[captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2013] on c-span, former president bill clinton speaks at georgetown university. then, "washington journal." followed by live coverage of the u.s. house. everybody says, how do you think these women came from such a very low rent part? the victorian era is so stratified. rich and the real -- thebaron achievers life and times of these women

was in the most buccaneer times, after the civil war. we had rockefeller. the robber barons making a lot of money. i think it was easy for them because they had been running around with low rent con artists , now let's go with the big boys. they were beautiful and they were tough and they were driven. they were driven for power and individualism, but they could have been courtesans, they could have kept in a fine manner if they wanted. they pushed for their and dependence and women's independence. -- independents and women's independence. two little remembered victorian sisters changed the course of american women's

rights and american history. sunday on q&a. itself is not unusual. similar streets have popped up in other cities. beaumont, texas. fort worth, texas. denver. what makes ogden's 25th street unique is that it grows right in the middle of the mormon settlement. -- arose right in the middle of the mormon settlement. the railroad was bringing in non-mormons. it swelled the length -- ranks of the liberal party. you had that irony. the guilty pleasures along 25th street were going to be a little

more taboo than they might have been in other cities. restaurantsels and , the three blocks between them began to fill in with boarding houses, rooming , ands, and saloons bordellos, and even some opium dens. it just so happens that people who came through here, transcontinental passengers, were interested in past times that were quite different than those that mormon culture was accustomed to. >> this weekend, book tv and american history tv take a look at the history and literary life of ogden, utah.

>> former president bill clinton spoke about how the policy it georgetown university. the second of four lectures he is giving on the topic of public service. he graduated from the school of foreign service in 1968. this is two hours. [applause] >> thank you very much. thank you. thank you very much. it is great to be back. i want to thank hillary for coming with me today. it has been a long time.

[applause] she has not had to sit through one of these in ages. [laughter] i think there are a lot of my former classmates and friends who are here. i thank them for coming. i want to mention that my chief of staff is here. she is a georgetown alumna. she has been pushing for me to put this on the schedule. thank you for being here. to remind me that if i had been a catholic, i could have been a jesuit. [laughter] i can say this. i was america's happiest protestant when the new pope took his holy office and i had and thrilled by that and i think all the jesuits of the world should be very proud of him.

as the president said a year ago today, the state, i gave the first in a series of lectures on composing a life in public service weather in elected office or government job at any level or as a private citizen seeking to advance the public good. i tried to organize these talks around what i said i believe to be the four essential elements required for effective service. a deep interest in people, especially those who are different than you are. a clear purpose for the service, and an idea about how it can best be advanced through government or the private sector

or the non-governmental sector or all three working together. how before you can advance your service, you had to determine, develop, and then implement the policies that will be the instrument of your objective. how do you do that? what are the problems with it? fourth, how do you succeed? how do you turn your good intentions 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 reasons, policymaking tends to be dimly understood, often distrusted, and disconnected from the consequences of the policies being implemented. i have felt 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 leader and is covered primarily by the political press, there is a craving that borders on a date if to have a storyline. -- addictive to have a storyline. then once people settle on the 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. so for all 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. and therefore, the debates are important, the disagreements are important, but it's not very helpful 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? that's not what a president does. but this is really, really important. because it affects people, and it determines whether your purpose can be advanced.

so i decided, i just picked three policies. i started 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 me was that until people 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. the welfare reform bill, which

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. so let's begin with the economic program, because that's actually what propelled me into the race in 1992, and the primary reason i was elected. when i was elected, we had already more than a decade of stagnant wages 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. at least 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 america, i don't know that i 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.

and we had 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 extent, 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.

