>> good afternoon, i am from the 21st century intelligence and i would like to welcome you to this conversation. we are going to ask questions of the congressman and try to elicit conversation on strategic and various defense issues then turn to you for questions. eagle was on the independent panel assessing rerue view and worked on the hill and pentagon and she is esteemed and very

experienced. and that is a good way to describe the people on my right. they have been in congress for a number of years. they are among the more senior members of the armed service committee. thornberry is the vice chairman. they have many interest in congress and want to express appreciation to them. i want to start with congressman larson who was next to the district that suffered the washington mudslides and we want to send wishes to the people of washington state. and people to the good state of texas who together with the folks in washington sent us these two wonderful congressman. i would like to start with questions and pass the baton. and i will start with china and

first ask congressman thornberry who is back from china for his impressions on how things have been. and then i will ask congressman larson who runs a working group on that and we will go from there to a couple other subjects and topics. so welcome to both of you and look forward to your impressions. >> i just came back from ten days with majority leader eric cantor and others. we visited japan, korea and china. i would say among my impressions from this visit are number one: the nationalism that exists in all three countries partly for domestic political reasons but yet it creates some conflict or some tension.

a and between japan and korea and japan and china obviously. and we were able to meet with the top leaders in china and may impression is they see china as rising power and a declining pow and they have historical grievances and maybe that is what concerned me the most. i kept thinking back to the history books and what things were like in germany before world world war with the sense of them being a rising power but with the grievance that they would soon be into position to correct in some way. now that doesn't mean conflict is inevitable but the decisions over the maritime disputes you

felt the chance of to improve. >> the trip i took in march was my 9th trip there. and it was a great quote that i would like to point out from a debate from two people of letters. i will not go into their names. they were arguing about china and one was living there for a couple years and there other returned. and the guy who had not said the guy who lived there was too close to china and the guy responded surely there is a medium between never -- living

in china versus never being there at all. that guy had never been there at all. i can tell you every time i go i learn how much i don't know and how much is changing in china. i would be concerned about china's economic rise if it doesn't happen. and that is because the imperative i think from the comm commonnist party is if they don't grow fast enough they will not supply employment opportunities for that undermines the creditability of the party. if they don't deal with environmental concerns that said 60% of china's ground water is polluted and that ought to be a concern and the vast corruption that exists from the top down is a huge creditable party. and there is no junior varsity in the chinese government.

it is a commonnist government or not. so they have to get it right. and part of that is making sure the economy grows. and the other part is the military rise. there are rational reasons it is investing in its military but the challenge it faces is they do a poor job explaining and what they do explain sets up a region for further disputes and possible conflict. this isn't something i think china wants and certainly not something the united states wants but they are claims that many of these countries that are friends and allies of ours have in the area and i think there is some point rewriting of history that goes on on the chinese side

about historical claims. and i am not here to solve them today but i think the u.s. has a direct interest to be part of the solution. >> if i could follow-up on this. and a question for both of you. i would like too ask you what you think the next step is bu d building on the president's trip. and i am not trying to start a dispute, the armed service and you are known thworking togethe. but what the does the united states have to do to build on what the president accomplished and deal with the crisis as they develop? >> for our trip we were just

ahead of the president by a day or so in japan and korea and our focus was to emphasis we agree with the president and will stand by treaty commitments and there is no dispute about that. so i think that is is kind of step down. r reassuring friends and the bases in the philippines are positive steps and encouraging our allies not to let the differences between us divide us. so i think number one is build new friend and reassure our

friends. and we have to spend more on defense. what china and the host of other countries respect is strength and that is numbers of ship and a variety of other things. so we have to be strong. i just -- there is not another way to put it. >> if i could follow-up on that issue to clarify where we should be on the budget. there are a mb of baselines that we could measure to be stronger. there is the possibility of sequestration and there is the president's budget which is a little above. there is congressman ryan's plan which might be slightly different and maybe you could say a word more about that. and the plan that governor romney and ryan ran on.

do you have a specific proposal you would advocate? i >> i voted for the house budget and we had the number we are moving toward and that increases defense beyond that. i don't know if there is a magic number. but i do know the world is watching what we do. if china, putin, whoever you want to say thing thinks we are not capable of increasing defense, being strong and having the capabilities we need do deter them they will be more

aggressi aggressive. what i am focused on here is what is the world seeing of us now and i worry about that. increasing and showing we are serious about putting our money where our mouth is in defense, i think, is a strategic imperative regardless of the specific number. >> congressman? >> which question? >> where we should go on asia policy. >> okay. i think the president's trip was largely successful in terms of assuring our friend and allies that the united states is a pacific country and that the rebalance is real and the president's putting some reality to that. but it goes beyond -- in the defense community, just like anything else, it is all about

us in any other community. the defense folks think about defense. health care folks think about health care and if it isn't about that it isn't about anything. rebalance is about defense, trade, diplomacy, economic security -- it is about all of those things. so the effort to pass the tra transpacific partnership is continued support in the community. we had an ambassador opening up from our perspective the opening of burma is an important aspect of that and continuing to reassure friends and allies. a rebalance is about many parts of what the united states government does. the rebalance is a work in progress but it is work. and it progresses. with regards to the broader

budget question, you know, i have today as we sit here very little hope that congress will readdress the sequester when it returns and that is today as we sit here. i expect to be sitting in my office at midnight sometime during the end of some year in the future possibly voting on a change to that. the point is nothing focus on a mind like hanging and we will be approaching that point at some point in the future. right now, neither party, i think is willing to make the concessi concessions to lift the sequester caps or get rid of it all together. i would note our ranking member adam smith said this clearly and i think i was asked to do this because i look as close to adam smith as anybody else in

congress. so we are trying to trick you into thinking i am. i am funnier. no one gets a carve out. dealing with sequester is about dealing with discreationary and mandatory spending. not just defense, non-defense, or whatever budget. that is the challenge we face. and one is for the heathier long-term process of the federal budget as a whole. >> one more question on this part of the world. congressman thornberry, you mentioned treaty obligations and i know this is a delegate subject especially for

government members because explaining how we would do that has downsides. but i would like to ask anything about if we wake up tomorrow and china takes one of the inhabited islands -- what do we do? and it is coming to you sitting congressman. do we have to have a military response that is symmetric? someone said we would have to kick them off. that is the answer? some could be sanctions and other non-direct but resolute responses. do you have a strongly view on that? >> we need to be clear we will

stand by our allies according to the treaties whether it is japan, south korea or whoever. countries need to know the united states is a reliable friend. newspaper article this morning talked about the military preparing a range of militarily options for a range of possibility and that is what we expect the military to do. do the planning and give policy makes options. until we know the situation i don't think we can say what option is appropriately. i do worry, and i don't mean to shift subsejects, but the slowl ratcheted up sanctions doesn't

seem to be working. so it is important to make clear we have the full range of options should a country decide to take some aggressive action. ... >> should do one thing if another thing happens because there might be also of options to choose from if something happens, and it would not all the military as well. reassuring allies that the trees

mean something is important. our treaty allies would probably define exactly what they believe we ought to do as a result of any action. but we may have very different ideas about what is the most appropriate thing to do which is the negotiation that takes place between the united states and our treaty allies. we have done several things in europe as a for instance to reassure our friends there, deployment to poland, additional deployments to the baltic states. but new sanctions go along with other sanctions. i think they have targeted the right folks. there are not many folks who run russia. they are all friends of the leader there, the president. going after those folks is a great start.

