>> more road to the white house coverage tomorrow here on c- span. mitt romney and newt gingrich address the national rifle association meeting in st. louis. other speakers include rick santorum, eric cantor, rick perry, scott walker. live at 2:00 p.m. here on c- span, c-span radio, and also at c-span.org. newt gingrich made a campaign stop in delaware yesterday where he posted a town hall at wesleyan college. the delaware primary is april 24th. he focused his remarks on social security reform. >> in the delaware chair of

delaware students for newt. we're currently at 236 campuses across the country. i urge you to get involved. i am also, along with the college republican president, chief of staff of the student government association. at this time i would like to introduce to the former speaker of the united states house of representatives and the current candidate for president, the honorable newt gingrich. [applause] >> thank you. you did good. thank you all very much. thank you for coming out this evening and for giving us an opportunity to talk about ideas and to be in a setting where it

is totally appropriate to talk about ideas. one of the major reasons i decided to run for president -- because i think we have a tremendous challenge in our political system trying to develop a new generation of ideas and a new generation of solutions. i think our system is remarkably resistant to new information and automatically shifts over to talk about almost anything else. i was asked this afternoon by somebody who remember an article they read about me when i was speaker in which the reporter went off on my hair and spent the whole article talking about my hair. from the standpoint of being a liberal, maybe that was less dangerous than talking about my ideas. it is literally that kind of politics. if you love, for example, of what i thought was a totally -- look, for example, at what i thought was a totally

artificial fight over contraception. if you look at the total news coverage from when george stephanopoulos started it, three and a half months was spent on this. how much serious conversation has there been about saving social security? how much serious conversation has there been about the american reliance on saudi arabia for oil? how much serious conversation has there been about the scale of the interest payments we're about to have on the debt? if you're a young person, let me just give you a specific example. if you are a young person, under the current deficit spending pattern, just to pay interest on the debt you're going to inherit -- remember, you will not get any goods and services, just the debt. the politicians will have spent the money. they will have taken care of your parents and grandparents. you will show up and go to work

and just like a credit card, here come the interest payments. in your working life time, you will pay $300,000 in taxes just to pay interest on the debt. now that means, in effect, you will have bought a house, except it will be a house for politicians. it will not be a house for years. now, you go down a series of steps like that, you look of the current economy, which is the weakest since the great depression, and you say, i'm going to end up in a world where it is harder to get a job which will have higher gasoline rates, so will be less disposable income. your taxes will be higher to pay interest on your grandparents and parents debt at the national level, and that will leave you less money to pay off your student loan, and in that context, what your options? -- what are your options? having a long-term conversation

actually matters the most to people who are currently young, because you're the ones who are going to live the long-term experience. over time, you can achieve things you cannot achieve in a week or a month. let me give you an example. in 1983, we try to solve social security. we ended up selling it in the usual washington method, which was paying. they raised taxes and cut benefits. kind of double pane. the opposite of free enterprise where you are supposed to get more for your money. you are now agreed to give up more money to give your benefits. in 1983, if they had adopted the personal social security account, today, we would have 16 trillion dollars in savings accounts.

that is the power of building up over time. this is not a theory. chile exists. it is a real country. you can look at wikipedia or google and see that over the same period, the average worker is going to retire with two- three times as much money as they would have gotten from the traditional system. they have a provision that says if you drop below the minimum payment the government will make it up. in 32 years, they have written zero checks. they have never had a single person fall below that line. when happens? -- what happens? here is how it works. how many of you went to work at

15 and paid your for social security check? how many as 16? two-thirds of this audience. the way this system would work, the tax has two parts. the personal part you pay in your employer's matching tax. under this model, your share go into a savings account that you would control. the employers part would go into paying for the traditional system. just taking the part you pay, starting at 15 or 16, on average, people are going to work probably at least until 70 intergenerational. so that means you're going -- in your generation. that means you're going to have interest.d do the math. it is amazing how powerful it gets. this is the key difference between social security in its

current form and a personal social security savings account. today -- if you pay all your life and you die a week before you are eligible for benefits, everything you paid goes to the government. you have no estate. in the personal social security savings account mano -- model, the money is yours. that means, if something happens to you, it belongs to your family. you have actually created and the state. in fact, the power of the system is such that the estimate is that at the end of the next generation, we would have eliminated 50% of the wealth inequality because every single worker who took the personal social security savings account would be a safer and an investor. we would have raised the bottom automatically by having that many more people have saved money that would be building up interest their whole life. furthermore, if you build up --

remember, $16 trillion between 1983 and today -- if you build up that kind of money in savings, what happens is, you increase the growth of the economy because you now have all this capital to invest. the estimate is, at the end of the next generation, you would have about a $7 trillion bigger economy, about 50% bigger. so you end up saving your own money, becoming wealthier toward retirement in a bigger economy with better jobs, which gives you even more income to allow you to save for your own retirement. you begin to build a circle. many carry this one step further. -- let me carry this one step further. this gives you the opportunity to control your own life.

remember, if you have a personal social security savings account, congress does not have any reason to tell you what you are doing. so, you want to work until you are 60? retire a 60. retire at 70? the tired 70. there is no control because it is your money. you will never have a president say what obama said in july, that he might not be able to send you your check, because it is not his check to send you. it increases your personal freedom. it increases your personal control over your own money. it gives you dramatically more money and does so in a way that grows a bigger economy. while reducing wealth inequality to make the country fairer, not by lowering the top, but by raising the bottom. one last example. this is all real.

the principal group in the morning i was actually runs part of the chilean -- in des moines , iowa, actually runs part of the chileans system. today, 30 years after they began the program, a 72% of the economy is represented by their savings pool. they have so much savings, it is 72% of the annual economy. it is so big, they now allow chileans to invest outside the country because there are not enough opportunities to invest in chile. imagine a world in which instead of borrowing from the chinese, our savings pool was so massive that we had invested in every conceivable american investment and we had money left over to invest elsewhere. that is what has happened. so, the first idea want to leave with younger people here is, if

you really want to look at this, i believe the system can be made voluntary. if you do not want to join it, stay in the current system. the official actuary for social security estimated that if you made the system voluntary, between 95%-97% of the young people would take the new program because the difference in the out year payment is so massive that you would have to be very foolish not to take it. now, for people who are currently on social security, what i would do is i would eliminate social security's connection to the budget. i would say look, you have two dollars trillion -- $2 trillion in the budget. there is no excuse for

politicians holding senior citizens hostage. you can actually protect the current generation on social security while giving their grandchildren a chance to have a dramatically more powerful model. the last point i make about social security is very simple. getting back to a full employment economy is the best single step you can take to extending the life of social security. if we had a full employment economy today, we would have millions of people working who are currently unemployed. the real unemployment number is massively bigger than 8% because we have had some many people drop out of the economy. some arguments are that it is 18%-20%. when i left the speakership, we were down to four 0.2%

unemployment. if you got back down to that level of unemployment, you would have some anymore people working, they would be paying so much more into the social security trust fund, that you would basically be investing traditional years of stability -- for additional years of stability in the fund. it is very hard to keep these funds stable if you have massive unemployment because to do not have enough people paying taxes into the system. that is true both for medicare and social security. it is also true if you do not have a balanced budget. the number one step to a balanced budget is to get people back to work because want to take them off unemployment, off food stamps, off welfare, of public housing, off medicaid, and you put them back to work paying taxes, you have increased revenue well decrease in government spending. is no accident that -- it is no accident that the four years of balanced budget came during

years of low unemployment. revenue will come in as people go to work and the result is we will have dramatically -- we will have balanced budgets. the only four balanced budgets in your lifetime came when i was speaker. he came because we consciously set out to balance the budget -- they came because we consciously set out to balance the budget. in addition to your generation having the opportunity to have a personal social security savings account, which i think it's very important to your long-term future, i think we need an american energy independence plan. i think it relates directly to the younger generation. first of all, we need it for national security reasons. if we had energy independence, no future president would ever again out of saudi king. it is very important -- baow toa

saudi king. is very important that we get to a point where we are dealing with the middle east from a position of strength instead of weakness. i would suggest to all of the -- take for example what the iranians are doing right now. the straight handles one of every 5 barrels of oil in the world. today, the guarantor that these three will stay open is the u.s. air force and the u.s. navy. in the long run, if we could develop energy independence, we could say to europe, china, japan, we're fine. we have enough energy ourselves. if they have a problem, they need to figure out what they are going to do to keep open the straight. it would be much healthier world if other midlevel powers were doing their fair share and not relying on the u.s.

to do that, you have to get to american energy independence of the we're not faced with a crisis every time the saudis or the iraqis or the iranians decide to reduce oil production. now, there is another side effect of growing energy independence, and that is jobs. north dakota is the preeminent example of oil being produced in the u.s. we hav we have new drilling technology that lets us reach out in north dakota, and we are now producing a tremendous increase in oil. 15 years ago, we thought there were about 115 million barrels of oil in north dakota. today, we think there are 24 billion barrels of oil. that is how big the increase has been. and people who developed it believe that another generation may have technology to go even

deeper, in which case there could be 500 billion barrels of oil. what happens if we start discovering oil on this scale? the unemployment rate in north dakota is 3.5%. the fact is, of 3.5% are unemployed, there are 16-18,000 jobs -- 16,000-18,000 jobs they cannot fill. because the people that are unemployed do not have the right skills. one of my proposals is that we modernize the unemployment compensation program by attaching to it a training program requirement. if you sign up for unemployment compensation, you also sign up for a business training programs so that during the period we are paying the money wyou are actually learning something. we do not pay people for doing nothing. if you think about it, 99 weeks of unemployment is enough to

earn an associate's degree. alitalia the signal u.s. -- i will tell you the signal you are sending if you give people money for 99 weeks and do not ask for anything vs same, we will give you 99 weeks of unemployment and you need to learn an associate's degree. first i think we would see a dramatic drop-off in unemployment applications. you cannot leave the work force behind. is not enough to invest in new machinery. you have to invest in training the workforce that can use the new machinery. this is part of where we're going. and expand further on the issue of oil. i set as a goal of price of gasoline of $2.50 or less. the president of very sensitive to this and his pollsters came

in and said this is very dangerous. he made a series of speeches in which he talked about the oil problem in the price of gasoline. they would be great speeches for you to study just in terms of logic and the underlying structure of the speech. he said drilling is not the solution. and then he proposes a solution. does anyone here remember when it was? the president's solution was algae. we went and checked out algy. -- algae. we do have research under way to produce oil from algae, and within 10 years, we may be able

to do it, and the research suggests it will be between $140 per barrel and $800 per barrel. it is an interesting theory until you go out into the real world. $800 a barrel would be about $40 a gallon. cut your local gas station and tell them, i have a solution. it is algae. it is $40 per gallon. i do not think anybody is going to buy it. two pages later, he starts talking about natural gas. this is one of the great revolutions of our lifetime. in the year 2000, we had a

seven-year supply of natural gas. we were making plans to bring liquefied natural gas to the middle east. we were going to build huge, expensive ports to contain this and bring it in in specialized chips. some people develop the new technology which is drilling. with the new technology, we began discovering natural gas in jail. we now have an estimated 125 year supply. we went from a seven year supply to 125 years supply. we went there with drilling. i was in mississippi at this point, and we went out and found a drilling rig. we did a youtube video to try to point out to the president that you do not get natural gas from lg. you get it from drilling.

this has huge implications because one of the counter arguments is you cannot tell me what the price of gas will be. they are right. you cannot. but you can tell direction. under obama, the direction is up. gas has risen more under a obama than it did under carter, who was the last record holder. do you wanted to go down or do you wanted to go up? let me give you history, not theory. when we began developing natural gas, the amount we produced since 2008 has gone up 11%. when you have an increased supply -- this is standard economic theory. when you have an increased supply, what will happen to the price? it will go down. that is the theory. what is the history? in 2008, natural gas was at

