house national economic council will talk about the health of the u.s. and global economy. campaign 2014 coverage continues in one hour. we will be live from texas for a governor's debate. the current governor, rick perry, is not running for reelection. here are some of the ads running in that race. a guy in a wheelchair can move faster than some roads in texas. newlan adds billions for road construction without raising taxes, fees, or tolls. we pay for it by assuring money will be spent totally on roads. no more taking highway funds to pay for pet projects. elect me and i will get texas moving. a texas court room, great

abbot the case against our children. he fought for $5 billion in education. now he is proposing standardized tests for four-year-olds. heard enough question --? the answer.is she will use education to build an economy for all hard-working texans. you decide. who will be best for texas. >> wendy davis is embroiled in scandal again. to -- sheer influence profited from her day job. she crossed from potential to real conflict of interest. now that legal work as part of an fbi investigation. unfit to be governor. >> he was a texas surgeon,

performing operations for -- well using cocaine. two patients died and others were patient -- paralyzed. families and victims sued. campaigner accepting a contribution from the hospital's chairman, greg abbott got involved. using his office to go to court against the victims. another insider not a working for you. >> we will have debate coverage for the race between wendy davis and greg abbott and 9:00 eastern live from dallas here on c-span. >> >> the head of the white house council says -- jeffrey zients spoke to the economic club of washington and took questions. his is 45 minutes.

>> thank you. quiet. thank you. ok. thank you very much. we're very privileged today to have as our special guest, jeffrey zients. he's the assistant to the president for economic affairs. also, he is the head of the national economic council. prior to assuming this position -- these positions in february of this year, jeff had several positions in the government, in this obama administration. in the beginning of the obama administration he was the first chief performance officer of the united states and deputy director of o.m.b. and he served as acting director of o.m.b. prior to jamaica the government

he was an active businessman in this area. he broughted from duke university and went immediately to bain and in bain from boston he came back to washington where he grew up and he then joined a firm here, a consulting firm, mercer, but was recruited away to join the advisory board and the corporate executive board and helped run both companies for a while and helped take both of them public. after they went public, later jeff began to do other things in the private sector, investing his own money and started the urban alliance foundation in helping underprivileged youth get more training about how to act in the professional world. he also was one of the leaders in getting baseball to come to washington, d.c. and -- >> [applause] and so the nationals win the

world series this year, he is directly responsible for this. so jeff is a bheern has a lott of interests, public and government and flan tropic interests. one thing i didn't mention in your bio is this. you were the acting head of o.m.b. for six months. then you left in around april i guess of 2013. and later the president announced you were going to come back, more or less at the beginning of this year as the economic advisory to the president and the head of the national economic council. you had some time off. while you were off, the president called you and asked you, by the way, i have a problem. my health care website isn't working so well, and although you're not a software expert, can you come in and fix it. so my question is, a, did you expect to get that call, b, did you think if you didn't do a good job you might not get the

economic job later, and how did you fix the website? >> they asked if i could come in for a meeting. that meeting led to an announcement a week or so later that i would come in and help lead the turnaround. i think it's fair to say that if the president and chief of staff asks me to do something, if you're in a position to do it, which i was. as you said, i was off at that time -- you take on that assignment. it was a hard assignment in that there was obviously pressure to create a decline, which we did. that was one of our first moves. after a quick assessment, we put a stake in the ground early october, so about a year ago and we said that by the end of november, the site would work for the vast majority of people. as we all know, there's nothing like a decline to force action, so there was ruthless priorityization. the second thing we did beyond setting the decline was to bring in a new team of people. anyone who's in i.t. knows that you don't flood with lots of new

people but at the same time, a did l of the best talent join the team. people from elsewhere joined. the project did not have a general contractor. optum stepped up to the plate. the c.e.o. of that company spent a third of his time in washington, d.c. on the project. a combination of a lot of late nights, a lot of stress, we hit the declines and the site fortunately is working well. >> so you never worried that if you didn't get it done, the president would say you can't be advisory? >> there were scary moments. we realized that the fixes we were doing weren't working, we