it lets the russian leaders know that there is a penalty to them. also, i think the experience of crimea who might have been a great national thing for russia to do, but so far it has been a disaster for premiums and crimean russians as well where things are hardly run down there right now as a result. there may be a self limiting factor of how the leaders in russia see the rest of the eastern ukraine based on the crimean experience. >> thank you. >> thank you for having me. this immense opportunity to talk about this. but of bin. just getting of an airplane and hobbling all over town. they're is a lot to worry about

faugh. polls show that americans are increasingly concerned about u.s. foreign policy, what they perceive as growing numbers of challenges and threats, not necessarily in what they perceived but what is coming out of washington. they're out there saying we have a lot of challenges. of these concerns justified..

at some point her in order to make the investments we need in the future it might make sense for us and not make investments in things we had in the past. it is difficult to do that for a lot of reasons.

one of them is congress. they want to of of the things. one of the things i want to point out, be sure that people named about this defense budget. and big enough for us to maintain and operate. those of our that three things that every member of congress asks. sometimes congress knows the district better than the defense department and have a better feel for the sense that -- the capabilities and commitment that takes place on the ground. but the same token you tend to get wrapped up and preserves thing to about preserve things that may not not to be preserved. it tests.

bin and just don't think correct to assume we're not making investments or correct to assume that a bigger budget is a bigger -- better budget. there have been a lot of ways. but certainly like to see an do a better john upton by completing a clean audit to be spent been well in. there are a lot of things that i think we could do. finally, i don't think the russian president has a concern about our defense budget. he's more concerned with how we will use it today.

moi. >> i'm persuaded it is true that we have a greater number of complex threats facing a smell when than perhaps ever before. you list of a lot of the bill, things around the world as well as new demands of warfare. he did not mention space. al qaeda has not gone away. as a good deal and i and others have testified we have a tremendous number. at the same time under any scenario we have limited resources to deal with those threats. that is a huge part of for a challenge. a dome of a disagree. part of what congress needs to do is get more defense of the money we spend.

they're is bipartisan effort to try to do that through reform, cutting overhead. we absolutely need to do that. on a bipartisan basis working with the pentagon as we go through the regulations that govern acquisition. they're is a lot of work. that is not going to do enough to solve all of those issues. you have to do a lot of reform to get another carrier or refloat -- refuel the one that is halfway through its

both to increase spending on defense and work to get more out of what we spend because there is of value in and of itself to numbers of ships and airplanes and ammunition and though host of things. again, my point is not that there is magic number. my point is the world is watching. the world has some doubts about us through a series of events. and it sends a clear message when we make clear on a bipartisan basis we will do whatever it takes to defend ourselves, interests, and melons that message is important.

>> i just want to know, he has not given himself enough credit. he is leaving that. >> you never worked harder this issue. i second the gratitude. one quick question before we opened it up, the president himself thinks many the spend more on defense. let's just put that aside. he is admitting head there are hundred and 15 extra billion dollars. and so there is a pretty strong statements that it may not be a lot more, but it's probably required.

i don't know. perhaps was not true. the politics of grilling the defense budget have changed. in recent years the congress has been going on. it has become a deal where if you agree it has to grow, the conditions are now an artificial how far wall. it complicates -- it puts all federal prurience of the same level. i personally don't interpret the constitution that was. i don't think it's as important. the protection of the nation's citizens and our way of life. that's what that implies. and so what -- if the president and the defense budget this to grow beyond the levels and were

just looking it 2015, how do you get there? does it have to be linked to a discussion about non-defense discretionary? >> as i say, for fiscal year 2015 the number is set. were talking about beyond that. i could probably give you a more informed election result. if they're right and there's a decent chance that the senate switch's hands that could change the dynamics. but i think, like you, i believe the first church of the federal bear bryant is to defend the country. but i do think you can make a pretty good case with the return of about medical research or over are ready if things that in

the domestic discretionary area their areas affected use saugh while additional funding. bottom line is, two-thirds of our budget is entitlements. and so that -- and that is true of -- regardless of how this a mix to the of the election comes around. we have to begin to reform entitlements. another thing i would add is we have to keep in mind what other folks are doing. i think gorgeous saw a number, maybe you all did an estimate that russian defense spending has increased roughly 80%, china's defense budget is growing. it is not just like this is all about us. we have to see what is happening

in the world. out in the world of the defense budgets are growing and of the threats are growing. >> i would challenge anyone to go ask a homeless veteran in my district using the program, a combination of vouchers to get housing along with supportive housing services to help them deal with a pro, the core reasons for the homeless bonds. so the issue of whether it's a $1 for $1 or one for two or two for one, the point is, there are important things we tried to do in the budget and have a direct impact on people we represent. before going to look good numbers of of what other countries are doing we should

look at what the basic research in universities are. i think of what we have tried to do historically hand especially have to world war ii from a federal government perspective is we doug volt and poured the foundation really well. and then the market takes it from there. so this foundational thing, basic research, medical research , we have generally done well. we have a gun away from the fresh variety of reasons. but we have gotten away from that well of the countries of not. we continue to be the foundation of things the set themselves up for better economic growth than the united states will be able have. for originally they are not doing very well.

it's actually on a downward slide. five to 6 percent growth is not really all that great. so if we do coloristic to our basics, fundamentals, i think will do all right. >> we ask you wait for a microphone and identify yourself we will take to lead a time. we will start over here. >> thank you. the implications of the advances in commercial i t. and the wonder if he could tell us a little bit more detail about plans for the acquisition,

reform, thinking about acquisition and how that may play out. >> congressman, first of like to think you. thank you for everything you have done. the total bipartisan support. one of the questions i have his priorities. it was about a year ago. he made the point, as much of the support iran, i go back to my district and constituents. what they want to hear about of problems of social security, medicare. basically what's happening to the department of defense. >> briefly on acquisition reform

of of spend too much time. as i said, this is ben tried a number of times before. what makes you think this will be in a different. a couple of answers is number one it is completely bipartisan. the pentagon and congress. we have reached a point where everybody agrees that the system not only costs more money but is too slow. we have information that china's economic ravish it every six months. that think there is an imperative given the budget issues we have been talking about and the state of play to do better. i t is a terrific example.

if you think about how quickly technology changes it is inevitable that by the time the government procure something it is out of date. so part of our challenge is listening to ideas about what we can do. maybe we need pilot programs. there are a number of ideas coming in. if we can identify up to about would be next year : 01 that says start in that a 2000 page bill when. a lot of it is not necessarily legislation. working with the pentagon him through the regulations which is going. there are a number of aspects.

we don't need another oversight office or law. we have to look deeper at the incentives. >> it is true why and our country feel relatively safe you worry more about the things that affect your life and that jobs in the economy. i do think part of our job as leaders in is to remind people about the fundamentals of what it takes to keep the greatest of last august, freest country so that we can all worry about their kids' education and the of the things to occupy our daily lives. if the fundamental aspect of

that. there were talking about counterinsurgency. may be true a security is only 10 percent of the solution was, but if you don't have that the rest of what you're trying to do is going to be worthless. and so part of our job as leaders is to help remind people whom and educate people who knew about the multitude of france that we face. it's challenging. with the median naturally does is focus on one intensively and then forget about the first one and go to a third. so some keeping with so many things that play, keeping that brought range of challenges is a big part of the challenge that we face. >> commercial like tea and acquisitions.

