file available. over 100 million records to all federal agencies for all federal payments. senator mccaskill: it would be great if we could get that done. are they to your knowledge, maybe they would know? are these other agencies then going an verifying?

>> no, i don't think there are there is additional ver figureation. gherting information that they believe to be true and correct. there is no additional verification.

this is agency policy; correct?

senator mccaskill:. >> the agency is not permitted to spend trust fund dollars or a limited administrative tax account on items that don't have a program purpose and that's the basis on which we don't verify nonbeneficiary reports senator mccaskill: okay. i completely get that but you understand the commonsense argument. tell you me you do. >> i do senator mccaskill: okay. we have a bill. this is an agency we call it let me google that for you because this is an agency that the vast majority that they're supposed to be distributing is easily available online and they are the distribution source for the public desk master file.

have you all given thought if we get rid of it which we should because it's a waste of money. >> we have not considered an alternative distribution method because at present they serve that data clearing house for the federal government senator mccaskill: and money goes into a revolveing fund. for some reason we have a hard time shutting down agencies like that. so i'm determined and i think most of my colleagues on this committee share my determination about this agency so i would think you should begin pricing out what ntis is making on selling your list. maybe you can use that money to verify for the other agency. >> understood senator mccaskill: thank you. >> we will be supportive of that issue. >> let me just say i completely

agree with my colleague on this. so i wanted to ask just to understand this information sharing piece. in order for you to share information, it sounds to me because of the limitations that are put on what you can do with regard to the trust fund that we're going to need some legislation there to have broader information sharing across agencies; correct? senator ayotte: i understand it as we look at this challenge we're facing in terms of the dms list we're also not sharing

amongst states right, so do we share -- do states share with us? the i know they're sharing with us in terms of vital records but do we share with states what we know? >> we do. we share with those states that have a responsibility for centering federally funded benefits. >> of any kind? >> yes. >> okay. and so one of the things that just seems as i look at this whole thing as we look, you know, we're not communicating amongst each other and then there's also the amount of money that's at stake here you know a lot of us talk about wanting to address sequester, we could do it if we just actually got improper payments to a much more reduced level, these resources that we're talking about whether it's to defend the nation or nih or all the things

that we'd like to do i mean this is very big money. and so i'm looking at this thinking how do we also not only share information with each other, what steps do we need to take to verify it further and then there's a lot of publicly available information it seems like we're leaving on the table to help verify for us. i mean, i'd love to get certainly mr. o'carol and ms. davis's opinion. >> that's correct senator. what we did was an audit a few years ago and in the audit we were looking at -- we went to ssa and saw how many records were suspended showing no payments were going out and it was 58. we went through the 58 and found that 57 were deceased and the way we found it was probably in

about thirds. one-third ssa had been able to find out had the information in the records and it was just a question of cleaning it up. and then one-third of it we were able to get death certificates from the states in other ways like that. and the other third was pretty much using other databasings that were available to if i the person as deceased and be able to get the information that way. senator ayotte: so in order to incorporate information third party available that's available and also when i hear mr. o'carroll's example i also think that apparently what the states in submitting their vital statistics to the social security administration apparently doesn't have the same level of accuracy that it should too, so do you need legislative proposals to be able to consult third party information or is it

a resource issue or is it all of the above? and also what is it that we need to do from the state's perspective if we knew that you could get the death certificate for certain individuals. apparently their vital records office wouldn't have submitted that if it didn't get into your system properly. >> senator, two points. the data set that mr. o'carroll just mentioned, the 58 number holders in suspense those recommends were sent to the agency last friday. we believe there are policies we can look into and agree with that recommendation and will be pursuing it. the best thing that we could do in my opinion, the agency's position is full funding of electronic death registration would include many of these files. many of the files are in jurisdictions where they're

paper processes are out of date. funding them to move to go electronic would get the information more accurate because electronic death regulation verifies against social security before the death certificate's issued before a report of death is made. so that would be the approach i think of -- that appropriation falls under the health and human services department. >> why is it that this hasn't been a bigger priority of the

federal government. >> this is a situation we have to fix. i don't think anybody disagrees with that. so what i would like to ask inspector general o'carroll, if you would please -- what i'll do is read this quote that came from the management at ssa and this was in response to the ig's findings and recommendations. the recommendations that create a significant manual and labor intensive workload and provide no benefit to the administration of our programs end quote. do you feel and i think we've talked about this. i heard some mention of this. but do you feel an accurate and reliable death master file is the responsibility of the ssa? >> the easy answer on that is yes that i think that any data ssa is providing to the government, the public has to be

accurate if the and the that's pretty much the reason we identified the 15 million is because when anybody knows we're -- that's what this group was, a large outlier. as i said before there's so many other different benefits in the states and in the government plus what we're looking at with fe voter registration and driver's licenses and everything else all based on this thing. >> thank you. i would agree. and i think that is a good start. yes, it is an easy answer to say yes but we do know that now we

need to move forward and correct the deficiencies that are out there. there are so many improper payments that are going out, not to mention some of the issues that have been brought up with those not receiving payments but we also have fraudulent voter registrations, we have illegal use of numbers for employment or government assistance. so many other issues that come with this and i do believe that you have delivered around 70 recommendations to the social security administration over the past number of years and can you please tell us how many of those have been implemented over the years? >> yes. of the 70 that we've recommended, well first there's two steps to that. the first step is an agreement. and then we're getting about a 93% agreement level out of ssa. but out of that 70 probably about 50 have been enacted.

and in fairness on some of them as sean just mentioned, in the last six months we've made maybe four or five audits with a lot of different recommendations on it that there's not enough time to implement. but as an example on it we watch it very closely and go back every few years to take a look to see if they agree with something whether or not it was implemented and if it wasn't we bring it to their attention. >> and with these recommendations and any other that are coming out can any of you please to the panel just really give an overall cost estimate, man hours additional time any of those parameters that might be necessary to make sure that corrections were implemented?

