government. >> the major point and i'm going to have to stop you there. a really good job from all be. thank you very much. [applause] [captions copyright national cable satellite corp. 2012] [captioning performed by national captioning institute] >> an examination of how national security issues could affect 2012 election. hosted by the american enterprise institute at 8:00 p.m. eastern on c-span. a hearing on nuclear reactor safety in the 21st century. commissioners testified on the lessons learned and what can be

done to prevent another disaster. also at 8:00 p.m. on c-span2. >> i was a radical as a young person, and i was the one who said we shall overcome was not an effective way of gaining rights. i thought that more confrontation was needed. >> walter williams on being radical. >> i believe a radical is any person who police and the personal liberty and individual freedom and limited government. that makes you a radical. i have always been a person who believed people should not interfere with me, i should be able to do my own thing without -- so long that i do not violate the rights of other people.

>> they would wear garments made of homespun cloth, and the cost would be much more rough textured, much less find then that goods they could import from great britain. by wearing this homespun cloth, women were visibly and physically displaying their political sentiments. >> sunday night, the role of women during the revolutionary war, part of american history tv this weekend on c-span3. >> the atlantic magazine hosted a look at the current situation here and overseas. one of the panel's started by talking about how to jump-start the economy. this is just over an hour. [applause]

>> good morning. thank you, elizabeth, for that introduction. she told you everything about me accept my shoe size. that is a secret for later. it is a pleasure to be with you this morning. this could not come at a more exciting time and a more timely topic that we have to discuss today. the caq is proud to be an underwriting. caq is an aura as asian base in washington and our mission is enhancing confidence through company auditing. i am interested in hearing what our last panel had to say, although it was pessimistic, but also what our next panel will say. hopefully they will give us some optimism.

one of the things we do at caq is a survey of investors, and these are main street investors. we issued a few months ago our fifth annual survey, and i was pleased to present those findings, working with "the atlantic" on their forum in washington, d.c. one of the things we found was despite the bad economy, the man on the street, the investors that we interviewed or survey, there was a remarkable amount of confidence in the system. seven in 10 indicated they had confidence in u.s. publicly traded companies. that was down 5% from the year before, but remarkable given the times we are in. they also had 61% of confidence in our u.s. capital markets. the percentages were not so

high which respected european companies and markets, however. we also asked investors what kept them up but night, was the question we asked them, and not surprisingly, i suppose, 59% -- the answer that got the most responses was not having enough money for retirement. coming in second at 54% was not having enough money if they were to be injured or suffer a serious illness. our findings have special relevance for our next panel. unlike that panel, i'm not a medicare or social security expert, but like many of you here, i am a baby boomer. i cannot help but wonder what is on the horizon for us, especially as we heard peter note on the last panel the ratio of retirees and active workers,

as those figures are going to balloon in the coming years. it has been estimated that 10 years ago there were approximately 10 new members in the labour force for every retiree. in another 10 years, the predictions are that there will be 10 new senior citizens for every new worker, said that has been a flip of that ratio in a 20-year span, which i find that alarming, myself, and as tom noted in the last panel, we need to pull for shared prosperity if 10 of us are going to rely on each new worker. i am hoping that by the time is up caq does our next survey this coming year at the numbers will be better and there will be more optimism in the system. i am very much for looking forward to our next panel. if our first panel was the panel of doctors diagnose the problem, i hope this coming panel will be

the doctors that prescribed ways to jump-start the economy. we are in good hands with derek thompson, who is going to moderate that panel. derrick is a senior editor at " the atlantic." he is a visiting research fellow at the committee for responsible federal budget at the new american foundation. we are in good hands with derek. thank you. [applause]

>> i am going to be the ringleader. we have with us douglas holtz- eakin, president of the american action forum, kevin keller, certified financial planner, anette nazareth, governor edward rendell, peter schiff, president, euro pacific capital, and sherle schwenninger are, director of economic growth at the new american foundation. the name of this panel is the no-nonsense prescription for a jump start economic growth panel. we hold ourselves to a higher standard of no-nonsense. on the subject of nonsense, but

sides seem we need -- seem to agree we need tax reform. when you seem to get republicans and democrats sitting in the same room, given a deadline, they come up with a plan that seems to always have three variables. one is lower rates, two is reduced tax expenditures, and three is to raise revenues slightly. barack obama released a tax plan that does not lower rates. who is right, obama, romney, or democrats and republicans in the same room? >> this is washington, so i am right. [laughter] you have to recognize a couple of realities. we have had the income tax for almost 100 years, and you can count the reforms in less than

one hand. we should not expect it. number 2, mr. romney and president obama are running for office. he should not listen to them. number three, it is true that tax reform is defined as raising revenue more efficiently, allowing growth more quickly, and right now i think the bulls- simpson commission -- the bow les-simpson commission reflects three things, we need to grow and we need a ruthless attention, and the oecd -- [unintelligible] number2, we were a lot about workers in the u.s. economy corporate income taxes.

number three, we have a big debt problem, so you look at bowls since then -- bowles-simpson and pray that history gets this done. >> we will cover and not a ground and jump from issue to issue. the boomer generation will turn 65 in the next few years. this will put new strains and comes at a time when people have lost their savings that they were depending on during the next decade. we're living in a time of personal loss. what sort of ideas should americans have for investing responsibility to create a secure retirement and how can government help? >> i think retirement is an

imperative, and have a lot more focus nationally, because this is going to be one of our great challenges. the earlier panel spoke about this, the 80 million baby boomers who are getting ready to turn 65. it comes to 10,000 people a day turning 65. we find ourselves with an economy that has done poorly. people were borrowing against their 401k's. the safety net that people relied upon doesn't exist in the war. social security is something we have less confidence than we did before. the private pensions are what we

are gone to be relying on. this was not intended to be front and center. it was supposed to be a supplemental plan. the imperative is now that the responsibility for retirement savings has now fallen very much to the individual. i do not think individuals in this country are armed properly with information they need to do ly.t the effective leade we have a lot to do in the area of investor protection they can better understand it is what they are investing is come -- in, and we have serious issues with financial literacy. it is astonishing for a country that is this educated that there are so little that is understood about investing and what the risks are. these are things we will have to focus on very much and quickly.

>> kevin, your organization released a study that asked people about their attitudes toward retirement and investing. reading through it people said two things straight government -- said two things. government, help me. is this, but the dissidents or sensible for people that a sense of, i want promises government has made to be there for me, but i also want a space where i can make my own decisions and get proper support from government? >> i am not so sure the results are as conflicting as you might think. we released the study this morning. a curious thing, and in bleak st to your p prescription of the future, there was a cross-section study

of all americans, and 67% said they feel like they have sole responsibility for their financial security. in contrast and also acknowledging what you said, there is a feeling that the government needs to provide the social safety net. at the same time they recognize the importance of providing for their financial security, they also want social security, medicare, and to get your point, protection for financial investors. i am not sure it is that conflicting. it is encouraging that 2/3 want to and feel like they need to. part of that, they are feeling like they are making their plans with social security and medicare as part of it. >> governor, i will talk to

another generation, young people, education, and what we can do to make education work better. people who will be paying for their tax dollars a lot of the income and medical security that the older generation is going to need. at the state and local level, what are the major problems in paying for an creigh quality education, and what are the best ways? >> it is a quandary, because you cannot listen to polls, because polls ask a question, but they often do not ask a follow-up question. do people believe they have sole responsibility for their financial future? yes, but those same people believe that medicare ancestor security should be there.

70% of people does not want the government to change medicare. 70% of the people, already, folks. it is like that lady who held up the side, keep the government's hands off my medicare. you have to understand, you have to ask six or seven questions to get at the treat. do we need medicare to be sound? we need social security to be sought. we have to change entitlements, reform the system, make common- sense changes that take into account all sorts of things. democrats who would react reflexively and say they cannot change anything, that is wrong. the president and health care bill took $500 billion over 10 years out of the bill by changing medicare. in this case he changed it in a relationship the pharmaceutical companies, so it did not have an

impact on beneficiaries, but we need to do all hold lot of that stuff, got to be reasonable, but understand, and we have a five- month window after the november election to the middle of march. if we did not get things done for the country, that means tax reform, raising revenue, cutting entitlements, it means an investment strategy. if we do not do that in those five months, we are cooked as a country. to go back to your -- [laughter] education is part of the investment strategy. in my judgment there are three absolutely -- for absolutely crucial things we have to invest in. one is in for church. -- is infrastructure.

it is the fastest way to fill the economy with well-paying jobs. secondly we have to continue to invest in research and development. research and development is what made this country the leader of the world economically. we cannot roll it back. we have to invest in alternative american energy strategies, and as the president is fond of saying, but not necessarily doing, everything has to be in the plant, everything. before, we have to invest in education, because in the end it will be to capital that decides which countries are the most viable economically. we still produced out of our universities the smartest ph.d.'s and nba's in the world. -- and mba's in the world.

if they want to stay here, let them stay here and open their businesses here. that disconnect between the greatest post secondary education in the world and what we do with kate-12 is stunning. we have to invest and start as early as we can, and investment has to be there as incentive for state and local investment. we need to start pre k and 3- year-old trick by the time they hit kindergarten they have great skills, and the basics of reading and socialization. we got to start early with them. we have to make sure our teachers are trained and our teachers are paid a decent salary, so our best scientists, some of them go into teaching science as opposed to the private sector.

we need to incentivize those scientists in the classroom. we have to make use of technology. one of the best things we did in pennsylvania, we invested $220 million to put a laptop and everyone of that four basic curriculum courses in grades 9 through 12. our kids have to be technologically ready. in addition to college, we need to make sure our community colleges are the best they can become a and we have to spend money. you spend money to make money. every business understands that. if we stop investing in our cells, which are truly cooked. >> peter, you have a different take on the economy. i want to bridge the subject, but first making a plug, this is the cover of the new "atlantic."

it says the hero is ben bernanke. peter, you told me and i believe this was on the record -- [laughter] if it was my contractual obligation to do everything possible to wreck this economy, what i would do is go back and follow every single thing that ben bernanke, the hero, did in the last three years. explain that. >> you mentioned you think the government needs to protect investors. investors need protection from government, from people like ben bernanke. he is the greatest threat to american investors. he has interest rates artificially low. he has devalued our currency. the government is forcing americans to participate in the world's biggest ponzi scheme.

we need to be protected from government. the reason i criticize bernanke is rather than learning from the mistakes of his predecessor, he is repeating them on a bigger scale. greenspan's policies created the house and bubble. fannie and freddie were part of the problem. take the fat out of the picture, take the artificially low interest rates, we would have never had this problem. this was a creation of the fed. burstreenspan's bubble in 2008 and we have -- we had that financial crisis, which was a creation of government, what did bernanke do put it relearn? not only did he not raise interest rates, he put them to

