justice, william rehnquist. he practices law, with more than 88 supreme court briefs and taught litigation at the university of texas school law. the nation's youngest and first hispanic solicitor general of texas. ted crews -- cruz was elected as senator from texas. fixing tax increases and mitigating of the harmful effects of obama care. he became a hero for all the constitutional conservative republicans. the critics describe his actions as of the tail wagging the dog.

i am not born in this country and i don't know how this is physically possible. all that i can say is that we are happy that the tale is here, and the dogs are in washington. [applause] and >> his critics also said that he is whacko and lives on a different planet. when i today's media coverage proves that he is a soaring eagle in the iowa caucus planet. [applause] please welcome our first his panic speaker, -- keynote speaker, ted cruz.

? ♪ >> it is great to be with so many friends in iowa. thank you for that very kind introduction, thank you a.j. and david for inviting me here today.

thank you for your gracious hospitality. thank you, to chuck grassley for welcoming me into your home state with so many dear friends of yours, and thanks to each of you for coming out tonight. i promise you i will do everything humanly possible to speak for less than 21 hours. you know in nearing the end when i began to read "the cat and teh he hat." 21 hours is a long time. that is almost as long as it takes to sign up on the ob amacare website. [applause] everyone of us is grounded and we have kept to we are by our

families. i am proud to have the opportunity to introduce to each of you, my wife. she is beautiful and brilliant and the mother to my two baby girls, and she is the love of my life. thank you for being here. talking about family keeping one grounded, we have a tendency in the midst of heated battle to think fax that battle is of great importance. but that cannot always perceive that to be quite the same. last sunday we were in washington with our two girls, we were driving to mount vernon

that afternoon to spend some time with the girls. the five year-old lester little sister, what do you want to do when you grow up? she said i want to work with daddy in the u.s. senate. caroline said that this is boring, i want to be in a rock band. she said, he will be dead by then. [laughter] >> this is a true story. i was driving the car. i wondered if she had been talking with republican leadership. if she knew something i didn't. i am here tonight, more than anything else, with words of encouragement, with the words of

hope and optimism. what want to talk to you about tonight is that we are facing extraordinary times, the answer to what we're facing his -- only the people can turn us around. but the fight is worth it. let's start with the extraordinary title. this is not a typical moment in the political process. we are facing extraordinary threats to the nation, with an administration that seems bent on violating every constitutional protection that we have in the bill of rights. i don't know that they have violated the third amendment, but they may start soon ordering soldiers in people's houses. if you look at the first

amendment, and the complete disregard of religious liberty, telling servicemen and servicewoman they cannot share their faith with others or risk discipline, the idea that the men and women who risked everything to defend our liberty check their constitutional rights at the door -- this is against who we are as a people. we saw just a few months ago and air force chaplain and alaska, reprimanded, because he posted a simple statement that there are no atheists in foxholes. apparently, chaplains are not supposed to be talking about god. the phrase he was quoting, was president dwight d. eisenhower.

who had some passing familiarity with the military. we have seen the assault on the second amendment. no administration in history has tried to come after the second amendment like this administration. vice president joe biden, the nice thing, you don't need to punch line. [applause] you just say his name and people laugh. but vice president joe biden said, if anyone is attacking your home, just go outside and fire both barrels of a double barreled shotgun into the air. which is very good and advise if you are being attacked by a flock of geese.

we have seen the assault on the fourth and fifth amendment, as this administration has invaded our privacy, seizing phone records and e-mail, of law- abiding citizens as the target of their efforts. by the way, for anyone who has yourself on here, please leave them on. i want to make sure president obama here's everything that we say tonight. we have seen the assault on the 10th amendment has the power has extended beyond the limits and no extension is more of bridges, then that power grab that as obamacare.

and then if you look at the fiscal and economic state, we're facing an enormous crisis. for the last four years, our economy has grown 0.9% per year. there is only one other four year time since world war ii with less than 1 percent growth. 1979 -- 1982. coming out of the jimmy carter administration, the same failed economic policies and out of control spending and regulation. this produced the exact same economic stagnation. people are hurting all across this country. we're at the edge of a fiscal and economic cliff. i'm reminded of last fall when we had the opportunity to speak

at the national republican convention and i talked about the national debt and our two little girls. that night we went back to the hotel room, and i began to look at twitter. paula poundstone, the comedienne watched the convention, and she sent a tweet. she said, "ted cruze just said, the national debt is 16 trillion dollars. what did she do?" we laughed so hard we almost fell out of bed. caroline is five. in her short life our national debt has grown over 60 percent. what we are doing right now is

fundamentally immoral. [applause] if we keep going down this path, our kids and our grandkids will spend their whole lives now working to meet the challenges of the future or their priority, but working to pay off the debt of their parents and grandparents. our parents didn't do that to us and our parents did not -- their parents did not do that to them. we are here because we're not willing to do that to the next generation. that leads to my second point. growth is that answer. growth, if there is one word that every republican should have tattooed on his hand, this is growth.

the book of ecclesiastes says there is nothing new under the sun. i would say the challenges we face right now are very similar to the late 1970's. this president is fond of saying he has the worst economy in the history of that she inherited the worst economy since the history of the universe. he does not seem to have a great memory. do you remember double digit unemployment, 22% interest rates, gas lines across the bloc. do you remember our hostages in iran as the president wrung his hands? the answer we saw in 1980 was a grass-roots revolution, the reagan revolution, millions of americans, many americans in this room who got involved and said, we will get back to the principles that made this nation great. president ronald reagan came

into office in 1981, elected the same year that chuck grassley was elected to the u.s. senate. he implemented policies the exact opposite of those that president obama has made. instead of raising taxes to cut taxes and simplify the tax code. instead of exploding spending here restrained the growth of federal spending. instead of unleashing regulators, like locusts, to destroy a small businesses, ronald reagan restrained federal regulation. the result was among the most incredible economic growth that the nation has ever seen.

