to mention again to the senators that at 11:00, we are going to excuse dr. schuchat and caught a second panel, but anyone who has not been able to ask a question will be the first one up. senator baldwin? >> thank you, mr. chairman, and i also want to thank you for holding this hearing. it has reduced human suffering and saved lives by preventing and reducing the outbreak of preventable diseases, and thanks to national policy, including the affordable care act now millions of families have access to free immunizations. and it is why i am so concerned as i know many of my colleagues are, about the recent measles outbreak and the surge in misinformation, exacerbated by the media and even some national figures, and this is information

that is surrounding vaccine safety. to prevent against future outbreaks, i think it is vital that we continue to invest in our nation's vaccine production capacity, support cutting-edge science, and enhance the accreditation surrounding vaccine safety. so i have a number of questions, especially around our production. over 20 years ago, partially in response to a measles outbreak, congress recognized the critically important role of vaccines by passing and creating the cdc vaccine for children program, which provides recommended pediatric vaccines to low income children. the cdc also maintains a stockpile for pediatric vaccines, so, dr., could you tell us the current state of our national pediatric vaccine

stockpile, and is the measles vaccine included in that supply and can you elaborate on the role of the stockpile in addressing outbreaks, as well as how cdc works to maintain it? >> yes. be vaccines for children program includes a stockpile that is approximately 50% -- enough vaccine for 50% of the pediatric population to be vaccinated for one year, so we currently have over 3 million doses of mmr vaccine. the stockpile has been used for outbreak response and also for shortages, and even with our robust vaccine industry, there are many vaccines where there are only one or two manufacturers who produce them, and when there is a destruction in supply, we will have to go to our stockpile to make sure there is no disruption in use, so it

really has been a safety net for vaccine security. >> i want to explore a little further this issue of production , both with disease preventable diseases that are prevented by vaccines, but also with the influenza vaccine. where they might not be 100% match to the strain in a given flu season. two issues. well, three issues. the mistake manufacturer versus overseas manufacture, in the case of an epidemic that is particularly lethal. it has been a long issue, anna and at her stand we have improved domestic production. anything you can't elaborate on that would be helpful. secondly, production is usually still slow and based on chicken eggs, and there have been many efforts to transition to a

production in the influenza vaccine. where are we on that? and thirdly with regard to diseases that are preventable by vaccine, we have had drug manufacturers who have decided to exit that area, and oftentimes, with little notice to the medical profession. i have heard from frontline pediatricians who say we don't have enough in our clinic, and he cannot meet the demand. is there better notice given to the cdc? do we have more safeguards in place to make sure we don't have an alarming shortage? >> yes. we had a big wake-up call about 10 years ago in october 2004, where overnight, half of the expected influenza vaccine supply wasn't coming through and that really prompted an enormous amount of reevaluation

on the different parts of government. we are in much better shape now. that year, we eventually had about 58 million doses of flu vaccine. this year, we have nearly 150 million doses of flu vaccine that have been distributed. there are multiple new manufacturers or additional manufacturers producing for the u.s. market, and we also have others come besides those that are egg-based that are being used, so the influenza vaccines are included among this year's seasonal flu vaccine supply, and looking towards the future, there is a lot of enthusiasm across the government and across academia around investments towards a universal influenza vaccine that might give us broader and better and longer lasting protection than the annual flu vaccines that we use today, so there is a lot of progress in the past decade. there is more work to be done.

in terms of the communication with the industry -- >> i would like to get senator franken in, before you leave. if it is all right. thank you, senator baldwin. senator franken. >> thank you. i am thinking that maybe this outbreak in measles is a bit of a wake-up call, as senator warren said. you know, a lot of baby boomers and some of us, some of the senators who are older had measles and remember it. and maybe this is a really good time for people, especially some educated people, who were forgoing this for their children that they understand things like

herd immunity, and if you have a mass of people not getting vaccinated, you have outbreaks like this, and the financial costs. there was a 2005 nih article that attempted to quantify the economic impact on health infrastructure. they estimated that one case of measles costs the federal state, and local health departments more than $140,000 to respond to just one case, and you talked about the return on investment of all of these immunizations, and i think it is one of the -- it is obviously cost effective also prevents a lot of suffering. we live in a global world, and i just want to ask you about that investments that we put into

global public health, and what the importance of that is, so in terms of our investing in this in africa and other places. can you respond to that? >> yes. measles has been eliminated from the americas but it is still circulating around the world with about 20 million cases per year, and in some of the countries that have had major outbreaks, it is really investing in their health infrastructure and supporting their ability to have strong immunization systems that will protect americans as well as strengthen their health, so we are really keen to be partners in the polio eradication initiative and the measles rubella eradication and how we can protect children everywhere with vaccines that are safe and effective. it really strengthens our community protection here at home, and it is really the right thing to do overseas, as well. >> because measles, in

particular is highly contagious, and you are one plane ride away from an american getting infected. speaking of which what other infectious diseases may be on the horizon? what might be the next measles and what might come from -- what else are we looking from -- four in the near future? >> possibly. >> with infectious diseases, you really have to be ready for the idea that the microbes are changing faster than we are as people, this past year we dealt with the enterovirus, a severe respiratory illness that we have not really seen in children. and then we were dealing with the middle east respiratory syndrome, a new virus that was causing very severe disease in

the middle east and with some travelers returning from there two cases in the u.s., so we really think it is critical to be strengthening public health infrastructure and capacity for global health security in countries around the world so that we do not let an epidemic like ebola get as bad as it got. we can jump on it right away. we will not see importations, but we recognize this overseas and help the countries that are battling them deal with them swiftly. >> and that is why the cdc is so important. i really want to thank you for your service to this nation and to the world. thank you, dr.. thank you, mr. chairman. >> thank you senator franken. dr., maybe i'd miss heard something. the state department website said u.s. immigration law requires visa applicants to obtain certain vaccinations

prior to entrance with an immigrant visa, so an adult immigrant to the united states who obtained a visa is required to obtain certain vaccinations correct? >> yes, i can double check. >> i did not want to leave a different impression that was not true. >> thank you. >> dr. schuchat. thank you so much for your time. there have been a couple of senators who have not had time to ask questions, but hoping they will understand we want to invite the second panel to come up now, and they will be the first ones up after the next 15 minutes of testimony. i was now move ahead and introduce the second panel to save time, if i may. first, we will hear from dr. kelly moore. dr. moore is the director of immunization at the tennessee department of health and she is responsible for promoting proper use of recommended vaccines as well as overseeing the response to outbreaks of vaccine preventable diseases.

she has her undergraduate medical degree from vanderbilt and a masters in public health from the harvard school of public health, and i am completely objective, but the tennessee department of public health is one of the finest in the country. dr. sawyer, pediatric disease specialist from the university of california at san diego. and the children's hospital in san diego. he is also the ethical director at the san diego immunization partnership and involved in a variety of immunization practices projects. dr. tim jacks is a pediatrician and the father of two young children who were recently exposed to measles in arizona. he is in every child by two immunization champion. every child by two is a nonprofit dedicated to increasing vaccination rates among children.

his wife is in arizona and caring for the two children. i am grateful he could be here to tell their story. dr. moore, let's begin with you. if the three of you could summarize your comments in five minutes, we would appreciate it. the senators will continue questioning. >> thank you, chairman alexander and senator murray, for holding this hearing on the benefits of immunization and for inviting me here to testify about the preventable diseases. most people are unaware that even in a state with a strong history of immunization, a single case of measles requires a major public health response. i would like to begin by recognizing first lady christie haslam and bill haslam for the commitment to immunization as an essential step in promoting and protecting the health of tennesseans. you can say tennessee has a culture of immunization. for the past two influenza

seasons, the majority of tennesseans, aged six months and up, received a flu vaccine. in 2013, 95% of kindergartners were immunized with all required vaccines including both of mmr. the federal vaccine for children program has removed barriers to access for eligible children since 1994. our state's online immunization information systems supported by section 317 federal funds, ensures authorized users, such as clinics and schools, have access to immunization records to see what vaccines a child may need or to verify that they are protected. we have more work to do with vaccinations for teens and adults that prevent seasons such as meningitis, cancer, and shingles. public health colleague to address misinformation and

concerns about safety, l benefits, and affordability. to improve access, our department is using public health funds to help clinics become in network providers for commercial insurance plans so we can provide recommended vaccines to their beneficiaries with no out-of-pocket costs. when it comes to disease outbreaks, he realized how much public health work goes into one case of measles. i vividly recall each of the nine cases tennessee has had in the decade i have directed our immunization program. our most recent experience is a good example. on a friday afternoon last april, a doctor called his regional public health office about an adult with an uncertain immunization history in recent overseas travel who was in the er with classic systems of measles. the diagnosis was not in question. a game plan was quickly developed, following the state immunization program to identify

those who may have been exposed in the four days he was in. 124 people were identified. the mmr vaccine could protect the most recently exposed in -- if public health could find them quickly enough. those with uncertainty immunity were vaccinated on others were saturday. counseled in symptoms developed. among the 124 contacts just , three cases among other adults developed. for these, the same isolation contact tracing and notification process was practiced, but faster. no additional cases occurred. in total, 406 were evaluated. pbh works with the media statewide to educate the public and prepared clinicians through state health alerts and an educational webinar. cdc measles experts provided consultation and specialized testing that helped us optimize our outbreak tactics.