0%. even some of those will say part of the problem was that the fed kept interest rates too low for too long. what is bernanke doing, keeping them at 0% even longer? the federal reserve asked the banks to run stress tests. under the tests, the assumption that interest rates stay at 0% and the yield stays below 2%. why didn't the fed asked the banks around a test on a return to normal interest rates the reason is because all those banks would fail. ben bernanke has got a whole economy cooked on a cheap credit, and it is masquerading as economic growth. if you look at the deficit that came out last week, it is exploding. jobs we are creating now is making us poorer, not richard.

all we are doing is spending borrowed money. when you do that you can create jobs, but we created jobs during the housing bubble. when the bubble burst all those jobs disappeared and what you're left with is a gigantic hole. this panel is about growth. we do not have any great. our economy is getting sicker because ben bernanke. the government is not letting the market determine the interest rates. americans spend too much, do not save enough, and the government is enormous. the deficits are so big because of ben bernanke. if he let interest rates go up and refused to monetize debt, congress would have no choice but to cut spending. because ben bernanke gives them an easy way out because he buys

all that paper, the government gets bigger. these same mistakes took place in europe. we look at what is happening increase right now. a few years ago they had very low interest rates, and then they went out because creditors got worried they were it not going to get paid back. we cannot pay our creditors either. they will figure it out, and people say we are different because we have a printing press. zimbabwe has a printing press. it does not make things better, it makes things worse. that is the crisis we're heading for. we are going to have a sovereign currency crisis,rrenca and the coming collapse will be much worse than it was in 2008. >> peter seems to thing ben bernanke is a big kamikaze

pilot. you take a different view. you think the government -- the economy is in a ditch, a downward spiral with or without the help of the fed. we were talking about best ways to think about the problem, the united states faces, and the way to get us out of that problem. help us from the way you think about the current deficits in the u.s., both fiscal and economic, and a way out of that. >> i tend to side in his argument about the fed "atlantic" cover story. i see an optimistic path going forward. we're still dealing with three series that is its holding us back. the first is a demand deficit that has been partly filled by government transfer teams that

have held up its function. there is limits to that, particularly if you are going to get a sustainable growth path. we're getting a little job creation, we are facing a serious global head wind, and we have another way of framing the demand deficit is that we have supply outstrips demand globally, which will get worse with the economic crisis in europe, which will eventually hit asia and china, as they are dealing with their own type of delivering problems. the second is the jobs deficits, which we have a long way to go back to the approach full supplement. the most important deficit and one that response to peter's concerns is we have an investment opportunity deficit. we have too much savings in idle

capital that is looking for too few good investments in the u.s. and the world economy as a whole. as a result, the result of these altered-low interest rates is a not ben bernanke's policy, although he has helped it. it is because there's too much money not being able to find much investment and has ended up being part in fixed income because of the resistance to taking on new risk at this point. so the challenges, how we encourage the tax and other frameworks, to put this idle and savings in capital to work, making real investments that create jobs, that produce a more productive economy in the future, and governor rendell pointed in the right direction, and to do it it in a way that

gives returns to all these aging future retirees that right now are getting less than 1% or 2% on their fixed income. pension funds are having enormous difficulty in being able to meet their returns because of this low yield. the answer in my view is we need to invest in the missing piece in the new american growth story. there is a powerful new american growth story emerging out there around the synergistic convergence of the will and gas revolution -- the oil and gas revolution, which will cut our trade deficit in half if we develop these resources. the accompanying rebirth and revitalization of the manufacturing sector, partly made possible by the chief of energy. we have had a huge swing in the chemical manufacturing sector because of the dramatically

lower cost of natural gas to feed stocks in the u.s., compared to the middle east and asia and europe. we're beginning to talk seriously about the conversion of 25% of our fuel consumption, by certain delivery vehicles, all of which could be moved from diesel to natural gas in a cost-effective way. if we get serious in investing in infrastructure, what is missing a federal framework to make this happen so it spreads out to the widest population. but we have enormous infrastructure bottlenecks. we have all this oil sitting in the middle of america, dast not being able to move the other place -- gas not being able to move to other places. for all the infrastructure of

roads and in the waterways, this new emerging american growth story that is fighting against deleveraging becomes a dominant reality and may be able to insulate us from slow growth in the rest of the world. >> governor, i am of two minds with manufacturing. manufacturing has declined significantly since it employed 40% of all workers in neff -- in 1950. now it employs 10%. these jobs have quadrupled in the last 60 years. on the one hand i see manufacturing is in its own structural decline and seems to be recovering some of the jobs it lost in the 1990's, 2000's, while the service economy points to our future. do you see that manufacturing is

having a kind of revival that could have a multiplier effect that could jump-start this recovery? >> in the short run, there's a great role for traditional manufacturing -- sherle said if we developed our own energy, shale is important in pennsylvania, and i believe it can be done in an environmentally sound way. we have to master that. it is an enormous job creator in itself. the construction of the wells, the process, but it is a great manufacturing boost. the single biggest advocate for the shale industry in pennsylvania, other than the companies themselves in is -- cause all those drills require accident did not of steel. that is true for wind.

when the energy, where the turbines come from, what turbines are made out. if we develop our own energy, building out the infrastructure for natural gas, think of all the new types of gas stations being constructed. this is an investor asher itself. the big secret is not just jobs on construction sites. stimulus produce 1.1 million jobs on the construction sites, 400,000 jobs back in the manufacturing plants, asphalt, concrete, steel, timber, paint, and in the short run as we build up our economy, and treasurer and energy and manufacturing can play a big role in the recovery. those things are going to become more automated as time goes on, but we ought to look to advanced manufacturing. pennsylvania has lowest unemployment rate of any big investor state and has had for

over the last eight years, encouraged with me leaving as governor. [laughter] it was not all my doing. in the southwest in pittsburgh area and philadelphia, we do a lot of pharmaceutical manufacturing. those viagra pills, somebody has to manufacture them. there is a growth in manufacturing, a significant role, and remember we're talking about raising wages. i will take manufacturing jobs manufacturingtwo service jobs any time. >> let me say something about manufacturing. real're ever can have a recovery, not a stimulus- induced temporary high, it will have to be led by manufacturing. the problem is that manufacturing has declined so much because of government policy. we have more people working for

government. the reason we have been able to get away but this is the world has taken the money we print in exchange for the stuff we produce. the dollar is the reserve currency, when the dollar plunges, americans will only be about consumed what we produce. we want to import something, which will have to export something of equal value, not just money. it will not happen until we have an lot less regulations, and it will mean we will have to spend a lot less money on things like education and health care and services. we spend too much money, thanks to all these government subsidies. we wait so much money on education. talking about education, we have kids borrowing $100,000-plus ticket worthless liberal arts

degrees that have no marketable value when they could be getting real jobs in the real world. 15% of the population is unemployed, and we have a trade deficit because no one is taking anything. >> can i just respond to that. [laughter] >> does anybody know what the h1n visa is? you would think that is just about software programmers. we bring about a million of them a year into the united states because we do not have young people trained enough to take those jobs with benefits. [unintelligible] >> they are taking humanities

and sociology paid >> the bottom line is there are tons of 23- year-olds in every american city who would love to have jobs, but we did not educate them well, we did not train them well. it is not just about spending money. >> whose fault is that? >> i want to move the conversation a little bit down here. doug, this is the topic i wanted to discuss, education, and i am pleased where this landed. you were talking earlier about the guiding principles of public policy, and one of them was education. it is interesting because on the one hand it is hard to see what is the real education crisis. is it a 40% of people who do not

the college, the half of the people who go to college that cannot finish, the college premium seems to be flat landing and the people who do get a degree are not seeing is a benefit -- are not seeing the same benefit they would see in the 1950's? where is the best place to focus our attention? >> i will agree with everything said. i think the primary challenge the fact that we are, especially in our large metropolitan school dress, generating enormous social inequities and not preparing students to be able to achieve at the college level education. many of them are not graduating, when they graduate.

education is in serious trouble. [unintelligible] we have to problems, but the one is about skills,, it's the ability is -- competency abilities. we have turned the system into an image of our health-care system where it they deliver products of questionable quality. >> i want to talk about the kind of investments families should think about when sending kids to college. you reach a point where with more people born to school, middle income wages have flat line. people have to borrow more to get this necessary degree in order to advance in the world, to get the skills to be a

designer or software engineer. is there a smart way for families to think about better ways to invest that they can afford college for their children? is there a role for government to play in order to help families do this? >> when we talk to the certified financial planners around the country, what we are hearing and what we saw in the research results was there is a conflict with middle american families be able just to meet short-term obligations like paying the mortgage or filling the tank with gas. at the same time, preparing for retirement. it was not surprising that 82% of folks said they needed a financial plan. one of the things that you mentioned which was a little bit in conflict with what the governor said was that it is not just college. it is getting into a training

problem of some type. a high-school diploma alone does not prepared. that does not mean that a fancy four-year liberal arts degree -- >> we have had a conversation that has been free-flowing so far. i want to impose a small constraint, which is the realm of the possible. in washington the role of possible fit inside a peanut. what do you think is the most likely and most important low- hanging fruit that this congress, in either the next six months or in the first five months in the next an initiation, that we should focus on that will give us our biggest bang for the buck in terms of getting the right productivity and the right kind of growth to

the u.s.? >> republicans are moving to pass a version of the transportation and infrastructure bill, which is terribly important, both for the macro economy, but the real productive economy. i think a number of little twists be put on that -- and this is where i think some democratic concessions, obama administration concessions, speeding up environmental approval, which i know governor rendell has spoken about for certain transportation and infrastructure projects. rizing the approval of the oil and gas industry. i think we're beginning to pinpoint the problems, with deficient welds, and not a fracking.l crackin

certain members are reporting toward an infrastructure bank, but additional loan programs that make it possible -- corporations right now are in a better position to borrow in the capital markets, and there is record corporate borrowing. they are borrowing at 2% coupons to be able to pay out more dividends and buy back more stock. yet it is very difficult because of the 30-year time horizon to borrow for extensive natural gas pipelines that takes up to 20 years for retrofitting utilities convert from coal to natural gas, even though there is major cost advantages. i think by having a couple add-

ons even a republican-led transportation and infrastructure bill will give us an lot of bang for the buck in terms of both offsetting the head winds, but moving us forward with what i call a potential very important american growth story that could emerge. >> that is one thing we have not talked about yet, financial or four. the steps we still need to take that what happened four years ago does that happen again. what are you looking for washington to do in the next year that gets us closer to a point where you feel that banks are safer and the government is more responsible, more aware of the kind of risks the banks are taking? what are the steps you are looking forward to in the next year? >> i think we are fully in the implementation phase of dodd-

