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.

in washington you have the house and the senate that want to go different directions. people will talk about the good old days of bipartisan compromise, by telling you how old they are. because it is true that 30 or 40 years ago the republicans would get together with the democrats and they would argue about today's topics. all fights in washington dc work bipartisan. going up to nixon. lifetimeagan's nice -- the two-party sorted themselves out. lon wants a more constrained view of the government, one wants a expanded view, and they are heading different directions. one wants to go east and one was to go west. what would compromise look like? government, bigger and we have revised between bigger and much bigger credit each guy would go back to his corner and say you know, i got is a really good to have more

than they wanted or less than they wanted. we were always compromising for bigger government. which was not the direction that we want to go. now we have one party that wants to go to less government, once that wants to go to bigger government, and they're not going to agree. each one can say no to the other. to give you some idea of you could quantify this. funds that invest when congress is out of session and goes into cash when they are in session. is thaton they do this for 30 years, when congress was in session, the stock market was up about 1.6%. when they are out of session it goes up 17%. 17 bytes better when congress is not sitting because you could wake up in the morning and something bad had happened. longer has the advantage because for the last couple of years at, at least since 2000 little when the republicans actually held

against the push for a tax increase, and the markets were convinced that nothing bad was going to pass legislatively, there is no discernible difference between when congress is in session and out of session on how the stock market moves. that give you some sense of the advantage of gridlock. the markets are not paralyzed whenever congress goes into meet level, we havete the opposite of gridlock. 24 states have republican governors and republican house and senate things to the redistricting. republicans have held those legislatures for a decade. the democrats were asked, would -- like one land letter to one landslide or two, and they said two. they reduced to did for 10 years, and so they got to landslides that lasted for four years, and one landslide that asked for 10 years.

we just in washington where tend to focus on congressional redistricting, but for state legislatures is probably even more true. the democrats redistricting did make illinois at bill -- california and bulletproof are democrats, and the 13 days that have both legislature and governor. the republicans have 24 states. republicans have half the population live in another state. the democrats have a quarter of the population living in their states, at a quarter of a places like becky and i over the legislature is divided. 13 states, democrat-controlled state going as quickly as they want. 24 states becoming texas or hong kong. they are moving in very different, some more rapidly than others. statesingle democrat raises taxes, and all the republican state's top cut taxes

unless several years. you see several differences on how they treat public-sector unionism. spending,taxes and markets for tax reform, by 2050, to get all 50 state to abolish the state income taxes. nine have no income tax now. north carolina and kansas, republican governors, both houses, have announced that we are going to zero. they got about a quarter of the way there so far. watch aerosonic of what oklahoma got weird word to see more movement more quickly. and then we can judge. if you think that more government spending and higher wages make people healthier, wealthier, and were successful, and the economy will be better cover than he can do it all loads loads of good enough to will behington -- better. they can do that. you do not have to wait to washington.

filibuster proof majority have they want to reform the corporate tax code they want to fix obamacare. they seem to be troubled by the same gridlock that troubles the administration. to worrying about the changes that you want me to the way that the national government treats the national economy? >> we have a senate and house race in november. it looks very good for the republicans, with the number of senate the that are held why democrats that are engaging. -- are indeed your. danger. 2016, there are a number of seats that you worry but in illinois, perhaps, which is one intent but it which is not only republican territory. 51 is not what you're looking for, 54, 55 is what you're looking for.

the house will strengthen going forward. the replica guns have repetitive it is for -- the republicans have better candidates than the 10,012ts, much more than -- 2012 and we were sloppy about running for senate. not being disrespectful to anybody's arsenal -- personal to go withuld refer the scaling or something. [laughter] >> you said greater than 50%. what percentage would you give? what fact are -- what factors do you think are behind the republican wave that is coming in november? >> the democrats who are sitting in republican states. west virginia is technically a blue state, democrat of hundred, democratic house, democrat excitement.

democratic governor, democratic house, democratic senate. 50-50, the west virginia senate, we will take that senate the force or -- for sure. in montana, the cumbersome and has been running for that seat, and that will be a republican pickup. arkansas will go republican. so will espn a, so we'll north carolina -- so will louisiana, so we'll north carolina. i just left one of the seven out -- alaska. the republicans just to make sure that they take one and not have a third-party, and then they get to win. those of the 70 need to get across the finish line. but now the republicans are pulling ahead in michigan, so that in that race, you have a serious candidate in new hampshire, in colorado, both in play. one out of three shot in those. you add those together and you start to worry.

you worry about georgia, if they a warlock. could you define this for the audience? >> one of the candidates had decided she was a which -- witch, and she was good enough to defeat the sitting republican. but she was not good enough to get across the finish line in the general election in delaware. woman, probably not a witch, she was probably making that up. [laughter] optimistic as republicans are but 2014, changes a little bit because especially on the left there is a lot of days in the clinton machine if she does announce the extremely formidable race. take us through the top

candidates for the republican party party for 2016 and the strengths are? >> this field is so much superior to 2008 and 2012. you really had one of two people who are running for president of the others were running to be a radio talkshow host or marriage counseling. or to sell books. but they were not actually running for president with a -- but they were buying a lottery ticket because maybe they would primary, and then the press would come and they would get attention. money,n they would raise and then they would get a campaign together, and they would get a campaign manager and all the things that should have happened two years earlier for a grown-up campaign. this time away aren't we have six people who are either standing on the stage already, or good step up on the stage and no one would laugh them off of it and ask what you are doing. five governors, one senator. start with chris christie, he has had some challenges, and

maybe he does not make it, but he writes himself, he will be a serious person and a good raise the money, he has the capacity and the name to both raise money and run, and a narrative of successes in terms of reforming a deep blue state. a constantr was attorney blue state red. reformed the pension rules there, they report that union rules. every year they have to have an election if the unit was to keep going. -- if the union wants to keep going. your money oute of your paycheck, they have to come and ask you for it. teachers are making $50,000 in cap and that was taken out of your paycheck by the city or the school board, and given to the union, and he never sought. not since you and your pocket until the union guys come and say can i have $1000, and you're

allowed to say no. oddly enough, several do. he has dramatically changed the saint -- the state. every republican has made a contribution to him when the unions tried to recall him. he is the only governor that defeated a recall and got reelected. down to rick perry, he faltered last time because he should not have taken pain medicine before debates. that said, he spoke with the conservative legal action conference, and the establishment press for saying he is agreeably articulate. he is when he is not taking pain medicine. he is a very successful governor for 14 years. there is a real narrative there, good ra -- it could raise a

bunch of money. the governor of louisiana got an ethics law that minnesota would have been pleased with past and louisiana. school toys for 380,000 kids -- school choice for those kids. schools are available for a buddy who wants to take him up on that. he may well run. jeff bush was governor for eight years, perfectly competent regular republican governor. he would be a candidate who could step up to someone would have to fall over for him to step up, but he could do that. and then rand paul, who starts with 15% or 20%-based both and all 57 states. there you have a real opportunity as a senator.

it other senator, it is very different -- very difficult to pass this bill. it is increasingly that they don't pass bills. [laughter] speeches, but if you can compete with the guy who could wake up tomorrow morning who could do something edges on the front page of a major newspaper and the sugar is awfully difficult to compete with that. >> you said christine, walkabout. , bush, paul. is there a top three? >> no, i think the good news is that all of those guys are being tested on whether they have glass jaws or not, and most of them have done quite well. kristi is being run through the ringer again. and he makes you will be tough as nails, if he does not make it, that will be fine. i think he has covered well in a difficult state.