$7.97 a unit. it is today at $2.05 a unit. that would be down, right? from drilling. so what would happen if oil had a comparable decline? oh, gasoline would be $1.13. i'm being very cautious. when was the last time gas was $1.13? when i was speaker. what was it when obama was sworn in? $1.89. the news media probably go to the following point. the economy was bad. first of all, the economy is still bad. gas prices have gone up, but the economy is not better. here is a fact. under ronald reagan, we created

16 million new jobs. under ronald reagan, who replaced jimmy carter's destructive policies coming gasoline prices went down. because it was supply and demand. prices went down while jobs when up. some of you may be too young to remember this. there are a few folks here who will remember. jimmy carter, who was the last person to be truly committed to big government intervention a matter how stupid -- and in all fairness to bill clinton, he was for big government intervention but not when it was really stupid. he had enough common sense coming out of arkansas and survive going to yale that he actually avoided doing anything really stupid.

how many of you remember when you bought gas on the day based on the last number of your license plate? you had a government that decided they would require people to buy every other day based on the last number of their license. a good friend of mine reminded me that he was 13 that year. he went -- every morning his father gave him a screwdriver. [laughter] and sent him out back to make sure that the car that needed gasoline have the right license plate. now, i developed from that the theory of liberalism and conservatism. the government adopted a regulation so dumb that we were

-- if you say that we adopted a regulation so dumb we were teaching 13-year-old how to cheat and you say we should drop the regulation, then you are conservative. if you say to the same story, that is proof that we need a license plate police, you are a liberal. there are two parts to what i'm trying to describe. one is the power of ideology to avoid reality. we have the entire record of the carter and reagan years. these things are factual. we know the history. we know that government interference lead to scarcity, rising costs, and did not work. we know that the very first executive order reagan signs deregulate gasoline. everybody thought the price would go up and within six months the price had crashed.

the market work. so you think based on history that the answer to america having energy independence in oil would be to open of federal land, open up offshore, and you would rapidly produce enough oil. if you produce enough oil, you drive down the price. it is almost theoretically possible to produce enough oil to be independent of saudi arabia and not have the price down. so ideology is a major hindrance. but there is a second thing that is a major hindrance, and that is a real and willingness to learn about technology. remember, what i just told you about involves a brand new style of drilling that is changing every day. if you go from a seven-year

supply to 125 years. if you go from being very expensive to very cheap, these are huge changes. you now have companies, truck stop companies, that are putting in a natural gas highways of the big trucks will be able to be natural gas driven rather than the seller gasoline because natural gas is about $1.50 -- rather than diesel or gasoline because natural gas is about $1.50 cheaper. there are tremendous opportunities to get as independent of the middle east, create millions of jobs, lower the cost of energy both for industry, so we have more jobs, and for our own cars and trucks, and do so in a way which gives us one last big breakthrough. if we could impose discipline on washington, we could once again

balance the federal budget is the did when i was speaker. if you then said all of the royalties for oil and gas are going to go to pay for paying down the national debt, the estimate is that in the next generation, the potential for oil and gas royalties is between $16-$18 trillion. not the united states would be debt free. this is what a grand strategy looks like. he developed --you developed your energy resources, you liberate yourself from the middle east, you lower the cost of industry and you lower the cost of driving. you create tremendous wave of royalties for the u.s. government, and over the next 40 years you are safer, wealthier, and you have a higher

standard of living and you pay off the national debt. that is where we'll leadership will be. i'll close with one last example. how many of you have ever been called by your credit card company to make sure you were the person using your car? just raise your hand. this is not a theory. credit-card companies have very sophisticated systems that monitor it in real time and analyze whether it is probably really you.

over here you have 9:00 a.m. to 5:00 p.m. bureaucrats with paper were competing with crooks with ipads. the "new york times" estimated that over 10% of all payments go to crooks. and when i say that, i do not mean someone making a marginal mistake. i mean a dentist that files 982 procedures per day. the russian mafia and los angeles in durable medical equipment. the guy in florida and was convicted of stealing $24 million, who had originally gone to prison as a cocaine dealer. he that trial and the judge is asking him questions and he said, you know, i was in jail and we all talked about it and we decided cocaine dealing with dangerous. we can actually make more money stealing from the federal government that we can selling cocaine. and it is a lot safer.

what he would do is set up a phony held company. he would build florida medicaid. they would start sending him money. and after about six months they would want to come and audit him. he would probably close the company, leave, go to another town, open up a new company and do the same thing all over again. he did this for three or four years and collected $24 million without ever doing any services, because the system is so out of sync with reality. for your generation, here is what is at stake. it sounds like a funny anecdotes. it is not. we wrote a book at the center for health transformation called "stopped paying the crooks." we thought it would get washington's attention, but it had no impact at all. the best estimate we could get is that fraud in medicaid and medicare is between $60 billion and $110 billion a year. that means over 10 years, $1 trillion in fraud.

why does this matter? think about how much students pay back in student loans. my guess is the fraud in medicaid and medicare is as big a number. the about all of the challenges we have preserving medicare. if you are paying croaks, wouldn't the obvious first place to save money be in not being the crooks? there is enormous resistance to learning new ideas. you have an opportunity to get to a balanced budget, which is at least $150,000 in your lifetime. you have an opportunity to have a safer country with less worry about the middle east, which dramatically lower costs for transportation while increasing the total number of jobs in the u.s.

and you have the opportunity to apply technology to the government to dramatically improve the outcomes in a way that gets us to a balanced budget not by hurting the innocent, but stopping pain the crooks. all of these things are doable. they will only happen if the younger generation decides to go into public life and help make this possible. we are much more prosperous and a much safer and much healthier country over the next 20 years if we deal with these things. that is why i would love for you to vote for me in the primary. i will put in a brief commercial. i will be the only newt gingrich on the ballot. [laughter] i would like to toss it open for questions. we have microphones here.

>> you were sitting in exactly the right place. clever of you. >> i kind of planned that. what are your thoughts on iran and north korea as far as nuclear technology? >> i think we have to worry about a couple of things. a good friend of mine who is michael author for novels, bill fortune, wrote a remarkable book called "one second after," which is a novel about the impact in a small town in north carolina of an electromagnetic pulse attack. it is a very sophisticated system that is sort of like a giant lightning strike. any of you ever have lightning knocked out the television or an

appliance, imagine this tremendous amount of electricity that will literally knocked out generating stations. i worry that north korea is developing that kind of weapon. the catastrophic impact is very real. if you have a rocket big enough to put something in orbit, you have a ballistic missile. you can disguise it and say it is just for science, but they have tested an icbm. it is very dangerous. the north korean regime is dangerous because it is unpredictable, and also because they will sooner or later sell stuff. we know a couple of years ago that the israelis destroyed a north korean facility in syria, which they had sold to syrians. i am concerned about north

korea. with iran, it is a different problem. the iranian dictatorship has been so clear about its desire to destroy israel that you have to take very seriously that possibility. and i do not see how you can ask an israeli prime minister of the risk of a second holocaust. if you look at the tremendous loss of jewish life in world war ii where some 7 million jews were killed, and you start saying to yourself, if you were the prime minister of a very tiny country with three or four nuclear weapons and there is a risk of another holocaust, what steps would you take? i think they will simply not run the risk. i could never ask them not to do it because you have a dictator in iran, ahmadinejad, this has publicly that he will erase them from the face of the earth. it has been my experience that when dictators say things like that, believe them.

these guys are really dangerous. i'm really worried about barack obama cutting our military dramatically, which i think will really expose the united states. [applause] we have to be very worried about unilaterally disarming in a dangerous world. yes, ma'am? >> when we talk about american independence on energy, why is it that we as a nation -- and you also said, we focus on oil independence. why can't we focus on both oil and alternative energy resources? why can we focus on the short term fix of maybe drilling in north dakota to lower gas prices, but with the long-term goal being alternative energy independence? why is it only american oil independence? >> if you go to newt.org i have

an entire section on alternative energy. i am for alternative energy. i voted for those in 1979 as a freshman. the fact is, technologically, they're still dramatically more expensive. if you're trying to move a vehicle around -- we are right at the edge of hydrogen fuel cells, which made come in in the not too distant future. you could have a natural gas vehicle as opposed to oil-based vehicles. but also any time in the next 10 years, the vast majority of vehicles will use gasoline. that is just a fact. you're talking about a huge amount of cars and trucks that will use diesel or gasoline. i am very much for alternative fuels, but i will warn you that they all tend to be much more expensive.

there's a reason fossil fuels have been dominant. it is because they are cheap. we do not know the breakthrough in battery technology yet. it is very hard to get an electric car that does any substantial distance. that is why you find people looking at this. i am all for research and i'm for research into biofuels. as a model, algae is part of the future, but not part of the present. i would say that about a wide range of these alternatives. >> most students get financial aid and student loans. what is your plan for the student loans that is apparently going to be worse than the housing market. >> it is not going to bust unless students decide not to pay it. addi we're on a wrong track right now students are more money and take longer to get through school. ironically, students who work get through school faster than the students who do not work in school.

then they get out of school and they realize they have to pay back all that they borrowed. this is a real challenge. i want to increase economic growth so you can get a job, and i want to lower the price of gasoline to you can afford to pay off your student loan. if i can do those two things, you're probably going to have to pay off your student loan. my advice is to borrow as little as you can and get through as quickly as you can. the college of the ozarks is a fascinating work city college, which can only go to if you need need student aid and they do not have any. they have to work 40 hours a week in the summer.

when they built the new library, all the actual labor was done by students. it is a very interesting model and designed as an alternative for a very inexpensive education. >> my name is rose. i'm a candidate for the united states house of representatives from the state of delaware. how do you feel about fighting wars for other countries and bringing home our troops? >> if we fight a war, we should fight for the united states, not other countries. i would look at places we do not need to be and bring people home. i would be against the ron paul approach of bringing everybody home. we have lots of interest around the world and i think we want to sustain our capacity and impact around the world, but there are a lot of bases we do not need around the world anymore.