by the fourth year of reagan's presidency, does anyone recall the rate of growth the echo 7.2%. what does this mean to echo what does this mean in practical terms. inheriting the same lousy economy -- implemented the same policy. and if those policies had produced the same economic growth, we would have 7 million new jobs. the equivalent of every single person i was unemployed in 46 of the 50 states and having a new job for every one of them. every other challenge we have, unemployment and the national debt and maintaining the strongest military and the world, if we have growth we can do all of this. if we don't have growth we can't

achieve anything. this is an interesting statistic. do you know that 1 percent of economic growth produces a decade of 2.8 trillion dollars in tax revenue, and 3.1 trillion in debt and deficit reduction in echo this is one percent. this is the technical term. this is what the republican party needs to be about. we need to be about economic growth all the time, every day. this is how we turned the country around. [applause] so how do we get this done echo only the people can turn us around.

i'm convinced we're facing a new paradigm in politics. this is a paradigm that is the rise of the grassroots. this has official washington absolutely terrified. [applause] but this new paradigm has been beta tested. unlike the obama care web site this was been tested in 1980 with the reagan revolution, and we pulled this country back from the brink. and if you look at this past year, we have seen, over and over again the power of grassroots. i participated in standing side- by-side with rand paul it is at

a filibuster against drones. when that started, most of his colleagues did not understand and they thought that this was curious and did not make any sense. police started to see people all over the country going on line, speaking out and saying, defend our liberty and our constitutional rights. as a result of your leadership, and the grass roots rising up, the next day, president obama was forced to do what he had refused to do for three consecutive weeks. to admit in writing that the constitution limits his authority to target u.s. citizens.

we saw the new paradigm the second time, on the battle over gun. following the tragic shooting in new town conn. president obama did not come out as he should have, targeting violent criminals. i think violent criminals, we should come down on them like a ton of bricks. [applause] but instead of that he chose to target the second amendment rights of law-abiding citizens. i have to tell you that conventional wisdom was that this was unstoppable. early on in the first few weeks, we said if this had happened early, this would not have been pretty. and once again the same thing happened. millions of americans began to speak up at town halls when the senators came home, going on

facebook and twitter, speaking out. the lead alternative to the second amendment infringing bills, the law enforcement alternative, was a bill that was entitled to the grassroots -- that i was very proud to write, side by side. i was sorry proud to write this with chuck grassley. [applause] it received 52 votes, the most bipartisan votes of any comprehensive bill concerning guns. nine democrats voted for this. but the filibuster prevented this from passing into law. even though washington was convinced that nothing could stop the anti-gun agenda of the president, when it came time for a vote, every single proposal of the president that would have undermined the second amendment was voted down on the senate floor. [applause]

this was the power of the grassroots. the third time that we saw immigration where the president and senate democrats made a push to grant amnesty to those here illegally, and they push this through the senate. but the american people rose up an overwhelming numbers and said, we don't support granting amnesty without securing the borders and solving the problem. as a result, that bill into the house of representatives. and it has stopped because of the speaking at your alleged

representatives. the fourth example is syria. the president announced to the world that he intended to launch unilateral military attacks against syria. and leaders from both houses of congress came out supporting this. in washington, this was a done deal and there was no stopping it. but then, what happened is the same thing. the american people spoke up louder and louder, and the calls were coming 100 -- numeral 1. -- 100 -- 1. we do not want to put them there aware of the sad -- national security interest is not real. [applause] and as a result of your

leadership, what was a failed complete, was stopped dead in its tracks. and then the fifth and final example, is the battle that we just went through over obama care. if you read the new york times that is your first problem. they will tell you that this battle accomplished nothing. i think collectively we accomplished a great deal. [applause]

one of the things that we accomplished is that we elevated the national debate, over what a disaster and what a train wreck, how much this is hurting millions of americans across this country. this is called the patient protection and affordable care act. it does not provide protection and is not affordable, and it denies care to millions. the one word in the title that is true, is patience, because you have to be very patient. collectively, millions of americans made the case that this is not working, this is the no. 1 job killer in the country. this is causing millions of americans to lose their jobs. young people are not finding jobs right now. single moms across this country

are being forced to work part time, trying to feed their kids on 29 hours a week. hard-working families who are struggling to provide for their children. they're getting skyrocketing health insurance premiums because of this. people all over this country andpeople all over this country right now, many people find their health insurance is being canceled because of obama care. as a measure of how far we have elevated those arguments, how many of the use of the season premiere of saturday night live ? the opening was the three minute skit on the disaster of obama care. kathleen sebelius went on the jon stewart, the show.

he ripped apart. as john's. astor, the president has given an exemption to big business for a year, why not give this to and hard-working americans. this is a liberal comedian on television making that argument. and by the way, making it to a lot of viewers who would pretty much never listen to republican politicians. this is a sign of what we accomplished in elevating the debate. we energized the grassroots. in the course of just a few weeks, 2 million people signed not to fund it. the #makedclisten has gone out over 1 million times in the last

30 days. and for everyone who talks about wanting to win elections in 2014, they say that nothing matters more than an energized an active and vocal grassroots america. we may democrats take a lot of stupid votes. let me highlight one in particular. the polling on that, over 90 percent of americans disapprove of that, and 70 percent of democrats say they would vote

against the senator who voted to keep a special exemption for and in themselves. when the house of representatives funded the government and repealed that exemption, harry reid marched all 54 democrats off that cliff. the same rules as the exchanges of those who are obstructing this are facing, it would not surprise anyone in that room is that language is known as grassley.

