cities are actually having a comeback, but if you look at those specific comebacks, you will see that in effect it's just in small areas of that particular city. and that, in fact, when you go outside of that area you see a lot of poverty. you see a lot of joblessness problems with public education with the infrastructure, so we believe we have to have a dialogue. we have to have a discussion collectively thinking outside the box and saying that our urban areas are the engines of our states for job growth and job creation. to pay particular attention to resolving this problem and rebuilding our urban centers across the country. we view this discussion as the beginning not the end. we believe this should be a priority not only of the federal government, but it should be a priority and we should coordinate our activities between the federal, state, and local level. to resolve the problems, provide quality jobs, provide

employment, to provide hope for people who reside in these areas. just want to -- they are playing by the rules every single day. they want to have a chance. they want to have an opportunity to achieve that american dream. so we are very, very excited about this. we are looking forward to having more dialogue on it. neera tanden: excellent. secretary clinton, as i mentioned you were a senator from new york. you represented new york city. why should the country care about the city's success or failures? secretary clinton: i join with lee in thanking you and cap for pulling us together on this, i thank you, lee, for motivating this conversation. i did represent new york for eight years and i not only represented new york city, i represented buffalo and rochester and syracuse and albany and binghamton and a lot of other places that had very different challenges, but they all fell under the category of how do we make sure our cities are good places for people to live and work. that's become even more

important as we have watched how cities are driving economic prosperity. it used to be that jobs were moving out of cities into suburbs and rural areas. that trend is reversing. so people want to live in cities. there are all kinds of reasons. and there's research i'm sure we'll hear from bruce about millenials wanting to live and work in the same place. so cities have always been the engines of prosperity. but now what we are seeing is, unless we pay attention and come up with some very creative and i would argue effective solutions based on our past practices, we will not see our cities doing what cities do best. it goes to lee's point. a lot of our cities truly are divided. they have a lot of inequality that has only gotten worse. they have some of the most dynamic, well educated, affluent people in the world.

and people who are trapped in generational poverty and whose skills are not keeping up with what the jobs of today and tomorrow demand. so i'm looking not just at what can be done by working across governmental lines, because as we said that has to be absolutely critical, but what we can do in partnership with the public and private sector. i'm glad we have people on the panel who are speaking to that. let me just make three quick points. one, i think that we for a long time, especially at the federal level, but also at the state level, shifted resources to follow people. which meant that we shifted resources out of cities. it made sense because roads had to be developed. all kinds of utilities and infrastructure had to be put into place in suburban areas and even further out. i remember having all kinds of conversations as a senator with people who wanted to bring jobs

to upstate new york in particular, and they would move out into what they called green areas or clean areas, even though the utilities and a lot of the other infrastructure was actually in the old cities. and so how do we begin to make what we already have more of an attraction? but then that raises the second point, how do we repair and update a lot of our infrastructure? in a lot of the older cities we have terrible problems with water systems, sewer systems. to say nothing of not keeping up with an electric grid or broadband access that are the infrastructure of the future. we have to do what i would hope to see as kind of a mapping of our cities. and an understanding that when it comes to the physical infrastructure, we have to take care of what we already have upgrade it, modernize it. we have had problems here in washington. we have problems in new york. potholes exploding, all kinds of issues. we have to really invest. then we have to throw it into

the future. the second big issue is the human infrastructure. that's the most important part of any city. it's the most important part of our entire country. what do we do to better equip our people to be able to take the jobs? how do we keep middle class families in cities where they want to stay? they don't want to leave. but they are being priced out. so we need to do more to fit the human needs with both the potential that people have starting early with pre-k. i'm very much a supported of what the mayor of new york did trying to create pre-k access for every young child in new york regardless of who that child is and who its parents are. we also have to do more on affordable housing and more of the amenities so that families middle class families, working families, can actually stay in cities and have a place to go. i want to publicly acknowledge randi because through a clinton global initiative commitment the afl-cio and building trades

pooled their public pension money to train people to do energy retrofits. energy efficiency. they have now created tens of thousands of jobs. that's the kind of creative work that we can do together. i'm obviously proud that c.g.i. was the convener to make that happen. the final point is this. we know a lot about social mobility. one of the biggest issues we face is income inequality combined with wage stagnation. they really go hand in hand. we don't have enough good jobs. we don't have people being placed into those jobs. we don't have enough social mobility. really interesting work being done by professor schetti and his colleagues at harvard. it wakes us up as to what we are facing. they have looked at the indicators of social mobility. why do some communities have frankly, more ladders for opportunity than other communities? how do we promote success and

upward mobility? it's not only about average incomes. as important as that is. you can look at cities that on average have similar affluence but people are trapped and not able to move up in one city and are moving up in another. i'll give you two examples. two cities with similar affluence, seattle and atlanta. have markedly different rates of economic mobility. it's not about race. white and black citizens of a city like atlanta both have low upward mobility. it turns out that places where the fabric of community is strong, with a vibrant middle class, places that are more integrated across class, places with good schools, places with unions, places with religious organizations and civic organizations help people feel

rooted, part of a community, and then being able to pull together all of the aspects that play into upward mobility. so we need to think hard about what we are going to do now that people are moving back into and staying in cities to make sure that our cities are not just places of economic prosperity and job creation, on average but do it in a way that lifts everybody up. to deal with the overriding issues of inequality and lack of mobility. and that's why i think this conversation is so timely and hopefully cap and others will continue to work on these important challenges. neera tanden: thank you so much secretary clinton. just building off of your remarks, cap actually worked a little bit on the issue and found that the size of the middle class actually affects

how much social mobility you have in these metropolitan areas. we did that work with him and he applauded that work. i think that's a really important point. bruce in the 1990's we saw articles about how cities were dying. secretary clinton referenced this. now they are seen as the engines of growth. what are the strategies you have seen that actually succeed in making cities more hospitable to the middle class families who want to live there? >> the secretary has it right. this is a very different conversation today than 10 years ago. cities have enormous demographic and market wind behind their back. it's the millenials. they want communities where they can live, work, and play. it's also companies that are moving to an open innovation model. they are not staying in their silos, inventing only within the four walls of the company.

they are looking to interact with researchers and others. authenticity. mr. katz: there are four strategies that matter playing out in the past that play out today. innovation. you have to as a city, your companies are clustered, continuously innovate on products, medical campuses and the companies that cluster around them. skills, stem skills. science technology, energy, and --engineering and math. not just people with four-year degrees, but people coming out of high schools, community colleges, business training efforts. as you said, not just roads, transit, and bridges, but to move energy. to move ideas, broadband. ports, airports, logistics cities are trading entities. and last the quality of place. this probability matters more today than it has in the past 50 years. authenticity, amenities, vibrancy, vitality. that's really critical to the innovative process which makes cities hum, metros hum, and the economy hum.

it's worked for cities. as we go around the country what we are seeing, not just governments, but private, civic, union, community, philanthropy stepping up and doing some really hard work. louisville, lexington they are making manufacturing innovation a priority. charlotte and chicago, they are changing their community colleges to equip workers with the actual technical skills they need. you can go to denver and l.a., they are using local resources to build out state-of-the-art transit. then you can go to the heart of detroit and to the heart of buffalo and you'll see the cities coming back from the core. it's still a very small landmass, but when you put that innovative economy on steroids one innovative j.b. equals five other jobs. it can expand out into the neighborhoods if we are smart about skills and education. there's not a recipe about there. it's about collaboration. it's about public-private at its core.

