dollars to try to comply and file according to the tax code. billions of dollars to stay out of jail. we should not have to be on the defensive when it comes to paying our taxes. so and then pass our 9-9-9 plan. how sweet it is. as jackie gleason would said. -- would say. description about how and why we came up with that. we want it to be simple 9-9-9. we wanted to be transparent.

there are no hidden9's. [laughter] we wanted it to be efficient so we have -- don't have to spend billions of dollars just to file and we wanted it to be fair, not fair according to washington's definition of fair but according to webster's definition of fair treated the same, no loopholes,secondly, we are often introduce another component for government to tax us on, the national sales tax. the trade-off is i am willing to fight and defend keeping the national sales tax rate at 9% in place of throwing out an 82,000-page tax code that allows

the government to try and pick winners and losers, that allows the government through the irs to harass us and those of you who have ever been something -- through something like that know what i'm talking about. the idea is we want to broaden the base. if we did not end in the national tick -- sales tax fee, the only way we could generate taxes. what we have done is effectively lowered taxes to the lowest possible rate for everybody. plant would like to clarify -- first, there is not a 909 plant. -- plan. we have a poverty exemption built into the revenues that we would raise such that people

would be able to deduct the poverty level for their family size. if a family is at poverty level, their tax rate on that middle 9 will be zero. that is not a new plan. it has been in the analysis all along. we did not call it 909 but we allowed for that deduction in generating the same amount of revenue. it is not a new plant. i have not tweaked it because of the criticism. as i mentioned in one of the debates when i was attacked by my opponents, they did not read

the whole plan. we also have something called the opportunity zone. opportunity zones would be cities that would be able to qualify if they compete with other cities for even more generous deductions such that cities will have an opportunity to help get themselves back on their feet like detroit where we were a week or so ago. detroit need some help and so the opportunity zones are not more entitlement programs. they are empowerment programs which is how we will renew this we also have the objective of replacing five taxes with these three. according to the analysis we did, we replaced corporate income tax, personal income tax, capital gains tax, the death text, and the biggest tax that

people pay, the payroll tax and replace it and collect the same amount of revenue with 999. yes, it is a bold idea and a bold plan. but america cannot wait. 14 million people who cannot cannot wait. some of the criticism has been that it is the vat. i don't care what you call it. if you want to call it a vat, it is one rate, one point. we are simply taking invisible visible attacks. when you buy a loaf of bread, it is estimated that that loaf

of bread contains at least 30%- 40% more cost because of the taxes that have to be paid along the way. you just don't see them. the farmer pays taxes on his profit if he makes a profit. the flour miller pays a tax. the baker visit tax. the truck driver that delivers the bread to the store pays aand the grocery store, if itwho do think pays those taxes? we do, the consumer. we are simply taking out the embedded taxes which are invisible and replacing it with a 9% retail sales tax. the other question that often

get is how we came up with 999? why not 10-10-10 or 888? being a mathematics major, real simple -- 888 not enough revenue. [laughter] 10-10-10, too much revenue. audience -- [applause] analysis. i am thrilled that it came out a 999 because of 10% is good enough for god, nine should be enough for the federal government. [applause]

growing. we also have got to get our spending down, not just the rate, but how they define spending cuts in washington, d.c. we have to get the absolute believe that the american people america. mark? [applause] >> thank you. we really appreciate your willingness to be here today. we have had a number of other presidential candidates join us at the podium. we have that presidents -- we have had presidents and we

appreciate your willingness to take part in a civil discussion of the cheap issues of the day. it might be said that one reason we have more cameras here the might otherwise be the case is because of a story in politico today that talks about some accusations of inappropriate behavior when you're at the national restaurant association. i understand you addressed to these allegations and this may there was, in fact, a settlement of any kind? >> i would be delighted to clear[laughter] [applause] #1 -- in all of my over 40 years of business experience, running businesses and corporations, i have never

sexually harassed anyone. number two -- while at the restaurant association, i was accused of sexual harassment, falsely accused, i might add. i was falsely accused of sexual harassment and when the charges organization, i recused myself and allowed by general counsel and might human resources officer to deal with the situation. it was concluded after a had no basis. aware of any sort of settlement. i hope it was not for much because i did not do anything. came out of that accusation.

sources claiming sexual no basis for the accusation. the three people mentioned in the article that were at the restaurant association as past chairman, chairman, and incoming validity. it was not. as a result, i have never sexually harassed anyone and those accusations are totally [applause] are asking the restaurant association to help you further shoot this down to the extent

they might have for their records if indeed there -- they could look at their records and that might have affected their insurance or they might have had to pay -- to make that payment? will you get back to us and verify or should it down? >> no, there's nothing to shoot down. unless they have changed the concerned, enough said about thethere is nothing else there to rivals might have helped put >> i told you this bull's-eye on my back has gotten bigger. we have no idea the source of this witch hunt which is really what it is. we have no idea. we have been busy trying to get my message out. >> perhaps if you work aggressively to affirm or deny in the coming days, we have had

to deal with this issue today and we appreciate your willingness to answer the question of the podium. another issue that is out there that people have been asking about in recent days is the abortion issue. you clarified that to a degree yesterday abob schieffer. in an earlier interview, you indicated there may beyou have seemed to have vacillated on this a little bit in the last few weeks. under what circumstances would outright ban and have you only this apparent change in direction? >> let me state what i stated because part of an interview that i did was taken out of context. i am pro-life from conception period. i have been that way for many,i

have not changed. i don't plan to change. i have been consistent. in that one interview, the reporter tried to pigeonhole me granddaughter? they took that piece out of context as i was trying to explain it to come to the erroneous conclusion that i am from conception, and the story. not be allowed? outlaw it? >> yes, i would. >> and there would be no

exceptions allowed? would that be at the federal and state level? >> i cannot determine the state level but i would support that at the federal level if that desk. important nominees. would you allow that to be in an issue that would allow you to vet a nominee? >> there will be no litmus test. the constitution and those of the kind of people i would point. nominee. >> correct. is for government in our society, you just talked about certain stance on abortion -- how do you determine where government should intervene on a given issue such as abortion

andwe had ron paul here a while ago and he is at one extreme of that equation, a so-called>> i go back to the founding fathers. in the declaration of independence, they said that endowed by their creator, you and die, with certain unalienable rights, that among these are life, liberty, and the pursuit of happiness.

can pursue happiness in this country as long as you don't infringe on somebody else's liberty. you have the liberty to do what and that includes the life of the unborn. [applause] >> we have a number of questions about your 999 plan. one person asked how this differs from a vat. you indicated that maybe it doesn't. bread, you've got five taxes embedded. the current code is a vat because you have five. we do it one tax so we don't care what you call it. there is one tax rate imposed at the end at the retail register. that is how it is different from many vat.

dire consequences for economic recovery if we can address the housing crisis. specifically? i would do to address the housing crisis is to get this economy growing. it all gets back to economic growth. this is why we're so confident that our economic growth and jobs plan is going to boost the economy. we have also done a dynamic analysis to show that the unemployment rate will be reduced. if you've got people going back to work, they've got money, they might go out and buy aif you have a growing economy, people who are underemployed would have a better opportunity and one of the biggest things that will help the housing market is an economy where businesses are excited about growth.

directors of several corporations leading up to running for president, part last three years, the conversations in the board rooms or how to grow the company. we did not have conversations about how do we stay the same or get smaller. you don't talk about that. that is not what boards are supposed to do. we have a $14 trillion economy because we have run this economy because businesses have ground. they are talking today in this environment, board members are talking about how we survive. survival is not what will grow this economy. the certainty of a new tax plan called 999 will cause businesses to get excited and b n/a mode to grow again and that is the best thing we can do to help the housing slump. [applause] >> mitt romney has said to let

the foreclosure crisis playaside from your plan, would you allow that to happen? >> i would do one other thing prior to that. ever since we have been in this economic decline, this administration, through the fdic, has meddled in the community banks. i would like to eliminate the new requirements they have imposed under the guise of it protecting banks from failing. it has had unintended consequences. it has caused more banks to fail when they ratcheted up the capital coverage requirement for banks, i know of community

and some business transactions simply because they were trying to meet an artificially to buy requirement with the federal government. -- too high requirement with the federal government very we need to allow the community banks and medium-sized banks and small banks to do what they do. one of my guiding principles is if you want to solve the problem, go to the source close to the problem. it is not washington, d.c. and the big banks. we need to get government out of the way of small and medium banks. [applause] >> to go back in history, there are those that might have said government was out of the way while the housing crisis was created. was there a proper role that government should have been involved with that of all that? how did they miss the boat when you're talking about keeping the government out in the first

>> government did not miss the boat. [laughter] [applause] government put the holes in the boat. if you go back to the financial meltdown of 2008, it all precipitated because of the freddie mac. fannie mae and freddie mac is the roots of why we had holes in the boat because of the practice of bundling mortgages, the freddie mac making it too easy mortgages that were bundled. fannie mae and freddie mac have not received the oversight they should have received for at dodd, head of the oversight committee in the senate, barney frank, head of the oversight committee in the house of representatives, yes i am naming names --

[applause] because they did not do their said fannie mae and freddie mac have been cooked but they did nothing about it. i'm not mad at you will, i just get passionate about it, you understand. [laughter] if the government has not made it too easy for banks and mortgage companies to bundle up have had that part of the problem. properly defined in terms of what businesses can do. everybody in here is familiar with enron. that was probably the early precursor to someone who pushed decline.

i believe that needs -- their regulation relative to the derivatives market. rebuilding the dodd-frank legislation and let's do it right the next time. [applause] >> you are targeting the two congressional leaders that had oversight roles. was the bush administration not to blame? to get legislation passed but because he did not have a republican majority or a super majority, the legislation was blocked several times. i think the legislation, if i recall correctly, was introduced by senator john sununu and that can be looked up.

did they have a role? yes, but they made an effort to a moment -- >> good [laughter] gop tax plans would do anything but leave a $9 billion tax deficit. >> this is richard lowry, co- architect of the 999 plan, senior economic adviser to the herman cain plan and i will allow rich to answer that question for may. -- me. [applause]

>> thank you. the plan as it is designed to bring in the same revenue as the current code will. the issues regarding the deficit are a function of spending and spending restraint will be handled separately. what we are trying to do with how to generate the requisite least amount of damage to the economy in the meantime. >> with a bold plan like 999, the projected growth in gdp is going to be much higher than we are experiencing today. to get our hands around spending, my current plan is to do an across-the-board cut in all federal agencies day one. secondly, do a deep dive into all the agencies and find at least another 10%. i know the government accounting office documents of waste and duplication all over the place.

congress looking out for either their pet projects or somebody else's, it will not happen, or looking out for their friends. i am told i don't have any friends in washington, d.c. i believe we will be able to cut a lot of spending going on in washington, d.c.. [applause] >> those members of congress election. it has been demonstrated with the effort to cut the budget now that it is hard to hide -- find agreement between the two parties and the white house. how do you draw the same 535 together when you just said that is what they fight for? question. it is called the power of the

people. by keeping solutions understandable, that the public can understand, they will put pressure on their members of congress to support that legislation. congress and i will work with there have been times when compromise has just about killed this country. my campaign itself is evidence awakened and it is the voice of the people that will put the understand and that will be the kind of legislation that i will propose.

former senator dirksen who popularized the statement "when they feel the heat, they will see the light." the american people will be the [applause] >> student loan debt exceeds credit card debt and graduates are having trouble and how might you address the problem of the expense of getting higher education? let>> the issue of addressing the expense of higher education, i happen to believe letting the

free market sort it out. you have more expensive collegesyou have less expensive colleges a choice. colleges and universities are competing for students. >> the free market is starting out now and students are paying the price. is the system find? that is one of the problems that i see with the government in general, tampering with the free market situation. relative to the student debt, i we should do about the studentit is unfortunate but is with. >> some of the biggest budget challenges ahead involve long term entitlements. how would you work with both members -- members of both parties about the huge differences decades out with massive deficits. >> i believe these programs which we call entitlement programs must be restructured.

we can no longer say we will raise the retirement age and reduced benefits and think that will solve the problem. we have to restructure thefor example, i am a believer chilean model how they got off this broken security system. even though we will collect the same amount of revenue will 999 and it will go to the social security account, i happen to believe that we need an optional personal retirement accounts system so we canwean this nation of a broken system. they did a inchile and 30 other countries around the world when they recognized we have a problem. we have long recognized we have a problem but we simply have not done anything about it.

relative to medicare and medicaid -- remember one of my the source close to the problem. i plan to go to the states and get the states to help us restructure medicare and how it is administered rather than try to come up with a one size fits all set of rules out of washington, d.c. we have to restructure programs, not reshuffle them. >> you will have 50 different solutions? >> you will have 50 different groups working on a solution but not 50 different solutions. states learn from one another. >> how much of the current president's political problem is caused by people not being comfortable with the nation accepting the first black president. where we stand with race in our country today? >> i don't think people being uncomfortable with this

president has anything have problems with this president. [applause] here is where we stand on race in america, in my opinion -- instead of us coming closer together, we have become more divided because of part of this administration playing the race card, the class warfare card, another, the millionaires' tax -- all that is part of the classas a result, there is more racial tension than there had been. the fact that the tea party movemen is not just one group of people.

