through government or the private sector or the non-governmental sector or all three working together. how before you can adventure service, you had to determine, develop, and then implement the policies that will be the instrument of your objective. how do you do that? one of the problems with it? fourth, how do you succeed? how do you turn your good ,ntentions into real changes and whether you have to win an election or not, there's always politics involved in that. i decided after thinking about this, and particularly after the last talk when i spoke about how i came to be interested in

people, that we should put the purpose part off till the last, even though it's really the first thing, because it will make all the rest, i think, make more sense in that way. i think that it's very important to understand we live in a time when, for a whole variety of tends topolicymaking be dimly understood, often distrusted, and disconnected from the consequences of the policies being implemented. that most intensely in the development, the passage and implementation of the affordable care act, but i also feel it in many other areas as well.

one of the problems is that if a policymaker is a political and is covered primarily by the political press, there is a craving that borders on a date if to have a storyline. the once people settle on storyline, there is a craving which borders on blindness to shoehorn every fact, every development, everything that happens, into the storyline, even if that's not the story. of you who are students here, the first thing i want to say is, i spent a lifetime really believing that policy matters. that there are different consequences to different sets of ideas, and that they matter. therefore, the debates are important, the disagreements are important, but it's not very to overlay them with too

much cynicism and pretend that it doesn't matter and that it's all just a roll of the dice. i just don't believe that. and so today, what i hope to persuade you is not that everything i did was right, because it wasn't, but that all the policies that we developed, we developed with a certain set of objectives. we spent an enormous amount of time on the details, for which i might say i was made a lot of fun of when i took office. why is bill clinton spending all this time on the farm program? a presidenthat does. but this is really, really important. anduse it affects people, it determines whether your purpose can be advanced.

, i just picked three policies. to talk about americorps and student service because this is the 20th anniversary of it, but i think its impact, its return on taxpayer dollars and the number people it mobilizes, the fact that we have had far more people serve -- we had more people serve in americorps in the first five years than in the history of the peace corps. the main thing that frustrated peoplethat until actually needed them, a lot of people didn't know much about the americorps programs. but i decided not to do that. i wanted to talk about three policies today that i discussed in the first talk a year ago. the implementation of our economic strategy in 1993, anchored by the budget.

, whichfare reform bill was highly controversial at the time, and remains so, and our efforts to achieve a comprehensive peace in the middle east, which has taken on new urgency in view of all the things that are going on, and which took up a lot of secretary of state clinton's time when she was in office. begin with the economic program, because that's actually what propelled me into the race in 1992, and the primary reason i was elected. elected, we had already more than a decade of and a declining middle class standard of living.

many years, poverty was rising instead of going down. the things we thought were guaranteed right at the end of world war ii all the way through the 1960's, that we might fight about civil rights, vietnam might be a catastrophe or a great idea, depending on what you thought, but at least we knew the american economy would be there. we knew that every year people would make more money than they did before, that families would be better off, that children would have more chances, that poverty would go down. it's hard for all of you to imagine that, but when i was a kid, that was taken for granted. even in my state, which was one of the lowest income states in ierica, i don't know that ever met anybody who wanted a job that didn't have some kind of job. we thought that that's the way america work. by the time i ran for president,

people didn't think that anymore. been, for 12 years, governed by an economic policy which propelled president reagan to office in 1980. republicans call that supply-side economics. the democrats call that more disparagingly trickle-down economics. but the idea was that the economic troubles we had in the 1970's were caused by the strangulation of a regulatory state, the inefficiencies of unions and government trying to hold onto past economic arrangements which were no longer relevant, the need to deregulate to the maximum is 10, and most important of all, to make taxes as low as they could possibly be on what the second president bush always called the

wealth creators, the highest income people, because the more money you gave them and their business entities, the more they would reinvest, create more jobs, and create prosperity. and we had been doing that for 12 years. when i was governor of arkansas, during this time, there was quite a lot of prosperity in the 1980's on the coast with the beginning of the rise of the high-tech economy. along route 128 in massachusetts. here in the d c area with the interconnection companies, and obviously in silicon valley. the 1980's were tough for the middle of the country. you had great industrial cities just hollowing out. the farmers had a very tough time in several of those years, and a lot of people thought manufacturing was going to disappear from the country.

years, i tried to that wasstrategy really quite different in some ways than the reaganomics strategy. i did believe we had to keep taxes low if we wanted to especially jobs, since our state was already a low income state, and we had a very good budgeting system which made it illegal for me to spend more money than we took in for more than six months in a row. if i did that, my chief financial officer and i could be found guilty of a misdemeanor. for a system going back to 1948. we weret of which, cutting spending all the time, and not just at budget time. we never had any mass layoffs, we never had to abolish any big rogue rams. if we had the money, we invested

it. if we didn't, we didn't spend it, but we had a flexible system which enabled us to operate, and we relentlessly worked on developing our education systems, our training programs and our attraction for new investment. in the 1980's, there were only eight states which gained manufacturing jobs, and my state was one of them. we worked on it. but i can also tell you that i learned that it takes a good to repurpose an economy, and when i ran for president, in the previous 10 years are unemployment rate had been below the national average on he wants, but in 1992, and a happy political coincidence for me, we led the country in job growth throughout the year. we were always first or second in every month. but i developed a very different

theory about what makes an economy grow. when we started practicing supply-side economics, this country had never before in its entire history ever deliberately run large structural budget in timesin peace time of growth. so despite the current congress deriding president obama's stimulus program, basically we had an eight year long stimulus ride. driven primarily by big increases in defense spending and large tax cuts. the reagan tax cuts were so large in 1981 that about 40% of them were actually clawed back, and in only eight years we still tripled the debt of the country that we had run up from the beginning of our existence to

1981. and when president bush came in, he basically, the first president bush had to serve president reagan's third term in economic terms, that if the ideological and institutional political support to supply-side economics was so deep, there wasn't much that could be done about it. democratic1990, the majority congress passed the bill to try to start doing something serious about the deficit and the debt. tax had some modest increases and some modest spending cuts. the most important thing in that bill in 1990 was the so-called pay go provision which said that unless it was an emergency like the financial crisis, which congress could recognize, or a big national security emergency, in normal times, if congress wanted to spend money that went beyond -- be on the revenue

growth that was projected, they would have had to raise taxes or cut spending somewhere else, to try to turn this trend around which had then been going on since 1981. it was a good thing for president bush to do, but the reaction in his own party was for roche's. newt gingrich led a revolt against the republic leader in the house -- republican leader in the house, bob michael, and he was deposed. it led to the beginning of the preteen party movement -- pre- movement. economics is not the all it, folks. -- economics is not theology, folks. they had convinced everybody, including middle class people that their incomes were stagnant

because they had been so crushed and their wealthier neighbors had been so rushed by the burden of the state. it led to the rise of newt gingrich and orson president bush to give what i thought was a very said speech at the republican convention saying he had made a terrible mistake in signing this budget bill and he would never do such a terrible thing again. now if you read the press, generally people think it is one of the three or four best things he did. i thought he had done a very good job in most of his foreign-policy work, he signed the americans with disabilities better had a environmental record, and my point of view, than his predecessor, but he was stuck with this economic policy. and i thought the most important thing i could do was to reverse it. ,nd it began with the budget