unfunded liabilities, and done that with a democratic house and a democratic senate in new jersey. real progress there. brownback ofked kansas. he could have an exciting legislative term just as scott walker did. back in 2011. that could put him up front. other than that, i do not see a governor that would work within that would do the kind of a mage and back you say i know the six guys a really just think of a but look at the new kit and -- new kid. >> there was a poll that came out at the end of last week that looked at some trends among millennial's. it found a couple of things that i think pertains to this conversation. not, like tohey do

identify with labels over the independent, most of them voted for obama. the ba percent of nonwhite millennial said of the it'snment that it is responsibility to provide health care. 71% said they want a bigger government with more services. these are slight majorities, filibuster proof majorities. does the republican party have a serious demographic disadvantage moving forward in the next 20 years? what is the best way to think about this? >> you need to look at demographics in two different ways. democrats look at graphics like race, ethnicity, and gender because that is what they think of. there are ways to look at it, self-employed people, the number of covered workers versus rented sector workers to people who ow

n 15% of stock. health savings accounts, individual retirement accounts, eating more people into the stock market. answer everything with cops, teachers, and underment -- those government employment. it makes you lower likely to be a democrat or republican. you can add into that the other things you can change. states 45t the united years ago, 25 years ago homeschooling was a legal in just about every state, maybe to had it legal. today is pretty much legal in all 50 states. 2 million people homeschool, and they know perfectly well that the modern democratic party wants to take that away from

them. add to that the 380,000 parents $500,000 voucher and louisiana, $2000 voucher in louisiana -- in arizona. we are building out schools and structures that allow the letter, but they can go to a different public school, or the one that they go to might be nicer to them when they walk in and say i have $5,000, and i want to know how you're going to treat my kid this year versus last year. they will treat you with respect, which they will not do w, think about how you're cheated when you go into law -- go in to buy a car versus the department of motor vehicles. i do not think they will ever come back in the state for school choice has been one. just as labor did not come back in great britain until they fundamentally changed their view about allowed people to buy the

console housing over the public owns. and people did. the bolsheviks ran against them, and they said they will steal everybody's houses, and this will be great, and they got wiped out. people who where were labor voters wiped them out when they threaten their kids and education. 30 years ago there was very little concealed carry issue. able tollowed being carry a gun on them in their purse. have concealed carry permits. who has made that decision is a different human being than the one who says that we have a government, and if something goes wrong they will draw a circle around me and this

will be helpful. in person says i will be charge of myself. try to take that away from people, try to take that away from people. that's what the democrats always get in trouble when they talk about gun control because they do not understand their threatening something that you will consider important. we can, by expanding liberty, and that is where half the country that lives in red states are doing all of these expansions of freedom, and the immigrants are voting against that, and we would not want you to have that, and if we ever get active power wisconsin and we will take your dues out and you will never see it, and you do not produce a no, and we will go back to the way it was. tot is not a real self but -- sales pitch to go to people. once you give people more liturgy, the dates of major who they are -- liberty you changed the nature of who they are.

i am not sure that the challenges that you mentioned continue out. at 40 not the same person as we were at 20. that said, i think a lot of needs to bearty much more aggressive in being pro-immigration and we need to be taking all the smart people from around the world and when they come here to get a phd, i'm not in favor of not letting them leave, but i'm in favor of encouraging them to stay, and stealing their airplane ticket home. we want all this talent. there's a lot of people in a lot of jobs that we need more people. the reason that we are the future and china is not because we are allowed to have kids and a lot of immigration. >> we have one more question. make it great. >> chairman cummings. you just promoted

liberty and individual responsibility. how do you feel about corporate responsibility? companies, who through negligence or error do not -- dump chemicals into a westward bend to river and declare bankruptcy? how can our economy deal with situations like that that does not just fall on the government to bail them out? reasonable to have loss so that people who pollute the neighbors property paid for damage they do, just as they were in a vehicle. real damage can be done. i think it is very important that we ask individuals and businesses to be responsible for real things they do. reform, whereort the trial lawyers have been getting rich going after people

force the that the guy who owned the house before them did the some of the stop where you the guy with the deep rockets, again texas has passed a great number of reforms in terms of that reform that have dropped the cost of notable care in the state, more doctors are moving into texas as a result. louisiana is about to pass the same collection of rules. sohink getting those reforms that the billionaire tile reforms -- trial lawyers who save been abusing the system is the thing we need to tap down. it is killing the sector, being very and helpful. very unhelpful. let's reform those so that we realocus on cases of criminal activity. by individuals, or people can

collectively in some company. >> we have one time -- one more question. the guy with the beard? >> guys with beards get to go first. [laughter] you have taken it to an extreme. [applause] [laughter] sunshine press. i'm wondering if he could set would make anrics economy better that is -- what is the purpose of all of these policies? how would you measure that the economy is better here than there? states whereo some the democrats are predominant. do you look at life expectancy? education levels?

how can you tell if the economy or economic policy is better or worse? want to have metrics, if you do not have metrics, you end up with all sorts of problems. i talked to the budget guy when bush came into office. i asked what metrics are you going to use? percentage of gdp? total number of full-time employees of the federal government? what is the metric you're going to have to maintain the cost of government. and he said we should do something like that, and they never did. it wasn't on the list of things to do to measure the size of government. what are you trying to get to? is one capita gdp measure. people decide to be monks or warlocks or something, and they do not care about that.

some people will be rather them to have more than last -- some people would rather have more than less. few people are quitting jobs and few people are moving. in a vibrant, dynamic economy, where people are leaving their jobs because they're someplace else to go to, they move because there is something to move towards. when you look at all the bad numbers not the employment levers, the number of people force, we are, -- not moving as much as we used to , we not eating jobs as easily as we used to. it was not what people can come to a job -- moving jobs as easily as we used to. you do not want people handcuffed to a job. generally, there are measures, and that is useful.

we have done some fine work on earned success by what translates into happiness. winning a million dollars does not, surprising, make you happy. people will make a lot of money, but because of lack of the draw they do not get to be happy because they're not sure they are earned it -- have earned it. happiness through money is probably easier, when you have money as the metric. >> thank you very much. [applause] a big thank you to grover norquist. what is our funniest guy? >> washington, d.c.'s funniest celebrity. >> he competes every year, and he wins most years. he has drafted me in from august

through september. i've gone back to watch who has one in many of these cases. one was john lovett, present obamas funniest speechwriter, and he impersonated arianna huffington. grover won last year for impersonating dick cheney. and my strategy this year will be to impersonate grover norquist. we look forward to seeing you all there. -- thank you very much. [applause] the food is coming out of and i want to say a special shout out to my friend that c-span. , theyere really hard are about to depart. i want to get these guys food because they are leaving in 15

minutes, and another five people are coming in. these guys back here on the podium, i want to make sure that they are fed. here,'re sitting over you're ugly get festivus of idriss opentable. -- you are not going to get fed, -- annd in opentable 0 open table. they need about the connection between at innovation, economy, and the state. andis on a plane right now, the entrepreneurial state were so good to you would be able to connect by sky from the plane. haveng in the audience, i found a good friend from denver who happens to be a fortune 500 eeo. into safety come president obama -- site seem president obama? ladies and gentlemen, the chairman, and immediate that ceo

. lee mcintyre [applause] we're going to have a discussion about the state, and infrastructure. placement. coca-cola, thank you. i want to thank rolled gold tidy twist pretzels. this is part of your lunch. >> thank you. [laughter] i want to make sure lee is well fed. not pay us, in case anyone is tweeting that, it was just a joke. lee, i thought we might start off with a serious question. you are chairman and immediate past ceo of ch2m hill. why is it not -- >> there were two h's and a c

and a m. they were cleaning up the environment and hill did not want to be h3. just a bunch of names. the founders had a sense of humor. i have been living with it ever since. kepten i first met lee, i calling it incorrectly. i was pulled aside and said, we need to go through a course correction. for those who do not know, ch2m hill is one of the largest infrastructure, broad infrastructure companies in the world. lee help to grow to a gargantuan size. i thought it would be interesting in terms of talking about the economy domestically and globally, what you see as both the opportunities, but also black swan issues out there from your perspective. >> first of all, i really like being in d.c.

