had a red bag. he was detained as a protester.

mistakingly, i want to correct the record. with that i want to thank the panel. [applause] i have confirmed it is true that for those of you that have the temerity to hang out with us all day, we are in fact serving the -- in drop and the deficit will keep referring to that. the stage nancy cook, whose the domestic and reporter for "the national journal." [applause] >> hello everyone. thank you so much for sticking around. thank you so much for joining us. i feel like the public appearances you make are somewhat rare. the cbo has been under fire

recently so i think we will have a lot to talk about. >> glad to have all you here to join us. issince this whole event about the economy, i wanted to start off with a broad question. five years since the start of the recession are you surprised by where we are at this point in economic recovery? we have been surprised and disappointed by the pace of economic recovery. i think the people who are more right are those that look more carefully at the experience of other countries. -- of other countries and have looked at crises on the housing and financial system. those people found those sorts of recoveries from those events are very prolonged relative to the post war experience. i think in retrospect we put too much weight on not just the

postwar experience but on the rapid monetary policy response and fiscal monetary policy response. that would be enough to put the economy fairly -- not a v-shaped recovery, really, but a quick u-shaped recovery coming back. we think at this point there is still considerable slack left in the economy and the labor market. watchingeen carefully the structural factors that have slowed the economy. for example labor force participation is down considerably over the past several years. we think a good chunk of that is due to the democratic -- to the

demographic changes. we think a significant chunk of the decline stems from the weak economy. left thehe people who labor force we think will stay out permanently. others, we think, we'll come back as the economy strengthens . our projection is we will return back to full employment. that will come from a healing of the underlying economic problems that stemmed from the housing boom and bust during the financial crisis. we think economic growth will pick up this year because the fiscal drag we have seen in the past few years won't be in place this year. we do think there are even stronger reasons today to expect the economy to rebound. we have been wrong before about that. i think we have learned --

economic forecasters have learned just what a prolonged process it is work off of the excesses of a housing boom, rebuild the financial system, to restore consumer and business confidence. >> have you changed anything internally at the cbo or the way you go about forecasting? if you guys feel like you were wrong in the way you viewed economic recovery? i'm not sure we changed anything structural. we look very carefully at the successes and failures in our forecasting process. thate certainly aware other research has been on the panel of economic advisers for some time. i think we misjudged the underlying resilience of the u.s. economy. our forecast tended to be similar to those of private forecasters. current law and fiscal policy

has been involved in the past couple of years. private forecasters are trying to guess what congressman will try to do based on fiscal policy. forecasting is very hard. and we are always working to get better at the things we do. >> one thing i was really struck by in the latest budget outlook was heout in february predicted the unemployment rate will or maine above six percent through late 2016. -- will remain above six percent through late 2016. n an election year. what you think that is going to mean for the labor department? >> error estimates. -- there are estimates. there will be 6 million more people working if the unemployment rate was down to

its pre-recession level in the labor force participation level was back up. of those are 6 million jobs that our economy is short today in our estimates. of those peop -- those people are not using output. it is a large cost for those people and their families. a rate oflar we have long-term unemployment, the sheriff ibo who have been out of work for a year or more, it has -- the share of people who have been out of work for a year or more, it has been extraordinarily high. people who have been in on -- who have been unemployed for a long time had a long time had great personal hardship at the time. if they had savings they worked through, perhaps. they find it more difficult to get back into the labor force.

some of that seems to be a deterioration of their skill or not keeping up with changes in how work is done, that also some of that seems to be a stigma that attaches to people out of work for a long time. resumes thatnd in are identical except for some of those who are unemployed for a short period of time. it is hard to get back into the labor force. we think a number of them will not. has of the labor force taken up disability insurance, part of the social security program, and are likely to stay on that program or moving to the social security retirement program. stopped reporters from reporting on the conflict in the labor force. the consequences of having unemployment so high for so long

are really profound. for now we will have a long, long shadow. it is what has tended to happen in other economies that have experienced financial crises. the latest work i am aware of will collect a very large experience from across the world. this sort of crisis takes six to eight years to get back to the pre-crisis level of output per person. the u.s. is now back to the pre-pro -- to the precrisis levels. it doesn't mean that it doesn't seem like much of an accomplishment in an economy that should be growing. was your reaction when congress failed to reach an agreement to extend emergency long-term unemployment benefits? >> as you know, cbo does not

make policy recommendations. very important because policy choices depend not just on the analysis of the consequences but how one weighs those consequences, what values one applies. there is something special about our values. it is of to our elected leaders to make the policy judgments. our job is to help congress understand the consequences. we have set a number of time that extending unemployment insurance benefits will provide a boost to the economy because that money will go to people who will be highly likely to spend it. there are consequences of extending unemployment turns -- unemployment insurance benefits. there would be people who would look for work less vigorously than they would otherwise.

laid out the consequences of that and offer the congress and number of times menus of possible ways of providing some fiscal stimulus to the economy. >> i want to talk about the politics of the cbo. the agency has come under fire recently. reports you put out, one was on the effect of the minimum wage, which the white house aggressively came after. and then the affordable care act. what sort of pushback have you gotten from officials and congressional democrats over these reports that did not necessarily buttress a lot of the political conversation in the crosswalk to have. wantnversation democrats to have. >> we don't get private pushback from the administration does i have no private conversation with anybody in the administration.

i think that is appropriate. don't really get private pushback from members of the congress when they are unhappy >> on twitter, all over the place. >> lots of different ways. is to do anof cbo analysis without carrying who will be made happy or unhappy about the results. it just isn't a factor in what we do. congress is paying us to do objective analysis, to do analysis that draws on the best thinking in the analytic community and among practitioners, whoever we can consult for information to do our budgets and analysis. heat. to know

we get favorable attention from summoned unfavorable from others. that just comes with the territory. shortly after i started my job, five years ago, i was taken to lunch by a former director of the cbo. everyone has their stories to tell. i wondered whether i should go back to the office and just get on the metro and go home again. the stories are really something. it is the essence of what my predecessors did and what i did. most importantly is what everybody at cbo does. everybody comes to cbo knowing that this is a place where we will to really high-quality objective work, where our own value of judgments and policy , do not enter

the situation. in the entire organization in the culture of the place, it is all most 40 years old. when we've really some studies and they get some attention, sometimes they get less, people are happy or unhappy. to testify,call send tweets, or write letters. that's ok, that's their role. our role is to work on the analysis for the next project. you ever worry about cbo's of validity to maintain a nonpartisan environment or its mission in such a partisan environment moving forward. >> don't be worried about the ability to do objective work. that is so ingrained in the organization and the people there. i worry about the perception of our objectivity. i think in an environment that is as highly partisan is ,ashington is, especially now

things can be viewed through partisan lenses. viewedn be fused -- he to suggesting. we can talk about why we estimate the effects of this proposal and not that proposal. why did you write it this way and not that way? why did you really sits on this day of the week and not that day of the week? -- why did you release it on this a of the week and not that day of the week? we are doing it in a way that demonstrates objectivity. i don't worry about the analysis been objective, i worry about the analysis being right. the topics are very complicated. our energies are devoted to trying to take the best available evidence from published research, from conversations with petitioners, from people running state governments and administering toeral rules, and trying

combine all that knowledge to produce the most accurate estimates we can. we have a terrifically talented and dedicated people. >> i want to talk about the budget wars that consumes washington and a lot of my life, your life, for about two years. what was your reaction to the budget compromise that democratic senator patty murray and republican congress meant paul ryan came up with in december? do you think that was adequate in tackling the issues everyone has been fighting about for two years? the budgetestify to conference committee in november, i said near the end of the testimony that given the budget challenges we face, the big steps are better than small steps and the small steps are better than no steps. and i added no steps are better

than backward steps. have to be careful. [laughter] the agreement that chairman murray and chairman ryan came to the was endorsed by the congress was the appropriations bill. they were small steps toward better budget policy, not endorsing the particular actions that were included. but getting a company of people to agree on something that allows the government to be funded and move ahead was very constructive. the fundamental fiscal challenges that we face remain. the fundamental fiscal growth in come from spending for social security and a major health care programs. the government as a whole is not getting bigger relative to the size of the economy.