in october and november of 2014, we're going to see television commercials all over this country. there will be members of the and senate to experience the joy of and the private health care system. the fourth benefit is that we demonstrated the power, of what the people and what the grass roots do. every once scoffed at the idea that the grass-roots would rise up. and 1.2 million people signed -- and then the vote to defund obama care. exercising a profile in courage

that stood strong and listened to the american people and lead -- the caucus. [applause] we did not accomplish our ultimate policy goal. a number of senate republicans chose not to stand side-by-side with house republicans. had we stood together i am sure the outcome of this fight would be very different. but none of us thought that taking on the washington establishment was going to be easy. all of us thought that this was going to be a simple task. we all understood it was going to be an ongoing effort and

right now, i am more encouraged than ever if you look at the five instances i talked about, the power of the grass roots, four of the five have been complete victory. this is batting .800. double ty cobb. the fifth one that we saw, we saw the house of representatives listen. i thought and time the u.s. senate would listen as well. tell the stories of the people who are hurting. i would encourage each of you -- upload your story.

upload your stories in hal obama care is impacting you. how was this impacting you and your job. one of the things that we can do in the senate, is help to tell a story. make it real, how people are hurting. i am working to continue to energize and mobilize the grassroots to help all of us. the only way we win this is to win it together. how many of you have yourself on. i would ike you to text growth to 33733.

the word growth. we're working to try to build a grass-roots army across this country, because the way that we will stop obama care, and get back to economic growth, is not going to come from washington. it is not going to come from elected officials. i want to mobilize and get this information to our friends and neighbors. this is how it worked in 1980 and this is how it will work now. this leads to my fourth and final point. this fight is worth it. this fight is worth it, because

for one thing this is the path to victory in the media loves to fly stackup -- a false dichotomy. the love talking about a republican civil war. how the republican party should defend itself, this is like taking medical advice from dr. kevorkian. but not want the same outcome that you are desirable. we need to unify and let me tell you, growth and freedom are principles and ideals that unified the entire republican caucus. they are principles and ideals, that unified the evangelical

community. with the liberty movement. with the business community. growth and freedom are principles that bring together main street, and the tea party. >> and we got clobbered. in all three of those, the wisdom in washington, if you took every washing the strategy and dump them in the ocean, you know you would call it? a good start.

2006, 2 thousand 8, 2012, don't rock the boat, don't stand for much of anything. the economy is not going great. keep your head down and we will win. shock of all shocks, we got cleaned up. there was one election that was different. it was different in the way we campaign. campaignpositive across the country, saying we stand for growth and freedom we stand unambiguously against obama care because it is hurting millions of americans. what happened? republicans one eight title way victory, taking control of the

house. say?did the strategists let's go back to the model of 2006 and 2008. stand,s pushing for a that is risky. just keep your head down and we will win races, that is not how you win races. by the way it is driven i the old -- by the old nixonian adage. what complete poppycock. [applause] that is based on the oh so clever idea that if your opponent is here, that you want to be to the right so you could capture every marginal voter. the problem is if you do that,

you destroy every single reason anyone has to come up and vote. [applause] the model i turned to over and over again is the rock -- model of ronald reagan. does anyone remember in 1980 ronald reagan sand, i am almost exactly like jimmy carter? except a little more conservative. ronald reagan stood up with a smile and drew a line and he said president carter and i have a different visions of this country and our future. if you believe in freedom, in standing on your own feet, if you believe if government is not the solution, government is the problem, and stand with me and that is how we solve an epic transferred -- transformation.

the second reason -- is that growth is fundamental to opportunity. for years i have abdicated what i call opportunity conservative. which is that every single policy we think about and talk about should focus like a laser on opportunity. on easing the means of ascent up the economic ladder. the biggest lie in all of politics is that republicans are the party of the rich. under president obama, the top one percent are earning a higher share of our national income since 1928?

that shouldn't worry us because nothing bad happened after 1928. who has been hurt by the obama economy? who have been the losers under the obama economy that of the most vulnerable among us? they are younger people, hispanics, african-americans, single moms. those are the ones pushed into part-time work, losing their health care. as republicans am a we should be championing opportunities for people who are struggling. [applause] what is the fight over obama care about? let me share with you a couple of stories. shannon from toledo, ohio, roads

wrote that both her husband and her are machinists. our insurance premiums have doubled already in our due to go up dramatically for 2014. our hours have been reduced. my son has a part-time job as a server. in the past, he was able to work up to 35 hours a week. a month ago, he was told he could only work up to 25 hours a week as a direct result of obamacare. in our family, 100% of the working people are seeing a negative outcome due to obama and his fancy laws. please continue to fight. here is another story from texas.

my name is rigo. i am a single father. i have health care coverage through my employer and i pay for myself and my daughter. i am worried and concerned that my premium will go up if obamacare goes into effect. i live paycheck to paycheck and and i cannot afford my premium to rise. please help me. one more story from sherry from west virginia. i have been forced to part-time employment because of obamacare. i now may lose my home because we may no longer be able to afford to make our mortgage. i have medical issues and i am losing my insurance and him being forced to obtain other insurance. i was happy with my insurance and my job because of obamacare, my life is in shambles.

i was happy as a worker who is self sufficient. obama and his policies have driven me to a state of shame and embarrassment replacing the pride and satisfaction i once felt as a result of my own self. god is not happy. [applause] these are real people feeling real pain because the obama economic agenda does not work. we need to make the case to every young person in the -- hispanic committee, african- american community, that the greatest engine of prosperity the world has ever seen is the free market system of the united

states of america. [applause] the final point i want to make is like each of you, freedom for me is not some abstract concept you read about in a book. it is real in our lives but while you talk about coming as an immigrant, it is real in your life because you have seen of the freedom this country is. for me, my dad fled cuba 55 years ago. as a teenager, he fought in the cuban revolution, he hadn't thrown in prison, and tortured and beaten almost to death. today, my dad is a pastor in dallas. his front teeth are not his own good as they were kicked out of his mouth in the cuban jail as a teenager. when my father came to texas in 1957, he was 18, he cannot be

