dubowitz. hillary, or anyone else, does not tell me how to think. i am an independent anger. i will say this about the negotiation. a face-to-face meeting about any peace is the trump card here. if anybody has had any dealings with the war, having a son or brother or father go to war and face the front lines will know that negotiations trump everything. as far as nuclear weapons are concerned, i don't know how many countries in the world now have nuclear weapons. including israel. and by the way, the subject of

israel, everyone loves israel. why wouldn't anyone love israel? but everyone loves peace. that is the main force here. we want peace. i have a grandson in tennessee that has a wonderful friend who was a football player on the local high school team who went to war in iraq and came home minus three limbs. for hussein, for a lie? i do not think so. host: mr. dubowitz? we want peace. guest: we all agree we want peace. i oppose military strikes against iran. i have been working on almost 12

years on trying to find a way to provide the united states with a nonmilitary solution to this. a nonmilitary solution to this through diplomacy and using sanctions as an instrument of pressure. and it is to try to get the iranians to come clean with the past military dimensions of their program. hillary would have you believe that iran is complying with all of the obligations, but the iaea actually disagrees. they have fundamental problems with the ron because iran refuses to acknowledge that they have engaged in weaponize in -- weaponize in -- weaponizing activities. we want peace. what we do not want is iran with a nuclear weapon. that could that of a cascade of proliferation in the middle east and it would lead to multiple arab countries with nuclear weapons, or at least the capability. and that could lead to a nuclear disaster in the middle east, whether by intention or miscalculation. none of us want that, which is why we all support negotiations and a good iranian deal.

host: another hurdle in the "usa today" about a nuclear iran. a question from twitter. should we cut a deal with iran even if they refuse to give up their enriched uranium. guest: it's not really a question of giving up their enriched uranium. it's what to do with their stockpile. there are three options on the table. the u.s. preference is that they just give -- get rid of it to russia or anyplace else. it is a little odd that they would want them to give it to russia, given the climate that we have today. another is to convert it into usable fuel, so that they are not sending it out of the country, but they are dealing with the stockpile of letting them turned into fuel. there is a middle ground, where potentially iran could send some of it, if not all of it, to russia, but along with their scientists are they could get something in the bargain. their scientists could learn something about the technology and the science with the russian

counterparts and bring it back to have a more competent program in iran. host: is that likely to happen if there is a deal? guest: i think it depends on sanctions. the core bargain struck in 2013 was that in exchange for iran taking these steps to restrict its program the sanctions would , be lifted. if there is not a consequence of lifting the sanctions, i think you will see iran not deal with the scientific issues but putting it to their preference rather than the american preference. so these issues, whatever it is, they are basically -- there are basically two or three different ways to deal with each issue. americans have their preference. the iranians have theirs. if we do not come through on our end of the bargain for sanctions relief, we will see them cling more to their preferences. they will address the issues but with their preferences. host: let's bring in rafiq from texas. line for independents.

good morning. caller: good morning. i definitely appreciate always hearing ms. leverett's perspectives, because she provides a very sobering outlook on the matters. i would like to share with the audience and or at least remind the audience that the extra demonization of iran is due to the cia's -- they helped to form a coup of iran's democratically elected prime minister back in i believe, 1953. and when the shah was installed and he became a dictator, i believe that is what led to the iranian revolution. this is why the iranians have this distrust with america. if we are going to have a

conversation, then we need to bring in all of the facts as a -- as opposed to the propaganda that mr. dubowitz is. because he is really doing a disservice. we cannot afford to get into this isolationist mindset. host: would you like to talk about the history here and the history that has led to the distrust that we see today? guest: it is a long history, painful for both sides. let's talk about the present. right now, iran is maintaining a nuclear infrastructure against multiple un security counsel -- there have been 6 -- that have been supported by china the europeans, and the united states that require iran to stop enrichments, come clean of the iaea of possible military dimensions of the program, stop building long-range missiles

capable of carrying a warhead. actually the un security council has spoken as has the international community. that is the current reality in iran. these negotiations have to deal with the reality. the history is painful on both sides and there is no doubt. we have to acknowledge that. but the reality and the future to get a peaceful nuclear deal that prevents more in the middle east and a cascade of proliferation will require unlike what hillary is suggesting, is going to require a comprehensive deal with faced sanction relief so that we retain peaceful leverage so that when the iranians cheat the way they have cheated for decades, we have a peaceful instrument to respond to iranian compliance. the fact of the matter is that is the position of the obama administration and i support. host: how long are you talking? how long will the sanctions go on? guest: that is where the main sticking points in switzerland. they are trying to negotiate

exactly this phased nature of the sanctions relief, so we don't know the details. we do know is that the obama administration position is that they have to keep some form of economic leverage in the form of u.s. sanctions and eu sanctions. the only way to apply to iranian -- to reply to iranian noncompliance is to either accept it in the pathway to include weapons or to use military force to forestall the possibility. all of us can agree we do not want to see that. host: let's head to north carolina where eddie is waiting on our line for republicans. caller: good morning. would your panelists were saying it if the iranians do not cheat and they were allowed to have a weapon within 10 or 15 years, with the nuclear proliferation in the area, how will you solve other countries not to have a weapon at that point? guest: it is very interesting. the idea of iran having a weapon is a social fact. it has been repeated over and over again. even though the u.s. intelligence committee has been

saying since 2007 iran has not produced nuclear weapons and they have not even taken a decision whether or not to produce weapons. the iranian intelligence committee agrees on that. but it has become a social factor here that they are held to the end of producing nuclear weapons. the history that the prior caller pointed out is important. in particular, when iran was attacked with weapons of mass destruction during the 1988 war with iraq, and iraq was lobbying hundreds of rounds of chemical ammunitions and lobbying them on to iranian soldiers and civilians, 80,000 iranians either died or were injured. documented cases of iranians killed or injured because of chemical weapons. the iranian government decided , took a decision, not to weaponize their chemical stockpiles that they had. they took a decision not to do that, not to retaliate in kind.

this is based on, in large part , dedication to their islamic belief that these types of weapons of mass distraction are forbidden. now many in the united states , dismissed that as part of the islamophobia. we dismissed that, but in the republic and political order of -- that steeps its clinical legitimately -- legitimacy of islam and to go back on that well, we are sorry that 8000 iranians were killed or injured during iran-iraq war, we are going to change our mind and pursue weapons of mass distraction both defies history and depicts a lack of understanding of their political order. even if they decided, for some bizarre reason that they were going to try and acquire a nuclear weapon, they are bound by the nuclear nonproliferation treaty not today, tomorrow, but forever, in perpetuity not to , pursue and not to acquire nuclear weapons.

this idea that there will be a sunset clause in this provision is again just propaganda being , put out there. these provisions will allow in perpetuity and if they sign the additional protocol to the nonproliferation treaty there , will be even more intensive inspections and verifications of their program in perpetuity and those restrictions would last forever. guest: it is interesting what hillary is neglecting to tell you and your viewers. in 1980, iran began to move forward on a military program. she is absolutely right. it is devastating the chemical weapons attacks that were launched by saddam. but if the response by iran was to move forward on the nuclear military program. the fact of the matter is that the u.s. intelligence committee believes that iranians have not made a strategic decision yet to build a nuclear weapon but they want to retain the capabilities to do so, which is called threshold nuclear capacity. the response to nuclear capacity and the perception that there

may be a bad iranian deal, is that you have the saudi's, egyptians and others begin to take moves toward their own so-called civilian nuclear programs. what they want to do is build the same kind of infrastructure to give them the same kind of option to become a nuclear weapons threshold power. the problem with that is that the nonproliferation treaty is actually for normal nuclear powers. it is for holland, germany, japan, and other countries that represent such threats to world peace. the nonproliferation treaty with constraints under the npt do not apply to a country that has not yet made a strategic decision to give up its military nuclear program. when iraq comes clean of all these outstanding weaponization, then we know they have made a strategic decision. when that happens, hillary and i will both celebrate. because that will be a very different iran. host: we have a half hour left. with hillary mann leverett and mark dubowitz. she is the author of "--

we want to get to as many of your calls as we can. as we continue to watch the negotiations happening in switzerland. the deadline at midnight tonight. we are seeing reports this morning already, from cbs news being one, that negotiators could consider extending the talks for a few hours are putting off the biggest decisions for a matter of months. linda is up next, good morning. line for independents. caller: i guess my question regarding this deal is how do we trust what we hear? we have the iranian leaders demonstrating in the ocean the mock blowup of a u.s. carrier. we have speeches consistently saying death to america. even last week. and now we have negotiators sitting at the table. when the state department speaks, we have jen tsaki and

susan rice telling us about benghazi and other stories that we know are not true. we have an administration that tells us things that are not true. my question for many americans is how do we trust this government? guest: i worked in the george w. bush administration at the white house. i had to deal with this issue firsthand. how do i trust my government the president i swore to serve and who i wanted to succeed, especially after 9/11, who was selling the american people a bill of goods based on the agenda-driven desires of interest groups, particularly in washington, to say that we should believe then that saddam hussein had nuclear weapons and we should invade the country never mind killing however number of iraqis and americans killed and terribly maimed. we should do that based on their evidence. evidence like groups that mr. dubowitz represents today, they