every organization that has members have mobilized their members to get involved and be a part of this voice of the sleeping giant i talk about because they do not like these policies. i started speaking at tea party is in 2009 before it was cool. april 15, 2009, and the people who attended these rallies have only gotten bigger. while i'm on the subject, if you don't mind, some people have even made the assertion that the only reason i am doing so well americans, the republican party conservatives, are trying to racist.

come to some of our rallies. you have to follow along because there is no room on the bus. you will come to the conclusion that i have come to and that we have come to. [applause] about where we are with theyour parents worked very hard and you have had tremendoushave we made much progress? is there a possibility that two

men of color could face off in the election? and 1960's in atlanta, georgia. the civil rights act of 1964 was passed in the voting rights act opened the doors. we had to make some politicaldr. king touched the hearts of america and the world and helped to bring that about. leaders. i am a beneficiary of those two changes in our loss, no question about it. la --ws. i happen to know other black americans, brown americans who are beneficiaries because institutions have opened up. corporations have opened up. corporat corporate america has opened up.

is there presence of our institutions? yes. it will probably always be there but for people who are interested in pursuing their american dream, don't put race in your formula. it is not there more than a mile. be there -- it is not there more than it might be there. that is how i address it. we have come a long way but yes, we also need to do more work to united back in united states of america [applause] >> as we move into the softball question >> -- you mean there are softball questions?

president of united states? >> the day barack obama signed obama care is what really occurred to me. [applause] many of you may know that i was a radio talk show host and for five years leading up to president obama getting elected -- leading up to running for president, rather -- when president obama took office, i, like many americans, i did not vote for him by the way to don't get carried away -- i, like many americans were hopeful that he president. i never wished him to fail. that is not good for this country. when i saw his policies and his

became deeply concerned. obama care is not something the american people wanted. they did not want that solution. america and i am an example of that because of having survived the stage for cancer. we have a health-care cost problem and i believe in order to address the health-care cost problem not more government but less government and allow the free market to deal with it. we are weaker economically in america. we are weaker in terms of our dependence on foreign. oil my priority will not be how, when, where we cut on defense. there are areas we need to

invest in defense in order to rebuild our military might. because i have been blessed to have achieved my american dream, by and notcajillionaire but i couple of times per my wife and i moved back to atlanta and i was on my way to cruise control. and then the country got off track. i felt i needed to look at using my skills, talents, and abilities possibly to help get this nation back on track. it did not start as a consideration until after president obama took office. >> we're almost out of time -- a couple of housekeeping matters to take care of. we have upcoming luncheon speakers like tom brokaw on november 3, the u.s. postmaster general will be here and on december 4 jim in, cantore from

the weather channel will join us for his view in journalism. as we always do, i'd like to present our guest with the[applause] -- coffee mug. my final question, if you can join me for that -- you chose to sink at the home of pressure club [laughter] i thought i would -- of the omaha press club [laughter] would you like to give it another shot? >> would you like the same song? 9 >> whatever you like. >> let me first said that it is demanding enough to speak a dozen times a day, let alone to

them also have to sing. however, [laughter] i will take advantage of this opportunity but if i come to your event, don't ask and don't expect it. this decision. it is a big part of this journey that we are on and this is a journey, not just my campaign, but this nation. senses it and -- since it is an opportunity for me to share a -- amazing grace will always be

my song of praise, because it was grace that brought me liberty i will never know why jesus came to love me so he looked beyond all my fault saw my needs ♪ thank you. how about a warm round of applause for herman cain? booktv.org 0--

[applause] thank you, and we are injured. [captioning performed by national captioning institute] -- we are adjourned. [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. the website helps you navigate the political landscape, biographies, and the latest polling data, plus links to media partners in the early primary states.

>> president obama signed an executive order today aimed at preventing shortages of prescription drugs. this is five minutes. >> the united states i think rightly takes pride in having the most innovative and most successful drug industry in the world, and as a consequence, the health of a lot of people in the united states and around the world is improved, but as we also know, occasionally there are problems, and there are manufacturers and the distribution of drugs and how successful they are. recently, we had seen have the potential of drugs shortages for vital drugs, including some cancers can really have an

adverse impact on patients and those who are caring for them. sometimes we run out of or run low on certain types of drugs, and that drives up prices and increases patient risk, and i have got a couple of people beside me who helped advocate for this problem. jacob knows what it is like. the center he was that receiving chemotherapy ran out of the drug to treat his cancer, and when that happens, there are managers who have to scramble to make sure that their patience somehow find a life-saving medications that are necessary, so over the last five years, the number of these shortages has nearly tripled, and even though the fda has successfully prevented a crisis, this is one of those problems that could end up resulting in disaster for

patients and health-care facilities all across the country. congress has been trying since february to do something about this. it has not yet been able to get it done, and it is the belief of this administration as well as folks like bonnie and david, we cannot wait for action on the hill. we have to move forward, so i am going to be signing an executive order today that directs the fda to step up and work to reduce drugs shortages to protect consumers. we will still be calling on congress to pass a bipartisan bill that will provide additional tools to the fda and others that can make a difference, but until they act, we will go ahead, and as part of this, we will require the drug companies to let us know earlier about potential drug shortages

so we can respond successfully. we're going to make sure that if we find out the prices are being driven up because shortages are being made worse by companies or distributors, that we are making sure that we stop those practices and further empower the fda and the department of justice to investigate any of these. so there is a combination of tools that are going to be contained in this executive order. we can make sure that life- saving drugs are available, and if you start seeing shortages, we will be able to catch them ahead of time so that body does not have to try to scramble as a pharmacy manager, and others do not have to scramble as a patient. i want to thank the leadership of both our fda at minister and our health and human services secretary for having done

outstanding work in preparing this order. again, i still urge congress to move forward so we can provide even more tools for our agencies, and i want to thank bonnie and j. for being here to inspire us to get this done. all right, with that, i am going to sign this bill, the executive order. there you go. thank you very much, everybody. i appreciate it. i enjoyed my meeting with tony blair. thank you, everybody. >> coming up in a few moments, the white house economic adviser at the economic club of washington. in a little more than an hour, house speaker john boehner on the house and the economy. then the head of the group americans for tax reform on the

republican presidential candidates, and later, the monday state department briefing announcing the u.s. is cutting funding for unesco. on "washington journal" tomorrow morning, we will look at the work of the joint deficit reduction committee. you can call in with your questions about the solvency of social security with the committee for economic development, and we will be joined by the policy director at the summit foundation who is encouraging the deficit- reduction committee to a molt -- to hold its meetings in public. "washington journal" is live on c-span every day. >> the heat is on. this is the first time that i have seen in my long tenure in politics where the heat, the real key, because if these guys

cannot come up with something, i am telling you, they will not want to go home. >> on tuesday, former senators and a former clinton administration official, all participating in passed a deficit-reduction talks, and you can watch a video of those meetings along with the four public meetings on line at the c-span public library. everything is archived and searchable. what you want, when you want. >> now, the head of the white house economic council was at the economic club of washington on monday, talking about jobs, taxes, and the deficit. because of technical problems, we are only able to show you a little more than an hour of this event. >> larry summers left. he has replaced larry summers. prior to that, he served as counselor to the secretary in

the first two years of the obama administration, in he brings a wealth of experience. as you know, they koran in and help developing -- develop economic policy for the president. the experience he has brought to that is he had the same job. he served as the deputy head of the council under bob rubin, and then when bob became secretary of the treasury, jean became another director. -- gene became the director. in terms of consistently working democratic administrations that make policy. he is by background from ann arbor, mich., although he did not go to the university of michigan. he is a diehard walgreens fans. he was recruited as a tennis player on a scholarship and played and was the captain of

the university of minnesota tennis team. he subsequently went to yale law school where he also continued his great academic pursuits. at the university of minnesota, he was a member of the phi beta kappa. after law school, he began to get involved and worked in the dukakis campaign but also work for mario cuomo in the early 1990's and then was recruited by people he met in the campaign to work with bill clinton and that campaign, and he ran the economic policy of the clinton campaign in 1992. then, as i mentioned, he went into the clinton administration. he has done many things. when he left the clinton administration after serving as head of the council, he joined and sent up a center for universal education to help children all around the world to make sure that they do get education. in addition, he spent some time

as a consultant to "the west wing." he was interviewed by a writer, and that riders subsequently became his wife. he is now married with two children and resides in washington now and is well known, i think, among other things for his enormous encyclopedic knowledge of economic policy. he has spent years working on economic policies, but also for his workaholic tendencies. he probably per hour is the least well paid person in washington, d.c. so it is our great pleasure to have him make a presentation now, and then after his presentation, we will have questions and answers. gene? [laughter] [applause] >> the last time i saw david was

at the kennedy center last sunday night, and he was introducing jack black, then stiller, and will ferrell. i think i have now arrived. that never happened my first time around. i am always happy when people mention that i was a consultant for four years and part-time writer for "the west wing," because let's face it, almost all of you think is cooler to have consulted their then to work in the real west wing. but as david mentioned, they're real west wing has been a highlight of my professional life. the fake one has been the highlight of my personal life. that, as he mentioned, is where i met my wife, whom many of you have gotten to know all along with our two kids. i am very happy to be here.

there are so many friends out here. i can see steve, market, and i am so happy to be here with david, who has given the advice and counsel since my first days here when people said that when i stayed up very late at night, i reminded them of another crazy man who had worked at the white house in the carter administration, and i later learned that that was david. so anyway, thank you all for having me. my talk today is simple and direct. to achieve a sustained economic growth right now, we need a bold, immediate jobs plan to inject a man, help this recovery takes hold, and have a meaningful impact on jobs over these next 12 to 18 months, and two, a balanced plan for long- term fiscal discipline that combines savings from

entitlements and revenues from the most unfortunate while ensuring that we continue to invest in the potential of our young people and the economic dignity of our working families. i will start -- start with the imperatives of economic demand. now, there are those who argue against the need for a significant immediate jobs plan. those who make the case for inaction at this moment usually do so, usually stay as their reasons that we already tried the recovery act, and they claim it did not have an impact, that we cannot afford a new jobs plan, that because we're coming back from a financial crisis and recession we simply have to be passive and patient, and that in bold immediate effort is inconsistent while focusing on longer-term structures in our economy. i will address each of these arguments, but even combined, they fail, because in the

current economic context, unemployment is simply too high. the projections for near-term growth are too weak, the risk too elevated, and the natural crisis of long-term unemployment too profound to sit on our hands and do nothing. to those who say, as an argument for inaction that the recovery had failed, i would highlight is a few basic facts about what we know about the state of the economy at that time. when president elect obama was taking over koran economic policy, the blue chip forecast predicted the economy would contract. in the fourth quarter in 2008 and the first quarter of 2009, at an annualized rate of 1.65%. the economy would be losing at a growth that should contraction

that near 2%. by december, that had gone to 3.25%. so what do we know now? what do we know now that we have more better information? during that six-month period, the economy contracted at an annualized rate of 7.8%, nearly 8%. actually, in the fourth quarter of 2008, our economy was losing, contracting, losing growth at 8.9% per year. it was the worst six. -- it is the worst growth since records were kept in 1947, other than the period of demobilization in 1946 after world war ii. it is the worst six months on record since the heart of the great depression, and on the jobs front, our economy lost 2.3 million private-sector jobs in the first quarter of 2009.

we were losing jobs at a pace of nearly 800,000 per month in the first quarter of 2009. again, theagain, the worst recoe the heart of the great depression. croats actually return to our economy of that -- by the third quarter of 2009. half a year later. and private sector job growth returned in march 2010, a year after we have lost 800,000 jobs in a single month and a year earlier than the recovery from the previous recession in 2001. in 2001. we are big boys and girls. we understand the president's opponents will continue to make the next the arguments -- to make the speedy argument that since we have much further to go in thinking ourselves out of the whole the president inherited

that therefore that is evidence that the recovery act did not work. but let us be serious in one crucial regard. using the experience of the recovery act, which is critical to bringing our economy back from a contraction of nearly 8% a year and a loss of eight and a thousand private-sector jobs a month as an argument that any future effort to inject a man to create jobs is futile is but a cynical argument and one without merit. it may be that it prevented the second great depression does not read well on a bumper sticker, but is peppery description of policy decisions that help and improve the lives of tens of millions of our fellow working families. some have suggested to me that even if the recovery act was the right medicine for the economy in 2009, that today we should

just sit tight. they will argue, often citing the work people, that as recoveries following recession- induced by terrible financial crises are inevitably going to be long, slow, and painful, we simply should just wait and be passive as the slow process of healing unfolds. i am not sure i would ever agree with this interpretation, but if we were projecting 3.75% growth next year and a conversation was simply about the pace at which unemployment was headed down, we could at least have a conversation about how quickly one could expect action to further accelerate growth and lower unemployment. but that is not economic moment we face today. it is not the economic outlook we foresee over the coming year.