which is far more than just numbers. the details matter. so let me begin by saying i put out a booklet in the primary and ann al gore and i reissued economic plan in the general election, and we began to work on what would be in the details of the budget. and it was a very interesting process. we debated all kinds of things, and you may find this amazing because interest rates have been down so long. even the democratic economists assumed during the transition period that if we got unemployment below six percent, we would have terrible runaway inflation. so we had these arguments at the .overnor's mansion in arkansas i said no, we won't, because productivity is high and our

borders are more open than other countries. if we start charging too much with inflation, competing products will come in and we will drive prices back down. even my own advisers looked at me like i had been temporarily deranged. is 4% hasten to say, that inflation with high unemployment. discouraged, as they have quite understandably in the aftermath of the financial crisis, then the --ticipant haitian rate participation rate tends to go down. the unemployment rate may not be comparable from one year to the next. it really depends on what the level of work force purchase a patient is. anyway, what we decided to do was first, to figure out what had caused a slowdown, because

there was a marked slowdown in the economy in the bush years, and we got into a recession and got out of it. shake out ofjust it. why was it worse since the economic policy had not changed from the reagan years? was, ity, what happened was the first time in american -- in effect we went on an eight year stimulus program and then a ten-year stimulus program in peace time with economic growth. if you keep borrowing all that you have toually pay higher interest rates. and a higher interest rates were crowding out private investment. had toecided first we get the deficit down, and secondly, we had to do it in a way that people would know we were serious. is in 1993 dollars,

so we are talking about a lot more money than today. we had to have a plan that would todibly reduce the deficit $500 billion over a multiyear period. it meant that are estimated revenues and spending had to be credible. something that had been shredded rosye 1990's by so-called scenarios where you would always assume when you did your budget you are going to get more money than you would. you always assumed you were going to spend less than you knew you were. reverse this, i want to assume we will get less than we think we will and assume we will spend more than we think we will, so the numbers will be better. and we did that. just announcing the program, especially since the chairman of the senate financial committee, lloyd benson of texas, agreed to be my first treasury secretary am a had a huge impact on the bond work it, and interest rate

started to drop in investment started to pick up. this bill violated all the orthodoxies that had governed the country for 12 years. we raised personal income tax on people with the top 1.2% of 36%, wherem 33% to it had to remain until it was cut, and the president obama allow the cuts to lapse and then the affordable care act levy on top of that came in. we raise the corporate income 35% above $2to million. the difference between that day and this is when i did it, that 35% was exactly in the middle of the corporate tax rates of all the other rich countries in the world, the ones we compete with in the organization for economic cooperation and development. today it is by far the highest in the world.

else has opted for a lower rate with fewer deductions. so you had this bizarre situation in america where one of our big companies a couple of years ago, exxon, paid 17% in real dollars him a while a lot of our big manufacturers paid near the maximum, companies like dow. but it was very different then. i wanted us to be competitive and right in the middle. now you should know we are also the only rich country that taxes repatriated income. that is, if you earn money in ireland, you only pay 12%. if a company brings it back to america, the have to be -- they have to pay the difference between 12% and 35%. shouldn't surprise you that there is more than a trillion dollars in corporate cash by american companies hanging around oprah's. if you should ask yourself

to yourresponsibilities shareholders or customers, your employees, would you bring the money back if you could conveniently keep it somewhere else? it's a big issue today, but i'm saying this because it was not an issue then. there are a lot of companies that didn't want to pay it, but it is not because it would not put them out of line competitively with what is going on in the rest of the world. we also passed in the house america's first carbon tax, which al gore had recommended and which i wanted to do because i wanted us to get a head start on tackling climate change. 21 years ago we passed the carbon tax in the house. alas, in the senate, we couldn't because carbon had more friends in the total vote. we had already had two changes.

then we had tax cuts. the most important one to me by far was doubling the earned income tax credit for working families. it had a big impact. i also proposed a middle-class tax cut that was modest but real , and the creation of empowerment zones in areas of very high unemployment and low income to induce more investment there to try to create a normal who hadfor people really been totally left out of every good thing that happened in the 1980's. then we were told late in the process that the deficit was going to be a lot bigger than i thought. this is the first thing about policymaking. about the details, the have to be calibrated to the circumstances. now, i had two choices.

i could pretend like i didn't hear that report. believe it or not, a lot of people have done that over the years, just pretend you didn't hear it. or i could change the budget. this whole thing would have been pointless from an economic point of view if we didn't drive the interest rates down. i changed the budget. we cut a little more and had to take out some of the tax cuts. the carbons changed tax to a gas tax. and so i decided to take out the middle-class tax cut because i knew that if you got interest rates down, middle-class people would say way more money -- save more money in lower interest rates than we could ever afford to give the men a tax cut. saving3, that averaged $2200 in lower interest cost on home mortgages, car payments,

credit card payments, college loans. and it was enormous. so i think i made the right decision, but it was hard to do because i said when i was running that this would be part of my economic plan. so will you be accused of breaking your commitment? i commitment was to restore broad-based prosperity. chance, and the circumstances had changed. had i just said i'm going to commitment, one congressman came to see me and tried to get me to get rid of the gas tax and go back to the middle-class tax cut and get rid of the earned income tax credit for low-income working people because he said were all going to have to run in 1994, and they don't vote in midterms. the intersection of politics and economics. by the way, here is absolutely

right. i thought it was wrong for america. we had to get lower income families up to a decent standard of living. i deferred the middle-class tax cut until we passed the balanced budget act in 1996. and you know the rest, it worked pretty well. that.did now the thing i want to emphasize is that it wasn't the only thing that we did. triedt budget, we really to dramatically increase investments in certain areas. beginning with early childhood education, we added $2 billion a year. we tripled spending for dislocated workers, people that lost their jobs through technology or trade, to try to

prepare them to take other jobs. even when unemployment went way low and there were fewer dislocated workers, we kept doing that. good attill not very it, particularly if they live in small towns or rural areas. what would you do to restore the in rural west virginia or theern kentucky, mountains of north arkansas? or the rio grande valley, or the mississippi delta? the native americans that live on reservations who don't have gambling? they are still the poorest americans. so we tried to come to grips with all this, and it required some investments. we were on track to double investments in the national institutes of health. we finished by the time i left office sequencing the human genome. we spent a lot more money on other kinds of research and

development, and especially on information technology. in the balanced budget act of 1996, which most people know about, which we passed with republican majority in congress, a one the congress in 1994 in no small measure because of the economic plan. it was a shock to the system. it was like being taken to the dentist and pulling your teeth without novocain. they said we have been living on sugar since 1981. you cannot go pulling our teeth. we don't have to go to the dentist. it was ugly out there. and people didn't feel the benefits of the program by 1994, but they knew what had happened. so we lost the congress. republicanser the had shut the government down twice and the american people pre-tea artieir

