federal law in those respects. it's also important to understand what this data is for. the information we collect is very different from the purposes the industry itself collects. industry, typically, for example they want to know about richard. what did i spend? what did i go? that's an entirely different approach than what we're doing which is we're monitoring these institutions for how they -- how they treat consumers. it's an aggregate, a pattern type of thing. we don't care what richard corddry spent last night. what we care about is what kind -- fees and pricing. we have to be able to keep up with understanding what they're doing to consumers. >> you said you didn't agree with the charactization where

reviews were done in an adversarial basis and therefore had to be changed somewhat. if that's true you don't agree with it, why did you agree to stop sending enforcement lawyers? >> there was a certain message from that practice that was not the message that was intended. we've been working hard to integrate our supervision and our enforcement elements of the bureau. we're a little different animal -- certainly a different animal from my experience. i had enforcement authority but i didn't have any sort of examination authority or supervisery authority. it's something i had to learn about when i came to the bureau. most of our enforcement attorneys are in the same boat. they need to understand how the examination function works and how it is getting to a similar result. they have to understand how enforcement works when it's an

appropriate tool and when it's not. in attempting to integrate this is one of the early judgment wes made two years early on. it seemed to me that this cost were outweighing the benefits and so we've made an adjustment there. >> you mentioned ohio. somebody was telling me that you essentially commute from ohio to washington and don't live here full-time which -- >> i think that's healthy actually. >> i was going to ask you about that. i'm a d.c. native. i love the d.c. itself. but not wanting to be in the political culture, it's certainly understandable. but i wonder how that informs your execution of your duties of this job. do you think it help dwrouse be closer to institutions outside this policy wonk world of washington? how does your decision affect how you operate? in t's been helpful to me certain respects. it's hard on me and my family. it's a certain amount of, you

know, effort that you have to put in. but frankly it's no different than from what the members of congress do. it give mess a better appreciation for the sacrifices they make in being in public service and that's whether you agree on sub tanive issues. i can agree how what they do and how they do it. washington is a bubble. there's the government mentality. it's good to get away from that in part of your life. there's a real prosperity bubble around the washington area if you look at the wealthiest counties in the united states, a significant number of the 10 wealthiest counties are the suburban maryland counties and the suburban virginia county. this is not a place that has seen and suffered the great recession in the same manner that i've seen it in ohio, in and around my home noun the areas of that state as it's unfolded. i think it's very healthy for

me that on the weekend that i go to the grocery store or the barber or whatever and people who are paying attention to what i'm doing, they tell me pretty straight what they think -- they've always done that when i was in other public positions. and i like having that inl put. >> you don't think you get that same input at the whole foods on peach street? >> i'm sure i'd get input. but it would be a little different. >> i want to talk about this idea that there is a brain drain at the cfpd. it's understandable. the agency had a bit of a hard time getting started getting the opposition on the hill. a lot of folks a naturally moving on. there's the notion that you're losing a lot of very important folks, a lot of people with knowledge of everything they do. the creation of it or leaving. is that a problem for you guys? how are you dealing with it?

and are you recruiting a lot of good talent now? >> yeah, i think from time to time any agency loses some folks and you look at the kind of folks we've recruited to the agency, you know, some number of them have spent their lives going and doing something for a few years and then moving on to do something else. i think it's natural that would be true of the time they spent at the bureau. so we have lost some -- i would agree some important folks. but we gained important folks to fill their places and the talent at the bureau continues to be of the highest caliber. it's by far the most talented group of people i've ever worked with. and that is just as true if not more true today than it was a year ago or two years ago. we continue to get tremendous numbers of applicants per ever position and at the highest levels we're recruiting among some really great people. the attraction for us, the key thing, the advantage we have is first of all, our mission which

is extremely attracted to people. a lot of people who have done a lot of things in their life but they haven't found the kind of satisfaction that they're finding at the bureau working to improve the financial lives of 313 million americans knowing that they can make some significant difference on that particularly in the early going here. and it's also oddly attractive for people to be a part of a new agency. you know, when you're in it and doing it, you actually find that's challenging and burdensome because we're thinking through pretty much every issue through scratch. sometimes you wish it was already settled in an attempt to go through that exercise. that's attractive to people and it continues to be very much so. if you look at our leadership, and it's been a pretty staple team, they're outstanding -- stable team, they're outstanding. i now have a trajectory going forward that i didn't have a year ago and that's pro-brought stability to the agency as

well. >> do you have a wigs of how long you'd like to stay there at cfpb and give me one or two things that you would like to accomplish before move ok? what are the most critical things you would like to see the cfpb do? >> it's been the first time i've known for sure that i've been at this agency -- heading the agency for a significant period of time. and that's a great thing. it gives you a little more patience. on the other hand i don't want to lose the sense of urgency i've had that knowing from lots of experience in my life what an amazing opportunity this is for me and everyone who work tats bureau to really make a mark in a way that really will benefit people throughout this country. i mean, it's a very homespun thing that you're affecting the markets that people use to access credit to get access to opportunity to manage the financial sight of their lives which can undergird you know,

either success or failure in other aspects of their lives as well. and i've seen -- i've seen the real effect of that. when i was in county and state government with people -- when i was back as a county treasurer and we were in fault in collecting property taxes about delinquent property taxes an seeing the differents these people had always made more difficult because they were having trouble managing the financial market, having trouble understanding some of purposely and is hidden from them so they can't easily figure it out. those are all reasons that motivate me in this job. as i look forward, you know, what -- what do i hope to accomplish? i think there's lots of room for progress in these markets. i think it will be notable within a matter of a couple of years how much -- how much better -- how much better is

the piping and the mortgage market in terms of how it serves consumers and how it serves responsible lenders as well. we will have rooted a lot of things that if they had been rooted out so years ago, i don't think we would have had a financial crisis, anything of what we experience. but also one of the things that i emphasize a lot and increasingly am trying to become a loud and clear voice on this is that we have to do a better job in this country of educationing people about how to handle their finances and it stars with the schools and it starts with young people. but it's true of all of us. we have not paid attention -- we've neglected that point and it makes everything harder for people. it makes everything worse in terms of making choices that they can live with and not end up regretting. and it's -- it is really a scandal and a shame that this country has not paid more attention to that and done a better job. and if we haven't made real discernible progress in that

the next several years thenly be disappointed in myself and in the bureau? >> very short answer to this one, is there a political future for richard corddry? which would consider running for an elective office in ohio? >> it's not a political job. i understand it's a job done in a political con teblings but it's a federal -- context, but it's a federal job and that's how i see it. >> you can send more questions #morningmoney if you have something in mind get it ready in the next few minutes. one good question that came in cfpb es this cfb -- which the market and authority?

how do you pick in the nonbank area what you focus on and which tools you use? >> i think your question there just illustrated there are a lot of choices to be made in terms of how to prioritize our resources and our work. and it's a -- already a somewhat complex thing to determine what we choose to take on when and why. i think we've had a thoughtful process around that but it falls into two baskets. some of it we don't have much choice about. congress dictated certain portions of our agenda. if they hadn't done so we probably wouldn't have made the same choices anyway. . that was the cause of the crisis. so that's understandable. it also is the largest single consumer financial market, vom between 10 and 13, some depending on what the evaluation of helping is at a given time. so that made a great deal of sense. now, as we have a little more

room in our agenda to figure out what we think we should be doing without being subject to specific mandates and we're still under some, the mortgage rules were peculiar because we were not only mandated to d certain things but we were given a dramatic and urgent time frame for doing it. there were some things that we were required to do they don't necessarily have a time frame. we have more room on our agenda, the debt collection, rule-making that we began on yesterday that may well the lead big changes in the debt collection market. that's a discretionary priority that we think is appropriate and we're putting fair amount of resources into that. what we try to do is what i think any of you would try to do if you were trying to make similar choices. we try to think about what is the risk to consumers. what is the scope of the market? what is the extent of consumeder harm? all of those things help guide

us in terms of directing resources and that's true not only bureau-wide but also within each division. we risk our examinations. we try to prioritize our role-making and then as you say on a bureau wide basis we have to make choices among those as well. >> auto lending initiative would fit into this as well. tell me a little bit of what you doing there in terms of trying to prevent discrimination in auto lending and particularly on the interest rates that people pay on their auto loans. give us an insight into your approach on this issue. >> so that's exactly what we want to do. we want to make sure that auto lending programs whether they're direct loan programs or indirect lending programs do not result in a discrimination against individual consumers. you know, next to a house and frakly for many people are not homeowners even more so than their housing -- their car