the reason i like it here so much is because everyone is so friendly. everyone is so happy. they always greet me with eye contact and a smile. i realize after a while, everyone here thinks you might be someone. [laughter] they're really nice to you for a while. i just took a trip where i went to panama canal where we are building a new lane. it is a pretty interesting project. we have the locks done by a spanish italian joint venture. what could go wrong with that? [laughter] the north america are in the north dakota. andhen i went to miramar the north dakota. there's a real obvious connection between the three. that was a joke. that was a joke. that was a joke. the other thing i like about d.c. is ask questions when i'm here. there's a little the provincial, a little -- the same questions i

got here in the last few days were the same ones that were asked by my mother's friends in the adult community she lives him go, which is in pandemonium and i always wanted to be in panama. they're building a new canal? miramar, is it safe? in north dakota, isn't it cold there? it was the same questions in both places. the town is gotten a little insular in d.c. the other reason they are fridley is because they bring them news from the outside when i come to d.c. i tell them about stuff. they are fascinated. [laughter] so, anyway. >> got it. we're going to enter you into that comedian contest. we've beenthings talking about in terms of what a healthy economy looks like, many people have been talking about infrastructure. some of you were there last

night and some not. we had a very interesting dinner last evening where a lot of people talked about infrastructure. we had someone talking about the importance of and for structure investment in the u.s. from the afl-cio, those from the chamber of commerce who agreed with that. when you have afl-cio and the u.s. chamber of commerce on the same side at a time the business roundtable i think was chaired by john engler, and when he was on that side, how can such a powerful coalition making such a sensible suggestion lose? why are you so lousy at getting the kind of infrastructure investment you think is important the country? >> i totally agree. if you look at the world economy, too, i think it is now $70 trillion and where 25% of that. i think in 20 years, at 3.5% growth, the world economy will be $140 chilean.

for young folks, you'll be working -- not too long, double the size of the economy right now. this is kind of an optimistic thing. but it will only happen if there is infrastructure growth that is proportional. as every study shows, economic development -- >> [inaudible] >> no, there are problems everywhere. the u.s. has advocated structure growth. they blamed it on the gasoline tax earlier, which is part of the infrastructures transportation. that is true, they don't want to raise that amount anymore. so that is the fun for transportation. there is a movement to maybe use mileage usage to fund transportation. the structure is more than that. it is water and sewer and electrical power, data, communications. all of those things. it is pretty clear without infrastructure growth, you will not see that $140 chilean

economy. the infrastructure has to be improved or you will not get that $140 trillion. are we have to get with it whether it is india or china or with thatybody investment is not happening. the reason you have that coalition of strange bedfellows agreeing on infrastructure is so obvious in the united states. the stimulus package back in 2009 did not do a whole lot. .bout $100 billion of stimulus >> did you tell that to president obama? >> multiple times, and he looks at me like, that is not what my guys are telling me. he calls it the three-inch deep stimulus because it was three inches of asphalt spread all around the country, but zero for my estimation, that was -- >> want to do that again? >> just to make a point here. >> you operate, usually when i

run into lee mcintire by accident but usually in foreign governments or rooms in airports around the world, does you do a lot of international work, the one of the interesting things about your tenure there is that you have pulled out of a lot of places in which your operating around the world. so rather than expanding indefinitely, i think you told me were once operating at 120 different countries and now brought it down to like 60 or something. is that right? >> that is roughly right. the reason we did is because some countries will have a hard time advancing almost every country in the world has some similar issues. so then you have to judge whether it you're able to pull it off. >> corruption? >> corruption and bureaucracy are usually in her tangled. to get things done in certain countries, the brick countries, for example, in other places, there are usually 20 signatures

from 20 different government officials you need to have for you can progress, and then you might have a little intertwining of corruption and those 20 signatures. it can be taxation, promises made to people, just not getting things done. so the projects really don't go. we decided to get out of some of the countries were just looks too hard, and focus on the ones where you can actually -- >> > [inaudible] >> north america still the greatest economy on the planet when you could mexico. >> the last time i asked, you said it was the u.k. >> it is really greater privatization. and getting big infrastructure things approved. i do admire the u.k.. they fiddle around and study things for a while, but when they make a move, they make a move. they're building high-speed re d rail, an underground train, not

a subway. they are building a whole new sewer line for london. they get out and move. i'm pretty impressed by how they do it. >> with a working summit this morning before today's conference. atlantic's like that meeting after meeting. we had a guy from general electric, very senior official of ge, telling us they wanted -- one of the surprising things they're looking at on the infrastructure side is egypt is booming for them. people think egypt is a volatile lace. it has all sorts of instability. but other because so much has been held back and there is new demand, or because something else is going on that these volatile places where there are uprisings, part of what the governments are doing is investing in deeper infrastructure. is the answer to your success more and more revolution? [laughter] >> change is another way to put that. a good example.

it is one of the poorest countries in the world. it is been repressed and held back for 60 years. a very interesting place, by the way. i recommend it. it has 135 ethnic groups. you have some religious fundamentalism there. even with buddhists, which is just shocking that the buddhists even have fanatics who are oppressing the muslims. it is a fascinating place. it has all kinds of resources -- oil, gas. you see a lot of the old gas folks moving into the area. it is also a political pond between india and china. the u.s. is interested in kind of intervening in that political pond situation. so it is a very fascinating place. there is a place of change. it might be a good place to do infrastructure. >> the other thing that occurs to me in terms of thinking about another contradicted on issues

often left out our gender issues. i'm sure someone has tweeted that steve clemons is interviewing another white rich men from the midwest or something. we met in aspen at the idea festival several years ago at a roundtable i had the privilege to moderate along with beth broke. ernst & young had just done a study about the impact of women or the absence of women on corporate boards, but a much more drill down study in looking at the economic benefits that came from women. opportunistic that said they needed to broaden. there were some crusty folks who are resistant to the idea. anyone who tweeted i'm talking to another white guy, you're not a ceo anymore and just given the jackie hinman, the new ceo. first time ever at a large-scale

engineering firm -- >> construction firm. 24thrst woman ceo and the in the fortune 500. did that lunch push you over? is that why you went that way? i just want to take credit where i can. >> you made a big difference. i was going to give it to a white male, but decided to give it to her over dessert. company, a while ago, we decided to push women in our industry. i would say we treat women as poorly as we treat the men and our company. and that is why they do so well, because they toughen up and do quite well. we won the catalyst award. i think we're the only engineering construction firm to win that award for developing woman in business. the more we promoted women, the more profitable we became. i always tease the women in the group and say it is coincidental that we have become more

profitable just because they're running the company, but i think there might be a connection. it is a very bright pool. you just don't want to be without it. jackie joins the group -- is appointing it is only 24 women ceos in the fortune 500, but that is double from a couple of years ago. the trajectory is right, but we have a long way to go. >> i was sort of joking, but i think your conservative who is very progressive, which is complicated and may be an oxymoron. very progressive in terms of those kinds of things and, at least in your sector of the fortune 500 firms, a demonstrable leader on the source of leadership issues and inclusion of women. at the atlantic with had a lot of debate about why women still cannot have it all. we have hosted others that are raising these important questions. when it comes to economic inclusion and balance, how

backward is the rest of your industry on these issues? >> we move reduce low. it is a complex subject. trys not just white males to suppress women in the business. i've never been to a meeting in our industry and it was several comedies were guys are sitting around cigars and, how can we hold down women? i just haven't been invited to that meeting. they may be going on somewhere in the building, but i don't get invited. subjectcomplex low -- of women giving themselves the power to succeed, women deciding -- yes, i think i could be the ceo and will run for it. those kinds of things inter-into the equation. >> they're trying to give me the hook. if there are questions, i would like to grab one of these from the audience before we move to the next session. this lady right here in the middle. i don't see who it is. we have bright lights glaring. >> thank you.

cheney with vitamins americans. thank you for discussing the women as the ceo. i have a question for you ever the gentleman in the room. woman feel threatened by who is too smart, too beautiful, and to feminine, and what do you think about the fact that seeybody seems to love to hillary running, for president, i mean, madam clinton, to run for presidency in 2016. in the first creek going from the conservative side -- critic coming from the conservative side was how mr. clinton handled his own affair and not on her own credits. >> we have an economic question for you. what you think about hillary clinton running in the first

guys out of the box go after president -- just give us a quick survey on sex and politics, lee. [laughter] well, i don't know very much about politics, so -- [laughter] a-political and getting more a-clinical all the time and the independence at some point, have to start speaking up in the political system. we do have a very strong wife or kid two-party system right now. kind of gerrymandered. i'm not happy with it. independents will start speaking their displeasure. >> we are at the end of our time before i invite richard vague to join us. i feel like i should be ellen. it is a really good turkey sandwich. tiny twists are

very good. the one thing, now that you're not ceo and when ceos like yourself at the business roundtable spent time with the president of the united states, we often don't get a lives at those meetings. you're talking about jobs and economy and the kind of choices they're making, most ceos won't reveal what they've said or cicely to the president. although steve jobs did. and steve jobs is very hard-hitting. in a way he was counterintuitive because he wasn't really trying to get obamas blessing when he talked about why the iphone would never be built again and the united states, why so much of that -- i'm interested in whether you would share with us maybe the hardest hitting comment you have shared with the president of the united states will stop just give us in a glimpse of these meetings and whether they're worthwhile between the business community and the president.

