>> you by stefan amazon. >> as you live. there are a couple of questions here about the definition of the pledge including one that says have you ever thought about and no new increase in debt pledge in which balancing the budget is equally important? any thoughts more broadly about the concept of pledges beyond the scope of taxes, there are few others out there. it helps to elect entire legislative bodies across the country. has been very helpful in 1994 and in 2010. the number of pledged takers

keeps growing. then people say tax pledge, great. what about spending pledge? my answer is fine, write it. don't spend more than $1.20 trillion, except with inflation and growth of the economy, then $1.40 trillion and then $1.50 trillion. i am not opposed to a spending cut. congress is set up so that everybody touches the ball but nobody touches it last. i voted against most of the spending. the late it is designed to make it impossible to figure out who is responsible for the spending. if we could come up with a mechanism, which need term limits on the appropriations committee. as opposed to someone coming to washington d.c., they cease to

be part of the moderate critic the modern conservative party. that is my best suggestion on reining in spending with a rule change of the then how -- have the tea party yell at everybody, and that has made some progress. >> could you craft the words for a-- no spending increase pledge? >> i think the overall point is true. you can come up with ways, but it is absolutely much trickier than the beautiful simplicity of the taxpayers protection pledge. i am just not persuaded that that beautiful simplicity has led to real taxpayer protection over the life of the united

states fiscal picture in the early 21st century. i would add that i think that the effectiveness of the pledge overall depends on the political context. at the state level, you have a balanced budget amendments which tends to place it -- it doesn't place a cap on spending, but it creates a further constraint. in states that are dominated by the republican party, i think the accommodation of a balanced budget amendment and tax player pledges has been wonderful for the split -- for small government. in states where the republican party does not dominate and shows few signs of dominating in the future, like california, you could argue that the taxpayer protection pledge has prevented california from going the way of greece, but i think many people who live and work in california would argue that california is headed that way regardless. i supposed to the big difference

of opinion here is that i think that an enormous enough gap between outlays and revenues becomes a more dangerous in the long run than a modest tax increase. i think and based on the view of american politics, i think grover disagrees. that is to say that i think california today is in a more dire position than the united states was in the clinton era when tax rates were higher than they are today. that is the core of my skepticism about the effectiveness of the pledge. >> we have time for a couple more questions. this question comes from the audience. the bush tax cuts are scheduled to expire in a year and rates are scheduled to go up. if a place under votes for tax reform and the tax cuts expire

in which rates are lower than they would otherwise be, but higher than they are now, is that a pledge violation? >> if they have already expired, or if they vote for them before they expire? >> i had -- ahead to get into hypothetical. if you went to the american people and say let me tell you what i am voting on and what is about to happen, i got in trouble with the washington post having this conversation about what if the tax last and if no one was there to vote, did anyone break the pledge? i am not getting into a hypothetical. it is a this is what we are doing and they think it is a tax increase, then you have a problem, and i cannot get you out of trouble. you need to take a look at what

common sense tells people. idea of put aside the imaginary spending cuts for a moment. if there was a real package of spending cuts -- >> a real unicorn her? >> if there was a real package of spending cuts on tax increases -- we know from the debate a couple of months ago, candidates ask the question at 10 to one. even at 100 to one, isn't that better than nothing? >> the democratic senate -- why did i not get worked up about the to me sing -- the toomey thing?

they said we would have a trillion dollars of tax increases. i ran into senator kerrey and said you need to help us work on this. he said all we need is a trillion dollars and higher taxes. personaltoomey's theory about what would be cool. when you are all by yourself imagining what unicorns might look like, but the democrats won't let you have a unicorn, and obama's sitting at the white house running a campaign of class hatred and india agreed as his campaign slogan, your not going to be cutting marginal tax rates 28%. what if they would agree to vote for some deal, wouldn't that be cool? i suppose that would be really cool, but if we can come back to planet earth for a moment, that

is not an option. >> doesn't that lead us into a pit of existential despair? [laughter] it requires us to imagine the democratic party largely disappearing, or alternatively, the republicans passing sweeping legislation that i am moderately skeptical about its popularity, and then enforcing it. i would ask in part, what makes you -- if real spending cuts are a unicorn when there is bipartisan support for them, why are they real when there is partisan support for them? you talked about $2.50 trillion as a victory for conservatism. why do you think that is real? if introducing the virus of a tiny tax increase corrupts a host of projected spending cuts

compaq might be the spending cuts happen when there isn't a tax cut? >> when you put a tax increase on the table and they talk about spending cuts, the spending cuts get taken that. when you look at simpson-bowles and the bill turned down, the tax increases grow and grow and the spending cuts become further and further away. not a single democrat has actually endorsed any of simpson-bowles. the president introduced his bill a couple of weeks after simpson-bowles, and none of it was in it. if the democrats -- if harry reid got together with the democrats in the senate and passed a bill that did all the

things that people like to imagine the modern democratic party is capable of, then we would have something to look at. bring me a bill. pass something that looks like the right and budget, meaning that it is real budget that can be scored, that can be looked at. the democrats have not passed a budget out of the senate in the last three years. they cannot stand in front of the american people and passed a laughed -- passed the lasaugh test or when an election. this is not easy. this is a lot of work. the modern republican party only started in the right correction a while ago. goldwater was against cutting taxes. we had a bunch of republican spending money with bush 41 and nixon and ford. it took the tea party to really

whacked the party on the side of the head and began to move the republican party more seriously for spending restraint. this is a lot of work. this is not going to be magic. imagining a reasonable modern democratic party that will help reduce spending, all the spending we have got now, these guys did. they are proud of it. it was on purpose. >> colada the spending, republicans did, too, right? >> -- a lot of the spending, republicans did, too, right? >> that is where this huge jump in the spending projections got crazy. >> it has gone on under both parties. however, there's a difference in the magnitude of the spending that is rather dramatic. what happened was, we lost the election in 2006 and 2008 on

issues other than economic issues, and ended up now paying the price with the guys we elected. >> we are at our one hour mark. a couple of housekeeping matters. i will ask to bring up the last power point slide. folks can watch this debate, the replay of the debate, as well as other debates we have had in this series. they are available at www.aei.org. an ebook is available of the very first debate we ever had. that is available online, too. all that information is on the screen. i want to thank grover for participating in this informative discussion this evening and i want to thank

everyone here for attending tonight. thank you very much. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> in a few moments, a town hall meeting with house minority whip steny hoyer of maryland. a little more than an hour, republican senator pat toomey, a member of the joint deficit reduction committee, in what should be included in the budget and spending negotiations. then, focusing on president obama's efforts to extend payroll tax cuts. later, democratic representative

barney frank of massachusetts talks with capitol hill reporters about his decision not to run for reelection. >> on "washington journal" tomorrow morning, we'll talk about the congressional agenda with republican representative nick mulvaney, a member of the budget committee. donald payne take your questions about a bill in the house tomorrow regarding how union elections are held in the workplace. the national journal's chief correspondent my hirsh joins us to talk about his article on unemployment. washington journal, " every day at 7:00 a.m. eastern on c-span. >> it is easy for you to watch today's events alive and reported. it is easier for you to get our schedule, with new features so you can quickly scrolled through all the programs scheduled on the c-span networks, and even

receive an e-mail alert when your program is scheduled to air. there is a section to access our most popular series and programs cut. a handy channel finder, so you can quickly find where to watch zero or three c-span network on cable or satellite systems across the country at the all new c-span.org. [applause] >> house minority whip steny hoyer held a town hall at the university of maryland. he was presented with a leadership award. this is an hour and 15 minutes. >> that is the end of our award ceremony, but next we have our town hall meeting with the congressman. for those of you who don't know what a town hall meeting is, i will give you a little sense of what to expect.

first, the congressman will make some remarks, and then he will take questions. one of the key aspects of the town hall meeting is the questions. so as the professor, i am here to remind you of what a question is. a question is a short statement of inquiry that ends with the expectation of or response. the key words, short response. some of you may be tempted to play the role of professor and give a lecture or speech. but that is not appropriate. so we will have a few words from the congressman about his outlook for the economy, for the state of the nation, and then we will take some questions. we have three or four students who will have the honor of asking the first two questions. they are brilliant freshmen and

sophomores at the university of maryland. i would like to say i help with that. they are my students. our program will begin now. [applause] >> i want to say that i don't know that i have had that exact real before where i got up and sat down and then got up again. it does give you the opportunity to leave, however. many of you showed poor judgment and then didn't. i am pleased at that. before i begin, i want to thank the center for american politics and citizenship for the role they play in assuring access and transparency in government and promoting careers in public service.

young people, at the end of the speech, i will say something more about a career in public service and america's need for your participation. capc is leading the effort to help of our personnel and citizens overseas boat. this first of its kind system resulted in military and overseas of voters being 20% more likely to cast their ballots in 2010 than those who received their ballots by mail. 20%. the center goes to work is an important service to the citizens of our state, insuring that marylanders know where they can vote on election day and that citizens know who finances state and local campaigns. that is a critical issue. we have had a supreme court case recently that frankly allows it very, very large contributions without knowing the source. the problem without knowing the

source is you don't know why they are telling you something on these 32nd and 62nd ads that you see too often, in my opinion. -- 30-second and 60-second ads. you need to consider the source, and it cannot find out the source, that is a problem. that is why this transparency is so critically important. our state treasurer is here, one of our elected officials, who is one of three boats on the board of public works managing the money. i always mention her name. she is a wonderful lady who served in the house was extraordinary service. i know there are certainly a lot of special interests in washington that wish capc had not done so, to make

transparency contributions. the constitution of the united states guarantees that citizens can address their government for redress of grievances. this is an absolutely critical right in a democracy, and spending money exercising that right is an appropriate thing to do. again, transparency is critical so that you know and i know who is contributing to whom, for what reasons, and do they have an underlying motive? many students from the capitol hill internship program have in turn for me -- have interned for me. paul has been sending me some wonderful insurance. steven mooney and danielle -- paul has been sending me some

wonderful interns. stephen, stand-up. is danielle here? thank you very much for what you are doing in our office, and thank you very much for providing such talented people. i spoke a few minutes ago about the difficulty of summoning political courage during times of division. today we find ourselves living in one of those moments. when it comes to the challenges of our debt, we have just seen what happens when political courage is lacking or when parties refuse to compromise and come to consensus. as we come back from the thanksgiving holiday, we have seen little progress on deficit reduction. in order to avoid the difficult process of sequestration, which is a series of automatic cuts that will take place without the kind of agreement the subcommittee was supposed to

have reached, congress will have to act. for those of you who may not know what sequestration means it is from anybody's standpoint and irrational process. it is and rational process because it opines that we will cut across the board, in respect of a priority. -- irrespective of priority. it gives interpersonal life need to not spend an extra $10 a week, the probability is you do not spend the $10 on the thing you think is least needed in your life. however, if you have sequestration, and you had $100, it would cut 20 cents of everything you did across the board, without regard to priority. the simpson-bowles and the so-

called gang of six, which were group of republican and democratic senators, three of each, which has now expanded to almost 45 members in the united states senate. a combination -- they have all suggested a combination of revenue cups. -- revenue cuts and spending constraints, the raising of additional revenues. the federal budget, and i want the young people particularly, because you are going to have to pay the bill. in a regular town meeting, one of the things i say is that my father and stepfather both fought in world war ii. my father was too old to go into battle, so he was stationed at a pow camp in texas as the finance officer. my stepfather fought in the pacific theater out of new

guinea. he was shot down in the battle of the coral sea. he came back. tom brokaw call them the greatest generation. my fear is that my generation, if we do not act, and act quickly with courage and conviction and wisdom, we will be known as the greediest, most selfish generation. and young people, you ought to be very angry about the position that we are putting your country in the and the legacy you are about to inherit, of deep, deep debt. it is not only an intellectually bankrupt policy that we have been falling, but it is an immoral policy as well. we need to get a handle on the budget. the simpson-bowles committee was appointed by president obama and by members of the leadership of both houses in the congress of the united states. they met, they came up with the proposal to cut four trillion

dollars through a combination of efforts. there are essentially five components of our federal budget. one, you cannot do anything with. nor should we. that is payment of interest on the debt that we have already borrowed. the other four, however, are subject to change. one is non-defense discretionary spending. student loans fall in that category, education assistance falls in that category. much of health spending, not all of it, falls in that category. the running of our entire government falls in that category. the second category that we can affect is discretionary spending that is defense spending. they are about equally divided, about 32% of the budget. about 16% for each of those, a little less for domestic and a little more for defense, but about equally divided.