becomes a critical element of their life. it's how to get back and forth to work depending on where you live unless you're in d.c. with great public transportation. you may very well be entirely department on having a car in order to be able to function and we want to be sure that a consumer who goes into that marketplace is not ending up paying more to borrow, to buy a car based on the color of their skin or their ethnic background. that's pretty much a fundamental american principle that we all can agree on how to implement that, what the risks are and what actions need to be taken to minimize those risk appropriately is a much harder set of questions and that's what we're trying to work through in the moment. >> did you find that this was a significant problem that people are being discriminated against and getting higher interest rates that they shounlt otherwise get? what information did you see that caused you to believe there would be a need for some

enforcement or investigation into this area? >> so i want to be a little careful because it's -- the norm is not to speak into too much detail any kind of investigation or examination of this kind. but we have seen indications that convinced there are concerns in this area. and they're not just similar where the concerns that people saw in the mortgage market with the premium and other practices that have resulted in a number of discrimination actions that suggest department and the other banking agencies have pursued in the mortgage market. >> i want to open to audience questions. folks have question first richard. i think we've got microphones somewhere in the room. we'll start up over here. is there -- are there microphones? >> i could probably hear them. >> can you talk a little bit about how you evaluate credit availability vs. regulations?

and could you do an actual renewal assessment as to whether or not any action taken is constrained credit? >> that is in fact, one of the lessons we've learned very forcefully in working on the mortgage rules. because the mortgage market interestly when dodd-frank was written. and it was responding to a crisis, you know, in the economy that was caught by an overheated mortgage market that became pathological in various respects and a lot of very almost crazily irresponsible practices that have become, you know, very widespread. by the time we came to write the rules to implement dodd-frank we're now looking at a mortgage market that could hardly be more different. it's a market with credit that is real cri tying. this is what happened when you

have a boom and a bust and a crash. mortgage lending was pulled back significantly and what we learned from getting an exceptionally broad range of input is that access to credit is a very significant problem that we're going to have to pay attention to here. it isn't just adding new consumer protections if credit is going to shrink even more. that is currently one of the big problems in the mortgage in helping markets. so that was notable to us. and i think it will inform our approach to all rules. as i said we can write the best most gold-plated consumer protections for people that we can devise and in and of itself everything else being equal. that's a good thing. but if it means that it's going to dry up credit so that consumers can't actually borrow and have the opportunity that borrowing for a number of consumers mean. you know, many individuals have to borrow to get a higher

education. almost everyone needs to borrow to buy a house. that creates opportunity in people's lives. if the lending isn't there to serve consumers then they can't consume. that's a balance that i think we need to strike with all the rules. as we go forward, we are actually required with every rule we write in our statute to have a look back at least every five years, ago we certainly won't wait that long on major rules like the mortgage rules to be assessing the impact of those. if we find that the affect of the rules is turning up differently than what we expected or there's some sort of new concern that it gives rise to or that we got something wrong, i think we've shown we will not be hesitant to revisit. we're not going to stand on the fact -- well, we decided it and we're stuck with it. what we want to know is that these markets are working well. and we did that with the remy tans rules where we fixed three significant problems that the industry pointed out to us. it delayed the rule a bit but it made ate better rule that

took effect a week ago. i think it will be dramatic improvements in that market and how consumers are treated. the mortgage rules we have made a number of tweaks even after we finalized the rule particularly the tweak for small lenders that is very significant for community banks and credit unions. and as we go, we encourage people to bring us data on what's actually happening so we're not missing thing. the october here is not to write every rule and to write every provision. it's to get the market right and that's paying attention to the data and how it works. >> we have a question right behind here. and there's a microphone for you. >> director, i think you have a very tough job and you're doing it very well. so i wanted to thank you for your public service. everyone that provides -- that's good and provides consumer financial products or services wants good outcomes

for consumers just like you do. the focus has been enforcing against bad behavior that we've seen come out of the bureau. what is the bureau thinking about or what will it be doing to encourage good behavior? are you thinking about best practices or good incentives to get the right outcomes for consumers? >> it's a great question. it's one that we grappled with from the beginning. first of all, i appreciate your comments about the difficult of my job. it's nice that people comment on that. they were commenting on the way in that i had a big binder for today. i said some days i'm getting two of these and it feels like a student when you have unreasonable teachers giving you too much homework. in any event, the question you asked is something we have asked ourselves because do we really want the entirety of the

bureau about being the bare minimum people limping over the threshold of complying with the law? or what about best practices, what about the some of the things that we see that should be more widespread in the market? that's a hard question because we don't necessarily have legal authority to insist on best practices. although there's much we can do to encourage and the dialogue we have with industry which has been a very good one and a very broad one does give us some ability to influence that. but i would say this -- the way in which we've had some -- some discernible impact on improving practices beyond just compliance with the law has interesting enough been our consumer come plants and our consumer complaint data base. you're starting to see a number of stories about how industry is getting the message. they're understanding what they're doing. we've been really clear about this. we paid attention to consumer come plants. in materialy going it wasn't easy to do.

some of it i thought was valid because when you have a few hundred complaints poured in there it doesn't necessarily give you a good picture. once you go get the point where you are now we've received and handled 230,000 complaints. it's as though you're adding pixels to the picture and it becomes more fine and more precise an more accurate in terms of indicating the patterns of what's happening to consumers. it's just common sense. if you hear about a problem from two consumers it's very different than if you're 200,000.rom 200 or it helped us prioritize our enforcement work and our rule-making work. institutions seem to be getting that message that therefore they should get out in front of his and pay attention as well. that's how it becomes a great business and over time if it

loses that focus it often doesn't continue to succeed. but businesss that are now paying close attention to the consumer complaints that they have public access in their own websites and being more responsive to their customers builds lt, that excellent customer service, lping them to expand and minimize legal risks. we are strongly encouraging and applauding that wherever we see it. that's the way in which we are pushing up the quality of what's going on in the marketplace quite apart from any particular rule or any particular enforcement action of the kind. >> we're about to run short of time. but i like to give folks an opportunity at the end of these things to sort of give an assessment of what they hope their legacy will be in the job that they have. so elizabeth warren created the

cfpd, she'll be remembered as the person who had the idea and created it. when people write about the first era under richard corddry, what do you hope they'll sigh? >> i hope they will say we created an agency from scratch and built it into a solid agency that takes care of the asics and delivers the kind of confidence and ability that the public has a reason to expect. but second rkt i hope that they will be able to say that we stayed close to our compass which is how to look out for consumers in the marketplace but that over time we understood that mission in a very balance and comprehensive way which as i indicated before it includes protection first consumers with access to consumers. i hope they will be able to say that we were good listeners and what we heard and we took broad

input informed our work and made it better. but i do hope and expect they'll be able to say that we improved the market and we rooted out a number of bad practices. thattiness tukeses got the message that they needed to be more careful and thoughtn't about how they were treating the customers and that they stepped and improved the operations and on mandating the tools. and finally that we've done some of the hard work to create a more informed consumer public in the country that can stand on its own two feet and look out for itself doesn't depend on washington to make everything i right for them but people are in position to know what they need to know, know what they need to figure out, make good choices and good decisions and therefore don't need as much protections. >> good choices, sounds like what i say to my kids every day. sounds like good advice for everybody. you've got a binder to get back.

so we'll get let you get back to that. i want to thank the peterson foundation and everybody on the live streem and thank you to joining us ddry for . [applause] >> president obama will be at the port of new orleans to talk about the economy and jobs. the president will focus on the role of u.s. exports. that's live at 1:10 eastern here on c-span. and later in the afternoon state department officials will discuss the resolution on keeping weapons of mass destruction from terrorism and other criminals. watch live coverage from stimpson center at 3:00 eastern lso on c-span. ow, judge greg talks -- judd

financial about the market. mr. gregg weighed in on the government shutdown and the tea party. from the national press club, this is an hour. >> good afternoon. and welcome to the national press club. my name is angela, i'm a reporter for bloomberg news. we are the world's leading professional organization for journalists committed to our profession's future by hosting events such as this while fostering a free press worldwide. for more information, please visit our website at ww.press.org. to donate to the national press club journalism institute please visit press.org. i would like to welcome our speaker and those in our

audience today. our guests include working journalists who are club members. if you hear applause from our audience i'd note that members of the general public are also attending. so it's not necessarily a lack of journalistic objectivity. i also would like to welcome c-span and our public audiences. you can join us on twitter. i'll have a question and answer period. i will ask as many questions as time per fit mitt -- permits. i would ask you to stand briefly as your name is announced. mike descend, senior editor. james mctague. washington editor. mark shaff staff writer at crane's investment news. michael lindenburger, washington correspondent for the dallas morning news.