[laughter]. >> thank you. >> please don't tell him i did this. [laughter]. >> but i caught myself. i want to go back if i could, the question i'm going to ask you, that is the -- i started asking earlier, there's one thing we're to do what would it be and you're the only one i got

to pick on and it's time to sort of follow up on that which is good but i'm going to ask before we finish i want to come back to the portion of your testimony where you went through a series of items and ideas that i think are contained in the president's 2016 budget and a number of those involve program integrity. some involve funding and resources for the irs. will you just step through those again and i'm going to ask our other panelists to respond briefly to those that make sense. >> there are a series of program integrity initiatives across hhs and in fact in the current budget in 15, we were actually fortunate to receive funding for one of those. there are program integrity

initiatives across dol and i think they have demonstrated a pilot program with the states because recognizing that unemployment insurance is a block to the state but they've demonstrated using new york state as the key to doing some very creative analytics. that was the top six. we could provide a few more for the record. but those are i think going back to the senator's comment i think that if there was one thing i could ask for, maybe two, is get to treasure the full death master file because that is the place that we are running off of the civilian payments past and having the most accurate set of data would be

the real benefit. that's the one ask. the other ask and i strongly believe that in order to save money we need to make an investment and the investment in those half a dozen or so program integrities i believe and i think the administration strongly believes that we'll see benefits in driving not only the rate but the total amount of improper payments down if we're allowed to make those types of enhancements enhancements. >> okay. thank you. any comments on what we just heard from david? >> senator, i believe that funding edr would be the first best step as all that data hopefully eventually in your bill goes into do not pay. we want to make sure it's as accurate as possible on the

social security administration's end we're going to certainly take a look at those very old records, see how we can make sure they're as accurate as possible. but prospectively getting all jurisdictions to use electronic death registration would be the way to go. >> in terms of the timing i seem to recall five months. am i maybe confused? there's a delay. it would be five months or until october. could somebody help me with this? >> the delay on the release you're talking about? >> yes. >> one of the bills that came out of committee was that it would be three years before this goes public on it so that's the biggest delay on that and we applaud it because it is pretty much based on one of our audit findings that if you give extra time to a person that's been reported dead they can come into ssa, fix it and get it fixed before it gets out in the public and that's probably the best thing that's happened with death reporting.

>> okay. anybody else? give us a killer idea maybe something already mentioned once or twice? maybe not. >> i think the improper payments act that we have do not pay establishes metrics that holds accountability. when you're measuring back, it's going to hold mcs accountable to making it a priority. i think it's proven that state level death reports are highly accurate and moving in that direction i would agree that that's prudent. and i think it would allow ssa to really look at their other verification processes and perhaps move some resources over to those areas.

and if we look at the source of those reports, perhaps you can look at these other policies and do additional verifications. >> if i could look at a bit higher level at the overall improper payments estimate this past year which was almost $125 billion, there were actually three drivers of the increase of 19 billion and those three drivers were medicare fee for service, medicaid, and the tax credit program. and when you look at those

individually, medicare, fee for service was almost $10 billion medicaid a little over 3 billion and then the tax credit program was a little over 3 billion as well. when you look at those, you have 65% of your entire estimate of proper payments. what is of concern is that these programs in particular the healthcare programs are growing. for example, hhs has estimated, predicted that over the next three years that the medicare and medicaid programs are going to expand program outlays by about 8% annually over the next three years. so if you take that and analyze it against the rate increases you know there are some concerns definite concerns. the rate for the fee for service program last year was 10% now

it's 12%. medicaid also went up almost a whole percentage point. the earning from tax credit over the past years has been running about 25%. the last year was a little over 24 and now it's over 27. so if you look at these programs and the facts that the rates, the rates, error rates in these programs are increasing and then compound that with the possibility that program outlays are going to increase you know it's going to be difficult to get a handle on these overall government proper payments. >> good. thank you so much. >> thanks for holding down the fort here. not only is our ranking member highly interested in this initiative but he's also a pretty good sprinter. i saw him in the hallway. i want to explore the edr from the states and the data from those. i don't know who's the best person to talk to about that. is that you, mr. o'carroll? is there a significant -- do you

have stats in terms of the information coming from the states with edr versus those that do not have edr? >> yes we do. and there's really two dimensions. both of which i think are important to us and of value in the conversation about improper payments. one to mention is timeliness of reporting and within the edr arena, we average a report within five days of the date of death and within 24 hours when the state becomes aware of it. that's very timely. >> again those are in the exact format you want it in. >> correct. >> matches your database. >> correct. >> and for the record i can provide you what amount of those inquiries do not match when they send us a name and ssn combination, what doesn't match before they report. now, i want to make sure that i mention that process is that the

first step before anything is sent to us is name and ssn match. if that occurs then we'll get the rest of the information. and if it doesn't occur it goes back to the reporter in order to double check and make sure they have the correct information, that they didn't miskey something. >> so states without edr are you getting that from the office of vital institutions postals, all of the other? >> all of the other. and we could get multiple reports, senator. even in an edr state. and it's important to recognize that in those states that have adopted electronic registration every jurisdiction within the state does not use it equally and so some jurisdictions, counties municipalities may be at 100% utilization. others might have a very low rate. so there's much more work to be done.

and part of that i think is a reflection of the fact that at the local level these records were maintained in different formats and the quality of that data varies. >> so you don't have the localities within a state submitting information to a central data center and then have those electronic records forwarded to social security. you're getting them from multiple sources from the state? >> it's up to the state how they send us the information. usually it does come from a state bureau of vital statistics. but how those entities are organized at the sate level. >> but again, 37 states come from a centralize vital statistics office in the state? >> they may be getting information from multiple sources but there's just one contact for social security within those 37 states? >> that's generally true but it can vary depending on the state.

>> what's the hangup in the other states >> resistance? funding. did the other 37 states fund their electronic death records or registries themselves? >> i would say that funding is part of the equation.