the fourth category is called tax expenditures. without changing any rate, if we reduced tax expenditures, we would have an additional $1.10 trillion of revenue. that is because we would eliminate the so-called loopholes, or more politely, tax preference items. reducing those or eliminating them would provide an additional $1.10 trillion. that is more money than we collect in income taxes in the united states of america. so you can see that one of the ways that we can get to where we need to be, that $4 trillion, is simply by saying no, what ever you earn, we will not change the rates, but we will say you will

pay that rate on the income you earned. there are three major preference items for individuals. the deduction for health care expenses, mortgage expenses, and the third for pension expenses. there are a lot of other preferences for individuals and for corporations. but the amount up to $1.10 trillion of what bowles-simpson referred to as tax expenditures. the $4 trillion of objected that bowles-simpson and the gang of six were trying to get to is because at that figure, economist and fiscal experts tell us the debt level is sustainable. it is a little less than 70% of your debt to gdp. everything that we make in america. we are now at $15 to yen of

debt -- $15 trillion of debt. none of us can conceive what a trillion dollars is, but it is got a lot of money. we are taking an extraordinary amount of dollars out of everyone's pocket in this room, and your children and their children, and their children, in order to amortize that debt. if we do not set ourselves on a fiscally responsible path. those of you who read the papers know that part of our fiscal problem is caused by the fiscal instability in europe. reece is a particular example to which we look. greece has a debt level of about 128%, debt load to its gdp. the good news for america is, and the bad news for greece, is they do not have the resources themselves to solve the problem

have created. they are going to need help from outside. the good news is, america has the resources to address its debt differently, its debt crisis, its debt challenge, if we have the political courage and will to do so, and we can create agreement on how to get that done. the so-called super committee or the deficit reduction task force, failed in that effort. i urged them over the seven days before they concluded their work on monday and said we cannot get to a resolution of the objective that has been given to us, i urged them to extend their life by 90 days, because in my view, failure is not an option for our country. we must get to a fiscally

responsible, sustainable path. or young people will not have the kind of country that i inherited from my family and my generation. you need to be angry about that, energized about that, and focused about it. it is much harder, of course, to pick which sacred cow to butcher than to spare. if you sit around and say we are going to get that cal or that cow, and you like cows, you don't want to take any of them. in a democracy, in a body like this, if we were all here, everyone of you wants to spend money on different things, and you think they are very high priorities. if you are in a collegial body, a legislative body or a city council -- the mayor is here.

choosing is tough. choosing an making alternative choices is tough. it is toughen our personal lives, our corporate lives, and in our government. we must also remain relentlessly focused on jobs. we need to bring this deficit down, but we also need to grow our economy. if you don't grow your economy, you will never get your deficit challenge resolved. why? because your revenues will continue to be substantially down. and the demands on government will increase, so you will have the opposite of what you want. more jobs, less demands. so there is no alternative but to succeed. i am very hopeful as we go back to congress tomorrow that i will

be able to work with members of both sides of the aisle and say yes, there are sacred cows. yes, we would like to ask nobody to tighten their belts a little bit, no reductions in expenditures, and no increases in revenues. that would be a short-term solution, but it would be a long-term catastrophe. so young people, i am pleased to be here to talk about these issues, as we move into the second decade of this millennium. as we move into the country that you will inherit. and i am hopeful that the congress in which i serve will not leave you a legacy of debt, but will leave a legacy of a fiscally sustainable path. we won't get there in my service

in the congress of the united states. we were at balance, we were at surplus. bill clinton is the only president in my lifetime -- there may be somebody in this audience older than me -- there is at least one that i know of. [laughter] but neither of us were alive at the last time we had four years of budget surplus. the only president in my lifetime to have done that was senator bill clinton reject president bill clinton. let me tell you how we as a country accomplish that. he had a republican majority that kept a restraint on spending. you had a democratic president who said we need those revenues to save social security and make sure that we are able to pay for our defense and our domestic security needs, and we had an

economy of private sector in permission technology explosion in our economy. so it was not democrats, it was not republicans, it was not simply the private sector. it was the three all acting in concert. there was a multi-party responsibility. let me again suggest to you that the reason i believe now is the time to accomplish this objective is because it is almost impossible to make a very tough decisions on entitlements -- i don't think i mentioned entitlements. that is the fourth. there are some 55 to 70 million people who receive transfer payments from the federal government. many rely on those to survive, and need to be protected. but many do not rely on those payments to survive or even to

do well, but they believe strongly that they worked for those entitlements and they ought to get them. i think that is an understandable sentiment, but we are going to have to ask all of us, and light breeze that is going to have to sacrifice, to simply make -- i like grease that is going to have to sacrifice, to simply make a contribution to solving it. in my opinion, that occupy wall street movement reflects an anger and fear about the future of the country. the middle class in america is shrinking. that is not a policy that we ought to allow to continue. every country i have ever been to has a very poor people. every country i have been too has very rich people, every

country. america is a uniqueness and strength came from its broad middle class that was making good wages and was able to buy houses and cars and education for children and groceries and and all those things that people made here in america. let me end with an agenda item i am pushing very hard. it is called make it in america. it is an agenda which says america has a dream, and that dream is that all of us will have the opportunity to realize the american dream of success, not just financial success, of success in accomplishing our objectives and living a quality life. that was the american dream, and there are a lot of people who do it -- a lot of people who don't believe that dream is alive for them and that it will not be

alive for all of you. make it in america means you are going to make it, you are going to succeed, you are going to get the job, when the game. you are going to make it. it also means you are going to make it in america, you are going to manufacture it in america, you are wrong to grow it in america and sell it here and around the world. manufacturing creates a middle- class and pays on average 22% more than average wages in other types of jobs. it gives working people the opportunity to make sufficient money to have sufficient security and health care so that they and their families are living in hate not comfortable way, but in a satisfying, quality of life away. i want you to remember that, make it in america.

i want you to believe you are going to make it in america. i want you to believe that america is going to make. one of the ways we are going to do is to spur manufacturing, making things in america. they can be very high tech things. we obviously saved the automobile industry, something i think was very important for our country. it saved hundreds of thousands, even millions of jobs. manufacturing jobs have the biggest leveraging effect on other jobs of any other kind of enterprise. the young people, we are going to make it. we are going to make it working together. we are going to make it talking to one another. we will make it by doing what john kennedy asked us to do. not what our country can do for us, but what we can do for our country. let me hear your questions. thank you very much. [applause]

>> hello, congressman. my question is, as a proud supporter of the federal pell grant program, how would you preserve the program that has given up to six dozen dollars to students with the unstable economy and republican house members threatening to shut it down? >> first of all, from a partisan standpoint, the democrats have consistently been very strong supporters of pelgrin is. pelgrin historically replace 70% of the cost of college, not room and board or meals, but 7 percent of tuition costs. they were down as low as 31%. they are now probably 33% or 34%. we upped the pelgrin is in the

last congress as one of our proud accomplishments -- we up to the pell grants. there was a proposal to decrease those. they are not going to be decreased. obama has made it clear he will veto any bill that decreases the pell grants. i am the whip. the quick count votes. let me give you a quick -- in england had fox hunts. the horses ran after the foxes -- the horses ran after the dogs, actually. the dog ran after the foxes. they had two riders on either side with whips, keeping the hounds in a pack going after the fox. they were called the whispers. that is -- they were called the whippers. i am the whip, so i count votes. we have the votes to make sure at least through january 20,

2013, that that will not be changed. so i can say i am going to give you more money? that is not why we have pelgrin. we have pelgrin because we know america will not be the great -- we have pell grants because we know america will not be the successful country we wanted to be if we do not out educate the rest of the world. we have the greatest institutions of higher learning in the world and america. but if they are not accessible to average students, because you find it brilliance in the poorest neighborhoods as well as in the richest of neighborhoods. in america, we have believed that he needed to provide access. when i came to the universe -- to the university of maryland -- this is going to really hurt when you tell your parents.

i was a communities do it. i worked 3:30 to 12:00 a.m. as a file clerk. my first semester at the university of maryland was $86. [laughter] again, that was in 1847. [laughter] 1957. clearly, college costs have escalated very substantially. we ask taxpayers to invest their money and making sure you and so many of the brilliant young people that we have in this room, so that you have access, so that our society and country will be better. we are going to continue to fight for that. >> thank you. [applause]