during those years, i tried to follow a strategy that was really quite different in some ways than the reaganomics strategy. i did believe we had to keep taxes low if we wanted to compete for jobs, especially 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. as result of which, we were cutting spending all the time, and not just at budget time. we never had any mass layoffs, we never had to abolish any big

programs. 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 while 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 deficits in peace time in times 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. finally in 1990, the democratic majority congress passed the bill to try to start doing something serious about the deficit and the debt. they had some modest tax 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 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 ferocious. newt gingrich led a revolt against the republican leader in the house, bob michael, and he was deposed. it led to the beginning of the pre-tea party movement. economics is not theology, folks. it is a practical business. was.hey thought it 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 act, he had a better 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. and 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 then al gore and i reissued an 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 governor'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. we need to shoot for 4% unemployment. even my own advisers looked at me like i had been temporarily deranged. let me hasten to say, that is 4% inflation with high unemployment. when workers get discouraged, as they have quite understandably in the aftermath of the financial crisis, then the 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 -- participation was. 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. we could not just shake out of it. why was it worse since the economic policy had not changed from the reagan years? basically, what happened was, it was the first time in american history -- 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 money, eventually you have to pay higher interest rates. and a higher interest rates were crowding out private investment. so we decided first we had to get the deficit down, and secondly, we had to do it in a way that people would know we were serious. so all this is in 1993 dollars, so we are talking about a lot more money than today.

we had to have a plan that would credibly reduce the deficit to $500 billion over a multiyear period. it meant that are estimated revenues and spending had to be credible. something that had been shredded in the 1990's by so-called rosy 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. i said i want to 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 earners from 33% to 36%, where 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 tax from 33% to 35% above $2 million. -- $10 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. everybody 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, 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, 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 overseas.

and you should ask yourself if you had responsibilities to your 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 pass it 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 economy for people who had 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. if you care 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. and congress changed the carbon 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 save more money in lower interest rates than we could ever afford to give them in a tax cut. in 1993 dollars, that averaged

saving $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. to give people a chance, and the circumstances had changed. had i just said i'm going to keep my 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, he was absolutely right. that is, accurate in his analysis. 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. so we did that. now the thing i want to emphasize is that it wasn't the only thing that we did. in that budget, we really tried 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. we are still not very good at it, particularly if they live in small towns or rural areas. what would you do to restore the economy in rural west virginia or eastern kentucky, or the mountains of north arkansas? or the rio grande valley, or the mississippi delta? what about 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, they won 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. by 1996, after the republicans had shut the government down twice and the american people try to put their pre-tea artie 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 this is not all, we invested 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 signed by general consensus, and 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. and we came a long way toward connecting all of our schools to the internet. we went from 35% to over 90% with connectivity in those few years. connection costs for hospitals,

schools, and libraries. we were investing in things we thought would speed up what was going on, and it was really easy in the balanced budget act because the bill in 1993 had done twice as much good as everybody estimated. we 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 was to sign the balanced budget act of 1996, lowering the capital gains rate from 28% to 20%. i did it, but -- we had the money to do it. it was the price i paid 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 heartbeat. when you are not alone in a room dictating what is going to be done, sometimes other people have ideas too, 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? he was getting 6 million poor children health insurance coverage. and you just have to ask yourself, it is the price you want to pay. i would not have done it in 1993 because the deficit was too big. we were balancing the budget. we subsequently got four surpluses in a row for the first time since the 1920's. [applause] but even there, we had an investment strategy. so you had to control all the other spending to target what you wanted to target. and the people who thought something out should have been targeted criticize you for it.

now, the storyline of all this was very different than the story i have just told you. the storyline 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. the storyline was designed to create the impression that i hadn't kept my commitment. so a man i had never met, who turned out to be america's most foremost scholar, thomas 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?

he said president clinton made 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 care, which is another way of saying i didn't have 60 democratic votes to break a filibuster. and he failed to give the middle class a tax cut. 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. ross perot used to do this all 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. so he had 15.8 million jobs. we had 22.9 million jobs.

you could say clinton was lucky, he caught the tech boom. clinton was lucky, he came out of the recession. 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

technology, thanks to al gore's reinventing government program, and we reduce the size of federal government by to 347,000 by the time i -- 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 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?

look how steep that curve is for eight years. that is median family income. that is the one in the middle. between 1993 and 2000, in 2012, median family income increased 17%. from $57,800 to $67,600. 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 measured is in quintiles, the lowest to the highest. so this shows you why president reagan only had 77,000 people move out of poverty.

in income -- now these are averages, 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 have to have unequal economic growth. you can have broadly shared prosperity, but it requires policy. you have to have a deliberate strategy to do it. and the policy that would 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. but it shows you that you can do 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.

