next six years by six companies in the price gap carrier arrangement. then we put in behind that a structure that says that those areas, they are not going to serve, we are going to auction off. we are going to put auctions back to work to say, ok, who wants to serve this area, and what will it cost to serve it? one of the things we are going through is -- we are going through both changing the existing models that people are used to working with, and the problem is as i said, that's something that affects companies, but also changing the overall construct and saying it's not just your father's u.s.f. program anymore. we want to look at bringing new people in. we want to look at having markets decide things by auction. that's what we are committed to doing. senator moran: if the industry could come up with a plan, is that a way it could be

considered within the f.c.c.? chairman wheeler: yes, sir. that's what we were saying when the three commissioner's offices got together with them and said, hey -- where you stand, depends where you sit, sir. we have to make sure everybody understands they are sitting in the same place. senator moran: : how long do you see a transition making? chairman wheeler: to? senator moran: to that broadband support. chairman wheeler: i hope we could have the plans in place this year. senator moran: let me ask about call completion. what progress is or isn't being made? chairman wheeler: there are three components to call completion. one is enforcement. we fined wind stream $2.5 million. level three almost $1 million. the second is that they had this

fraudulent activity going on where you would hear a ring even though the call wasn't being completed. we have passed a rule and commissioner pai and i again worked together on this to make that illegal and to be able to take enforcement actions against that. and then the third question becomes, ok, beyond that, how do we quantify what's going on? so we have a data inquiry out to the affected carriers right now saying, we want to know what happens about this, what happens about this, about this. that will help us define what any further steps need to be taken. senator moran: when can you share that report? chairman wheeler: i hope that's something that will be ton towards the end of this year. senator moran: busy year, mr. -- commissioner pai, i intended to ask you to respond to anything you wanted. my time -- with the chairman's indulgence, commissioner pai anything you'd like to respond to the questions i asked the chairman? commissioner pai: build on briefly to the chairman's answer with respect to the mechanism for supporting stand alone broadband. this is something we long had a

colloquy about. we have seen it for ourselves in kansas. the need is acute and we need to get this dofpblet i join the chairman in both my commitment to getting it done and commitment to finishing the project by the end of the year. this is part of the reason why i proposed -- support for stand alone broadband a couple years ago. these carriers are a hobson's choice, either they go it alone with stand alone broadband or they risk losing the customers. so i think we do -- i'm glad on a bipartisan basis we keyed up a lot of these issues, including how the mechanisms should be structured. in the proposed rule making last june. we had a number of other different proposals. we need to be clear. we don't need a second path for carriers. we don't need an elegant mathematical model. we don't need a follow-up to the which i am grateful to the chairman for scrapping. increasingly optimistic about we can adopt targeted reforms to our rules. in particular part 36 and part 54 accounting rules. that regulatory tweak, which we would have all the legal authority in the world to do, i believe could help some rate of

return carriers offer stand alone broadband without effectively being penalized for it. those green shoots hopefully will blossom over the next couple months. i stand ready to work with the chairman, our other colleagues and of course with you to make sure that the mechanism is something that works for rural america. senator moran: thank you very much. senator boozman: senator lankford. senator lankford: thank you both for being here. i want to follow up on the investigation of the program and potential now about $3 billion in lost revenue. where does that stand for tom -- where does that stand for the future? what is the process at this point for re-evaluating the program and how it's managed? as you alluded to before closing a loophole on this. what's the conversation right now? chairman wheeler: let's parse it into two parts. the first part commissioner pai spoke eloquently about the reality that happened in the ds

three auction. i can't find a lot to argue with in that. i think we are strongly of the belief that this was designed for designated entities. the -- how the rules were, in fact, administered, not administered, used, followed by the bidders, is an item that now is finally before us because yesterday was the day that opportunities to challenge those licenses closed. and we have like a dozen challenges to them. you may have noticed that the wireless bureau was slow in getting those out because we wanted to make sure that we understood everything there was in those. so that we would be able to respond in this kind of situation. we are now to the point where there are challenges to those licenses and we will respond accordingly. that's kind of what happened.