>> we have not done recent work to determine the actual mix. i will say though that the majority are overpayments and there are a number of items of course that are classified as improper improper payments because there's insufficient documentation. >> the calculation of the $127 billion that's all through fiscal sampling; correct? >> correct. let me qualify that statement. the onb director can approve an alternate methodology. >> okay. those were my final questions. i guess i'd like to just go over the panel if there's a particular point you want to make one point relatively brief. >> to the extent that dms and the do not pay initiative at some point will be made to the

full file, i think you're mr. o'carroll. >> my biggest point on it is we ask for an exception for igs but by the same token, it should go to the igs and the parent

agency. for example, when we do an audit and find there's an issue of one agency making payments and another agency making payments we can have the parent agency make those matches. >> thank you. >> i really appreciate these brief statements. ms. davis. [laughter]. >> the improper payments legislation requires the inspect general to perform annual reviews of compliance and there are a number of issues that they have identified and for the last several years implementing the recommendations made by these inspectors general would go far in helping to reduce improper payments. >> okay. again i just want to thank all the witnesses for your thoughtful testimony, thoughtful answers to that question. ms. rivers thank you for sharing your story. this committee is dedicated to making sure it's not just a hearing but something comes out of this.

so we want to work very closely with the departments and agencies so that we can prevent the type of situation that ms. rivers has to deal with. this hearing is adjourned.

president obama: thank you so much. [applause]. president obama: i want to thank the members of the city club for inviting me here today. it is wonderful to be back in this city and i see a lot of friends and in some cases mentors. that's just wonderful to see again. [applause] [applause]. president obama: every sitting president since ronald reagan has come here to the city club of cleveland to take your questions. and that's because this reflects what is a truly american idea.

president obama: we're now in the midst of the longest streak of private sector job growth on record five years 60 straight months, 12 million new jobs. [applause] [applause]. president obama: american businesses have added more than 200,000 jobs each month or 128 straight months. -- 12 straight months. that's the first time that's

happened in nearly 40 years. our unemployment rate has fallen from a peak of 10% in 2009 when i first came into office. we were losing jobs at a pace of almost 800,000 jobs per month. today the unemployment rate is at 5.5%. [applause] [applause]. president obama: this progress is no accident. first and foremost it's because of you the drive and determination of the american people. but i'm going to take a little credit. [laughter]

[applause]. president obama: it's also the result -- it's also the result of decisions made by my administration in partnership with some of these members of congress who are here to forget a second depression and to lay a new foundation for growth and prosperity. and a lot of those decisions were controversial. and there's a lot of resistance and obstruction. but we decided to continue to advance. we believe that if the last decade was defined by outsourcing of jobs overseas that we could define this decade by bringing jobs back to america and today there are more job openings in the united states since any time since 2001. the auto industry that we rescued despite the fact that it was not popular at the time is firing on allcy cylinders.

manufacturing is growing at a faster pace than the rest of the economy. and more foreign companies are realizing that made in the u.s.a. is a trademark to be proud of. something i'm going to discuss last week at our select u.s.a. summit where we get local and state officials and economic development organizations to meet with foreign investors from around the world in one stop shopping to start getting more investments and businesses right here in the united states.

more americans are earning their degrees than ever before. reare reare reare we are reducing our dependence on foreign oil. today america is not just number one in oil and gas. we're number one in wind power. last year was the biggest year for solar power in our history. we're producing three times as much wind power and ten times as much solar power as we did when i came into office. [applause] the solar industry is

adding jobs ten times faster than the rest of the economy and meanwhile thanks to lower gas prices and higher fuel standards, the typical family this year should save more than $700 at the pump. we believed that sensible regulations could prevent another crisis and shield families from ruin and encourage their competition. and today we've got the tools to stop taxpayer funded bailouts. we've got a new consumer watch dog to protect families from predatory lending and credit card practices saving billions of dollars for american consumers. oh, and by the way there's this thing called the affordable care act. more than 16 million more americans have gained healthcare coverage. [applause]

[applause]. president obama: they don't notice the reduction in their pockets, it's because of what didn't happen. that's $1,800 firms can use to hire and invest. $1,800 that you're spending on a computer for your kids or to help pay down debt and stabilize your finances or put into

retirement. and finally, we believe that we could lay this new foundation for growth while still getting our fiscal house in order. you'll recall when i first came into office deficits were skyrocketing partly because the economy was plummeting less tax revenue coming in more going out. and the notion was that the steps we took to ensure the economy was covered was going to cause even higher deficits red ink as far as the eye could see. well, since i took office we've cut our deficit by about two-thirds. two-thirds. [applause] [applause]. president obama: and looking forward, long determine deficit projections have improved as

well in part because we've done such a good job in controlling healthcare costs. this is progress that every american can be proud of. we've got a long way to go though. i'm not satisfied. i know you aren't either. we've got a lot more work to do. any american will tell you that. but we have emerged from what was a once in a generation crisis better positioned for the future than any of our competitors. we've picked ourselves up,

dusted ourselves off, retooled retrained, refocused. the united states of america is coming back. now, i want to return to the issue of the debate that we were having then because it bears on the debate we're having now. it's important to note that at every step we take in over the past six years, we were told our goals were misguided, too ambitious, that my administration's policies could crush jobs and explode deficits and destroy the economy forever. remember that? because sometimes we don't do the instant replay. we don't run the tape back. and then we end up with the same argument going forward. one republican in congress warned our policies would diminish employment and diminish stock prices.

diminish stock prices. [laughter]. president obama: some have doubled since i came into office. corporate profits are -- corporate balance sheets are stronger than they have ever been because of my terrible business policies. [laughter]. president obama: one republican senator claimed we faced trillion dollar deficits as far as the eye could see. another predicted my re-election would spike gas prices to $6.60 a gallon. i don't know how he came up with that figure. [laughter]. president obama: $6.60. my opponent in that last election pledged he could bring down the unemployment rate to 6% by 2016. next year. at the end of next year. it's 5.5 now. [applause] [applause].

president obama: and right here in cleveland, the leader of the house of republicans, a good friend of mine, re you know, he captured his parties economic theories by critiquing mine with the simple question of where are the jobs. where are the jobs. i'm sure there was a headline in the plain-dealer. well, after 12 million new jobs stock market more than doubled, healthcare in place in the lowest rate in 50 years, manufacturing coming back auto industry coming back. clean energy doubled. i've got not only the answer to that question but i want to return to the debate that is central to this country. and the alternative economic theory that's presented by the other side. because their theory does not change. it really doesn't. it's a theory that says if we do

little more than just cut taxes for those at the very top, if we strip out regulations and what special interest rules prosperity trickles down to the rest of us. and i take the opposite view. and i take it not for idea logical reasons but for historic reasons, because of the evidence. we know from the facts that it all -- that they're there for all to see. that america does better our economy does better, everybody does better when the middle class does better and we've got more ladders ladders for people to get into the middle class if they're willing to work hard. we do better when everyone grows together. top, middle, bottom.