one area that i no will be discussed as we come up to this market than his the idea of cloud and they use of cloud competing in information storage and the conflict that exists between the department of defense controlling that when we . a much less extensively. the conflict exists because the department of defense would argue that they need to have that, the highest security possible. as a result that sets up hurdles like a record. that same principle applies in other parts of the service, services as well. we have to find a way.

we have to get around it. the. >> story about a trip to china. , the question him about where in -- he represented. what you need to understand is they go home to their districts. if we are hearing yet home or not hearing certain things, that's what gives our interest

first and foremost. if we are not hearing the deal, it tends to have an impact. on the flip side of that, we have to sift through a lot of this knowing of some of this stuff is the same because all the e-mails of the same. we have to sit through that. also as well, something is going wrong, and it is not with congress when the major security issue here at home is a concern that folks have all of the nsa as opposed to anything else which is not their fault, i would argue. debt is some of the kinds of things you hear in your home. >> okay. the third row.

and then the woman in the far back, just to set that one about [inaudible question] will there be any change at all? >> and in the back please. >> hello. thank you very much for being here. it my question has to do with department of defense auditing. how do we empower those in the department of defense responsible for this herculean task that is supposed to be on track for 2017? how do we empower and support them over these next years to ensure that they have the good will that they need to get this job done? >> let's start with -- -- in russia i don't know that i have any more to say about it.

i think that nato deployments are an important signal to our nato allies and, i assume, to russia that the nato alliance is important to us and our nato partners. and that they do need to consider that. i think that that nonlethal aid and financial support for ukraine is important and the eu needs to, if they can to move faster. i think right nobody there is only one way you claim this government is headed, and that is west. not sure russia. as well they're not asking for my advice, and it would not give it to them, with a time the poor russian separatists in ukraine can take hostages that only helps the united states in the west. it shows us how, you know, al

uncoordinated, and mature, and reactionary those folks are. and i cannot imagine that russia sees that as a positive either. we need to a listen to public opinion, frankly in my view, in order to move changed on the ground. >> on russia i think it is a big deal. at think it is a major change. most of us, and i would not accept -- accept myself had basically in our minds, the cold war is over. we don't have to worry about that anymore. the brazenness of this aggression, similar to tactics we have seen in history. i think it is somewhat

startling. and so one conclusion one could draw is that it expands the range of military options for which we have to be prepared. and maybe we thought certain kinds of conflict or in the past and we did not mean that stuff, but maybe that is not true. budgets as we prepare for everything, you know, from relatively low level ground to cyber and space and, you know, all these things in between. i think it just adds to the complexity, the number of national security challenges we face. i think it is a pretty big deal, and i don't think things will go back to a way that it was anytime soon. on long in congress for -- we

are in need of action. the stories today about ammunition being wasted because we cannot keep track of what we have or when we got it is just another example of. so it -- i don't know. i get pretty frustrated. we had a hearing a couple of weeks ago again on trying to get the department of defense medical records to talk to the department of veterans affairs medical records. the country has got to have electronic medical records that are compatible, portable, and yet billions of dollars, years and years are required to get one department of the government to talk to another. it is just unbelievable. the frustration when you talk to

members about auditing and about other changes, i know they are hard, still we have got to figure out away to cut through this stuff, even if it means get outside of government to find those answers. >> effective follow-up, we talked about some of the broader u.s. responses, sanctions issue, deployment issue. at what point is there a case for rethinking u.s. permanent force posture in europe? at what point we think about either adding a brigade or to back to germany or putting battalions in the baltic states or something else, or is that not even an option you feel we need to start thinking direct this states? >> first of all, let me clarify. i am not encouraging more to be taken into custody. it happens to play in the favor of the west. to clarify that for those taking notes, but i don't know that it

is too early to talk about that. it is a good discussion to have, but it probably would not -- you know, if we use the model of the past in germany as much as they would be in the baltics and poland. they would be in this states that are next -- as close to russia as possible. and i think that actions and decisions that the leaders in russia are making, they are only doing one thing in congress and that is creating this conversation. a conversation they know that russia does not want to have immobile we are going to have it i am ready to talk about it. i think that we have to. going back to the previous question about what are the implications of what is happening in the ukraine, part of it is, is nato worth anything or not? what is it going to amount to? so what is the purpose and value

of that alliance at this point when meets this situation, which is what it was created for. and so i think a lot of soul-searching needs to take place on the part of our european allies and others about how we stick together and meet this kind of brazen aggression. >> thank you. >> here in the front row. the gentleman in the front row. >> thank you, congressman. i thank you for your bipartisanship. it is much needed, and you have emphasized that after your recent trip to china still thinking that the u.s. is in decline and they are rising and they is rising more attention which affect our security, job market, people at home.

so i am asking both of you if you would bipartisan the help from the house to give our strong message so that the u.s. can say we emphasize flow lee on the rules of law, especially in the case of the south china sea and everything involved. you talk about our responsibility. as a global leader we also should be accountable for international law, the rule of law. that means that for countries that are not our ally, we still need to hold other powers accountable to observe international law. that is the case in russia and crimea, and i hope that would apply to china if china is causing -- using some other form

, invading small countries like vietnam, laos, or cambodia. i hope that you would make it clear that any country, not just allies, by its very important, especially looking up to u.s. leaders so that they can solidify and form a group partnership with the u.s. so would use some help from the house up to the senate from congress look get a clear statement, maybe a statement to clearly define the global leaders of the u.s. in the rule of law and respect all rising power to observe it. >> let's go here. one more, and then we will -- >> yes. [inaudible] very educated discussion for me. my question is inevitably a

different but also very clear. it will have an impact on china, on the region. u.s. aid forces and nato forces are honoring the drawdown from afghanistan. and to -- if it does not work, if it collapses because. [inaudible] very high at this time. it is the u.s. have a contingency plan on how to deal with the implications? and many countries which the u.s. is leaving behind what will you do with the administration

about it? >> we cannot quite hear you, but i ask you to wrap up. >> thank you. >> i will just say, majority leader cantor and others made it very clear in all of our meetings that we expect any territorial disputes to be resolved peacefully and in accordance with an international rules-based system. and i don't -- it was very explicit. it was in every meeting. that message that you talked about applying to all countries was made very clear. you know, on afghanistan obviously now we are having the 1-off for the presidential election. i very much hope and trust that the united states will continue to have a presence after december of this year. i think it is important for us to be there to continue to provide support of various kinds

for a -- the security situation where the afghans themselves are taking the lead, but i think it would be a terrible mistake for situation to get to the point where we have a complete withdrawal. i think it would increase the dangers tests. it would increase the dangers to pakistan. it would increase the problems that many countries face. so i hope we're going to have a continuing presence, and i think we should. ..

