part of the second term of the bush administration, we mentioned the land border ports of entry. there was a new study last week that a friend of mine worked on that he just released. forl be turned around public release. it showed the value that the union -- u.s. current economy. talkly, i want to briefly about flexibility. the unfortunate things about the system is we have this incredible rigid system. congress sets the quotas, the quotas are fixed. there are some categories that are hard to legislate. they change it once every 20 years. countries like canada or australia or some of the

european countries, the systems are more flexible and adaptable to the needs of the economy. gordon hanson out of california did a paper for us where he noted that the only flexible part of the u.s. system is the legal part. risesthe only part that and falls depending on the economy. we need to crave that kind of flexibility in the legal system. doris is a new leader on this at the wilson center. they recommended a standing commission on labor markets. to create a real research capacity in the u.s. government to look at the needs of our economy for immigrants. it is shocking how little that has done and the u.s. government. we have something called the international trade commission which employs about 200 economists that can answer the same questions. what will the impact on the economy be? of can answer these kinds

questions. immigrationn the side. i am very encouraged by that. what we need to create, what i hope this bill will be a big first up is an ongoing challenge in creating a system that allows the united states to manage immigration for the economic and social benefits of americans. to see this as a critical part of our economic future and one that actually works that has integrity. if we do that, we not only help ourselves, will help our neighbors to the south was paid a very bigp rice for our mismanagement of our system. let me stop there so we can turn to questions. [applause]

>> a two-minute break. [no audio]

>> let's move to the discussion part of our discussion. let me reiterate something we touched on earlier which is to thank simon rosenberg for putting this together. it is another hallmark and the continuing work on these issues. i know a lot of it comes from your own brain and energy. and a very capable staff that you have. thank you for doing this. we have just under 30 minutes to have a conversation to engage the members of the audience. let me start with the question and we would turn to the audience's question. we do have the two presidents meeting in less than two weeks, by that point immigration legislation would have been tabled, but not discussed.

endill be toward the tail of what is going to be a vibrant discussion in the senate on gun legislation which will begin this week. all of those things will be in trained, what do we expect the president to do in three weeks? i will start with the ambassador. >> the focus is going to be to enhance the opportunities in our economic states. to create competitiveness -- [inaudible] >> is it working now? >> it is going to be the competitiveness of our shared states. actually, improving --

[inaudible] it will be improving our shared economic state which of course includes a comprehensive approach to immigration, trade, job creation, innovation, education, technology which have to be shared. actually, shared competitive states in order to create an for mexicans and americans. that is exactly what we have done in the last 20 years. and you see the numbers

some of the numbers that i just provided, importance of mexico for u.s. exports is much more important than citizens on both sides of the border think. it depends on how effectively our economies are. how integrated we are. as i said, if an american consumer buys a car or a house or appliances, that was manufactured in mexico, 40% of the product is american. if you do buy a product that was manufactured in china am a it is only four percent. it is because we are combining

the best advantages of both sides of the border. integration approach which is precisely the point. howill bull seeing immigration debate -- we will be seeing how the immigration debate works. in which we have -- because we have a strong responsibility to our mexican nationals here for opportunities and the opportunity to contribute to america. as america is one of the greatest countries in the world, or cicely because it has embraced -- precisely because it has embraced immigration. >> thank you, ambassador. do you have anything to add on the president's visit, if not we can turn to the audience? >> the ambassador said it really

well. there are a lot of gains to be realized which we have just began to explore. i would second that. >> let's turn to our audience. a lot of our members know a great deal about mexico. i want to start in the front row. withl ask you to speak up your questions so we can be heard and we will try to repeat it for those on stream. >> [inaudible] can you give us -- [inaudible]

>> the question for those of you who could not hear on the web relates to the transpacific participation which includes the u.s. and canada. whether or not it is starting with the european, the transatlantic discussions and which mexico and canada are not participating could benefit from that participation. >> we have stated that at our economies are so much integrated, it would make a lot of sense to address the partnership together. very actually, it is difficult that is only mexican, only canadian, only american. it is very difficult on how these negotiations will work and the frame will be set.

we will insist with our american counterparts and that we believe that we need to be in these conversations. it is been going on for 11 years now. canada is about to finish their own, so it would make sense to have this. otherwise, we might wind ourselves -- find ourselves without results. not adding value to the shared manufacturing and competitiveness, but additional burdens. the name of the game is competitiveness. to do that, we have to do this together. >> that would be quite a three- dimensional game of chess if we got both russians that include -- both oceans that included the canadians and the mexicans.

>> the u.s. has been a little lackluster on the trade front. the u.s. is in a position of looking to canada and mexico for guidance on how to negotiate with europe. for a long time, the u.s. was the leader in pursuing free- trade opportunities around the world. not unlike immigration, the rest of the world is linked. we were a leader on trade and immigration. other countries begin to recognize the value that comes from being big players in those areas. we find ourselves in the positions of looking at a canadian agreement, a mexican agreement with the eu of how we start and how we can build on those. it is definitely room for cooperation. thether questions? on second row.

right there, you. >> thank you for taking my question. theill be primarily for ambassador. the immigration bill will be presented tomorrow and there is a strong border enforcement opponent. can you tell us what mexico's goal would be an increasing their border enforcement? mexico already cracking down on the southern border side of stopping central americans. it is always demanded that it do more on the american side. are there any legal barriers, any constitutional barriers that would not allow you to stem the flow of illegal immigration to the u.s.? i know there is the freedom of movement within mexico, right? sees wondering what you your country's role in enforcing security with this new

bill. thank you. >> the border is of course a natural, shared responsibility. we have to see what doris was saying. the forecast that was made 20 years ago is here now. in 1960, the fertility rate in mexico for women was 70 kids per women. today it is 2.2%. in cities like mexico city, it is 1.8%. actually, the supply of mexicans entering the labor force and willing or able to dramatically shrink.

i remember when i was part of the border safety agreement in 2002, it was -- back then thomas -- then, we were using an old reference. the security -- last year, it was 22,000 headcount. the is not only because border patrol became much more effective in doing their job, they did. too, the supply from mexico cross the border to migrate into the united states is not there anymore. this is essentially a zero net

migration into the u.s. we have commitment and responsibility to cooperate with the united states, both ways. it goes back and forth, of course. trafficking and illegal -- handling of -- it is behavior with a working together for many, many years. in that sense, it has been very much on the bilateral agenda the last few years and in the future. >> other questions? is why wouldn labor unions and the congressional black caucus want to vote on legislation and that could increase the labor pool in

the united states? >> i'm not as soft-spoken. here is regulated ands and managing flows having a laissez-faire market. it is in our interest to be cooperating in a system where we hopefully flexibly that has a relationship to what the market needs that can change, not in 20 or 30 years when the pressure cooker gets so tight have to have years and

years of trying to get through legislation. are supplying the labor force with jobs and work. were talking about high school, medium scale. demographicng with changes in the united states. it is the first time in history as a country that we have had that experience. innovation needs to be part of our future. labor unions have an interest in that, as do employers. >> i think you have to start from the current system, which

is where so much of the labor demand is made up of an unauthorized workforce. congressional black caucus has come to recognize this. the issue is about numbers. in a weak economy with higher migration. in a stronger economy, we want more immigration. i don't think this bill is going to be as flexible as i would ideally like. if you look at the agreement on of skilled immigration, they 20,000. 200,000 is a real number. that makes sense . >> the gentleman here in the front row. >> independent consultant. there was a 90% apprehension

rate. if you take a look at the present statistics, 5% of northbound cocaine is seized, a fraction of 1% of money laundering being seized, and who knows what percentage of people illegally are apprehended. with the german border, the east germans were successful in apprehending 95% of people attempting to escape. it seems like 90% is going to be going to impact potential reform measures? longcould give you a

answer to that. answer. if it includes drugs, you're right. the percentage of drugs being apprehended is tiny. i'm hoping the language that comes out will not inflate -- they're different problems. i'm not in favor of targets. statisticsthe gathered by the border patrol, looking at who they see and apprehend, in the tucson sector, 87% of the people who try to get into arizona are apprehended by border patrol, 64%, or are turned back.

they come in, take a look around, they go back to mexico. those two together. tothe 90% number refers that, we are close to hitting that target in a lot of high-it depends a lot on the numbers. it is a pure apprehension rate number, i agree with you. that apprehension plus people it. >> doris? >> no. >> steve landy, manchester trade. i want to admit to something. when you go to miami and way to get your passport stamped and you say, used to work with

doris, we get a smile. [laughter] >> thank you. >> let me say one thing for the record. africa. when people talk about the transatlantic partnership, people think it is u.s.-africa. my serious question has to do with mexico's new role. besto probably has the record to tell in terms of growing into an open economy. my suggestion, very quickly put -- when you're meeting with

president obama, why don't you mention the need to develop countries like ghana, mexico, costa rica and so on. i think the world needs a new model. mexico should be part of that model in relationship to wto. think you so much. >> it is easy to identify like- minded countries. >> we will take you live now to mexico city pripet president obama on the first day of his central american trap with a joint press conference with the mexican president. this is live coverage on c-span.

gooddies and gentlemen, afternoon, everyone. after theforemost, bilateral meeting, i would like to extend the zero warmest welcome to president barack obama, his team, joining him once again, we would like to welcome all of you with open arms and we hope you feel at home. we appreciate your will to have a relation built on mutual respect, collaboration, for the benefit of peace. before we cover the areas it we had during our bilateral meetings, on behalf of the mexican people, i would like to

for thee our solidarity acts committed in your country, in boston, and in west, texas. if you allow me, i would like to share with the audience and the members of the media the areas we have addressed with president obama during the meetings we have just had. first of all, we have reached an agreement that the relation between mexico and the united states should be brought in terms of the area that covers. it should open up opportunities and collaboration in different arenas with a very clear purpose in mind to make the north american region a more productive and competitive

region that will trigger the enormous potential that our people has and our nation has and we're well aware of the fact take top of our bilateral obligations. within the framework of the agreement made it, we have reached a new level of understanding. there are two new administrations that began around the same time the term of president obama and my administration. among the items recovered, i can speak for how relevant trade and commerce is in the mexican-u.s. relations.