and we know from more recent history that when we stray from that ideal, it doesn't turn out well. we've now got evidence there is a better way. there's a better approach. and i'm calling it middle class economics. for the first eight years of this century before i came into office we tried trickle down economics. we slashed taxes for folks at the top. stripped out regulations. didn't make investments in the things we know we need to grow. at the end of those eight years, we have soaring deficits record job losses an economy in crippling recession. in the years since then we've tried middle class economics. today we have dramatically low deficits, rapid job creation, and a growing economy. so when we the american people,

when the public evaluates who's got the better argument here, we're got to look at the facts. it's not abstractions. there may have been a time where you could say well those two theories are equally valid they're differences in opinion. they could have been abstract economic opinions in a book somewhere. but not anymore. reality has rendered its judgment. trickle down economics does not work and middle class economics does and that's what we should keep in mind when we think about what's going to take us forward. not on a path to slow down businesses by slashing investments in the future. not a path where we put our economy at risk again with government shutdowns or fiscal shutdowns. not a path where just a few of us do spectacularly well and folks who are working hard see

their income wages, financial security erode. we need to go forward to an economy that's generating rising incomes and chances for everybody who's willing to work hard on that continued advance where we invest in our future. give working americans the tools they need to determine their own fate. research, education, infrastructure. job training. we know the recipe for growth. and we know that we can make growth broad based and we can raise incomes and wages in the process and those incomes and wages then get plowed back in to businesses and investments and we get on a cycle.

republicans must define themselves the party of the american worker, the party of higher wages. another urged his party to shout at the top of its lungs the gop is the ticket to the middle class. now, this is good.

this is a good development. i'm encouraged by this because once you get everybody talking about the same thing now we can decide all right, how do we do it. if we can at least share our goals, if the goal is strengthen middle class raise wages, that's good. there's nothing i'd like more than an opposition party that works with me to help hardworking americans get ahead. i don't have another election to win. [laughter]. president obama: come on, let's go, let's work. now, the problem though is so far at least the rhetoric -- of the rhetoric not matching reality. the loft not meeting the top. all you have to do is look at the budget house republicans put forward just yesterday.

it's a budget that doesn't just fail middle class economics it's the opposite. doubles down on trickle down. i don't expect you, by the way, to read the budget. theirs or mine. but you can do some fact checking on this. their budget doles out even more to those who already have the most makes massive cuts to investments that benefit all of us asks middle class family to foot the bill. it's a budget that claims that reducing our deficit should be our very highest priority despite the enactfact that the deficit has been reduced by two-thirds. but its center piece is to spend trillions of dollars on another giant tax cut slanted overwhelmingly in favor of those at the top. if you are claiming that deficit reduction is your number one priority, how can you start by giving a tax cut to everybody?

and not doing much to help folks down the economic pyramid. the average now they say they'll also close high-income tax loopholes for those at the top which i have very specific proposals for which we can do that. their budget does not name a single loophole it would close. this budget does provide nothing to prevent tax cuts from expires for 26 million working families and students. i mean these are folks who, for almost two decades now, have

gone without a raise but their budget lets these tax cuts expire. that's the equivalent of $1,000 a year pay cut for these families. so you can call cutting taxes for the top 1% while letting taxes rise for working families but what you can't call it is a ticket to the middle class. that you cannot do. allowing tax cuts for working families to expire doesn't get you close to this budget's cut at all costs goal and $5 trillion deficit reduction. i think we should bring down our deficits. that's a rate that most economics agree protects our fiscal health. but because house republicans

want to balance the budget without asking any sacrifices of the wealthiest americans in fact, asking them to sacrifice less the middle class has to sacrifice more. those working to join the middle class have to sacrifice more. the authors of this budget were not specific of the cuts imposed. and implied no matter who you are, somebody else is going to bear the burden. but if the cuts they propose were to fall equally on everybody, here's what could happen over the next few years. i really got to bear bear down on this thing. investments would be cut to their lowest level in ten years. 157,000 fewer children would have the chance to get early

education through head start. more than 8 million low income students would see their financial aid cut. investments in job training would be cut to the point where more than 4 million fewer workers would have the chance to earn higher wages through programs to help them upgrade their skills. it would end partnerships that help 30,000 manufacturers create businesses and better jobs including here in cleveland. these aren't just new cuts. these are some of the greatest hits on this broken record. and just as more working families are finally beginning to build security in their lives, the republican budget would strip health insurance for millions of americans taking away coverage from millions more who rely on medicaid including right here in ohio, nursing home patients, children of autism

parentsover children with disabilities who need at-home care. it would try once again to gut the guarantee of the center of medicare. instead of the promise that healthcare will be there for you when you need it you get to roll the dice. if you get sick and that's not enough to cover the cost of your care -- it's enough to cover the cost of your care you win but if not, you lose. programs that help low income parents provide for their children, all those would be in the cross hairs. and at a time of new and evolving threats overseas the republican budget despite all the talk they have about national security would actually cut our core national security funding to its lowest level in a decade and still those at the top won't have to sacrifice a single dime.

so lower taxes for the most well off. higher taxes for working families. gutted investments for job training military national security. kicking tens of millions of americans off their health insurance ending medicare as we know it. if you have heard these kinds of arguments about this kind of budget before that's because you have seen this kind of budget before. republicans in congress have put forward the same proposals year after year regardless of the realities of the economy when the economy is in a slump we need tax cuts. when the economy is doing well you know what, we'll try some tax cuts. and we know now that the gloom and doom predictions that justify this budget, three, four, five years ago, were

wrong. despite the economic progress. despite the new evidence, their approach hasn't changed. now, there's nothing wrong with changing your opinion if the underlying facts change. serious economic proposals change when the underlying assumptions are proven false. if republicans believe we should adhere to a set of abstract principles even though they hurt the middle class then they should make the case. show us. prove it to us. if they believe it's time to end the social contract that's sustained so many of us the shared responsibility, own it and make the argument. but you can't credibly claim that this is about helping working families get ahead or that this budget is the path to prosperity. same about healthcare. it was one thing to argue against obamacare before it was put in place.