budget in place and do some other things i didn't think much of, we passed the bipartisan balanced budget. it did have a middle-class tax cut. it had massive increases in the budget and outside it. we had the biggest increase in college aid in 50 years. since the g.i. bill. and we had the first money since harry truman to help schools build new schools and repair old ones because we finally had a class of young people in our public schools, including many of you, bigger than the baby boom generation. what we had the highest percentage of public school students we had ever had his parents were not property owners. so it became very difficult to pass local property tax levies and states all had to run on balance budgets, so we had some

money and we committed a billion dollars to a school construction program. we went from zero to 1.3 million young people in afterschool programs. so that they could keep their learning going. we did a lot of other things, so , we investedll some things. we tried to accelerate the tech boom that was underway into spread it to other areas of our national life. telecommunications reform act i , andd by general consensus created hundreds of thousands of jobs. it kept the opportunity to go into business in the telecom area available to small business people and entrepreneurs and did not let them get choked off by big players in the game. way toward a long connecting all of our schools to the internet. 90%ent from 35% to over in those fewvity

years. connection costs for hospitals, schools, and libraries. we were investing in things we thought would speed up what was easy on, and it was really in the balanced budget act because the bill in 1993 had done twice as much good as everybody estimated. had no rosy scenario. we underestimated its impact. the growth was greater than we thought. so the balanced budget act of 1996 was an easy bill. the most important thing we got out of it or the future is something that is at the heart now of the expansion of health care under the affordable care act. the establishment of the children's health insurance program was the biggest expansion of health care since medicaid, and almost immediately we had several million children getting health insurance.

to get that in all that education aid, i had to make a compromise. i don't know how many times i have read from the left or criticism about what a slug i sign the balanced budget act of 1996, lowering the capital gains rate from when he a percent to 20%. toid it, but -- from 28% 20%. it was the price i pay to get the children's health insurance program and all that education stuff in the budget, and i would do it again tomorrow in a hard week. one of the things you -- in a heartbeat. when you are not alone in a room dictating what is going to be done, sometimes other people have ideas to, and if you want what you want, you have to give them a little of what they want. and it isn't just politics per se. it is integral to the process. you are free to decide that you think i made a mistake, but all

the people that say, you know, what was bill clinton doing getting in bed with wall street and lowering the capital gains tax? 6 million poor children health insurance coverage. and you just have to ask yourself, it is the price you want to pay. in 1993not have done it because the deficit was too big. we were balancing the budget. fourbsequently got surpluses in a row for the first time since the 1920's. [applause] but even there, we had an investment strategy. all thead to control other spending to target what you wanted to target.

and the people who thought something out should have been targeted criticize you for it. thisthe storyline of all was very different than the story i have just told you. was basically twofold, and it hurt us in the 1994 elections. the storyline was something like bill clinton raised taxes but not middle-class taxes. therefore, unlike our heroes of the last 12 years, he is a tax raiser and he didn't even give the middle class a tax cut. was designed to create the impression that i hadn't kept my commitment. met, whoi had never turned out to be america's most , thomas scholar patterson, who was at the maxwell school of syracuse and i believe is now at harvard, he wrote this article saying what

is going on here? madeid president clinton more commitments, more specifically, than any of the last five presidents, and he kept a high percentage of them. the american people should think that finally got somebody in here who thought about what they were going to do and kept their commitments. instead, they are being told every day that he is a slug because he failed to pass health ofe, which is another way saying i didn't have 60 democratic votes to break a fill -- filibuster. underneath, all this other stuff is going on and the storyline blanked it out. nobody said the guy did it in reverse. trickle-down economics, that was a pretty good hit. or that we had these programs to do away with poverty. so it was challenging, to say the least. but the most important thing is, did it work?

in the end, that is the test. so we got a few charts here. the first chart up. i love this. this allt used to do the time. it drove me stark raving mad, but i decided there was something to it. so president reagan had very, very good job growth. for the time. before him, if you go back all the way to the early 1970's, 1970's, the only person with better job growth was jimmy carter, who had very good job growth, but low income growth, in real terms, because inflation was so high when he was president. he had 15.8 million jobs. we had 22.9 million jobs. you could say clinton was lucky, he copied tech boom. clinton was lucky, he came out

caughtrecession -- he the tech boom. i hope i have convinced you it wasn't just me. we had a whole team of gifted people working on this. but one thing you cannot explain away is the difference in the poverty reduction numbers. that is the single most important number to me in my eight years as president, personally. in all the so-called prosperity of the 1980's, only 77,000 of our fellow americans moved from poverty into the middle class. in the 1990's, 100 times as many, 7.7 million people, did. that was policy. [applause] interestingly enough, the conservatives always said they hated the government, but the size of the federal government expanded by nearly 200,000 under president reagan. we maximized the use of gore'sogy, thanks to al

reinventing government program, and we reduce the size of federal government by to 347,000 by the time a -- when i was in office. we were doing what we should have been doing for years, using the benefits of technology to increase the benefits of government. let's go to the next slide. the most important thing i will say again is -- that's not the next slide. [laughter] the most important thing i will say again is, we had then what we have to do now in more difficult circumstances. we had to restore broad-based growth. you can have all the economic growth in the world and it's only -- if only 10 people have it, you don't get very much. let me just show you this.

you see where it says clinton administration? forle steep that curve is eight years. that is median family income. that is the one in the middle. and 2000, in $2012, median family income increased 17%. to 67,000 $600. you have to go all the way back, let me just show you here. you have to go back to the 1960's. let's go to the next slide. you should always ask if you aren't in an economics class,

don't let anybody tell you what the average is. that is like you ought to be able to put one foot in boiling water and one foot in freezing water and feel just right. [laughter] [applause] the average is great. what you want to do is put your foot in the median water, the one between a hot and the cold. here is the most important thing. the typical way income is in quintiles, the lowest to the highest. shows you why president reagan only had 77,000 people move out of poverty. in income -- now these are but they are within a tighter screen.

the bottom quintile averaged .7% increase in income. the second, seven point eight percent, the third, 9.7%, the fourth 12.2%, and the top, 22.7%. keep in mind all these people over here started with higher incomes in the first place. but the point is, you do not economicave unequal growth. you can have broadly shared prosperity, but it requires policy. you have to have a deliberate strategy to do it. woulde policy that produce it today is slightly different than the policy that produced it in the 1990's

because of the aftermath of the financial crash, because of the continuing acceleration of technology to dramatically increase productivity, to the point where it's hard to create more jobs than are being eliminated every year. in rich countries and for a lot of other reasons. you can dos you that this. you can have broad-based prosperity. and drives me nuts when i read all this, saying ever since the 1970's when inequality has been growing. that is not true. inequality grew in the first year and a half when i was president, by the way. this understates how much was done once the whole economic row graham kicked in. we had increasing inequality through the end of 1994, and then from 1995 to the end, it took off. let's go to the next slide.

i think this shows you how concentrated it was. this is the so-called 5% slide. no, this is more important for right now. this shows you how america changed. for me andant everybody else to knowledge that this growing inequality started economics,kle down or supply-side economics, but was accelerated by it. if you look in the nixon-ford years, we had a democratic congress and two republican presidents come a both of whom would be far too liberal to get nominated today. night there you see it is almost identical.