>> i think the president has reached out, particularly, i think his work pretty well with the business roundtable. forants a vehicle, a voice the business community, and has done a nice job. probably the first above ever heard anyone say the president has done well in the business community. >> he would like to have work medication with the business community and has been improving in that area. himconversation i had with once, just to show you how inept i am politically, it was on the debt ceiling. it was just before we were looking like we're going to have another debt ceiling crash. i told him i thought he should trade keystone pipeline for a vote on the debt ceiling. just go ahead and give that to tea tea party years -- partiers. it seems like it is politically tangled around her ankles. it was just a blank stare.

politically, i am not the world's most finessefull. >> one less item, bill gates -- we all know from microsoft and the gates foundation, spoke at the atlantic last week. he came in and did a form we organized and he made the emphatic point that innovation and economic growth in the future essentially did not depend on washington and could bypass washington. very interesting, provocative comment. looking at the government as the fundamental core building block of wood so much other innovation was built, would -- that would have been -- i would have started with her. does innovation and growth in america, to bypass washington? dysfunctionington's is that something that will keep

the economy -- >> i think bill gates is right on the mark. washington, d.c. is at great risk of becoming somewhat irrelevant. the panel you have before with grover, by the way, that was my dream to be between grover norquist and lunch. selfie of myself between those two. but the panel before, that is what it was all about, wasn't it? that sort of theme of d.c. -- ig great potential think he is right on. that is been predicted for 20 years. big governments would be less important than the corporations and ngos. fulfillit starting to itself. other than on foreign policy. other than foreign policy, d.c. has to watch out. >> ladies and gentlemen, lee mcintire. thank you so much for joining us. [applause]

go enjoy your lunch. here's the mustard. i will hand your diet coke. coca-cola. i'm just joking. i love pepsi, too. pepsi got really upset once when we had too many cokes around. we love pepsi-cola. now, i'm going to reproduce myself. i am steve clemons of the atlantic. person who ise a been supportive of various things you listed as try to do on the economy front but also my previous with the american foundation, explain a little bit about richard vague was a venture capitalist, businessman. he has been thinking a lot about that. not government debt, but private sector debt. he and i have been sort of plodding along to say, is washington, d.c. and our capitals around much of the world focused on the wrong part of the debt equation and what can be done about it?

richard vague, more than anyone else i know, is the world leading expert on debt because he was the guy who helped create so much of it. in the sense that -- i'm not joking. you think i'm joking. richard vague was the founding chairman and ceo of a prominent bank called first usa bag. if any of you remember the old credit cards they started there. if any of you have airline mile credit cards, university credit cards, things that give you mileage points, prizes, richard vague basically became the king of the infiniti credit card business which he later sold to chase. he has been in energy entrepreneur and out there, but he is most known particularly by those delaware companies as somebody who really created the modern credit card business. be testifyinguld before congress about that regulate our industry, it is very interesting that he has come in to look at ways to look at the ball and chain of private sector debt around americans

today. this is somewhat of a unique learning moment, to look at someone who knows that world so well but also now realizes that one of the real hindrances on growth, not only here in the u.s., but as you look at economies around the world, is debt. richard will come make a comment and i will harass them from the side. i promise not to do so for the first five minutes. ladies and gentlemen, richard vague, chairman of the governor's woods foundation. [applause] did i say anything unfair? >> it's all a lie. don't leave anything. thank you very much. i'm grateful for the opportunity to present today. a lot of the current economic debate centers around stimulus versus austerity. as steve mentioned and is abundantly evident from today's conference. is the much bigger issue

private debt. the u.s. crisis of 2007, 2008, was caused by rapid increase in private debt. mortgage debt, which have been growing gdp at about 17% per decade group 46% in the six 2001-2 thousand seven, and wasn't just mortgage debt. all forms of private debt in the united states were growing rapidly. become -- anytime you have 20% growth to gdp in private debt, and you also have absolute levels of private debt gdp, you're probably going to have a crisis. now, after the crisis, that private debt will flatten or decline. let's look at the united states in 1929.

in 1997.1991, asia let's look at europe in the same 2007, 2008 timeframe. stock market crash and i to 29, yet almost 20% growth in private that. any reached really for the first time in peacetime, this 150 plus percent absolute level. in japan, the growth rate was 20% in those five years. debt grew more -- to be more than 200% of gdp. in this chart, the red bars are the private debt and the blue bars are the public debt. in asia, in the five years leading up to the 1997 crisis, you had a 29% growth in debt in korea, for example, up 43% growth in private debt in indonesia. forpain, and 2008, in spain

much of the major eurozone countries, the most egregious in 49% regard, but spain grew gdp anddebt to to five years to exceed 200% in gdp and still remains at about that level. in europe, the obstacle to recovery is high-level of private debt. done over this past year is we have examined this comp reasonably from major economies that 22 economies in the world that have more than half trillion in gdp and constitute over 80% of world gdp. this threshold of 20% growth in five years and 150% overall level that holds true. there were six such occurrences prior to 2000, and all resulted in banking crisis or gdp and traction. you're no crisis otherwise.

there have been nine occurrences from 2004. seven of those resulted in crisis or gdp contraction, and there's only one crisis otherwise. that was switzerland in 2008, which of course, was because they were intertwined with crisis countries. there is one instance that is still in process, and we will examine it in a moment. and that is china. where you have 56% growth in private debt in a five-year period. the next tier down, countries 150% private gdp, it is almost as bad. there have been 13 such instances and 9 of those resulted in a crisis where gdp contractions. now, it is not just mortgage debt. there has been this kind of obsessive focus on mortgage debt in the u.s. because that was what precipitated our 2007-2008

crisis. there've been many crisis or precipitated by an increase in business debt. it is also somewhat independent of the instrument involved. there's been a lot of focus on securitizations, but a default swaps and the like, but there have been plenty of crisis that did not involve securitizations for things like that. the key is to track the aggregates. whatever form they might take. now, why does runaway private lending cause crisis? because when you're lending that much money, you have built too much of something and you have bad debtloans and have associated with that. and once too much of something has been built and too many bad loans had been made, monetary and fiscal policy cannot solve the problem. they can soften the blow, but can't solve the problem.

you have to write off those bad loans, recapitalize those institutions, and time alone has to pass before you can absorb the overcapacity that you have created. triggering events often get mistaken to be causes of crisis. in 1929, the stock market crashed and was mistakenly assumed to be a caused by many. the lehman brothers crash was mistaken to be the cause by many. the cat was already out of the barn for the time those events happened. all whole lot debt had been created. sitewhat other factors the private debt growth are predictive of crisis? we have looked at these 22 countries as far back in time as data is available, and look at 20 different factors. how long does the data go back? well, there is not as much data as you would want. in some cases, noah goes back to