english. all he had was $100. i do not advise carrying money in your underwear. for the young people who are here today, imagine being 18 and a strange land where you do not know anybody, you do not speak english, and you have nothing. he got a job washing dishes. he worked seven days a week, paid his way to the university of texas. he graduated and got a job and went on to create a small business. when i was a kid my dad used to tell -- say to me, when we face depression in cuba, i had a place to sleep. if we lose our freedom here, where do we go? [applause]

that is why every one of us is here tonight. that is why we are fighting because as ronald reagan observed, freedom is not passed down from one generation to another. every generation has to stand up and defend freedom so that one day we do not find ourselves answering our children and our children's children what was it like when america was free? that is a question and a single person in this room wants to answer and that is why we are fighting because together i am convinced together, standing together, we can get back to where free market principles in our constitutional principles. we can't restore -- we can restore that shining city on the hill that is the united states of america. thank you and god bless you. [applause] ♪

>> thank you for coming. have a safe trip. ♪ [no audio]

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[captions copyright national cable satellite corp. 2013] [captioning performed by national captioning institute]

>> i think there are abuses of the system, so you have to have a system that encourages innovation. >> ok, appreciate it. >> thank you for having me.

>> i don't know what your neck size is but i appreciate your sticking your neck out. >> it is a privilege to be part of the fight. >> thank you for all you do. keep it up. >> thank you very much. >> very good speech, sir. >> i appreciate the encouragement very much. thank you. >> national economic council

director gene sperling spoke about the economic agenda as congress begins its budget negotiations. both the house and senate named conferees that were part of a larger deal to reopen the government. from an event hosted by business forward, this is 50 minutes. [captions copyright national cable satellite corp. 2013] [captioning performed by national captioning institute] >> i'm jim doyle and i'm the president of business forward. those who are new to us we were created four years ago with the mission making it easier for business leaders across america to tell washington had you to create jobs and accelerate the economic recovery. thanks to the help of 50 of the biggest countries in the world we are active in 100 cities. we have briefed more than 400 different members, mayors,

governors and members of congress and administration officials. we are honored to welcome gene sperling the president's top economic advisor to discuss how budget negotiations can move forward and what is ahead on the president's economic agenda. he is director of the national economic council and assistant to the president for economic policy, the first person to hold it twice having held the sail position for president clinton. prior to this he was counselor to secretary tim geithner. he served as the point person on manufacturing policy, housing, economic assistance for veterans, played a key role in jobs act and small business tax credit. during his eight years in the clinton white house helped negotiate the 1993 and 1997 deficit reduction acts an championed the children's health insurance program, earned income credit and direct student loan program.

between the clinton and obama administrations he worked at the brookings institution, center for american progress and the council on foreign relations working on a range of economics and education issues. he is the co-author of a book on girls education and pro growth progressive and economic strategy for shared prosperity. he graduated from the university of minnesota and yale law school. he is a native of ann arbor, michigan, and will rejoin his family in california at the end of the year. when he finishes the remarks we will move over hear for q&a. thank you very much. gene. >> well, thank you very much for having us here today. i want to thank jim doyle very much, not just for today but for all of the leadership of business forward, all the consultations, even the recent meeting with your small business

advisory committee as we went into this recent round of budget discussions. again, i really want to thank you and business forward for the leadership that you have shown and the desire to look beyond your own particular situation to the larger economic issue that we face as a country and understanding that that affects all of us. so, again, i really want to thank you. i guess i would just say we are, as usual, going into another phase of the budget discussion. we are now going into a period where we will have a budget conference that will go until december 13. we will have then a c.r. that goes to january 17.

and a debt limit that is extended at least into february. and i think as always you will see different people go quickly into the weeds and details, which is not inappropriate, but it is important at these moments to step back and remember why we care about these issues. sometimes here we start to think that the end goal, the end goal of all of our public policy, is to hit a particular metric, a particular budget or spending or revenue metric, as if those are the goals in and of themselves. but it is important for us in policy to remember that each of these metrics, however

important, are means to larger goals. the larger goal of what we do, the end goal of what we do, is really to have an economy, to have economic growth that allows us to live the vision of the united states as a country where there is a growing, secure and inclusive middle class. that's not an obama or romney or anybody's unique particular vision. that is the vision of the creation of our country, is to have an economy that was not a barbell economy with a tiny group in the middle and a lot of poor people or some well off people, but to have more of a bell curve economy where there is a large number of americans that can be in the middle class and have the benefits of a middle class life, a chance to have their children do as well or better than them. that is the -- that is one of the fundamental goals, the end goals.

the second end goal is that people in our country who work hard and take responsibility can work with dignity, raise their children with dignity and retire with dignity. third, that we are a country where the accident of your birth does not overly determine the outcome of your life. so, of course, nobody more than me will get lost in the difficult issues of pay fors and adjust sets and budget totals, et cetera. but it is very important for us to step back and remember that all of those measures have to be measured against whether it is fulfilling that basic goal of a strong inclusive middle class, being able to work or raise your children with dignity in a country where everyone has a chance to rise. that is what we ultimately measure our success against.

and i feel that at times we do lose our way on this. when you look at current fiscal policy right now, you can feel that some who advocate -- forget what that larger goal is. for example, we work very hard, president obama works very hard in thinking through and design being a pro growth and pro jobs fiscal policy. we understand that you have to have -- that the goal is not a budget policy per se but an economic policy that promotes these values and these issues of job creation, a strong recovery, inclusive growth. so when we look at how we do a budget, we look at whether the budget as a whole meets those goals.