the bottom fifth grew almost as much as the top 50 in those years. close, and you have to understand, if jimmy carter had 2.8 million jobs in four years. todid a lot of things to try get jobs, but inflation was so bad, it made it look like nobody was making any money in real dollar terms. so those numbers are low because of the inflation. you are familiar with the reagan numbers. president bush had a decline in , but i believe you should see that in terms of the other eight years. sooner or later, the wheels had to run off of running these big deficits and letting the interest rates go up and potentially, there was a limit to it.

president bush, believe it or not, this is both a compliment and a cautionary tale. when president bush ran for office, the second president bush, unlike the first president bush, he was free to decide what he wanted his economic policy to be. he basically said vote for me and i will bring you back to supply-side economics. the rhetoric was clever. i will give you the same thing clinton did with a smaller government and a bigger tax cut, wouldn't you like that? i am a compassionate conservative. he believed that reagan was right and i was wrong. that's what he believed. back to financing

two wars on borrowed money and financing a tax cut for hillary and me on borrowed money and spending more than we were taking in. .nd the consequences were there put that chart back up. i want to make full disclosure here. i attempted to get these numbers , i just haven't been able to do it, to stop on the day of the financial crash. so that no one would say i was being unfair, not to him, but to the theory that i am advancing to you. prettyn't do it, but much the numbers would be the same. they would just be slightly smaller. because a lot of the damage of the financial crash was done at the very end of his term. it didn't occur until he was almost out of office. but what happened in those years was, all of our growth before housing, was from

consumer spending, and finance. and median income, the one in the middle, was lower than it was the day i left office before the crash, which is why you see these income numbers. in other words, there is a very significant limit to how much you can grow the economy by cutting taxes on high income people, and even by spending money, if you don't spend it very well, in the government. you have to have a clear strategy on harry are going to spend your money and you have to have a clear strategy on what tax policy can be. but there is no inherent virtue in taxing anybody, but there is an inherent virtue in raising the money that you have to spend to build a decent society to take care of people who with snowfall of themselves cannot take care of themselves, and to

do the investment that has to be done publicly. are all these businesses, hundreds and hundreds of billions of dollars in benefits and have spun out of the human genome, but the first $3 billion you paid for as taxpayers. not, we would not be where we are. what the't know primary genomic variances are that put young girls at a high risk of breast cancer at an early age, a discovery which literally could in death by breast cancer and end mastectomy's. we would not be where we are in learning about parkinson's and alzheimer's and all these other things. we wouldn't have the level of allow thoseon that johns hopkins researchers that may have found a way to end heart attacks.

a little late on that for some of us. [laughter] we are laughing, but this is important. matters. it is not just spending and tax cuts. it's what kind of tax cuts and how much, and what kind of spending and how much. the details of the policy matter. they will have consequences. so let's go to the next slide. they lost it. [laughter] this basically says what i told you before, but if you look at between the poorest

and the wealthiest 20%, it shows you that there was almost no difference in how they did under nixon and ford. carter had some difference. the biggest difference but light years was under president reagan. the two bushes had almost identical differences, and the only time the poorest 20% had a bigger income increase was in a 3% difference. go to the next slide. this just gives you an opportunity to see how wealth was being concentrated. big turquoise number, that is the top 5%.

we had to simplify the rest of it, but you have the lowest fifth on the ride, the middle fifth and the highest fifth, and on the -- on the left, i mean. on the far right we have the top five percent. in the nixon for years we had the most progress in that he, that is the biggest gain on the bottom. president carter, those numbers just mean that a sickly everybody inched forward together. basically, everybody inched forward together. numbers are the top 20%, with the one on the right being the top 5%. , the thing i'm proudest of on these numbers

when we were there is that our bottom 20% actually had in percentage terms about the same gain in income as the top 5% did. this is really important. this is the kind of stuff people say this will never make the evening news. nobody gets shot, there is no drama. are millions and millions of people's lives. means. what policy go to the next one. the next one -- hold on. in closing, here is what i want to say. we had a plan that restored fiscal responsibility come increased investment where it would do the most economic good, instructed the tax system to live middle-class wages and reduceproperty --

poverty by moving people into higher paying jobs. we pursued it for eight years through different circumstances with both hardee's, and i made deals when necessary. we will talk more about that next time. but it worked. , it's harder because of the crash. , a lotrder because now of the information technology that helped me so much maybe it producing so much productivity so fast that it is more difficult to replace more jobs than you lose, that it was when i started. because of thelt and almostmpetition desperation all over the world. there's is a world job shortage, especially for young people. us becausesier for of the energy revolution, we are

producing more of our own energy of our otheruse strengths. we still have the best network of higher education in the world. we are still the youngest country of all the major competitors except for china. 20 years from now, we were going to be younger than china if they hadn't changed their one child policy. and the details are not clear yet, so we may still be younger. immigrationhy reform is even more important today than it was 20 years ago when i was president. because having lost it, i can tell you, use matters -- youth matters. [laughter] it matters. does look around this room here. we have all this diversity, all this youth, and all this brainpower. it is a massive competitive advantage. because we want to

do something about the deficit, but we actually should be investing. interest rates are lower than inflation theory if interest rates are lower than inflation, no matter how upset you are , you the deficit or debt should focus on growing the economy more and driving interest rates up, so that you can actually lower the deficit if you cut spending or raise taxes. now i supported it when president obama decided and fought for the right to let the tax cuts on high income americans that had been enacted in the bush years expire, because people in our income group have enough disposable ourme that it didn't change consumption patterns much, so it didn't contract the economy very much. it if you did

what i did in a heartbeat in 1993, if you did exactly that, and you cut spending too much on the or you raise taxes too much, instead of investing in infrastructure bank and enticing companies to return some of this corporate cash to america to put america to work, it wouldn't work. you can only balance a budget if you have adequate revenues, adequate spending restraint, and adequate growth. the country needs growth. then everybody will do well. hilary and i and some of our friends in this audience who live in new york probably pay the highest aggregate tax rates in america, and i thank god every april 15 i'm able to group -- able to do it. the family i grew up in, i'm thankful.

but you could tax me at 100%, and we could not bring growth to the economy enough to balance the budget. it's got to be a growth strategy. as long as people in the top five percent are making the lion share of the money, we ought to pay the lion share of taxes, for the same reason that willie sutton robbed banks, that's where the money is. of not just for the purpose lowering our incomes, is for the purpose of having some balance in this country that should be part of a strategy to restore broad-based growth. i can guarantee you, every would farrew up with rather have a pay raise and a better future for their children and grandchildren than any given tax rate on any given individual or company. strategyll part of the

. the progressive gold should be shared prosperity. and we have to think about it in terms that are relevant to today , so if i were making these decisions today are trying to work it out, i would have to admit that not everything we did then would work today. but if you start with the goal in mind -- that's the lesson of this whole thing. start with the goal in mind, broadly shared prosperity. identify the problem. much inequality, it's a severe constraint on growth, and it is. it is a huge constraint on growth. spending 17.8% of our income on

health care was a huge constraint on growth. we will talk about that more in the next lecture on politics, but when the president signed the affordable care act we were spending 17.8% of our income on health care. company spentich more than 11.8%. that is a trillion dollars in year. in addition to whatever you think about what finance did in the crash or what big companies theiring, not giving employees pay raises, there are massive numbers of small businesses who would have loved to give their employees pay raises, who spent the money on their health care premiums. nowbviously it's even worse because we've got eight million people enrolled in exchanges and another 3.5 million already covered by medicaid expansion, on the way to 5 billion. on the way to 10 million, but other states don't want to participate.

virginia has a study commissioned by the republican legislature. it says if they take the medicaid expansion, it will create so many jobs and save so many jobs and increase productivity so much that the budget of virginia, even when they have to start paying a match, will actually be improved by $1.5 billion over a decade. and they are still not going to do it, even though they're going to make money on it. there is this idea abroad in the land that this is all for four people on welfare. they are covered already. covered before the affordable care act ever passed. this is for low income am a working people that cannot afford it. but here's the main point. what we're spending on health care today after four years of implementing this law, senior saving $10 billion in drugs?

