of people who were eligible before will be covered under expansion. states should expect to cover at least 20% of the costs of covering the expansion population. while there are certainly health benefits and other societal benefits to cover in the uninsured under medicaid, the argument that it would be a cost saver is not persuasive. one other economic arguments made host: expanding medicaid will help increase economic activity within the state and generate new jobs. guest: i don't disagree with the fact that if a state participates you will be bringing more dollars into states. but adopting that as an economic growth strategy strikes me as very misguided. we are already facing a rate of health care cost growth that is

untenable. we should not be basing our economic growth strategy on fueling higher cross -- cost growth in the healthcare specter. i think we would be in trouble if we were doing anything other than to try to slow the growth of our health care costs rather than trying to feel additional healthcare consumption. host:? and from new york is next on the independent line. preston, you are on the air. caller: i think you are missing a huge part of the picture. we are talking so much about how to pay for medicare and medicaid, the old healthcare thing, what percentage will states pick up, no one is talking about why it is so expensive. we spend a larger part of our gdp than any other country in the world on healthcare.

i'm reminded of this conference of article recently in "time" magazine called bitter pill. you can get it online. it is about the cost of health. can you address that? guest: i agree with the caller that's an incredibly important question is what do we do with the overall increase in healthcare costs because clearly they are growing. my paper was not designed to study that question. my paper was not designed to study the merits of healthcare reform at all. i was narrowly focused on trying to evaluating incentives facing the states, the position the states are in as a result of the law being passed eric -- past. having said that, i think there is a lot that people miss with respect to the drivers of healthcare cost. i think part of this reflects

the fact that our body politic is reluctant to accept certain realities of the academic literature. finkelstein's research demonstrated that one of the big drivers of healthcare cost inflation was the rapid expansion of federally subsidized insurance in the 1960's to medicare and medicaid. the provision of federally subsidized insurance is a big driver of health service consumption and puts a lot of upward pressure on costs. there of another academic studies. one basically look at the factors throughout countries that drive health inflation. one of the big factors is the rate of growth of government provided health care services. if we are with ourselves, we have to recognize that one of the big drivers of healthcare cost inflation is the extent to

which the federal government is subsidizing healthcare through various means. it will be difficult for us to get that under control and must we go back and take a realistic look at the growth of federal subsidization. host: a couple of questions have come up on twitter about the problem of medicare fraud. how big is the problem of medicare fraud? guest: there have been some recent stories of medicare fraud. it is definitely an ongoing problem, as it is with any federal program. i generally tend to say there is a continuum of fraud practices between the various federal programs. the lowest rates of fraud and abuse would be in a program like social security, which is comparatively quite efficient and few of the payments that go out the door do others in -- do

anything other than what they are intended to do. when you bring in more third- party processes like you do in medicare and medicaid, you have more of a potential for fraud. in medicaid or medicare, particularly medicaid, you will see more emphasis of fraud then you will see and social security. with social security, i think we should be very pleased by how well it runs. we could have arguments with the policy and whether we are making benefits to the right people, but i think the benefits are high. we need to do better with medicare and medicaid. host: i want to go out to california, one of the states that is participating in the medicaid expansion. on the democratic line. caller: good morning. a few minutes ago, your role as a trustee, you mentioned that it is your opinion is that social security is not quite as

stable and sustainable as others. one of the others is a regular guest on here, senator sanders. i've heard him and others say that social security is stable and is not a problem or a drag on our debt or deficit. could you compare the two points of view? guest: i am happy to. i write a lot about this. let me say before i begin speaking that if you line up 10 experts and ask them how severe is the social security financing problem, i will probably be among be one or two experts that believe it is more severe than the other eight or nine. i'm not in the middle. let me lay out why i believe i am right. first, the social security shortfall or is larger than it is for medicare. medicare is a bigger problem

for the general federal budget, but the size and changes we have to make in the social security in order to keep it a program it is much greater than it is. a lot of people do not realize that even though we consider and expect medicare to be the bigger driver of cost down the line, over the past few years, social security costs have grown more rapidly. they burn in the aggregate and in the first time for the obama administration. it grew faster than medicare. the current social security shortfall is larger than at any point it has been since before the major 1983 social security reforms. if you compare social security 's current shortfall to the one we faced in 1983, it is about twice as large now i might even relative to the size of our tax base. what does that mean? if you like and look at the

political high water marks of what our political system can achieve to keep social security going, we are now twice as far past that. in order to fix social security , the left would have to agree to twice as much a benefit restraints, the right would have to agree to twice as much in tax increases. the problem is getting worse very rapidly. we are in uncharted waters. there is no precedent for fixing a social security shortfall the size we now face. while it is possible on paper to draw up a solution to social security's problems, whether our lyrical system is willing to -- political system is willing to face it is very much an open question. each fasting -- passing year will be less likely that we can a cop with that. host: dan in new hampshire on the republican line. caller: good morning. i have been on insurance agent for over 20 years.

i have looked at this from all angles. i am a firm believer in health saving accounts. i have been doing hsa's four years. the incentive of making people spend their own money and having interest in how healthcare dollars are spent -- we have a third-party system in this country. employers, medicare, medicaid. there is no incentive for the individual -- if they are not spending their own dollars, they will not be as conscientious when they are spending somebody else's. we live in a society with huge numbers of lawsuits. there are some money lawsuits, defensive medicine and spending billions of dollars per we are living longer, we have the best technology. medicaid and medicare, medicaid in particular, what incentives do we have to move people off medicaid?

what incentives are these folks going to have to not over utilize the system? what approach can we have where people have incentive to make smarter decisions on how they seek services, seek their healthcare? we need more transparency in the system. we do not have enough. you cannot walk into a doctor's office and find out what things cost. nobody can tell you. we need to more incentivize the whole system for everybody so people know what these things are, what it is costing us. i would like him to address these questions. thank you. host: new hampshire is one of those states that has said it will be designating in this medicaid expansion. guest: my sentiments are much like the caller's and some respect. a deep problem is that there is not enough conscious is on the part of the. so you do not have the normal

market forces that rein in the growth of cost. in response to the question as to what are we doing to increase the incentive -- i am pessimistic. we are not moving in the right direction. the bigger effect of third- party provided insurance is to a greater extent to shield people from the financial consequences of their healthcare purchasing decisions. by expanding health coverage as much as we will be doing under the hca, it may have humanitarian benefits, but whether it leads to a cost- conscious system where the individual consumers become more cost-conscious, i do not think we are moving in that direction. one final point, it is important to keep in mind the separation between the question of services which people are likely to be cost-conscious and services where people are not likely to be cost-conscious. if you have an emergency or you have some catastrophic illness, invents, and you have to have

it dealt with, it is probably asking too much to expect that individual to say that through an hsa. if you look at the way many hsa plans are constructed, it is a basic plan to handle the could start -- catastrophic events. i think the potential for cost consciousness is greater with respect to the other, routine healthcare rather than with these catastrophic events. it is a way to create greater consumer accountability. i would be in favor of it. host: sheri from clearwater, florida. caller: am i on now you g> ? -- am i on now?

acupuncture, has been around since india, herbs, which have been in the bible. doctors do not have all the answers. there are too many misdiagnosing and under diagnosing. there is too much reliance on expensive technology and prescriptions for pharmaceuticals that cost so much money and have so many side effects, and they may only be 26% effective. plus i have often heard medical suppliers laugh at how much the -- how much money they are making overcharging. we have so much waste and corruption am a and the quality of our healthcare is so poor. guest: first, the caller is right. technology is a big driver of cost growth. we have tended to adopt a new technology that costs twice as

much, even if it is only 5% more effective. that has been a driver of cost growth in the system overall. i think the academic literature -- one place there is broad agreement is the historical role in technology advancement and driving the overall cost. on the second point about what thirds of -- what sorts of care services we allow for, this is one of the things that the inevitable byproducts of having the government involved to such a large extent with providing insurance through programs like medicaid and medicare because once you do that, the government has to make a decision as to what it is going to cover and not cover. it is inevitable that there is going to be places where the government says, if you are on your own, you could buy such and such service, but the federal government won't choose to separate -- subsidize that through a federal program.

host: florida is a place where governor rick scott, a republican, is trying to get expansion of medicaid to happen. i want to get you to respond to a same and he made in his state of the state address this week, according to a "politico" story. he said "our options are either having from -- floridians pay to fund these programs in other states while denying healthcare to our citizens or using federal funding to help some of the poorest in our state. i conclude that the federal government is committed to paying 100% of the cost for new people on medicaid. i cannot in good conscience deny the uninsured access to care." guest: he has deftly articulated one of the benefits the states are facing. you have the potential to have additional healthcare benefits financed by other people. we are all federal taxpayers, so we will all be paying for the larger medicaid expansion whether or not our state

dissipates. the other side to that argument is what is the condition of the state budget? that is a matter for the florida legislature to deal with. but there will be costs for the state involved with the expansion. they have to decide, and apparently they have, whether the health benefits justify the cost. host: thank you for coming in today. guest: thank you. host: up next, our america by the numbers segment in which we will focus on your daily commute to work. we will be right back. ♪

>> abigail letters have been in print and she has been ready since the 18 40's when her grandson first publish an edition of her letters, which went through four, in the 1840's. she was a bestseller through the 19th century. she has always been famous. >> our conversation with historians about abigail adams is now available on our website, c-span.org/firstladies. >> the united states patent and

trademark office is one of the few federal agencies that actually is designated to exist in the constitution. patents and trademarks are a fairly modern invention. the first patents were actually royal grants given to inventors for monopolies on of their inventions. they were popular in england and continental europe. but because edition takes it one step further. this is for useful inventions, and from the beginning of a novelty was a key aspect of the patent office's role. you will notice that every one of the models have a little tag with it. each of the tags is tight on by a piece of red ribbon. this little piece of red ribbon is one of the supposedly originations of the phrase "red tape." government red tape. so it is hard to tell that this is originally red ribbon that

each one of these was tight on. it was not until the was tight on and the patent was approved that you would cut through all the red tape. originally, patent models were required to show the operation of an item. so each one of these models works in the way that a full- scale version would work. >> this week and on american history tv, tour the national inventors and museum on american artifacts, sunday at seven: -- at 7:00 eastern on c-span 3. >> "the washington journal" continues. host: we look at a new report from the census bureau on american workers commute. we are joined by dr. robert mckenzie of the census bureau and robert puentes, a senior fellow at the brooke -- brookings institute.

dr. mckenzie, how long is it taking the average worker to get to work these days, and how has that changed? guest: the u.s. census bureau asked abel how we get to work here it we asked how long it takes them to get there, how they get there and where they work. this is all collected in the american communities survey. it highlights more than a quarter of all workers working in a county that is different from where they live. the average travel time is about 25 minutes, and this has not changed as much over the last decade. if you're highlights here -- a few more highlights here -- more than 75% of workers get to work by automobile. but this has changed very slightly over the last decade. it has gone down by about 2%. host: folks at home can follow along with these numbers and charts on our facebook page.

you can see on our facebook page at facebook.com/cspan. we want to take your questions in this phase -- segment. we want to hear about your commute and how long it takes you to get to work. urban commuters can call 202- 585-3880. suburban, 202-585-3881. rural, 202-585-3882. if you work from home, 202-585- 3883. those numbers are on the screen. mr. puentes, take us through these numbers that are collected by the census bureau. how are they used to influence policy or talk about policy on transportation and infrastructure? guest: these numbers really matter. when you look at the u.s. economy, we do not just have one national economy. we have 360 something

metropolitan economies. these places matter. these metropolitans are made up largely of commuting paths. that shows economic connections between a u.s. county. there is a cohesiveness that exists. the numbers really matter for looking at metro areas. but when you think about what we are trying to do now as a nation, trying to recover the economy, trying to create more jobs, we know we need more jobs, we need better jobs. we also need to make sure that those jobs are accessible to people. it is no good to have jobs all over the place that people aren't able to get to. these numbers directly tie in to the conversations about where we are creating jobs, what kind are creating and who they are for. those things matter. with commuting, there are trans

rotation policy communications. 4/5 of the trip are something else, but because they're highly concentrated in the morning and evening commutes, that is a lot of trans -- the restaurant he transportation network. it really matters for transportation policy and planning. host: dr. brian mckenzie, talk about how people are getting to work these days. are we still a car bound country? guest: absolutely. the vast majority of workers get to work by automobile. about 86% of workers, those who drove alone and carpal, get to work by automobile. only about 5% use transit at the national level. host: so this use of cars in the chart here that shows 86% car,

truck and van use, this is a number that goes down for folks who have a mega commutes, as he would discredit. these are folks who have commutes of 90 minutes or longer to work. guest: we do see a relationship between transit uses and average travel time. people who get to work by transit on average do have a longer commute than those who drive alone or carpool. but it is difficult to disentangle these two factors. it is not necessarily a direct linear relationship. transit users are highly concentrated in places like new york, d.c., chicago, laces that have long average travel times. it may be overly simplistic to sibley say that transit equals long travel time during that is how i think is often perceived. host: we want to hear your

stories about how you get to work. if you have a particularly long commute, here are the census bureau's numbers. 60 minutes and 90 minutes or longer for those who have a fixed a minute or longer commute, it is about 8.1% of commuters. those with a 90 minute or longer commute in 2011 with 2.5%. .- was .2.5% these numbers seem stable over time. guest: that is right. and maybe even contrary to popular perception about how our commuting times have changed. we have not seen a lot of variation across recent decades. since the 2000's. the average travel time in 1990 was 22 minutes. it has dried up -- jumped up slightly by three minutes. it has hovered around the 25 minute mark ever since. even the long commutes of an

hour or more, it has remained about 8% since 2000. host: mr. puentes, your thoughts on these numbers staying relatively stable, even as we see gasoline prices jump up and drop down and spike over the years. why don't you think these numbers are being affected by gas spikes? guest: we are going through some dramatically dynamic changes in the country. we are still a growing population. we are heavily urbanizing, moving into metropolitan areas. some different -- demographic changes are disrupting the moment in american life. the fact that these numbers have stayed relatively constant is interesting. how long they want to travel by car to get to work. we know that there will be slight increases in things like transit use, and mode like walking and biking.

there are these interesting trends that are happening in metropolitan areas, moving back into center city's in some cases. maybe that is changing some of the ways that people get to work and changing these commuting times. at the same time, we know that we are still experiencing decentralization of jobs and residential life within metropolitan areas. we have been doing work looking at transit use and how transit commuters are getting to work or whether they can get to work. looking across the 100 largest metropolitan areas, we found that about 7% of residents live in areas close to transit. so they can get to a bus or rail line. you get -- but getting to a job in 90 minutes is where we have a problem. these jobs are scattered, particularly service jobs are out of the suburban friends. so even though so many have access to transit, within 90 minutes you can only get to about 30% of jobs.

there is a disconnect between where people live and where people work. host: again, we are talking to robert puentes, the brooking brs institute senior fellow, and brian mckenzie is the journey to work and migration statistics analyst. let's take a taller --caller. bob, what are your thoughts? caller: i used to travel 59 miles back and forth. i mean, one way. 59 miles. i moved to the country, and i'm sure other people have, because they were tired of the gang problem in the suburbs and city. they are talking about gun control, which is another issue i know we don't want to get into here, but it upsets me that they want to take things away

from the people, and the people are moving out farther and farther to get away. host: was it a quality-of-life issue, even if you had to had a -- you have a long commute? caller: ethically. i enjoy living in the country. my closest neighbor is a quarter-mile a way. aroundgone, everybody here watches for everybody else's property. we just don't have the crime like they do in the city. i am going to touch on the gun- control issue because that is part of the reason that people are leaving the city is because of the gangs. you cannot take the guns away from people because you have to draw the line in the sand somewhere. host: dr. mckenzie, when you did this survey for the census bureau, did you ask folks to give you reasons for why they

do these mega commutes that you are talking about? guest: no, the census bureau simply collects information on how long they travel, how they get to work. we do not necessarily get into why they have made the commuting decisions that they have made. this is his bureau -- we tend to ask the what not the why, i guess you'd say. host: so that is maybe for the brookings institute to give us the why. guest: safety is certainly a reason people choose where they live and work. when you think about safety, getting to your car is not may be the thing we can do. we still have an tolerable level -- on an tolerable level of -- an intolerable level of crime and death on the roadways. when you think about moving out of the country and getting into the car's to drive further and

further to where they have to go makes it safer. host: a tweet from robert -- he says the car is king, nobody wants to take the bus to work. i want to go to charlie from florida, a rural commuter. caller: here is an observation. the implication that we are better off with something called light rail or rail services. to handle this commuting. i was in washington in 2009. i left law group florida -- rural florida, and i thought the best transportation system that money could buy, and that is the train system and express buses that take people from the suburbs into the city to work, but also they had a localized bus service that ran all day, so it presented not have to have any kind of private transportation. when i thought myself going through the tour sites, this

localized bus had almost no writers during the day, and we were out all day getting our money's worth. in the train system when we left washington to the airport, as we came over the highway, it was packed with cars, stopped traffic at 4:00 p.m., people commuting from work, and the train is packed, but the roadway is packed. my point is, all of that public transportation of buses and a train did not stop the terrible congestion on the highways. so in florida here, there is a lot of movement of interest groups to try to build a localized train service, i thought in washington the best funded and the best in place a system of all of those factors -- it did not work at rush hour. host: mr. mcentee, the numbers here showing transit usage -- mr. mckenzie, the numbers here showing transit usage that the

number of people who use transit for work is down about 1.4% in 2011 from what it was in 1980. can you break that down more for rail service and buses? guest: we do not have that in that chart, but in the year 2000, the percentage of workers using transitivity work was one -- 4.7%. you see a very slight increase in 2000 from 4.7% to about 5%. changes in the labor market, changes interest rotation investment -- changes in transportation investment. one of the nice things is that the american survey tracks changes and behavior at the local level over time. as cities invest in various

solutions to our transportation issues, whether it is light rail, bus rapid transit, highways, the american community survey allows us to really track how these investments and how these policy decisions have affected not only travel behavior in our own backyard, but also allows us to compare local communities to other communities and to the nation as a whole. so it is important for tracking how well our investment are doing. host: mr. puentes, we show a chart here of percentage of workers who use public presentation in metro areas, with the darker areas being more usage. can you speak to the caller's question about there being a great first class public transportation system and being is as much as it should be? guest: it is interesting that the caller would focus on

washington. we really do have one of the most state-of-the-art transit systems in the country and probably around the world. it may not be what we have and some other countries like tokyo and london, but i think the system here comes in quite well. it is relatively use. -- used. pdc circulator is quite use and very popular. -- vdc circulator is quite used -- the d.c. circulator is quite used. and solving traffic ingestion, there is only so much we can do. if the train is jampacked and the bus is jampacked, that is clearly taking some workers off the road and that is probably a good thing. but it is not the only thing that will solve traffic congestion. we have lain use concerns, concerns about where people are living and working. it can only do so much. i think traffic congestion

relief is probably not the only motivation to use in transit. it is about connecting people, communities, building communities in a different way and making sure people can get to point a from toynbee. host: we are separating by type of commuter cure it we will put those numbers back on the screen for you. we want to go to tom in atlanta, georgia. an urban commuter. he says there is about three percent to 5% of commuters using public presentation. tell us about your commute. caller: i live in the city of atlanta. i have to say i am very fortunate in that my particular neighborhood gives me the option to take several different forms of commute. i can drive to work at my office downtown, i also located within a few blocks of a bust line,

which have a direct connection. i also drove by bicycle, which is usually how i get to work. i have a four mile, one-way commute, and half of it is on a dedicated bikeway. so i have a very pleasant and very relaxing kind of commute to work. i get to work feeling great. i think the take away here is that from a policy standpoint, our leaders should be thinking about providing people with options because atlanta, like many cities, is famous for its traffic congestion. if you speak with commuters around here who are car bound, they may prefer to take a car to work, but while they are sitting in traffic, they also feel trapped because they happen to be in a situation where they have no other options. host: tom, a commuter in atlanta, with some numbers here from the census bureau that you

can follow along with on our facebook page. the numbers of people who walk to work, about 2.8% of commuters in the 2011 survey. those who bicycle to work, just .6% of those who commute. let's go to ann now from illinois, a rural commuter. caller: thank you. if i were to take public transportation or drive my car, it would take the same amount of time. i travel about 55 minutes. the problem is the system has done a good job of giving train service, but once you get to the community you work in, there is no ancillary transportation to take you from the train station to your place of business. so we are forced to continue to drive our car in order to get from point a to point b.