know better than international monitoring organizations what saddam hussein had. i saw that firsthand. today, what i think is so important, the opportunity we have, is to get iran to negotiate and agree to. it is the only way you can have an agreement, to agree to more intrusive monitoring and verification. that would be monitored and verified by the international atomic energy agency, not by interest groups in washington who previously told us not just a mistake, but manufactured made up information about saddam hussein's nuclear weapon program. i agree with the caller at this day and age that you really need to have more objective data on the table and not have the united states and our interest groups say what is going on. host: you said the iranian president is somebody that can be trusted, what about the iranian supreme leader? guest: i don't think anybody should be trusted. i share the sentiment of the

caller. whether it is the resident of the united states or the president of iran. the reason why we have laws in the united states is to hold our government accountable. the reason we have international laws, similarly, is to hold governments accountable. what is so important here is that you run is a signatory to the nonproliferation treaty and what we can do for our own interest is to have them abide by that as much as possible, and to even go beyond that. what we don't want is a situation like we had with israel that has the only nuclear arsenal in the middle east and is an outlier. outside of international law the treaty, and that is something that is outside of our interest. we don't want another pakistan nuclear arsenal. we want the incredibly successful nonproliferation treaty where all the states have not acquired nuclear weapons and the only state that did have to leave the treaty. but then you have come out of the states that are not part of the treaty, 75% of them, israel,

india, and pakistan acquired nuclear and that is that we don't want. host: that's head out of the united states to jamaica. good morning. caller: good morning, sir. host: you are on with hillary mann leverett and mark dubowitz. go ahead. caller: i do agree with hillary . there are arguments coming from tehran about obliterating israel. can we therefore talk about your on, not on its liquor program, but israel, what they are saying about it. saying ok, we have -- negotiation with iran is the best thing to do. if it is going to take us to the end of june, we need to insistently push and push. negotiation is of the very best

thing to do. i am not sure what the gentleman is talking about. host: let's hear from mark dubowitz. do you want to talk about the role that israel plays and some of the concerns the caller brings up? guest: first of all, i admire hillary's passion. i appreciate it focuses on the substance than the personal attacks. if she knew nothing about my history, i am certainly not publicly advocating for war in iraq. i am absolutely committed to negotiations as the caller said. i think peaceful negotiation is the way to go. the issue of israel is an interesting one because hillary talked about the failure of the bush administration. it was a failure of intelligence . it was a failure of the intelligence community, not just the cia, but intelligence agencies from around the world. what i think that points to is that we have done a very bad job of being able to detect when a country builds nuclear weapons. we missed the soviet union china, israel, india, pakistan.

we actually underestimate how far along saddam's program was in the early 1990's and we overestimated how far along it was in 2003 and we missed north korea. the fact of the matter is, we have a very bad job of detecting when countries have covert nuclear weapons sneak out. that is an issue as we look at negotiations because what is very important in the negotiations is that this deal is a bet on inspection. of that on our ability to detect when iranians are engaging and nuclear facilities. as a former david drucker of the iaea said if iran was not , engaging in clandestine nuclear facilities today, it would be the first time in 20 years that they have not. this is a record of a government that is engaged in nuclear mendacity. the problem is, they have not had a strategic decision and they have not made a strategic shift to begin to pursue peaceful civilian nuclear energy and become responsible member under the npt. how do we stop a dedicated

regime that the supreme leader yells death to america and supports international terrorism in order to a compost that objective. how do we ensure that ali khamenei does not build a nuclear weapons? that is the challenge. host: let's go to cameron in louisville, kentucky. line for democrats. good morning. guest: good morning. how are you doing? host: good go ahead. . caller: i had a question. i will take my answer off the air. what do you think the impact of the netanyahu speech and of the letter written by -- written and signed by the 47 senators is going to have on the negotiations? also, do you think that act was a treasonous act?

host: do you want to take your thoughts first? guest: yes, i think it had to impacts and underscoring for the iranians in that the united states cannot be trusted. it is not about whether or not we can trust iran but if iran can trust the united states. it certainly raised a red flag, and i think underscores for the iranians the importance of lifting u.n. sanctions that that the american congress or the various republican presidential candidates have vowed to overturn any deals that they have not touch. they are trying to get an agreement that is based on international law, based on the nuclear nonproliferation treaty. that is what they are focused on and i think that continues. it spurred that concern for the iranians and the focus on getting guarantees. what i think it did here was take the obama administration in some ways off guard and put them in a position where it does not have an answer to many of mr.

dubowitz's claims about the nuclear agreement on the scientific basis fact of it or the technical details. it puts the obama administration in this position where they are talking about various little , details about nuclear talks about physics rather than on a strategic picture of how the united states itself for its own interest needs a deal with iran , that we are not doing them a favor. it is not because we are wary, but because the united states needs a deal. what netanyahu did was set the stage for all of his supporters in washington to argue that the united states is not doing this in a strategic interest. be our state is doing this with a radical muslim leader that we cannot trust and that may be president obama is a closet muslim. in the letter, it was specifically about how the agreement would be between president obama. you hear that with mr. dubowitz today.

and the agreement with ali khamenei, that any agreement would be between the two. that is a pernicious narrative that i would not attributed to mr. dubowitz personally, but it is something you see increasingly in the rhetoric and that mr. netanyahu spoke of in a speech. there is no different than any people between isis and the islamic republic. we should not be talking to these people anyway and that mr. riverwoods talks about in the nonproliferation treaty for is white people in holland and all the rest of the world. that is a pernicious narrative that iranians are trying to do that. host: a quick response for you. guest: hillary, i admire your passion, but let's stick to the substance. the fact of the matter is that in iran -- iran and the united states are very different countries, in case one has not noticed. the supreme leader of the iran is the absolute power in the country, a brutal totalitarian country.

the u.s. is a democracy, an imperfect one, that has the u.s. congress, executive branch, and we see a lot of disagreement. we should have an adult conversation of congress and executive branch about the deal. the fact of the matter is that you and your husband was the only people in washington in 2009 who were defending the fraudulent election of guest: it -- was not fraudulent. guest: the fact of the matter is -- there is absolutely no international consensus that that was a fraudulent election -- there is international consensus that that was that, in a and [indiscernible] you are the only person out there -- host: let's stick to the iranian negotiation's going on now. several callers wanting to chat with both of you. we start in maryland. republicans. good morning. caller: thank you for taking my call. i have a short statement and a question.

my statement is to ask your guests to look out from the mindset -- take off the american glasses. looking at the iranian system, you can notice that they are told that made sure since 1989 to consolidate the power and we can -- weaken any possible successors to be the next leader. keeping this in mind, do we know who are we striking the deal with and how can we ensure in the future that the iranian political system we are dealing with currently will not fall apart and a deal can survive and be maintained? guest: again, it is important to be negotiating on the basis of a nonproliferation treaty. it is not about trusting one particular figure or saying one system is good or bad. i joined with mr. dubowitz and his endorsement of our own

system. but for iranians as they see it, they are also pursuing a profound political experiment to build an islamic republic, which they see also as deeply flawed as mr. dubowitz talked about our democracy being flawed. they too see it as flawed and they are trying to perfect it along the way, to build it along the way. there are no guarantees, which is why it is so important to have an agreement based on a nuclear nonproliferation treaty. i come back to, again, the importance of the deal with china. no one could possibly say the -- of that chairman mao who presented over the cultural revolution who killed at least 3 million chinese was some sort of jeffersonian democrat with whom we could sit and have tea. the issue is about american strategic position which the sanction policy that mr. dubowitz has pursued has weakened the united states and threatened our leadership of the economic order and threatened our position in the middle east. this is a course of -- coercive

strategy that has gotten us into trouble over and over again and now threatens our global position as leader of the economic order. host: a few more callers in the last five or 10 minutes. kay is an illinois on the line for independents. caller: good morning. my question is, how do we trust the country that kidnapped a bunch of our people? it is obvious that we really can't trust people like this. host: mr. dubowitz, going back to the history of trust. guest: it is not just the history, it is now presents. the fact is that there is an american journalist in "the washington post" who has been denied repeated access to counsel or his family. there is an american marine sitting in the dungeons of iraq's prisons. an american preacher as well who was also sitting in iran's torture chambers. the fact of the matter is that this is not the united states of

america. this is a brutal iranian regime that again it murders its own people, tortures, rapes women, a regime that at the end of the day, not only can we not trust but a regime that in its very , nature and in a makeup, a regime we should be very careful of doing anything with. the notion of a strategic with -- rappochement with this regime should be handled carefully. i think obama administration, to its credit, is going in with eyes wide open and holding the nose on the deal. it understands at the leading state sponsorship of terrorism and abuser is not the united states. host: on twitter, question going back to the discussion of sanctions. how did the united states justify the sanctions to the iranian civilians? guest: sanctions are always going to have a disproportionate impact on the people. i'm originally from south africa and lived under apartheid.