right now, i think there is among a lot of people a consensus as to what the ingredients of a pro growth fiscal policy are. it would be a fiscal policy that, yes, did give more confidence in the long run that we have a path on entitlement spending and revenues that gives confidence in our long-term fiscal position and that we are not pushing off unbearable burdens to the next generation. that is very important. but it is also of a pro growth, pro jobs fiscal strategy to ensure that you can invest in the things that are important to growth and productivity. if you could hit every single fiscal goal that you wanted, but your bridges crumble and none of your students, or a tiny percentage of your students

could read or perform well in school, nobody would say that your economic growth strategy was working. on the other hand, if some of those things are going well and you have a completely fiscally unsustainable future, that is not so great either. you have to think about this as part of an overall pro growth, pro job strategy. also, there's no question that right now we still need to give this recovery more momentum. we cannot possibly be satisfied with the levels of projected growth when we are still coming back from the worst recession since the great depression. we have too many long-term unemployed americans. we have too many middle class families who are doing better, working harder, but still are not where they should be or where they deserve to be.

we need stronger growth. we need to give this recovery more momentum. so, it is not hard to think about how you would design a pro growth fiscal strategy. you would make sure that right now you weren't overly contracting the economy. chris van hollen asked the congressional budget office recently how much the sequester would cost us in jobs this year, next year. they answered 900,000. really? we can afford to have a fiscal policy that our independent score keeper thinks is going us 70,000 to 80,000 jobs a month? but it is worse than that because that is not static. economies are about momentum. so we could have a economic growth strategy where we had a more pro jobs, pro recovery fiscal policy right now that

included -- that did not have this harmful sequester. we could have more savings that were on both the revenue and entitlement side that were long term and would help in the future. and we could make sure that we are making room for the things that almost everybody thinks we need to do more of. the amazing biomedical research from n.i.h. the efforts to make sure young children from poor families have a chance to have a fair start when they go to kindergarten. i have not had any business leader come tell me they think the united states needs to invest less in infrastructure. none. so, a pro growth fiscal policy as president obama has it is one that has as component a strategy to have balanced, long-term fiscal discipline, deal with entitlements and revenues for

the long-term situation, but also includes allowing this recovery to get more momentum and allowing us to do the investments that are in the critical ingredients of economic growth and competitiveness that virtually everyone who is not operating from an ideological or political frame thinks is important. the president is today. headed to brooklyn to go to the i.b.m. p-tech school. this is the things we are talking about, turn high schools that allow young people who may not have been on a college path to start in ninth grade on a career path to get maybe in four to six years have a high school degree, a technical degree, perhaps a job waiting for them or perhaps to be turned on to education enough to go to a four-year higher education. these are important serious things. you go to the business roundtable or business council

meetings and they are talking about these things because they go to the skills gap they are trying to fill. but too often here we are just in a world of abstract numbers, metrics, and even when we are talking about how we deal with the economy we are not asking ourselves, you know, we talk about whether we're cutting spending as opposed to cutting unnecessary spending and investing more in the things that are good for economic growth. we forget the frame that everything we do needs to be measured against the goal are we encouraging a growing more prosperous middle class. example it is relevant -- it is relevant to the budget conference you are going to see today because even if you do not have the big grand bargain, if you were to have a medium deal or small deal, those deals could have permanent loophole closers and permanent mandatory savings

that would help permanent, our permanent long-term fiscal situation. at the same time, they would allow more room right now for investments that will be important to growth in the short term and important to our investments and competitiveness in the long term. so it would be a very positive thing if we used this moment to push forward a pro growth, pro jobs fiscal policy where we look at the components and make sure they make sense, not just for hitting a person's particular metric, but whether they make sense as a pro growth fiscal policy that will be good for the middle class, good for economic security, good for our long-term competitiveness. i think it is again a very important reminder as we go forward. the second thing i think we need to do is we just have to put an end to the sever inflicted wounds -- self-inflicted wounds.

i became the n.a.c. director in january of 2011 this time for my second swing through. and it was actually quite an interesting time. we had a very bad election in november if you were the obama white house or democrats. but after that we had been in a very tough situation, yet i had been privileged to be part of working out a compromise deal in the lame duck that probably didn't make anybody, or definitely didn't make anybody entirely happy, didn't make us and many democrats happy because we extended some of the tax relief at the top that we didn't think were the most fiscally responsible thing to do but we did it in a context where we extended long-term unalignment.

middle class tax relief and a new payroll tax cut. and we surprised markets and growth was actually lifted up a half percent almost everywhere. beginning of 2011 i think we were looking at 3% growth. i understand things happen right after that, i barely remembered where the bathroom was when you had both the developments in the middle east raising gas prices, you had the unprecedented natural disaster in japan that had a much, much deeper and more harmful on the global economy than anyone expected. those are the things you can't prevent. those are the external factors. even the european financial difficulties that you have to deal with. but what you don't expect is that you are going to manufacture your own domestic crisis to inflict wounds on your own economy as you are trying to

recover from the great recession. but unfortunately that is what has happened. the question is, why? it is not because we had divided government. it is not because we had great differences, philosophical differences in how to do a long-term fiscal plan. it is because we started seeing in 2011 really for the first time ever a serious use of a threat against our own economy and against -- and the potential for default -- as a budget tactic. that is what hurt us. it is not having divided government. it is not having a difficult budget negotiation. it was the practice of threatening the default of the united states as a negotiating

tactic. and i think it is very important for people to understand that single fact. because i think sometimes i read descriptions of the president's position, it often seemed to be about would the president negotiate, will he negotiate. there is no question that this president has been willing to negotiate and compromise on budget issues. let's be honest, most of the flack he has received from his own supporters has been when they thought he was too willing to negotiate or compromise. but the president does believe in divided government and that everyone has to give a little and compromise can't be a dirty word and if you are going to move forward nobody is going to get 100% of what they want. what the president was doing was taking a stand against using the threat of default or put it this