would realize in the middle of the night and we'd have to roll them back. thankfully, due to a great team effort and a lot of private sector help, we got to where we needed to by november 30th. >> when you joined government in the beginning of the obama administration, there were a lot of severe economic problems. we were in a very sad situation economically. now the economy is in better spape. there seem to be a lot of problems overseas. ou sometimes feel like the maytag repairman? or are you getting enough attention? >> i think if you're the c.e.o. what the which is president is, you do a lot of things at once. so yes, the president is focused on international issues and at the same time he's very focused on the economy. we are optimistic about where the economy is headed. you see it in the jobs numbers. we have 54 straight months now

of job growth. over 10 million private sector jobs created, and this is led by the private sector, the job creation, obviously. g.d.p. was just revised up to 4.6%. when you break down the components, you're seeing pick-up in consumer spending. corporate balance sheets are in terrific shape and we're starting to see some increase in investment there when we look at the forecasters we agree that absent any major surprises, that we should have decent growth ahead. now, there are challenges. housing has recovered about 2/3 of the losses, but we are not seeing the type of new home construction that you would normally see at this point in recovery. if we were on that path we would have another point, point and a .alf percent in g.d.p. growth there's a couple of areas that are of real concern.

long-term unemployed. if you look at that and untack that between short-term less than 26 weeks, that's back to where we were before the recession. however, long-term unemployed, greater than 26 weeks, that's at two times its normal level, just under 2%. very elevated. having sat through a round table of long-term unemployed folks, it's heart wrenching. they're very talented, these folks, have good relative experience but can't even get their foot in the door. what you find is it's the down side of technology. technology is screening and it's screening in a way that doesn't alu people who have been long-term unemployed to even get their foot in the door in many situations, which is clearly unfair. 300 corporations have stepped forward and said we're going to look at our h.r. practices to make sure we're not discriminating against long-term

unemployed and we give them their fair shot. if anyone in this this room is interested in signing up for that, that's a great effort. >> today we had 4% growth more or less last quarter. would you expect for the year overall, given the first quarter was relatively week, would average 2 .5% a year? >> i think there's more that we can be doing. the infrastructure is a great example. we have a short-term tax on infrastructure. it's a great opportunity for the country to be investing in infrastructure. interest rates is low, construction work unemployment is relatively high. you see the potholes, the back-ups on bridges, the airports, the ports. there's an opportunity for us to do an upgrade. it's really a twofer. it sets us up for long-term

competitiveness to have strong infrastructure and as i just alluded to, it creates jobs in the short term. it's a great time to be investing in infrastructure that can help create more middle class paying jobs. we hope we can make progress on that in the new congress. >> is that likely to get through congress? >> i think there's two pieces of infrastructure. one is long-term thousands of the transportation bill. that's important. there are infrastructure banks that are on the floor and the president supports an infrastructure bank to leverage private and state and other capital. then third is public-private partnerships. if you brching mark various states around the country, virginia, for example, they've done a good job on infrastructure, private-public. how do you take the best practices for public-private practices to scale that form of

infrastructure development? >> inflation is not a problem that you're worried about right now, check, 2% for the year? >> we leave monetary policy to the fed. we are focused right now on jobs and wages as we talked about earlier. >> i'm see -- you don't see inflation as a problem? >> i think forecasts are relatively moderate. >> one thing that came out of the session is income inquality. what can the president or the administration or the duning about income inquality. >> we've had very flat income for the middle class for decades. this is a problem that predates great recession. we've seen a little bit of pick-up as unemployments come in but we really need to focus on middle class wages. the minimum wage is something we believe should get done. that helps those that are earning less -- at the minimum wage and also helps with others to higher pagse wages.

increased investment in job training. we've done a thorough scrub of the $18 billion that the federal government spends on job training to make sure that we have good metrics, alindicating the funds to programs that actually work. we have to move away from a system of train and pray for a job at the other end to a system that we're training people for jobs that are available not only now but in a couple or three years. there's some frustration around the country that you can't find qualified workers. we need to work closely with the private sector. for every dollar that's spent on federal training, $20 is spent in the private sector. the leverage is in the private sector. private sector working with community, compledgets, creating their own job training programs, there's a big movement we have to accelerate to make sure we

