>> he is a reasonable guy. some of the newbies would insist on a huge debt reduction package. it seems like they would make a deal to pass that. he is not acting by himself. the speaker has reflected this .aid mccarro >> will this be on voters' minds? he seems to think they will vote on the economy.

collects those messages are >> those messages are really geared toward swing voters. they really are representatives. the people he talks to back home are his constituents. they probably do not think much about the capital issue. it is still remaining to be seen. >> we will give you the last word. >> gov. dukakis was a clear example of how you can be heard early in the summer if you let these attacks defining. that is not mean -- that does not mean that we could end up the president romney. >> thank you both for being with

us. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> kevin brady talks about the future of the bush era tax cuts. newsmakers it today at 6:00 p.m. eastern on c-span. the national governors' association continues its meeting with a discussion about entrepreneurship. we will hear from the author and consulting professor at uc- berkeley. the justice department announced that wells fargo agreed to pay $175 million to settle unfair lending practices. it is the second largest

settlement. this is about half an hour. >> good morning. i am pleased to be joined by tampere's, lisa madigan, and thomas curry to announce a step forward in our ongoing efforts to protect american consumers, to ensure fair treatment for struggling borrowers, and to seek justice and recover losses for victims of discriminatory lending practices. today, the department of justice reached a significant settlement totaling at least $175 million with wells fargo bank, the nation's largest originator of residential home mortgages. this settlement constitutes the second largest fair lending settlement ever reached by the department and it will resolve the government's allegations that, from 2004 to 2009, wells

fargo engaged in discriminatory lending practices against qualified african-american and hispanic borrowers and thereby violating the equal credit opportunity act and the fair housing act in these activities to place in at least 82 geographic markets across 36 states and the district of columbia. as a result of the investigations conducted by the department of justice and the treasury department's office of the comptroller of the currency, systematic discrimination was discovered in wells fargo's lending practices. this resulted in more than 34,000 african-american and hispanic wholesale borrowers paying an increased rate for loans simply due to the color of their skin. this includes approximately 4000 african-american and hispanic wholesale borrowers who were

steered into subprime mortgages. under the terms of the settlement filed today, these victims will be able to receive the much needed relief they deserve. as part of the agreement, which is subject to u.s. district court approval, wells fargo will provide $125 million in compensation to those wholesale borrowers who were victimized by widespread practice of charging higher fees and rates to non-what are worse. the bank will provide another $50 million in direct payments for down payment assistance to residents in eight metropolitan areas where the banks discriminatory practices have a significant impact. in a distant -- in addition, wells fargo has agreed to an internal review of its detailed mortgage practices with additional compensation for

minority borrowers who received subprime loans while white borrowers with the same credit profiles were offered prime loans. we will hold financial institutions accountable, including some of the nation's largest, for lending discrimination. an applicant's creditworthiness and not the color of his or her skin should determine what borrowers pay and what borrowers qualify for in loans. with today's settlement, the federal government will ensure that african-american and hispanic borrowers who are discriminated against will be entitled to compensation and borrowers and communities hit hard by this crisis will have the opportunity to access homeownership. forsimply, there's no place discriminatory lending in the marketplace and it will not be tolerated by the department of justice. in fact, today's summit marks the second time in just seven months but the department has taken action to bring relief to borrowers who were steered into subprime loans based on their race or national origin. and it underscores our

unwavering determination to work closely with law enforcement allies and government partners in order to hold lenders accountable for unfair and unlawful practices wherever and whenever that might occur. in recent years, this commitment has led the department and specifically the civil rights division, it's fair lending unit, to aggressively combat bias, fort discrimination, and work to restore confidence in our housing and lending markets. since this establishment, less than 18 months ago, the fair lending unit has finally resolve a record of fair lending matters. as a result of this work, we see an unmistakable message. this department of justice will use every authority and retool and every resource at our disposal to ensure fair access -- and every tool and every resource at our disposal to ensure fair access for all and to ensure the rights of every american. we can all be proud of the

results we have obtained and the progress that is currently in the way. and there is no question that we stand poised to take this work to the next level. i want to thank every support staffer, every investigator and every attorney from the department of justice, the illinois attorney general's office under the outstanding leadership of attorney-general madigan and ron maiden and come in particular, the office of the comptroller of the currency who initially launched this investigation before referring it to the department of justice in 2010.

it was their tireless efforts that brought about the settlement that made today's announcement possible. i would also like to acknowledge wells fargo's cooperation in reaching this agreement with the department and its commitment to correcting course by implementing stronger for lending policies and controls to ensure that such unacceptable behavior does not occur again. and now i would like to turn things over to another key leader in this work. my good friend tom perez will provide additional the tells. >> -- additional details. >> i am particularly honored to be joined by my friend, the attorney general of illinois, lisa madigan, who has been a national leader in this effort and a tireless champion of behalf of the people of illinois on a range of issues, including fair lending and protecting the

rights of consumers. i would also like to thank the u.s. attorney of the district of columbia where this was filed. he is unable to be here today. he was also an in valuable partner in this case. and the deputy general, i would like to acknowledge the critical contribution of the comptroller of the currency. they have been an excellent partner in this case. the work of the occ and other regulatory partners is essential to the effective enforcement of our fair lending laws. at the core of this complaint is a simple story. if your african-american or latino, you were more likely to be placed in a subprime loan or pay more for your mortgage loan, even though you were qualified and deserve better treatment. this was a case about real people, african-american and latino, who suffered real harm as a result of what wells fargo's -- result of wells fargo's a discriminatory lending practices. where they're rock-solid credit

score receive a subprime loans of a prime loan. and she was not told that she may have qualified for a prime loan with better terms. the time she realized she had an adjustable-rate mortgage and not a fixed rate mortgage, it was too late. the damage was done. this is also about communities, such as the city of chicago that we visit -- that we visited last year, where house after house was either boarded up or headed for sale sign. today, the sediment with wells fargo is the second-largest in the department's history. the settlement shows that, while we will vigorously investigate practices, we will work constructively with responsible lenders that are willing to take the necessary steps to ensure equal credit opportunity for all. i have spent considerable time in recent weeks with a number of senior leaders at wells fargo who have had open and frank

discussions. we have that time agreed to disagree. and at the end, we were able to reach a resolution. our investigation began in earnest in 2009. we received the referral in 2010 from the occ, which had been conducting its own parallel investigation of wells fargo's lending practices in a baltimore and d.c. metropolitan areas and a finding of discrimination. the department's lawsuit is the culmination of this thorough investigation of their lending

practices, which included a review of more than 2.7 million wells fargo loans originated between 2004 and 2009. it was during this time that the subprime boom that some of the most harmful practices took place. the complaint alleges that between 2004 and 2008, wells fargo discriminated by steering approximately 4000 african- american and latino wholesale borrowers into subprime mortgages when non-hispanic white borrowers with similar credit profiles received prime loans. people with similar qualifications should be treated similarly. they should be judged by the content of their credit worthiness and not the color of their skin. yet our investigation revealed that african-american borrowers who obtained a loan from a broker working with wells fargo or almost three times more likely to be placed in subprime loans than a similarly qualified white applicant.

latinos were almost two times as likely to be placed in a subprime loan by a broker working with wells fargo than similarly qualified white applicants. the complaint also alleges that, between 2004 and 2009, wells fargo discriminated by charging approximately 30,000 african- american and latino wholesale our worst higher fees and rates than non-hispanic white borrowers simply because of their race and national origin rather than the borrowers' creditworthiness or other objective criteria related to borrow or risk. what does this mean in reality? let me give you a few examples. it meant that an african- american wholesale customers in the chicago area in 2007 seeking a $300,000 loan paid on average two thousand $9 -- $2,900 more in fees than similarly qualified white applicant. these fees were not based on any objective factors relating to credit risk. these fees in fact amounted to a racial surtax. a latino borrower in the miami area in 2007 seeking a three and a thousand dollars loan paid

on average $2,530 more than a similarly qualified white applicant. the surcharge for african- americans in the miami area was $667. all too frequently, wells fargo african-american and latino borrowers have no idea whatsoever that they could have gotten a better deal. they had no idea that white borrowers with similar credit would pay less. that is discrimination with a smile. african-american and latino customers of wells fargo in 82 geographic markets across 36 states and the district of columbia were victims of these discriminatory practices spirit of the roughly 34,000 total victims identified in our complex, roughly half are latino and half are african- american. those borrowers who were steered into subprime loans paid on average tens of thousands of dollars more for their loans and were subject to possible pre- payment penalties come increased risk to credit problems, the fault, foreclosure and economic

and emotional stress. these effects can be devastating and they can last for years. in fact, the occ did a survey last year and found that, as of june 30, 2011, 28% of subprime loans nationwide are seriously delinquent or in foreclosure compared to 5.5% of prime loans. in other words, the decision to place someone in a prime loans versus a subprime product can have enormous consequences. the impact of lending discrimination and the harm to a person's credit can be far reaching. and the collateral damage to whole communities when widespread patterns of discrimination occurred deprived those communities of

equal opportunity. and this is why the proposed consent order we filed today addresses both the individual harm and the community harm. the settlement will provide $125 million in compensation to approximately 34,000 qualified wholesale our worst we their charge a higher price or were steered to subprime loans based on race or national origin. borrowers will be compensated for the direct costs or other harm they experience. we know the prime qualified borrowers were steered to subprime loans generally experienced a greater harm. as i mentioned, this case did not -- was not simply but individuals and families who were victims of discrimination. it is also about communities. under the terms of this settlement, wells fargo has agreed to commit an additional $50 million to community improvement programs based on its successful terrible was program to assist communities hardest hit by the housing crisis. we have identified eight areas

that will receive this important investment. metropolitan washington, d.c., chicago, baltimore, philadelphia, the oakland/san francisco bay area, new york city, cleveland and riverside- salmon and tuna-ontario, california. these are areas that were heavily impacted -- riverside- san bernardino-ontario, california. these are areas that were heavily impacted. wells fargo has agreed to conduct an internal compliance review of a subset of its retail subprime loans during 2004-2008 to identify any prime qualified african-american or latino retail customer who was improperly placed in a subprime loan. wells fargo will compensate these borrowers in an amount similar to the amounts paid to borrowers who received improperly subprime loans from the wholesale division.

all amounts paid to retail customers will be in addition to the $125 million in relief for the wholesale customer. while the federal government must be a credible deterrent to those who would choose to violate our fair lending laws, the best policing is often the policing that comes from within. that work is vital to ensuring fair and equal treatment for borrowers and the success of thoughtful and comprehensive compliance work and attention to fair lending is reflected in the fact that the vast majority of lenders across the united states are not violating the law. that is why i believe that wells fargo should be commended for implementing strong fair lending policies and agreeing to conduct the internal review of its retail lending for the time during the mortgage bom. i have been impressed with their leadership and believe that we will continue to work in a collaborative fashion.

we have a shared interest in ensuring equal credit opportunity for everyone. deputy attorney general cole describe the opportunities for the lending unit and task force for the interagency. we will ensure that those harmed by discriminatory conduct during the mortgage them get compensation. we will also investigate and bring enforcement action to confront emerging discriminatory practices or longstanding discriminatory practices in the credit market. we will continue to aggressively enforce the law to protect the rights of all who face discrimination, to ensure full and equal access to credit for all as the law requires. lastly, but certainly not least, i want to commend our dedicated team of attorneys, economists, investigators and support staff, as well as all of our sister agencies who are here today and have been involved in this effort to ensure equal

opportunity to the american dream. our career staff is remarkable and i am fortunate to be in the position of assistant attorney general of the department of justice. i have mentioned the important role that the occ attorney- general madigan and, i want to say thank you to the u.s. attorney from quite literally all over the country who offered in valuable assistance in this case. if we had not been able to resolve this matter, it would have been a team effort with u.s. attorney's offices in over 50 jurisdictions. and this has been a team effort and we will continue to use this as a tool in our law enforcement arsenal to ensure that people have equal credit opportunity across this country. with that, i will turn the podium over to the distinguished attorney general of illinois lisa madigan. >> good morning. i am pleased to announce that i am joining the justice department's settlement in resolution of a fair lending lawsuit i filed against wells fargo three years ago.

for illegally discriminating against thousands of illinois borrowers of colored during the peak years of the sub prime lending spree. this settlement sends a clear message that the fair lending laws of this nation and of the individual states will be and must be vigorously enforced. the unfortunate reality is that discriminatory lending is not some shameful relict of our distant past. as alleged in my lawsuit and borne out by the justice department's investigation as well as my own, wells fargo was making mortgage lending decisions based on the color of borrowers scans as recently as five years ago. if you were african-american or latino shopping for wells fargo mortgage at the height of the housing bubble, your chance of being sold a high-risk loan was far greater than those of a white borrower with a credit profile who was comparable to yours or even much lower. chicago-area african-american borrowers with an annual income

of $120,000 or more were vastly more likely to be sold in subprime wells fargo loan than were white borrowers earning $44,000 per year. stark racial disparities such as these cannot be explained away by mere chance or marketplace demands for borrowers lack of sophistication. rather, as alleged in my lawsuit, the fact that a disproportionate numbers of minority borrowers were sold toxic subprime murrieta as was the direct result of policies and practices of wells fargo's own design. the policies and practices were illegal and they helped destroy a generation of wealth in the african-american and latino communities in the chicago area and cities throughout the nation. today's settlement will not roll back the clock. it will not undo the devastating consequences of wells fargo's misconduct on african-american and latino families and their once vibrant neighborhoods. but it is a significant step forward.

in my ongoing efforts and of those of my partners in the federal level, the whole bank is accountable for their disgraceful role in causing the worst financial crisis of our lifetime. just as importantly, today's settlement affirms the basic american tenet that a person's race or ethnicity should never determine his or her access to affordable credit and to a better future. in closing, i want to thank the attorneys from the left suwannee -- from the illinois attorney general's office for working diligently and passionately on this lawsuit for the last three years. i also want to commend deputy attorney general poll, tom perez for all of their hard worker and dedication in crafting this settlement. let me handed over to the comptroller of the currency, tom currie.