>> all those guys who had such great things to say are walking out. they have heard this before. >> we had an opportunity to have a picture earlier tonight. >> since we are in such a large economic crisis, why doesn't congress introduced a bill allowing people to take out a certain amount of their 401k without penalty? >> we have done that to some degree, some years ago we allowed you to keep in for an extra gear so you didn't have to take it out and take a penalty. i think that is a good suggestion. we have not recommended that yet. for one thing, frankly, kisco little perverse. americans are saving more now, but we are not a good savings

culture. we tend to be spenders. now people are worried. what do you do when you are worried that you won't get another $10 in your pocket? you tend to hold on to that $10. so savings is up. but that is a good suggestion. the other suggestion that is being made by the president of the united states is to cut the fica tax, that is the social security tax, to cut it in half by 3.5%. it is now 7%, so you cut it 50%, both for recipients and for individuals. that will cost about $240 billion. frankly, i have supported the proposal, but i will tell you that i had reservations about it. first of all, we don't have any

money to give anybody, so we would have to borrow that. i am not so sure that if we are going to borrow that sum of money, putting it into infrastructure would not be a better return. we would create jobs, and at the end of the jobs being created, we would have something that needed to be done, whether it was a safer school, a stronger bridge, what have you. so i am looking at that alternative. i look at it in terms of having people take money out of their 401k without penalty and early. [applause] >> my question is, the 2011 year ends and we approach 2012, what goals do you plan on accomplishing by this time next year and how you plan on achieving them? >> it is a tough atmosphere in

the house of representatives and the united states senate. one of the things i urge my colleagues is not to think in 24 month cycle. do not begrudge the fact that members of the house of represented think in 24 month cycle. they think in 24 months cycles because that is their contract. they have a job for 24 months. therefore they are focused on what they can accomplish in 24 months, either defeating things, passing things, or a combination of the two. if you cannot do it in 24 months, you cannot take it home to the constituents and say this is what i did. to come back and say this is what i did in 2019 or 2020 or 2021, we are going to have a budget deficit down to 80% of gdp. that is great, what a wonderful

thing that is. we are only 4000 trillion dollars in debt. if i can come home and say i did this, defeated this, or passed this piece of legislation, in my view, what i want to accomplish and what our country needs to accomplish, which i think i will be the single biggest thing we can do for our economy, for the psychology of our people, and for the perception of the united states throughout the world is to get our country on a fiscally sustainable path, a credible, fiscally sustainable path, a path that gets us that four trillion dollars deduction over the next decade of indebtedness. that will be the single best thing we can do for our country and for all of us. i will be working on that. >> thank you. >> i had another question about

education. to my knowledge, there is another bill going through congress talking about we prioritizing expenditures in education, including cutting to funding and arts education. i want to ask your opinion on that bill. >> there has been a longstanding effort to reduce funding in arts and humanities. i don't want you to take this wrong, but we spend a relatively small amount of money on those objects, and in my opinion, we get a pretty good return. when i saw a relatively small, we are talking under $200 million in terms of one of the programs here, and that is real money. to any of us, that is very significant sums of money, but we have a $3.70 trillion budget. in my opinion, in that case, the

return is an elevating of our culture and of our understanding and appreciation of things that ennoble the human spirit. that may sound corny, but every great nation needs to pay attention to its culture, to its art, its performing arts, its artists, skull stores, to which writers, and to -- every great government in history has supported that to a much greater extent than does the united states of america. one of the things we have is a lot of generous people. of course, they get a tax preference for their generosity. life is a series of trade-offs. many people are giving substantial sums to the arts and humanities and to charitable, cultural efforts, and they get a tax benefit for that.

if we eliminated all preferences, there are some people who will be worried about that endeavour. we spent a relatively small amount, not in the sense of any of us in this room or from the sense of the university of maryland, but in the sense of our overall expenditures, relatively small amount on the encouragement of the arts. it is to our country's benefit that we make those investments. let me say something to all of you young people. it is not that i am excluding those who are slightly older than young people, but it is that you have a much bigger stake in what is going on. you will live with that much longer than some of the rest of us. it will impact your lives over the long term, and you need to be sensitive. there is debate in washington about cutting spending. cutting spending -- spending is

not all alike. if i spent on a pelgrin, i expect that to pay off fort -- if i spent a on apell grant, i expect that to pay off for least three-quarters of a century. if i spend buying a new car, that might last for 10 years, maybe longer. those investments that we make an education our investments on which we expect a return. do we need to rein in excessive spending? the answer to that is yes. here at the university, states have tough times. we have millions of people unemployed and not paying taxes. property values are down. pre-tax revenue is down. when that happens, obviously,

you have to either borrow money to keep going or you have to reduce your expenditures or go into debt. at the federal level, we are going deeply into debt. at the state and local levels, they cannot do that. but we need to continue to invest in the arts and humanities, in my opinion. >> thanks very much. >> you have got a microphone back there. >> as you may know, [unintelligible] the imminent war against syria and iran [unintelligible]

the russians are very open to it. the question is this. if we are going for a war against syria and iran, which could lead to world war ii, would you join forces with other people to stop this war which is intended to trigger world war iii? president obama is the one person in the u.s. government who is committed to such a war.

through impeachment or the 21st amendment that says if the president is mentally unstable he should be removed? >> if i adopted your premise, the answer would be, i hope i would have the courage to do so. i do not adopt the premise. i think your premise is dead wrong. obama has no intent to go to war either with syria or iran. i will tell you, however, that i believe that iran is a very, very dangerous entity in today's world. mr. ahmadinejad has made it very clear that he wishes the destruction of israel, destruction of some of his neighbors in the middle east, and the destruction of america. and he is seeking nuclear weapons. the entire world is concerned about that, not just president

obama. the united nations is concerned about that effort by mr. ahmadinejad. of course he is not in charge in iran. in terms of syria, the arab world wants to see syria's leader removed because he is in the process of slaughtering his own people, who like the people in tahrir square, want simply to have a voice in their government. so i don't adopt your premise. i believe that obama has shown great courage and great leadership in a very polarized environment in which cooperation with the congress he has found to be almost impossible. that is lamentable, but i think is an accurate reflection on the present political situation that confronts. if in tack -- if in fact the

intent of some is simply to defeat president obama, then any success he would have been growing jobs or anything else would be counter intuitive for that objective. furthermore, as it relates to president obama, libya is a perfect example where he wanted to, in the most surgical way, bring to a close a tyrannical dictatorships that was committing extraordinary human rights abuses, that was killing its own people, that threatened to annihilate people, and i think he did so in an extraordinarily successful way, not losing a single american life in the process, but bringing to an end one of the real tyrannical figures on the world stage. so i simply cannot adopt your premise, but the answer to your question is, if i did, i would

hope i would have the courage to act consistent with my conviction. >> i have a question about wasteful spending, the kind that does affect our generation. that is our nation's drug policies. if we continue to spend the same amount of money but have not seen much result, if you support termination of drug policies. >> i am not sure what you are referring to. we changed something and i think it was the right thing to do tricks we had a disparate sentencing structure for cocaine used by being one community and cocaine being used by a more affluent group of

people. one carried a higher penalty by factor of five to 10. i thought that was wrong. we addressed that in a bipartisan way. republican leadership was critical to getting that job done, as was democratic participation. the issue of drugs is a very serious one. as significant plurality, if not in georgia, of the prison beds and america, and america has one of the highest rates of incarceration of any nation in the world. a significant number of those beds are taken by those who are there for drug-related crimes, not simply for personal use, but for possession with intent to sell, or for the commission of crime to get money to use strokes, or the commission at

-- to get money to use of drugs, or the commission of violent crime while on drugs. an extraordinarily difficult question for us to deal with. we are not doing it very successfully. we need to redouble our efforts. if you are asking if i am for legalizing certain of these drugs, the answer is no. if you are asking if i think we ought to revisit how we treat particularly offenders who are offenders because of use of drugs as opposed to commission of crimes fall under the influence of drugs, i am certainly open to reviewing that, because from an economic standpoint, and from a penal standpoint, what we are doing is not working. >> thank you.

>> i cannot see. -- cannot see you. have you been standing>> i havef my family in your district, including my little one. because of them, there is an issue dear to my heart. that is providing healthy and safe food for them. there is actually a bill in congress that will help with that. what has been happening the last several years, the ftse -- the fda has been targeting with undercover operations for local -- [baby crying] including raw, unprocessed milk for families.

[unintelligible] [baby crying] [applause] [laughter] undercover sting operators on farmers for providing a product. there is a bill in congress that would decriminalize that and realize its for human we- legalize it -- re-legalize it for human consumption. i have a three-part question. are you aware of this? do you support it? if you're not aware of that, will you discuss it with me so

i can fill you in and ask for your support on the legislation? >> i am not familiar with it. i know about it, but i am not familiar with the legislation. are you familiar with that legislation? [inaudible] let me say this. in an era where we all lived in a small village and we knew former jones or farmer brown, and we were pretty confident that he would not tell us -- sell us something that was tainted or healthy as you point out. we did not need an fda. we have found that pretty soon as we did it needed fda because we are dealing with people that had no idea who produced the food, and there is very substantial and adverse health consequences covering the food -- coming from food which is not healthy. it was created for the purpose of making sure that the prescription drugs that we get,

or the food that we get is unsafe for human consumption. -- is safe for human consumption. i think it is a critical function, but i will look at that bill to see if i believe, as you seem to think, some discrimination on what would otherwise be very healthy food and milk, what you're referring to specifically. i will look at that and see what i think about it. but i will tell you, i believe the food and drug administration performs a critical function for a safe america when you have 315 or 325 million people in america, and probably 1% of them has any real idea where the food they eat comes from. but i will talk to you about it. but the?

-- ok? ok. now that i am not distracting it, maybe the baby will be happier. [laughter] >> my question is, you were talking about the fica tax earlier, solvency for medicare and medicaid, social security. i was wondering cents those -- since those agencies are at risk of becoming insolvent, in the near future, to you believe that the -- do you believe that the retirement age and eligibility age should be raised for social security? >> i gave a speech a couple years ago and which i said everything needed to be on the table. including ages. this is controversial and my party, and there are some very critical of me saying that. when social security was adopted, the average life expectancy was 65.4 months. who said the aged 65.

-- they set the age at 65. the life expectancy is into the 80's et least, that is my expectation. [laughter] maybe even longer. the fact of the matter, we are living very much longer lives and healthier lives. and more productive lives for much longer periods of time. in that context, it seems irrational to take that off the table. in 1983, before you were born, ronald reagan in republican -- a republican president and a democratic speaker of the house sat down together and agree that social security was going to go bankrupt. that means the cash flow, it was never really an investment fund. it was a path through a fund -- pass-through fund. because you start giving benefits immediately. as a result, those working paid into a system and those retiring

took it out. pretty much a pass-through. for almost all of its years, it had a surplus. he used that surplus to mask the whole death of our debt, -- depth of our debt, frankly. we will increase the age from 65-67. it will be six, seven, eight years. they didn't phase in for 25 years. everybody had an opportunity to get an understanding of what they could expect. if i promise you when you're 65 or 66 you will get something, you manage your finances based upon that. so if we change the age, it has to be done prospectively so that people have an opportunity to plan their lives around what they are going to be giving.

-- getting. it seems to be fair, but that ought to be on the table. very controversial, however, as in of. -- as you know. good. i am glad i gave you the right answer. i am always pleased when i hear the right answer -- and give the right answer. if you will be quick, i will be quick. we will see if we can get through this -- ok. >> i am the the fact of financial adviser for my 89- year-old mother. she lives on three checks. she gets retirement benefits from the federal government, one that a social security, and one for survivors annuity from my father. i'm also the representative from my younger sister. and my younger sister, ida the finances for because she is mentally ill. what should i do as a representative for other people when congress is talking about

cutting those programs? >> again, the keeper is -- the key here is perspective. prospectively. your 87-year-old mother, you will have no problem managing her finances. there'll be no change in her finances. when i say that, i have a caveat. there is talk about applying a change to not just social security, but everything where there is a cpi adjustment. chained cpi is just a little bit less. let's say one this coming january, it is about 3.5%. it'll be 3.2%, not 3.5%. is set for that, there'd be no -- except for that, there would be no present benefit taken away from your mother. i believe that is the case as well for your sister.