have a work force that's well positioned to compete in the global question as technology and automation accelerate changes. >> when the obama administration came in it inherited a fairly large deficit. w it's around $600 billion more or less. but nobody seems to be talking about the deficit very much. is there any realistic way to get the budget to balance anytime soon? >> when the president walked into office, we had a measure -- way to measure is a percent of g.d.t. and it was north of 9%, so very high. last year we were around 4%, down to about 4%. we'll be around 3 according to the congress budget office. this year, the president's udget has us just over 2% in 201, a nice downward sloping

line. we're talking less about this, david. the president's ackplirned this -- or the country's accomplished this through $3 trillion of deficit reduction and on top of that, a real decrease in health care costs. we see it in our premiums. premiums are up about 3% this year versus 2000 through 2010, they were closer to 6, 7%, so cut in half. health care is a big piece of the federal budget and if you ook at the 2020 projections on medicare and medicaid projected spending,. the last word on deficits and debt crises and sequester and all the rest is, we look at the economy and the progress we've made and the outlook we have.

i think it's important to note that we have not had a period recently of self-inflicted crises, you know, debt seelings or otherwise. it's -- ceilings or otherwise. it's important that washington not get in the way of recovery by returning to those dark policies. >> when are we going to hit the next debt ceiling? >> it's stimse sometime in 2015. there's always been the statutory period of time. let's hope that we don't create a crisis around that >> do you think over the remaining two-plus years of the obama administration it will be possible to get appropriation bills signed on time and passed and actually have something more than a continuing resolution or is that unrealistic? >> right now we're operating under a continuing resolution. we're hopeful that in the lame duck election in november we can

sign an omnibus bill. as we enter the next congress, there are bipartisan pieces of legislatings that focus -- i'll focus on the ones that matter most to the economy. i mentioned earlier, infrastructure and doing a long-term reauthorization of infrastructure is something that has traditionally bye partisan support. corporate -- by part soon support. we're hopeful we can make significant progress on across the next couple of years. there are trade agreements that, you know, that we believe we can have good, fair trade agreements that allow us to compete on level playing fields in the world economy. then there's smaller things that traditionally -- smaller but important that traditionally have sailed through like reauthorization of the x.m. bank, which has been reauthorized 16 times, is set to

expire in june, is responsible for a couple hundred thousand dollars -- couple hundred thousand jobs each year, cost u.s. taxpayers nothing and importantly, again allows us to operate on a level playing gold ore global competitors. there are things we think can get done and we look forward to working with congress to having progress. >> it seems like a republicans' view of corporate tax reform is that there has to be no enhanced revenues for the government and the democratic view seems to be that there does need to be enhanced revenues, so how do you square those? >> i think there's reason to be optimistic on corporate tax reform. both parties have talked about it. it can get geeky and technical as to how you measure it, but let's accept that both are

it's g for revenue -- remarkably similar as a frame work to what chairman camp put forward earlier this summer. let me run through the three components. >> all right. >> the first is to lower our statutory rate of 35%. that is too high. tights highest oecd countries. the president would take away deductions, loopholes and bring that into the high 20's. camp, the same thing, probably in the mid 20's. some difference on level. that's point number one. the second is how do you tax overseas earnings. right now we operate under a global system with that 35% rate applies but they doesn't apply when the earnings are earned. it is taxed when it's brought back in the country. that's global. he other system that some --

you pay in the country where you're earning the income. the problem with the territorial system is it creates perverse race to the bottom for the lowest tax rates in the world. what the president proposes is a high rate, which is to have a minimum tax. if you're in the country and the tax rate is above that level, somewhere in the high teens or low 20's, then you would then -- if it's above that level, you don't yone other taxes, if it's below that, you'd pay the gap. again, same structures as chairman camp's. final piece is how do you bring the money back that's overseas right now? both have a repatriation tax at a lower level than the levels we talked about. again, some difference in camp would set it and the president would set it. the framework is similar or

remarkably overlapping. that makes me optimistic that we can get something done. there's a lot of negotiation that i alluded to here. taking away special tax treatment is a hard thing because everyone's tax treatment is represented by some special interest. >> will the president send legislation to the hill or will you let congress develop it themselves? >> i think we'll see what is most helpful in terms of advancing corporate tax reform in 2015. we're hopeful that given the framework and bipartisan support, such strong support from the business community to get something done. version tly announced in profingse, which is what you're talk about. you think congress is going to pass anything related to inversion? would you send legislation to congress dealing with inversion or are you happy with the administrative actions? >> the right thing to do is what