>> thank you, lisa. providing fair access to credit and treating every customer fairly. every person who applies for a loan should be evaluated on the basis of objective credit factors and not the color of their skin. the practice of steering minority borrowers into a higher priced subprime loans is not just an acceptable, it is illegal. the occ is committed to eradicating this practices. the action being announced today should send a strong message to every institution that lending discrimination in all of its forms will not be tolerated. this case is an example of interagency cooperation that represents the government at its best year multiple agencies working together for the benefit of the citizens we all sir. the occ's work began in 2004 when we started an investigation of wells fargo's mortgage lending in the baltimore- washington area.

based on our findings, we referred the case to the department of justice and we continue to work with the department to route. i would like to commend everyone at the department who participated in negotiating. they put the public first at every step of the way. i am pleased that the occ's examiners, economists and enforcement authorities were able to play a role in this action. i believe that they brought this matter to an appropriate conclusion. thank you. >> 0, a correction, in 2009 was our investigation. >> we have time for any questions. >> two things -- if the evidence here is so strong that there was a racial surtax, why settle this case?

why not pursue it? second, are there any states that are not part of the settlement? >> as for your first question, there are real people affected. we were able to reach a resolution with wells fargo not to provide assistance to people. when you have protracted litigation, that could take years. there is obvious mutual litigation is on everyone's side. our goal is to help people and to come to a resolution that can in fact help ensure equal credit opportunity. so i am very appreciative of the collaborative spirit that wells fargo bought the table. week undeniably had moments where we disagreed and disagreed strongly. but we came together because we had the shared interest in people credit opportunity for

everyone. and moving forward to ensure that the proper policies and practices are in fact in place. add to your second question, there were other matters that was fargo had involving fair lending issues. you heard about illinois. there was a matter involving the city of baltimore. and there will be announced later today regarding that matter as well. and finally, the state of pennsylvania, the pennsylvania human relations had a matter with wells fargo and that has also been resolved. that is part of this global resolution. i think it is a good day for american homeowners and american would be homeowners that can benefit from this. >> to questions -- they say that it is the mortgage brokers fault. how do you respond to that? second, what kind of time frame do you anticipate the mediation will get to homeowners? there is some concern about the

country white settlement. >> wells fargo and any lender that has a wholesale or a retail arm is responsible for the conduct of people who are working under their supervision. the complaint alleges that individuals, originated, whether retail or wholesale -- or given discretion and were not properly monitored. that unfiltered or unmonitored discussion regrettably, in this case, and in other cases that we have seen, resulted in african-american and latino being victims of discrimination. whether you have a whole still

practice or resell practice, you have an obligation when you're working with and directing originators to make sure you're doing so in a matter that complies with fair lending laws. your second question related to -- oh, the time frame. there will be an administrator who will administrate this settlement agreement. i'll understand, in the countrywide case, we are on track to meet the deadline set forth in the case. i am confident that we will meet the deadlines here. we know that will fargo has been very responsive. there are consent decree calls that have not been done yet because we want to make sure that there is an appropriate selection process. but we have a lot of experience in this. i appreciate the need for people to get relief as soon as possible. but we want to make sure that we have and the corporate process for identifying them. >> is there a specific time frame? >> i believe that within, i want to say six months to 12 months, so in the next year is the time

frame put forth in the agreement. >> to questions, first for the justice department. it sounds like the disparate impact case, did you find evidence where they were involved in intentional discrimination in the basis of race. for the comptroller, this referral came in before your tenure. are you making fair lending referrals a particular priority of your tenure? >> we don't plead legal theories in the complaints that we file. we alleged that the conduct constituted discrimination. so you will see in the complaint that is filed that there are allegations that the unfettered discretion and insufficiently monitored discretion resulted in discriminatory effects on individuals and you will also see allegations that a lot of the internal honoring -- internal auditing process place

that was fargo, including a process called their a-paper filter that would ensure qualified people would be placed with the proper product, was not working. you will see those allegations in that complaint. but we don't played specific intentional discrimination. >> we will take you live to the national governors' association annual meeting. our coverage concludes this morning with a discussion on entrepreneurship. what they can do to support job growth. they will hear from the author and consulting professor at stanford.

the annual meeting will conclude with the governor who will unveil his 2013 initiatives. we're looking at the room as we're waiting for it to begin. he can find all of our weekend coverage online. >> i need everyone to take their seats. please, take your seats.

>> if you please take your seat, we are top to begin. members of the audience to please take their conversation outside in the hall, we would appreciate it. all right. thank you for being here for the

2012ing session of the 200 meeting. i think you will enjoy our speaker. our topic is growing the next big idea. i think every governor would like to know the answer. we are joined by steve. he co-founded his last company in his living room in 1996. he has had eight start-ups including two semiconductor companies, workstation companies, a super computer fun, i could go on and on. after 21 years and high- technology companies, he took time to reflect on his experiences and read a book about building early stage companies called "four steps to the epiphany." his latest book integrates

tenures of knowledge. he has a variety of things -- 10 years of knowledge. he has done a variety of things. we are very honored and pleased that he would spend time with us this morning. there will be plenty of times for questions when he is finished. >> thank you. i am honored to be here. i should have realized that business casual means you wear your blue suit. i am sorry. i am a little underdressed. the subject will be growing the next big idea. i want to share with the some of the things we have learned in the silicon valley, working with government agencies, working with small businesses and large corporations on how to build new

ventures and create new jobs. we have learned a whole lot of new things and the last couple of years. i thought i would share them with you in the form of four lessons. lesson one, the different type of start-ups. lesson no. 2, what they started ecosystem looks like. lesson 3, we now know how to make start-ups fail less. it is a polite way to say we know how to make them succeed more. can we actually teach what we now know on how to the company's tax i am going to share this with you as quickly as i can. lesson one, types of start-ups. one of the things that confused me when i left the industry, a

start up was a high technology, high growth -- you look up in the morning in your goal was to build a billion dollar company. i started attending other lectures and heard them talk about start-ups in descriptions i have never heard before until i realize we're using the same word to describe multiple things. there are different types of start-ups. number one, a lifestyle start up. people that work for their passion. they serve no customers. in california, it is surfers who love to surf. if they hang up a sign that says lessons 09:45 - 10:45. they make enough money and they go out. they are self-employed. they're creating jobs for themselves of committee wondered

two assistance. there's another type of startup -- one or two assistants. there's another type of startup. these are entrepreneurs who want to dedicate their lives to solving pressing social problems. they either want to build a company to do that and make a profitable or they want new social innovation and new nonprofit. their goal is to go from a social start up into a large nonprofit. another type of startup is the one that my parents actually started. my parents were immigrants. their dream in this country was to open up a grocery store. they work in sweat shops for 15 years saving every dime they had and finally they were able to do that. what i did realize is that my

parents for entrepreneur worse. they did a startup. their goal was to serve a known customer with no projects. if they were successful, they were able to feed our family. some days they were not successful and we were eating stuff off the shelf. others drew the business. what is really interesting is their criteria was not the billion dollars. it is not even a million dollars. it is probably $400,000 to much. -- too much. they thought what product should they carry. they did with an existing team. in silicon valley we look down at small businesses and say these are livestock businesses. that is a mistake. small businesses are the heart of the u.s. economy. there are 5.7 million small

businesses in the u.s. the maker of 99.7 of all companies. they employ non-government workers. small businesses are on to consumers. they do start of. is the type of ones they need to think of -- they do startups , the type of ones they need to think up. the other type are the ones that get all the press, high-growth start up spirited these are the ones you see in the new. -- startups. these are the ones you see in the news. they're designed to grow big. in the wake up in the morning and say we are going to build a company that is going to take over the universe. one of two things are true. they are visionaries or more than likely they are hallucinating.

a scalable start up not only is designed to grow big from day one, it typically needs risk capital. this is a fancy word for angel funding or some type of private capital that is used to dealing with risk. what i will mention is for this class of startup, 90% of them fail. over 90% of scalable start-ups fail. who would be crazy enough to invest in anything like that? i guess the housing market. besides the housing market, what we have is a start of class that most fail but the returns are so large and so huge they attract a special asset class. the goal is to stop for i know customers. they are looking for markets

have a billion dollars or greater and they want to grow to $100 million a year. there is a new type of startup in your states emerging in the last couple of

the amount of time they have to stay on top of the pack has frozen. but only do they have to deal with known customers and known products, they have to do with destruction. and disruption is when they have a great core business and some

crazy comes along and says we will take out this company. the best examples of this are two of the smartest companies. does anybody have a blackberry? or a nokia phone? i was in finland talking with someone was at the nokia board meeting a month the iphone came out. they passed the copy of the iphone around at the nokia board meeting and the fatal quote was "what should we care about this? what is their market share?" they said why should we care about this that what is a market share dax it looks like a toy.

i use these as examples. these jurors smart companies that every year they were doing great sustaining innovation. they did not understand that they were being disrupted. how large corporations need to deal is they can either build their own disruptive technology, a partner with those, or acquire start of technology. they can disrupt the innovation inside a large innovation. it looks like a corporate start that. we have the types of start-ups. summary is the tactics and each of your state to deal with small business start-ups. scalable start-ups. corporate start of this. the tactics are different. the techniques are identical. we know what is common between them.

hold on a second. the second thing i thought i would share is the ecosystem. i spent my last 35 years in silicon valley. i got used to the fact that we have a technology ecosystem and infrastructure that feed on itself but never quite understands where it came from. i will share this with the because i now do a talk called the secret history of silicon valley. when asked some engineering students where did silicon valley come from, and they say some old guy named steve jobs started it. i say perhaps -- what is the government's role. i want to share with this. what are the rules we can learn.

these are unintended consequences. it was not designed. it started with stanford university and outward facing research. it had deep university, military, and industrial ties from day one, building weapon systems. the engineering department had a secret 400 persons weapons lab building electronic systems funded by the dod and all our intelligence agencies. at the same time there was mass of weapons systems. silicon valley was not a start at center. it was a defense center. missiles and space set up the facility in 1956. it had zero employees. in 1960 it had 25 engineers working in what would become

silicon valley. at the same time, of building all the reconnaissance satellites for the cia. they have this engineering culture into an entrepreneur or culture. it is a professor from stanford who ended up as dean of engineering. i want my students to start companies. it is great for the company. this is the 1950's. if my academic professors sit on boards, becomes advisers, invest

and all the start of, i got the engineering to face outward as well as in word. that was a radical shift the . they said it is great to take our inventions and help the country. the venture capital, investing in start-ups actually was started by our response of sputnik. u.s. congress decided that we were falling behind the soviets and technology and launched a series of program, nasa, and a program called the small business investment corporation. the first set was actually an

unintended consequence of sputnik. venture capital was this. it is only until the limited partnership that venture capital took the form we need it. it does not use government money. in the late 1970's, regulatory changes change venture capitalism all again. pension funds were now about 3 billion role to invest 10% in "risky ventures." the amount the capital when from millions to billions of dollars literally within a year. venture capital as we know it took off in the late 1970's. there are two key lessons.

one is we built a culture that embraced technology rest. we recognize that 90% of start- ups fail. imagine in your state and 90% of your programs failed. it turns out in our culture failure = experience. we understand that these are the risks. more importantly, the culture embraced financial risk. investors understood that nineties are would fail. so with their limited partners. -- 90% would fail. so would of their limited partners. they also learned that the 10% would read turn capital. -- return capital. what they brought to silicon valley was not just money.