projections under current law, all federal spending apart from that for social security and major health programs will be a smaller share of gdp by 2020. social security will be more expensive relative to gdp. that comes from the aging of the population. there'll be one third more people receiving social security benefits a decade from now than there are today. coming partly from rising health care costs per person, not as rapid and increase but still rapid enough to push up health care spending. the third coming from expansion to subsidize health insurance for lower income americans. with those three factors at work handful of a large program is

becoming more expensive. we have a choice as a society to .cale back our programs we can raise tax avenue to its historical average to pay for these programs. or to cut back on spending even more sharply than we already are, even more sharply than the lowest gdp in seven years. we haven't decided at the society how we are going to -- what we are going to do. of those threen choices will be needed. as we continue to do work we present to congress a volume of options for reducing deficits. there are lots of ways to proceed but they tend to be unpleasant one way or another. we have not decided how much of

that unpleasantness reflected. iseveryone on the hill exhausted by the budget wars. -- the annualt deficit really dropped. when do people need to start worrying about these questions of government spending you just brought up? >> we have been saying in the five years i have been at cbo, the deficits would be particularly high for a while and then decline. would decline because the economy recovers, even more we also have a deficit decline the cause congress passed legislation in 2009 to provide stimulus to the economy.

wouldect that legislation wane. our projections have shown for it while that deficit would come down from the roughly 10% gdp in 2009 four something in the two percent to three percent range, which we still project to happen this year and next year. to rise again because of these underlying .actors, which are happening those underlying factors will show through very clearly. the current level of the deficit is roughly the average episode of the gdp we have had over the last 40 years. the challenge is not the deficit in the short term, it is the deficit rising to capture that. levelticular, a very high of debt is now 70% of gdp.

that is way above word was for most of the postwar. it can slow emulation of capital and the growth of wages and incomes. -- slow the accumulation of capital and growth of wages and incomes. the high level of debt and growing deficits, the reason action today would be beneficial is because we want to make changes in programs for retirees or changes in the tax code. it is better to make those with a warning. one wants to set changes in motion early, even if the full effect will be felt for many years. >> we're going to take some questions from the audience. there are people with microphones.

if you just want to raise your hands -- we have a question over there. go ahead. >> good morning. my name is tom with marconi pacific am a we are a technological consulting firm. a question about technological driven deflation, and i'm wondering if cbo has done any work in that area, looking at the effects of the internet, driverless cars, machine to machine technology, sort of the next generation and how that is going to impact employment or unemployment. and if you could connect that to the last panel with the lack of that of results as a economic -- of economic growth -- result of family >> we have not looked very carefully up the questions you have raised.

we have a limited number of things we can tackle. our projection of growth and is close to the average of the last couple of decades. we are not looking for any particular pick up or slow down. there are cases people have made about why there may be at particular close-up or slow down. we think in terms of wages that there will be some return of wage growth as the labor market tightens the next several years. as you know the share of national income going workers has been on a gradual downward trend. it has fallen quite remarkably since the boom. we think that will take up to some extent but not go back to what it was in the past.

we have federal reserve targets -- think we have another question right here. >> good morning. there are two issues that come to mind. the fact we keep hearing entitlement when it comes to social security. and people who paid and that while they were working. as an just that entitlement when americans have done this? you focus on tax policy when americans incomes are going down and we continue to subsidize exxon mobil. >> one of the options we offer congress in the fall for the

deficit is to change the tax treatment of companies that are extracting resources, like exxon mobil. that is one of the possible ways of moving forward. security generally don't use the word "entitlement." tohas different connotations different people. a lot of people have paid social security taxes on the respond.on they will the argument that people have come to expect certain things and are counting on certain things to be there for them is exactly the point i mentioned about how one wants to change those programs and then giving people a lot of warning about how those changes are coming, it

would be especially important. >> one quick question i want to ask you, your term is up in january 2015. if you have been a valiant soldier for a while now. you have in in this job for a while. are you interested in serving another term or what else would you be interested in doing? >> i love my job. i have had a chance to work on some interesting questions with some terrific colleagues. >> that is not answering the question. >> i know. and i am focused on what we are doing in 2014. i have no plans beyond the beginning of 2015, when my term expires, and i am making no plans and we will have to see what happens when we get there. >> thank you so much. >> thank you very much. [applause] >> a big round of applause for .oug elmendorf

the question i would ask job -- ask doug is does your job suck? it must be a complicated thing when you are trying to tell the truth to both sides who do not want to hear it. you don't have to answer that -- >> i love my job. >> great, so that is readable. -- that is tweetable. another round of applause. thank you, doug. they count on the for craftiness. yet anotherg on for of our keynote conversations. conducting that is david graham, senior associate editor for "the atlantic." he is going to have a conversation on the state of the hollen, ath chris van ranking member of the house budget committee. a hand for david graham and chris van hollen. [applause]

>> where you want me? >> i think right here. >> congressman, thanks for being here. let's jump right in. that seems to be this idea maybe the budget wars are over. as ryan murray suggested, the détente. what can we look forward to in the next few months? >> first of all, it's great to be here. i appreciate the opportunity. i think you have a temporary truce on the budget wars. the budget agreement that was reached in december carries us through fiscal year when he 14 and 20 year 15 -- what he 14 and 2015. 2015.4 and agreement to

increase spending on those deeper across-the-board cuts. by 2015 you are back to current law, and that is the sequester with the deeper across-the-board cuts. look at some point we are going to have to resolve those issues. there were concerns we would have another showdown about the debt ceiling. we were able to approve the debt ceiling without too much forensics. there is some talk, and it is only talk, that the house republicans -- my colleague paul ryan may be considering putting forth a budget proposal that would actually change parts of the ryan-murray agreement. i hope that is not the case because that would route -- would create unnecessary disruption. -- they talks they try will try to increase the defense and reduce the

nondefense spending for 2015. those numbersear, were very carefully negotiated. if there was a move in that direction it would create unnecessary uncertainty. truce and a temporary hopefully that will last. >> you were pretty lukewarm on this deal. you said it was not a perfect deal but it was great there was an agreement. how would a change play out, what would it look like politically and what -- and how with the process go? >> if you have a change in agreement that would show -- that would throw a monkey wrench in the process. the appropriators, the people that actually make the decisions about how to spend and allocate funds within those limits, they have been able to get to work. for years they have not been able to get to work because there has not been an agreement between the house and the senate, between democrats and republicans as to what the overall numbers are.

if you were to change the agreement he would throw that up in the air. was ahink the agreement positive development but it was far from perfect. budget attempt to address some of those issues by saying within the limits he allocates resources and he suggests it would be better for the country if republicans or democrats could get together to agree to increase our investment in nondefense spending. also increase our military readiness by actually providing $28 million in additional funds. let's talk about the earned income tax credit. many people said it was the greatest possibility for bipartisan. d.c. your colleagues going along with that? >> i hope so.

