what we see around us. that is, for whatever reason, things are not working. i built a business and went back to my business in 2009. it was flat on its back and i turned it around. i had ways of looking at whether i was doing a good job. to ultimately make that company successful. that is what we have to do here in pennsylvania. you can measure success in a lot of different ways. but i look at job creation. we used to be at the top of the charts. we are now at the bottom of the charts. i see a bureau of economic analysis saying that we are being beaten by west virginia, ohio, new jersey in terms of economic growth. property taxes have gone up. we are not doing as well as we should do, and i think we need to look at that and say this is what we need from our state government, to set the table for robust economic growth.

i am a fan of the private sector. i come out of the private sector. i built a business, actually twice. but i also know that while the private sector is going to drive this process, we need a government partner to make sure the private sector entities work optimally, that the market works optimally. that is what we need to do. that is what we have not done. that is why i'm running for governor. about your tax plan. can you lay out your tax plan? basically it has been reported -- you want to increase from earners -- on wage let's lay out your tax plan. do you believe most pennsylvanians pay enough personal income tax? >> here is where the 5% rate came from. this is a misconception of the ap reporter -- i don't know if peter jackson is here -- he

asked me about the mathematics of how my plan would work. the traditional bracketed progressive income tax would be unconstitutional in pennsylvania. so we need a flat tax. i was giving him an example of how this would work. i said 5%. this is an example. that is not what i am proposing. but what i am talking about is a tax that is fair. the secretary of revenue and a business owner twice, i understand what the state governor has to do to set the table for private sector growth. we cannot overtax, create tax burdens that are unfair to anybody -- emily's, individuals, individuals, or businesses. i am talking about a fair tax system, one that is good for the business community. >> when you say fair, do you believe most pennsylvanians pay enough in income tax, or does that need to be increased in

some way? because a lot of people are looking at the budget situation and think we need to raise more taxes. rightly or wrongly, they see you as the guy who wants to raise taxes on business, on marcellus shale -- and we will talk about that in a moment -- there are a lot of small businesses in the room that pay the number -- are they paying enough taxes in your view? >> i am talking about a tax system that gives -- that brings people to the point where they tax rates that are appropriate. property taxpayers, businesses, and families are paying too much in property taxes. we have the highest corporate income tax -- 9.9% in the united states. that is too hi. system,eate a fair tax

some people will have to pay more. we need a fair tax system that does not destroy the economy, that enables the economy to do all it can do, and that calls for a fair tax system. that is what i am talking about. >> but you will concede, their antenna go up and people like yourself say they need to pay their fair share, that they fear that will hit me three >> fairness is in the eye of the beholder, i understand that. i think i should pay more. think. what i >> i think you should pay more, too, but additionally many people here would say we can tell you where to write the check. but usually when fellows such like yourself say we will raise more, 1% or 2% will not affect your standard of living, but if and my wife makes $45,000, they would be declared rich.

the tax rates would be hitting them. >> actually, most taxpayers file separately, not jointly. i'm talking state, not federal. look at where we are in pennsylvania, a lot of people are in the middle class and we need to figure out where that breakpoint is and we need a system of taxation that is not overburdened the middle class and ordinary pennsylvanians. , would you like to respond? >> sure. [laughter] revenue, theof budget has as much money coming .n as is going out there an it has to be a balanced budget. when i take a look at the spending, trying to figure out in the plans that mr. wolf has put out, talking about

increasing to 50% education, the state's share, that is about $3.5 billion bank. returning the billion-dollar cut from ed rundell, we're talking about $4.5 billion. we believe his increases in spending would be about $6.5 billion in his term. the question is, how do you tax? where do you get the money? what is going to be fair? honestly, i think it is time is to wolf share his plans, rather than stand up here and say we are going to have to figure it out and i am going to sit down with the legislature and work with them, give us your plans. finally, we should have conversations about the state of delaware and incorporating in delaware, and not be incorporating here in pennsylvania. [applause] could, lay, if you

out your plan. just last week the auditor general and the treasurer -- it should be noted, both democrats -- they pointed out that we borrowed money a couple of minutes -- a couple of months into the budget, and they insinuated this year's budget was put together with smoke and mirrors and one-time gimmicks. getthat there is no way to the numbers to add up without a tax increase. can it be done without a tax increase? or is this one of those times when we level with the pennsylvania people and say there will be a tax increase? >> number one, with me people know they will have someone to fight to make sure we will keep our spending as low as we can and not tax them if we can help it. someone working to protect their tax dollars. wolf has indicated there will be a tax increase. that is number one. number 2 -- and i know jean is right in front of me -- how are