if i emphasize anything here, it is the importance of smart capital if you're trying to build an entrepreneurial capital. it is not writing checks to on a trip and yours. that is the money. what you really want is experience, tolerance for risk, and the long-term interest. start up take years to come to fruition. many people that understand what it takes to coach this from a napkin into a billion dollar company. what was this that we learned without cold war funding? one is that it really requires an ecosystem. it requires infrastructure. i mention some of these other things.

some of these things really are not even available. for your states one is to think about research universities. that is a place to start thinking about bringing a core of innovation. the second is culture. starts of culture -- start up culture is very innovative. tod like our universities learn how to be outward facing. when al have management tools that i will show you in a minute -- we now have management tools that i will show you in a minute to help start-ups fail less. and the motivation for the ecosystem is capitalism. if there is anything to remember about start ups, it is not just about the great entrepreneurial hours. it is about the ecosystems that

is a circle between start-ups and risk capital who make enormous profit by funding most of them who will fail. it is building this ecosystem that is critical in getting any entrepreneurial cluster off the ground. here is a some of what it would look like. let me point out the lessons. the lessons are here. we want to understand that entrepreneurship requires a healthy ecosystem of all these pieces. at the end of the day unless you that are acting like experience angel investors you will just have a pile of very short of entrepreneurs looking for money. the best thing we can do is figure out how to encourage that

top part of the ecosystem. making start-ups fail less. here are some lessons we have learned that i think are fairly critical. they are going to be counter intuitive to everything he might know. after 50 years of history, we now know how to build start-ups. first of all, in silicon valley we take more technical risk per square foot than probably any other place in the world. more technical risk. you would think that start-ups would fail because the technology fails. over 90 5% of start-ups that fail fail because they did not find customers and markets. it is not because there technology did not work. noteir technology did work. they do not find enough customers and markets. while we are investing in the technology, and the things that do not work for these companies is we did not know where our

customers were. we have the wrong distribution channel. what is really interesting is how we used to build companies. we used to believe that start- ups were nothing more than smaller versions of large companies. this is really interesting. i was consulting for a large corporation that had 100,000 people. i was helping them. how hard could it be to give advice to a start up that there to guide and it arises. these must be smaller versions. we're going to tell start-ups to go do. that is what we did for 50 years in silicon valley. we now know that they are not. to this is a huge insight. we now know that start-ups search for something. large companies execute. what that means is start-ups are

searching for who their customers are, weather channel does, how to price the project. large companies know how to price the product. this distinction between certification and execution is not just -- search and execution is not just words. it is the difference on how we would build these things. we used to believe all we have to do was write a business plan. nice document. it is baked. we no -- big. we have a photo when it has first contact with customers. it represents what it looks like. what we now know is that there is no possible way that you could write down in a document

fiddling in your office or consultant what the real world looks like. the real world is chaos. if all we're trying to do is make the plan, we have gotten ahead of ourselves. if ever seen a plan, everyone knows appendix a is the fe- year forecast. just tell me what the future will look like. my investors what they forecast. i will type it. i always tell my students there is a key code that will ought to generate this. -- auto-generate this. no one said it who else will do five-year plans. how successful were they? these are the only guys who used to five-year plans. we know how this ended up. if we think about this, what is wrong with this?

not suggesting we never do planning. i am suggesting what is it that we now know? we know no business plan to buy its first contact with customers. we tend to write it with certainty -- survives its first contact with customers. we tend to write it with certainty that no facts. this starts by first defining what the heck is a start up? i never had a definition. i never even knew what i was supposed to be doing other than it there is no such thing as a 10- year-old starter. there is a 2-year-old start of attached to an 8-year-old fa

failure. my job was to build a product or find customers. what you mean by a business model? a business model is how we company crits valley for itself and its customers. it basically says -- company creates value for itself and its customers. it basically says, it is about your product and also about your customers and how you credit channel -- you create a channel. the business model is all of these pieces. on day one, most start-ups just have guesses because all of these guesses, at stanford,

where students pay $50,000 a year, a deny use the word guesses, we call them hypothesis so they play like they're getting value for their money. on the one, a startup is a faith-based enterprise. it is based on the passion of its founders. the mistake is continuing to operate it as faith-based. " you truly want to do is turn that faith into facts as quickly as possible. you're guessing about a lot of things. what you really want to do is draw this business model on the wall, but stickies on them, etc., but now how do we change these guesses into facts? that is the invention we came up with in the last couple of years. that is called the customer development process. it says that everything you know or think you know is a guess.

so let's get out of the building in a formal process and start testing this is a step at a time. and we could test this incredibly rapidly. the last thing we know -- and this is something that took me a ticket to understand -- in a startup, it used to be that come when you fail, you made a mistake, you picked the wrong customers, you fired the vp of sales. when that didn't work, you fired the vp of marketing. when that didn't work, you fire the ceo and shut the company down. but we now know that start-ups' go from failure to failure. they don't go from success to success. it only happens in the movies. so what do you do when the hall -- when the hypotheses do not match reality? will come up with a term called the pit. the pivot says, look, this will happen all the time. so why not just to embrace the fact that failure will happen and, when it does, we will

change some of our business model. we will either change the customers or the channel or the pricing and it is ok as long as we have cash left. and if we embrace the fact that this is part of the process, we will fire the hypotheses before we fire the founders and executives. and that is a huge insect about early stage ventures. so pivots are the result of all of these out-of-the-building about the cs been reviewed on a speed and tempo and we do it with irrational focus. so making -- so start-ups are not smaller versions of big companies. all the tools and techniques that any staff or you have learned in business school last 100 years, we have taught great tools for execution. remember, a master of business administration, not the master

of starting companies. those tools are excellent for growing large corporations, but we never had our own tools for building early stage ventures. we just kind of tried to adopt these old tools. what we now know is that, before you do a plan, whether it is an operating plan or a financial model, you want to run a customer development and business model process before you write the plan. if you believe any of this, can we teach it? we put together a class at university, stanford, berkeley, colombia, cal tech, and we also put together for the national science foundation within eight weeks could we get teams in front of 100 customers we're not talking about doing a survey. we're talking about out of the building. 100 customers. yet to be deaf, dumb and blind to not get some feedback talking to 100 customers. and not only do a good for the generous is, but last year, the

u.s. government adopted this process. the national science foundation now uses this as the innovation court to teach the top scientists and engineers in the country to get out of their lab and we do the same thing. except this time, instead of 22- year-old in equities and flip- flops', we do it with 45-year- old tenured professors who probably have not let their labs since their ph.d. world offense. and we have made -- ph.d. oral defense. the national science foundation thought this was so productive that they're now scaling this to teach hundreds of teams of our best scientists in the united states and other research organizations for the country are also adopting the same class. you'll see other announcements and there will be a major announcement this coming wednesday. the national science foundation instrument to this class and said, steve, ok, we hear you had

this business model. prove to us that it works. so they surveyed students about knowledge coming into the class. what did you know? essentially, we didn't know anything. if we were successful, we could move the orange bars to the right so it would be some to a great deal could years with the new going into the class and here is what they knew going out and so then we can say, yes, we taught them a lot about how to do start-ups, but that was not the goal. we want to teach them how to commercialize the technology and build companies. so what does the data set about building companies? again, what did you know about building companies? coming into the class, after the class. and the national science foundation connor said, i think we have something for the first time in 30 years that bridges the gap between basic research and sbir and sbtr grants, which

is there funding arm for commercialization. but for me, i was not satisfied. while it is nice to teach the elite american to come if you remember my definition of entrepreneurship, it embraces small business, large corporation than the rest could because my parents and my background is small business, i question is what about the other 99%? the same generic process, the same customer development model work for grocery stores, dry cleaners, small businesses, trying to get off the ground. the -- could they use this technique? a.govu go from the sba do site, what did they do? we still use the same business tools from the '50s. we are working with professors and organizations like weber state in utah to apply them to small businesses.

other colleges and community colleges are adopting these processes as well. and we believe it will be applicable not just to technology and high growth companies, but to the other 99% on main street. what can states do? let me give you for five short ideas. number one is the culture for entrepreneurship is fail fast and move fast. it is about speed. and it is about not a gotcha game. we embrace failure as part of the process. which, by the way, is counterintuitive when it is a federally or state-funded process. which is why i believe, as you will hear later, it is something that private capital needs to do. failure is part of the entrepreneur will process. recommendation #two is that there are incubators of accelerator's, organizations nationally that are coming in to all states will have tm to help concentrate on track nor's

and give them -- concentrate entrepreneurs and give them organization. start up america and startup weekend are my favorite. these art forms you shall hear about. if you do not have one of these going on in your state, you should figure out how to encourage one or all of them to set up shop. because they add value. recommendation #three is, if you remember my comments about ecosystem, you can have the smallest of entrepreneurs in the world -- and i want to which state i traveled to that graduates 6000 world-class engineers out of the state university and, at graduation, i swear they must ask where do you want the airplane ticket, east coast or west coast? i think that is a waste of enormous talent. but they don't have locally, next to the university, is a risk capital culture. the have an entrepreneurial culture, but they haven't

figured out how to and sent private capital to take risk and instead send their best talent out of the state. i find that an enormous waste. if you're thinking about investing, how do you and sent risk capital, not by having state replace it, but how do you cent someone who grew up in california and worked in california to come back home? how do have them come back home? recommendation #four is universities are still teaching how to write a business plan for entrepreneurship. i find that quite -- a quaint, but you can encourage them to do this. recommendation no. 5, small business initiatives should be thinking about adopting these same techniques. we now know their work. we know they're better and more efficient and make start-ups' over a large pool fail less

good at have -- fail less. i have sourced all of this material which basically means it is free. it will cost you and your staff absolutely zero. i have hundreds of presentations of my students and what we do for the national foundation. this is my way of giving back to the country and i would be happy to answer any questions. thank you for your time. [applause] >> jack, go ahead. >> thank you for your very interesting presentation. incenting risk capital, money will crossover state borders,

how important is it that risk capital be located at close? if you have good ideas and good entrepreneurs and a good companies developing, will they find each other if they're not located within those borders? >> in a perfect order, you would hope it is true. it's not. it turns out, even in silicon valley, most think of the east bay as a foreign country. when you have enough opportunity locally, you tend not to travel. the number one priority would be to get a local state set of vc's engaged and interested. the best model for this is not a state, but something the size of one of your states. that is the country of israel. israel has more public companies on the stock exchange than any in the european union combined.

their number to to the united states. there is a book called the oakwood startup nation" which describes their journey -- "startup nation" which describes their journey on how to create this culture. they finally realized that the real goal was to give initiatives and incentives to kickstart these incubators and venture capital firms and then even as we get out of that business. that is what the model philosophy that i would suggest because venture capitalists don't drive very far. truly, the ultimate is to have a cluster, a small group in your state know your state, know your culture, know your local universities, know what you're telling this, know what your state and schools are great at and be focused on that. >> in maryland, we partnered -- recreated the maryland-israel

investment fund. it has been a great partnership, identifying that pipeline to its salaried innovation and create the jobs, fell fast/move fast. one of the things that we found in our ecosystem in maryland is that we're number one in terms of research and development. no state, per-capita, does more research and development, yet we were lacking in terms of commercial implementation. and in our ecosystem, we recognized one of our weaknesses to be the lack of venture capital. one of the things that we did this year is we had something called the innovation initiative with a consortium of our great research universities that are committed, a very small amount of money, to move forward ideas year after year out of their labs. as part of that, they are redoubling their culture. instead of simply rewarding professors, you get tenure rewards for commercialization. which is a big shift for us. johns hopkins, md. morgan.