we just talked about, comprehensive business tax reform. we have sent legislatings to congress on inversions as part of the president's tpwhauget he sent up last winter. so the president sent legislation to k45eu7k or eliminate these inversions last winter. secretary lue last week took administrative action which does impact the economics of inversion, takes away some of the positive economics of this action. at the same time, there's no substitution for legislation like the president's legislation on inversions, but again, the real piece of business is to do comprehensive tax reform. >> i thought lue did was propose legislation. >> they go into effect right away and apply to deals that have not yet closed. >> with what about personal tax reform? is there any chance that there

will be profltse on personal tax reform? >> possible, because i think we'd all agree that it's way who too complicated to do taxes. like on the corporate side, there are too many special interests and loopholes. it's a heart piece of business, in that here the president would propose to raise significant additional revenue from the top 1% and the republican party is opposed to that. so there's not the revenue neutrality that we talked about. skwleets talk about russia. you think the sanctions on russia are working? >> i think they're working at the level of they're having a significant impact on the russian economy. russia was forecasted to grow by the forecasters is or 2 wrs before the sanctions. now forecasts are hovering around 0 percent. many believe that russia is headed toward a recession. if you look at their companies, those that are subject to sanctions are rg real trouble

accessing capital. they've drawn about $50 billion capital from the russian reserves. the difficult thing here is it's hard to draw a straight line between our actions and putin's behavior in that his behavior is not necessarily economically rational. we've mutt a lot of time and energy into cr569ing sanctions to main areas of focus. one is how do we maximize the impact of the russian economy while minimizing the impact on our companies and our allied companies? and the second is making sure that we work very closely with our allies. we have different sanction systems so they're never going to perfectly overlap but we've been doing everything we can to maintain symmetry, which is important to again have maximum impact in the russian economy and to make sure that our companies are treated fairly and are not subject to taxing by our

allied partners. >> suppose nothing happened and putin's actions continue to be ones we don't like. do you have any more sanctions that you can do? >> what we want to have happen is that putin deescalate and we can across time remove the sanctions. but if his actions continue to run against what was agreed to n the peace plan in men action -- minsk, then we have to -- >> suppose he pulls all his troops out of ukraine and says you win, i give you everything you want, go back, but i'm going to keep crimea. would you keep sanctions in place? >> that's obviously a decision for -- >> i was trying to see -- >> no, no. but clearly he has illegally

seized crimea and that's unacceptable >> today, how is your current role different than being he of o.m.b. >> i'd start by saying both jobs are incredibly intense. you talked about the initial public offerings of some of my advisor board colleagues are here. that period of anaheim my corporate life when we took the two companies public, the intensity of getting ready, the team on the road, making that first quarter, those five, six-minute period of time of the company were as intense as it gets. think it's that i and my colleagues operate at all the time. so both are very, very intense. both are tremendous jobs. i -- o.m.b. is like being a c.f.o. you're hoping put the budget together. you are monitoring performance against the budget. you're looking for areas that

are working really well that you might invest more in. you're looking for areas that there are inefficiencies that you might figure out how through technology or by spending less to get productivity gains or limb 2345eu9 things altogether. you're watching the performance of the government for the president and the executive branch. it's harder to map directly my urrent job at the nec to the corporate org chart. when i went to see bob rubin who was the first nec director as i got ready for the job, i got his advice, and he said, your main job is to help set priorities, economic priorities, working with the president's economic cabinet and getting the president's input and sign off on those priorities. you need to be an honest broker.

and at times, there will be differences of opinion on what a priority is or what the right policy is to achieve that priority. then the piece that i spend a coached e on, reuben me to do so is on implementation, in that implementation or execution is hard in any setting. it's particularly hard in government. as we all know from business, strategy or what we call government policy is important, but the great companies or organizations are differentiated by their ability to execute. so we spend a lot of time at the nec working with treasure and commerce and labor and transportation and energy to ensure that we are getting strong execution against the president's priorities. >> when you're at o.m.b. or at your current job, if a cabinet officer doesn't agree with you, do they try to go around you and go to the president? how too they do that? >> that -- we minimize that i