1990. in some cases, 1970. the usa has a back to 1960 in very good form. it is kind of frustrating that this has been so out of the spotlight that countries don't do a good job of keeping this data. the speaker pro tempore: the house will be in order. the chair lays before the house a communication from the speaker. the clerk: the speaker's room, washington, d.c., march 18, 2014. i hereby appoint the honorable thomas e. petri to act as speaker pro tempore on this day. signed, john a. boehner, speaker of the house of representatives. the speaker pro tempore: the

prayer will be offered by our chaplain, father conroy. haplain conroy: let us pray. gracious god, we give you thanks for giving us another day. you have blessed us with all good gifts and with thankful hearts we express our gratitude. you have created us with opportunities to serve other people and their need and to share together respect and affection and to be faithful in the responsibilities we have been given. in this moment of prayer, please grant to the members of this people's house as they meet with their respective constituents the gifts of wisdom and discernment that in their words and actions they will do justice, love with mercy and walk humbly with you. may all that is done this day be for your greater honor and glory, amen.

the speaker pro tempore: pursuant to section 3-a of house resolution 515, the journal of the last day's proceedings is approved. the chair will lead the house in the pledge of allegiance. i pledge allegiance to the flag of the united states of america and to the republic for which it stands, one nation under god, indivisible, with liberty and justice for all. pursuant to clause 4 of rule 1, the following enrolled bills were signed by the speaker on february 14, 2014. the clerk: h.r. 2650, to allow the fond lack band of lake superior chippewa to transfer certain land. to delay the implementation of certain reforms of the

biggert-waters reform act. h.r. 4076, to address shortages and interruptions in the availability of propane and other home heating fuels in the united states and for other purposes. the speaker pro tempore: pursuant to section 3-b of house resolution 515, the house stands adjourned until 10:00 a.m. on friday, march 21, 2014.

growth. you can pry to inflate your -- you can try to inflate your way out of it but it will take a generation or two. the only realistic short-term way or near-term way to help with debt is through restructure. we think the underwater mortgages are a candidate of this. we think second rate mortgages are a candidate of this. restructuring -- and i think frankly one of the ways to do is not to have the federal government step in and fund it, but just allow the bunks to spread this over an extended period of time, 10 or 20 or 30 years.

why can't they do that today? what prevents the -- why doesn't water run downhill? it makes so much sense to restructure all this bad debt in the economy, give the economy to have a balance again, what are the -- what are the things that need to be done to incentivize that kind of restructuring? well, the objection of course is primarily moral hazard and unfairness. he just loves to charge the credit card. >> i'm picking on him and he really doesn't but what you're worried about -- the moral hazard is if he gets a break on his credit card and debt forgiveness he's going to take advantage of this. absolutely. anytime you mention this, the moral hazard comes up immediately and frankly it's a complicated question and difficult to deal with it. however, those same questions would have been associated with

the rest of the banks that occurred in 2007 and 2008. they are not different questions. the one thing we do know is high level of private debt impede economic growth and so you're going to have to come to grips with that in one form or fashion. so let's talk about the current situation in china. we're getting there. one more -- there we go. china, as we mentioned a moment ago, if our threshold is 20% growth in five years and 150% absolute level of growth, china is well beyond those hurdles. they've seen 56% growth in private debt over the past five years. their current levels of private debt to g.d.p. are at least 180%. now, if you spend time with china numbers you know there's a lot of different numbers flown out there.

it could be as high as 200%. they have created significant overcapacity and bad debt levels. you hear about ghost cities. you hear about ships that have been built that are unsold. everywhere you look you see significant overcapacity in china. we think it's realistic -- if i can get to my last slide here -- we think it's realistic to think that china could be facing a crisis in the next two to three years. when you see in all the crisis we've studied, when you see this 20% threshold it can actually keep going for a number of years. we think the average number of years that this 20%-plus threshold exceeded was about five or six years. so you can see once the party gets started, it can keep going. and that's where we think china is. it could be a slow-motion crisis. you know, the mitigating factor here, as a couple folks mentioned here, china is carrying a lot of monetary

assets. its central bank borrowing rate is relatively low. it's only 30% of g.d.p. whereas the u.s. is about 100%. japan is 220%. china has the capacity to move concurrently or even preemptively to recapitalize businesses, recapitalize banks, expand the safety net and either preempt or cushion any type of crisis. but they could easily mishandle it. it could be a full-fledged unraveling of the financial system there. we recommend, frankly, that china, to the extent it isn't already in its murky and hard to tell act preemptive to recapitalize businesses and financial institutions on a massive scale. the amount we're talking about could be 25% to 50% of g.d.p. so those are our thoughts. i think our general thesis is

we're not paying as much attention to private debt as we should. that's what drives the economy. that's where we're going to find answers. in the u.s. to a certain extent, in europe in a big way, the way to increase demand, have strong g.d.p. growth is to deal with this private debt issue. >> so richard, thank you. we're short on time. michael free throwman, i ssadorfroman is here and don't want to step on his time. i've been interested in this. richard, i think one of the things that we've found is we've gone out and to talked to some of the world's economists and commentators who tend to focus on government debt and we raise this issue. much of the data on private debt wasn't available. so richard has spent a lot of his resources going out and amassing the data. it's available at debt-economics.org so people can kick around this data.

but the other interesting piece of it is, despite you having private sector events out there that precipitated government action and thus government spending and rising government debt levels that began to then animate the civilian space and taxpayers with how outrageous that was, the level of attention to the private sector debt question has been, if you are to do is on a 100% basis, it's 99% of the world has been focused on government debt all around the world and maybe 1% of the coverage in the world has been on the private sector side of it. so i'm just interested in whether it's the politics of that or, you know, the societyiological dimensions of why this has been ignored and what your research has shown. >> well, i think we more naturally think public debt as collective responsibility. it's we, the people responsible for our federal debt.

we think private debt as hands off. es that laissez faire. we don't want to -- that's laissez faire. we don't want to intrude. all of our crisis has been caused by runaway lending, i think that brings it back into as it ic sphere, and relates to capital at financial institutions, which is the most breaking element that you have. it's not a natural thing for folks to think they have responsibility. any article you read talks about rolling over public debt, refinancing public debt, rates on public debt. the issue in spain, in france, in italy, in portugal, in greece, in ireland, in the u.k. is public debt levels. you do restructuring in a big way in spain, things turn around. and very -- >> and very finally, richard, you are one of the titans of

the financial industry. you saw the foreshocks of the 2008, 2009 financial crisis and tried to advise bark klays and others about that and didn't get very far. why do you think your own industry is so blind to the sort of proposals and prescriptions you're suggesting? >> you know, lending boom, everybody's making a lot of money. institutions are making money, individuals are making money, governments are doing well. it's hard to step back and look at this. but let me give you a little tidbit here. in the 10 years leading up to the 2007 crisis, net new private loans totaled $15 trillion in 10 years. government debt increased $3 trillion. look at the order of magnitude difference. and by the way, lending is the principal means by which money is created in our economy. so $15 trillion more in new loans, in essence mean we were

awash in $15 trillion of new money in a decade period. and by the way, we went from $10 trillion to $25 trillion. 2 1/2 times the level of private debt that existed in 1997. >> ladies and gentlemen, richard vague. [applause] richard, again, is chairman of the governors woods foundation. now i have the distinct pleasure to introduce someone that's been a friend and colleague of mine since i've really been in washington early in my career. we've both aged well, i think. at least i have. [laughter] working on the funniest guy in d.c. contest. again, it's not working. i think when we think about the economy, when i worked the economic strategy, worked in the designate, trade was a huge deal. one of the reasons i'm so because to mike is

they know him. they knew people like nicky cantor. of course, there were other distinguished trade representatives that came after them but nobody remembers who they are. so trade fell out. if you weren't a former citi bank guy, goldman guy, you weren't remembered much. mike doesn't like this at all. mike has brought celebrity back to trade in my view. at least he's helping. and penny prisker is bringing celebrity back to commerce. but mike is going to join us today and talk about moving the needle on the trade front on a variety of issues he's working from and engaging in conversation with him and then with all of you as the chief u.s. commentator of the financial times. i am going to give you guys a break from me. the ongoing emcee the next hour will be scott, whom you met this morning from the atlantic. mike welcome ambassador