the other thing we did, that i will share with you, mr. chairman, and it is one practice. the year before, reawe created something called in this maryland where we held an auction for companies like insurance companies, where they know they will have the tax side but -- tax liability. we allow them to forward-pay five years of taxes and it allowed us to pay a sort of venture fund of about $85 million. that is another effort to build on the vc that we have, but have a state role in this as well could not directly picking the winners and losers, but going through entities that we have that do this, that have boards that are set up. i think every state is a little different when they start off on this. but all of us want to make

improvements that allow us to excel renovation. and invest maryland is one of them. i will send it to you, mr. chairman. had you seen this happening in other states? have you seen things that the rest of us might copy? >> unfortunately, i'm not familiar with all of the initiatives in all the states. my last year or two has been involved with the national science foundation, a doe, and some dod initiatives. i'm looking forward to reading this. and the thing you describe makes lots of sense because those are the things we need to move forward. i cannot emphasize the importance of one of the things that governor riley said, which was changing the culture and side of the university. you heard me say the phrase of " out word facing." academics are in word facing. the worry about publications,

research, giving grants. they're not worried about starting companies and pushing their graduate students to do that. and fact, they are happy if there graduate students publish more papers and become academics. that is the great -- that is great for the future research, but not productive for your stater national economy. so we want some balance. and get -- socent incent states? you >> we established two different groups, one on high technology and one on life sciences to do this. in the life sciences group, we took some of the money from the tobacco settlement fund that the attorneys general got back in the early 2001-2002 to set up

the life sciences greenhouses'. there are a few across pennsylvania. they are working with successful ceo's of start-ups who are acting as mentors that somebody needs to have to take them through this. they sit on a board of a new startup company and participate in it. the green house help to guide the company through research and commercialization define who will buy your product. at the same time, it helps companies find that venture capital. we see the bench decapolis know where we are could the same thing on the technology side. we call it ben franklin. there are four locations in pennsylvania that they exist. each one is around a university. it could be penn state university. it could be university of penn drexel and

philadelphia. we are one of the greatest startup universities in the country in spinning things up. it has worked very well. we are pleased to share with anybody here what we're doing here in pennsylvania. >> those are great initiatives. let me use that to point of something which may or may not be obvious. you mentioned the life sciences. since the first initial public offering up a life sciences company in 1980, it is a segment that venture capitalists have put billions of dollars and. -- in. but a life sciences company, unlike a software company, takes a decade or more to come to fruition. i will just tell you the silicon valley problem. the giant sucking sound you hear is all of the money going to social meeting were investors are saying why should i spend 10-15 years waiting for an

investment in licenses to come to fruition? that means tens of hundreds of millions of dollars of capital -- and i could be investing in facebook or hoping to get the next one? that is a risk in all areas. it is an area where states may be able to give incentives. you know what? there is plenty of money going into the next iphone app. research of the next richar non-iphone apps. but you have to understand how long those commitments are. smart money goes where money is being made. right now, the money is being made in twitter, facebook, etc. i think even smarter money is being the contrary and where we say that people will still need drugs and we need clean energy, etc. one of the best things we saw come out of the last national

science foundation pennsylvania was how to clean up water from fracked wells. when you saw the numbers of how productive that could be, there were some very smart vc's lining up to invest in that. >> i was struck by your comment that programs in our universities are masters of business of administration, but not entrepreneurship and start- ups. do you have a model program or programs in the country, at least the elements that go into that to change the culture? >> yes. please don't get me wrong. now lots of universities in the

last 10-15 years have entrepreneurship programs. i taught how to write a business plan before i realized that, gee, that's exactly the wrong thing we should be teaching. but no one knew. we kind of new avenue you ever met entrepreneurs? they're crazy people. they are not normal people. they dress funny. were they checked for weapons? but we kind of knew this and other things about entrepreneurs. but we had no methodology to connect witto connect that we kw that they're different, but why? we know that there write business plans and then ignore them after they get funded, but why? we had no replacement for all of this stuff. it is only in the last couple of years that we put together what we call this launch pad correctly all -- launch pad curriculum. we're now turning other instructors. there is a nonprofit called

nciia.org. that trains other universities. all of the class's are going on- line. so by this fall, any student or professor that wants to use all my on-line material, it is there. it is being taught at stanford and berkeley and colombia. so there are on-line versions, quarter versions. other people and teaching it and we're happy to share it. it is not because we are smarter. it is we -- because we have learned stuff over the last 50 years. we have learned what is the more efficient way to build these things and we had 100 years of building management staff for administering and executing large companies. but we never build the equivalent management staff of what it is we do for searching for the business model. and that is what we're doing now. we're building those tools that we now know, i use those, they're much more efficient than the stuff that we used to do.

it is all available. sen minimill appeared happy to send it to your staff. jigsaw enemy and e-mail. happy to send it to your staff. >> one of the things we do in oklahoma is that we have a governor's cup on entrepreneurship and which we have venture capital, private sector people, who will work with the universities and students who have to go through the process, as you're just talking about. and they actually meet with people who invest in products and services with the students. and it is the competition. i spoke recently and there were

probably a ton of people there in teams. but all of these teams -- probably 800 people there in teams. but all of these teams -- they were not all eccentrics. but they get in front of adults and make their case as to why someone should invest in their products or their service. it is a great way for a governor to be involved in helping to encourage a young person to be involved in the spirit of entrepreneurship. if your to ask my 21-year-old what he will do after he graduates from college, he says that he has three patent ideas that will make him a millionaire by the time is 25. that is the hope and the dream that you can do something. >> thank you, governor. you raised something i ought to share. entrepreneurship, he even though the founders might be engineers

are business people, actually, founders of companies are closer to artists than anything else. artists see something that other people don't. in fact, they see it when there is a blank canvas or blank score sheet or a block of marble and they're capable of convincing other people that it will be great. and one of the interesting things is that we have been teaching art for thousands of years and we teach it now in our state come in our schools on multiple levels. we teach art appreciation to everybody. we teach techniques and practice. i think entrepreneurship and business should be taught the same way. we should teach business appreciation as early as we can. we should teach technique, etc. we should think of it as teaching artist. the other thing is that, not only are we changing the minds

of entrepreneurs, but also the way venture capitalists think about starting companies. right now, you could say, steve, everything but our local venture-capital still want to see business plan. this is kind of the golden rule. but any venture capitalist who has been exposed to this process, and there's one in this room, john burke, who actually volunteered to sign up for the national science foundation, now we cannot get him out of the class. he just realized that we have discovered a more efficient class. if you want to talk to a venture capitalist who has been through the process, there is one here. i know my time is short, like, over. are we done? >> one more question. >> thank you very much. [applause]

>> steve, thank you very much for the presentation and your response to the questions. >> mr. chair, i am a little disappointed that not more governors left to the defense of entrepreneurs. >> as a result of your presentation, i now understand how a crazy successful entrepreneur became an outstanding respected governor in the state of colorado. if you want to go ahead and respond -- [laughter] is that good enough? he liked it when you got to artists. i could see the smile on his face that he was moving up the ladder. but you should talk to governor hickenlooper. you should talk to him because of what he did in his previous life, prior to what he did as governor. it is a great story.

we need to do a few things before we shut down this particular meeting. i want to thank governor bob macdonald, and more rain, for being absolutely fantastic. [applause] i truly enjoyed the opportunity last night to talk to governor jefferson and gov. henry. secondly, i want to thank governor walker to come forth. i thought you would be riding a harley. but apparently not. to talk about the next annual meeting which will be in milwaukee, wisconsin in 2013. >> i would of had more of hickenlooper if i was not eating my cheese of there. it is inappropriate connection to entrepreneurs because john, before he was mayor, before governor and mayor, he was a great honor to menorah and

opened up a number of blue button wisconsin. you'll get some great cheese next year, some good beer. we have that joint-venture with millercoors. i want to add are things from our family to bob and maureen and to the whole team here in virginia. it has been an outstanding time. our hope next year is not to beat it appeared with a great time here. we had a great time with gary and genets efforts last year. but it should be just as great as the last two years. we hope you'll join us. the date is a little bit later. it will be thursday august 1 through sunday august 4. it will be in milwaukee. again, not only will you get great cheese and beer and broughats.

some of you have also asked about miller park, which espn has named the best ball park in the major league. we will have the opportunity to do some events. maybe by that point, the parts will be back where we would like them to be. our hope is that you can join us for that. we will spend some time to you have as a gift for all of you to remember, you have at your spot one of our bandannas from harley-davidson museum. we don't have the history that they do in virginia, but next year is the 110th anniversary of harley davidson. a few weeks after we will be there. one of the things we will do is work out an event at the harley- davidson museum. [laughter] my staff ask me to put that on, but they didn't think that i would be goofy enough.

he looks like an entrepreneur now. [laughter] i will bring you a cheesehead when we are in wisconsin. [laughter] but we have a little bit of a challenge. i was thinking around -- unfortunately, a couple of the governor's i know who ride, one that you would not suspect, mitch daniels rides a harley davidson. i have an anniversary edition harley. one of the things that we thought would be fun is to bring a bunch of governors and spouses -- and maybe some other staff and others out there. for any governor who is interested between now and next summer in joining me, it will be a short ride in. we will work out a deal at the dealership closest to your capital to get you trained in the harley-davidson riders edge course so you can ride with us.

you have former mayor john norquist in milwaukee. i never rode a bike before before the harley davidson hunt anniversary. we dared each other to get the course and we led 10,000 bikes going down the street. it is an absolute rush. it won't be 10,000 bikes. but i'm working on jack. i have to work on your wife more than anything. but you would be good at it, too, i think. we can get you in that course as well. but we would love to have you join us, even if you're not writing, just to participate. we will have a lot of people on the coast to do not recognize the spirit but we have a tremendous shoreline of lake michigan. we have the world's largest music festival. we have the milwaukee art museum. we have another -- we have another number of great things on the lakeshore. tunis august 1 through the

fourth. we hope to bring your spouses, your families, your staff, and for the corporate feliz and the sponsors here and anybody else that is interested, we hope you will come. wycombe also helped arrange a little bit of time to come early and leave or stay late if you like. if you like the gulf, kohler is just up the street. there is some great golf in there. we hope to see you in february in the sea, but a year from now, in wisconsin. [applause] >> scott, thank you very much. i know jack is very interested, along with his vice chair, to ride those harley's into milwaukeeans and event. i look forward to cheering them on. [laughter] before we move to our new leadership, i want to remind everybody that come after this

meeting concludes, there will be a movie screening of "won't back down." it will be at 12:30 p.m. at the rockefeller room. it has been my great honor to serve as the chair of this organization the past year. i followed in the footsteps of a terrific chair who taught me everything that i should know in this job. it is a tough job on a lot of different days. but i want to thank all of the governor's and your staff for all of your hard work. to do what we do effectively, it cannot be done without the support of the governor's and your staff. we really work hard to get you more and more involved. i also want to thank the nga staff. i want to thank them for their expanded by some council, the technical assistance that you provide to all of our state governments, and for organizing all of these meetings which turn out to be very, very successful

meetings. it has been a pleasure for me to get to know the staff better. there is a lot of expertise there that you can call on an individual basis. i also want to thank my staff personally. we have a small staff appeared in particular, i want to thank one kidder, staff, to be my legal counsel for the past year. i made her do a lot extra work for the nga and no one can do it without our great step. i am thankful for their support and dedication and their commitment. with that, i would like to call on the chair of our nominating committee, gov. berkshire, to report the findings of your committee and nominate the new leaders ofnga. >> thank you. the nominating committee felt inspired to do some extra effort in our deliberations.

they began yesterday at the receptions after the session. they continued at the governor's palace last night. [laughter] adjourned to the raleigh tavern and other venues and we worked late into the night. but we have come with a unanimous recommendation to nominate the following governors to serve on the 2012-2013 nga executive committee and as nga leadership. gov. john hickenlooper of colorado, governor mark dayton of minnesota, gov. mike beebe of arkansas, gov. dave heinemann of nebraska, governor chris christie of new jersey, gov. scott walker wisconsin, and governor jerry herbert of utah. and as the new vice chair of nga, governor mary phelan of oklahoma and as a chair, gov. jack martel of delaware. i move that these nominations be

adopted. >> is there a second? >> second. >> all in favor? the ayes have it. before i turn it over to gov. martel, i want to say a few words about jack. we have known each other for a long time. i have great respect for what he has done as the governor bill weld appeared more importantly, what he has done for me as vice chair. we have had an absolutely fantastic partnership. i can talk to jack about any single issue. we can have a great conversation and move for a behalf of the nga. my wife sally, who i see has walked in now, we were very honored and pleased to get to know jack and carla on an even better basis then we have known them in the past. we want to thank both of you for what to do and what you have done for us. but now it is time for you takeover. here is the gavel. good luck and congratulations.