easier to go back home and say, there's an agreement, it protects us, we get to do our job, but we also need to continue, as mack noted, continue the investment and that afghan national security forces taking control on behalf of their civilian government of their open -- their own security because we can't and won't be afghan's long-term surrogate army, we just won't. but i'm hopeful that both folks in the runoff maintain that

commitment they made to sign it. on your point, i'll make two opinions. one, fully agree with mac. it's not just friends and allies. everywhere at region, we want things settled

trying to -- will take a position of strength in the world to show the world day are the leader. i know it's a very difficult job few you and i know you do not have to share the burden of the whole responsibility. you will have friends around the world to support you, but the friends have to know you're there to stand by them. the problem in afghanistan, gentlemen, -- >> has to be a question. we have two left. >> we have established a army are inia. nato and the united states are leaving afghanistan within the year. the afghan acknowledge army has been left peppyless and armless, the only material, the arm they have, are the -- >> question. >> we would like to know, what

type of equipment are you going to leave the afghan military with so thigh can defend themselves against invaders, to defend a mountainous region like afghanistan. we don't have tanks or helicopters or the right equipment. >> pass the microphone to the gentleman behind you. >> hi. i'm peter, a student. i came over from ciss to be here. i'd like to know a long-term question about education. a lot of americans don't know a lot about history, international history, things like empires declining or isolationism or expansionism. isn't there the problem with the formation of american public american, americans don't think that what happens overseas is important, don't have the sense they're in an empire that could

go either way? isn't it dangerous for americans not to know enough about history because they can't tell their congressman, their senator, not going to be able to make informed decisions about things like national security or not going to be able to make the right sacrifices, not going to be prepared to think about foreign policy. in the right sort of way. and this is a serious problem. >> thank you. >> i talked to -- >> the question is clear. want to keep things moving. canningman larsen, over to you. >> yes and no. the 675,000 people i represent are pretty busy in their lives rooking now. getting up in the morning, making sure the kids get to school, and getting lunch made for them if they're going to school, or paying for college, going to work, and to add this to their list is their choice. not my choice to add to their

list, and so i can't expect everybody that i have an honor to represent to know everything that they -- i think they ought to know. in fact that's like a recipe for not being able to represent them anymore. i tell them their job, their job is telling me my job. my job is to impart filter that a little bit and get other context to it. most folks will respect a member of congress who fought through issues they haven't been able to think through so lock as the member gets back them and pain and why they did x, y, or z. so we have a responsibility towards our folks first, and before they have the responsibility to come up with an idea that is well thought out as you might find in an academic paper because you're not going to find that. folks are busy living their lives and we have to be

responsive to that first in my view. and next we can help explain why we are doing the things we do, or might do the things we want to do, and get their feedback as well. >> the afghanistan question. >> on afghanistan question, i agree that it is important for us to ensure that the afghan security forces have the weaponry and the equipment that is appropriate for their circumstances. and i think we're doing some of that. we're buying some russian aircraft, for example, for them. we will leave some -- and that's controversial, by the way. and we will leave them some of the equipment we have. it may not be everything that they want, but those are part of the discussions -- i think the bottom line is, we must be -- i think we are -- absolutely committed to doing whatever we

took support the afghan security forces be able to take care hoff the security needs of afghanistan, and whether that's training, equipment, whatever, we need to be there to assist them. that's in our national interests. i completely agree on history, and we have -- are not as good as we should be, and educating folks about what has happened in the past. the only thing i would add, i am continually struck by how globally interconnected this world is, and so part of this is generational. again, just coming back from china, and going through all of the economic interconnections between us and china, which we really haven't talked as much about today. we focused on security and mentioned trade. but there's a whole other dimension to that relationship that also plays in. and i think that is not exclusive to china.

it is true around the world. so, while i agree with you on history, i think that the interconnectedness of our world today is truly astounding when you start to go through step-by-step. some of that may be slightly a double-edged sword about it is reality and it's only going to grow more so. >> one final point on that. just to give you a flavor of maybe how public opinion is shaped or changes. in china, three weeks ago when i was there, we met with the number three -- chairman jong, and his staff came up to us, number one question on their mice. is "the house of cards" really reflective of congress and the american political system? so, our culture is inculcating

china, so they care less about what wear really like and how we are on tv. we may be undercutting their view of history as well. >> you can see what they're really look is pretty good and we're grateful to have had them today. so please join me in thanking the congressmen. [applause] [inaudible conversations]

>> okay we have an important guest with us today. governor shumlin of vermont. >> ok. we have a very important guest with us today.

governor shum lin was elected in 2010 and reelected in 2012. how many states reelect in two years? >> vermont. >> and you're running for reelection? >> we have a lot of work to do. >> you may announce it again. >> i would bet on you to win because i checked. no governor of vermont running for reelection has been defeated in over 50 years. >> and we hope to keep it that way. >> back in 1962. and you come from put ni, a place very dear to my heart. i used to have a roommate in college and we used to visit the school. >> wonderful place. beautiful place. also the chair of the democratic governor's association and therefore responsible for what happens in the election this year for governor. how many governors are up this year? >> 36. >> if you look on page 3 of the news letter, you will see that the outlook for democrats for

governor is pretty good compared for the senate. over in the righthand side i list the 2012 romney states with democratic senate seats up. as you can see, seven of them are romney states with democrats up for reelection. there's only one obama state with a republican up for reelection. that's susan col lynn in maine. on the other hand, it reverses completely for governors. remember that the senate seats were last ot ballot six years ago which was a democratic landslide with the financial crisis of 2008. most of the governors were up four years ago and that was 2010, which was a republican landslide so we have a lot of states, obama states like florida, iowa, maine, michigan, new mexico, nevada, ohio, pennsylvania, wisconsin, that elected republican governors

and many of them are vulnerable. so the outlook for democrats in governor races is a lot rosier this year than it is for the senate. let's start off with this question. how are you advising democrats to run on obamacare? are there states where democrats can call obamacare a great success in their state? >> let's start with the top line for a second. because of what's happening in d.c. regardless of party and the lack of progress on so many issues because of the objections in congress, i would argue that governors races have never been more important because we actually have to do things. we have to balance budgets, implement education policy, actually have roads that work and policies that work. so these elections are really important in this year. as bill mentioned, this is the referendum on the tea party

governors that got elected four years ago. we sometimes forget because congress had their chance two years ago for their referendum that this is the first time that they've been up. so whether it's health care or jobs -- and jobs is really the central element for governors because that's what we all ran on four years ago. and lecks look at what happened. we came out four years ago limping. we had 19 democrats. we are up to 21 now. we adopted lin chafeie and picked up terry in virginia. you all know about. but having said that, the question for governors races isn't so much -- doesn't hinnage on one issue. let's take health care. with health care you know that -- and the american public knows that governors don't come down to congress and decide what national health care policy is going to look like. we have the job of implementing it. and the challenge for the republican governors, the reason that we are on offense -- you can believe what you

want about the pundits and the democrats but for us we're on offense because these republican governors have uniformly implemented their policies that have rewarded the top 1% while they have balanced budgets and tax cuts for the rich by slashing education this their states across the board and really sticking it to the middle class, the folks who most desperately need to lift up out of this tough economy. so on health care, we have the job of implementing it. now, the problems with republican governors is this election may focus on congressional races about whether you voted for it or whether you didn't. folks know democratic governors and republican governors didn't vote for it because they weren't there. we have the job of explementing it. the governors who are going to

be punished it -- because we have the job of putting it in place. but those who are going to get punished are those who are denying millions of their residents affordable quality health care because they want to make a political point. and that's the problem. what happened with these republican governors is as they awarded the 1 presidents, failed top down economic policies that have helped the very top while the middle class has taken it in the teeth, slashed education, implemented tax policies, gotten i would argue distracted by the same radical social agenda that the tea party wishes they can implement if they have the power, ultra sounds for most women in their states, a full list of issues that took them off the jobs battle. so i would argue that on health care those that will be punished in governors races are those that refuse to give access to the most vulnerable because they want to make a political point.