paul marion, for crane chicago business. for raymond e.o. james financial. allison fitzgerald, finance and investigative reporter and the chairwoman of the national press club speakers committee. skipping over our speaker, kasha a u.s. economy and treasury reporter for bloomberg news. molly, freelance journalist and the president of the freelance committee. and chayian hopkins a reporter if bloomberg news covering banking legislation. [applause] >> our guest today is a long time term of the republican accomplishment in washington. a former leader on capitol hill

and a respected voice to reign in federal spending and reduce the national debt. early this fall former u.s. senator judd greg began a commentary. most americans these days are simply ignoring republicans and they should. gregg was lamenting the strategy of some in their own party to default on the u.s. debt and the government shutdown in an effort to kill president obama's health care reform law. he called it a tactical fiasco. judd gregg came to washington for the first time in 1981 representing new hampshire in the u.s. house for nine years. he then went back to the granite state. as governor he was champion of environmental conservation and helped preserve more than 337,000 acres of sensitive land. after four years in the state house, he returned to washington to become the first

-- to begin the first of three terms in the u.s. senate. his political career was marked by contra dictions. he was known toe be a stanch fiscal conservative yet, he didn't hesitate to work with democrats in the white house to push policies he believed in. in 2008, he was the top republican negotiator for the trouble assets relief program which set aside $700 million to bail out wall street and commercial banks. just four months later, however, he withdrew his name from becoming the first commerce secretary saying he was opposed to the president's stimulus plan because he was a budget hawk. he joined with michael bloomberg to become a leader of a bipartisan group called fix the debt. the group is urging officials to cut the deficit.

gregge hasn't been shy of criticizing republicans and democrats alike. his comments on the hill have touched everything from tax policy, to immigration to health care. today senator gregg is here as the c.e.o. of a trade group that represents the interest of its investment industry. it includes the security arms of j.p. morgan, citigroup and fidelity. he spent more than 10 million lobbying congress in the last two years. he's here today to discuss an initiative to insure investor interests are protected. please give us a press club welcome to judd gregg. [applause] >> thank you very much, angela. and members of the press club. thank you for the opportunity to have this forum. very much appreciated by myself and folks at sifna.

it's a pleasure to be joined here by so many of the team and family and our chairman chet hulk and by our president and by abby and by my wife kathy and have a chance to talk to you a little bit today. kathy said i should begin by telling you one of our new hampshire stories. now i hesitate to do this in washington because the punchlines are very subtle. but i noticed that we have these flags here that are new hampshire flags. i hope no one's bitten into the flag because that would be against the protocol speaking as a foreman governor. chet is from texas. he was an excellent member of congress and has a very distinguished career and his family is equally distinguished. whenever i talk to him i'm reminded of a story in new hampshire. we live in a town of 600 people

. it was a beautiful town up in the foothills. and in the fall a lot of people used to drive through the town. down the road from us was a fellow named oscar payne. oscar was in his late 70's. he was still farming. he was working on his fences and this great big s.u.v. pulls up with a texas plate. this fellow gets out and he's got this huge hat. i mean, this big hat, big cowboy hat. he walks up to hos car who wasn't that -- oscar who wasn't that big. and he says, sir. yep. is this your farm? yep, oscar says. says, well, if you lived here all your life? oscar says, not yet. [laughter] he says to him. well, how big is your farm? oscar says, well, that's a good question. if you go down the road here,

you'll see a birch tree. when you see that birch tree, go up that little ridge there and you'll find a stone wall. you go across that stone wall to a bunch of oak trees, come down there and you get to the road again. you come up here, that's my farm. so he says, well, i'm from texas. and i need it many my car and i can drive all day, all day and only be halfway across my farm. oscar says, yep, used to have a car like that myself. [laughter] is applause from the press allowed? i'm amazed. well, since kathy told me to tell that story, i'll tell another. that way i used all your questioning time. so mildred perkins and mable austin lived in town all their lives. but they have fallen out of

sorts after about 35 years after a church circle. and mable made a pie that mildred thought it was her recipe. so they didn't speak to each other for 40 years. and mildred dies. she goes to the town store and oscar says to her. ethle, did you hair that mildred died? yep, heard that. well,ethle, are you going to go to mildred's funeral? nope. she's not coming to mine. i'm not going to hers. [laughter] i can go all day like this. i'm making more progress than i am addressing some of the issues before us. but i did want to talk today about the role of financial markets and specifically our role in helping americans succeed in main street prosper. we take this very seriously as

an industry. and i think to understand where we are you need to actually go back to the last century. a lot was decided in the last century and was carried into the second decade of this century, of course, because life is a continuum. but two things were clearly decided in the last century, the 20th century. the first is this, if democracy wins out over total tism, and by the end of the last century, most of the western world was democratic. and people moved to democracy as a way to govern. the second thing that was decided was that free markets create a great deal more prosperity for the people than collectivist markets. and as a result, again, free markets become the way especially of the western world . and america is uniquely

positioned as the representative of democracy being the world's oldest demock si -- democracy and being the most prosperous nation in the world. and the financial markets play a critical role in the success f those financial markets. this point i think was made uniquely by joseph shuler who is an economist at yale whole just recently won the noble prize for economics when he said this in his book, finance and the good society. the essential challenge for leaders to contemplate in coming to terms for the future of finance is to understand that it can be used to help broaden the prosperity across an increasingly wide range of social classes. imagine the development of a new laboratory. the funding of a new medical

research center, the building of a new university, or the construction of a new subway system. finance provides the structure to these and other enterprises and institutions throughout society. if finance succeeds for all of us, it will help build a good society. but we're not sure it will succeed, a market economy. there are issues which make it a challenge. and thft, interestingly enough it was adam smith over two years ago developed the concept of a free market society which is who caught this issue and he said, and i'm paraphrasing here. he said essentially great nations are not impoverished by their people. great nations are impoverished by their government's acting badly. prodigiatlity.

but i replaced it with badly. which means governments acting appropriately, wastefully, mismanaged. wilt said it another way. he said if you put the federal government in charge of the sahara desert, there would be a shortage of sand in five years. [laughter] the simple fact is that there are forces which negatively impact a free market economy and democracies' path. i would like to mention three of them that i think are of concern today. the first, of course, is our federal debt and deficit. you simply cannot run a country if you run up a deficit and a debt which you can't sustain. we have doubled our demet the last five years. we will triple it by 2020.

we are on a pathway which basically puts us in a debt situation which our debt to our gross national product will equal or exceed other nation who is have had extraordinary problems such as greece, italy, ireland, iceland, france. we have the advantage, of course, of being the world's strongest economy and the world's kirn -- currency and therefore we have more running room. but if we continue on this path, at some point there is going to be a challenge to our currency. and it's viability. and when that challenge occurs, it will lead to either significant inflation or some other financial event which will inevitability lead to a di munition of the standard of living of people and it will impact our democracy and our markets. and we need to address it. and hopefully we'll see our congress come together. they've got the folks together in a room now, i guess, to try to do some part of this over

the next few months. the second issue that we have which a concern in my opinion, is the piling on of federal regulation. we in the financial markets business totally support appropriate regulatory activity, embrace it, want to work the regulatory agencies to construct a regulatory activity. but we're getting a few more regulations than i think anybody expected. regulation ys a few comes in. we've received 15 million words under dodd-frank. two represents about million. and we're only 39% of dodd-frank. so we've got another 20 million words to come.