[applause] >> thank you, david. i want to say how good it feels to know that, it was only after heavy drinking that i was elected. something that my staff will not be the least bit surprised about. i want to think my wife carla for being here as well. but is a must for your hospitality. scott, we look forward to being in milwaukee. to dave, i want to thank you for your for nominal leadership of the national governors association. we have known each other for a long time. we serve as street traders together. i remember dave heinemann was the first treasurer that i met.

you have been a great, great leader. i know that mary phelan and i look forward to following in your footsteps and to continue to worked -- to build on the great work that you have done in leading nga. on behalf of the governors' association, i will give the gavel right at you. this one is presented to dave heinemann, governor of nebraska, for his great leadership of the national governors' association 20 debt -- governors association 2011-2012. [applause] >> each year, the nga chair this to choose an initiative to focus on.

gov. heinemann's has been about christ economies. he has given each of its great tools and information. i think the speech today really builds on that. i want to thank him for doing a great initiative could not wanted to talk a bit briefly about-impaired my initiative would be called a better bottom line, employing people with disabilities. i would like to explain where this comes from. about eight or nine years ago, i visited a facility in delaware run by nba -- and by mbna. it is now run by bank of america. many of them make promotional materials and they do a wide range of jobs. i remember that day, i went in and i met a 25-year-old man. he was making t-shirts and he saw me frazzled. i asked him what he had done before he had this opportunity to work at mbna and he told me that he sat at home for six

years watching tv with his parents. honestly, a light bulb went off in my head, understanding the incredible improvements and the quality of life to this man and the improvement in the quality of life for his family. he, like the rest of us, what every day to wake up and be able to feel like they're part of something that is bigger than themselves, be part of a team, be productive and earning a paycheck as well. a focus still on this issue of the years. and i knew i had the opportunity to serve as chair as the national governors association. i knew that this is not a democratic issue or a dip -- or a republican issue. i really believe in continued to believe that this is an issue that all governors across the country can embrace and really make a difference on. today, americans with disabilities face a disproportionately high rate of unemployment. some of these rates are frankly staggering. individuals with disabilities should have to the extent possible the same opportunities that all of us do, to live close

to family and friends, live independently, and in state communities, to have employment and participate in community life. my initiative is employing -- simply aims to increase employment among individuals with disabilities. specifically, my initiative will focus on the employment challenges for those with disabilities, including veterans. and facilitating and advancing opportunities for these individuals to be gainfully employed in the competitive labor market appeared successfully achieving that goal will require not only attention to a corporate training and job placement and work-base support, but also best practice and meaningful engagement of the business community. and that really means engaging with the business community

about how productive, loyal and how valuable these individuals can become a book to the company's culture and to the company's bottom line. so this initiative will provide governors and other state policy makers with a better policy options to assess the environment in our own state and to provide strategies to design -- strategies designed to support this population appeared emphasis will be on people will have significant intellectual and developmental disabilities and may require support like job coaches and personal attendance in order to live and work in the community. and we will convene a governors and businesses business leaders, disability leaders and other leaders throughout the year to share ideas and move forward with support for this population. more specifically, this initiative will create a blueprint for businesses in states identifying best practices, outlining steps that can be put in place to increase

employment the people with disabilities and also heightened awareness and launch a campaign to help governors put in place practices to increase employment for people with disabilities. i am very excited to start this initiative. it is the right thing to do. it is a smart thing for governments to do. and it makes good business sense. while the initiative is just being formally announced today, i have been talking with people about it for a few months. there is tremendous support out here for this. last month, walgreen's hosted the first-ever ceo summit on this issue. i was really pleased. i was honored to join senator tom harkin and congressman pete sessions at this meeting. it was in connecticut and it included senior level executives, including many ceo's from companies that employ hundreds of thousands of people. more likely than night, in each of your states, companies like

america group, best buy, best clark co., ernst and young, ibm, lows, mclane co., merck, asap, proctor and gamble, ups, walgreen's, and wal-mart. that is just to name a few. those companies do not have a lot in common in what they sell or how they sell it. each has a different mission and a different corporate culture. i can tell you that having senator tom harkin and pete sessions working together, these two really impressive guys don't live anywhere near each other on the ideological spectrum. but when it comes to this issue, they're very much together. and those companies and those leaders realize the value and the common purpose in this story. they shared how giving them a chance for employment, this is not just about what makes social sense. this is good for their bottom line. that is not just my opinion.

that is coming directly from the ceo's themselves. walgreen's, for example, we were posted in connecticut at a tremendous distribution center right near the hartford airport. walgreen's has 500 people employed, half of them with disabilities. and walgreen's compares their distribution centers across the country. in this one, the performance is just as good if not better than all of their distribution centers. they have found that their best forklift operators happen to be deaf. this is good not just as social policy produces good for the bottom line occurred when know that our nga core proposal have their own stories to share. the bottom line is that there some people with disabilities. they have the time and the talent and the desire to make meaningful contributions to interested employers. it doesn't matter whether you were born with additional challenges to face or, as in the case of our wounded veterans to return home, whether you

acquired them later in life. what matters is what you have to offer appeared i look forward to working with all of you to find these inspiring stories in your state, recognizing what is working best and getting people back to work and to helping more and more companies recognized that creating greater economic opportunity for these workers improves their own bottom line as well. and between them and between our own governments as employers, we can in fact ensure that individuals with disabilities will have opportunities for a brighter future. i want to thank all of you for being here with us for this 104th annual meeting and we are now adjourned. [applause] host[captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012]

>> we are looking live at the conclusion of the national governors' association annual meeting. we will have a discussion on stimulating entrepreneurship again tonight here on c-span. you can also visit our website to see all of our coverage. this weekend's natial governors' association meeting. join us later today for " newsmakers" with republican kenneth brady. he discusses the economy, congressional reaction to president obama's tax proposal,

and the future of the bush era tax cuts. "newsmakers" tonight at 6:00 p.m. eastern here on c-span. new jersey gov. christie spoke about his fiscal agenda and the economy of new jersey as well as his efforts to address the " millionaires' tax" during his first term in office. he also said "we have too many elected officials up for re- election." this is about an hour. >> good morning, i am their west. today, we're pleased to welcome governor chris christi to the brookings institution. as all of you know, he was ected rnor inovember nd s arn in as new jersey's 55th governor in

january 2010. he graduated from university of delaware and attended the seton hall university school law. thereafter, he joined a cranford law firm and was named partner shortly thereafter. he started his political career by being elected as a freeholder in morris county and serving as director of the board in 1997. in 2001, president george w. bush nominated him as u.s. attorney for the district of new jersey. the position that the health through 2008. it was in that role that gov. christie drew national attention for his efforts in battling political corruption, corporate crime, contracting and gang violence. he directed his attention to ethics during his tenure and spear headed a number of aggressive investigations against corrupt public officials. and he was able to build an impressive 130 convictions during this time. but what you may not know is

that, like many true new jersey native's, gov. christie is a dedicated bruce springsteen fan. [laughter] to date, he has attended 209 bruce springsteen concert over 36 years. that is a bipartisan issue on which everybody can agree. [laughter] this morning, gov. christie will make open comments and then we will have a moderated discussion led by brookings senior fellow ted gayer. this event is also being webcast and viewers can post comments and ask questions during discussion. please join me in welcoming gov. christie to the broken this institution -- to the brookings institution. [applause]

>> 94 your introduction. thank you for having me here today. two weeks ago, i signed my third balanced budget in a row since becoming governor. it is a budget that increases spending on k-12 education to a record level, $8.8 billion this year. it increases aid for tuition assistance for children who need it to head to college. to support the most will hon., including our veterans, individuals facing disabilities, the working poor, and making a significant downpayment on our pension obligations. in fact, the largest single contribution that any governor has made to our state pension system in its history, $1.1 billion this year. at the same time, i used my

line-item veto authority to veto $360 million in special- interest spending so that our budget this year and fiscal year 2013 has just begun, is still smaller than fiscal year 2008 and 2009 budgets signed by my zine.cessor governor corvin we have pretty good budgetary success. we feel good about it. but one thing that did not happen that should have happened is something we will continue to talk about. we're talking about the tax for middle-class new jersey nets. the president will not propose extending tax relief for middle- class americans. yet, in new jersey, despite promises that we have had for tax cuts to happen, the tax cut was left on the table at the last minute.

let me give you a little background. i started off in my state of the state address in january 2012 advocating for a 10% across the board income tax rate reduction. new jersey has the third highest income-tax rate for any in the nation. we believe that reducing rates across the board would be one of the best ways to make managers more competitive with our neighbors. our tax rates are higher than the state of new york, higher than the state of connecticut and neighboring pennsylvania has a top rate of 3%. when you're competing in the kind of job market that we're all competing in right now, the states are facing competing with each other. basically, that is in two ways than the normal types of services that they provide, infrastructure and higher education. you're really competing on two levels. tax competitiveness, which has two parts to repair what tax

incentives are you willing to give to read their retain companies or attract companies there? and what is the tax environment for that company once it is there, both for them and for their employees who they will be asking to move into their state, if they are locating from one state to new jersey? i think that is why tax reductions are so unimportant in our state and the current environment. it is because we're competing with these other states that have significantly lower rates. and we are not competing well in that regard because of the atmosphere that has been created over years. i advocated for an across-the- board income-tax cut. i have, by the way, a state with a great sense of humor. not just because of native sons like john stuart, but it also because our voters elected a conservative republican governor and retained a democratic

legislature. i think they just wanted to see what would happen. the state senate president came back with a counterproposal, which is an income tax credit of 10% against whatever amount of property taxes you pay in our state up to a cap of $1,000 per taxpayer. there were certain limits and will like it into the weeds about it. but there were some limits put in it as far as income eligibility, etc. as we move along through the spring, i begin conversations with him about finding some ways to compromise to be able to bring a tax-cut package to the people of the state. we came to an agreement. in the late spring of this past year on a 10% income-tax credit that would be capped at folks with income under four and a thousand dollars a year -- $400,000 a year. it would exempt any income they

may on the federal return. and it would apply equally to all those people under $400,000 a year. and we would increase their earned income tax credit from 20% above the federal level to 25%. this would mean that everybody $400,000 a year or under who is the employed in new jersey would get tax relief. and we phased in to be fiscally responsible over three years. so the hit to the budget would not be significant. we had an agreement until normal politics sent back in. and when the senate president went back to his caucus, went over to the assembly, the lower house, they decided that what was much more important was that it is more important for me not be able to go to the republican national convention in tampa and say that i got a tax cut for people of our state than it was

to actually give the people of our state a tax cut. unfortunate, this was a reversion back to politics that has been seen relatively infrequently over the past years in new jersey. so we will i'm looking forward to it. i called them back into special session. they thought they were leaving on june 28. our constitution allows the governor to call the legislature back in for special session. i did on july 2. i gave a speech to lie second about the importance of trying to reach compromise. that making our state more competitive and giving taxpayers relief was extraordinarily important. especially for a speech i have yet -- not yet been invited to give. i have no knowledge if i will be speaking. they are concerned about that.

i offered my hand of compromise. it was slapped back. there are two of chance. number one, hold your breath and say i am not working with these people because they are mean i'm going to send out really nasty press releases. or you can shrug your shoulders and say the job you were given was more important than your ego or the politics of the day. you can continue to try to fighti think the evidence of the last 2.5 years will show you that i have consistently, along with a number of leaders, pick the latter rather than the former. it is important to review that with you so you get context. where was new jersey when i became governor in 2010?

a week into the job my chief of staff came to my office and told me that if we did not cuts $2.2 billion from the current budget of 2010 that we are seven months and to within six weeks that we would not make payroll for the second pay period in march. in new jersey, they would have to get out ious. i do not know how you define broke. but that looked like broke to me from where i sat. we had two choices. we could either negotiate with the legislature. they made clear that it would happen through tax increases, immediate retroactive tax increases, or because new

jersey's constitution is the most powerful constitutionally in america - america's caesar, i really liked that a lot -- i can act by executive order and impound funds. for those of you have watched me either closely or vaguely, if you believe that i picked option number one you did not earn your invitation here this morning. you need to leave. i pick option #2 and 132400 lines of the state budget. i found $2.2 billion in cuts and made them by executive order. i went to the legislature and presented them in a joint session. after i was done the speech was about 40 minutes long.

i went up there. i said you left me with this huge problem. i needed to fix it. you wanted to raise taxes. i am not going to. i just made $2.2 billion in cuts. i fixed your problem. you can think me later. have a good day. i left. you can imagine the atmosphere. i was called all kinds of names like napoleon bonaparte and julius caesar. i admire them so much. the next day i saw the president. he is the senate president. he is the most powerful democrat in the state of new jersey. he is the president of the ironworkers local. like me, a shy and retiring guy. i said i saw all those things

you said about me. you said you really turned me around. i am going to vacate the executive order. that is all you need to know about new jersey politics. he said do not overreact. i did not think you did all that bad. it is politics. we inherited a huge problem. 158 tax increases in the eight years before i became governor. 115 tax increases at the state level in the eight years before i became governor. that is a tax increase ever 25 days for eight years. if you want a definition of how to kill the goose that killed the golden egg look at our economy in the 1980's and 1990's.

we have an unemployment rate over 10%. 155,000 private-sector jobs lost. highest tax burden in the country. highest number of government workers per square mile in the country. all of those things were dropped in our lap only came into office. when you are confronted with that with the democratic legislature you have to make some very specific and difficult choices. we moved into the fiscal year 2011, which had projected deficit of $11 billion on a $29 billion budget. 37% deficit. the largest of any state in the country. there was a call for higher taxes. what we did is proposed a budget that cut every department and state government, everyone without exception.