>> which means that i assume medicaid expansion. >> absolutely. let's be candid about this. governors have picked up the opportunity to expand medicaid to in many cases hundreds of thousands in some cases millions of constituents. and americans understand that. there's too many folks out there who have a brother or husband or wife or relative who got medicaid expansion and in the states next door, mostly governed by democrats, a few republicans let's be honest, where other people don't have it. and they're asking why don't i? >> republican states have passed a lot of new restrictions on voting rights. is there -- can democrats make that an issue? is there anything democrat ks do about that? we can bet that we can make it an issue. i can it fires up our -- i think it fires up our base to be candid. there is a basic sense in america that everybody should have the right to vote. along with the radical social agenda they've implemented

against women, against minorities, against gay and lesbians, these governors have tried to disenfranchised low income voters. >> with the federal government in gridlock what can democrats do in the states to advance the agenda on an issue like, let's start with immigration? >> it's tougher for us to make big advances on immigration because obviously it's a federal law that we're dealing with. so the only thing that is we can do is, as i did in vermont, sign into legislation that allows guest workers to have drivers license, tries to make their experience in our states more humane. but really that is a federal issue and i think voters understand that. >> what about climate change? >> climate change is a place where governors can really make a difference. we are. with the en-- inaction in congress with the issue that is incredibly important to our kids and grandkids' liveability

on this planet we're implementing renewable energy policies that are showing the way. vermont is going 90% renewable by 2050. i now have -- as a week ago friday in example, the second lowest unemployment rate in america in vermont. now, one reason for that is that i have quadrupled the number of solar panels. we're manufacturing renewable energy products. so our governors message is pretty simple. as we move froim in the future it's a huge jobs creator and we want those jobs. >> are democratic candidates relieved or frustrated by the president's decision to put off the decision on the key stone pipeline? >> it depends where you're from. one thing you have to remember about democratic governors is that we don't have a litmus test on issues of any kind. in other words, in the republican party it appears that you've got to pass legislation restricting a

woman's right to choose or you're not seen as viable for republican governor. they've all -- whether it's ult rat sounds, they passed 80 laws in 20 states that put restrictions on a woman's right to choose. so we can start the list but whether it's labor or women's health care or shutting down planned parenthood or the list goes on and on, there seems to a sort of level of social change that they view that's -- that is required to be a republican governor. we don't suffer from that in the democratic party. we're looking for job creators, for people who can balance budgets and manage the states that they're in and do it in a way that's going to grow jobs and economic opportunity for the middle class. >> 2012 saw a record number women elected to the house and senate. women have had a lot more trouble winning governors

races. currently there are only five women governors. four are republicans. where do you see democratic women making a breakthrough this year? >> we've worked hard to recruit candidates who are going to be great governors but secondly women. as you know, we were drilled to pick up maggie of new hampshire because we were close to becoming an all-boys club. we recruited -- we've got to be careful about primary states because we don't take a position in primaries. but should gina win in rhode island we believe that she should be the next woman governor for rhode island. we have high hopes for wisconsin, pennsylvania. we have -- there's one other woman that we have high hopes for. texas. and -- >> and one.

>> massachusetts. so not weighing in on primaries but we've got a lot of great women candidates. should we prevail we believe we'll have more women governors. >> where do you believe the democrat's prospects look brightest? >> let's run down that very quickly. starting in three states where we have very high hopes -- and you've read about this in the press. baw because they have uniformly plemented economic policies, we think we've got hope in very likely possibilities in maine, pennsylvania, and florida. those are all important states for us. then if you look at the midwestern states, we believe we also have very good shots in ohio, michigan, and wisconsin. and we've got a great candidate i knew i was forgotten one.

but mary is an extraordinary candidate. we believe that we've got a great shot there. and then if you look at the other states where we have high hopes, some might surprise you. but we are optimistic about south carolina. we can see from the rga spending there, they understand that they could well be in trouble in south carolina or they wouldn't be spending there like they are right now. south carolina, georgia, that might surprise some but jason carter is an extraordinary candidate. i keep saying jason carter is going to be governor of georgia and i believe it's going to be in this year. kansas. candidate in kansas. and arizona. we understand that we're hopeful in texas but we'll be

candid about the fact that we all understand that democrats haven't won texas in a long time. we hope this will be our year. >> we now have the highest number of red states and blue states in deck cadse. states like california, new york, and verm where democrats control all of state government. and states like texas and arizona and georgia where republicans control everything. it's never been this divided. is this a problem for the country or do you think it creates laboratories of democracy where each party can try out its ideas? i think it's a problem for erica when any extreme becomes the controlling influence in any political party. in my lifetime i've seen it happen to democrats and we've been punished at the polls for it. but we've clearly seen it in a way that my memory doesn't recall in american politics. in the republican party in the last four years because of the tea party in way that is are

destructive to america. and i don't think there's an american who believes that congress is getting anything done. and bringing these tea party social conservatives into government who just want to obstruct progress is a good thing. now, in the states that we happening to be running in governor and the reason we're on offense and not defense is that the republican governors have implemented the same failed policies that the candidates wish they could implement and i think it's bad for america. i don't think americans are going to reward that kind of leadership that is both obstructionist, that sacrifices in the case of governors job creation in exchange for rewarding the top 1%, which is what they've done state after state, tax cuts for the very wealthiest, whether it's corporate or income tax paid for by slashing education which is america's hope for the middle class, and being distract bid a radical social agenda that goes after women, minorities, gay, lesbians, and

a lot of folks that need a lift, too. >> is there a democratic-run state, in addition to vermont, where you would point to a particularly outstanding record of job creation under a solidly democratic government? >> there's so many of them. you mentioned california. people that said four years ago jerry brown's going to be able to get california's fiscal mess cleaned up. i think most people said come on no one has been able to do that. he has. he has got an extraordinary track record. from coast to coast what democratic governors are ocused on we really have focused on job creation for the middle class and it's working. so i would say from coast to coast you're saying democrats deliver. democratic governors are delivering oba promise made four years ago. if you elect us we'll create jobs for the middle class. >> i want to ask a few

questions about vermont and then i want to open it up to the group from the press here. vermont was the first state to introduce civil unions back in 2003. >> yes. i like to say we invented it. not the internet but we invented civil unions. >> i remember it was extremely controversial. howard dean was governor. >> i was president of the senate and howard dean was governor and -- >> and there was a big backlash. and the first state to accept same state marriage when i think the legislature overrode the governor's veto. >> i was the lead sponsor of that bill. that was a great moment. >> is this debate now over? will republicans pay a political price if they don't change their party platform? >> yes. and it's not only because of this issue. as i've mentioned a couple times this morning, you know, i think we're beyond the point in

american politics where you can just defend the people that have traditionally always done well. the top 1%. and whether we're talking about gay and lesbian americans or women or minorities or folks who want to be citizens of this country, the tea party element of the republican party has turned their back on the people that need government the most. in the history of america regardless of your political party is everyone should have a fair shot. i don't believe these folks believe that. >> your experience in vermont where there was a serious backlash to civil unions, what happened to that backlash? did they just change their minds? >> i'll give you a little history of that but when we decided to confer marriage rights to gay and lesbians, i think first of all most people in america thought we were crazy. and it just wasn't on the political radar. and there are a lot of folks --

i was a bit of a skeptic at the time. i think there are a lot of folks who hadn't thought a lot about it. i remember serving on the transportation committee in the senate at that time and i just thought to myself before i'd heard the testimony, you know, if you've got half of the people loaded on to the bridge to get across a river and -- if you've got people getting across the river on a brinl and half the people are falling into the water why load more on to it? we hadn't thought about it a lot. when you heard the testimony in vermont in the statehouse even though people were weren't with us at the time about the moms and the moms who wanted to have the same rights when -- as everybody else in that legislature, when the point was made this is about our families, this is about our neighbors, this is about people being able to love each other for the rest of their lives and have the same family units as the rest of us, people came on