a great deal of credit in the story goes to the hard work of public health at all levels. this result however, it could have only been achieved in a community where the high percentage of the population was already immune or there would have been a very different outcome. congress' sustained commitment through the program and section 317 funding, will continue to equip us to meet the educational and operational challenges of keeping individuals and communities healthy and safe through affordable, accessible and effective immunization services. thank you for the opportunity to testify here today. i have provided a more detailed testimony for the record and glad to answer your questions. thanks. >> thank you, dr. moore. dr. sawyer? >> thank you very much for holding this hearing on a very

important topic during the reemergence of vaccine preventable disease and what we can do together to prevent further outbreaks. as you have heard, i'm a pediatric infectious disease specialist at the university of california san diego and with the children's hospital in san diego. i am also a member of the committee of infectious diseases of the american academy of pediatrics. my testimony today has a strong endorsement of aap. vaccines are one of the greatest health achievements, which has been pointed out by the dr. and senators. prior, children suffered regularly from serious illnesses, like measles, polio diphtheria, and, in fact even , bacterial meningitis. the development and widespread use of vaccines has led to a reduction or ratification of these once common childhood illnesses. because of the success of vaccines, i have never seen a case of polio, diphtheria or , tetanus in my 30 years of practice in pediatric infectious diseases. in the teaching session i held last week with 20 pediatric

residents in training, i asked if any of them had the measles. none of them had. however, as we have seen from the current measles outbreak and continued outbreaks of whooping cough or pertussis around the country, we are witnessing a reemergence of vaccine preventable diseases in the united states. unfortunately, my residents are going to get a chance to see the measles. pediatricians are concerned that the reemergence of disease is a signal that bigger outbreaks are yet to come. most of the cases in the current measles outbreak are from california. and 13 are from my own community. outbreaks like this are increasing in frequency and size. this measles outbreak, like all other measles outbreaks, are occurring because we have too many intentionally unimmunized children in the united states and it illustrates the problem with unimmunized populations. a simple trip to disneyland has led to a multistate outbreak of

measles involving more than 100 people. measles is one of the very few infectious diseases that literally flies through the air. so it is completely predictable that such outbreaks will occur again if immunization rates staying where they are or get worse. while most parents do choose to vaccinate their children, there are pockets of unimmunized children all over the country. in san diego, we have 1500 kindergarten students that are not immunized. that number has been increasing steadily. over the last decade. the current measles outbreak reminds us of an important fact about infectious diseases. they are a shared public health problem. when one person is infected, people around them and people they do not even know, become infected. the decision of a parent to leave their child unimmunized however well-meaning, is a decision that affects us all. although our public health community has done an excellent job of controlling the current measles outbreak, too many people make a decision not to

vaccinate their children, outbreaks will no longer be controlled. why is this happening? all parents want what is best for their children, but many parents are choosing to not have their children immunized amongst having received inaccurate information about the risks, benefits, and the diseases they prevent. i have held a number of forums in san diego county, meeting with vaccine-hesitant parents to hear their concerns. i conclude that the internet can be a dangerous place for parents looking for information about vaccines. the internet is replete with anecdotes and misinformation that leads parents to think that vaccines have caused harm. what it is overlooked by parents is the fact that just because an outcome occurs in the time after vaccine, it does not mean the vaccine caused the problem. it takes science to prove or disprove a linkage between two events, and our parents are not hearing the science.

the vaccination schedule recommended by the cdc and aap has been developed with a strong scientific standards and has been proven to be safe and effective. in every case, for every vaccine, the risk from the disease outweighs any risk from the vaccine. in my opinion, the best way to decrease the number of families refusing to vaccinate their children is to improve communication about vaccine safety and effectiveness. to increase the science literacy of our population, to limit the philosophical exemptions from school entry requirements on vaccinations, and to continue to carefully monitor the safety of all the vaccines we use. taking these steps can ultimately help reduce the number of parents who choose not to vaccinate their children. the reemergence of vaccine-preventable diseases is alarming and must be confronted if we are going to prevent further outbreaks like the one we are currently experiencing. thank you for allowing me to testify and i look forward to your questions. >> thank you.

dr. sawyer. dr. jacks? >> senator alexander, senator murray esteemed members of , congress, my name is tim jacks. i am a board certified pediatrician and i am on the front line of this vaccination issue. i daily recommended vaccinations to my patients and address concerns and questions they have regarding immunizations. lately, i have also been addressing many questions on the ongoing measles outbreak. but i am not here today as a medical professional. i am here today is a father. three weeks ago, my infant son and daughter madeline, who is battling leukemia, were exposed to measles. since her diagnoses with leukemia six months ago, our home life has revolved around my daughter maggie's care. she has been admitted to the hospital six times and spent nearly one month there. she is on a very regimented schedule of treatments and she takes medication three times a day, up to six medications at a

time. we have weekly visits to an outpatient clinic where she has procedures. she has blood work drawn, and she gets chemotherapy infusions. at one visit my children were exposed to measles. we were informed of the exposure and instructed to return for shots of the measles antibodies, which we did. now, these antibodies are not perfect protection, but in the case of my children, the only thing we can do to prevent them from actually coming down with measles. right now, my two children are at home under quarantine. while we are waiting the three weeks to see if they develop measles or if they exit quarantine without any symptoms, i typed an entry into maggie's blog. and this blog is something i use to update family and friends into her treatment progress and just to let people know how she is doing. typically, i get 100 people

needless to say, it has gone viral. the title of this blog entry was "to the parents of the unimmunized child who exposed my family to measles." in this blog, i vented my frustration and anger at the situation and i explained and hopefully educated people as to why my children and many other children like them are at risk. eli, my 10 month old son, has received all of his immunizations on schedule but he's too young to receive his first dose of mmr. my daughter, maggie, who was also previously fully immunized, is at extra risk right now because of her weakened immune system due to her leukemia as well as her treatment. the blog went viral. in over two weeks, it received over 1.3 million shares on facebook and has been read numerous times.

i have been contacted for interviews on local and national media outlets. i have taken these opportunities to share our story and hopefully raise awareness to the issue. my hope is that we can prevent families from going through the same thing we have gone through these last weeks. we also hope we can prevent more families from getting measles altogether. prevention is simple, vaccinate. as immunization rates drop, and the community starts to break down, that is the only thing protecting my two young children from being exposed to measles or whatever the next outbreak is. i urged a strong, unified, bipartisan voice supporting the scientific evidence that immunizations are safe and that they save lives. we need a consistent message from the presidency to capital and down to local state legislators, schools, and even thinkers.

i urge congress to take actions recording programs and infrastructure already in place to get these vaccines to those that need the most and contain outbreaks such as we are seeing today. i will care for my family and i will work to promote health among my patients. and through partnership with immunizations, like every child by two and the arizona partnership for immunization, i will advocate for timely vaccinations for children. thank you for your commitment to the issue. with your help, we can stop the spread of vaccine preventable diseases and protect the innocent. we can protect our children. we can protect my children. thank you. >> thank you, dr. jacks for your personal story and thank you dr. sawyer and dr. moore. i will go to the people who have not had a chance to ask questions and begin with senator casey. >> thank you very much.

we would like to thank the witnesses for bringing to this table and hearing room your experience, knowledge, significant time that you have dedicated your lives to on these issues. dr. jacks, we are especially grateful for bringing your story. especially when you have a loved one, in your case your daughter, is the subject of your own efforts. we are grateful for you bringing that to us. i am tempted to ask, but i would just refer to it, about the why question and why the failure to vaccinate has become significant? that may be the question that we are all asking. i guess maybe a better question to ask is, what we can do to push back against it?