we have mention of all the agreements in the free trade agreement and the benefits of our economies have received from the exports made from the u.s. to its top trading partners, mexico and canada. this represents one at a beach three products exported from the u.s. and only the relation with the 1 thehigher than u.s. has with the european countries. or the export to china and japan together. it does not reach the level the u.s. has to mexico. the economies and the last years have shown to be relevant at the content of exports from mexico

have 40% of u.s. and put. thatfore, i can conclude the more growth mexico shows and , theore capacity to export more benefit the u.s. gets. jobs are created in mexico, therefore jobs are created in the united states, therefore one of the first agreements we have create a high-level dialogue that within its . amework foster's trade ,his means for the first time we will have the mexican economic cabinet with their

counterparts from various government agencies in that united states and high-ranking individuals and we heard from the president that in this group, the vice-president will participate in order to present a dialogue that will result in arrangement in terms of how the government can support all the efforts made by the private sector in for this purpose, we have in the fall of this year am a this high level group will meet for the first time with the attendance of high-ranking officials working in the area of the economy. we have also agreed to endeavor to joint actions to have a safer order within the framework of the agreement made.

border that a 20% was about to be defined. an action agenda. our teams have already set it up. and now through this agenda, we will have borders that will expedite the transit of people crossing our border. a have also agreed to create binational group to define joint action and joint mechanisms to support entrepreneurs in both countries, and by this, we will economies and our countries. we will lead this mechanism as an enabler and we will see this

miss developments for small and , and weized companies hope that all the action in the will makefuture .arge enterprises and this action will specifically favor young entrepreneurs. tordly, we have agreed boost our economy and our potential to have a bilateral .nnovation and research team government agencies will work , and presidents from mexico university will be part of this group.

more changes will happen between exico and the u.s. we have agreed that higher is a platform to economic potential that we have in our nation in order to compete with the world, specifically the heavily developed countries where science and technology have been the target of efforts and investments. fundamental that we have well-prepared youngsters with the skills necessary to give our economic development a greater strength and a greater capacity. , we haveerent arena addressed security. theave both recognized

level of cooperation that the u.s. has shown towards the mexican government's and the strategy in the area of security and our country has a very clear purpose, and that is to fight organized crime in all of its forms. ,e it drugs dealing, extortion or any crime perpetrated. my government and my administration are going to face crime and all of its forms. we have emphasized the fact that we will reduce violence. unfortunately, these -- these

are not objectives that contradict each other. these are two goals that work within the framework of one 'srategy, and president obama has expressed his will that we know to cooperate on the basis to be moreespect efficient and our security that we are implementing in mexico. i have shared with president obama as well. -- what mexico has done during the previous months of our administration. i have shared with president reachedat mexico has maturity in terms of its democracy. the country has reached political maturity.

it has managed to show respect to each other and the cohort of the government of mexico. together we have managed to put together a working agenda that will band together reforms that will transform the structure of mexico's needs to boost its development. i have shared with president obama the fact that we recognize all political forces in mexico, finally. i would like to share with all of you that we fully agree that our nation some of our p all -- our nation, our people must move to another community. we are all part of the trade integration ross us. we have reached high levels of development. still, there is

other nationsake of collaboration and integration of north america. we can make a more competitive region. i would like to conclude by the words of former president kennedy. his were shared during .isit 61 years ago i have shared this with president obama, but i would like to share it with all of you. president kennedy said to president lopez -- geography has made us neighbors. tradition has made us friends. us not allow let

a gap where nature has denied it. and so, we have this understanding, this dialogue, this climate we have set up. we hope it will give us more growth, more development, or opportunity for our people once again. i would like to welcome president obama and his delegation. i hope that your stay in mexico is very for all and you enjoy your stay as well. spots reject -- thank you. [speaking spanish] thank you for your extraordinary hospitality. you were the first leader i welcome to the white house. i am thankful for the extraordinarily close

relationship between our two countries. during his visit, he's its time as a student in one of our most beautiful states, the state of maine. maine is very cold, so when i come here on a beautiful spring day, i understand what you came back home. [laughter] i want to thank you for your hospitality and i look forward to joining you and your lady this evening and i want to thank all of the people of mexico for such a warm welcome. it is always a pleasure to visit. president pena nieto and i discussed between our two 40ntries are some 30, million people, tens of millions of mexican americans that enrich our national life in the united states. well over one million americans live here in mexico.

every year, millions of tourists, many from the united states, visit this beautiful country. many workers in our countries are in a living thanks to the dobbs made possible by our -- thanks to the jobs made possible by our trade. students, researchers, collaborating in every sphere of human endeavor. mexico and the united states have one of the largest, most nine amick relationships of any two countries on earth. and yet we do not always here about all aspects of this, because too often other issues get attached. security or immigration. obviously these are serious challenges, and president pena into and i discussed them depth today. i agree we need" operation on security, even as the nature of iat cooperation will --

agree that we need cooperation on security, even as the nature of that cooperation will change. i made to the president is that we support the mexican government's focus on reducing violence and we look forward to continuing our good cooperation in any way the mexican government deems appropriate. i also reaffirm the determination of the united states to meet our responsibilities to reduce the demand for illegal drugs and to combat the flow of illegal guns and cash that helped to fuel violence. again, i want to pay tribute to the people of mexico who made extraordinary sacrifices for their security and displayed great courage and resolve every day. even as we continue to deal with uncertain challenges, we cannot lose sight of the larger

relationship between our peoples, including the promise of mexico's economical progress. i believe we have an historic opportunity to foster more jobs, more trade on both sides of the border and that is the focus of my visit. the united states and mexico has one of the largest economic relationships in the world. our trade has passed $5 billion, more than $1 billion every day. the largest customer, buying the largest number of mexico imports. every day our workers are building projects together. this is the strong foundation we can build on. i want to amend president pena reformsr the ambitious you have embarked upon, to make your economy more effective, and i know it has been hard, but

it is also necessary. let me repeat what i told the president. as mexico works to become more competitive, you have a strong partner in the united states. because our success is shared. when one of us prospers, both of us prosper. that is the context of our discussion today. president pena nieto is creating a dialogue to broaden and deepen our economic relationship. there will be members of my cap net. vice president biden will participate as well. we will focus on the connection between business and workers, making our economies even more , weetitive. to that end reaffirmed our goal of concluding negotiations on the transfer of the partnership this year. this will be another major step in integrating our two economies in decisioning us to compete

the fastest-growing markets in the world, those in the asia- pacific region. we want to sell more goods from mexico and the united states. if we partnered together, we can do even better. we want to continue to make our shared border even more efficient with new technologies so it is even faster and cheaper to trade and do business together. energy new relationships to combat climate change. i am pleased that we have agreed collaborations and exchanges between our students and schools and universities. just as henrique studied an enrique studied in our country, we want more students studying here. and finally, i updated the president on the path to common

sense immigration reform that lives up to our tradition as a nation of laws and a nation of immigrants, including generations of mexican americans. as we do, i think it is important for everyone to remember that our shared border is more secure than it has been in years. illegal immigration is near the lowest level in decades and legal emigration continues to make both of our country stronger, more prosperous, and more competitive. the partly is reflected by economic opportunities and progress here in mexico. i think that should inform the debate in the united states. i am optimistic that we will get immigration reform passed. i will have much more to say about this and other issues in my speech tomorrow. express mywant to gratitude to the president for his hospitality and also for your leadership. given the

prospect of staying here in x ago, i see so many opportunities to to deepen our extraordinary friendship and common bond we share between our two great nations and our two great peoples. thank you. spanish]ng [applause] >> we will have a round of questions. radio formula. to the president of mexico, we welcome gladly the agenda with the priority conflicts to be included in your agenda. this high level group, as you it seems to out --

be that trade is now about security. and for president obama, given your expertise, what is your take on president enrique pena ?ieto's administration is the u.s. government seeing this as a promise or a packed? hank you. >> thank you very much. we have relaunched our relationship. we have to find our priorities. we do not want to make this relationship targeted on one ourle thing. we want

relations to include different areas and we especially want to the our relationship on trade relationship between mexico and the u.s. we want to cover other areas. we have shared our view on that topic to work towards reducing violence by combating organized crime. ofhave reviewed a long list potential opportunities we have identified in the economic relation between mexico and the u.s. in the area of commerce. president obama has already put it for the u.s. there exports were the second destination, and our case, the united states ranks first.

we need to identify the areas where we can supplement each other's production of goods and exporting goods from mexico to highorld, because this has content on u.s. imports. as i that theed, they see u.s. will benefit and vice versa. we can't perceive the participation of officials that -- part of my cap net .abinet the u.s. has a long tradition of having cabinets like we have, but president obama has decided high ranking officials from agencies government

will participate including the u.s. vice president. they will be part of this high- ranking group that will define we haveific actions had so far in the private .ector we have seen a good float between trade and between our countries. there is no doubt that we can push it further. we can extend its capabilities for both of our governments, identify the right mechanisms, boostght formula to economic integration, and that is precisely the agreement we have reached today. >> on the security issue, i think it is natural that a new administration here in mexico is looking carefully at how it is going to approach what has obviously been a serious problem. we are very much looking

forward to cooperating in any ways that we can to battle organized crime, as president pena nieto stated. we anticipate there will be strong cooperation, that on our side of the border there is continued work to reduce demand and stem the flow of guns and cash from north to south. this is a partnership that will continue. i think that president pena nieto and his team are organizing a vision about how they can effectively address these issues and we will interact with them in ways that are appropriate, respecting that ultimately mexico has to deal with its problems internally and we have to deal with ours as well. but respect to the president's a wonderfulad relationship with president

calderon and the previous administration. the bonds between our two countries go beyond party. if a republican president replaces me, there will still be great bonds between mexico and the united states because it is not just geography, but friendship and our interactions. what i have been impressed with is the president's boldness and his reform agenda. big issues.ng that is what the times demand. we live in a world that is changing rapidly. in both the united states and in mexico, we can't be caught flat- footed as the world advances. we have to make sure that our young people are the best educated in the world, and that means some of the old ways of educating our kids may not work. he have to make sure we are staying at the forefront of science and technology and are

investing in those areas appropriately. we have to make certain that our economy is our competitive around the world. and that when it comes to energy we are addressing issues like climate change, but also making sure it is done in a way and creates jobs businesses on both sides of the border. what i very much appreciate is the president's willingness to take on a hard issues, because sometimes i think there is a to just stay elected as opposed to trying to -- you well as use our time as we can to bring about the changes to move our country forward. -- on theu.s. runs .s. front -- -- thank you, mr.