she combated poverty and made sure work pays. extend thate is to to childless workers. right now it applies to individuals who are working with families. projections,most it would help lift substantial numbers of people out of poverty. i hope we can move forward. the price tag is over $78 billion. in budgeting the question is always how you are going to offset that. the president offsets that in his budget by reducing certain tax breaks and benefits in other areas. i'm not sure our republican colleagues would agree to that approach or not. or could policy agreed

you imagine siding on the extension itself? -- towill have to seek see. i'm not sure. for example, one question will -- will be if and when the house republicans put their budget forward, will they include this extension? on ifs the first clue they want to before this idea. >> how about the minimum wage. is it fair to say that is a nonstarter? >> we are trying to get a vote on the minimum wage in the house. have filed a discharge petition, trying to collect signatures to essentially pressure the speaker of the house to bring that up for a vote. we are confident that if it had actually had a vote on the memo if it actually had a vote on the minimum wage

increase it would get a majority vote. so far the speaker has not allowed us to have that vote. i think the votes are there. the question is the opportunity to actually get the boat and let the house work its will. >> we are praying on that theme. something your democratic colleagues sent over -- unemployment insurance. this is something democrats have said is important to the economy and the people. to me about the prospects there. -- tell me about the prospects there. >> that is another sore point in the house. one other bill and mentioned -- minimum wage increase, extension for unemployment compensation, and immigration reform are things we think the house should vote on this year. they are all important measures

to the country. they can vote yes or no but we should at least have a vote. as you indicated the unemployment compensation extension is not only important to the families who are struggling -- we still have an economy where three people are looking for each job. it is good for the general economy. indicated that if you extend unemployment insurance through the end of this year you would save or create about 200,000 jobs by the end of this year. that is because when people are able to pay their mortgage, pay their rent, go to the grocery store and buy goods, it is good for their local economy and the national economy. people can't make the payments if it just has a negative effect on the surrounding economies. >> we have talked about these concrete policies democrats have put forward. we see a lot of republicans

focusing on poverty in a can -- in a new way. the most is probably visible in doing that. are they taking this seriously now? is this a new change, is it a cynical ploy? what is really going on and is there somewhere we can agree on on both sides? >> the test of whether or not this is serious will be in the house republicans budget. budgets are an expression of our priorities, values, what we care about. in the past despite a lot of talk with our colleagues about the budget poverty, have decimated very successful anti-poverty efforts. we all know we can do better on the war on poverty. tens of millions of americans are still below the poverty line

. that is unacceptable. if you look at the time from 1967 until today, or 2012 with the latest data, it shows the initiatives that have been taken over that time result in about 40 million fewer americans in poverty. be a big mistake to unwind some of the important measures that are in place. we can look at reforms if the goal is to improve and strengthen those programs. and year's the public budget slashed medicaid, which is already a health program that has the lowest cost per capita increase of any health programs from a whether it is the private market or comparing it to the medicare. he would essentially cut that by eat hundred billion dollars. -- they would essentially cut that by $800 billion over a 10 year period. this is a question of what is

your budget -- what does your budget do you? not what you say. a friend of mine that we have disagreements on these policy issues. i think they fundamentally misdiagnosed the problems. his recent comments suggests this is a lack of motivation, that people just do not want to work. there is a coulter of not wanting to work written think the problem -- a culture of not wanting to work. i think the problem is a lack of opportunity and i think it is important we identify the key issues here. if you/important programs that provide some basis -- if you that providems some basis of security, it will be worse. >> we see the report on the war

on poverty that argues all of these programs haven't really worked. there are too many things going on, the pocket he rate hasn't fallen nearly enough, and we haven't made a dent -- poverty rate hasn't fallen nearly enough, and we haven't made a dent in poverty. >> if you look at that report is an inventory of different policy initiatives over a. period of time. it is a catalog of different programs. the opening statement begins with a false premise, and that is that we have not made any progress. the council of economic advisers did a very exhausted of -- very exhaustive report in january. what they found is that we have seen a 40% reduction in poverty compared to where we would be with how these measures have been put in place over time. the premise that we have not made any progress is simply false.

if you start with that premise you say let's get rid of these programs as opposed to look for ways to improve them. i don't think you can improve the food nutrition program by cutting $140 billion out of it. i mentioned medicaid, which is an important health care program for seniors and also for lower income families. that is already on a shoestring. there are already low reimbursement rates. to take almost $1 trillion out of that program would simply be at death nknell. ,> there were things you liked you mentioned the gingrich loophole, the kerry loophole. republicans into the less fond of this plan. is there any hope of this going forward?

about interesting thing the tax plan is the people who put on the running shoes the fastest and running away from it were speaker boehner and republican colleagues. forve dave camp credit putting something concrete on the table. there is lots not to like him to david kamp plan. was make the point many of us were making over the last years. think toder than you bring down rates in a deficit neutral manner, in other words eliminating certain tax benefits, tax expenditures. for years the house republican budget has said we are going to from 39% downate to 25%. down repeatedly during these budget discussions without cannot do that

actually increasing the tax burden on middle income americans. we think the map shows that. i think dave camp has proved that. at his plan, you actually have a top marginal tax rate. he also put a lot of provisions in there to try to make it deficit neutral in the last 10 years. he has the bank fee and think tax in there. he has a lot of other provisions in there. he has made the point a lot of us have made, which is this is harder to do than you think. thatuld also point out even with everything he did to try to make it deficit neutral, most people believe it will significantly increase deficits .nd the second 10 years her because he moves forward , going various changes

from 401(k)s to iras, it moves revenue into the next 10 year window. that revenue that will come in the second 10 years is no longer .here with increased deficits lots of big questions. gives up the gavel, will this create a template going forward? >> i think the different components of that are certainly things that are going to be in play and discussed. if and when we are able to move forward on a company of tax reform legislation, these are ideas that are out there. i'm sure when we have a discussion on the budget this year in the house budget committee we will have a healthy discussion of some of dave camp's proposals as well. there is one area in the tax

that is at least overlapping in principle. that has to do with corporate tax reform. at the president's proposals, dave camp proposals, while they are different there are some important principles. there is some overlap in the way they deal with international taxation. proposals useboth some of the income captured as part of corporate tax reform to increase the transportation , our infrastructure investment. we haven't mentioned that i would say that has to be an important national priority. in the past year there is not enough revenue coming into our federal transportation trust

needso do the work that to be done around the country. fundsw projects, all new for projects will come to a halt in september if hungers does not get its act together. of there are some things -- if congress does not get its act together. years republicans have been talking about the budgets president obama put forward and there is not a lot of movement on that. what will it take for some sort of change? >> this is something that worries a lot of us. we need to come up with a long-term plan for our national infrastructure investment. with so many other things in congress, we are on a week to week and month to month short-term horizon. the key issue comes down to funding for the transportation for -- transportation trust

fund. either you essentially borrow the money from the general fund and dedicated revenues. those and't replenish come up with a mechanism to expand those resources, then you are borrowing from the general fund. a number of proposals to deal with this. if our republican colleagues don't put up that idea than they should put out another idea on how to pay for. if they want to pursue dave camp's proposal that's fine. >> you mentioned doug elmendorf, who was up here. he has not been especially kind to democrats.

reports have suggested there'll be a negative impact on employment. it seems to have stalled political momentum. do you worry about what the cbo projections have been saying? want to salute dr. elmendorf because he has a tough job being the umpire of who calls the balls and strikes. there will be times where one party or another does not fully agree with this assessment. if members of congress could to make up their on projections you can imagine -- as crazy as the budget process is now it would get that much worse. out dr. elmendorf pointed the economic recovery helped save millions of jobs in this country, republicans did not like it.