we have to make significant cuts to close the budget deficit of $111. we did. folks sent me what has become in vogue lately, a millionaire's tax surcharge. you have to understand the history of millionaires' tax. we are the have a millionaire's tax. in new jersey it is special because we have special new jersey math. the tax applies to all individuals or businesses which have over $400,000 in income. that is the millionaires' tax. $400,000 in income. when you're trying to market your state, that raises difficultly. how do you market your state? i would go around saying

listen, come to new jersey. if you are not a millionaire but you want to feel like one come to new jersey. we will tax you like one. [laughter] even tell all your friends ip the millionaires' tax. we already had a millionaire's tax. this proposal was for a surcharge on top of that to raise it to 10.75%. it took place as only below hawaii at that point. in terms of top tax rates. i vetoed that tax increase because i thought it made is not competitive. the senate president came down. i viewed it with the bill.

i said "here it is." they do not call it a tax. maybe people will not read it. i just said wait a second. sit down. i do not want you to waste your time. we went ahead and continue to push for our budget. they said it would be dead on arrival without a tax surcharge. that june with democratic votes, 99.8% of the line items as i presented. i tell you this to set up the idea about what executive leadership can do if you set out your principles but also showed that you are willing to compromise where appropriate. they were testin me in the first six months.

i was a new governor. they have been in charge for a decade. they were the veterans. i was the newcomer. legislatures will always test executives and see how much they can get away with, how far they can push you, are you willing to stand for your principles or are you not? up and fight that you are being obstructionist. that becomes true only if you're unwilling to compromise. the story of new jersey is really broken up into two parts, that first six months and then the two years since then. that first six months they were testing me. in the two years afterward, let me go through with you some of the really bipartisan accomplishments that have been put forward by this governor and the democratic model.

i call them back into special session for the fourth of july weekend. we have the highest property taxes. we needed a real cap. after a lot of negotiation, we passed a 2% cap on property taxes. a hard cap. only three exceptions. it is already working. last year property-tax is rose. only 2.4% is the lowest increase in property taxes in over 20 years. we then moved to reform the arbitration system that drove enormous increases and public sector salaries, up 5% to 7% increase. we created interest arbitration. we capped the amount of money that arbiters could be paid. they had a small amount of time to make a decision. they were capped at 2%. we then moved to deal with the biggest problem i think for any of the state and the country or federal government.

that is entitlement costs. in new jersey that is represented by our pension system and our public-sector health care program. when i became governor our pension system was underfunded by $54 billion. our public sector he care stem was underfunded by $67 billion. that is four years of budgets. september of 2010 i put forward a very straightforward program

on how to deal with pension and benefit reform. it was this. raise the retirement age. increase the contributions made by employees to the pension system. until the funds are solid over the next 30 years , increase the penalties for early retirement. the state would be making its payments to the system. on the health care side most new jersey employees paid nothing for health insurance, zero. these programs run anywhere from $15,000 to $19,000 a year per employee. they got them until they died. we needed to do something there. we could forge a simple task. we said everybody should pay 1/3

to cover the cost of your premiums. that seems to be fair. somewhat in line with what is going on in the private sector. many people would jump at a program like that at the moment. where did i announce this plan? i went to the firefighter convention in new jersey on friday afternoon. it was quite something. 2:00 in the afternoon. i suspect much had been liquid. those firefighters were ready for their governor. they were booing like crazy. i said you can do better than that. they did. i decided to eliminate the speech i was going to give them. i said this. i understand you are angry. you feel betrayed. betrayed is because you have been betrayed

that said they can give you increasing benefits you do not have to pay for. they made you those promises to get you to vote for them. i understand why you're angry and why you felt betrayed. why are you doing the first guy to tell you the truth? there is no political upside to tell you the truth. if we do this program and your pension is there to be collected and you have health insurance you are going to be on the internet looking for my home address to thank me because we did this together. i probably only got 1/3 of the audience to cheer me. it was probably a big deal. i got out of there as quickly as possible. i went to over 30 town hall meetings and campaigned for that plan.

ultimately with thousands of protesters on the front steps of the state house and in the galleys, in a bill sponsored by the senate president, only eight of the 24 democratic members of the senate, only 13 of the 47 assemblies voted yes, those reforms passed in the assembly and and the senate and or sign into law by me and will save over the next 30 years of $132 billion for the taxpayers of new jersey and will return those funds to solvency. it took not just leadership but courage on the part of democratic leaders to move them forward without a majority of the caucuses voting for them. they did it because they knew it was the right thing to do.

that is the environment we have created. it would not have happened if the executive did not lead first. i did not run around a campaign for it. it then would not have happened. executives lead. legislators can be persuaded. this year we have been able to pass a number of important initiatives. i put forward that the war on drugs has been a failure. we are warehousing addicted people every day in prison, giving them no treatment and sending them back out and wondering why the rates go up and why they do not go better. you can certainly make the

argument that no one to try drugs in the first place. i certainly am in that camp but tens of millions of people do. some people can try and walk away from it. for other is the first time they tried they become an addict. they are sick. they need treatment. i said what we need to do is for all first-time non-violent drug offenders, we have to make drug treatment mandatory. if you are pro-like as i am you cannot just be pro-life in the womb. every life is precious. every one of god's creatures can be redeemed. they will not be if we ignore them. i believe that this program which was passed overwhelmingly

by the legislature this year and will be phased in over the next five years will allow every person who comes into the criminal justice system in new jersey with a drug addiction to get a year a mandatory drug treatment in house. i believe the results will show after this is fully implemented. it will be stark. people can be treated. miracles happen every day. lives of mothers and fathers are restored to the heads of their families. sons are restored to their family. we return fabric to our families. to those of you concerned about economics, it costs as $49,000 a year to house a prisoner. a full year of drug treatment cost $24,000 a year. it makes economic sense also. that is just a collateral advantage. the real reason to do it is we

have an obligation to understand that addiction is a disease. we need to get people a chance to overcome that disease and restore dignity and meaning to their lives. that is not a partisan issue. it is a bipartisan issue. we reorganize our higher education system in a way that three previous governors tried in special interest be down every year. i said we have a deadline. if we do not do by july 1 i will never let it happen. the press weighed in and said it was arbitrary. it is rushing. it got done. it would have gotten done if i had not set a july 1 deadline.

bit intimidated the special interest to believe that they could always defeat a legislature and divide them much harder than absolutely committed executives. for the first time in 100 years we have also performed to our teacher tenure laws. new jersey's teachers union is one of the most powerful in america. new jersey's teacher union collects $130 million in dues every year. they do not spend a nickel on teacher salaries or pensions or health care. all of that money is used to support their political operations. they spent for their first two years over $20 million in negative ads against me on the philadelphia television trying to say that my proposals were

anti-teacher and anti-students. we continue to press on. guess what happened in? the teachers union came to the table. we negotiated the tenure law which is over 100 years old, the oldest in the country, and has now been reported to say that teachers get to years of then they lose tenure. we are putting accountability back into the system. test scores must be evaluated for. as well as peer review. now principals and superintendents will have the opportunity to manage their school systems in a way which allow them to put students first. there are not tolerating failure. imagine that. that was accomplished also in a bipartisan way. it took a two.

five-year fight. we accomplished it two weeks ago. i said that the obligation of a governor would find that space between compromising your principles and getting everything you want. boulevardways a between those. that is the boulevard a compromise. sometimes it is narrower. it is always there if you are willing to try to find them. i would not ask anyone to compromise their principles too much. i also have to give everyone an acknowledgement that you do not get everything you want. then you can find and enforce compromise as an executive. i can walk into gum at the same time.

i can fight with democrats publicly and privately over issues of principle where we cannot find a compromise and at the same time hold conversations with them on issues where we can enforce that. this illusion that you see in this town that somehow that cannot happen is just an excuse. it is an excuse a failed leadership. you have to be able to walk into them at the same time. you have to be able to find a compromise. people send us to the jobs to get these things done. are people in new jersey noticing that i say this. the last public poll before election day 2009 and ask that question do you think your state is moving in the right direction, 19% said they thought the state was getting in

the right direction. in the last public poll, 63% believe their states is moving in the right direction. in the same poll only 67%believe our country is moving in the right direction. they are discerning report two different approaches. what i outlined is the new jersey approach. it does not make every day a happy or easy day for sure. the state is getting better. 85,000 new jobs. the best year in home sales in 2012 is 2007. our best job growth year of last year since 2000, we had a decade of joblessness. 2009 we had zero net job growth.

2011 was our best year since 2000. 2012 is outpacing 2011 already. people are noticing. things are happening. in the end, leadership is the only thing that will make the difference. it is the only thing that'll make the difference. leadership is not about obstructionism. leadership is also not about keeping every time you get pushed. leadership is about new ones and communicating to people here is what i stand for. on these issues i will not be moved. on other issues, leaving room

for discussion and accomplishing principled compromise where it can be. that is why i have great respect for them. democrats do not agree on a lot of things. we have worked together. we put the business first and politics second. that is why it is disturbing to idea of tax reduction. the closer we are getting to a presidential election in 2012 and a gubernatorial election in 2013, at the old politics may be creeping back again. that is when it is more important for the executives to fight to continue to find compromise. all too often the leadership positions across the country executives have decided to throw their hands up and say "they are bad. i cannot deal with them." then do not ask for the job.

no one ever told you it was going to be pleasant or easy. the job of an executive is to make sure they you get the job done and you find a way to get the compromise. not on every issue. some it'll be impossible. my experience is more times than not you will find it. i hope new jersey is setting an example. states are seeing more and more of this. hopefully this infection of compromise will eventually spread here. i am not nearly as hopeful about that as i am that it will spread to the other states. we need to continue to talk about it. i am coming to this place, washington d.c., because i want people to know that their

government can work for them. they need leaders willing to take risks. risks with their own parties. let's with the public to vote for them. in the end coming here is my philosophy. pretty blunt and direct. people wonder where that comes from. we all come from our parents. we are all part of our parents whether we like it or not, good or bad. i had an irish father who is 79 years old. if he were here he would be sitting up in the front. he would tell you all about his grandchildren. he would be hugging you at the end of the conversation. on the other hand, i had a sicilian mother. for those of you who have any sicilian relatives you know this is a different kettle of fish.

in the automobile of life, my father was a passenger. my mother was the driver. she set the rules. she was the person who set the tone in roles. she passed away and died of lung cancer. she was a lifetime smoker. at the end of her life my brother called and said she was back in the hospital in great condition. if i wanted to see her, i need to get home right away. i took the red eye and i got to the hospital. when i got there she was sleeping. without saying hello to me, she looked at me and said, what day is it? i said friday. she said what time is it? i said 9:30 a.m. she said, go to work. i said mom i have decided to

take the day off. she said, christopher, it is a work day. you go to work. are you afraid you are not money isyour taxpayers' worth today end? she said, go to work. it is where you belong. there is nothing left unsaid between us. she was giving me permission to let go. it was the last treatment gift she gave me. that was important, not for that moment, but what it said about how she raised us. there should be nothing left unsaid between you and those people you love and trust. you should not wait until the fact that moment to get everything out. you might not make it. you need to tell them when you are happy and when you are angry and when you feel great and when you feel terrible. you need to share everything with the people who trust you. i know that if my mother were

still alive to see the circus my life has become, she would be saying the same thing to me. she would say, chris, these people trusted you with the most important job they give to anybody in new jersey. tell them what you think. tell them how you feel. i think that is what leadership needs to be about, especially in the difficult times we are in today. we should not listen to political operatives whispering in our ears. we should not be listening to those voices that say, just use party doctrine and do not stray. we should tell people how we think and feel and let them judge us up and down. i love this job, but i have plenty of great titles already. i was u.s. attorney. most importantly, husband, father, son. if it means i lose if i choose

to run for reelection, so be it. at least i will be able to tell my children that the time i spent i spend doing something significant. if you go into the voters' booth, you will not say, i wonder who this guy is and what he has to say about -- has to say. i will not \ be a mystery. -- i will not be a mystery. you cannot leave by being aloof. you cannot lead by been programmed. when people trust you, they will follow you. i am happy to take some questions. thank you all very much. [laughter] -- [applause]

>> thank you, governor. thank you for coming to any today. we appreciate your visit. i love being theme of your speech. everybody knows the most pressing problem we face is our fiscal on sustainability. any guidance you can offer? you stated the first job was to set out your principles. i want to talk about taxes. that is where a lot of disagreements come. we know with the republican principles are on federal taxes. we had a compromise a couple of years ago from the simpson- bowles commission. had some pretty good principles. lower marginal tax rates and pay for it by raising capital gains

taxes and dividend taxes and get rid of some of our popular deductions. i am curious what you think republican principles are when it comes to federal taxes? are republicans willing to pay for a marginal reduction in tax rates? >> first of all, i do not think there is one republican condition -- a position. it is a game that partisans in both parties try to play. they do not want things to happen. they want division. i do not agree with every element of simpson-bowles. i think it should have been pursued. it is an absolute mistake in leadership, a lost opportunity, not to push it. there were republican and

democratic votes on that commission. the lowering of marginal rates, the elimination of loopholes, means testing of other deductions, is absolutely acceptable in the current context. we also have to get the spending side as well. that is where we get a democratic opposition. i do not think you can just deal with the tax system to get this under control. you have to deal with entitlements. if we do not deal with entitlements, we are never going to get there no matter what we do with taxes. i agree with many of the general principles laid out in simpson- bowles. lowering the marginal rate on the personal and the corporate side is good, but only in the context of eliminating loopholes and means testing other deductions to make sure you have a system that out race in a fair way.