i saw what sanctions did not to the white south africans, but to the lack south africans. despite that, the leaders of the anti-apartheid movement understood that sanctions were instruments that would be used to change the strategic packers of the apartheid government. they helped to do so. they were not a silver bullet, but still a shrapnel in convincing africaans that they could no longer maintain the system of apartheid in south africa. what the administration has done, and i give them credit they have taken these traits sanctions and made them much more targeted and focused on iran's financial sector and on the energy sector. the civilians have paid a price , but there is not mass starvation in iran. civilians are not dying by the hundreds of thousands and millions as hillary is saying. host: they are saying they're trying to target and have less radical damage. guest: there will obviously be

collateral damage. iran had hyperinflation significant recession, currency , has plummeted. it is seriously under pressure . now that pressure has been relieved and the economy is modestly growing right now. the average iranian wants a nuclear deal, a booming economy. the only question is ali khamenei. host: dan from new york, line for democrats. caller: mr. dubowitz forgets very conveniently that israel made possible the south african that supported the apartheid regime. for a number of years, we have been told that we should really tailor our foreign policy to what we are willing to pay. the amount of blood that we have wasted in the middle east calls for another policy other than guns waving and threatening other people. i really want to say how much i admire miss leverett for her courageous stand and i hope they are fighting side-by-side because they are really americans who are presenting as a reality that we need to know

so that we can accept the cause of whatever we do henceforth. host: mr. dubowitz, do you want to respond at all? guest: no, i admire hillary. she has taken a position that has made her an outlier in washington and that is a difficult place for her to be and her husband. it is because they supported macwhinnie gads election -- guest: there is no evidence of they were fraudulent. host: there was -- guest: there was clear evidence of it. everyone agrees. the fact of the matter is, hillary, you have taken a position -- hillary, hillary hillary. guest: the 1953 -- why is it important not to go where there is no evidence. in 1953, the cia was able to pay and use people to go out in the streets.

i don't know if this was true or not, but the concern was it could happen again. for me or anybody else in washington to say they have proof of fraud is a lie. after serving in the bush administration and seeing the lies they used to invade iraq, that is when i became an outlier. i resigned from the bush administration because i cannot support another lie being perpetrated on the american people, never mind the civilians in the middle east. host: let's see if we can get mike from kentucky. line for independents. caller: i was just wondering how are we keeping track of the build these bombs? how are they keeping an eye on them? also, two or three years ago the iranians hid one of the scientists away from us so we could not get to him and i think they have already killed two or three of them. if they can find out where he was at, i would think they would probably kill this guy. is this true or not? guest: hillary seems traumatized by her experience in the bush administration.

i have a lot of sympathy for her, as she has been lied to by her own government but she seems to be credulous on the lies of the iranian regime. the caller brings up a good point is -- and that is the iranian regime has been lying to the international committee, the iaea about its military nuclear program. that is evidence that pertains there are multiple lies -- let me finish. the fact of the matter is is that the iaea wants to speak to a guy who has been in charge of iran's military nuclear program for years. who has been responsible for the weaponization activities. until they come clean and a -- acknowledge that they had been engaged in these organization -- weaponization activities and until we can have a baseline of what they have done, we will have no idea of what this program will look like. that is a reality, and that is the evidence. hillary, you got to deal with evidence sometimes. guest: well, the question was

about iran scientists, which have been killed by the israelis. that is not the way we get iran to the table so that united states can have a deal our future based on. we need some reality on the ground. you can take all the scare mongering and the caricatures about the people muslims in iran but the reality is that is the , islamic republic of iran is a rising power just as the people's republic of china was. we need to come to terms in our own interests not to do them a favor. or not because we love the ayatollah commoner. host: hillary mann leverett, co-author of "going to tehran: why the united states must come -- except the islamic republic of iran." and mark dubowitz, executive director for the defense of democracy. -- defense democracy.org. thank you so much for your time. thank you, hillary. >> indiana governor mike tense says the state assembly needs to clarify a religious freedom law. he says it is not allowed

religious dissemination and it needs to say that. governor pence said incorrect media coverage cause much of the public criticism. here's part of what he said in his news briefing that wrapped up a short time ago. governor pence: clearly there has been misunderstanding and confusion and mischaracterization of this law. i come before you today to say how we are going to address that. we have been working, over the last several days literally around the clock. talking with people across the state of indiana. talking to business leaders and talking to organizations around the country who have sent -- spent time in indiana and enjoy the hospitality of the people of indiana. we have been listening. let me say first and foremost, as i said to each one of them. the religious freedom restoration act was about religious liberty, not about

discrimination. as i said last week, had this law been about legalizing discrimination, i would have vetoed it. this law does not give anyone a license to discriminate. the religious freedom restoration act in indiana does not give anyone the right to deny services to anyone in this state. it is simply a balancing test used by our federal courts and jurisdictions across the country for more than two decades. let me say on the subject of the bill in itself, i do not believe for a minute that it was the intention of the general assembly to create a license to discriminate or a right to deny services to gays, lesbians, or anyone else in this state. it certainly was not my intent. i can appreciate that that has become the perception, not just here in indiana, but all across

this country. we need to confront that. and confronted -- confront it boldly in a way that represents the interest of all involved. >> hear from the iris commissioner john k -- irs commissioner john koskinen. it is due to start at 1:00 p.m. eastern live here on c-span. then we hear from antony blinken at the brookings institution in washington at 3:30 eastern. candidates for the chicago mayoral candidates forum will speak. rahm emanuel will face off against jesus chuy garcia at 8:00 p.m. tonight.

the c-span cities tour has partnered with cox communications. >> woody good three was more than that. he was born in 19 note -- 1912 in okemah, oklahoma. we are proud to have his work back in oklahoma where we think he belongs. he was a advocate for those this in franchise. margaret workers from oklahoma, texas, and kansas during the dust bowl era who found themselves in california starving. we found the vast differences between those with the haves and the have-nots and became their spokesperson through music. woody recorded very few songs of his own. we have a listening station that has ordered six songs of -- with his own voice. that is what makes those recording so important.

♪ this land is your land ♪ ♪ this land is my land ♪ >> watch all of our events from tulsa on book tv and american history tv. now an interview with the founder of paypal. he has written a book called "021: notes on startups." it was from the washington ideas form hosted in aspen. it is about 20 minutes. [applause] >> thank you. thank you, peter, for joining us. we have a lot of ground to cover. let me put it to you directly. you have rows great controversy with your flame -- claim that the rate of innovation is slowing. how do you substantiate that? is is an assessment or and --

>> it is hard to measure how much technological progress we have as a society. there are so many different things that come under the rubric of science and technology. my claim is that over the last 40 years since the 1970's, we have continued to have fast progress in the world of business. internet that entire ensemble. we have had less progress in just about anything else. the everything -- everything else, supersonic aviation, underwater cities, desalination plants, the green revolution out the culture, that was in about a 1950's. these are not considered technology today. we have this narrow cone of progress. i think it is reflected in a

general sense of stagnation and our society. where median wages have not gone up much in the last 40 years. i think people in the tech industry and in the science industry are always pumping their companies their inventions, research. the venture capitalists are very guilty of this. you always have to discount a little of that. david: in your book and in your investing life, you are very disdainful of incremental progress. you urge people seek changes. let me push back on you. in the area of transportation, for example, you see technologies that are conceptually -- to those 100 years ago. trains, the motor car. they are the same, except that when you look at the costs, the cost of moving goods has dropped i over 90% in the past hundred

years. the chances of being killed in a car accident are 1/17 what they would have been in the 1920's. some of those -- karl marx said that out of print -- at a certain point that changes in quantity become changes in quality. can you explain why you think that is less important than the visionary things you talked about? peter: there are certainly many things that have a cumulative effect of being incredibly valuable. my approach, a how-to advice book for people who are going to found companies. if you want to start a successful company, you want to do something where you have a monopoly. what you're doing something no one else in the world is doing it. and there is a significant

difference in what you are doing and what everyone else is doing. software has been here christ by these fairly large breakthroughs, which is why people in software have made so much money. it is because the micro of software are monopoly-prone and lucrative. most of the inventors and scientists and technologists never made money. the wright brothers did not make money, tesla made no money in the 19th century. even the steam engine and the first industrial revolution, which represented tremendous progress with up to 10% efficiency gained every year from 1780 to 1850. even in 1850, most of the wealth in written was held by the landed air costa gave -- landed aristocracy.

if you want to start a successful business that makes a big difference, that is the sort of thing to do. you could come up with a new product in manufacturing, they will be superseded one half or two years later. everybody who started a -- there were two different kinds of notice at work. david: a wise financial had once told me there's all the difference in the world did clean a great investment and a great company. when you talk about these concerns of yours, you're talking about the point of view of the investors in these technologies not from the business or consumer's point of view. peter: certainly, if we build more breakthrough technology, it will also be valuable to six ivy -- society.