every prediction they made about it turned out to be wrong. so it's working better than even i expected. [applause]. president obama: but that doesn't matter. it's still a disaster. well, why? the truth is the budget they're putting forward and the theories they're putting forward are a path to prosperity for those who have already prospered prospered and in that sense it's a story of retreat and i'm offering a different path. the budget i've put forward is built on middle class economics, the idea that everybody does best when everybody gets their fair shot, plays by the same set of rules. and it reflects the reality of the new economy by giving every american the tools that they need in this highly competitive

constantly changing world. middle class economics means preparing americans to earn higher wages down the road. that's why my budget makes new investments from pre-k to mid-career job training. i want to make sure all our kids get a great education from the earliest age and that young people can afford to go to college without getting buried under a mound of debt. [applause]. president obama: and so we're working with private companies and community colleges and universities and businesses to provide apprenticeships and on the job training and i've proposed making two years of community college as free and universal as high school is

today to up our game. [applause] [applause]. president obama: it also means building the most competitive economy anywhere so that businesses can keep churning out jobs for our workers to fill. right before i came through i went to miga. they make airplane parts medical devices and whisky. i did not sample the whisky before i came here although i'm taking a sample home. [laughter] [applause]. president obama: and this partnership is bringing good manufacturing jobs back to cleveland. the republican budget would cut the whole thing entirely. if something is working, why would we get rid of it? we should invest in it. which is why today i announced nearly $500 million in new public and private investments

for american manufacturing and that includes -- [applause]. president obama: that includes a new manufacturing hub making america a leader in producing high-tech fabrics for uniforms our soldiers wear in battle. 21st century businesses need 21st century infrastructure which is why my budget invests in the fastest internet, faster trains more secure ports. so the jobs of the future are created right here in the united states and we can pay for these investments in a responsible way and ask those at the very top to pay their fair show and reform our tax code to make our businesses more competitive. and we can keep our exports and protect our workers with a

strong new trade deal. first in asia. then in europe. that aren't just free but also fair. i've had a lot of conversations with delegations in ohio about this because here in ohio you saw firsthand a lot of trade deals didn't always live up to the hype. and that's why the trade deal i'm negotiating now, the trans-pacific partnership would reform nafta with new tools to hold countries accountable, focus on the impact it's having on american workers, and would make sure that the rules of the 21st century economy are not written by china but by the united states of america and that's what this does. so helping our working families make ends meet giving them the tools they need for a new economy, revving the engines of competitors, that's what middle

class economics offers. that's why america needs to go. if we make these investments in ourselves and our prosperity and our future this economy is not just going to be stronger a year or five from now, it will be stronger for decades. and it falls upon us now. remember those words of fdr, it falls upon us now to say whether the chapters are to come will tell a story of retreat or a story of continued advance. i believe in continued advance. the challenges of this this generation of americans has faced are less dire than those the greatest generation endured. but we have the same strength and drive and optimism in order to shape the american century. we know what works and what we have to do. we just have to put aside the stale and outmoded debated,

rejected failed policies, embrace the policies that we know work embrace the promise of the future. and we're not just going to then move forward. we're going to write the next great chapter of our continued advance in this living book of democracy. all right. thank you cleveland god bless you. [applause]. president obama: let's take some questions. come on. i'm going to start calling on people, huh? okay. i like that. all right. so the only thing i'm going to do is raise your hand i'll call on you. stand up. introduce yourself and i'm going to go boy girl boy girl. [laughter]. president obama: all right.

we'll start with that young lady right there. yeah, you. right here. >> thank you. president obama: what's your name? >> colleen connor the executive director of the legal aid society of cleveland and my question for you, mr. president, thank you so much for coming to cleveland, my question is you talked about the importance of everyone playing by the same rules. unfortunately, millions of americans because we do not have the right to court appointed council in civil cases cannot enforce the rules out to protect them where there's tenants, consumers, preventing fore closure. how do you propose we address that very important issue? >> well as you know we've worked hard to continue to support legal aid around the country. this was a target of slashed budgets early in the previous administration. we have not fully recovered. and with the existing congress

it's unlikely that we get the kind of bump up that we need. two things i think we can do though is one, in addition to the federal government helping, i think we can elicit more from law firms than they currently cough up. young lawyers are eager to participate if it's structured properly. the other thing is to create in various jurisdictions more efficient, effective civil procedures potentially that can streamline the process because a lot of the clients that you work with, they don't -- we don't need a full-blown court process and filings and motions that's taking forever and often times when people are in desperate straits they'll say they've been cheated on something by a

landlord or they bought a product and it turned out to be faulty and they're trying to get some relief. they can't necessarily afford some lengthy process and your office should be reserved for the toughest cases. so are there ways in which we can structure more effective dispute resolution mechanisms? now, that's going to necessarily operate probably jurisdiction by jurisdiction. but some jurisdictions have come up with some creative ways to fill the holes that arose as a convention of the legal aid cuts that took place a long time ago and what we should do is highlight those best practices, see if we can get them duplicated across the board. but thank you for the good work you're doing. proud of you. all right. it's a gentleman's turn. let's see. right there. you. yeah. nice looking bow tie. >> thank you. president obama: you're welcome. >> i'm the superintendent of

shaker heights city schools. you've visited us twice already. president obama: great school system. >> i wasn't superintendent at that time but it still is a great school system. my question is regarding the community college initiative and how it affects the middle class. i think that some of us in the colleges here in cleveland as well as across the country, they get a bad reputation in that they don't provide a high quality education which i believe that we do. how can we better convey a message to our constituents and possible future of community college enrolled students. how can we convey the message that the community college is high quality education. president obama: i'm doing my darnest to advertise. one of our greatest comparative advantages is our higher education system here in the united states.