this ex-says is driven an large part that says to folks, listen, we the regulators know better how to deal with your life than you do. we want to take risk out of your life. you shouldn't have risk of your life. we are going to be charge of regulations. it's a bureaucratic excess in many ways. there is no question than an appropriate regulation is needed in a market economy. but that at some point if you go too far you end up straining that economy because the energy instead of going to creating economic activity goes to responding to basically the issues raised by the regulators. the third area is what i call rt of a galloping populism which will we've seen.

folks t its core are who don't believe in free market economies. it's a belief again that doesn't trust the ability of individuals to make decisions on their own for their own betterment but reater says that a collective group of folks should do it in the name of a better society. it has become reflected in statements like those made by michael moore who i'm sure uld not turn down the -- the title of spokesman for the progressive left. i think he would be attracted to that title. where he says i do not own a single stock. he's made the statement during some sort of event that he's sponsoring.

and i have never owned a single share of stock. i don't support this and he was pointing to the new york stock exchange. this rigged casino, i don't know why anybody would put their hard-earned money into this, the new york stock exchange. well, i would refer those folks to twitter. today, the twitter company issued -- i think it was 70 million shares of stock. in the interest of purchasing those stalks from people -- of people from all walks of life was extraordinary that the value of that stock went up dramatically from its particular issue. what does that reflect? it reflects the core element of a free market society, that people want to have the right to go out and participate with other people who are trying to create economic activity in businesses which they deem and feel would be successful.

that is the way this economy works. and to reject that is a mistake. i think to reject that also reflects a certain discomfort that you see amongst populism with the concept of free markets, obviously. i think milton freeman got this right again. he said a major source of the objection to a free economy is precisely that. it gives people what they want, instead of what a particular group thinks they ought to want, underlying most arguments under the free market is a lack of belief in freedom itself. and who's harmed by that? by this -- by this -- who's not going to be harmed bay

government not fiscally responsible, by people going way too far in the area of dampening economic activity through an attempt to address risk through regulation or by the galloping populism that basically rejects free market as a concept? well, i have to tell you it's not going to be the folks on wall street. it's going to be the folks on main street. it's main street where the jobs are created or whether the opportunity doesn't exist if you don't have a vibrant economic engine. if you have these retarding events. that's why it's our intention in the financial markets industry through sigma to make the case for a free market economy that is properly regulated, that has as its most basic element individual initiatives, supported by readily available capital and

reasonably priced credit. to promote the importance of the role of a vibrant capital -- a vibrant capital markets and a financial system in the every day lives of americans and their ability to pass on to their children a more prosperous life. we intend to essentially reconnect with the american people by reinforcing the fact that the financial markets basic purpose is to help americans succeed. to to allow main street prosper. by ntend to do this basically concentrating on four major areas. the effort will be primarily an attempt to make it clear to folks in a very person way how important it is to their day-to-day life that the financial markets participate

in our economy in an aggressive and positive way. the job they go to probably sa function of something having invested capital in a business. when a person sends their kids to school, it's probably being supported by market activities which allow a loan to be made. when a person goes to an emergency room that emergency room was probably built with bonds that came from the financial market. somebody in the financial market taking a ricks on building that hospital by supporting it with bonds. when you drive down a good road or even a bad road for that matter it was probably built by bonds where somebody took a risk in order to create that. last year, and the last five years, business has accessed over $6.3 trillion in capital through the financial markets.

bonds have been issued which have built eight million miles of road, one and a half million bridges and 500,000 miles of water pipes, all to the benefit of making a stronger and more prosperous sofmente over 3.3 billion people have received maul business loans presenting $178 billion of investment. and these are real folks. there are folks like carmine who started in their garage a food distribution business but working with their financial advisor were able to expand that into a major business in southern california. or jill brown when her husband advisor elped by our to get back on her feet. and she began a small business of home furnishings which she's

now built into the brown home good stores in houston, texas. stories that created jobs, stories about real people whose lives were improved by investments made. as a very practical matter we've done a lot of great things. we even brought back the twinkie. i guess the twinkie never went anywhere because it's not bio degradable. had it gone somewhere, we brought it back. the second thing we're going to concentrate on is the lessons we've learned. we know that too big to fail should not exist. and as an industry we're committed to ending it. we've done this through basically having living wills, by having stress tests by having resolution authority. urther more the capital of the

investment industry has increased dramatically in the last five years from $400 billion to $800 billion and that gives it much more safety and soundness and even the taxpayers have benefited a great amount from the financial industries to stress. and all the money that was paid out to the financial side of the ledger has been paid back and there's a $20 billion profit for taxpayers that can be used for other things. going forward, we intend to work for strong and effective regulations that will create transparency and will make for a safer and sounder system. the third thing we're going to focus on is education because we believe firmly that a well educated population about the their ce of finance in daily life is going to be a population that can more

effectively succeed and prosper. we're going to talk about the importance of market, entrepreneurships and yes, even profits and the market and how it creates prosperity. we're going to talk about financial literate si and how people should invest and prepare for their future, how they deal with their retirement savings or their investments that are coming through their pension funds, in a way that communicates and touches folks in their day-to-day life. we're not going to do this from washington or from new york. we're going to do it in the local rotary clubs, at the local boys & girls clubs, hopefully, in the local school systems where we basically one-on-one talk about the importance of the financial industry and the day-to-day lives of people and how we work with them to try to help them

succeed and that's the fourth and most important initiative which is our commitment to put our customers first. our commitment to protect our customer's right to choice, our commitment to customers to get the information they need and to protect their savings whether they're being used for investment or whether they're being used for planning for their retirement. and in that role and part of that effort, a lot of energy has been put into this. we have created a document called our partnership with you. and essentially this is a statement of rights that our customers have and should have and that we are committed to as an industry. this was not written up by one or two folks sitting down one afternoon. this spent john and his group, worked with hundreds actually thousands members of the industry to try to make this work and come together with

this partnership so that people were committed to it and bought into it in a way that made it clear that we put our customers first. let me just read a few points of this. i had to put on my glasses to read this which i may not have brought them. ok. i'm all set. i buy these at -- at reagan airport, by the way. it's the best place to buy your glasses. 12 for five bucks. [laughter] let me just read from this. as an investor you have some important rights. we are committed to provide you with educational resource, forms, tools to better understand the products and services you are investing in and how they work to help you achieve your objectives. it's about the consumer. our industry continues to embrace the implementation of high standards for interacting

with our individual clients including putting the client's best interest first when we provide, personal lies investment advice about securities -- personalize investment advice about securities. our customer has the right to work with a professional who will help them clarify their investment goals in risk, tolerance and help them achieve their stated objectives. further, they have the right to receive investment advice, to be informed of material con ibblingts of -- conflicts of interests to receive financial assistance and to be present. they have the right to receive clear and accurate descriptions of all their transactions and about the fees associated with their accounts, to be clearly informed about the risks associated with individual

investments, to receive after it in a timely and pure yodic statements and to receive clear descriptions of their financial services firm's policy and practices as it would rethrite the individual. they have the right to be treated in an ethical way at all times and to receive competent advice at reasontial prices and to choose products that are suitable for their investment goals in line with their stated risk and to be able to move their accounts if they wish to do so. and to receive prompt responses from their assistant and the investment community and to have clearly defined process for resolving any issues that might arise. this is a commitment that we're making to our customers because e put our customers first.

joseph shuler, again, makes the point that the better align to society's financial institutions are with its goals and ideals the stronger and more successful that society will be. if its mechanisms fail, finance has the power to subvert such goals. as it did in the sub prime mortgage market of the past decade. it is funging properly it has the ability to create great levels of prosperity. we are going to align our efforts with the purposes of the people who we serve and of a good society. we know that main street is the engine of the american economy.

but as the financial markets and the resources they bring that is the fuel of that engine. this is the american advantage. the people who are willing to go out and take a risk and put their sweat equity into pursuing their dreams are able to find other people who are willing to support them with capital and credit at a reasonable price. we have this advantage as a nation and we as an industry are totally committed to it. the financial industry is going to work to be an extraordinarily strong and positive force for helping our customers pursue their dreams. we are going to work to make sure that we can help americans succeed and main street

prosper. thank you very much. [applause] >> thank you. tell us, why should consumers, individual consumers trust the industry for advice on their protection? >> well, first it should go meet their advisor. people who came up through the system -- get to know them. get comfortable with them so that they develop a rapport. the advisor is there to be their assistant much like you would go to a doctor or dentist. your financial advisor is there to help you out in an area where you don't have the expertise. that is the opportunity that exists for a person to go to someone who was a true professional who is committed to be on the side of the customer

when the customer has questions about how to invest their money and save for their retirement. >> were there any consumer advocate that helped design the program? >> yes, we had a lot of consumer input on this proposal. we basically rely on our customers to tell us what they want as we develop this proposal. >> as part of the effort, do you have any plans to make it any more of a consumer organization? do you plan to do any consumer facing work as an association? >> actually, it is our members that do that. it really should be our members. we are very sensitive to any issues that are raised and if anybody wants to call me up, they can call me.