-- program 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. it's important for me and everybody else to knowledge that this growing inequality started before trickle down economics, 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, both of whom would be far too liberal to get nominated today. but they had -- right there you see it is almost identical. the bottom fifth grew almost as

much as the top fifth in those years. it's pretty close, and you have to understand, if jimmy carter had 2.8 million jobs in four years. in fourmillion jobs years. he did a lot of things to try to 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 both, 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

generate jobs 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 turned out to be and a lot of other things -- in a lot of other things. he believed that reagan was right and i was wrong. that's what he believed. and so we went 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. and the consequences were there. put that chart back up. [laughter] 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. i couldn't do it, but pretty 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 the crash was from housing, 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 fault of themselves

cannot take care of themselves, and to do the investment that has to be done publicly. now, there 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. and had you not, we would not be where we are. we wouldn't know what the 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 sophistication that allow those 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. it 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. they lost it. [laughter] this basically says what i told you before, but if you look at this slide, 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. then the two bushes had almost identical differences, and the only time the poorest 20% had a bigger income increase was in the 1990's, a 3% difference. go to the next slide. this just gives you an opportunity to see how wealth was being concentrated. that big turquoise number, that is the top 5%.

we had to simplify the rest of it, but you have the lowest fifth on the right, 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 basically everybody inched forward together. then everybody lost ground with the two bushes. then look at reagan. the last two numbers are the top 20%, with the one on the right being the top 5%. you see here, 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. these are millions and millions of people's lives. this is what policy means. 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 reduce 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. and today, it's harder because of the crash. it's harder because now, a lot 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. it's more difficult because of the level of competition and almost desperation all over the world. there's is a world job shortage, especially for young people. but it's easier for us because of the energy revolution, we are producing more of our own energy producing more of our own energy now, and because of our other

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. but that's why immigration reform is even more important today than it was 20 years ago when i was president. because having lost it, i can tell you, youth matters. [laughter] it matters. just look around this room here. we have all this diversity, all this youth, and all this brainpower. it is a massive competitive advantage.

it is harder because we want to do something about the deficit, but we actually should be investing. interest rates are lower than inflation. if interest rates are lower than inflation, no matter how upset you are about the deficit or a debt, you 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 income that it didn't change our consumption patterns much, so it didn't contract the economy very much. but right now, it if you did what i did in a heartbeat in

1993, if you did exactly that, and you cut spending too much on r 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. hillary 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 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 1% to 5% 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. but not just for the purpose of 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 person i grew up with would far 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. this is all part of the strategy. the progressive goal 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 or 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. this is the lion's share of what i want to share today. start with the goal in mind -- broadly shared prosperity. identify the problem. there's too 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.

i don't want to talk about this today, 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. no other big rich company spent 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 are doing, not giving their 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. so obviously it's even worse now because we've got eight million people enrolled in the exchanges and another 3.5 million already covered by medicaid expansion, on the way to 5 million. it should be on the way to 10 million, but other states don't want to participate.

which is one of the all-time bad economic responses. 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 poor people on welfare. they are covered already. they were 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. do you know what we're spending on health care today after four years of implementing this law, and seniors 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 get to to save your life half of the time. policy. now i want to do two quick ones to make the point. also to talk about the positives and the negatives. let's take welfare reform. what was the problem? it was developed to be a temporary assistance for young widows with young children. when there weren't many women in the workforce. for a variety of reasons, it became the lifeline for millions of people. it took generations out of the

work culture. the storyline when i signed the welfare reform bill was, the republicans have got clinton. they have forced him to sign this horrible bill because he wanted to get reelected. the facts are different. 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. i was a governor in 1980 when jimmy carter got the authority to give five states experiments