we have an obligation to take a sober, non-political look at the state of growth and employment in our country today, the risk that it could get worse, and what it would mean for our country if we did nothing and simply allow the consensus economic forecast to come to pass. with regard to the risks, everyone understands the value of taking out insurance against ive events in our personal lives. the administration projects the economy is still to add to the private sector jobs the been created this year. most forecasters agree with this assessment. even though the blue chip financial forecasts found a 35% chance of a double-dipped recession among their nearly 50 forecasters, it is our hope that with the uptick in some recent

numbers those odds might go down. nonetheless, it is still fair for all of us in policy positions to ask, when you already have 9% unemployment and 14 million people out of work, is it worth taking out some insurance against even the prospect, even the relatively less than 50% chance that things could get worse? if you thought there was a one in three chance that your house was going to burn down, you would find home interest of the bible. likewise, the value of taking insurance out for our economy today is alone strong basis for taking bold action in the immediate future. remember in 2010 when we have passed separate payroll relief, the price of gasoline was $3 per

gallon. we did not know that the error spring and defense outside our control was " pushed prices over $4 a gallon in some parts of the country, but there's little doubt that the insurance we took out in the form of the payroll tax relief has provided a crucial question to prevent consumer spending from falling and putting us in a stronger position than we would be otherwise. but even if one decides that the need to take interest out against unexpected events at this time of high unemployment is not persuasive. the case for action, if standard projections bear out, is overwhelming. right now, the blue chip projecting 2% growth in 2012. the conference board is projecting 1.1%. jpmorgan, 1.7%. imf world economic outlook finds 1.8% growth for 2012.

as such growth would be the load the trend growth, it would hardly be projected to even bring unemployment down below 9%. this type of growth should be unacceptable and unsatisfactory at any point in any recovery. in any context, it constitutes less than turning a blind eye to our national crisis of long-term unemployment. while washington today is focused on the political punditry over the ups and downs of the american jobs act, it is long past time for all of us to realize that long-term unemployment is our true national economic crisis. and that choosing to play politics as usual or sit on our hands in the face of this crisis is both irresponsible and inexcusable. that death of a recession this president inherited and the

difficulty of recovery from a -induced ly r recession has forced us to consider it a lot worse and a climate in our lifetimes. 44.6% of the unemployed is now -- has now unemployed for more than six months. 75% of them have been unemployed for a year or longer. consider this -- the average length for the unemployed right now is 40.5 weeks. that is the worst on record. it is almost twice the length of the highest prior record, which was 21 weeks during what was a very painful recession in the 1980's. this is a matter of the highest

economic importance. we know that very long spells of a plum and cause harm to workers, to families, and to our long-term economy, that shorter terms and more typical out of unemployment do not. we know when you lose a job it is always painful, but when you are in voluntarily out of work for a year or two years or more, you lose your home, you health, the family. economists have used the term to describe where and a lot -- where elevated and employment can reduce our productive potential. being out of work makes it harder to re-enter the work force. if you lose your job today, your chances of being employed in the next three months are box one in two. but if you lost your job for six months, the chances of the next

three months is about one in four, gets worse and worse the longer you are unemployed. and an economist at university of warwick sound there's no circumstance that has a greater negative impact on mental health than being unemployed for six months or longer. and economists found a permanent job loss results in up to a 100% increase in mortality rates for the next 20 years. on top that, the national employment law project found that a four-week survey of online job advertisements, over 150 examples of companies explicitly saying if you're unemployed, do not apply. do not apply signs that were --

now being put up for those who had the misfortune, usually at no fault of their own, of finding themselves in the dire straits of long-term unemployment. of course, concerns about the cost of long-term unemployment lead to one of the other rebels in the case for inaction, which is that a diploma is purely a structural problem. some argued there are more than three made jobs openings and this shows that all our problems are simply due to a mismatch between skills needed to fill current spots and the skills possessed by an unemployed workers. as recently described by those, there's little evidence for this case. here is the simple math. there are over 14 million people looking for work, full-time work, not even counting the people who are halftime looking for full-time work and 3 million

job openings. that means there is newly -- there is nearly five people looking for every job that is open, far higher than any people looking for jobs before the recession. no questions that skills mismatch issue is a and a poor long-term issue that we should be committed through education and innovation to fixing. recent research by the new york fed makes it clear that explains only about 1/5 of the rise in employment in the recent recession. with this and other evidence, it suggests the overwhelming cause of the ottoman crisis we face is a lack of economic demand, and the real irony we face here is not so much that structural unemployment is driving high employment right now, but instead that if we fail to act, we will create a new and deeper structural unemployment in our

economy. we will by sitting on our hands allow legions of our colleagues, our neighbors, to be disconnected from the work force for unforeseen periods of time. this takes me to a final point on the subject, which is that a lot of what we do in economic policy is try out policies that prevent this cycles that i necessarily take away the value in our economy. we have bankruptcy laws that prevent credit rushes that would unnecessarily destroyed the value of company or the future of someone who has failed once. steve case will tell you what a difference it would be if a debtor prisoner inside of a second or third chance was what happened to len gonchar nor who failed their first time. we do not allow bankruptcy, a

rush of creditors again because it unnecessarily leads to a downward cycle that hurts our economy. we have deposit insurance to prevent the vicious cycle of- runs on banks, and we try to promote policies like our neighborhood stabilization plan and the american jobs back to prevent a downward cycles in neighborhoods. if we see sections of up to 2% growth right now that inevitably mean that the prices of long- term unemployment will get even worse, we are in essence saying that we know millions of our friends, our neighbors, fellow citizens are destined to a downward cycle of economic opportunity that will cause long-term damage to them and our economy and that we are choosing to simply sit back and watch. a great nation, facing the worst crisis of long-term and apply it

in our lifetime, can certainly do better. at president's american jobs tries to deal with this challenge in two and a waste. it has the smarts demand plan for next year that independent economists have projected result in up to 1.9 million more jobs next year, that is 150,000 more jobs per month than is currently expected and up to 2% higher economic growth, the difference between 1.5% and 3.5% growth it was planned to its completion. it includes elements like the payroll tax cut which uses an existing structure to get a significant amount of money in the pockets of every worker every two weeks into doesn't call will provide work customers and more cash for the small businesses who have been hit hardest by the financial crisis. further at this moment, there is -- the american jobs also is a

major investment in creating jobs by the rebuilding our infrastructure. there is just no sound reason not to make a major investment in our infrastructure right now. let me be clear about one thing -- there is nothing fiscally irresponsible about deferred maintenance. if i choose to cancel my direct tv, nfl subscription, with, which the lines at 6-2 i am not going to do, i would say $230 in consumption. if i decide not to fix that i did my basement, i would just pay more later. at this moment, with interest rates at historic lows, with an overflow of the unemployed construction workers anxious to get back to work, when the macro economic impact would be the best and manageable, how can we passed by this moment to address the deferred maintenance in our schools, roads, railways, and airports? how can we let this moment pass?

what is the rationale for not acting? the second thing the president did when he announced his act on september 8, to dow's 11, is but a national focus on this challenge of long-term unemployment by making it explicitly one of the four major planks of his plan. that meant, including every responsible idea we can identify, from outlawing hiring, discrimination based on being unemployed, to tax credits for people who but a ploy for six months or longer, extra incentives for veterans. we proposed the misleading reform out of plumb it interest in the last 40 years. every aspect of the reform is designed to make and implement insurance more of a bridge to work. and hiring people to use their u.i. to connect for short-term jobs or to start their business or as wage interest out older

workers get back to work or for companies to include work sharing over layoffs. we are no doubt disappointed that the republicans in congress have blocked the american jobs act. but that should not be our major disappointment. our most profound disappointment should be that they have not even come forward with an alternative plan that in the top independent forecaster could possibly estimate as spurring growth up to 2% next year or adding up to 2 million new jobs. at this moment the republicans' main alternative is the best to get a host of long-term measure , some good, like trade agreements and then reform, some not so good, like repealing the affordable care act, but all having one thing in common -- they have nothing, absolutely

nothing to do with sparking demand or job growth in the next 12 or 18 months so that we can get this recovery better chance of taking hold or give hope to the long term on a point of getting back to work. these plants are therefore not really jobs plans. they are plans to sit by while our national crisis gets worse. franklin roosevelt argued during the depression of when facing great national challenges our obligation was to try and try, expert and experiment until we get it right. yet the republicans in congress so far cannot live up to teddy roosevelt's admonition to get in the rain and get a shot. there is no question that the right physical package for policy at this moment is to combine this strong demand in the short term with a balance, long term plan for fiscal

discipline. the two are not contradictory. they are as complementary as good hitting and pitching. and together they are exactly what we need to maintain confidence that the economy is going to pick up, america remains a place for companies to make a long-term investment, and we will not face a debt crisis in our country in the near term for a share. those who suggest we cannot afford the act are being penny wise and pound foolish. nothing will hurt our current efforts to get our path is a steadily more that if our economy stays weak or if we allow long-term and implement the weak economic projections and potential. furthermore, when you pay for the jobs planned as the president has proposed, the long-term cost is just the lingering interest from the jobs planned, while the ongoing offsets lead to net deficit reduction each and every year for the foreseeable future. there is a reason that even

their rivlin-does she plan, when of the most efficient plants the together by bipartisan outside group, including the most robust injection of temporary demand come complete payroll tax holiday to ensure our recovery takes hold. if we are to succeed in achieving strong that is a reduction, let's be honest -- the single most critical ingredient will be the washington reaching a consensus that we must have a balance in our deficit reduction strategies. there is no single barrier that stands and away more of same fiscal policy and the fact that the sizable proportion of the republicans in congress have taken a pledge that there cannot be a single penny of revenues in any significant deficit- reduction act. is notbsolute pledge a historically republican position. in 1982, president reagan

raised revenues. in 1983, he and ted o'neal include the revenues in fixing a social security. in 1990, the elder president bush were to get a bipartisan agreement that included revenue and the visits. in 1997, we had a balanced budget agreement where republicans agreed to continue all the revenue increases from the 1990's and the 1993 budget agreement. every independent bipartisan plan has called for a mix of revenues and entitlement reforms. a letter calling for reductions from republicans and democrats include an endorsement of a mix of revenues and entitlement cuts. prime minister cameron has as much as 1/3 revenue in his

budget. the spots us from making progress for a few critical reasons tricks everyone knows the way you achieve bipartisan deficit reduction is through people holding hands and jumping together. to conclude, it is with this that we can best move our nation toward the shared prosperity that should always be the aspiration of this country. thank you very much. >> so you are not point

person in negotiating with republicans? >> i often have ben part of the team. we stand ready to. david, you cannot do this thing we make no differentiation. the president very clearly has continually reached out. he over the summer, we all know, was willing to go further on entitlement savings, take on more sacred cows, risk taking opposition from his base of supporters in the interests of getting an agreement. it is the president who has put out to the supercommittee proposals in detail that would cut agriculture subsidies, affect federal retiree benefits, that talked about adjusting beneficiary changes for

medicare. so when you have this of the inability to come together, you cannot just decide that your analysis is that it is a pox everybody's house, that everybody bears the same responsibility for the failure to come together. you have to look. and others part of the 19797 balanced budget agreement. i was one of the people who encouraged and supported us calling to the extra mile at every point to try to get a major budget deal with the speaker. so i am very much for bipartisan negotiations, and i want to make clear, i believe there are many republicans on the hill who want to be part of the balanced agreement. you have seen the gang of six, a

few republican senators in the bowles-simpson who are willing to raise revenues. this is not a democrat- republican issue as much as a portion of republicans who are blocking from coming to a compromise of a budget agreement that includes revenue savings together with entitlement savings, including medicare as part of a bipartisan -- >> you do not have a majority of democrats, cannot get 51 democrats in the senate, to vote for it. i thought the democrats did not support the president's jobs bill. >> that is not the case. we have sometimes 53 out of 53, 51 out of 53, 50 out of 53. one of the people -- have been

here a while, as he said, you have been here a while. getting 96% of your own party is pretty good. you cannot look at -- the reason we're having trouble is that there is a complete inability for any one to come over. i understand what i did in my talks today. i did not say, here is the american jobs at come our way or the highway. i presented the case for action. i presented why we as a country cannot sit on our hands and do nothing. >> why did the president not meet with bowles-simpson -- why

did he not meet with them at that time? >> he chose those two men. he chose representatives that were very much about reaching a bipartisan agreement, moving toward the center. he was very supportive of their actions. we do not or did not agree with everything in the bowles-sim pson plan, we understand the way you make progress in deficit reduction measures is to create the mechanisms where you bring both houses and both parties together. every successful effort we have ever had as that characteristic. that does not mean it always works. it was very close to working over the summer, but just failed.

none of us know for sure how the supercommittee will turn out, but that notion where you bring democratic and republican leaders together from both the house and senate to hold hands and jump together is the only hope you have. nobody wants to put their political life on the line for a plan that they find out is going nowhere or is going to pass the senate, but not pass the house. if you are interested in actually getting things done as opposed to getting a good op-ed at on the back, what you want to do is exactly what this president did, which as soon as we got down with the yearly c.r ., agreement that took record, within five days of that, the president put out a $4 trillion framework over 12 years and called for both houses and both

parties to come together. add the biden group and that was the first effort. bulls simpson bipartisan commission was called together by this president. biden negotiating process was pulled together by this president. the president and speaker boehner -- and i give him credit for being willing personally to reach out and put revenues on the table as part of the deal, even though he could not ultimately deliver that deal -- i give him credit for trying. in each of these cases, it was the president was trying to create a mechanism that is the best hope for bipartisan deficit reduction, and i promise you, whenever it comes, it will come in this form. it will come in this type of -- it will not be because the president of the united states goes out with an independent group's plan.