as a practical matter, if a consumer has an issue that deals with how they should invest or whether investments are being handled properly, the first opportunity is to talk to their financial advisor. >> you talked about there being what you consider too much regulation of the financial services industry. we all lived through 2008. at that time, there was a concern that there was too much regulation back then. what is the right answer if we saw the failures of banks and mortgages than with that level of regulation? why should there be less now? >> we are not talking about less. we are talking about rational. regulation that accomplishes the purpose. first, find the purpose than try to accomplish it through regulation. we embrace the idea of a strong regulatory environment.

it is important for transparency, integrity, having confidence in the system. there are a variety of regulations which are more than confusing and some, in our opinion are counterproductive to the basic goals of what the regulation was going to pursue. i think that we are in an atmosphere where so much energy is being put into responding to the regulatory regime that resources that should be going out to help the person who has got the idea that they are trying to succeed in are not being used there. they are being used in response to the regulatory regime. we will get through this, obviously, as a government. as we move towards resolving all the issues raised, we just have to be sensitive that we don't swing so far that we undermine the basic strength of the american economy which is that it is a free market where people do take risks in order for it to succeed and where you basically

want the financial sector to be properly regulated. without overwhelming the ability of the financial sector to be an aggressive player in promoting opportunities for prosperity. >> pointing the finger in a different direction, this questioner asks how protection can be advanced while investors themselves continually ask for high risk high return investments? >> i am not speaking as -- i don't think it is our job to tell people what risks they take and what risks they don't take. the financial industry as a whole must participate in the efforts of the government and regulators to make sure that

systemic risks are muted to the fullest extent possible. individuals in our society invest. when they invest, they take risk. if somebody wants to invest any more risky way to get a higher return, that is their right. if they want to invest in a more conservative way to protect their resources and not have any downside, that is their right to the. that is an individual choice. >> back to regulations, can you give us some specifics of regulations that you think have gone too far and what are you looking to change precisely? >> the original proposals on the issue would have forced out of the business of giving advice a lot of the industry. the loser in that would have been the consumer because the consumer -- especially the consumer who doesn't have a huge 401k.

they would have found themselves not being able to use advisors in order to determine how they wanted to invest their retirement funds. that is counterproductive. that would have undermined and harmed a lot of folks' ability to get ready for retirement. that would be an example of one area where we think regulation simply was misdirected. it would have produced the opposite result of what we expected and what we would want as a society. >> are you supportive of a house bill to delay the labor department rule? >> that is the proper approach. dodd frank made it clear that the sec should take responsibility in this area of establishing rule. we as an industry support the concept.

it should be put onward by the sec. the role here should be secondary to the sec moving forward. the sec has primary responsibility. >> what is the relationship of financial advisors to the consumer? >> fiduciary relationships have also to legal implications which would limit in many ways the ability of people to give advice in a constructive way or maybe even not allow it at all. it depends on how the term is interpreted under the advice being given. for example, the dol fiduciary language would have barred people from giving effective advice to folks who wanted to use it who had smaller accounts.

we have another situation like this in the area of municipal bonds where advisors are subjected to fiduciary role that bars them from giving the types of advice that the community might want or the bond issuer might want. they will find themselves unable to give the advice which would allow that issuer the most opportunity to get the return they want and pursue the course they want because of the limitations that are arbitrarily in the fiduciary language. >> a prominent blogger opined that the derivatives business is dead due to increasing regulation. do you think that is an overstatement or are derivatives disproportionately overburdened by regulations now?

>> i don't agree with that statement. there is still a very vibrant derivatives market. what you're seeing is the derivatives market moving to much more clarity, transparency. it is moving more into an open arena and that is the way it should evolve. there are some derivatives that don't lend themselves to that type of approach but as a practical matter, i think the derivatives market is adjusting to the new regulations. we weren't all that comfortable with some of them but the adjustments occurred. >> you used the example of the twitter ipo as a way of illustrating the benefits of a free market. of course, most of us individuals couldn't buy the twitter stock at the ipo price. how do you reconcile that disparity? >> you will have to ask the folks at twitter. they were the ones who chose the amount of the stock they were going to put out. it was a very narrow amount of stock they decided to issue compared to the value of the

company. that was a legitimate business decision. they did not want to put the entire company into the marketplace and we can understand why. however, if you want to buy twitter stock, you can go right now and buy some twitter stock. the price will be a lot higher than what the offering originally was but that is called a market economy. >> you talked about capitalization of banks. alan greenspan was here last night and talked about this topic of banks needing more capitalization. do you think progress so far is enough? >> i think you need to turn to this question constantly. the regulators who were responsible on the issue of the proper capital is a very legitimate question. if you require too much capital, you contract economic activity because money that is being used

for capital can't be put out to investment or lending. there is no question, the issue of capital is at the core of a sound banking system. it should be constantly looked at. there has been huge progress on the issue of capital. the american banking system especially is very well capitalized relative to the rest of the world. >> you talked about the importance of confidence in our public markets. this questioner says, the growing threat of cyber attacks could undermine the confidence. is there a role for the financial industry to address cyber security and information privacy? >> that is a great question. we consider this one of the truly big issues that we confront as an industry. chet's firm spends a tremendous amount of time on this. cyber attacks can be for the purposes of gaining proprietary information which can be used in criminal activity or it can be for the purpose of shutting down the industry.

disrupting the commerce of the country. the industry fully recognizes the seriousness of this and is moving in all sorts of fronts to try to address it. let me tell you about one. basically, we set up what amounted to -- we have done it twice now, a test case of a variety of attacks on the investment community and on the exchanges. it was called quantum gone 1. it was a very intensive exercise. it involved a tremendous number of business entities and banks and investment houses. it involved the entire relevant part of the federal government including the treasury and homeland security, the fed and other agencies.

the attacks were structured by independent groups which we hired to figure out what would be the most vulnerable places and where the attacks would come from without us knowing about them. there was a basically, a process of replicating what might happen in an attack. we learned a great deal from this. the quantum dawn exercise occurred last july. we expect to do it again. the systems held up fairly well. we were reasonably accountable with the fact that the industry is doing a good job at trying to get ready for this type of a threat which we consider to be extraordinary. >> is there anything you think regulators should do on the cybersecurity front? >> i think congress should do something.

congress has a responsibility to come up with decent cyber language which creates a proper sharing of information across agencies. this was a problem when i was there. we spent a fair amount of time on this. those were the good old days. that is the way it should be today. just kidding. [laughter] it is hard. we all know it needs to occur and we need proper sharing and congress has had a couple of good bills that made it all the way through. we need to get something done. >> that is a good segue into the political questions. you have called senator ted cruz incredibly self-destructive. what can and should the gop leadership due to limit his influence given that he has a powerful base of supporters outside the senate?

>> i am not speaking here as a ceo but as a republican. a former republican office holder from new hampshire. you can't do anything about a member of the senate's right to say things and you shouldn't be able to. someone used to describe the senate as a task force moving around the halls of congress. everybody is their own power center. senator cruz has decided to pursue these issues but unfortunately, the manner in which he pursues them, especially the attempt to shut down -- make the condition of opening the government and passing the debt ceiling conditional on full repeal of obamacare and the affordable care act, it had no chance. it had no chance from the beginning. there was never an opportunity

that was going to lead to governance. what the american people want and what the republican party has to do is govern. it has to participate in the governance of this country. it has to work across the aisles to solve our deficit problem and move forward as a nation that is actually addressing the issues that are critical to the everyday lives of americans. you can stand in the corner and shout out phrases. you have to be willing to come up with ideas that can go across the aisle and work. it doesn't mean you have to give up your philosophy in any way or your commitment to your basic goals. there are a lot of places where you can cross the aisle and still maintain your basic philosophies. there are a lot of good folks on the other side of the aisle. they are willing to try to govern. that is where i think the republican party needs to do something that reestablishes its credibility with the american people. as should the president.