board. i think what happened is there was a huge bashlash bsh backlash at the time. as vermonters implemented it, had their neighbors able to celebrate their love for each other, they said, this is a good thing not a bad thing. and i think that's what's happened across america over time. it was 11 years later that we were the first state to pass marriage equality without a court order just because it's the right thing to do. and there was no backlash. vermonters had gone through that. they had gone through the same process i think you're seeing happen across america. so my view is that more states will adopt marriage equality. we're now up to 17. and last time i think it was hawaii that went last to be honest. and it hardly hit headlines. it was back with the oh bitries. it wasn't a big deal. imagine 12 years ago. so my point is there's an evolution going on in america where people believe that basic

fairness, decency to all is important. regardless. there's some who own some sports teams who maybe don't join the rest of us. but i personally think you're going to see more and more states adopt it and eventually the federal government will have to catch on. >> the republican platform says marriage is between one man and one woman. the religious right says they will walk out if that is changed. do you think that's a serious problem for republicans? >> i think there are a number of serious problems for republicans when it comes to issues of equality, decency, and fairness. >> ok. a few more questions about vermont. you face two crises, at least, that i know of in vermont. i never imagined there could be a hurricane in vermont. i mean, it doesn't have a sea coast, folks. but hurricane irene hit vermont very hard with flooding in 2011 during your first year as governor. how do you assess these federal

disaster relief efforts and what steps do you think are needed to improve disaster relief? >> i think this is one of the areas the president has not gotten the credit he is due. i was the recipient of one of the earlier climate-storm in-- climate change induced storms. it was just devastating. we lost 500 miles of roads, 36 bridges. we had covered bridges that had been there for over 200 years just swept down, little rivers that became raging rivers. we lost seven vermonters in that storm irene. it was the third time i've been through it. we had been through previous storms that bring that have been devastating as well. when we had the first experience it wasn't great. there was a lot of bureaucracy, red tape, and the response time was slow. the administration sat down and said, in light of climate change-induced storms, how can we do this bet center and they totally revamped it so by the

time they got to the storm that hit chris christie so hard in new jersey, they were running a much more efficient thoughtful machine. when we went through iran, we stafert replacing cull verts, bigger, smarter, and better for future storms recognizing that we had come to a new standard of storm management. and fiona would say to us you can't do that. you have to put exactly the same back to where you were because that's how we do things at fema and that's the only way we'll reimburse you. and we got together and saying this is crazy. you're giving us hundreds of millions of dollars to put things back to seer whack here in three or four months asking you for the same loot. this is just a waste of money. they said you're right. and they changed they're rules and procedures and reimburseable policies and i think it's an area where the president says climate change matters. i can't change it in congress

but i can change the way we deal with major climate change induced storms. >> how do you make the argument that hurricane irene and that tropical storm was due in fact to climate change? >> all i can tell you is that i've always said that climate change awareness is going to come first from the coldest states. so when you're out in alaska and you see your perma frost melting, or in vermont and see the effects of what's happening in climate change on our forest, agricultural economy, on our fields, erosion issues, we're -- and frankly on the change in weather patterns. let's be honest. vermont happens to be a state, new hampshire, maine, where snow is white gold to us. it brings in new yorkers and bostonians and phil asies, new jersey folks come in and ski and we get revenue. so the states most warning are

the ones where you see the most extreme weather change. >> do you feel comfortable making the argument that a freak storm like irene can be attributed to climate change? >> there is no question that it is. any reasonable skinet agrees with it. and my feeling is that i do not have time to argue with the folks who pretend that these storms are not induced by climate change. my job as governor is to find -- is to build resiliencey for the future understanding that the co2's that we've put into the environment are creating the kind of weather changes we're seeing. it's going to get worse in the next decade or two because we haven't learned our lessons. and if we don't move very quickly we're going to have a perilous situation with for humankind. >> another crisis. you talked about your state of the state message this year vermont faces a terrible

epidemic of open yat addiction. why is this hitting vermont so hard and what can the federal government do? >> well, the first thing i want to say that's important is that it's not that it's hitting vermont harder than any other state. it's that we're talking about it in vermont because we have such an extraordinary quality of life there that if we lose it we lose everything about vermont that we care about. so i want to be clear. and the national governors association, will tell you this. all 50 states have an op yat crisis in their states. the crisis is how can we be more innovative in dealing with it? how did we get this? when the f.d.a. approved oxycotin and we dispensed it with what i think alan greenspan would have called a rational exuberance we created addiction problems. we passed on enough to keep

america high for a month. that happens to be true. so what happened was as doctors and public policy makers became more alarmed at the addiction to op yats because of oxycotin and other drugs like it, painkillers, they started changing the formula so you couldn't crush it or shoot it and that drove folks who were addicted to the next cheapest option which is heroin. so that's what has created the addiction in america. the question is what do we do? the first thing we do is not approve even stronger oxycotin forms which the f.d.a. has just approved. but what we've done in vermont is said, listen, this is a health care crisis. and we've got to deal with this as we would with any other health care challenge. and i got to this by traveling around vermont and having too many moms or dads or people say

to me my son we've lost him and it's destroyed our family or my daughter. or my noose or my nephew. so -- niece or nephew. so let's talk economics for a second. forget for a minute that we're losing really good people. this knows no political lines no economic lines. we've got across america. we've got rich, poor, middle class addicts. they're from all political parties. they know no other persuasion. this is indiscriminate. it hits everybody. on the economic side in vermont, it cost $56,000 a year to put someone in a vermont correctional facility. my corrections budget has doubled in the last nine years. what we know about our corrections population is that 80% of the people that we incarcerate are in on addiction related charges or they're addicted. 80%. -- 132 a s me $is 100

week. i can get you into the best program. a lot of other service that is will get you back to a productive member of vermont in society. so forgetting our hearts for a minute. from a dollar and cents standpoint if i can do it for 138 a week and put someone into recovery instead of for 1138 a week putting someone in prison, it seems like a good investment for taxpayers. the second piece is with our hearts we know that these are folks that should be in the fork -- workforce. your problem becomes enough qualified people to do the work and that's the challenge we're facing now in vermont for our job creators. so what i've done is said, listen, when i address this issue back in january we had waiting lists for hundreds of people who are waiting for

treatment who couldn't get it. we just didn't have the facilities for it. so we have built the best treatment system we believe with wrap around services community based no mort waiting lines. i've said in 12 months we might have more waiting lines that those who want treatment. that's the first piece. the second is now -- the point with any addiction, the biggest challenge is denial. and open yat addicts are the best liars and denires you'll ever meet. your window to get them into treatment is very narrow. they're most likely to get into treatment at the point where they bottomed out usually when the blue lights are flashing, they're busted and down and out. our system in vermont works absolutely against that. it takes you three or four months to wind your way through the court system before you can get to the point where you get your punishment and by then it's too late. you're back on the streets doing all the thing that is drive crime and destruction.