president. what is your thinking on arming the syrian rebels of the violence has continued, and do you see nonlethal aid as the best option intervention u.s. in syria? center -- senator rubio said an immigration bill may not pass unless the border is strengthened. are you concerned that the effort to bolster those border security triggers may make the path to citizenship almost impossible for many p all in the u.s. -- for many people in the u.s. who are there illegally, including many mexicans? >> what secretary hagel said is what i have been saying for many months. we are working with our a politicalfind

transition that stabilizes the country, or in signaling, and allows the syrian people to determine their own destiny. we have made an enormous investments, not just in humanitarian aid, but in helping the opposition organize it felt. to make sure it has a consistent vision about how it is operating. as we have seen ,vidence of further bloodshed the potential use of chemical weapons inside syria, what i have said is we will look at all options. we know that there are countries that are providing legal aid to the opposition. -- lethal aid to the opposition. we know the assad regime is getting legal aid from countries outside of syria. we want to make sure every step

we take advances the day when sad is gone and you have people inside of syria who are able to determine their own destiny rather than engage in a long, bloody sectarian war. we will continue to evaluate that. as i mentioned in my press d.c.,rence back in dc -- we want to look before we leap. we want to help the situation rather than make it more deadly or complex. with respect to emigration reform, i said to president pena that i am optimistic about us getting this done because it is the right thing to do. we have seen leaders from both parties indicate now is the time to get comprehensive

immigration reform done. part of what we discussed is getting it done because we do so much business between our two countries that for us to cost only bog down on these border instead ofdebates moving forward with a 21st century border that is maintaining security and making sure legal immigration and legal trade and commerce is facilitated, but at the same time ensure that we are not seeing a lot of illegal traffic and allows us to continue to be a nation of immigrants that has contributed so much to the wealth and prosperity of our nation -- if we're going to get that done, now is the time to do it. the bill that senator rubio and others put forward, i think, is a great place to start.

it does not contain everything i want. i suspect that the final legislation will not contain everything i want. it will not contain everything that republican leaders want either. but if we can get a basic framework that secures our border, building on the extraordinary success we have already had and the cooperation we have with the mexican government, that cracks down on employers who are not taking the law seriously, that streamlines and enhances our legal immigration system, because the problems with legal immigration often forces people to the illegal immigration system, and provides a pathway to citizenship for those currently living in the shadows inside the united states. if it had those elements, then build on be able to that. we can have arguments about other elements of this as we go

further. but that is the core of what we need. have put in we norma's resources into border security. don't take my word for it. infrankly, we have put norma's resources into border security. some of this is not simply securing the united states from illegal traffic. some of it is improving the infrastructure, which we have been talking about for congress to come in smoothly, which creates jobs and helps our unitedses both in the states and mexico. what i'm not going to do is go along with something where we are looking for an excuse not to do it as opposed to a way to do it. and i think if all sides operate, that can be

accomplished. on that matter, allow me to note my government acknowledges the efforts made by the leadership led by president barack obama and your congress to mexico understands this is a domestic affair for the u.s.. we wish you the best in this push you are giving to immigration. that is what i have to say for the reform. thank you. good afternoon. good afternoon, mr. president. i would like to ask you both specifically what would be the most important outcome of

president obama's visit to mexico? ifould like to ask as well you have considered the possibilities to scale up the u.s. relationship and integrate the region further? it is could lead to a national strategy in terms of fighting organized crime. thank you for your answers. gracias. thank you. to conclude this meeting, i would like to say revitalized our relations between two governments that have two new administrations. president obama's second term

and a new administration for mexico. in which we are strengthening our relations is a relation in space, respect, cooperation, and collaboration, and all areas we share a common interest. we will not target the relation in one specific area. the want to address multiple issues -- we want to address multiple issues. define all the potential areas that could help us advance our agenda. we have emphasized trade and hummers during this visit. we have made a thorough analysis -- trade and commerce during this visit. we have made a thorough analysis and analyzed trade

flows and how to complement each other. it we truly want to become more protective and more competitive in the north american region, that is what we need to do forced to compete with others in the world. here are the highlights and specifically the agreements made to grade a high level dialogue of a bilateral forum to expand academicxchanges -- exchanges and work toward science and innovation for both countries. also, we will have a national -- there areoster mechanisms that will help us protect further the economic and

trade relations to mexico hast with the united states -- has with the united states. , let me say this , -- in -- insecurity security, the channels will be very clear. we will use one single channel to attain better asults and we have reached very good understanding with the u.s. government. they know what we are strategy.g this president obama has expressed his respect to the strategy that the mexican government defines

in the area of security and has shown his ability to cooperate with us and have a peaceful mexico. >> i think president peña nieto summed it up well. let me give you an example, which is the work that our countries are doing. is largest trading partner canada and our second largest trading partner is mexico. north america has become far more integrated economically than it was 10 years ago or 20 years ago. there are suppliers from mexico who sell to u.s. companies that in turn sell back into mexico or sell to canada or around the world. their jobs are created in mexico and in the united states.

all the economies have grown as a consequence of the work that has taken place together. as i said, the world is changing. the fastest-growing part of the world is a asian-pacific region. by us working closely together our trade and revamp relationship, we are also in a position to project outward and start selling more goods and services around the world. that means more jobs and more businesses that are successful in mexico and in the united states. some of that will be bilateral. finding ways that we can reduce trade frictions, improving transportation and infrastructure, how we can improve our clean energy cooperation, you have a

situation in which energy that is creating power plant in california sometimes is soldiering non-peak times into during non- sold peak times into mexico. it makes it more efficient on both sides of the border. that reduces costs for consumers on both sides. those are the kinds of areas that we continue to refine and improve upon. that is what this high level dialogue will accomplish. even as we are improving our bilateral conversations, we are aligned in projecting both to the pacific and atlantic in saying, let's make sure that we are taking advantage of all all of the economic opportunities around the world. when the u.s. does well, mexico

does well. when mexico does all, the u.s. does well. that is what i want to make sure we are focused on. when economy is is growing, when people have opportunities, then a lot of other problems are solved or least we have the resources to solve. that is something we want to make sure we are focused on during the rest of my term in office and the rest of president peña nieto's term in office. >> kathleen of the los angeles times. >> thank you. mr. president, i want to ask about a domestic issue. the fda rule on the morning after pill came out this week. it prohibits girls under 15 from under -- from buying the morning-after pill. resolves some of

the concerns you expressed last year about your role as a father and if you believe there is scientific evidence to justify the 15-year-old cut off. and for president peña nieto, i want to ask you about the president's most recent attempt to pass new legislation on gun control that did not pass in the senate. i'm wondering if you talked about this in your meeting and if you have urged him to try again. do you think there will -- there is more the admission she can do without approval from congress? thank you. -- there is more you could do ithout approval form congress? thank you. >> this is a decision that was made by the fda. not my decision to make. the first time around are there was no age restrictions,

secretary civilians expressed concerns and i supported those concerns. -- the role that has been put forward by the fda secretary sebelius has shown choose comfortable with it. i'm very comfortable with contraception. it is important that women have control over their healthcare choices and when they are starting a family. that is their decision to make. we want to make sure they have access to contraception. we have a little bit of a fuss around what we're doing with the affordable care act. but i think that is the right thing to do. -- currentuling ruling, you phrase it as prohibiting, but i phrase it as they are now allowing

contraception to be sold over- the-counter for 15-year-olds and older. it does not resolve the question of girls younger than 15. there was a court case that came up that is being appealed by the justice department that is a justice department decision. my understanding is part of it has to do with the president and the way in which the judge handled that case. my suspicion is that the fda may now be called upon to make further decisions about whether there is sufficient scientific evidence for girls younger than 15. that is the fda's decision to make. sebelius'sretary decision to review.

i know you do not direct the question to me, that i do want to editorialize this for second on guns. i think all of your mexican counterpart understand and as i spoke with president peña nieto, we recognize we have obligations when it comes to guns that are often times being shifted down south and contribute into violence in mexico. what i am most moved by our the victims of gun violence in mexico and back home. i said the day the legislation itt was proposed, the date failed to get 60 votes, that was not the end, but the beginning. it took 6, 7, 8 tries to get that.

things happen somewhat slowly in washington. this is only the first round. when you have got 90% of the american people supporting the initiative that we put forward on background checks and making that they cannot just send someone with a clean record to buy a gun on their behalf, when have commonsense legislation like that but the overwhelming majority of americans, including , those of us who strongly support the second amendment, i believe we will eventually get that done. i will keep trying. i do not mean to horn in on president peña nieto's response, but i want to be clear that we will keep at it. i am persistent.

>> i believe that we have an agreement with president obama's words. what mexico would like to see betterng in the u.s. is control of the sales of weapons. we cannot ignore the efforts made by president obama and his administration in order to approve better control of weapons. 90% are in favor of gun control. this is a domestic issue in the u.s. that we of the areas are working in collaboration, [nos that we can address,

audio] have been of mexicans lost to that. guns bought in the united states have reached mexican soil. our commitmenton to working together towards making our borders safer. -- we will keep on supporting you to have better gun control in your country. we are going to wait until that -- we are not going to wait until that happens. we are working to gather more intelligence information and we are taking action to have safer

borders so that we do not have weapons of being smuggled into mexico that end up hurting many mexicans. >> thank you, everyone. gracias. [applause] [captions copyright national cable satellite corp. 2013] [captioning performed by national captioning institute] both presidents addressing the issue of immigration, but 's second-the u.s. largest trading partner. to trip also includes a trip

coast arica -- costa rica. defense secretary chuck hagel said the obama administration is considering arming rebel groups in syria. he spoke at the pentagon with britain's defense secretary. this is just over 20 minutes. >> good afternoon. secretary ham and i completed a session regarding our countries to common interest. i would like to say thank you to him and uk strong partnership with the u.s. and french it. friendship.