obviously we've got the best universities in the world and people flock from everywhere to try to get an education. but we also have an unparalleled community college system. and there are places like lore rain that are doing great work. the challenge we'velorraine that are doing great work. the challenge we've got is that they're underutilized. we're not linking what community colleges do with high schools on one hand and four-year universities and businesses on the other. so part of our initiative is not just to make the first two years of community college free. because not everybody needs a four-year education. some people may be interested in graphic design or interested in manufacturing processes. or even in some cases, high-tech

jobs that don't require a four-year degree but they do require some advanced training. and if they can get that first two years free without debt plugged into a business they save money. they don't have all those student loans to pay. they can work for a time learn more in their career and then maybe they go back and decide to get a higher degree. if they decide to take the community college and then spring board into a four-year university, they transfer their credits. they just saved themselves half the cost of that four-year college degree. so what we're trying to do is create more and more partnerships suited for the particular inclinations aptitudes of the public. in some cases what's needed

for example, for a career person is a quick training program to get them in a job right away so we're increasingly working with community colleges to reach out to the businesses in their community where there are job openings and have the business help design the training program. collapse the training program. a mid career person who needs a job right away, maybe a single mom or a guy who's been leiaid off and needs to get back into the workforce, they don't necessarily have the luxury of two years of study. get them into something where six, eight, ten weeks of training and if you complete this successfully, we know there's going to be a job for you because the business helped design the program. if you are a high school student who is interested in doing something that doesn't necessarily require a four-year degree getting community colleges to link up with the high school ahead of time the

high school student can then start getting credit get hands on experience in some cases with businesses who are partnering with the community college and now that high school student has gotten a head start on moving into the career and they're also saving money in the process. if it's a student who wants to go to four-year university but they don't have the money to let's say, come right away to cleveland state even though cleveland state is a pretty good place relative to a lot of other schools. go to that community college first but make sure that they are getting up front the kind of counciling that they need so that they're taking credits that are transferable in the fields that they need. so that they're not wasting time in the community college taking out pell grants and loans and

then they get to the four-year university and have to start all over again. so in each of these cases by us linking businesses, four-year institutions, community colleges high schools, we can create a series of pathways of success and it can be life long. and the great thing about community colleges is they're flexible in ways that four-year institutions because of the nature of those institutions it's a little harder to do. community colleges can adapt and meet a need quickly. so a new business comes to town, we need machine tool operators, coders, whatever it is potentially, you can design something quickly that's effective and makes an immediate difference. so we've put a lot of resources into community colleges. we are highlighting these programs encouraging the kinds

of lengths that i just described and we're going to keep on doing it. all right. [applause]. president obama: okay. right there. go ahead. she was very excited. >> my name is helen sheen and welcome to cleveland. we love this city. hardworking city and hardworking county. so thank you for coming. i have a two-part question. first, who's in your bracket? [laughter]. president obama: i wasn't that creative. i think kentucky's going to take it. but, you know i haven't won since my first year in office. clearly i'm not spending as much time watching college basketball as since i took office. so i wouldn't necessarily take

my bracket and copy it. although i suspect i'm not the only person picking kentucky. >> yeah. i have too. now, since you've been in office what has surprised you the most? president obama: that's an interesting question. what surprised me the most. i'll start by saying what has not surprised me. [laughter]. president obama: i'm not surprised by the determination and resilience and grit of the american people and the fact that they're not as divided as washington would seem to reflect. because i travel around the country a lot -- [applause]. president obama: -- but one of

the great things about being president is you can pretty much go anywhere. [laughter]. president obama: and say i want to come back. okay. [laughter]. president obama: so you can go to factories, community colleges, national parks. and you can go to every state and meet people and it turns out that, you know, what i talked about back in 2004, this being a united states of america it really is true outside of washington. and that's encouraging. that makes me happy. what has surprised me even though i had served in the senate was the continued difficulties in congress getting stuff done that shouldn't be controversial. there are some issues that i

knew would be controversial. and we know that, you know if there's a debate in congress about abortion, that's going to be controversial. you know, there are strongly-held views on this side, they're hard to reconcile that. we understand that. and that's part of the democracy and it never gets perfect perfectly resolved. but i have been pushing for us to fund infrastructure since i came into office because we've got two$2 trillion of -- secure and reliable in terms of how we use energy and making it more efficient, the broad band lines that still need to be going out into every part of the country. now, the recovery act that i passed with the help of these members of congress when we

first came in didn't just help to avert recession, it was also the largest investment in infrastructure in decades. and we've made significant progress. for example, just getting broadband lines out in rural areas. if you talked privately to our republican friends they'll say we need to do infrastructure. well, why are we not doing it? and the reason is the degree to which constant campaigning and sort of the polarization of the bases and then the inability it seems to just agree on a core set of facts means even when

some of our republican friends want to work with us it's hard to do. they're worried they'll get attacked or be viewed as compromises or get a primary challenge from someone further to the right so it becomes harder to just get basic stuff done. and obviously the greatest example of this is when the government was shut down. or just recently the threat that the department of homeland security was going to be shut down. we can have a significant debate about immigration. not everybody is going to degree with my view that we are a nation of immigrants and we have a broken system and we can craft an immigration agenda that holds into account folks who came here illegally, forces them to have a background check, pay back taxes, but gives them a pathway and in turn strengthens our

borders. that's my view. it's good for the economy. i can point to the evidence. but i understand some folks won't agree with me. the notion though that you would then threaten to not fund the very department that is responsible for securing our borders because you're mad that our borders are not secured -- [laughter] [applause]. president obama: -- that's not a good way of doing business. so that surprises me a little bit. [laughter]. president obama: and i think that the other -- there's a connected issue and i'll make this last point and go to the next question. i think it's hard for voters to see why it is that things aren't working in washington. they get frustrated that they're not working but there's this

kind of defense of well a plague on both their houses. part of the reason is the media is so different. fox news has one thing and then msn has another. the challenge is making sure the public is aware of that and holding public officials accountable for their position. that's why i talked about the budget. now, the republican budgets will not end up getting passed. my budget won't be passed you know, given i've got to work with the republican congress. but it is a reflection of what our priorities are. and it's good for people to know what's in there. and our democracy only works when we're informed enough that we can say, well you know what

i don't think we should cut medicaid for families that have a disabled child. that's not who we are. i know my neighbor who relies on that. that's important. i may not like obama but if i've got -- if we know that there's 16 million people who now have health insurance and my health insurance hasn't been affected and, in fact, healthcare premiums across the board are going up at a slower rate than they have in 50 years, it's not clear to me why i would want to have 16 million people suddenly not have health insurance who are then going to be going to the emergency room and then i'm going to end up paying for them because somebody's got to pay for them and i'm going to pay higher premiums. you know that's -- it's that -- if we know what the issues are

and who's taking what positions, then i think our democracy functions well. right now what happens is people just hear there's a mess there's an argument they're at it again, and then often times people just withdraw and don't vote. and then people are cynical and dissatisfied and that actually empowers special interests and the status quo which we want to discourage. all right. that was probably too long an answer. [laughter]. president obama: it's a gentleman. let me ask that young man right there in the purple shirt. that's a good looking shirt right there. yeah. >> my name is nelson. i'm a high school student. president obama: what year are you in? >> junior. president obama: junior. starting to think about colleges

and all that? >> uh-huh. president obama: yeah? >> yeah. president obama: mileah is going through all this. getting enough sleep? >> yes. president obama: what's your question? i'm sorry. >> how can you inspire children who want to follow a political career path to become the best they possibly can. president obama: are you interested? >> uh-huh. president obama: that's great. i'm proud of you for that. the -- my most important advice is worry more about what you want to do rather than what you want to be. and what do i mean by that? i think there are a lot of folks that get into politics and think say i want to be a blank, i want to be a congressman, i want to be a senator, or i want to be a governor, or i want to be a president.