there is some of his analysis that democrats may not always love it. on the two issues you raised i did want to point out the fundamental misunderstanding that surrounded one of their proposals. if you go to work for your employer you get a tax break. your employer gets to provide you with health care tax benefit. people who go to work with employers who provide health insurance are essentially getting a tax subsidized health insurance. that kind of tax benefit was not accessible for people who do not go to work within employer. where we cantem purchase the health care in the exchange. everyone acknowledges we have a lot more work to do you you can

-- work tox benefit do. you can access the tax benefit and that frees up more choices for people. i want to be clear the cbo assessment with respect to employment said in the out years, as people have more choices they may select not to were selectedours to work at a particular job that they were working because that was their only way to axis health care. it wasn't that they were going to be thrown out of their jobs, it was they have the ability to access the tax credit elsewhere. talk about the minimum wage issue as well. year 2017cted in the you would have 500,000 fewer jobs. this year if we extend unemployment insurance we would

have 200,000 additional jobs. adopted immigration reform you would see job growth that would dwarf what the project in the out years. finally the minimum wage also is going to benefit over 20 million americans directly and then millions more. it is just wrong that in our country you can work full-time and still be below the federal poverty line. it is a value we should adopt as a country that if you week,ull-time, 40 hours a you should not fall below the federal poverty line. >> one strict political question, what moral support are you offering your successor? >> steve is doing a terrific job. it is a hard job.

i think as we go into the november election cycle, what democrats would like is for them to be able to punch through some of the specific proposals with respect to the economy. early education, minimum wage, every oneolicy issues suggests it will be a strong report. there is so much polarization, so much focus on dysfunction. we are just going to work hard to get the best job. elections are huge issue on both sides. >> good morning, my name is daniel plummer with daniel

plummer incorporated. we are a business and internet strategy company. is congress doing anything to debt?s the student loan specifically aged debt a legitimate program that what awaits the debt for any service. referring -- is commerce working to reform a lot of the credit laws passed in the past 12 years with high consumer interest rates? >> this is a huge issue for the country. a trillionare up to dollars in student loan debt. economy we want to make sure that in order for people to have the chance to compete in go ahead they can go to college. affordability should not be a major obstacle. there are three areas where the federal government has moved.

we have increased the size of payments. --s is a note or difference this is another difference. the house republican budget would significantly cut support for the program. we worked to keep down the of the subsidized federal student loans. they were going to double to 6.8%. we were going to keep them lower. the third case directly addresses the question you raised, which has to do with the ability to repay. there are a number of opportunities for people now, either through public service or other kinds of service that they can see a reduction on their loan payments. there are also safety nets or fire breakers that if your income is below a certain point

then you can pay off your student loan over a much longer. bang -- much longer. od of-- much longer periio time. even though support for federal student loans has gone up, so has tuition. it has been difficult to try to develop a system that ties federal student loan or grant ofistance to the question the tuition being charged universities. that but it's at hard. some universities may be increasing their tuition just because they want to expand operation. --g the economic turn down during the economic turn down, because there were less resources coming in to state commerce they cut that their contributions to universities and universities had to struggle

to increase their tuition in order just to maintain current service. there are lots of moving parts here. we would invite anybody who has an idea on how you can tie federal assistance to some student accountability. it is a tricky area. in terms of the other credit programs, i'm not sure exactly which ones you may be referring to. have been looking at a number of reforms of various programs, at least in the house and other areas. i can follow up later. >> we have time for one more question. >> just a follow-up to the prior question, i'm not suggesting this is a father-son chat. see in the new pew poll numbers that changing attitudes in the oncoming

generation and what effect might that have on the competition of house of representatives over he next six to eight years? >> changing social attitudes as they breed -- as they believe in -- as they bleed into political convictions. >> that is a very good and very tough question. how thisd to predict will impact our politics going forward. i think you see a mix of attitudes among young people. one is on a lot of the social issues. generalized and more socially liberal. when it comes to gay rights, when it comes to a number of the , i thinkues like that that you are going to see a continuing trend. issue is onet that

good example we see incredible changes in the country in a very short time. i think that is driven by younger voters and the next generation. i'm not sure yet how all their attitudes will sort there are lots of questions about where younger generation will ultimately gravitate to politically. clearly the coalition of young voters was very important to president obama's election in 2008. and, also in 2012, not as much energy and not as much enthusiasm perhaps in 2012, but again significant voting block. so the question is whether those sort of voting trends among young people will continue into the future. i mean, there's a fair amount of evidence that people tend to stick with their choices of

political parties throughout their lives on average. but i don't know, it's a very good question as to how this our hange and affect politics. as you know, a big part of campaigning these days is trying to harness the information available now through essential media and all the other data that's out there to get a better idea of how voters are thinking, not just young voters but across the board. >> congressman, thank you very much, i think we're out of time. >> thank you, >> thanks for having me. >> david graham, terrific job. the one question david wanted to ask but didn't get to is do you ever get so frustrated and wake up and say what would l.b.j. do today? >> let me take a second to answer that question, actually. so the answer is yes -- but in

terms of the congress, look i think the president's been dealt a very tough hand with this congress. that's my personal view. and we went through a whole litany of issues where we're trying to get a vote in congress. if we get a vote, i think we'd be able to move forward on lots of those things the president pressed for. but he cannot make them, hold the vote in the house of representatives. >> thank you so much david. thank you very much congressman. errific. now, darrick thompson has the most fun job here today because he's going to moderate what i suspect is the feistiest panel of the day capped off by a one-on-one interrue with grofere norquist. i can't imagine any more fun than that. he'll be moderating the next session on the domestic economic outlook.

bill clinton takes credit for balancing the budget, but pete had a hand in that. bill hogan was his hatchet man in that process as chief of staff of the budget committee, now senior vice president of the ipartisan policy center. eve smith just, everything about eve is provocative, she's

ublisher a blog. we have jim pingerton, the only guy who intim nates me in this room. there are other reasons he intimidates me and they're more intellectual. he's a contributor for the american conservative magazine, and also former senior fellow at the new america foundation. so good luck with this panel and good luck with grover after. >> great. if the last panel had a quaint father-son dynamic, this is more like an irish family reunion. if the economic principle though of competition breeding quality holds up this should be a fun one. so, we're talking about domestic economy, and there's a lot to get to. one point i wanted to make to start off is that when your job

is, it's very easy to get caught up in the day-to-day week numbers, to make jobs say for example a national holiday as a lot of economic journalists do. when you look at the bigger picture, you look at the four month running averages, the story is actually surprisingly boring. we've been creating between 150,000-200,000 jobs every month, four month running averages for the last three years. the economy's been growing for about 2% for three years. this has been a rather big recovery and really the strangest thing about the fact that it's like that is that's not how recoveries are supposed to go. you're supposed to have a deep cash and a period of catch up growth and it's almost as if we returned to trend growth before we had recovery growth. jared, to start with you to help set us off, what happens, why is his recovery been so boring? >> yeah. first of all, it's great to be

here and thank you all for coming. it's great to be in the living room with my friends. the answer, i think, has to do th the causes of the great recession. and the responses to those causes which have been incomplete in some cases and adequate in others, with a number of inequality over the whole thing. so let me quickly tick through that if that's ok. so, the downturn was caused by a housing bubble, and that bubble, you know, got a lot of abuse for their spread sheet error, but actually they were right to warn everyone that debt bubbles, when they implode, can be far more damaging than equity bubbles. when your pet rock share goes from a thousand to zero, from friday to monday, that's it. mark to market.