frank, to a large extent, i think that legislation is addressing to the full extent that is possible at this point and number of issues that were determined to have been a problem in the financial difficulties in 2008. even that is really not one to be enough. he cannot just be in a steady state. dodd-frank, will see substantial reforms at the banks, capital side, and regulation with perce -- pervasive regulation, derivatives, which was largely needed. : forward there is still so much that will be left to do if you take it down to the individual investor level. a lot of what needs to be done is not being addressed because a band with issues at the agencies. there were a number of reforms,

where marh schapiro brought, so the reforms were more informative. to some extent, a lot of the information they get is more developed from a litigation standpoint than from an informative standpoint. we need a complete rethinking on how we deliver information to investors so they get information that is useful. the other thing we need to do is continue to work on insuring investors are protected -- >> [unintelligible] is it possible to twitter side

thoughts? >> peter will disagree, but we think one of those protections in that is holding anybody who gives financial advice to a fiduciary standard of care. >> one of the things that would have been higher on the list of priories but for and with implementation issues with dodd- frank, is creating a uniform standard of care across industry so these intermediaries who investors are dealing with, whether broker dealers, have the same obligation to the investor. [unintelligible] >> that would force me to close my broker dealers. i wanted to get back on dodd- frank. i said earlier that the architect of the housing bubble

was greenspan, but he had help in congreat. dodd and frank -- they had a commission in congress to study why they had a crisis. i tried to get them to call me. i read a book. they did not want to testify. they did not want somebody to predict the crisis to say why it happened. they did nothing to take power away from the fed. the fed got more power. they did not even cut fannie and freddie. they are insuring more mortgages now than they did before the crisis. the bigger problem was that has infected in having the fdic in sure all these banks. if they did not, they would not

have done all this stuff. since government has created a hazard, that is the problem, and we made it worse. that financial pressures that is coming is gone to be worse. we had guaranteed its. >> i was a member of the commission. it had nothing to do with dodd- frank. they went ahead with the legislation before we gave our reports. >> now we have time for questions. presumably -- and as i surveyed the room --

>> it was clear there are 600,000 jobs out there that we cannot fill. companies have to go from the seven-week training period to a 14- to 16-week training period to fill jobs in their company. the governor has pointed out the education process and what we are doing to education is not focused in the right direction. community colleges are not connected with the industry to find out what it is, the knowledge that is needed for these new jobs. >> that is so important, the the work force investment boards.

we want to make sure we have private sector people on that and survey the private sector and ask, what do you need? to do it without doing that makes no sense. we then start putting in training programs in our community colleges and technical schools to fill the need. there is no question about that. we work with private industry. in the allentown-bethlehem area, there is a big ups area. ups came in and set up the equivalent of the facility and trained kids right there on the job and guaranteed them jobs. they have to survey and find what you need out there, but to have 600,000 jobs -- and might guess it is more -- they could be filled by americans, decent jobs, and it is a shame because

there's not that type of court nation. >> thank you. >> i would like your thoughts on broad capital ownership as a basic means to distribute new wealth and capital assets to promote real economic growth, not just increasing wages as a way to create demand for purchases of goods and services. >> that has been an important issue, not so much on the growth part, but we have seen across the globe these trends in both income and wealth inequality over the last couple decades. it is clear what is going on. with india and china returning to the trading system, labor has gone down.

in u.s. the reflex has been to try to fix this with distribute torre policies -- distributory policies trick the answer is to give skills and have financial capital said they can save for their retirement more successfully. that is the only way people stop this awful approach to getting income distribution right and get ahead of the kerf. >> it is not about creating demand. what we need is supply, and if we have supplied weekend have legitimate demand because there's something to buy. until would produce something, it will not be available. the reason we have a shortage of supply -- it is all things the government does to interfere

with capitalism which would produce more products. >> at the foundation we have looked at this issue for more than 10 years, and king to the conclusion it has to be part of the toolbox of addressing, of maintaining a quality of life and standard of living, particularly in light of trends of rapid productivity growth in manufacturing, which sheds workers into a lot of services, many of which for a variety of reasons will be relatively low productivity and not paid relatively good reason -- wages. the question is how you structure a much broader our rate of capital ownership that just not mean people trying to save for retirement, because that does not get you very far. unfortunately, we have not had a

serious conversation. we had the flirtation with the ownership society in the 1990's, and in the early chu george bush years. we will have to have more serious ideas put on the table, it has to be a part of addressing inequality in the future. >> thank you. >> i think you are doing a great job, derek. i want to bring in a live wire which is the teacher's union, which has not been touched. i think many of us know pension, the cost of pensions for teachers is higher than is what is being spent on education. eight disconnect there. the question i have, if we are

not looking at that, if you were given the opportunity to redesign how education would be done in this country, what would it look like? i have heard so far first get rid of liberal arts. that is quite extreme. then i heard go become a ups driver. i do not get a comfortable feel with that solution. >> both of them have liberal arts screes anyway. >> what would you do, how would you redesign our educational system, and i threw in the parable of the teachers' union. >> i do not think people who work for government should be allowed to unionize. the whole thing is corrupt. it is like a terrorist organization. the biggest losers are the

children who get a lousy education and the parents who get stuck with the bill. if we got rid of government- subsidized student loans for higher education, university would have no choice but to slash their tuition. the people who did go would get a decent education and it would not cost them a lot. if we have more competition in k-12, some way so there was competition with these monopolies -- you have a government monopoly, it is not going to be efficient. everything we get from the free market, cell phones, computers, the quality contest gone up and the price goes down. everything the government gets involved in, the government -- the quality goes down and the price goes up. >> understanding that education

is important if not crucial to getting ahead in a globalized economy where skills are at a caribbean, aren't there good ideas for bringing down the cost of higher education? >> i was going to say it is in the state -- it is a mistake -- you have to separate k-12 from the college community, college, and the grad school. with k-12, it does not make sense to talk about it as a purely educational issue. there was a piece written and number of years ago that said it was a local economy problem. until you are able to be able to create a workable schools that come out of healthy communities and neighborhoods, you are not

chasing housing values get your kids into a better neighborhood, you have to think of the k-12 as a larger economic development issue in improving education. in the case of the higher education, i think obama has sent -- has started an agenda that is very important, and that is our colleges and universities are horribly inefficient. they have tuition escalation that goes far beyond the value they are providing skills. thisave relied also on d my experience with educational institutions, the higher educational, they're probably the least flexible institution

i've ever worked in, and governor rendell tried to do an admirable job in putting private sector people there. but there are two major sections that have to undergo restructuring. one is the health sector and the other is the education sector over the next 10 to 15 years. i think we need to get some more vigorous experience of what is required and also get back to some functional equivalent of on the job training because companies training their own employees may be better than the community college model. that may be not a successful model. >> thank you. >> well, --

[laughter] we could be here until 2:00 just answering your questions. it's a brood and crucial question. by the way, don't demean u.p.s. driver jobs. there are a lot of americans who would love to have that type of job with a decent security package. and there are a lot of americans that are not going to be computer technologieses or science teachers or -- >> or economists. faithfully. >> that's number one. number two, can the colleges do better? of course they can. when i game governor, the first year, the university of education, 14 colleges, came to me and said they wanted my permission to raise tuition 11%. inflation was about 2.5% that year. i said are you guys kidding?

why? oh, we can't afford it, blah, blah, blah. what colleges have done for too long, when they have a financial problem they raise tuition. just like government raises taxes. i made them go back and they saved millions of dollars on their energy costs. i made them resource their purchasesing. they saved millions of dollars. we wound up with a 3.1% increase that year. for eight years, pennsylvania's tuition increases were lower than inflation cumulatively. you have to force people to do the hard work in cutting costs and most of the universities don't do that at all. last thing, k through 12, can't tell you how important it is to start young. start young, before

kindergarten. have small class sizes in kindergarten and first grade. do things where kids can get excited. we had the kids as third graders doing experiments in the classroom, little experiments, to learn how rain happens by heating up water in a little plastic thing. they never forgot that stuff. they love science. there are so many things we can do. it's just a question of having the ingenuity and the will to do it and the willingness to do different things. if we're going to succeed in this country we have to do what j.f.k. said. we do these things not because they're easy but because they're hard. >> i just want to say this -- when you think about these issues -- there are two

unproductive back waters in america's economy, one is health care and the other is education. and both need to see a future that has real budgets, payment on the basis of outcomes with some accountability and providing people with more choice and competition. >> great comment. we have time, unfortunately, for one more question. seriously, 30-second answers. i'm sorry. you can ask these questions in a spillover session. last question, sir? >> my name is fred singer. i'm a science and environmental science project. my question, how important low-cost energy in jump-starting the economy and is the administration doing enough to promote low-cost energy or are they moving in the opposite direction? >> quickly, the biggest problem with the cost of energy right

now is not our energy policy, which i don't like. it's our fiscal and our monitor policy. the reason that gasoline is so expensive is we're printing all this money to guy government bonds. gasoline production in america is the highest it's been since 1993. demand is the lowest since 1997. so many americans don't have jobs they don't need a lot of gas to go to work. the reason gas is to expensive is because we're printing so much money. if you look at gas in terms of real money, back in the 1950's, you could buy a gallon of gasoline fortune 25 cents. you can still buy a gallon of gasoline 25 cents full service and get change. the thing is you need silver. when you have fun money, prices go up. when you have real money, prices go down. that is going to undermine our

economy. >> as i maid the point in our introduction. low-cost energy ask a big boon for revitalization of parts of our manufacturing sector. that is happening, even absent a coherent federal policy. the advantage of low-cost energy doesn't necessarily apply when we're able to produce more of our own energy. because the mument flyer income and effect stays in the economy. i think the goal would be more of an optimal energy policy that allowed for the revitalization of mastering if we're able to be able to produce more of it in the united states to include our income and wealth posture. >> i'm afraid that's all we have

time for. i want to thank our panel. [captions copyright national cable satellite corp. 2012] >> tonight, the national security agenda is discussed and we hear about the ongoing sflinse syria. they also examine how national security issues could effect the 2012 presidential election. and on c-span 2, the c-span environment committee holds a hearing on nuclear reactor industry in the 21st century. that's also at 8:00 p.m. eastern. >> our system is fundamentally undemocratic in a number of ways. one of the ways is closed primaries. so in half the states in the country, 40% of all the voters