>> i'm teaching at the university of delaware main campus, although i'm not only an adjunct faculty member. but in my building of about 200 faculty, i would say i am one of two non-liberals. [laughter] i am wondering if you would be allowed to speak on the main campus. legally, of course you would be. but i'm not so sure they would not make up some excuse about security or something. >> why don't we test it out? i'm coming back next week. [applause] let me say first of all, i think you just proved what diversity means if you're on the left. [applause]

i'm sure senator bernini and others -- of course, senator beldini is a graduate of this fine institution, therefore he has a deep commitment to education [applause] and senator lawson is right there. we have three state senators who i'm sure would be happy to share an interest. i would be happy to go to the main campus. my hunch is -- this is my experience in general. i have been to harvard and lots of places. overwhelmingly, they're sufficiently curious. having a conservative who write books is such a novelty to them that it is like having a giraffe at the county fair. they show up for the spectacle. as a general rule, we get a fairly decent response.

we will try to work it out to come to the campus. it will be a lot of fun. ati'm a freshman year wesley. my question is, how would you go about bringing back jobs that are going to international companies? >> i would do a couple of things. that is a very important and powerful question. it all goes back to reagan creating 16 million new jobs and working as the speaker with bill clinton to create millions more jobs. it breaks into three big part, i think. taxes, regulation, and energy. i've already talked about energy. you would literally create several million new jobs out of energy program, and by driving down the cost of energy, you create additional manufacturing jobs and to lower the cost of living, thereby making the u.s. more competitive.

on taxes, a zero capital gains tax so you have hundreds of billions of dollars pouring into the u.s. with companies opening of new factories and lodging onto the ownership. the second is, to have 100% expensing so that you have all of the equipment getting written off in one year, so you are in the position to have the most modern work force in the world with the most modern equipment. and i try that back into the unemployment training. you constantly have the most up- to-date equipment and workers to be the most modern country in the world. third, making us one of the least expensive countries in the world for corporate taxes. currently, we're the third highest. fourth, i would abolish the death tax.

i did it is profoundly wrong to punish a family for having worked and saved the entire lifetime. and i think it is wrong to have the undertaker and the irs the same week. and i want successful businesses to focus on growing and creating jobs, not hiding from the irs. and finally, i am for a flat tax option. this is something to do with hong kong. you can take the current code, current deductions, current way of doing things or you can have a percentage. this is what i earn, ip 15%. liberals balance the budget by saying you we have to balance your taxes to catch up with barack obama's credit card. my model is, tell me what the revenue is. i will now shrink the credit card to meet the revenue. it is a fundamentally different model. [applause] on deregulation, i will give you five quick examples -- one,

repeal obamacare. overnight, you will create jobs. no. 2, repeal the dodd-frank bill. it is crippling businesses. 3, repealed sarbanes oxley, which is crippling business in the u.s. i would replace the revenue replacement agency with common sense and to innovation and working with an entrepreneur is to develop better solutions. and i would modernize the fda to sell its job would be to be in the laboratory, learning at science, and accelerating medicine to the patient and not blocking it. i would like american health products to be the most modern and most effective in the world. that would create hundreds of

thousands of high-value jobs in the u.s. those are the steps i would take in this economy. >> my name is michael. i'm currently secretary of the student government association here at westy college. i have a two-part question. my first question is, how would you go about increasing the allocation for students that want to go to college in terms of the federal funds for students that want to attend private colleges such as was the college? and also, the students that is just graduating college, what would you do to increase the job population? >> i started in college by the secretary of my freshman class. this is going to be the

beginning of a great career for you. [applause] let me say first of all, i wish all of you would take a serious look at this college of the ozarks model. i would like to see if we could not turned a fairly significant amount of students into a work study program. he would not have to pay back because he would be working and earning it. my experience is that students who work learn to discipline their time and actually do very well because they get up in the morning knowing they have to get this stuff done. i would be more comfortable with more aid coming in the form of a work study program rather than more loans or just plain grants. second, the job creation program, my theory is simple. if we get back to where we were when i left office, which is 4.2% unemployment, every graduate is going to have a job almost overnight. at 4.2% unemployment, people are hunting for folks to higher.

the problem is, the president seems to keep trying to find small solutions to a big problem. get the economy growing so rapidly that it absorbs all of the americans wanting to work. the energy plan would create millions of new jobs pretty rapidly. >> you were part of a balanced budget. how would you employ maybe zero based budgeting, holding government agencies accountable, and the whole use the money or lose it? >> with the young lady joining you, you all are the last questions, ok? i think it is a good idea. ironically, is something jimmy carter tried to implement in the 1970's. what we do today is a, i'm already spending $1 million on this, so if i spend any less than $1 million i feel really bad.

and by the way the current budget goes, i'm actions was to spend more. imagine if your kids came in and said, have a new model for lots. i would like to get $10 a month, plus $5 a month extra every month. every month that he did not give me at least $5 extra you're cutting my allowance. and you say, you got $10 a month last month and i can give you $11, this month and it is an increase. and you say, no, you are cutting out $4. the political science department ought to dig into this. the absence of serious intellectual effort to understand how destructive the federal budgeting rules are cripple our ability to get to a balanced budget. there is no reason to use a current services budget.

it guarantees permanent up for placing pressure. we ought to say an increase is in increase. a decrease is a decrease. then you do not have to fight over the particulars, but at least you are talking about an increase. paul ryan used it in his budget and i think it's a pretty good phrase. the same as on the tax side. many years ago, a senator said if we take a 100% tax rate, how much money would we get? and they came back and said, the total u.s. income last year was $600 billion. therefore, we would make $600 billion. and he said, you are telling me that you think if we take 100% of people's income that they would work?

that was that model. and they were wrong. it is a very sophisticated, but really important principle that we ought to go back to, which is to go to a reality-based budget. look at every single item and ask, why are we doing it? as opposed to, we are going to keep doing what we are already doing, and now let's add to -- $10. and the first question is, why are we still doing it? if you were not already doing it, why would you start? and if you wouldn't do it, why would you start? i find useful in life, but particularly useful in the federal budget.

>> thank you for taking my question. considering the saudis have become somewhat hostile trading partners, is there anything wrong with saying, if you raise oil prices, we are going to raise the prices of f-16's and other parts. and have you spoken with senator santorum? >> we have been swapping phone calls, but have not gotten on the line yet. the first thing is you have to create so much american oil that you do not care. otherwise, the saudis will find a have a production problem and will will jump to $150 per barrel. and it would say, oh, we would like to solve it, but we cannot quite get around to doing that until you do what we want. this is bipartisan, both democrat and republican, they treat the saudis very cautiously. remember, you had virtually all the people involved in 9/11 were saudis.

and the washington establishment did not want to think about that because it was scary. what they should have said is, this is proof positive we better have an american energy plan. if the president's speech the week after 9/11 had been, we're going to go to an american energy independence plan, we would be in a different world today. >> thank you for coming. i have a question. obviously, our government spending is out of control. reducing government spending should be? environmental policy and such? it is a hot topic in class. >> i am very much in favor of a healthy environment. i taught environmental studies. i talk on the second earth day. when i was teaching environmental studies, the cuyohoga river in downtown

cleveland caught fire. yadier river so polluted that it catches fire, there is something wrong. i care about endangered species. i am a zoo fanatic. you have a fine small zoo and south of euan salsbury you have a very fine small zoo. i care about the red wolf in north carolina, i care about making sure the elephant survived. that will require resources, but also requires using common sense. i would be happy to say that part of our foreign aid is

contingent upon the use of national parks. you go back to the turn of the 19th century, 20th century. we had almost wiped out the buffalo. we had heard at one time of 15 million, 20 million buffalo. we liked them all out. when the audubon society first got started, birds were being wiped out because of their fathers. women's hats were being filled with bird feathers. andglad people intervened found ways to preserve species. i do not want to see a planet where we say, in the interests of the economy let's run over everything. i also think there has to be some level of common sense. when it turns out a subspecies of squirrel -- not a species, but a subspecies on a mountain blocks the development of an astrological observatory for five years, is this serious or is this bureaucracy run amok? some common sense has to be

applied. i do not know if i help your class at all. [laughter] >> i am not old enough to vote yet, but i wonder what your take is on the state of public schools. >> first got it you're going to vote for me, i wish you were old enough to vote. [laughter] what is my take on public schools? >> the fate. >> the fate in public schools. my view is that we ought to teach american history accurately. [applause] if you teach american history accurately, you get to our founding document, the declaration of independence. and it says we hold these truths to be self-evident. they should then pick up on the

fact that it says we are endowed by our creator with certain inalienable rights. what do you think a man by our creator? and meeting their inalienable, meaning nothing can come between you and your god. if you get a chance to go to the lincoln memorial, one of the things you should do for your own education and really feel america is read the gettysburg address. it is very short. maybe 289 words. read it slowly, which is how lincoln read it. "one nation, under god" comes from the gettysburg address. he personally wrote it at the podium while looking at the first national cemetery at gettysburg. and he wrote that just before he spoke. but then turn around and on the

other wall is the second inaugural, march, 1865. 702 words, 14 references to god, two quotations from the bible. lincoln is a man who enters the war as a rational person, believing in the law. his great speech at cooper union was 7200 words long and is entirely rational. 600,000 dead americans, more than all the other wars combined. four years of brutal war. and he writes the most religious inaugural address in history. i do not know how teachers can teach him as secular. it is just not true. read his second inaugural. you can google it. it is astonishing.

it is one of the great speeches of american history. i do not think we have to get into a sense of faith as a catholic verses baptist, or catholic verses and jewish. the idea is, you cannot understand america if you eliminate god from our history. [applause] i'm very grateful to wesley college for letting me be here today. the students are really terrific. and i would appreciate any of you help me over the next few weeks. i think we have an historic chance here in this primary. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012]

>> more from newt gingrich tomorrow on c-span. he and mitt romney will address the national rifle association annual meeting in st. louis. rick santorum who dropped out of the race this week. we will have that for you tomorrow at 2:00 eastern on c- span. mitt romney, yesterday, at a campaign event in hartford, conn., said president obama is waging a war on the women it through his failed economic policies.

>> i will not do it now. never ask a question you do not know the answer to, right? >> you are here because we are a small business. we think you are qualified to lead us out of our national debt crisis and solve the economic problems we have. my interest as an employer of 24 people and the grandmother of 11 grandchildren -- i am concerned

about the next 10, 20, 30 years. and the next four years. so they did not have to worry about paying the national debt. [applause] i would like to introduce the connecticut republican party chairman. [applause] >> hello, conn., but a great day. -- what a great day. i cannot think of a better place to kick off a general election campaign for our republican nominee than right here in hartford, conn. [applause] we planned it this way all along.

a message of economic freedom, fiscal responsibility, and energy independence, exactly what we need. [applause] i would like to introduce to you a man that i am proud to be supporting, the next president of the united states, governor mitt romney. [applause] >> thank you, mr. chairman, thank you. they have a seat for you right there. [applause] what do you think, karen? can we fit another 200 people in here? thank you. out in the hallway, we were just outside, 200 or 300 people.

we were speaking to them. there is a very in busy times interest in seeing new leadership. the president's campaign slogan was a hope and change. they are changing it now to, let's hope for a change. [applause] there are so many dignitaries here. do you want to introduce all the folks that are here? senators and others who are here, old friends, and new. i have had the opportunity to meet with each of these business owners. we spent half an hour or so talking about their businesses. each of them is running a business. one in construction related products, another in consulting,

and another in printing. as we chatted, it was very clear that they did not feel the government is their ally. each of them said that it would be nice if the government got out of the way. i asked them to be more specific. they began going through various things that the government does that makes it harder to be a woman in business. or a small basin -- or a small business person, and general. small businesses i meet with, i hear the concerns they have that the government is making things worse. remember that old ronald reagan line. the one thing you have to fear is when somebody comes to your door and says, i am here from the government, and i am here to help. it is not the government telling us how to live our lives or build our enterprises or how to grow them. instead, it is a free people

pursuing their own dreams and the way they think best. [applause] i was disappointed in listening to the president as he is saying, republicans are waging a war on women. the real war on women is being waged by the president failed economic policies. [applause] actually, can i borrow that, karen? we handed these out. these are statistics which showed just how severe the war on women has then by virtue of the president's failed policies. the number of jobs, the percentage of jobs lost by women in the president's three years,

at 92.3% of all the jobs lost during the obama years have been lost by women. 92.3%. the president says, i did not cause the recession. that is true. he just made it worse. and made last longer. because it lasted longer, more and more women lost jobs. 92.3% of the people who lost jobs have been women. his failures have hurt women. what president has the work -- worst record on the female labor participation? barack obama. we have gone back 20 years. under president obama, 858,000 more women are out of work. 858,000 more women are out of work under this president. the total female unemployment

rate has gone from 7% when he took office to 8.1% in march of 2012. he has failed america's women. if i am the next president, i will go to work to get american when good jobs, rising incomes, and growing businesses. [applause] thank you. now the president failure is not just a statistical anomaly. these are real people and real families. let me tell you which policies hurt. what was borrowing $787 billion and adding that to the deficit and using that money to protect government. he failed to get americans back to work with this so-called stimulus.