on the broader designated entity question, again, commissioner pai and i are in agreement. this program needs to be updated. i was around when it was created in 1993. it has the right kind of philosophy and it's a mandate from the congress that we need to make sure that there are opportunities created for small businesses. and the problem is that the world has changed a lot since then and our rules haven't. so what we did a few weeks ago i think probably a month ago now, was to put in a public notice. we wanted to make sure we got the record to support everything we do. we put out a public notice saying, here are the kind of issues that got raised, give us input on that. and it's our intention that we are going to have a rule making that will be in plenty of time

before the incentive auction so the people will know what the rules are there and change the structure of the designated entity rules to make sure that they meet the mandate of congress and to make sure that they don't run afoul of the kind of things that we have seen happening. senator lankford: thank you. anything else you want to add? commissioner pai: no. we are working in common purpose and i hope that some of the common sense changes teed up in the public notice will be adopted as fundamental reforms to this program. senator lankford: transition to the lifeline program. you-all have put some reforms in place over the last couple years. that program rapidly accelerated and then it's starting to be able to draw back some. it still has a distance to go. what are the major reforms still pending whether it be pending rule making or proposals or whether that be changes that are in operation that you would see? my state of oklahoma is one of the prime examples of that. i have already mentioned to you as well i'm willing to be able to work together to make sure that those individuals that rell

-- that are eligible for this receive it and those individuals , that are not do not. as we walkthrough the process. what is tom wheeler pending at -- what is pending at this point? chairman wheeler: we will bring out a reform of the lifeline program, notice of proposed rule making, in the next couple months. it will address the kinds of issues that you mentioned here and many others. there was just a report by the government accountability office in which they came out and said, you know, there's been great progress in helping to clean up this progress and move it forward, but there aren't enough specific management goals. you're not shooting to these specific targets and saying are you hitting them? we are going to be developing those. so that we can have a managementlike approach to lifeline. and as i say, we expect this to

start in the next couple months. senator lankford: is it your assumption they'll get a phone for free? chairman wheeler: that is specifically one of the questions that we are going to ask and we'll make the decision based on the record. langford going what is your assumption? what's the conversation happening in that? do you need to save that for the record? chairman wheeler: i have heard arguments on both sides. so what we are going to do is tee up in the nprm this specific discussion and try and tease out from everybody and have people debating the various topics so we can have the best record to make that decision on. senator lankford: there's also a conversation with a large native population in other states, that they were set up for individuals that were native american, but it seems to be the assumption was on tribal lands to try to expand that out into tribal members. it seems to be expanding well beyond what it is intended for.

in my state there are more individuals on lifeline than total tribal members in the state. that get the travel subsidy. there is a problem with that. i assume it's in other states as well. is that part of the rule making? chairman wheeler: one of the things i learned when i came to the commission that all of oklahoma was tribal lands. i didn't realize that myself. you pointed out to me the other day that tribal members carry an identification card that say i am a tribal member. the reality is that when -- multiple years ago during the bush administration when lifeline was expanded to nonfacilities based carriers that a whole series of things were triggered that we now have to address. and that clearly is one of the obvious things. i can assure you, sir, that will be in the nprm. senator lankford: let me do one last question on this, we need

to talk about some of the open internet conversations. i understand the issues that are flowing through this and the opinions out there. my question really circles around why not a legislative fix for this? why do a rule making? there are so many different exceptions that were built in to the areas to say these 30 different parts you don't apply to this. these 700 different rules you don't apply to this. there sems to be so many exceptions. it looks like a round peg in a square hole. when there was a congressional conversation about some of these same issues and resolve it, why do it through a rule making and adapt rather than wait on congress to respond to it? the second part is, is there any guess at this point in your budget, long term, the cost of litigation based on this as you're beginning to prepare for that? chairman wheeler: the -- thank you, senator. the legislation that is been proposed in both houses as you know. i read in the trades this morning that in this body senator thune and senator nelson are discussing how to come together on legislation that is

the prerogative of the congress. and we would certainly bough to whatever decision -- bow to whatever decision the congress makes. insofar as the budgetary impact, we don't sit down and say, well this is specifically what it's going to take to do this program or that program. with the possible exception of lifeline where we reduce it down and say we have 155 people dedicated to lifeline. we don't have that kind of thing with open internet. senator lankford: do you have any guess on litigation cost? when you dip into this you got to know there will be tremendous litigation. we looked at that as well. what's about to happen on costs of litigation? chairman wheeler: i don't have an estimate. senator lankford: more than $10 million? chairman wheeler: i don't have an estimate. it's a fixed cost. we are not going to go out and hire ted olson.