way -- he was taking a stand against sanctioning anyone using the threat of default as a tactic in budget negotiations. and i can't express how important it is that this issue be resolved in the right way, and soon. it is very important that we as a country decide in these next couple of months that the era of anyone threatening the default of the united states economy is over. and i think we need to come together, business community, democrats, republicans, and decide, there's going to be many ways we are going to battle with each other on our priorities but the era of threatening default is over. now, people would say, but really, the president can really

take that hard of a stand? he's really going to -- he's so determined not to sanction that type of negotiation that he'll stand firm no matter what? what if you get to the 11th hour, you know or 11:59 on the critical evening? and the reason why the president did and was willing to stand firm was that he believed and his entire economic and strategic team believes that if the president made concessions at the last minute, even for the purpose of preventing a crisis, that it would increase, not decrease, the chances of default. it would increase the chances we would undermine our full faith and credit, not decrease it. think -- it's just logic. if after all of that, the lesson learned had been, yeah you put a

gun to the american economy and you get your way, then why would people not continue to try that tactic for the rest of the obama presidency? and if it's used by the minority party against the obama presidency, why in the world would you not expect payback? why not expect that a democratic house of representatives would not do the same thing to a republican president later, saying they're not going to sign the debt limit unless there's background checks or higher minimum wage? so this was a very important -- this was a very important struggle for the future of sane economic and fiscal policy in our country. clearly, we have now seen twice where we have been willing at the end, this year, to extend the debt limit without, you

know, concessions or somebody being paid to agree not to default the country. but it is important that this end now. let me give you some reasons why. first of all, you have to start with the fact that we had a very, very wise first secretary of the treasury in alexander hamilton. when you read him, you really do have great administration for his foresight that he could establish that the united states of america had impeccable credit. that future generations would benefit. the actions he took at a time when that was not so -- that was not such a conventional wisdom understanding was -- showed great foresight.

and he gave us a great gift that we have maintained for over 200 years. i think we should look at it this way. i think that we should consider it a precious asset possessed by all the american people, our credit. our credit standing over 200 years is a precious asset that is owned by the entire american people. that has allowed us to -- that has allowed generations of our businesses and entrepreneurs and families to invest in their future at lower costs. it's led to our currency, it's led to people all over the world believing that u.s. treasury bonds are the safest form of investment. that's been established over 00 years.

we should not play around with damaging that brand. that precious asset. and my deep worry is that if this happens another time, we will hurt, we will do lasting damage to that brand. i mean, in 2011, there is no question, it had a very harmful impact on the economy. we had a couple of companies come in to talk to the president over a year later, where they talked about the impact on consumer spend, consumer confidence, at their company during the financial crisis. as being matched only by 9/11 and pearl harbor. that's not a great thing. we saw the harm of it in the

short term. we have lived through the harm that this government shutdown and second threat of default has done to our economy. jason furman and jim stock estimate it's cost out 120,000 jobs in quarter and many people feel that's conservative. there's no question we'll take a hit in great. but i am most worried about what it means for, you know, -- about the threat of lasting damage. i mean, think about just some of the specter of some of the things that happened. fidelity. j.p. morgan. blackrock. decided they couldn't hold treasury bills that had maturities in early november. ok, well, is that going to tank our economy? no. but is that the sign you want to send to the rest of the world,

that your own brand name top financial institutions have decided that they are so unsure of their own government that they're not willing to even for a short period of time -- i mean they're not willing to hold short-term treasury debt? it's not the signal we want to send. and i think i heard so many accounts, receive sod many emails from people saying, you know, we did a contingency plan in 2011, we never thought we'd have to do it again. now we've had to go through doing a whole other contingency plan for default. sooner or later we're going to start implementing those contingency plans. the message is, it was bad that this happened in 2011. it was more harmful to confidence in our financial system that it happened a second time in just a little over two

years. but i worry that three strikes and you're out, that a third strike within three years will start to do some of the lasting damage. let me just give you a couple of quotes we pulled. this is larry fink, the c.e.o. of blackrock, october 22, the beginning of this week, in the "financial times." quote, many -- this is the person who holds the largest assets in the world. many foreign investors are rethinking their approach to investing in u.s. debt. even a marginal change in the willingness of government pension funds, insurance companies, and other institutions around the world to buy american bonds will

incrementally raise interest rates and drive up the cost of financing our deficits. student loans are tied to treasuries. ultimately mortgages are. if interest rates go up permanently, even a little, because people are rethinking their approach to investing in our debt, that will do lasting damage, ironically to the deficit, but to middle class families as well. and again, this isn't because there's lack of faith in the united states economy or the power of our entrepreneurs or innovators. it's simply about our dysfunction, it's about the practice of threatening default in our budget battles. bill gross, the world's view of the u.s. has been damaged by all this. dysfunction in washington appears to be a permanent disease that ultimately should concern longer term treasury investors as to the volatility of washington's debt. muhamed al arian. an international financial system is based on the assumption that the core of the

system will predictably, -- will act predictably, responsibly, and rationally. if this assumption proves faulty, which is what would materialize from ta congressional refusal to lift the debt ceil, the rug would be pulled out from the critical underpinnings of daily financial systems. so this is a very serious issue. and i really do believe it is not a partisan issue. i think this is about the brand and the benefits we as a country enjoy from the precious asset of our credit standing over 200 years and i think we just need to decide the era of threatening default by anyone, for any reason, has to be over. what you'll hear, well, two things. this is the way it's always been, one, and two, gee, people

would have to give up leverage. i want to contest both of those. i think i've made myself a little bit of a history buff on all past debt limit increases. and yes, there have been times, not often, where the debt limit has got, you know, muffed up in another issue or two, maybe once or twice, there have been times when the debt limit was perhaps used to encourage budget negotiations, but there has never been before this an organized, long-term effort by a faction of a political party to use the threat of default as a key element of their political or economic strategy. that has not happened before. the republicans were putting in a prioritization in their bill.