he passed dodd-frank. all right. does anyone here think that dodd-frank made it easier for community banks to make loans? as a matter of fact, the banks that have become bigger under dodd-frank are the big banks. community banks are the ones they're having a hard time under dodd-frank. i spoke with one head of a large new york centered bank and he said, we have hundreds of lawyers implementing dodd-frank. hundreds of lawyers. banks at the community level cannot afford hundreds of lawyers. it has caused the business sector, alone sector, to pull back -- alone sector, to pull back. and then there were the president labor policies. trying to force unions into businesses. the national labor relations

board saying if you are right to work state, you cannot have a factory from bowling -- boeing. you haven't lawyers worried about the gasoline prices. -- you have people worried about gasoline prices. 300 gallons a day. a penny a gallon savings is not gone to help a lot when you have 300 gallons a day. these high gasoline prices, why are they so high? the speculators make an investment as to what they think the future price of gasoline is going to be. as they look at the future, they look at what the president is doing today. he is making it harder to get oil out of america. he has cut back by half the number of licenses and the number of permits that are provided on public lands to drill for oil.

he he held off on drilling in the gulf. he is not drilling in and more -- in anwar. that fuel is being held off because of the epa trying to get into the regulation business, making it harder for us to rely on that source of energy. if we want to get america working again, we have to have a president that will take advantage of our energy resources, cuts back on the obama-air regulations, cut back on its trade policies, crack down on china. we will have to have a president who will finally balance the budget. i will be the best president for small business and jobs. [applause] >> [chanting]

>> the president said something i agree with. it happens every now and then. he said, this is going to be a defining election. i agree. pretty dramatic differences between the two of us. his vision is a european-style social welfare state where he promises bigger checks from government to almost everybody. my vision for america is a land that is free and filled with opportunity. if you are looking for a bigger check from government, he is your guy. if you are looking for more freedom and more opportunity, rising incomes, good jobs, a bright future, but for me. i will get that job done for the american people. [applause] you have been standing long enough over here. stay away from work, whatever. i did want to say a couple of things.

i did have the privilege over the last year of going across the country and meeting with people like these women, men and women of all backgrounds and interests. i am more enthusiastic and optimistic than ever. i am afraid if all you did was to watch the evening news, you might conclude that things are getting worse. you might feel a little skeptical about its the future. that is wrong. as you meet rigid the people in the news have done something unusual. typically, not good. they are either politicians or people that have done bad things. i am being redundant. [laughter] i get to meet every day americans going to work. people were thinking about how to make life better for themselves. one of the women here indicated that she and her husband had a service station.

the economics did not work very well. so they changed it. they went into a car wash business. now they have a couple of car wash centers. we are invented, creative people. that is how the whole economy works, by the way. the liberals have this idea that if a few smart bureaucrats in washington can guide the whole economy, tell us how to run an art enterprises, pick the winners and losers. think they will do a better job than individuals pursue their own ideas. let the marketplace determine which will succeed and fail. that is what has worked, by the way. but these guys think government works. they are wrong. the right course for america is

a larger embrace of freedom and opportunity, allowing individuals to pursue happiness. i happen to believe the founders were inspired and brilliant. they said the creator had in our right,with not the state. we are free to pursue happiness as we choose. our freedom is not just that we have the ability to choose who will represent us in washington. but also the ability to choose our course in life. those freedoms brought people here for hundreds of years, seeking opportunity, seeking freedom. that build the most powerful economy in the world. how come europeans have such a lower standard of living? the average american has a 50% higher income than does the average european. why is that?

the dna is the same. the differences are the principles. freedom, opportunity, and when government intrude on those freedoms, it kills will make america the powerhouse it is. the president wants to transform america. i do not want to transform america. i want to restore to america the principles that made as the nation that we are. [applause] this president will do, in his campaign, anything he can to deflect from his record. what i will have to do every day is bringing back to his record. i will have to show that the policies of this administration have led to 92% of the people love lost their jobs being women

in this country. when he says there is a war on women, let's bring it back to the fact that the real war on women that has been waged by his economic policies. let's hammer date in and day out what has happened under his policies. ronald reagan used to say, it is not that liberals are ignorant. what they know is wrong. [laughter] i do not think the president is a bad guy. i think his political philosophy is entirely wrong. it does not work for the american people and is hurting the american people. i want to return to the principles of our founding. they are not only in power in to the american people, they strengthen our economy, they give us hope for the future, to ensure the children will have the kind of future we would hope for them. i love this country, i love the

people of america. we are the greatest nation in the history of the earth. it is time for us to stop apologizing for success here at tom. we will never apologize for success abroad. [applause] i want to thank these women for standing here and spending some time with me. i think him for the fact that they are business owners and managers -- i think them up for the fact that they are business owners and managers. i appreciate what you do. i appreciate the work of the american people. as you are fighting to make your enterprise more successful, you are lifting america, you are lifting our economy. you're making it easier for us to care for seniors with the taxes you pay.

hard-working americans of all kinds are what make this nation of the nation that it is. i appreciate the work you are doing. i will solicit your help because i need your help to get elected. i need you to vote multiple times. [laughter] the only way you can do that legally is by talking to your friends and telling them to vote for me. i want to bring back what we have always experienced in america. we've always known that there is something very special about america. what makes it special is different to some of us, but it is special to all of us. there was always a time where you stand a little taller because you know that we have a gift no one else in the world has. we are americans. we know this nation has done more to free other people from tyranny than any other nation in history. we know that our policies, our promotion of freedom and opportunity, those things have lifted people from poverty.

we have done more to help people out of poverty than anybody else in history. it is a great legacy and a gift that was given to us by those who founded this great country. we are at a critical time. we are at the defining time. are we going to turn left and become like europe? are we going to restore the principles that made as to we are? that is the vision for america. bring back freedom, and bring back opportunities. stop attacking fellow americans. stop trying to divide us. we are one nation under god. i will unite this country again. thank you so much. thank you. thank you. [applause]

>> more coverage and more from mitt romney tomorrow and newt gingrich. both addressing the national rifle association. other speakers include rick santorum, eric cantor, rick perry, and scott walker. live coverage at 2:00 eastern. ahead of that on friday, george -- condoleezza rice will be speaking here in washington at the heritage foundation. she is a political science professor at stanford university. that is live tomorrow morning at 11:00. >> i walked out after the iowa caucus victory and said the game on. i know a lot of folks will right, game over. -- write, "game over."

we will continue to fight to make sure that we defeat president obama. we stand for the values that make us americans. that make us the greatest country in the history of the world. to be a beacon for everybody for freedom around the world. >> rick santorum ended his 2012 presidential bid. a process he began in 2009. all the steps he took on line at the c-span of the new library. every program since 1987. >> are specific mission is to work to see that human rights remain essential component of american foreign policy. when we are evaluating our foreign policy moves globally, human rights can never be the

only consideration, but it has to be part of the dialogue. >> she is the president and ceo of the foundation for human rights and justice. >> when we abandon our deepest values, whether we're talking about torture, the war on terror, or the policy with russia, and the upcoming issue of whether or not the u.s. congress should pass the accountability act. whether or not we will stay on record as saying, human rights matter. the matter in russia. a matter in china. sunday night at 8:00. >> john nichols lead the discussion on changing the u.s. tax code. representatives remain number of the think tanks, participants discussed the buffet rule.

this is 90 minutes. >> we will get started. i am the executive director of americans for democratic action. i also served as secretary of the ada education fund. i want to welcome you all today. item very excited about the panel that we put together -- i am very excited about the panel that we put together. we will get going. thank you. >> thank you. i am the director of program and policy.

for those of you do not know, americans for democratic action is the nation's longest established liberal advocacy group. been founded in 1947 by people like eleanor roosevelt and a host of other progressive luminaries. for the past year, the fund has been holding a series of monthly congressional briefings we try to bring important national topics to the attention of congressional staffers as well as other interested citizens. this is the latest iteration of that series. this event is part of the commonwealth project, which is a joint venture of ada. i have a list of people here to thank. hold your applause until the end. i want to thank our honor very host for today's occasion --

honorary host for today's occasion. the office of -- has been invaluable of getting us the space and all the facilities. she has been the point person on that. over on the house side, not to leave them out, a staffer in the office of organization's president. she has been a very helpful in publicizing this event. then i want to thank an excellent group that works on economic injustice and inequality out of boston and specifically lee feris, tim sullivan and mr. ali, who helped with everything, including the lunch you're eating right now. and finally i want to thank the staff and volunteers of a.d.a.

which includes the executive director of americans for democratic action, our communications director, karen treager, and volunteers. today's topic -- how to make the tax system fairer -- has been and will be a hotly debated topic this whole election year. with the nation facing record budget deficits at the same time as slow economic growth, the question of how to raise the revenue necessary to address both is an extremely urgent one right now. next monday the senate is going to be considering the so-called buffett rule which would raise taxes on very wealthy people who have a lot of investment income. earlier this year the house voted on a budget, the ryan budget, that moved in the opposite direction. but spurred by phenomena as

divergent as the occupy movement and warren buffett's secretary tax rate, the question of who should pay how much has come to the foreof public discussion, and that's why we're here today. we're going to address this issue with an all-star cast, a dream team, any other term you want to use for a whole bunch of people who really know what they're talking about assembled up here. and at the end of their discussion we're going to accept questions from the audience. we have a hand-held mic that will come around to you. if you're watching us remotely, whether on c-span or we're on ustream, we're live streaming this on the internet, you can tweet questions to this address right here@ada ed fund. now i'd like to turn this program over to our moderator, john nichols.

he is the washington correspondent for "the nation" magazine and the associate he had tore of "the capitol times" and the just pn published book, "uprising, how wisconsin renewed the politics of protest from madison to wall street." so with that, we can applaud for everyone that i just thanked and also welcome mr. nichols. [applause] >> thank you sks right up fronts i want to chang united for a fairer economy, a.d.a., and especially will, who went out of his way over many, many months to pull this together and dragooned us all into this position, and i think we're very excited, because it's rare to have this collection of people together at such a critical moment.

i also want to note with great compliments a share the brown. he didn't just arrange a room, he is is one of the senators who is more intensely engaged with tax policy than anyone else and has a constant fascination. while he is not with us today i assume he is watching us via c-span in his office. 100 years ago robert m. lafolette, the great progressive reformer and the leader of the progressive movement of that era proposed an amendment to the republican party's platform. it read, "we collect the

revenues to sustain our national government through tax ing consumption. these taxes upon the consumer are levied upon articles of universal use. they bear most heavily upon the poor and those of moderate means. other countries tax income and inheritance at a progressive rate. the burdens of our people should be equalized. wealth should bear its share." amazingly enough, the republican party of 1912 adopted some elements of that proposal. over the ensuing 100 years, the party seems to have wrestled with the issue a bit and may not have come down in the same place. but i cite the lafolette proposal of 100 years ago to remind people that this is not a new conversation. we are not arriving at this point without a lot of background, a lot of history, and frankly, a lot of frustration. getting fair taxation, getting an idea of an he can quit

tabble tax policy is drk equitable tax policy is one of the great challenges of our time. we seem for a variety of reasons to be edging toward a point where that might happen. i give compliments to paul ryan, the house budget committee chair, because he's forced some of these issues and gone to what many people see as extremes, but forced other folks to talk about tax policy in ways that they hadn't up to this point. i give president obama crit, because president obama has countered with a discussion of the buffet rule by begins -- does not end, but begins to address some of these issues. but we're going to go a lot further than the buffett rule today. today we'll try and explain why it's so very hard to get a good rip-roaring honest debate about tax policy going in america and in our congress. we'll look at why it is so important to have these debates at a time when the alternative

appears to be an austerity discussion that takes us into taking apart, undermining, perhaps even eliminating social security, medicare and medicaid. we'll talk about what ideas could and should be in play at this moment. we'll talk about what our prospects are politically for bringing them into play and we will discuss the fascinating penchant of some wealthy americans to suggest that they should pay more taxes. i know. a novel notion, which we have some real experts on. but i want to begin -- and i'm going to begin with rebecca thiess. let me take this around our panel so we let people tell about who they are, and then we'll go to rebecca. bob mcintyre, what are you doing on this panel? >> always an excellent question. well, i have a microphone, this is so cool.