17.2% of our income. in other words, we are getting close to our competitors because we are delivering care in a more efficient way, and we are wasting less money. that is policy. it's all that boring policy that you cannot claw your way through the storyline to policy. i want to do two quick ones to make the point. also to talk about the positives and the negatives. what was the problem welfare reform? it was developed to be a temporary assistance for everybody but -- for young widows with young children. reasons, ity of became the lifeline for millions of people.

it took generations out of the work culture. the storyline when i sign the reform bill was, the republicans have got linton. they have forced him to sign this horrible bill because he wanted to get reelected. i had been working on welfare reform since 1980. the first politician i heard talk about welfare reform was robert kennedy. right, frank? who worked for him. governor in 1980 when jimmy carter that the authority to give five states experiments to change from an income system to work a system. i apply. we were accepted.

the time i was a senior governor any 1980's, -- in the 1980's, i worked with the reagan administration. here is the only thing you need to know. forum for the governors in washington. to go lobby to congress. we brought in a bunch of people would pin on welfare. -- who had been on welfare. i said, lily. she was talking to the governors. i said, do you think this program should be mandatory? she said, oh yeah. i said, why? she said, because people like me are scared. we don't think we can amount anything. we will watch tv unless you make us get out there and get job training and take a job. >> i said, are you glad you went

to work? >she said, yeah. the bestthing thing -- thing is when my mom -- bouygues the best thing is when my boy goes to school and ask him what his mom does for a living. i thought there were many people we could move from welfare to work. able in my own administration said, this would be a and amid -- this would be a disaster. you will increase poverty. it will be horrible. we go through the first years of my administration. i decided along with donna chill a lot. statesela, we would give waivers to start putting people to work. by the time the bill passed, 90% of the people had been covered

because he had given 44% of the states waivers. we knew what would work and what would not, theyu read the history, will say that bill clinton vetoed the last two bills. he caved because it was an election year. to be fair, two people who work for me -- worked for me. they resigned. i applaud them when they did. howid, nobody can be sure this will work. if you can no longer in good conscience implement a policy, people should we would design -- people should resign. they were good people and i applaud them. when i wentthe -- to harvard to speak, he said i had been right and he had been wrong because of the results.

but it is more public aided the that. the welfare reform bill basically said, if you can work, and there is a job, you have to take it. you have to be involved in some training or preparation program. but there will be a lot more money to help you manage your parenting responsibilities and work responsibilities and child care and transportation. a lot of other supports. charts.art with these we'll show the charts. i vetoed the first two bills. they wanted to block grant medicaid. grant food to block stamps and let governors decide not to give poor people and their kids the medicine. they wanted to cut the school lunch program. it was terrible. he was trying to veto the first two bills and

then caved. got from 16 changes i their bills after two vetoes. including guaranteed medicaid. $4 billion in child care money that was not there before you read -- there before. a work performance onus. -- bonus. take benefitse to and given to employers as weight supplements. stamp block food grant during we got that back in the school lunch program. we were having a dazzling policy debate. including the republicans on the other side who disagreed with me. they really thought that the governors would be so much more efficient. they didn't care what they got rid of. but then decide based on the facts of the poverty in each state. differentknow,

electorates show up in different elections. the people may or may not need to respond to that were let did -- who are elected. here is what i want to say. there were two provisions in the ale that i hated. one was a five-year lifetime time limit three i had no problem -- time limit. i had no problem with it, except that should exempt recessions. it wasn't a problem the first time, but it was a terrible problem after the crash. the second problem we largely corrected. congress wanted to eliminate and eliminate benefits for legal immigrants. money onhow much more the list is how much more we spent after will for reform passed. if you go a line down, after 2006, when congress changed

hands, how much more money was spent. go to the next light. -- slide. here is what happened to poverty rates in those years. it went down most where it was highest in central cities. it went down least where it was lowest in metropolitan areas outside central cities. there was a pretty healthy decline in nonmetropolitan areas. welfare reform bill was a part of that. go to the next light. -- slide. the welfare rolls declined by 50% in four years. 4.5 years. from the time i signed the bill. in my last budget, over city present. -- 60%.

one of the things i was criticized. i don't the guy ever read any single article. -- don't think i ever read any single article. , how could bill clinton take away the monthly minimum benefit? when the welfare reform bill was signed, the minimum monthly benefit was whatever the state 23 yearsg in 1973, earlier. the only protection in federal law was you could cut your federal benefits, but not below what they were in 1973. , a family ofates three in texas and mississippi got $187 a month. best state,ht --

vermont got more than $600. go to the next slide. dreamed there would be governors who would want to eliminate the income supplements altogether. he didn't get the last one, that is what he is trying to tell me. her work. -- there were. tea partyerceive the waiver that would believe key part -- poor problem -- poor people were the problem in america. almost all those people want to go to work. if youu leave today, were at the other lecture, and you want to parity people with the policy, and don't forget lily. when her son went to school and

was asked, what does your mother do, he could give an answer. my conclusion about welfare reform is different from the economic plant. -- plan. my conclusion is a lot of that is still relevant. it did more good than harm. but now, given the changed climate and aftermath of the welfarehe poorest families, about 15% of the total, are worse off. we should do some good for them. we ought to -- we should admit that. the other 85% are better off. we should not have a five-year time limit that includes prolonged recessions. you should hold the running of the time. you don't have to pay for this year, it was too severe. that is my conclusion about that.

you can draw your own. let me just say a few words about the middle east peace process. they are relevant to today. i almost never hear it reported accurately. i think it is worth knowing. when you do domestic policy, you have to make agreements with other people and politics and interest groups. with your conscience. when you do peace processes, it is not about you. it is about them. no president or diplomat can want anything for anything also worse than they want for themselves. when i go to ireland, they think i am pretty great. but they deserve the credit for

the irish peace process. the albanians think i am pretty great, because of kosovo. muslims and croats christians like me. i hope someday the serbs will forgive me. these deals are done by the people themselves. the are the ones who are affected. the job of the peacemaker is to listen and try to find a way they can both meet their fundamental needs. if they do decide to take the benefitsmaximize the and minimize the risks. that is our job. policymaking cannot solely be judged on whether somebody else makes a decision that is beyond your control. you cannot enforce these things.