>> will you support moderate republican candidates in 2014 primaries if they find themselves running against tea party backed candidates? >> i don't think we are going to get involved in that issue. >> why not? [laughter] >> i just don't think that is a role for us. we are going to support people who support the free market, who understand the importance of the financial markets to improving the lifestyle of americans in their everyday life. we will be there to help americans have a more prosperous lifestyle. >> does the u.s. deserve to have a lower debt rating now that many members of congress have shown themselves willing to default? >> of course not. we are not a government that moves linearly.

we move all over the place. we are not a parliamentary system. the government can't do whatever it wants. we are a madisonian government built off of checks and balances. both parties have to be consulted to move forward and there has to be some consensus in almost all major issues addressed in a bipartisan way. it takes a much longer time to accomplish that than if you're running a parliamentary system. what i think the more sophisticated rating agencies see is that we are making progress on this road. there has been progress made on the issue of getting the deficit and debt under control. the 2011 budget agreement was a $900 billion down payment on the discretionary side. the fiscal cliff was a $600 billion down payment on the tax side. now we have the sequester in

place which is technically a $1.2 trillion payment on the discretionary side. not the right way to approach it but that is a mechanism to return to the table and reach an agreement on the entitlement accounts is where the real problems are. the process is going on now with the budget committee negotiations chaired by senator murray and congressman ryan. it is an opportunity to move the ball further down the field. i think most rating agencies are sophisticated enough to understand that this isn't going to happen overnight but that there is progress and we are hopefully moving in the right direction. >> you talk about the importance of both sides of the aisle working together. you are here speaking to us today as a ceo and not as a commerce secretary. why did you turn down that invitation from president obama? >> i have explained this before. kathy and i thought about it a lot.

i like president obama. he was a friend in the senate, not a close friend that somebody i dealt with. when he was elected president, like all americans, i thought it was a great statement. i wanted to try to be helpful. when he asked me if i would be willing to serve in his cabinet, i was caught up in the moment and was very appreciative. kathy and i talked about it and i should have realized this immediately but i didn't. my philosophy on fiscal policy was a long way from the president's philosophy. the number one job of a member of the cabinet is to be 100% with the president. it would have been very

difficult for me to do that and maintain my values on fiscal policy. i should have recognized it earlier and i didn't. i have always regretted that. i will say this, he was extraordinarily gracious in the way he handled it. i have always appreciated that fact. rahm emanuel was also gracious. he was the chief of staff at the time. i was very appreciative of that. >> how do you see the differences in the republican party playing out? will things get worse before they get better? >> i am not speaking here as ceo, ok? the way i see it playing out is this, i think that this country is built on the two-party system. the two-party system is critical to our success as a nation. we are 330 million people.

you can't govern a nation of this size and complexity unless you have a process -- what we in new hampshire call sugaring off. the first step in that exercise in politics is gathering people under the big tents of the parties. a multiparty system would be destructive to our nation because everybody would go to our own corner. the two-party system forces people of very large philosophical beliefs under one tent. we have different philosophies but the folks under those tents also have lots of similarities. it is a process of building into an agreement. i think the republican party is the right force for good governance in this country on the issue of fiscal responsibility and i think we have to get back to those themes that have always been at the center of our policies which is that we believe this country

must live within its means and that we have to have a nation which cares for those who are less fortunate, but in the process we also have to recognize that we can't have a nation that lives beyond its means for an extended period of time. i do think our party will be a very strong voice as we go forward. >> treasury secretary lew previously said we would solve too big to fail by this year. is it solved? if not, how can it be solved? >> great progress has been made on that. capital which is the core of safety and soundness is up by almost 100%. we have the living wills. we have the restitution authority. we have the stress test. all of this works together in tandem to basically lead towards

making sure that we never have a situation like 2008. there are other things that may still be thought of that can be done. weeks possibly to the capital structure. as a practical matter, i think we are well on the road to putting an end to, as i think we should, the concept of too big to fail. >> we are almost out of time. before the last question, a couple of housekeeping matters to take care of. i would like to remind you about our upcoming speakers. on monday, we have the president and ceo of the charles schwab corporation. he will discuss 401(k) plans. on november 18, we have gloria, a feminist activist and founder of a magazine. next, i would like to present our guest with the traditional national press club coffee mug. >> thank you. [applause]

>> one last question. here at the national press club we have the tradition of the last question being lighthearted. we don't usually have the speaker asked it of themselves. senator gregg has asked himself the question. he wants to know who won the world series? >> nobody knows? [laughter] the red sox won the world series. go sox. [laughter] [applause] >> thank you for coming today. i would also like to thank the national press club staff including our journalism institute and broadcast center for outing organized today's event. you can find more information about the national press club on our website and if you would like a copy of today's program, you can find it there at well at www.press.org.

thank you. we are adjourned. chris general james amos said thursday that the pentagon budget cuts could lead to more american casualties. he testified at a senate armed services committee hearing here -- committee. here is part of his testimony. >> determined that a force of 124,000 marines quite simply is the largest force that we can afford. assuming that the requirements for marines remain the same in the foreseeable future, it will drive the marine corps to a wanted to dwell. it will be that way for virtually all operational units. six months deployed, 12 months home recuperating and training and six months deployed once again. this is dangerously close to the same combat operational task

that we had in iraq and afghanistan while fighting in multiple theaters and while maintaining operations around the world. the 174,000 force accepts a great risk when our nation commits itself to the next major theater war. as there are significant reductions in my service, in ground combat and aviation units available for the fight. under sequestration, we will live in marine divisions worth of combat power. this is a marine corps that would deploy to a major contingency, fight and not return until the war was over. we will empty the entire bench. we will have no rotational relief like we did in afghanistan and iraq. they would like to go straight from the drill field to the battlefield without the benefit of pre-combat training. we'll have fewer forces arriving later to the fight game this

will delay the build up of combat power and allow the enemy to build defenses and will likely prolong combat operations altogether. this is a formula for more american casualties. watch all of the hearings recover on c-span.org . the entire hearing will air at 4:30 a.m. eastern here on c- span. >> i think regardless of where you are on the political spectrum, we all feel very fortunate and grateful that we live in the united states of america. it is a very unique place. and if america was considered to be a product and we do try to sell our product overseas, what is our brand? is thehink our brand constitution, the rule of law and our value system. and under that brand and under that value system, there is a notion of equal under the eyes of the law.

under that brand and value system is the aba and trying to elevate the rights of americans with disabilities. >> this is a treaty. a treaty is a law. it is the emotional and political arguments that no one can disagree with these arguments. but the question is will the treaty actually have the legal effect that is being proffered by the proponents of the treaty ?senator kirk as the chief -- we don't your citations of the articles of the treaty. we don't hear consideration of the report. don't hear the kind of legal analysis that will be appropriate for analyzing the legal impact of this treaty. >> this weekend on c-span, more than 130 countries have ratified united nationsed disabilities treaty which failed to win senate approval in 2012. 10:00saturday morning at eastern on c-span two book tv.

also, the upsides of being a big fish in a small pond saturday night at 11:00 there and on c- span three, american history tv come on a credit segment go straight to my two feet from then president for, lynette squeaky from pulled the trigger. >> the senate backed a bill that would make this commission in ,he workplace against being gay transgender and transsexual americans illegal. it was passed with bipartisan support. the senate approved an amendment that exempted religious groups from the law. today, senator pat toomey offered an amendment that would have granted mars options. that measure was blocked. we will have some of the senate debate nexon c-span. then senate democrats urge the house to pass the amendment.