think by running a good process. and i think that that's -- comes back to reuben's advice about honest broker. these are hard issues. we have very talented cabinet secretaries and teams, so we will have differences on how to achieve a priority or whether something belongs in that handful of priorities, and what nec does is keys up the option for the -- tees up that for the president. at the same time we will have a view, so we will present both options. and at the same time we can put our thumb on the scale, might not impact the president's decision making but we will express our views. >> as a business person or a nonbusiness person says i have a view on economic policy or i twoornlt lobby on something, what's the best thing? to just call you up or get on your schedule? >> when i was on the executive board, when we had a problem or trying to launch a program in sales or retention, or we were

trying to figure out our next new product or market, we would always kick people out the door, go talk to people, the customers, go talk to potential customers. particularly those whoot aren't happy, talk to those folks. that's how you learn. you are the customers. all of you as business leaders in terms of growing the economy, in terms of creating jobs, well-paying jobs. so i try to meet one-on-one with several c.e.o.s a week. i come to forums several times a week of c.e.o.s and other leaders of businesses, small and large so get feedback. my question, though, is what are we doing well, what are we missing, what are we doing that's getting in the way of you creating jobs and growing the economy. so we learn by understanding what's going on from your

perspective. >> do you find people come to you and say i talked to the president about this and he wanted me to talk to you about it. do they ever try that? >> occasionally. the president, too, is doing a fair amount of outreach, and he will put me aside occasionalry and say, i was just meeting with this person or this small group. there are some ideas that came up that i want you to follow up on. there was some feedback, maybe not positive, on some of our policies or something we're doing, would you follow up? so yes there is follow-up from the president or i have people calling me and saying i was meeting with the president and he wanted you to follow up. >> you have a thousand people or something like that and you've got grand offices in the o.m.b. in the executive office building. now you have a smaller office in the west wing but -- and an smaller staff. so which job actually makes you feel more comfortable? the small staff and big office? >> if i was to describe to you what o.m.b. does, you would say

must be a thousand, 2,000, 3,000 people, o.m.b. is 400 people. it might have been closer to a thousand when you were there, but it's been shrunk, which is remarkable, given its scale. >> ok. >> the west wing, probably some of you have been in there. it's teeny, tiny. it was built for a different era. so there are only a handful of office. most of my staff is actually in the old executive office building. i have have a small staff in the west wing. we're a staff of about 30. that's a relatively big scale group for the west wing. you're right. the breadth of the terrain, we talked about some of it from sanctions in russia to infrastructure to the minimum wage that nec helps to facilitate, which is why we are stacked helping to facilitate,

helping to monitor executions. we are the staff and the line, if you will, or the treasure secretary, the commerce secretary, the labor secretary, and their teams who are proposing policy and executing policy. >> we've had a bit of a manufacturing revival in the united states. we're manufacturing more than we did a couple years ago. why is that? you think that will continue? >> if i could, let me take a step back because we haven't talked about it. sort of where are we positioned in the global economy. now let's do competitive analysis. we have a very sg position. we have our historical lead in innovation. 30% of the patents worldwide come from the u.s. 15 out of to top 25 research universities are here. we are the fleerds r and d. second our work force is the most productive in the world. two times or more productive than china and south korea, and

then third -- and we would not be talking about this a decade ago with energy. a decade ago we would have set from a exetive viewpoint we're the number one producer of oil and gas in the world. we now produce more nan we export on oil. years ago there was talk of importing gas. we're now exporting or getting -- planning to export gas. all eff this helps when it comes to manufacturing. our manufacturers enjoy a big advantage on energy. about a third of the cost on natural gas here versus our asian competitors, so that leads to a real cost advantage. so you are seeing a real revival of manufacturing, over 700,000 jobs. there are more manufacturing start-ups many this country than there have been in two decades, so that's an encouraging sign. you have entrepreneurs in

manufacturing. if you poll c.e.o.s, global c.e.o.s as to the number one place to invest in the world, it was china for a long period of time. it's now the u.s. and we're widening our lead. surveyed u.s. manufacturers who had operations overseas. over half of them, 54% now plan on bringing those facilities back to the u.s. so yes, we're optimistic, david, about our position in the global economy and how that translates to success in manufacturing. >> so let me ask you this. we're producing roughly 11.5 million barrels a day in the u.s. >> 8.5 >> well, with the other equivalent things, 11.5. so say 8.5. why don't we export some of the oil? >> let me do natural gas first and then we'll talk about oil. >> ok. >> i think this is a somewhat unknown story. the department of energy has