briefly, and i will make it brief, but it is important what happened in the middle east peace process when i was president. it is relevant to where we are today. the agreement signed in september of 1993 on the white house lawn reflected what the parties had done themselves in secret meetings in on low. -- oslo. representatives of the palestinian authority. they wanted to do it any white house because both sides trusted the united states. they trusted the u.s. to be an honest broker. 's securitye israel concerns and palestinian concerns were legitimate met -- legitimately met. and i two years later, worked with for israeli premise

are doing this. yasser arafat, senior team. we had a signing of the first log deal after all low -- os where a check of the west bank was turned over to the palestinians to govern. the agreement included, the release of prisoners for israel. intovide the west bank categories. be totallywould controlled by the palestinians. palestinian villages would be category b. if there was a terrorist threat, the israelis could move in. category c were unpopulated areas which israel would maintain jurisdiction over for security regions.

that. i have two points to make about it. one, we signed it. we signed and nine maps marking all these changes. three copies of each. in the middle be process, there was a bypass road that looked like the map said belongs to israel, but arafat said he was supposed to have. rubbing and arafat said -- rabin said, you have to fix it. i said, you fix it. but it wase road, for a religious pilgrimage. the whole world press corps is outside. they have been waiting for is for 20 minutes. you guys better figure out what to do. this is important. imagine this today. in ukraine. in any other setting where you

are tried to get supper done. -- they walk out where you are -- in any other setting where you are trying to get something done. they walk out. didn'trs earlier, rabin want to shake arafat's hand. the map says it is yours. this, it will be binding under international law. arafat did not link. he said his word is worth more than any written contract. can you imagine people in conflict situations talking about each other like that today? this is important. he signed it the next day. abin gave him the road. nobody talked about it. of course his work was good -- word was good. . that is the first thing i want to say.

you have to find a way to establish trust among adversaries. agreement is not as important as trust. trust predates everything. cost itzhaknt rubbing his life -- rabin his life. he was murdered by an angry young settler. who is still revered as a sort of hero in his crowd in the west bank. for what he did. the vast bang chance we have for peace was lost. best chance we had four piece was lost. 1998.orward to we met at wye river with netanyahu. who was then the likud

conservative prime minister. his defense minister ariel sharon was considered to the right of him and would not shake hands with arafat. for nine days we stayed there. everyure we violated human rights convention because my goal was to not let them sleep. until they actually made an agreement. until 3:00p them up or four clock in the morning. we had to do something. we have where stock -- we were stuck. they agreed to give 13% of category c to show good faith. that the palestinians up to 40% of contiguous land on the west bank. things, of other problems slowed it down. ehud barack was elected the new prime minister.

he completed the transfer. that0% of the west bank came out of the wye river accord is largely what is governed today. governs from which he and negotiates or not with israel. i had been talking to arafat for a number of years. i said, do you want to do an agreement before i leave office were not? he said, yes. if not, it will take 5-10 years. many more. we have to do it when you are there. it is 13 years and counting. right about it. want to come to camp david and the beginning -- > in the beginning.

the palestinian strategy was to deliberately be not prepared. in the sense that they understood that all they had to give was security swap rate in. cosecurity swap rate in -- operation. that was were something. i am pretty sure it is the only year in the history of the state of israel when not a single solitary person was killed by a terrorist incident. there was an election and change of government. because of massage working with the palestinian security services -- them assad working masad working with the palestinian security services. arafat said, we have to do this. the first thing you have to figure out is what you will take. expected -- everybody talks about the collapse of camp

david. it was a roaring success from my point of view. they had never sat together and talked about all these final status issues. who had to try to broker a deal, any sense of where the parameters were. what were the limits? where would we go? we had camp david. offered 90%, 91% of the west bank. they said, what will you take? they would not say. it happens all the time. we set about working for six more months. finally, in december, i could not close the deal. i said, i have tried to bring you to to this -- ring you two to this. i will tell you what i think the deal should be. the palestinians should

have a state on 94%-the discs presented the west bank -- 94% to 96% of the west bank. the israelis should give them some compensating land. they should be able to get some settlers and settlement locks -- areas adjacent to the 1967 borders. they should have a capital in east jerusalem. it should be all of the east jerusalem except for the jewish never hurts, which could be a part of israel. there were two big jewish neighborhoods. a lot of other stuff. here's what you need to know. iter all this negotiations,

intentionally let there be a little playing the territorial thing so the palestinians could get a little more. they needed to show they would. do israelis were prepared to a 100% man swap. that is a good thing for them to negotiate. arafat wanted the israelis to keep the jewish neighborhoods in east jerusalem. specialto have security guaranteed for the rest of jerusalem. the divided -- agreed to governance of the old city. the muslim and armenian quarters would go to -- i mean me jewish and armenian quarters would go israel. he was proud of being a custody and of christianity for that

he was proudns -- dianeing a custod virginity for the arab christians -. the only thing they could not agree on was how the -- the temple mount would operate. .hat the arabs called -- read what it should be. said, who had run it since 1967. propose to turn it over to the palestinians. they agreed that palestinians could not do anything under the temple mount because the ruins of the temples of david and solomon are there. because of the

excavation. feetdisagreed only on 50 of the western wall. where i think israel is right. arafat wanted to give them the wailing wall. at the end of the 50 feet, there is an interest to a tunnel where you could do mayhem to the ruins of the temples. they had not agreed on the composition of the international force we would be a part of on the west bank. they pretty much agreed on everything else. the temple mount problem, i never saw anything like this. they agreed on how it would operate, but the palestinians wanted to say they had sovereignty over all of it. the israelis want to say they had sovereignty. i try to get them to split the sovereignty or turn it into an

international peace enter. -- center. it is the only political problem where there is no problem on what happens, but nobody can figure out how to describe it. that is about it. ehud barack said, i will take it. we will negotiate and fill in the blanks. arafat said i will take it in theory, but i have reservations. and ehudd, israel barack accepted the d real -- the deal. wasel was able to us willing to give up 96% of the west bank. to give the palestinians a capital in east jerusalem. arafat wanted eight more blocks in the armenian quarter cause there were a couple of churches there. he once you have all the christian churches. -- he wanted to have all of the christian churches. all they were

disagreeing on. arafat knew he would have to recognize the state of israel. get up the -- give up the unlimited right of return. refugees would be taken into northern israel. but there could be no unlimited right of return. raise $10 billion or more to relocate the palestinians out of the camps. arafat never said yes. go, sixas about to weeks before i left office, he came to see me. i said, i will never forget this because you read things -- he and ehud barack did not get along that well. at first i said, stop. we have been doing this for

eight years. you think i care about the palestinians? >yes, more than the arabs do. be --ere a jew, would i all of our children would be in america going to college. he said, yeah i'm a you do. -- yeah, you do. i said, if you are not going to do this, i think you are in knots, but it is ok. -- are nuts, but it is ok with me. i can go to north korea and get rid of their nuclear program, go to japan. south korea. russia, china. we have to do this together. it will take 12 days. i only have six weeks left.