guest: i think we see this in a lot of different places. while you may have provided transit between major stations, is this last mile problem that we we have in different places because it might be a suburban office park that might be in close proximity or near a train station, but unless it has direct connections, it will be harder for a lot of workers to get to their ways of work. i think the caller has the right frame for looking at this people are going to make whatever rationalizations they have to get to work, whether it is convenient, cheap, predictable, efficient. if it is going to be quicker or cheaper or easier to drive, that is the decision they will make. what we are seeing in many cases because of congestion, which we heard from earlier, because of the cost of transportation, which is the number two household cost for most americans, all of these things are starting to add up. they are certain to rethink

where they are living and working and how they are going to get between these two. part of the transit complex we are seeing is because of these different factors. host: duke is up next from same beaters burg -- st. petersburg, florida. caller: hi, my name is chris. i used to live in new york, which is the worst place to commute. one reason is because of the criminal negligence of the state of new york. the state of new york has not built a major bridge in 50 years. 1964, the year the bureau scam to america, -- the beatles came to america, every last biridge. they stopped the bridge. now the traffic is backed up. they get 30 or 40 miles of backup.

it is the most active roadway in america. host: what are you give us some specifics about new york commuting? guest: the new york metropolitan area, which includes new jersey and long island, does have the longest average travel time in the nation. it is about 35 minutes one way. we also see that the poughkeepsie area has a high travel time. that is about 32 minutes one way. so we do tend to see that the largest -- longest travel times and to be places that are very large metropolitan areas, d.c., new york, or small metropolitan areas sort of right outside and adjacent to these large metropolitan areas, like riverside, san bernardino. there is a trend in average travel time for these places.

host: robert puentes washington, the color of said about travel times. guest: new york is a great place to look at this. is place of a robust transit. but they are reinvesting in other modes. the city of new york is really a national leader in looking at how folks can get to work by other modes -- walking, biking, closing down parts of major streets in new york that were formerly high-speed thoroughfares for vehicles, closing them down and focusing on walking and aching. -- biking. i think it was a struggle for some folks in the beginning. it is to be successful at providing alternative modes than just taking transit or driving er. host: jim on twitter says

neither freeways or public tradition can be built economically to handle the rush hour. your take on that. guest: congestion is a way of life in many metropolitan areas. i do not think that just chasing it down is the way that we should focus all of our public policy intentions, like being on a treadmill, we try to build our way out of traffic congestion for generations. that did not work the way we thought it would. we need to think differently about these metropolitan areas, think differently about how we will handle these rush-hour commutes. we need to provide alternatives to people who do not want to be sandwich into one mode or another. they do not want to be tethered to their vehicle for everything. they didn't want to be stuck in other modes. they want to have options, alternatives. that is a focus for many public policy decisions being made, particularly in fast-growing parts of the country, places like denver and saw lake city

and phoenix and dallas. these places are investing massively in public transit. to provide options, to think differently about how these areas are growing and developing and get people to work as quickly and efficiently as possible. host: another question from twitter, when california started high-speed rail, will we see superlong distance commuters of 400 miles or more? guest: california is being aggressive and committed to rails, not just high-speed rail, but even the traditional amtrak routes that are there. the distance between us and for cisco in los angeles is right about distance for something like high-speed rail. it is too long to drive, too short to fly. there is an economic connection between metro l.a. and metric -- metro san francisco. you will see a lot of success once that is built. host: dr. mckenzie, telik the

little bit about how you conducted the study. i noticed flight is not included in there. is that something that you might be including in the future along with high-speed rail and some other transportation ways to get to work? guest: the american commuter survey does ask about various forms of rail. in terms of airline travel, that is typically included in the other category. we do have a catchall category. it is not distinct among the transportation choices that responders can select, but it is included in the other category. we do not disentangle that mode of travel with others, so we do not have good information on how many people consider their commute to work to be taken by airplane. host: i want to hear about your stories about commuting to work. give us a call. the numbers are on the screen there. a caller from maryland is up next.

he works at home. caller: good morning. i was just wondering will this problem be solved if businesses -- i am speaking of the offices , like government offices -- would locate their building or their business in an area where they have the personnel. that would solve the problem. why are we fighting against ourselves by creating what they call a metropolitan area when the whole united states could be a metropolitan area? if we have a concentrated ipt people in rural virginia, why not ipt locate there instead of bc? -- d.c.? if we are putting ourselves in a position to fail, to create accidents, gangs -- gangs go where the money is.

if there is a lot of money coming from virginia into d.c., then you will have a gang. if a lot of money is coming from a d.c. inter--- into northern maryland, you will have a gang. you want toentes, pick this up? guest: major corporations, firms, are looking at transit as a major piece of how to be competitive. they know that they need to have workers that can get to their jobs. they are very attuned to this. there is a lot of competition in locating commercial business, retail space, in and around transit space. but also metropolitan leaders recognize that for order -- in order for these cities to be economically competitive, they have got to be able to attract the kinds of firms and those firms are looking for things like transit access. it is already happening. we have the fbi building which

is moving out of downtown washington. it will move somewhere else in the d.c. metropolitan area. it will not go out to the suburban french. -- fringe. the competition is at places that are transit oriented. host: anna tweets -- if a worker is out of a job, they commute further to get to work. the jobs numbers that came out today from the bureau of labor statistics -- nonfarm payroll employment increased 236 thousand in february, bringing the on employment rate down to 7.7%. we have seen the employment rate drop down from the depths of the great recession. have we seen commuting times go up you go -- up? guest: it has remained

remarkably consistent since 2000. is that a function of more people telecommuting these days? guest: maybe a little bit of a change of people driving solo. maybe we just maxed out the amount of time that people are willing to spend on their daily commute, both going to work and coming home. but as the tweeter said, people will have to do what they have to do to get to work. if you are out of the job and you are -- you have the means, you will go as far as you can to remain employed. that makes a lot of sense. but at the economy recovers and we think about competing in the future, trying to make sure that they are not drying of -- driving too far, jobs are more accessible. host: a tweet from jim buck --

workers used to live closer to work until urban decay scared them out into suburban areas. let's go to the phones. we have a caller on the rural line. caller: i am a first-time caller. it is a 1000 people town here and -- town. it takes me between 40 and 45 minutes to get to work one way. i wish that there would be more research and more talk about rural aspect because most people in america live in small towns and rural america. nowadays, with the cost of living and the gas prices, i

know the towns will have to rethink what is going to work, especially if you have children, you also have childcare. i wish there would be more research because that would be the starting point of talk. and then make a national point and concern. host: dr. mckenzie, what is in you tell us about -- what can you tell us about rural commuters? guest: every community in the united states was survey. commuting is very much a local level phenomenon, certainly regional. much of the travel patterns that we have seen across places is determined largely by local level factors -- the labor market, community design, even whether when you -- weather

when you think about biking or transit uses. the tools are provided for local cities to determine what is best for them. no two cities are like, know to small towns are like. as such, transportation solutions will vary. and some of the areas, you will see van pool programs, various forms of sharing rights, and even small transit system in some areas. the american communities allow city officials to determine what is best for that area. host: urban line from detroit, michigan. caller: i drive at least 30 miles one way to work. the problem you have here in the city of detroit is certain jobs are located outside of the city, and it is almost impossible to

get there through mass transit, and certain jobs coming into the city -- the only way assessable is to drive. there is no such thing as public transportation. they are trying to build a light rail line in michigan, but it only goes so far. it is not even go far enough to make it worthwhile to do it. host: mr. puentes, jump in. guest: detroit is a great place to look. it has a lot of issues. it is just now starting to provide different alternatives. the light rail line downtown is one example. but they are trying to think differently about the governance of the transportation system in detroit. it never even had the regional transportation authority. they talk about all of these commuting patterns that are metropolitan in scope. they cross county borders, go in and out of cities. but for a long time, it was treated separately. there was a city system, and they were not working together. part of what they are trying to

do in that region is to look at it as a metropolitan area, which is the right thing to do because detroit is one of the few cities in which they get smaller during the daytime. many other cities, like washington, get bigger because the people going into go to work. in detroit, people -- you get smaller and people leave to go to suburban areas. it is idiosyncratic, but it is a good study to figure out how you deal with something like metro detroit. have you build the right kind of in the structure and make sure that people are getting to work in a timely and efficient fashion? host: mr. puentes of the brookings institute. he is the metropolitan policy program senior fellow. this rate is directed to you. the ceo of yahoo has requested workers come into the office versus working from home. this is new for silicon valley workers. talk a little bit about the rise

of folks working, telecommuting from home. guest: maybe 15 years ago, with the rise of telecommunication capabilities, we thought that these people would be able to live on the mountain tops and be able to tap into their home office and it with the death of distance and it would ruin cities. we did not see that at all. we saw a re-organization in some cases. -- a reurbanization and some areas -- in some cases. there are definitely some things you can do telik commuting from your home -- telecommuting from home. but a lot of jobs require you to be face-to-face. i see what the ceo of yahoo has done. best buy is another company that just changes telecommuting role, trying to make sure that people are engaging in more face-to-face conversations. i think telecommuting has its

role. it will not be everything. but if you can get folks to telecommute one day a week, that is 20% of your commute that is cut down right there. so does have a role. host: dr. mckenzie, we will show our viewers one of the census bureau charged -- charts. take us through these numbers. guest: you see the bottom blue line here. beginning in 1990, about 3% of workers consider their home to be their primary workplace location. we see a gradual but consistent increase for about 4.3% in 2011. we really do see a clear trend here for working at home. we have another survey different from the american communities survey that asked the work at home questions different. the american communities survey

asks people if their home is their primary workplace location. it is not physically ask how often do you typically work at home or do you typically work at home the whole work rick -- workweek. fust under 10% of uighurs -- o workers say they working on the whole workweek. host: robert is a suburban commuter. thank you for joining us. caller: my main comment in regards to transportation commute to work would be the constant changes in government, republican, democrat, energy policy that we have. that has a big influence on whatever is going on at the time in regards to people taking chains -- trains, the country making more money. what i am getting at is that i think in regards to energy, the oil companies are making money

in regards to gas. republicans push oil companies, democrats bush railroad cars, general electric. whoever has the contract has the power. to understand this whole issue would be understanding energy policy. whoever controls government controls the contract in regards to energy policy. what we need to be looking at is what is the cheapest way for people to get to and from work in regards to the cost factor because if the price is eight dollars a gallon, that goes to the oil company. going back to the railroads, whoever makes the main trains and the train stations delivers

--. the democrats percent hard-core because it is all about contracts. host: mr. puentes, i will give you the last thought. guest: i think the caller is partly right. cost is a big factor, but it is not the only thing. convenience, all of these things really matter. it might be really cheap, but if you do not know if you're going to be sitting in traffic or you do not know how long it is going to take, these things do factor in. cost death really matters, but it is not the only thing. -- cost definitely matters. all of these things are intertwined. this is not a transportation cover station by itself. energy conversation cannot be by itself. this is really two ways to view this shift and rebuild of the american economy, and transportation, energy, all of the things have a dramatic role. host: brian mckenzie of the

census bureau and robert puentes, do i for coming in and speaking about the workers commute. we will take you to an event at the national press club that is getting ready to start at 10:00 looking at state implementation of the >> member of the news makers committee and host for today's event. the national press club is the world's organization for journalists. today we will hear from people who have been on the front lines and back rooms when it comes to turning the affordable care act into policy on the ground. assenter piece of the law is state level insurance exchanges or marketplaces. these will go into effect in january 2014.

to my left george kaiser first elected to the state house in 1993. he served as president of the comps of legitimate tors in 2012. new york state senator is in his 9th term in the senate. he chaired federal relations committee and is now the organizations vice president. mill la could haveman is executive director of the exchange. she's a superintendent and a former research professor at the georgetown policy ins tuesday. >> and george is the first director of the insurance oversight in the obama administration. he is currently an attorney here in washington. each panelists will speak for a couple of minutes about the situation in their state or the implementation as they see it. we're going to start off with representative kaiser. >> thank you very much.

it's a pleasure to be here. i feel like i'm in north dakota with the weather you have here so it's like being at home. john asked us to share what is happening in the states. north dakota was not a strong republican state. was not quick to accept the move to the affordable care act. we had a long period we waited for the supreme court to make a decision then we waited for an election to occur. but the reality is we now have the affordable care act and as a state that was resistent to the concept of the affordable care act we are in a position of hurry up, trying to catch up with the affordable care act and its implementation at the state level which we have specifically -- we did last summer during a special legislative session passed

legislation which gave our departments approval to go forward and seek funding for the i.t. portions of interfacing medicare, medicaid chips program etc. with any form of exchange. so we did participate early in that respect. we had a lengthy debate last summer whether to become a state based exchange and created legislation designed to do that and eventually that legislation was defeated. so effective as of the 15th of last month, north dakota is in the federal exchange. so we are waiting at this point in time to -- for hhsa or whatever to give us direction on how the federal exchange is going to be rolled out in the states that are participating in the federal exchange. the other thing that i can say is we are in session right now.