you could make a lot of progress through incremental innovation. i argue that most of that happened in the 19th and first half of the 20th century. it has been slower in the last 40 years. david: when you're really lamenting and the slowdown is the fading of what may be called big engineering schemes. super highways. you talk in your book about this project to turn the san francisco bay into a freshwater -- i was startled that was your point of view. what drove the heyday of big engineering was the heyday of state power. whether it was the new deal in the nine states or the soviet union, or was illini -- mussolini's italy, it was the power of the state that made this possible. i would've thought you would have endorsed saying that your big engineering project only exists because your overridden

property rights, because you have not done your cost accounting properly. if you actually had to pay every urban resident, you had to pay all the farmers and fishermen whose livelihoods were taken away by turning san francisco bay into a freshwater lake. you would see this whole project never made sense except from the point of view of a central governing state. peter: i am partial to robert moses. ever since jacobs won the battle in the 1960's, nothing new has been built in new york city. there is a tricky trade-off. we can distinguish three modes of innovation. incremental progress. we do that well. we have done less of it the last 40 years. breakthrough point technologies which we still do occasionally and are valuable. then there are things which are complex coronation of getting a lot of different pieces to work together in just the right way.

that is a form of progress we used to do that we do not anymore. part of it is the governance, things like the manhattan project or the apollo space program. a log of us had a more private sector feel. early 20th century america was dominated by these engineer schemer type people. people who had some complex plan to build a transcontinental railroad or a canal through panama. the ford motor company was a complex monopoly. there are interesting companies like that there are being done, but they are notable for their rarity. if you ask what tesla the electric car company, do that was new, it was not the they invented any single new thing, it was that they combined things together and just the right way to create a dramatically better

car. this is also part of what steve jobs did successfully when he repositioned apple from a home community -- home computer to a -- it was no single massive excerpt. there was no incremental improvement. it was not a point rate through. it was complex coordination. you look at the modality of progress that is underexplored. i am politically more libertarian, so i am skeptical of the government being able to do these things, but not in the absolute sense. our government did indeed -- could do it in the 1930's to 1950's in a way that it cannot do today. this is an important policy question we should inc. about. a letter from einstein to the white house would get lost in the mailroom today. in this sense we could not do apollo. whatever you think of the affordable care act, i maintain

that an internet website is the much a bully inferior and simpler technology than building a rocket to send someone to the moon. there has been a strange decline when you think about it. david: unlike many in silicon valley, you are conscious of the pattern of growth in the american economy has left many americans behind. there was a survey released this morning that reported 45% of americans say their personal finances have not recovered to where they were before the financial crisis. this preoccupies you. can you suggest one policy change that may make a difference for the up to 90% of americans who are not expensing the benefits of economic growth? peter: there are three separate debates in this quality debate.

one is it isn't happening and is it increasing. the answer to that is wrongly yes. there is a second question which is why is this happening, which is a very different question. almost all questions that start with why are hard to answer. i think the answer is that it is overdetermined and there are different factors leading to it and they needed -- they need to sort through it carefully. then, what do you do about it? if i had to answer the why question, i think we put too much blame on technology that displaces workers and not enough on the challenges of globalization. the competition from people in china and india has been a much greater source of pressure on the middle class than the replacement of them by computers. chinese and indians are much more like americans than computers. they are natural substitutes. computers are kabul mentor and

not really substitutes. we tend to scapegoat technology and downplay the challenges with globalization. i am in favor of globalization but i think that is where a lot of the challenges come from. in terms of what to do about it from a policy perspective, i think that is challenging. david: i said just you not solve the entire problem just answer one thing. [laughter] peter: the people who have stagnation are those who cannot get ahead. places like new york or silken valley, one of the main manifestations is the high cost of housing. if we could turn a affordable housing back into something that was real rather than just this weird bracket that people used to get zoning permits if you turn affordable housing back into a good thing, that would be good -- why has housing shifted from

something seen as a consumption good so therefore the cheaper it was the better, to something seen as an investment, where we are happy if housing prices go up and we are disturbed they go down? we should shift our respect on housing. see it as something you want to produce cheaply. be much less restrictive on zoning laws. david: something that you are now joining the fray and an intense way is your negative feelings on higher education. you do hold a distant worst legal degree -- a distinguished legal degree. i want to understand the nature of your critique. your complaint is that students armor -- are studying the wrong things or they are getting too little value for money? if the former, because you are skeptical of humanities degrees

do you believe we are blinded by paying to much attention to believe? there are 1.7 billion four-year degrees conferred in a typical year. the vast majority of them are not the liberal arts. the single biggest degree is this mess -- business. peter: my focus is on the elite universities. i think that is what sets the tone for so much that happens in our society. there is this problem where people are trapped in these places or some people go to the same short list of careers and end up in the same short list of careers. one of my friends wrote in my high school yearbook that they knew i would go to stanford. i want to stand for it for four years, went to stanford law, i

went to a law firm in new york. i left after seven months and three days. one of the people down the hall from me said i did not know it was possible to escape from alcatraz. the reality was you just had to walk out the door. people could not bring themselves to do that because people were so wrapped up in these competitions they have one -- won. higher education, it is not about learning, it is about a tournament. if you want to get fired the next way -- the next day, get a mob of students alumni, faculty, to run after you with pitchforks, the one thing you should propose as a leader of the university is to double the enrollments. why should harvard or yield not do so? they are not doubling enrollment because their model is not to educate, it is to be studio 54 with a large velvet rope and

probably a very long line of people and a tiny number of people who get in. that is zero-sum tournament german around exclusion. i do not think that is the right way for us to think about our future. it is not year or go to jail. we had to create more alternatives. [laughter] [applause] david: we only have a minute and a half, but i do not want to go past that so quickly. for many americans remains crew that that's true that a college degree leads to the middle class. we are talking about the broad middle who have not done well. one thing they can do that could make a difference completing the four-year degree for the 1.7 million people who do a year. that makes a huge difference. are you telling them do not. are you telling them do not study english? peter: i do not want to talk

about those people, because if they fall through the cracks, they are in trouble. that is why focus on elite colleges. it is much less risky for them to try other things. we do have questions on why isn't there is no safety net. why do you have to get these degrees to get ahead? i think you have all these questions about how much of this is correlated? does the degree give the advantage or is it the signaling or the selection? if you're able to get into a four-year college and completed it selects for more talented people and it signals to people that you're disciplined enough to plow through this. it does not mean you learned something. i think that the amount being spent on is disproportionate. about 40% of the people who start four year colleges do not finish them and still end up with a lot of student debt.

you probably are worse off if you star and do not finish than if you did not start in the first place. when i talk to people in their 50's and 60's, they always think i am crazy, because they want to college at a time that i give you did not leave with a lot of debt. people in their 20's still feel like they have to go to college. they have failure of the imagination as they cannot imagine doing anything else. it is not good to start life, your career, $100,000 in debt. the bankruptcy laws were written. you cannot get out of student debt. it attaches to you the rest of your life. you will have to use your social security checks to pay it off. david: we are out of time. peter thiel, thank you. [applause] >> the hill is reporting today a

change in stance from the indiana court -- governor in a religious law that has treated in international response. governor pence backed away from his support on a religious freedom law and asked the state legislature to medially change it to make sure did not discriminate against gays and lesbians. he insisted that this law was not to allow businesses to discriminate. this is part of his briefing. governor pence: after much reflection, and in consultation with the leadership of the general assembly, i have come to the conclusion that it would be helpful to move legislation this week that makes it clear that this law does not give businesses the right to the nice services to anyone. -- to denying services to anyone. i think it will be helpful and i

would like to see on my desk at the end of this week association -- legislation that is added to the religious freedom restoration act in indiana that makes it clear that this law does not give businesses to deny services to anyone. indiana is open for business. we want to make it clear. we want to make it clear that hoosier hospitality is not a slogan, it is our way of life. it is the reason why people come here from around the world and come back again and again. because hoosiers are the kindest, most generous decent people in the world. >> coming up at 8:00 eastern tonight, the candidates in chicago's mayor race will debate. we will have coverage. rahm emanuel faces his je opponentsus chuy garcia. they'll be at

we're live at the national press club. they are discussing what's in store for the national press -- the international -- the irs. >> i am president of the national press club. the club is the world's leading professional organization for journalists. we are committed to our profession through programs such as this. we work for free press worldwide. for more information, visit our website, press.org. to donate to programs offered by our institute, visit press. org/institute.

i would like to welcome our speaker and those attending the event. members of the public attend our lunches so applies you hear is not a surly evidence that journalistic objectivity is lacking. i would also like to welcome our c-span public radio audiences. you can follow the action on twitter. after our guests speech, we have a question-and-answer period. it's time to reduce our head table. i would like each version -- each person to stand as her name is announced. the senior association for kiplinger washington editors and treasurer of the national press club. senior business news editor for national public radio and a member of the board of governors. desk editor for the associate

press. rosemary marcus, director research analysis and statistics for the irs. and a guest of the speaker. enterprise editor for the economy team. wife of our speaker and guest of our speaker. [laughter] host: chair of the speakers committee, washington bureau chief in buffalo news, and former president of the national press club. freelance writer and the committee meeting member who arranged it is program. eric smith, an irs spokesman and guest of the speaker. mark camera, washington bureau chief for bank rate.com and former president of the national press club. kevin, editorial director of kiplinger washington editors.