i ever sawnly time arafat cry. it is very different in private. i didn't go. i said, we are giving up an opportunity to make the world a safer place. if you are not going to do this, just tell me. he went through this whole deal about how it would be 10 years again. two different arab leaders he was going to take the lille -- deal. the details had to be filled in. on january 7, i went to the israel policy forum and went public. i had a couple of weeks. we really had until the middle of a brewery when the israeli election was going to occur. under the agreement, israel had

to ratify the peace agreement. whiche of the intifada, started when sharon went to the temple mount for the first time since 1967, which i think arafat beggedstart -- i arafat not to start, ehud barack was down 38%. they said, let's elect the toughest guy we can find. to heck with them. and ehudt me leave barack leave. in the most bizarre episode, president was decided to get active in the middle east. he developed a roadmap. you remember the term? just a few days before the roadmap was announced, arafat said, i want clinton's deal. let's close the thing on clinton's deal. nobody took him seriously. he headed -- had an israeli

government that would not give it to him and didn't trust him. with all the intense involvement, there is a high level of misunderstanding. a high level of mistrust. which is why it truck were being theabin's that may be pivotal moment. did we fail? you tell me. in the four years, three times as many israelis and palestinians were killed in violent actions. we always have to get caught trying. theory people will die. -- fewer people will die. any endeavor you do, if you try to settle a dispute between somebody else. it is about them, not you. you cannot succeed if you ever forget is about them, not you. think about yasser arafat telling me the word was worth

more than written contracts. there is no problem on earth we cannot solve if all the adversaries could say that about each other. too.y matters, thank you very much. [applause] you, president clinton, for joining us. i have a few questions from students at georgetown and students watching us live from the clinton school of public

service at the university of arkansas. let's get into that. the first question is from alicia. she asks, an important achievement of obama's term has been the brain project. a important advancement for research university like georgetown. what is your opinion of someone like this? some of the ethical issues? >> i support the brain project. it is starting out with a modest amount of money, but is an important thing to do. it is important to have public investment in grantmaking areas -- groundbreaking areas where there is no immediate prospect of return. when you break through the first barrier, other people will pick it up. that is what happened with the human genome. we spent $3 billion of your money on it.

a study that said we had benefited $180 billion in terms of research. that is what will happen with this brain research. we are learning amazing things. it is particularly important because of the aging of the baby boomers. sent your brain starts to shrink when you are about age 30, don't worry about it. we use such the small amount of our capacity, it is ok. you'll be ok. [applause] [laughter] but since it shrinks, people thought the aging of the brain meant we would all naturally atrophy intellectually and mentally as well as we do physically. a couple of years ago, it was discovered for the first time you conform numeral networks -- nueral networks in your late 60's.

the brain growth is available to all people, not just geniuses. appose somebody my age were prize-winning theoretical physicist. you would think what i would want to do to keep my brain going, since physics as a young person's game, is to take the biggest remaining problems and try to solve them. the truth is, i would be better off taking the grandchild to suzuki piano if i don't play pn oh. -- piano. doing something new, even simple, is more important to revitalize everybody's brains. like taking spanish when you are 70. been doing a more complex version of of what you already know how to do. if you think about the health retirements of the

and aging of society's. what about japan? replacementen below in population, or italy. what if people have to do nonphysical labor until they are 75 years old in some of these countries? this brain research thing is very important. obviously for all the human reasons. sincere is some way, hillary has this fascinating program for young children. she talks about the word ga p. poor families here 30 million fewer words by the time they are three. what if this brain research reveals we can start rebuilding again? 16-year-old who

has been in prison for stealing tools tod give him the create the person that god meant them to be in the first place? i think it is worth doing. subsequent governments without regard to their theirity will put -- party to put more money in it to read science is something you should want your government to do. basic scientific research, technological rectors. -- breakthroughs. i personally would like to see more investment in building the i.t. infrastructure. we should have national broadband speed the same as south korea. they average 3.5-four times faster than us.

you have long stretches where people do not have it. it has adverse consequences. all that sort of stuff -- you should have your government invest in. >> you talked about aging in your last response. we have a question from vicki wang. a senior at georgetown. according to the united nations population's projection, the people over 65 is expected to double in the next 25 years. what is the most effective first step of the u.s. federal government that they can take to mitigate the negative impact of demographic shift? >> well, the most important thing we can do is keep those people healthier longer. so that when our lives come to an end, i'm not being facetious here. like an ideally

maintained laboratory specimen. we would, in effect, die with our boots on. we would be as physically mobile as possible. our brains would work as well as possible. we do nothing to add to the massive cost of maintaining people who need more help that can be avoided. that is the most important thing we can do. then we have to look at whether there are employment options canle can't undertake -- undertake that will not forfeit the benefits they have earned. one of the great bipartisan bills that i signed -- there was one vote against it in the house. 65basically said people over could go back to work if they wanted and earn income without losing their social security benefits.

it flew through the senate, too. all the republicans and democrats said, what were you thinking? when the demographics changed, you may not have enough young people. extraneous, it is a good thing to have seniors. in loma linda, you have all these 90-year-old women driving around in care of the poor old people. explore whatve to we can all do to be productive and active. that will help us stay off the. those two things are the most important things. otherwise, we will have to find ways with -- to do with the affordable care act is struggling to do. change the delivery of health care so you have more prevention and less cure. more continuity of services at

the most affordable price. the best thing to do is stay healthy and active. if possible, contribute to the country's for activity. -- productivity. >> in your lecture, you spoke about college-age. this question comes from jane. he asks, i have a large amount of loans coming out of georgetown? studentsour advice for who need to pay back loans and need more schooling? how you have to repay them. one of the things that president obama did with the congress, once we had a democratic they changed the federal student loan program so everybody has an income contingent repayment option. are you familiar with that? i can do that when i was president.

i get the congress to approve letting every college who wanted to participate in it do it. a lot of the bakers were financing it -- bankers who were financing it did not like it. i thought it was great. that way, no matter how much you borrow, you would never pay more than a certain percentage of your income. usually, the limit is like 10% of your disposable income. when hillary and i were in law school at yale, are plus -- our class started this program. 0.6% of itsto pay income until we paid its income off. that was the best money i ever spent. as long as you can make it income contingent -- in the percentage of limited -- almost all higher education is a good deal. the problem is, people have

loans from many sources. a lot of them don't have that. since the cost of college has three the rateor of inflation for some time now, it is difficult. but the government is going to try to rework this reader has got to be a way to get a sickly everybody in the income contingency business. try to -- there has to be a way to get everybody in the income contingency business if you buy a house, you probably want a 30 year mortgage. about it.think you think your first house is worth more than all your education. it?s not, is i'm telling you, when you are my age, you will be able to remember -- i remember classes i had.

i'm not trying to embarrass him. rice secretary of education in south carolina. he said his favorite moment was we had all the teachers of the year there. i reeled off every teacher i had had since kindergarten. they thought i was making it up. why do we make students pay their student loans back? tabless and within time that are worse than you get to buy a house? or worse than we get if we have to pay off a power plant? were 30 years. the most important power plant of all is what is in our minds. you can't -- for universities, it is a real problem. a lot of them cannot change the delivery system. but it depends on the economics, the student body.