so what we're saying bring in a third-party assessor for everyone who gets busted for the prosecutors and the judges if they wish and they will figure out whether you are someone we should be scared of in which case we put you into the court system and in jail or whether we should be mad or disappointed in but who we think we can bring to recovery. that's majority of the people we're busting. and we'll say if you'll go into a treatment right now, stick with it, we're going to monitor you closely work with with you and try to make you a success you will never go through the court system. you will never be charged. but if you screw up you're going to court and we believe that's going to make a huge diverages in putting more people in recovery and less in jail and dealing with the crisis. one of the things, we've got to change our thinking on this. politicses don't like to talk about this addicts don't want to talk about it because they're ashamed. family members don't want to talk about it because they feel

shame. but if public policy members don't we're going to continue to lose this battle. and i liken it to my dad passed away a couple weeks ago and he died of a cancer that may well have been induced by his years of smoking. when someone gets sick because they have cancer, we don't say, hey, you know, we're not really going to help you because you did some things in your life that could have had better outcomes. we feel the same compassion for them that we do for everyone else in our family who has disease. my point is we've got to deal with this disease in exactly the same way. we've got to say this is a disease. we've got have a health care system here to deal with it. and if we don't we're going to continue to see rising numbers of addicts who continue to steal and make our communities unsafe as they support these habits. the economics of oxycotin in vermont right now is it costs 80 bucks on the street for a

pill that you can crush because they're hard to find. you can buy a bag of heroin for 20 bucks which you can buy in cities to the south of us. so it's a huge economic incentive. >> questions from the press. >> governor, one of the advantages republicans hold this year is not only the money they'll raise which democrats will raise but also spending from outside groups like those funded by the koch brothers network. tom stire, the environmental list billionaire said he is going to be spending lots of money, upwards of $100 million in this cycle. have you spoken with him about his plans? do you get any sense about how he is going to help democrat ors is he an independent player? >> i went to summer camp with tom stire. i've known him since he was nine years old. so we're friends. having said that, listen, there's no way -- we understand that we're going to be

outspent. this isn't something new. but i've now had the pleasure of chairing the drn ga for about a year-and-a-half and it's important to note that whether it's outside rgo ditures or inside, the tends to outspend us two to one. if you take the last nine races that they have both played in, democrats have won eight of those nine races. now, that's not because we outspent them. they outspent us in every single one of those races except for one. it's because we've got the right candidates who are fighting for jobs and economic opportunities for the middle class and that's what voters want. and we happen to have, i believe, a superior organization. the reason that we're the only democratic group in america right now on the offense is not despite the dga. it's because of the dga. so the answer is no we'll never keep up with independent expent

turs. we won't even keep up with inside expenditures. but we've got a strong organization. history proves that eight out of the last nine races we've won eight. that's a good track record. >> what camp was that? i think a lot of people want to send their kids to that. >> camp tree top. it's across the lake in lake placid, new york. >> secondly, -- >> but i wouldn't guarantee that you'll be a billionaire if you go there. >> or a governor. but when you look at the mid term congressional elections we know that president obama's approval rating medication a big difference for candidates for the house and the senate. is that also true for governors? does it matter the standing that president obama has with the american people? >> we all want our president to be successful. but i do believe that there is

a difference in the assessment that you make about governors. now, i want to give vermont as an example. vermont tends to be seen, we've got is the best congressional or ation, all democrats democratic leaning. we have an independent as you know. in vermont we change governors and have since 1963 every time we elect a new governor. even in blue vermont. so my point is voters hold governors to a different standard than they do congressional candidates. they're asking a different question. do we trust these people to manage our budgets, to keep our roads open, to have great schools, and to create jobs for the middle class? because that's what we do. that's what we do all day long as governors. so i would argue that most of this national stuff doesn't have that much effect on governors races. what matters is do you have candidates that will inspire the confidence of voters for you as a chief executive to run the state?

very different question than what happens in d.c. >> the legislature just passed a bill requiring the labeling of gmo's. whent do you expect to sign that and what consequences will that have and do you see other states following vermont's lead? >> i never comment too much on whether i'm going to sign a bill because we have to get into the fine print. but i'm very supportive of the bill and i would expect to sipe it. i don't know how long it will take them to get it to me but when i do, i will give you a heads up when it will be but it won't be far from now. i feel strongly that americans deserve to know and vermonters deserve to know what's in their food. and the interesting thing about this bill is it's not a judgment about whether you should or shouldn't eat foods that are gmp mo-based. we're not making a judgment. we're simply saying when you read the ingreed ynts of what you buy it matters how much

sugar in there, how much corn syrup, all the thing that is consumers want to know usually based on their health. they ought to be able to know whether or not they're eating a gmo-based product. now, a number of states have passed legislation, connecticut, i believe the state of maine, a couple of others, that have triggers that say if a number of states do it we'll do it. they're doing that because they're afraid that they're going to be sued by the manufacturers of gmo-based foods. my feeling is if you're going to serve the public and do the right thing, and if you believe that you should do something don't be dissuaded by who might sue you because that will destroy democracy. stand up for what you believe. i firmly believe that americans have the right to believe what's in their food not passing judgment but it's important that you have the right to know. >> [inaudible] >> i would be surprised if there's not a legal challenge to whoever goes first. >> how do you intend to fight

it? >> we think we've written a really solid bill that -- shot-possible standing up in court. and we did that it's not a special label that's listed with the ingredients. we got the best legal advice we could. we all know that the judiciary sometimes doesn't agree with legislatures but we're hoping they do on this one. >> and if the bill does -- if you sign the bill it goes into effect, vermont will be the only state requiring the labels of gmo's? >> yes. because every other state has required a trigger. yes, but that could change at any time. one thing we're trying to do here, when we started civil unions and marriage equality in vermont people thought that was a little unusual. then a lot of other states decided to join us. i am convinced that labeling of gmo's is going to be demanded by consumers and its demand that politicians are going to

have to meet. >> as vermont goes. >> so goes the nation. >> something else as vermont goes is single pair, or at least you hope so. has that effort proven more difficult than you would anticipated it was going to be? and give us for those of us who haven't been up to vermont recently give us a report card on where it stands and how you're working out the cost issue. >> sure. so the answer is no it's not more difficult than what i anticipated. i'm not sure that everyone would agree that it's not more difficult than what they anticipated because it's difficult to make positive change. listen, let's just do big picture permanent because we talk about the economics of prisons. i want to talk about the economics of health care and i suspect this is true with the other states. i'm surprised that more political leaders aren't focusing on the health care cost crisis.

when i as governor get up in the morning i deal with lots of crises all day long. but i also try to think, long after i'm gone -- and we know governors aren't there for life. we get our windows and then we get cycled out. because every time we make a decision we make someone mad. but having said that, this is how the cost is working in vermont. when i look at why i'm working so hard to raise the minimum wage in vermont it's because folks -- the middle class and working americans -- and this is what the republican governors don't get -- are the ones that need the raise. they haven't had a raise because in almost every case health care costs for the people that pay them have risen faster than their profits and their incomes and therefore they can't afford in many cases to give reasonable rates. why are our wages frozen in america? one reason is health care costs are climbing faster than our incomes.