a reporter with investment news and vice chair of the nbc publications committee. [applause] mr. hughes: welcome to tax season. americans have 16 days to get their federal returns filed, but for our speaker, every day is tax day. [laughter] mr. hughes: john koskinen oversees the collection of $3 trillion every year. he has been on the job for about 15 months. how is the gonzo far -- how has it gone so far? during the first half of his tenure he testified frequently on capitol hill. questions revolved around allegations of the irs targeted conservative groups to deny them tax-exempt status. when he wasn't testifying, he

was wrestling with budget cuts imposed by congress. they irs audited 0.57% of businesses in 2014. that was the lowest rate since 2005. money being used to enforce an important idea affordable care act has attributed to reduced staff on the telephone helpdesk. at one point koskinen said agency belt-tightening might result in a miserable season. koskinen is no stranger to challenges. it was the acting ceo. his very career has included stints as deputy director of the offices in management and budget , city ms. rader for washington, d.c. overseer of the federal

government's y2k efforts, and president of the u.s. soccer foundation. no amount of irs trouble is going to put koskinen in a bad mood this week. he is a super fan of the duke basketball team that is appearing in the ncaa final four this coming weekend. ladies and gentlemen, please welcome john koskinen . [laughter] [applause] commissioner koskinen: that was such a thorough introduction that that's my speech, i'm ready to stay questions. i appreciate the warm welcome i'm delighted to back your the national press club. i was intrigued as i was last year by the desserts. my desert is a cookie that seems

to be not quite the image i would like. if the dollar with wings flying away. -- it is a dollar with wings flying away. [laughter] commissioner koskinen: this one is a 1040. we are flexible, but you cannot finally returns on a cookie. -- file your returns on a cookie. there was some indication in a periodical that i had -- i was a super fan of duke and that i would no doubt regale you with stories of this year's final four. the way i did last year. to clear the record up, last year, i did note my affiliation with duke and apologized for the fact that we had ruined everybody's brackets by not quite making it at the final four and not making it be on the first game of. i thought that if i read your brackets, it was my fault. this year, if we ruined your brackets, you are going to get

no sympathy from me, because should have had us going at least this far. in any event, the irs commissioner isn't always the hottest ticket in town, because everyone knows the subject is going to be taxes. i really do want to thank the press club for allowing me to have this return engagement. i promise to stifle normally my impulse to remind everyone as a public service announcement that april 15 is just around the corner. although it is. i hope everyone is doing well with their taxes and i would remind you that the complexity of the tax code is not my fault. [laughter] commissioner koskinen: i am leaving the irs and i have been for 15 months. it is certainly an interesting time, to say the least. and it has let me to conclude that i'm going to pay more attention to the fine print of the contract. especially the part about hearings running into the night with no breaks. today on to share with use of

observations and some insights about the irs. the problems of the past, and how we have dealt with them, the challenges of the present, and our strategies for meeting them. and the possibilities for the future, and what we would like to be able to do for taxpayers. first i would like to talk a little bit about what i've have learned about the irs in the past 15 months. when people hear irs, they usually think of tax enforcement. a letter in the mail or a knock on the door. well we are the nation's tax collector, that is not the whole picture. besides enforcement, and other big part of our job is to help taxpayers fulfilled all tax obligations as quickly and easily as possible. when i arrived at the irs it surprise me to learn the more than one third of our employees work in taxpayer service. for example, we run one of the world's largest customer service phone operations. after seeing everything our employees do to keep the taxes are running in to help taxpayers, i'm no longer surprised by anything that they do. and to show you what i mean

courtesy of our excellent research division. the leader of that group rosemary marcus, has already been introduced you and is here today on the dais. she will be retiring shortly, and i want to thank her for more than three decades of wonderful public service at the irs, the bureau of economic analysis and the congressional budget office. consider some of these breathtaking numbers. this year, the irs has already processed more than 90 million tax returns from individual taxpayers. on the way to an expected total of 150 million. we have issued more than 70 million refunds to individual taxpayers so far. last year the refunds reprocessed topped $330 billion. put another way, that is more than the gdp of entire nations such as delay -- chile portugal,, and finland. given my finish ancestry, i give better press in finland that i

sometimes get here. -- i get that her press in finland then sometimes i get here. but that's another story. the average refund check issued was nearly $2900. that's real money going back into the economy. in a way you can blame the irs at this time of year for the annual surge in loud commercials selling furniture, flooring, and cars, all in pursuit of the biggest check many people will see all year. also this far in 2015, the irs is assisted more than 24 million tax papers who called -- taxpayers who called our hotline. helped more than 1.3 million people who visited our tax payment assistance centers around the country, and our website am irs.gov, continues to grow more popular with more than 230 million visits already this year. our electronic tracking tool -- where is my refund -- is more popular than ever with more than 170 million hits this year

already. but there's more. we routinely help people who are victimized by identity theft disputed tax liability, or face some form of hardship. in 2014, our appeals officers assisted more than 100,000 taxpayers while the taxpayer advocate service provided help to more than 200,000 taxpayers. our employees with special identity theft training work with victims to resolve more than 800,000 cases of tax related identity theft. and our tax collections continued as well. as noted, the economy improved in 2014, the irs collected a total of $3.1 trillion in federal revenues. that's $3.1 trillion, not billion dollars. we have been working hard to improve our operations, and one interesting figure that comes out of this is the cost of collecting this revenue. according to statistics gathered by the oecd, the irs spends less than half the amount to collect the dollar of revenue than the

tax of ministrations of germany france, england, canada, and australia. i could go on if there's any place that has numbers if the irs. we only have an hour, i won't. i hope this gives you a better idea of what the irs does your in and year out. i also want to mention the people behind these numbers. none of the work i just described could happen without the dedication, professionalism, and next matisse of our employees. my admiration for them continues to grow. i have never seen such a dedicated workforce in my entire career. this move filing season we are experiencing is a great testimonial to those employees. they've achieved an amazing degree of success when you consider the challenge of this filing season was to build into our system the backend of the affordable care at, the front end of the foreign tax compliance act, and the tax extenders passed in december. we often hear from people only

when things go wrong, so i think it would be help to remind you of something significant that is going right. a great example of the caliber of our workforce is also sitting up here with us. eric was introduced to you and has spent nearly four decades of the irs working with reporters helping them put the complexities of the tax code into plain english. he shows no signs of slowing down. his dedication to public services what you find with our employees in locations all across the country. i am pleased to be able to publicly thank eric for his years of dedicated service. i wanted to give you this picture of the irs today because i think it has been obscure is by the intense focus on the problems -- obscured by the intense focus on the problems of the past. you heard a lot about those problems. overspending, making a revised videos come and inappropriate scrutiny of applications from groups seeking social welfare status. the criticisms of these areas is absolutely deserved. but what gets lost is that these

mistakes occurred several years ago and we have taken concrete steps to address them. in the tax exempt area, we acted on all of the inspectors general's recommendations to fix the management problems they identified nearly two years ago. these problems should not have happened and we continue to work to make improvements to ensure that they never happen again. as for conferences, spending has been reduced by 80%. since 2000 10, when the conference took place that was the subject of all the scrutiny. not only that, but we require all conferences tossing above $20,000 to get prior approval from the irs commissioner. otherwise known as me. and for any expense over $50,000, planners have to get my approval and the approval of the treasury department. and for videos, many of the ones we are making these days are aimed at helping taxpayers. the irs channel on youtube has more than 100 videos with nearly 9 million views to date.

make no mistake, that we understand we will never compete with taylor swift, jimmy fallon, or funny animal videos, but our videos to help on very difficult tax topics. the subjects run the gamut from understanding how to claim various tax credits, to protecting yourself from identity theft and avoiding tax scams. what's more, the much criticized videos from years ago could not be made today. any irs division seeking to make a video must receive prior approval from an executive review board the agency created more than two years ago. not to miss anything, people may have listed to justify or budget, we no longer issue performance bonuses to employees who fail to pay their taxes. the tax compliance rate of irs employees is over 99%. we work to ensure that no former employee with a serious performance problem is rehired.