i wanted to talk into a microphone. it's one of my favorite things. i'm here -- well, i'm always at these things. i've been doing this since 1975, and you could arc i'm to blame for everything that's -- argue that i'm to blame for everything that's wrong with the world today. at least when it comes to taxes. people think, oh, man, this is always going one way and it's always against us. that's not true. we've had, over the years, some very amazing victories and we've had some staggering losses. are we better off than we were then? hard to say. but we certainly have done some good things as well as bad, and i'm looking forward to this year, to pushing that rock up much much closer to the top of the hill. >> you do it on behalf of tax justice. you've been banging away at it, an we'll come back to you in a second and asked you why you

haven't had more successes over those 40 years. rebecca? >> hello, everybody, thanks for being here. i am an analyst at the economic policy institute and i mostly focus on budget policy, with a little bit of tax policy and social security thrown in there. the things i've been most involved with at e.p.i. have been putting together our numerous budget alternatives, which i've real lien joid doing. we had a document called investing in america's economy. came out in november, 2010, and it's basically your ideal budget picture for the next 25 years, i think. and then we've also been assisting the progressive caucus in putting together their budget alternatives over the last two years, the budget for all of this came out a few weeks ago and i highly encourage you to check it out. i spent a good deal of time working on that. >> rebecca thiess is with the economic institute.

and the caucus cot 76 votes. >> 78. 12k3w4r78. pardon me. a little bit of work there. mike lapham, tell us what you've been up to and why you're with us today. >> i'm the responsible wealth project manager for united for a fair economy, and that's faireconomy.org, if you want to look it up online. but what i do is organize wealthy individuals, business people, inheritors, investors, who are in the top 5% who sort have been used as the poster children for tax cuts. we get them to say to get into the halls of congress, where greed is represented and to give a different voice to say we need higher taxes on folks like us. we also try to get their voices into the media and into corporate boardrooms on corporate accountability. and i would say we were just over at the white house and some of our folks were talking with president obama, who just

gave a speech on why we should have the buffett rule, and i would venture that i might be the only person here who's going to advocate repealing all of the bush tax cuts. so we can come back to that later. >> we'll have a wrestling match on that issue. some of your folks that you've gotten to speak up for raising their taxes include -- >> well, probably the most famous would be a guy named bill gates sr., his son founded this big tech company called microsoft. he's been a big advocate for the estate tax, for having an estate tax and there's a number of other. we have 2,000 people who have signed on, wealthy people who have signed on in favor of having a strongest state tax. >> thank you, mike lapham. dean baker. tell us some of the stuff you've been working on. >> i'm the co-director of the center for economic and policy institute. usually i actually have a different hat. i'm a macro economist.

so i like to tell people there's a big housing bubble that will crash and -- >> you're too early. >> that's what i've been told. >> he will tell us things today that will matter many years from now. >> exactly. but the background is that it is important we understand the macro economic context. unfortunately, people down here make all this fiscal policy and they act as though the macro economy doesn't matter, and it actually does matter. those of you who are old enough to remember back to our balanced budgets and surpluses at the end of the 1990's and 2000, what you should know and probably don't is because we all were wrong -- the congressional budget office was wrong about the projections. if they had been right about the macro economic projections back in 1986 and we had 6% unemployment in 2000, bill clinton would not have had a balanced budget. an important point there. the other important point i'd

like to make in a background economic context is that when we look at our long-run deficit, it's all a health care story. it's not a public health care story, i'm the private health care. if we don't fix it, none of us could think of enough taxes to pay for it. we have to fix the macro economy. we have to fix taxes. and today we're talking about taxes. i'll be the big proselytizer for financial speculation tax, taxing wall street speculation, which could raise an awful lot of money and it has the other nice effect of increasing the quality and makes the financial sector more efficient by eliminating a lot of waste in the financial sector and eliminate ago locality of the high-income people. so the best way to direct -- to get rid of the problem of all the money going to the top 1% is doing it right off the top. >> dean baker. financial transaction tax a big goal of national nurses unitsed and a number of labor groups and got a reference in the

congressional caucus budget. so it's in play. and i believe tom harkin is bringing it up. chuck marr. you've scoped around the capitol and now you're doing some other work. tell us about what brings you here. >> i'm chick marr from budget policies, an focus on tax issues. we're focusing on the ryan budget, which hopefully we'll get to talk about today. also, the whole issue of tax reform, which i'd like to raise some flags about as well. heading into the big debate this year is what to do about the bush tax cuts, where we think the first step should be to let the high-income ones to come. thanks, chuck. elspeth gilmore. tell us about that. >> i'm one of the co-directors of resource generation and we're a national nonprofit that works with people 35 and under

to mobilize with wealth. so we've been recently identifying as the 1% and figuring out how we can mobilize our resources and our access to actually move towards progressive social change. recently we've been working on a tax equity campaign and it's been exciting to figure out how the 1% can speak out in the moment and occupy wall street in the context of what we're all here today to talk about and figure out how the 1% can actually say that it is in our best interest, and especially bring the voices of younger folks, and i speak both from a personal -- i'm a member of the organization as well as a co-director, so really moving my peers to be part of this movement at this moment. >> before i move on, i want to bring becky in on some history here to give us a frame. right at the moment, do you think occupy wall street has played a significant role in bringing tax policy debates more to the forefront? >> absolutely. i think one of the messages i wanted to bring today was

saying that the way that occupy has been able to shift the national debate in conversation has been huge, and we're at a moment when the folks in this room, the people i work with, the people mike works with and the staffers and congress, people on the hill, have a chance to really take that moment and move it forward and figure out how we can actually capitalize on that and move what they brought to the forefront into policy. >> thanks, elspeth. now, i think that's significant for anybody to bring something to the forefront, because it's never easy. rebecca, you've actually been working a lot on sort of the history of tax policy. and i realize at this very moment there are people across america who are thinking, i wonder what's on some other channel. but it's actually very exciting. if you'd give us a quick hit here to give us a sense of how important understanding where we came from is to understanding where this debate is today. >> i'll run through this rather quickly. but we are coming up on the 100th anniversary of the 16th amendment.

that's next february. >> the 16th amendment, of course -- >> the 16th amendment, of course, allowed the government to put in place the income tax, the federal income tax. so a big moment in our nation's history. i'm going to go back before that to begin with. we actually had a federal income tax during the civil war. that was instituted because we needed revenue to help pay for that war. it proved to be highly unpopular and it was done away with in the 1870's. some politicians tried to bring it back a few decades later and it was actually found to be unconstitutional. i am not a constitutional scholar. i cannot explain exactly why it was unconstitutional. maybe somebody else here can. >> they said it was communism. that was the venue. >> ok. but as we got through the progressive era at the turn of the century, more and more people started coming out in favor of us having a federal income tax. and you saw william howard taft come out in support of one.

we saw teddy roosevelt come out in support of both that and an inheritance tax. >> and that was -- for some of the folks who weren't around for the election of 1912, that was the liberal and the conservative wings of the republican party both coming out. >> and an interesting note is that both teddy roosevelt and later franklin roosevelt, that he framed a progressive income tax as an issue of fairness. they didn't frame it as we needed revenue. we see obama today doing the exact same thing. and it really is an issue of fairness i'm not for paying are the war or food stamps. those issues as well, but fairness and closing the income inequality gap is very important as well. so with woodrow wilson's election we basically saw the 16th amendment and the income tax come into play. tax rates were immediately raised during world war i to

help pay for that war. they came down after world war i and came down significantly in the 1920's under harding and coolidge. then, of course, the great depression hit and federal revenues took a really, really big hit. and you saw f.d.r., like i said, come out not only for, you know, america, but for actual tax fairness. in 1935 he proposed significantly what we might call soaking the rich. and he ended up raising top rates to 79%. i recently read that when he did that, he also raised the threshold to $5 million, which is $78 million in today's world. and i read that only john rockefeller paid that tax rate. >> one guy. >> in 1935. so then we saw world war ii and taxes needed to go up again to help pay for that war. you couldn't do much more on the wealthy. their tax rates were already fairly high.

so what happened was we saw significant base broadening. so taxes really went up significantly during world war ii. and then after the war they came down moderately, but not as much as you might think. there were fears of a national debt, fears of inflation and also fears of soviet expansion, which did not allow us to cut our military budget villanova. so we still had high military spending. we couldn't bring taxes down all too much. kennedy and reagan -- actually, kennedys was assassinated before he could push through his tax cut and johnson did that. but they were the two presidents who brought tax rates down. to wrap up, what's wore to note over the last 40 years, really, in tax policy is that we've seen some pretty interesting trends. the first of which is falling marginal income tax rates. you know, they used to be 91% back around the time of world war ii and they fell to 28% under president reagan.

they're now, of course, at 35%. that was put in place by president george w. bush. we've also seen a decline in the income threshholed, so it used to be -- threshold. it used to be up around $3 million, $1 million in the 1950's, and now it's at $380,000, so that's the amount of money that taxed at the top rate. finally, we've seen corporate income revenue fall by about half as a share of g.d.p. corporate profits have not fallen. we've also seen a substantial increase in payroll tax rates -- i'm sorry, used to finance social security and medicare. >> thank you, becky. as you went through ta history, i noticed bob mcintyre sometimes rolling his eyes, sometimes nodding, saying i remember that, i told path not to do that. but, upon, you have been at

this since gerald ford has been president. it's been a long journey. you've seen victories, and it's important to recognize that tax fairness can win, but you have speak also seen some frustrating bat -- you've also seen some frustrating battles. give us a sense as to where we are now as regards a tax fairness fight and why it is so -- it seems to be so very hard to bring these issues to the forefront and to get a real debate on tax fairness. >> well, there's been a change in the republican party since the liberal years of ronald reagan and that's been a big difference. reagan, you know, put through what was possibly the worst tax bill in the history of the united states in 1981. he was advised by people like jack kemp and newt gingrich and a business professor, who has a laughable name, and reagan was told if you cut taxes on the rich people and the

corporations that it would increase revenues and he could pay for his defense increase. and he believed that because he was a believing kind of man. when that didn't work out, a year later, when dave stockman came to reagan and said, you know, we've got a big budget hole, an reagan looked at stockman and he said, you mean tip o'neill was right? the speaker of the house at the time, a democrat. well, for the next rest of his term, really, reagan raised taxes rather regularly every year, mainly by closing down some of the loopholes he had previously opened up. in 1986 we went a long way to getting rid of tax shelters in the individual side of the tax code and making the corporate income tax back into what it was supposed to be. that was a very good thing. how did we do it? well, stars were aligned maybe, but we had a bipartisan congress, public incentive, a democratic house, a republican president, no interference from

the supreme court. and the public was energized. i take some credit for that, because i was putting out reports regularly about how general electric and most of the other big corporations weren't paying any taxes. and we made them pay taxes for a while. then times changed. republican party changed. the democratic party somewhat lost interest in tax reform and things started to fritter away. but now we're at a point where we're having a more interesting debate again about who should pay for government, whether we should pay for government, whether we should have tax breaks for millionaires or whether we should have medicare. that's a nice way to frame it, but it's a true story. should we give corporations big tax breaks, whether it's to move jobs offshore or to do what they do anyway, or should we repair the infrastructure so business can succeed in this country? a lot of business people would prefer the latter, but unfortunately, there are lobbyists not as powerful as