we are doing that today and i see each of your testimonies have referred to that. i want to see some of the ground-level work that has to get done day in and day out about which i do not know much and maybe some members of the panel do. what happens in our schools, communities, and even in the offices of pediatricians? dr. sawyer, you mentioned that you had never been exposed to this in a direct way as a practitioner. i wanted to ask you specifically about pediatrics. do you think we are reaching a point where there has to be pediatric training that speaks to this? in other words, a change in the training that reflects the reluctance that some parents have to vaccinate? >> i think that is a good question and there are efforts

underway from the american academy of pediatrics. in my case, i have a curriculum for residents about immunization. three years or four years ago, i added a whole section to teach residents and training on how to communicate about vaccine safety and address the concerns of these parents in an open nonconfrontational way, with the hope that if we can educate our families and give them good and accurate information, they will make the right decision. the problem is that there is so much inaccurate information circulating that a highly educated family who read something on the internet and takes it to heart before they really critically look at the source of that information. that is what we need to try and address. i mentioned in my statement, to raise the science literacy in the united states. that is a tall task, but we need it. >> i would like to refer to your testimony on page three, you talk about in the second full

paragraph, in tennessee, local school nurses and coordinated school health directors are among our most important champions of immunization. can you tell us about the importance of that? as much as we have an obligation in washington to get a message out and get policy right, a lot of the best work will be done in those settings. >> that is true. i cannot speak highly enough of our local public health nurses school nurses, school administrators at work with families. truly, these parents often have the hesitation of physicians out of fear. they want to do the best for their children and bells go off with these very things about vaccines and it is hard to un-ring that bell. when i talked to local public health nurses, they care so deeply about these families that they work with, and a lot of this can be overcome with credible information from trusted sources and good relationships.

that is what these folks provide. i am always a phone call away when they have a question on a technical thing. i can help them with that, but they are the ones with relationships with families to help them overcome fears. i think our immunization rates are testimony to that ability for them to work through this with families. >> i appreciate that. i will wrap up. just one statement. i know that in the debate on how to respond to the public crisis, among the best pieces of advice we all got here was local valuators are a lot better than valuators outside of the local area. i don't want to say washington but i think you know what i am talking about. thank you for your work and i'm grateful you are here today. >> thank you, senator casey. senator murphy, especially dr. jacks for taking the time to tell your story. i want to ask a few questions about the nuts and bolts of how exemptions work.

we have seen a pretty rapid rise in exemptions, in my state for instance, we have fairly loose rules in getting exemptions. a feature we share with california, frankly. we have seen in the last three years, a number of people who are applying and getting religious exemptions doubled. just in three years. you are proposing eliminating the philosophical objection. can you speak for one minute on why you made a proposal? >> i made the proposal because as you pointed out, i live in california where up until last year, in order to exempt your child from school vaccinations you simply flipped over a paper and signed it that you had a philosophical objection. not a religious exemption, not a medical reason your child cannot

be vaccinated, but just that you do not believe in vaccines. just as you mentioned in your statement, we have seen a steady rise in those exemptions over the last few decades. there are very few religions that specifically advised their followers to not vaccinate. it is the philosophical exemption that is causing the problem. i think it is driven by misinformation, so i certainly am in favor of eliminating such philosophical exemptions. the state senator in california just introduced a bill last week to do just that and i am certainly going to be supporting the effort in california. >> levy suggests an alternative to the elimination of the exemption, as you mentioned, all you want do in a state like california or connecticut is sign a piece of paper and you get no information on the consequences of not getting a vaccination. if the studies are pretty clear that more information you give the less likely it is that people take the exemption.

if that, the less likely you will have outbreaks. this is a stunning one from 2006, in states that have higher bars for exemption, they were 50% less likely to have whooping cough outbreaks. let's say we just raise the bar for a philosophical objection and we said for instance, you have to consult with your physician first or you have to review information on the risks of not getting your kids vaccinated. do you think that that would be helpful if we were not successful in eliminating the exemption? i asked dr. sawyer, but i will be glad to hear others. >> i will speak first because we have a form that says they need to sign that they have been educated. that led to about a 1% drop in the rate of california, but it

is still at 2.5% to 3.5% in communities in california. we will see whether that form continues to drop the rate, but my concern is that we have seen the benefit of a one-time drop and we will go back to the study and gradual increase in exemptions whether people stick to philosophical ones or as they start to exercise religious exemptions that they did not before. >> tennessee is one of the vast majority of states that does not have a philosophical exemption and has no intention of developing one. >> only 20 states have them. >> correct. about 29 or so only have no philosophical, including tennessee. do we want to protect the most vulnerable among us or do we want to provide choices and options for protection? we cannot do both at the same

time with the disease as contagious as measles. prepared to accept the consequences of offerings like this and personal choice is fine, but if we want to protect the vulnerable, like dr. jacks' children, then immunization needs to take place and it is the best way to do it. >> my office is looking at some legislation -- proposed legislation that would provide incentives for states to increase the information that they are giving to parents. not necessarily dictating what exemptions are used, but to admit that as a national health priority, it probably makes sense to make sure that the best information is given out. the irony is, if you are getting a medical exemption, you have to have a note signed by a doctor. if you are using a philosophical exemption or religious exemption, often all you have to do is sign the back of the form. it seems at the very least we should try to marry those two standards together. >> senator bennett. >> thank you, mr. chairman. thank you for holding this hearing. it strikes me listening to the

testimony that we have been victimized by two things. one, a generation that has not experienced these diseases because of vaccines and they have lost sight of what they look like. and interestingly, dr. sawyer's point, the unedited content on the internet they are reading. i wonder, dr. sawyer, and i hope maggie is getting a chance to watch you. thank you for being here. dr. sawyer, could you use this opportunity to tell us what are the biggest falses that are being trafficked on the internet and what are the answers? if the other panelists would like to join in, that would be great. >> as it has been mentioned, autism remains one of the major

concerns to parents even though dr. schuchat has pointed out that there is not a lot of credibility between the two. the whole philosophy of the immunization schedule is to protect children as soon as we can for as many things as we can. delaying vaccines is really counterintuitive to the whole purpose of the vaccination program. if we were overwhelming children's immune systems, i am an infectious disease doctor, we do not see that into two months, four months, or six months when we give routine vaccinations. the last major thing you hear about are the ingredients in vaccines and the concern that perhaps some of them are toxic. once again, that has been discredited and looked at very carefully. the fda approves of these vaccines. >> i will add to dr. sawyer's excellent list that i agree with.

the vaccine causes the flu. i'd hear that every year over and over from well-educated folks and that is certainly one we work to counteract of the benefits of the flu vaccine. the hpv vaccine, may cause promiscuity. we hear that from time to time as well. that is what people are concerned about hpv given to preteens. >> just to be clear to everybody listening, these are demonstrably incorrect. >> i wonder, you are a pediatrician, do you have advice to pediatricians across the country on how to handle the conversation that they have with parents about vaccines? >> yeah, with regard to families that have questions and concerns, it is really just that. it is addressing their concerns and questions. you know, back in the day,

physicians could take somewhat of an authoritative stance and there was a great deal of respect. nowadays, it is more of a working with families to come to a conclusion on what is best for their children. whether it be immunizations or whether or not we want to treat an ear infection. i would like to make my recommendations and address their concerns specifically. >> do you have anything to add dr. sawyer? >> this question on whether there are things pediatricians can do? >> right. >> the curriculum i develop basically takes people through the appropriate way to listen attentively to people issues and be respectful and addressing them, but to continue to convey

the science in the most clear way one can, so families can reach the right conclusion. >> thank you, mr. chairman. >> thank you. i finished early. that is 43 seconds. i will never get that time back. >> we will put it in the bank. we have time, and i am sure all of us would probably like to ask or have a second round of questions, dr. moore, i believe you said the case of measles from tennessee was in memphis? >> it was actually an adult in west tennessee. >> you describe you moved in quickly and the number of people in that one case that you have to be in touch with have to be how many? >> people i come in contact with them. i do not have a specific number

for that region, but it was clear because 124 people were exposed and only three people got sick that it was very high. >> as dr. sawyer was talking earlier, i was thinking about the phrase, going viral. and then dr. jacks used it. this generation understands the idea of going viral. you are talking about measles flying through the air. that is unlike ebola that threw the country into a panic last fall, that could only be caught by an exchange of bodily fluids. this flies through the air and goes viral. this is a disease that goes viral. we senators, in a bipartisan way, understand the problem of dealing with highly educated people who get that information on the internet. that happens to us every day. we deal with that and we know

what it is. let's go back to the going viral. what if this person in west tennessee, who dr. moore acted on quickly, what if that person had been discovered in a part of los angeles where the immunization rate is 60% or 70% instead of 90% or 95%? describe the number of people and the multiplying of people that would have to be contacted to make certain that the disease did not spread. >> i can share the experience we had in san diego in 2008, which was our last outbreak. we had 12 cases and over a hundred people were exposed to those 12. it quickly goes up