i would stress that again, while these problems were important and needed to be addressed, and deserve your attention, the remedies we have applied we think will keep them from happening again in the problems to come from a prior era. we have addressed them, so we think they want happen again and it really does make it a new day at the irs. it's not the irs of 2010, 2011 leaving 2012. i can't guarantee we want have any problems in the future, no one could, since we still have 87,000 employees who deal with 150 million individual taxpayers and administer the world's most collocated tax code. but i can assure you that our commitment is to find problems quickly, to fix them promptly and to be transparent in the process. so how are we doing that? in the past, problems were not found fast never corrected right away. we are building a culture within the irs that is focused on risk management and encourages the

flow of information from the front lines through the organization and encourages every employee to think of themselves as a risk manager responsible for reporting problems as soon as they see them. employees are beginning to believe that i mean it when i say the bad news is good news. we don't shoot the messenger, we reward him or her, and the only problem we can't fix is the problem we don't know about. in trying to build for the future, one of the challenges we face involves our workforce, which has changed genetically over the years. -- dramatically over the years. for years, we heard concerns about the brain drain confronting the federal workforce, as large numbers of workers had towards retirement. the irs has been dealing firsthand with that issue. the problem is aggravated by are steadily declining employee numbers, which in turn are driven by or budget cuts. the high water mark of the agency's workforce in terms of size was in 1992, since then we

have lost more than 30,000 full-time employees and we are at the lowest level since the early 1980's. the drop has been accelerating between 2010 in 2014, the irs lost over 13,000 employees. these are just positions in washington or one or two other cities. every state in the country now has fewer irs employees than they did a few years ago. meaning fewer people to help with taxpayer service and enforcement. we expect to lose, through attrition, another 3000 people or more by october 1 of this year. the resulting composition of the irs workforce also presents a challenge. the problem is simple -- given my age, i think i can diplomatic lycée our workforce is maturing in a rapid rate. as highly skilled employees retire, we need to replace them with the next generation of talented dedicated people. that is becoming harder and harder to do, in large part as a

result of the hiring freeze have been forced to maintain for the last several years to absorb the significant cuts budget since 2010. more than 70% of the budget is devoted to employee costs, so we had no choice but to constrain our hiring of new employees. as a result, a portion of our workforce over 50 years of age has been growing rapidly during the last several years. today, more than half of our employees are in that age group and we estimate that by next year more than 25% of the irs workforce will be eligible to retire. by 2019, that number will be over 40%. meanwhile, the number of irs employees under 30 years old has been steadily declining and is now less than 30% of our workforce. we have only about 1900 employees out of the 87,000 underage 30 and about half of them are only part-time. we have only 650 employees out of 87,000 who are 25 years old or younger.

essentially, the irs is facing its own version of the baby bust. the situation may seem extremely difficult -- makes it extremely difficult to develop the next generation of leaders. we estimate that 41% of our front-line managers and 61% of executives will be eligible to retire. with so many departures go knowledge and a cheese that we will find difficult or impossible to replace. especially if our severe underfunding continues. for anyone who questions whether he really is a new day at the irs, let me share another piece of information with you about our workforce. since october 2011, 101 irs executives, or 46% of them have left. some of our business divisions have experienced an even higher rate of turnover. a good example is our small business self-employed division, where about 80% of the current leadership team is new since the

end of 2010. the changes are so significant throughout the agency that you could hang a sign out at the front of the headquarters saying under new management. tax issues aren't simple, and neither are the core skills we need to run the irs. for our technical positions, it's not like hiring people for a fast food restaurant or grocery store. when we hire a tax auditor, it takes years for them to reach full productivity. it can take even longer for those auditing the largest most commented corporate cases that involve complex issues spanning industries and national boundaries. it's one of the reasons we decided, even in this legend environment, that we have to continue to train our employees to ensure they are prepared as possible to deal effectively with taxpayers and their questions and problems. the negative impact of the budget situation on our workforce are generally overlooked in our funding discussions, and yet these issues are critical for the future of the agency and one

that will only grow in importance in the months and years ahead. my term will end it before the true magnitude of this problem is visible to outsiders. it would be irresponsible to just slide along without beginning to address the situation. we have a number of initiatives underway to deal with a specific challenge. with regards to the loss of insights and experience when employees retire, we initiated an agencywide knowledge management program divined -- designed to capture the lessons learned along the way from employees at all levels of the association. the business international division is leading the way in this area, the human capital organization's core dating similar activities across the agency. in addition, the office of personnel management has approved a phased retirement program, designed to have a retiree spend time transferring their expertise to ongoing employees. we are still studying now had a pit that program -- how to fit

that in. with regards to the lack of younger employees, i've advised our senior leadership that this is the last year that we will deal with budget constraints by freezing or severely limiting new hires in the agency. we have interesting and exciting career opportunities to offer young people beginning their careers, and we need to encourage more of them to join the agency. in the days gone by, the irs had a reputation of being a great place to start your career because of everything you learned that made you attractive to accounting firms, businesses, and law firms. many of those who started with the irs and assumed they would move on after what sometimes was viewed as a postgraduate education discovered the challenge and satisfaction of the work here and stayed throughout their careers. we need to restore our reputation that regard. but i'm not here to talk just about the problems we face. we are also working to move the agency for with new ideas and new initiatives, especially new

ways of helping taxpayers. even with our budget constraints, many good things about happening at the agency recently that people may not be aware of and i would like to give you a couple of examples. what is our adoption less summer of a taxpayer bill of rights. we believe this is a cornerstone document that will provide clearer help for taxpayers. the taxpayer bill of rights consists of 10 fundamental rights that every taxpayer should be aware of, such as the right to receive quality service from the irs, the right to pay no more than the correct amount of tax, and the right to retain representation and what taxpayers a disagreement with the service. our employees believe in these rights and are doing their best to advise taxpayers about them and to support them in their day-to-day activities. given the complexity of the tax code, the majority of taxpayers these days seek professional help with their taxes. last year, more than half used a professional preparer. the irs has been taking steps to help taxpayers know where and

how to get the help they need and as part of that effort, we launched a new directory of tax return preparers on irs.gov earlier this year. for the first time, taxpayers could use this directory to find a tax professionals with credentials and qualifications in their local area. we're also trying new ways of doing business in the taxpayer assistance centers. we remain deeply concerned about helping people at these walk-in sites given our resource imitations. we are aware of taxpayers lining up outside some of our offices many hours before the open. you would think, in fact, we must be something -- selling something like the apple watch when you look at the lines. this is not a new story, just gotten worse than we are working to find a better approach for taxpayers. to help cut down the long lines, one approach we're trying is simple. let people make appointments in advance rather than wait in line for hours. he began doing this at 10

centers in february and recently added 34 more. if this works, we will consider expanding the approach to all of our taxpayer assistance centers next year. we already discovered one major events to this new system -- the irs employee setting the appointment time is often able to determine what the taxpayers problem or question is, and as a result, what information the taxpayer needs to bring with them to their appointment. this saves the taxpayer the aggravation of having to make a return trip later. the pilot program is a great example of a commonsense change that increases the level of customer service we can provide while minimizing pointless burdens on taxpayers. another good example of a new initiative is in the tax exam to area, where 15 months ago we had a backlog of applications from groups seeking status as private nonprofit organizations. those applications come in at the rate of 70,000 a year, and at one point, the backlog exceeded 60,000. this cap groups in limbo for months or years.

so our tax exempt organization group got to work trying to come up with ways of attacking the problem before got further out of hand. these efforts led to new processes and the development of a simpler application form for small groups, the 1023 easy. that form debuted last year, the result is that our inventory of applications is now current. as a huge compliment, and it changes -- a change that is helping all applicants including larger organizations. these are just a few of the new, innovative initiatives we have been working on to help taxpayers and approve tax at administration. all of these efforts are important, but we want to do still more. in the time remaining, i want to talk about the iris of the future, and some of the things we're looking at. i would like to talk more generally, just for a minute, about our current budget and technology challenges. by now, some of you, especially my newfound friends in the

press, have to wonder why i don't get tired of talking about the subject of our budget. the simple answer is the underfunding of the agency is the most critical challenge facing the irs today. as a serious ramifications of five years of budget cuts become increasingly visible, i don't want anyone to say that we didn't warn you in advance. so consider this your warning. in case you missed it, the irs budget for fiscal 2015 was set at 10 point $9 billion, which is $1.2 billion less than five years earlier. the irs is now the lowest level of funding since 2008. if you adjust for inflation, our budget is comparable to where we were in 1998, and despite that, we've taken on many new additional responsibilities like the aca, while the taxpayer base continues to grow by millions. as a result, we reach the point of having to make radical performance trade-offs. for enforcement, budget cut means we will close fewer audits

and collection cases. we estimate the reduced closures this year will translate into a loss for the government of at least $2 billion in revenue that otherwise would have been collected. it's a classic example of being penny wise and pound foolish. we are also seeing a noticeable negative impact on taxpayer service. this year we were forced to substantially reduce hiring of extra seasonal help we usually bring in during the filing season. as a result, the phone level of service is now below 40%. that means that six out of every 10 people who call can reach a customer service representative. this truly is an abysmal level of service. it's troubling to me that these cuts prevent us from cruelly -- from fully modernizing our support. it puts taxpayers -- it hurts taxpayers and the entire committee. we are operating with an antiquated system that is increasingly at risk as we continue to fall behind in upgrading both hardware and software.

despite more than a decade of upgrades in the agency's core business systems, we still have very old technology running alongside the more modern systems. we have many applications running when jfk was president. the only good thing you can say about them is that the code they use has been out of date for so long that it has the unintended effect of creating problems for any hackers who might try to figure out how the system actually works. but this ancient technology compromises the stability and reliability of our information systems and leave this open to more system failures and potential security breaches. while irs systems have held up well, it's a continuing area of major concern for us. in this era of daily headlines of major companies and institutions seeing security breaches. so there you have it. there is no doubt the irs has budget and i.t. challenges. the where does that leave us -- but where does that leave us?