approved -- initial approval for 11 billion exports. that's about 30% of the l and g market. so that's significant. >> when? >> 2015. they announced that they're studying the impact of going up to 20 billion cubic feed a day. they're studying the potential tradeoff of allowing exports up to that level. so that's significant. there's a significant amount of activity around l and g. >> you think there will be more exports of l and g? you think there will be more? >> there's three that have received final license, which represents about 4 billion cubic feet of the 11 that i described and the other seven billion or so is working through the process, through the process, and as i said, we're studying up to 20. so i think we will be exporting

significant sums of l and g in the future. these are big projects, so they take a while. >> gites for gas. why not on oil? >> soil a changing landscape. the 80.5 million figure, that's up 670 -- 60 pshes in the last five years. this is a changing landscape. we're look -- we produce more than we import. we still import a lot. we are looking at policy and locations. >> all right. we're doing so well, producing all this, do we need a keystone pipeline? >> i'll defer that to the state department and the president. >> don't want to get trouble or say anything. >> no. >> ok. so today, what do you see as the biggest economic challenge hat's facing this country? >> i think we have, i'll say,

two. one where we've made a fair amount of progress, which is the long-term unemployed. still unacceptably high running t about 2%, 1.9%, down a lot from where it was but unacceptably high and again i think we need to not only have some targeted programs in the government to help the training. we also need the corporate sector to step up and give these folks a shot. > the largest systemic shot is wages. it's stagnant. we're starting to see a little bit of an uptick but nothing nearly significant enough that we need to focus on that. we need to pass the minimum wage. we need to invest in infrastructure. we need to look at our education system and training and make sure that we're equiping folks to compete in this global economy and earn a decent wage. >> so when you were in the

private sector for a while, you created the urban alliance foundation. tell us what that does. >> so the gang of people led by a good frind named andrew pleffler started the organization years ago. kids whoorp 17 years old who really had not stepped foot into one of your orpgs environments and by giving them an opportunity, a paid opportunity to intern, during the school year after school and then full time during the summer, that it could be life changing. it started off with sort of a match manging. let's take this individual student and put them into a law firm and it's not quite that simple. it requires a lot of mentoring, a lott of training, coaching on basic life skills. but the end result is graduation from high school and many going on to two and four-year colleges

and being quite successful. there's an alumni network, so we continue to work with students throughout their time in college. my guess is a quart of the companies have urban alliance interns. the goal is to make that 100% of the companies in this room. the alunes is also in chicago with a very big program. also, in northern virginia and also in baltimore. >> so i presume you're going to stay in your position for the remainder of this administration, i assume. >> if the president -- >> right. >> -- prefers that i do, yes, absolutely. >> so would you want to stay if there was another democratic administration, would you go back in or would you go to the private sector? >> i think it would be a time for a break, catch up with my family and my wife. at that point i'll lift up and -- i do miss my time in the private sector. i love my time in government, but i'll take a little time off from the government.

>> it's easier to get something done in the private sector or the government, in your experience? >> i think earlier, the execution is critical in both sectors. i think the degree of difficulty, even higher in the public sector. >> when you deal with members of congress, you try to explain where the economy's going, what is your sense of their understanding of economic issues? >> i think it varies a lot. if you're -- mark warner is one i -- someone i talk to an a regular basis or senate bennett, people who have spent time in the private sector and focus their time in congress, the economy, it's a discussion like a discussion with any of you in the room, but obviously more policy focused, what can we do to advance the minimum wage. there are other members of congress who have different backgrounds, don't focus on economic issues and they can be less sophisticated

conversations. depends on the member. >> the least effective way to influence you if you're a corporate c.e.o. is to come in and say what? ? the least effective way. >> i think -- i always start by asking what's going on in the economy and the questions i ask, what's working, what's not working. i think when someone is in just to talk their own book, you can learn, but that's probably not conversation as someone stepping back, helping us think through the economy as a whole and thinking through the dynamics of their industry as opposed to their narrow corporate interest. >> are you more worried about growth in china or more worried about deflation in europe as it impacts the u.s. economy? >> i think europe would probably be our number one area of concern. unemployment across the region, the zone is close to 10%. here's still 2.35% below their