to change from an income-based system to work-based system. i applied. we were accepted. by the time i was a senior governor in the 1980's, i worked with the reagan administration. here is the only thing you need to know. i had a big forum for the governors in washington here to go lobby to congress. we brought in a bunch of people 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 just stay home and watch tv unless you make us get out there and get job training and

take a job if we can get it. i said, are you glad you went to work? she said, yeah. the best thing is when my boy goes to school and ask him what his mom does for a living. he can give an answer. i will never forget that as long as i live. 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. ok, so we go through the first years of my administration. i decided along with donna shalala, then head of the department of health and human services, we would give states

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, if you read the history, they will say that bill clinton vetoed the last two bills. he caved because it was an election year. to be fair, two people who worked for me, one of whom became the dean of the kennedy school at harvard -- they resigned. i applaud them when they did. i said, nobody can be sure how this will work. if you can no longer in good conscience implement a policy, people should resign. they were good people and i applaud them. now, when i went to harvard to speak, he said i had been right and he had been wrong because of the results.

but it is more complicated than that. the welfare reform bill basically said, if you can work, and there is a job, you have to take it. if not, 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. let's start with these charts. let's show the charts. i vetoed the first two bills. because they wanted to block grant medicaid. they wanted to block grant food 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. the storyline, he was trying to veto the first two bills and then caved.

these are 16 changes i got from their bills after two vetoes. including guaranteed medicaid. $4 billion in child care money that was not there before. a work performance bonus. that is we allowed people to take benefits and give them to employers as wage supplements to give people jobs. i vetoed the food stamp block 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. let them decide based on the facts of the poverty in each state. as we all know, different electorates show up in different elections.

the people who are elected may or may not need to respond to that. here is what i want to say. there were two provisions in the bill that i signed that i hated. one was a five-year lifetime time limit. i had no problem with it, except that should exempt recessions. it is not your fault. 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 did eliminate benefits for legal immigrants. but look how much more money on the left 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 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. the welfare reform bill was a part of that. go to the next slide. at the top, the welfare rolls declined by 50% in four years. 4.5 years. from the time i signed the bill. in my last budget, over 60%.

one of the things that i was criticized for, and you should all know this, i don't think i ever read any single article. they said, how could bill clinton take away the monthly minimum benefit? here is what was never in those articles -- when the welfare reform bill was signed, the minimum monthly benefit was whatever the state was paying in 1973, 23 years earlier. the only protection in federal law was you could cut your welfare benefits, but not below what they were in 1973. the lowest states, a family of three in texas and mississippi got $187 a month. the best state, vermont, got $655.

it seemed to me that having more flexibility and letting them use the supplement on wage payments was a good thing. now, go to the next slide. i never 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. right? and there were. i didn't foresee that, i did not foresee this tea party wave that would believe poor people were the problem in america. almost all those people want to go to work. when you leave today, if you

were here at the other lecture, and you want to pair the 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 plan. my conclusion is a lot of that is still relevant. it did far more good than harm. but now, given the changed climate and aftermath of the crash, the poorest welfare families, about 15% of the total, are worse off. we should do some good for them. and all of us who supported that 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

six months or nine months or 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 -- for anybody else 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. the bosnian muslims and croats christians like me. i hope someday the serbs will forgive me. in the end, all these deals are done by the people themselves. the are the ones who are affected by it. 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 leap, to maximize the benefits 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.

let me tell you 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. number one, the agreement signed in september of 1993 on the white house lawn reflected what the parties had done themselves in secret meetings in oslo. representatives of israel and the palestinian authority. they wanted to do it in the white house because both sides trusted the united states. they trusted the u.s. to be an honest broker. to make sure israel's security concerns and palestinian concerns were legitimately met. almost two years later, and i

worked with four israeli prime ministers doing this. yasser arafat shifting his senior team. we had a signing of the first big deal after oslo where a chunk of the west bank was turned over to the palestinians to govern. the agreement included the release of prisoners for israel. to divide the west bank into categories. category a would be totally 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. we did that.