providing additional funding -- would that solve these problems? the iris is to do more and take a different approach, when the doesn't just rely on funding. as i told our appropriations committee in the last few weeks the irs can't keep doing business in the old ways. if we get additional funding we're not going to build the irs back to where was in 2010. we need to be looking forward to a new improved way of doing business. the world is changing, taxpayers are changing, and so too must the irs. we need to look at the future in a more comprehensive way, and consider how we can take advantage of the latest technology to move the entire tax very -- taxpayer experience in a way that's more cost-effective. we are focused on how best to use our limited technology resources for the benefit of taxpayers. the goal is for taxpayers to

have a more complete online experience for all their transactions with the irs. the online experience should give everyone confidence in knowing they can take care of their tax obligations in a fast, secure, and consistent manner. the goal is not unrealistic. we are not trying to go to the moon. we are simply saying that people should expect the same level of service when dealing with the irs in the future as they has now -- as they have now with their banks, brokerages, and mortgage companies. the idea is that taxpayers would have an account of the irs where they and their preparers can login securely, get all the information about their account, and interact with the irs as needed. things taxpayers need to do fulfill their obligations could be done virtually and there would be much less need for in person help either by waiting in line at an irs assistant center, or calling the irs. improving service to taxpayers in this way can also help us on the compliance side of the nation.

we need to be faster and smarter with a more modern system, the irs could identify problems. while the meter is running on potential interest and penalties. the want to interact with taxpayers as soon as possible on these issues so they can be corrected without costly follow-up, contact, or labor intense issues. this could also help in other areas such as the ongoing battle over the use of stolen identities to file fraudulent tax returns. we must provide greater security in the future. we need to find more ways to protect taxpayers' private information. improving identity authentication is a major gold on forward. we have taken a number of steps in the identity theft area, the most recent occurred earlier this month and we held an unprecedented sitdown meeting with the leaders of the software and tax industry and state taxes ministers.

we agreed to build a cooperative effort of the past into a new way to leverage this public-private partnership to help battle identity theft. we agreed to form three working groups to come up with short-term solutions to help taxpayers in the next tax season and to work on longer-term efforts to protect the integrity of the nation's tax system. you could say that if i find it exciting to talk about the possibility of taxpayers being able to conduct all of their communications with the irs electronically i may need to find a way to put a little more balance in my life. but do look forward to talking more about the future vision of the irs in the months ahead. many of our efforts to improve taxpayer service will take years to fully implement. our progress will be affected by many factors, including changes in the tax law, the continuing evolution of refund fraud, the demographics of our aging workforce. and of course, how quickly we can do this will defend --

depend on future levels of funding. but we will continue to find some funds to support these efforts to build towards the future, even at the expense of other areas of operation. otherwise, if we just wage a guerrilla style fight every year to the continuing funding challenges, focusing only on the present, we will wake up in five years and be no further ahead than where we are today, and in fact, we will be five years farther behind. so it gives you an idea for the irs stance today, how we change from the past, and will want to go in the future. i took this job 15 months ago because i understand the critical role the irs plays in the lives of taxpayers in the collection of the revenues that fund the government. i know i speak for the thousands of professional, dedicated employees at the irs when i say that we are committed to continuing to do all we can to build for the future in the interest of serving the american taxpayer. i hope all of you filed your taxes now, and had a good experience.

for those of you have been filed yet, remember the clock is ticking. [laughter] commissioner koskinen: you have 16 days, which now means you have the benefit of three public service announces for the price of one. the irs serves all taxpayers and therefore we also include in that group procrastinators. if you can make the april 15 deadline, remember everyone can file for a six-month extension. thank you very much. [applause] mr. hughes: thank you mr. koskinen . if there are only sony people who can perform audits and resources for audits, how do you determine who gets audited? it would seem to people who own the most money would be the higher on the priority list, but that is not always the case. commissioner koskinen: for those of you not at the top of the food chain making a lot of

money, not rest comfortably that we are not coming after you as well. our audits serve an important function, which is to have taxpayers, as they pay their taxes, feel comfortable that everybody is paying their fair share. if you're trying to cut corners we are going to notice that, find it, and we will be unhappy about it. so we need to actually demonstrate our focus on taxpayers across the entire income spectrum. because tax repairs are very quick on their feet and they will notice if they have taxpayers in certain income brackets you don't get audited very often word all. that will simply encourage people to take risks that they otherwise shouldn't take. every year we review our exam plan to see how to make it most effective, obviously we do on a higher percentage of people at the top of the income stream and collect significant amounts of revenue from them, but i would stress that we always have and always will audit people across the entire spectrum. as i have said, even as the exam

process slows down, because of the funding constraints, the roulette wheel keeps turning and you don't want the white ball landing on your number, because we will be too happy about that. i would also say, there is been a question often raise about how we select within that exam and how we select returns for review. that process is basically automatic. it's done by computer filters to look a returns and identify those that seem to have issues or questions in them. no individual in the irs can cause any taxpayer to be audited or reviewed. there are at a minimum, takes a group of three to take a look at any particular issue, but the vast majority of audits and exams are determined by a set of computer programs that don't know who they are looking at. i think it's important for all taxpayers understand that even with the limitations, we will over -- we will do over one million audits. everyone should understand that when you hear from us by letter the first time, it's because of

something in your return. taxpayers need to be comfortable, they are all going to get treated fairly no matter who they are. what political party they belong to, no matter who they voted for the last election. if you hear from us, it's because of something in your return. if someone else has that issue in their return, they are likely to hear from us as well. mr. hughes: with these budget cuts, is it easier to treat -- twoo chat? commissioner koskinen: even the best of days, we might be honoring -- auditing 1.2%. on the high-end, 15% to 20%. those percentages would make you say it's only 98, 99 chances of a hundred that i won't be in the 2%. over time, as i said, it's all done by computers. to the extent you start taking

shortcuts that other people aren't taking, it's going to show up. we talked to a revenue agent once, who said we should and we do divide the world into those trying to be compliant and those trying to avoid their taxes. if you are trying to be compliant, even if you have trouble paying, we will work with you. your interest to help taxpayers. if you are try to dodge your obligation to pay her taxes, we will find you and will be happy about that. i think that's important for people to know as well. mr. hughes: as someone who is involved in implementing tax law and tax code, what would be the best thing that congress could do to improve the tax code? commissioner koskinen: i always preface my answer by saying tax policy is the domain of the treasury department, the administration, and the congress. we are involved in taxing administration. having said that, the best thing they could do would be simplify the tax code. it is beyond being impenetrable

i don't know how anybody understands all the ramifications of it. congressman can't, when he was chairman of the ways and means committee and took out his tax reform proposal last year said the irs code is longer than the bible with none of the good news. [laughter] commissioner koskinen: i told him i would give him credit for that for a year, and i'm stealing it for my own line. the burden on taxpayers individually and corporate by the tax code is -- it makes no sense. the best thing that congress could do and which we are happy to help on a technical basis the policy issues or theirs. but on a technical basis anything we could do to help simple five tax code, would be delighted to do. -- simplify the tax code, we would be delighted to do. mr. hughes: how likely is it that we will see comprehensive tax reform in the next five years, and along with that, someone is asking about your relationship with paul ryan, the

chairman of the house ways and means committee, and whether it you will be able to work with him in getting some tax reform done? commissioner koskinen: on a one to 10 scale over five years is people who are working on this in great detail, i would simply say that it's instructive if you look at both the house and the senate, at the number of individual congressmen and senators who have taken a position the tax reform is important, either for corporations or corporations and individuals as well, you would almost think there is a quorum if you would pull them all together for it. obviously, as people on the hill have said, if it doesn't get done this year, next to her will be difficult because it's a presidential election year. but over five years, i think the pressure is building from the public to do something about the complexity of the tax code, in particular, i have spent some

time internationally, i work with taxes ministers and commissioners around the world. on the international front progress is moving quickly to try to attack zero taxation by international companies. the result is going to be that this is the first platform for the exchange internationally have tax information focused on individuals. the next move will be to get to country by country reporting. as you move in that direction, the complexities of our corporate tax code will come back to create great problems for corporations in this country. i think the political pressure from individuals and corporations will build over the next five years. with regard to chairman ryan chairman of the ways and means committee, who has been a vigorous supporter of tax reform, i have had good discussions with him. we are actually working with the staff trying to provide the many support they need in this area. i think the tax policy issues

are going to be discussions between the administration and the congress. but in terms of the implementation and applications of any policy change, we already are having positive discussions and stand ready with both the house ways and means and the senate finance committee and chairman hatch who also has taken a strong stance in supporting tax implementation and tax reform. we stand ready to help them all. mr. hughes: you made reference to the issue of targeting groups in a 501(c)(3) area based on political beliefs. changes that have been put in place. do you really believe, from your position atop the agency, but that issue is totally in the past and what gives you confidence that this issue will creep up again -- won't creep up again? commissioner koskinen: the use of improper criteria to screen companies or organizations trying to get status. the reason i'm confident is that

first, we have taken all the recommendations thus far from the ig to provide better training and review, of the entire process. i do think it's important to understand that even the best controls don't self execute. it is important for every employee in the irs to feel, as i said, it's their responsibility and they are empowered to let us know when things are going the way they thought they should go, or the way they are supposed to go. but the way they predicted it would go. the only way any organization, but certainly a large organization, can effectively function and deal with problems that occur is if there is a free flow of information. i'm confident with the dedication and professionalism of our employees, that if anything looks like it's creating a problem or is about to, we will hear from them the next time around, and people understand it's important for that issue not to be raised just in the middle of the organization, it's important for everyone at the top, especially commissioner, to know about it.