interestinge has an system. they have 85,000 students. if you make less than $60,000 in family income, you do not pay tuition. if your families below the poverty line, you pay nothing. they got tired of doing the paperwork. but you do have to work. not just lot of -- cleaning the campus. as assistantsork to professors. they do all kinds of jobs. we need to figure this out to make the load burden -- loan burden easier or get people a reasonable amount of time. you get four years to pay for a car. your college education last longer than your car. especially for some of you. thought.y best the income contingent loan program gives us the key to what we should try to work for with

the private sector loans. we need to set up something. there are all kinds of things we can do to make this work. we have to do it. i don't care what anybody says. i know you don't have a guarantee once you get a college education. i know some graduates get more starting pay than others. a, it is good for you personally, emotionally, intellectually. b, it is good economics. it matters. in the depths of the economy after the crash, unemployment among people with four-year degrees was one half the overall rate. unemployment among people with post graduate degrees was less than a third the overall rate. it is a good investment to read -- it is a good investment. >> a lot of your lecture was about economic policy. you touched on the economic situation in role areas. theyquestion comes from --

ask, in 2008, the recession closed nearly every factory in my hometown in ohio. we lost everything. at acles lost their jobs paper factory. how do you think the politics of the federal government can help cities like hamilton, ohio, get back on their feet? >> i would have to know more about the community. -- i told you we would talk about this next time. this is one of the deals where the federal government can provide either tax incentives or direct investments to help. sometimes you can even solve other problems. the community has to decide what its future is going to be and where they are going to go. when hillary was secretary of state, she spent a lot of time lobbying for american companies

to be treated fairly in contracts in foreign countries. they would have towns like this -- what the town does and how they chart their economic future has to be involving the state and localities. the business community. you have to have a strategy. i suppose iovernor, spent more time on economic development than anything else. the mississippi delta was the second poorest part of the country, after the it of american reservations. -- the native american reservations. there was a county in arkansas with two towns about the same time. one of them had 12% unemployment. the other had four percent unemployment. same socioeconomic background. all theseere were go-getters in the four percent town that kept redefine the

mission and finding new possibilities. i will say this. i will tell you again, since you lost all those jobs. i became very worried in my the empowerment zones and all that was great, but harlem got an empowerment zone. unemployment was 24% when i took office. eight percent when i left. detroit got an empowerment zone. was 9.9employment rate -- 9.5%. barely over six percent when i left. it has not always been a basket case. but it is tough. you have to have a local strategy. we passed this new markets tax credit.

i would be shocked if more than 10% of you knew what it was. it basically says, if you go to a place and invest, and the unemployment rate is above the national average, you can get a 39% credit on your investment. salt whooper worth his has a way to finance this will figure out how to use this and use it to increase the number of people, particularly small towns in the rural areas. friend'snswer your question without knowing more. i could give you good ideas if i had two hours to sit and listen to what the place looks like. i used to do that for a living here that is what governors do. president, we went to thank you for joining us. [applause] >> thank you.

make you all. -- thank you all. >> i have one quick announcement. seatede, please remain while mr. and mrs. clinton leave the building. everybody remain seated. thank you again on behalf of everyone at georgetown. [applause] >> a senate hearing on campaign-finance laws. john paul stevens endorsed a constitutional amendment to permit restrictions on campaign spending. here is the opening statement from the hearing. >> campaign-finance is not a partisan issue. four years, the court has been incorrectly predicated on the assumption that avoiding corruption or dear currents of corruption -- or the appearance

of corruption is the only justification for regulating campaign speech in the financing of political campaigns. it is quite wrong. that all ofy assume our elected representatives and areidates for office law-abiding citizens. briberye laws against which provide an adequate protection against misconduct in office. tois fundamentally wrong assume that preventing corruption is the only justification for laws limiting the first amendment rights of candidates and their supporters. betweens are contest rival candidates for public office. like rules that hovering litigation,tests or those rules should create a level playing field. the interest in creating a level

playing field justifies regulation of campaign speech that does not apply to speech about general issues not designed to affect the outcome of elections. the rules should give rival candidates irrespective of party and incumbency status and equal opportunity to persuade citizens to vote for them. and contestedures litigation regulate speech in order to give adversary parties a fair and equal opportunity to persuade the decision-maker to rule in their favor. rules regulating political campaigns should have the same objective. in elections, this is a makers are voters. not judges or jurors.

second, all of elected -- all leaded officials would happier lives if they did not have to spend so much time raising money. campaignles limiting contributions and expenditures should recognize the distinction between money provided by constituents and money provided by nonvoters. such as corporations and people living in other jurisdictions. an important recent opinion andten by judge kavanaugh summarily affirmed by the upheld thert constitutionality of the federal statute that prohibits foreign citizens from spending money to candidates forse federal office. will the interest in preventing

foreigners justified the financial regulation, it placed no limit on canadians freedom to speak about issues of general interest. during world war ii, the reason behind the statute have permitted japanese agents from spending money opposing the reelection of fdr. but would not have a limited their ability to broadcast up again the to our troops. reasoningrries any -- would justify the state of issued and placing restrictions on campaign expenditures made by residents of wisconsin or indiana without curtailing their speech about general issues. voters fundamental right to participate in electing political leaders is more compelling than nonvoters such as corporations and nonresidents to support or oppose candidates for public office.

that theillustrates interest in protecting campaign speech by nonvoters is less worthy of protection than the interest in protecting speech about general issues. fourth, while money is used to finance speech, money is not speech. speeches only one of the activities that are financed by campaign contributions and expenditures to those activities should not receive the -- precisely the same constitutional protection as speech itself. campaign funds were used to the watergate burglaries, actions which were not protected by the first amendment. the mostd this is important thing i want to say, the central error in the court's campaign-finance decision is the 1976 case of buckley.

it denies congress the power to impose limitations on campaign expenditures. my friend, just as byron -- justuiice byron, was the only member of the court to dissent. he was familiar with the importance of rules requiring a level playing field. i did not arrive at the court in time to participate in the decision. i have always thought that byron got it right to read that right --. it right. one of the most ardent supporters of the broad interpretation of the first amendment characterized its ruling as quote tragically misguided. that erroneous holding has been consistently followed ever since 1976.

we need an amendment to the constitution correct that fundamental error. i favor the adoption of the simple amendment. neither the first amendment nor any other provision of this constitution shall be construed to prohibit the congress or any state from imposing reasonable limits on the amount of money that candidates for public office or their supporters may spend in election campaigns. i think it wise to include the reasonable, the word reasonable. to ensure that legislatures do not prescribe limits that are so low that incumbents have an unfair advantage or that interfere with the freedom of the press. i have confidence that my former colleagues would not use that word to justify a continuation of the practice of trading any limitation -- treating him he limitation as unreasonable.

create a risk that successful candidates will pay more attention to the interest of nonvoters who provide them with than those who elected them. >> we appreciate your willing tons share your remarks with us today. you are excused. >> senator ted cruz made the case for limiting campaign contributions. >> and i will tell you this, i am certainly one who will defend the rights of our citizens to speak out whether i agree with their speech or not, the sierra club has an absolute right to defend their views as does the n.r.a.