at a meeting that was re- american ande british leadership in world war revolved discussion around our continued relationship and partnership. our history of being allied in defense of common interest and tomon values continues strengthen the relationship of our two militaries. the discussion that we have had today which we will continue this evening before our shared desire and deepen our defense operation in the face of a very complex and unpredictable global security. i discussed with him i recent trip to the middle east and highlighted made challenges to our shared interest in that combustible region of the world, .ncluding iran and syria

i also expressed appreciation for the contribution and sacrifice of british forces for international efforts during afghanistan. i would also like to express my condolences to the three british soldiers killed this week. as the transition to afghan , theity patrols into news united kingdom will continue to play an important -- patrols continue, the united kingdom will continue to play an important role. our discussion also focused on preparing this alliance for the future. yesterday secretary hammond had opportunity to visit the naval air station to observe ongoing testing of the strike fighter. the united kingdom's continued commitment to this program and

our growing cooperation in new ensurey areas is helping this alliance has cutting-edge capabilities needed for the future. over these past few weeks, the u.s. and the uk have commemorated the 50th anniversary of a sales agreement, a commitment of shared country patient through strategic deterrence. i congratulate secretary and his steadfast of the nuclear summary forces and around-the-clock patrols. i strongly support the united kingdom decision to maintain an independent and strategic deterrence. strong alliances and partnerships are becoming even more critical. u.s.critical because both and the the united kingdom face the challenge of meeting global threats in a new era of

constrained resources. as our department undergoes strategic choices and management review, secretary hammond discussed the united kingdom's defense strategy. dod has gained many useful insights for recent vision expenses. our staff continues to coordinate mostly in strategy and defense planning. we will also continue to work closely together to ensure that the nato alliance has the capabilities needed for the future which will be a focus next month in brussels. i look forward to seeing secretary hammond there and continuing our discussions. build anontinue to effective working partnership around the world. again, thank you, secretary hammond. welcome and glad you're here. >> thank you.

i'm delighted to be here this afternoon. i would like to say thank you to secretary hagel for his warm welcome. as you know, i enjoyed very close relationship with her predecessor. i'm delighted we have been able to pick up exactly where i left off in my discussions with secretary panetta. secretary hagel and i have detailed discussions on the challenges we face in afghanistan, syria, and iran. despite the tragic news that three british soldiers were hurt, we remained open as to on preventing afghanistan from becoming a safe haven for terrorist. both of our militaries continue to take risks as they carry out the dangerous tasks. the mission remains on track.

the afghan security forces now lead on providing security for nearly 90% of the afghan population and lead roughly 80% of all security operations. their capability will continue to grow as forces draw down to conclusion by the end of next year. on syria, we are free -- we reaffirmed that they must end the violence and slaughter of its own fecal -- people. a diplomatic solution is needed to end the bloodshed. are setting up our support for the national coalition and undermine the regime that nothing has been taken off the table in the light of continuing bloodshed.

we remain increasingly concerned of the emerging evidence of the use of chemical weapons. we demand that the regime allows the un to investigate these allegations. assad should know the world is watching and will hold him to account. him and anyone else who is found responsible for the use of chemical weapons. as we face up to these security challenges and those posed by iran, we also face significant budget constraints both in london and in washington. secretary hagel and i have addressed the issue of defense reform and how we can get more bang for our buck on both sides of the atlantic. greater military cooperation is a part of it. the also need to look at how we can encourage partner countries within european nato to have their forces take on more security challenges with more effective and deployable forces. of course, the uk and the u.s. enjoy a very high level of

cooperation and interoperability. we have agreed to explore what more we can do in our armed forces to drive greater efficiencies through collaboration together. yesterday as secretary hagel has commented already, i went down to the river and saw one of the fruits of our collaboration. f-35bish islet flying an in vertical landing mode. i'm delighted about the progress we are making in this project and in others such as the common missile department for our next generation of submarines. the uk in the u.s. remain in lockstep on these projects. as we take them forward, we will ensure that continuously of those capabilities.

it will remain the bedrock of britain's defense policy. we see it as part of our special relationship for decades to come. secretary hagel, i look forward to working with you to maintain and strengthen that relationship in the coming months and years. thank you. >> thank you. if you could be as cobranded as possible, now that we know the white house is rethinking its proposition to arming the rebels and syria, why are you in agreement with that fresh look at rearming the rebels? he isl dempsey has said skeptical about that. my second question, why have you since the emergence of chemical weapons, but new intensity into looking at what

might be done in syria? bottom line for both of you gentlemen, secretary hammond, you said all options are on the table. there is a good deal of skepticism. why should anyone leave any of this other than political windowdressing by both governments? eithern't appear as if government will exercise any option. >> as to your question regarding rethinking options -- >> rearming the rebels. >> that is an option. i think secretary hammond framed it rather clearly when he talked about what is the objective for both our countries? stopping the violence. stability in the region.

of syria to ag democracy. those are the objectives. any country, any power, any international elision and partnership will continue to look at options and how best to accomplish those objectives. this is not a steady situation. a lot of players are involved. look atcontinue to options and present those options based on contingencies with a focus that we all have in the international community to achieve the objectives the best way we can. we are constantly evaluating. as the president noted a couple of days ago and one of his press conferences, we are rethinking options. >> the administration is rethinking its position to

rearming the rebels? >> yes. >> why? what has changed in your mind? -- generalut you dempsey said it was not a good idea in his review. all options.k it does not mean that you do or do will. these are options that must be considered with partners in the international community. what is possible? what can help accomplish these objectives? .e have a responsibility i think general dempsey would say the same thing. we need to continue to evaluate options. it does not mean the president has decided on anything. you in favor of arming the rebels? >> i'm in favor of looking at what is the best option in coordination with our international partners. >> even after all of these

weeks? you have no conclusions? >> about what options we will use? that thesions administration is rethinking arming the rebels. you said yes. you have no conclusion on whether you support that? rearming the rebels? >> we are exploring all options to achieve the objectives i just talked about. these are not static situations. you must look at different options based on the reality on the ground and based on what you want to achieve and based on the future and international partners. we talked about that. secretary hammond and i. relationships. when i was in the middle east last week, i was in five countries. i discussed syria in all five countries. >> if i could -- everythingo repeat

secretary hagel has already said. i agree with what he has said. this is not a static situation. it is a radically changing situation. we have kept all options open. we have not thus far provided any arms to the rebels. we have never said something we would not do. both of our nations will only do what we legally can do. certainly in our case, the uk, we have been subject to an eu ban on supplying armaments to the rebels. we will look at the situation when that ban expires in a few weeks time. we've continued to keep that situation under review. we will do what we are able to do within the bounds of legality. that is important. >> sunday times. how confident are you at the

assad regime is in control of its chemical weapons? how confident are you that the u.s. and the uk knows where those weapons are? if a red line is determined to have been crossed, will any military action be targeted against chemical weapons site? or is it more likely to be a broader attempt or strategic and overthrow the assad regime? >> thank you for that. i think the evidence that we have is that the regime is largely in control of its chemical weapons. not the same as saying we are able to account for every last unit of chemical stock. there is no evidence that they have lost control of significant chemical weapons sites yet. in terms of the location of

weapons, i think we have a good deal of knowledge of locations of chemical weapons. that is not the same as saying i can put my hand on my heart and say we know where every last item is. in terms of any possible response, i would not close off any option. the answerollows on to the previous question. we keep our range of options open and in continuous consideration. we should look at the evolving situation on the ground and look at the range of options that we see appropriate and legal in any given situation. >> if the region has used chemical weapons tactically on a small scale, we you consider it legal and proportional to arming the rebels in order to overthrow the regime? >> i do not want to make legal judgments.

before we made any decision, we would get legal advice from the attorney general on whether a proposed course of action was legal and proportionate in the circumstances. thatnk having to find it way, we need to keep our options within the bounds of legality. another question on syria. secretary hammond and secretary hagel, i welcome your comments. in order -- the international community would likely have to wait another attack to get the right kind of evidence. is that correct? have evidence trails collected been done overes time? >> we are trying to establish

of what of the nature would be acceptable in the court of law and send a clear message to the vision that any use of chemical weapons in the future that generates the potential to collect that evidence has a price. i hope we are sending that message. i'm not a technical expert. i do not think you need to be a technical expert to know that. after any use of chemical agents, there will be a degradation of the time on the evidence that can be collected. from the point of view of construct in a chain of custody of that evidence, clearly the longer the period of such an agent in the point where you acquire it, the less stronger that tina custody will be. will be.of custody

>> and the new attack? >> that would provide new evidence for a legal standard of evidence. >> are you confident given evidence that you you have or the evidence that could be collected, he would you be able to work with -- would would you be able to work with that? or would you need a new attack? >> i think secretary hammond said exactly right. i would not add much to what he said. what he hasagain noted there is a legal issue here as well. that is why evidence is so critical and important. >> you need to -- >> you need the evidence. if you are going to exercise certain options, a range of

those options, that evidence is particularly important. from the uk perspective, uk public opinion remembers the evidence it was presented with in 2003 around iraq. it turns out not to be valid. there is a very strong view that we need to have very clear, very high quality evidence before we make lands and act on that evidence. >> to questions. one on syria and one on afghanistan. areboth of you, when you are youat the samples, looking at the same source of material or separate? i think the white house said in a conference call that british had their own investigation.

are you looking at the same material or different materials? on afghanistan, the prime minister said the other day that the british has encourage afghan that it iss to -- --e early interpret all >> let me deal with the first point. i cannot comment on the evidence or the sources of intelligence that we are looking out for obvious reasons. we are working in close collaboration to establish a robust analysis. interpreters,n of we may be sending mixed messages to what is written in the media. that is not our intention. i think we are and that we will not abandon those who have

served us in afghanistan. we are also clear that to the extent that these are people who have an important contribution to make for the future of afghanistan, educated people, by definition, english-speaking people, it is our wish if we have to construct an offer to them that attracts them to stay in afghanistan and be part of afghanistan's future. it is clearly the wish of the afghan government to see as many of these people as possible make their future in afghanistan. we think that it sends an important message about our confidence in the future of afghanistan that we are seeking to work to allow these people to build a future in afghanistan rather than simply abandoning the country. to your question regarding ,ntelligence, each country certainly the u.s. it uses its

own intelligence agencies and institutions and makes its own efforts. thisso collaborate in case with the united kingdom and other allies. we share intelligence. >> thank you. , atonight on c-span conversation from columbia university's journalism school on news coverage of mass shootings. reporter in virginia recounts some of her expenses during the virginia tech shootings six years ago. >> here we were. we felt this was literally in our backyards. i think there were 500 satellite trucks. there was one or two roads and everyone was

close together. virginia tech is a big campus. the families were all over virginia and elsewhere. there were a lot of locales to go to. other than that, the experience was very eerily similar. a little bit about me. i was another news reporter. i have been a future -- feature writer. i have never had to call a grieving family on the phone. people don't believe that, but i have never had to do it. .y editor gave me two names they had just released the names and i had to do that story. i thought if i quit -- [laughter] i said to my friends who have done a lot of these editorials, what will i do? you said, call them up. tell them you are sorry and that you want to talk. everyone was calling.