exponentially. the number of people you want to track, and unless public health is there to track those people and keep them quarantined, it could easily get completely out of control. >> so you had 800 people, but each of them might have infected someone else, right? >> exactly. in that outbreak, we had close to 800 people quarantined for three weeks to prevent that next wave. we were all crossing our fingers with this disneyland outbreak that maybe we are near the end. i noticed that the case number went up by 20 just this past week, so i am not sure we are done with this just yet. >> moneys a flight to the air, we have an example of going viral in modern i suppose. dr. jacks, this might not be an exact comparison, people asked me why continue to play the piano when i was young and i remember responding that i did not remember my mother giving me a choice, but i guess i had a choice. we are not talking about taking choices away today from parents, but we are talking about a conversation between a

pediatrician and a parent. that probably would not start -- even in this day of parents who feel differently than my generation of parents, let's say, how strongly do you recommend to your parents that they vaccinate their children? i suppose the most persuasive than you can do is tell them the story of your own children. do you just make a neutral observation about it or do you come to a conclusion and say, i think you should do it? >> i definitely come to a conclusion of recommending that we do vaccinate. i often times do not approach it quite that way because i want to get their thoughts, opinions and fears first, so i can address those. i have heard from a couple that is still pregnant and has not had their first child yet to the routine thing -- visits where we

would do a vaccine. every visit, whether they are getting vaccinated or whether they are still trying to decide, i am talking and answering questions and urging them to make good informed decisions. my understanding, opinion, is that, yes, vaccines are one of the best things they can do to protect their young child. >> i am out of time, but i assume -- my wife led an effort to try to establish prenatal health care and trying to let parents know about vaccines before the child is born is a good way to keep the vaccination rate high. >> dr. moore, i'm interested in learning more about the increase of the uptake of the hpv vaccine. we are very fortunate to have a vaccine today that can prevent

most forms of cervical cancer, which i am sure you know is the second leading cause of cancer death among women in the united states. about 12,000 women get cervical cancer every year. about 4000 are expected to die from it. we know that those are deaths that now can be prevented. i would like to ask you what can state and local health departments do to effectively promote hpv vaccine? >> that is a wonderful question and we certainly know that a lot of young women and men are not protected against this virus yet who could be. in tennessee, our immunization rates are about one in three and we would like it to be much higher. we are working collaboratively with cancer advocates because they have wonderful experience raising awareness about breast exams, pap smears, and we are collaborating together to try and help families understand that this new vaccine is a cancer prevention tool that can

help reduce the risk of an abnormal pap smears for a young lady later in life. we are also trying to make sure people understand the vaccine is safe, it lasts, and it is very very effective. we bundle with other routine vaccines. so what is given at the same time as other vaccines, the first meningitis shot, and it is part of the routine pre-immunization bundle. we are trying to help people understand that there is nothing exceptional about this except that it is phenomenal cancer prevention and incredibly exciting to have its will in our hands when the last generation did not have to protect women and men from cancer for their lifetime. >> thank you, i appreciate that. i would also like to mention in my home state we have an incredible public and private partnership called vac northwest. at my time when they had the highest vaccination rate in the

country, our state health department came together with key health promoting organizations, within reach, and seattle children hospital, to create an innovative partnership which addresses a vaccine hesitancy to work with parents and health care providers alike. it has support from the gate s foundation which was helpful and engagement of a lot of partners. vac northwest has been doing amazing work and has been evaluated with the intent of sharing a lot of lessons that they are learning with other states. i wanted to ask you, dr. moore how can working with private and nonprofit partners help the efforts? >> health departments have a major role in promoting immunization. long ago we started -- they go to their own private doctors for immunizations now to provide

holistic care about praying for their child, but we partner with these organizations in order to help support them in doing the right thing. pediatricians are incredibly busy with everything they have to do and it really helps them if there is a group in public health focused on promoting immunizations where we can provide them support like our immunization information system that makes their job easier. our role but it comes into doing site visits about quality of immunization care, site visits that we do in their offices, educational programs that we provide, promotional material, we help give them the resources they need for the private sector to do the best possible job for the patients because they are primarily the ones vaccinating our children. this partnership has been wonderful. i am all about relationships and these relationships have been great at developing immunizations. >> thank you. and dr. jacks, i appreciate your

willingness to come. since you started speaking about your own family's situation, are you surprised to know how many people know that some people cannot be vaccinated? >> surprisingly no, actually. there has been a lot of positive feedback, certainly a small amount of negative feedback from certain populations, but it seems like the knowledge is there. i just do not think it is in the public conscience when they are making the decision to vaccinate or not vaccinate. that is why i am doing this. i want to raise awareness of the issue so we can be part of the discussion. >> i appreciate that. i just wanted to ask you as a pediatrician, what do you think are the key areas to vaccine uptake? >> largely education and the misinformation that is out there. >> thank you.

>> thank you, senator murray. senator cassidy. >> i would like to question anonymous consent to enter a statement to the record. thank you. obviously, we have declining resources on the federal level. i see that the administration is cutting the 317 money, dr. moore, that you had reference. i also will note as a fellow who used to work in a public hospital system that there is always a great concern about immunization. sometimes i would see people come to speak to our pediatrician about immunization and it was like a call to newcastle. these folks cared about it. jacks and sawyer care about it passionately. can we use our 317 money more effectively? i ask this not to challenge but to suggest. when i look at that map of california, you can isolate those communities which are not

immunizing. if you want to pay jacks to come in and speak to those families whose child was unvaccinated and recently came from another country, their child is at risk. i guess i will ask, are we still using our 317 money in a paradigm of 20 years ago before we had immunization registries that could pinpoint where we had pockets of the unimmunized? and before we realize that many people are basing their decisions based upon a motion, not upon the physicians' recommendations? simple question, 317, are our programs adapting? >> thank you for that question. i can say under dr. schuchat's leadership that we are focused on where we are with our immunization program. the 317 funding that we have is going to support our information system that provides clinical

position support for clinicians who need to keep up with the complex current immunization schedule to provide optimal care. it can provide that support. it makes it easy to issue immunization certificates. we are also using those funds to provide education not only for clinicians in large conference settings, it also one-on-one education. we will send a public health immunization expert into a clinic to spend half a day. >> those clinicians, again, they do not need to have it and they just need to have posted online their clinic's results compared to other clinic's, and natural competition will drive it and we know that from infectious disease rates. if you post an immunization rate and they are lacking, they will come up. i suspect if you did that for elementary schools, we are going to post the rate of the children immunized here, so what are your

comments on that? >> first, i would like to agree with your last comment about posting rates for schools. we want parents to be informed about vaccines in general and we should also want them to be informed in the environment they are putting their children in. there is no doubt that is going with 40% or 50% of unimmunized children -- >> is there a push to do so? we should be letting parents know as much as possible about both because i read the pediatric's article that staff provided. if a pediatrician pushes immunization, she is more likely to convince someone to vaccinate them if she is passive, that's ok, i will sign a no. to what degree are we posting individual clinics or to individual schools?

it seems like you should be doing that in santa monica. >> the rates for school vaccination are public school information and posted on the state's website. you have to go look for them instead of putting them in front of the face of a parent, which might be more effective. >> well, i will yield back my 43 seconds. >> this time bank is getting full. >> i will not take very long. i appreciate your testimony and answers to the questions. it may be too early to know the answer to this, all of you are on the front line obviously, what is the public reaction to this in the last week or so?

because hopefully we are disseminating some information here and the news has been, what do you sense has been the reaction to the outbreak and to all the public information, all the discussion on the news etc.? what has been the reaction from those parents who waived the immunization for the child? is this being helpful, a learning moment for america? >> i would say absolutely. i have heard stories from pediatricians that have tried to convince parents for years, and when the measles outbreak happened, they were walking in the door wanting to be immunized. i think it is important to raise awareness about the fact that these diseases are still out there, and i think the senators

who are organizing this hearing can do that. >> i have had great experience and getting a lot of good questions from the media and family, particularly focused on our immunization exemption which is low, but notably the most wealthy county in tennessee has almost four times as high an exemption rate as the county next-door, davidson county among kindergarten students. i think that caught everyone's attention and hopefully, even though our exemption rates do not compare to california and some other places, it is making people realize that these are the consequences of their choices. >> dr. jacks? >> i would just echo what they are saying. there has been a lot of good awareness and a lot of families that come in to get immunized, both against the measles as well as other immunizations. i just had a family this last

week that the parents were kind of split on should we vaccinate, do we not? i remember them and they came in and got all their vaccinations. >> this article from years ago i think prob ly did a lot of damage in this. we have seen not an explosion, well, maybe, in autism, at least in the diagnosis of it. whether it is a genuine increase or just better diagnosis. it is devastating thing, autism. i know that that fear resonated with people, so i think that

this is maybe a wake-up moment learning moment, and i hope it is. and i want to thank you for being here today. i want to thank the chairman calling this hearing. thank you. >> i will give you one minute and 16. but i am the end, anyway. >> senator murray, do you have closing remarks? >> i would just like to thank our witnesses and for being here and doing all the work to help keep people safe from vaccines and preventable diseases very i particularly want to thank our chairman, senator alexander, for holding this hearing. thank you. >> i thank senator murray for her work and her staff putting together an extraordinary group of witnesses today. dr. moore, again, we are so proud of our public health department in tennessee.