you doing there? silly season. since the middle of the summer, the middle of the campaign. this is not the first time in pennsylvania we have had to borrow money against future revenues. we have understood that, the democrats have understood it, both parties have done it. i want to grow the economy of pennsylvania, but the first place you have to look at is cost drivers. $610 million. that is what we have to spend new every year for pensions. you cannot walk away from the question and answer of having to deal with the pensions of pennsylvania. why do i say that? 2017, 2018,l year our contribution to state

pensions will be $3.3 billion. every time we sit down and look at creating a budget, the first thing we have to look at is -- , because myer me predecessor did not completely fund the pension system -- i believe as governor i have the responsibility to all those workers and teachers to fairly fund the pension system. we have to come up with $610 million, new dollars this year. that is the starting point to this whole discussion of spending, budgets, and pensions. >> mr. wolf, rebuttal. >> i understand we have to make ends meet. when i went back to my business, i had to do that, to make sure expenses were in line with revenues. the first thing i did after that was try to make my revenues grow, and i did. that is the two parts we have to look at. we have to look at how we are

going to make ends meet in terms of keeping our expenses in line with existing revenues. what we have not done in the state is to make the revenues grow. we have not set the table for robust economic growth. a proof of that is in the numbers. we have not done that. what the auditor general and the last treasurer revealed week was not something that happens routinely in the course of any business or state. newin 2.5 months of the fiscal year, we were already borrowing money to pay bills, and not just investment bills. these were bread and milk bills we were paying with that line of credit. if you look at the chart that was in the treasurer's report, 2005-2014 average of cash balances on the daily basis, and then the 2014 cash balances, and then the actual

and projected. the first thing i would do is look at the tax allen's great my cfo -- the tax balance. my cfo is here. michael has done this for 20 years. if i showed a cash balance that looked like the state's, a business plan that showed you are getting worse every year in terms of revenues. forget about expenses, your revenues are going down. there is no bank out there that would give me a line of credit. we do not have a business plan that is working. >> let me ask you what question. -- let me ask you a question. do you believe that pensions are a crisis? the legislature has not come to terms on some kind of a pension plan. is it a crisis or is it not? >> i am not sure about this crisis problem issue. that is a semantics thing. we have a problem. if we do not do something about it, it will become a crisis. we need to do with the governor

said we should do, adequately fund our pension system. we have not done that over the past 10-plus years. governors past and present have not done that. >> i take exception to that. >> if we keep up with that pattern, we will have a huge crisis. like a credit card bill, the balance goes up every year we do not fully pay off our debt. we have not paid our debt off over the last 10-plus years and are balance has gone up. we have got to stop doing that. have a new plan we can work with in terms of design for employees going forward. we need to pay the bill we did not pay for the past 10 years that we have not paid adequately. if we find a way to do that that does not hurt the taxpayers, we will have a solution to this problem. i am not going to kick that can down the road. >> governor corbett, one-minute rebuttal to that? >> i am surprised, because we are talking the same thing.

we are disagreeing on how to do it. i am looking at budgets growing, the cost of the budget growing because of health care, medicaid, because of contracts that we have in pennsylvania and just the cost of business continues to grow. we have revenues growing. but i have yet to see any country that has grown its economy by taxing. i guess i am inquisitive as to where mr. wolf wants to spend the money, how much he wants to spend, and how is he going to get the revenue? i heard him say 9.9% is too hi. we agree, and i think everybody in this room agrees. we could be attracting a lot more business coming to pennsylvania if we could lower that, just like we are about to limit -- just like we are about to eliminate the capital stock inheritance tax.

that is a start, but you have to control spending first. to thernor, let's pivot issue of marcellus shale. critics say your refusal to have an extraction tax has left hundreds of millions of dollars if not more on the table. why do you continue to oppose it when every state in the nation that has natural gas has an extraction tax? >> we talked about this a number of times. we tax that industry. we tax it differently than other states. we have a higher corporate debt income tax than texas have. we have a personal income tax that texas does not have. when you are talking about the industry, you're not talking just the big corporations. businesses.ng small 95% of the businesses in pennsylvania are small businesses that supply the industry, that have continued to work with that. you are talking about employees who are getting good salaries.