some of the companies. but we'll see. i think the public kind of gets annoyed to hear that general electric and boeing and so many other companies are making these enormous profits and paying nothing in taxes. and they might vote for a guy who says he's going to do something about it. >> is barack obama that guy? is he saying -- is he -- he's talking about the buffett rule, but is he getting to the points of actually saying the kind of thing you're talking about? >> we're working on him. what he said is that he wants to get rid of the loopholes, but he wants to use all the money to lower the corporate tax rate, because in his vision, i guess, corporations are paying exactly the perfect amount in taxes right now, which is 1.2% of the g.d.p., which is compared to 4% back during, say, the kennedys administration. i think we can talk him out of this, but we'll see. >> you've got some talking to

do, mike, you were over at the white house today. >> to me the question is, do we want a tax policy that works for the 1%, or do we want a tax policy that works for the 99%, you know? and that's part of the problem is that we have -- our tax policy over the past several decades has really benefited the top 1%, and not only that, their income has gone up, their taxes have gone down, and meanwhile we're saying we can't invest in education, in infrastructure and research and all this stuff. there's this myth out there that it's one wealthy person. we've got to get off of that entrepreneur who does all the work and we have to get government off his back, right? and if we -- and then what we say is everyone who's rich is a small business person. so we've got to keep taxes low on these people, otherwise they won't invest and do stuff, right? the reality is, you know, business people don't make business decisions based on the

tax rate. i mean, i represent a whole bunch of business leaders. >> you actually ran a business for a long time. >> well, my family was in the paper business for a long time. i wasn't making a lot of the decisions. let's be clear. but take martin rothenberg, one of our members. he said for 25 years ago on the management committee of his company, no one ever mentioned the tax rate around that table. it just doesn't come up. business person after business person will reinforce this, that that's not how -- so the idea that we have to keep taxes low or even capital gains rates low so that people will invest is hogwash. and, you know, it's being used to undermine our country. it's being used to say we can't afford to do -- to invest in the stuff that made these people rich in the first place. >> many of these ideas are outlined in a fine new book. >> i happened to have written a book called "the self-made myth." there's great profiles. but it's true, it's really

hurting our country. >> that self-made myth, that concept -- i think one of the elements that we want to talk about is the concept that a wealthy person, who may not even be running a business, is somehow going to potentially create jobs. something is going to happen. mitt romney's money in switzerland will somehow do something. >> so one person investing their money in the stock market and buying their shares from someone else doesn't create any new jobs. there was a guy named nick hannah who wrote an op-ed in "the seattle times" and he said i've built big companies but i'm not a job createor. it's the middle class. >> chuck marr? >> you hear these people talking about these logical ideas, there's things that need to be done. i note, chuck, that you were senior advisor for budget policy at the national economic counsel and you were economic

-- you worked with the senate budget committee and all this stuff. i would assume that you are personally responsible for these things not happening. why don't we get to, you know, a realistic debate about tax policy? what are the pressures on congress that prevent us from getting there? >> i think we're having a real debate right now, john. >> i do think we are geeting there, yeah. >> in the last few decades, what happened is in the late 1980's with president bush's father, president herbert walker bush, his new tax pledge that he went back on. he had a conservative revolt against that. and you had this pledge -- the whole rise of govern norquist in the political dynamic in washington and you basically had one side of the table, the conservative movement has become a litmus test of against taxes. that sort of, over time, has morphed into the top priority

being taxes on high-income people, really for them. any sense of hiring people, paying higher taxes, there's always a drive to lower their taxes. so you really have one big part of the debate on one side of the table is constantly pushing for lower taxes on high-income people. so that's the reason why it's difficult. but i think now, as some of us mentioned, you do have this moment of public opinion where, after decades and decades of greater inequality, where you do have incomes at the top, rising so sharply and the middle class, working-class people becoming more stag nantz and more difficult, that that has bubbled up. you have a different public dynamic now. you are getting this debate on the buffett rule because of that. as you debate the bush tax cuts, you do have this one side who would be reluctant to give anything on that. the public, if there is this

debate, which there will be, is siding with -- high income people are doing fine. they did great during the 1990's. we do not need to give them more tax cuts. a lot of budget decisions are coming. they will hit middle-class, working class people and everyone has to be part of that. >> digging in deeper and one thing on working around congress. is there money in politics? is that a component to this? >> money is rampant in politics. it is not so much money. if you think about the corporate tax debate, there is a big debate right now over whether the united states should say to taxes on foreign profits -- whether they should be taxed. the romney plan, all of the

plans, say we should not have a tax. we should have these zero tax rate on foreign profits. why should we encourage china -- investment overseas over investment in ohio? from a company perspective, for multinationals, that is in their interests. i think, you know, what needs to happen is they need to be elevated somewhat because if they can be put in terms that people understand and people get engaged, we have a better chance -- >> is focusing the attention that overcomes the lobbying pressures. >> very much so. let me take you in there because one of the things you have tried to do is to bring some folks into the debate to get attention and to say, as wealthy people, we think we should be taxed more. they are not simply saying, we are patriots. there is a sense of a -- how you create a civil society.

how you create a functional society. talk to me about that . >> just building off of what mike was saying before. we want what is good for the 99%. i think that what we are saying -- what we are all saying is is what is good for the -- what is good for the hundred%. that is what you are talking about in terms of building a civil society. the young people i work with and the people i talk to that immobilizing are around this -- we are seeing public infrastructure with a safety net. we know there is health care, education. the people that are affected by that are not only -- i went to private school, so maybe i was that impacted, but my entire community is full of people who are relying on public education. i want my kids to go to public schools. i want to not have to be in communities where people are

courting wealthy and not having to -- and having to live in that scarcity mentality and worrying, but having a collective net for all of us to have been not just -- not only the 99%, but the 1%, as well. >> dean baker? you come in addition to saying there was a housing bubble and concerns we want to look ahead to, you have been talking about their taxation, their tax policies, about the role that tax policy plays him in making that civil society. if we have a consensus on the panel, we might be in a moment where we could do some things. if we recognize there are going to be some people that say we should not do any tax reform -- for people who believe we are in a moment, what are the initial steps we should take? >> the most obvious thing that is on the table is the bush tax cuts.

they expire at the end of the year. i think it should be a no- brainer that we want to raise the top tax rate to 39%. for people to forget in the 1990's the economy did well when those jobs creators paid the higher tax rate. i do not see harm in raising that hire. 43%, 44%. even 50%, that is not a problem. a couple of the other things -- we have created this big gap in tax rates on capital gains income and dividend income in order -- in ordinary income. that is why you have any for the buffett rule because you have

the buffetts of the world getting the income. people are paying 25% off of middle income people. if you got rid of that gap -- ronald reagan said, we will have people make money the old- fashioned way, by working and investing. one of the things that it was created the same tax rate for capital gains, dividends, and ordinary incomes. it got rid of hiding income as capital gains and dividends. people cheating the government. that would be a great thing to go back that way. reagan was right. >> reagan is coming out very well. >> there are a few other things. people talk about deductions in the tax code. that is to be expected. what you can do, and i think you get support from people across the board to, economists across the board, you can cap that. make a $400,000. the government does not have to subsidize some to get a million- dollar home. caput at $400,000. that takes clear of the middle class.

that is a great weight to get money. president obama proposed to cap the rate at which you take deductions. we can have wealthy people giving big deductions to charities or whatever, but they would only be able to take the deduction and a 20% rate, the same as a middle-class person. good thing to do. the last thing i will mention that does not often get talked about, but would be a good idea, the federal reserve board holds about three trillion dollars in assets -- $3 trillion in assets. when they hold those assets, guess what happens to the money? it gets paid back to the treasury. the treasury cut $80 billion from the set last year. -- got $80 billion from bell said last year. -- the fed last year. the fed holds -- plans to not hold that money. i will not go into other issues.

there is a lot of money there. in washington, they have the view that the fed is a church and they believe in a separate of church and state sometimes. the fed is not a church. it is the creation of congress. congress cannot tell the said what to do. that is a good way to get $800 billion for the budget. >> we are talking real money. >> that is over a decade. >> let me give you a quick sauce. i want to hear about a financial transactions tax. >> it is great that this has gained momentum. it is getting a lot of play in europe. it is likely france will have the financial speculation tax and many other countries and the european union are going in the same direction.

this sounds strange to people. i say this to people and they say, you cannot do that. i say you have to tell the stupid people in england because they are getting $30 billion a year in revenue and they just tax stock trades. they're not taxing credit defaults swaps. if you had a robust tax, you could get as much as $150 billion per year. the tax proposed by tom harkin and others were scored as raising $400 billion over the next decade. that is a low tax. that is paid almost exclusively by a wall street-types. they will say, your 401k held over. he will not even notice. anybody who notices is doing something they should not be doing. it is a great tax. i am glad to see it being talked about. >> bob? we're hearing a lot about personal taxes.

corporate taxes? anything we should be talking about? >> that is what we should be talking about in tax reform. the individual side, i mean, it is complicated and we do too many things through the internal revenue service. the mortgage interest deduction and the charitable deduction and so forth, they are not undermining taxpayers. on the corporate side, it is an absolute mess. on average, the big companies are paying half what they are supposed to. some of them are playing full freight . >> what do you mean? >> they're not paying its. on average. that is right. some of them are. some of them are paying 35% and some are paying nothing. that is a weird way to even run an economy as compared to a tax system. who has a lobbying power in washington? if you argy and you hire lobbyists, well, you do not pay taxes. -- ge and you hire a lobbyist, well, you do not pay taxes. i have no problem with retail stores paying 35%. i just saw ge ought to, also.

if you close the loopholes allowing this to go on, you could raise close to two trillion dollars over a decade. that is a lot of money. it is more than anybody has talked about raising taxes, even by their phony baloney standards when they are cutting taxes but say they are raising taxes. we more than some symbols and the president has ever talked about. way more than -- weigh more than simpson bowles and the president has ever talked about. >> in the context of the citizen united movement, how realistic is it to suggest that we will be able to get a tax fairness with regard to corporations? is it a political challenge? >> how realistic was a doing ronald reagan would sign onto a program that was a lot like what i just described? it will take effort. it will take leadership. we need a president to start

being a little bolder on the issue. if he gets there, the american public will be with him and congress, despite the fact that they are frightened to death of corporate money being used against them, they are out -- they are more frightened of voters not liking them. >> mike, we have touched down a lot of stuff. take me down the state tax -- the state tax road. it was just go as far as --

>> for the record, before we run out of time, i suggested rolling back of the bush tax cuts, not because i think we should not have some of those in place for lower-income folks, but we believe that that is the way we will get them. we will not always get an agreement on where we should draw the line, but, if we get rid of them all and go back to 2001 and start from there and give tax cuts to people who really need them man -- to really need them, that will put money back in the economy. the estate tad -- tax, we have been trying to work on this. bill gates senior signed on. the estate tax has been weakened over 10 years. it is not to the point where the exemption is $5 million per person, $10 million per couple. that is higher than it needs to be before you start paying. the mcdermott legislation says $1 million or $2 million for couples. obama to texas $3.5 million. that is weaker -- obama's says $3.5 million. that is weaker. there is a letter circulating concerning the rollback of the tax cuts and cutting capital gains, having a strong the state tax and then saying this

corporate tax reform. -- strong estate tax. increase the capital gains rate. anyway, that is a matter to congress. >> that what is titled our tax code is written to benefit the 1%. >> rights. there are forms out back if you are here in the room. if not, you can find it -- >> you are a entrepreneurial activists. >> we need to get the voices of wealthy people. those voices making huge difference, when it is the people who would be taxed. >> i just wanted to throw in a little bit about philanthropy. >> let me throw a little frame on it. there are an awful lot of folks that say, if we got rid of taxes altogether, rich people could do nice things. and take care of everything. you are dubious about that.