it will be because he brings both leaderships of the house together. that is what happened in 1993 and in 1990, hot hot for, and hopefully that is what will happen this year with the supercommittee, and if not, there will be a process like that in the future. the president was focused what the process and the mechanisms to word that had the best potential to get the job done. >> the stimulus bill that not have republican support, so the president did not the republicans there. do you support the fact that he was republicans to support it and it was not likely to succeed, and you said at the time there was a good economic impact from that stimulus bill, which has not seem to have that impact. why do you think people should say this past -- why should people believe you now? >> people say to me it is hard

argue that the eggs are better than they would have banned. what i just presented to you once they are way better than they were. you cannot make everything a political argument. yet to digest the following facts -- our economy was shrinking at the rate of 8% a year when the president took office. 8%. we have not seen that since the great depression. we were losing jobs at 800,000 and month. expect your economy to add 2 million a year? we lost 2.3 million in three months. by the second half of 2009, just six months later, our economy was back to growth is not something you can take for granted. there was no guarantee that was going to happen. that happened because this president took a very bold

politically different actions -- difficult actions, and the fact that we were creating jobs, albeit much too slowly a year later, in march of 2010, a year earlier than took place after the previous recession, again did not happen by accident. so i totally agree that the deep financial crisis that we inherited was a very deep hole and that it is discouraging how long and tough it is to climb the way out, but i wholly refuted and disagree and to speak anyone who suggests that the recovery act did not have a major impact in helping ensure our country to not go into a great depression and instead went to growth. what was the stock market in march when we were doing the financial rescue plan 6400.

one out of five people was betting it was going under 5000. you cannot take for granted what happened. the idea somebody would use the recovery act as an argument suggest he should not do this type of demand injection for jobs is totally misguided. 2009,remember january where was the demand in the global economy to eur? europe? what industries when people were seeing their house values going down? had united states not go in and inject the man into the economy, had we not taken the type of action, the stress test, and the action on the automobile -- we could have faced an unforgettably painful economic. -- economic period.

we understand our opponents are pretty is the fact that things are not as great as any of us would like to suggest. but nobody who is not political is serious, nobody should buy into that. >> the and implement rate today is 9.1% as we count it. no president since fdr has been reelected and the rate was above 7.2%. where the you think the unemployment rate will be at the time of the next election? >> i will not make projections. whether or not we do something about job growth right now is calling to determine in part that outcome. i'm here making the case for a jobs act because i fear that if we just sit by and allow the standard economic forecast to take place that we're going to

grow 1.5%, 2%, that we are going to be sitting by passively while we do serious harm to many of our workers and our economy. remember, you expect that you need growth to be about 2.5% just to stabilize employment, just to handle the new workers who come into the workforce, just to stabilize. when you have 9.1% unemployment, you need growth to be much stronger than that to bring unemployment down, and as i just described, you need unemployment growth to be stronger than that to encourage workers, companies to look beyond the best young people coming out of college and the start giving those who have been unemployed a year or longer a second chance to get back in the workforce. rather than us handicapping or banking, the right thing we

should be acting. we have a chance as a country to take action that would meaningfully affect -- moody's said with the jobs back in the project for put two% scion growth. -- 4.2% growth. so whether or not we'd do something bold and immediate like what we have proposed, even if it has different elements or slightly different composition, is the single most crucial thing we can do to being able to answer that question in a way that suggests the chance that the unemployment rate coming down our but as opposed to bad. >> the president has said the economy is in worse shape than he thought was going to be when

he was a candidate. and it is a problem is bigger. why do you not support eliminating all the bush tax cuts? that would pick up $500 billion the year. why not get rid of all of them as opposed to people in the top 2%? >> because i think at this point that hit on working families struggling in this economy would just be too great. i am not convinced that we need to do that to achieve deficit sustainability. for example, we have already put $1 trillion into a deficit reduction agree to over july. the president then put forth his job -- his plan to the supercommittee. that plan does have a seat of that revenue portion, but it only $250,000.'s

that plan together risks that down as a percentage of our economy. i do not believe that if we were to let all of the tax cuts expire and have working families making $70,000, $80,000, suddenly facing a $3,000 higher tax increase that that would be good. and so i think we still believe that we can get our deficit under control, bring our debt down as a percentage of our economy, and do so by asking for sacrifice broadly, but by asking for revenues to come from those two had income of $250,000 and over. >> where would the president like to see the capital gains rate? >> i do not have anything any

different to say than what was in our budget. i do think there are areas that we think -- what the president has spoken of is the fact that we should be concerned when very, very well off people can take all their income under preferred rates so that somebody making $100 million, etc., is simply paying 13%, 14%, 15%, and you have a situation where the net or even the incremental taxes of people who are teachers, fire chiefs, firemen, are higher than those who are the very, very most fortunate. the idea of the buffet rule

would be if we with the tax reform and bring down everyone's rates, if we were to reduce tax expenditures, that it was important to be able to say to the public that this would not mean those who are the very most fortunate would be able to, in the fact, they effective rates that were dramatically lower than that. and that is what we put out. i think that is very reasonable. i think the public supports it largely, i just saw a poll saying those who make over a million dollars support that put the ball as well. >> under the buffet role heavyset that rate? >> were setting up a double for tax reform. right now one of the openings you have seen from at least a

few of the republicans in the senate has spent -- has been to raise revenues through tax reform. we wanted to put out what our principles work for tax reform, and one of the things we wanted to say was be supported the idea low ring expenditures, raising revenues, but luring everyone's rates. in doing that we wanted to have certain principles. when of the was we did not want the tax code to get less progressive than it would be today or in the absence of the sun setting of the bush high- income tax cuts, and the second one was going to be if you're going to be taking down rates and taking alkylates for those in the highest income brackets, it was the essential to say there would be a floor under which the rate would not go, and that was obviously something

warren buffett had spoken about quite a lot, and the point there is that that is not even the principal that will affect most people who are very well off. it will only affect those who are somehow able to organize their income so that all of their income or the overwhelming majority is at preferential rates. again that is a principle that has wide support, so because we do not know exactly the metrics of what tax reform will become we wanted to put that out and the progressivity principle out. you have worked for mario cuomo, obama, and bill clinton. >> that would be a great question to answer. [laughter] up there with who you love more,

mom or dad? greta and your answer to that question is? >> my answer to that question is that i have lived a charmed life as a progressive policy wonk. the privilege i have had to work for people who are of such intelligence and commitment. that is not to say that there are not other people who would be great leaders to work for, but all of them were so intelligent, so thoughtful, so interested in the details of public policy. when i was asked about ron barack's book about obama, i was so upset about the thesis that he was being dragged along by others. i sat in march in a six-hour

meeting in the roosevelt room on whether we should go forward with our stress test. the fact that the economic team did not totally agree to meant that the president had to sit there at the most complex financial issues imaginable and go back and forth quizzing some of the top economists and financial experts in the world and then making what ultimately proved to be a very wise call. that is not something you can do without both an enormous amount of intelligence, without you being the one who was running the show, often because you're economic advisers will be divided at times and you have to make the call. >> as you brief him every day, who sits in that meeting? >> we spent quite a bit of time with him, but sometimes it fluctuates. the budget negotiations with speaker baiting -- speaker

boehner, it was almost a role in meeting. if we send him for -- we send him economic update each and every day on quite a variety of issues. >> the does he handle the economic issues as well as or better than bill clinton? >> [laughter] rahn told me at the very beginning not to ever take clinton versus obama questions. there's nothing to be gained from those. they are both very smart policy people, trained as lawyers, who i think come to expect as i would, and probably you as well.

who i think, added from a very discerning position. -- come at it from a very discerning position. they come at it from a year high understanding of economics, but also -- a very high understanding of economics, but also with realism about what works and what will be perceived. you have to have a core of the guiding you when you make these decisions. when you are in that room and you have absolutely determined that the right thing to do is just going to be terrible politics and you decide to still go forward. when the decision it was made on chrysler, i was part of the team in advocating strong weight to that. you could not argue to the president that this was

politically popular at this time. it was not. you could not argue that the stress test, the financial rescue stabilization were politically popular. but each and every moment he did the right thing. he did the right thing for the economy knowing he would probably pay a political price for that, but it was the right thing to do. >> is the white house satisfied with the way the volcker role, as is proposed, are you in support of the regulatory proposal that is in front of the people? >> we obviously, in doing financial reform, we were very active in the legislation. obviously, we do not control all of the regulations put out by independent regulators because they are independent. that said, i think we looked at the ball rolled off, as he noted later, it was released 35 -- the volcker rule, as he noted later,

it was really 35 pages. the rest was commentary. and i think the basic t, the basic purpose, the basic goals are in place. >> are you satisfied with the occupied wall street movement? do you have any comments on that movement? >> i think the frustration those people face, i think they see what was historic effort to stabilize our financial system. they, like us, are still unsatisfied with the state of the economy and feel a sense of unfairness in how the economy has rewarded the different segments of the public, not just in the past couple of years, but in the last 10 or 12 years. i think we understand that.

i cannot try to say that i can say much more, other than i think our goal always has to focus on what the tangible elements that we can do. i feel bad i cannot any more than you -- i do not have any better insight than the people here as to the media and the exact composition and the exact issues are, but i will say that we are putting forward tangible, real choices for people. we are asking for a jobs out -- jobs act that does ask for compensation from the most

fortunate among us. if jobs at that we feel will put people back to work and make them feel -- a jobs act that we feel will put people back to work and make them feel the economy is working again. for mortgage refinancing and student loans, we're going to take up those issues, too. but what do you think the chances are there will be a sequestration? in other words, that the super committee will not come to any resolutions? >> as i say to people, i might

know.ow -- i don't it was the joke about somebody that it's more educated they do not know, but at a higher level of sophistication i would say that i am probably more informed than the average person. but i still think is very difficult to predict. i think the good news is that i think that particularly, you have seen many democratic leaders much more open to being part of a grand bargain. over the last year, a lot with the leadership of president obama, he has been much more open to taking on difficult issues on medicare and other entitlements from democrats if they can be part of a grand bargain. i think there are republicans who want to be part of the grand bargain, who understand intellectually that, of course,

you can get serious, fair, sustainable agreement. but unfortunately, even those who feel that way, and i think speaker brainard did for a time , -- speaker boehner did for a time, they are blocked. you have to hope that the public message, that that people still care about what the public says. they overwhelmingly support balance. they overwhelmingly want us to work together. they overwhelmingly do not want either of us to take absolutist positions. i just have to hope that over time, that will force an agreement. and i will say that having lived here and having been part of the white house in 1995, when things seemed pretty died in october and november of 1995 when we had to shut down. but three months later, president clinton and bob dole were sitting in the oval office at trying to balance out --

hammer out a balanced budget agreement. i still believe things can turn. i am still hopeful. every day, i talked to -- not every day, but often enough i talk with rising republicans in positions of responsibility who want to be part of a solution. i think they have to be willing to overcome the opposition and their party in the same way that president obama was willing to help move his party to move toward a grand compromise. >> does the president support you in supporting operation twist? >> on the -- on that, the clinton economic team, the obama economic team, we respect them

both, so we do not comment on whether we supported or not. and we think that is a hallmark of our system. we, as an economic team, often talk to the federal reserve and to the chairman about policy issues. i meet with him once a month. tim geithner meet with him more often than that. he does come in and we have small meetings with him on the president. i think what we try to do is make sure we are using their expertise, make sure we are consulting with them on issues like housing, make sure that the chairman has a chance to speak to the president to tell him his views. but on the other hand, always make sure that we keep the line clear that they are independent and that we are not seeking to influence them in any way.