yes, we are getting revenue. we have gotten over 2.5 billion dollars in revenue since 2008 because of the taxes we already have imposed. but yet we did add a fee, the impact fee. in 2000 10, governor rendell before that was saying if we put a tax on marcellus shale, we will get $100 million a year. but we put any impact fee because the communities there are impacted. that impact fee in the first year brought in over $200 million. in three years it has brought in that is sharedon with the communities and a little bit to the state. it has gone to every county in pennsylvania, so we do get that revenue. no other state has an impact fee on natural gas. we are the only state. but i look at it this way. we are trying to grow relatively

new industry in pennsylvania. we are trying to attract businesses. high taxes does not attract business. everybody in this room would agree with that. more difficult tax climate does not do that. here is what we are trying to do . we say come to pennsylvania. i have no intention of exploiting any of our natural resources, whether it be timber or coal or wood or natural gas. wolf, one-minute rebuttal? [applause] tax, too, believe the industry could be a game changer for pennsylvania's economy. i actually have run a business. how important tax calculations and considerations are for any business owner, manager, who is trying to naked decision on where to locate a business. but a 5% -- to make a decision

on where to locate a business. we could make the gas industry a partner with pennsylvania citizens so that doing this environmentally responsibly and economically responsibly is a game changer that it should be. we need to do everything in our power to make sure this benefits pennsylvania. that is why i am talking about a severance tax. but my severance tax is not meant to kill the goose laying the golden egg. i am just saying let's share some of that gold with the people of pennsylvania and make sure that the industry and the citizens of pennsylvania benefit from this great natural resource. >> now i want to direct a question to you on marcellus shale. taxing marsalis would raise $500 million, and your recent one said it would raise over $1 billion. which is it? >> the reason for the change is that since i first started

talking about this -- and i thought the number was around moremillion -- we have wealth, a higher price, so the estimate i have seen most recently says that would raise about $1 billion. i don't know, i do not have a crystal ball. i work better with calculators. the estimate i am seeing says that would generate about $1 billion. some of that would go to localities. to fundingt we go needed regulations and oversight from environmental protection. a big part of it could go to things that we really need, like education. it is not enough in and of itself, but it would be a start. >> governor, minimum wage. $7.25.ight now talk is to raise it to $10 or more. support or not support?

>> i support it at the federal level. friendly, i don't want to see people have to work on minimum wage. ash frankly, i don't want to see people have to work on minimum wage. that is why we are encouraging more of our children in high schools to take a look at technical schools, to get a technical degree or a two-year agree, or, my goodness, to become a carpenter or a laborer or a plumber. 25% of those in the trades today are 55 or older. if you are looking for a job in the future -- and we absolutely need them. my --ly, because of because of the great work my secretary of labor has done, we created a job gateway site where people of pennsylvania can go and look to see where there are jobs. today that site on average shows

about 200,000 open jobs. 200,000 open jobs. i have to be the teacher here and ask everyone of you -- raise your hand -- how many of you have at least one job you're looking to fill right now? a whole handful here. 200,000 jobs. the people may not be trained. that is our job in education, to get them trained for that. we have been working with career investmentforce, and boards all across pennsylvania to bring everybody together to say how can we get that person out of a job that is a minimum wage job, working at a burger king or something like that -- how can we get them the training that they need to get a good job?y-sustaining >> mr. wolf, one minute. you support raising the minimum wage? >> yes, i do.

it is one thing to talk about specific things you are proud of, the overall, how are things working out for us? the unemployment rate has gone rowhe last two months in a at a time when the national economy is not doing very badly. ideology,alking about partnership. i am talking about, open your eyes. look at what is going on around us. it is not working. minimum wage is something we ought to increase. i agree with the $10.10 per hour, from $7.25. that is economic theory says that could not do good things for jobs, but there is also theory that says it will. i went to a company flat on its back. place to be in the construction industry at the worst time, i raised hourly

rates. not only did it not destroy jobs, it increased them. >> i have to do one curveball. ask one question. >> you have not been? >> a 15-second answer here it a look at your campaign donations. the biggest contribute has been unions. if you are beholden to the union agenda, can you give us one area where you disagree with the union agenda? quickly. >> first of all, my second largest donor is a private business owner. i have gotten generous contributions from labor. in the primary i did not get the endorsement of the traditional democratic powers that be. i did not get the endorsement of most county chairs. it was liberating. i am a free agent. ist i am getting right now support from organizations who agree with me. i am who i am. i am not making anything up. in my business, i share 20% to 30% of my net profit with my