[inaudible] your sister. i believe the case would also be the same case for the sister. assistant its supplemental -- the sister gets supplemental security income, ssi. one of the things about the age, when it was created, when social security was created, it was only for the person that turned 65 and only for them. there was no survivor benefit, if they were disabled, there was no disability benefits. if they died prior to 65 and left children under 18, there was no survivor benefit. we have at a lot of benefits to social security. in your case, there will be little if any change with the one caveat that i indicated, the increase might be a little bit smaller. but let me say something so you

get my view on this. i believe that a society that is worth its salt ought to take care of its most vulnerable citizens. that does not mean, in my view, that we have to take care of our best of citizens the same way. -- best-off citizens in the same way. there are some of this country that argued that we earned this, we get this, everybody ought to get the same thing. ross perot wanted to do away with social security. his problem was, i am a multi- billion there. why are you sending me $20,000 a month? not a month, a year. [laughter] i have a feeling that your mom and your sister are very vulnerable and don't have a lot of cash or stocks or bonds or dividends.

we ought to make sure that they are ok. but the folks that have done better, not to penalize them, but to say, you have done well in your country needs help, -- and your company need some help, we're going to reduce you by 0.3%. i think that would be fair and smart and good for all these young people. that wasn't as quick as i intended to be. >> my name is a alexander and i am a senior at the university of maryland. thank you very much for the telegram, and my question, i am -- the pell grant, and secondly, my question, i am very concerned -- >> thank you for taking advantage of that. >> no problem. i am concerned about the issue of climate change, i think it is the most serious issue facing our country this century. despite our current budget problems at the national debt, should we increase spending on research to help fight climate

change? or what you plan to do to address this issue? >> i think alternative energy is the idea of the coming decades. -- i.t. of the coming decades. it is becoming an opportunity. alternative energy sources, we see it in electric cars, the utilization of fossil fuels, even, natural gas. a cleaner burning fuel. we failed to pass an energy bill, very controversial. we are still making efforts. we invested a lot of money in the american recovery and reinvestment act and alternative energy sources, and i think we will continue to do so, but it is very controversial. there are people, smart people that believe that global warming is not an issue. that is not as much an issue in our party as it is in the

republican party. their differences of opinion in the republican party. there are some that believe that global warming is a natural occurring phenomena worry go up -- where you go up and down, and i don't share that view. i think that it is a starkly -- it is historical ily true that e have seen areas of climate warming and climate cooling, i think there is little doubt that man, in particular the use of fossil fuels to the extent that we are using them today with china and india escalating their use very rapidly is having a detrimental effect on the warming of our planet and the changing of our environment. we'll continue to invest in alternative energy. quite frankly, it is not only a good thing for us to do from the environment standpoint, but

a wonderful thing to do from the economic standpoint and job creation. there'll be a lot of jobs created in the coming decades producing alternative energy. the chinese are very much ahead of us in solar panels. we need to catch up and make sure that we're doing what? what do we want to with solar panels? make it in america. [laughter] gets the $100 right over here. >> i am a plumber with local 5 here in d.c., and i have helped a lot of the people here keep this university running and the toilets flushing. one of the reasons some of them backed up is because of what is happening on pennsylvania avenue, the lines get full.

that is supposed to be a joke. [laughter] >> you ought to come to my place. [laughter] come up there some time. >> unfortunately, it happens here at the university. looking at the whole situation, you're talking a lot about economics. congress has pretty much ignored this legislation and none of them talk about this huge infrastructure project, and the 4 million jobs, and the economy, why is it in the state that is? if congress was doing its job. i think the way that you are thinking in the rest of the congressmen are thinking, this type of thinking will permeate

the enactment of as british third world war. i think lyndon larouche is absolutely correct and most of congress is wrong. i was wondering if you would rethink this thing about endorsing the impeachment of obama who has a british assets. awaydon't want you to go confused. i am for obama. i think obama has shown great courage and leadership. i intend to support president obama. [applause] that is what makes our democracy is so great. >> this is the way the world wars are started. >> next question. >> i had a question about the

making it in america agenda. he talked about investing in high-tech energy. how would you do that when we are concerned about reducing our deficit? gosh i mention these three -- >> again, remember, i mentioned the story -- these three commissions. all of them agree and i agree on this premise, we must grow the economy in the short term. if you cut spending very significantly in the short term, you will tampa doubt economic tamp -- you will tamp down economic growth. you will then be chasing your tail data rathole. unless you grow jobs and grow the economy, you will not get revenues and no matter what the radar. you have to get people working. as a result, i believe that in the short term, we need to make sure that we grow jobs. i am for the president's's job

growth -- although, as i told you, the fica tax would not necessarily be my first choice. if that is the only way we can get a stimulus to the fact, -- is to an elective -- a stimulative effect, then -- i am wanting to invest in infrastructure and schools. i am interested that neither of the larouche questions mentioned glass-steagall. it is not a bad focus. and that is the answer to your question, i think. >> thank you for your time. >> i see all the others were intimidated by somebody. >> can i do a quick one? the following question concerns our liberties. what is your stance on the u.s. senate new defense

authorization bill sponsored by both fellow democrat carl levine and republican senator mccain which will give the president and future presidents of the authority to indefinitely in prison citizens without charge or trial abroad and inside the u.s.? congressman, what would you do to fight this unconstitutional bill? >> during the bush administration, i made it very clear that i thought the suspension of habeus corpus, even for non-citizens under this very difficult scenario, we are really not at war, they are not prisoners of war, they are not uniform soldiers that you take into custody. my father was a finance officer at a pow camp in camp for -- in texas for ss officers. they were prisoners of war that would be released at the end of the war.

interestingly enough, a number of them did not want to go back to germany. having said that, i believe that habeas corpus of some type needs to exist in this type of environment and let me explain why. let me explain to you young people why i am explaining this. nowadays, everybody has their phone, a camera, they take down your phrases in the problem is they only take one phrase and don't give the explanation. this is a very complicated scenario that we are confronting with terrorists. terrorists that come out of a broad whose intent is to kill us. who are taken into custody, and proof may be difficult. i don't think it is tenable for a nation that has the principles of the united states of america to take people with the premise that we can hold them indefinitely without there

being some oversight of the person or persons that took those people into custody. let me tell you one thing i have suggested as well. there is a debate going on. i have discussed it with the white house counsel and eric holder. and there is a constitutional issue here, why we cannot authorize the title three a title iii court. that if you were arrested, if you're arrested me incorrectly, you get a writ of habeas corpus to take you in front of the court and the court would make a determination about if the arrest and have already had authority and probable cause that was the earth -- therefore legally justified in holding you. i think that procedure should be available. the procedure should be available, even to terrorists. for instance, we have domestic

terrorists. the building burned down in oklahoma city, killing hundreds of people, children, women, innocent civilians, and he was afforded the constitutional rights. foreign terrorists are not due to foreign -- constitutional rights. they are not citizens and the crime may have been committed overseas. but consideration of our own principles of how we want act, the expectations if our citizens were taken into custody in some other nation, how we would want them to be treated. i believe that we ought to have a habeas corpus proceeding available, not necessarily exactly the same that we have here, not exactly the same criteria, but we are at a war where the expression that i mentioned, we are not confronting however,

theoretically, formally, the state militia. this is individual aggression. group aggression. terrorist aggression. it is not the same, and therefore, we need to think creatively of how to meet our own principles, our own requirements, of how we think we ought to handle ourselves as americans in this context. >> adjust to clarify the though, i fully said what it was -- basically, the law says for the first time that our homeland is part of the battlefield, that americans can be detained. if someone is a political dissident, they can be detained without charge a trial. >> i don't accept your interpretation of their

language, if you're a dissident like occupy wall street. saying i do not like the government are what the government changed. i don't believe the language you're referring to provides for when you think it does. i think what it is trying to provide for is the very difficult question, and my answer to you was that i am not sure i agree with that language. you understand that? i am not sure that i agree with that language. >> it does clarify that is about that. but you're running out of time. so i will be respectful. >> apparently you are too. my time is your time. >> i tell the story, i got into politics because john kennedy came to this campus. and he spoke, i was almost going to miss it.

it had an extraordinary impact on my life. it was almost in damascus rd. experience that turned me around and focused me. what i wanted to close with for the young people is that i use a " all the time that has meant so -- a quote all the time that has meant so much much to me. it is one of the driving things i hear in my head as i pursue this job of being a congressman which sometimes is pretty difficult. right now it is pretty difficult. kennedy said in his inaugural address, that the energy, the faith and devotion that we bring to this endeavor will light our country and all who served as. they go from that fire can truly -- the glow from that fire can truly light the world. and people, i hope you believe that your energy, your faith, and your devotion honed in this university brought the enterprises of importance either private or public and will indeed continue to light the light of this country that has been the light for some of

our own people and for people around the world. thank you. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] [inaudible]

[inaudible] >> the house leadership reporter, returning to work with

a lot on their plate this week. what is at the top of their agenda? >> at the very top is what to do with the outstanding, unresolved nine annual appropriations bills that were not in includedminbus already passed. >> what is the prospect of getting them done? the date is december 16. >> that is the date that the current stopgap expires further agencies under the nine unresolved bills. today it was full steam ahead on a so- to get m so-calledi called minibus to get passed before the legislators go home for the holidays. >> ahead of that, the u.s. house has a number of legislative items to address, and back to

dealing with regulations, tell us about those regulatory bills. >> this week the house republicans are putting on the floor several of the regulatory bills, including what they have done to the reins act. it is to take on what they say are the high cost of regulations imposed by administrations, in particular president obama right now. it would require that anything that would cost over $100 million has to be approved by congress. another couple of anti- regulation bills that may pass the house but will certainly die in the senate. >> it has been a week since the joint deficit reduction committee said they could not come to an agreement. in the wake of that, what are some of the issues that congress will have to address that have to get done but to mark >> they have to decide what to do about

unemployment insurance, to extend that period and the so- called doc-fix for medicare providers that needs to be extended at the cost of 30 $100 million. -- that is the focus of a lot of discussion right now. they're hoping some of these items can be attached to that previously discussed minibus. >> a lot talk about the payroll tax cut and adding that increase for wealthy americans. will they come up for a vote in the senate? will the house have to deal with that as well? >> it will, for a vote in the senate. the republicans will try to filibuster it. it will be a tax increase, and

the middle class income earners would get in -- hit with pay increases. it is a microcosm of what is going on with the super committee and discussions around here for a couple of years, how tax breaks should be hitting who. this will play at until the very last hours as they go home. >> about the super committee, lots of talks about and doing parts of the sequestration requirement that kicks in on january 2013. will there be house or senate debate about there? jetted there certainly will be. whether read occurs in december is uncertain. as of now, i do not think the leaders of either house want to take on anything a significant as that until the january.