it will fundamentally, i think and we can come back to this change what the national government does. in some cases the national government really does need to lead, a lot of this advance research is really coming out of the national government. no one else does the same work on basic science or even applied research. but on skills, infrastructure, quality place. the national government needs to be a better partner in the service of city priorities and city vision. so there's exciting work out there, and there is a road map for prosperity, shared prosperity. but it does mean that we need to recognize the world has fundamentally changed. neera tanden: thank you so much. secretary castro, i'm going to come back to you to discuss what the federal government should do towards a little -- a little later. first talk about your experience as the mayor of san antonio. you took a number of policies to really address some of those -- these key challenges that we have raised. what worked for you as mayor and

what can we learn from your experience? secretary castro: thank you to cap. this is a very timely subject. i'm convinced we are living in a century of cities. and that here in the united states that america is falling in love again with cities. the census bureau estimates that by 2050 we are going to see 80 million new people in our country, and about 60 million of them are going to live in urban areas. in san antonio, one of the things -- if i had one piece of advice for local leaders around the country, it would be to break through the silos that often exist at the local level. one of the things that we saw the administration up here doing very early on was an effort called sustainable communities that was h.u.d. working with the department of transportation working with the e.p.a. we said, hey, i think what we should do is organize ourselves in a similar way. the city government needs to be

talking to the community college district, needs to talk to the housing authority, to the transit agency, to our electric utility, water utility. and it is absolutely surprising how often that actually doesn't happen. even at the local level. when we did that what we found was that first of all there are a lot of resources out there if they are coordinated in a better way, they could make a bigger impact. that's money and resources you already have. secondly, it really allows you as a community to create long-term vision for lifting up parts of the urban core that are most in need. in our case, in san antonio, we focused on the east side of the city. one of the poorest areas of san antonio. and looked at improving the schools, looked at improving the roads. making the neighborhood safer. ensuring we had better bus routes to that part of the city. not only does that help us

eventually get promised neighborhood grant, choice neighborhood grant, promise zone, but maybe more importantly we saw the attendance rates going up at the elementary schools in the neighborhoods. the graduation at this high school going up. you start to see by coordinating and making investments in housing, in education, in safer streets the actual bottom line on the ground results that you want to see, and that would be my piece of advice for local leaders out there. the number one thing that you can do immediately is to break through your silos and get into meetings with the community and amongst each other as leaders to look to the future. neera tanden: thank you so much. mayor brown, throughout your career you focused on spurring change in disadvantaged communities. what's been working in compton to foster growth? mayor brown: we were busy. before i became mayor i was an urban planner.

when i came into office i brought every sector of government, community, faith-based organizations together and i introduced the vision that i have for the city. it came from hearing what the residents. really wanted in their community. we focused on public safety and crime. when you think about why do middle class families flee from inner cities because they want to raise their kids in a safe environment. we brought together every single level of law enforcement. labor unions, we had our wrap around services. every single entity that touched compton, we came together and focused on two issues. eradicating human trafficking, a huge issue and impacts 90% of people involved in human trafficking they are minors. we also addressed gang violence through intervention and prevention measures. through our task force we focused on what factors allow these activities to happen in our communities?

number one for human trafficking we eliminated hourly motel rentals. let's face it, tourists don't rent motels by the hour. we really actually were able to identify really what the hub of these activities were. we also focused on addressing gang violence. we wrote out prevention programs. we focused on truancy and how can we work with the worst kids and get them back on track. we also focused on -- i asked every single level of leadership our gangs and city to come together. we sat in a circle. there were about 50, could we have peace? who was going to be the last man standing? at the end of the day i think something came really apparent to them they have been in a cycle. so they committed to having peace. eight months later violent crime is down 40%. we didn't spend any additional dollars on law enforcement. we have less long-term on the street.

we also focused on creating mentorship programs and bringing in ex-gang members and gang members to make them accountable, but empower them to make their community better. we also focused on the job creation component. and tying it back to infrastructure. we are a 126-year-old city, we have to like many others, repair our water lines and streets. i proposed a tax measure. we also sat down with labor leaders and said how can we make this a group project? with our community members, they are excited about the opportunity not only to have clean streets but also to have jobs. we are creating the employment development programs now. we have community benefits agreement legislation that i practiced where 35% of new hires have to be compton residents. we also have employment development programs at the onset of the project so there can be no excuse there are not qualified residents ready. we have done amazing effort and it's all through collaboration and it's about empowering the stakeholders you have in your community because i learned that everyone who is doing amazing things bus they are in their

silos. can we do a few great things together well? we have seen phenomenal results. lastly i think that when we focused back on people, when we think about what america is and the pride of really being an american, it's about having strong people and strong people build strong families, strong families build strong communities. that's where we have a robust nation. we are focusing on the basics in compton and we have had tremendous results. neera tanden: thank you so much. that's very inspiring. beth williams, you're c.e.o. of a company that actually also does a similar thing. where you were hiring people 10% of your hires have a criminal record. what -- you have a particular goal of revitalizing your community as you do business. what has helped enable you to grow your business? ms. williams: first i'd like to thank you for having this conference. now after listening to what i represent, i represent that group, that community we are

talking about that needs to be revitalized. we are seeing tremendous revitalization in certain pockets of the cities, but there's certain pockets that are truly being left out. and historically been left out. basically my company's growth has been focused around green technology and really has benefited from the corporate diversity programs and people wanting to spend x number of dollars as minority women business. we work every day to increase employment opportunities for low-skilled labor force who are often trapped in that circle of poverty as we talked about. they have no real clear path out. when we think about it, this isn't new. america's cities were built on manufacturing. immigrants came here, got jobs. we were able to build skill sets. then move on. the american dream just as you said. people just need an -- opportunities. we have proudly supported core reform, which is criminal record information.

20% of our work force are ex-offenders and ex-gang members. we make a big effort to hire young men. i feel like young men, particularly young men of color, are at tremendous risk in this country. and that unless we do something about it, those communities are at tremendous risk as well. we really focused on how there are ways to prevent recidivism. you have to create jobs. people want jobs. i felt like i had people at my job, yes, we build imaging supplies for staples. they are my biggest customer. it's not learning how to build a toner cartridge or ink cartridge. they are learning how to read detailed manufacturing instructions, warehouse shipping and receiving, skills they can take on to other companies. so i feel like i have been successful when i have turned a young gang member around who said ms. williams you saved my life, i'm now working as an

apprentice or warehouse at neiman-marcus. those are things that say success to me. we really made a positive impact. we made manufacturing happening in the city of boston. the value of those companies like that and bringing those partnerships together between corporate and small businesses and minority businesses that have the capacity and ability to do that is that you create a primary business that feeds the secondary business, the main streets. when my folks go to lunch, my 75 employees, they go to eat, the nail salons, it's sort of that's what revitalization means. someone asked me in our debriefing room. how do you get your people? it's word of mouth. i cannot tell you. we live in a labor surplus. the name has changed so many years since the 1970's. affirmative action, hub zone there are tons of workers we have that just want jobs.

when they heard that -- anywhere i go if i say i hire ex-offenders, my cousin, brother, can they fill out a loan application? it's really very, very critical that corporations and governments continue their focus to allocate resources to helping small businesses and women and minority businesses. typically when these programs were established they were established, too, with the mind set that minority and women business programs -- companies will hire people from their community. so the government's one of the largest consumers in the country. i really hope as we continue to look at this issue that we try to figure out ways that we can kind of tweak some of these programs the government has to make them more effective. in partnering and looking at ways to help grow these businesses. neera tanden: thank you so much. i'm going to turn to you, glen.

you invest in companies in range of cities. innovation is a critical component. i would love to get your view what cities are working and what cities are not working. >> after listening to this i want to invest in compton. and in pittsburgh. and in boston. i have some investments in boston. you two are real heroes. i admire what you have done. we saw this. mr. hutchins: i talk very quickly, three minutes, over the course of the last 30 years i have had the opportunity to help build businesses that became world class businesses in both pittsburgh and detroit. over that time period i saw one city go through a renaissance and the other collapse in a bankruptcy.