north dakota has in the house passed the medicaid expansion portion. as you all know, the medicaid expansion didn't have a date certain requirement and it did provide the opportunity for legislatures to take up that issue in the sessions that they are currently in. and we have at the house level passed it. it's gone over to the senate. and although there will be some resistence on the senate side, i think it will be adopted. the governor has taken the position that if the legislature supports it, the governor will sign the bill and north dakota will become one of the states that originally opposed it but now has moved a position of supporting medicaid expansion in the state. consumers in our state especially because we're in a

federal exchange program, both individuals and businesses are really trying to figure out what to do. the affordable care act was passed in 2010. we're in 2013. and the reality is that we have until october to open the exchange and make enrollment possible. and then january 1, 2014, people can be in the exchange. that's a lot of work left to be done by tin assurance departments in the states to approve the new programs and policies that will incorporate the essential health benefits that each state have adopted. so north dakota is working as hard as we can to bring us online and to meet all of the requirements. we are still waiting for a lot of direction from the federal government relative to the federal exchange and what it's going to look like. >> thank you very much for

inviting me here today. as george mentioned, he's from a red state. new york is sometimes refered to as a blue state. although we were not able to in our legislature because one house, the senate is controlled by republicans to legislatively pass for an exchange. it took our governor to set up the exchange which i believe is up and running. at first it was a little bit slow. the exchange isn't up and running. the preliminaries are up and running. we received several hundred million from the government for several stages of implementation. i've seen the degree which is a by product, a degree of cliege alty among healthcare plans, the legislature, the agencies particularly. and i commend the agencies in new york, the health department and the old insurance department which is now the

department of financial services for having some really bright people who have moved to do everything possible to get ready for the january 1, 2014. and we have some unique situations in new york stated. we have .7 million at any one point who are uninsured which comes to maybe 5 million in any given year and we have hundreds of thousands who are eligible for medicaid who are not on it. and under the guidelines, those people if they are placed on medicaid, 100% will be paid by the federal government the first two years and 90% there after. so it's important for us to recruit them and put them on medicaid. but it's also an economic bonus for the state of new york to do that. i believe in the end, we will

place 1.-- over a million. i would hope 1.3 or 1.4 million. that might be too optimistic. it's a unique opportunity to take them out of the emergency rooms, place them in healthcare. place them in a situation where you can prevent hopefully the major sicknesses that cause so much hask -- havoc with the health care system. >> thank you very much. right from the start, the city council here in the district and the mayor were fully committed to implementing the affordable care act. and sister agencies got an early start with implementation. i'll share with you a couple of our priorities for this year to ensure that in the fall we're up and running so people's

coverage can become effect nive january 2014. we really believe that we need to build the exchange in the district from the ground up so it's reflect it is values and the priorities of our community. and so we have a bunch of policy working groups that include diverse stake holders such as consumer and patient advocate groups, business community, hemmingt insurance companies, health insurance agents, physicians and other providers. these are the stake holders who are helping us make policy decisions. and we believe that process will help us build the best possible state based exchange that really truly serve it is needs of our community. in the fall, my executive board of the exchange also made a very significant policy

decision to leverage the affordable care act to help us actually create a more competitive marketplace. and so they made a very invite tive decision to essentially require all health insurance companies and all products to be displayed through the web portal that we are building. so for the first time, any consumer can go on our web page once we're opened for business in the fall and look at all the health insurance policies that are being sold, compare prices and benefits which and we believe that kind of transparency will help us create a more competitive marketplace, both where small businesses have new and good options, as well as individual and family purchasers. so we're really excited about that decision and moving

forward to full implementation. i also want to share with you the creative partnerships we're building to make sure that we enroll everyone who is currently uninsured. and in the district we are lucky because we have one of the lowest uninsured rates in the nation. but we also have a very diverse population. and so we need to be creative in how we reach our population who is without coverage. and we also need to be very creative in how we reach people who are under insurance meaning they are covered now but their insurance is not adequate for their need. we have a very aggressive campaign planned to work with diverse business partners to hetch educate everyone, small businesses and individuals who live and work in the district about the affordable care act

and what it means for them in 2014. so we are partnering with the d.c. chamber of commerce and other business groups as well as community health centers and patient and community advocate groups and the faith based community to help us educate folks who live and work here in the district about the affordable care act and the opportunities that people will have. thank you. >> thank you for hosting this and thank you everyone for being here. i'd like to make four points based on my perspective on the one hand having run a unit responsible for implementing the insurance provisions of the affordable care act and also different experience being the insurance commissioner of an extremely red state and also for a while the regional director of an hhs region which

is entirely red. point number one, and these are all points that i think don't get as much public attention as they should. the technology involved in establishing the exchange, the technology required to establish the exchange is -- there is a lot of it. it's a big burden. it's a huge job. and even under the best circumstances, even if there were no political issues involved at all. for people to be able to go to the internet and punch in the answer to four questions, age, zip code, family size and whether you smoke or not and to be able to get instant quotes for all the companies selling through the exchange, that's what the affordable care act. and if they are under the 400% of the poverty level get a

discounted price and that go to the insurance companies, that is a tremendous thing for consumers. but in the background the technology required is huge. so i think for these exchanges to be established by october 1 when open enrollment starts, whether they are run by the federal government or the states will be a tremendous accomplishment. and i really do expect all states to have exchanges ready for open enrollment on october 1 of this year. second, there has been a lot attention on whether the state is going to run the exchange or the federal government is going to run the exchange. and to the person buying the insurance that doesn't really matter. but there is a big difference between the money that is available to the states and the money available to the federal

government. one provision that gets less attention than it should, is the provision which gives the secretary unlimited authority to make grants to states to run their own exchanges. so far h.h.s. has made over $3.5 billion in grants to states to run their own exchanges. so there is a lot of money available to the states to run their exchanges. on the other hand there is no designated earmarked funding for the federal exchange. so the ironny is there are some states that the states that could run their own exchanges and could receive money from the federal government for some of those states are voluntarily saying no, we're not going to do it. we want the federal government to trun exchange.

that doesn't seem to make sense because there is the so much money available for the states and very little for the federal government. it's too early to see how all this will shake out. it's possible the federally run exchange and the states within that will be a more efficient system. because once you establish a federal exchange, it doesn't cost all that much more, the mar marginal cost isn't that much to turn on one additional state. it's interesting to see how things shake out between the states and federal government. but i am confident the exchange will be up and running in all states by october 1. we know that the system works. in missouri for example we established a system -- we established an exchange, not for everyone in the state but

for state workers. we standardized the benefit package and we whether i shalled a competitive bidding system. and we got very very low bids as a result of standardizing the benefit package and going to a competitive bidding system, we were able to reduce the cost of insurance to missouri state employees to 41%. there is one standardized package that is pure competitive bidding. i wouldn't expect to see reductions of that amount as a result of the affordable care act because the system that it continue plates is not that pure a system. there can't be one standardized benefit package but there can be four. that leads to my last point which is this. we have a rare unprecedented opportunity drive down costs. if the exchanges use the barge ganning power that they have.

by that i mean if they do standardize the bidding package and do a competitive bidding process or negotiate with plans, they really can drive down cost. they can force insurance companies to compete on price. if they are forced to compete on price they'll have no choice but to drive down underlying healthcare cost and their administrative cost. if the exchanges are week and don't use the bargaining power they have, this will be an opportunity that unfortunately we don't take advantage of. so i'm looking forward to october 1, 2013. >> before we go any further, i wanted to mention they are in town here for the meeting of the national conference of insurance legitimate tors. i want to thank them for helping make that possible.

a few ground rules on the q&a. the q&a is for press club members only. when you are recognized identify yourself and your organization. there has been a lot of concern about the role of agents and brokers under the exchange system and also with the navigator systems. can you speak to the role of agents and brokers as you see it? >> i'll be happy to start with that question. in north dakota we see a very different perspective than most other states. i go back to medicare part d, that's really the first time that navigate tors were yusde. we didn't call them that. when president bush rolled them out, i'll be honest, i thought this can't work.

partnership between the private and public sector, we're going to roll out this prescription service. and when it first rolled out, it was so confusing. but who stepped up? in our state it was the pharmacists. in our state the pharmacists became navigate tors. the patients came in and they were concerned, generally older. the pharmacists were like wait, i've studied it, here are your ten prescriptions. there is this other plan that has eight of them and we can maybe get our doctor to change two prescriptions. bottom line they were the navigate tors but they are very knowledgeable. i'm a strong proponent in our state. what does the law require? most people have no idea. the law says you must have a minimum of two navigate tors. read it if you don't know that. so you only need two.

so when we developed our model legislation, we had two. we put one on the reservation for the tribes and one on the exchange and they were going to go out and train people. we believe strongly in north dakota which is different than most other states that maintaining the integrity and value of agents and brokers who are licensed and regulated and knowledgeable about healthcare sales, that they are the people. and we did provide a commission structure within the exchange so they could be compensated. that doesn't mean a citizen can't go into the exchange and use the exchange. but we had at least in our state grave concern about creating thousands of navigate tors out there that were offering an additional service, chamber of commerce, aarp, you name it. thousands of people who did not

understand insurance but were giving insurance advice with no ability to control it once it got out of the box, with no regulatory authority. so we felt very strongly we should maintain the integrity of the 21,000 agents and brokers in our state. and it wasn't fence building. we believe that providing advice on health insurance is extremely important. and so that was our position. >> i think in new york state we're trying to make sure that navigate tors are objective, don't have an interest, are not likely to be questioned on the advice they give. and so far it seems to be working well. i haven't had any recent updates on the selection process. but it seems to me we want to make sure those people giving advice as to what the best health plan given by people who can be objective, don't have

any conflict of interest when they give that advice and that the right decision is made. >> in the district, we're actually pretty similar to north dakota which may surprise some of you. we are heavily relying on the health insurance brokers. in fact, we are building them into our i.t. built so at any point in time when a consumer is using our online application system and they want to talk to a broker, have questions about the different policy choice that is are available to them, they can just click on a button and choose among licensed trained health insurance brokers for help. we are focusing our sister program to help people figure out if they are eligible for medicaid and to help people figure out if they are eligible for premium tax credits.

we're focusing on the brockers to help people figure out which plan is best for their family or small business. so we have a two prong approach. we realize that health insurance is very complicated. it's not like buying a car. you can't get in and test drive it and know ahead of time that it's going to work for you. and relying on the expertise of professionals is going to be critical to help consumers who may have never been insured ever or may have not ever used their health insurance when they were insured to help con sumers make the best possible decisions. we're relying on brokers to help after they enroll. sometimes you get your medical card late or sometimes your

claim is denied. so we view our brokers as expert people to help to continue to help consumers even after enrollment. >> the beauty of the exchange system though if it works is you don't have to use an agent. you can just go direct to the internet, you don't have to use an agent. and if people want to use an agent and they want to pay for an agent then they can. but they don't have to. and i would hate to see the exchanges build in the extra expense that effectively requires people to use agents and therefore race raises the price of insurance more than it should be based on an electronic system. >> if i could clarify. consumers and businesses in the district would not be required to use brokers. they'll have access to brokers should they need additional

help. and if they do use a broker, it will not be at any additional cost to the consumer. the premiums for health insurance include a payment structure either commissioned or per member per month fees that insurance companies would continue to pay directly to the brokers. >> first of all, this session is providing a lot of very essential information and i appreciate everyone's comments. we haven't had an opportunity like this and i'm going to take advantage of it. i would like to ask a question. yesterday a blowup occurred in california. and you were talking -- both of you were talking about cost. apparently blue cross blue

shield just raised rates 19%. consumer watchdog went off the wall and fine sign the introduced legislation. could y'all talk about that issue, your reaction as to what -- they said consumer watchdog said that there was a loophole that bar redirect examination state from regulating it. although connecticut, a few years ago, i think you were involved in that, held rates down. so i'm thuroughly confused. if you could help me, i'd appreciate it. >> it's not a loophole. just certain states regular late health insurance rates in different ways. in some states they must get the approval before putting it into effect. in others, the company can put the rate into effect and the

department has the authority to roll it back. and in others like missouri the insurance company doesn't have to file the rate, they can raise rates at will. in california the department doesn't have prior prolve authority. in addition though, there is a federal regulation which allows and requires the h.h.s. to review rates, review proposed increase that is exceed 10%. but the h.h.s. doesn't have the authority, even if it find rate unreasonable doesn't have the authority to order that rate reduced. so my understanding of the legislation it would give h.h.s. that authority. >> rate review is veneer and dear to my heart. as some of you know when i was superintendent of insurance in may. i did have prior authority. not only that but i held

reviews of rate increases across the state. and the three major rate increases i denied to the largest carrier in maine, they did take me to court and challenge that. but the court's upheld my decision. and at the when i was still in maine, i did endorse an earlier version of that legislation. i felt it was critical for allstate insurance regulators to have the kind of authority i had when i was in maine. when you think about health insurance premiums, it's not like an average consumer can look at a premium and figure out is it reasonable, am i being ripped off or is it based on something reasonable, is it justified. so you need expert insurance regulators with authority to review the rates, either new

rates or rate increases to make sure that in fact they are justified. and without the full authority which is called prior approval it is very difficult to do. now the affordable care act had a significant impact on the ability of state insurance regulators to even look at the rates. in many states before the affordable care act, state insurance commisioners couldn't even ask to see the rate, let alone to see if it was reasonable. so the a.c.a. took a major step forward. but additional authority is needed. and i do believe that h.h.s. needs authority to not only look at rates when they are in fact reviewing rates, but also to say no to rate increases when the rate increases are not justified. >> thank you very much. >> in new york state up until

three years ago it was called file and use. which means a health maintenance organization could file a rate and it was approved automatically, no one reviewed it. three years ago we passed legislation that said any rate increase must be reviewed by the insurance department to see if it's a valid increase. there is reference in the ardable care act as well as the mlr which is the percentage of dollars that should be used for medical care and not for things other than medical care. >> i just would like to make a comment from a little different perspective. we are in the greatest period of turmoil in underwriting in healthcare in the history of the united states. the traditional methoding of underwriting for healthcare are being turned upside down with

the affordable care act, with many parts of the affordable care act. we have used a system of cost shifting to fund medical care in the past. the affordable care act has attempted to address and reduce the amount of cost shifting that is going on. but the bottom line is there will be a bottom line. there will be a cost and there are of course those people that advocate cost will go crazy. those who advocate cost will be reduced. we really don't know. the regulators in the united states do an outstanding yob regulate -- job regulating the cost of insurance. i think they are going to do a great job regulating it. regardless of whether cost go up or down, we have to

guarantee that we remain sound in the underwriting process. that we don't ash trarle either inflate or reduce premiums solely for political purpose. because that will lead to a disaster ultimately. there are many changes, really positive changes in the affordable care act which are impacting this cost shifting that is going on. i happened to be a fairly large medical center board. we do business today entirely differently than we did prior to six months ago. the reality is readmission rates, if you're in the lower 50%, there is a deduct for medicare reimbursement. if you're in the top -- lowest 50% readmission rate, you get a benefit, you get a bonus.

think of this. now medical conditions that are induced in the hospital setting are now owned by the hospital. you've all heard the term staff infection. prior to the affordable care act and the implementation fairly recently, a staff infection was a billable outcome. patient came in for surgery, we did the surgery, staff infection occurred, we build for the surgery and we build for the staph infection. today the hospital owns it. if you don't think hospitals are behaving differently, i can tell you yure wrong. as a board member you're wrong. we are aggressively addressing this. but keep in mind that littleable is gone. so -- billable is gone.

if the patient needs to be held an extra day, hold them. don't have them come back and have tremendous cost. avoid the problems up front. but those expenses may not fully go away and we have to find methods of reimbursing them. >> will your state be enforcing all the insurance division in the affordable care act preexisting guarantee coverage? does your state enforce that? >> every state will enforce it. it's the law. >> oklahoma and missouri have implemented laws barring people -- it's being considered in the state legislation g legislature

of oklahoma and missouri had a voter referendum on this issue imposing criminal charges for getting involved in enforcing this law. >> again, i'm going to defer to my attorney. these are all legal issues. as far as i'm concerned we have a federal law and i'm going to follow it. >> let me say a few words about that. it prohibited the governor from establishing an exchange in a state run exchange by executive order and it prohibited the state from cooperating with a federally established exchange in missouri except to the extent ha the state was required to do so by law. so it sounds like a big deal and it is but it's not quite as radical, when you read the

language it's not as radical as it's been characterized to be. >> if i can add, the way the affordable care act works is if a state is unable or unwilling to implement the health insurance consumer protection standards like guaranteed access and adjusted community rating and the essential benefits and all that becomes effective next year, if a state isn't able to do that because of restrictions in state law or unwilling tons do it. there is a federal backup. h.h.s. has the authority to make a determination that a state is not enforcing. and in fact under jay's leadership and under the current leadership, h.h.s. in their office, they have a significant staff devoted to

coming in to states if the states cannot enforce. so h.h.s. can come in and look at health insurance policies to make sure that the policies are compliant with the minimum standards. they can take action against insurance companies who are not implying. so there is a mechanism. if a state can't do it, then there is a federal backup plan. i'm not endorsing the federal government coming into any state. i if you rememberly believe that no one can protect their consumers better than the state. and the state insurance regulators. so i hope to see that every state is able to enforce the basic consumer protections and the new market structure that the affordable care act has put into place.

>> i'm curious i guess to the degree of interaction between the states and the federal government in creating the exchanges just as far as collaboration making sure the exchanges look similar and act similar. and i'm thinking down the line if sfatesth states divide to switch from federal to state exchanges, how we can streamline that process and make it easier. >> i think in new york state there is constant. there are several agency people who live in washington to enjoy that interaction, to get the right procedures. whether there is that kind of relationship in and among the states, i'm not so sure. but i think it will all fold into place i think a lot of the prior question on whether states will implement. i think it will subside. it will be implemented. i don't understand why people aren't taking advantage of the

opportunity have someone pay for significantly improved healthcare in their state. and sometimes when we hear the amounts of money that is available on a discretionary basis, when a state turns their back on it, i say good, that's more for new york state. i think in the end you'll see a slow compliance and a slow involvement of each and every state. i hope that's the case. >> i can tell you about the work that we've been doing with society. their leadership at all staff levels has been incredibly help to feel us. we have calls can with them every two weeks to check in on our progress. it's our opportunity to ask any dwheas we have in between those calls, we're in constant communication with their staff. they are very open to our questions and they are very

dedicated to helping us get through some of the tough decisions that need to be made. even when there is no federal guidance out, they are always willing to take our calls and to work with us. so the partnership that we've enjoyed with the federal government has been incredibly valuable to us. we would not be this far along in the district with our exchange built, the i.t. built and operation liesing our exchange ifed the not been for the significant resources and staff help that the federal government has been providing for us. so i very much appreciate their resources and their partnership with us. >> we are one of the states in a federal exchange and how do we move to a state exchange? we don't see that happening

easily for a variety of reasons. there are many questions that are unanswered. would there be money in 2017 when the state really has an option to move? although we can do it within one year with notification. will there be the money available to set up your exchange because it is an expensive process? we've missed those windows to date. in addition, there are contract periods that have to be taken into consideration. in the exchange whether it's a federal or state, contracts are issued, usually for a year long period, so you have to transition from a federal to a state based exchange while maintaining those contracts which would be very challenging. but we have been told by h.h.s. , and i want to reaffirm, every agency i've worked with in

washington have been impressive. the people at h.h.s. have been great to work with. they are very bright experienced people and we are in contact with them daily. but what would we gain by going to state base exchange if there is no noun do it? if the contract period gets to be too problematic? the essential health benefits have been defined. the advantages that i believe are associated with a state based exchange wouldn't be available to us. they are gone. so it's both a challenge for the federal government because from the get go, it's been my impression that the federal government wished to have states establish a state based exchange. that was their primary goal and if they didn't, the fallback was we'll do it for you. but it's going to be

challenging. and if you could answer a lot of those questions i have, will the money be available for to us make the conversion, can we split contracts mid year and move to an exchange? some of those tough technical questions, would still consider doing it but i don't know if it's possible. >> i guess a lot of the philosophy especially for the states is we don't twant government doing anything we can do ourselves. i wonder ow you balance that philosophy versus the reality you just laid out there. >> i can't. i have a buys because i was a prime sponsor of our state based exchange legislation. but to me it is the great ironny that we are now improving medicaid expansion with no input or control. have accepted money for the i.t. early on. the insurance department accepted a grant to do some