>> billy house, you can read his work at national journal. thank you. >> in a few moments, pat toomey, a member of the joint deficit reduction committee on what should be included in new budget and spending negotiations. in 20 minutes, part of the white house briefing focusing on president obama's efforts to extend the payroll tax cuts. after that, democratic representative barney frank of massachusetts talks with capitol hill reporters about his decision not to run for reelection. later, a look at tax policy in deficit reduction in the debate that includes grover norquist. >> a couple of live events coming up tomorrow on our companion network, c-span3. the house judiciary committee holds a hearing on state

taxation of online shopping. the supreme court ruled that retailers without a physical presence in the state did not have to collect sales tax. the senate commerce committee considers two nominations to the federal communications commission. >> within 90 days of my inauguration, every american soldier and every american prisoner will be out of the juggle and out of their cells and back home in america where they belong. >> george mcgovern's pledge to the 1972 democratic convention came nearly a decade after being one of the first senators to speak out publicly against the vietnam war. the senator from south dakota suffered a landslide defeat that year to president nixon, but his ground-breaking campaign changed american politics and the democratic party. george mcgovern is featured this week on "the contenders." from south dakota, live friday

at 8:00 p.m. eastern. >> senator pat toomey, a member of the joint deficit reduction committee, says that defense spending cuts should not abandon option during recent budget and that -- budget negotiations. he also told the heritage foundation audience that any your -- any budget negotiations should include a state taxes. this is a little more than 20 minutes. >> good afternoon, ladies and a gentleman. i am the president of the heritage foundation. on behalf of my colleagues, is my great pleasure to welcome you here today to the auditorium. it is a particular pleasure for me to welcome back to the heritage foundation a dear friend, a collaborator in many important efforts over the years both in his former service in the u.s. house of

representatives, in his various roles in the private sector, as leader of the club for growth, a private business leader back in pennsylvania and the distinguished junior senator from pennsylvania. i must say, you have some very enthusiastic constituents in terms of my son, daughter-in- law, and granddaughters. we are delighted always to welcome you back to the heritage foundation. your role as a principal conservative leader is well known to everyone. your role on the super committee has been a critical one and will afford to your comments today. -- we look forward to your comments to date. thank you for being with us. >> it is great to be back, and as you know, i continue to be a great fan of heritage. you really do continue to play an indispensable role in helping to build the intellectual infrastructure for the conservative movement and

coming up with the kind of policies that we need for our country. though i am grateful for the work that you do. the topic of the day, i guess, is to reflect a little bit on the super committee experience. i look forward your questions when we finish. i want to start off with a little bit of context. i will share with you what i said to my staff when the assault finished. -- when this all finished. when it was finally over, after several intense months, i said to everybody, if anything like this comes up again, i want you to know that you can immediately sign me up. and then you will be fired. [laughter] that is not what i said, but it is a tough experience. it is worth reflecting for a minute on how we got here. let's remember that this did not happen overnight.

what happened that brought about the massive budget deficits and mounting that that caused this -- mounting debt that caused this committee to come into being was a, fundamentally, a spending spree. that is what has driven us. it has been the sequence of stimulus and bills, bailouts, government takeovers, a huge surge in discretionary spending. i think of it sometimes as the political resurrection of john maynard keynes. the man is dead, canty just rest in peace? in his name, invoking his memory, this government has gone on an unprecedented spending spree in the misguided notion that somehow we can borrow and spend our way back to prosperity. by any measure, the spending has gone through the roof. one of the measures i think is particularly telling, in 2007, total spending and by the

federal government as a percentage of our economy was 19.7%. by 2009, it was 24.7%. a 25% increase in the size of the federal government as a percentage of our economy in a mere two years. i think that says it all. let me say one more thing, that what we are facing is not fundamentally a tax problem. as recently as 2007, the very tax rates that we have today generated revenue that was about the historical average, 18.5% of gdp, and with revenue at 18.5% of gdp in 2007, we had a deficit that was almost trivial. 1.2% of gdp, a size the seems quaint by contemporary standards. an eminently manageable number. this is not ancient history. and it is with the current tax

rates. another illustration of the fact that taxes are not the problem, consider this. if you could double the individual tax revenue that was collected last year, not that you could without triggering the -- without cratering the economy, but imagine if you could, you would run a $400 billion deficit last year. the cbo ran through the exercise of calculating where tax rates would have to be if we're going to solve the entire long-term deficit and debt problem. through taxes alone. the you know what they came up with? they said that the top individual and corporate tax rate would be 88%. at all the other rates would have to increase in proportion. clearly, no economy could possibly sustain those kind of rates. it is arithmetically impossible to solve this on the tax side alone. we find ourselves having gone through this spending spree,

find ourselves with a weak economy that has not had the intended effect. unemployment is persistently too high. but we have now a huge debt, about 70% of gdp and growing rapidly. if you what to consider how -- if you want to consider how utterly unsustainable the situation is, here is the statistic that speaks volumes. if you look at just social security and the mandatory health care programs and interest on our debt, just of those three things, those things alone by 2021 inside the current budget window, they are projected to consume 90% of all expected tax revenue. just those three things. leaving absolutely nothing for all the other mandatory spending programs, welfare programs, nothing for discretionary defense spending.

none of that is included in those three things. he had -- yet they would consume 90% of what we would reasonably expect to collect in revenue. it is abundantly obvious to me and probably all of you that we are on a completely unsustainable path. on the super committee, the republicans -- i have to say i am very pleased at the extent to which we are relatively united, not completely unanimous. certainly, there were disagreements, but mostly it was on emphasis and priorities. what we did what to do is fix the problem. president obama was helpful and the fighting the problem quite correctly. -- in defining the problem quite correctly. the major driver of our long- term viability, everybody here knows, is medicare, medicaid, and health care spending. nothing comes close. that is from president obama on

january, 2010. he is absolutely right. what we set out to do was redesigned what the fundamentally flawed architecture is of the big programs, the reason that they are unsustainable and redesign them in a way that will make them work and allow us to get back on a sustainable fiscal path. the budget gave us a way to go forward, when never expected that the democrats would embrace that. we weren't shocked when they didn't, but we were open to a number of other ways to try to change this problem with the architecture of the big programs. failing a change in the architecture, we suggested, can't we make some meaningful reforms on things like eligibility and means testing. so that we to make meaningful curves to the growth projection of these programs. that was what we set out to try to accomplish. the democrats had a different

idea. they wanted at $1 trillion tax increase. they wanted at the beginning, they wanted it in the middle, they wanted it at the end. sometimes a little more than $1 trillion. without any fundamental redesign of the -- the programs that are driving the problem. i maintain that it is a trillion dollar tax increase, it would be a devastating effect to the economy. it would be the wrong way to go. we were at this impasse. we were at this impasse for periodic months. is there a way that we can put some kind of revenue on the table since the democrats are so insistent on this that might be allowed us to break this logjam? it would be consistent with our principles, consistent with a very important priority of having a pro-growth economic policy? there were facts that i thought we ought to take advantage of

it, and away. what is the fact that we are currently facing the biggest tax increase in american history. we're 13 months away from massive tax increases across the board. as much as i hope we are able to prevent that, it is obvious that we won't have the political ability to prevent those from occurring. that is reality number one. we're facing a grave threat to our economy and to taxpayers. secondly, we currently are continue to be hobbled by an absurdly ridiculous tax code, one that is terribly unfair, incredibly complicated, difficult to comply with. it misallocates resources. this struck me that maybe it would be worth something if we could avoid the biggest tax increase in american history and do it in a way that would generate a pro-growth tax reform.

that is how i developed this framework, that we proposed to our democratic colleagues. it had a tax component and a spending component. on the tax side, the idea was, how do we maximize economic growth? since i believe that capital formation is one of the biggest drivers of economic growth, let's make sure that we preserve the things that allow for capital formation. let's insisted that the capital -- let's insist as one of the features of this proposal that the capital gains dividend rates and a state tax rates that are currently enforced become permanent. secondly, let's insist that we have our revenue neutral corporate tax reform that will lower the top rate to 25%, broaden the base on which taxes are applied and develop a territorial systems that we can encourage huge repatriation of hundreds of billions of dollars overseas. there was bipartisan acknowledgement that we need to do this kind of corporate tax reform. rob portman to his credit was,

there was a passionate advocate for this, many of us spent a great deal of time working on the specifics of what this would look like. i thought that this was something that we really should and could do in this community. what i suggest it is that we lower marginal rates. let's shoot for 20% reduction across the board on all marginal income-tax rates and offset the lost revenue by limiting the value of deductions. i think that we should be flexible about the exact mechanics by which we achieve that. i personally think that the mechanism that marty feldstein developed for a percentage of adjusted gross income is a very appealing way, but there are other ways. but in any case, our proposal was that we do it in a way that does not make the tax cut less progressive than it is today with one very important exception, that we would further restrict the value of reductions -- of deductions for

the top two brackets such that we would generate $250 billion over 10 years for deficit reduction. in addition to the $250 billion so generated, we propose another $250 billion of revenue coming from non-controversial resources like user fees, asset sales, the feedback that comes with higher compliance from the simpler tax cut. the total revenue was $500 billion. we complemented that with $750 billion in spending reduction, and we have long since given up the idea that we live bloc -- that we were going to block grant medicaid the state's or that we would adopt a premium support model. at this point, we were looking for what was possible in the final couple of weeks before the clock ran out, so we suggested that it would comprise items that had been vetted by both

sides and had been deemed accessible to both sides, at least in the context of a broader agreement. $1.50 trillion when you add in the savings of the results of lower interest payments. you end up with just under $1.50 trillion. him what we offered, i think, -- so what we offered, i think, was a very reasonable offer. it was offered to generate revenue, and suggested that we do it to the very mechanism that every bi-partisan group suggested, tax reform, broadens the base and lower the rates. he suggested that we do it in a -- we suggested that we do it in nama fashion that would make the tax cut even more progressive which is something that the other side insisted that they have. we offered a combination in

which the spending reduction was more favorable to the democrats than any of the bipartisan commission set suggested, and we offered a plan that would allow us to modestly exceed the goal that was created for the committee in the legislation. nevertheless, the democrats said no. they needed a trillion dollar tax increase, that is what they were interested in. we were not interested in doing that kind of damage to the economy. cell in the end, why did it fail? there are a number of reasons, and over time, additional reasons may occur to me. at the moment, one of the fundamental reasons, i think is that there was an asymmetry of incentive. i can tell you the republicans had a very powerful incentive. six of us wanted to. it grows from a sense that we all have of the urgency of this crisis. i don't think we have a great deal of time to hope that the markets will continue to lend money to a government pursuing

an unsustainable fiscal policy. i can tell you from republican conference meetings, i've been present for almost a year, virtually every single time we meet, this topic comes up. how are we going to change that fiscal path we are on? there is a very strong sense of urgency on the part of republicans and beyond. there is also a very serious concern that the alternative to the super committee's success, the sequestration of funds heads -- hits the defense budget way too hard. there are a lot of republicans very concerned about that and created an incentive for us to try to find an agreement. on the other side, there were forces pulling the democrats away from an agreement. we have a presidential campaign on the idea that the president is running against a do-nothing congress. never mind half of the congress is controlled by democrats. that is the fundamental message

of his campaign and of the -- and get the select -- if the select committee had come to a great bipartisan agreement that could pass both houses, it would rather model the message. muddl --e -- muddle the message that the president is running on. in addition, let's face it. many of the democrats have long hoped to cut the defense budget. that is exactly what happens and -- in the sequestration. there is a segment of the caucus that finds the alternative perfectly acceptable. i think we have all seen the mood in the country on the part of the far left, anyway, that productive people need to be punished with a big tax increase. that voice was present. there were some democrats on the committee that i think definitely wanted to accomplish something. i just think they found it impossible to bring -- in a break from the left wing of their own caucus. it is clear what we need to do,

maximizing economic growth. lead to focus on transforming the big drivers of our deficits into a sustainable fashion. i will have to vote soon. >> formats. -- four minutes. >> a lot time for questions. >> i think the big questions here, the size of government and the role of government, the questions that divided us that some level will await another election cycle for further clarity and guidance from the voters. there are some things that we need to do. we absolutely need to stick to the $1.20 trillion in spending cuts, i think it is important that they be reconfigured so that they don't land disproportionately on the defense budget. the second thing is that he ought to accept that maybe we

can't persuade our democratic friends to reform the tax code, but let's move to a territorial system. let's close some of the egregious loopholes like the ethanol features that we voted successfully on in the senate. on the spending side, if we cannot agree, let's take the individual items for which there really ought to be brought a bipartisan consensus reducing corporate welfare and even asking federal employees to contribute a little bit more for the retirement benefits. these are things that both sides ought to be able to agree on. if there is a silver lining, perhaps it is that we discovered, or for some of us rediscovered a great deal of places where we can have very substantial savings for taxpayers.