and so then their focus is on i want to get that position. and that leads some young and ambitious people to say well, it doesn't matter to me what i stand for as long as i can get the position. and you end up maybe if you're talented enough getting the position but along the way, you haven't really accomplished much. and if you do get in the position, you don't know why you're there. or what you want to do with it. and i think that politics and public service is an incredibly noble profession but it's a hard life as these folks will tell you. you're away from your family. you're under incredible scrutiny. people are criticizing you all the time. you miss birthday parties and soccer games.

you're on the road. you're eating chicken dinners and the chicken's not always great. [laughter]. president obama: yeah, you're not getting enough sleep. you are having to raise money. so the only reason to do it is if you're getting something done. if you're helping somebody get healthcare or you're helping somebody get a job or you're making sure that our troops when they come home are treated with the dignity and respect they deserve and give them the benefits they have earned. or you're trying to clean up the environment. [applause]. president obama: you know, so rather than think about okay, i want that office my advice to you would be start serving. what are you passionate about? what do you care about? is do you care about some kids in your neighborhood that maybe don't have the same opportunities because they're poor and that really bugs you?

well start mentoring those kids and start volunteering at a boys and girls club and start, you know getting your friends involved and organizing a fund raiser to build a new playground. are you interested in the environment and worried about climate change? well, you know what get started now. go find a group of like minded people and talk to your members of congress and get educated about the issue and start, you know figuring out through social media how you can form a broader organization to advance the cause. here's the good news. if you take that approach, then even if you don't get to that office, you've done a world of good. and if you do get to that office, it will be earned and you'll have a sense of what's

important to you. and what your moral compass is. so you'll be that much better as a congressman or a mayor or a councilman or what have you. this is actually pretty good advice generally, not just for public service. because when i meet the -- [applause]. president obama: if you look at the most successful business people they are people who just love the thing they're doing. you know? steve jobs loved computers. he loved design. he loved the -- so he's working on this and it turns out you get so absorbed in it you end up being pretty good at it. and then so i was -- i always tell young people you know don't wait until you get there to do something.

you can do something right now. [applause] [applause]. president obama: all right. go ahead. >> hi. president obama: hold on. let's get a mic. >> i'm lucy. i'm a student at hawkins. i'm wondering that you've said that the republicans, they've never really changed their opinion of what to do. it's always tax cuts, tax cuts. why do you think that they're always proposing tax cuts and never changing what they think we should do? president obama: well you know i -- [laughter]. president obama: that's a good question. look -- and i want to be fair to their philosophy. i think they have a particular philosophy. now, keep in mind every party

changes over time so you know the person who i consider the greatest president of all time, a guy named abraham lincoln was also the first republican president. there have been democrats who -- whose main goal was to block civil rights back in the 40s and 50s and 60s. so i want to be clear that our country works best when both parties are evolving and changing. and over certain periods of time democrats have been stupid and republicans have had better ideas and vice versa. right now at least the core republican philosophy and belief is that the less government interferes with the marketplace, the better off we all are. some believe that because just

philisophically think government is a source of coercion and interference and telling you what to do and they believe that everybody as long as they're not hurting anybody should be free to do exactly what they want. some of it has to do with an economic theory that says capitalism and the free market is great and so government when it gets involved in regulation et cetera, you know is hurting economic growth. some believe that, look if i'm out there and i'm making a whole lot of money, it's my money and i should not have to pay taxes to pay for somebody else's school or road or what have you. so there are a bunch of reasons why i think they have the philosophy that they've got. i think the problem right now is that we live in such a

complicated, big global society that what might be a sensible theory on paper doesn't always make sense in real life. so you may generally think as i do that the market is the greatest source of productivity and job creation and wealth creation in history, but our history tells us that if there's a company that's out there making a lot of money but also pouring a bunch of pollution into the water and it catches on fire and suddenly people can't, you know fish there anymore and people are getting sick that it makes sense for us to have some regulations that say you know what, you can make your products, you can you know make a profit that's great.

but, you know you're kind of messing things up and so we're going to say you can't just dump your pollution in the water. in theory you might say we don't want government forcing itself in the interactions of people but if our history shows that racial minorities or a gay person is discriminated, we make a value judgment that says, yeah this is an exception. you can kind of do what you want but when it comes to a hotel, you can't decide you're not going to serve somebody of a particular racial or ethnic group. you've got a business. we don't want you to discriminate. that's a principle that constrains your freedom because we think that, that is a value that we care about.

so that's -- my philosophy is that you can have principles but then you have to apply them and how they work in the real world and are they fair and are they just and are they generous and do they work? you have to base some ideas on facts and our history. and i think sometimes that's not what happens in washington. and, you know you probably know somebody like that at school you know who doesn't matter that you know what happens, they keep on doing the same thing over and over again even though it doesn't work. [laughter]. president obama: and, you know einstein called that madness. all right. two more questions. young people have gotten some good questions. so we're going to get as young a guy here. yeah. go ahead. still pretty young.