employees because i understand how important they are to the success of my business. that, so my contributions have come to me, i that, goes people believe what i believe makes sense. i am not pandering to anybody. >> last personal question to governor corbett. polls suggest this guy has a big lead. what do you make of that? do you think there were mistakes made in the first term, and what would a second term look like? >> in 15 seconds? >> take 20. [laughter] >> and the clock is not on. first off, everybody makes mistakes. have i communicated the best? probably not. but i have made the tough decisions. i was hired to change the culture of harrisburg, to change

from tax and spend to save taxpayers dollars and be as efficient as you possibly can. they be we did not communicate that well, but we went from an 8.1% unemployment rate to 5.8%. i want to see it go the other way. if i could control some of the things going on in washington with the cost of health care, obamacare, that would be one. second term, i cannot answer that. i want to grow in pennsylvania. that in myill do closing. >> ladies and gentlemen, closing from tom corbett. >> thank you, ladies and gentlemen. we have enjoyed this. i hope you all have enjoyed it, too. [applause] that cost me five seconds of time. [laughter] this has been such a wonderful experience for my wife, sue, and i. she was not here, but she is

here now. we really enjoyed seeing the people of pennsylvania, all of the people of pennsylvania. we are in a much better position than we were when i took office. deficit.4.2 billion no more relying on the federal government to balance our budget. new jobs coming to pennsylvania. that we arereported the number one state in the northeast, number four in the country, for the establishment of new or expansion of corporate headquarters. because we have created the atmosphere for businesses to and grow jobs in the private sector of pennsylvania. we have built the foundation. but what am i really looking at? i did not make any one of my decisions as many do, and i am not that good a politician because i try to keep my promises and look to the future,

years.four or six because we have the responsibility to do better, not to give debt to our children, to our grandchildren. many of you here have grandchildren. every day i get up and look at the picture, it and many of you have had to suffer from looking at my pictures of my soon to be three-year-old grandson. .e need to lead a better state i am happy to say that sue and i became grandparents again to identical twin bro is -- elliott andin boys, theodore. i want them to have a better pennsylvania. that is why i am doing this. thank you. [applause] >> mr. wolf, two minutes. again, thank you to the

chamber for hosting this great event. you have been a great audience. dennis, thank you for monitoring -- thank you for moderating this. governor corbett, thank you. i look at this challenge coming out of the background i come out of. my business when i took over in 2009 was flat on its back, not performing. but i saw a great inner strength in that company, and i turned it around. i worked with all my employees and we turned it into a successful company over the last four or five years. ideology,ot with partisanship, but with practical problem-solving. that is what i brought to that business, and that is what we need to bring to the state. because as a citizen, i look at my state and i do not like to report that the auditor general, the state treasurer put out last week -- i do not like the cash seem to beat

deteriorating each year. i do not like the fact that we are not creating jobs that we were creating in pennsylvania. ourment the fact that schools are being hollowed out. that is the real world. we need to look at that. i think, when i look at those things at a citizen, the state i love, we need a fresh start. we need to go in a different direction. i think we need a new governor. thank you very much. [applause] ladies and gentlemen, regardless of your politics, you have to appreciate that these two gentlemen have put their cells that have put themselves out there. can we have a big round of applause for governor corbett and tom wolf? at 9:00,ay night nebraska's second congressional district debate between lee terry and state senator brad ashford. sunday, the iowa u.s. senate they between bruce braley and

republican joni erickson. c-span campaign 2014, more than 100 debates for control of congress. "washington journal" is next. we will look at today's news and take your phone calls. peter bergen will talk about national security and the terrorism threat against the u.s.. live coverage from the bipartisan policy center begins at 10:00 eastern here on c-span. later in the day, a discussion with health and human services secretary sylvia burwell about implicating -- about implementing the health care law. that is at 1:30 p.m. eastern. jay solomonis hour, from "the wall street journal." umet.hen jason cregr

and then mitch daniels looks at public education costs. you can >> good morning, it is tuesday, september 23. this is "washington journal". today we will open up our phone lines for your comments. we will begin with isis and syria. later we will discuss security concerns at the white house after a man hopped the fence and entered the north door. we want to hear your opinion. you can reach us by phone, the democrats line (202) 737-0001. republicans line (202) 737-0002.