let's do what we can. [applause] >> we are all governed by somebody else's schedule. think you for being with us and will afford to welcoming you back to continue this dialogue. ladies and gentlemen, we stand adjourned. >> tuesday's white house briefing focused on the effort to extend payroll tax cuts. alan krueger joined jay carney for about 20 minutes. >> another 40 seconds.

any more stragglers? >> yes. >> i meant that in the best possible way. >> good afternoon, ladies and gentlemen. i did not hear that. thank you for being here. i apologize for the delay this afternoon. i have with me the president's chairman -- or rather the chairman of the president's council of economic advisers alan krueger, recently confirmed by the senate. he is here to discuss with you the economic importance of the payroll tax cut, extending and expanding it into next year, as well as the importance it has had to our economy and to 160 million americans this year. so what i would like to do is have him go at the top, for you to address whatever questions you have on the policy issues to him. you may have some political questions, which are more

appropriately directed towards me. i will remain here to take them for you -- from you, rather. and then i will let alan go back to his important and difficult work, and then i will remain to take questions on other subjects. with that, i give you alan krueger. >> thanks, jay. i thought i'd say a few words about how the economy is doing and the importance of extending and expanding the payroll tax cut. this is a critical time for the economy, and i think it's a time where the economy can use more medicine to strengthen and sustain the recovery. as you know, a year ago the congress passed and the president signed a 2- percentage-point reduction in the payroll tax. that tax cut has provided important support for the economy, especially at a time when the economy was hit with some shocks such as rising gasoline prices and supply-side shocks from the earthquake in japan, problems in europe. the president has proposed

expanding the payroll tax cut to 3.1% on the employee side, as well as cutting payroll taxes for employers, focusing the payroll tax cut for employers on small businesses and businesses that are expanding. i think the economic argument for these proposals is quite compelling. i think across the spectrum of economists you would find support for applying this type of medicine to the economy now. the economy has been recovering. we've had nine quarters of growth. but the pace of growth has been moderate. we still have a great many underutilized resources. unemployment rate is still 9%. we still have underutilized factories and resources. fundamentally, the economy is facing weak aggregate demand.

that's economist-speak for not enough spending in the economy. and i think you can trace the reasons for the weak demand directly to the problems that caused the economic crisis -- families borrowed too much in the run-up to the crisis -- they're now paying down debt. we had a severe bubble in the housing market. and residential construction has been quite flat in the recovery -- really unprecedented to have a recovery where residential construction has not been increasing. and then on top of that, state and local governments, which retained employees when they were getting support from the recovery act, have been laying off workers. so i think those are the reasons why the recovery has not been stronger, and at the same time, i think it's important to provide insurance for the economy against further shocks, possible shocks down the road.

if the payroll tax is not extended, then the typical family with $50,000 in earnings would face a $1,000 tax increase starting in january. what the president has proposed is extending that tax cut and expanding it so the typical family would have about a $1,500 tax cut, and as i mentioned, other components in the jobs act, the employer side, tax cuts, as well as extending unemployment benefits. so, with that, i'm happy to take some questions. >> ben feller. >> thank you very much. are you asserting that the extension of the cut would actually make the economy better, or are you just saying that allowing it to expire would make the economy worse? >> i think both are true.

the president proposed extending and expanding the tax cut, so the beneficial effect that we saw from the last round would be larger. i also think that the tax cuts on the employer side are particularly well designed. the cbo has concluded that the type of incremental payroll tax that the president has proposed has pretty high bang for the buck, compared to other things that could be done to strengthen the economy. and if the tax cut expires, as i said, that will be a $1,000 increase in taxes for the typical family, which would be a drag on economic growth going forward. and you can see economists from across the spectrum who have noted that this could pose a severe drag for growth going forward if it's allowed to expire. >> but if it's extended at the same level, which is something that the hill has talked about, 2%, that wouldn't actually do anything to increase demand, increase spending. i mean, people are already getting that cut. .

i am just not persuaded that that beautiful simplicity has led to real taxpayer protection how over allied -- over those light of the united states house fiscal picture. the object of mass of the -- the effectiveness depends on the political context. at the state level, you have a balanced budget amendments which tend to place an actual -- it does not place a cap on spending but a further constrained. in states that are dominated by

the republican party, the combination of a balanced budget amendments and taxpayer protection of pledges has been wonderful for the cause of small government. in states where the republican party does not dominate in shows few signs of a dominating in the future, like california, you could argue that the taxpayer protection pledge has prevented california from going the way of greece, but many people who live and work in california think that california is headed that way regardless. i suppose the big difference of opinion here is that i think an enormous enough gap between outlays and revenues becomes more dangerous in the long run than a modest tax increase. and i think that based on his view of american politics, the rubber disagrees. -- grover disagrees.

but i think california is a more dire positioned than america was in the clinton administration when taxes were higher than today. that is the core of my disagreement with the pledge. >> we have time for a couple of more quick questions. this question comes from the audience. the bush tax cuts are set to expire in a year. rates are set to go. if i played synar votes for a tax reform a year from now -- if if rates would be lower than they otherwise would be with the expiration, but higher than they are now, is that up alleged violation? >> if they have already expired and then, or they go for them for? >> we have a baseline. >> the answer is if you went to

the american people and said let me tell you what is about happen. if they said you are raising my taxes, that is your answer. i got in trouble having this conversation about what attacks last -- if no one is there to vote. i am not getting into hypothetical. but the answer is if you go up to the american people and say this is what they doing -- you are doing and i think it is that tax increase, then you have a problem and i cannot get too out of trouble. you have to look at what common sense tells people. >> ok. let's put aside decide -- the idea of imaginary tax increases at the moment. >> a real unicorn? oh, good. this is the 73rd time i've heard this argument. i am waiting with bated breath. >> i will finish.

if there was a real tax increase at a ratio of 100 to one, and we know at the debate, it was at 10 to one. isn't that better than nothing? >> and i prefer purple unicorns to gold unicorns. why didn't i get worked up about to me saying that? because the democrats told him that that is intriguing for the next morning, they laughed at him and told him no way and we want $1 trillion in tax increases and ran into senator kerry and the hallway, and you need help us work on this. all we need is $1 trillion in higher taxes. and the raid stuff is going nowhere. all of those fantasies, the democrats were not part of it. this is toomey's fantasy about

what would be cool. if you are fantasizing about what unicorns would look like but democrats will not let you have the unicorn and president obama is running a campaign of class and the and greed, so the hypothetical questions about what the modern democratic party was peopled by republicans in would agree to vote for some deal, would that not be cool, yes, i suppose it would be really cool. but come back to planet earth for a moment. that is not an option. >> doesn't that lead us to a state of existential despair? >> if no. >> then it requires us to imagine the democratic party largely disappearing as a force and national life or alternatively the republicans passing sweeping legislation

that i am moderately skeptical about its popularity and in enforcing it. alaskan part, it spending cuts are a unicorn, when there is bipartisan support for them, why are they real when there is a partisan support? you talk about $2.5 austrian as of victory for conservatism. i do not -- $2.5 trillion as a victory for conservatism. it entering at by rest of a tiny tax increase corrupts spending cuts, white is spending cuts taps' when there is not a tax increase? >> when they talk about spending cuts, the spending cuts get taken back. all 100 to one ratio, when you look at simpson-bowles, three- one, four-one, and in that tax increases grow and grow and as spending cuts get further away,

and not a single democrat has endorsed simpson-bowles. the president introduced his budget a few weeks after simpson-bowles and not of it was in it. this is counterfactual. the democrats, ok, harry reid , if harry reid got together with the democrats and the senate and passed a bill that did all the things the people like to imagine the modern democrat party is capable of, then we would have something to look at. bring me a bill. bring me a bill. pass something that looks like the ryan budget that can be scored and looked at. they have not even passed a budget out of the senate in the last three years. they cannot say it in front of

the american people is that they cannot pass one and when the next election. as long as they're committed to going in that direction, you have to have elections. but this is not easy. this is a lot of work. this has taken decades and the modern republican party only started in the right direction a while ago. goldwater was against cutting taxes and you have republicans and spending money with bush 41 and nixon and ford. it took the tea party to what the party on the side of the head and began to move the republican party more seriously to spending restraint. this is a lot of work. there are a lot of elections to be one. it will not be magic. imagining a reasonable democratic party, all of this, they did, it is -- they are proud of it.

>> a lot of this the republicans did, too. >> it was a mistake, but to look at the jump in spending that we saw from 2007 and ran away with things in the last five years, that is where this huge jump and the spending projection. >> because of the recession. >> however, there is a difference in the magnitude of the spending that is rather dramatic and what happened was that we lost the election on issues other than economic issues, and ended up not paying the price with the guys that were elected. >> we are at the hour mark. a couple of housekeeping matters. i would have to bring up a last powerpoint slide. folks can watch this debate as well as other debates we have

had in this series, as well as future debates, they are available at aei.org, the aei website. an e-book is available of the first debate that we had. that is available online as well. all that information is on the screen. i want to thank grove ros ands --grover and ross for participating. and i won at banks c-span for attending. thank you very much. and -- and i want to thank c- span for attending. thank you very much. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011]

>> in a few moments, a panel of former transportation secretary is discuss the state of transportation infrastructure. "washington journal" is live at 7:00 a.m. and the houses and at 10:00 a.m. eastern for general speeches, with legislative business beginning at noon. today's agenda includes a bill for union organizing. >> on this morning's "washington journal," we will talk about the congressional agenda with mick

mulvaney of south carolina, a manager -- a member of the budget committee. donald payne takes your questions about of a bill about union elections in the workplace. and the chief correspondent for national journal mick mulvaney discussing an article on unemployment. live every day at 7:00 a.m. eastern on c-span. >> the newly designed web site has 11 video choices. it is easier for you to get our schedule with new features like that three-network layout to squiggly scroll through the programs. you can even receive an e-mail alert when your program is scheduled to air. there is a section to access our most popular series and programs, like "washington journal," book tv, american history tv, and the contenders.