i have two points to make about it. one, we signed it. we signed nine maps marking all these changes. three copies of each. in the middle of the process, there was a bypass road that looked like the map said belongs to israel, but arafat said he was supposed to have. rabin and arafat said, you have to fix it. i said no, you fix it. i was on the road, but it was for a religious pilgrimage. you have to figure it out. 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 trying to get something done. they walk out. two years earlier, rabin didn't want to shake arafat's hand. rabin said he is right, it is his, i am going to give it to him tomorrow. i said but the map says it is yours. if arafat signs this, it will be binding under international law. arafat did not blink. 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. rabin gave him the road. and we never heard a thing about it until i think dennis wrote

about it in his book. nobody talked about it. of course his 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. that agreement cost yitzhak rabin his life. he was murdered just a few weeks after that 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 best chance we had for peace was lost. because rabin had captured arafat's psyche, and he trusted him. fast forward to 1998. we met at wye river with netanyahu, who was then the likud conservative prime minister.

his defense minister ariel sharon at the time was considered to the right of him and would not shake hands with arafat. for nine days we stayed there. i am sure we violated every human rights convention because my goal was to not let them sleep. [laughter] until they actually made an agreement. i would keep them up until 3:00 or 4:00 in the morning. we had to do something. we were stuck. they agreed to give 13% of category c to show good faith. the israelis did. that the palestinians up to 40% of contiguous land on the west bank. there were a number of other things done. problems slowed it down.

ehud barak was shortly thereafter elected the new prime minister. he completed the transfer. the 40% of the west bank that came out of the wye river accord is largely what is governed today. the base from which he governs 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, my god, yes. if not, it will take 5 years to 10 years. many more. we have to do it when you are there. it is 13 years and counting. he was right about it. they didn't want to come to camp david 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 cooperation. and ultimately a declaration that the conflict was over. that was worth 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. and there was an election and change of government. because of the mossad working with the palestinian security services and the cia -- and we got a little luck, but it happened. arafat said, we have to do this. the first thing you have to figure out is what you will take. i never expected -- everybody talks about the collapse of camp david.

that is a load of bull. camp david was a roaring success from my point of view. they had never sat together and talked about all these final status issues. given the u.s., 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. the israelis offered i think 90%, 91% of the west bank. they said that is not enough, and 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 two to this. i will tell you what i think the deal should be. i think the palestinians should have a state on 94% to 96% of the west bank.

the israelis should give them some compensating land. they should be able to get 80% of settlers in settlement blocks on 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 neighborhoods, 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. after all these negotiations, i intentionally let there be a little playing the territorial

thing so the palestinians could get a little more. they needed to show they did. the israelis were prepared to do 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. offered to have special security guaranteed for the rest of jerusalem. they agreed on how to divide the governance of the old city. the muslim and armenian quarters would go to -- i mean the jewish and armenian quarters would go to israel. the muslim and christian quarters going to arafat.

he was proud of being a custodian of christianity for the arab christians. the only thing they could not agree on was how the temple mount would operate. what the arabs called -- they agreed on what it should be. the muslim had run it since 1967. they proposed to turn it over to palestinians because of the dome of the rock and the mosque. they agreed that palestinians could not do anything under the temple mount because the ruins of the temples of david and solomon are there. as we know now because of the

excavation among other things. they disagreed only on 50 feet 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 entrance 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 tried to get them to split the sovereignty or turn it into an international peace center.

it is the first political problem in history where there is no problem on what happens, but nobody can figure out how to describe it. that is about it. ehud barak 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. in the end, israel and ehud barak accepted the deal. keep in mind, this was in 2000, israel was able to us was 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 because there were a couple of churches there. he wanted to have all of the christian churches. that is all they were disagreeing on.