can't participate in the primaries. and so they have no say in who gets nominated. and as a result, we get more and more extreme candidates on both ends of the spectrum. >> saturday night at 10:00 eastern on "afterwards" linda kilian writes that the most powerful bloc in the u.s. are independent voters and they've decided every election since world war ii. also, on book tv, saturday at 8:00 p.m., how the network was turned into an extension of the republican pearlt. and sunday night at 10:00. mark levin and his thoughts on the current state of politics. book tv, every weekend on c-span 2. >> i was quite ir-- a radical as a young person and i was the one who thought singing "we shall

overcome" was not a very effective way of gaining civil rights. i thought that more confrontation was needed. >> substitute host for rush limbaugh, walter williams, on being a rad cam. >> i believe a radical is anyone who believes in individual freedom and limited government. that makes you a cad cal -- radical. i've also believed that people should not interfere with me. >> more with walter williams sunday night at 8:00 eastern and pacific on c-span's q & a. >> earlier today, kathleen sibelius invalue veiled a new federal campaign against tobacco usage. she said the new ads feature

real people with real stories who lost limbs and lungs because of smoking. this was held at the museum here in washington. it's 40 minutes. >> good afternoon, everyone, and thank you for joining us today. i'm delighted to have the chance to share the stage with two of our great health leaders at health and human services, dr. a gene aye benjamin, surgeon general and dr. friedman, who heads the centers for disease control and prevention. i also wants to thank those here. some of whom you'll hear from, former smokers. we're hear -- here today to announce the latest steps this administration is taking in our

fight against the number one cause of preventable death in america. we have a new ad campaign that we're launching today and it will feel some of the most attention getting stories about smoking's devastating effects. these stories haven't ever been seen in popular media. we expect it will lead to more than half a million smokers seeking out the resources they need to quit. when we look back a few decades to the days of smoking on airplanes and elevators, it can be easy to focus on how far we've come since then. it can be easy to be lulled into a sense of complacency and start to think that tobacco use is a problem that will go away on its own but unfortunately we know better and the numbers tell a very different story. tobacco in this country continues to kill 443,000 --

443,000 meshes every year, and for -- americans every year. and for every person who dies from smoking, at least two new young smokers take their place. across this country, we have 4,000 young americans under 18 smoking their first cigarette every day, recruited by a tobacco industry that spends more than $10 million a year to sell its products as cool and fun. so the campaign ad we're launching today will tell the real story or how tobacco use can change your life. the courageous volunteers have lost limbs, lungs, and the ability to speak as a result of smoking's toll. millions of americans are already suffering from

tobacco-related illnesses and their families and friends. but we hope these ads will be a wake-up call for the smokers and potential smokers who are not yet aware of the enormous damage they may be doing to their health. the campaign will build on a booed agenda we've undertaken in the last three years to stop kids from starting to smoke and help the 70% of smokers who want to quit make that important leap. we've enacted historic anti-tobacco legislation that cracks down on the back door tactics tobacco companies use to market to kids and restricts the misleading terms like light and mild. the reforms have been debated for years and now we're pleased to say they're the law of the land. we've also passed a health care law that's made it easier for

people to get counseling to help them quit. and medicare now covers the treatment before people get sick instead of forcing them to wait until symptoms show up. we're supporting state-gaysed quit lines and supporting anti-tobacco efforts that can become models for the rest of the country. there are signs that momentum is building. for the first time we have comprehensive smoke-free laws in more than half the states in the country. as we pursue these efforts, we're also conscious of the enormous burden tobacco puts on our economy, almost $200 billion a year. any step we take, even a small amount is likely to have a huge payoff in reduced health care costs and higher productive. we estimate this campaign will

save $170 million over the next three year's. as last week's surgeon general's report made clear, we need to make an all or above approach that reaches everyone. from the 12-year-old thinking of testing his or her first puff to the 75-year-old lifetime smoker who could still reap huge benefits from quitting and that's exactly what we've been doing this campaign is an important key addition to those efforts. thank you for being with us and now i'd like to turn over the podium to surgeon general regina benjamin. regina? [applause] >> good afternoon. in a and a very special thank you to secretary sibelius for her exceptional leadership in this issue.

she regrets to have to leave for another commitment because she's really been very involved in this initiative from the beginning. being here today is personal to me. as many of you, it's also personal to you. as i mentioned when i took this position, my mother died of lung cancer from smoking. when she was young she started smoking because she was a girl, she wasn't allowed to smoke like her twin brother was. she said as soon as she god got to be old enough she would. and it took her life. uncle buddy, a world war ii prison of war survivor. i saw him sitting next to an oxygen tank, struggling for each breath, until a few months ago when his lungs gave out.

i don't want anyone to have to sump the loss of a loved one due to a preventable condition such as those caused by tobacco use. i've released two surgeon general reports on to bicycle. the first one, known as the heart stopper report, because it showed that one cigarette can cause a heart attack and the science of how tobacco smoke damages almost every or began in your body. -- or gann in your body. the second report was released a week ago about ago, focused on youth and young adults. the stories you'll hear today will convey the messages from those two surgeons general reports in very democratic and real ways. i want to tell you a little bit about the science and what is from the doctor's standpoint. tobacco smoke is a toxic mix of more than 7,000 chemicals and

compounds. inhaling these in tobacco smoke causes need and long-term -- immediate and long-term damage. damage from tobacco smoke is immediate. the chemicals in smoke reach your lungs very quickly every time you inhale. your blood carries the intockscanlts to every organize than your body. damage from the smoke quickly damages every organize than your body. the chemicals in the smoke damages the delicate lining of the lungs and causes premature and permanent damage that reduces the ability of the lungs to exhale air officially and leads to c.o.p.d., which includes imif a zeema. also, many americans have some degree of core norah artery

disease and don't know it. people at heart disease are at risk from second-hand smoke exposure. even a breach exposure to smoke leads to changes in blood vessel function and blood cotcloing, which could lead to a heart attack. chemicals causes imthat medication and cell damage and and can weaken your inmune system. the toxins damages your d.n.a., which can lead to cancer. and smoking weakens your body's ability to fight cancer. also, smoking makes it harder for die beat i said to control their blood sugar. this results in amputations and poor vision and even blindness. tobacco smoke is addicting and cigarettes are designed for addiction. anything teen is a key chemical

compound that causes the powerful addicting effects of cigarettes. other ingredients and designed features make them more attractive and addictive than ever before. filters, added agents and flavors make nicotine easier to absorb and can deliver it more quickly to the plain. -- brain. adolescents' bodies are more sensitive to nicotine and adolescents are faster to be addicted than adults. every day, more than 1,200 americans die from smoking and each one of those who die are being replaced by two young smokers. in almost 90% of those replacement smokers smoked their

first cigarette before they were age 18. fortunately less people smoke today than in the past. with a whole lot of effort, our nation has reduced tobacco use by half since the surgeon general's report in 1964. however, since 2003, hour progress has stalled. it has stayed the same since three. one in five adults in the united states continue to smoke. tobacco use remains the leading cause of preventable death in the united states. the good news is that we know what to do. if you or your loved one smokes, please quit. i tell my patients, which is now 300 million americans, that quiting gives your body a chance to heal the damage caused by smoking. quitting at any age and at any time is beneficial.

when smokers quit, the risk of a heart attack drops sharply after just one year. smoke risk can fall to about the same as nonsmokers after two or five years. the risk of cancer to the mouth, throats and eto have -- esophagus are cut in half in five years. the risk of lung cancer drops in half in 10 years. but it's never too late to quit. as a nation we know what works. when we increase the price of tobacco, smoking use declines. when we enact measures and reduce exposure to second-hand smoke, we change the social norms, support healthy decisions and reduce heart attacks. and when we educate the public with aggressive media campaigns to inform them of the risks we prevent youth from starting.

so today we're going to do just that, educate the public with an aggressive media campaign. now i'm going to ask the director for the centers for disease control and prevention to tell us about the c.d.c.'s tip for former smokers' campaign. dr. -- doctor? >> thank you very much. thanks also to the department of health and human services and secretary kathleen sebelius, who can be -- whoove real leaders moving us forward put f.d.a. and many other means to reduce tobacco use in the u.s. i'm here as the director for the centers of disease control and prevention and i'm also here as a doctor. when ink about smoking i think

of the patients i've cared for with emphysema, gasping for every breath. the parents who didn't live to see their children gough from high school or college. the patients who were unable to go back to the lives they were previously leading and the people who developed cancer and died from it or had to go through painful and difficult treatment. that's the real story of smoking and that's why we're at the museum. this is the reality. this is the news. this is what smoking brings to people's lives. nearly 90% of smokers begin smoking of a young age when they're under the age of 18. smokers they my -- think they're just going to die a few years younger. while that's true, it's also true that they live sicker.

big tobacco has spent more than $100 billion on marketing and promotion in recent years to convey that healthy image that secretary sebelius spoke of. but now, thanks to these courageous use exsmokers, we can bring the realities of smoking to smokers and nonsmokers across the country. the ads you'll be seeing later are not easy to watch. as physicians, it's not easy to care for patients dealing with very difficult medical conditions. it's even harder to live with these conditions day in and day out, and yet the smokers who have come forward to tell your -- their stories are living vibrant, healthy, affirming lives and helping other smokers to quit. ads like these work. research by the national cancer

institute, reviews in the scientific literature are unanimous. hard-hitting ads convince smokers to quit and reduce the likelihood that kids will start smoking. i will confess that about eight years ago i wasn't convinced that ads like this worked. so we ran hard-hitting ads for one year and systematically monitored the impact and it was democratic. we -- dramatic. we saw a substantial dee kline in smoking, especially in communities where the highest rates of advertising, and the models, wherever we showed the ads the most, people stopped smoking in the greatest numbers.

to bicycle industry continues to do aggressive marketing and promotion. they've spent more on january 1 and 2 of this year than we at the c.d.c. will spend in the entire year of this campaign. so this is going up against great odds but i am very confident that we will prevail, because the truth does preveal and the truth is what these ex-smokers are showing to america. the evidence is clear that hard-hitting ads work. these will pay for themselves in reduced medical costs in just a few years, we think. but even more importantly, it will help 50,000 smokers to quit, reproject, and save thousands of lives. these are inspiring, courageous people, many here today who are willing to share their stories.

i'd like to introduce three of the former stories come up one by one. first is brandon carmichael in north dakota. he is 31 years old. he hasbergersers -- has berger's disease, diagnosed at 1. amputations from smoking are very common in a wide range of people. second, roosevelt smith from virginia, age 51, who's had a heart attack and heart surgery. he was 45 when he was diagnosed. and third, terry hall from north dakota, -- north carolina, who's 35. has had head and neck cancer. we'll hear presentations from these three individuals and then i believe we'll show all of the ads. first, brandon?