handy channel finder to find our networks across the country at the all new c-span.org. >> now all forum on transportation infrastructure and economic growth. university of virginia's miller center hosted a panel of former secretaries of transportation for an hour and a half. [inaudible] >> q will have to excuse my coughing. i cannot believe that we have this kind of warm weather at the end of november. but we have a great panel, these are great colleagues, and we have had a chance to work with them over the years. how like to start with the navy

with jim burnley -- i like to start a first with jim burnley, the earliest of the secretaries. he was deputy secretary under elizabeth dole, and then secretary in his own right. he has had a great influence on the transportation department before coming in as well as in his post-departmental activities. he is always maintain that contact of transportation activities. jim, if you could start off? >> thank you, norman. is a great privilege to be here on this panel of colleagues. people that i have great admiration for. the ultimate usual suspects around our room. more about that and a moment. it is a pleasure to be with all of you. as i understand the purpose of the conference, it is to

address among other issues the fundamental question of how we convince the american people that they should be a priority and that something must be done. we have done, i think, an outstanding job of convincing each other. [laughter] therein lies part of the problem. we're talking to each other and we have had any number of distinguished panelists putting out well done reports, including the report from the miller center issued under the leadership of sam skinner and norman mineta earlier this year. and yet i believe that we have got a fundamental disconnect between what we proceed to the the needs -- perceive to be the needs and the resources devoted to those needs and what the american people believe.

i want to give you two quick examples to perhaps frame that point more sharply. on november 26, this last week, the "washington post" letter lead in our core real -- had a lead editorial about northern virginia. it talked about various alternatives. toward the end of the editorial, this really remarkable sentence appears. what it might mean permitting no. purging it to levy new taxes is up, but without putting the question on the ballot in a referendum, which would politicize a critical issue. in other words, if we all let it -- if we let the people of northern virginia have a direct say in whether we want to spend more money on transportation, one of the most congested areas in america, always number one in number two, that politicizes --

we know what that means. it is likely to lose, that is what that means. and you know what? at inside is sadly, i think, dead on. -- that insight is sadly, i think, dead on. they ask people in five states, all of them urbanize states, to rank if you had to make choices on what you want to cut, rank k- 12 education, medicaid, higher education, and transportation. five different states, different regions of the country, and i apologize, i did not it is blown up in advance, but i hope everyone can say.

that is k-12, that is medicaid, that is higher education, and you see the little green box down below 10%? that is transportation. so when you ask people where transportation stacks up on basic priorities, there is your answer and five critical states. the survey also included the following. the remarkable similarity, supermajorities of roughly 75% found that additional taxes to pay a for transportation, three out of four. i do not think any more reports, i do not think slick packaging, i do not think any of that matters. , the about fundamental crisis transportation fund has collapse. we have had to put $35 billion into it to prop up and it is

about to collapse again. cup fundamental disconnect between what we perceive as a fundamental crisis and the american people as anything but, as anything they want to spend money on or make a trade-off against other public policy areas. let me state why i believe this is since year-end what we have to address. it will take time. the fundamental disconnect is happening because the american people have become very cynical about how fuel taxes are spent. every time there is a state budget crisis in misstates, they see attempts to raid transportation trust funds and divert those funds to other needs. whether successful or not, they see that. on the federal level, they see what we have called -- we have come to call enhancements.

congress is beginning to focus on that. if you build a trolley museum is instead of repairing bridges, you should not be surprised that people become cynical over time. and then there is earmarking. earmarking has stopped as of last january. in both houses of congress. but the american people, if you ask that there was still earmarking, 75% are more would say yes. that is a well-kept secret and it will take time and continuing efforts to educate people about that having stopped. and it has to stay stopped. if we go back to earmarking, we go back to what we come to know under the bridges to nowhere, then that cynicism will be reinforced. this fundamental disconnect will not get addressed. in all my list the things we

have to stop doing, is treating transportation infrastructure as a short-term stops program. -- jobs program. it did not work by any conventional definition of working. we knew that it would now work in terms of short-term stimulus. it takes time. it takes years for that money to actually be spent and people to be hired. we need to convince the american people that we need to invest in transportation infrastructure because we need to invest in transportation infrastructure. if we sell that idea, not as a jobs program but because it affects the ability of our economy to grow and our international competitiveness and all the of the things that we believe, then we have a fighting shot at convincing the american people that the resources and needs that need to be devoted to transportation should be devoted to it.

so i'll stop there and let my colleagues have at it. but i think that is our challenge going forward. >> next in order is sam skinner. i had a great pleasure of working with sam when i was chairman of the house committee on transportation. the relationship with sanaa secretary and me is the committee on public works and transportation, and again, as the governor was talking about the bipartisan nature of transportation as a subject matter, not only in terms of our relationship but within the committee of public works and transportation, it was always the bipartisan relationship because of that big four relationship. the chairman of the full

committee, ranking on the full committee, chairman on the breaking committee, ranking on the subcommittee. it was the big four deciding what bills to consider, even to amendments. so in the whole idea of this was coming along, it was a wonderful highway administrator by the name of tom larsen, we had a great team effort going on at that time. a will always be grateful to sam for his counsel and advice during that whole process. working at the white house as well. let me have sam skinner next. >> thank you, norma. i'm glad you mentioned dr. larson who is no longer with us. is the one person if he is in this room would be really contributing when i did not know

him until i was identified critical he was identified to others. it took several phone calls cannot as many as president bush made to hank paulson but a few bird we should recognize is aphorist and what he did. -- we should recognize his efforts and what he did. hollen like to say something about norm when i introduce him. i will say something about rodney in a minute. but i think what we have here is interesting. i am one of the people that went back outside the beltway and stayed outside the beltway. i can give you my perspective from outside the beltway and a number of you can see that as well. jim got into it -- the american people have lost confidence in the ability of government to do

big things. to manage spending in what is a simple -- a sensible way. in order for us to sell our programs and the fact that we effectively to projects in many cases on budget and on time, especially in highways, the american people have to have confidence restored in government and the way the money is being allocated and spent. until we do that, it is going to be very difficult. so we have two missions, one estimate the cost of transportation spending, but the second, to make sure that people understand that rightly allocated, governments can spend money correctly. it is a bit of an uphill project. health care cost and not affect us at all. but they are going up at 7%, states are being killed with

medicaid expenses, and they have no ability -- the public does not perceive that those programs are being managed correctly. state and local pensions, it does not affect us. we have a lot of great people at the state and local level doing work. the problem is, the program in pensions and salaries, potentially pensions and benefits being delivered at the state and local level is unsustainable. and people are beginning to recognize that. in illinois, if we took one state and a lot of states have this problem, rhode island, some have addressed it -- all the increases in revenues in state budgets for the next two years will be required just to fund the underfunded pensions for state and local employees. and these budgets and obligations being incurred are being incurred at the state level and locals have nothing to

say about it. it is not independent control of these entities. mayors, city councilman, school boards, all looking at this same issue to fund these. in illinois, it may be different. but there still is a feeling that the defense department, with the huge budget may have, is it really effectively -- how do they spend money, and i'm not talking about war efforts. maybe you could justify spending $2 a gallon to deliver a gallon of fuel to the troops. but there is a sense that we're not coming to our reality of how we're spending and what we need. we're still suffering from the residue of a couple projects that got out of control and with the help of republicans and democrats working together, we got them back into control. in particular i am thinking

about the big day. -- the big dig. we have process right now, billions of dollars that we will allocate $15 billion for high- speed rail. the budget, putting aside whether you believe in high- speed rail or not, let's talk about the fact that the project when estimated in california to be maybe $20 billion is already up to $90,000,000,000. shovel has not wouldn't put into the ground. no one knows which path it will cross. but the people of california voted for. -- voted for it. that is unfortunate because and projects we are talking about,

the state of illinois, they delivered good projects on time and on budget. we will do it tollway project, multibillion-dollar project, and i'd bet you money that when they are done, that will lead implemented it one time and on budget. but they will not get credit for that. number one, we have to continue to sell that when it comes to transportation, unlike other areas, if you do not have any confidence in any other areas, you should have confidence in transportation areas comparing the billion dollars that we spend every year effectively, and i'm sure is happening in arizona and arkansas, virginia, oliver -- they are building projects on time and on budgets that are ineffective and are exciting projects, and it is being done with no attention whatsoever. i think the time has come for

all of us to to the horn of the good projects and make sure that people understand when it is time to go to this very difficult time of allocating funds, the toughest we have ever seen, that transportation can deliver on time, on budget, with productivity increases, and with effectiveness. and that is where i think our next hurdle ought to be. with that, rodney, he is the man for all seasons. first of all, he is sitting in the middle, that is appropriate. rodney works with everybody. he is loved by everybody. norman is beloved, but not like running. -- not like rodney. he came in and effectively did a great job under president clinton. he continues to do great things for this administration behind the scenes. i will say that he is as good an

example of why everybody likes running. my son-in-law is a commissioner of the nfl. it was not such a good jobs at all of you months ago so happens that rodney new one of the parties on the other side. on his own, he said, he called me and said i know you're son- in-law's commissioner, so and so is a friend of mine. i have not talked to him about this but if there is anything i can do to help get this resolved, just call on me. that is why rodney is so effective and beloved. i did not have to take you up on that offer. they got it down on the run. otherwise we would be going to the super bowl together. that is why rana so affected. he has a view that very few people have. >> thank you, secretary skinner and secretary mineta, secretary burnley, and mary peters, all gathered.

it is a pleasure to be here part of this gathering. let me note the presence of another individual who just walked into the room who was so much a part of my work at the debarment of transportation. we were true partners in every sense of the word, and that was the case with morton downey and the secretary but for me in the clinton administration. wartell walked in and out wanted to and knowledge -- he walked all the way around. i wanted to leave knowledge his presence. actually, what i want to say speaks to some of the points that have been made but relate to some of the good work that i think mort did is the deputy secretary, and really the ceo of the department of transportation. -- coo of the department of transportation.

it is very important to have good legislation. it is important to have the money. we have considerable dollars as well. but we had just wonderful legislation. that legislation was crafted in many respects by norm, who has been identified as shepherding it through the house side and sam in the secretary's post, and the people with whom they were. clearly the president and other members of congress. what we sought to do, and maybe this was because we were -- you do early on recognize that you are not necessarily of washington and that there are wonderful thinkers outside of washington grid that is the point i am making. we actually hit the road with the legislation to basically tell people what we had the power to do on their behalf and with them in partnership.