it was -- i had a front row seat to view that. it was interesting. pittsburgh -- both cities were vulnerable to declining basic american industries. basically the same set of problems. in the 1980's pittsburgh lost 75% of its basic metal employment. but over the course of the next 30 years built a world class city. and what i saw was a collaboration between all parties. business, labor, government, universities, hospitals, etc. they built a tech hub. based on robotics and computer science around carnegie mellon. built a health care hub base at the university of pittsburgh. medical center. the philanthropists derived from the steel fortunes invested in education, cultural institutions, historical preservation projects. made the city an interesting place to live. government together with private players invested in a bunch of brownfield redevelopment projects that revitalized, as well as technology investments to bring companies in. and the students who came to go to universities got good jobs and affordable housing and

stayed and created a resurgence in the economy. by 2009 when i will note the automobile industry in the united states was in bankruptcy, pittsburgh was voted by the economists intelligence unit as the most livable city in the united states. in contrast, in detroit which had the very same set of challenges, decline of a major industry, loss of high value taxpayers and businesses collapse of public revenues, massive increase in city obligations, pension health care as a result of declining tax base responded what i observed the response was, based upon a culture of contention. rather than one of collaboration. i often thought it was -- they came out of a historical relationship between the largest industry in the community and its labor base. but it seemed pervasive across the community. what i observed was the zero sum exercise over a dispute of resources. and the capital, defined

broadly, financial capital human capital, all migrated away from the city. notably as bruce has taught me over the years to ann arbor. a place that flourished at the same time as detroit was in decline. the lesson i took from that is you can have a collaborative approach and forward thinking point of view. or you can find yourself mired in old disputes that you're relitigating in a culture of contention. it seems to be straightforward. it seems also as i have learned more about detroit these days that post bankruptcy its leaders are focused on that. understand that lesson and have the exercise of the bankruptcy are getting to it. but it's a lesson we have to learn and relearn. as a businessperson there's only so much we can do. we can thrive in the cultures of collaboration. and we can succeed in the cultures of contention. it's a lot easier to see it elsewhere >> i hope some folks in washington will take note.

>> local not national. neera tanden: my word. not yours. randi, i wanted to ask you about something that glen mentioned which is human capital. capital resource as well. you have heard throughout this discussion the importance of attracting business and growth is from the human capital potential. bruce has really referenced that as the high point for cities. what are strategies to make sure that our schools are developing kind of the human capital of tomorrow? >> it's absolutely doable to create these kind of -- it's absolutely doable to create these kind of human capital strategies. the real question is how do we

do it for every child? the real question is sustainability and scalability. let me just start with this. three districts quickly. district on the brink of collapse, community fighting its way back from recession, lawrence, massachusetts. could have closed schools, instead decided with a new superintendent to focus on a strategy of, this will sound familiar to both glenn and secretary castro, everybody's been talking about this, engagement, intervention collaboration. working with teachers and working with parents, working with kids. in one year, i don't want it to sound like it is -- that this is going to happen every single year, but they turned around schools so that the -- in massachusetts they had a five point or 10 point increase in school scores in one year. second, school with health and dental care, social workers for students, families, guidance counselors, support for housing,

early childhood settings, you say this is school system? yes. cincinnati. half the schools are community schools. the schools have become centers of community. what we have seen is that cincinnati is the highest performing district in ohio. as secretary castro said breaking down the silos. it was done economically well. third, and this gets to the whole point, think about a school where gets have to learn under water, work with their hands, building and operating boats, harvesting oysters, designing submersible vehicles. i know it's your husband's favorite school in new york city. this is the new york harbor school. it's one of hundreds of career tech ed schools that got not only new york city butt landscape. this is what's so important about these schools. when you align the work that's in a community, just like you talked about in terms of manufacturing, we are doing this in pittsburgh as well. peoria, illinois. when you align manufacturing or the other kind of skills, the

employers that are in the city and the high schools and community colleges. you create this amazing robustness in terms of that pipeline. and in fact, that's where someone like nick, chairman and c.e.o. of snap-on tools said we are in a global competition for jobs and the single best weapon is c.t.e. we need to outskill the competition. why do i start with these three? then i'll end. because if we know we can do it, then we need to make these the norm not the exception. if we want to help all kids, the way we have to do it, to borrow the phrase that the secretary used many years ago, it takes a village. because economic and educational policy have to go side by side. even though it's not an urban setting, we learn in mcdowell county, west virginia. where we are building housing,

trying to create jobs, the eighth poorest county in the united states, while at the same time working with our union with folks in san francisco to build housing there. it is this public-private partnership where we are collaborating as opposed to simply engaging in conflict. we can do it, but if we don't have the -- we can do it in this ad hoc way. if we don't have, as lee said before, the kind of intervention and strategies that promote this all throughout the country, they will still be outliers as opposed to the norm. neera tanden: thank you, randi. randi was talking about place-based strategies. matching up human capital with economic development. i want to talk to you about how a number of urban areas are facing she's issues of inferior housing, failing schools.

one of the initiatives that secretary castro talked about was promise zones. which is really looking at the fact that today research shows that a person's zip code has more to do with their life expectancy than their genetic code. how do we really directly address those -- what's happening to the individual in that community? promise zones someone of the initiatives. can you tell us how that helps tackle some of these challenges and what you're seeing from your experience? >> thanks. i want to echo what an honor it is to be part of a distinguished panel this morning. as we have already heard, there are a host of collective impact initiatives going on in urban communities across the country. really a modern day war on poverty. the federal government is playing a major role in this

work. we are thrilled in los angeles to be at the forefront of this efforts. effort to break the intergenerational cycle of poverty. so targeting specific geographies, in our case the community with about 200,000 residents, and saturating that community with resources. the policy institute happens to be the only agency in the country that's been awarded all four of the initiatives, that's the los angeles proom moist zone. that's the promise neighborhoods which is modeled on the harlem children zone. there are now 12 promise neighborhoods in the u.s. choice neighborhoods, that of h.u.d. and the byrne initiative department of justice. i'm pleased to announce in the last two years, $100 million in new targeted federal investment has come into the los angeles promise zone from seven different federal agencies. mr. slingerland: these are $100 million in programmatic funding

for a specific community. what we are learning on the ground there is no silver bullet for these urban challenges. you have to do everything and you have to do it well. in our case that's a focus on the continuum from cradle to college and career. with high quality schools and early education and wrap around services for youth and families. targeting disconnected youth who dropped out of school and don't have employment. all of that has to be part of a strategy and results driven. we have a common system that all our partners within the community use so we can track these outcomes over time. and i think you got to have everybody at the table. in l.a. we are lucky the annenberg foundation has put together something called l.a. in sync to bring lowell philanthropy in. i want to add that leadership is really critical. we have a fantastic mayor in

l.a. who is a big believer in this approach, who is innovating and restructuring at the city government level. none of this would have happened if the obama administration hadn't taken on what i think is a herculean challenge of getting federal agencies to collaborate, break down silos, to better support place base work in communities like l.a. i think it's the best kept secret of the last six years here in d.c. we are just so happy to be part of it and happy to be here today. neera tanden: thank you. janet, i want to come to you. one of the areas that we have really seen take off is latino entrepreneurship. that's grown immensely over the last 15 years. we know from research that latinos actually more than any want to stay in cities. how do you we harness that energy as part of an economic development agenda for the future? >> sure. it's great question. latinos are entrepreneurial and we are clearly punching above our weight when it comes to

small business area. and the facts show that there are more than three million hispanic-owned businesses in this country. generating more than $1 trillion into our economy. and one of every five new entrepreneurs is latino, and hispanic women-owned businesses are leading the way. latinas are the fastest growing segment of the small business owner community. many times they are doing that out of shear grit and will. yet they are still not -- there is still not enough support and services to help keep these small businesses sustainable. and the theme that we have heard already today is really one that absolutely needs to be reinforced, and one area, group of -- i guess sector that i'd like to highlight is that

community-based organizations. they are doing so much to pitch in and collaborate with those community colleges and with the businesses, larger businesses often with the chambers. for us, it's going to be essential that community based organizations who know these communities, particularly in the latino community, can help give them the skills, that support that they need so that they can have that access to capital. ms. murguia: secretary clinton knows, your deputy secretary she was part of a great model with axion international there's one in texas. there is now a new spinoff called lift that is helping many small business owners, particularly across different sectors, they are doing it by using this model we talked about. breaking down the barriers that are often there and the silos. we at the national council are looking to make sure that our affiliates, dixon here is one of them and a shining example. there's lots of ways we can be