[applause] >> thank you. thank you again for inviting me here to speak today. i started smoking when i was 15 years old. peer pressure drove me to pick up the first cigarette. just three years later at 18, i was diagnosed of berger's disease, which causes inflammation and clotting of your arteries and veins, resulting in reduced circulation. i suffered extreme pain, multiple sores and gangrene.bec, both my index fingers are shorter than the rest of my fingers. throughout this ordeal, i

continued to smoke, and at 27 i was finally able to quit. the use of nicotine replacement therapy has helped me in this process, a home health-care nurse gave me the strength to quit successfully. that nurse is now my wife. not everyone will have the guardian angels i consider my wife to be in helping me through this process. for those people still struggling to quit, i urge you to get the help available. there are resources out there that can help. if there is anything else to learn from my store, it is that smoking has consequences you may not be aware of. you do not know what that consequence of the next cigarette will be. thank you. [applause] >> roosevelt smith.

>> hello. i'm roosevelt from virginia state. i became a daily smoker at 17. when i enlisted in the navy, for the next 28 years i was a pack a day smoker. i have had five heart attacks, received two stints, and had one open-heart surgery where they performed six different bypasses. i still continued to smoke, the addiction was that strong. i lost my ability to work my trade. i could no longer perform the tasks that were needed, and not being able to work through financial hardship for my family

and myself. something that impacted me to this day. i have five children. after my heart attacks i could no longer physically do activities with my children. three years ago i finally quit. my heart physically hurt from the years of smoking. my move came from the heart. i did not want to inflict further pain on my family. i wanted to do all i could do to ensure i would be around for my children to grow up. i did not think -- do not think that cigarettes cannot hurt you. your families and friends will be glad to help you. your loved ones will thank you, and i know mine did. thank you. [applause]

terrie hall from north carolina. >> good afternoon. from north carolina. i would like to thank you for allowing me to tell my story. i started smoking at 17. i smoked for 23 years. at the peak of my addiction, i was up to two packs a day. the age of 40, i was diagnosed with cancer. now have a hole in my neck. i have had cancer 11 times. 7 since my larynx surgery. you think this is something that

happens the other people. i am the other people. when i was growing up there was no education in north carolina about the bacca. -- about tobacco. what the cdc is doing today through this campaign is moving us into a positive direction. i am grateful for the opportunity to share my story. hopefully, that will keep others from making the choice that has so impacted my health and my life. thank you. [applause] >> first there was my left leg, and after my left leg, it was my

right leg, and so now i am a double npt because of smoking. do not believe this cannot happen to you, because it can. >> you can quit. >> my name is roosevelt. i always thought -- i never thought that at 45 i would have a heart attack. i never thought it would stop me from playing basketball for my kids. i never thought it would give me a scar like this. like tic is due your heart a favor and quit now. >> you can quit. > >> you can quite.

>> it began with my big toe. that was the first and petition i have. >> is a vascular disease brought on by smoking. >> first my left leg, and after my left, it was my right leg, and now i am a double amputee. >> do not believe that it cannot happen to you, because it can. >> my name is res about. i never thought that at 45 it would give me a heart attack. i never thought it would give me

a scar like this, and i never thought it would change my life forever. do your heart a favor and quit now. get a huge round of applause to the brave men and women who told their stories. [applause] many of them are here with us today. this is the reality, and what is at stake is today and every day this year 1200 americans will be killed by tobacco. for every person who dies, there are 20 more who are living with disease, disability, or

disfigurement from tobacco. americans, whether you smoke or not, are paying the costs of smoking, not only in the human lives, productivity we are losing in our committees, and $200 million -- $200 billion a year in health and productivity costs. starting today, americans will see the reality of smoking as doctors and family members, patients, and loved ones see it. there is good knees. most americans -- and there is good news. most americans who have ever smoked have already quit, so we're making progress. most americans who smoke to they want to quit. more than 2/threet want to quit, and most tried to quit every year. ads like these and support services greatly increases the likelihood they will succeed in becoming tobacco free.

if you smoke, acquitting is the single most important thing that you can do to improve your health. it will also protect the people around you. children whose parents smoke are twice as likely to smoke themselves. and virtually all children who live with a smoker have detectable levels of toxins in their bodies. if you smoke, quit. youso what -- if someone love love smokes, help them quit. if you smoke, quit now, and if you want help, you can call the national toll-free " line or visit www.smokefree.gov. i want to thank the department

of health and human services, the surgeon general, and the courageous men and women who came forward to share their stories with america to protect and help other americans get free of tobacco. we can take a few questions. >> i wanted to ask about the stakes. -- the states. the $25 billion the states are getting from the tobacco settlement and tobacco taxes, only 2% is going to anti- smoking. is that enough? should the state be doing more? >> cdc publishes guidelines on what states should spend on tobacco control.

no state reaches the recommended level of funding, and some of them are at single digits in terms of the proportion of the funds they dedicate to tobacco control. there are people who have said the reason smoking is not going down is we have reached some irreducible minimum. that is simply wrong. states that continue to invest have seen a steady decline. california is down to about 12 corporate -- 12% to tobacco use rates, and some communities are down to the single digits. where progress is possible, but a national campaign does not replace state and local efforts. it supplements it. one of the things we do is to host a media resource center for anti-tobacco ads. these ads are there so states and local jurisdictions can choose with their own resources to extend that and run them more. we have to give thanks to some of stations that will be running

these ads free in addition to the paid ads. $43 wasct to get one a spent on ads. i will now be joined by the tim macaffee. next question. did we answer all of the questions? we were that clear? >> should the states be doing more? >> we understand the states are in considerable pressure fiscally. at the same time we the tobacco control is a good buy, as a good return on investment in terms of driving down costs. any people that wants to see fewer people die should be considering increasing their investment in tobacco control. >> i would add that the purpose of the report is to give good science and evidence and facts

out so policy makers, communities, individuals can make good decisions and can make the policy decisions, and our hope is states would try to reach the decisions, and we also encourage them to look at tocdc levels of funding, but it is left up to the states, and our role is to give them that information. >> thank you. next question. >> are you going to be able to run some of these ads in spanish and in spanish television stations and radio? >> yes. one of the ads is in spanish, and as we do further ads, we will continue to work on providing these four different communities within the u.s. one of the ads we did not show is on secondhand smoke and that is in both english and spanish, and we have the person who take that at here with us, showing

basically at any time people smoke runs someone with asthma, they are much more likely than have an asthmatic attack and an up in the emergency department or hospitalized, as is common with hispanic communities, so we are targeted to that community. yes. [unintelligible] >> have you thought about how we in the public health community can help, because they are important to do and it is possible the tobacco industry will react in ways similar to the ways they reacted to the labeling of cigarettes. >> we will see what the tobacco industry does. our focus is bring the reality to the lives of americans who smoke in order to save lives. i think we can expect some people will say what are you spending money on seven like this when we have such severe fiscal pressures could yet

again, tobacco control is a best buy. now we're spending is less than two days of the advertising budget of the tobacco industry for our whole year, and yet we think it will have a major impact, and where ads like this have been run we have seen a steady decrease in smoking. not only do we think they pay for themselves in economic terms, but most importantly, they save lives, and that ultimately is the answer. >> since so much initiate aion occurs in the military, are there any ads that will take place in the military? >> all of these ads are being placed in the cdc's media resource center, from so from that perspective it will most assuredly be made available.

we would love the opportunity to make sure these are seen by people in the armed services as well as veterans. >> i will comment that as part of the affordable care act, there is a national prevention strategy for the first time. 17 u.s. agencies have joined together to focus on preven tion, and there has been an embrace within that within the armed forces, which has focused on fitness, whether it is smoke- free environments or insuring healthy foods for our forces. it is a good partnership, and we will follow up. other questions? i want to thank everyone, and let's have another round of applause for the people who came forward. [applause]

in the past there has been interest of the media in interviewing some of the people, and we will make that available. we will work with some of the local media outlets from the areas where people looking forward live encourage additional coverage. every bit of coverage about tobacco use that shows that tobacco kills saves lives. so thank you all very much. [applause] [captions copyright national cable satellite corp. 2012] [captioning performed by national captioning institute]

>> at 8:00 eastern on c-span a discussion on u.s. national security and the two dozen top presidential election. an event hosted by the american enterprise institute. among the topics of conversation, how the spending in iraq and afghanistan could impact nationals dirty. here's a look. >> it seems we have had a couple moments in the last 60 years where there were up or changes in the international attrition. one would be the aftermath of the vietnam war. the other would be the fall of the berlin wall and the end of the cold war and the rapid decline -- decline in defense spending that occurred. yet i think a compelling point is made that through both of those watershed periods there was a surprising amount of

consistency. we are now facing a situation where we have u.s. forces have been in close combat in two ground wars for more than 10 years. there was an interesting piece washington post" about stress in world war room and one. the horrors of killing such as the site of dead and maimed comrades all start a process of moral atrophy that cannot be reversed. that we have to look at these issues now in the context of having fought 10 really difficult years in iraq and afghanistan, and i'd wonder what you think it'll mish crist applications of the last 10 years of combat in in iraq and

afghanistan mean for this debate, this discussion we're having? >> i think two points on this, and i want to thank everybody for arranging this at aei. we are what casting this on cnn.com. i wanted to mention that. in 1968 we spent 9.5% of gdp on the vietnam war. that is relatively small. our only spending 1% of gdp in afghanistan. we're not spending much money on these wars. . two, agreeing with -- point two, you have undercut the whole point of this exercise, because you pointed out the stomach to difference who the next president is because these policies will continue. president obama into the 11th

was involved in six conflicts in muslim countries, yemen, somalia, and war that was winding down in iraq, pakistan, he tripled the number of troops in afghanistan. he said they've run to stay there for five years. it was an application, and when we pull troops out afghanistan -- in 2014 we will have the same troops in afghanistan that we had at the end of george the busch's eight-year term. it is an amplification. >> the question is looking ahead. we're now looking at getting out of afghanistan. >> i am skeptical of that. yes, there is that discussion, but the state of forces

agreement that we will do with the afghans will leave 25,000 americans there root they will not be combat troops. it does not matter who is in the white house. we have abandoned afghanistan twice. no american president is going to do that again. >> i seem to be failing in my effort -- [unintelligible] >> i am happy to throw a quick hand grenade. part of the point in the article is that because the professional force is so small, a very small percentage of us have been doing the actual fighting. it is true there has been an ebbing of political enthusiasm for these awards, but the question is, to go to this sort of means resources, which are