i think that it was clearly in the spirit of putting the american people first, but it was also an attempt to demonstrate that at the end of the day, the private sector can deliver on many things. and it is really good true engine of growth and jobs, but it also has to have a good partner in the public sector. and the public sector through a good policy and resources can be a wonderful partner with the private sector. came in when, we people were as skeptical about government as they are now. and i think that is why there was an initiative to reinvent government and to cut regulation and to try to bring balance between management and labor and to take a middle-of- the-road approach. and to really reach out across the aisles, republicans and

democrats alike. and that is just the way that we started and that is the way we have played it from day one to the end. during that periods, and that is why i know it is possible now, during that period, not only did we raise the gasoline tax but we also built on the project. and we have some enhancement projects there. that is a small amount of money. but i will tell you, you go to see some of those projects a dedicated, the crowd that is there, that is as supportive of the major multi-billion dollar projects, those crowds are the same. and it takes both of those crowds to help us get the message out, i think. so i think that there are clearly places to complain about the role of government and how

governments sometimes, you know, maybe makes a misstep here or there. but there are dedicated people in government. and we need to help the public understand that, and they are ready to work with the public and with the private sector to do the kinds of things and the kind of work that has to be done to move the country forward. wondered two other comments. i've never really discussed stress protection as concrete and steel. i do not think that winds for us anymore. it won for us when we had a decade -- a dedicated source of financing and no one could get to that finding. and with every experience that a driver had where he or she started those vehicles and used gasoline, they added to that fund. those resources were there for us. that fund cannot do what we needed to do. so we have to have a relationship with the public

goes beyond us getting together here in washington, deceit and deciding how to use the money -- washington, d.c. and deciding how the use the money that appears in that trust fund. we need to go back to a time when you had to deal with the needs prior to the trust fund and had to make the case for the trust fund. we have to do that heavy lifting now. i do not think you do it with us gathering in washington. if that is one message that i want believed, it is this. we have to hit the road. just as we hit the road to talk about that policy, and one trip, i remember which of or from buffalo, new york to laredo, texas. 3,500 miles. and every step of the way, we were dealing with projects in locales with people who are excited about those projects and we were telling them how we

could help them deliver on those projects. and we were telling them about the policy that was available to us through ice-t, and threw 21 over time. 20-21 came around, there was a desire to go back before ice-t. but we were able to hold the line. and so i think that if you look at the legislation that is being formulated now, you have a good policy. i think we have been able to hold that line. i believe that is the last 15 are you so years has been about this new view of transportation has more than concrete and steel. everything that jim listed, education, health care, all of those issues, transportation helps to make our enjoyment of

those things possible. no, we are not just going to the school next door or to the health care facilities around the block. usually it is across town and the school is sometimes across town. and transportation makes it possible for us to enjoy those goods. and we have to talk about transportation, i believe in that way. and so i just think that let's applaud the senate for giving us what we have always come to expect and that is a congress, coming at this from my vantage point of bipartisanship. we have never had to really work in an environment, not in the last 50 years, where there has not been the case. i just had a wonderful time working with republicans and democrats, and i cannot think of a bad experience that ipad has

secretary during that period and that is not because we always get everything we wanted. but we always had the audience and we always had the opportunity to make it work together. and it is only recently that we have gotten to a point where that is not something that you can expect. but now, the bp w committee gave as that. and you cannot have more distinct and unique titans than a barbara boxer and jim in haho. if they can do it, we can get the same thing from the fall of support from banking and commerce and the other committees across the senate. i think that we can get a good bill. it may not be -- it could be two

or three, not the type of increase that we want, it may be just had a modest level, may be some increase, hopefully. but if we can manage that, then i think we could do something that is more important than transportation and moving a transportation bill. i think we actually, through our efforts, our collective efforts, and all the people that we represent and all the interests we represent, working with the congress and the administration, we can show the american people that government working with the private sector can get things done. and that is a legitimate question out there. i think that, you know, maybe it is for us to look beyond just the road or the bridge or whatever.

to help make that a reality, and if we do that, then i think our business along with the other issues you have mentioned, jim, will be in a position to be taken care of as well. thank you. >> i really am pleased to be able to introduce mary. meritor -- mary was the federal highway administration when i was secretary. she did a great job and the time that she was there. and then personal circumstances required that she returned to arizona. in the meantime, in 2006, i decided i would be leaving.

and so i called mary ann said, mary, i know you had just been back to arizona not that long, but if they were to suggest your name for secretary, would you consider coming back? she said, well, i will have to talk to terry about this. and so a couple of days later, she called and she said, i think i would like to do that. well, she goes to the confirmation process, she gets cleared, and the day of the swearing-in, terry came up to me, i do not know whether to thank you are punch you out. [laughter] but she did a great job as federal highway administrator, did a great job as secretary of transportation is. and i have always been really

y,debted and grateful to marr hear from her ability to get things done, so it is great to have this opportunity to be able to introduce mary peters. >> thank you so much. the night before the announcement, norman and i spoke on the telephone. i tell them, now i know what ginger rogers felt like. i think you can see the quality of my predecessors at this table. and the quality of people that have had the privilege of leading the u.s. department of transportation. norma's clearly among the top. your experience on the hill played very well on how to deal with these problems. but how do we manage the message?

you've done a great job, jim, convincing people of the need to invest more in transportation. how we get it out to the american people and convince them. it's instructive to go back and see when it worked. it worked any interstate area, when there was a compelling national purpose. and the american citizens saw no problem in investing and increasing taxes to fund the federal highway system. even if it did not come directly back to the state, it was better to build the highways in montana or wyoming, even if they were not generating much money, so one thing that moved us away from that time to agree it will be how, this lack of investor confidence, part of it was the abolition of some of the things that several of us have talked about.

nothing bad in and of themselves, here mars, special programs, bicycle trails or distort covered bridges, -- or historic covered ridges. i think that has contributed to the problem of what they lack of investor confidence. others sat in the projects we all talked about. they do not know what the big dig, or what the bridge to nowhere is, even though both of those projects would have value. getting to capture the public's confidence in this system, we have to do a couple of things. we have to cut back to the very core highway and transit programs that these bills are supposed to fund. we no longer have the luxury of

doing nice things. we have to be willing to bring the program back to the very basics of what we must do. i think passenger rail, you mention that. i would put that in the nice category. others may disagree but we do not have the revenues to do it at this time. perhaps in the future, that may be a good idea, but today we do not have the luxury of doing that. things like transportation enhancement, those railroad museums may be good in and of themselves, but they are nice to do and we cannot afford that luxury right now. just last summer when the aviation bill was being assessed, for the first time ever, congress let it transportation program lapse. you and i talk about this that there were no democratic highways or republican bridges. this was something that enjoy bipartisan support.

but last summer, i said, this is a very important thing. we ought to take good could look at it. congress is never allowed program to collapse before. again, getting back to basics and what we need to do. the essential air program started out as a good idea to serve underserved airport. now there are airports as close as 90 miles from the capital getting those funds. we cannot afford to do that in the aviation program and we certainly cannot afford to do things like that within the highway program as well. we have to explore alternatives to the gas tax. it has served as a very well and we have enjoyed the fruits of that over time. today average fuel economy is 27

miles per gallon. it has to go to 35.4 mpg and by 2025, we have seen their regulation that would drive that up to 54.5 mpg. the gas tax is not sustainable. it is not reliable. and it will not get us into the future. so let's focus those revenues on where it can do the most good, explore alternatives and more importantly, or perhaps as importantly, we need to demonstrate to the public that when we invest in transportation, york getting a good return on investment. and we have to use those terms. e q invested dollar and a transportation project, -- do you invest a dollar in a transportation project, you're investing in the area. more than 67% of local initiatives that would find

transportation, whether from sale taxes or other types of revenue, most of them pass. people see that it is a good investment and we need to bring that same parameter to the federal level and make that demonstration there as well. i heard a figure and i think i am accurate, but transportation accounts for 10% of gdp. if we are able to take that return on investment and communicate to the american people, i am glad to see that you're trying to do that with other groups, if we can say that if we do not invest in transportation, what that percentage gets greater? if our calculation of what it costs us is greater than it is in china on south america, we lose and a global economy. if we can make that

transgression -- weekend may the public understand that. these transportation systems will help save this money and make us more competitive on a national stage, then we can make some progress. i thought your report was very good. it is a great baseline to go from. we need to figure out how to communicate to the american public that they are getting a good return on investment and restore the confidence that our system enjoy it when we started with the interstate highway system. thank you. >> i want to mention one other person that shifted credit for a lot of what the miller center has done and a great staff here. gov. baliles, he is a legend throughout the country. the number of areas, but particularly this one.

it's taken this idea and worked and that the financing and put it into play and he is always there, and he is a person that delivers an answer he is delivering for the american people now. thank you for all that you have done. [applause] in introducing norm, i first met him when i hardly knew anybody in washington. we became fast friends but he had been around a long, long time. they tried to figure out how many years each of us is been in government. one form or another. i think that if you took the total of all four of us in government, it may be about equal to norm's timing government. that shows you how much experience and that he has in doing so many things for this country.

and not just in transportation, but a number of other areas. he has been go to for multiple presidents on a number of occasions. and he has been the go to person for the united states congress as they dealt with the infrastructure and transportation issues, all of those issues that his committee covered for some many years. he is very, very good at what he does. and i think we all know it. it is appropriate that at this time, norm, you give us your thoughts based on your past experience and trials and tribulations as the secretary and an airport named after him, all of those things that go with recognition, give us your thoughts, please. >> talk about past experience, my father told me when we had been in the insurance business, he said, never undertake vast

projects with half-vast ideas. [laughter] one of the things that we're facing is what everyone has pointed out. we are always talking to each other. part of the problem is that when you take a look at transportation, as part of the whole picture, it really is a small sector of the economy. it everything we eat, everything we where, everything we do somehow got to us on wheels at our home, at a store, at a distribution center, at a manufacturing point, some where it got there on wheels. i have never been able to understand why is something as vital as transportation is something that everyone takes for granted except when it is

denying them. and then when it denies them, the shelf life is maybe 45 days. i remember when the iw35 bridge tragically went down. jim said that we needed an emergency bridge tax. the bridge when down on wednesday and he talked about it on friday, and by tuesday, you talk about -- what surname? dancing backwards, man. ginger rogers. by tuesday, and jim was already backpedaling from that his emergency gas tax idea. and then not long after that 45 days later, usa today had a survey about the emergency idea. 57% said no, we do not need it.

so the shelf life of a tragedy, 45 days. and yet it is something that everyone is dependent on. maybe this top-down approach just is not working. somehow we have to be able to deal with this from bottoms-up, because it is really the question of how does it impact people at the street level? it is a question of thought leaders, policy people, labor, business, everybody, at the local level having to deal with this issue. i am not sure that i would like to think that we have been effective at the last level, i am not sure that any of the alphabet groups here have been able to leverage this,

especially when you think of the extensions that we have had on the faa bill as well as the highway bill. and the question of or the idea of devolution has been around for a long time. but the question is, how do we get programs to be impacting on people at the local level not what they didn't national program can do at the u.s. and local level. because that top-down to me has not worked, especially with the nature of the polarization of people in politics today. i gave a tremendous address at ucla talking about issues, people who are proponents of an

issue, they do not go after the issue. they go after the people. is the politics of personal destruction. so we ought to keep that out of the federal level. get it down into the grass roots. it is something that a lot of people in this room, where you have sections or branches have local and state level, and i think we have to start working on those folks to be able to start talking about what transportation means. the other day, and i really am appreciative of caterpillar joining the miller center for public affairs, they talked about their great achievements

in terms of sales, but they have done in terms of profit. to make, the most and significant part of it, it was not all but the vast majority was generated from their exports. that meant that someone is building something out there. but at caterpillar is not selling domestically, that means we eight building here locally -- we ain't building here locally. we have to get that whole picture, to turn it around in terms of a domestic, local, impact ful nature. we know how effective the programs are. we have had tremendous administrators and secretaries. remember when i went