they were disagreeing on. arafat knew he would have to recognize the state of israel. that he would have to give up terror, he would have to give up the unlimited right of return. some refugees would be taken into northern israel. but there could be no unlimited right of return. i agreed to raise $10 billion or more to relocate the palestinians out of the camps. arafat never said yes. when i was about to go, six weeks before i left office, he came to see me. i said -- i will never forget this because you read things about how america is in the tanks -- he and ehud barak did not get along that well.

at first i said, stop. we have been doing this for eight years. do you think i care about the palestinians? he said, oh, yes, more than the arabs do. he said if i were a jew, would i be in this fix? no, all of our children would be in america going to college. he said, yeah, you do. i said ok, all you owe me is the truth. if you are not going to do this, i think you are nuts, but it is ok with me. but after 8 years you owe me the truth. i can go to north korea and get rid of their nuclear program, but i have to go to japan.

but you can't just drop in after 50 years. it was different then. but i have to go to japan. south korea. russia, china. we have to do this together. it will take 12 days. i only have six weeks left. it is the only time i ever saw arafat cry. he said oh, no, you can't do that. i said i have to make it look like i forced you to. 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. he told two different arab leaders he was going to take the deal. the details had to be filled in. on january 7, i went to the israel policy forum and went public with this whole thing. i just had a couple of weeks. we really had until the middle of february when the israeli election was going to occur.

under the agreement, israel had to ratify the peace agreement. because of the intifada, which started when ariel sharon went to the temple mount for the first time since 1967, which i begged arafat not to start, ehud barak was down 38%. they said, let's elect the toughest guy we can find. to heck with them. arafat let me leave and then he let ehud barak leave. in the most bizarre episode, president bush decided to get active in the middle east. he developed this roadmap. you all 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 had an israeli government that would not give it to him and a public that didn't trust him. with all the intense involvement, there is a high level of misunderstanding. a high level of mistrust. which is why rabin's death may be the pivotal moment. i ask you to think about that. did we fail? you tell me. in the four years since i left office, three times as many israelis and palestinians were killed in violent actions. we always have to get caught trying. fewer people will die. just remember this -- in 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 that rabin's 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. policy matters, too. thank you very much. [applause] >> thank 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 institution of the brain project. an important advancement for a research university like georgetown. what is your opinion of something like this? some of the ethical issues with something like brain? >> 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 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.

i saw a study two years ago that said we had benefited $180 billion in terms of genomic research in america. 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. since 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. [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 that you can form neural networks in your late 60's. the brain growth is available to all people, not just geniuses.

suppose somebody my age were a prize-winning theoretical physicist. you would think what i would want to do to keep my brain going, since physics is 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 piano. the study shows that doing something new, even simple, is more important to revitalize everybody's brains. like taking spanish when you are 70 than doing a more complex version of what you already know how to do. these things are important.

if you think about the health implications of the retirement and aging of societies. what about japan? they have been below replacement 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. if there is some way, since hillary has this fascinating program for young children. she talks about the word gap. if kids in poor families grow up hearing 30 million fewer words by the time they are three.

and the architecture of the brain is largely fixed by the time you are three or four years old, what if this brain research reveals we can start rebuilding again? you can take a 16-year-old who has been in prison for stealing a car, and give him the tools to create the person that god meant them to be in the first place? so yeah, i think it is worth doing. i hope subsequent governments without regard to their party will put more money in it. science is something you should want your government to do. basic scientific research, basic technological 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's. they average 3.5 to 4 times faster than ours. 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 number of 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. we would drop like an ideally maintained laboratory specimen.

we would, in effect, die with our boots on. that we would be as physically mobile as possible. that our brains would work as well as possible. and that we do nothing to add to the massive cost of maintaining people who need more help that can be avoided. that is by far the most important thing we can do. then we have to look at whether there are employment options that people can undertake that will not forfeit the benefits they have earned. one of the great bipartisan bills that i signed at the end of my presidency -- there was one vote against it in the house. it basically said people over 65 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. if it is not 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. i think we have to explore what we can all do to be productive and active. that will help us stay healthy. those two things are the most important things. otherwise, we will have to find ways to do what 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 productivity. >> in your lecture, you spoke about college aid. this question comes from jane. he asks -- i have a large amount of loans coming out of georgetown. what is your advice for students who need to pay back loans and need more schooling? >> i think first it depends on how you have to repay them. one of the things that president obama did with the congress, once we had a democratic congress, they changed the federal student loan program so everybody has an income contingent repayment option. are you all familiar with that? i could not do that when i was president.