changing without actual decisions being made, except in absentia, whether absence some hard choices made to rebuild the means of power and hard military power, whether this world order that bob describes will run its self whether -- will run itself for what it will look like to share the load, so this becomes a in a way that fundamentally changes the role of the united states. >> that is the point, bob. has there been any. in the last 60 years where we have had such a debate over the fiscal constraint that this government faces as we have right now? you make the point of the defense spending should not be the focus of that debate. nevertheless it has introduced a

new element. >> in the interest of not emphasizing continuity, as i recall, the debate to the defense budget during the reagan years was a greater than quest was greater than what has until about a year ago. i am used to make the point that i was astonished how little the u.s. defense budget, which was could be up toward $700 billion a year was the subject of political debate in the united states, when reagan paused defense budgets were in major democratic party platform for much of those years. now, of course, things are more like what you are saying because of the fiscal crisis, and i think we are capable as a nation, because we have done it in the past, of overcutting our defense capabilities and getting to the point where we have weakened our ability to shake the international system and

brought ourselves to a potentially perilous. -- point even in conflicts where we do not think we're going to get into. where capable of doing that. if history is a guide, and that is always the good question, something else will happen in the world which will lead us and send us in another direction. the 1990's trend was toward ever declining defense budgets. we were getting close -- it was not dramatic a cut. it was down 3% of gdp. we were only spending $400 billion a year. then of course something happened in 2001 which then led to this explosion. that is not the first time that happened. there is a cyclical quality to this. it is an interesting question about having been in war for so long. my son, who is 13 years old,

said to me not long ago, has there ever been a time when america was not at war? when i grew up, we were mostly not at war. for much of my life, we were mostly not at war, and that is an extraordinary thing. i do not know where that leads, because there is a whole generation of young people for whom september 11 was the defining moment. many of them have gone into the military. they go into the international relations field. has this conceptual period we have been created a fundamental wariness with it or has it brought people back to the realization that the world is a dangerous place, the united states has to do something? peter's poor, of where barack obama has been as president is maybe the most compelling portrait if ever there was a time when the world thought

america is done with this intervention business, they thought it was the election of barack obama. i get to tell this joke, which is if people told me if people voted for john mccain, we would invade another country and get rid of another dictator. that is exactly what happened. there can be a tipping point. it is more likely will to been a dangerous direction and go through another cycle where we move up again. >> ike got the feeling that you and richard were on the same pager -- i got the feeling that you and richard rahn the same page i got this to mean that it was more words than reality since we still have a lot to deal with in the middle east. >> i would pick a fight with the pivot. i do not want to get in the way -- you want to ask richard

question first. >> no. >> i am dubious about the pivot. your point is we never left. the point that is made in europe and the middle east is if you are pivoting toward something that means you must be giving away from something else. there are the conference organizers in europe are having a field day with what does the american pivot mean for europe? that is the subject of every conference in europe right now. i think it is a mistake for an nation of america's global responsibility to talk about pivoting anywhere. we cannot have it. our interests remain very much in europe. our interests remain in not leaving the middle east, as you rightly pointed out. that we need to increase our intention to asia in terms of our capabilities is true, but

there is a kind of misunderstanding of our role in the world to even talk about pivoting in one direction or another. >> all that conversation in about an hour, 8:00 eastern on c-span. at 8:00 this evening on c-span 2, the senate environment committee holding a meeting on nuclear reactor safety in the 21st century. nuclear regulatory commissioners testified on what can be done to prevent another disaster in the feature. tomorrow on "washington journal ," david ignatius on recent news and afghanistan. jack gerard discusses the increasing cost of gas and alternative energy efforts.

farm imports and exports and how foreign and agriculture have changed over the past few decades. plus your phone calls, e-mails, and tweets. >> our system is fundamentally undemocratic and a number of ways. one of the ways is closed primaries. when half the states in the country, 40% of all voters cannot participate in the primaries. they have no say in who gets nominated. as a result, we get more and more extreme candidates on both sides of the spectrum. >> saturday night on "after words," linda killian.

sunday night at 10:00, syndicated talk radio host mark levin on "ameritopia." >> they would wear garments made of homespun cloth. this homespun cloth would be much more rough textured. it would be much less find that the kinds of goods they can find an britain. when and where invisibly and physically displaying their political sentiments. >> sunday night at 9:00, rosemarie zagarri on the role of women during the american revolution. >> next, remarks from oklahoma senator tom coburn on the future

of medicare and what changes need to happen. he spoke earlier at the hudson institute. >> good morning and good welcome to the conference center here at the hudson institute. i am ken weinstein. i would like to welcome our live viewing audience at home on c- span. thank our friends for covering the event. the hudson institute was founded 51 years ago as a forward-looking policy restructure organization designed to think creatively about how to achieve a better future in the face of unprecedented challenges of the early 1960's. the key to our research then as well as today is a unique

approach in trying to solve problems deemed unsolvable by the so-called experts. we have done this repeatedly over the past five decades my understanding policy in a broad perspective calling in sight their integrated research that calls on human ingenuity through science technology and innovation, all this against a backdrop of shifting demography ngo strategy. central to our research has been health policy and technology and human choice are central to lengthening life spans and reducing the cost of medical care. our research today is anchored by the secretary of the department of health and human services. as to our speaker, i can think of no better speaker in the u.s. senate to examine how to solve

the crisis of medicare which opposes such a broad fiscal threat to our country than senator tom coburn of oklahoma. the senator is a rare bird in washington. he is known for speaking his mind, his independence, standing up to the left and right on critical issues. and for his opposition to waste in federal spending. the center was known for leading the fight against earmarks, he called for an unprecedented nine trillion dollars in spending cuts. he is a physician training and practice of until this year. a businessman by background. he was elected to the senate in 2004 after three terms in the house of representatives. he served with distinction as a member of the house judiciary as the only non lawyer.

in response to the current medicare crisis, he has introduced the senior choice act. the center will speak briefly. he has graciously agreed to take questions after his remarks. you can follow us on twitter and tweet live using the hashtag #senoirschoice. -- #seniorschoice. let me turn the podium over to him. [applause] >> good morning. we probably do not have anything in front of our nation that is more critical both for the national security and also for our future, even if it had no

national security implications, then our budget. nobody denies the fact that the greatest component of that is the federal obligations through health care. ronald reagan long before he was president identified a time for choosing. quite frankly, that is where we are again today in our nation. with my independence comes my desire to be able to make choices and make decisions for me. i often travel throughout oklahoma. one of the things -- yesterday i turned 64-years of age. i understand the aging process and the insecurity that comes with aging as health bonds in the road and you fail.

i understand how important health care is to seniors. i also understand one other aspect of senior's lives that is just as important. that is their grandchildren. we are now faced as a nation with making critical choices over a very short period of time. some have said that is not a short period of time. i would say we have to make choices in the next two or three years of our children and grandchildren are to survive in an america as we know it. the key crisis is how do we strengthen medicare, how do we provide quality health care for seniors, that our grandchildren can afford? if you look at the numbers today, the average couple puts in less than $130,000 in their lifetime in medicare. on average, they take out $350,000.

if you combine that with the demographic shifts that are happening in terms of my age groups, the baby boomers, and what we have seen coming into medicare, and you can readily see that is an impossibility. you hear the calls that we cannot change medicare. the fact is we will change medicare. we will change it significantly. that does not mean we will change quality health care for seniors. the reason we will change medicare is because the world's financial community will not allow us the money to pay for it the way it is today. -- long us the money to pay for it the way it is today. we have a choice in front of us, and we can follow what has been put forward and what i choose to

call obamacare where we have a top down elite -- we can use what we have used in every other aspect of society, that is the good choices of market forces allocating scarce resources to drive efficiency and quality. tackling medicare in an election year is what has known as taboo in washington. i think that is exactly the time to tackle it. to build a consensus of what the real facts are about medicare. the fact that it is absolutely unsustainable. close to 15% of everything that was spent on medicare is fraud. we have not a dress that. that would by medicare 5% in 10

years of life just to address the frog. we cannot even get a fast act which has 37 bipartisan co- sponsors in the senate on the floor which will actually address it. what our -- what are our options? they are to choose between market forces and washington elites. just by example, can we trust consumer choice to allocate a scarce resource? can we be involved? that does not mean that a 95- year-old senile individual has to make those choices. that does mean somebody can help him make those choices. can we allocate through consumer choice more consistent, more economical more efficient utilization of the resources that our children are going to provide for us?

i would tell you that a trusting he leads in washington is exactly how we will end up with the independent advisory board. nobody should defend other than the fact that is nothing but a pure rationing board. the whole goal is to look and say how do we reduce payments within that cap to be able to control the cost of medicare. that is how it has a cap on it. he had this to say -- we need to jettison the fairy tale about representative democracy. we need to begin to build a new set of rules and institutions. the problem with such a commission is they have reduced the power of elected officials

and has made our government less accountable. i want you to hear that statement. we do not need democracy to decide how to handle health care. we need to leads in washington to decide how to handle health care. -- we need elites in washington to decide how to handle health care. when we have the elite position that we know better, the greatest country in the world that has produced more efficiency and has done it through consumer choice and market forces, we need to abandon a representative democracy as we do that, it is the height of the choice that reagan identified. what are we proposing? senator byrne and i introduced an idea to create competition through premium support.

if you are on medicare, you like it the way it is, you can stay there. the only problem is traditional medicare will have to compete with the market. we allow you through a premium support to buy whenever you want to buy. you have the ability to make decisions about your health care, your financial situations with the aid of a system that will get you better care with less dollars. the assumption behind this -- this is a recognizable fact. it has been confirmed by four separate independent studies. one out of $3 that we spend and health care today helps nobody. it does not prevent disease, and it does not help cure disease. if in fact america would solve that problem, that one out of

$3, then our health care burden would be much less an hour outcomes would be much better. how do we do that? we do that through the forces of competition and consumer choice. beginning in 2016, regan require medicare to compete directly with private plans. we model this somewhat after medicare pardee. we allow each citizen to get a fixed stipend which is the equivalent to what it would be receiving today. we set up a competitive model within the private insurance plans, controlled by consumer protection board to make sure those plans are not cherry picking, and make sure they are what they are supposed to be. then we make medicare compete

with that. so what we do is we put the forces of competitiveness back into the system, which we do not have today. ask yourself for a minute why we have an acute shortage of primary-care doctors today in this country? why do we have that? you have a price-fixing bureaucracy that has undervalued the value of primary care, and they have underpaid it. why did you have one and 50 doctors to graduate from a technical school in this country that go into primary care? they are responding to market forces. if we want more primary-care doctors, what has to happen? you have to create a market incentive for them to go there. the option against that is the government will tell you what kind of physician you will be.