doing more. i will say that prince charles was in washington, d.c. last week. and while he did many things one of the things he did was visit the carlos rosario center here in washington, d.c. and he was looking at, i was told, the way they were integrating immigrants to have the skills to be able to succeed in the mainstream. oftentimes many of them need small business assistance and learning about the access to capital. but sometimes it's just the language skills that we need to transition so that they can be fully successful and i think that there's much more that we can do. one of the things i would just say as i close is that we are doing a lot as a community, i think, to be part of that vitality in the urban corps. i would say that one reason that oftentimes some of these folks

turn to the small business sectors because still the labor market is still not sort of an even landscape. there are limited opportunities. i would hope that we can still look at adequate way that is we can support our work force development system. because i think we need to be moving on several fronts to make sure that the urban progress we make is inclusive of all of our communities. >> i know i'm not on the agenda. i agree 100% with her with one of the points she made. that is we are looking at partnerships with the community colleges. we are looking at partnerships with the schools of the we are not looking at partnerships with the small businesses particularly the small minority and women businesses that are there. we don't have the bandwidth to reinvent ourselves as a large corporation. as we are looking at changes in innovation, we need to be partnered with some these corporate partners and be a part of that. be at the able. and we are not.

i couldn't agree more -- 100%. that's where i am right now. i know a lot of folks, but i'm looking at the -- my peers and what's happening and we are seeing a big, big change. wonderful things happening in boston particularly and the innovation district. it's not filtering over. really if we could look at ways corporate and government to pay attention to the small businesses and integrate it into this new process with stem and community college, etc., that i think that it would really have an impact. neera tanden: did you have anything else you wanted to say? >> no. i was finishing up. i think that for me it's real important to reinforce this notion that a hidden gem in these core urban centers are these community-based organizations. and they are hustling out there trying to support. i really credit a number of folks in the public and private sector foundations have stepped

up in the new way, to offer us models so that we can scale some of these programs. it has to be a partnership and there has to be coordination and collaboration. there's a lot of folks working really hard out there. they want to make it, they want to contribute. they need a little bit of help. and again having a small loan, doesn't have to be a big one for some of our folks to be able to open those doors but to keep them open for their small business, that's going to be how we are really making sure there's vibrancy in these urban centers. >> we talked about this before. the only thing i would add to this, kids who come out of good schools with science and engineering degrees are going to do fine. what we need is to focus on the people who have never had a job. the jobless. the long-term unemployed. and the post incarceration population. and that's a lot about -- not about stem research but it's about skills training. integrated with the local

businesses, small and large. and it still amazes me in our unemployment insurance system is based upon job search as opposed to training. if you're going to break into the employment -- hard core unemployment at those levels we talked about earlier, you have to be able to do that. secretary clinton: this is exactly on point. we have 5.6 million young people in america between 16 and 24 who are neither in school or work. and if we don't consciously try to set up better systems to reach out, find these young people, and train them, we are doing something at the clinton foundation called job one, as glenn said, a loft them have never had a job before. and so -- a lot of them have never had the job b they don't have the hard skills, they don't have the soft skills. part of the challenge is working with companies that will do exactly as you're saying that is to make it possible to have these entry points where

companies with i think either already existing government support or revamped support for skills training will coordinate. it's -- the other thing that germany does is instead of an unemployment system, they have a wage subsidy system. you don't let people go in the first place. i think that there are lots of creative ideas both in our own country that are being tried and elsewhere in comparable economies, but we have to focus on that first job and get people into that system so that they then can maybe get better educated and better opportunities will come. neera tanden: randi, did you want to say something? >> what we often do is we do top-down rather than bottom-up. this whole notion of neighborhood based and thinking how you work, how you both work with the assets, you leverage the assets, including human assets, and community based organizations, and the faith community to actually find your kids in the neighborhood.

and that's part of the reason that what we have seen when we wrap services around schools and try to think about the school as the center of community or church as the center of community, we find the kids. because kids actually, if we can engage them, they don't drop out. if we can engage businesses small and large in terms of the c.t.e. process, we actually have a pipeline to jobs and pipeline to more learning. >> lee? >> i'm getting a number of things out of the discussion, but there are a number of words that have been repeated. one is collaboration. unfortunately, in many cases, we begin in a contentious mode. i can give you a variety of examples where they were looking

at cutting retirees benefits who earned $19,000 a year on average. we were looking at cutting that just out of the box for we had to react to that. they care about the keys and provide essential services, but rather than starting off in a contentious mode, it seems to me there are enough examples that we talked about here this morning, where we can collaborate and bring all of our community together, whether it is a nonprofit community government, labor, and we can talk about resolving these problems. that is what is missing in many cases. we have got to bring discussions together and bring everyone to the table so we can honestly have dialogue about how to rebuild our infrastructure and educational system, provide

decent housing and quality jobs in the areas across the country. there are examples out there. people are doing it. we have got to talk about the strategic plan to get the job done. neera tanden: ideas for us to go forward? >> collaborate to compete. if there's any place that is more collaborative it is denver because they were flat on their back in the early 1980's. the suburbs invested in downtown because they knew they needed a vibrant core. fast-forward 25 years, 122 miles of light rail transit to resources. the success goes to success goes to success. if you put your stem economy on steroids, every job yields another five jobs.

some that support it and some that are basically in the retail and housing sector. in many respects in cities there is not a difference between the stem economy and downtown neighborhoods. i would just argue that going forward, we need to think about stoking the fires. you go to downtown detroit and downtown buffalo and downtown st. louis, and we have got to focus even more on supervising -- supercharging those economies. the multiplier effect is really off the charts for people living in the neighborhoods. we have then got to connect them. neera tanden: can we call it steam? put the arts in there as well. building on that, others have research on folks and the cities

who raised the wages for everyone from those who never went to high school. mr. secretary of housing and urban development, i will start to close with you. from this conversation, what is the strategy we can learn to go forward. what are you working on at the federal level to support the local efforts? secretary castro: great points all around. i got elected to the san antonio city council when i was 26, just last year, in fact. [laughter] i remember earlier on, we were trying to make a decision about where to put the limited resources the city had every year for street maintenance and repair. basic thing that happens in cities all the time. one of the neighborhood association meetings, i ran into a woman who came up to me and

said they had been waiting in the neighborhood for many years for sidewalks to be created on their street, and it meant something to her because her mother, this was an adult woman, her mother who was elderly had diabetes and a doctor advised the mother to try to walk, to help out with the health condition, but she could not do that because there were no sidewalks and also dogs -- for me as a policymaker it drove home the idea that all of the things we do are connected in terms of policy. but the infrastructure for economic development and housing, the best thing we are doing is really bringing all those issues together, ensuring there is good, and quality, and affordable housing and making sure cities are safe.

we are celebrating 50 years this year and one of the things we are most proud of are place based initiatives, that builds on the work of home six that said it is about housing promise zones and promise neighborhoods. i believe we need to do more of that in the years to come to lift up the urban cores of communities out there that have been struggling but at the same time, it was noted at the beginning of the conversation today the top 100 metros make up 75% of our national gdp and in this 21st century, the united states itself in an unprecedented opportunity for

jobs and investment for nations arriving around the world, we need more than ever for those cities to excel. i think we can do that if we collaborate and think of a policy in away way that blends all those areas. >> thank you much. closing thoughts? lee: thank you for pulling this together. you got a good amount of recommendations and suggestions. >> my report is coming out tomorrow. lee: this is just a discussion that i believe is a beginning. we should continue it. let me just highlight a couple of things i have heard constantly. one is the key to rebuilding our city, good jobs are at the root of all of the other social and economic challenges. improving education in establishing programs, investing in public safety, dressing health disparities, and preserving affordable housing. here is something else i heard today.