froman and welcome mike. >> welcome, ambassador froman. 'm going to get into t.p.a., loads of things starting with t. i want to talk about the world of -- state of globalization. we've seen in the last couple years, the first time ever, at least for the first time since the second worrell war, trade global ing lower than growth. and whether we're moving into globalization or at least fragmentization, deglobalizing

trend, do you worry about that? this is a 30,000-foot issue. but do you worry that we might be deglobalizing? >> i think it depends a bit on what's driving it and what deglobalization means. i do worry about new forms of protectionism. i think we were quite fortunate and i give credit to the g-20, as one mechanism in this effort that in the midst of the worst financial crisis in 80 years the major economies actually did resist putting in place a lot of protectionist measures. no country was perfect. every country put some in place. but the percentage of world trade that was affected by traditional protectionism was quite small. what we see now is the rise of new forms of protectionism. localization barriers. and other new forms of forced technology transfer, indigenous innovation. i think that can all lead to some deglobalization in the negative sense. i think deglobalization means companies looking at their

extended value change, supply change and deciding whether it's because of changing economics or operational risks, that they want to move some of that production back to their home country. that's not necessarily a bad thing. we want to drive more manufacturing to the united states. but if it's because of these new forms of protectionism i think it can be quite pernicious. >> clearly america has been the oulder behind the wheel of global trade globalization since day one, since the second world war, and you've always had the support of capitol hill. you wouldn't be able to do deals without fast track authority. with fast come up track authority. this occasion -- harry reid has deprived you of trade promotion authority. was that a shock to you? was that a surprise to you?

how big a problem is that in terms of the trade negotiations you're in? >> well, look, i think taking a step back, i think there is a healthy debate going on right now across the country about globalization, about trade, about inequality how they -- how factors affect inequality. it's technology, how that's had an impact on our manufacturing sector or about different tax policies and different ways in which people earn money, whether that has an impact on inequality, so i think there's a robust debate going on. it's a serious debate. we need to be very much involved in that and we need to be able to convince the american public why these trade agreements are good for driving growth, creating jobs and creating good high-paying jobs. we know export-related jobs pay up to 18% more than nonexport-related jobs. so it helps for inequality. at the same time be sensitive to the various other issues

being raised so that we're pursuing trade agreements that reflect both our interest and our values. raising labor standards around the world, environmental standards, taking on new issues in the global economy like the digital economy, taking on new challenges to globalization, such as the state on enterprises and the role they play in competing with our private firms. so we need to demonstrate we're doing all these things to our trade policy. globalization itself, it's here. we're not going to be able to roll back the tide of globalization. the only question is whether through our trade agreements are we shaped by it and does it reflect our interest and our values, our roles or the interest, values and roles of others. >> one of the critiques of the obama administration is it supports lots of good things, depending what your point of view is, but it supports things like immigration reform, gun control. and big trade agreements like the pacific and atlantic ones that you are in the midst of. but it doesn't do that much to make the case for them

aggressively with the american public. do you think the time to twist harry reid's arm and others who are skeptical of big trade deals is upon us yet? would you agree with that critique of the obama administration? >> i am ale not sure i would agree with the critique. the president talked about trade in the state of the union. he talked about it in many of his public speeches. talked about it in private meetings with members of his own party and leaders from the other party as well. we have the whole cabinet fanned out. i'm spending a lot of my time on capitol hill and around the country, but so is secretary prisker and secretary lew and secretary vilsack, secretary kerry. secretary hagel has been riding importance of it on asia. we are out there engaged and this is a long game and we need to continue to make the case and ensure that we're making it

real for the american public and for their representatives in congress. so not just statistics about how much growth it will create or even how many jobs it will create but what it means for businesses in their district. putting on another shift. hiring another 50 people. sending product to another market that's opened for the first time, we are going to need to do all that work. we're engaged in that now, and we'll continue doing that forward. >> so realistically, what is the chances of getting t.p.a. before mid term elections? >> there's a process under way on capitol hill. as you know a bill was introduced in january. there is a transition at the finance committee. chairman wyden stepped in that position and he wants to take the time necessary to confer with the democrats as well as the republicans on that committee, as well as his colleagues in the house to try and build support for broad as possible support for t.p.a. going forward. we're very much engaged with

the hill on that process, and we're engaged -- personally -- i'm personally engaged on the hill mostly walking through what it is we are doing in t.p.a. so people understand what the value of these trade agreements are, what's at stake in these negotiations in the hopes it helps people get comfortable with that agenda and as a result support what's necessary to move the agenda forward. >> the mid term elections, whether democrats can hold onto the senate, but from the point of view of you -- of the ustr, the senate going republican is not necessarily bad news because you'd have a probability of getting it moved through it? >> as a member of this administration, i'm very much in favor of the democrats retaining control of the senate. in case -- absence of doubt, let me restate that.

look, this is an issue where there is support and -- on both sides of the aisle and we're going to want broad bipartisan support for what we do on the trade agenda. >> the president visits asia next month, and it's been assumed that what has been signaled that's the deadline of getting serious t.p.p. progress on the board and it boils down to the u.s.-japan talks going on right now, the breakthrough won't go through with bilateral talks about vietnam. i've been hearing some very sobering reports of how much the japanese prepare to concede on the traditional agricultural blocks, dairy, pork, rice, etc. and i guess my question to you is, are you going to have something that president obama can show to the world when he visits japan next month and when he visits korea? >> well, we're very much

focused on the substance of negotiations. we're not setting any deadlines. the substance of the negotiations to determine the timetable. on your point, when gentlewoman ined t.p.p., they agree to ambitious, comprehensive, high standard aspirations for this agreement, and that meant putting everything on the table and achieving market access through these negotiations. looking at the prime minister of his comments and comments of his own government, they viewed t as one critical part and the so-called third arrow ever structural reform in japan. as we look what's going on in japan, t.p.p. remains very important. potentially to achieving the objectives they set out for themselves in their economy, and we're very much engaged with japan on ensuring that they meet the standards of t.p.p. by the way, it's not just a u.s.-japan issue.

it was absolutely clear from our last several rounds of negotiations is that all the other countries in t.p.p. are also looking to japan to open its market and view that as a critical part of moving forward. and so we have trade ongoing engagement with them. we made some limited progress. the gaps still remain and we continue to be engaged with an effort to bridge those gaps. what will be important at the end of the day is t.p.p. be a comprehensive, ambitious, high standard agreement where every country plays its appropriate role in that regard. >> as a negotiator with japan and others, how much does not having fast track authority in your pocket inhibit your ability to do the kinds of things that make trade deals? >> it is certainly an issue that is on the minds of all of our trade partners. when i -- when we last had a t.p.p. minute steerial in -- ministerial in singapore last month, i laid out in great deal

exactly what was happening in washington, what the issue was with t.p.a., what the process was and what our view and approach is. from our perspective, we're going to continue to work with congress on building broad bipartisan support for a trade promotion authority bill. at the same time we're going to work to conclude the t.p.p. negotiations. made progress on the tpip process. as we show to congress and the american people the benefits of these trade agreements, it should move the whole agenda forward. >> would it presume to say your prognosis when you will get t.p.a., will you say by the lame-duck session at the latest? >> this is the process that we need to work with congress on. as we mentioned, we have a new chairman of the finance committee. they'll go through the legislative process. the house as well. and we're going to work with them to determine what the most appropriate timing is for moving forward. >> europeans have had their own

difficulties with coming together and you've had your own problems in getting rapid pip talk.with the t is vladimir putin helping with this? >> i'm not sure that's a justification. i think that may be an issue in the background of this, but fundamentally the ttip negotiations are driven and have to be driven about by the economic stakes in bringing these two great markets closer together, eliminating -- eliminating tariffs, eliminating nontariff barriers, bringing the regimes closer together in a way that does not reduce the level of health, safety and environmental protection and that's the primary focus of the negotiations. we want ttip to be -- to help build an economic relationship and a trade relationship that is as strong as the strongest