house leaders say they will not bring up the bill. perry.vernor rick the presiding officer: without objection. mr. toomey: i rise to speak on an amendment to the enda bill which we're going to vote on soon. this is an amendment i offered on my own behalf and that of senator flake and senator mccain. and i thank them. it occurs to me that sometimes in our work a tension can arise between important competing american values. and two vitally important american values i think are somewhat intentioned in some aspects of this bill. first, one great enduring and important value for all americans is equality. and this bill today clearly makes a strong stand for greater equality. i believe, and i think most

americans share the view that every individual is entitled to dignity and respect and fairness and that individuals ought to be judged based on their merits, on their character and on their abilities. a person's sexual orientation is irrelevant to their ability to be a good doctor or engineer or athlete or a federal judge. and that's why i've supported acknowledging that reality. i supported 17 years ago in the writing of the charter of the city government of allentown, a provision that would ban discrimination on the basis of sexual orientation in the hiring for that city. and i supported an end to don't ask, don't tell because i thought that it was an inappropriate infringement on the freedom of gay and lesbian persons serving in the military. and i think that there's more legal protections that are appropriate to prevent

employment to discrimination based on sexual orientation. so these are an important set of values. another obvious and vitally important american value is freedom, and particularly religious freedom. and the first amendment guarantee of the free exercise of religion means that religious groups, even in the course of secular services, can, for instance, choose to hire employees who agree with their religion, employees who will promote that religion. and, of course, the first amendment applies even when we don't necessarily agree with the views of that religion or that faith. so i think what we try to do in this legislation and in other contexts is to strike an appropriate balance between the tension that arises between these sometimes competing values. i think the sponsors of this bill have made a very thoughtful, credible effort to strike that balance.

in fact, i think the sponsor of this bill and i agree on what, at least an important aspect of that balance ought to look like. and specifically, i think the agreement is that religious institutions, including those engaging in some secular activities, should be exempt from the requirements of this bill if it violates the tenets of their faith. my goal with my amendment, mr. president, is to simply make sure that the bill actually achieves what i think the drafters intended. so to quote the gentleman from oregon, the senator from oregon, who is the chief sponsor of the bill, he has stated, i think, correctly in terms of its intent that the bill broadly exempts from its scope houses of worship as well as religiously affiliated organizations. and this exemption which covers the same religious organizations already exempted from the religious discrimination provisions of title 7 of the

civil rights act of 1964 should cosure that religious freedom do not hinder the passage of this criti legislation. other groups that are advocates for this legislation have similarly observed that title 7's provisions would ensure the exemption of faith-based institutions. and there are examples where circuit courts have ruled in interpreting title 7 of the civil rights act that affiliated organizations would in fact get this exemption. schools andinclude universities, a presbyterian operator of a retirement home, seventh day community center, and there are others. i want to acknowledge it is absolutely true it is the case that there are federal courts that have respected the religious freedom of these institutions to be exempted from the religious hiring mandates of the civil rights act and

presumably that would apply in the case of enda because of the way the legislation is crafted. the problem that concerns me is that there are other cases where other courts have come to a different conclusion, and they have not recognized religious institutions the same way. so there's a lack of uniformity across our country, across the different districts that ultimately interpret the application of title 7 of the civil rights act. in fact, over the years different courts have interpreted the language quite dimple. and so we've got -- quite differently. so we've got these two problems, in my view, if we leave the underlying legislation as it is. one is that americans will live under two different -- not two, multiple different standards. the 12 circuits that apply title 7 exemptions have already adopted four different tests for determining whether or not an institution qualifies for the

religious exemption. and the second problem is that employers and workers don't necessarily have predictability even within a circuit that has its own test which differs from another circuit. and the reason is that the tests themselves are somewhat subjective and somewhat unpredictable. they've got multiple factors. for example, the third circuit, which includes my state, the state of pennsylvania, has nine factors. and as the court explained, not all factors will be relevant in all cases and the weight given each factor may vary from case to case. the result is that in a single case, decision-makers looking at the same set of facts can reach very different conclusions. so in the absence of my amendment, my concern is that there will be no uniform, predictable national standard for determining when a religious entity, a religious organization is exempt from the bill. there are a couple of examples

that illustrate my point. in a case called the eeoc vs. kamehameha -- i think it is a hawaii word. my pronunciation may not be correct. it is a 1993 decision. there were two schools created by a charitable trust to help orphans and poor children. the trust instructed and i quote, the teachers shall forever be persons of the protestant religion. the schools shall provide a good education and also instruction in morals. the schools hired only protestant teachers. they held themselves out as protestant schools. they required all the students to take religious classes. they offered bible studies and worship services and they had a cooperative relationship with one specific protestant church. now the district court found the schools were religious and, therefore, they were covered and they qualified for the exemption. but the ninth circuit court, considering the exact same set of facts, found the opposite and

stkaoeupded that the schools -- and decided the schools were secular. the ninth circuit decided the school's original principle was providing religious instruction but saoepbgsly ruled since -- essentially ruled since some students were not protestant and since the schools offered courses that were not religious in nature -- the schools taught math, they taught social studies -- that for those reasons they would not qualify for the exemption and the schools were required to hire non-protestant teachers. another example, i only have two, but one other example is a methodist orphanage founded by the methodist church. its board of trustees were methodist, had close ties to the methodist church. the district court eventually held that many of the orphanage's day to day activities of caring for children were simply not necessarily religious, and so the home was not exempt. but initially the district court had actually found for the methodist orphanage. it was the fourth circuit that

reversed it, sent the case back with instructions that they reconsider this. the district court had an interesting comment and stated its opinion by declaring it remains some what confused by the interpretation but it would do its best. mr. president, if a federal judge can't tell what the test; how could workers? how can an employer? how can an institution based on faith? my amendment is a modest attempt to ensure the bill believes what i believe its sponsors and supporters intend, its continue to guarantee equality to workers, it would protect religious groups rights to the free exercise of their religion. and it would ensure that all americans would live under the same rule, the same formulation with predictability and certainty. it would clarify that enda's religious exemption applies to religious hospitals, schools, charities and other organizations that are owned by, controlled by or officially

affiliated with a church or religious group covered by enda's current exemption. i think what this really does is simply ensures that we get close to striking a good, sensible balance between the equality in the workforce that is the principal motivation for this bill and the religious freedom that i feel very strongly about and i think many of my colleagues do as well. so i want to commend everybody who's put in a lot of hard work on a careful and thoughtful effort here and hope that my fellow senators will join me in supporting this amendment. mr. president, i yield the floor. the presiding officer: the senator from iowa. mr. harkin: mr. president, first, i have six unanimous consent requests for committees to meet during today's session of the senate. they have the approval of the majority and minority leaders. i ask unanimous consent that these requests be agreed to and that these requests be printed in the record. the presiding officer: without objection. mr. harkin: mr. president, i ask unanimous consent that

zachary kechivis and nicole dubois be granted floor privileges. the presiding officer: without objection. mr. harkin: mr. president, i ask that the senator from wisconsin have two minutes also to speak in opposition. the presiding officer: is there objection? without objection. mr. harkin: over the course of this debate we have documented the tremendous business community support for this bill, including over 100 major companies. a key reason for that support is that enda is closely modeled on the title 7 of the civil rights law. employers are familiar with the law. they understand how to comply with the law, and it provides certainty. the many fortune 500 companies that have employment nondiscrimination policies in place have modeled these policies on the nondiscrimination requirements of title 7.

fortunately, by proposing an entirely new definition of businesses that would qualify for an exemption from the employment nondiscrimination act, this amendment calls into question that very certainty. enda already exempts the same religious organizations that qualify for an exemption under title 7 of the civil rights act. under current law the exemption includes not only houses of worship, churches, synagogues and mosques, but also religious schools, religiously affiliated hospitals. the exemption that's in this bill passed the house of representatives on a broad bipartisan basis 402-25 in 2007. in determining what organizations should qualify for religious exemption, most courts have also said that where the primary activity of the organization is commerce or profit, despite strongly held religious beliefs by the owners,

the organization may not discriminate in hiring. that is what this amendment i believe seeks to change. this amendment would allow entities that are -- quote -- "officially affiliated" with a religious society to discriminate on the basis of sexual orientation and gender identity. this is a new term that's undefined in the text of the amendment and could lead to thousands of for-profit businesses being allowed to discriminate. some examples that have been suggested could qualify for the exemption include a private employer whose only -- quote -- "affiliation" with a religious society is receiving a regular newsletter from that society. or a private employer who sponsors a fund-raiser for a religiously affiliated nonprofit. or a private employer who provides goods or services to a religious organization. so again, this amendment would open up the floodgates for all

kinds of new lawsuits. courts would be inundated trying to figure out what does "officially affiliated" mean because there's no definition to that. the definitions that we had before provide that kind of certainty to our business owners. our nation's civil rights laws require those who participate in commercial activity must adhere to the broad principles of fairness and equal treatment. and potentially allowing secular commercial businesses to discriminate in hiring and other employment practices on the basis of sexual orientation or gender identity, this amendment threatens to gut the fundamental premise of enda, that all workers should be treated equally and fairly. so, mr. president, while i urge my colleagues to oppose this amendment, i would like to note that the sponsor of the amendment supported beginning debate on the bill. his amendment is one that goes directly to the substance of the bill that we are debating and not an unrelated issue.