every community has got to be included in this discussion in every community has got to have the opportunity to advance and make better lives for themselves and their families. we need to invest in our infrastructure across the country. we are going to need help here and we are going to need resources coming from the federal government but also from the private sector to do just that. i think this is the right thing to do. it is an important thing to do. we have the examples of where we can be successful all across the country. the trick will be to pull all those countries together rather than continue to fight and argue one another. and talk constructively. hillary clinton: amen.

i love sessions like this because it is nice to get back to an evidence-based discussion about what works and what does not work and try to learn from examples that teach us a lot of lessons. that to me is the most important take away. we have cities that are working well because they have been reinventing themselves and have done so in a collaborative and inclusive manner. they still have work to do. they are at least demonstrating there are approaches that we can learn from and try to apply. we have other cities, which we know are having difficulty overcoming the contentiousness trying to figure out ways to

collaborate, where it is really more of a political battlefield than a policy discussion. i hope that cap and the others represented here this morning can do to gather what is so needed, and that is to try to stimulate a conversation in cities themselves. i think it is both bottom-up and top-down. if we could get more cities going to state capitals and coming here to washington and saying, we need to abolish the silos, we need your help in creating the conditions for coordination and collaboration we need to have your help in convening. that is something secretary castro is very focused on, and then looking at what works and looking at results which i think dixon has also pointed to. look at what works and get out of the very unproductive discussion we have had for two oo long, where people have been

an ideological bunkers, having arguments instead of trying to reach across divides and come up with solutions. mayor, i think what you did with gangs and gang members is exactly what needs to be done in so many places in our countries. do not be surprised if you get a call. maybe we will start not too far from here. [laughter] in a beautiful domed building -- [laughter] where we get everybody in the same room and start that conversation. it could lead to collaboration and a better result for our cities and our country. thank you very much. neera tanden: thank you everyone for participating. [applause] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org] [captions copyright national

cable satellite corp. 2015] [indiscernible] [indiscernible]

>> next on c-span, the house armed services committee chair talks about making changes to the pentagon acquisitions system. the house approved a resolution monday urging president obama to send weapons to a crane -- weapons to ukraine. on our next washington journal we will talk to texas congressman michael burgess about a bill that tries to solve the annual medicare doc fix. then congresswoman gwen moore will talk about the democratic approach to the budget. then they news director jeff bower -- jeff mower will talk

about energy. here are some of our featured programs for this weekend on the c-span networks. on c-span to's -- on c-span 2's book tv, peter wallace and says that housing prices caused the financial crisis. then, jeffrey sachs on a development plan to conquer poverty, corruption, and environmental decay. then on american history tv, a discussion on the last major speeches by abraham lincoln and martin luther king jr.. then sunday afternoon at 4:00 the 1965 meet the press interview with martin luther king jr.. find our full schedule at

c-span.org and let us know what you think about the programs. e-mail us at comments@cspan.org. like us on facebook, follow us on twitter. the chair of the armed services committee talked about increasing accountability in the acquisition process. the congressmen spoke at the center for strategic and international studies. >> thank you for joining us.

this is a great way to start a week. it doesn't get any better than when you have the chairman of the armed services committee saying he wants to kick off a week of discussion and have it here, so i'm pretty happy this morning. i want to say thanks to chairman thornberry for doing this today, but also for becoming such an important leader at this time. we were just chatting when we were waiting for everybody to gather. probably not been a time when the country and the congress faces more complex issues, security issues, than now. and honestly the country's fatigued about the military. i mean, we've had 12 years of wars and there are an awful lot of americans that just want to forget it. they just don't want to think about it. but the point of genuine national leadership is to bring issues of long-term significance to the public debate so that we don't ignore this.

this is a very important time. we're having a huge debate in the congress right now about the budgets and how much money we should be spending on national defense. i think chairman thornberry, i know this is his view, that the reason he's pushing so hard on the question of acquisition reform is because if we're going to ask more money from the american public for defense, they want to know that the money they were already spending is being well spent. and i think we just have to honestly say we've got a lot of reform that we need to bring to the defense department, to validate our request for a stronger budget. and we do need a stronger budget. i don't know how many of you feel comfortable every night when you look at the daily news, but i don't. to think that we are drifting without a strategic plan for our long-term defense posture at a time like this is genuinely scary. now, the chairman has spent the last two months taking the committee down deep to understand the risks and the threats we face all over. i think it's a tremendous foundation for the markup that's coming, but also for the next two years. today he's going to spend some time talking with us about

acquisition reform. it is a crucial and central part of his overall strategy and agenda. i think we're very fortunate to have a man of his character and his leadership perspective leading the committee at this time. so would you please, with your applause, welcome chairman mac thornberry. \[applause] mr. thornberry: thank you, doctor. i appreciate those kind words and i appreciate the chance to be back at csis and also everything that you and this organization does to help inform and educate and guide many of

us, as we try to think our way through the national security challenges that we face. you know how when you're on an airplane, they're about to close the boarding door and somebody says, if you're not going to dallas, this is it's time to get off? i'm kind of thinking that anybody who is here who is thinking this is a texan about to announce something about the presidency, you're in the wrong place. \[laughter] there's another speech that you may have a chance to get to if you run. it's ok to slip out the back. i was here in november, 2013, to launch a defense reform project that former chairman buck mckeon had asked me to work on. so i thought it made sense to come back here to unveil the first installment of where we are. when i was here before, i mentioned that nobody that i'd run into thought that everything at the pentagon was going fine.

what i more frequently got was a reaction that, an eye-rolling reaction that, oh, yeah, y'all are going to try that again, it's not going to make much of a difference. and it's absolutely true that change is hard, especially for a military. which brings me to a subject of vital importance which is trousers. now, when you talk about defense reform, you probably think about fighters, not fabric. but in 1912, just before world war i, trousers were heavy on the mind of the french ministry of defense. see, the british had learned from the war that having those bright red coats on tended to make them more of a target. so they switched to khaki. the french by comparison still wore blue coats and bright red trousers. the french minister of war saw an advantage of being slightly less visible on the battlefield and sought to institute the same reform that the british had taken on, but a general way to describe the debate would be to

say that the french have always held a high regard for fashion. so, taking away trousers would be, as a parisian newspaper wrote, contrary to french taste and military function and of course they put taste before function. one former general even took to a parliamentary hearing, screaming to ministers that they would never eliminate our red trousers. well, later on, after a bloody conflict, the french minister of war wrote that the blind and imbecile attachment to the most visible of all colors was to have cruel consequences. so far we've been fortunate enough not to have had a general scream about the color of military pants in one of our committee hearings. but i do think the french

experience is instructive and as we all know their reluctance to change in the next war was to have even more serious consequences for their nation. militaries are traditional by nature. it's part of their strength. it means that change, even necessary change, can be slow and hard. as the doctor just referenced, i think one of the reasons that military reform is necessary for scenario, resources are tight and we have to make sure that we

get more value out of the money we spend. we have to show our colleagues on the hill and the taxpayers that we're carefully overseeing how their money is used. but i believe an even more critical reason for reform is the need for agility. as the doctor again just referenced, we've had witnesses over the last two months in congress testify that we face a wider array of national security challenges now than at any point, certainly since world war i, and maybe in the history of the country. we know from the headlines that the threats to our safety and well-being are multiplying and we know from the polls that the public is pretty uneasy about it. just think for a second, if you will, about what's happened in the last 16 months since i was here to start this reform probably. china is pushing out its territory, even building islands on the south china sea while our justice department has indicted

p.l.a. members over their cyberactivities. now, north korea's been busy in cyber as well but they shoot off a few missiles from time to time just to keep everybody on edge. u.s. military was sent to africa as the first response to the ebola epidemic and the national guard in texas was sent to our border to help cope with tens of thousands of unaccompanied minors that were flooding in from central america. threatening the peace of europe and post-world war ii stability and putin won't stop talking about where to put his nukes. they have shot from copenhagen brussels and paris, across africa and south asia in malls museums, grocery stores and even schools. that's not to overlook the success of isis drawing thousands of foreign fighters, humiliating the iraqi army. nor the fall of the government of yemen, the source of the most serious threats to our homeland over the last few years as iran spreads its influence throughout the middle east and maybe a threshold nuclear state with the blessing of the international

community setting off a nuclear arms race in the middle east. old problems haven't gone away from afghanistan, pakistan somalia and palestinians where there was a seven-week summer offensive in gaza. several airliners got shot down with hundreds of people dying. in short, it has been a difficult time in the last year or so. and the truth is nobody can see what is going to happen but the velocity of change is accelerating. the question is how well do we or how well can we respond. so, to help us be better prepared for a world of proliferating threats, including those we can't predict, we need to have reforms in at least three areas, one is personnel to ensure that we can attract and keep the top quality folks who serve our country.