updated. but the one area where the state had the opportunity for state control, although limited is the one area that north dakota chose not to participate in. >> i had a question for jay. you talk about the need for states to use their bargaining power to get low rates. what tchaws look like in practice? these exchanges are intended by definition they are bidding mechanisms to get good prices. what can states do to enhance that? >> they can be bidding mechanisms but they don't have to. many states are going to have weak exchanges in the first year. the federal government's is going to be weak. not impotent but weak. so the term that those who favor those types of exchanges

use is clearinghouses, they would simply be mechanisms through which they sell and p consumers buy. but the exchange doesn't use the bargaining power to go to companies and say we've got a market of 16 million new people is estimate is and the only way you can have access to that market is to go through us. and so we are going to standardize the benefit package to make it easy for people to make apples to apples comp sons. >> you are going to make everybody go through the exchange? >> people by law are going to have to go through the exchange. but the point is are they going to be able to make apples to apples comp sons? are the insurance going to be required to sell the same four benefit packages so people can see who is charging what for

the same benefit package and that will facilitate competition. what will facilitate competition more is -- they don't just want to sell through the exchanges, they have to sell through the exchanges. not only do they get this new market, if they don't sell through the exchanges they are going to lose some of the people they have now. companies have to sell through the exchanges that gives them the extreme ability to say if you want to sell through us, give us a good rate. if you do, you can sell through us and if you don't, then you can't. so there is a tremendous amount they can do with -- by using their bargaining power. we sue this work in missouri and that's why i'm so enthusiastic about it. >> so you use your gate keeper role with the exchanges as a

defact toe rate regulator. >> you are not regulating rates. we are letting competition work. >> but yure implying you can tell people no if you don't like their prices. >> sure. >> that is rate regulating. >> we have a slightly different vision in the district. we are not going to be -- we the exchange are not going to be negotiating over rates with carriers. we want all health insurance companies to do business through us. we're going to rely on our sister agency, the insurance department to do their diligence in reviewing all of the rates for health insurance product that is are going to be sold through our exchange. we believe that if you require health insurance companies to have all of their rates and all

of their products posted on one website that that in itself, that kind of transparency will result in better premium rates. so essentially our exchange is going to be -- we envision it to be one big marketplace where a consumer can see everything. and we think that what that will mean is for insurance companies that are not the largest market share currently, they are going to want to price these 2014 products in a way to attract new business. and we think that the largest market share company which right now has about three quarters of the market in the district will also want to make sure that its pricing is competitive because they are not going to want to lose market share. so through that kind of

transparency where consumers can pick the best price for them, and if the company doesn't perform well, the consumer can go to a different company. we believe that will help drive down prices through real market competition where insurance companies are really competing for your business. with that said, we will be relying on our insurance regulator to review the underlying rates to make sure that all of the rates are justified. >> jay is talking about a standardized benefits package which i assume might weed out some of the competitors. you are talking about everybody under one tent. how standardized do you think your benefit package will turn out to be and how much interest -- seems like there say tension between getting everybody involved and having the apple to apple comp sob son that jay is talking about. some of our policy groups are

looking at that exact question. how many products are going to be available, are we going to limit the number of products and will there be standard benefit package science our current thinking is we want health insurance companies to offer as many products as they want. but tothe end user for the end user for the small business or individual purchasing, we're going to have a filter system where a consumer answers a couple of questions about what they are looking for and they are going to have two or three option that is pop up for them to compare. if they want to see all options, they can click on the filter system and see all options that are available. so there are ways that we can -- we believe we can assist consumers in making the right options and choices without

limiting some of the invasion and createtivity that could be developing through offering a number of different products. with that said, none of these policy decisions have been finalized. this is the current thinking on our approach forward. and our legislative package will be done sometime in early april. and we'll know a whole lot more as that moves through the legislative process in the district what will have at the end of the day. >> we have just under ten minutes left. >> i wanted to go back to the point about funding. i thought that was an interesting point you raised earlier. what concerns do you have about funding for the federal exchange. the administration just asked for $990 million and they

didn't get it. what would any problems look like in terms of operating the federal exchange and how serious are the concerns about funding? >> it would be great if the federal government -- if there were a designated stream of funding for the federally run exchange as there is for state run exchanges. but h.h.s. has been making do and will continue to make do. the marginal cost of adding one more state to the federal exchange is not that great once the technology and the template has been done. there is an argument that a federal exchange with all states following the federal rules would be much cheaper than these grants state by state grants. so i think it's too early to tell. i think what george said makes a lot of sense.

he doesn't see any benefit for north dakota to necessarily go to a state exchange once the federal exchange is up and running. it may be the federal exchange, once it gets up and running is running well and states decide to stick wit. i just don't know except i do believe that there is enough funding available so that regardless of how many states on the into the federal exchange, they will be up and running. >> my question is your feeling, does h.h.s. have enough money to establish the system throughout the country? you said it's not earmarked money. are they coming up with it? is it barred from them? there are all these provisions in the appropriations. what is the situation 24r?

>> i'm not there. i can't tell you what the situation is there today. i can tell you that during the three years i was there, we always assumed that there would be a large number of states who would on the into the federal exchange whether it was 1/3 of the states or two thirds of the state who knows but it's a big surprise that h.h.s. is going to be running all these exchanges. it's not a surprise. h.h.s. has been planning this and i have confidence they'll be able to do it. >> thank you, sir. >> a couple of quick points. by 2015 all exchanges must be self-supporting. so the moneys we are talking about really are the front end moneys to get these exchanges into place. another response, all states -- all plans in all states have to -- whether they are state based

on federal exchange have to meet the essential health benefits definition of that state. that means they have to cover all the manned dates that were currently in play at the time they made the decision on the health benefits. so the plan in north dakota has to cover the 24 mandates that were required in every plan. we had to select from ten plans. in our state we did make the decision to take the least beneficial plan, the plan with the least number of benefits as our definition of essential benefits, we will build from that. the insurance crps very good at figuring out how every plan must have to essential benefit plan just ased the to meet all the state mandates, but they can package their product and market to add additional benefits that people may

desire. >> just to go back to the medicaid issue, there has been a lot of controversy in a lot of states that have said they are never going to do it and some have since said they are going to do it. the 100% of funding for three years and then dips down to 90%, is that still a good deal for states and what are the consequences that don't make the headlines on that? >> i think it's a great deal for states. it goes to 90 in 2020. the reason it's such a great deal for states is it's 100% funding for three years and then the states at the end of those three years have the option of saying we liked it better when we had a lot of uninsured people so we're going back to the old s. so they take no risk.

the ironny for governors is this, the governors are saying we're not going to insure our uninsured people but we're going to make our people pay taxes to insure in other states. theas craze. that's why you see people in ohio who have been against the expansion now accepting it. it's such a good deal for the states and it's not just the uninsured people who benefit, the hospitals benefit. they are losing funding and they need this to more than make up for it. even business groups, even the chambers of commerce in these states are supportive of a medicaid expansion. so i think most if not all states will expand medicaid. >> as i said, my initial remarks, the medicaid expansion

just for new york state where we have hundreds of thousands of people who are eligible for medicaid who had not signed up, is just a tremendous windfall for us. and as i said, the people who are uninsured get into the most trouble in terms of sickness. if that's the case, that's the premise, then if you insure them, you're going to cut down the obesity, the cancer, the diabetes and the heart. and to me, it's one of the reasons i say ultimately there will be a significant savings in healthcare. >> we were talking before this began, we're concentrating on medicaid expansion. but i want to you look at the affordable care act a little differently. from my perspective it was an attempt to use a patch work approach to save the current

american healthcare system. what did we have? we had individual market, we had small group market. we had medicaid, we had medicare. we had workers comp, we had auto insurance for those types of injuries. we had all of those methods of funding healthcare. what didn't we fund? >> what what hhs did did is ask where are the donut hole schools and 26-year-olds, -- we have to carry these kids, we need to bring them back under their parents. what did medicaid expansion do? it filled another donut hole. we had a group out there and was not doing it that. what are the penalties, if incentives are people of certain incomes being able to access health care insurance with a

subsidy? they looked at our system and said where are all holes, and they started putting them. will it work? that is a precaution. if that is what they were trying to do, in my opinion. we look at it when the 1 per quest one perspective we never looked at it from its st. the average family planning united states plays overruns thousand dollars a year to help do the kind of shifting for people who are not able to pay, who go to the emergency room, and using a medical plan, " to their march 0. at our hospital, 6% of every emergency of all emergency room visits are dental only. there is not a thing we can do for them accepting the pain medications. that tuesday is still bad. if we wanted to get our hands on

health care in this country, the old system was not working. it was imploding. we need to do something. this is an attempt. whether it works high did not know. this is what the affordable care act is trying to do. is it the way i would design its? maybe not. >> that is a good ending point. i think everybody for come the outcome and some of the panelists while sticking around for questions. thank you. [applause] [captions copyright national cable satellite corp. 2013] [captioning performed by national captioning institute]

>> from the national press club, we will go live to capitol hill at noon to bring you and sent whether internet users are complying with copyright restrictions. it is hosted by a congressional internet, caucus advisory committee, starting at liv noon. secretary of state, john kerry and michelle obama will take part in 2013 when an of court awards, recognizing women who have shown courage in by advocating for women's rights. watch that the beginning at 3:00

p.m. eastern. >> these letters have been in print and read since 1840. she was a best seller to the 19th century. people new corporate she has always been famous. >> car conversations -- our conversations about abigail adams are now available on our website at c-span.org. >> stronger hiring shows businesses are confident about the economy, despite higher taxes and government spending cuts. john boehner reacted to today's stoppers numbers with this -- any job creation is positive

news, but the fact is of a point in america is well above the levels the obama white house projected stimulus bill was enacted. details of today's labor report are available on our website, c- span.org. get ministration is also intriguing response. alan krueger issued a statement in which he couched the positive news of today's numbers, saying -- earlier this week alan krueger spoke about policy and deficit reduction, warning about the impact sequestration would have on the economy if left in place. mr. krueger's remarks were attacked the national association of business economics policy conference.

this is about 45 minutes. [applause] >> thank you for that kind introduction. one thing you did of manchin, which is fine, there was a picture of a cabinet meeting "new yorkssible times c times," can you can see the back of my head. how am delighted to liver and address here again. some of you may recall that at last your's conference i spoke about progress that we have made recovering from the worst recession since the great depression. i also discussed beck dear term, outlook for the american economy. i emphasized reasons she to be cautiously optimistic about the

economy going forward. despite uncertainty about the government's fiscal policy and the lingering effects of the financial crisis that were then and continue topeka can wins for the recovery. i am sure you are aware our economy continues to recover over the past year. real gdp has now grown -- through 146 kippconsecutive quarters. yes real gdp is 2.5% higher than it was at the previous business cycle peak. last year i told you that council of economic divisors forecast was upset picks 2 million payroll jobs would be added in 2012. employment actually rose a bit more by 2.2 million jobs in 2012.

this increase was entirely accounted for by the growth in the private sector. thanks to the resilience of the american people we have now added more than 6.1 million private-sector jobs over the last 35 months. since i spoke last year to about the economy has continued to show signs of healing from the great recession and he. in the past year, the housing market appears to have turned a corner which rising nationwide home prices, sales, and home construction. new-car sales reached their highest level in five years. all of these gains reflect the determination, of american businesses, workers, and families in the aftermath of the most painful recession in our lifetimes.

nevertheless,, there is still much more work and needs to be done. , unemployment remains too high carrying a middle-class, continues to struggle with stagnant wages and persistently and widening inequality. our nation because of deteriorating infrastructure cries out for further investment. and on top of everything else, political, gamesmanship in washington is creating unnecessary uncertainty cannabis and conflicting, and necessary wounds on our economy just as the recovery is gaining traction. the prime example of this problem, of course, is the sequester,. cat is washington speak corp. severe budget cuts. , the sequestrate officially went into effect last friday.

as: saks economist alan phillips sequestration is poorly timed, less efficient than most other forms of deficit reduction, and does little to address long-term imbalances that stem from demographic shifts and the excess growth of health spending compared to revenues. given the ongoing debates over the federal budget, the main theme of my remarks today will be the economic case for a balanced, responsible approach for deficit reduction, which has always been the administration cost position. a critical point, one of which others have made but frequently gets lost in public discussions about fiscal policy, is that the federal budget is not an entity in itself. the federal budget is simply

been means to which we as a nation ec to achieve our economic priorities. as president obama an elegantly stated in his state of the union address last month, the north star guiding our course as a country must be a growing economy that creates middle class jobs. this requires taking steps to make sure that america is a magnet for good jobs in that pay decent wages and that workers have the skills needed to build on those jobs -- to fill those jobs. we must also address the federal budget deficit, because if we do not put the budget on a sustainable course, we will ultimately not be able to achieve our objective crowing the economy in treating good middle-class jobs. president obama has repeatedly called for a balanced approach to deficit reduction.

his plan for a balanced approach includes raising additional revenue from those who are most able to contribute , reforms to our entitlement programs, so that they will be around for generations to come, can smart reductions in spending that preserve key investments in education and training, research, and national security. one thing that is often overlooked is that before the sequestered, we have made substantial progress toward reducing the deficit in a balanced way he pick, achieving over $2.50 trillion of the $4 trillion in deficit reduction needed to stabilize our finances over the next decade. we are more than halfway there. and we have done this in a balanced way, cutting over $2 in spending for every $1 in new

revenue. my thing today is that a balanced approach to deficit reduction is good economic policy. it is justified by considerations of both the efficiency and fairness. deficit reduction that bounces spending cuts, entitlement reform, and loophole closing is also in the interest of the macro economy and economic growth. economists should not reject a position that says no revenues can be raised by closing unjustified attacks a loopholes in order to finish the job, of stabilizing our finances and strengthening our economy. i have to say after i wrote my remarks i saw that there was a survey of nade members, and to some extent i am preaching to

the converted. i see in one question when nabe members were asked how deficit reduction should be accomplished, 77% said with a combination of spending cuts and tax increases. that is defenestration cost position. also, when asked about tax reform, should tax increases for former -- should tax reform to increase brenda, there was agreement. barrett whitney, as i explained why i think it is a very strong the economic case for those responses. guest economists cannot we are accustomed to viewing the world through the prism of cost and benefits. and it was being the costs and benefits on the margin. the proper approach to deficit reduction will be to implement policies to the point that they

equate the net marginal cost of raising an additional dollars in tax revenue against the net marginal cost double against dan that marginal cost of an additional dollars in cuts to programs such as education, research, and defense. d as well

can anyone believe that it is impossible to produce any reduction in the tax code in order to cut more deeply the number of children who can go to head start or the amount of research at nih can conduct? i did not to think there is much question that it would be more efficient if we eliminated some of the tax expenditures get our request that our wealthiest citizens does is take advantage of to enable more children to attend had startled and to allow nih to do more in medical research. compare this approach to the alternative, which says that all of deficit reduction must occur from reductions in government programs demand that not a dollar more would be raised from closing tax loopholes. does anyone believe that on the

margin it is more costly to trim back one dime of the trillions of dollars in deductions and loopholes that mar the tax code than to spare one more child of the chance of a preschool education or spare one more grant to a top medical researcher from being cut, or scare one more border patrol agents are being furloughed. a balanced approach kids not only economically more efficient, it is also more fear. as president obama said on friday, it is not their pitch by to ask middle-class families, asks seniors cannot ask christie and spare the entire burden of deficit reduction, when we know we have got a bunch of tax loopholes that are benefiting the well off and the well-connected. the american people cannot is fair.

across the political spectrum double double -- are limited or eliminated altogether. this would simplify the tax code, reduce the ways in which our tax system distorts economic decisions, and achieve that elusive but very popular goal of broadening the base. with respect to government outlays, it cannot be stressed enough that rising health care costs and an aging population are the key drivers of our long term budgetary challenges.

as a result, to stabilize our long-term finances, reforms to mandatory entitlement programs are needed. these reforms would ensure that medicare and social security are solvent for future generations. importantly, these programs can be made solvent through sensible reforms that protect the most vulnerable. for instance, the reforms that were included in the affordable care act, which the president signed into law two years ago this month have already extended the life of the medicare trust fund to at least 2024. going forward, the budgetary challenges posed by the medicare program will be largely contingent on the pace of health care costs.

now, a balanced approach to addressing our fiscal challenges must also recognize the importance of tiny. the recovery is still fragile. weak growth in europe and asia are limiting our exports. consumption remains constrained, as households are still recovering from the loss of $16 trillion in wealth from the financial crisis, despite the rebound in equity markets and a firming of home prices, we have not regained all of our $16 trillion that was lost, although we have made substantial progress. in the near term, this will policy should remain focused on supporting the ongoing recovery. at the same time, we should take steps to address the deficit and a balanced way in the intermediate and long term.