the families i got most attached to was a family with a community that we covered. a very small rural town. 2000 people. as the press came in and they found her house and they were parked in front of the house like train cars, that community embraced her. they told the reporters to go away. , one ofer one of them the men in her church went over to a chicago tribune reporter, i know you think you're a from a tough town, but if you mess with her, you will see what a tough town is. >> you can see the entire discussion from columbia university's journalism school on news coverage of mass shootings tonight at 8 p.m. eastern. >> ronald reagan i think budgetly -- the defense

was not just a waste of money in those eight years. it is what created the war machine that was used to great havoc in the world and created so much, you know, anger and problems throughout the world that were totally unnecessary. it made it an imperial power. that was a real negative. on the other hand, he did for the first time since eisenhower stand up for the state. the government, big government, the state is not the solution to every problem. they can weigh down the economy. the idea of entrepreneurs, technological change, the idea that people should make their own decisions without some big nanny in washington, he stood

for all those things. i agree with those things. fiscally, he lost it. he really needed to stand up for closing more effective this it. ronald reagan spent a lifetime as the greatest scourge opponent of spending there ever was. he left a legacy, massive deficit come in which permitted his followers -- that was a historical error of enormous proportion. onmore with david stockman "q&a" at 8 p.m.. of goldmanankfein

sachs. he is introduced by the ceo of a arror price financial -- financial company. ♪ [applause] >> thank you. i would first like to start by saying thank you to george and his team from jpmorgan for a wonderful lunch. can you join me in a round of applause? [applause] i would also like to recognize all members of a planning committee. they did a fabulous job in helping put this conference together. i would like to ask them to stand and also guide to stop that but a wonderful job. please stand as well. can we give them a round of applause? [applause]

outstanding work. thank you. to engagering all out in a very wide range discussion about the financial markets in all things associated with our keynote speaker, lloyd blankfein, i would like to spend a minute recognizing paul. his tireless leadership, inspiring leadership and all the things he has done to represent this industry and help us further our duty to shareholders is nothing short of breathtaking. gives a better interview. we will be funding his newscast program in the future. we will taking your orders later. i want to have you guys give a warm welcome to paul stevens and say thank you for all the great

things he has done for our industry. paul,, now. -- come on out. [applause] >> we have to get a chairman for this committee that stays on script. [laughter] that thank you very much. i guess i'll have to keep doing these interviews until i get them right. we were very delighted when lloyd blankfein excepted our invitation to participate in this year's general membership meeting. he has held the top job at goldman sachs since june 2006. that means he has led a storied financial form -- firm through perhaps its most difficult period in its history. it gives him a unique window into markets and economies all around the world. lloyd looks out of that view

through the prison of his -- prism of his unremarkable career. he comes from brooklyn. he won a scholarship to harvard. iny continued his studies cambridge and harvard law school and practiced law in new york city. in 1981, he applied for a position at goldman sachs. like many extraordinarily talented people before him, he was turned down. [laughter] but luck was on his side. he took a job at a trading firm. which almost immediately was acquired by goldman sachs. , as well as said goldman is concerned, i'm acquired taste. [laughter] he rose through the ranks with his new employer. in 2004, he was named president

and ceo. was namedessor secretary of the treasury. there are no doubt many factors in his great success. his experience on the trading desk and his ability to manage risk must be prominent among them. and a comment in a news paper , but ahe is a risk taker very disciplined one. ladies and gentlemen, please join me in a warm all, or lloyd blankfein. for lloyd blankfein. ♪ [applause] thank you for that. >> it was reflecting on the luncheon today.

our gratitude to jpmorgan for sponsoring the lunch. it reflects a kinder, gentler wall street, doesn't it? [laughter] .> i know it is a big group jamie i'm tell eating his lunch. he gets very upset. [laughter] [applause] >> we will rely on the honor system. [laughter] let's talk about the u.s. economy. a good place to start. the picture is pretty mixed. on one hand we have seen improvements. that has got to be admitted. that is reflected in the equities market recent performance. on employment is unacceptably high is at a four-year low. the housing is showing signs of recovery.

all of that good, but negative ones as well. recent job growth has weakened. a lot of people have stopped looking for jobs. consumer confidence numbers have been shaky. what is your sense of where the economy is today? what indicators are you watching closely question mark -- watching closely? >> i think most people think that the recovery is established. again, not without risk. take a little risk, but highly consequential risk. going in thee right direction. there are a lot of great factors. i can explain anything that has happened. if you give me circumstances the u.s. is living with now, housing having bottomed and going up, the energy position,

manufacturing, and deleveraging that took place, a lot of cash on the sidelines, visit be a terrific environment. i have predicted much higher growth rate that we are having. knowing what it is, i can look at and say with permissions that you get from hindsight and say, there is still a lot of uncertainty and regulation. it is hard to explain. if you lay out the circumstances, i would say the trajectory of growth would be higher. people are nervous about taking risk. there is a huge consequence in getting it wrong. nobody agrees on the price. no one is borrowing to invest in their own businesses. does that mean people think they cannot get a return out of their own businesses? higher than the costs of funding? seems unlikely, but that is what -- where we are today.

forget about economics. markets are not science. they are social science. there is a lot of emotion. . expected to change there are a lot of problems dogging it. i think the world models through and the u.s. does better than muddle through. >> i do not know if you saw the piece that bill had in the wall street journal. he talked about uncertainty. many uncertainties that are caused by government policy. it is a drag on economy. do you you subscribe to that point of view? not remember ao time when i could not have said that. there is always something. i would say, look, we came to a very dramatic period. a lot of that has preceded -- receded. if you give the circumstance to me, i would say it looks a lot

like other times when things were stronger. other times do not have the history and therefore not their reticence or the fear and anxiety of making a mistake which seems to be much more consequential as the world gets .ore vindictive maybe unforgiving as a better world -- word. look at equity markets. you have companies that have equities. funding markets and the rising equity market. if you're optimistic on that you think the price should be higher. the other person does not want to pay you for that risk. , but i doncertainty nothing spectacularly more. more.think spectacularly

>> a lot of aftershocks, i suppose. >> that is one way to look at it. >> is talk about monetary policy. unprecedented amount of liquidity. monetary policy. not only are short-term rates above zero, it has been doing so for some time. depending on you -- on how you count it on unintuitive easing, how effective -- quantitative easing, how effective do you think that policy has been? are there alternatives now? >> sure. the fed has a dual mandate. you raise your hand and you pledge that you are going to accomplish both of those mandates in the proportion that

you think the economy has in its needs. >> a kind of zen exercise. >> it is not zen. there are real consequences. you go in and you look at it and say, what are you most afraid of? if i were in charge of the economy, what would i be most afraid of? i would be afraid of the market sliding back. psychologically, we are in a bit of deflationary mindset. thelack of activity -- deflationary period mean to get up everyday day and have something you might want to do, but instead are doing, you wait until tomorrow for it to get cheaper. somehow it will get better tomorrow. in a state wake up and you say, i will wait for tomorrow and tomorrow. you have 20 years of tomorrow's. inflation is insidious. but you wake up every day and

say get that done before it gets more expensive. at the end of the day, i think there is a risk of inflation. there is a risk of deflation. maybe higher risk of deflation. but the consequences of deflation are so much more severe. so, if i were in charge of the -- i, i would be doing it would say, when will the other guys kick in? , onceou think of the qe interest rates go to zero, the returns of those policies are diminishing. what is the value at this point of taking a mortgage getting another three basis points? what that make people do something they do want to do before?

what you need is fiscal policy to kick in. the chances of getting that kind of consensus to legislate our slight. >> i know you are a student of history. what period in the usd look at u.s.mparable -- in the that is comparable to that kind of inflation at you think is appropriate today? >> we are looking for inflation everywhere. we grew up during an inflationary time. >> in our lifetimes. >> the guy got out of school instead of working in that 1970's. double-digit inflation. double-digit unemployment. was passed ont from my parent to grew up during the depression, they would not spend a dime ever.

they grew up with a deflation during the depression. .hey were not haunted theirs was the opposite. that we come to a thing where you cannot contemplate where it is the fed 's job to shield us from the inflation from self-indulgent policies. my parent's generation grew up in a different environment. at is what they're always preparing themselves for. they were not going out eyeing acid items whenever they could. they were holding onto -- and going out and buying asset items whenever they could. they're holding onto their money. it tookry teaches us world war ii to get as out of that cycle. -- it is noted

just a policy shift. the late 1970's were a parallel. i look at the corner of my mind -- i to the 1994 period when you got used to long interest rates for a long time and then a shocking and large over a short period of time hike in interest rates. that even though you think in hindsight should have been expected, was stunning and had a major affect on people's portfolios. >> as if we do not have enough to worry about. a large part of this meeting has been focusing on international issues. i know you and your firm follow developments closely. want to turn attention outside of the united states, starting first with europe.

i gather you have just returned from a trip to germany and the united kingdom and you had the opportunity to meet with policymakers in both countries. with that trip in mind, what is your sense of developments in europe? have they decisively turned the corner in the eurozone crisis or are we in yet another lawal lulle yet -- lawal -- before yet another storm? >> the situation will be problematic for a long time because you are trying to accomplish something very radical in a very difficult government modeled to say the least. that may be the biggest problem, the ability to adapt to change. the big problem in europe is growth. how do you achieve a growth rate? by having in interest-rate policy appropriate to germany and spain? who would have thought in prior generations that spain and

germany would have the same exchange rate for 15 years? but they do. it is a difficult situation, but one thing i would impart, it is confusing for americans and less so for europeans. europeans,ness of including germans who have to pay a lot of the bills, to actually continue to pay those peans to support the euro experiment, which again is politically motivated even though it bears on the economy and economic functionality but it is really politically driven, to do that, iwill believe, is absolute. we sit here a lot of times and say the germans will never go along with this, will not pay for that. they will not pay so much to support the greeks. but other than the fact that we try to keep the hazard out of

it and going to the brink, i am convinced the support for making ofope work, the alternative which -- i think it is very strong. when people talk to you, people can be cynical about a lot of things but they talk in terms of nobody wants to repeat the 20th century in europe. it is a real political requirement. people should suspend their faculty about whether they will keep going along with the sacrifices necessary. the question you have to go in, at what point regardless of their willingness to do it today lose the capacity? in other words, at what point do theyet to wear it even if are willing to they cannot, or even if they can the world can tolerate a situation where unemployment in spain is so

high, that there is social unrest, which is a fear down the road. not remote from people's thought process. if you want to make the economies converge and balance tax can you much put on the last percentage of people working in spain? you put people out of work and get less revenue. revenue destructive, not creative. i would say that the focus on capacity issues and not the willingness. they had the capacity for a long time and are focused on it at the subset is governance. the point where you need unanimous agreement for certain things, from belgium, the federalist system there is very awkward and hard to get results. you can get a situation where you might have -- think about the fed, what they were doing during the financial crisis.