i know eve has insights into these dynamics as well. but, with extended, pretend and -- he mags nations around the dynamics of debt bubbles are per nishes and you have to hit that card and hit it consistently. i think we did hit back hard with fiscal possibility and stablization policy. i think the fed hit back with monetary policy, but the fiscal policy was way too short lived. just one statistic in my notes as well which is the deficit of the share of g.d.p. fell from 10%, these are calendar years, not fiscal years for those who care. the deficit fell from 10% of g.d.p. in 2009, so it was highly elevated as it needed to be, to 3% in 2013. the largest four year decline since the mid 1950's. and that pivot to us a teri has been very damaging and is one of

the answers to your questions. the only other thing i'd add and i'll stop here is that at the same time we still have a 70% consumption of economy, and if the growth is eluding the middle class, g.d.p. is up 11% over this expansion. my point, this expansion now is 56 months old. the average post 1945 expansion is 58 months. this is already long in the tooth. 70%, up 11%, s&p 500 up all adjusted for inflation. the median household income is down 5%. i'll let my colleague heather talk more about the implications of these. but the fact that growth has done such an end run around so many people have also been a factor and a real condemnation of the pivot from stimulus to fiscal policy. >> thank you for building my rant to the next question. if the story of the recovery has been boring, it still had a

motive, i think one of them has definitely been in common equality. why has growth eluded the middle class. what characteristics are such that it's not trickling down into the middle and helping typical family wages grow? >> well, there's a lot of reasons and jared sort of eluded to some of them why we haven't seen the kind of broad based prosperity that we saw in previous decades, certainly before the 1970's. one place i want to start, as jared said we've just lived through a period where we've seen too much debt. it wasn't too much necessarily among governments. we saw too much debt among individual households. so the housing bubble sort of increased, saw people taking on increasing amounts of debt and you saw especially middle class and upper middle class family lays from spectrum taking on this debt, which in no small part was a part of the crisis. but i think we need to be thinking really seriously about why we got into this situation,

right? so some of the story is about the availability of credit. some of the story i think is about the way that families coped with the declining wages, the lack of wage growth that they've seen and the decades leading up to the crisis. so when you don't have a lot of income growth and you have a lot of access of credit, you've got a bit of a perfect storm there. so this question of why families and workers are not benefiting from where growth is going today isn't a new question. one we've been dealing with for decades. so what we just lived with is families living through it with debt. what we're still dealing with the reverberations from is families coping by putting in ore hours. that's the first way families coped with declining wages. so at this point you've been seeing this for a long time, so i think they're saying that this is unique to recovery really

isn't where we need to start our questioning. so why is it that you haven't seen workers benefiting from growth? you know, i'll start that comment by pointing to something that larry michelle often said, who we worked for once long ago. that we continue to live in one of the richest countries in the world. you see that everywhere except for the in the increases in workers wages. what's happened to corporations and productivity and what's happened to workers wages. so there's a lot of things that go into that, right? we have to think about policy choices that we've made, from everything to thinking about the real value of the minimum wage, to thinking about our trade policies on our fiscal policy and we also have to be thinking about the ways that workers have lost their voice at work and ha's happened to unions over the past few decades. so there isn't one answer, but i do think that it requires us looking back over time to see what is changed, and i will end by noting one of the biggest

things to have changed over the past few decades has been this very significant rise in inequality that has taken a very peculiar form. we now know thanks to this very detailed data that scholars have been putting together is it's the pulling apart of the top 1%, the very, very top that has sort of shaped this rise in inequality. so thinking about what that means for economic growth and how that growth isn't trickling down really is one of the most important questions that we need to be tackling moving forward. >> that's fantastic. it's not mere that growth isn't hitting the middle 50%, it's also there's just not enough growth. we're used to recoveries, we actually had catch up growth, catching up at 2%. walk us through some of the head winds that the u.s. economy faces right now. you said there are three. >> yes, thank you. i thought there were basically three issues that i think that are holding back the economy going forward. number one, first of all is the

globalization. when i went to the hill, we never worried about x my news at the end of the ecation, it was never there. globalization is a major issue mpacting us. the impact of the media, the internet, makes it difficult for toll si makers to come to conclusions because they can go to the internet and find different solutions for different problems and different information. i think it's confusing the american public and making democracy. but quite frankly the biggest hurdle from my perspective to long-term growth in this country is ourselves. it is the old -- we are our own enemy. we ask our politicians to provide too much for us in the near term not the long term. as i look at it, the statistics are fine, but the one statistic we would focus on is after all that's been said and done, we're still focusing on a 73% of

g.d.p. public debt and that hasn't changed, even in the projections going forward, that's more than double what it was historically. and the bottom line is, let's be brutally frank and honest about what we're talking about here. that is basically what's dropping expenditures in this country and causing the difficulties that we have to build up that debt that we know will come to haunt us in the future, another bubble out there, is the bottom line is that it's squeezing out the things that i think jared, you and i would agree to, and that's investment in our future. so we have the social security medicare, medicaid basically driving it. let me just finish by saying that with that debt growing the way it is today, because of those programs, even though mr. von holland suggested we -- basically it's only one third of the budget. that portion is getting squeezed, so the fastest growing component of the federal budget will not be social security, medicare, medicare in the near

future. it will be paying the interest on a public debt, a 19% annual rate of growth. that to me is the biggest danger going forth. that is the headwind we'll face. >> bill says we want too much in the short term, not enough in the long term. people in washington call it budgetting, i think, probably. people look t of at deficit hawks and they say aren't you happy? and we're talking about this a bit backstage and you said, we got it all wrong, we did too much in the short term, not planning to do enough in the long term. walk me through that thinking. >> so on the very beginning, go back to when people started talking seriously about fiscal policy, when simpson bowles came out with their recommendations and people turned their attention to the issues. i would point out the first irony when people started focusing on this, it was right after the financial crisis and we hit deficits that were a

trillion dollars. people then would say you must so worried as a deficit worrier. the answer is no, that was a very appropriate time to have trillion dollar deficits right after the financial collapse and that's what helped it not get worse. the concern of course is the longer term debt is on an unsustainable trajectory. what we've done, what we pointed out was you need a blueprint for a medium and long term debt consolidation plan. take a decade where it wouldn't make changes in the first years, when the economy is still too weak. but it would take place gradually. you heard doug talking about this. when you're making changes to programs like social security or health care programs, you can't just spring them on people. you need to put them in place and change into them as gradually as possible. that's what we did with the retirement age last time. so ideally that's what you would have, a plan that has short stimulus, gets krol in the debt in the long term. i think, i mean, one of the biggest challenges facing all

of, creating all the problems is the political dysfunction in ashington. as a result, the changes we've made so far to the budget have been basically the opposite of what you would want to do. we did raise revenues, but we raised them by raising tax rates, instead of using the opportunity to start the discussion that they have now started, how do we fundamentally overhaul our tax code. are there ways to broaden the base, lower the rates which would help growth and actually keep the tax code as progressive as it is or make it more progressive as part of income quality. but we did it through rate increases which i think makes things more difficult. more damaging though has been the sequester policy and the ongoing squeezing out of disregulars anywhere spending. this is what people talk about when we don't need deal with entitlements, those are down the road. if you delay those, as you have, the result is you squeeze out

other parts of the budget. we've been doing that, not just now with the sese quest urg, what we have is basically upside down where we are focusing on that and right now we're focused on bringing the deficit down in the short run. we've done nothing to deal with the long run. the one hope is that health care costs are growing more slowly but we have no certainly that will stick. what we should have done is the reverse, which is allow for a lot more fiscal space to grow the economy in the short term while dealing with those issues. there's still plenty of policy solutions to do that. we know how to do that, that's not the challenge. i would go back to the political point though. the political difficulties of one, there are no more actions forcing moments, the fiscal cliff is gone. two, these are really difficult choices to make. nobody wants to do any of the real policies if you have to. three, it's an election year like it is every year, so nobody's doing anything. but four, the parties are unwilling to compromise.