>> hi mr. president. you speak about the dysfunction in washington partly because people are trying to be re-elected every so often. president obama: yeah. >> what about citizens united and overturning that and getting some limits on campaign spending so that we bring some reality back to this situation? president obama: well, there's no doubt that among advanced democracies, we are unique in the length of our campaigns the almost unlimited amounts of money that are now spent and i think it's bad for our democracy. and i speak as somebody who has raised a lot of money -- [applause]. president obama: i'm very good at it. i'm proud of the fact that part of the reason i was really good at it was because we were the

first sort of out of the gate to -- not the first but we really refined using the internet for small donations and to be able to pool a lot of resources to increase our message. but i also got checks from wealthy people too. so it's not that i'm not good at it but it's just not a good way for a democracy to work. also it makes life miserable for people in congress especially in competitive districts. there's no doubt there's an impact on how legislation does and doesn't move forward in congress. there's a reason why special interests and lobbyists have

undue influence in washington and a lot of it has to do with the fund raising that they do. and the degree of just the -- every election season you just have to turn off the tv. it's depressing. and it's all negative because we know that science has shown that people are more prone to believe the negative than the positive. and it just degrades our democracy generally. now, here's the problem: citizens united was a supreme court ruling based on the first amendment. so it can't be overturned by statute. it could be overturned by a new court or it could be overturned by a constitutional amendment. and those are extraordinarily challenging processes. so i think we have to think of

other creative ways to reduce the influence of money given that in the short term, we're not going be able to overturn citizens united. and i think the other way is for us to think creatively. we have to have a better debate about how we make this democracy and encourage participation. the process of political gerrymandering is dangerous to congress. i don't think people should draw the line and decide who their voters are. democrats and republicans do this. and it's great for incumbents. but it means over time that people aren't competing for the center because they know if they win a democratic republican primary, they're won. so it pushes parties away from compromise in the senate.

i think that -- now, i don't think i've ever said this publicly but i'm going to go ahead and say it now. we should not be making it harder to vote. we should be making it easier to vote. [applause]. president obama: and -- i haven't said that publicly before. so my justice department is trying to force voting rights. i gave a speech down in selma at the 50th anniversary that was incredibly moving for me and my daughters and the notion that this day in age we would deliberately try to restrict the franchise. at the state and local level you can push back against that and make sure we're expanding and not restricting the franchise. in ausa and other countries, there's mandatory voting.

it would be transformative if everybody voted. that would counteract money more than anything. if everybody voted, then it would completely change the political map in this country because the people who tend not to vote are young they're lower income, they're skewed more heavily towards immigrant and minority groups. and they're often the folks who are scratching and climbing to get into the middle class and they're working hard. there's a reason why some folks try to keep them away from the polls. we should try to get them into the polls. so that may end up being a better strategy in the short

term. long term, i think it would be fun to have a constitutional amendment process about how our financial system works. [applause]. president obama: but realistically, given the requirements of that process you know, that would be a long term proposition. all right. last question. it's a young lady's turn so all you guys pull your hands down. all right. this young lady. she's had her hand up quite a bit. go ahead. >> hello, mr. president. my name is laura winfrey. no relation to oprah. i'm in seventh grade. my question is if you could go back to the first day of your first term and the first day of your second term what advice would you give yourself? president obama: that's a good

question. you know i -- i would have told myself to anticipate that because the recession was so bad and so tough for so many people that i was going to have to be more aggressive in explaining to the public how long it was going to take for the recovery to take place. although -- this was a challenge we had when it first came out.

when fdr came in during the great depression, it had been so long for two three years that everybody understood we were kind of bottomed out. so he could come in and then just propose here's what we're going to do and there was huge support because there had already been a track record of failure by the previous administration. when we came in things were crashing but it hadn't yet shown up in the statistics and it would take another eight, nine months before -- even a year before things really bottomed out. and i think people were nervous and the stock market was plummeting but i don't think people knew it. i think i might have done a better job of preparing people so they knew what was coming which would have helped to

explain why we needed to pass the recovery act or why we needed to invest in the auto industry and i feel -- so i think we could have done a better job on that front than we did. and also to close guantanamo bay the first day. [applause]. president obama: we had enough consensus there that we thought we could do it in a more deliberate fashion but the politics of it got tough and people got scared by the rhetoric around it. and once that set in then the path of least resistance was just to leave it open even though it's not who we are as a

country and is used by terrorists around the world to help recruit jihadists. so instead we've had to just chip away at it year after year after year but i think in that first couple of weeks, we could have done it quickly. i was thinking maybe i should have told myself to start dyeing my hair now. [laughter]. president obama: before people noticed because by the -- a year in it was too late. on that i'm just kidding. [laughter]. president obama: michelle thinks i look distinguished. [laughter]. president obama: let me just say, it has been wonderful to be with you. i'll leave you with this thought: as discouraging sometimes as the news is and the news out of washington is sometimes certainly, it really

is important for us to understand how well positioned we are for the future. we get white house interns in every six months. wonderful young people. really inspiring because they're so smart and clever and hardworking and idealistic. and i tell them if there was a time in history where you would want to be born and you were most likely to be healthy, have enough to eat, not be subject to violence, not be subject to discrimination not be subject to sexual assault, not to be abused by your government, the time would actually be now. and that's hard to imagine with all the terrible things that are happening around the world but we've made enormous strides. we've made enormous progress. when i was at that bridge down

in selma and you think about where we were 50 years ago and where we are now, as challenging as -- [applause]. president obama: -- as troubling as what has happened in ferguson and cleveland and in new york around some of those issues as much progress as we have nevertheless made, when you think about our economy and the fact that we had the best universities and the best workers and we still had the best scientific establishment and the most innovative companies, you know we -- we've got all the cards. we really do. i mean life's tough and america's got problems and they're hard to solve and they're rarely solved overnight.

and progress has never been a straight line. it's always zigged and zagged and sometimes you go sideways and backwards. but our trajectory is towards greater fairness and more inclusiveness and more tolerance and more prosperity. i want people to feel encouraged by that. because the longer i'm in this office actually the more proud i am of all the incredible things the american people do every single day. and our biggest enemy i think is this corrosive criticism that tells us we can't do. there is nothing this country cannot do. there's nothing cleveland cannot do. and that's because of you. thank you very much, everybody. [applause] ♪

♪ host: good morning. "the houston chronicle" confirming today that texas senator ted cruz will officially enter the presidential race tomorrow. we will have his remarks from liberty university in virginia. at the white house on tuesday, president obama will hold his first meeting with the afghani president who will be in town this week. on capitol hill, the budget process continues. i wednesday, we will hear from the fbi director. on thursday, home