>> i am. that is everything being talked about. i am excited to move on all of these. the financial transactions stuff is going on in europe, that is exciting. whenever we can move through, i feel like i'm not a policy expert, but whenever we can move through moments over the years is exciting. to put the context of philanthropy -- i work with wealthy individuals. i am a wealthy individual. i work with people who work in philanthropy.

what the amount of money that -- the amount of movie that we -- the amount of money we are moving is nothing compared to what is needed for public infrastructure and all the things we're talking about funding. nothing compared to what the government is moving. just to really put it in that context of what ever we can move forward at any given point. the amount of money will not be covered by individuals. what we give through charity is a completely different ball game. also, what -- when we talk about rights or moral imperatives, it is health care, education. are we leaving that to charity? probably not. >> cannot be voluntary. that is a critical point to underline. often the way that our media covers these discussions, that there is a sense that there are these wealthy people and if we get out of their way, they could do good things. sometimes, they do. we raised those instances of to be greatly celebrated. -- up to be greatlyb celebrated.

backy? we have been talking about what we cannot do. can we save social security, medicare, and medicaid? they seem to be so central to the current debate. can we say that without fair taxation, some kind of tax policy? is it possible to save them? >> that is an easy question. >> i like easy questions. >> i do not think so. in order to do it in a fair and equitable way, the answer is no. i will say, first of all, it is sort of drives me crazy that people talk about social security at that point in the game. social security is perfectly

fine for another 25 years. you know, we have a huge trust fund. you will hear the social security report is coming out soon. you will hear people screaming about cash income deficits. the reality is, social security is taking in less money because fewer people are working. we have a high unemployment rate. that is what we need to be focusing on, now fixing social security. we need to get people working and paying their payroll taxes, income taxes, and the social security thing can wait until our economy recovers. that said, i think that an answer to the social security problem, now i'm talking about, which i said people were not doing, is raising the payroll tax cap. you can raise that. just to back up, the payroll tax cap is about $110,000.

that means that income above that is not taxed at 6.2%. or 12.4%. whatever threshold you want to go with. if you raise that cap, you can still pay a higher benefits to the wealthy people who would be paying that tax and you can solve almost the entire 75-year social security shortfall. asking people who make, you know, $1 million a year, $200,000 a year, to pay taxes on all of their income instead of the first $110,000 of it. that can serve our problems to resolve our problems. >> that is a 4-tax fairness

concept. --for tax fairness concept. >> with rising income inequality, we have actually seen a greater percentage of income above that cap. if we use to cover 90% of income, now it covers 84% of income. income inequality has really increased 70-- health care is a mess. with the affordable year cack -- with the affordable care act, president obama raised taxes. it is about a trade-off. if we want to continue funding medicare, medicaid, paul ryan does not think so, but i do. >> speaking of paul ryan, chuck? is there anything about paul ryan plan -- is in play. that is obviously, as much as the president takes his megaphone and speaks about the buffett rule, paul ryan has become the central figure. he is much discussed as a possible vice presidential candidate.

they're democrats that are excited about that prospect. -- there are democrats that are excited about that prospect. is he talking about tax fairness, or an extreme that would be kind of what we have now on steroids? >> right. mr. ryan's budget is divided between spending and tax type -- spending and tax side. his spinning his charge. he goes after all people, medicare, very harsh cuts in food security and a whole range of programs. it puts the main part of the government on a downward track. almost an impossible level over time. the spending side is very harsh. his tax side is in sharp contrast to that. on the tax side, he starts with making all of the bush tax cuts, including the high income once, permanent. on top of that time he goes much further. he sort of talks about how he will have deficit neutrality. he never says anything how he would raise money.

he just talks about the cuts, which are tilted towards the high income people. the most prominent is he poses to take the top tax rate down to 25%. that will be the lowest rate since herbert hoover. coupled with the same tax rate for corporations. the result is, his specific tax cut on top of the four trillion dollars of president bush, he did say the other four and a half trillion dollars deeper. -- digs another $4.5 trillion dollars deeper. the one local he takes off the table is the capital gains rate. -- a one lupo he takes out the table is the capital gains rate. -- the one loophole he takes off the table is the capital gains rate.

you are left on the table the mortgage interest deduction, the exclusion for health care. all things that tend to middle- class people. those things can be reformed, as being mentioned. president obama's proposal to reform those, that would raise the 500 chilean dollars -- $500 billion. he is implying that the top priority is to cut taxes for the highest income people. before we go to questions, i want to ask two more things. dean, you do an analysis about how the media covers economics. how did we get to a point where the most talked about tax plan of the moment is seemingly a plan for redistribution of the wealth of board? >> it is remarkable. what is striking about paul ryan plan, nobody knows what chuck just said. that tuesday did not make it clear, but you have to

understand the paul ryan plan gets rid of most of the budget. the congressional budget office, under his direction, if we just assume his numbers and that he wants to keep the military spending at its historic levels, somewhere between 2200 -- 2040, and 2050, the rest of the government disappears. the food and drugs administration, the national -- all of that disappears because there is no money. that is what he signed off on. the fact that is treated seriously, that is incredible reporting. basically, i am sorry, it this

is a lunatic budget. you have all of these people running around watching this series proposal on the table. that is not serious reporting. risch -- reporter should have been pointed out that he proposed getting rid of the federal government in 30 years. nobody did that. >> right. there was a little moment when paul ryan plan first came out where he was saying, you know, we will cut four trillion dollars off the debt and we will do that by increasing tax cuts for the wealthy. obama said, we will cut four trillion dollars by rolling back those tax cuts. there was a moment of conversation. >> that is healthy to have that conversation. >> to have people look at that and say, where is our priority. -- ?

do we want to find the money? we did not have that conversation. do we have to stop -- we have to stop coddling the rich. we have to stop saying we need the tax cuts for the rich and we need to have that voice saying, in 2010, 93 -- you all saw this, 93% of the income gains went to the top 1%. you have $80 on average. it is bad. it is getting worse, right? to say that rich people cannot afford it>> bob mcintyre will remember, fred harris ran for president in 1976 on the slogan, take rich off welfare. >> what might just said is a good call to the outrage that

should stop the crowd here. let's give a round of applause to the panel. i'd think this has been an amazing conversation. [applause] and then what i would like to do is have questions from the audience. if you are watching at home and it is not some other day than today, you can tweet questions in to this address, and i will try to be the medium for those questions. if you are here physically, just raise your hand. john will call on you and don will be viewed the mike. i have been waiting all day to say this.

wait for the mike, we are on c- span. -- microphone, we are on c-span. we have about a half hour left, so if you have a very long and extensive statement to say about tax policy, you may want to cement that the for the record -- submit that for the record, but in the meantime, let's go on. >> philosophy, through a man named louis kelso, had developed a concept called by neary theory of economics. and the plan for moving beyond the keynesian model, and the marxist model. he challenged both. neither of whom thought individuals owning the means of production was an important goal. yet, i see behind us ada education fund. you have two of the heroes, walter reuther, who worked for some years ago, and senator hubert humphrey, both of whom congratulated kelso and supported the idea is of democratizing the ownership. the problem i have with listening is there is no discussion at all about the system, and it assumes the tax system, as a whole, is a good system.

we will tinker with it in terms of what we do. i think that is an unfortunate thing. there is a plan that i would like to call to the attention of -- >> i want you to tell people where they can find that plan on the web. >> cesj.org. >> cesj.org. i appreciate your good insight here, and i'm going to go to bob mcintyre here. should we scrap the entire damn tax system? is the system itself a crisis? do we have a friend that we

should work in and we cannot work in? >> well, we have to have a tax system. >> i think so. i do not know if ron paul is in agreement. >> he has not only repudiated the 20th-century, he has done so for the 18th century. we put people on mount rushmore because they were taxed heroes. george washington for putting together the constitutional convention that gave us the power to tax. abraham lincoln, who instituted the first income-tax. teddy roosevelt, because in a petulant moment, he ran for president as a third-party candidate, split the republican vote, and got the 16th amendment adopted. it out liar was jefferson, who was a bit of a coupon taxes, but he did get louisiana. there are a lot of people that would like to go back to the 19th century and all of our taxes be sales taxes.

that is the scientology movement tax program. oddly enough, called the fair tax. it must be an acronym for something. they have the flat tax, like dick armey, who wants to exempt rich people from taxes and only tax the middle class. louis kelso was an interesting character. he tried to get work around a shipping company. people have talked about doing that with tax programs. we have that now, call the employee stock ownership plans, which has turned into a shelter for rich capitalists. any well-intentioned loophole ends up as a tax shelter for the rich capitalists. it is always a problem. >> that is what my mother, who spent her life as a tax preparer, always said. it is always a bunch of new loopholes. in the back row. >> question about capital gains. there has been a lot of

discussion about the ordinary rates and capital gains. conservatives will argue that capital gains faces are not indexed for inflation. two questions on that. extreme for raising capital gains tax rates, which were also index, calculated the national game, and secondly, how much of an impact would that have any way? does anyone have any idea what the dollar-weighted average -- you know, gains that are over a year? >> wants to grab a piece of capital gains? bob? >> it has been talked about, especially when inflation was high. the problems are these. no. 1, if you index gains and do not index debt, people have a tax shelter. you can make money by losing money because of the tax code. no. 2, realizing tap -- capital gains is a voluntary thing. most people who have a lot of

them do not realize a lot of them. we already have an exemption for three-quarters of capital gains. any kind of break for the quarter that we do get, seems to me, unnecessary. >> to build on that, bob makes the point, it is an optional tax. what a lot of people do not know, also, if one buys stock at $10, ibm stock, as a young person, and then you grow old and it goes to $100, it makes a huge game, if you die without selling it, the capital gain is completely forbidden. so you have will be people making tremendous amounts of income from that over their lifetime and borrow against it. that money is never taxed. >> or if you give it to charity, as many do.

>> you are now going to have perfect fairness in the system. if you think you are getting money from interest and dividends, there is also an insurance premium there. i would want to maintain some sort of separation if we raise the marginal rate. i would not tax capital gains at that rate. raising it to 20% or something, i do not think we have to any special indexing for that. >> just a quick word on putting dollar amounts of capital gains reform. there is definitely an interesting debate coit on a bad behavior responses and what would happen if you change the rate at which we tax capital income. there is a great congressional research service report by jane gravell. she goes into great detail on some of the research that has

been done on behavioral responses and why the joint committee on taxation may be able -- be global in their estimates of how much we would get. -- be low-balling their estimates of how much they would get. >> cbo says that taxes are progressively effective. federal, over $250,000 is about 20% on average. then you have state and local which is another 6%. 34% of all income over $250,000 goes to the federal government or local government. i know from the tax foundation that the average taxation is 20%. so the system is effectively progressive. cbo has stated that. they have shown that in various

reports. a lasting, there are indirect costs for regulations, tax issues by compliance, and excessive legal system costs, which according to the cost of government, is 22% universal. those are progressively incurred, too. wealthier people are in the courts dealing with the tax system, regulatory more. so it is probably like 26% for that. add that to the 34, 60% of all the income, average over to her to thousand dollars, is in government-related costs. >> thank you. do you want to unpack that? >> 28% design sounds plausible of what people pay above $250,000. i would be happy with 40%, but ok. the compliance costs, i think they're being overcharged for

their accountants. >> they are avoidance costs. people do it because they are trying to lower their taxes. >> when we to do that is to get rid of the loopholes. >> if you look at our tax system, it is mildly progressive the way it is, if you look at combined taxes. income, on the other hand, is not much of the progressive. it is extremely skewed towards the wealthy. we have a class of people who can afford to pay a lot more -- never mind fairness. >> people often get confused on that. the statement about 20% was of the income over $250,000. we have some hard working decorator that makes $250,000.10 dollar, they pay 20% on that $1. that is important. when we talk about the estate tax, i know there were a lot of people out there wondering that they would end up with