the only way that a bigger debt deal is really going to be able to tackle these challenges is if everybody feels like they've been part of it, everybody's been giving something. the upside is a plan that will deal with the debt and help grow the economy. anybody who studies washington one bit right now knows we're in a really tough place to envision that happening immediately. that i think is a huge challenge here. >> one thing of what maya is saying and what other panelists are saying is that the people in charge of the recovery, in charge of the economy are getting in their way. you've been blogging about this for seven years. how is it true in the financial services industry? >> well, actually, i want to step back further than that. which is, i live in new york. when i come to washington, d.c. do i need to talk in this kind of voice? is that better? should i talk like that? when i come to washington, d.c., i live in new york, when i come

to washington, d.c. for these kind of discussions, i have this -- and you'll have to yell at me. i have this feeling that i've versailles in 1780. there's a lack of what's going on -- my esteemed colleagues have been talking about inequality. but we've got a recovery where the top -- have pulled away massively. the top 25% is doing ok. the bottom 80%, they don't have savings, a lot of them are working part time jobs. e have seen hours, everybody saying job numbers are good. the hours have collapsed, shrunk to an unusual degree to what's supposedly a recovery. seeing more and more part time work. job creation has all been at the

bottom end of the income spectrum. and, you know, to widen the frame we have basically been running a 40-year experiment of neo liberal policies, of deregulating markets, supposedly businesses let the private sector do what it should do. what have we seen? e've seen increased in crisis, increased behavior, not just by banks but frankly the health care. we see a lot in the health care industry in terms of literally vioxx marketing a drug where they knew it would increase heart attacks. when vioxx was taken off the market, you saw a change in the u.s. death rate. the overall statistics moved. so we've had significant -- sorry, applications were reduced. that's a better way of saying it. we've seen significant behavior in the private sector that is

destructive. when you look at for example, the stock market. everybody likes to think the stock market is used to raise capital for companies. since 1985 companies, 1985, corporations have been net buyers of stock. they are not using the stock market to raise capital. they are using it to prop up their own prices, and that's been increased with the fed zero interest rate policies. companies are borrowing these super cheap rates and bying stock. that's one of the reasons when you saw stock markets fall in the ukraine crisis, they didn't move much in the u.s., that's because of the corporations. the corporations were buying their stocks that day. we don't have a can't list system that is working anymore. and so this idea that if we step out of the way and let government companies invest, they aren't investing. they weren't even investing in the last expansion. they we are net savers in the last ex pngs. and so we've got incentives that are broken, all the way across

the system. we can try to dial, twist the dials in washington. but until we actually fix basic corporate government structures we're rearranging chairs on the titanic. >> it can be fishy when the person talking about corruption is the only person whose mike goes out. [laughter] i wanted everybody to know that was not planned. completely innocent mistake. now that you have a mike, you have a voice as well. jim, do i want to talk about the future. you know, so many periods of economic growth have come from sort of, we had a manufacturing expansion period. even the last 10 years frankly, was a housing and debt consumption fuel recovery after the brief recession in 2001. a lot of people look to industrial policies to solve some of these problems. they say the u.s. needs to get behind a certain sector and push

it forward and that will create the sort of jobs we've lost the last 30 years. how do you think about building a smart industrial policy? >> well, it's well known that industrial policy is a dirty word, of course, unless you live in germany, japan, south korea, the european union, in which case it's different. but in america, in the past, we have called it national economic development, and i think it's been pretty spectacularly successful and it's worth as we look to the future and the dilemmas of the present, looking back to such spectacular successes as the eerie canal, or the trans continental railroad, or the internet. run thread running through all of them is they're precongressional budget office. if the c.b.o. had had to score -- would have said what a catastrophic loss of money, huge loss of revenue, we couldn't possibly do any dynamic analysis and think of any positive benefits to come from the canal or the railroad.

so i submit that a big part of the problem you have is that we're crippled by static analysis scoring system that simply destroys as a matter of implemented policy any idea of vision. and so, let's take a practical look. maya and others mentioned health care. let's talk about how vision in the past has worked to save money on health care. in 1938, president roosevelt created the national foundation for infantile paralysis, a noncatchy name that was organized against polio and when they started doing public service announcement on the radio, the line was send your dime to president roosevelt. nd the comedian eddie an tor heard it and said oh, i get it, march of dimes. it was a public private partnership in the best sense of the word and over the course of 16 years from 1938 to 1954, they

worked on the vaccine and ultimately hired -- they had the vaccine, the first thing he did was inject it in himself, and his children. and then he went to president eisenhower and said you know, i think i've got something here and he said well, this is really important, polio is a scourge. i have now decided, this is the president speaking that 1.3 million school children, are now enlisted as america's polio pioneers. you're all going to get the shot, the vaccine, the rest is history. it was a collosal success, forget the human nature, human sprest and empathy and so on. according to one institute, the government did a study in 1950 said if we project future cost of polio to the year 2000, we're

looking at $100 billion a year and wheelchairs, iron lungs and braces. and of course the answer is we're spending zero, at least in the united states. again, there is no way that this congressional budget office ever would have seen that coming. you can do similar analysises of the budget health care savings that come have saving money on aids, on heart disease and of course small pox which has been eradicated in the last few decades. so the point i'm making is not only is a c.b.o. a bystander to this process, but part of the protagonist of making the problem worst because it refuses to define all issues, including health care issues as finance issues. we spent the last quarter century wrangling around on health insurance, clinton care, obama care. you can say what you want about the merits of the the program, what's unmistakeable is we've made a massive financial extension to our commitment of people's health care without a

similar scientific commitment. the number of new drugs apouffed by the f.d.a. has plummetted. the antibiotics has really plummetted. so, experience now we all have of minor surgery and hospitals is a scary thought now because you think you might get an infection and die. u.s. congressman said his cousin left for a knee operation and ended up dead. if that's not a cause for action, what is? the biggest cost overhang staring at us is alzeimers. it is a $200 billion plus hit on the economy now, headed toward a trillion a year by the mid century. with a cost of $20 trillion. you would think that if somebody were working on health care policy and health care finance they would be thinking look, nobody's health insurance plan, whether it's peter or paul ryan's or barack obama's anybody else is going to be much good if you're dealing with tens of millions of people being

warehoused in 24/7 care. forget humanitarian issues. i was talking to richard last night, and he is, like many other people in his shoes said you can't believe the miracles that we're working on that are coming out of the labs and stuff like that people are dreaming up. i said i don't doubt it. history shows though that the valley of death between a medical discovery and a drug is pretty long and wide, and again, in this town, the f.d.a. and the trial errors, hipa, nobody will care. it just doesn't register in the political community oh, that was the problem. it was a shame that company or that entrepreneur worked so hard that would have saved people's lives and it never happened because the f.d.a. turned it down. you would think if we were to take the hamiltonian vision of this and say look, we obviously have a severe supply side

problem on the medical front, like we have too much regulation, the f.d.a., trial lawyers. and we also have a demand site problem. -- there is something like an alzheimer's drug, or something like this in certain areas, if this is a crucial national priority, with the pentagon buys airplanes, we need this drug can -- drug company assistance. but instead the pharmaceutical companies take their chances and the fda says no, that is the end of it. wants anpentagon aircraft carrier they put out a contract, for the companies and they get it done. including all the regulatory systems. health care is far and away the most important issue that is being treated as a strategic

issue, not like building canals or railroads. thank you. [laughter] [applause] >> there were some comments made to the right. i will try to do this the best i can. this is more optimistic than and ahis is coming from lot of the comments resonated deeply. all, let me say where i agree and disagree with kind of the fiscal thrust of bill and maia. this bill is exactly right.