but it has to be combined with entitlement constraints. if we do not have entitlement constraints we are lost. you talked a little -- >> you talk a little bit about your budget. everyone is talking about the mandate and that it is a tax you can opt out of the medicaid expansion. is this something you have decided thinking about your budget, or is -- or is this a way to help people in new jersey? >> it would -- it will not affect our fiscal 2013 budget. i am glad that the supreme court ruled that extortion is still illegal in america.

obamacare on medicaid is extortion. you expand your program where we tell you. if you do not, we are taking all the best of your money away. that is extortion. there were a whole bunch of nice words in the bill, but that was extortion. as a former prosecutor, extortion is still illegal, even when done by the president of the united states. secondly, in a place like new jersey, we have the second most expensive medicaid program in the country behind new york. our question is going to be, how much do we really need to expand our program? that is the analysis we are going to make. we also have to make an analysis on the exchange issue as well. it could be a state-run exchange or we could let the federal government run the exchange. we have to do what makes it better for the people of our

state and what is most cost effective. now that we have a ruling, we have policy folks working on it to find out what they think given the current state of new jersey's medical system. we have to come to some decision by 2013. we do not have time to plan. i do not know what other new deadlines they may put on us as well. there may be some back and forth from being governor and the administration. >> we have some questions. if you could say your name and make it a question. >> i am not a resident of new jersey. yesterday, on the new jersey turnpike, i thought i might become one. >> sunday in -- sunday in new jersey. >> my question has to do with the federal-state relationship. i was wondering if i could get a

few comments from you. in washington, we tend to see things differently, particularly in areas like education and health care insurance. in some sense, is the federal intrusion into areas that were traditionally state responsibilities helpful or harmful to the state of new jersey? >> i think generally hurtful. on issues like health, the idea that the federal government is going to give a one size fits all health care program and think it is willing to work just as effectively in new jersey as it will in montana -- we know that does not make any sense. from a gut perspective, the health care and -- challenges i face -- 8.8 million people in that size of the land mass with an urban population -- i face

some extraordinarily different health care challenges. this is the arrogance of the federal government. they believe that down here they can craft a program that works for everybody. i just think you have to leave more to the states. medicaid should be block granted. the way i a minister a medicaid program in new jersey is different -- administered a medicaid program in new jersey would be different from the way in barbie -- haley barbour does it or andrew cuomo in new york. they say i will take health care away from children. what makes you think i would do that? what in my record makes you think i would do that. it is a suspicion that drive some of this intrusion.

they have tried to do the pot -- the popular thing to empower states. trying to manage education programs from washington d.c. for schools in new jersey, that is a big challenge. you have to have quite an ego to do that effectively. >> right here on the aisle. >> governor, you mentioned 85,085 -- 85,000 new private- sector employees in your state. there have been massive job losses in the state that has led to higher unemployment in this country. would you support a request by the governors to the u.s. congress that would request additional federal funds so that

states could hire back some of these is essential employees they have been forced to let go? >> no. >> why? >> it is only a temporary ban day. john corzine -- it is only a temporary band aid. i cut $820 million from our k- 12 educational program to balance our budget. that is what we are going to do, federalize the state, he continued to give us these -- this money, we continue to -- we continue to give us this money and we continue to hire people. where is this money coming from?

going to pay these folks afterwards. i do not see it. christie whitman left office in january of 2001. there have been some layoffs in our state at the local level, but i do not think that is a bad thing. it is regrettable when somebody loses a job. do not send me any more money to hire any more public employees. i do not need any more. i have plenty as it is. they are extraordinarily expensive and extraordinarily difficult to manage. the idea that we continue to have to deal with some of these issues because of federal intervention -- the president and the congress wants to spend money to create jobs. they should spend it on infrastructure. cannot spend money on sending me

money to hire more public employees. do something that will have a geometric multiplying effect on the economy if you are going to do it. cannot do that unless you are going to do the other thing that we talked about up here already, which is to deal with the fairness of the tax system and the structure of it and the entitlement programs as well. >> thank you. i write the mitchell report. i want to ask you about two sets of comments you made that seem to flame opinions -- frame opinions on government. you say they are in -- and there are examples around the country.

i do not think you used the word pessimistic. you said you were not necessarily hopeful that that contagion will move in here any time soon. it seems to me it raises the question of rethinking federalism itself and the partnership between the federal government and the states. alice rivlin has written a book about that and there are others who are talking about what steps might be taken, what specific kinds of programs might it be possible for states to take either all responsibility or greater responsibility for so that the federal government can concentrate on doing the things it does best and states can take the lead.

i'm wondering what your thinking is about that and, b, to 20 you have specific thoughts, whether you can share them with us. >> i think we have to have that type of examination. it gets to the point of the question i was answering over here which is do i think that this continued intrusion of the federal government into areas that have traditionally been state are helpful or harmful and i said it was harmful. i think we do have to have that kind of conversation and we have to lower the level of suspicion that sometimes states are going to want to do things that are injurious to their population. we all get elected, too. the fact of the matter is, we're going to want to do things that are generally good for the population in our state and will make people feel good about wanting to live there, work there, raise families there so, yeah, i do think we is should have that conversation. on the specifics, i haven't given it a lot of thought so i don't want to shoot from the hip on that but i think it's worthy of a conversation and i hope it will grow out of a vigorous conversation of simpson bowles because that will force that conversation because in an

era where you're trying to figure out, what are your priorities, because, really, the question you're asking is, what should the priorities of the federal government be and the priorities of the states be and then have them divide responsibilities based upon those priorities and right now we're saying everything's our priority, we're going to do everything. man, if you try to do everything, you'll probably do most of it lousy and it's certainly going to cost you a fortune so let's figure out what are the priorities. seems to me at the federal level you start with the national defense which only the federal government can provide in an effective way and you work from there. and so state responsibility should not continue to be

encroached on by large federal programs which then blur those priorities even more and which we don't have the money to pay for. >> we have time for one more quick question. tracy in the corner. >> hi, i'm tracy gordon with brookings. i also spent time in the other newark. so i think these are very essential and important questions we're talking about right now. i was going to ask a slightly different question but it gets back to this. i think you became governor at the worst time for someone to become governor, first six months of 2010. i wonder about that saying, crisis creating opportunity, and how do you sustain these changes going forward and in any important topic like federalism, how do you sustain that conversation and keep people focused on the problem. >> i feel like it was a much better time to become governor now than i did then. i feel like at the time it was an incredible burden because when you sit down and you're cutting over 2400 lines in the

state budget, every one of those reductions you know, i could see those people in my mind that were going to be affected by it. and that's a heavy burden to carry. and my wife could tell. when we were doing that over a three-week period, we had three meetings per week and they rab four hours per meeting which is about all we could take and my wife could tell without looking at my schedule when i had come home that night that i had had one of those meetings because it was a really difficult time to become governor but you are right, that type of crisis presents opportunities because everyone knows that we have limited choices now. all the gimmicks have been played. all the games have been played in new jersey. we have bonded our tobacco money. we had worried for ongoing spending.

every trick in the book that could be played -- extend the debt from 20 years to 30 years to balloon payments to every game and you were left with no games left in the playbook to use so you had to actually make difficult choices. the sustainability of those is, i think, the possibility of the sustainability is embodied in that right direction number i told you. like what the special interests will attempt to do when you make those tough choices to say this is the end of the world as we know it, he's throwing grandma off the cliff, you know, your children are not going to be able to learn. you will not be able to get into a hospital. the roads will be caving in, the bridges will be collapsing and there's 30-second ads for all this stuff. what they've seen in new jersey now over the last 2 1/2 years is sun's still coming up every morning, kids are still going to school, test scores are pretty good in a lot of the

school districts. the roads could be better but they're not awful, bridges are being repaired. we're doing the things government needs to do and we're doing it with less employees than we've done it with since 2001. we've amended the pension and benefit program and no one's visibly suffering from that. would people liking to have more money? sure they would. but i can't justify any longer to the union carpenter who's been out of work for two years that he's trying to keep his house, his property taxes continue to go up because i'm paying 5% raises for teachers. i can't justify it anymore and neither can the union carpenter so the divide you see in our country in one respect is the divide between the private sector union movement and the public sector union movement and the private sector union movement which is dependent

upon a vibrant private sector economy to put their people back to work during a down time like this is saying how can my people survive and how which when our pensions go down we have to put more money in but the public sector workers don't. how come when my healthcare costs go up, i have to put more money in but the public sector workers don't. this is an issue of fairness. you see the sustainability of these changes lie in their common sense and fairness. not doesn't mean they're hard and it doesn't mean they're not painful because they are. but they're also fair and they make sense and so people are willing to accept that in the context of shared sacrifice and so new jersey we have an extraordinarily progressive income tax code where the top 1% pays 41% of the income tax so it's not like people are saying someone's getting away with something.

when the top 1% pays 40% of the tax, that's where you get sustainability. the last piece of getting sustainability is the last piece i talked about using the example of my mom. you have to talk honestly to people approximate it. you can't say to them don't worry, it's not going to hurt, it's going to be fine. you have to say, this is going to stink, it's going to hurt, we're all going to hurt, we're going to hurt together but in the end we'll have a better day at the end of it. i don't know how long it will take but it's going to get there. and i think that's the other thing that sustains it is the candor with people where you're not trying to protect your own rear end all the time in elected office. we have too many elected officials who are obsessed with

re-election and they're willing to do anything to keep their job. personnot the kind of you want in the executive position or any position for that matter but certainly in an executive position right now given the challenges our country faces. beware of the person who will do anything to get re-elected because that means they'll do anything to get re-elect and it won't matter what the long term is. i had somebody tell me when i was talking about these pension changes, why do you want to do this? it was a friend. i said because the pension system will go bankrupt by 2018 and he said chris if you're elected two terms, you're out in 2017. let the next guy deal with it. that'sthe mentality crept into political consulting and the politics of it. onit's not going to blowup my watch, let it go.

only deal with the things that are going to blow up on my watch. that's what's gotten us to this spot and the next explosion that's coming will be difficult to contain on the federal level if we don't deal with these issues. people say europe, look at europe. forget europe. europe will be a picnic compared to what will happen here because the entire world depends upon this economy. we start going in that direction, then the ramifications for the entire world are going to be graver than anything we're seeing in europe right now in my view so the sustainability is to say that to people and to say it from behind podiums like this. to look at people and say you know, guess what, social security, we're going to have to raise the retirement age. listen, like i said, i was at aei a year ago and i said listen, social security, have to raise retirement age and i haven't been vaporized into the carpeting, i'm still here. we need to be hon best these things. we need to look at wealthy

people and say some of these benefits need to be means tested. i know you paid into these benefits, guess what, we can't afford it, sorry, you got screwed, it happened. you have to say this stuff to people and if you're unwilling to say it in my view you're not worthy of having the position and you certainly can't call yourself a leader. leader is not just somebody who is whistling a happy tune at the front of the parade. sometimes that's part of your job but the grunt work is part of your job, too, and you have to sustain the reforms you're putting in place. you have to sell them to people in a way they can believe, it becomes a part of who they are. then they'll support you and they kick you out of office, they kick you out of office. seems to me it's not the end of the world. for some people maybe it is but we should keep them out of office.

that was a long answer. >> thanks for your honest and invigorating comments. this was a great start of the week for us. thank you for coming. [applause] >> hitler had no plan. when he realized these armies or remnants of armies were not coming to his aird -- aid, that is when he collapsed. it was only a question of suicide. >> anthony beevor, the dark, chaotic days of hitler. >> his main objective was not to

be captured alive by the russians. he was afraid of being marched through moscow in a cage. he was determined to die and eva braun was determined to die with him. >> next, we are going to show you two speeches from last week's aa cp annual convention. first, from -- naacp convention. mitt romney tells the crowd he will be a president that makes things better for the african american community. >> thank you. thank you.