everyone went to be said for a long weekend. coming up with a whole set of buying assets, that did not work, a couple weeks two, capital injection, can that system be nimble enough to move for a moving market and expectations and fears? right now it feels relatively safe because of the work that was done by mario draghi and the central bank. .ut to take that off the table but it is not resolved. you have to have growth and have to have a growth model that works in the periphery and within germany. >> it seems to me that the united states has a great deal the mostin seeing extraordinary political experiment, which is the european union, succeed. does our government do enough to support the europeans in coping

with what you called the eurozone situation? i used the term crisis. >> i stopped after the third the mortgage crisis, i stop calling it a crisis and started calling at life. i think they will be living through this for a long time. not one critical moment, but a series of decisions. >> are we doing enough? i think he politics of it and the sociology of it is we want them to succeed, we have a lot of suggestions, they have their context, we have our context, and we compete in a lot of ways and have different views of how regulation should be done the power of the central government or the parliamentary systems. we have a divided government. we have a recent history of the europeans having the belief

that their problems, ground zero for their problems were the united states. >> there is that narrative. a catalyst, but i think the leveraging of their system and the fact that the revenues and costs of their social system diverged and the lines never crossed again is a function of european policy, not united aids policy. but there were certain catalysts -- united states policy. but there were certain catalysts. very complicated. a lot of it is european, but back-and-forth, i do not know how receptive the europeans would be to take instruction well there -- while they are working out their system. in real concrete ways, when they need dollars, do not forget that most trade in

the world is financed through dollars. europe can only print euros. when they were going through their problems are government was taking a lot of credit risk by swapping and giving them dollars in return for euros so their banks could function and the banking system could function. we are doing a lot but everybody thinks, everybody is generous with his own advice. >> i have noticed that. >> and feels how lucky the other person is to get it. the recipient is not always feel so lucky. >> we used to say that free advice is worth every penny you pay for it. let's move to china and developments in asia. very important topic for this conference. we heard early this morning from the eurasia group founder on the subject. in a session that i think everyone here greatly enjoyed.

we could probably devote an entire conference to the subject given the complexities and significance for the future. -- theone hand, it is economic outlook and growth continue to amaze. i have seen some of your research publications , andcting 20 years hence it is extraordinary. >> pretty impressive. >> very impressive indeed. on the other hand, i think the challenges facing the country are striking as well. demographic pressures, including a population that is aging relatively quickly. the political and economic divide between the urban and the rural communities in china remains an issue. infrastructure of the market system out there. and ultimately the potential in a large population for social unrest among a citizenry legitimately earning for --

yearning for financial opportunity and political accountability and the like. you have traveled to china, have done so recently. -- closebe a class of observer of the evolution of the nation and its economy. what is your outlook? >> the 20th century was america's century, and that does not mean we owned every year of it. there were a few bad years in the 20th entry. 19 as seven was a bad year. a bad year but if you shut down than you would have missed the last 93 years. i cannot tell you if this is a chinese year or not. by the way, i feel positive about the u.s. they are the two places i feel best about, for different reasons. but i would rather be a long- term investor for china than a short term. i would rather predict five years and 10 years.

i would rather be investing for my kids than investing for short-term for myself. i think every problem you mentioned is also an opportunity. population means they will have to go out and create social services which means they will have to create pools of capital. they will have to have something to buy, so companies that go to the outside world and issue equity on the hong kong up equityve to build markets, bigger equity markets inside china to create security for pools of capital. the pools of capital in turn will fund chinese growth. themarkable situation now, only people who can really invest in china -- the external. problems you mentioned are the flip side of opportunity. they areems -- problems if they do not go well, but as they did work through

they will be big opportunities. if it does not go well you can see a conflict and dissatisfaction, but look how , allpeople are coming in consumers, a fabulous labor force. i think there will be problems, and it is hard to know. we find out about our problems because the market helps tell us. stimulusf their program they build something like 80 airports right away. if you build 80 airports at once maybe 40 of them will be in the wrong way, -- place, maybe 50 of them. if that happens here nobody goes to them and supports them and you write them off and fire a million people. and you kill the people who made the decision and move on. there you do not really know. suchy do i have said jp -- a good view of how that works? >> i knew every part except the moving on par.

in china you do not have the mechanism of writing off mistakes. so i think when they have they will be bigger than they otherwise would be if you were facing them all along. but if you ask me, i would bet along with china that it works out. thisof government, government -- new government, this government had a couple years to think about what they want to do. i expect they have reforms on the mind. should berkets reform early in the agenda so you can achieve those things by having capital markets that will allow people to finance and fun things. -- fund things. i would be positive but as a risk manager the next year kind of confuses me. i do not know. not a lot of visibility. the market does not tell you like it does here. so we stay invested but we watch

how much we have in. what we do not want to do is have so much in that we have a problem and have to pull out. and once you are out or start to get out it is hard to get that reputation back. so we are being very careful about how much we have in. we are constantly financing, constantly investing, but when we invest we sell other things and try to keep a level of risk in that country we think we can support. >> interesting. let's come back closer to home again. this is not news to you or anyone here but in recent years we have seen to have hit several high watermarks in terms of the public antipathy toward the financial services sector. >> that is hate, right? [laughter]

among policy makers -- this is important note, on the right and the left. 2010 dow jones described u.s. "the focus of anger about wall street's skyhigh bonus culture" and reported that you were grilled, drilled by a senate subcommittee looking -- grilled by a senate subcommittee looking into goldman and the financial crisis. i do not want to dwell on the past, but where do you see the temperature levels now in terms of our industry, what the report we have with policymakers is, is the grill still hot? >> somebody once said how much better does it feel to be boiled in 450 degree oil rather than 600 degree oil.

things have moved. you cannot ignore the legacy. in the present we are carrying a legacy and working through these issues, and that is a source of resentment and distrust we have to grapple with in the present. it was a very big trauma. the narrative that got written will be expanding over time to include regrettable behavior, a lot of people, including things we regret financing in hindsight. that capturede everybody, and there were no brilliant actors when everybody got caught up in the same credit bubble. but we have to work through it. it should not be a shock that the trauma will have repercussions for a long time and we will live with the legacy issues for a while. there -- no surprise there. we are on the front foot going

forward. people are more interested in how we get this economy going than they are with again rehashing. you are not abandoning the legacy management, there is no abandonment, but in terms of share people want better growth and want a better life and they want firms like ourselves and accomplish the purpose we are here for, to alternately finance risk-taking and growth in the system. you accumulate capital, you make decisions, you yea this investment and nay that investment and allocate capital. we make decisions among who are the best sources of the need for capital. that is something we have to do in earnest. other things we have to do with tot to the legacy -- nod

the legacy issues, i think we have a lot of regret for not having that dialogue with the public. we have to do a better job explaining what it means to be able to have and what a blessing it is for the united states to have good big pools of capital with professional management and long track records and a disciplined financial system that is regulated very well. what does that mean to the real person? better off because we have great capital markets? look at the innovation, entrepreneurs. everybody wants to come here and make their fortune here because we have the infrastructure for that. and we have to do a better job of explaining our role in that and what a boon to society that is. , from the point of view of the rank-and-file

american it is a very abstract concept. a lot of complexity to it. i think it is even more complicated by the fact that financial services industry is different. inhink of goldman as being many different spaces. as you know, the investment company institute occupies one, the registered investment company mutual fund he is -- space. how do you accommodate within your firm businesses as diverse as you have? asset management business on the one hand, investment banking, what are the challenges involved there and how do you manage it? >> let me say we are not that diverse. for a big financial institution we are relatively focused. that werell others

dedicated investment banks, we did not merge with big commercial banks or form financial supermarkets. we do not have a retail business like one of our nearest competitors, morgan stanley. we stayed in a wholesale institutional businesses -- advice, market making, financing, and asset management. we are engaged with the same kind of people and infrastructure and intellectual capital. technology. way, the samee culture throughout the firm. people who tend to fund those kinds of businesses tend to be similar kinds of people with similar skill sets. so i think it was very important to us to maintain that culture and to recruit at the kinds of schools we recruit at, to stay wethose relatively narrow --

think all those activities give us a frankly tremendous advantage in terms of investments we make in our technology and the culture of risk management, the way we can attract people, even if people do not intend for 30 years they do not mind getting trained for three years ago and. some stay for three and stay 30 just the same way that people come for 30 and stay for three. we have great recruiters as a result of that synergy. i think those businesses fit together very well. within our own organization asset management has the advantage of being a business where we can still grow without just crossing our fingers and hoping the market itself gets bigger. we tried to grow our market share in investment banking, but how much will we grow our market share when we are the number one player? , thereasset management is an asset manager that is four

times our size. the things i told you about the pool of capital and wealth creation, i think it is the market that will grow and a big opportunity for us and one that gets a very high percentage of mine and our boards share in terms of growing the business and making sure we do it in a sensible way and are careful about risks and returns. >> you talked about trying to explain to people that are the benefits of great capital markets that we have. benefits in their own personal lives and those of their family. reinforcesexperience the old expression that a plan for slow growth. what is goldman doing, thinking about the industry at large, to increase public confidence and customer and client confidence in the firm and the business

that it is engaged in? >> the first thing that we obviously focused on and the industry has to focus on is it is a good thing when you are trying to repair a relationship not to do anything that inflames the relationship. it would be a very good thing for the industry to stop having problems. then, obviously the market had a big trauma and the social system in the country had a big problem -- trauma. ,e are determined to use that we talked about that before in our partnership culture that forces us to be very introspective and dig deep and figure out what we were doing and what we could do better and spend a lot of time on this. we published a lot about changes we have made. .gain, be very public i think people are living their lives and worrying about their performance, not obsessed with

what we are doing. but it is there for people to see. we are going out and doing the best we can in demonstrating through the things we do for a living how important that is. in the past couple days, $17 billion of debt for apple, we helped jcpenney, who needed obviously an infusion of capital. when i think of the ipo's and the things we do, what i would like to be able to do is tell people, and i will get to this for a second, apart from the special programs and philanthropy we do as a firm, i would like people to understand that the things that we do in the course of our business activity is supportive of the country, the economic system, and growth, job creation. that is a big enough gap right there. beyond it we are also trying to

do things that operate on a human scale. ae disadvantage to us being wholesale institutional business is a little bit, who are these the ball? --do not have a dialogue who are these people? we do not have a dialogue the way consumer firms did. we did not participate in the narrative about our self. so i think we are doing some programs, small business programs, taking the themes and work we do and providing advice and education and financing and support in the small business context. we put a lot of money and energy and infrastructure around that program, operating in several cities. if any of you have crossed it you know it very well. that has been a great program. to do what we do on a level that is more comprehensible to people. we recognize the need to do that. >> you started out your career as a lawyer, then became a

trader. as head of the firm most of your focus is on clients. when you became head of the firm there were a couple of really good years, perhaps you would mistrust some of that because it was in the midst of the bubble. then some tough ones. maybe we are coming out of that now. it has no doubt tested you as a leader personally. what lessons in leadership has lloyd blankfein learned since becoming chairman of goldman sachs? >> i will tell you, in those did years we were having i not necessarily feel good. i was looking around every corner nervous as can be. -- so only in hindsight do i see how easy it was. the tough years i did not exercise a lot of critical faculty about how tough things were.