here's how you should manage the defalmt of the united states. so this is unprecedented in the sense of it being a sustained and serious effort to use the debt limit and the threat of default as a key element of political strategy. second, the idea that you need this for leverage is belied by what we know from taking our civics classes as junior high students. or middle school students. our governmental system gives enormous leverage to the minority party. barack obama wants to pass immigration reform. he wants to have a strong infrastructure bill. he's offered a deal, compromise, that would combine long-term corporate tax reform and infrastructure investment a pro-

growth, pro-jobs grand bargain he has many, many priorities he wants. and none of them in our system can get through without the cooperation of the republicans in the united states congress. that is the leverage that's given our minority party in the united states government. that's the leverage that is given if you control even one house. so in 1997, when we did the balanced budget agreement, i was one of the negotiators, just had the white house and they had both houses of congress. but of course we had leverage over each other. if they wanted the medicare savings they wanted, they wanted to lower capital gain, they had to get bill clinton to change his position. if we were going to get the children's health initiative, the hope scholarship, investment funding for education, we had to get their cooperation. that's the mutual leverage that

leads to compromise. you do not need the threat of defaulting your country for leverage. that's more of a super-leverage, perhaps designed to nullify election results. it is not -- to give that up does not take away the normal leverage you have to force the president or the other house to work with you in the spirit of compromise to make sure that something that passes includes the priorities for both the democrat and republican parties. that's what we need to get back to. not asking anyone to give up their leverage, just asking people to use the normal leverage that's built into our constitutional system to forge compromise when you have divided government so that we can move forward. so thank you very much for giving me the opportunity to talk today. [applause] >> thank you, gene.

the first question comes from hundreds of investors, entrepreneurs, small business owners that you deal with all the time, in the last couple of months and the question they ask is, when you're negotiating, does the threat to fourth quarter earnings come up at the table? they're all asking, do they know they're killing my fourth quart her especially the retailers and everything else. does it come up in negotiations? >> that is really interesting that you mention that. i think that -- i think there have been people in the business community who have been frustrated that they -- that their words have not had the force that they should have on washington. to be honest, some of them have felt that as many of the fortune 500 c.e.o.'s are often republicans, perhaps they've been frustrated that their words

have not had the impact on some element of the republican party as we've gone into these self- inflicted, you know, crises. but i will say, if there was one thing that seemed to really break through, it was indeed the idea that putting the kind of crisis point in the middle of december was going to impact the holiday shopping season and the awareness that for many businesses, large and small, that 70% or 75% of revenues come in those final two or two and a half months. in fact, i was very struck by the fact, one day we were doing significant outreach one day,

the president was talking to a bipartisan group of governors, and then i stayed on the phone after to take question and answers and other than issues on parks, the number one issue for both democrat and republican governors was, please don't do this thing where you're going to make the date in the middle of december. and then we walked downstairs, the president and i and others met with a group of small businesses and literally the first words out of, you know, the first person he went to was, someone who sells kind of gift candles who said she was dead if this happened there. and it was very interesting. it seemed like in a very short period of time, the republican proposal that was going to extend into mid december suddenly went to january. i think the reason that broke through was it was a commonsense

message that people were hearing from the largest businesses but also the smallest businesses in their district. i think it says a lot about what has impact which is, you know, a lot of people, they do care what the c.o. of the 15th largest company in the world thinks, but a lot of times they care a lot more about what they're going to hear at a town hall meeting. so perhaps when they're at home with a smaller business, they may not be hearing as much about what's happening to money market funds or interest rates but they are hearing somebody say, you know, you're going to kill me. i'm going to have -- i usually hire more people, at the holiday shopping season. i'm going to lay off more people. that's a pretty powerful, tangible message. i think that broke through. secondly, i think the shutdown -- i think the negative

impact of the shutdown was felt quite broadly, for a couple of reasons. one, with the sequester, the sequester is going to be -- is obviously harmful to growth, harmful to investment, harm to harmfull a lot of families in our country but when it first go into place, people are able to, you know, do one-time things, find that money under the cushion or whatever and so it doesn't necessarily hit as quickly. i think in the shutdown, people might have expected it was going to be like that as well. or they might have remembered the 1995-1996 shutdown where maybe only half the government was shut down. i think this ended up being very harmful. i think people felt it in their economy. i think people started to realize that's not just about federal workers. they saw the small business contractors.

i think what a lot of members of congress started to hear was the small businesses say, hey, when you open this government, federal workers will get paid, not me. you know, i missed a payment. my credit is hurt now. you know. i already had to -- i already took the hit. i think there was a broader sense of the economic harm there. i think the reason why, unfortunately, while all those things are extremely harmful, the thing that would be the most, you know, the most scary and threatening would be a default and yet that might be harder for some people to digest. clearly some members of congress tried to pretend that, you know, it would be -- the united states could somehow get through it or the united states for the first time in its history massively not meeting its obligations,

breaking its bond, would not have this terrible, harsh effect. fortunately, i do feel that the leadership on all sides did not buy that. i think there are members of congress, house and senate, who take that position. but i think those in the leadership of the democrat and republican parties were not confused that a default would be financially devastating, but it's not the kind of thing you want to prove. >> we found that business leaders might be unwilling to talk about sequester cuts because they're not experts, but we talked to them about what with happens if they don't pay their credit cards, they're -- they know about that. you talked about the farm bill. what do we have a chance of getting done before you leave at the end of december? >> well, let me say something on immigration. i do believe that immigration,

comprehensive immigration reform will eventually become the law of the land. i think there is just an overwhelming sense for both sides wanting to get that done. i think there should be as much pressure on the system as possible to get this done. a couple of things. obviously it would be a great thing for the economy. we know that immigration would be good for growth. we know it would help more companies continue to locate in the united states and employee more people. we know it would be -- and employ more people. we know it would be good for g.d.p. but it's also interesting, we're