now, in vermont we spend 20 cents of every dollar we make on health care right now. so if you're a vermonter on average your first 20 cents is going to health care. if health care costs grow at the same rate for the next decade, just the same rate that they did for the last decade, that number doubled. now, i say to vermonters. raise your hand if you think that's a recipe for prosperity for your family and kids health care costs doubling or if you're a job creator for your business. so what we're trying to do in vermont is two things. the first is say if we can't get costs under control on health care, stop spending wildly for outcomes that aren't as good as the people we compete with. we have higher infant mortalities than the people who spend much less, our results our outcomes are worse than people who spend much less than us. so what we're saying is let's move the entire system from fee for service where we reimburse

in a system for quantity to one where we reimburse for quality. for outcomes. and that happens to be what most of the rest of the world does. so we've got a health care board working with our hospitals, our providers, to try to move the entire state to an outcomes based payment system where you get paid for keeping people healthy, getting them jogging, eating vermont food. >> who is driving this? >> all the people who are keeping the loot. so what we're trying to do is move the system of payment from fee for service to outcomes based payment. at the same time, if you ask how do we pay for health care and how do you get it? my view is you should get health care because you're a state of vermont not because of who you're lucky to work for, not how rich or poor you might be. so we're trying to move you have a health care card because you live in vermont. second, we want to fund it in a

more sensible way. i think everyone around the table would probably agree that having a quantity-based payment system probably isn't going to lead to prosperity for us. we've got to change that. if i said to you, we have no health care system, i want you to design a system for us that makes sense, and you came back and described the current system later this morning and said we've got an idea, let's do something called health insurance for mostly for-profit insurance companies, and if you can or you will, you'll buy insurance for your family or your employees. and if you can't or just don't want to you won't. but if you refuse, don't worry about it because the people who do will pay for you. we would say go get a sunny room somewhere. we'll face you south. when you feel better we'll let you out. so what i'm saying is let's also try to move vermont to a system where you pay for health care based upon your ability to pay. everyone pays something based on our ability to pay. that's what we're trying to do.

i think we'll get it done. >> you're suggesting that health care should be a right because when the supreme court approved the health care law justice roberts specifically said it's not a constitutional right. it is a tax and it can be withdrawn any time. >> justice roberts and i disagree on a number of issues and that's one of them. >> ok. >> we've seen a pretty big rray of messages on obamacare. do you think these different messages are good or bad for the party and doing we'll see more positive messaging as the cycle evolves? >> because of the paralysis in d.c. that if you look at poll numbers and pundits appears to maybe not going to change very much going forward, i really believe that if we really want to create jobs and opportunities in america, democratic governors are going to do it. i don't get up in the morning and say i want to go to washington and help other

democrats get elected. i do that because i centrally believe that there has never been a time in america where getting democratic governors elect whod are going to fight for the middle class and create opportunity for all not just the select top 1% makes a difference. and when i look at the political landscape i say anything we can do to elect democratic governors is smart and good for america. and that's i believe -- when i'm saying to democrats is, listen, if you believe the pundits and the polls, -- i never know whether you should or not. but if you do, this is the one place where we've got to get it right. because governors actually have to govern. we can't get up in the morning and say hey let's just let these guys in congress -- these tea party folks, let's just shut the whole thing down. let's make sure nothing happens. governors can't do that. look at what's happening under these republican governors. it's the wrong choices. it isn't the top 1% that needs the help right now. it's the middle class.

>> governor, you wake up every morning with a firm belief that democrats have better solutions or americans than some other approaches like tea partys. yet, as bill pointed out, is the fair chance that the republicanless take over the senate, there's a -- no chance that the -- a low chance that democrats will run the house. next year. so what is it in the american body politic where you're convinced that your approach and the approach of your colleagues is the right one that has the other side copting to win? what is that? >> because we're creating jobs. and that's what we promised to do. >> no. why do the republicans win in congress? why can they take over the senate where you've got the

better side of the argument? >> i'm not an expert on what goes on in congress or what goes on here in d.c. really i don't think that much about it. happen to is that i be maybe the rare people in this earth who would be so frustrated in congress that i would probably jump out one of the highest windows i can find. if i'm not making a difference, if things aren't happening i don't want the job. so i don't understand the whole thing down here. what i do understand is that governors actually have to deliver. and what we've seen in the last four years with these tea party governors is delivery of all the wrong choices. instead of creating jobs and lifting up the middle class they literally have passed taxes that either cripple the middle class to give the benefit to the top is% whose doing just fine before they

came along, or slashed education spending. they've done this uniformly across. you go look at what -- go to michigan. go look at what they're trying to do in maine. go to pennsylvania, wisconsin, ohio. look at the states that have actually had these republican governors and they've uniformly have implemented a policy that literally gives tax breaks to the very top 1% while they pay for those by slashing education and raising taxes on the middle class. it just makes no sense. it's an economic policy that's doomed to fail. >> i think part of the answer is that there's increasing political segregation in the country and that's been well documented. and certainly how many republicans are left in congress when you leave them? i don't think there are more than susan collins. >> yeah. susan collins and one in new hampshire. >> i think chris shay was the last republican in the house.

and they live in different universes today. >> can we talk about a couple of the states you didn't mentioned. new mexico, nevada, which again from a presidential perspective these were really strong states for democrats. so either what did the republican governors there do so well or what did democrats do in terms of recruiting not as well to not make it to your lift of the top pickup opportunities? >> i think there are states where their leaders have not been as distracted by the issues i just talked about. things member after kind of fell apart in new jersey after the election and most governors tried to move people as quickly as we can through bridges -- covered bridges if we can keep them. in case in new jersey went off the traction.

people said don't you think you should have spent more money in new jersey? because we didn't spend any money in new jersey. and my response was, i wished that we could spend money for democrats in all 50 states. but what we have to do because we have half the resources of the rga is manage them really smart. and my job is not to promote governors races in states where we believe we can't win. my job is to promote governors in states where we're going to win. that's what we focus on. we're not going to win in nevada. we're not going to win in new mexico. >> is it that that strong or is that the bench for democrats was not particularly strong? >> i haven't spent a lot of time analyzing it. all i can tell you is we don't believe we will win in nevada and we're not going to spend any money there. unless something changes radically in the next -- unless a bridge gets shut down. >> does it have anything to do with the fact that republican -- >> they don't have a lot of water though. >> that's the problem. >> republican governors of

nevada and new mexico are both latinos. does that have anything to do with it? >> it's certainly the exception to the rule in the republican governors association. >> could you talk about legislatures where although as you say you're on the offense in the government on the legislative level you're not. and as terry has learned the hard way you can have a great victory for governor but then if you have an uncooperative legislature, it's hard to get your agenda passed. >> you raise a good point. let's talk about how he got nto this mess. haily barbour i believe when he was chair of the republican party made a decision that democrats didn't pay enough attention to. ich was invest in electing

legislators and republican governors for loost reasons you want to do it but one was so that when reapportionment comes up we can redraw the line in congress and have a bunch of people who believe what we believe which happens to be the tea party in barbour's case, to govern america or be obstructionists and they did it and they did it pretty well 20 years ago. that's why we're in the mess that we're in. so one of the points that i make to democrats is, listen, i'm just speculating here but one of the challenges to taking back congress might be that they gerrymandered these districts so effectively after they did that is it's tough to win. so if you elect democratic governors and legislators, going forward, going towards reapportionment, maybe we'll have an opportunity to at least make the districts fair again.

i do think that democrats historicically didn't look carefully enough at electeding democratic governors who control governors mansions and democrative legislative candidates. >> >> we had a good democratic year in 2012. most governors were elected four years ago in a republican landslide, so republicans were on the defensive. senators were elected six years ago, which was 2008. the financial crisis, a big democratic landslide. if the results of the election this year point in all kinds of different directions, and we're asked what are the voters trying to say, i think the answer is land slides don't last. that's what they're trying to say. finally, court ruling on money, is that creating a problem for democrats? >>