if that is what you're asking. it's a fixed cost that we have an appellate group inside the office of general counsel. and they are worrying about u.s.f. the next day and they are worrying about this the next day. senator lankford: thank you. senator boozman: chairman wheeler, the f.c.c. announced in march that 16 of the 24 enforcement bureau offices around the country tom -- around the country would be closed. what impact will these closings have on the f.c.c.'s ability to address interference concerns? chairman wheeler: thank you, mr. chairman. it will improve our abilities. one of the realities that we have is that the offices were placed there 20 years ago in an entirely different era when radio frequency interference was not an issue.

on average, less than 40% of their time is spent on r.f. interference issues. we ought to be spending more time on the challenges to the future economy, which is a wireless economy, rather than trying to figure out if the local broadcaster has painted his tower. and so what we are proposing is a structure that will put electrical engineers in a -- eight strategicically located offices so that they can then get out of those offices and deal with the issue which is never in the office, it's out there. and in addition, we then want to -- we get a lot of complabets -- complaints from the industry,

i tell you about some kind of r.f. problem and it falls into a black hole. back to senator coons' i.t. question. if we have the right kind of i.t. structure, i want to have a dashboard so you can say, let me look up who's responsible for this, where it is in the status, and what the outcome is. but we are not structured to that right now. we are structured a to an era when you used to go and inspect broadcasters' records which are used to be in files at their offices and now are online. where you used to worry about whether towers were lit and we got to ask the question, is that the broadcasters half -- br oadcasters'responsibility or

should we have 24 field offices out there doing that? we are trying to reallocate our resources to do weighter job. senator boozman: the resources you save then is going to go towards interference as opposed across other enforcement or just within the agency itself? chairman wheeler: we believe that we will be improving our interference. we believe we'll save about $9 million a year because -- senator boozman: that's going back into -- chairman wheeler: that goes into the general fund. it will be -- it will be used, obviously, for paying for what will be increased cost of travel and this sort of stuff. we want to have a coordinator at headquarters so that oversees -- we want to build the dashboard all of those will cost money. senator boozman: so you're not committing to putting it in interference for sure. it's going in the general fund. chairman wheeler: the focus of the field offices is going to be interference. senator boozman: commissioner pai, under the title 2 reclassification, if someone

files a complaint with the fcc that a internet service provider is charging unreasonable rates isn't the f.c.c. legally obligated to investigate the complaint and make a determination under section 201? commissioner pai: that would be the f.c.c.'s obligation, which is why ex-post rate regulation is on the table as a result of the net neutrality regulations. chairman wheeler: one last thing there, senator. i hope somebody files on that. i said this with commissioner pai and i have had this discussion before. i hope somebody files with this because if they do, i hope we will be able to, as a commission, take an action that makes it clear that ex-post rate regulation is not what we are after here. and that we will produce a decision that makes it clear that that's not what we are trying to do here. we are in strong agreement on

the effect, if not how to get there. senator boozman: mr. pie. -- pai. chairman, you due to respect to my chairman, the order says they won't get engaged in regulation that means tariffs and methodology. senator boozman: we are talking about consumer as well as internext rates. commissioner pai: exactly. as i read the open internet order, it explicitly permits ex-post rate regulation both of the consumer facing service as well as interconnection under section 201 of the communications action. -- act. senator boozman: chairman wheeler, you're not interested in interconnection rates. chairman wheeler: our goal is not to have red regulation. the 201-b interpretations some people have said this gives us some kind of ex post authority i , would like to be able to make it clear that it is not a rate regulation tool. senator boozman: either consumer or energy connection. chairman wheeler: that we need

it specifically for consumer regulation. as we look at interconnection, i think we need to make sure that we make decisions based on what the facts in the situation are. i'm not trying to dodge your question. i'm trying to say absent understanding what the facts are, i think we need to wait for that. senator boozman: i guess the question then is, would you have objection to congress prohibiting the f.c.c. from spending money on regulating rhett charges charged for the broadband internet access service, including those four interconnection? chairman wheeler: i think one of the things that's most interesting is that as i believe senator lankford pointed out, we forbore from a lot of sections in title 2. there has been a concern raised, ok, this commission will state