$1,000,100. they pay the tax on $100. lots of confusion on that. >> we have eight twitter feed coming in. >> somebody actually send in three questions. i will quickly run by them, you can choose which one you want to answer. andrew nose and occupier. he wants to know what occupy can do to shed more light on any angle of the tax justice question that has not gotten the attention it deserves? the next question is is there any concern about the small revenue increase apparently that about roe would generate? thirdly, how possible are fairer taxes when money runs the electrical system, as he says? >> i will take that. you have spent time talking with folks with occupy,

building these coalitions, connecting people. it strikes me that occupy wall street, which is now much more than that, it is a national movement that is in many places. but at the core of it, it is a discussion about the inequality of wealth. is it beginning to get focused now on how we might address that inequality and how we might use tax policy? >> i would always go back to what i said before in terms of the opportunity for us to seize the moment, focusing less on wall street in and of itself. the question that the person asked, i think there is a way there needs to be a popular -- we all need to be mobilizing about this and talking about this for legislation or a the house to move in washington. there needs to be popular support. i think there is a way that occupy can continue the conversation and keep people mobilized around it. i do not know if occupy is the place that solution should be talked about.

it should be talked about everywhere, -- >> it is not a suggestion that occupy should come up with solutions, but as a movement, raising these issues, as bob said, you might want the president to get more focused on these issues. >> just talking about occupy, responding to that question, a key role is key to the conversation going and mobilizing people. i can talk about my own trajectory of learned about taxes. five years ago, i was in a different place. the popular education that is going on, people are beginning to think about government differently, beginning to think about disparity and how that is impacting people. people looking at their community and tie that to a

letter analysis. that is what will allow my generation to have a different perspective on the work that bob has been doing for a long time. >> i think occupy, together with warren buffett coming out and saying stop coddling the rich, those two together, the pressure from the bottom and somebody at the top saying i should take -- pay more taxes, that combination makes it possible for obama in the middle to say we should have the boss and roll. i would say that is the camel's nose. -- buffett rule. it is a tiny sliver of everything we are talking about. we are talking of the bush tax cuts, capital gains, estate taxes. but i think it starts the conversation of should we be taxing the wealthy more? >> i want to talk about one thing that was mentioned that i thought was important. you talk about where you live. we have focused so much of this discussion of tax policy on washington and congress, the federal level. but an awful lot of tax policy plays out at the local and state levels. it can also be very unfair.

we have had great discussions about the legislative exchange council and the center of democracy on its various projects, focusing attention on how this national group develops model state policies on a lot of tax issues. is it important -- and keeping your eye on the broad prize, rather than thinking this is just a d.c. debate? >> getting back to what the gentleman was talking about, it is true the federal tax code is somewhat progressive, although less so than it used to be. but state taxes are very regressive. they fall much harder -- and bob does great work on this. they fall much harder on lower income people. lower income people pay the heaviest share of sales taxes of their income and much higher share than what people do. estate taxes hit poor and moderate income people much

harder than federal taxes to, compared with higher income. >> one of the things on estate taxes -- financial speculation taxes -- i am stealing one from the imf. they did a good paper on financial transaction. it did not say that was the best thing to do, but they said the financial sector is under text, and recommended a financial activity tax, which is to garment's could do. financial taxes are exempted. you are taxed undershirts, clothes, food, but you go to the bank, that is not taxed. why not? it is a great thing to do. i also discovered, talk into a wall street attorney, you can tax mortgage transfers. they could tax the transfers of mortgages issued against property in that state, whether they are traded in new york, switzerland, or wherever it might be.

>> it also might slow down all of the gaming there, mr. housing bubble. >> we have a question in the back. >> could you stand up so that we can see you? >> i am with a anti-party organization. one of the -- part of the tax code that folks to not always realize when it comes to fairness is the tax credits for low-income working families. earned income tax credits, child credits. the center of budget tells us that they do more than any other to lift americans above the poverty line. can you talk about how you see that playing out with the year on -- year and battles, how to protect those small but important pieces of our progressive tax code, especially for low-income families? >> chuck?

>> people should understand, bob, in many ways, it is the great seer of the discussion here. >> this is a huge year for low income tax credits. if you think about it, president obama made improvements in the child tax credit. if you look at the ryan budget, it would eliminate that, and at the same time, he is a pro -- he is proposing this tax cut for people making over a million dollars. right now, for a kid, for woman working full time, if the rise but it would go into effect, she would lose $1,500. if you are making $17,000 a year, you have at stake $1,500. that family, and millions of others like that could take a huge hit. the stake for working families, the welfare success stories that people like to point to,

very high stakes in the tax debate this year. >> let's go to will for another question from twitter. >> i will use my authority as the ultimate moderator to say that we can probably just take one more question after this. richard phillips wants to know how exactly companies dodge taxes, and who are the worst offenders? >> i am not letting bob off that one. bob mcintyre. >> they dodged taxes by reporting less income than they make to the interest -- internal revenue service. they do that in a variety of ways. sometimes they move their profits to a tax haven in a warm, caribbean place.

sometimes congress passes a law that they can report less than they make. by taking write-offs for expenses they do not have. sometimes it gives them a credit against their taxes for research they do not do. that is how they pay less. the reason, in this report we put out a while ago, that some pay more and some others nothing, there are more loophole that they can use. some of them have not paid taxes for 10 years even though they reported tens of billions in profits. >> do we need more auditors? >> we need fewer loopholes, which meet -- means we need a better congress. >> then you have campaign finance reform -- >> no, we just need a better congress. >> one thing that has become increasingly important. private equity, when something is taken over by private equity, they tend to borrow large amounts of money against the company. then they pay interest payments. that is all tax-deductible.

typically, a company in private equity pays much less in taxes than if you have the same company as a public company. that is one reason why public companies are paying less. >> two quick questions. i know we are winding down. we have some that there. thank you. >> brian roberts, on the ada fund board. one of the big expenditures is, obviously, education. public education. one of the big inequities, of course, is proper taxes is what funds schools. -- property taxes is what funds to schools. i would like to hear about different options for k-12. you also have states that are strapped. higher education at the public level is also suffering in the same way.

>> terrific. thank you. i am going to have my microphone master scramble up this way and we are going to get one last question and then we will take most of the questions -- both of the questions. a round of applause for dan's work on the microphone here. could you stand up? >> mr. latham said that there were a number of individuals that were in favor of raising the estate tax. i wonder if there is any consensus about what they want a number to be? are they thinking about some other number? >> i am going to parts of these up bigger we have a few minutes. you have been a wonderful audience. great questions.

our twitter fans, great questions as well. we asked a few minutes ago about state and local taxes. property tax is something, by and large, run at state level. but are there ways, as we talk about a federal policy debate, that we can begin to address education funding? should we? and what is the most equitable way to make sure that our schools are funded adequately? does somebody have a notion on this? bob is smiling slightly. >> is an interesting question. some states on the more of their education through taxes other than property taxes. they're generally known as southern states. not spend much in education. that is possibly an advantage to the property tax. people see it as going to their kids or their neighbors' kids, and they're willing to pay it. it is certainly not the world's most progressive tax, the most regressive either, but this kind of ownership people have over it the schools seems to be a factor

in increasing education spending. >> some states to try to move the money from wealthier districts to poorer areas, -- >> some states get away with it. va does it. hardly any complaining. i do not know how we do it. >> the mason-dixon line is the rappahannock river. >> it keeps moving south. >> the estate tax. mike, where are you going with that? >> most people want to see the exemption of about $1 million more than they have. i literally found this to be true. when we started this work in 2000, actually, there was a repeal of the estate tax that had passed both houses and then clinton veto the repeal. then bush made it sort of the engine of his tax cuts in 2001. we turned it into the caboose, and have kept it there, with a lot of pressure. there are a lot of groups out there, 78 organizations, citing

a letter -- signing a letter. we are working within mcdermott legislation, and jim mcdermott from washington, suggesting $1 million per person, $2 million per couple. fighting that is quite a lot of money. people on the coasts, in california and on the east coast, some of the big cities where property valley gets to $1 million pretty quickly, feel like that is too low. certainly, we do not need to be $5 million, $3.5 million per person, $7 million per couple. and what is the right? is it going to be as low as 35% now or go back to a 45% rate and then have it graduated above that? and then hopefully indexed for inflation, which is a key thing. this is how we got into this mess.

we still have a gradual estate tax that a lot of people paid. then as wealth went up, that did not change at all. now it just kicks in immediately at 45%. i would like to see it go lower and start more gradually. that is perhaps a dream. >> thank you. just to wrap up, i want to go around the panel and give people a last moment to give us a bill, proposal, idea, that they ought to think should be in the mix of our system. >> can i read a story instead? we launched a tumblr blog where there are wealthy people in the 1% that say they are standing with the 99%. it is amazing.

people wrote pictures of themselves with a sign. one is from -- i would just read it. i made millions studding the map of mortgages and bonds and helping bankers pass the chartered financial analysts exam. it is not fair that i have retired incumbered after working with that instruments welcome to work as nurses, teachers, soldiers, etc. are worried about paying for their future, healthcare, and children's educations. they are the backbone of this country and allow me to succeed. i'm willing to pay more in taxes so that everyone can afford to secure future, like i do. i am the one%, i stand with the 99%, which equals 100% of america. tax me. [applause] this is a blog started by young people, but people all over the country have signed on. one more brief piece from a younger man. i made more than i need after a couple of years of hard work. now i am giving back, but i cannot do it on my own.

i need government help to reduce to be my wealth. tax me. the message i wanted to leave everybody with is, this is a moment. people on this panel know a lot more than me about the political moment and the opportunities, but this is -- people are talking about a movement moment. there are people who are waking up and listening to the message that occupy has popularized in different ways. there are people who will back this legislation, moving forward. >> where can people find what you were just reading online? >> westandwiththe99percent.org. >> i would ask people in the audience and policy makers, when they hear tax reform, keep two things in mind. first, the country has huge budget deficits in the future and will make some gut wrenching choices.

it is more about the revenue than it is about the reform. . the very wary of that term. >> elizabeth was talking about giving back. i want to talk about giving back in a different way. a lot of the reasons why we're sitting around here with a 0.2% unemployment and people facing losses of their home is because those folks on wall street where building up a huge housing bubble that collapse. we are in an obligation to give back. it could be a nice financial tax. it will raise money for us. >> we are not investing as a country and what we need to be

investing in the future. if you're in the top five%, a sign on to our letter to congress. it covers what we have been talking about. >> i would say you have to get rid of the dividends. we have got to get rates equalized on that kind of income. >> if there's anything else you me, justnow from google "assistant for tax justice -- citizens for tax justice." we have covered more important

turf today than zero sessions of congress. i want to leave you with a quote from 111 years ago "the people have been promised equal and just taxation for years and have borne repeated disappointments and delays in fulfillment of those the foments with great fortitude. their patience is not limited." thank you so much. [applause] >> i want to thank everyone for coming out. i want to direct your attention to the back of your program. this is event sponsored by our sister organization. it is a rally happening on tax dy. -- day. if you like to express the real tax reform and balsa everyone pays their fair share, we invite you to join us. you can go to stopthepledge.org.

thank you so much for coming out. thank you so much for coming out. keep your eye on the tax issue. adobe a hot one. -- it will be a hot one. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] like bill clinton said today that congress should renew the export/import bank and that the issue should not be political. his remarks and next on c-span. then paul ryan talks about the federal budget and the u.s. economy. then we