the sequester is poorly timed and badly targeted. before the sequester, i used to say that we faced two risks when it came to the budget. on the one hand, we can lower the deficit too much and too soon, jeopardize in the recovery. and on the other hand, we run the risk of floreen 82 little and too late, creating -- the risk of glorying it too little and too late. the sequester as a third press. we can cut the near term deficit and a dumb way that shortchanges the future without addressing our long-term budget problems. that is, the sequester forces us to cut spending that supports key investments in education, research, and infrastructure

without addressing our long run problems. as a former republican staff director of the senate budget committee recently put it, the sequestered eats into the seed corn of the future. this hurts future generations and does not ease the burdens of debt they will inherit. the sequester was not designed as a means to addressing our budgetary challenges. rather, it was agreed upon in the context of avoiding national default, you might recall, as a mechanism to force congress to come up with a bipartisan solution to our fiscal imbalances. the congressional supercommittee was supposed to come up with a bipartisan and balanced agreement. unfortunately, the supercommittee was unable to pass a plan, even though they had a blunt instrument of the sequester as their sword of

damocles as well as fast-track authority. as a result, the sequester was automatically enforced and went into the fact last week. these indiscriminate, across- the-board spending cuts pose a threat to the ongoing recovery. you cannot take $85 billion out of the federal budget in the remaining seven months of the fiscal year without hurting the economy and job growth. according to the congressional budget office, the sequester is expected to shave 0.6 percentage point from real g.d.. -- from real gdp growth and lower unemployment -- and lower employment by the end of this year. most of these losses will be in

the private sector, as businesses feel the ripple effects of government cutbacks. these cuts may not necessarily be felt immediately, and uniformly across the country. but the longer they remain in place the greater the damage will be to our economy. in northern virginia, it is estimated federal spending drives 30% of the economy. as federal workers are furloughed, a month or so from now, and contracts are cut, families will have less money to spend and that will ripple throughout the economy. as the president said last week, the sequestered is a slow grind that will intensify with every passing day. and what do we as a nation get

in return for this self-infected wound? yes, the sequestered reduces spending, but because it largely by sit -- bypasses mandatory spending programs and does not make structural reforms, these automatic cuts too little to address the primary drivers of our longer-term fiscal challenges. the sequester is the antithesis of smart, balanced fiscal policy. it jeopardize the current recovery at a time when policy makers should be focused on growing the economy and investing in our nation's feature. indeed, it was warned last week that instead of reinvigorating the economy, we are heading into an ill-advised across the board austerity program. president obama has already put forward a balanced plan that

would not only put an end to the sequester, but also put our country on sustainable fiscal footing for a decade. and we have already made big strides toward achieving that plan. to recap where we are, as a result of the budget control act of 2011, the american taxpayer relief act of this year, and earlier actions, president obama has already signed into law more than $2.50 trillion in deficit reduction over the next 10 years. most of this deficit reduction, around $1.40 trillion, is from cuts to discretionary programs. more than $600 billion in additional revenue will be raised as a result of the american taxpayer relief act, which was part of the fiscal

cliff negotiations at the end of last year and the beginning of this year. the interest savings from these spending cuts and increase revenue amount to $500 billion over 10 years. use some this all up and you get $2.50 trillion toward the $4 trillion goal that we need to stabilize and our finances. as a result of this and legislation, and our recovering economy, you could see from this next question from this first slide, this chart, that government spending is coming down relative to the size of the economy and revenues, which had fallen to their lowest point since 1950, are growing and projected to grow further. of course, the difference between the blue line, which is spending, and the red line which is revenue is the deficit.

it is here scaled relative to gdp, the size of the economy. shows you the size of the deficit each year. one of the things i like about this chart is you did not have to worry about baselines. this is the way i economists tend to think about the deficit, how large is the deficit relative to the size of the economy. and you can see that the federal budget deficits as a share of gdp has already fallen by 3.1% over the past three years. this is the fastest three-year pace of deficit reduction since the late 1940's, as you can see in this chart. and this next chart shows cbo's protection under current law, and this shows that the deficit will continue to fall at its fastest post-war pace this year and next year, and then after

bottoming in 2015, slowly rise to about 3.8% of gdp by 2022. now, the cbo projection is under current law, which includes the sequester. path, of very rapid deficit reduction over the next couple years, and fix near term pain to the recovery and to american families, but it does not stabilize and our finances. to stabilize the debt of the to the size of the economy, we need the deficit to fall below 3% and stay there. that is why we set a target of $4 trillion over the next 10 years. so we are most of the way there, but we need to finish the job.

and the sequestered does not finish the job. in fact, it makes the job harder, by slowing growth this year and next year and distracting from the real drivers of our deficit problems. providing health care costs to an aging population. president obama has offered a balanced approach to get our deficits to a sustainable level. it is frustrating to hear claims that the president has not proposed a plan to end it the sequester and stabilized our finances. he has, repeatedly. in fact, it is posted on the white house website. you can easily find it beit googling white house and sequestration plan.

if you click on the second link, and then click on the links under it, is what you come up with -- lastis the president's offer to speaker boehner in the fiscal cliff negotiations. the president of plot -- the president proposed a balanced plan that stabilizes the debt to gdp, ends the sequester, and strengthens the ongoing recovery. on the revenue side, is consistent with the administration's fiscal year 2013 budgets, the prison -- the president has proposed to limit deductions to 20% for wealthiest taxpayers and close loopholes. this would result in savings of close to $600 billion over the next decade. last december, speaker boehner said he was open to 800 billion,

and then a trillion in new revenues as part as tax reform that close the loopholes and deductions. now he says that our nation has gotten enough revenue, not a dime more. if you subtract the $600 billion in taxes that will be collected by allowing the bush tax cuts on the top two% to expire under the atra, that would leave $400 billion on revenue based on his last offer. as far as spending cuts go, the president has proposed an additional $930 billion in spending cuts that address the main drivers of our deficit. you can see here the president has proposed health care savings of $400 billion, which, by the beginning of the next decade, is in line with the amount proposed by the bipartisan simpson-bowles present -- commission.

furthermore, the president has offered to use the superlative consumer price index as a more accurate way of measuring the cost of living adjustments to federal programs. and the president has offered an addition to hundred billion dollars in discretionary spending cuts beyond those required by the budget control act. these are not easy cuts for a democratic president to propose. president obama has shown a commitment to doing the hard things that are needed to stabilize and our finances. including interest savings, all of these tax and spending changes, would have resulted in about $800 billion in additional production and will stabilize our nation's finances of the next decade in a balanced way. the president has also proposed the temporary growth initiative

of investing $50 billion toward fixing our nation's roads and highways to support recovery in the near term. research by others has found that spending on maintenance of existing infrastructure has a very high return. in addition, it will help to put construction workers back to work right away. pursuing a growth agenda today is important because, as we saw in the 1990's, and as many countries are learning the hard way today nothing restores fiscal balance faster than economic growth to which everyone can contribute and from which everyone can benefit. you could see from the next slide that the president's plant would reduce the deficit below the 3% of gdp threshold and keep it there to the end of the next decade.

counting state interests spending on the out lakeside, the $2.50 trillion in deficit reduction that president obama has already signed into law is comprised of nearly three-one ratio of spending cuts to additional revenue. place, this ratio would be pushed out of balance. our immediate and long-term deficit problems will still remain. if congress were to pass the president's proposal, the ratio of spending cuts to the additional revenues would be brought back into a reasonable balance of 2-1 spending cuts to the additional revenue and we will have stabilized our debt and deficits relative to the size and the economy for a decade and made strides in addressing the longtime drivers of our budget deficit.

let me conclude by telling a story. a long time ago, a young president called over to the council of economic advisers late one night. president kennedy's call was transferred to a young senior economist named robert solo. bob solo told me president kennedy said at the other end of the phone, "i always get the difference between fiscal policy and monetary policy. which is the one i get to control?" solo responded the fed is responsible. he said if you get confused, think of "m" for monetary policy. the president does not have full control over fiscal policy.

both houses of congress must president can sign or veto. this is how our system works. president obama has made it clear that he is willing to work with the congress to find a balanced solution to our physical challenges. unlike others at the table, he did not retreat from his final offer in the fiscal cliff negotiations. he has kept on the table a balanced plan to deficit- reduction that makes responsible reform to slow the growth of health care spending for an aging population. the single biggest driver of our long-term debt. his proposal saves hundreds of billions of dollars by getting rid of tax loopholes and

deductions for the well off and well-connected. he has never said it is my way or the highway. he has kept its offer on the table in the hopes we can reach a bipartisan solution that reforms are tax code and entitlements and puts us on the sustainable fiscal course. there are many ways to reach a balanced solution. if we follow our north star of growing the economy and the middle-class, we will end up with a balanced plan that supports the economy in the near term while we take steps to adjust our long-term budget deficits. this is the ultimate test that we must apply to government policy. thank you very much. [applause]

>> we do have time for questions. please write any questions you have on cards and we will answer as many as we can. thank you very much, dr. krueger for your insightful comments. some experts say the middle- class will ultimately have to pay part of the cost of reducing the growth of our debt. you have indicated on the well- connected. can you clear up some discrepancies on those views? >> i do not think they're necessarily inconsistent. if you look at who bears the brunt of the spending cuts that have already been put in place and the president has proposed, they fall largely of middle- class families. that is one of the reasons why

i think the american people think it is fair to ask those in the top income groups to contribute more. if you look at what has happened to income inequality in the u.s., the rise in incomes and to the top 2% of americans, even after the tax increases that congress put in place by the american tax payer relief act and the loophole closings' the president has proposed after-tax income for the top 1% will still be at high levels. i do not think anyone would say the problem our economy faces now is that people like incentives to be successful. this is an example of the kind of balance the president has proposed, that the middle-class is already struggling with a lower income growth, stagnant wages and spending cuts that

have already taken place. that is what i think balanced does speak to fairness. >> in the state of the union address, the president recommend increasing the minimum wage. what impact would you see on certain groups such as teenagers and part-time workers? >> the president proposed raising the minimum wage from its current level of $7.25 to $9 an hour over the next few years. that would bring it back in terms to where it was when one reagan took office. it is a range we have seen in are not too distant past. the research is mixed on the minimum wage. i think most of it is

concentrated around finding little if any fact of modern increases in minimum wage on employment. the president's proposals were a 24% increase. in the clinton years, the minimum wage increase by 21%. that is the last time i did research personally on the minimum wage. that showed hardly an impact. i was struck by the way if you look at the igm panel of expert economists, they favor an increase in the minimum wage and split evenly on whether there would be a noticeable effect on employment. i think within the mainstream view of economics now, the minimum wage does not have much impact on employment if it is in the range we have seen historically. the economists in that survey

thought that whatever affects it may have in terms of employment, would be outweighed by helping who have done the worst over the past few decades. >> you spoke about the importance of entitlement programs. any specific measures? >> part of the president's proposal is to switch to the superlative cpi, which research suggest is a more accurate measure. partly because of substitution bias. also because of finite sample bias. the way that cpi is constructed because of sampling at the lower level, that causes the

index to slightly overstate inflation. if every price were measured as opposed to drawing a sample, we would have a lower rate of price inflation. that is one of the president's proposals that would raise about $130 billion in additional revenue. we would set aside money to help protect the most vulnerable from the switch in the index. more importantly, the president proposed $400 billion in medicare reforms. many of which have been outlined explicitly and in the past budgets. >> on the medicare, specifically raising the retirement age, increasing the deductibility overtime, and other areas -- you point out health care is where the problem

is. >> raising the age does not really solve the problem. it just shifts the burden. that does not seem like the right solution. the president has opposed raising the age and has proposed means testing. making other changes to providers so that we are spending money as effectively as possible. >> in terms of a tax loophole, would you entertain looking at a mortgage deduction and how would you address that? >> president's proposal is to limit deductions for mortgage for state and local taxes for other deductions to 28%. right now the way the tax code

works, warren buffett gets a more generous tax advantage from deducting his mortgage than his secretary does. it does not seem that warren buffett needs more help buying a house that his secretary. the administration's proposal makes a great deal of sense economically, to give the upper income groups the same tax advantage from tax expenditures as middle-class families and the or the deductible to 28%. but there are other ways. we think this makes a lot of economic sense. we are willing to discuss ways in which we can improve the tax code and eliminate or reduce the distortions. >> we have time for one final question. where would do you see is the

optimal share of gdp of revenue and tax and spending in the budget? >> i do not have a precise answer on that. i think what we want to do -- first of all, we have to recognize that because of commitments we have made as a nation to older populations and because of demographics, we face rising costs. that has been known for a long time. at the same time, i think we are ready critical point where we want to make sure we invest in research and our emperor structure so america is a magnet for jobs. other countries, they have learned from our success. education is a good way to strengthen your economy and the are investing heavily in education and research. it is extremely important that we also reserve space in the

budget for this critical investment. when businesses come to talk to us, they talk to the importance of having better temperature in the u.s. and that will help them bring more jobs back to the u.s. i cannot give you a precise number. >> i think he would all agree we are fortunate to have someone who appreciates the importance of cost-benefit analysis. thank you very much, alan. [applause] >> thank you. >> please proceed to the luncheon, which is just a floor a way. thank you.

>> we have more live coverage coming up. in 10 minutes, we will bring you an event whether internet users are heeding copyright restrictions. is hosted by the congressional internet caucus advisory committee, at noon eastern on c- span. today is international women's day, and at the state department, john kerry and michelle obama will participate in the 2013 international women of courage awards ceremony, recognizing women who have shown leadership in advocating for women's rights. live coverage of that at 3:00 p.m. eastern. yesterday united nations' security council voted to impose new sanctions on north korea. after the meeting, susan rice

spoke with reporters about the u.s. support for the new sanctions. >> today the security council unanimously adopted resolution 2094, strongly condemning north korea's highly february 12 nuclear test and imposing significant new sanctions under chapter 7 of the u.n. charter. the strength, breadth and severity of these sanctions will raise the cost to north korea of its illicit nuclear program and further constrain its ability to finance and source materials and technology for its ballistic missile, conventional and nuclear weapons program. first, resolution 2094 imposes tough new financial sanctions. when north korea tries to move money to pay for its nuclear

and ballistic missile programs, countries must now block those transfers even if the money is being carried in suitcases full of vault cash. likewise northern banks will find it much harder to launder money for the nuclear program. today's resolution also imposes new travel restrictions. if, for example, a north korean agent is caught making arms deals or selling nuclear technology, countries will be required to expel that agent. countries must also now prevent the travel of people working for designated companies involved in the nuclear and missile programs. states will now have new authority to inspect cargo and stop north korean arms smuggling and proliferation.

if a country has cargo on its territory that might be carrying prohibitive items like nuclear or ballistic materials, this resolution requires that the cargo be inspected. it will also make it harder for north korean vessels to offload such prohibited cargo if a ship refuses inspection on the high seas. thus forcing it to return to its port of origin. and airplanes carrying smuggled items can find themselves grounded. this resolution will also counter north korean efforts to abuse diplomatic privileges to advance its nuclear and ballistic missile activities. it will now be much harder for such diplomats to procure technology or divert funds to the nuclear program without being detected and expelled.

resolution 2094 further bans the transfer to and from north korea of specific ballistic missile, nuclear and chemical weapons-related technology. it lists new prohibitive -- prohibited items and calls on states to block any item at all that could contribute to these activities. it names additional north koreans and north korean companies whose assets will be frozen and those individuals will also be subject to a travel ban. this resolution lists a number of luxury goods that cannot be sold to north korea. as a result, north korea's ruling elite who have been living large while impoverishing their people will pay a direct test.

-- price for this nuclear test. this can be found on the u.n. mission web site www.usun.state.gov. these sanctions will bite and bite hard. isolation and raise the cost to north korea's leaders of defining the international community. the entire world stands united in our commitment to the denuclearization of the korean peninsula and in our demand that north korea complies with its international obligation s. if it does not then the security council committed today in this resolution to take further significant measures if there is another nuclear test or

missile launch. we regret that north korea has again chosen the path of prove occasion. -- of provocation instead of the path of peace. far from achieving its stated goal of becoming a strong and prosperous nation, north korea has instead again opted to further impoverished its people and increase its isolation. we hope instead that north korea will heed president obama's call to choose the path of peace and come into compliance with its international obligation. >> you can find out more about the new sanctions against north korea by going to our website, c-span.org. you will find yesterday's

security council hearing. search the c-span deal library. >> the patent and trademark office is one of the few agencies that is designated to exist in the constitution. patents and trademarks are eight fairly modern invention. the first patents were oriole grants given to inventors for monopolies on their inventions. they were popular in england and in continental europe. the constitution takes it one step further. this is for useful inventions and from the beginning, novelty was a key aspect of the patent office's role. >> every one of the model has a tag with that. each of the tag is tied on by a piece of red ribbon. this piece of red ribbon is one of the supposedly originations

of the phrase red tape, and government red tape. this was originally red ribbon that each one of these were tied on, and it was not until the tab was tied on and the patent was approved that you would cut through all the red tape. marginally, patent models were required to show the operations of an item. each one of these models works in the way that a full-scale version would work. >> this weekend, tour the national inventors hall of fame museum, sunday at 7:00 p.m. eastern on c-span3. >> the things that and early american life was taught to do, she supported her husband's career, usually through entertaining. dolly was both socially adept at

politically savvy, says she kentuck -- she constructed her entertainments in such a way that she could lobby for her husband in the guise of entertaining. she thought it was important to create a setting in the white house, almost like a stage, for and the conduct of politics and diplomacy. first lady, dolly madison. we will follow her journey from a quaker window into the woman people remember. we will include your phone calls, facebook comments, and and tweets on monday. live coverage this afternoon from the labor house office building on capitol hill for a hearing on copyright compliance, specifically looking into whether its internet users are

heeding copyright restrictions. members from the motion picture association of america. all of the companies participating in a copyright alert system that seeks to inform subscribers that they have downloaded and shared copyrighted content. it is being presented by the congressional internet caucus and advisory committee.