prerecession peak. we are close to 7% above, just to show you the delta between the two. they're potentially going to have a triple dip recession. we believe that both monetary and fiscal policy are too tight. drage's move, there needs to be some flexibility and they're alking about that to allow some time and space in structural reforms in the labor departments and the pension terrain and the regulatory terrain. i think if you step back and think about president obama's approach with the recovery act, i think there's a lesson learned here, that you really can't cut your way out of a recession and not that we've done everything right here, but that directionally we've had a good approach and it resulted in, as i said us being about 7% above

our prerecession peek whereas -- >> what about silicon valley and a lot of technology innovations in our economy have been quite remarkable. what impact on the economy do you think technology and innovation has right now. >> i think very positive. you think about our sources of compare active advantage i talked about earlier, i start with innovation in technology, and technology has been very important to improving productivity and really does position us well in the world economy. one thing i'll say about technology and the u.s. government versus the private sector is, if you think about the productivity games of the private sector, 1.5, 2% a year, year over year for several decades, that compounds to quite a significant level. the government, there's no perfect metric of productivity but has probably grown about a

hird the level. so that's created a big productivity gap between how the private sector operates and the public sector. we all know that it's always rong to lead to a -- believe technology is the answer. technology's been in the center of those productivity gains. private sector, not that every technology project works. we have a lote hit rate in terms of successful technology projects in the government. the root cause is technology, we have to get a lot better at technology and get better fast in this budget constrained environment that we're in is forcing a hard look at productivity in technology. like with health care .gov we've got folks looking forward to doing rotations for six months to help us with technology. some optimistic federal government is trying getting

some traction on technology. it's, if you will, a late mover advantage. e can sort of skip some of the prior technology and go right to the leading edge. >> you have four children. are they more impressed with your being economic advisory to the president or being head of o.m.b.? >> they are ages 19 to 13, i'm not sure that respect is high on their list. >> all right. well, one final question. i notice your initials are j.z. has anybody ever thought you might have a career in music because of that? >> if there's one way to get my children to run out of the room, it's so sing or dance. so the answer to that is no. >> well, thank you very much for a great conversation. [applause] > thank you.

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>> our campaign 2014 coverage continues at the top of the hour. we'll have live coverage from dallas of the texas governor's debate. democrat wendy davis faces republican greg abbott. rick perry is not running for re-election. jewel why pearson testified about security breaches that have taken place at the white house. here's a portion of her testimony. >> i want to remind you, the distance is about 80 feet. >> it's 30 yards inside the house, inside the house. i've been there many, many times. and that -- you know, to the --

to talk about somebody transversing the white house foyer, the full length of the east room, down to the green room to the american public, that would be half of a white house tour >> you keep minimizing 24 stuff. i'm just wondering when too the red flags go up for the secret .ervice i knowoff lot of wonderful people over there but this is not their best work. we have a serious, serious issue here about protecting the . esident and his family this is absolutely disgrateful

that this has happened. i'm not even going to mention the fact that it took us four days to figure out that somebody had shot seven rounds into 2 white house. this is beyond pail. and i've listened to your testimony very deliberately this morning. and i push to god you protected the white house like you're protecting your reputation here today. i wish you spent that time and that effort to protect the american president and his family like i'm hearing people covering for the lapses of the secret service on these several occasions. i really do. so whash we going to do -- and look. this whole thing is the united states secret service versus one mentally challenged man. , one man with meantal illness,

that you know had mental illness. this is the secret service against one individual with rk and you lost. you hi got to the green room in the white house. what happened if you have a sophisticated organization with an attempt and resources going up against the secret service? what happens then? >> you can watch the hire hearing on our companion network, c-span 2 or c-span.org. c-span's 2014 coverage continues. we'll have live coverage of the texas governor's debate. democrat wendy davis facing republican greg abottle. we spoke to a reporter about the ace.