sitting here talking about, you're seeing comments, you know, from congressional leaders saying, maybe we can get something done. maybe it's not going to be a large deal. maybe we can get something done. when you look at what the, you know, what people are talking about, it makes you realize that the c.b.o. has scored the immigration bill as reducing the deficit by almost $900 billion over the next 20 years. so if you're asking yourself right now, what is one of the most promising, bipartisan things we can do to reduce the long-term deficit, you should be supporting and actively fighting for passage of the comprehensive immigration reform that passed the united states senate. but obviously it's just also the right thing to do from a moral point of view. the president's mentioned the farm bill, where there's been bipartisan movement. you know, one of the other things that we talked about with the president quite a bit is understanding the ability of the

president to get things done and have change even beyond legislation. now, legislatively, a couple of other things i mentioned, i think there's some bipartisan progress on patent reform, and trying to reduce the degree of abusive litigation that gets in the way of innovation. i think chairman goodlatte has shown leadership in getting -- in moving forward a bill that will probably still need some adjustments from his democratic colleagues but nonetheless is consistent with the president's, you know, goals. i think that there has been surprising but promising opportunity on g.s.e. reform in the senate. myself and shawn donovan and

jack lue, the three of us have been working very closely, often behind the scenes but to work with those who are trying to forge bipartisan progress on g.s.e. reform. i think there are areas along with immigration reform where, you know, if we could -- if washington could get itself in a better state, we could make progress but there's also areas where we're working with members of the business community or other stakeholders to make progress where you might not need, where legislation would be most helpful but you could still make progress. we've done an enormous amount, the president and first lady have, and mrs. biden, on veterans. in a very serious way. reforming the way the military deals with people coming out, reforming credentialing. very serious things that will affect hundreds of thousands of people. the overall majority has been done without new legislation.

we proposed the manufacture and innovation institutes, we've been able to do -- to pilot our first one in youngstown and we'll be announcing before the end of the year the next three. this is being looked on in the united states, at universities around the world, as one of the top innovations in manufacturing and encouraging jobs here. we've done it with federal resources but we've been able to find ways to do it without legislation. now that people have seen the success, there is, you know, senator blunt and senator brown have a bipartisan bill in the senate. there's a bipartisan bill in the house. a couple of areas we have been working with the business community on is long-term unemployment. just making sure that we're talking to companies about making sure they don't have screens that unintentionally don't give people who may be -- who maybe have been unemployed for six or seven months or a year, don't give them a chance to at least interview to prevent

that negative cycle. if you could get a real change from companies large and small, those things could help. we're talking to colleges about, you know, college cost and value and what they can do to help more low-income students. so you know, one thing to be very clear is legislation is the path to many of the very big things we need to do but it's not the only way to make progress. we spend a lot of time on the national economic council on legislative proposals but we show how we can move the ball forward on some of these issues about advanced manufacturing, long-term unemployment, with or without new legislation. >> so you'll be busy through the end. >> i'll be going full speed. another thing is detroit. we can't do anything about detroit's bankruptcy or their larger financial system but we met with the business community, the philanthropic community, the community leaders, the african- american faith-based leaders there.

what were the top priorities? and we went through our budget and looked for something that was stuck in pipelines that we could work or do in partnership and went there, myself, shawn donovan, secretary fox, all four of us, and announced over $300 million. again, that was a major effort and a major show of support for detroit's comeback. did not require -- did not include new dollars or new legislation but it's going to make a big impact. this president, you know, makes very clear, no excuses from his policy team that we didn't make progress in something because we couldn't pass legislation. i will be going full blast to the very last day to try to get as much of these things done like that particularly, before i turn over the reins to jeff sykes. >> we'll be in detroit on november 7, i believe, i believe there's an invitation in your inbox. are there questions from the

group? >> a health care question. not necessarily on the exchanges but -- >> can we get him a microphone, please? >> thank you. health care question, not necessarily on the exchanges but the a.c.a. overall. lots of good components in it, lots of things that have already taken effect. it's sort of being clouded by the exchanges but there are also some other rules that are going to come out before the end of the year that might have an adverse impact. i'm just wondering, with the government shutdown and some of the delays that came from that, whether or not some thought is going into how those sort of proceed and whether any of those are on your radar screen. >> obviously, one of the things that, you know, one of the things we did as soon as the shutdown was over is to try to look immediately at what's been held up and you know, if the

shutdown is going to impact rules of any kind to try to quickly let people know. if there are dates that are changed. but, look, we have always -- people will not agree with every decision that we make, but we have always listened. we have made it -- we have made adjustments, like on the employer reporting, that were due to hearing practical of businesses, employers, and we are always going to do our best to strike the right balance between getting things in place as quickly as possible, and that is

our goal. but i am happy to check on, if you want, if you have a particular thing, i am happy to go back to our health team and ask. i would say right now one of the things the president asked our secretary to do was immediately looked through the government to where the government shutdown might have taken a certain date that was expected on anything, beyond health care, and moved it, and try to give people clarity on that as soon as possible. that is going on as we speak. late, and ilittle apologize for that. we will take your information and get all of your questions written, and we will try to get you answers. if you have questions you do not get a chance to ask, i apologize, but we will have staff to take those questions and try to get back to you. gene, thank you very much for joining us. >> thank you. >> appreciated.

[applause] [captions copyright national cable satellite corp. 2013] [captioning performed by national captioning institute] >> on the next "washington journal," reaction for millennial's to the government shutdown, enrollment and the affordable care act, and unemployment. that is followed by dan fitzpatrick on the possible settlement between the justice department and jpmorgan over past sales of mortgage bonds. then doug lederman looks at trends, including tuition costs and financial aid. live at 7on journal," a.m. eastern on c-span.

sunday, c-span profiles two lawmakers on capitol hill. joe manchin talking about growing up in farmington and his family's connection to the 1960 kennedy campaign, and cathy mcmorris rodgers. here is a preview.