>> we are live on capitol hill for a hearing on copyright compliance. we expect this to get underway in just a moment. we will have a live when it does. cardinals have set tuesday as the start date for the conclave to elect the next pope. the decision was made during an voted this afternoon among the college of cardinals. tuesday afternoon will begin with a mass followed by the first balloting at noon. while we wait, let's go back to

this morning's washington journal. we spoke with a reporter who has information on the president's outreach to rank-and-file republicans. the president's charm offensive. host: thanks for getting up with us this morning. talk to us about this charm offensive and where it came from. guest: the president has done things he has never done. he is reaching out. earlier this week he had dinner with nearly a dozen senate republicans. he had congressman paul ryan at the white house for lunch. next week he will sit down with republicans and later house republicans. this is a shift of the president who has taken criticism for being aloof the strategy behind

this is basically, the white house has to try something else to get a deal to block be sequester. the automatic across-the-board budget cuts failed to work. the white house and republican leaders could not get a deal to do that. the president is trying something else. they are trying to build bridges with members across the aisle and hopes that dividing and conquering and getting rank-and- file republicans to agree to a deal that he should have been reluctant to agree to. host: is it working?

guest: it's early to tell. the white house has acknowledged the limitations of the strategy. there are still a lot of big differences specifically when it comes to raising revenue or taxes. obama would like to see increased revenue past parts of any deal. republicans say they have already done that in their efforts to stop the country from going over the fiscal cliff at the beginning of the year and they are not raising any more taxes unless it's part of a tax overhaul that deals -- that lowers rates as part of that. so there are still pretty major differences. the white house spokesman jay carney yesterday said that we know this is still going to be a long shot, that the differences are still pretty intense. is too early to say. i'm not sure anyone is expressing great confidence. but republicans on the hill that said this is a really good place to start and they welcomed the president's overtures. host: you brought up jay carney is a response yesterday. he was asked whether he should a been reaching out to members sooner. i want to play a clip of jay carney yesterday. [video clip] >> again and again, this president has moved towards

republicans in trying to find common ground in these negotiations. as you have seen him say and is evidenced by the meetings he has been having, he remains interested in that. he believes that when he hears, republicans say that they are interested in finding that common ground, that they believe it's possible to marry entitlement reforms that produce savings with tax reforms that produce savings and achieve deficit reduction. he wants to have that conversation and that's what he's doing. host: lisa is still with us. where did it change in strategy comes from? is it attributed to someone specifically at the white house? guest: [indiscernible] democrats and officials assumed that republicans would never be able to swallow the defense cuts that were part of the sequester deal, that they would never sllow -- allow those cuts to happen. it was a little bit of a shift in the republican caucus where they broke their traditional opposition.

many particularly younger house republicans, new members, those that came in with a lot of tea party support, they said that they did not like the way sequestration has been implemented but they would like more specificity in the across- the-board cuts. that is a bit of a surprise to the white house, which expected the republican caucus would never allow this to happen. part of the change stems from a miscalculation and from the simple fact that efforts to avert this just is not --just did not work, the strategy of going to republican districts, it did not seem to deter republicans from allowing this to go into action. republicans think they agreed to increase tax cut as part of the fiscal cliff deal and they

felt the president was pushing them to do something they already did. that he was asking for too much. host: the reaction from democrats to this charm offensive for rank-and-file republicans? guest: democrats will not say they don't want the president meeting with republicans. publicly, they said it's a good thing. i think that many particularly on the hill are sceptical anything will come out of it. host: thanks for joining us. guest:. thanks for having: >> to capitol hill for a meeting on copyright compliance. this is just getting underway. >> i am the executive director. a bit of housekeeping. next week on friday, march 15,

we have another briefing on cyber security. it is called the cyber security after the white house order, will congress make the next move? it will deal with some of the cyber security issues we are dealing with on a daily basis. today's event is called combating cyber security online. toay's event is designed explore a system that is being s ined out to the major isp' america. that system of all lawyers started last week. we thought it would be timely for folks in congress to learn more about this program and how it rolls out. we tried to get this group that put this together to explain what the system is, how it relates to the policy in general and the impact on

members, constituents, in the districts in which they live. we have lots of folks. it is almost like a wedding banquet table to get through. i will quickly introduce everybody as quickly as i can. i will hand it off to the executive director, jill. and we will go to the presentation and ends up with the advisory board providing their conversation. then we will do some q&a. it is a timely opportunity to ask questions. quickly, to my rights is jill, executive director of copyright information. she has been working on civil liberties issues. later working for aol, later became aol/time warner.

to her right is maryann grant. she is with the motion picture association of america. she interfaces globally on their relationship technologically with isp's across the world. next is thomas dailey. mitch has served on the intellectual properties committee. if i just make a point. the last three speakers at the table, but the -- not the least, on the advisory board.

the advisor report is designed to consult on this project. jerry is the chair of the internet, this advisory committee. he is my boss. he was a founder of the center for democracy and technology. before that, he was the director of the electronic frontier association. before that, he was chief counsel for the aclu. he has worked on a lot of intellectual property issues. i am including the electronics property act of 1986. to his right is gigi stone. to her rights is the executive director of the future of privacy form. jules was with aol as their

chief privacy officer. he has a long history of war beyond privacy related issues. with that said, i would like to hand it off to jill, the center for " -- for copyright information -- the center for copyright information's executive director. >> can everybody hear me? ok. now it is on. i do not work for a technology organization, so i have no idea how technology works. [laughter] hello, everyone. thank you for having us. when we talked about doing everything like this, we did not know it would be coincidental with our implementation. we are arriving in front of you in real time, just on the heels of the culmination of 18 months ' worth of work on the copyright

information system. many of my colleagues were involved in a multi-year association. these issues have not lend themselves to voluntary, robert if discussions or agreements. this has -- voluntary cooperation of our agreement. we will take you through the nuts and bolts. a lot of you have questions and comments. we are happy to take them afterwards. we are stuck with the technology of shia. i am running two computers. i apologize in advance. just to give you a little bit of background, the center for copyright information was formed in 2011 by a memorandum of understanding the party -- the parties of that memorandum were the largest service providers in the country. it represented the first time

these entities came together to deal with ever-increasing problems of digital privacy. cci was set up as an organization to work with multiple constituencies, including our advisory board and other interested parties. we wanted to implement the copyright information system. we have to achieve goals as an organization and through the alert system itself. one is to educate consumers up about the importance of copyright protection. -- consumers about the importance of copyright protection. we are really trying to crack the code in terms of getting to consumers. to those of us who engage in these discussions, who engage in policy discussions for a living, we take for granted that copyright is a concept people

can understand. from our research, it really is a confusing and confounding topic to lots of people. having a successful effort in reaching people and educating them and getting tim -- them to appreciate the importance of protecting creative work is a primary goal of our center. the second and equally important goal is to bring to life and to collect consumers to the multiple ways of enjoying copyrighted content and digital content legally. that has always been the case. it has not always been the case that there have been a variety of different options, price points, formats. some people want to buy. some people want to rent. some people want content for free. marion those choices of consumers with what is available is -- marrying those choices of

consumers is another key of copyright information. the primary goal is getting people's attention around these issues. it is the copyright information system. i want to put it on the screen so you know who our partners are at the moment. the five largest isp's and the movie and music industries are represented by the recording industry association of america and the motion picture association and independent film and television alliance, the association of independent music. independent and studio-related producers. the effort began in 2007. at that time, there was a lot of trust.

there were a number of different people at the table. over the course -- and some of those folks can talk about how difficult the process was at the beginning. there was involvement by key consumer groups and government entities trying to unpacked the problem and how you would get to a voluntary solution that would work. the second thing is, there was an understanding that in the realm of digital privacy, the one in which the parties around the table could focus on, was peer-to-peer piracy. that is not the sum total of the digital piracy problem. it is the area where these parties could start to show an effort and progress in terms of educating people and getting them to change their behavior. the last thing i would say on

this slide is that we hope to change attitudes. there has been a lot of attention given to this effort. a lot of claims about the fact that it might shut down someone's internet our lead to bad result. -- bad results. the goal is education and not punishment. i cannot emphasize that enough. hopefully, it will become clear as i moved through the presentation. -- move through the presentation. how about this?

how about if i just continue and if we get he screamed back, we will. here is how the copyright alert system works. it makes consumers aware of possible illegal activity that occurs over peer-to-peer networks. there are three types of alerts people could get over the course of several stages. educational is surely one way. it is purely educational. the second phase is and now -- an acknowledgment alert. that an acknowledgement is what it sounds like. this requires the consumer to acknowledge the receipt of the alerts. instead of being delivered by e- mail and just being one way, it will require some level of conversation between the user and the isp.

as stays four, five, or six is what we call a mitigation alert. the best way to describe it is somebody saying, i have sent you that 05 of these alerts or you have -- and you have ignored them or taking any steps to stop piracy over your internet connection. we want to make it clear that we mean business. this is a serious issue. there are some consequences attached to those mitigation alerts. one of the things we want to accomplish is to educate consumers on how they can prevent the activity from happening again. it is not always the case that people are engaging intentionally in copyright infringement. there are folks who might have a peer-to-peer system on their consumer -- on their computer

and data not realize it. somebody who is not a primary account holder in their household is to gays -- is engaging in that behavior. there are lots of consumers out there who receive these notices and have not been engaging in these behaviors themselves actively and are willing to understand how they can change that behavior. that may include securing their wireless. it may include making sure they talk to their teenagers. there are a variety of different steps they can take to stop the behavior from occurring over the internet connection. let me just talk about, if so happy to go through in detail the with the copyright system works. as an overview, that is probably enough detail. let me give you some key facts.

these are the things people are most interested in understanding. residential broadband internet accounts. alerts are sent to the primary account holder. this is primarily going to affect residential account holders. secondly, and we will go into more detail now that scary and grant is now here. we will go through methodology in -- now that is here. the content owner are passing those notices on to isp's who have a relationship with their customer and then send the alert on to their customers. the information does not go back to the content owner of who at the chicken and subscriber is. a third point is married to the second point.

we spend a lot of time building in elements to protect consumer privacy. we feel committed to that and we will continue to watch and monitor to make sure the system encompasses those goals. the copyright alert system does not require an isp to terminate a subscriber's accounts. it bears repeating. i was not actually repeat it. this has been a piece of misinformation and concern that has swirled around this program since it was announced, since its intention to implement it was announced. there has been some confusion. i cannot say that strongly enough. termination comes with a punitive system. this system is built around education. fifth, the website is intended to help people find legal content. i talked about this earlier.

i encourage everyone to go to their website. for those of you into the center for copyright information website, it looks different and had a different focus and was intended for a different audience. we spent a lot of time of the last several months talking to consumers and learning the best way we can give them this information. what you will see now at the cci site is a consumer-oriented set of materials. i had hoped to show it today, but technologically we cannot do it in this room. there are several animated videos we have created. they are short and intended to help consumers who do not want to read through a lot of materials, understand the system, what their rights are in terms of and in every view and how the process works. i recommend those to you. if the infringing activity

stops, the alerts stop. we are hopeful people will get one alert and that will be it. the notion that we are going to send people multiple learns there are no subsequent instances of infringing behavior is not true. it is a pretty simple system. if you get an alert and you take the steps necessary, you will not get another one. the next point is that, once a consumer has received a sheet mitigation alerts, they will no longer receive alerts the best received -- we seem to two mitigation alerts, they will no longer receive alerts. there are consumers that we believe are engaging in this behavior inadvertently, or they

do not understand the illegal nature. we are hopeful, which is why we have invested so much time and energy and funds in it, that most people will change their behavior. if we get to the situation where people have gotten six alerts and two mitigation measures and day thinking -- they continue to engage in piracy, clearly the message has not reached them. we will use the resources we have to try to address alerts to other people. there is not an unlimited of a list that will be sent out. we want this program targeted to people who will respond. finally, the accounts included in the cup red alert system are not the accounts to be used to provide public wi-fi. i cannot emphasize enough the point i made about no termination. there has been a concern expressed that if businesses are providing hot spots and they get

these alerts, they will shut those hot spots down. accounts that are parts of this program are not accounts where businesses are providing hot spots. i wanted to make that clear. the next part of the copyright alert system -- once you have gone to the program and are presented with a menacing -- mitigation alerts, you are given -- alert, given a chance to challenge the alerts you have received. we want to have a check and balance. we want to have one that is independent, neutral, and that consumers can easily use. we spent most of the last year building the independent review process. it will be administered by the american arbitration association. they will assign neutral arbitrators. there is a lot more detail about the process on our website.

before a user would be put through a mitigation measures, they will of 14 days to file a challenge. they will pay $35. that money will be refunded if they have a successful challenge. there are several reasons for review that are built into the system. my isp misidentified my accounts. or, this was not made serious someone was using my wireless. if the user is successful, they will be refunded the $35. if they cannot afford the $35, a beefy -- the fee will be waived. if a user is successful in challenging -- if a user is successful in their talent, you will go back to zero as if you

never received an alert. the last thing i wanted to talk about this program evaluation. we are in front of you in real time. we are at the beginning stages of implementation and have not got into the face of determining how specifically we will evaluate the program. i can say this. now that we have implemented, we will be collecting aggregate data to the guy with the efficacy of the program and recommend it necessary -- recommend necessary enhancements and report that data to the public. it is difficult to know because we are just rolling out exactly what the time frame will be. we want to be transparent. he wants to let people know how the program is working. at the same time, we want to make sure we have enough data to draw a good and reasonable

conclusions about the program's efficacy and enhancement that need to be made. we will be looking at both delivery of alerts as well as the appeal process. there will be on lots of information we take in and analyze and make available. before i turn it over to maryan n, i want to say this has been a collaborative process. one of the most important pieces of it has been the continuation of our consumer advisory board. they are a group of people who come to this with many years of experience in analyzing internet issues, property issues, privacy. i think it has helped us get to this place in a way that is fair. so i will turn it over to

maryann. >> go to the slide. the the mouse and go to the corner. >> it is really hard to do this unless you have eyes in the back of your head.

>> thank you very much. ok. i am glad to be a. my job today is to take you through the methodology that content owners used to verify cases that generate notices for the isp's. we take a lot of care over this. our intent is to make sure every known as we send is a

valid notice. we will take a bit of the context and go into the process is self. as we get toward the end, there will be time for you to ask questions if you have them. we are going to review the motion picture association's methodology for doing this certification the music industry how music is different from the way you look at it and how it is seen digitally. it is efficient at dividing large files into small pieces and disseminating -- them

quickly on the user's computer. it is the best place to get what you want if you are interested. music files show up on other b it torent. we have scanning vendors, technology vendors, who helped define these cases and generate notice as for us. i will show you shortly how all of that works. the isp's will match the ip addresses to those of fiber accounts. as i go into the more detailed description of the process, the first thing i want to emphasize is that we do not want to send that is not a valid notice. we want to make sure every single one of them is supported by evidence to make sure somebody could not come from left field and send one and pretend to be us. there are several things we do

to make sure that occurs. we make sure television or music content are identified -- is identified properly. we want to be sure that if we tell them to find avatar or lincoln and they find something that might be and it absolutely is. things like the name of a movie with the name of the track are not sufficient. there are other things we need to be looking at that are part of the files and help us validate the process. as we are getting into the process, we need to make sure of verification is done in every case. the way to guarantee that is to order it on a vendor. we can look at that evidence. and i.s.p. keller that evidence. the independent review people

can look at that evidence -- and i s p can look at that evidence. we want to make sure the computer that we think is to chip in that file actually did. it is not just as simple as singing -- seeing a file advertised as linking -- lincoln and assuming it is. finally, we want to be sure that when we send the messages to the confidentt they are that they came for us -- from us. there needs to be a standard format so that it is not confusing to the isp system when they are receiving information from us. this diagram is an overview of the process. i will be digging into it in more detail. there are a two size to the equation. one side is the kind -- the content side. the other side is the ip address

side. only if we get a yes on both sides are we going to send a notice. there are reasons why we might not get a yes on both sides. we will see far more potential cases than we are actually going to act on in terms of sending notices to our isp's. the scanning vendor that finds the notices and verifies them work in the peer-to-peer network. they are doing exactly what you would be doing if you are trying to download a film or a piece of music. there are two basic differences on top of the fact that they are doing what a consumer or user would do. they can do more than one case at a time. they use servers and they can be running multiple sessions. they saved the evidence. the evidence is there for anybody to see who is doing this process. we require it to be saved in a

way that we can look at it in a way that is valid. what i am going to do now is work through the content side of the equation to show you how we verify the contents we side -- we find. we give our scanning vendor a list of things to be monitoring. in our case, it would be television shows, episodes, or films. in the case of music, it is albums or tracks. the venture goes into the network with that list. anything that does not appear to be on that list is going to be passed by. current releases and popular stuff. you can imagine what might be on the list today from television. some of the things are from music. we start looking for things before release. once in a while there will be something that case before it is released. there will be things in the list -- in movie releases such

television shows or when it gets on dvd's. they go into the network and find a file that they think is interesting. they are going to investigate the file. if the file has been seen before, they will take that one. if the file has not been seen before, they will take --," two. -- they will take track two. it is only when we do what we do and we get a guess that we are going to be thinking about sending a notice. let me now address the situation the first time we see a file. is it -- the vendor is getting the content, downloading the content. they will generate something we call and hash value. some of you are thinking i am

and india for mentioning this kind of thing. idiot for mentioning this kind of thing. a hash value is generated from the file itself. you do not give someone a hash value. you get it from the file itself. we did not take on hash values that are advertised. you see hashes advertise. we actually generate it every time. the vendor is downloading. they go to check the database to see if they have seen this before. if they have not seen that- before, they know it is new. they will download the entire film or the entire album or track.

in our case with television or movies, they watch it. it is a manual process with evidence. this and pieces are not the things we would be sending notices on. for this program, that is not something we are interested in. if it turns out it is something like that, it just gets parks and the move on to the next one. if it is a copy of lincoln or a copy of the seinfeld series, episode five, that is something we would be sending a notice on. we want to see the titles, the credits, everything about it to make sure it is a copy of that

actor. we are also going to record things that in minutes 16, here is the redhead that went across the screen. all of those things can capture so we can recognize it later. once we have capture of the information about the file, we are going to send a notice to sendip address send -- sent a notice to that ip address. we are going to do this religiously, every time we see and file for the first time. it is similar with music. with music, it is easier to use automated tools to do the delegation. there is an occasional double- automated tools to do the -- automated tools. we have found a version of

linkedin that has odd things about it like the head on the screen and minutes 16. that entire -- lincoln that has five things -- odd things like the head on the screen. we have downloaded sufficient content to generate that hash again. that piece of content will be saved. in some court cases, we have gone to court with an entire movie and we have gone to court with bits of movies that have been collected in the process and have shown how they over land. it absolutely proves that it was the same file that was being distributed. hash values are important to us. we also depend on other things.