i think there has been a rededication to the long-standing commitment of the irs, to be involved in taxing administration and not be involved in politics. the final recommendation of the inspector general is the fact and circumstances test used to sort through who is eligible to be a tax-exempt organization and not needs to be clarified. i've said from the start, we need a process that is clear fair to everyone, every organization that applies, and easy to administer. we're working on that as well. mr. hughes: there has been interest in the issue of using private e-mail accounts as government officials. have you ever discussed irs business on a private e-mail account or use of private e-mail server to store e-mails that a government records -- our government records. did you use anything to make

sure the people weren't using private e-mail for public discussion? commissioner koskinen: the long-standing irs policy is employees are not to do business on their private e-mail system. we monitor our systems regularly for security purposes, and i discovered early, very early in my career when i was preparing testimony and i wanted to work at home, i sent the testimony home to my home computers like it printed out and edit it, within a couple of days, i had a visitor from i.t. security noting that i had been sending a couple e-mails to my home computer. they assumed, correctly, i was trying to edit my testimony. they therefore give me a computer and a printer for home from the irs so that i would have my account available to me at home, because in fact, our strong policy is you can't do personal business on your personal e-mail account. back to the first part of the question, other than sending a

couple of people of draft testimony to my e-mail accounts, i have certainly never discussed irs business on my own personal account. i'm confident that we continue to enforce and remind people about that policy across the agency. we have 87,000 people, does that mean no one is doing it? i can't guarantee that. but i can guarantee we are keeping a close watch on it, and if someone is doing a comment with your from this in. -- they will hear from us soon. mr. hughes: several questions on cyber security and tax scams. a recent report reviewed i.t. security and found a significant deficiency in its financial reporting systems. how vulnerable are taxpayers because of the i.t. system, and if you could comment in general on how challenging it is to keep up with the scammers and that kind of activity as it seems to be on the increase. commissioner koskinen: the

report that's been ongoing is about our financial systems not individual taxpayer information. and that's not a security problems on much as we just -- we have accommodated financial system because we process all of these funds and activity. we are working to correct that weakness, but it isn't just our financial management side and it's really in the reporting of funds the flow of the irs. it is not connected with our day in and day out processing of taxpayer information. as i said in my talk, it's a high priority for us to not only protect taxpayer information to do whatever we can to increase and have the ability of those security systems to ensure us that there won't be any breaches of taxpayer information. clearly, identity theft and refund fraud are an ongoing challenge for us. we have thrown almost 2000 people in jail over the last two or three years as we have increased significantly our policing of this area.

we had a lot of the imagers off the street but we are clearly dealing with organized crime syndicates here and around the world. particularly, one of the stamps that has surprised me with its longevity was about a year ago we began to hear that there were people on the phone and calling people impersonating irs agents and threatening people if they didn't immediately give up their personal information or make a payment with jail, with criminal prosecutions, with seizures of their houses. we have tried to make it clear that as a general matter, as i've said for the last year, if you were surprised to be hearing from us, you are not hearing from us. our way of contacting you with my letter. if we ever talked to on the phone, the last thing you'll overhear hear from an irs agent of any kind is threats that we are about to throw you in jail unless you pay us immediately or put money into a particular account. the good news about that -- the inspector general collects all of those reports and i get a weekly report from the aig. the number of reported calls is

going up, the number of people who have fallen prey to this scam is down significantly. the ig has a record of over 400,000 reported scam phone calls. that's obviously not all of them, a lot of people don't call. it's part of our efforts whether it's youtube videos for information or tax tips to remind taxpayers of the way that people will try and take advantage of them. last year we put out the dirty dozen, of the tax scams. this year to try to get more visibility about that, they put them out one a week so we would get people focusing on not only the people calling you impersonating the irs, but fishing expeditions where you get an e-mail and it looks like an irs website to go up to the details you will see it's not from the irs. the people again reaching out to try and get information from you that will allow them to still your identity. there are unscrupulous tax preparers, we said if anyone

says just sign a blank form and i will take care of it, you should go find another tax we. it's an ongoing issue, this year our filters things to our expenditures of some of the constrained resources on approved data theft are catching more refunds at the door. more people are getting letters from us questioning their 1040 filing who didn't file yet. i told him the good news is that means we stopped the refund at the door, not paid the refund, and haven't contended your account without false information. we will continue, it's a major issue for us. we get millions of attacks on the system every year. thus far, knock on wood, we have been able to defend against those. it's one of my concerns about funding constraints, that we could become even more secure with more funding in those areas. but it is a high priority and we will continue to do whatever we have to do to secure taxpayer

information from any threats of breach or theft. mr. hughes: what has been the impact so far on the affordable care act? americans now either have to have insurance or pay a tax penalty, so has the administration and the tax penalty proven to be a burden so far? commissioner koskinen: the filing season has gone swimmingly. you could've made a lot of money betting last january 15 months ago that result. the ability to implement all of the new statutory requirements and changes and how the season run smoothly has surprised almost everybody. we are delighted with it. part of the reason is i think that about last year, 91% of people used software to fill in their returns. 85% of people filed electronically. we worked very hard for the last couple of years with software producers and tax preparers to make sure that those systems worked properly.

for the average taxpayer, the affordable care act is just another item in their questions that they get asked by the software. this year, 77% of people have just checked the box that said they had insurance. for the vast majority of people filing the affordable care act has been no problem whatsoever. this far as well, the people seeking exemptions, the people making the shared responsibility payments do not appear to have a problem with that. we monitor the questions that come in on our call centers, we monitor the sessions -- the questions on our walk-in sites to make sure we catch any questions that were not covered adequately in our website. generally with easy portion of it. we've not seen any indication that the information out there doesn't answer the bulk of the questions. we still get calls with people asking questions, but there are no gaps that we have found. the test of it is thus far, the system has worked flawlessly it

has gone smoothly, and everyone seems to be comfortable preparers and taxpayers, in preparing the returns. low income taxpayers can go to any one of our 12,000 sites staffed by over 80,000 trained volunteers. lester they prepared 3 million returns. it a lot of people use free file on her website. 3 million returns were prepared that way as well. there a lot of assistance available to taxpayers the matter with the complexity of their particular situation is. mr. hughes: we are almost out of time, but before i close, i would like to remind everyone about upcoming speakers. a best-selling author and outspoken critic of radical islam will address a luncheon next tuesday. ban ki-moon, secretary-general of the united nations, will speak on april 16. and navy secretary ray davis

will address the club on april 30. we might have time for a couple more questions come up the irs is considering including section 527 organizations in its upcoming guidance on 501(c) exempts. what formal with this guidance take -- what form with this guidance take? mr. hughes:commissioner koskinen: one of our goals is to treat everyone fairly. there are 501(c) threes which are the normal charitable organizations, 501(c) fours are organizations which of been the focus of most of the discussion. and you have c5's, and others. congress established 527 organizations to be organizations that basically can spend all of their money on politics. one of the things we have been doing is looking at how all of

those provisions of the 501(c) section of the code plus the 527 organizations fit together in terms of creating a pattern crated by congress to rationalize your choices to whether you want to be. we're not going to regulate five 27th any more than they already are regulated. the reference to it has been that you need to understand that that is a possible place an organization could decide to go or end up if it spent more than half of its money on politics and of being regulated. the goal here is to include the 527's in the review of all of the other exempt organizations not to provide a new set of regulations or constraints on the 527's themselves. mr. hughes: your final question -- will do when it's game this coming weekend -- will duke win

its game this coming weekend? commissioner koskinen: with any luck, we'll have two games. a group in kentucky, i've had mixed emotions about how to deal with kentucky in their success. they are the figures they are the favorite. -- they are the favorite. some people say they are so good but no one else is ever had just a 30% chance. it continues, apparently i'm told they're going to have an interesting set of games. wisconsin is a great team. the first game, duke and michigan state of had a series of games. at this stage, they are all great and they are all playing well. anyone predicting is probably to some extent rowing darts against the wall. i think if you step back, you have to say that kentucky still seems to be the favorite as they go forward. there are those of us who think the other boys in blue, known as duke will do well.

we will see. i tell my sun, it's why they play the games rather than letting you just mail in the results. [laughter] commissioner koskinen: thank you for your time. [applause] mr. hughes: thank you, mr. koskinen . i wanted to present you with the honorary national press club mug , i think it falls under the limit to need to disclose on tax forms, so you are good in that regard. commissioner koskinen: you can either get a gift you can eat or share with people were under $25. can't eat this, but i'm assuming is less than $25. [laughter] mr. hughes: thank you so much for coming. [captions copyright national cable satellite corp. 2015] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org] mr. hughes: i would like to thank the national press club staff are organizing today's event. if you look a copy of today's

program or to learn more about the national press club, go to our website, press.org. thank you, we're adjourned. >>