and we are looking at the military retirement modernization and i suspect we will try to do that. organization and overhead, that classic tooth-to-tail ratio as the end strength of the services has declined the bureaucracy in the pentagon and elsewhere has stayed as they say robust. so we need to streamline the bureaucracy partly to save money but partly to streamline the process because every office has a right to make their presence known and there is a good chance we can work with secretary carter. but the third area of reform, is improving the way we acquire

goods and services. the definitive edge that our military enjoys comes from two sources, our people and technology and if we use our technological edge, our troops will lose as well. our military has got to be both strong and agile and people are going to get tired of me talking about the importance of agility. the army that can outmaneuver its foes wins and why the germans valued their formations. russia and china are trying to outflank us using technology whether it is using missiles or building radar that can detect stealth. the only defense is to adapt quicker than they do. i don't want to see america outflanked. the hearings and briefings we have had this year point to an

eroding technological superiority. several factors have contributed to that including the general pace of change, our broken budget process and acquisition process where we have a hard time getting modern technology fielded in a timely way. last week when secretary carter testified in front of our committee for the first time as secretary, i pulled off my shelf, a book that he had edited and partially written from 15 years before. as you can imagine, it can be a cruel thing to do to somebody to cloak their own words to them. but in this case, i think he was right and i think he is still right because what he wrote, is to maintain a technological edge we have to align our procurement system with market forces and we have to be the fastest integrator of commercial technology into defense systems. we have moved further away from those goals rather than closer to them over the last 15 years.

one of the many lessons i learned from dr. hamre is our unique government-industry partnership in the united states has been one of the key factors in our success to becoming and staying a world leader. it is a fundamental strength but also been a persistent problem. since i was last year 16 months ago, i have spent the time listening and hasn't just been me. many of our committee members on both sides of the aisle, especially ranking member adam smith have listened, read and stud yesterday about past reform

efforts and how well they have succeeded or not. we have listened to folks in the pentagon such as the under secretary and the service chiefs. we have listened to industry including trade association, companies and individuals and people who have spent years studying the acquisition process. we have listened to former military and pentagon officials and industry officials. we have listened to people working in the system now managing programs trying their best to get capability delivered on time and on budget and we have consulted with people completely removed fl the defense acquisition system to learn about best practices that could be incorporated into the system. i know this is shocking, but we have listened to each other, because there are members of congress and staff that have a tremendous wealth of experience and expertise in these areas and we have taken that input and compiled the data base with more than 1,000 specific proposals, some of which as you can imagine better than others, more realistic than others, but it's

a data base we can continue to mine for years to come. despite the fact that there are a lot of smart well-intentioned people in this field, i don't think anyone has all the answers or to understand all of the consequences to any particular change. so on wednesday of this week i'm going to introduce in the house a bill that will serve as a discussion draft for the first traunch of legislative proposals to improve our acquisition systems. folks will have a month to do it because our full committee markup of the next year's national defense authorization act will be april 29. so there is a month to make comments. in offering this legislation, i expect at least two reactions, one is, it doesn't go far enough. and you know what? that is exactly right. it isn't enough and doesn't try to be enough, but it's a start. and it's a start that tries to focus on the basics of the

acquisition process. our people, the strategy and the decision-making chain to buy goods and services. another reaction is well, it does too much. well, i don't think that's right, but that's why i want to put it out there. my first rule is the doctors do know harm. -- no harm. this is the best application i know of that overused phrase of trying to fix the airplane engine while the airplane is in flight. this plane cannot go off duty and land for several months while we fix the engine. it has to keep flying while we make improvements. but if we don't try to fix the engine, it's not going to be

able to defend the country. so in the proposal that i'm going to introduce, i really break down the changes into four categories, people, acquisition strategy, streamline the chain of command and thin out the regulations and paperwork and let me give you a brief summary of each of those. it starts with people. that's our most valuable resource in acquisition. we would remove some of the obstacles that make it more difficult for top military talent to serve in acquisition. and we make permanent the defense acquisition work force development fund to help to make sure it can be used more effectively. we would require training on the commercial market, including commercial market research to help close that gap between

industry and government. to be the world's fastest incorporator of commercial technology, that there has to be a lot of interaction between industry and government. and so we require there to be mandatory ethics training on that acquisition-related interaction so it's clear what you can and cannot do. secondly on acquisition strategy, we require every program start out with an acquisition strategy. it has to be done in writing and upfront and dated as needed. this strategy would consolidate at least six different requirements into that upfront strategy and has to include what is the most appropriate type of contract for this particular acquisition. this is another area where one size clearly does not fit all. it has to consider whether multi-year is appropriate and

include risk mitigation strategies just like commandants have to have war plans, and we need to have it for our plan. and it has to consider incentives. so, for example, one of the things we want to consider is shared savings on service contracts, which are not currently allowed. and the third area, we want to simplify the chain of command tore acquisition decisions. so a number of requirements on milestone a and milestone a are going to move from a legal certification to just a decision. and as a recovering lawyer, i can attest that the fewer lawyers that are involved in the process, the smoother it's probably going to go. one of the reasons i think we

have gotten so bogged down in bureaucracy is we have tried to paperwork our way all of the risks. not only does that never work, it slows everything down and creates a situation where no one is responsible or accountable for the success or failure of a program. this will raise the dollar thresholds on a number of authorities such as simplified acquisition to make it easier for people to get things done. and we make it clear that the role of the testing community is to test and advise, not to make decisions. fourth, we thin out regulations and get rid of paperwork. in fact, there are going to be dozens of reporting requirements that are going to be eliminated. over and over again, i hear that program managers and industry are forced to manage the process rather than manage the program. g.a.o. came out with a report that evaluates the usefulness of a bunch of these certifications that apply to every single program.

some are useful, some you won't be surprised to learn are not. so, for example, several years ago, congress was concerned that several programs were not paying proper attention to corrosion resistance. what got interpret d by the bureaucracy was that every program had to have a corrosion prevention report which had to be staffed and written before that program could proceed. it even applied to computer software, not generally known as a high-corrosion risk. now, in truth is, d.o.d. has taken some steps to fix this issue, but this is an example of how the system has gotten so bogged down. the best summary of the current system that i heard over the last 16 months was by one of the leaders working in the system every day.

the current system is like a bus, where the driver is the program manager and he or she is responsible for getting that bus or that program to a certain place on time and on budget. yet, the bus is full of passengers and every passenger has their own steering wheel and their own brake. so that makes the driver's job pretty hard. and when the bus ends up in the ditch as too often happens, then all those passengers scatter away and climb on another bus. the driver is left there trying to figure out out how to get out of the ditch and back on the road. we need to eliminate those steering wheels and brakes and then we can hold that driver accountable for getting the bus where it needs to be on time and on budget. that's what i hope these proposals move us toward. finally, let me just mention three other things.