we americans want this much and we are told that we can get it for this much. as long as we are told that, we believe we can get it, and that sounds pretty good. as long as we do that we will have the problem that we have. i think this is a very important future, and the folks like maia and bill and their organizations can help, avoid that in the long-term. where i strongly disagree is when i think of the problems facing the current job market, and the current income and wage package of the vast majority of working americans, problems i have been working on for 20 years, and have seen only one period where they got better, for a new york minute, there is nothing -- those problems, that it should won't be scratched in

the slightest by doing something to reduce the debt from 73% of gdp, to 55, 40, whatever you want in the long-term average. i suspect my colleagues would agree with me. to the contrary. term, itar or medium may go the other way. i think it is curious to be on says, weels, everyone pivoted too soon and it is not my fault. there, isomebody out am not pointing fingers because i don't know the answers but somebody out there, and it was thise, helps to motivate early pivot. and so i am very wary of trying to address the problems with the folks on this couch, that they have talked about.

i so i wanted to bring some of this together. when bill talks about globalization he is right again. you can correct me if i am wrong -- this is the trade deficit. was talking about large, persistent trade deficits that have been a drag on growth for many years in this country. this is not a protectionist or anti-free-trade wrap. i am in favor of free trade -- free-trade. but because we have had this drag on growth, this has happened because our trading partners to not practice free-trade. they manage their currencies to avoid that. that is what i'm getting at in my final comment. as thesehat, as bad with a veryound, compelling structural analysis of how screwed up different markets are, product and pat fullts, all of that,

employment, truly full employment, and tight labor markets, actually have been shown, in fairly recent history, and i am thinking about the latter 1990's, to counteract many of the negative effects we are talking about. including the deeply embedded inequality straight -- inequalities. achieve full equality -- these are not have love traction right now, i have a lot of ideas on how we can get back. by achieving full employment, and giving workers more of the power that they labor markets we had the last 40 years, that would offset a lot of the problems that we have articulated. >> can you respond? >> states rights, how do you respond to that?

--there are 2 clear debts one of them is in the midst of, -- we are in the midst of, the level of entitlement spending has not already been freezing out -- has artie been freezing up others -- and this has a big affect on the level because the squeezing out public investment. this affects where we are today. that trend takes a long time to reverse. you can't change medicare quickly enough, to go back and say it used to be the reverse, this is more investment over consumption. that has changed the way we make commitments down the road, and it will take a long time to reverse that. if you have something unsustainable and go badly -- you want to get out ahead of it. that is part of the historical average. this is higher in the future and

it means that it is certainly not the only priority, there are many economic priorities. economic growth is the overall priority here. this is better for the country that has been in the past. one thing that will help grow the economy is getting a hold of your debt, and this is ensuring that you don't have a debt crisis because you did not address the problem. is not insignificant, and i don't think it means you should not deal with the other challenges. the problem in washington is that we comment allies -- compartmentalize the issue. we need people who believe in all these different things instead of just doing growth or income inequality. they are all interrelated. >> sorry. a largey, we gave you summer of issues asked questions about. the first question is coming from right over here. i my name is patrick malloy,

am a washington lawyer. i was a central banker during the 1987, 1988 period. i want to talk about what they said, we moved from stakeholder capitalism to shareholder capitalism. hadanies used to think they an obligation to their workers and we have the obligation to the shareholders. out, anded tensions squeezed down wages to increase shareholder value. the other thing is that as we enter the global economy, other countries saw what was going on but the incentive to underprice currencies with low subsidies and labor cost, to make our companies increase profits, for the show levels -- shareholders by chipping back. this led to the massive and ongoing trade deficit. the other point is that this

also be the budget deficit. because production used to be here -- and now it is in china, not paying taxes here, and workers who used to pay taxes here are now unemployed. -- and i means to me think that sherrod wrote a great article about this a couple of years were couple of months ago, he said the real problem here that we should be focusing on is balancing trade. that the trade deficit should be the focus because once you deal with trade -- to stop the outsourcing -- and including tax policies to incentivize production in the country. that will be the goal to help us and a national strategy help people. >> do you want to respond to that? >> i appreciate that comment, thank you. a couple of things i want to add is the picture that you are

in very dark colors, is actually a little worse than you suggest, in terms of the outsourcing. there are a lot of companies that outsource and i actually have their staff tell me that they outsourced when the case was not very strong. wall street likes hearing this -- there is no reason they should have ceded the furniture industry. other issue, i just want to -- it washat, is that related to your comment. politics,e industrial we have a very subsidized -- financial services industry. it is so heavily subsidized, it should not be considered a private industry. we should be regulating financial service companies like utilities. conversation you cannot even indulge in, either.

>> we will go over here. >> thank you. stern of the paula stern group. i want to talk about industrial policy and get back to jim's question. now i talk about the health andstry, and the economy, the role that the defense department and in particular, darpa has played in bringing us out of the manufacturing economy, into the information age. the role that they have played in the private, public basicrship, seating research. this goes into semi conductors and the internet. smartphones, you name it. should we be thinking more about darpa build on that

model? so as to assure that when we are in a mode where we are exporting, we are better equipped to do this. i would simply add on this trade issue, we have not even talk oil, thergy, gas and exports and what that will be doing to those numbers. i would not prolong those forers to provide the basis too good, washington-based policies for growth in this economy. >> it is supported by the institute for energy research, a conservative leaning research oil and natural gas under federal lands and water. trillion, a

statistic worth taking apart and criticizing and so on. this is what we owned and -- it is hard to think of a better place to spend the money on than dartmouth. the longest-serving dartmouth director, in its history, said, look. seven out of eight of our projects were total failures. eight, a lot of the drone technology -- this was -- these were successes. he rankled me at the meeting when he said this is touring stuff that is not interesting. because the case studies of how people do things, and the even the economists have a hard time figuring out the value of that. and that is up from zero.

thanks to the magic of moore's law and the national science foundation and silicon valley in a lot of consumers and everything else. this is pretty spectacular stuff. but there are others to be had -- i'm in support of the regulatory tax policy and so on. now, with this economy that we have, with the household is $80.6 trillion. this is still a lot of money. theree 80.6 trillion out as a pool of potential capital. have the cbo reading list. this is more powerful than the existing supercomputer.

there is a potential economic growth. of the budget game, if this quantum computer -- there is the tax revenue that is increased, in china. how much does this quantum computing benefit might prove to be -- might prove to benefit every american and have a strict policy for moving manufacturing across and all 50 states. further, and that is -- not that it would only be good politics, i think it would be good economics. democrats and republicans could take credit for ushering in a state of quantum computing for ohio, they'll be at the top -- and i think they would deserve to be in the pantheon of people

who invested in the railroads and interstates, and the cell phone and tv network. thank you. >> i think at the pace the recovery is going, i think the internet is cool. we have one last question. >> my name is martin apple from of scientific americans. i think that what you have all don'taying, is that we think long-term in a have been doing is intersecting all of the and therm thinking -- issue that was brought up, the things that are most important and the raising of the issue of alzheimer's and the other issues, tell us that good, fundamental research, and good, fundamental technology can rebuild what we think we want to have. but we still have to understand what the real problems are. azheimer's will cost us

trillion dollars in so many years. lima change could cost us much more but we won't address that. and other issues around the globe are the same kinds of things, so we need to look at the whole of science and technology, with all of the political and action systems and find a way to get them to work together by having the power to think long-term, so that we are not driven by the thinking that we should be triggered by. this is not quarterly because of shareholders. who are the shareholders? most people are not investing for six months, to one year or many years in their corporation. they are trading 90% of the shares every day. so think again about what you think you know, -- >> who wants to take a gander about what they think that they know? yes. >> you need another bite at the apple.