not just on this, but on the quick reaction to the fungal meningitis episode where your organization saved lots of lives. dr. sawyer and dr. jacks, thank you for your leadership in your field and your testimony. i think the hope we have is that dr. jacks' message goes more viral than the measles does and that it goes fast. i have a hard time keeping our -- my old governor hat off, and it makes me think of the importance of our state organizations. cdc really works through the states. the medical associations work through their legislatures and associations and they are in touch with parents every day. we would like to take some step to solve all of this problem

but the truth is, in my view most of that reaction has to be with those who were closest to the parents and who sees them regularly. i think the idea of a medical home for every child is about to be born is probably the surest and best way for states to approach this because parents are talking to their pediatricians and they are going to make sure their children are vaccinated. i have some closing remarks i am supposed to make. the hearing record will remain open for 10 days. members may submit additional information and questions for the record within that time. the next hearing will occur tomorrow at 9:30 to look at the issue of ambush elections. thank you for being here today. the committee will stand adjourned. they are, therefore, responsible

for her death. >> the senate finance committee held a hearing on the u.s. tax code on tuesday with former

senators backpack bill bradley. they were part of the 1986 tax deal under president reagan and talked about the process of creating the legislation. this is one hour and 10 minutes. >> hearing will come to order. today's hearing is about the need for tax reform and what lessons we can learn from the tax reform act of 1986. the last successful overhaul of the united states tax code. we have before us today two former senators who were key to that effort. i don't know why they call you former senators. i think you're always going to be senators to me. i look forward to hearing their thoughts and advice, and i think we all do, during today's hearing. before we engage meaningfully in tax reform we need a clear vision of what we want success to look like.

a vision is not a specific system of rates, of deductions or credits. instead a vision is how we want to change the opportunities for american families and the rewards that americans receive from their labor. entrepreneurship, and investment. a successfully reformed tax system will help make america the best place in the world to work, conduct business, invest and prosper. a successfully reformed tax system will be one that provides economic growth, and is simple and fair. this, more than anything else, should be our vision for tax reform. the landmark tax reform act of 1986 was developed by then-chairman bob packwood through a careful and methodical bipartisan process that relied heavily on member input. senator bradley was a key part of that process. i don't want to leave out congressman rostenkowski and a whole rash of others in the white house at that time. but these two are the two great leaders in the senate at that time. over the last few weeks we've begun a similar process that we hope will yield a similar result.

tax reform legislation that both parties can support. the 1986 act signed in law by president reagan reformed a costly and complicated tax system into a simpler one, with lower tax rates for american households and businesses, affording them greater personal prosperity. over time our tax system has once again become costly complex, it's impeding growth, standing in the way of shared prosperity and placing american workers and businesses at a distinct disadvantage. put simply, it is past time for congress to stand up once again to fix our broken tax system. if you've been around washington over the last few years, chances are you've already heard me talk about tax reform. i've been making the case for tax reform on the senate floor here in the finance committee and public appearances and written materials and in private conversations. in december the republican staff of this committee produced a comprehensive report outlining the need for tax reform and providing some direction to our overall efforts.

i'm sure everyone here has read that report cover to cover. i've already publicly laid out seven principles that i believe should guide our tax reform efforts. i will not go in to much detail on each principle today, instead i'll just talk about them briefly. first principle is economic growth. tax reform if it's done correctly should promote growth, and significantly reduce economic distortions that are present under the current income tax system. the second principle is fairness. the income tax base which has become riddled with exclusions exemptions, deductions, and credits, should be as broad as possible. tax reform should broaden the tax base by eliminating or reducing a number of tax expenditures along with lowering tax rates and removing distortion. the third principle is simplicity. the taxpayers and businesses spend over 6 billion hours a year complying with tax filing requirements, with annual compliance costs in excess of $171 billion, which is more than the gross domestic product of new zealand, for instance. simplifying the tax code will

result in greater clarity and compliance, and will free up resources for families, job creation, and other productive uses. the fourth principle is revenue neutrality. tax reform should be revenue neutral and not an occasion to raise taxes on american households or businesses. general revenues already exceed their historic average as a share of our economy and greater revenue should not be an objective of reform. the fifth principle is performance. the joint committee on taxation lists almost 100 provisions of the tax code that will expire over the next decade. this is unacceptable. families and businesses should be able to plan for the future without wondering if the tax code is going to change from year to year. the sixth principle is competitiveness. the combination of a high corporate tax rate, worldwide taxation and the temporary nature of some tax incentives makes american companies less competitive when compared to their foreign counterparts.

tax reform should reduce burdens on businesses, large and small to allow them to more effective compete on the world stage. the seventh principle is the promotion of savings and investment. many aspects of our current tax system discourage savings and investment, thereby hindering long-term growth. savings and investment help build the capital stock, providing fuel for economic growth, and it generates prosperity for american workers and businesses. these seven principles are the guideposts that we use when looking at tax reform proposals. i think we're going to have an interesting hearing today. we have two really great former leaders, chairman packwood and senator bradley, to see what advice they can give us if we undertake our tax reform efforts in this congress. i did read showdown in guchi gulf and some indication of how difficult this was. if anything it may be even more difficult today, because of the

mess that has occurred since none of which you deserve to be blamed for. senator wyden? >> thank you very much, chairman hatch. as chairman hatch noted, the finance committee is joined this morning by two legislators who are at the heart of the last major overhaul of the u.s. tax code in 1986. chairman packwood spent more time than anyone figuring out how to make the numbers in tax reform work. that is the tough work of legislating. senator bill bradley was the intellectual godfather of the reform plan that broadened the base, closed loopholes, and kept progressivity in the code. senator bradley lit the fire that got the reagan administration invested in reform. and i don't think anyone would question my judgment that senator bradley had by a wide margin the best jump shot in the senate tall guy caucus. now if there's one obvious

similarity between 1986 and today it's that people are quick to say that tax reform is absolutely impossible. americans say congress can't organize a two-car parade. there's no way they could come to major economic legislation. so what happened three decades ago needs to happen again. turning the impossible into the possible. the congress and president reagan came to the to pass the 1986 tax reform act based on what i call principled bipartisanship. one side wanted to flatten the tax code. the other side wanted to close loopholes and guarantee that the tax code treated everyone fairly. both sides said we're going to set aside the partisan attack. look for common ground, and each side came away with the feeling that it had upheld its principles. when president reagan signed the

bill into law, he called it an historic overhaul of our tax code, and a sweeping victory for fairness. he continued, and i quote here "it's also the best anti-poverty program, the best pro-family measure, and the best job creation program ever to come out of the congress of the united states." those same objectives guide the finance committee in the congress that works again to modernize our tax system. reforming the tax code is always a herculean task. but the same strategy of principled bipartisan can work once again. the congress can turn the impossible into the possible. however, policymakers need to recognize that the process is going to look different. not every part of a 30-year-old game plan for tax reform can work today. china and india are now

superpowers in the global economy, which is a much bigger factor in the tax reform debate. the gulf between wage earners in the top of the income ladder has widened. and america is at its best when a rising tide lifts all the boats, and it should be obvious that making that a reality once again is going to take some hard work. the status of the middle class across america is at the top of the list of compelling issues for tax reform to address. it's fundamentally unfair that a middle class wage earner could pay a higher tax rate than an affluent person whose earnings come entirely from investments. the tax code should not be used to punish the wage earner in america. many tax incentives for college education and retirement savings are simply out of whack. the support those incentives provide don't always get to those who need them the most. and that ought to change.