sometimes, our members are provided with reference copies of good or bad content. an example was when my the jackson's this is it -- michael jackson's this is it for come -- was coming out. there were trailer's all over the internet. we will provide it with bad copies that were confirmation that this needed to be stopped. now i will go down the other side of the equation, the ip address size. i mentioned i would show you a picture. this is one example of a peer to peer network. those are bits of ip addresses sharing a particular file. next to its is the type of find that a particular ip address is

using. i will come back to that in a second. you see information on the had values. left to -- hash values. we have to make sure the isp is the right isp. we have to make sure it is interesting for this program. if it is, we go to the next point. the next point is to try to communicate with that ip. the vendor system is going to say, are you alive using a basic communication came likeoping. -- like ping. that is not a sufficient answer for us to send a notice. about 3 or four years ago a lot of publicity was seen about a

printer. we go much further. now we have gotten an answer back from this ip address same, yes i am here. i am alive. you can see in the column next to the first blue thing, some names like -- those are appear -- those are peer to appear -- to peer things that we would see. we will try to speak to the ip in that kind's language. they want to get an answer back in that language, too.

we are dropping people as we go. if they get an answer that in that language, the next thing to say is that it looks like you have this file. palin for a file with these values. do you have it. the other computer replies, yes , the next thing to do is to establish a complete and shape. it is that the handshake point that we say, give me the file. we generate the cash -- hash and go into the database. it is only when we receive content that has been verified to be infringing that we will send the notice. once we have confirmed we are sending the notice, the scanning then there is one to sit the packages out. we will create what we call the

evidence package. it has a lot of different information in it. i would not take time now to walk through that in detail with you. in this summer, there is an overview of the transaction, which tests can double-time stamps. this is when i connected to the eyepiece. is this what is responded back. that is a screen with several lines 3. we also give details of the action communication between the computers. we capture the actual data. we capture the audio alive and the answer back and that is saved in a way that could be looked at and listen to later. we also save the actual content. what is the whole movie or a piece of the movie, we said that

as well. all of that ends up being several megabytes in file size. that can be presented for the independent reviewer if they want to double check that there is evidence supporting every case. what the isp does when it received the notice is to take the ip information and the date and time information. that is when it is confirmed to be an infringement. it is when we knew for sure. that is represented in the notice we sent. that is when the i.s.p. will do the mapping to make sure they will be sending the alert to the subscriber and again through

that ipo at the time. -- ip at that time. if they are having a rest between alerts, the ip will hold that noticing case it is needed later. that is my story. i will be happy to as a questions at the appropriate time. >> jill, before i had in that field, we are running short on time. i will handed back to you for questions. >> i would ask if my colleagues want to say anything. then we can have tim ask questions of the advisory board. >> at this point, we would like to transition to the advisory board, which i mentioned consists of three not-privacy,

internet -- three internet privacy internet giants in the space. i would ask for your perspectives on how you have been consulting on this and how the process is going forward? is it okay if i just sit here? >> please. >> it was kind of you to set me up for a long speech. i will take you up a step. we are in a contentious face. the goal i have always had an annual everyone at the consumer advisory board in the industry wants is an open internet. an open, democratic, vibrant internet. there are only does the things

they can get in the way of that. that solutions, bad behavior. this has been an area where the u.n. the vacillations iv and the intentions yelling and screaming as: -- don on. we have found a middle ground to preserve and protect the openness of the internet. but also intellectual property and the lives of higgins to present their stuff and to make a living and to create. that is far of defense amendment and is currently an infant. when they asked me to but his faith on this advisory committee, as i have in of reference that the content is 3 and the i.s.p. assault, -- reference to this context and

the i.s.p. also, i said sure. it is not in response to. many people are doing different things. this came along at about the same time. it is moving in a different direction than try to lock down or do global legislative solutions, which is changing too fast and where there are new business models and different approaches. we need flexibility. we need innovation in the solution space and we need a dialogue between being b policymakers isp's, and the consumers. this is the basis for that. it is the beginning. i am urging. marianne's presentation is really important.

what we discovered in the kicking the tires of this is that we are not creating a privacy nightmare on the front end. number two, they are going to diagnostics to identify real instances of intellectual property going to i t addresses where it is not sent this. these are big files. try to be clear that they are not skimming along. they are trying to untie that to real infringement and instead of bringing the hammer of the law down and calling six strikes, three strikes is a misnomer. three strikes and you are out. this is six strikes. it is six notices that may escalate. it is to convince the consumer that your ip address and your

computer has downloaded a mover and the less a movie or real tracks -- has downloaded a movie and real tracks from an album. there are new models. there are new ways to get done that. do not do it this way. the theory is most consumers want to do the right thing. they need to understand that if they want to have self-respect and dignity and being responsible to us as, they have to know that there are standards that they have to me that they have to confront the fact that they may be doing something that they should not. but the console and the front with being watched and noticed that way, will say, will stop. the hope of this program is to convince a good number of

consumers not to do what they are doing. i think that is volunteering. -- voluntary. it is not a draconian solution. a lot of data is pointing come in. we got a lot of data from the highest peak in terms of how it is working and whether there are false positives. if there are real hits, we will have enough to say, this isn't the problem and if and make adjustments. it would be helpful to give it a chance. it will be a disservice to try to sell it with hot rhetoric and mislead people about is characteristics in order to bring it down. if the argument for openness and freedom is that we can have no

solutions in the space, that is not acceptable. that is not going to happen. people will try to find real ways to solve this problem. >> gigi, you have been kicking the tires of this program. any hubcaps come off, or anything? >> welcome to everybody. it is good to see so many family faces. it is the first time i have been called a giant. i cannot wait to tell my family of jewish people that i have been called a giant. i want to echo some of what gerry said. there has been great care taken by the some form relating the system to try to protect

privacy and protect consumers rise to lose -- to use country unlawfully. to use content lawfully serious there will be some false positives. i am hoping not many. that is the nature of any system of this type. i think we have to determine, is the best and worth the cost. i certainly think it is with. this is the main chance. in the 6-10 months leading up to it, it was a long wait. one of the reasons it was a long wait is because companies will try to do it -- trying to do it right in trying to do it in concert.

people are going to start getting the alerts and we will see what happens. i am on this board to help fine- tune it. no hubcap fell off that the beginning. the first hubcap to come loose was what should be said to the warnings to people. the consumer advisory board was very clear with the board and with jill that that was not gone to work. if we were talking about education, it had to be educative. it has got to be more on the lines of we believe somebody is using your internet connection to illegally download, here are some alternatives, here is where you go if you do not believe you are doing so.

or of the gentle educative approach as opposed to we see you and me know you are bad. that was the only hubcap that came loose. i guess that is not true, if you have seen some of things i have written about. the other thing i have really been urging is for the cci to be as transparent as possible, and i will continue that. this is a good start. marianne, it will be great to have your presentation to be put up on me cci website. a lot of the noise you are hearing in the months coming up to launch last week were people spitting conspiracy theories because the transparency was not where it was supposed it was to be treated most exciting about the data collection, and the presentation of how this thing is actually working. most of you have not read the 40-page memorandum of

understanding. if you have an hour with nothing to do, go ahead and read it, because it requires collection of how many people get to each alert stage, how many people go through the appeals process, how many people win, lose, on what grounds. that data could be really valuable in determining, weather systems of voluntary systems like this work, and there are other voluntary agreements that are being hatched as we speak and have already been hatched around credit card companies and ad networks. this is not the only voluntary system that is being discussed right now between intermediaries and the content industry. i think data can be very viable, and i look forward to that because we what we are going to find and what i hope we will find is after people get the first four second notice, they stop what they are doing. this is not going to get to the

hard-core folks, not going to get to the folks who say screw the movie studio, the recording industry, i can believe i am saying all this on c-span. i'm just going to -- did not care if they go bankrupt, but that is not what the system is about. people criticizing the system based on they do not think it is done to start the hard cores, you are right. let's see how it goes. i am presenting myself as a person so people can talk to, complained to, give compliments to, if they think the system is working or not working. i see myself as a consumer advocate, a difficult balance for me, but like i said, we think we will give it a whirl and see how it goes. >> at the very end, you have a

long history in privacy in the past. my question, people are worried about the privacy. if you could give your perspective as a privacy leader and an advocate. >> i have a number of different hats, the chief privacy officer, state legislator, but their role i sort of put on an focused almost when we did our reviews was the chief privacy officer or all paired one of the things i learned is a good intentions and the policies on it goes so far when it comes to privacy to the extent you can design a system so that at an primarily does the way it intends to do. what i initially liked about the system and i share some of the input we provided that helped with collaboration of the team,

even add some positive elements to it. at the outset we had an adversarial system where people's names and identities to the course of litigation were disclosed. here we have a system that is in many ways very different. the information is not disclose, are not monitoring. the piece that i think we were able to help enhance, we wanted to make sure that when somebody did appeal, and they downloaded some content that they might not want to be publicly associated with or be uncomfortable about calling up an appealing and saying, i downloaded this particular content, and now i would like to appeal, and perhaps be deterred because they did not want to be publicly associated even non-publicly associated with that, and we

said why can people appeal with an account number or a registration number or the lighike. that does not need to be a part of the appeals process. the appellate review our needs to know this is somebody, here is a file, handed over to me, and they pay a fee we were there early enough that we could provide that sort of input and review into the process and we were delighted that folks worked hard to make that change, and enhance the design. the role i hope will continue to play on this issues is keep an ear open, and when the system is out there, whether it is a product or service, people bang on it and you try to figure out was it intended and you continue to tweak, but we have done a pretty good job, and the team has done a pretty good job by

privacy by design, and we have a pretty good situation for the consumer. >> i would like to get a question and one second, but the good folks from c-span.org like to enjoy it if you use the microphone that a standing, that is working. before i go to questions, one question for me for, and for brant is, this thing is rolling out right now, how many people are getting notices in the first several weeks or months, the one, and, number two, there are two different i.s.p.'s, could you talk about the differences of the program, from verizon, at&t, just get a flavor of that. >> thanks, and, first, i want to echo the comments that you have heard already from our advisory

board members, and we on the board very much appreciate their involvement, participation, throughout, and jerry's comments about what we are trying to do is to, and gigi's comments are important as well. i want everybody to know that we take their input seriously, and over the course of time, almost five years ago, to this month, that this whole process started, if you can believe it or not. it has been a long time coming, contenti.s.p.'s and the owners have worked to develop a system that war. all the things that jerry was saying about the focus on education, trying to correct behavior, where it can be corrected. ultimately, what gigi said was right. if he you are an infringement, this is

not going to stop that. that was one of the reflections with about and came to realize was practical reality here is we are not on to stop this. we can hopefully make a dent in it, and for those people, and most of the people in the audience, if you learned that something is gone on on your internet connection, you may very well want to stop it, and we hope you will. if you do not know what is going on, you did not know to stop it. this is our desire to do just that. it is an escalating process in a sense. i could speak to the verizon system, brent can speak to at&t's, and the mou describes the process in more detail. at horizon, what we have is three tiers. the first to notice as you will receive from us are going to be by way of email. we will send them to all the e- mail addresses we have on record for you. each notice will basically be

spaced out by a week. we will only said u.n. notice per week. the first two emails. then an acknowledgment which would effectively be an interstitial pop page on your computer. you have the keys to that popup page by clicking an acknowledgement, indicating you receive the acknowledgment and the notice. we're not asking you to concede that you infringed, but you have and fringed eyes you have received a notice. there is a video that we will ask you that we produced to do more education, and then you are out of the garden. and your service is restored. same thing on the fourth notice. when you get to the fifth notice, that is the mitigation measure, and what it is is an

enhanced form of notice. what is designed to do and the reason we have these three tiers of notice as we know that email alone is not when her the% effected. we have the second tier, which is the acknowledgement stage, and the third tier which is at horizon we will give you the option -- at verizon, you can either challenge the notices if you believe you have been receiving them in error, or we will initiate a band with slowdown. on the fifth notice it will be for today's. your bandwidth will be slowed down be256k, and on the sixth noticed it will be slowed down on for three days on the same speed. the idea is to give you enough bandwidth so that voip would work, but to get people's attention. that we all know their kids in the house, they can beat mom and

dad to the email, we want to make sure that somebody responsible at the account, the account holder, will get the notice and realized that something is going on and then hopefully make the decision to remove hepa software and stop the infringement, the infringing activity. that is the way the process at horizon will work hard after the sixth notice becomes third, that is the and the program. there's no further mitigation stages or anything like that. that is how we are handling it. we have told our customers about that it appeared we did a posting on our website. we did a posting on our policy page, and hopefully we will have good success. >> thanks, tom. at&t i would say -- let me step back. i would like to echo what tom said about the process and go back to the beginning.

as others have been saying, there is anticipation about this beginning several months ago, but all the delays, if we call them that, that happened were the result of people trying to be cautious and to do this the right way and to take into account consideration of the advisory board, to learn from each other's, to listen to stakeholders, but also to work in tenderly with the folks on our team to get the systems up and running, and i would like to its knowledge that the folks -- i am sure at horizon and the other cable companies, there are a lot of folks involved on the operational side that did a lot of great work here, because what it ultimately requires in a lot of systems worked, what the mou set out was a structure that we are following, verizon, at&t,

comcast, and cable, but it allows us to make implementation of that shropshire to fit with our systems -- of that structure, to me that our systems. to make a reliable as possible, and accurate as possible, it takes a lot of worked to take the input from the content owners, with reliability and the like. having said that, our system is zon inlike horverio terms of staging. what is unique about at&t is at the mitigation alert stage that tom was describing. what we will be doing at that stage is if folks reach that

stage, we expect and hope the vast majority of our customers will never reach those stages, nor will they receive the justices. that is something to be mindful of. if they reach that stage, what would happen is they're browser, online, would be redirected to an on-line portal, and that portal, they will go through a series of pages of content educates them about copyright online and the like. once they have completed that portal, the browser redirection will cease, and their internet service will work as normal come automatically. if there should be no need to call a customer care representative or anything like that. i will emphasize, the key here is the educational component. we are trying to educate the

customer, but it is not just education, it is to empower them to make a decision. we are not making decisions for them. we're giving them information. we are telling them what copyright is, the differences between lawful and unlawfully available content on the internet, and then talking to them about things like securing their rowdier and other things. at the end of the day, it is up to the customer to choose what to do and what not to do. this is not a program where we are trying to oppose -- impose a penalty. it is about changing my cent and change the bending curve on behavior. as everyone said, this is not affect those folks that are dedicated to doing this, but there is a lot of evidence, and mary and talked about this at some length, and certainly jill, there is evidence that suggest there is confusion out there, and especially with the younger

kids and teenagers and the like to experience, grew up with the internet, they did not see the difference between a legal website and an illegal website. this about letting them understand and powering them to understand what is going on on the internet. we hope that is where the program takes people, and obviously we are at the very beginning stages, we are ramping up right now, but in a month -- in the months coming up, we should have more of a share. >> i have a tough questions, and i have some from twitter and a question i promised i would ask, but i want to get everybody in the audience, questions from the audience, please. please identify who you are and if he could direct a question that would be helpful. >> the graduate student at university of colorado. my question is to marry and. i have not done a lot of research -- to marry and, and i have not done allow this

research, but what if their systems would change to bypass what you have put in place, so in terms of the handshake, if they are not reply in the same language, or stop replying, is there a way to incorporate that in the system he built, and how soon do you riser system if such navigation tools to come in place? >> ok, so that is a good question. yes, there are ways to avoid this. nothing is gone to be perfect. we rely on our scanning vendor to keep up with those kinds of technology changes. again, this is about reaching the bulk of people who are not gone to the with funny stuff other systems and would appreciate a straightforward message. our research supports that. we're not but the catch everybody, we're not going to find every case, but we do know we are right to find a number,

and it is done to make a difference. that is where our focus is on this. >> question. >> i missed the last sentence of your presentation. does the information in the summary get forwarded to the users, and if so, what kind of information would be helpful to them in figuring out if they are not aware of what is going on? >> right, so the notions that we sent to the i.s.p. include an evidence summary. it is not that big file. it is a summary of what is in that file. include dates and times, that it was verified by a manual verification or an automated verification. that is provided to the i.s.p. most i.s. [. are providing.'s

a summary of that. that is not sufficient, then the evidence package is office said there and can be accessed by the independent reviewer or by the isp who might want to give more accra. once people understand the basic process, they will know that that file sitting back there, and what is in the notice itself should be sufficient. >> does that include the peer- to-pierced-site -- peer-to-peer site? >> it does not include the side. it does include the details of the actual sharing and the dates and times, yes. we do not know where that file are originally came from, but if somebody cordially has that file, they distributed it

appeared to whether they got it the day before, the week before, is not necessarily known. >> i was just going to comment. i was going to ad, in terms of the information that the i s peas carper buying, there is information about how to check to see if there is software on your computer, and how to secure your connection. there is linked to information, similar links on copper right to information -- on copyrighted information websites. that is part of the agitation, the people how to look for it until the more about what they can do to address. >> i am from the american library association. after the sixth mitigation

notice, then what happens? i mean, do you do any more after that or do you ignore that person or -- >> basically, the program is intended to be educational. after that, after the second medication alert and the second time someone has been mitigated, the substance -- the assumption is they are not being educated. part of the copyrighted law system and for that person. >> and in the right holder can make a decision whether to take down our request something like that? >> the issue is a distinction from the takedown issue, but the rights holder can then decide whether or not to pursue other legal options. the copyright alert system is voluntary and does not affect the legal rights and obligations of the content owners. >> one point of clarification.