let's think very quickly. let me do this. this is a little off base. i am probably the only one up here who is a cbo alumni. let me just make one quick observation. about cbo. -- other people -- i'm glad it is there. and i alwaysou say agree with what you have to say but there is one thing that concerns me about the dynamic scoring. scoring,for dynamic and what martin talked about in terms of science-based research that acquires -- requires application and investment. my difficulty is this. this is my second problem. the ngo is a lot of this. program, the wic program.

i was told to put one dollar in the wic program, i would get three dollars from the same program. there is not an advocate in this town that won't argue to invest more. that is what surprises a little bit about what jim has raised. if you go down the tax policy route, the dynamic route that we will increase revenue by cutting taxes, but the same time, what you are talking about is increasing spending because someone will argue that it will be a return on the investment. that, i just don't think policies established on capitol hill are science-based enough to make a decision, and for you, there is more spending and i am all for the investments. also think those investments should be offset by an investment in long-term expenditures in growing the economy. >> one more brief comment. tweet -- linked

comments.ength >> we are in washington. i thought this was exactly right. it is a big mistake to think that we can say, and write rules that say, here is the share of gdp that we can devote to outlay going forward. there are various rules being conceived of by people who are nervous about where the budget is heading. they want to lock in the historical outlay of 21% of gdp. climate change itself may make that kind of a historical average a terrible idea, with the kinds of investments that your question suggested. >> i have to get in here. i don't fault the cbo for existing, they can do their thing and this is fine.

it is just that the width of the french adapted -- french said, war iss they too important to be left to the generals. , would go to the budgeteers and the conflation of the assumption being that the only thing that really matters about the american economy is the deficit, with a gdp ratio, or something. years, this is actually creating jobs across the country. sitting around thinking, as he or she makes entrepreneurial calculations about what others are thinking about customers and regulations and capital and so on. directay be some very relationships to the deficit and what they are doing out there, in anytown, usa. the main point is do they have technology available to them, and a larger political vision, and the budgeteers would say,

that boring subject of american history, this actually animates us and makes us optimistic about the infrastructure -- and we will get the benefits that we need. now,th policymaking right it seems too important to me to be left to politicians. one of the points i like, and i like the point together that we don't have the long-term vision in any of these areas. and a small division i would think about, i think it tries to do this -- how we have some institutions that are more impartial, that is why we do commissions sometimes, some kinds of ideas -- how do you o-crats orechn experts about what will grow the economy the most and what will be the most beneficial tomorrow. i would say that there is less room for that right now. but this is a lack of trust in what politicians are defining as

things that would work in certain ways. that is one of the biggest roadblocks right now. >> i would give you the red light and we could have a spillover session, and then go watch them argue right behind that exit sign. thank you so much, for a really good panel. [applause] >> terrific panel. -- jaredike to thank )--nstein and even smith --ev eve smith. she is fine and just telling you -- as applies to everyone but our wonderful viewers on c-span. you will have lunch delivered to your seat at 12:25. if you are not at your seat, you will not get lunch. and the former secretary -- of trade for asia, asia pivot, economy. bass, if you are

over there you will not get lunch. look for one of these empty seats and people in the hall. we have a whole crew of people over here i want to feed. so my folks over in this corner, we will aggressively find people to feed and make sure that you are all fed in the next round. i want to say something, isn't derek thompson fantastic? do you want him back for another session? there you go. let me say a few words about grover norquist. the president of americans for tax reform. he has been called on 60 minutes the most powerful man in washington. how many of you watched stephen colbert air, the "colbert r eport." colbert had him on with many occasions and said, imagine we have taken all of our grandmothers. all of our grandmothers, and we are going to put them in a container underground and smother it with honey.

and unless you agree to raise taxes, we are going to let out the fire ants. and go after our grandmothers. he said, will you give in to raise taxes. grover said, we have a lot of memories and photos, and we will rest well. just on this one thing. he was in my office of the new america foundation and he stopped in on one occasion, he had this big lack case. the top of the case i just happened to see, it was the oath, the oath signed by stephen colbert air. he got stephen colbert to sign the oath. but can you imagine? i never look in the case, but to have that case with all of your secrets sitting in my office for at least a day and a half. i thought i would auction on ebay and see what i could get. without further ado, welcome to the stage, derek thompson, and

norquist.two, grover >> thanks, everybody. one of the themes of the last session was short-term and long-term thinking. it was sort of scattered. literally go short-term to long-term for the republican party. starting most immediately, with camp'san't -- david tax reform, which is revenue neutral, and i understand a lot of people in the public and party said they can't support something that raises taxes this much. when you look at his plan, what do you look at as the positive or the negative? rates,aises -- it lowers gets benefits down corporate income taxes, 35% plus five percent average.

to europe, their averages about 25%. it gets down to 25% but when you look at the state -- we are still above zero. this is a step in the right direction. -- theya administration said they want at least $1 trillion over the decade any tax reform, to try for a tax increase between $1.4 trillion. he does not do that. the challenge is he has the appreciation schedules. going to the full expense. the tax code, if you got rid of all of the deductions and deficits, and the depreciation schedules, and just have the expense of something when you spend it, if you buy a machine, it appreciates over the year. this is a missed our -- there are some missed opportunities but the senate was never going

to agree with something that weryone would sign it -- should be happy it is not more than the discussion draft. >> the issue right now in lady will talk about fighting is the minimum wage. employ people a certain amount. and there is the earned income tax credit. they seem to be saying that maybe we would play with the earned income tax credit a little bit. maybe we could alleviate some of the problems of inequality, that we see by making these families a little bit richer. how do you see the benefit of the earned income tax credit. >> when you asked to write the check for people, this is not a tax credit. money,sked to spend more obama has kind -- has kind of spent more taxes. are allment that we focused on income inequality,

the government is capable of fixing or has -- the president is the president for five years. if he wanted to the minimum wage he could have done this in your 1 and your 2, when he had the super majority. he did not want to. this burning concern that he has is not true. wey talk about this because have had 50 years of the war on poverty, the government could not take -- not make people not poor. they don't want to talk about we have five years, but shoved away jobs by spending a lot of money. metric,here is a new which is making everyone in the country poor, and still have less income equality, that government is probably capable of doing. i am not sure that you want to do it, but you could make everyone poorer. >> what you think of the earned income tax credit, is this useful against income

inequality? >> i would not use the tax code in that sense because it makes you spend money -- make it clear what you are doing and have a vote on it. there is a certain amount of aud,ed -- brought -- fru and they are not able to go after that. addresses that doubled checked going to the belief in the conversation. >> a lot of people talk about how frustrated they are with the act that nothing can be done in washington. he brought up the good point that in 37 states you either have an entirely democratic majority aren't highly republican majority, and the house and the governor level. to compareeful way the trajectories of these dates going against each other. you draw any lessons from that? >> absolutely.