military alliance in the world but fundamentally it's got to be driven by the underlying economics. >> but it is a -- it is something that's also very strategically very important for you and for europe, right? and the energy component, i presume, has risen in urgency in the last three weeks of your negotiations. >> i think it's important to look at these trade agreements really in three ways. one, the economics. what i call the geoeconomics and then the strategic. the economics is the highest priority and that is, how many jobs will it create here? how much growth will it create here? why is it good for american manufacturing and agriculture and services? that has to be the primary driver of our trade policy. the geeoeconomics is really how do -- geoeconomics is really how do -- who will set the rules of the game and what are those rules going to be going forward for the economic system, for the international trading system? and that's where working with our t.p.p. partners and the

ttip partners, our goals is to ensure that we raise standards. it's not a race to the bottom. we deal with the issues affecting the global economy effectively. and then the third issue is the strategic, the geopolitical part. t.t.p. is rebalancing towards asia. ttip is key part of building an economic relationship to go along with our very strong partnership and military alliances there. but fundamentally it has to be driven by economics. economics and then strategic. >> if you look at the roadblocks that you're facing in asia, in the pacific and then with europe, dairy, pork, rice and in europe, beef, that kind of stuff, it doesn't look like the u.s. agriculture sector is going to get a lot out of these talks just to judge by the progress of the talks, rather the deals, whatever deals are coming.

do you think is there some kind of a hail mary, is there some kind of game changer that you got in your pocket as a negotiator that you can -- doesn't look empty from here but you can -- that you can change the nature of the talks in agriculture access or market access? . >> agricultural access will be a part of any market we reach. we've expert over $145 billion. our farmers, our ranchers are globally competitive. see the opportunity to grow incomes in this country very much tied to opening markets and increasing exports around the world. this is a high priority interest of ours. to go back to one of your previous questions, the fact that we don't have an agreement right now is in fact tied to the

fact that we are insisting on agricultural access both to japan and for canada, wrote of which we have not had a chance for negotiations. this is an agreement that we feel comfortable selling to the american people. to questions in a minute but i have to ask you about the political mood in germany. edward snowden might look a little bit different posted the crime year-end crisis. imea crisis. there is a political fallout in germany. how much of a problem has that been in sustaining this? >> he european leaders and the trade negotiators have worked to separate the trade negotiations concerns about disclosure. there is ongoing dialogue among

the appropriate officials around disclosures and those issues in the trade negotiations have continued along in parallel notwithstanding the disclosures. i think that is the way we are likely to continue. we want to make sure at the end of the day, we talk about data and the free flow of data. we want to take into account issues of privacy is appropriate. as of this moment, european leaders and the trade negotiators have kept separate. >> when you're in the room with your counterpart, do they threaten things like the european playoffs? we hear about the balkanization of the internet as a threat. ?o you get that pitch to to you >> we are talking through those issues probably earlier in the negotiations than in other areas but right now we are working through the issues to see how best we can ensure that we are

not putting up unnecessary barriers to trade and immigration, including small and medium-size businesses. at the same time, we can address legitimate privacy concerns. many we havere how time for him a two or three questions. we have the lady here near the front, there is another near the front. >> thank you, paula stern. mr. ambassador, russia became a member of the world trade organization only in the last couple of years. there is discussions about various forms of sanctions on russia including not allowing them to become a member of the oecd, for example. could you let us in on what the ofcussions were in terms

their membership in the wto and the geostrategic or economic considering they are such a small economic trading partner , i guess on the level of the netherlands or something like that. now that we have got sanctions topmost on our minds, i would our thinkingwhat was when we finally signed off on their becoming a member of the world trade organization? have you here.to as we know, russia has worked to join the wto for i think 16 years. the theory behind russia joining the wto was that when it came to trade issues and trade policy,

being part of the rules-based system and subject to binding dispute settlement isn't necessary to enforce those rules and this would help to address what we knew would be difficult issues as they integrate themselves into the global economy. the process, that was a useful process for talking about a number of policies that they needed to reform to join the wto. has beened and the wto a worthwhile mechanism for getting out those issues and using that as a potential mechanism for addressing them. that does not mean that there will not be differences in our trade relations. this is a mechanism for ensuring there is a process for dealing with that when it arrives.

>> we have a question back here. >> thank you. ambassador, good to see you. your comments were well received. can develop if you more on the markets that you did not mention, particularly latin america. given your background in finance, that would be interesting. >> africa is an area of great focus for us, as you may know. the african growth and opportunity act comes up for renewal by december 2015. we launched a review of our experience. we have been consulting with our we want to sees, what has changed in africa.

we are working through that process to see what we can do as we renew this to make sure that we're doing everything possible. this is to expand the exports for regional integration and for value added in production as we keep part of the overall development strategy. last summer when the president was in africa he announced our trade africa initiative was a is about supporting regional integration but also trade facilitation. looking at borders that are very will's up totruck customs, waits for long time, goes through customs again. in terms of the engagement. to try anding to

reduce those barriers. this is consistent with the wto agreement which made out a whole series of trade facilitation obligations. >> i am a recovering politician, thank you for your noble service. if congress does not do the wise modernizedass haps a tpa and we don't conclude these trade agreements, will america be left behind? >> the short answer is yes. the longer answer is absolutely. we are not the only countries out there. there is a lot of activity going on around the asia-pacific. there i battle idle agreements being signed. bilateralre agreements being signed. they don't focus on labor and

environment and intellectual property rights, enterprises, and the free internet. they don't try to raise the bar in a way that levels the playing field for our workers and our firms and creates an opportunity for us to compete in what is the fastest-growing region of the world. an estimatehere is of hundred million middle-class consumers in the asia-pacific. that is expected to balloon to two point 7 billion. us who will serve that market? will it be us or somebody else? our valuesan affect and our interests or someone else's. this is not a static game and we are going to do our best to get the best deal we possibly can but one should always look at what happened if these trade agreements failed because that cannot possibly be in the interest of american workers and american firms. >> one final quick question.

>> there is a formula that economists look for gdp growth and when that exports are gdptive, they contribute to growth and when they are negative, they detract. i think we have gotten about $9 trillion of negative exports over the last 20 years so many americans think that our trade policies have detracted from gdp growth and i think that is part of the problem in the trade debate going on right now. the administration set a goal of doubling exports and i think that is positive. imports are increasing faster than exports so the net figure is even more negative. ?hould we set a national goal the former chief economist to the vice president said us that we are focused on the wrong deficit, we should focus on the trade deficit and set a national

goal of balance trade. why do we do that and why doesn't the administration put forth as a way to help people become more pro-trade? >> it is a good and complicated question. my understanding is our trade deficit is down about 12% in 2013 vis-à-vis 2012. our trade deficit has been declining. we also need to look at the components of the trade deficit. everybody agrees that exports are good. us on the import side, it is a much more mixed story because a lot of our imports are intermediate products, our imports into things that we manufacture either for our own market or for exports and allows our manufacturing to remain competitive. some imports do displace domestic production and some are critical to american production and help us remain competitive

in the global marketplace. when you look at trade liberalization since the postwar , there have been studies done that it has country to did it $9,000 per economic family. a significant portion of that is on reducing costs for the consumer and expanding choice. we need to look at all of these issues. we need to make sure that there are not unfair imports. you have been a big part of that debate, that we're dealing through this with our trade laws or otherwise to make sure that there are things that have not put our imports at a competitive advantage. winning to make sure we're doing everything we can to expand our exports because we know that with every billion dollars of exports, somewhere between 5400 and 5900 jobs in the u.s.. we have more than 13 million people whose jobs are tied to exports and that has gone up 1.6 million in the last five years.