-- stay out of that, but what about the next commission? if congress wants to come along and say that's off the table for the next commissioner, too, i have no difficulty with that. senator boozman: thank you, mr. german. senator coons: thank you chairman boozman. thank you for a broad and vigorous conversation about a lot of different issues. i want to take us back to the access to broadband and making sure that we've got a rate program and u.s.f. that works. you announced sweeping reforms last year to the erik program to bring broadband and wifi to schools and libraries while modernizing the program while eliminating funding for lower priority programs. how will this provide funds to assure every child has the ability to access the internet or complete their homework at school or home? how will that lay out in reality? chairman wheeler: thank you, senator, for the question. literally we just closed the

funding period and there is about $3.9 billion in requests that came in. that we will be able to fund. and the exciting thing about what's happened this funding year is that because of some of the good work that john wilkins, our managing director did here he was able to identify a couple of billion dollars in u.s.f. funds that was literally just sitting there. and without any impact on ratepayers to be able to reprioritize those so that they could deliver wifi to the desk of the student. because it's one thing to connect the school, but getting it to the principal's office or computer lab isn't enough. it's got to be to the desk. we have always provided for that in the rules, but there was

never any money because it got sucked up by the first part. what's called category one. now there is the ability to do that. as a result of that, 20 million students are going to be connected at their desks that weren't before. that's a significant thing. the other thing that's really important as well, the connecting the schools, the worst situation for high speed connectivity was in rural america. now, that's no great surprise. but there were unique challenges that exist in rural america that we addressed in the new rules so that we could close the rural fiber gap to get the connection to the schools so it could go wifi to the desk. as i say, the first itgration -- iteration under the new rules has just happened. senator coons: i suspect something you'll find bipartisan agreement about is the need to continue for rural access.

many people don't think of delaware as a rural state. we have rural communities. i hear regularly in southern delaware about their concerns about broadband access by various schools, homes. in my former role as county executive i was responsible for a 911 call center and spent a lot of time on upgrading its response and the transition from a predominantly landline world to a cell phone world. i know you have been working hard on some investments to strengthen. commissioner pai, could you explain more about the recent f.c.c. rules on the topic and any other 911 improvements you think are necessary. chairman wheeler, the f.c.c. budget if i remember provides $850,000 for do not call registry. if you could explain what that would be used for. i would appreciate a few minutes. commissioner pai: thank you for the question, senator. i think our responsibilities are rarely cast into as sharp relief as when we are talking about

public safety. the f.c.c. has taken a number of steps to improve 911 functionality across the country. for instance, we recently found out the most fundamental aspect of a 911 call is, where is the person in need? and that was increasingly difficult in this world where people are calling from cell phones and it was difficult to figure out a location. thanks in part to our bipartisan efforts on that issue, i think we are moving forward with standards that hopefully will lace hasten the day when anyone calling from any kind of device will be able to be found very quickly. additionally, we are kicking off an initiative to study the architecture of our public safety answering points nationwide. unlike a lot of contry, we have over 6,000 of those apps right now. some big, some large. i visited the new york city peace effort. it is massive, rows and rows of

dedicated professionals. i visited some with just one or two people. they have to be there at all hours of the day. is there some way to rationalize that structure to make sure that we deliver public safety value while also being careful stewards of taxpayer funds? that's something the s.e.c. -- f.c.c. is shepherd a conversation about. the f.c.c. isn't just issuing man dates from on high, we are leading by example. i want to thank the chairman for our recent announcement that the f.c.c. beginning on june 1 now be allowing f.c.c. employees and the headquarters here in washington, d.c., to themselves directly access 911 where previously they would have to dial an access code such as 9. you might think an access code isn't a big deal, but in the press of an emergency that's not one of the things people think about. they just know the number 911. we'll be leading by examples that hopefully other federal agencies, other private sector entities will do the same.

senator coons: can i pile on there and give credit where credit is due on that last item thasm was entirely because commissioner pai brought this issue to us and championed this issue. he's also done and outstanding job working with hotels around the country to get them to voluntarily do the same thing. commissioner pai: very grateful for the chairman for the kind words. if they decide to move the f.c.c. to wichita i will support him in that endeavor. i thought i would push the envelope. planes, trains and automobiles , go there. chairman wheeler: not cost-effective. senator coons: the do not call registry -- chairman wheeler: so there -- we need to create get row bow calls. that's what the issue is. it wastes the time of these people that commissioner pai was talking about. we need a registry for that. the difficulty we are facing is