another challenge is making america more competitive in the global economy. today, look and come away saying our country is trying to win a road race in a 30-year-old car. our competition, meanwhile, trades up to more efficient models. america hasn't done enough to drive innovation at home, and worse, the tax provisions for research and development expire year after year. in 1986, there wasn't a lot of talk about the tax code. for example, and a clean energy future for our country. that's something else that has to change this time. and finally, modernizing our tax code has to be done in a fiscally responsible fashion. tax reform cannot become an exercise in slashing rates at any cost. the biggest lesson from 1986 is that tax reform is possible, when democrats and republicans set partisanship aside, come together, and focus on shared principles.

over the years, i've talked frequently to senator bradley about how tax reform is always totally, completely and thoroughly impossible until that moment when it happens. the finance committee today has two experienced, knowledgeable witnesses who are going to help us get closer to that point today. chairman hatch, thank you. and i look forward to our witnesses. >> mr. chairman, mr. chairman, if i may have a point of privilege just for a moment? and i thank the chair very much. i am in a intelligence briefing on iran, but i wanted to come to join the committee and its leadership in welcoming the most outstanding united states senator new jersey has ever had to represent it. not only is he had a great ability to shoot a three-point shot effortlessly, but the intellect that bill bradley possesses and his willingness to pass the ball to fellow teammates made him a consummate successful united states senator here in new jersey.

so, i've read his testimony. i look forward to the q&a so we can engage in some of it, and i appreciate him and senator packwood joining us. >> thank you, mr. chairman. >> thank you, senator. i think that was pretty -- of our senator. our first witness is bob packwood. senator packwood was first elected to the u.s. senate in 1968, and served the people of oregon and this body for 26 years. he was chairman of the finance committee from 1985 to 1987 and presided over this committee's efforts to draft and pass the tax reform act of 1986. he made a typical difference in this, as did our other witness. he also served as chairman of the commerce committee for four years. and prior to his time in the senate, senator packwood practiced law in portland, oregon, for ten years. was elected to serve for three terms in the oregon state legislature. he received a bachelor's degree in political science from

willamette university. i have got to pronounce that better, don't i? and a law degree from university of new york law school. we feel honored to have you here today. we know you can help us in many ways to understand some of the difficulties we're going to have to get through and hopefully give us some advice on how to get through it. our second witness is another great human being who i greatly admire and admired before he came to the senate, and that's senator bill bradley. senator bradley represented the people of new jersey here in the senate for three terms. beginning of 1979, and as a member of the senate finance committee he played a pivotal role in the drafting and passage of the tax reform act of 1986. of course prior to his time in the senate, senator bradley was a great professional basketball player. he's a two-time nba champion and a member of the basketball hall of fame. senator bradley holds a bachelor's degree in american

princeton university and a master's degree from oxford university where he was a rhodes scholar. he is the author of seven books on american politics, culture, and economy, and currently hosts american voices radio show highlighting the remarkable accomplishments, of both famous and unknown americans. we welcome you, senator bradley, as well. we thank both of you for being here today, and we look forward to your testimony. senator packwood you go first. >> and senator bradley also >> and senator bradley also holds a record for the most points ever scored in the play of basketball playoff in portland, oregon, when he scored what, 64 points? 58.

chairman, when i was contacted everyone asks how do you do it in '86, and are there any other parallels till today? there are some but the circumstances were different. in our era, fairness was the issue, not income and equality. and the next to the last page of my statement, you will see a list of newspaper stories about people that paid no taxes at all. industries, defense industries at the time of the reagan buildup that not only paid no taxes, they got money back. and the public, and the members of congress, could not understand how wealthy corporations, and wealthy individuals could pay nothing. it wasn't fair. so that was the premise we were operating under at the time. you will find -- you will find in my statement on occasion the word diary. that means it was taken specifically from my diary at the time. now, what happened. first tax reform is not a new idea. stanley surrey who was president kennedy's assistant treasury secretary for tax came up with the idea of tax expenditures. you can lower taxes and get rid of them. bill bradley and dick gephardt in their fair tax said the same thing. studies treasury one and

treasury two, we all knew how it worked. we all knew that you could lower the rates, if you could get rid of deductions. it's pure mathematics. the house had public hearings for a year in 1985, and they had a lot of individual votes on things as they went along. and they picked up enemies. they picked up barnacles because some of those interests lost their votes and there's lots of single issue groups. and i don't mean the nra or right to life but you touch mortgage interest, and you've got -- you touch charitable contributions and you've got every organization in the country opposed. and the problem with the -- the house bill is that they had enough of these barnacles attached to the bill when they finally came out of committee, that there were votes on the floor to pass it. it would have failed but for the fact that ronald reagan

literally came up on the hill. met with the republicans and said, please vote for this bill, i will veto it if it passes in this form, but send it to the senate and see what they can do. with that, enough republicans changed their vote and the bill passed. although you'd never know if they changed their vote because it passed on a voice vote in the house. comes to the senate. and in those days the senate didn't get going as quickly as you've gotten going now, and going till mid-february or march. i finally started having some hearings on this bill but we didn't need many hearings because in the summer of 1985 we had about 30 hearings on the subject of tax reform. just in case the house would pass something.

because if they passed it, i mean we have to act relatively quickly and i didn't want to have a lot of hearings at the same time. so we pretty much cleared the deck of hearings. but there's one thing that caught my mind at the time of the hearings. and i would ask witnesses how low would the tax rate have to be before you didn't care whether there was any deductions? how low? 30%? 20%? 25%? it's always in that range. i didn't think much about at the time but i was intrigued that almost every witness i would ask, that's what i would get. well, all right. we come to the spring of 1966. because i'm frankly making no progress in committee. we're not making the bill any better. we're not making it any worse. we just aren't getting any place. so on friday, april 18th, i simply adjourned the committee said we're done with the bill. somebody said you mean we're done for the day? i said no we're done with the bill. this is the end of this bill. and at that stage i called them and this is where things moved so rapidly.

i called david brockway, who was then the chief of the joint tax committee said give me three bills, 25, 26, 27 percent. he says 25% you'll have to get rid of mortgage interest. and bill i remember you saying how much trouble mortgage interest on your bill. so i asked him what about 26%? that's friday. the following tuesday he comes and he gives me three, not bills. they weren't bill form but three plans as to how you could get 25%, 26%, 27%. and i looked at them and then i was delayed for 2 1/2 days because at this stage, up came fast track for the canadian free trade agreement. it's one of those things where the president can't move unless you give him fast track authority, and there was a deadline. if congress had not acted by this is tuesday, the next wednesday at midnight, he got it. the house had not acted. fell on our side to take care of it. i thought it was a slam dunk. i was sure we were there. turns out i didn't have the

votes. i was missing one. and it was sparky who was mad from hawaii that the president had not answered his letter on macadamia nuts. and i had to get over that hurdle, and bring him around. we finally succeeded in doing it but it was thursday before i was done. then on thursday i presented to the committees at the same time our committee just the outlines. we have no bill. just the outlines of what might be possible, and they seemed to like that. so i thought to myself meeting's over, and getting toward the weekend and i'm thinking at this stage how are we going to do this? and i thought the only way it can be done is bipartisan, quickly, and behind closed doors. the bipartisan because i could see any bill that was utterly partisan on the republican side would have no success with the

house conference. any bill that was not done quickly, but hung out like the house bill did, would pick up enemies all along the way. and it would have to be done behind closed doors. it was helpful to have the president on board. it wasn't critical, but it was helpful to have him basically going the same way we were going to go in the senate. on that weekend on saturday and sunday, i called six senators. bill bradley, george mitchell, pat moynihan, jack danforth, john chafee, malcolm wallace and i said would you be willing to meet in my office starting next tuesday at 8:30 to see if we can work out a bill that would be satisfactory to us, and the president? every one of them said yes. and now passed starting that tuesday the most extraordinary experience in my life in politics.

we met from tuesday to tuesday the bill was at -- every morning at 8:30 i'd meet with staff at 7:30, this core group, a cabal as i called it at 8:30 we'd work out what we thought should be in the bill. we had one or two open committee meetings but basically the committee was just marking time waiting for us to finish. and you could tell although the meetings were behind closed doors there's no secrets in this town. and the board was getting out. we were having the meetings but no one exactly knew what it is we were doing. but on the thursday between these two tuesdays, came a phone call that became very important in this whole process, and i will read it to you, because it's from the diary. back again to tax reform in closed session was interrupted by a phone call from daniel rostenkowski. bless his soul he said, pal, i've been thinking of coming over there and without fanfare without press, just to say i've

been through it. i know every day you go through troughs and on hills and i've been bleeding for you. but i think what you've got in terms of tax reform is the best thing congress has seen in ten years. you get this through the senate. and between the two of us we're going to put out a bill that for a generation of americans will look like a pinnacle. god i appreciated it. what he was saying, with the ways and means committee chairman is saying write this bill in the senate, ways and means doesn't say very often. we continued our meetings through friday, and then we had a public meeting friday afternoon and i said to everybody, we're done. and we're not going to meet this weekend. by this time, the hallway is packed with lobbyists, we have speakers out there. committee we're done.