every day you came in and tried to sort things out and the next day you sort things out and one day you go out and there is nothing left to sort through and that is how you know it is over. but there's always stuff. i think when things are going well you love the hell out of it and when things are difficult you have a sense of duty that really takes over. ,n terms of leadership i think and this is a virtue but also a vice, have a thick skin. if it is too thick and you are oblivious to what is going on that is a bad thing, but it has to be thick enough not to take all the well intended device that would have you banned to end to every -- ban breeze. in november 2008 we had our research conference, september 2008 we had the crisis, november 2000 eight i am getting questioned on whether there will be any investment banking. be ad our strategy is to

financier and market maker and asset manager and co-investor. they said, don't you know? you cannot do it. november, our year started december 1 in those days. the next year was the all-time record year for goldman sachs and our businesses because of the needs of market making. we were able to accommodate other people's business. , as a leader you have to listen and you cannot cross the line into stubborn but you had better stay a little bit thick-skinned and a little bit focused on facts and information. they say, how can a lawyer be in this business? in a funny way, a lot of different people do well in the business but lawyers do not do so badly and engineers to not do so badly and accountants cannot do so badly. you know why? all of those groups have a real

respect for facts as opposed to sentiment and impression. lawyers are trained with facts, engineers for sure live with facts, and accountants. that cannot be all you are but that is not a bad place to start. as opposed to nerves and advice and short-termism. >> we are running out of time but i did one sort of a lightning round. really quickly. the volcker role? -- rule? >> i think misplaced and, well intended but out of place and potentially harmful to the markets. >> too big to fail? appropriately to an extent the current obsession and something that needs to be

sorted out to maintain the contractor want to have with the public. >> money market funds? >> very important source of excess liquidity for people but was done not -- what does not get enough attention is very important liquidy for companies. to have all that exist on the balance sheets of banks and loan inflate thes would balance sheets of banks and create more credit risk than the balance sheet we are, with the day. >> financial -- comfortable with today. >> financial transaction taxes? >> screwy. liquidity is a virtue of the system and to tax liquidity in order to hamper it is going to be a cost that will be realized in a lot of facets of our society that are not anticipated. >> a book you would recommend? >> every book i read i am in love with.

what area? >> you choose. >> history. the book on washington. >> i just finished it. >> covered a million things. so here is the demigod washington. no one had more prestige in the world. the politics surrounding him were so bitter and horrible, and everyone talks about the world has changed, nobody had to deal with a 24-hour news cycle, let me tell you. this is his own delegation writing pamphlets against him. it almost gives me some faith that we can survive the bitterness of the current system, that these things are part of a cycle and the fact we are thinking this is as worse as it can be is only a function that this is the generation we are in and everything else is focused. but that book made it vivid

that we have gone through these cycles before and we have certainly gotten out of them. so i feel better about it. point in time when washington and jefferson never spoke to each other. >> you know something? night about 5:00 i get the incoming e-mails that contain the next day's news stories and i'm thinking, these would take two months to get printed and would go by a horseback. last question. we try to use this conference as a way of maintaining a culture. there are not only some senior people here but some younger ones as well, and many of us have children. you have three. >> i do. >> at the age when most people are looking to begin their careers. >> 27, 25, 19. >> what advice would you give to young people starting out their

careers, financial or otherwise? >> you can never give your own kids advice. >> that i understand. >> i have learned my lesson. -- look, iple started out, i did not just go to law school but practiced law. things ended up a lot different than i thought. , note should do something be so obsessive about where it will take you in the longer run. not only don't you know the context he will face, you do not even know yourself. so the idea of planning these things, will this be good for me in the long run, people should take advantage of the fact that in this generation nobody is getting drafted into the army, you can have a few years of experimentation that you can be liberated from the

everything isure taking you on some straight line to someplace. it does not have to be a straight line anyway. >> enjoy the ride because you never know where it might take you, even to the chairmanship of goldman sachs. >> and do not worry about knowing the contents of your business -- you have to know content but you also have to be a complete person. in your early part of your life you should focus on being a complete person. >> agreed. ladies and gentlemen, join me in thanking lloyd blankfein. [applause] [captioning performed bynational captioning institute] [captions copyright nationalcable satellite corp. 2013] >> more from the investment company institute conference tomorrow. head ofwhite, the new the securities and exchange commission addresses the gathering. then at 10:30 tomorrow morning, en of the budget committee, kent conrad and judd gregg.

a conversation about taxes and government spending. they had this extraordinary role in culture. them they were regarded as a abject failure. then in almost no time at all suddenly he was the most popular man in the country, the man who would save the union on president ofld and the united states. >> julia loved her time in the white house. she said in her memoirs that it was like a bright and beautiful dream. the most wonderful time of my life. so i think that gives you some idea of how much she enjoyed being first lady and how she felt that her husband had finally achieved the recognition he deserved. >> be part of our conversation

on julia grant with your questions and comments by phone, face, and twitter. live monday night on "first ladies" -- also on c-span radio and c-span.org. next "washington journal," with april job numbers out tomorrow conversation on the size of the u.s. workforce that has declined by 7 million workers since the recession five years ago. a journalist on his book ?"ho sold the american dream about the decline of the middle class over 50 years. in our weekly america by the number segment a look at childcare at the u.s. live atton journal" 7:00 a.m. eastern. from this morning's "washington journal" -- a conversation on the senate bill on internet sales tax. joining us is a technology

reporter. we will talk about online sales tax with him. in the going on congress when it comes to online sales tax? guest: just before they left for the recess the senate teed up legislation that would require states to require that online retailers charge the sales tax for purchases. out-for people who buy an of-state. essentially an online retailer here in dc would have to charge the sales tax for the state of michigan when somebody from michigan bought the product online. host: is it going to pass? guest: it looks very likely it will pass the senate. we are almost certain. three quarters of the chamber's support. the house is less certain. there is still resistance. the house leadership is not fond of tax increases or anything perceived as a tax increase.

there are concerns about the implementation of the bill itself. but i think it is fair to say this is something that has momentum and will get a strong look in the house and if it does not happen it is something we could see in the next year or two. host: what is the name of the bill and you are the prime sponsors? guest: it is the marketplace fairness act. the main sponsors are senators lamar alexander and dick durbin. they have been focused on this issue for something like a dozen years. this is been around since the mid-1990s. senator durbin is a passionate advocate. in the house we have representative steve womack, also very strongly in favor. host: steve womack is a republican from arkansas. is there a walmart factor there? , ast: walmart is in favor

are most major retailers because they need to pay sales tax. the rule right now is you need to charge the sales tax if you physical presence in the state. they have stores in most states so they have to charge online sales tax for every state. amazon.com used to oppose this but they have seen their physical presence increase so have had to start charging tax in more states. they have supported this as of last year. retail industry in general is already collecting sales tax and they believe they are at a disadvantage. guest: host: is this considered a revenue bill? have actually tried introducing amendments that

a bit technical but essentially senator durbin has framed this as not a tax or revenue bill. this is essentially an administrative bill that gives states the authority to extend something that is already due to them. the argument is the sales tax is not new. consumers oh sales taxes when they i products on amazon.com or anyplace else they are not charged. the fact most consumers do not remit their sales taxes, it does not change the fact. we may see it come up in the house if the opposition there coalesces. host: gautham nagesh, what are the arguments against this bill and who is leading that charge? guest: as i said, senators from states that do not have a sales tax strongly oppose this. that is a pretty broad coalition. senator max baucus, the finance committee chairman, he says also that his committee was bypassed

with its bill, which is somewhat true, actually, because the senate majority leader harry reid brought it directly to the floor rather than sending it through the regular process this ashen. as i said, baucus opposes the bill. montana does not have a sales tax. senator wyden from oregon has also been strongly opposed. obviously from the moral liberal wing of the senate, but he framed this as businesses taking over government responsibility. oregon does not have a sales tax. he sought exemptions for those sorts of states and retailers. the problem with that, senator and see points out, that if certain they cannot forced to comply by all likelihood those states would become the center of online retailer progress -- retailing gossip -- retailing because everyone would move there. host: how much could be raised? guest: $23 billion has been going around. it would go to states, counties, localities, whoever collects sales taxes.

host: are there still companies that are not charging sales tax on internet purchases? guest: absolutely. i think it is fair to say most companies don't. the retailers and companies do, maybe not the majority but gradually an increasing number of online purchases have sales tax assessed. however, most retailers still do not -- they are not required to, especially when selling out-of- state, so they generally only collect from purchases in state. host: gautham nagesh, what about international purchases? guest: there are some things like the vat and other countries that resemble a sales tax. if you purchase things physically in another country you can apply to have it remitted and customs. it depends. these things are not enforced uniformly. a lot of countries do not have a sales tax. air is an argument online retailers will move abroad if we assess this -- there is an argument online retailers will move abroad.