congress said create this registry and it's a terrific idea, but we are asking you for the money to fund it. senator coons: one last question if i might. about positive train control. complex and difficult public safety investment improvement. could you give us an update on progress towards the deadline and what the f.c.c. can or should be doing to help expedite the process so that it's possible to meet the deadline for a number of infrastructure investments and processes that need to be done? chairman wheeler: there are two parts to positive train control, one is spectrum, the other is the placement of the antennas that will control that spectrum. we have been opening up spectrum transferring -- for instance, for commuter lines, we recently eased their power restrictions so they can push out more power over the same spectrum. for amtrak, we have new spectrum

in the northeast corridor. and we did some spectrum license transfers last week. that's kind of the spectrum side. then there is the process that is required for us to carry out under the e.p.a. and historical protection act that we create a structure for native american communities to be able to review the placement of the poles that hold the antennas. and when i walked in there was a huge problem that it was not structured in a way that could handle the terrific input that was coming from the railroads. i'm happy to say that thanks to the cooperation and working hard with tribal leaders, we now have in place a process that will handle 2,800 requests every two weeks. and it is, frankly, a process that the railroads have not been able to fill, we are about 27% capacity right now.

which is good news. i'd rather have excess capacity than struggling. not casting aspersions here. i think we are making some real serious progress on p.t.c. senator coons: thank you. senator moran: thank you very much. first of all i want to thank the commission. i mentioned in a hearing the last time we were together which i think was in e-rate case pending since 2011. within a week of that hearing the case was settled and the kansas board of regents appreciate -- chairman wheeler: isn't it amazing those kind of things happen. senator moran: let me turn to a letter that i and 28 of my colleagues recently worked on, including senator coons, related to mexican border spectrum issues. there is significant public well-being at stake here along that border.

the effort here is to implement a 2012 agreement that the mexican government entered into. my question is, does your budget reflect the necessary resources? and do you have necessary expertise critical to address this issue. chairman wheeler: thank you, sir. i think the answer is yes. i think i got some good news on that. we are as you know in ongoing negotiations with the mexican government. and i believe that we are now to a point where we have reached a structure where there can be rolling approvals, if you will. so we bring forward and say, here are a group of licenses we have to worry about. and they deal with those. we can deal with them on that kind of a basis rather than just dropping a whole load of hypotheticals on the table and say deal with that. our international bureau has been doing a great job on this.

and i think that we have crested the hill, sir. senator more yan: the new standard is if i raise a topic it's resolved within a week? chairman wheeler: well, sir -- senator moran: let me turn to money. -- the diversion of money. the president budget requested a diversion $20 million directly from the universal service fund for the purpose of identifying improve payments of waste, fraud, and abuse. i consider those dollars within the universal service fund pretty scarce and important and based upon what i know about the inspector general's report. in 2008, this is just an example, the i.g. predicted to congress they would find $608 million in potential improper payments. as i understand it the number after this onerous audit was a mere $79,000. my question is, what evidence -- what my questions are, what does the f.c.c. have to indicate that regulators would find $25 million of waste,

fraud, and abuse. in other words to allocate the money you would think you would get a greater return from the money spent. secondly, wouldn't it be bettory -- better to take those dollars from the general operation budget than take them out of the universal service fund? chairman wheeler: thank you, sir. you just gave me an identity -- an idea. i frankly hadn't thought about comparing ins and outs. i know within the last six weeks we fined at&t over $10 million on a lifeline fraud. i can virtually guarantee, but i will submit for the record the specific ability to recapture those funds. the point that i was trying to make earlier, senator, is that we have 155 people working on universal service. it's about 10% of our employees. and we are in a situation where we are cutting employees.

how do we hold universal service management, enforcement, and appeals harmless from budget cuts? i think the model was established by the congress when you said to us, the point you just made, about inspector general, we want inspector general's activities on waste, fraud, and abuse to be paid for not by the f.c.c. but by the universal service fund. the database that we had to build to go after that waste fraud, and abuse was paid for out of the universal service fund, as it should be. it's the same kind of concept where the cost of managing the auction is paid for out of the auction proceeds.