>> what about the so-called belen chinese tariffs? with the president veto that bill or signing it becomes in its current form? -- or sign it if it comes in its current form? >> i think we share the aspiration of that bill to try to create a more level playing field between us and china. there is little question that their currency is not determined by market forces. and that puts our workers and companies at an unfair disadvantage. we have said that if the bill is moving forward we want to make sure it is consistent with our international obligations. we had some concerns in those areas and would want them to be fixed. but i do not think there is any question that there are

challenges in our relationship, economic relationship in terms of a level playing field. and within our international obligations, that is something that we, as a country, need to address more. >> let me ask you a final question. if the president is reelected, would you expect to serve another four years, and you would be 16 years in democratic administrations -- do you have that much energy left? >> your questions to seem almost to be a seminar of what questions should not be asked. hypothetical and personal hypothetical. >> you are very good at avoiding the direct answer. [laughter] but hope springs eternal that you might slip. [laughter]

>> i am obviously not going to answer the question. >> do you still enjoy what you are doing? >> i feel so privileged. i mean, to be able to have this position as national economic adviser for two great presidents, two democratic presidents in my lifetime is one i take enormously seriously. i feel incredibly privilege, but also just in the enormous sense of the responsibility, knowing that you can be involved in choices that if done correctly, you can improve people's lives and choices that is done poorly, can have negative consequences. as a personal matter, it is a different experience. my last time i was there i was single. i could be there every day, seven days a week. i now have two kids at home.

thank god for technology that allows you on weekends to stay home. but unquestionably, at 52 years old and two kids at home, you have to keep a greater balance in your life at this point. i had to blow off a meeting today to go to a halloween parade with my 5-year-old. >> was that a meeting with the president? >> [laughter] it was not with the president. that would have been a tougher one, but i think he would have very much respected that choice. life is much happier being married with two children, but it does require constant choices and balance in a way that i think makes my life roger, but does not allow -- richer, but does not allow the 100 hour weeks that both you and i have done at different times in our lives. >> thank you very much for the

interview. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> in a few moments, house speaker john boehner are on jobs and the economy. in 45 minutes, the head of the group americans for tax reform, " or norquist, on the tax proposals of republican candidates. the state department briefing announced that the united states is cutting funding for unesco. and then funding for the economy. >> let the c-span networks be your source for public affairs,

nonfiction books, and american history. c-span2 has book tv with the lettuce nonfiction books and authors. american history tv on c-span3 showcasing people and events that shaped our country. all of our programs are available any time at the c-span video library. the c-span networks -- is washington your way. -- 45 minutes. [applause] >> some of my equipment is falling off here. thank you, jim, for an overly- generous introduction. at the risk of this sounded like a mutual admiration society, let

me thank you for the extraordinary transformation that has occurred here during your tenure. it is absolutely spectacular, is it not? [applause] and this center started before gary greg got here, but you can hardly recognize before and after. gary, you have an absolutely superb. thank you for your leadership. [applause] today, as gary indicated, we celebrated a first. this is the first time in the 20-year history of the center that we have had a sitting speaker of the u.s. house of representatives. as the second in line to the presidency right after the vice- presidential, and one of the few congressional offices specifically mentioned in the constitution, the speaker of the house plays a uniquely important role on capitol hill.

our guest today has performed that role exceptionally well. this is a moment of great challenges for our country. to many of our neighbors are what -- are looking for work. here in kentucky is one of 10. spending and borrowing by the federal government, which has exploded in recent years, is catching up with us. and for the first time ever, america has suffered a downgrade of its once pristine credit rating. but history has a way of giving america the leaders it needs in such moments, and speaker banner is one of those leaders. john boehner knows the struggles that small businesses face because he once faced them himself. growing up across the river in ohio, he worked at his dad's tavern, a place called andy's café. the mop the floors, waited

tables, tended bar. he put himself through college working odd jobs and night shifts. he tarred roofs, refereed kids in sports teams, drove tractors, and worked as a nice gesture. through hard work, he put himself through school and graduate from college -- and became the first member of this family to graduate from college. he ran a company that represented manufacturers in the packaging and plastics industry. they had only a few clients, and the company was barely hanging on when the order passed away. john took over and suddenly found himself the president of a struggling small-business and he turned it around. along the way, john learned a lot of important lessons. he learned how to meet a payroll. he learned what it means to go -- to wrestle with government red tape, and most of all, what it takes to create jobs.

john learned that it is the hard work of the men and women in america's private sector, not government spending, that drives this economy. he learned we must look to the private sector to grow, and to create opportunity. john boehner is a small businessman had a hard to, and despite -- at heart, and despite a sending to the highest congressional office, i'm sure he would tell you he will always be a small businessman at heart. in the house to work alongside the ghost of one of my -- my heroes, henry clay. he used the office to his dovish the house of representatives as the body closest to that -- to establish the house of representatives as the articles as to the people and to make clear their will. john leads a new house of

representatives today that he pledged would reflect the will of the people, focused and determined to put our nation's broken fiscal house back in order. and in the 10 months he's been at the helm, john has made good on that promise. for the 100th of congress, the right man has met his moment. -- the 112th conagra's, the right man has met his moment. ladies and gentlemen, to join me in welcoming the speaker of the house. [applause] >> good morning, everyone. [applause] thank you. [applause] well, good morning, and happy halloween. i want to start by thanking senator mcconnell both for his french and for the honor of

being invited here today to address this impressive institution here in the bluegrass state. senator mcconnell and i spend an awful lot of time together and i could not be blessed with a better partner. he is a man of integrity and one of the best legislators that i have ever worked with. i am truly grateful for his friendship and for our partnership, and i'm deeply honored that he asked me to, and be with all of you here today. i also want to thank our host, dr. ramsey, the president of the university, and dr. greg of the mcconnell center, who happen to get his doctorate from the university of ohio, which is located in my district. also, senator mcconnell told you a little bit about me growing up, a big family and working around the tavern.

the lessons i learned growing up are the lessons i need to do my job every day. we learned to get things done together as a family. if you grow up around a bar mopping floors, washing dishes, waiting tables, tending bar, you have to learn to deal with every character walking through the door. trust me, i need all of those skills to do my job. [laughter] but i am a product of the free enterprise system and i was one of the millions of small business people and around the country who make our economy grow. i got involved with the government because i saw politicians killing the goose that lays the golden egg. and that is, our free enterprise system. i decided i would do something about it and ended up running for office. trust me, i never thought i would end up being speaker of

the house. but the things that drive me to get into this business are the same things that drive me today. as a small-business person, i thought government was too big, i thought they spent too much, and i did not think it was holding it accountable. i do not see it as one bit different than the first day i walked into the u.s. congress almost 29 years ago. today, i speak to all of you at a time of great challenge for our country, and frankly, our country's economy. and whether you are one of the students at the mcconnell center, where one of the thousands of students that pass through these doors every year, the condition of our economy is something that millions of young americans are facing today. the unemployment rate is stuck at just over 9%. we had a national debt that exceeds, or nearly exceed, the entire size of our economy.

in millions of americans are out of work. because of government's seeming inability to focus on these challenges, it is also when conference -- confidence in our government institutions is at an all-time low. i have been speaker of the house for nearly a year. it is more clear to me that never what some of the obstacles are in washington. my message today is simple. i think that our government has never been high, but -- opinion of our government has never been high, but it does not need to be this low. the american people need to see that despite our differences, we can get things done. we need to start by recognizing that common ground and compromise are not the same thing. let me explain. common ground and compromise are commonly end -- and mistakenly

looked at the same way. and i think it is done by both sides of the ideological spectrum. i would prefer the term, and ground to compromise. i do believe there is -- common ground to compromise. i do believe there is a significant difference. the american people want leaders who will stand on principles and stick to those principles, who will keep their promises and fight for them. but i also believe equally that the american people expect us to get things done. they expect us to seek common ground and to act on it. common ground does not mean compromising on your principles. it means finding places where your agenda overlaps with that of the other party, locking arms and getting it done without violating your principles. it too often, a common ground

and compromise are assumed to mean the same thing. as a result, we sometimes see people with good intentions on both sides of the aisle operating out of an aversion to common ground because they do not want to be viewed as compromising on their principles. as a result, this mistake brings in less functional government and mistrust in our institutions of government. i do not think we can afford to let that happen. the jobs crisis demands that we seek common ground and act on it where it is found. we did that on the trade agreement the several weeks ago. the president signed a lease -- these three trade agreements into law that have been in the works for five years. these agreements will result in the creation of some 250,000 american jobs. they were enacted with bipartisan support and no one

violated their principles to get things done. the same thing occurred just last week in the house on another jobs belbacha by diane black of -- another jobs bill by diane blog of tennessee. imposes a 3% surtax on small businesses. the president passed it easily. in both of these cases, the trade bill and the irs bill, we found common ground and we acted on it. no one was compromising their principles. we were doing with the american people sent us to washington to do. and they want more of it. and i think we need to continue to focus on jobs. my colleagues and i have a plan for jobs and it has been our focus for this entire year. i gave a speech lacks -- last month at an economic forum in washington and i talked about the need to liberate our economy

from the shackles of government. as a guy who ran a small business, i certainly believe that until we get away from a government that is constantly battling, manipulating, and micromanaging our economy, we will not see lasting job growth in our country. i realize that president obama and vice president biden are probably never going to agree with that statement. it is probably going to take a different administration to do the things that i truly think are needed to turn our economy around. but that does not at all costs of our obligation to work together to do what we can do -- that does not absolving us of our obligation to work together to do what we can do to find common ground. we can make a difference in the crisis our economy faces. i want to highlight three bipartisan bills that are opportunities to begin the process of finding got -- common

ground, and building on the bipartisan efforts that have come about in the last month or two. the first bill was introduced by one of my colleagues in the house, bob gibso. it is designed to eliminate costly and duplicative permit applications. pesticide use is already heavily regulated and all this does is create new burdens and requirements for farmers, ranchers, and job creators. this bill temporarily stops it. 57 of my colleagues on the other side of the aisle voted for it, that is nearly one-third of the democratic office. -- caucus. today, the court order goes into

effect. it should have been stopped months ago. it is disappointing that the deadline has arrived and that this bipartisan bill has not been enacted. but the senate still can act and it is a clear opportunity for common ground on jobs. october 6, the house passed the house resolution 2681, it regulatory act. we have some strange names for these bills. nearly 20% of our nation's cement plants will have to shut down if these new cement regulations her go into effect. literally eliminating thousands of american jobs. this bill gives federal regulators additional time and guidelines to develop a achievable governing emissions from manufacturing facilities. the extended time line is to

ensure that we do not have should -- do not have plants shutting down and putting people out of work. when president obama came to a bridge over the ohio river between ohio and kentucky, he did this at a -- an event at a concrete plant called hilltop concrete. and the jobs of the workers at the plant may end up being in jeopardy because of the rules that we intended to stop with this bill. 25 democrats voted for it, including one of their leaders. i am certain that president obama wants to protect the jobs of those people at hilltop concrete. and if there are differences, let's work through them, because i do not believe there is any reason we cannot get it done. another one of these bills is the epa regulatory relief act, a bipartisan bill sponsored by a democrat and republican.

it gives federal regulators additional time and guidelines to develop achievable governing emissions from industrial, commercial, and institutional boilers and incinerators. it is pretty arcane. but as the rules were being implemented, it is pretty clear that if you are operating a boiler, you have huge new requirements that you have to meet. we have 41 of our democratic colleagues in voting for it. it is a bill that will protect millions of americans jobs. both sides worked together on this. there was no reason to compromise. we found common ground and we were able to get this done. the danger is that the overlap will end up in some political pawn game in washington d.c., held hostage to a broader

debate while the two parties clashed over their various philosophies. listen c'mon -- listen, there's too much that we agree on to allow this to happen. and i believe it is up to you, the young people entering the workforce at the end of the school year, to get this done. the current generation of students that will graduate from schools like this one at a time when our country faces questions about its role in the world, our competitiveness is declining while our debt is increasing. if you are a student here at the university right now, or at another university, there is no one who has more at stake than you do. as a consequence of the that the united states faces, there's the possibility of a downgrading of

our credit rating, thereby, increasing the interest cost on the nearly $15 trillion that we have added up. we must deal decisively with the spending epidemic in our government, and specifically our failure to deal with entitlements that have caused spending trillions more over the next decade than what we bring in. we have caught a glimpse of how disruptive this can be in response to what happened over the summer. we were pushing up against the deadline to increase our debt limit. the stock market plunged, and frankly, i think it rattled many americans. but here again, a place where we need to search for common ground. the super committee is tasked with finding at least $one. true trillion in savings -- $1.2

trillion in savings to reduce the deficit. nobody thought the committee's job would be easy, and clearly, i have not been. i do not think anyone is at all surprised. but our hopes here in the days ahead is that we can find common ground. everyone knows that we cannot solve the debt crisis without making structural changes to entitlement programs. you know it. i know it. president obama knows it. if we do not make these changes, the programs will not be there for your generation when your -- when you need them accurate i think everybody understands this. the fact of the matter is, strengthening these programs will be good for our country, and nothing would send a more reassuring message to the markets than by taking bipartisan steps to fix

structural problems with medicare and medicaid and social security. judge handling of texas, and patty murray, a democrat from the state of washington -- jeb handling of texas and patty murray, a democrat for the state of washington could not be more different in their ideals. but they will work together and find areas of overlap between the parties in getting this job done. common ground without, -- without compromising on principles is the recipe for some of the greatest milestones in recent memory. the 1986 welfare reform law is probie the most important domestic -- is probably the most important domestic reform law of this past century. it happened because both sides knew it had to be done. they locked arms and got it

done. the same kind of effort can lead to success on jobs now, and on our debt. i know this is personal for me, and for senator mcconnell as well. we want these things to happen. i did not take this job to preside over some partisan screaming match. i took this job to be speaker of the whole house, so we can truly listen to the people of our country, those who truly hold power in this country, listen to their priorities, and get step down. -- get stuff done. as i said earlier, faith in government has never been high. it does not have to be this low, though. i think it is natural to have doubts about the government. americans have had a healthy skepticism of the government since our founding. but we should never lose faith in our country or the system the

founding fathers designed for us. it has worked and kept the nation's strong for two centuries and i believe it will do so for centuries in the future. i want to thank all of you for the honor of being here with you today and i look forward to your questions. thank you. [applause] >> thank you, speaker boehner. in the same spirit of common ground, i should note that we have a number of dignitaries in the audience today, and i cannot name them all, but at least we should acknowledge that our yarmouth is, john your mus with us today, and our mayor,

greg fisher. [applause] no use of the cards coming down of questions. let's begin. dash,l call on john weber the first question from the audience. >> thank you, speaker banner. the first question i have deals with president's jobs bill and his recent actions. i would like you to comment on how he is doing and how congress would respond, as well as how you might pass some of the legislation in pieces. of >> as i made clear in my speech, i think is our job to find common ground. about a month ago, the majority leader, eric cantor, and i sent the letter to president obama outlining the similarities between our jobs bill and his jobs bill where i thought there was common ground.