we're not meeting at all this weekend. cheers in his office. and then i said, to the core group, but we will meet tomorrow. bill had already planned, went to kentucky that night for a speech, cansinged the kentucky derby and came back to be with us the next day. on that saturday the seven of us met all day, from about 8:30 to around 4:30 or 5:00 in the afternoon, and that tied up all the last of the things we needed. joint tax needed a couple days to get it together. but they would have it for us monday or tuesday. and we were ready to gone tuesday night until i finally had to make an odious deal with the oilies to get their support, not the committee, we could have beaten them in committee, but to get their support for something we needed desperately on the floor and if we lost this particular issue on the floor the bill was dead. and that was it. we vote that night and most of the committee had not ever seen

the whole outline of the bill or the whole bill until that night. so from tuesday to tuesday the seven of us worked that night the bill is adopted 20-0. now, can you do the same thing now in this committee? here are the things that would be critical. it's helpful to have the president on board, to have him with you from the start. but at a minimum, you've got to make sure that he's not against you, or gives the impression that he's not sure if he's going to vote for it, or he has some questions, because you're not going to get your members to take tough votes on things that the president might veto if you put them in a bill. so at a minimum he must say i'm open to sending you a good bill. two, i think you're going to have to do it in much the same way we did, which is behind closed doors.

but that's not uncommon in the house and the senate, even today. behind closed doors, and try to do it quickly, and present it in one grand bill. we did it combining both corporate and individual into one bill, and then used the money we raised from them to lower tax bills for everybody else. if you look on the last page of your statement you'll see who the major groups were we hit. it was almost all corporations and rich individuals. and do it in one bill so that people don't have to pick out a particular thing that they don't like and are forced to go on it. give them this. you give them the whole bill and i think they'll go for it. and so that's what we succeeded in doing and believe it or not hitting business as hard as we did, raising their taxes, about $140 billion, we managed to

lower the corporate rates from 48% to 34%. lower the individual rates from 50% to 27%. and keep the bill revenue neutral. you can do it. but orrin and ron, the two of you are going to have to make an agreement as to what we're trying to get, and the thing i like about the fact that the two of you doing it, ron, you may recall about ten years ago we ran into each other in the dry cleaners. and you were working on tax reform then. and i know, orrin, you crossed party lines many times i remember you working with ted kennedy on things. we both showed a willingness to work across party lines and on some occasions when it didn't please your parties too much. so it can be done but it william can only be done if the majority

and the minority at the start are on the same page. thank you, mr. chairman. >> well, thank you. that was fascinating. we're very appreciative to have that overview. senator bradley, we'd love to hear from you. it's always a pleasure to be on a panel with senator packwood. he's an extraordinary leader, and he ran the committee with great effectiveness, not only on tax reform, but on a whole series of other issues. this is also a first for me. the first time i've been in this room since december 1996. i notice it hasn't changed. but what i'd like to do is i'd like to keep a few thoughts about structure, and make amplification on two things that senator packwood said. first, what is the ideal income tax system? i believe the ideal income tax system is a system that provides the greatest number of people the lowest rate. in terms of principles, and these were the principles that i think we used in 1986 to determine what it was in, what was out, one was efficiency. the basic threshold question for

members of the finance committee, and the efficiency point is, i believe, the mark of a more efficient allocator of resources than is a member of the ways and means committee or the finance committee. so that was one principle. the second principle is an equity question. horizontal equity. equal incomes should pay equal taxes. not somebody has the same income and next door somebody is using loopholes to reduce their tax rate. third is fairness. which is essentially vertical equity. and that is those who have more should pay more. in other words the progressive nature of the system. and fourth, do whatever you can to make the system less complex.

we live in a time where few people fill out their returns, and where tax fraud is estimated to be nearly $80 billion to $100 billion. so those are the principles. efficiency, equity, fairness simplicity. and you measure everything against those principles. now what do you need to pass tax reform? drawing on our experience i think you need at least six things. the first thing you need is the exact thing president packwood said. you need a president who is going to put this prestige and clout on the line to drive

things through when the inevitable obstacles appear. second, you need a treasury secretary who is the president's designee to deal with it every day, and you need a treasury secretary who has an incredible person who constantly monitors that. of course, in 1986 the president was ronald reagan. and his secretary of treasury was jim baker. and his assistant was dick dar darmin. all of whom played critical roles in this. i can't tell you how important it is to have a treasury secretary who can speak for the president, who doesn't have to run back to the white house all the time to check this or check that. and, in fact, as bob remembers we got down to the critical strokes at the end of this process. there were some difference of opinion, and jim baker was in the room doing the negotiating. because he knew enough of the substance and had paid attention to it.

i remember him convening a meeting during the period when there was treasury one and treasury two, which were things that ronald reagan tasked as the treasury department to do. and he convened a meeting with jack kemp at his house, and me and i think bob or a few other people, i think it's important to know the long ter-term journey of tax reform. when i came -- one of the reasons i ran for the senate was i wanted to reform the income tax system. i remember reading an article by milton friedman many years before when i was a basketball player about how you could have a tax system with 16%, and i thought that's pretty interesting. and i read all of stanley surrey from harvard, joe peckman at brookings, and i remember in 1986, i went to walter mondale who was the candidate for president of the democrats, and tried to convince him to do tax reform. i said it could take the issue from the republicans, they were out there talking about tax cuts, here you could talk tax cuts and equity. talk tax cuts and equity. he had been a member of the

finance committee and charlie wrangle was his adviser on this issue and i think the combination of those things made him unwilling to take what he thought was the big risk for a hopeless cause and so, it passed, however, as everything in politics, nothing nothing's secret. it leaked that maybe he would be doing tax reform.

and so, that's when reagan called for a stutter by the treasury, treasury one and so happened that the people at the treasury department in the tax area were really great people and so, they took the charge seriously. and they produced a document that was an outstanding document laying out the boundaries and the parameters and the specifics of what tax reform is. nachl naturally when you threw it out there, '82, something out specific and everybody chews on it, so everybody chewed on treasury one and how terrible this is and how terrible that is and you ended up having treasury two. and it accommodated some of those, stiff arm aed other, but wasn't an improvement over treasury one. and so, that's how the treasury department got involved and you absolutely need a commitment from the treasury secretary.

so you need a president, you need a treasury secretary that likes it, knows it, can cut the deal for the president. the third thing is you need a chairman of ways and means and finance who want to get this done. we see that their own political interests have served by getting this done. and bob mentioned dan. in 1981, passed a bill the first year cutting rates 30% and then he ended up being labeled as the king of special interests. and so, i think that what he saw in this was an opportunity to seize the good government man tell and p push forward with a challenge. that would make him a historic chairman of ways and means. i think the senate was very fortunate to have bob packwood

as the chairman. because i don't know specifically what your political interests were, but i sense that it was if you were going to do something that no other chairman of the finance committee had done before and you wanted to do something that would affect the 100 million americans in a positive way and potentially change the way we think about taxes. without bob packwood and dan and jim becamer, and president reagan, which would never have happened. you have to have those, those parts in place and then you have a chance. the fifth thing you need to maybe a zealot. that's the role i played in 19 1986. i did nothing but talk about tax reform for four years. it got so bad, i was op a sunday

morning interview show recorded on a thursday night and rebroadcast on sunday. at that time, by daughter was about 8 or 9 years old and she had a girlfriend of hers staying with us, i said, dad's going to be on tv and the guy said, bradley, stick around, dad's going to be on tv, so, she elbowed her friend and said, let's go. i was going to talk about loopholes and indeed, that was all i talked about for four years. i also tried, recognized, i did not have the power, the power was with bob packwood and dan, so i had to be supportive every way i could and i tried to play that role. the sixth thing that you need if you're going to get it passed is a committed, knowledgeable staff.