our markets are already open. we have a 1.3% tariff. use nontariff barriers as a disguise or a barrier to trade. this our market is open. disproportionally open other markets and we can increase our exports. you look at the history of trade agreements, may be separate from the impact of liberalization generally, we will see a positive story there. want to thank you very much, ambassador. it's >> thank you, and lassiter. next up, we have the former director of the congressional budget office, the former vice .hairman of the federal reserve the former director of the omb and former senior fellow at the

brookings institution. derek thompson will be interviewing her today. ambassadorly, the du is very ill and really wanted to be here but cannot make it so we will continue on with senator gregg after this. thank you. >> hi, thanks, everybody. janet yellen first fomc meeting is today. one issue she will have to raise this the so-called evidence rule that says that unemployment rate falling below 1.6% it acts as a rush holt. made before we realize how quickly it is falling. this is falling because the denominator is changing.

people leaving the workforce. the recovery is at a state where we want to be dramatically raising rates. if you aren't you're in that you, and a voice, how do shape yellen's understanding of the issue and how do you think she will try to sway this group to think differently about unemployment and raising rates? >> janet yellen doesn't need me to help her understand the labor markets, she understands it for a well. she and her colleagues have been making some of these same points in speeches and even in the fed while.ls for quite a the labor market is complicated, it is right now. the unemployment rate has fallen quite respectably but that is not a good indicator of what good shape we are in in labor markets. we know that a lot of people

or have givenut up looking for work. this is a deep and long recession. the particular manifestation has been many more people who have been unemployed for a very long time and some of those people have given up. we have people who are working part-time who would like to work full-time. these are often true in a recession but this is a bad recession and it is been overtaken by the demographics. we have had people taking early retirement or dropping out because there were a lot of people in that age group. generation baby boom reaching retirement. it is complicated. i would expect that the discussion in the fomc today would say a lot of those things and they may even change the statement that they make at the end to put less emphasis on the

unemployment rate and more on the other factors. is a huge debate within washington which is the fact that the labor force for dissipation rate them of that season people are working or interested in working are actually working and it has fallen to its lowest rate since the early 1970's. demographics have to play a part. what else is playing a part? >> demographics played a big part but the depth and length of this recession has played a big part with a lot of long-term unemployed. it is overtaken by some structural factors. you always have structural not a shifth is from different injury -- industries. that not a surprising fact we are having fewer people in the labor force. >> one thing you do a lot of work on right now is health care

research. the rollout of the affordable somewhathas been disastrous from a pr standpoint. if you look at the democrats antunes in november, this is enormous albatross around their neck. what did the metrics that you are looking at in the next few months to determine whether or not obama care is succeeding or failing on its own merits, not just on the politics of the law? >> well, the technical glitches were extremely unfortunate. thatshocked and saddened this happened although it should not surprise anybody. anybody who has dealt with putting a big new system in no said it is really hard it does not work the first time. you need to test it a lot, they did not do that. i did not know why. has the question is

website recovered? the answer to that is yes. the numbers are up, 5 million people enrolled. what we will watch over is how fast months do those numbers go up, particularly in the next couple of weeks. what happens after that. theeople actually get insurance that they thought they bought or will there be more glitches? we are doing a complicated thing and we are doing it intentionally. a lot of people said, we should have blown up the whole system, started over. this we didn't. we have a very complicated ,ystem of medicare, medicaid and employer insurance and we were filling in the last cap. it is much harder to patch a system than to start over.

that is what we are doing. thene of the findings of cbo report on obamacare was that it would reduce the amount of work done in the u.s. economy. this was misinterpreted by some people as saying that it would kill all of these jobs. that had jobs would work less or choose to give up their work because their health care would no longer be tied to the employer. this is a good thing or a bad thing? >> many of us over the years pointed out as a reason for having a different kind of health care that would cover the uninsured that there were significant number of people that were stuck in jobs because they needed the health care and they might have a spouse or a child that had high health care

costs and they could not leave their jobs because they would lose their health care and they could not get more because there was a pre-existing condition. the affordable care act has changed that. no more concerned about pre-existing conditions and you can go to the exchange and find iflth care and get a subsidy you have low income, so it is not surprising that some of give up thoseill jobs. >> on the one hand, the long-term demographics and recession driven decline has forced the precipitation rate -- participation rate. the number of hours less work because of obamacare, do you have a worry that when you add these things together that there are not enough americans working to pay for the

entitlements we promised ourselves? >> not because of obamacare but what we are seeing is what we knew what was coming, the baby boom generation is retiring. known about have these people since 1946. 's so, we should not be surprised that we have a large generation of retirees and the people of living longer. this is putting upward pressure on social security and on medicare and we know that. we got to see what we want to do about it. crisis not a terrible but it is a long-run problem that we have to face. the easy part is fixing social

security. that should be done quickly because the longer you wait, the harder it is. we should have a bipartisan group. they would have to compromise. compromise is not a dirty word. we now think of it as something terrible. it means you don't have principles if you compromise. that is nonsense. we all have to have principles and we have to think how do we solve problems and get something done? social security is a good example of that. nobody serious wants to kill it. it is a very good program that has served a lot of people well. fixing it is not very hard. >> this touches more than social security, we talked a little bit immigration.

why are you more optimistic about this impossible government coming to a solution on this? this was an example of something that we were not fixing because we are so polarized and everyone agrees that we ought to. some years ago, people with very good intentions decided that we needed a formula for changing position payments under medicare it they devised one and tied to the growth of gdp. then when gdp did not grow as fast as they thought it would, it meant that the doctors would be getting less and so they said, we don't want to do that. so, they postponed it and they kept postponing it and they kept postponing it. the way the law was written is that it is humility. right now if we did what the law law. current

-- the way that the law is written is cumulative. this is not going to happen, it should not happen. the fees are not that high anyway. bipartisan compromise. they work hard, they can compromise this together to make a permanent fix to this. it is quite sensible. this has gotten caught in the polarized politics. a certain party says that we will not consider this unless you postpone obamacare. >> you're not talking about the democrats.

it does not matter. there is intransigence on both sides. this is an example of something that reasonable people want to do and cannot do it because we are in this politics. >> there are two solutions to that have been rolled out. the other is the earned income tax credit. which of these are the better policy and why? >> i would do both. we have not raised the minimum wage in a long time and raising the minimum wage would help that a lot of people. i'm stuck with that. thinkists like to efficient ways of doing things. the earned income tax credit which is basically a wage supplement for people who are

working at particular wages. is a more efficient way to do it. so, i would do both. would increase the earned income tax credit and it discriminates against people that don't have children. it is nice to have children but it is not clear why this -- >> this would raise the earned income tax credit for people without children. >> that is why it is a more targeted thing to do than a minimum wage. alexis was founded in a republican administration and has been raised by both democrats and republicans. what are the odds? >> a don't know exactly but it is another example of my theme which is if you have bipartisan support for something, do it and stop worrying about where the blame falls. hereover norquist was up

and he has a theory. we used have people that want to expand government a little bit and they compromise with people that wanted to do this by a lot. it doesn't have to be similar. weyou have a theory for why are in such a terrible moment of polarization in washington today ? >> i don't have a theory, i think a lot of things have happened. part of it is our primary system .hich pulls people to the right that is exacerbated by the way congressional districts are drawn. that is not the whole story. the senate is polarized. is for the districts.

our political leadership has gotten out of touch. if you get a group of average citizens, a representative group of citizens around the table and give them a problem, whatever it is, what should we do about the deficit, what should we do about immigration, they will sit there and talk about it and then they will cut deals. if they know they have to have a solution, they can find one. i just wish that our congress was behaving that way but it is not. nown the dead, right because of deficit fell so quickly between 2010 and 2013 and it is still falling, the debt as a long-term issue has stopped casting such a long shadow on these politics. do you think that we should be thinking more right now about our long-term debt or are the

problems that we are facing in the labor market, the upfront problems important enough that they should be on the front burner and we should deal with this after? >> is not a choice. we have lots of burners. i like to think of the budget situation in comparison to what it look like in 2010. with on some symbols along judd gregg. time, remember, the recovery was just beginning. we weren't sure it was going to take hold strongly. the deficit was very high. the stimulus was spending out. it has come down very rapidly. but we also lo a