i expect the we will continue to work in a bipartisan manner to address the issues where you can find common ground. with regard to the president's activities over the past week where he has decided that maybe the constitution does not matter, it is the president who taught constitutional law, if i am correct, so he understands article one, section 1 of the constitution gives congress the power of the purse. we will make sure that we are not violating the constitution while we are trying to find common ground to get the economy going again and get the people back to work. >> catherine? >> thank you, mr. speaker. we have a question from a young woman in the audience wanting to know what your favorite part of being the speaker is. >> well, probably doing events like this.

anything outside of washington is a lot more fun than being inside washington. i think mitch will agree with this probably. it is where america has its big debate. and regardless where people are on the ideological spectrum, their representatives come to washington, 535 of us, and we have a battle of ideas. and yes, we argue and, yes, we fight. but 95% of my colleagues, i think, are doing exactly what their constituents want. democrats or republicans. you know, the other 5%, we will not talk about them, all right. but most of my colleagues on both sides of the aisle are honest, sincere, and fighting for what they believe in. but that does not mean it will be real pretty every day.

being outside of washington, you are not in the middle of the pressure cooker. it is a lot more fun. a day like this is a lot more fun than sitting in my office looking at mitch -- [laughter] trying to figure out how we are going to solve the problem of the day when no one wants to do anything. >> thank you, mr. speaker. a member of our audience asks what your opinion is on the wall street movement. >> i understand the frustration with the economy and it is not producing jobs like they want. and frankly, under the first amendment, people have the right to speak out and to protest. but that does not mean they have the permission to violate the law. beyond that, you know, i lived

through the riots over the vietnam war in the late '60s and early '70s. you can see how some of those activities get out of control. some of us have lived through the race riots of 1968. that was clearly out of control. i would hope that these demonstrations will continue to be peaceful. >> thank you again for being with us today. it means a lot to all of us in the room. what you think is the future of the health care bill? >> the affordable health care act, or at least, i think that is what the title was. i call it obama care, and now apparently the president wants to call it obama care. in my view, i think it will deliver the worst health care system in the world and bankrupt are comour country.

i think it is doomed for three reasons. it could be the courts that decide the individual mandate for every american to buy health insurance, they may rule it unconstitutional. secondly, there will be an election coming up in a year. it is pretty clear that republicans and some number of democrats will have to go. and thirdly, it will just fall under its own way. over the course of this past year, you have seen various parts of this bill kind of fall away because it was not thought out very well, or it cost a lot more than people think it should have. there was one provision in the the long term provisions in obama care that the administration has decided not to go forward there. the provision was an amendment offered by a republican senator, during the debate, and it said

they could not proceed with this long-term care program unless it was actuarially sound for the next 75 years. that is kind of the basis for how we look at big entitlement programs. and because of that one provision, they could never see where this was going to be viable. frankly, i think we ought to take the same provision and apply it to the rest of obama care. if it is not economically viable and affordable over the long term of the program, then we probably should not proceed. [applause] >> john? >> mr. speaker, another member of the audience refers to the tax policy under both presidents clinton and bush, and the respective economic boom and recession and wondered what the

gop's evidence for tax cuts as an economic stimulus would be. i believe the more money will allow the american people told, whether they be families or small businesses, is money that will either be spent, save, or invested, all of which is good for the economy. while there is a role for government to play, money that goes to the government does not have the kind of a multiplier effect that it does when left in the private sector. and i am a big believer that the government should only take what it needs. the problem we have in washington is a spending problem. i have watched it for 20 years. mitch has watched it. we have spending that has been out of control and needs to be brought under control. what i was a first-time candidate in 1990, i said this. i said, the sooner we tackle our entitlement spending, the easier

it will be to make changers -- changes necessary to insure those programs are around for the long term. that was about 21 years ago. what have we done over the last 21 years? at best, and that around the edges. now what is happening is that we are chasing a runaway train. there are 10,000 baby boomers retire in every single day, people like me. 10,000 people on social security and on medicare. people are living longer and accessing medicaid benefits. this is not sustainable in any way, shape, or form. and the changes that need to be made, we are not talking about horrendous changes in the system, but small changes that will have a big impact over the next 10, 20, 30 years.

that is where senator mcconnell and i are focused as we look at this debt commission, the super committee, and the job that it has to do. but we have a spending problem, the big one. -- a big one. >> we have another question from the audience. someone wants to know about what your plans are for educational reform. >> when it comes to education reform, the secretary has been in conversations with both democrats and republicans trying to find a way forward. just like any big job that you might have around a house, breaking it down into smaller pieces gives you a chance to get the job done. the chairman of the educational work force committee, john klein from arizona, has taken the elementary and secondary education act and broken it down into about five pieces.

i think we have passed about four of the pieces. and frankly, all of them will pass -- passed with bipartisan support. the fifth piece will be more difficult because we are into the accountability part of the law. but i think it is time we take a very serious look at our education system. the facts are this, about half of america's kids get an education. maybe a bit more than half will get a diploma, but only about half of them are actually getting an education. i do not think we can compete long-term only educating half of america's kids. the current educational system, the structure that we have was designed over 100 years ago when most families had two parents there. the kinds of distractions in the evening were not as prevalent

and people did their homework. we have different needs today and bigger challenges in trying to find ways to educate today's children. and regardless of what kind of household a child might be born in, i think our society owes every child a chance at a decent education. that is not happening today, and it should happen. >> rose? >>, mr. speaker, how you feel about the president's promise to with fruit -- withdraw troops from iraq by chrichristmas? >> we all want our soldiers to come home. we have sacrificed hundreds of billions of dollars in treasure and thousands of american lives to try to help free the iraqi people from the grips of saddam hussein and to help those

people fight for freedom and democracy. we have nearly 10 years' worth of effort. all of those lives and all that money and my concern is that if we just walked out of iraq, we are risking everything that we have spent. the iraqis clearly are not capable of defending their borders. they have no ability to secure their space. they do not have the types of logistical things they need in place. they do not have the infrastructure in place that is needed for a country of its size. and right now they have the iranian regime just continuing -- the iranian regime just continuing to foment the discourse throughout the middle east. nothing would see them happier than to see us go because the iranians would attempt to fill the void quicker than you could

blink your eyes. there is some discussion about the state department for filling a lot of these missions rather than our military. i'm not sure the state department is capable of this because they've never done it, but we will continue to monitor this very closely. [applause] >> tyler? >> mr. speaker, a member of the audience today tells us she has historically allied herself with the republican party, but being fiscally conservative, she feels more more -- more and more alienated from a party every day precaution does the republican party plan to bring her back into the fold? courtney their party is what i would call pure. -- >> and neither party is what i would call pierre. and you will not get pure when

you have a two-party system. but we need to focus on what brings us together as opposed to those things that divide us. by focusing on what unites us, i think that helps. secondly, i would say this. if we are listening to the american people and following their will, it will bring our party closer together, and i think both parties closer together if we will listen to the american people and act on their desires, not our own. [applause] >> we have time for one more question. >> the last question we have before you today -- thank you again for coming on behalf of the mcconnell scholars and the rest of the global community. the last question i have for you today revolves around a bridges project that is central year in

louisville, kentucky, and in cincinnati. how do you feel about infrastructure spending in those cases of the areas? >> it is one of those areas that was contained in the letter that majority leader mcconnell and i sent to the president about a month ago because there was area for common ground. more needs to be spent to repair, replace, and in some places, build a new infrastructure. the problem is, nobody wants to pay for it. as a result, we have been looking through the last four years or so with most of this being contained in the highway bill, and reauthorize in this for three months, four months. i spent the last 10 weeks focusing on where we find the revenue to do something significant for our infrastructure.

the second part of this is, we will find a new source of revenue for infrastructure. and we need to look at what we are doing with it. it may not surprise some of you that there are 116 federal programs financed out of the highway bill. if you look back over the years at what we have done with highway funds, we have built some highways and some bridges, and we have built some sports stadiums and we have beautified everything under the sun. we have frittered away more highway tax dollars than you could ever imagine. if we're going to apply the revenue, we will clean up this mess so the money tree does get to the kind of projects that we all expect. and why do we need to spend five, 10 years going through all of the regulatory nightmares that it takes to build a new bridge, for example? why can't we streamline this process? [applause]

we have to streamline this process so we can get the project's start and end done. lengthening all of this, all it does is drive the cost up more and allows us to do that much less when it comes to rebuilding the nation's infrastructure. i want to say thanks for the opportunity to be here. as you can tell, senator mcconnell and i are great friends, kreag partners, and we work at this. it does not happen -- great partners, and we work at this. it does not happen by accident. i really appreciate the opportunity to be here with all of view. i am just a regular guy with a big job. thank you. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011]

>> mr. speaker, this has been a great honor for us. and we would like to present you with a small token of our appreciation. join me one more timepppppppppp@

we think it is a mistake. >> coming up and a few moments, a regent university forum on the economy. then "washington journal" is live at 7:00 a.m. yesterday what the work of the joint deficit- reduction committee. a couple of live events to tell you about today. a senate judiciary subcommittee holds a hearing on international organized crime at 10:00 a.m. eastern here on c-span. witnesses include representatives of the department of justice and treasury. later on c-span3, the joint deficit reduction committee will

review previous debt proposals. witnesses include the cochairs of the president's commission on fiscal responsibility. erskine bowles and former senator alan simpson. its star said 1:30 p.m. eastern. >> would you continue your treatment. wait for myred to answer until hell freezes over that is your decision. and he was the u.n. ambassador for president kennedy during the cuban missile crisis. he twice ran as the democratic nominee for president and lost. at least davidson is featured this week on the c-span series "the contenders." live friday at 8:00 p.m. eastern. for preview including more of his speeches and other videos, good or special website for this series. -- go to our special website for this series. >> now for among the u.s. economy and the federal deficit.

from -- university in virginia beach, va., this is two hours. >> this is the ninth annual clash of the titans that has become one of the great debates. we could not of florida football team. -- of lord a football team. we did the next best thing. we have a number of scholars fighting each other. it turned out that very good. when we selected a topic, what happens if they get everything fixed before our debate? no worry about that this time. [laughter] none at all. the super committee isn't going to fix anything. but we have people here that have answers. some distinguished people, senator alan simpson, a dear friend whose father served in the senate with my father and we have been friends for years. he is here. bret baier has done such a superb job of taking the

anchoring of the fox news. he filled in for brit hume, of marvelous news man, and he has covered himself with glory. we are so glad that he is here as the moderator of this debate. he is going to introduce to you the distinguished members of the panel. and one of them, by the way, is larry summers. he is president -- he was president of harvard. i went to yale. i told him, if he had gone to yale, we would be nice to him. but he did not. he was working in the clinton administration and several of us were there and work on a debt forgiveness package for third world countries, because larry has a heart of compassion for those who are suffering, and the initiative taken in that gathering with bill clinton and larry summers and others, it

resulted in a debt reduction of $30 billion of over indebted third world countries, to give them a fresh start. he is a wonderful person, as are all the members of this panel. you're going to get to know them. s one of them, by the way, it says that he worked for a man who worked for my father. it's incestuous in washington. [laughter] everybody works for everybody sooner or later. so we are all friends. they have rules -- no gouging, no biting, no kidding. maintain civility. i think you will have a wonderful debate. i hope they come up with some solutions to america's debt problem. right now what is a great pleasure to introduce a great broadcaster, bret baier.