so i want to compliment the author, senator toomey. this is the way that we should operate in the senate. as many know, i have been advocating for rules changes since 1995 here. one thing i've always adhered to and that is the right of the minority to be able to offer germane amendments, relevant, germane amendments to a bill. and the author of this amendment has adhered to that. it is certainly relevant. it is certainly germane. that is why i compliment him for providing the way the senate should work here. so i compliment him for that. but the amendment i believe is ill-defined, would open the floodgates for all kinds of new court cases, it would disrupt businesses all over america. and so for that reason, i -- i -- i urge my colleagues to -- to oppose the amendment by the senator from pennsylvania. i yield the floor.

mr. baldwin: mr. president? the presiding officer: the senator from wisconsinment mr. baldwin: thank you, mr. president. the bill before us, the employment nondiscrimination act, contains a very carefully negotiated bipartisan religious exemption provision. the amendment before us right now significantly expands that provision and i rise to share why i believe it would be unwise to do so and urge my colleagues to oppose the amendment. religious organizations are not touched by this legislation and they can use an individual's sexual orientation or gender identity in their employment decisions if they choose to. enda does apply, however, to business -- businesses and entities that are not primarily religious in purpose and character. just as with other civil rights legislation and in laws protecting individuals from discrimination on the basis of

race, sex, national origin, religion, age and disability, a capable employee in a nonreligious business should not be fired or not hired because of his or her boss's religious beliefs. the amendment offered by senator toomey would broaden this exemption to allow an employer to be exempt from enda if it is affiliated with a particular religious organization even if it engages primarily in secular activities. allowing this type of exemption could be interpreted so broadly that it could negate the bill and its important protections for american workers. mr. president, the provision of this bill that this amendment seeks to modify is the product of a long and significant bipartisan negotiation and compromise.

formally -- i would ask unanimous consent for two additional minutes. the presiding officer: is there objection? without objection. mr. baldwin: i'm a former member of the house of representatives and i worked very closely with faith groups and civil rights advocates over the months leading up to consideration of enda in 2007 to arrive at the religious exemption compromise in the bill that we're considering today. in fact, this current language in the bill before us passed the house of representatives on a broad bipartisan basis of 402-25. it was a floor amendment during our consideration of enda in 2007. it is a bipartisan compromise supported by many religious organizations, including the presbyterian church, united methodist church, and the united synagogue for conservative judaism. over 40 religious organizations wrote to endhors bil endorse thh

a letter that reads -- i quote -- "any claims that enda harms religious liberty are misplaced. enda broadly exempts from its scope houses of worship as well as religiously affiliated organizations. this exemption, which covers the same religious organizations already exempted from religious discrimination provisions of title 7 of the civil rights act of 1964, should ensure that religious freedom concerns don't hinder the passage of this critical legislation." i ask my colleagues to oppose this amendment and then join together on an historic day to vote in support of the employment nondiscrimination >> the amendment was defeated. the senate went on to pass a ban that would

discrimination against gay and lesbian and transgender americans. it passed with bipartisan exemptionsd provided for religious organizations. me voted -- senator toomey voted for the bill. among the speakers at the news conference, senator tony baldwin, the first gay person elected to the senate, says they will not rain the measure to the floor for a vote. >> thank you.

>> who are we missing? ok. do you want to reverse [indiscernible] ok, we are ready to start. go ahead. >> let the bells of freedom ring. to havevery exciting this powerful bipartisan vote and close to debate. but the senate has clearly spoken toend discrimination in the workplace. i thank the leadership, senator reed, for free and for this bill to the floor to make sure this would happen. senator harkin, who guided the committee through several markups, several hearings and then a markup for a terrific bipartisan team hearing tammy baldwin brought so much energy and momentum and coming to us from the house with her experience and her story.

senato senator kirk as the chief cosponsor who helped connect his colleagues. and in 2009-2010, the chief cosponsor continued working on this day in and day out. it is an incredible bipartisan group that says discrimination must end. i certainly must mention senator kennedy. he asked me to undertake leadership of this bill in 2009. he said, when we introduced it in august of 2009, just 20 days before he passed away, he said "the promise of america will never be fulfilled as long as justice is denied to even one among us." very true words. it is from the declaration of independence to the constitution, to the battle over gender discrimination, race discrimination, we have fought

to capture the vision of equality and liberty and opportunity and fairness. we have taken a huge stride in that direction today. now i hope that the momentum will carry to the house. speaker boehner has mentioned that he might not bring this up in the house. i call upon him to do so. his concern that perhaps other laws follow this, i can assure you that they are not. in 29 states, it is legal to discriminate against the lgbt community. his concern that there will be lawsuits -- he is concerned that it will reduce unemployment. that is unfounded. if any individual can rise to their full potential within the workplace, the entire company

thrives and that creates more jobs. this is a terrific day for fairness and freedom. i am just honored to have been part of this tremendous coalition that has made this happen. thank you. >> thank you, jeff. i just want to say that we would not be year without jeff. he spearheaded this whole effort. as chairman, i want to thank him for steering us through and being such a strong supporter of it. today is an historic day. think about it. in 1964, we passed the civil rights act. in 1990, we passed the americans with disabilities act. some of us were there at the time. now we have sort of finished the trilogy. we have now said, no more discrimination on the basis of your sexual orientation or your gender identity.

historic occasion in the united states senate. i think it is also remarkable that we got strong bipartisan support. i do not know what the final vote is, but i think it will be 62 or 63. 64 votes. i am proud of the fact that our committee reported out. it is the first time we have reported out a nondiscrimination bill on sexual discrimination and gender identity. we did that in july. i want to thank the leadership team, especially senator reid for his making sure we had an opportunity to bring this to the floor. this leadership team made it possible for us to come here. i cannot tell you how much we thank you. i want to thank senator baldwin, one of the new members of the midi. i am sure glad she left the house and came to the senate.

she has been so instrumental in bringing this up. the ball is now passed to the house. the house of representatives now has this. well, will shortly have it. i am calling on speaker boehner to bring the bill to the floor. let the house vote on it. i am convinced if the house votes on this, it will pass the house and go to the president. so i am asking speaker boehner, do not stop it. too many people in america have been waiting for far too long to end this blatant discrimination against people because of their gender identity or sexual orientation. i would just quote the words to remember when we passed the americans with disabilities act in 1990. the first president bush signed into law and said, "let the

shameful walls of discrimination come tumbling down." that is true in terms of people with disabilities and it is true today in terms of our lesbian, gay, bisexual, and transgender mothers and sisters in america. let the shameful walls of discrimination come down. speaker boehner, bring this bill to the floor. >> i want to say that what we have seen on the senate floor today and what we will see later this afternoon is such a restatement of basic american values, freedom, fairness, and opportunity. and for folks like myself in the lgbt community, the opportunity to be judged in the workplace by your skills and qualifications, your loyalty and work ethic, is an important pronouncement for this nation.

i talked about the substantive impact of passing laws, but i also just want to reiterate the symbolic impact. when we say something is wrong and it should not be done, that sends a powerful message that prevents discrimination in the first place. this is a really tremendous milestone, a day i will never forget in my service in the senate. i also just want to add how remarkable it has been to work with this really committed team of leaders in the u.s. senate who are everyday committed to freedom and fairness, equality and opportunity. >> i have served in the house. i am sure over there someplace, i just do not know where, there

is this room. and it has in it the farm bill. it has immigration issues, a big bill. it has marketplace fairness. and we can add to that this. it has postal bill the right time is going to come when we find out where it is and bring out all of the stuff that the american people support overwhelmingly. speaker boehner, please do what is right for the american people. let's do this legislation. it is fair. this legislation is only about fairness. more than 80% of the american people already believe it is the law. so let's do it. >> i want to thank chairman harkin and jeff and tammy baldwin for the amazing achievement which we are seeing