the lead position is we will mandate only so many positions and all these other areas so we force people into primary care. the entire goal behind the senior choice act is to set up both through increased recognition of our aging -- we would start in 2016 by slowly advancing the age of eligibility for medicare. we would start by 2016 a premium support competitive model, which is adjusted both for and come and on both ends of it. if you are on the low end of income you get a boot up in your premium support. of the 60,000 people who have adjusted gross income in this country who are getting medicare today, you would get less help. you would pay the full cost on

medicare part b. it also would have an impact in terms of supplemental policies. most people do not realize that people on medicare today who by a supplemental policy consume 23% more medicare dollars with exactly the same health outcomes. we combine the deductibles to get their. we create a new maximum exposure for seniors, all seniors. we create a maximum exposure so you know -- here is the limit which you will never spent any of your additional dollars on. willamette low deductible supplemental policies so that we can do -- we eliminate low deductible supplemental policies so that -- at one to get one final comment on that as an example.

when you have scan in the game, i do not care what it is whether it is health care, buying a car, buying groceries, whatever it is, if there is a connection with an extraction from your pocket book, you are a better consumer. when it is not, when there is no connection, we see what we are seeing in health care today. there is no differential increase in cost for over consumption. we do know through lots of studies that we have over utilization and large areas in medicare. the reason that we have over utilization and large areas, it really does not have much to do with patience as it does providers. we would put that in. i had the good fortune to take care of a lot of honest families with this large section of oklahoma that has a large amish

community. they are the best purchasers of health care i know anywhere in the world. they want to know what something costs before they buy it. they want to know why i have to have it. if i have to have it, where can i buy it most cheaply. they negotiate deals on pricing. if i pay you in advance, i get a discount? they are the ultimate consumer in terms of health care. the reason they are is because it is fully connected to their pocket. what we need is a model to where we have a connection of price and payment to be reinstituted. that is what we have tried to do for the seniors' choice act. i get letters all the time from seniors about their health care in the waste associated with medicare. hundreds of letters every month.

of course, there is no connection to her pocket because medicare is paying. they do not have a connection. they know medicare is in trouble. the final point i would make is why we have to change medicare is if you go back to the macroeconomics that are facing our country and the fact we're going to add another six trillion dollars to our debt and that medicare after pocket has increased its unfunded liabilities by 15 trillion dollars, that is what the increase was in terms of increased funding. we have to fix medicare. it is not a choice about the status quo, which is what the typical politician says. we're going to protect medicare.

we ought to be saying you have quality health care. the system we have today is not working. it is highly inefficient, and it will bankrupt your children. the choice is not of medicare as it is today. the choice is, how do we fix it to where our children can in fact afford it. no. 2 is how do we make it better? how do we get more security for the aging american so that they know that they are not going to be bankrupted. their lifestyles are not going to be markedly changed through any changes we would make in medicare. we can absolutely assure american seniors that we can do it better, we can do it more efficiently, and they can have the security that they have today but knowing that that security does not come by a loss

of standard of living in their children and grandchildren. with that i would be happy to take questions and go into details on the bill. >> can you wait for the microphone and identify yourself. >> my name is thomas clowd. my question is, you mention market forces and consumer choice being the key to solving medicare. if that is the case, why not simply just phase it out and replace it with a subsidy directly the person and let them choose among whenever with the cash? >> it is not cash, it is a premium support which is a payment and allows them to use it. if i am 65 years old or 6610

years from now when i and medicare age, -- if i am 55 years old, or 66 10-years from now when i am medicare age, i pocket the difference. in other words, it is essentially what we are doing. you can take the same thing and by traditional service or by any plan out there that meet your needs. still, you have a guarantee of having the ability to buy that every year. that is why the committee that we have set up to oversee this to make sure we do not get cherry picking, you do not get caught with an illness that you cannot insure. what we are doing is what you suggest. we still allow seniors to do not want to go there, who say i do not want to have to make a choice about what is best for

me, i want to stay in medicare. you can do both. fee-for-service will have to be competitive with the average cost of those plans. what it does is not only causes the insurance industry to have to compete for these dollars, but it causes medicare to have to be actually equivalent in terms of the cost and benefit. again, remember, one out of $3 in medicare is not helping anybody. what we are trying to do is squeeze that one out of $3 until it is one in 25 out. essentially if you want to buy something better than that. if you are well-to-do and you want to buy something better, you can buy something better than that. you will never get less benefits than what you are getting today in terms of the benefits you receive.

the problem where we are going with medicare today, the system we set up. 40% of physicians are not accepting new medicare patience. why is that? it is because medicare is not competitive. they are overly competitive in somewheres -- some areas of the disruptions. market forces would take care of that where a elite system does not take care of that. >> if you are 50 years old today, if you say you are going

to get the medicare benefits of a 65-year old today 25 years from now, if you extrapolate the trends in medicare, if people really understood that they might say that is insufficient or it is a lot less than what medicare is promising me now. medicare is promising me at 75, i will get a much bigger share. does that not mean that at some point people have to be told that they need to save more to be -- if they want to spend anything like the share of spending on health care that is expected 25 years from now? >> i think that is a great question. that discounts the fact that one in $3 does not help anybody.

can we use market forces to make it more efficient so that incremental increase in cost -- ask yourself, why our health care costs rising? is it all technology? he forgets the increased numbers of seniors. let's just say the numbers of seniors will stay constant. why is it rising? it is rising because there are no competitive forces and there is no over utilization. the age old joke is why the people and see you? they come to see you because it is cooler in my office in the summer time than anywhere else in town. it does not cost anything to come into see you. that is an extreme example. i do not need to say that applies. the point is, if you have market forces, and if you have a need, we are not promising a medicare that is like today tomorrow.

what we are promising is quality health care that is affordable for you that is not rationed from washington that both you and your children can afford. what we are also saying is if you are 50 today, you are probably not going to receive medicare until you are 66 or 67. we have a slow incremental increase in the age ability for that. can you allocate a resource better than we are doing it today? there is not a study out there that says we are allocating resources very well. every study says we are allocating them terribly. the new health care law mandates physicians we use, right? we are giving every doctor in the country $50,000 to buy computer systems. that is essentially what -- we are taking your tax dollars to

people who average $250,000 a year and we are giving your money to every doctor in the country. here is what the first exam has shown on utilization of i.t.. the doctors who can get their test a computer in terms of diagnostic x-ray tests, whether mri, ct, x-rays or whatever it is, who can get that through the aid of it order 18% more tests that doctors who do not. ahead if something is easy to utilize, guess what happens? it gets utilized. all these suppose the benefits are not going to drive efficiency. if you talk to doctors in terms of a computerized model now who are using it, it has so many spots to fill and, they put a little nut at the bottom that says "here is what i did."

now we are playing the game, but we are not going to utilize it. it will not save a significant amount of money. it will save as information when somebody does not have over here and you need it, you can go get it. the first test out of that is it causes increased utilization versus decreased utile -- utilization with no change in outcome for the patient. >> the question is, do you think things might change if mr. santorum or romney wins in november? >> i think things will change. on health care they are implying, i guess. here is what i know as an accountant, a businessman, and days physician. we are on a unsustainable course. we can tell the political ally, do not worry about medicare, nobody will touch it. then we will reach about in the

road where the international finance is not going to loan us money to fix it. nobody -- most politicians are afraid to talk about medicare. when i talk to seniors in oklahoma, most of them want to make sure that they do their part to make sure their grandchildren have a great future. we can be both. doing nothing on medicare assures seniors they are going to have a terrible outcome in terms of medicare. if you want to save medicare, we have to fix it now. we cannot wait 10 years to fix it. we cannot wait until we are in the middle of the baby boom cost explosion in medicare to fix it. nobody in the world will loan us enough money, nor will we be able to afford the interest cost of the money to be able to do it. the question is not whether or not we will fix medicare, the

question is are we going to fix it smartly and do it in a way that protect the quality of care of seniors, or will we wait for the international financial community to come in and say, you will do this, this, this, and this even though it may not be the best thing for the citizens of this country. that is the choice we make. how we are doing it with the tremendous waste unit and the inefficiencies and then and the top-down control and that ought to go away. we ought to do it smartly. the way to do it -- if you think about the two areas where america has really failed, we are failing and education. why are we failing in education? we have no competitive forces any longer that have any impact at all in terms of quality of education. the government is involved in the area so we have taken over. what has happened in health

care? the vast majority of competitive forces have been taken out. consequently we do not get a response for efficiency and good allocation of a scarce resource. we consume and inefficiently. -- we consume it inefficiently. >> i respect your point of view, but the concern that i have is, how will you guarantee that the folks you label the government elites will not be replaced by free-market elites? >> well, i guess the only way that could happen is if you did not have this board that would say, i am taking away your possibility. that is why we put the oversight board in terms of what is being offered.

again, i would tell you you could still have medicare. you can have it just like it is today. it has to be competitive. you have to drive efficiency and it. i will tell you market forces are not perfect. but they are better than any government bureaucracy i have ever seen. i do not know one area of the federal government that is both efficient and effective. the motivation is you are spending somebody else's money. you ask me what our experiences in the last 230 years in this country, my experience tells me that we have done much better when we trusted markets then when we trusted elites. where is the virtue of the elites? do you trust their virtue rather than yours?