>> i do love that music. and the piano. hearing sweet hour of prayer wonderful thing. good morning. and thank you for the generous introduction. thank you for the opportunity to be here this morning. and for your hospitality. this is an honor to address here and when i value very highly. i appreciate the chance to speak first even before the vice president. i just hope the obama campaign does not think you are playing favorites. now, you all know something about my background. maybe you wonder how any republican can ever become governor of massachusetts and the first place. when you are in a state with

11% republican registration, you do not get there by just talking to republicans. you have to make your case to every single voter. we do not count anybody out. we do not make a habit of presuming anybody's support. support is ask for and earned. with 90% of african-americans typically vote for democrats, some may wonder why a republican may bother to campaign in the african-american community. one reason is that i hope to represent all americans of every race, creed, sexual orientation. from the poorest to the richest and everyone in between. there is another reason. i believe that if you understood who i truly am in my heart and if it were possible to communicate what i believe is in the best interest of african-american families, you would vote for me for president.

i want you to know if i did not believe my pollard -- policies would help families of color more than the policies and leadership of president obama, i would not be running or president. the opposition charges that i and people of my party are running for office to help the rich. nonsense. the rich will do just fine weather i am elected or not. the president wants to make this campaign about blaming the rich and i want this to be about helping the middle class in america. i am running for president because i know that my policies and vision will help millions of middle-class americans of all races. it will lift people from poverty and will help prevent people from becoming pour in the first place.

my campaign is about helping the people who need help. the president will not do that. my course will. when president obama called to congratulate me on becoming the republican nominee, he said that he looked forward to an important and healthy debate about american oppose the future. i am afraid his campaign has taken a different course than that. at campaigns and their best, voters can expect a clear choice. with that hope the debate about the course of the nation that i want to discuss with you today. somebody had told us in the 1950's or 1960's that a black citizen would serve as the 44th president of the united states, we would have been proud and

many would have been surprised. we might have assumed the presidency would be the last door of opportunity to be opened. before that came to pass every other barrier in the path to equal opportunity wycherley have to have come now. it has not happen quite that way. many barriers remain. in some ways the challenges are more complicated than before. across america and within your own ranks, there is serious debate about the way forward. if equal opportunity were it and accomplished fact, then a bad economy would be equal for everyone. instead is worse for african- americans and almost every way. in june while the overall

unemployment rate remained stuck at 8.2%, the unemployment rate for african-americans actually went up from 13% to 14.4%. americans of every backgrounder asking when the economy will finally recover. you in particular are entitled to an answer. if equal opportunity -- [applause] if equal opportunity in america were an accomplished fact, black families could send their sons and daughters to public schools that are for the hope of a better life. instead for generations the african-american community has been waiting for the promise to be kept. today black children are 17% of students nationwide. they are 42% of the students at our worst performing schools. our society sends them into mediocre schools and expects them to perform with excellence.

that is simply not fair. frederick douglass observed "it is easier to build strong children than to repair broken men." [applause] yet instead of preparing the children for life, too many schools set them up for failure. everybody in this room knows that we owe them better than that. the path of any quality often leads to a lost opportunity, college, graduate school, and first jobs should be the milestones marking the passage from childhood to adulthood. for too many disadvantaged young people these goals seem unattainable. the lives take a tragic turn. many live in neighborhoods filled with violence and fear and nt opportunity. they're impatient for change is understandable.

america should be better than this. they are told even now to wait for improvements in our economy and in our schools. it seems to me these americans have waited long enough. [applause] the point is that when decades of the same promises keep producing the same failures, it is reasonable to rethink our approach to consider a new plan. i am hopeful that together we can set a new direction policy starting with where many of our problems to start, with the family. a study has shown for those who graduate from high school and get a full-time job and wait until 21 to marry and then have their first child, the probability of becoming pour is 2%. of those factors are absent, the probability of being poor

is 76%. here you understand the deep and lasting difference that family makes. your former executive director had it exactly right. the family he said "remains the bulwark and mainstay of the community. that should not be overlooked. any policy that up was the family is going to be good for the country. that must be our goal. i will defend traditional marriage. [applause] would you may have heard, i also believe in the free enterprise system. i believe it can bring change

were so many well-meaning programs fail. i never heard anyone look around and an impoverished neighborhood and said, there is too much free enterprise in this neighborhood. what you hear is, how do we bring in jobs? how do we make good honest employers want to move in, stay in? with the shape the economy is in today, we are asking that question more and more. free enterprise is still the greatest force for upward mobility, economic security, and the expansion of the middle class. we have seen in recent years what it is like to have less free enterprise. i will show the good things that can happen when we have more free enterprise, more business activity, more jobs, more pay checks, more savings accounts. on day one i will begin turning this economy around with a plan for the middle-class. i do not just mean for those who are middle class now. i mean for those who have waited for so long to join the middle class.

[applause] and by the way, i know what it takes to put people to work to bring more jobs and better wages. my plan is based on 25 years of success in business. it is a job recovery plan. it has five key steps. first, i will take full advantage of our energy resources. i will approve the keystone pipeline from canada. low-cost, plentiful coal, natural gas, oil, and renewals will bring over 1 million manufacturing jobs back to the united states. [applause] second, i want to open up new markets for american goods. we are the most productive major economy in the world. trade means good jobs for americans.

trade has to be fair and free. i will clampdown on cheaters like china and make sure they play by the rules and do not steal our jobs. [applause] third, i will reduce government spending. i hope everyone understands high levels of debt slows down the rate of growth of the gdp -- of the economy. that means fewer jobs are created. if our goal is jobs, we have to stop spending over one trillion dollars more than we take in every year. [applause] to do that i will eliminate every non-essential expensive program i can find. that includes obamacare. i will work to reform -- [boos]

you know, there was a survey of the chamber of commerce. they carried out a survey of their members -- about 1500 surveyed. they ask them what affect obamacare what have on their plans. three-quarters of them said it made them less likely to hire more people. if our priority is jobs -- that is my priority. that is something i would change. i would replace it with something that helps people with lower costs, good quality, the capacity to deal with people who have pre-existing conditions -- i will put that in place. i will work to reform and save medicare and social security. people keep talking about that those programs are on the pathway to insolvency and nothing gets done to fix them. i will fix them and make sure they are permanent and secure for seniors today and seniors tomorrow.

i would do that by means testing the benefits. higher benefits for lower income people and lower benefits for high income people. [applause] i will focus on nurturing and developing skilled workers that our economy so desperately needs today and the future demands. this is the human capital with which tamara's bright feature can be built. by the way, too many homes and schools are failing to provide children with skills and education essential for anything more than a minimum- wage job. [applause] finally and perhaps most importantly, i will restore economic freedom. this nation's economy runs on freedom. on opportunity and on to per newers, dreamers to innovate and bill businesses. they are being crushed by high

taxation, unnecessary burden some regulations, hostile regulators, excessive health care costs, and destructive labor policies. i will go to work to make america the best place in the world for innovators,s open up energy, expand trade, cut the growth of government, focus on better educating tomorrow's workers today, and restore economic freedom and the jobs will come back to america. wages will rise again. we have to do it. [applause] i know the president will say he is going to do those things but he has not, he will not, and he cannot. his last four years in the white house prove it definitively. if i am president, a job one for me will be creating jobs.

let me say that again. my agenda is not to put employs a series of policies that give me a lot of attention and applause. my policy will be to create jobs for the american people. i do not have a hidden agenda. [applause] i submit to you this. if he won a president who will make things better in the african-american community, you are looking at him. you take a look. finally, i will address the inequality in our education system. i know something about this from my time as governor. in the years before i took office, our state leaders came together to pass bipartisan measures that were making a difference. and reading and math are students were already among the best in the nation. during my term the took over the top spot. it revealed what good teachers

can do if the system will let them. the problem was, this success was not shared. a significant achievement gap remained between different races. i promoted math and science excellence in schools and proposed paying bonuses to our best teachers. i refuse to weaken testing standards and raise them to graduate from high school in massachusetts, students now had to pass an exam in math and english. i added a science requirement as well. i put in place a merit scholarship for all those students who excelled. the top 25% of students in each high school in massachusetts were awarded a john and abigail adams scholarship, four years' tuition free at any massachusetts public institution of higher learning. [applause]

when i was governor not only did our test scores improved, we narrowed the achievement gap. teacher unions were not happy with a number of these reforms. they did not like our emphasis on joyce three charter schools, which is a great benefit to inner-city kids trapped at underperforming schools. as you know in boston and harlem and los angeles and across the country, charter schools are giving children a chance -- children who otherwise could be locked in failing schools. i was inspired by a kid in philadelphia. right here in houston is another remarkable story. these charter schools are doing a lot more than closing the achievement gap, they are bringing hope and a real opportunity to places where for years there has been none. charter schools are so successful that almost every politician can find something

good to say about them. as we saw in massachusetts, true reform requires much more than talk. as governor, i vetoed the bill blocking charter schools. my legislature was 87% democrat and a veto could have easily been overwritten. i joined with the black legislative caucus and their votes helped preserve my veto which meant new charter schools including some in urban neighborhoods would be opened. [applause] when it comes to education reform, candidates cannot have it both ways. talking up education reform while indulging the same groups that are blocking reform.

you can be the voice of disadvantage public-school students, or you can be the protector of special interests like the teacher unions. you cannot be both. i made my choice. as president i will be a champion of real education reform in america and i will not let the special interests get in the way. [applause] i will give the parents of every low-income and special needs students the chance to choose where their kids go to school. for the first time in history if i am president, federal education funds will be linked to a student so kids can -- parents can send their kid to any school they choose. i will make that a true choice. i will ensure there are good options available for every child. should i be elected president, i will lead as i did when i was governor.

i am pleased to be joined by the rev. jeffrey brown who was a member of my kitchen cabinets and massachusetts. i will look for support wherever there is good will and share conviction. i will work with the to help our children attend better schools and help our economy create good jobs with better wages. i cannot promise you i will agree on every issue, but i do promise your hospitality to me today will be returned. we will know one another. [applause] we will work a common purpose. i will seek your counsel. if i am elected president, if you invite me to next year pose a convention, i would count it as a privilege and my answer will be yes. [applause]

you know, the republican party's record by the measures you rightly apply is not perfect. any party that claims a perfect record is not no history the way you know it. always in both parties there have the men and women of integrity, decency, and humility who have called justice by its name. for everyone of us, a particular person comes to mind. somebody to set a standard of conduct and as better by their example. for me that man is my father, george romney. [applause] it was not just that my dad helped write the civil rights provision for the michigan constitution, although he did. it was not just that he helped

create michigan's first civil rights commission or that as governor he marched for civil rights on the streets of detroit, although he did those things, too. more than these acts, he was the kind of man he was and the way he dealt with every person black or white. he was a man of the fairest instincts and a man of faith to do every person was a child of god. [applause] i am grateful to him for so many things. above all, for the knowledge of god whose ways are not always our ways, but his justice is certain and his mercy in doris forever. -- endures forever. [applause] every good cause on this earth relies on a plan bigger than ours. without dependence on god, dr.

king that said, our efforts turned to ashes and our sun rises in the dark night. unless his spirit pervades our lives we find only cures that do not cure, blessings that do not less, and solutions that do not solve. of all that you bring to the work of today's civil rights cause, no advantage accounts for more than the abiding confidence in the name above every name. against cruelty, arrogance, and all the foolishness of man, this spirit has carried the naacp to many victories. or still are up ahead. [applause] so many victories are ahead. with each one of them, we will be a better nation. thank you so much. god bless every one of you.

thank you. [applause] ♪ >> the day following mitt romney's address to naacp, vice president joe biden called on the group to support president obama's election. he talked about the difference between romney and the president on health care and education. this is half an hour.

>> it is my great honor to introduce to you a friend of naacp. [applause] at the age of 29, he became one of the youngest people ever elected to the united states senate. our speaker commuted from washington delaware by train every day. he was reelected to the senate six times. [applause]

as a senator from delaware, he has established himself as a leader of some of our nation's most important domestic and international challenges. now serving as the 47 vice president -- 47th vice president, joe biden continues to provide leadership to our nation on the important issues. of relevant issue -- interest to this audience, joe biden was an outstanding high school athletes who participate in an anti segregation sit-in. he is married to dr. jill biden. they have three children and five grandchildren.

join me in providing a warm, family welcome to the vice- president of the united states of america. joseph r. biden . [applause] >> hello. thank you very much. you know what they say, flattery is ok as long as you do not inhale. you keep this up i will start inhaling. it is good to be home, it is good to be back. ladies and gentlemen, madam chair, as we used to say that in the senate, to excuse a point of personal privilege, where is delaware? hey, delaware!

i'm a lifetime member of the naacp. they brung me to the dance. i was educated, and i went to the battle with mouse. hey, mouse, how are you doing, man? mouse and i go back a long way. mouse got my back a bunch of times. it is so good to be with you all.

i want to thank you all for your leadership and for your friendship, and, again, personally, for your loyalty. it is not an exaggeration. were it not for the leadership of the naacp, the men and women who educated me when we would sit over in reverend wright's churches -- remember, mouse, those days? i learned so much and i owe so much. ladies and gentlemen, this is not about me. this is about another office. this is about the presidency. this is about -- this is about --