there's more to the proposal than i have outlined here in addition to the changes in law. we are going to make public this week a separate document that is draft report language. and that includes several studies and markers for future legislation. so, for example, one area where we need to do a lot more work is in service contracts. but we are having trouble to get the information we need to look at that, so we're requiring the department provide us additional information in that area. and that will help guide our steps in the future. second point is part of improving the acquisition process involves changing the way congress operates. we are also pretty tied to tradition and often, difficult

to change. but our military cannot be acknowledge i will without congress taking steps and encourage that agility. third, i agree with those who argue we have the unique opportunity now to make needed reforms. few secretaries of defense know the pentagon -- have known the pentagon better than secretary carter. he along with the service secretaries and the joint chiefs are all committed to reform. they understand that it's essential. that commitment is strong on the hill as well. chairman mccain and i agree that reform must be one of our top priorities and we have excellent partners in that effort with senator reed and adam smith. many others on our committees are involved as well on a bipartisan basis. several long-term observers have pointed out to me that never before have all the stars been

so favorably aligned where we have the necessity of reform in key positions and commitment to make it happen. the point is, we can't waste this opportunity. as long as i'm privileged to hold this job, this is for the sake of ensuring that our military is prepared as possible for the wide array of threats we face today and the challenges that confront us tomorrow. we will never get all the way there, but we have to move steadily closer to a department of defense that is efficient effective and accountable with military capability that is strong and agile. the impetus of existing plans is always stronger than the impulse to change. we have to overcome that and we have to set aside our skepticism. we cannot allow blind attachments or inertia to cause our men and women to suffer cruel events. if we are smart and persistent we can say on top.

for there is much in our country and around the world that depends on whether we are successful. thanks. \[applause] host: thanks for coming back to csis and great privilege to host you and listen to this preview. it's very exciting. i liked what i heard and i think a lot of others did, too. for the benefit of the audience. i'm andrew hunter, director of the defense initiative and had the privilege of working in the

past for the house armed services on acquisition reform. mr. thornberry: we shouldn't have let you get away. mr. hunter: i didn't go too far and this is an issue we are tracking closely. i want to ask you a few questions and once you had the opportunity to respond to that we'll open it up to the group here. we have folks with microphones that will come around. let me start out by -- start at the end, i'm curious as to what

you see as the ideal or successful outcome for this effort, both in terms of this year's activity and i think you have indicated in the past that this is not a one and done exercise. if you could speak about what does success look like for this year and what might success look like over a five and 10-year type of a time frame. mr. thornberry: this is not a one-year effort. and if you try, you are probably going to make more mistakes than help. so this is just the beginning. and what we are trying to do at the beginning is deal with some of the fundamentals. i talked about the essential nature of the acquisition work force and some tools to help improve that. the acquisition strategy and the chain of command in making decisions about acquisitions which i think is fundamental. that's where we start. what i hope, if all of this is enacted and all of this works out perfectly, what i hope is that we have a more streamline change of command and more accountability that goes with that chain of command.

again, this is never a destination that you reach. this is just trying to swing back the other way from that pendulum that has gone so far. mr. hunter: you mentioned senator mccain and his support for this and that also matches obviously my understanding and his public reputation, but the senate doesn't always follow the will always of one person and not clear that it follows the will of even the senators at most points in time. but how do you see this playing out in the senate? how does the picture look to you on that side? mr. thornberry: the key place to start is, i think senator mccain is just as committed to this as we are in the house.

so it will be a major part of his efforts. we have talked about this from day one when each of us were chosen for these positions, and we are coordinating closely every step of the way. you are right. doesn't mean the senate committee is going to have the same language as the house committee. certainly both of us will go to our respective floors, various amendments come and go, and so we'll have to reconcile all that. but i think there is a tremendous amount of common perspective here and that's part of the reason i'm persuaded by people who say this is fairly rare, especially those skeptics who said i have heard this before, it is fairly rare to have that commitment in the senate and house and the department and you really do have it this time and it takes that, in order to make the changes, not just at a superficial level but in a deeper cultural level. but people who work in the

system are hungry for that. that certainly came across to me in the meetings i had with program managers inside government, industry people. people want to do things. they don't want to fill out useless reports. and so much of their time, effort and money is spent on paperwork these days. mr. hunter: i like the way you framed it, the importance of agill ti in the system. and and certainly a lot of folks have commented and we have been looking at it here how defense technology and commercial technology and interplay between the two is going to make change. you mentioned the pace of change and just sort of the nature of where technology development is happening, both in terms of commercial versus defense and a much more global exercise. so as you look down the road how do you see that changing the way the acquisition system needs to operate, both in terms of the laws that you are working on

but you mentioned the regulations? well, i think it is just fundamental because we cannot take 20 years to field a new airplane with technology moving at this speed. and so that's why streamlining the system is absolutely essential. and the point about commercial technology being where much of the innovation happens means -- in fewer instances can we start from scratch from the military developing the requirements and doing all of the work. there has to be that much greater cooperation and integration of commercial -- with military and that's part as i mentioned, part of the reasons that we have the proposals that we do. but i think your point gets to what i think -- part of what you

got to change here is the culture and the incentives and a lot of people who work in the system have been criticized in the past, say, for being too close to industry, so now they have the stand-offish sort of attitude. too often the current system rewards people who take the lowest bidder and we'll figure out the rest of the stuff later. it's important for us to start with these fundamentals. the acquisition strategy where you do the work upfront and thinking through what do you need to have a successful acquisition here. and then streamline that chain of command so you can hold accountable the people who actually make the decisions without the other people having their own steering wheels and brakes. i think we are going to have to do that or else we really will be left behind in not having that technological edge that has been key to our success, at least since the end of world war ii. mr. hunter: you mentioned

industry and the big focus and the partnership between industry. industry filled with very patriotic individuals who work hard on these problems, but they are responding to share holders who have expectations, which is reasonable. how do you see that dynamic in terms of incentives for not just the folks in industry but the share holders to make sure their incentives are outlined with what we are trying to do? mr. thornberry: i quoted from

ash carter 15 years ago, we have to align our procurement process with market incentives, because if you are going crossways it's not going to work. and too often it may not be crossways, but they aren't going in the same direction. what that requires is that streamline process so you can have more accountability. but it also means more innovative sort of contract types. i mentioned shared savings on service contracts where if you win the contract and you can do it a little cheaper, you can keep part of the savings and the government keeps part of the savings versus where too much of the time is now, you spend money in your account and if you don't it, you will get less. that's going the wrong direction. and so part of the reason i'm insistent this has to be a multi-year effort in order to really understand the incentives now and begin to change them because that's what's going to change behavior, it's going to take time and a more streamlined accountable system is a key first step, but there are many

more steps to go in order to have that alignment going in the right direction and be the fastest integrate -- integrator leader of technology but hopefully this is a positive step. mr. hunter: about time for someone else to ask a question. could say your name and where you're from and microphone is headed your way. >> so i'm a professor from george washington university. it's wonderful to hear you talk about things like incentives and you acknowledge some of the difficulties for change. but i just want to say before i

get to my question that i think when you talk about reducing the bureaucracy, any focus you have on reducing the coast drivers they would have direct effect on the bottom line. don't lose sight of the fact that every one of those you eliminate has direct benefit to the government. one of the things dave did before he left csis talked about the fact since the economy tightened up, the single biggest change has been the reduction in money spent on research and development and the most dramatic reduction has been in independent research and development. you talk about maintaining technical superiority. thoorn thorn i share that concern completely as budgets are tight. you have to pay the fuel bills and you have to send the paychecks out and what gets cut is the r&d and broken budget process, what does industry see, they see dysfunction and tend to put less of their own money into it. as we evaluate the president's budget proposal and move toward our own defense authorization bill, i think we will look at some key technologies that are --

to put i hope we will get some more. one thing that concerns me the most is lockheed and northrup are always going to deal with the department of defense. a lot of other firms that are key innovators can take it or leave it.

part of the reason to approve the way we contract is to make the department of defense easier to do business with. >> in the back.