i remember bob, absolutely first rate. key thing is they can cut the deal on a lot of issues, everybody knows they speak to the chairman. and they say the same thing to everybody. they don't say one thing to one person and one thing to another, but they keep their word. so, i think those are the six that i think you need and the president's committee, you need a treasurertreasurerer secretary that's committed. chairman of the ways and means committee. chairman of the finance committee. maybe or maybe not need a zealot and then you need a staff that is confident and honorable and has absolute integrity. the last thing i think you need

and this is probably the most important thing was epitomized by a visit we made to the white house to meet president reagan. i was a democrat, kind of a duty member, i wasn't invited a lot to the white house to meet president reagan, but there i was, seated around the table in the west wing and if you recall, each of us could go around the table and tell the president what we thought about tax reform. he was listening mainly, not talking, so when it came to me made his commitment and even though he's made his position clear, i said, mr. president, i know you're interested in tax reform, which means lower rates because when you were an actor, the rates were 90%. he kind of nodded. and i said, mr. president, i'm interested in tax reform because when i was a basketball player, i was a depreciable asset, which in fact, i was. in other words, what that story says is there's got to be something for each party in the deal. it can't be all one. the it's got to be something for

each party. each party has to know what they want and then if they do there's a chance to get something done. i'll make only two other quick comments. bob talked about writing to the line with seven people. again, the only reason that happened with bob packwood wanted it to happen. he was the chairman. finally called seven people. ok, meet you in the cafeteria tomorrow, or next day or two years from now. when the chairman calls, you show up. and so, it was because of him that that committee, that small committee of committees worked but he also mentioned that when you were headed down path for a long period of time, we had 30 hearings about tax reform. bob presided over every one. i was at every one. and we asked questions of every

witness. one, which was how low would the rate have to go before you give up this, that or the other thing. i asked how low would the rate have to go before you give up capital gains exclusion and in the latter, answers came back if you were from silicon valley witness would say, i don't care if the rate is 10%, you still need a differential for capital gains because that will affect capital appreciation and formation and but a lot of other people came in. i don't want to say just silicon valley, but there was a certain kind of person that said no matter what, you've got to have a differential. others said if you got the rate down to about 20, 28%, 29%, we give up that differential for capital gains and that is hatch, sen. orrin begins q & a indeed what

we did. we got the rate to 28 and that was the rate of capital and income. so each chairman would pose thoughts. thank you, committee for the opportunity to come back. once every 25 years. >> we're honored both of you are here and i think anybody listening to this has to realize went tli a very trying time. very difficult for the congress was split.

republican president -- >> appreciate you, start the time. let me just ask this question. revenues the percentage of gdp averaged 17.4% over the past 50 years. revenues in 2014 were 17.5% of gdp. in other words, taxes are higher than the historic, even higher. so, taxes are already higher and have been raising revenue and tax reform makes enacting it less likely. shouldn't we do tax reform on basis. start with you, senator packwood. >> i would much prefer it although i would combine both corporate and individual into one bill. and thep you have a little more wiggle room using either side of that equation to be able to

reach your revenue neutrality. >> we of course did revenue neutral. i think the times today might require some additional tax. but i believe that's something that the committee has to work out itself. if woeyou really do thorough tax reform, what you find is, at least we found, that upper income americans will pay a higher percent. example example, we cut the rate from 50 to 28 and yet, the top 5% paid a higher percent of the total tax revenue after that reduction and before. >> five major economies operating on the worldwide tax system.

meaning it currently taxes an income of its companies where ever that income is earned. even if it's not in our country. currently, companies have the option of bring inging the profits back, but face a tax of 35% minus foreign tax credits. both would rather not pay and keep the earnings abroad preferring the additional tax and currently is our law, u.s. law, allows companies to diefer the tax indefinitely. the budget was substantially limit the defeshl since it imposed a minimum tax of 19%. do you think we should go to a territorial tax system like most other major countries, in fact most other major companies or not? >> well, mr. chairman, i thought so the last 30 years. we're often, we have to compete overseas and here's the they have and one of the advantages they have is

territorial. i think we ought to go to the system that the rest of the principal industrial companies used, which is if you invest overseas and make profits overseas and you pay your taxes overseas, you can bring back whatever profits you have to this country and they're not taxed and i think that's a good system. >> when you have profits overseas and are taxed in a particular country at the rate that country charges, all of those taxes are deducted against liability in the united states. the tax credit. the president's proposed two things. i think one is a 19% tax on the deferred income going forward. and a 14% tax on a whole of the packets abroad. i think that the committee will have to work its will on that.

i think the tax makes sense in terms of the overall picture. in reality, we're going to have to figure out, is there some other way, i don't think that's going happen. is there some other way that you could bring the money wyden, back and i think embodied in the president's proposal, the 14%. is a b possibility that maybe top 14. maybe it's 10. maybe it's not 19. maybe it's less. but somewhere in there, capital gains, wants to bring the

capital back. >> thank you, mr. chairman and the two of you have told an inspiring story about bipartisan ship on a major economic issue and colleagues, we just looked up the vote that attests to what happened. 97-3, original vote in the senate and then on the conference report, 74.3. this kind of work paid off. what i'd like to start with is

asking about the process. because as far as i can tell, in this effort to promote bipartisan ship every step of the way, you said we're going to use the normal process because normal process in the senate really promotes bipartisanship and you have to have 60 votes and certainly, neither side today has 60 votes, so you use the normal process and it really forces bipartisanship. the alternative is to use what's called reconciliation, which in effect has 51 votes, one side could have their way on tax reform. my question to both of you either one who wants to start, is it your view that using the normal process, which you all used in 1986, was helpful and is it your assumption that it helps promote bipartisanship? >> absolutely for a variety of reasons. one, every member of this committee ought to be misgivings about reconciliation and using it to jam as many things into a bill as the majority wants because they're not sure they can get it passed any other way. what it lends to is more and more of the decisions leading up to the -- in my era, even in lyndon johnson's era, no majority leader would have ever thought of taking a bill away from committee. reconciliation just holds out that plunlg, they use it this way. no, i'd much prefer the regular order for a couple of reasons.

one, it is still the argument's against it, we had no chance. we didn't get to offer the amendments. there was a time limit william "bill" warren bradley and if you win it, in the normal process, you've got a lot better credibility than if you've jammed it through in reconciliation. >> bradley, top that? >> no. the question was what, mr. chairman? >> normal process. abiding bipartisanship reconciliation. >> i think the way we did it, i agree with senator packwood 100%. that the normal process is better. also has to do with with the committee in the larger senate. we had agreement and members of the committee that when a vote would come up, neither committee members would break and would stay with the committee bill. and that was a point of personal anguish for me because in the

committee. what senator packwood referred oils. senator packwood was the chair and senator russell long of louisiana was the ranking member and he had a few interests in the oil pack. and i of course was going to go after it. have to go after that, we can't leave that out. we were meeting in secret back there and we had a vote in the back room. and it was 11-9 against me. and i viewed that that was in the back room.

there was one senator who had taken it public, he wouldn't vote that way. and so, i didn'tthen raised the issue in the committee, full committee, and i saw senator long's head go like that. and i called for the vote. and the person who i thought would switch, didn't switch and right up there against this wall afterwards, russell long got ahold of me saying, if you ever do that again. but life went on and you know, the screw turned. we got to the senate floor and then republican senator lowell wiker offered the exact amendment that i had offered in the finance committee. because he had a deal, we were all going to stay together, i

voted against my own amendment. so, the cloud of the finance committee in the senate as a whole is instrumental in getting a bill passed because most of the other senators don't know a lot about taxes. they have a few opinions about this, this and the other things. to the extent that you can speak clearly and hang together, you won't need to have any kind of reconciliation. >> if i could ask one other question because this was a remark remarkable feature. of the 86 bill and i think it would be helpful for the committee to know how you two got to common ground in '86. in 1986, you were able to say that income from wages and income from capital was treated equally. bradley talk eded about his views on it and i think it would be helpful to know how you two reached that judgment that by today's standards, would be remarkable. in fact, today, people say if you could just reduce the difference between the way income from capital and the way income from wages was treated, that would be a huge reform. how did you two in 1986 get to

common ground on treating wage income and capital income the same? >> well, realize, we wanted to keep the same progressivety that we had in the existing law, but we were going to lower the rates tremendously. so, in order to make sure that the very wealthy still were roughly in the same progressivety incline, we had to get rid of capital gains and the differential. as simple as that. in fact, it didn't even really bother the committee that much. it was a small issue. malcolm wolf had some misgivings about it. we agreed, remember, bill, we made the rate the same, but didn't put it as a separate section because malcolm says you put that in the bill and get rid of capital gains william "bill" warren bradley and the word and

then pretty soon, congress is going to start to raise the rates and capital gains will go right up with them. turns out he was right. it was to make sure our progressivity was the same. >> just a little addition to that. exactly agree with what senator packwood said. there was a provision in the bill since we got to the magic number of 28 for both capital and earned income. we had a provision in the bill that said if the generate ever went higher than 28%, the capital gains rate would be 28%. in other words, you would never tax capital higher than 28. and i remember oh, might have been four months after the passage of that bill, people were saying we need differential capital gains and my point was if you take a differential