[applause] >> thank you very much. it is a pleasure to be here. thank you for that introduction. i know you have celebrated 50 years of broadcasting i can only hope to be broadcast in 50 years. it is a pleasure to be here. i will be honest, i received an e-mail and it said "will you come down to the class of the titans." i was not sure if it was a wrestling match, a monster truck rally. a little research and i am it so impressed with what you all have done here -- the ninth year of a truly fair and balanced debate. this is definitively that.

i am really honored to be your moderator tonight. we have some amazing people. there are 375 until the election. that is 9010 hours as of right now. the biggest issue, obviously, will be the economy and the press of this that the world has been facing when it comes to -- precipices that the world has been facing when comes to the economy. to deal with that, we have an amazing array of palace. lawrence summers served as the director of the white house economic sam -- council from 2009-2010. as chief advisor to the cadet on economic policy, he developed the recovery act and other measures, cochaired the task force to restructure the automobile industry, and played a note leading role in managing the nation's economic relationships.

the is well spoken on economics. he has won an award given to outstanding of american economists under the age of 40, which he received in 1993 following his service as chief economist at the world bank. he became a key policy maker in the u.s. treasury department, rising to serve as secretary of the treasury from 1999-2001. the only time when -- within the past 60 years that america saw a decline in the national debt. he played a key role in american policy decisions from the enactment to nafta, the world trade organization, and the response to the financial crises in mexico. he received the alexander hamilton medal, the treasury department's highest honor. from 2001-2006, he served as president of harvard university

where he was an outspoken advocate of reform and higher education. he currently serves aprofessor at harvard and a member of president obama's economic recovery advisory board. ladies and upham and, please welcome dr. lawrence summers. -- ladies and gentlemen, please welcome dr. lawrence summers. [applause] hailing from a family that was heavily involved in law and politics, it is no surprise that alan simpson has held distinguished positions in both fields. a third-generation lawyer, he urged his law degree from the university of wyoming after serving overseas in the army. he practiced law briefly as assistant attorney general and 10 years as city attorney in his hometown. he served as both governor and senator. he later served as in the wyoming house of representatives for 13 years, holding the office

of majority whip, majority floor leader, and speaker pro temp. he was elected for three terms in the u.s. senate and was named to the position of assistant majority leader, which he held for 10 years. he served as director of the institute of politics at harvard university's john f. kennedy school of government before returning to his of water, the university of wyoming as a visiting lecturer. his class, wyoming's political identity its history and politics, remains one of the most popular courses at the university. i would like to take the class. in 2010, president obama and pointed simpson to serve on the bipartisan commission of fiscal responsibility and reform. the search on numerous corporate and nonprit boards and speaks on a variety of subjects. his book, "right in the old kazoo -- a lfetime of scrapping with the press," cockles of his

views of the fourth estate. i can attest to that as numerous questions of mine have been called aatch belt in a rnado. ladies and gentlemen, senator alan simpson. [applause] our next guest, robert gibbs, has been an adviser and strategist for president obama says the early days his senate race. he has served as president obama's press secretary. he began his political career through an internship with former congressman glenn brown of alabama. he went on a specialized campaign serving as communications director for the

democratic senatorial campaign committee and for individual senate campaigns including those of fritz hollings and senator obama in 2004. he joined the cadet obama's senate campaign as sennott -- as communications director and served until becoming senior strategist for communications during the general election. members of the media have often noted his quick wit -- quick wit and candid style. having spent many years as a close adviser to the president, robert gibbs is able to offer an insider's perspective on current issues. ladies and gentleman, please welcome robert gibbs. [applause]

karl rove as precedent of karl rove and -- karl rove and company. his clients include more than 75 u.s. senate, congressional, and gubernatorial candidates in 24 states as well as the moderate part of sweden. from the consulting role, he rose as deputy ief of staff and senior adviser to president bush. his winning political strategies urged him a great respect. the executive editor of the weekly standard described him as "the greatest political mind of his generation and probably any generation." michael barone wrote "and no presidential appointee has ever had such a strong inflnce on politics and policy and none is likely to do so again anytime soon." he now puts these skills to use as a fox news contributor. he is author of a new york times

bestseller, "courage and confidence." he writes a weekly column for the washington journal and has written for a myriad of of other publications including newsweek, time, the weekly standard, financial times, and force. he teaches undergraduate and graduate students at the university of texas at austin. he is also a faculty member with the salzburg global senate and -- seminary. back by popular demandhe is a two-time to tighten -- ladies and gentleman, please welcome karl rove. [applause] ok, let's go over some ground rules. we want this to be feisty, substantive. we have questioned the were submitted by the audience, selected by a panel of

professors. our panel is, a professor of governmentnd a professor of law. our timekeeper for the debate is a professor from the robinson school of government and a city council member from the city of virginia beach. we will be using a traffic light system. green means go, yellow 30 seconds left to speak, read, time is up. we do not have like i have at the debate the fancy bell, but i will get in the middle if it drags on. the agenda is listed in your program. we will begin by opening statements -- four minutes each. we will have a round table where each participant holds the floor and can ask the other side questions. i will have the option of calling up. next, i will present your questions to the panelists in four differe rounds. each of our debaters will have

four minutes to make closing statements. i will not ask any follow-ups from those. the program will conclude with a bit of a wrapup by m with that, the opening remarks by each participant. t's start with dr. summers. >> thank you very much. a key for the invitation and the generous introduction. much better than we usually get. once i was introduced by someone who asked if i knew what it took to succeed as an economist. an economist as someone who is pretty good with figures but does not quite have the personality to be an accountant. [laughter] that was in moscow and no one got the joke. [laughter] we have a lot to talk abo. three years ago in the fall of 2008, this country was at the most critical economic juncture

it has reached since the great depression. it is no exaggeration to say that everything was collapsing. the stock market was in free fall. hundreds of thousands of jobs being destroyed eight months. vicious cycles of declining financial systems. a credit crunch that hurt the economy. a collapsing economy meant no one could pay back loans. incomes were going down. that meant less spending. less spending meant less job creation -- job creation. the worst economic statistics from the fault of 2008 until the spring of009 banned from the fall of 1929 in the next six months. that situation has to be contained. those of vicious cycles have to be broken.

they were. a combination of strong government action to jump-start the economy through unnecessary spending in infrastructure, through a support to working families, to support we did not wrk the future, even in a troubled time, by allowing teachers to keep working in schools, and prevent law enforcement officials from being laid off. people did care about those to whom the banks lent money and did not what the credit crunch to damage our financial system. where are we today? there is no collapse. the economy has grown with the last two years. people said the money was going down the toilet. it did not go down the toilet. the money put in the banks has

come right back. at the growth is not like anything we wanted it to be. unemployment at 9% is at 4to hide. you know the reason why. who is. to hire people to work at the restaurants when they are half empty? who is going to build a new factory when the existing factories are only being worked on one shift? who is. to build a new house where there are too many houses -- who is goin to build a new house where there are too many houses empty? this economy needs a new plan that creates employment, it creates income, that keeps the economy going. it nds it from the private and public sector. this is not a time to be laying off teachers across this country. th is why we need to use this moment to renew and rebuild america. that is why we need to support

our housing and financial system. that is that is why we need to make sure that we grow american exports on a substantial scale. that is why we need to cut taxes, help families who are in a position to spend the money to put it back into the economy, and that is why we need to recognize that confidence is the cheapest form of stimulus and what is necessary to ensure that over time our government stops piling up debt at the weighrate it has. ank you. >> dr. summers, thank you. [applause] senator alan simpson? >> i think i will have to stand. it is an honor and privilege to be here at this remarkable university. you all must be really proud of

it. i know that certainly am, after visiting with the staff and faculty. richard, james, my handlers, it is but a lovely treatment. at a special treatment to see pat robertson, who served with my father in the u.s. and that -- who served in the u.s. senate. we surely do not and will not agree -- you would not want that all -- you will find that out fast, but will be a real debate. i serve on a commission of presidential dates. would that this active type of thing, with the politicians able to accept this kind of debate, but thewould not. as we meet with them on the commission, they would not go with this.

first, a lot to answer a question when i walked in here. somebody asked me, at a lot to answer it now, and the answer is, yes, i did sleep in the suit. [laughter] 3:00 in the morning, the phone rang, the guy said, how do i know, that is 2,000 miles. and he said, i don't know, some guy called and asked if the coast was clear. [laughter] my time is expiring. we did 10 months of work on this commission and came up with a vote of five democrats, five republicans, one independent. it is discussed months to establish trust. trust is severely tarnished in america, and congress, and

people still get on their hind legs and say, if we could get this done without touching medicare, medicaid, social security, and defense. that is funny. you cannot get there without touching all four of these. paul ryan spoke up. they crucified him. there is plenty of fat in defense department. there is plenty of fat everywhere. we cannot get there without cutting every one of the big four. the nest is letters i get from peop were sent to me, all stuff from the aarp. i ask, are there any patriots here or just marketers? you'll have to find that out. and they say, what do you wan wer tax base, lower rates, spending out of the code. we said, great, we will g rid of $100 billion of these tax expenditures which only go to

the top 5% of the american people. we take the money and give them what they ask for. 70,000,zetrro to medicare is a disaster. it does not matter if we call it obama care, health care, i don't care, it cannot be sustained. [laughter] a cannot be sustained a will not be sustained. just look in your own neighborhood. finally, if grover norquist is the most powerful man in america these days, he ought to run for president. i will deal with that later on. thank you very much. [applause] ok, the coast is clear. robert gibbs? >> first, let me thank all of you for coming and thank dr.

robertson and the university for having us. virginia beach got your joke, but you already see that we will not try to be as funny as senator alan simpson. [laughter] that is one debate that larry, myself, and that karl would agree that we are likely to lose. we talk about america's economic crisis, and i think all too often we think about economic collapse that started on september 15, 2008, when the banks and walltreet collapsed. i don't doubt that had a significant impact, as larry described, on the financial markets, 1 are confidence, but i think we should be clear and honest, the economic collapse

has been going on in many parts of america, in many parts of virginia for many, many years. for a long time, we watched income decline, college education became harder and harder to get, yet more and more necessary for the future. this is not something that started in late 2008, this is something that started 15, 20 years ago. the questions we are going to ask each other today in the debate we're gong to have is, what are we going to do about it? i think all of u agree we are at an interesting inflection point in our country's history. a time in which it is not simply guaranteed that we will pass on to our children and grandchildren a better life than the one that we have. we will have to make hard and honest decisions with ourselves in order to make sure that

happens. and i wish we could go back to one thing, and that would be to go back to the washington that alan simpson and dr. roberon's father's both worked in. they were from different parties, and though the constitution requires that every two years we elect congress and every four years we elect president, those two men and the men and women and the senate and house decided that in between those dates we would get together and figure out was best for the country so we did not face the exact economic calamities that larry describes. [alause] that is not going on right now. you know that, i know that. i think the most remarkable thing that happened this summer

was not a debt crisis or a bargain was or was not accepted, it was a credit rating agency that downgraded our debt not because we don't have the physical ability to pay our bills -- understand that, not because we don't have the physical ability to pay our short-term debt, but because they don't believe we have the government necessary to overcome the dysfunction to deal with it. that is an economic and political crisis. and if we do not deal with them simultaneously, i can assure you one thing, when bret is here in 50 years, there will be a clash of the titans. you will be listening to the very same discussions we're going to have today. except we are going to have wasted 50 years of dealing with those problems. if we are going to pass on a country that is better to our

children and grandchildren than the one great country we have today, then we better get about solving some of those problems, democrats and republicans, right no [applause] >> thank you, robert. mr. karl rove? >> thanks to the regents for having me back. every person on this podium today is here under false pretenses. not a single one of them as a titan, accept me. [laughter] all of this high school, titans, class of 1951. -- columbus high school, titans, class of 1951. 14 million fellow amicans are out of work today. september, unemployment 9.1%, the 32nd month and a row in which unemployment was 8% or

more, the long sustained time of high unemployment since the great depression. it happened despite the fact we tried the 2 1/2 year experience of spending our way to prosperity. it has not worked. i country faces fundamental issues regarding how to get ourselves on the right track. we have lost 1.5 million jobs net since the stimulus bill was passed. we have had spending the size of the government relative to the gross domestic product of the united states, 20% in 2008. today it is near 25%. in 2015 it will be 23%, and then marched upward after that. by the middle of the century, if left unchecked, using the president's own projections, it will consume 40% of our gdp, the federal government. january 20, that the 2009, by

december 31, 2009, it was equal to the default% of gdp. last year it is equal to 62% of gdp. this morning it was 70% of gdp. at the end of the year it will be 72%. if the super committee cuts the rest of those trillions of dollars from the next 10 years budget, but and of 10 years it will be equal to 76% of gdp. we are slowing fure growth. the answer is clear, we have to stop spending. we don't have the money that we're spending today. we need to remove the burden of regulation and uncertainty that is dimishing business confidence. it wants to invest in plants and equipment when there were about the cost of regulation and the affordable care act? we need to repeal the affordable care act, which will cripple our economy if we don't. [applause]

and it is absolutely essential we tackle the fundamental challenge fing not us today but us today and our children tomorrow, and that is reforming entitlement programs which have made promises our country cannot keep and cannot fund. maybe we can do so today, that in 10, 15 years. the systems are going broke. by 2020, the hospital insurance partner medicare will be bankrupt. we are already spending more each year in social security than we are taking in it in. texas. but 2037, we will exhaust the trust fund, that goes bust in 2037, social security. this is going to be about as easy as giving birth to a porcupine. that that was said by alan

simpson. he also said we are the healthiest course and the glue factory. if you think that keeps spending money is smart, the drinks are on me. that is as smart as in a truck of potato chips to the obese. >> i said that? >> you did. [laughter] >> simpson said i once alienated all special interests. the president said, no, there are a couple of more you have not done yet. >> your time has expired. >> stop eating into my time. tell them to get the job done. ank you. [applause] >> karl rove. with that introduction, senator simpson, in this round table discussion, each debateras

their own time. bacon do with it what they want. senator simpson, -- they could do with it what the want. senator simpson, do with it what you want. >> allow to get back to rover norquist. anybody who uld say you will not raise taxes under any situation, even if your country is in extremity, he testified before us, he said my hero is ronald reagan. i said, great, he is mine, too. i said ronald reagan raised taxes 11 times in eight years, grover. he said, i did not like that at all. i said that that is not the issue, he did it. he did it to make the country run. now you have a situation where 95% of the republicans who are serving have signed that pledge. how can you sign a pledge before you have heard the debate, read the information, know the position of your country, and

pretend you are a legislator? i think that is remarkable absurdity. he is the most powerful man in the united states right now. not useuse charts, and power point. if you spend more than you earn, you lose your fund. if you spend a buck anbar of forty-two cents, you have to be stupid. and that is what your country is doing every day. borrowing forty two cents for every dollar that we spend, today. this day, your country is borrowing $4.6 billion, and it will bar that tomorrow and the next day and the next day. medicare cannot succeed, and i will tell you why. it is simple. all you have to do is look around. you have a situation where one person in america weighs more than the other two. this is not funny.