>> [inaudible] it's extremely broken. >> we will put it on the radar screen. do not expect all problems to be solved in a single swoop. >> mr. chairman, over the years, many have criticized the military industrial complex, and there have been great efforts to

try to insulate the government from the impact of industry, leading to the almost complete absence of senior executives from various defense-related firms to serve in policymaking positions. this removal of expertise, this barring of people who have the kind of expertise you mentioned means a lot of expertise is never able to be used by the government. what are your views on the potential of senior executives from military industrial firms being able to go back into government? >> i think this is one of the areas where the pendulum has swung too far. this is not because of some law congress has passed. it has gotten worse with the administration.

part of what i think we have to have is this close cooperation of industry and government, and that's going to include inevitably people who move back and forth. if you don't let people move back and forth, who do you and up with? people who don't have experience in what you're dealing with. part of the reason i think it's essential to simple find the chain of command -- simplify the chain of command is so you can have more transparency and hold people accountable for the decisions they make. we have a requirement for people who are part of the acquisition process to also have ethics training that is targeted to these sorts of situations. there are ethics classes but my thought is targeted for these

sorts of interactions, make it more transparent, but understand that sort of cooperation is essential, and it includes people who will move to different jobs. >> i had a hand here in the back that came up early. >> the defense department is doing this long-range program right now. how in-line are you with what they are trying to do? >> i think it gets back to the issue. how can the department of defense be the biggest innovator of technology, and how the -- how can the department of defense be a friendlier place

for innovators to interact with? i think all of that does fit together with the reforms we are talking about, but i think part of the reason reforms are so essential is that even rode inc. technological superiority i mentioned that is taking away one of the key strengths we have had over time, and if we sit here and little our thumbs and fill out a bunch of paperwork and it goes, it's going to be really hard to recover. >> right here. >> i am with northwestern university journalism initiative. my question pertains to the fourth priority you mentioned with the proposed legislation about cutting down paperwork.

while i understand the goal is to keep one program manager accountable instead of having confusing bus drivers, but my concern is -- say you have this bus and the driver is more into the administrative roles whereas the people with the extra steering wheels might have commercial drivers licenses and would be better suited to drive the metro bus. my question is if we put program editors in charge, how are we going to ensure that by decreasing the subject matter experts, how are we not setting the program managers, and how can we keep accountability in

check, even if they don't require rubberstamps so we can be efficient and effective? next i think -- >> i think you start with the assumption somebody is going to mess up. these are complex decisions. somebody is going to not be motivated for the right reasons. somebody is going to make a mistake. that is what happens when you get humans involved in decision-making. the question is how do you design your system? do you design your system to eliminate any chance of that happening, or do you design your system to be as transparent as possible to have the best chance of finding if someone is incompetent or corrupt? there is a difference. a simplistic example to me is that walmart could eliminate shoplifting basically don't to

zero if they frisk anyone going in or out of their stores, but that is not in walmart's best interest. neither is it in our best interest to have mile after mile of paperwork and reports and requirements and second-guessing, which have the overall effect on the system of preventing us from fielding modern technology in a timely way to try to prevent somebody from messing up or having the wrong motivation. we are partly responsible in congress too. if something goes wrong we like to say, you messed up, and pass a law to make sure every program has to have a corrosion report. we overreact. we have to be sure not to

overreact. i firmly believe the simpler the system the better chance you have for accountability and the better chance you have to find instances where it has not gone as well as he wanted. medicare is so complicated it is rife with fraud because there are so many ways to manipulate the system because nobody understands it all, so the simpler you make it, the less of that you are going to have, but you cannot regulate your way out of human frailties. >> i want to follow up briefly, because the acquisition report came out about a month ago, and i got an interesting e-mail, and one of the findings was that a little over half the major weapons systems experienced cost

growth. the notes said you do a 50-50 estimate. half the time you expect overrun. he was delighted. he said, you hit the nail on the head. that's not how it played out in the press. >> good point. >> here in front. >> thank you for your comments. it's refreshing to hear a lot of the things you are talking about. i was wondering if you could talk about how you laid out the case for reform. you mentioned overhead and acquisitions. it is very powerful, and change

agents like yourself and secretary carter have a shelf life. maybe you know. maybe you don't. the inertia is so powerful from the bureaucracy, so i was pleased to see people with acquisition reform. i wonder if you can provide more detail. you mentioned removing barriers to get into acquisition reform. are there any reforms on the civilian side as well? >> what i was referring to was on the uniform side so we have a situation now where if you want to go on acquisition you have to stay in acquisition, rather than being able to be in acquisition and move to the community and back so it eliminates the pool of people who want to get into acquisition. there are arguments on both sides of the debate. that's part of the reason i want to put this out there and get feedback.

do you think we are making it worse? i understand their arguments on both sides. a variety of things to help increase the pool and support the people who do come in to the acquisition system. when you start changes on the civilian side, you get a different set of laws and so forth. we are looking at how some of those might work. i do think people is the key. what do people get rewarded for? what do people get punished for in the system when it comes to careers and upward progression those are the things you need to understand to understand whether changes you think you are making

are going to take place. that is what is going to affect day-to-day decision-making. i am not pretending i understand all of that, but i hope beginning with opening the pool and using the workforce development fund. increased training for commercial and ethics gets us on a good start. that overruns with the second area of reform, which is overhead which is civilian and military.

your point is exactly right. these things are interrelated. just as military compensation is related, if you want somebody who can be competitive with google, you want somebody who understands what google is offering and integrating commercial technology, then you have to be competitive for that top talent, which gets a spec to the personnel commissioner recommendations. is the government competitive for the top talent? do the recommendations make it more or less likely we will be able to google -- compete with google? the idea they do intertwine is valid. >> i think we have time for at least one more. here in the back.

j:aay: thank you for your influence. i think we all recognize change needs to happen. your comments regarding the barriers that exist regarding insertion of commercially derive technologies. clearly, the secretary understands the value of commercial technology, as does the deputy and frank kindle, but all of those individuals are going to be out of the department in a couple years. what can the house do, what can congress do over the next two years to reinforce orientation towards leveraging outside technologies? >> i think we can get off to a good start, and we can help

educate and lead the discussion. i think one of the major roles congress can play in national security at large is to help shape the national discussion of what's good for the country especially going into the presidential election year especially at a time when national security is either the number one or number two concern. this is a real opportunity. it's an opportunity to elevate the discussion and focus on the trends. we have spent the last two months focusing on a security environment, on technological trends and were thanks stand before we start looking at the civic budget proposals, and i

think that has made a big difference in opening the eyes of all committee members and understanding where the trend is. nobody can guarantee anything. as long as i am privileged to have this job, this is going to be a major focus for me because if you look back at history, it has been congress that has been key to major reforms at the department. goldwater nichols is the most famous example, but there are a number of times -- the first speech i talked about former chairman vincent requiring some big holes be laid down that

became some of the key aircraft carriers at the battle of midway. congress has been one that made a key difference. for all the skeptics saying this is going to become an go, it's not going to matter, we are going to do our best to make it matter. one of my favorite sayings these days -- i cannot remember where it came from -- the pessimists are usually right, but it's the optimist who change the world. when it comes to acquisition reform i think that applies. if your most important thing is to be right, then be negative and skeptical, but if you want to make a difference, think about what can happen. that is what we are trying to do with the leadership at the department right now. >> time for one more.

chairman thornberry, thanks for your remarks. my question is about our international allies and partners. as we know, the u.s. military is not the only user of the defense system. i'm curious about how you see our partners in their role in acquisition reform to make it easier to access acquisition for military-industrial overseas. >> i will say over and over again there are lots of issues we don't fix. one of the issues is the slowness of the bureaucracy to deal with military sales. when we have customers ready to write a check, yet it is our bureaucracy that seems to think it knows better and slows it

down or puts conditions and makes it more difficult. increasingly, it is foreign military sales that the harder we make it to sell stuff overseas, the more we are hurting ourselves. another area that we don't solve is the intellectual property issue. i can recite a fair number of issues we don't -- but, i me ntion we have a database of more than 1000 suggestions. we will use that database when it comes to these problems in future years. some of my colleagues may offer it at the end of this year. as far as i am concerned, we will keep after it for a variety of these issues until we try