why is the average home and the united states 800 square feet larger than anywhere else in the world? what is the standard of living higher than anywhere else in the world? did that happen to government deletes managing a part of our economy or did it happen through market forces that allocated resources and people making choices that was best for them rather than what was dictated to them by a government board. when you cannot get -- if our path continues where it is going into cannot get the services you want or when preventative sources -- preventative phorcys task force says you are now 75 years of age, we will not do a mammogram on you and diagnosed breast cancer because it is not cost-effective for the value of your life. if you want bureaucrats to decide that for you, you should absolutely oppose what i am saying. i trust the american people more than i trust american

institutions. i think the american people will look out for them and there's better than any bureaucratic organization can. >> i would like to understand better how the financial incentive works. you say the premium support dozen for the individual. if there is something left for the end of the year, that stays in the account? next year they get a premium support? >> it does not even have to stay in the account. if you are a senior and you bought a health insurance policy for your medicare and it costs less, you can do with it what you want. the point is -- the call. for this advisory committee is to not allow the games that are

played in the insurance to cherry pick or undermine your health conditions. that way we create a real competitive model -- that does two things. it guarantees to coverage. number two, it drives towards prevention. what do we know? still in this country, the first symptom of the vast majority of people with heart disease is what? theft. why should that be? why is that? it is is a preventable disease. why is it that have the people whose first symptom of heart disease as they drop over dead. what we want to do is drive the prevention of chronic disease. we do not have health care in this country. we have disease care. what we ought to be doing is,

how do we regret that back to health care where we prevent disease or manage disease effectively. if you have 20 different companies competing for your business and they know you are still going to be there, what we want them to do, we want them to invest based on their own profitability in your prevention of a major disease. >> as a doctor, how do you think treatment changes or defer is with medicare and government dictates? " how do i think it changes? the first thing i think it changes based on medicare is doctors have no concern right now for what anything costs. there is no penalty for a physician to order tests that are not necessary. tell me what it is? if i have a question that comes

to my office that is referred to me that side doctor four days ago and they did blood work and i look and say, i can get the blood work back right now or i can spend an hour with minors trying to find online -- first, i have to meet hippa requirements so i have to get everything sign so i can get your information. i might accidentally disclose it. they cannot trust that i will call them and said, can you tell me these results. hip but does not allow that anymore. -- hippa does not allow that anymore. how do i do what i need to do that is both efficient and effective? what drives me to do that? blue cross blue shield was my profile as well as every other insurer and oklahoma. they know i am an efficient physician. they have a profile -- every insurance company in this

country knows everything about every dr.'s purchasing. one thing that is happening to medicare patience because doctors are opting out, the people who are not opting out of medicare are not the best physicians. the one that are opting out are the ones that do not need medicare patience. market forces should reward doctors who are efficient and get there. who knows that? medicare knows it too, but as long as you qualify for medicare you are going to get paid. there is no market force on the quality of physician. if i am way outside the you know what happens next year? they do not want me. they do not allow their patience to come see me. i am not an efficient or effective doctor. that is one of the things that is really positive.

i have another story. i do not have time to go into it. we resisted an insurance company who offered us a contract. was a go find out whether or not you think we are deficient. -- we set go find out if we are e efficient. we were more efficient than any other doctors and town in this one large group. what they did was look at the data. what they found was, they want to have positions that are efficient and do not over order tests. we do not have that mechanism going on in senior health care because there is no penalty if i over order tests. you cannot develop a bureaucracy big enough to micromanage that. he will spend more money on the bureaucracy.

that condition in fee-for- service? does that leave a significant financial exposure in the medicare system? >> the assumption is that as they get older they will get out of the entrance into that. i think there may be some of that. and again, the biggest problem we have with seniors today, part of it is we have two big problems that end of life. one is the threat of lawsuits.

you can have an advance directive and a living will -- i have been in this situation in number of times. i have taken care of a patient for 20 years. they come in with a life term event or hospitalization in prior to the event, but we are getting towards the end of life. they have an even that is happening and i want to follow their advance directive. a grandchild or a niece comes in and says, you are going to do everything. i say, you know, no i am not. i have had a great conversation with an aunt. i have known her for 20 years. i am not about to do harm to your aunt. they said, what i am going to do this to you. i said you need to fire me as a doctor. i do not care if you see me or not. i will do what she wants. most doctors will not stand to

that. they hear the word lawsuit and start running. why is it if in fact that advanced case there is no connection at the end of life with the cost? the key thing i would say that is different about our proposal is that medicare has to stay competitive. we are mandating that whatever this average cost is over here, that is where medicare has to be. what we will do is drive it towards that. you as a patient cannot cherry pick the program because the program is going to have to stay competitive with the private market. >> another twitter question. the question is, josh things your plan sounds like the affordable care act.

is this just extending the individual market rules of the affordable care act of medicare? but i do not know hardly any market forces that are working in the affordable care at. all we are saying is we are going to make sure whoever has participated in the market is not cheating seniors both in terms of quality or the equivalent programs. i feel really insulted that that is compared to the affordable care act. >> i am a member of the no label citizens' movement. i really appreciate your remarks and your emphasis on the importance of the budget, informed decision making, joyce, accountability, and the importance of a robust representative government.

i think those of us in no labels feels that not only are some of our system's broken as you alluded to, but congress is broken now, too, and we wish members of congress were all about the importance of the budget, and for decision making, accountability, and representative government. i wondered if you could share with us your thoughts -- you see how sausages made on capitol hill. we as taxpayers have some skin in the game on many important issues. what can we do that could help fix congress so that some of these same principles you talked about today can be a part of the decision making progress on their way so that thoughtful proposals such as the one you have described candy honestly considered and debated? >> -- describe honestly --

described candidly, honestly, and debated. >> we have the government we have because the american people have said the people here. they are wonderful people. they have great parts. the fact is that most of them like a frame of reference about what the real world is like. would you take somebody who has never had real exposure in the real world on real issues that require blood, sweat, and tears and hard knocks, and you have people without that who have been in a political position the whole time, they are working at a deficit. the deficit is the real world and common sense. if you look at the senate 65% of

the senate is filled with people the exact opposite of a guy named ron johnson. ron johnson had no political experience whatsoever. what is his number one thing? fixing our problems. there is more conflict on guys with our side of the aisle that one to fix the problem rather than care about the politics. the second thing that hurts decision making is everybody is always thinking about the next election. that means they really like the job. what we really need is people who hate the job but i do but one to fix the problem. if you want to fix washington, you can do process reforms and it will make some impact. it will not change until you change the motivation of people who are here. the horizon is the next election. we will fix it after the next election. that just goes back to senior -- human nature.

it is like seniors by medicare. everybody wants to get stroked. i think we need to fix -- we have the capability to fix every problem in this nation right now. the capability is there. the problem is, if we fix that we will all get fired. great. let's fix it and go home. the point is, most people do not want to go home. i cannot wait to get home. i would tell you, i you have the congress to send here because you have as a americans decided you are going to put your vote with career politicians who tell a big story. they are great salesman, but the action is different from what you have been sold. ask yourself a question. there is a bipartisan bill called the fast act that will address tons of the fraud that

is occurring today in medicare. it has bipartisan support in the house and senate. we worked with cms to create the bill. why is it not on the path to the president? it has nothing to do with medicare. it has to do with the next election. there are hundreds of things like that. there are 27 different jobs bills waiting to have passed the house that are not going to come to the senate floor. it is not because the country does not need them, but because it does not fit with the scenario of the next election. what is the motivation? we ought to be motivations first and republicans and democrats second. you see exactly the opposite of that. you can change of the process you want. until you change who is coming up here and what the motivation is in terms of being here, you are not going to change it.

>> i very much appreciate the idea that market forces and consumer choice can really control our health care costs. i worry that it does not operate like a true market because of the imbalance and information between consumers and insurance companies, also consumers and their actual care. i am wondering if you consider the seniors' choice act supports and tools to help seniors understand what they are choosing when they choose their health plan. not just the monthly premium which is probably the clearest thing but also the kind of benefits you are receiving, the kind of other support you are receiving, and the kinds of out of pocket cost you are exposing yourself to. >> i think that is a great statement and a question. we have looked at that.

that is part of what this organization will be that will control this. right now we have 15 supplemental plans and medicare. we tell them what you can put out. it is not any different than that. the question is, can seniors navigate that? up to a point, yes. i will tell you my mother died one year and a half ago, my brother and i helped her navigate what the choices were when she no longer could do that. we are talking about a small group of people that are not going to have family involve making those choices. the question is, how do you keep the bad apples out. how you keep those who want to cheat in the system and how do you have enough transparency so you know when that is going on so seniors are not taken advantage of? that is the key. one of the reasons health care is out of control is everybody thinks somebody else is paying the bill.

i am the first to admit that market forces will not solve everything. i guarantee you they will solve a whole lot better than what we are doing today. there will be people who fall through the cracks. it will not be perfect. the allocation of resources to apply dollars to make sure somebody has good health care will be much better than what we do today. there will be a consequence for a doctor over utilizing something because they will be being watched by the very people they are contacted with in a private insurance that is competed with medicare that they will not do it. there is no control. there are no breaks on the system for bad behavior. -- there are no brakes for bad behavior. the question is, the we have great health care for seniors and have a in a way that is more affordable than it will be in the future?

i think the answer to that is yes. that does not mean we trust markets 100%. that means we let markets work but we make sure we have controls. if we have a bad actor in that that is identified, they are gone. >> we have time for one last question from the audience and one last twitter question. >> you said many times that a big factor is finding the physicians that over utilize as a criteria. what will you do to protect the ones who will underutilized testing and that sort of thing so they appear good and score high? >> first of all, there are two different aspects to your question. one is laziness, and the other is whether or not you have a physician committed to your

health care. if you have a physician not committed to your health care, it does not matter what system we have you will lose on that. i cannot see a guy -- if you come to me as a physician. if i am a physician -- i am not talking about being a doctor, i am talking about being a physician. like cut a corner so i look good? i have already violated my hip accredit oath. the differences, i can look good and somebody else pay the bill when i over utilized. that is the whole. when a project that is the whole point where we are going now. the choice is, are we going to have access to a doctor in the future? that is the first thing. we will have 150,000 shortage of doctors in the next 10 years in this country?

the doctors my age are all, see you. i am not messing with this anymore. i have had it. i would say the motivation on both sides are different. could it happen? that happens today. that happens because when you go to see a doctor, they do not spend the time to actually listen to you about what is going on with their health care. that is happening today because medicare under pays primary-care doctors. rather than sit down and spent 45 minutes with you to hear what is really going on and get paid for that, which medicare will not pay them for, the average rent out his 30 seconds before they interrupt you with you telling them -- they have to get busy to see the next patient. they hear part of what you say. the order a whole bunch of tests to cover themselves, and walk to the next train.

they are on the treadmill because medicare set up a payment system that says you cannot make it if he spent time with a patient. we will not reimburse you for doing that. there are good studies coming. we have a new group of doctors that will say, i will quit it all. you pay a flat fee. i am yours 24/7, 365 days. these doctors are telling us this. i am part finally getting to practice medicine the way i was trained. on average they are ordering 40% less tests because they actually are listening to the patient. the insurance companies that are actually covering some of these are spending less and getting better outcomes because we are all saying, no matter what you do listen to the patient and they will tell you what is wrong with that. nobody is listening. we have a system that says, here is all we are going to pay you.

i cannot pay miners is if i practiced medicine the way i want -- i cannot pay my nurses if i practiced medicine the way i want. what good is a medicare program if you cannot get a physician? if you can get 1, what good is it if they do not listen to you? i will tell you that the down side is continuing the status quo. it will get worse. we know that. we are seeing it. >> on behalf of the hudson institute, i would like to thank you for coming here today for your leadership on these issues. i would like to wish you a happy birthday yesterday. [applause] [con