this cannot be helped, many people. that is the way it is. you have bouse, tobacco, designer drugs, all of this. just roll it into a big ball. medicaid. you walk up to the window, and if you are over 65 and you get a 150,000 other heart operation and never even get the bill. what is that about? and then you have this and that. if everybody waddles up and never has to pay a penny, do you believe they will cut back in any possible way? of course not. that is where we are. we cannot grow our way out of this. people testified would it have double-digit growth for 20 years and never grow our way out of this box. the big bang theory, if you believe that, happened 3.6

billion years ago. we owe $16.5 trolling in. until we -- trillion dollars. i want to ask another question, and that comes off my time, but we don't care how we got here. the first three months of our commission, the said to the biggest spending president in history of america? gege bush. then the other side, but this guy stripped him 3 to 1. we said we will adjust to a two- person report. we will not do bs and we will not do much. and we did not. it is very specific, 67 pages, an english, www.fiscalcomission.gov, and

the reason it is unpopular with the special interest groups is because it outlines how to get out of this whole. >> a minute to ask a question he posed, which you talked about politicians working together to get past this. he is saying that blaming who ever was before does not get past the crisis. how'd you get something done with the current political environment? >> i don't want to speak for larry, but i will, probably, i don't think any of us on this stage disagree with theotion that we are running path that is simply unsustainable. nobody would argue that. the question is, how we use our politics to get out of this mess?

i think senator simpson has dedicated his life to this problem and dedicated a serious amount of time to this problem and he makes a grammatically -- a dramatically good pnt. there is not one way to do it. we have to do a little bit of all that. we cannot grow our way out of it. we cannot cut our way out of it. we' not going to raise taxes to get out of it. we will have to do some little bit of all of that. we will have to address medicare. we will have to address social security. we will have to address the fense budget. we will have to look at the amount of money our government takes in and it would take it from. but if you leave one of those out, it is not going t add up. i think the sooner that we recognize thawe are all in this together and that we all have to be in this together and that we all have to contribute to a solution, we are much more likely to get to a point where

we are not debating this but we are reeing. >> the current environment does not indicate that is happening. >> there is no reason that it should. the problem is not going to get less. as senator simpson pointed out, it will get worse. if we do not deal with it, you will be debating this issue for a long, long, long time. we had every opportunity to do this. we had a real and genuine opportunity to do it to this -- to do this. the speaker and president sat in a room in that very close. but it did not happen because the speaker decided that we actually could not do the notion of having everybody involved, right? and thomas had be restructured, and we have to look at tax base. -- entitlements had to be

restructured, and we had to look at the tax base. we were close to something really, really big. but we decided bause of our politics would not allow it that we would not do it. the credit rating agency downgraded us? think about that. credit rating agencies. you have heard about them, right? they give aaa credit ratings to securitized mortgages. you heard of those, right? that is what got us into this mess nobody shoulwalked out of this room and mess with securitized mortgages. none of you. our debt is downgraded at less than a securitized mortgages because weo not have the political will that senator simpson says to just admit we are in this all together. bob dole had a great saying, the only way we do this without tipping it over the canute is to

step into that can do together -- the only way we do this without tipping over the canoe is to step into it together. we step in a different time, everybody gets wet. in this case, i think the analogy is closer to drowning in debt. i would ask a question, and it builds off of my latest rent. i think we had it and interesting summer around things like the gra bargain. we have had interesting debates on the republican side about how we're going to deal with this. i found one of the most eliminating things that happened in one of these debates, and i don't know which debate it was -- >> i think you and knowing where this is going. >> maybe you ask this question. >> it was.

>> this is better. he asked a simple question. of all the people running for president on the republican side, and that was, wou you agree to a grand bargain of sorts is for every $10 in spending cuts he would agree to $1 of increased revenue. raise your hand. i think it was nine at that point. they would not even take that. not one person raised their hand. >> the opposite. i said would you turn down the deal. and they all raised their hand. >> and my question would be to senator simpson, if you were in the senate today, would you take that deal? >> you bet. you cannot get out of this without everybody in skin in the game, there is no such thing as

shared sacrifice. if we don't step up to the plate and forget this, we are americans first, not democrats and republicans. [applause] >> karl, would you take that? >> i would, but i thought it was an unfair question to ask. in a democratic date, if you said, would you accept the changes in primary reforms that you have a lot of raised hands on the platform from democrats? no. >> i will say this. if the debate and the democratic party was had with the current occupant of the white house, that is what we had agreed to. >> hold on, hold on. >> let me finish. >> just finish your answer.

>> i will give some credit, karl, and if you have seen what happened over the summer, a lot of democrats were very upset the president got that close to the grand bargain with the speaker of the house. they were. they still are. t this president was willing to go along with some restructuring toot entitlements in order to all step into that canoe together. i think that is the definition of leadership. >> at the time, we could not give details of what that was that he was agreeing to end what the plan was. when you say he was agreeing to it, it may have been in principle, but as far as specifics, we cannot get what was gone to happen. >> let'sebate going forward rather than backward.

everybody here i think agrees that everything has to be on the table. that means entitlements, revenues, both of them have to be there, and we want to see the political leaderfind a way to that. that is an important area of agreement. i will let others fight about ho is a greater centesinner, republicans or democrats, and you could probably figure out where people will come out. but what i think it's much more important is that we all agree that all of the things have to be on the table, an that anyone who denies that is speaking passed the truth. >> karl rove. >> it requires bipartisan

leadership. with all due respect, i credit the current president with creating an environment in which there cannot be bipartisan cooperation. think about how he dealt with this with the speaker. the speaker was never clear about what the deal was, but the trust was simply not there. why? because the way the president has dealt with republicans from the beginning. the president and fights him, house republicans givcouncil on the stimulus program, and congressman ktor give suggestions and he is cut off by the president saying, i won. and you see it this year. thpresident says we he -- congressman ryan in january, he has a serious set of proposals. bed and april he invites but -- then in april he invites him

into the front row and savages him over a proposal he called serious and the spring, first offered by senator john breaux. we saw it in july when the president has this unique moment to bring the country together, and what does he do? three paragraphs from that and he says, and there's another philosophy and another approach. we should give back all the money and regulations and tell everybody you are on your own, but that is not th way of america. how was that bipartisan cooperation when you insult the people you are trying to get to pass this bill? and then the president is going on the campaign trail, last week, i know what the republican economic growth plan is, "but have dirtier air, water, fewer people with health insurance." that is not the language of somebody who wants to bring the country together. [applause]

i know dr. summers says duncan to the past, but there is an instructive lesson. we had a slightly more contentious election that president obama. dick gephardt was asked twice, the think that bush is legitimate elected? the democratic leader said i refuse to answer the qution. yet in june with a docratic senate would at the bush tax cuts passed and a quarter of the democrats voted for it. why? because we negotiated, we try to come to agreement and did things we did not want to do. if we're going to get this done on entitlements, we have to do that. let me say something about taxes. i think we ought to focus on a tax system that generates more revenues as a result of economic growth. i would be interested in what

our budget experts and economists think, we have budget scoring rules and congress that impossible -- we have a static scoring rule when it comes to taxes, so if we have a pro- growth plan, the congressional budget office course it as neutral. we have to find a way to make systematic reforms with budgeting. two-year budget, 0-based budgeting, as court rules that to not allow us to get away with the gimmicks we get away with and does not allow us to understand the economic imications of things like pro- growth economic plans. >> senator simps sitting next to you just said taxes need to be on the table, but he is correct saying most republicans say raising taxes is not the right thing to do it ever, let alone now. how do you respond? >> i am not sure now is the time for an across-the-board tax increase. but where the president could

get agreement was on taxing spending. we ought to be looking at tax expenditures that did not help. these are subsidies and giveaways and deductions and exemptions. i think he is in favor of getting rid of the research and development tax credit, i am not, but we could find a parcel of these to get going. a lot of them in the energy industry. there is no need to subsidize deep offshore oil drilling. we have the technology that was disarray at the time when we needed to encourage people to that. what we should not do is pick out the energy industry and said, we treat the manufacturing and industrial sectors this way and we will now say the energy industry involving chemical, natural gas andil is no longer part of the manufacturing base and you are treated differently. we ought to focus on the things we can agree with and put the

politics that we cannot agree on to the side. >> dr. summers? >> i want to say a couple of thingsand then put a question. we have an important agreement here, that we have to do something on all sides. karl is right, we need to do the arithmetic, but to proposals and a sophisticated way. i agree with them that if a tax change produces economic growth, we ought to take account of that. i hope that he would agree with me that if collecting money for people who are not paying their taxes and the irs budget, collect $5 for every dollar we spend, and we would count that. we are bringing about competition in health care. that saves costs. i hope we count that. if we do that, i think it would be an important step forward.

blame and both directions. republicans have traditionally been much stronger supporters of medical malpractice reform than democrats. personly, i am a democrat, but i think republicans are more right about that issue. the president would have been prepared to make a cpromise on that issue in the context of health care. he would have made a big change, he would have sold out longtime supporters. just one thing that he wanted. if he did it, he wanted somebody who was republican to vote for the bill. that sort of seems fair. not one was willing. so it is complicated. i am not goingo tell you that all of the problem is on the republican side, but if you don't think there is a problem with both sides of this question

of partisanship, i think that is wrong. my question for my friends is this -- we have to get together on the budget deficit. we do, and we have to touch all places that alan simpson talked about. we have some other deficits in this country, i think. i think there is a deficit when 50 million people have to rely on charity for their health care. my life was saved by the health- care system 25 years ago, but i would not have got the treatment i get if i had not come from a relatively privileged family and i think that is wrong in america. do you? i think it is wrong that in a variety of our states, public schools are open four days a week. i think that as a deficit.

i think that is wrong, too, and we need to address that deficit. how many of you have ever flown into kennedy airpo from someplace internationally? does it make you proud to be an american? you think about what kennedy airport looks like, the airport that came from looks like, i think that is an examp of our deficit that we have. our infrastructure is not remotely what it should be. so my question is, yes, we absolutely have to do the right thing on the budget deficit but when we are sitting here right now with 20% of construction workers unemployed, able to borrow money at 2%, should we not do something about the education deficit?

should we not do something about the health care deficit? that is my question. >> senator simpson, do we need more government spending currently on these things that dr. summers talked about? is that fair? >> just for the record, his question was almost four minutes. ?> was that fairpor >> it is what it is, i suppose. emmy said we need spending from the public sector and private sector. to narrow that questn? >> you reconstructed his question, beautifully. [laughter] >> i am getting the sense this is not a hometn crowd. >> if you read the report, we dealt with the issue of a fragile economynot doing too

much too soon, talking about infrastructure, education, research and development. every time we get a load of stuff, whenever i do i say, don't call my house anymore until you read the 67-page report, because it is very specific. i am talkingbout defense. that's get to that, quickly. how many conactors do we have and the defense department. the said it is between 1 million and 10 million? ehab anyway to audit them? no, we don't. i am a military retiree, active duty in germany. there are 2.2 million american retirees. i was two years active duty, reserve.

eight more years i woul've been a military retiree. they have their own health care plan called tricare. the premium it is $470 per year, no copiague, takes care of every single to panic. takes care of it every single dependent. you think we could change that? the drinks are on me. they come to the meetings and raise hell. if he cannot get that done, we went to gates and said, come on, he said he taken over, i have been cremated by these people. >> what i am trying to pull down, he says the fundamental question is government spending

compared with cutting the governor ment. >> that is not the fundamental question. alan simpson exactly right. there is a whole set of cutting that needs to be done. it needs to be done in defense, god knows there is waste everywhere. >> so what needs to happen first? >> just from my perspective is that it needs to be balanced in three ways. there needs to be balanced cutting the waist, their needs to be balanced cutting the tax expenditures, the subsidies that go and appropriately, and even as we at reduce the amount we borrow, we have to make sure that between the public sector and private sector that we're doing right by the future. fate dependsdren's

on whether we don't leave them to bit of a debt. it also depends on if we educate them. it also depends on if we are leader of science. it also depends on the airport. all of those things are important. the right picies take responsibilities for all of on. >> karl? >> let me dwell on tort reform 30 seconds and then i will answer the rest. the person that did a good thing in the health care speech. the president did a good thing in the health care speech. he said the republicans, we ght to look at tort reform. two weeks later they laid out their tort reform proposal, after no discussion with republicans. it said the following, states can apply for patient safety programs, money for that, which is what e