>> with governor rick perry stepping down, it is an open seat in texas. wendy davis, democrat and republican greg abbott, the texas attorney general. we have the senior political writer of the dallas morning news with us. >> good to be here. >> what do the polls tell you? >> the polls are all over the place. the republican is ahead by double digits, maybe as many as 15, 16 points. some polls and internal polls indicate that. there are some internal polls and a couple more recently that suggest the race may be in single digits, but in every case, the republican, greg abbott, is ahead, has been -- has held a durable lead, and frankly, in a state where every statewide official is a republican and where no democrat

has won the governor's race since anne richards did in 1990, it would be an norm out feath if the democrat won this year. >> there is a third party on the ballot. does that have any overall impact thus far? >> probably not. green party, libertarian and so forth, that's not what's happening here. the funny thing was with respect to 1990, that was the year even richards did win, a lot of people at least on the democratic side saw a year ago that there was some expectation that this could be the year that a new even richards, wendy davis, this woman who stood up last year and in a filibuster against some abortion regulations became a national celebrity on the left. was this going to be the new ann richards, the new person who

could begin the process of turning the very red state of texas blue. that has not happened for a whole lot of reasons. it's not impossible for her to win but she has been hobbled by questions about her personal story and problems in her campaign. they've had two or three shake-ups in the campaign to try to fweat republican attorney general. and again, it's a long shot. not impossible but a long shot that she could do this in november. >> why do you think she hasn't resonated up to this foint way you and others thought she might have? isi think part of the reason that she's not ann richards. she's very 1345r9, 23r57bkly when you see her in the first televised debate and the upcoming debate comes across as script. even when she's not scripted, she's extraordinarily reserved,

confident, but that doesn't make for good red meat politics. the strategy that she decided to push was first a personal narrative. she was up from the boot straps woman who was living in a traylor with a child and sort of earned her way through harvard law school. that was going to be the secret of her success. when some stories raised questions about not the fundamental legitimacy of that story but some questions of whether some of the facts in this narrative were blurred a bit, it took the shine off that campaign. the campaign also has chosen fundamentally to offer up as a message that the republican opponent is a political snowier, part of the rick perry republican machine that's been in power for 15 years in texas and they've helped themselves but have not helped you. it's a message that kind of

sounds good, at least the consultants thought it sounded good. but there's very little indication, frankly, in the polling or in my conversations with many texas voters up and down the state that it has resonated very successfully. >> greg abob has been very open about his condition. he's a paraplegic. he was running, following a severe storm in texas and he's used that as part of the theme in his ads. >> oh, he has. this is a case study in how you do something like this. here's a person in a wheelchair, to the extent -- to the stheant 234i voter might wonder if he has the physical ability, has dish guess has the the glilt to be the governor, he has demonstrated that absolutely he can. he not only showcase the fact that he is in a wheelchair. he is taking the wheelchair up,

up, up in a parking garage as a kind of metaphor about how he has overcome odds in his life and he simply hasn't given up. one of the issues in the campaign is the overcrowding highways, especially interstates and major highways in texas. in one of his most recent ads he is in a wheelchair along a gridlocked section of highway going faster than the cars. and making the promise that if he's elected governor, he'll fix all this gridlock. it's a brillyant way of dealing with his personal issue and also an issue in the campaign. >> bottom line based on what you saw in this first debate, what do you expect to see in the second and final debate? >> there are two things that are going to happen. one, greg abbott was very successful in appearing very likable and jean yal. he will try to ignorpe wendy

davis as much as possible. he will try to talk about what he wants to do, fix education, do things for highways, make texas great, continue the economic success that the state is having. wendy davis has no choice but to go after abbott hard on issues, ethics issues, questions about money he's gotten from contributors and the benefits that he's gotten in office. it's not the best route for wendy davis, because when she does that, she hurts her likeability quotient, but she has no choice. >> wayne slater joining us from austin, senior political writer for the dallas morning news, thank you very much for joining >> great to be with you. >> momentarily, we will take you

live to dallas for the final debate in the texas governor's race, wendy davis and greg abbott are running to replace governor rick harry. the debate -- rick perry. the debate set to get underway in a moment. it is coming up momentarily life year on c-span -- live here on c-span. >> the race for governor is the dallasbc 5, morning news, the texas association of broadcasters, other partners, and texas public media stations. let's welcome to the texas -- >> welcome to the texas debate, race for governor.