i got the congress to approve letting every college who wanted to participate in it do it. a lot of the 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, our class started this income contigent program. we only had to pay 0.6% of its income until we paid its income off. that was the best money i ever spent. as long as you can make it income contingent -- and the percentage is 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 gone up at two or three times the rate of inflation for some time now, it is difficult. but i think the federal government is going to try to rework this, and there has got to be a way to get a sickly everybody in the income contingency business. 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. you don't think about it. you think your first house is worth more than all your education? it is not, is it? 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.

i was down with the 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? on terms and within time tables that are worse than you get to buy a house? or worse than we get if we have to pay off a power plant? to a utility we take 20 or 30 years. the most important power plant of all is what is in our minds. you can't -- and look, for universities, it is a real problem. because a lot of them can change the delivery system and do better. but it depends on the economics,

the student body. arizona state has an interesting system. they have 85,000 students now. if you make less than $60,000 in family income, you do not pay tuition. if your family's below the poverty line, you pay nothing. they got tired of doing the paperwork. but you do have to work. they do a lot of -- not just cleaning up the campus and stuff. the students work as assistants to professors. they do all kinds of jobs. we need to figure this out to make the loan burden easier or to give people a reasonable amount of time. you get four years to pay for a car. your college education lasts longer than your car does. especially for some of you. that is my best thought. 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 that you don't have a guarantee once you get a college education. i know some graduates get a lot more starting pay than others. the truth is -- a, it is good for you personally, emotionally, intellectually. and 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 unemployment rate. unemployment among people with post graduate degrees was less than a third the overall rate. it is a good investment. >> a lot of your lecture was about economic policy. you also touched on the economic

situation in rural areas. this question comes from tyler -- they ask, in 2008, the recession closed nearly every factory in my hometown in ohio. we lost everything. my uncles lost their jobs at a 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. but this is one -- i told you we the future is going to be and where it is going to go. hillary was secretary of state, she spent a lot of time

lobbying for contracts and .ompanies to be treated fairly their economic future has to be involved in the state and the business community. you have to have a strategy. when i was governor, i suppose i spent more time on economic development than anything else. the mississippi delta was the second poorest part of the country, after the native american reservations. there was a county in arkansas with two towns about the same time. one of them had 12% unemployment rate. the other had a 4% unemployment rate.

they had same socioeconomic background. because there were all these go-getters in the 4% 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 second term that the empowerment zones and all that was great, but harlem got an empowerment zone. their unemployment was 24% when i took office. 8% when i left. detroit got an empowerment zone. their unemployment rate was 9.5% when i took office. barely over 6% when i left. some people tell you detroit can

come back. don't believe it. 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. any developer worth his salt who knows that investor x or y 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 and the places that have been hit with factory closings. i can't answer your friend's 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 . that is what governors do. >> mr. president, we went to thank you for joining us. [applause] >> thank you. thank you all.

>> before we go, i have one quick announcement. audience, please remain seated while mr. and mrs. clinton leave the building. please everybody remain seated. thank you again on behalf of everyone at georgetown. [applause] [captions copyright national cable satellite corp. 2014] [captioning performed by national captioning institute] >> today on c-span, "washington journal" is next with your phone calls, then the house as members debate the spending bill. later, we will talk with rob republicans from

western state to have federal lands transferred to state control, and congress men mark spokane host: good morning. the u.s. economy came near to stalling in the first quarter of 2014. government officials cited bad weather for the economic freeze. a measure to raise the minimum wage failed to get a vote in the senate. we will begin their with the economy and your ideas for spurring growth. democrats, (202) 585-3880. republicans, (202) 585-3881