it is a valid concern and we could see enforcement on that and also. host: we have been talking with gautham nagesh from "cq roll call" about the online tax debate in congress. we would like you to participate. you can also send in a tweet as well as an e-mail. we will begin with a call from sabrina in royal oak michigan. independent mind.-- line. caller: i can't believe they want to charge us more taxes for buying things online. because all of these companies are buying their goods out of other nations and they are avoiding taxes and they are taking their businesses to other countries to avoid paying u.s. revenue to the united states for their taxes, like candy bar companies going to mexico to avoid tax to the united states government.

hundreds of millions of dollars. and they -- and that is where all the businesses are going, overseas. but we are still being charged taxes for buying goods for our homes. i live in michigan. funny you should say that about getting taxed if you are buying something from washington, because whenever i buy anything online, most often i am charged a sales tax. i don't know how that works. but i am not getting out of sales tax here in michigan. but it grinds me that businesses are not paying taxes and they are operating here in the united states, selling us their goods and getting junk from indonesia, billing -- bangladesh and china and taiwan and the list goes on. host: we got the point, sabrina. thank you so much. gautham nagesh? guest: i think it is fair to say there are strong objections from people who see it as a tax increase.

those include the heritage foundation, americans for tax reform. heritage foundation in particular argues that this is an overreach of states rights because this is forcing starts to enforce other state laws on their own citizens. they have scored this as a key vote and are holding their conservative members accountable essentially for this, as if this is a tax increase. this is definitely something that has sparked concern on both sides of the aisle. and there is a concern in the house that it will be perceived as raising taxes on internet goods. host: here is a chart from "the washington post." u.s. census. five percent of all u.s. purchases in 2012, according to the u.s. census. mark from ohio on the republican line. please, go ahead with your question or comment.

caller: i sell things online. i have been unemployed for about a year and i am surviving selling things i bought and owned. i don't know what the sales tax is in michigan, in north carolina, especially since in ohio the sales tax varies from county to county. i would have to keep track or someone would have to help me keep track. or i am just basically out of business. host: what kind of business do you have and how much are your sales? caller: i amrange? selling things that i bought years ago. host: are you on ebay? caller: i have sold on ebay but i have not sold anything on there for a long time. host: thank you. let's hear what gautham nagesh has to say. guest: i believe mark probably would not be affected by this

law because it only affects companies that have more than a million dollars annually in online sales. so, that would be a according to senator durbin, less than 1000 companies. essentially major online retailers. if you are doing more than a million dollars in online sales, and there are small businesses and individuals on ebay and that sort of thing who do high- volume, and they may be affected. the concern about small businesses is something that sponsors are hoping to address two fold. states can either choose to streamline their sales tax procedures, therefore making it for people to calculate the state rate. the state rate would supersede the local rate almost in every case. in that case it would make it easier. there would be one uniform rate for every state essentially. or states and vendors would to be provided with software that would automatically calculate and ad sales tax at the time of purchase. again, supporters contend that this is very easy and how

retailers handle it now that have to collect sales tax. host: somebody like mark would probably not be affected at all. guest: exactly. if you are under $1 million, which is most people, then you should not be affected. host: c-span democrat tweeps in tweets in -- guest: opponents have thrown in the number 9600, 96 -- 9600 counties, municipalities and cities that impose a sales tax. there are very the word -- diverse forms of government. we see different states and localities impose them differently. however, as i said, that would have to be simplified under the statute in some fashion. we don't have an exact number but sponsors say there would be at most 46 different rates. host: just in vermont, independent line. good morning.

caller: hello. i have a couple of different questions that they are not really discussing. as a vermonter, like everyone in vermont and new york and bordering states, we always go to new hampshire to buy stuff .right now, brick-and-mortar, you are supposed to pay on your taxes anything you buy from a brick-and-mortar, too, and pay the difference. you are supposed to pay the difference. so if you buy something in new hampshire with zero percent sales tax and you go back to massachusetts you are supposed to remit the 6.5% for your purchase. why they are not going to then after they do this -- they are putting this huge burden on internet sales and there is no real contact or anything. they just have the information because of the shipping address and why aren't they going to go and do that now, the next step would be requiring you to give your address if you buy a purchase at a walmart where ever brick-and-mortar? isn't this the

next up? isn't this a slippery slope? you are not really using the state's resources for something that is shipped. host: thank you. gautham nagesh? guest: there is concern that first of all this will leave the door open to greater cross-state requirements in terms of imposing fees and regulations. that is part of the federalism argument cited by conservative opponents. adequately, supporters of the bill, conservative, have framed it as a states rights issue and this is about state forcing retailers who want to do business with in their borders to comply with state laws. the caller brought up a relevant point that, yes, consumers owe sales taxes on other things that they often do not pay. that is why supporters have framed this as an enforcement measure rather than a tax increase. it is simply shifting the burden

of collection onto the retailers to enforce the tax that is already old. did we see other similar taxes that consumers as opposed to self-report essentially be shifted? technology makes these possible. previously one of the barriers would be it would be very difficult to keep track of where everyone was and where they lived and where they are spending money. but in theory now, a credit card would tell where everyone has spent money. it has a detailed record of that sort of thing. then, yes, in theory you could access a sales tax. that is not something that has been discussed that it is definitely something technology has made possible. host: where do republicans stand on this issue in the house? guest: that is the question really. they expressed concerns about this. i think it is fair to say visible not be a priority to the same extent as the senate. i do not see this as being intractable, because the lobby interest lined up behind it -- the retail industry is very

large and lucrative and it supports a lot of jobs in a lot of home districts. that is why this is not really a partisan issue so much as a regional issue or an issue of who is in your home district and what they are pushing for. as you said, we have seen a representative from arkansas be the main sponsor. how's judiciary chairman bob goodlatte -- the house judiciary chairman will have a lot to say. he is definitely concerned about the perceived burden of calculating the various tax rates and forcing businesses to do that. so, how easy the supporters can make it if they can get it going and show it is working on a more limited basis as, say, and amazon is doing -- if they can make the case then this is something that could take place in the next year. host: why is this a priority for

dick durbin? guest: senator durbin, he says it is because illinois, his home state, is really hurting financially. that is something a lot of states and localities are complaining about. they are saying the online retailers have become a larger portion of the economy. that is more and more money consumers are spending at amazon, walmart.com, instead of their local retailers. there is no tax revenue coming back, so governments are dwindleg the tax base and they are getting nothing back in return. this is seen by both the retail industry and local government as sort of a lifesaver, a ray of hope in a very bleak fiscal climate. host: gregory tweets in -- it will help leverage small business sales against giants and protect retailers from amazon models. guest: this is really the main argument by supporters of this legislation. they trotted out small business people who say that they have to

collect the sales tax, and when large retailers don't it puts them at a further disadvantage. we have seen certain industries bookstores, other small businesses that sell physical goods have been cannibalized by online markets. that is not exclusively because of the sales tax. large corporations, ones that do not have physical footprints, they have some efficiencies. they are able to charge lower prices on some goods in some cases for other reasons besides sales tax. if you combine it with another four percent or seven percent discount because they do not charge the sales tax, small retailers say they do not have a chance. they believe this will make a difference. host: to tweets -- two tweets --

host: gautham nagesh, again, why is that amazon has changed its on this bill? or years they fought and kept it out of congress. guest: amazon has become the face of the struggle because they were the leading opposition for quite a while. it is mostly because as amazon has grown, they have had to build more warehouses and their infrastructure has grown and there has been debate in the courts about what constitutes a physical presence. as i said, it all dates back to that supreme court decision ruled that catalog sales did not have to charge a sales tax because they did not use the resources of the state in which they were selling. it was extended to internet sales eventually when the internet got it. amazon has maintained essentially for a long time. however, as they built more physical buildings and had more employees, courts challenged what constitutes physical presence and they have been

forced to collect more sales taxes. as they are already doing this, they are now on the side of the dismisses see this as a disadvantage if other companies are not forced to do the same thing. host: the next call for gautham nagesh on online sales tax comes from geraldine from montana. good morning. caller: good morning. yes. my question is, since montana does not have a sales tax, would this force us to have a sales tax with our online purchases? we are always asked when we buy, coming from montana, no sales tax, and generally it is on it and we do not have a tax added on. but what advantage in? i realize they would have revenue, but we voted down repeatedly this sales tax. so why would the montana people have an advantage? we would have more of an advantage without the sales tax on our online purchases because

if it generated interest in companies moving to montana, we need jobs. and it would be much more to our advantage to not have a sales tax and montana on our internet products. guest: as senator durbin emphasized, this bill would not impose new sales taxes on states that do not have them, like montana. so essentially, as a citizen of montana, you should not be affected by this legislation in terms of making purchases. there will not be a sales tax, no matter where you buy your goods from, because the sales tax is assessed by the state where the residents is and not where thetailer is.-- retailer is. however, she did touch on the other point which i think is the point that opponents of this legislation are playing down, but it is essentially the major caveat. retailers and montana, even

though montana does not have a sales tax, would have to start charging sales tax for residents of other states if they are selling more than a million dollars of goods on line every year. that would be an additional process that montana retailers would have to undergo that they currently do not. and montana could foreseeably become, a home for online commerce if they become one of the few states that does not charge sales tax, and just sort of continue in that fashion. therefore, that is a concern about retailers based in man cannot -- in montana did regular citizens should not be affected. host: tony irvine tweets in -- empower states to collect taxes and did not impose another edible mandate.-- federal mandate. guest: the legislation as framed is empowering states essentially that they collect sales taxes. a federal mandate, difficult wording. what this does is it does expand states'authority over retailers not in their borders.

for some it is an overreach. host: could states refused to do it? guest: states could refuse to be part of this program and therefore they would not require retailers to charge sales tax. however, retailers within their states would still be required to charge the sales tax to other states. there is really no way to make an exemption to that and make this legislation work. host: judy tweets in, nevada grandma. >> on the next "washington journal" a discussion on the size of the american workforce that has declined since the recession. our guest is from "the wall street journal." then the author of "who stole the american dream?" about the decline of the middle-class. and in our weekly america by the the numbers segment a look at child care in the u.s..

guests from the census bureau and the institute for women's policy research. "washington journal" is live on c-span everyday at 7:00 a.m. eastern. >> looking live at the u.s. capitol. the house and senate out all week. coming up in just a moment we will bring you a conversation from columbia university on how the media covers mass shootings and terrorist attacks. left washington today headed -- left washington today and headed to mexico, the first of three days in his central american tour. he held a news conference earlier today with the mexican president. the trip will also food a visit to coaster rica as well. we will show you the news conference coming up in about one hour and 20 minutes. before he left today, the president