it has been explained throughout the session, at no point in time the the i s p's give over any personal identifiable information to content owners. to the extent they made a decision to pursue other means, they would need to go to the normal course of seeking a court order to get that information out there. it cannot be emphasized enough that the steps we took and with the advice from the advisory board to maintain a strict privacy rules as part of the program and make sure we never disclose that information as part of the program. >> in terms of delegating that christ validating that somebody stops encouraging, is that

something that you see to looked to see that the ipe address is not being used again and again from the validation authentication site of a broader question, as you look for metrics of sussex, it seems that each of the i s p's is going its own route in terms of pressure to put on the users. do you envision trying to identify which ones are more successful over the course of time, and perhaps honing the program to a set of best practices on the isp site? >> let me answer the first question. i think and that it in your question is this notion that there is some continuing monitoring of a particular account or ip address. really, the system does not work that way. it works as maryann described, incident by incident. if a user gets a second request

and it is because as the scanning vendor is looking at now for probably another title copra perhaps, that same ip address emerge and the same process was gone through to identify which isp went with that ip address. there is not an ongoing dossier or information collection about a particular user, either on the content side or on the i s p side, and that is an important point. i am happy to have -- >> that is a terrific question, and i for one, hope that and expect that we will be involved in some evaluation done the road so you can look at at the different approaches that each isp is with current the parameters of the program, but

they held all their variations. you would be able to see whether there is a higher success rate with one kind of messaging versus another, how many appeals are being filed in one area, whether you can do a better education and job of being there, or maybe more requests from the consumer -- and there are parents that do not understand what is going on, they may want better information on the website. i think that feedback loop would be important. yes, i think that be able without getting into anyone's privacy, the aggregate data is really -- could be rich and yields and the poor lessons about how to improve the program. >> the notion of best practices is something that is very much in vogue with regard to the relationship between

intermediaries and the content industry. as i mentioned before, there are already best practices with regard to financial institutions and broke websites. there's now a process that is happening right now with regard to ad networks. i think there is an opportunity once we see the data, individually and in the aggregate, to fine tune the system and see what works best. , i also want to emphasize that the best practices should not just go to the intermediaries. the content industry also has to figure out what its best practices are, not only for determining when they are going to enforce their copyrights, but also how they are going to notify people, for example -- the use notified that you actually own the copyright, things like that. best practices are the way to

go, but the responsibility has to be on all parties and not just one half of the question. >> when questioned about jill only getsthis is served to residential users. commercial, wifi networks are not targeted. i do not know if an american libraries -- the question i was asked to ask was, won't those folks just go to commercial wifi vendors, and is a question of advocacy. will it be efficient going to other wifi providers like mcdonald's or starbucks? >> i would say this, which goes back to the assumption of the program, which is most people are not working hard to game the system or engaged in large-scale

copyright infringement. i would imagine somebody who is gone to take the time to stop using the home network and the starbucks or mcdonald's to download movies is in that category. we are working under the assumption, as i said, based on research we have done, on all the work that has been done by the content industry over the last decade, as digital piracy has continued to be an enormous problem, is that there is a lot of misinformation out there, and a lot of misunderstanding about what the copyrighted -- what is copyrighted and how to find out what people want in a legal way. i do not think we will see people heading out of their homes and going to starbucks, and hopefully as we evaluate the system and make it better over time, we will be able to address

the needs of the people as well. >> i would like to understand the arbitration process. if someone is accused of copyright violation and they say, i do not have pdp or i did not download anything, what evidence would they be expected to gather, how would it be w eighed. >> have built a system that would work on paper, if you will. as is described on our website and on the mou, but it is not an arbitration. the american arbitration association, the largest organization in the country, has built for us and a mechanism where the consumer is going to have the opportunity to link directly from his or her isp if they receive a mitigation alert,

go directly into the american arbitration association's system and see specifically which alerts are eligible for appeal. they will then be able to see the name of the -- a tag number, the name of the content, the owner of the content, and they will be given a set of choices that get exactly to what you're saying. this was not me. the isp misidentified my account. somebody use my wireless. i had in one case authorization from the content owner, so i have a letter from a movie studio that said i have a right to distribute this content. that is a consumer uses the online form, state precisely why they believe they have received a particular alert in error. they can choose disagree free -- they can use different reasons. they can attach a letter, and that entire package gets given

to a neutral, someone assigned that has been trained by the american arbitration association in this program. they have access to the entire evidence package that goes with an alert that was generated. they can go back into the information and they will issue a decision. it is not a facsimile of a court case or what you might think of as an arbitration, where there in our two parties sitting across a table. it is intended to be streamlined digital process that works within a few weeks. >> if you will alow, one last question from twitter. if the focus is on education, why not focus on fair use and other acceptable uses? i am not sure the contrast he is

making, but anyone want to field that one? >> the essence of the program, the educational part of the program, is day to get people on where they can go to get legal content. what they can do to make sure that there is not illegal content, that is, that their account is being used to transmit. it is not meant the a coarse and copyright law is not copyright 101. it is really meant as a program aimed at people using peer-to- peer or those who are casual users who want to make sure that an authorized -- unauthorized content is not going over their system, that they can find the

content legally on services like spotify on net flix. >> my understanding is the center for copyright information does want to be a resource about copyright, because part of the problem that we have identified is people do not understand how copyright works. i would hope, and i am planning on being an advocate for insuring that when we get into that water -- a broader that lawfulase uses are very robust and a bigger is part of that education, and not get left behind. i think the cci has pretentious to be more than just operating this copyright alert system and having a more vibrant discussion about copyright and the exceptions to the upper right.

>> that need follow on on that. as i said, that is right. one of the first mandates of cci is to implement the copyright alert system, and we are on our way to doing that. we do want to be a resource within a certain frame. we are not going to become a legal resource for copyright information, although we have links that people who are now coming to our side, if they want more information about copyright and its derivation and all law, we have links to the current alliance, links to the copyright office and other places where people should find out information. we do however -- we have begun one area of our exploration around broader education that i want to describe it, and that is working with an organization called i keep save, the state of california, to develop a k-12

curriculum, on copyright and fair use. one of the fear things we identified in the research and s we have talked educators out there, and we have kids who are growing up in a digital and varmint who do not know what copyright is, that we have to find a way to talk to them when they are five years old and had made a picture and is hanging up on the wrong -- wall and somebody has put a name on it, and how does that make them feel, and how can they engage in a fair use of a particular piece of copyrighted content. is an important concept and one that we will explore, but we will not be the same kind of resource that has been out there before, the same kind of resource that dix of covering in legal terms. we want to reach the next generation of people who are going to be thinking about creativity and the importance of

being able to have control over your creative works. >> i have a thousand or questions, but i will not get to that. i am interested in the consumer education rollout. also, interested as we go forward on measuring success and how people have responded. this is just the start of it, it is starting this past couple weeks, and it will be going on, and we will watch that closely. maybe we will be back and see how it went, but i want to thank everybody. you have been working hard, and i appreciate coming the time to speak with us, and, thanks, everybody, for attending. thanks very much. >> and thanks for having us. [applause] [captions copyright national cable satellite corp. 2013] [captioning performed by national captioning institute]

>> we have more live coverage on c-span, beginning at 3:00 p.m.. we will head to the state department, an event that marks international women's day. john kerry and michelle obama will take part, recognizing women who have shown courage in advocating women's rights. that begins at 3:00 p.m. eastern on c-span. the labor department reported

employers added 236,000 jobs and the unemployment rate fell to 7.7%. the numbers were better than economists had been expecting. harry reid released a statement on the jobless numbers and saying the numbers showed the economy is growing and is poised to grow even faster in the months to come. house speaker boehner reacted to today's numbers with this -- the details on today bus labor report are available at our website, c-span.org. yesterday the senate judiciary committee approved a gun trafficking bill that toughens penalties for those who buy guns for people who cannot legally owned edouard following the party line vote, the committee debated on legislation to ban

assault weapons. the markup last about an hour and f40 minutes. we will show you this as much as possible until the state department event begins, a around 3:00 p.m. >> good morning. we have one, two, three, four, five, six, seven, eight, nine senators. i think, senator grassley, we can get going. first off i want to thank senator paul for having a filibuster which kept everybody still in town so we can have a

quorom to talk about guns that may not have been his number one reason for doing it, but we take ancillary benefits wherever they come from. last week we all had the opportunity to talk about legislation before the committee regarding gun violence in america. we gave our speeches. and i hope we could make significant progress. earlier this week i was joined by senator collins, senator durbin, gillibrand, and senator kirk in the introduction revised legislation to combat the straw purchasing and trafficking of firearms. others have joined us in that bill including senator clow chew char, senator king, and i'll plan when we get on it i'll offer a substitute we find the provisions with the text of the leahy-collins bill.

i reach out to the senators, those discussions bore fruit. the substitute incorporates a pending bills provision, and its creation of a specific crime for straw purchasing designed to prevent criminals from using straw purchasers who can pass a background check and then hand those firearms to the criminals. straw purchasers circumvent the purpose of the background check system, and we have found many everything from drug gangs to others who have used guns that the gang members could not have bought but the straw purchaser has. straw purchasing is done only to get a gun in the hands of somebody who is prohibited from having one. i think we need a meaningful solution to this problem. as substitute we include suggestions, senator gillibrand, to require those that traffic in firearms by

wrongfully obtaining two or more firearms, and we'll give law enforcement more effective tools. the substitute also incorporates a number of changes, the result of suggestions from senator grassley and his staff. we have been working on this since january. tried to be responsive to the ranking member's concerns and suggestions, and have reached across the aisle to other senators. as an a.t.f. whistleblower, senator grassley has been the lead senator in whistleblower legislation, was an a.t.f. whistleblower, who testified last congress that the existing laws are toothless and they can't help law enforcement, and that's why law enforcement consistently has called for firearms trafficking statute

that can be effective and go after straw purchasers. we need now is to create better law enforcement tools. and i think this will -- the senators can join together on this will close a very dangerous loophole in the law that mexican drug cartels and gangs and other criminals have exploited for too long. stop illegal trafficking. the firearms act is important. this week the "usa today" ran a front page story about a study that estimates gun violence costs americans $12 billion, $12 billion a year. i don't care whether it's $12 billion or $10 billion or $2 billion, we ought to do what we can in this committee to mitigate those unnecessary costs.

i want to yield to senator grassley and then we'll take -- i think we have four or five nominees prepared to go forward. senator grassley. >> i would like to suggest three steps here. one would be to take care of the nominations. the other one i have an issue that i'd like to just make a statement on. and then i have a general statement on this whole issue of the four different bills, and i would like to have any of my members that want to make statements just before you bring up the legislation and then have debate on the legislation. >> obviously i'll give time -- i think we tried last week to get as many of those statements, including mine and yours, out of the way, but naturally i'll

yield to people who wish to make statements. some are going down for the bill signing, and others i do not want to lose a quorom. go ahead. >> as you can see from the absence on my side except for maybe three of the newer members, we all have people that have responsibilities in other committees. that's why i bring that up. let me say that we are able to, i think, unless one of the members wants a vote? i think we can do all the nominations by voice vote. why don't we do that first? >> you want a roll call? >> we do not need a roll call now. i have been informed by that one member. >> i would -- why don't we -- i appreciate your cooperation. i would ask consent that we consider sherry shapell, michael j. mcshane, nitza alejandro, luis strapo and jeffrey schmell.

all of those in favor say aye. >> aye. >> opposed? the ayes will be unanimous. and shapell, mcshane, alejandro, strapo and schmell. will be reported to the floor. >> following up on that i would like to bring up something you brought up yesterday at a hearing i very much appreciate your bringing up. and that is at the oversight hearing with general holder there was a significant discussion about the oil sea memoranda regarding targeting

killings americans abroad. chairman leahy and i wrote to president obama on february 7, one month ago, asking that he instruct the attorney general to provide these memoranda to the judiciary committee. i don't think -- at least i haven't, i don't think the chairman's received a response. i wanted to highlight a statement that chairman leahy made to general holder yesterday regarding the possibility that this committee subpoena the documents. i want everybody, both republican and democrat, to know i fully support the chairman in this effort and would urge that absence a response from the president that we move forward with a vote on subpoena for these memoranda in the near future. then i'll go to my statement. i'm not asking you to comment, but at least you know how i feel about it. but i think you feel strongly about it or you wouldn't have brought it up. >> i also spoke again with the attorney general now going into private conversation, i think that he's -- he would like us

to be able to see that and i think the decision we remains within the white house. i'm sorry they haven't even responded to our letter, but if need be we will subpoena because it is a matter, and we are going to have, for those of you who weren't there at the hearing when we talked about this, we are going to have a hearing on domestic use of drones in this committee. it would be helpful to have that, helpful but not necessary to have that letter prior to that time, but we are going to have many of you on both sides of the aisle have raised concerns about the domestic use of drones and we will have a significant hearing on that. thank you. >> the committee and subcommittee have held three hearings and legislation related to our purpose of voting bills out today.

while i believe that addressing violence requires examining more than guns, guns were the near exclusive focus of those hearings and will be the near exclusive focus of the bills the committee sees fit to mark up. all of us were strongly affected by what happened in newtown. all of us want to take effective action to prevent future tragedies, but we have different deeply held approaches to do so. what we are talking about today is freedom, freedom not only guaranteed by the constitution but what the supreme court recognized as a pre-existing right of self-defense. individuals do not need the government's permission to defend themselves. today gun violence rates are at the lowest level in 50 years. this is a tremendous accomplishment. there are many reasons for it, including longer incarceration of dangerous criminals,

abolition of parole, and police practices. this drop in gun violence has occurred even as there are more guns in the country than ever before. it has occurred after the supreme court has found the second amendment to be a fundamental right, and after many states have increased the ability of law-abiding citizens to own guns. the drop has also occurred despite any new federal gun control enactment in almost 20 years. but a majority of the committee seems determined to impose more gun restrictions on law-abiding citizens. consider the assault weapons ban. this bill represents the biggest gun ban proposal in our history. a similar ban was enacted in 1994. and the justice department's own studies failed to show that the ban had any effect. some of my colleagues speak, we invite demonled rumsfeld on this point and i quote him, absent of evidence isn't evidence of absence. but the assault weapon ban did

not work. and just this year the deputy director of the national institute of justice wrote that, quote, an assault weapons ban is unlikely to have an impact on gun violence. but rather than trying something different, the first bill on the agenda is an assault weapons ban. it is based on how guns look not the damage they do. an ar-15 is prohibited while a mini 14 is exempt because one has a wooden stock and the other a plastic one. other guns that are more powerful than prohibited guns are exempted. the guns that it bans are not ones that are used in the military, as they are semiautomatic. they are in common use. and banning large capacity magazines last fails a rational basis scrutiny when the bill exempts a class of shotguns

that can be continuously reloaded. the bill is not like passing a law that criminalizes speeding. it is like banning the manufacturer of cars with hood ornaments from having the capacity of exceeding 65 miles per hour while exempting trucks from the same requirement. at the hearings the justice department did not endorse a specific ban, but said that nonetheless that a ban could be constitutional. they did not suggestion what level of scrutiny courts would apply to a bill with second amendment implications. they also said that they would develop an analysis of the bill's constitutionality, but it speaks volumes when we are about to mark up such a bill and that analysis is not forthcoming. i think it is necessary to point out that had this bill been law at the time, sandy hook still would have happened. it would not have stopped a

mentally disturbed person while stealing a gun that this bill would have not banned from his mother and then shooting unharmed children at a school for several minutes before police arrived. on background checks without notice we were given an entirely new bill late yesterday. i know the sponsor says that he does not intend to create a national gun registry, and i accept that as his intent. i would just say that the deputy director of n.i.j. recently wrote that universal background checks can be enforced only if there is gun registration. i note that at the hearings some stated that criminals are foiled from buying guns because they do not go to gun stores to buy guns. they recognize that prohibited persons do not now submit the background checks although they obtain guns which is why they want to expand checks. but they fail to recognize that

criminals won't be any more likely to submit to expanded background checks than they are currently. they will go around supposedly universal checks to steal guns or buy them in the black market. when the universal background checks don't work, then registration will be proposed to enforce them. when that doesn't work, because criminals won't register their guns, we may be looking at confiscation. there is a refusal to consider that gun control of law-abiding citizens does not work. if gun control worked, we would expect to see that places with stricter gun laws would have less crime than those where it was easier for law-abiding citizens to have guns. instead, law-abiding citizens obey the laws and criminals don't. and those areas with gun control often have more crime. under federalism, state and localities are laboratories of experimentation. results of different approaches come in and then the federal

government learns which laws work better than others as it considers national legislation. but that is not what is argued for gun control. we are asked to adopt nationally the policies that have not worked at the state and local level. we are told that poor results in places with gun control are due to more lenient gun rules elsewhere in the vicinity, but if that were true one would expect more crime in the suburbs where guns are lawfully available than cities where there are not. and the states where guns are not easily able to be purchased than in states where they are not. however, this is not the case. restrictions on gun rights of law-abiding citizens do not work. again, rather than trying to approach a different approach, supporters of gun control not only want to double down on failed strategy, they want to impose on the nation as a whole

despite the second amendment. i do think that action can be taken on gun trafficking and straw purchasing, but because those are actions by criminals and occur across state lines, i am glad that we have a bill on that subject on the agenda. i appreciate the efforts of the chairman and other senators to be receptive to changes to the original legislation. and when that bill comes up, i'll speak about that. the final bill on the agenda is school safety bill. that bill originally had an enormous cost at time when we were entering a sequester. however senator boxer and senator warner, the bill's sponsors, have shown flexibility on spending amounts and other issues, and so i want them to know that i appreciate those efforts. mr. chairman, republicans will make sure that we get the finality on these bills, and not meaning any criticism they were not ready to be considered

last week, we will raise a fairly small number of amendments which is how the committee process works. we are not standing in the way of any of these bills from being voted in a timely fashion. a number of members on the democrat side made statements about these bills last week and i know that members on my side would like to at this point. thank you very much. >> thank you. i appreciate the cooperation. bring up s-54, the trafficking bill. stop illegal trafficking in firearms act. and following normal procedure, i will amend it with my substitute which is based on the text of the leahy-collins bill. i assume there is no objection to the substitute.

it's a bill -- without objection. the bill as amended by the substitute is now opened for further discussion and amendment. >> if i could, i would start the discussion. before i make a statement, i think -- i have not talked to senator sessions. i talked to senator cornyn. you folks want to make statements overall or you're ready to go to straw purchasing bill? it's on the agenda now. so the chairman has the right to bring it up. or do you want to go right to this? >> i have statements on both, but i'd be happy to address the straw purchasing bill first. >> how about you, senator sessions? >> i'll proceed with the amendment process. >> we are ready to go on your bill. can i speak now? >> sure. >> sure.