and i just think it is good business to associate expense with revenue. i also think it is good equity for the ratepayers. you were asking me previously about how we were setting the rates. we ought to establish that there is -- this is the benefits that you get and this is what you pay. but not load in the costs for somebody else into what a broadcaster has to pay, for instance. and so -- what's really important to mention here is that those 155 people, that $25 million, we got to pay that one way or another. it's not going to go away. so what i'm suggesting is that there should be a dollar for dollar reduction in the general fees charged by the agentcy. -- agency, so that we can assure that universal service is protected from any f.t.e. reductions or any of the other

things, and is paid for out of the funds generated by it. yes, sir, i can virtually guarantee that i'll bring you years of history that it's always been paid for by enforcement. senator moran: let me make one final point then turn to commissioner pai for any response. i have asked you, i think i submitted in writing, i.t.t. infrastructure questions at our commerce hearing in march. i'll resubmit those today and look forward -- commissioner pai. commissioner pai: sorry, -- senator more yan: anything in particular on the $25 million? commissioner pai: thank you for the question. my concern is twofold. first, we should think about what the universal service fund is. this is basically a tax on consumers, any consumeer with a phone bill pays into the universal service fund. by definition if you exstract $25 million from that fund, the consumer will have to make up that gap eventually.

to accommodate this $25 million transfer or any further transfers in future years, if this were to be approved, the tax on consumers would have to go up to cover that gap. secondly, on how the money will be spent, i agree enforcement of the rules regarding universal service fund are essential. i have been -- since i started the f.c.c., i have been talking about the need for more effective enforcement of our life line rules. making sure people don't take advantage of the system. but we need to reprioritize in my view, the sec's -- fcc's operations in washington to streamline our operations, make ourselves more efficient, to free up funds to go after that enforcement rather than diverting it from the universal service. my concern is this is essentially the camel's nose under the tent. i would prefer that we keep the two activities separate for the sake of the consumers. senator more yan: thank you very

much. thank you very much. senator boozman: senator coons. senator coons: thank you for your service and testimony today and the businesslike way you approach both the solutions to the challenges in front of you and working together. thank you. senator boozman: thank you senator coons. and thank you-all for being here. we had a good hearing. i think we really do have -- we've got some profound disagreements, yet we really do have some areas we all agree on. one thing as i go out and about throughout the state, i know it's true of my colleagues, in the old days when you talked about infrastructure, you talked about roads and bridges and water. now electricity. now, infrastructure, what you're doing with broadband connectivity, is so very, very important. i think that we are all agreeing that this needs to get done. and certainly we are looking for ways to help you get it done. so again, that's so important. not only for rural america which we are concerned about but also we are also very, very

concerned about urban america, the whole thing. we appreciate you being here. if there are no further questions -- other thing before i go on, i want to thank you but i also want to thank your staffs. i know you worked really hard in getting you all prepared. chairman wheeler: you want to thank your staffs, sir. senator boozman: exactly. our staffs have also. we do appreciate them. if there are no further questions, the hearing record will remain opened until next tuesday, may 19, at noon for subcommittee members to submit any statements or questions to the witnesses for the record. subcommittee hearing is hereby adjourned. [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]

[indiscernible] >> the house foreign affairs committee will look at isis attacks on ridges -- religious and ethnic minorities in the

middle east. see the hearing as it gets underway live at 10:00 eastern. live at 2:00 officials will be fear -- appear before the homeland security committee. >> here are a few of the book festivals we will be covering this spring on book tv. we will visit maryland for live coverage of the gaithersburg book festival. we will go to bookexpo america. we will be live for the "chicago tribune" printers row lit fest.

>> coming up on c-span, president obama addresses the partisan divide on poverty in america. then, "washington journal" is live. later, the house returns live to begin work on a bill authorizing defense programs. >> next, president obama speaks about poverty in america and how democrats and republicans can unite to support the poor. he joins a panel. it is part of the georgetown university's catholic evangelical summit. this is an hour and 15 minutes. [applause] >> it is an honor to be here with my two residents -- presidents. my friend david brooks curled the most vicious insult at me when he said, i was the only

person he ever met whose eyes lit up at the words held discussion. it is a real honor to be with you. poverty is a subject we talk about when events such as those in baltimore grab our attention. and then we bury it. we say it is not politically shrewd to talk about it. i salute georgetown. all the others who are gathered here for the summit. from all religious traditions all over the country. a friend jim wallace once said, if you cut everything jesus said about the poor out of the gospel, you have a book full of holes.

these are people who understand what the scriptures said. two organizing points. the first is, when it is time to go, please keep your seats so the president can be escorted out. the other is we agreed we should direct more attention to president obama than other members of the panel. [laughter] i say that in advance so you know this was our call and not some exercise in executive power. [laughter] this was our decision to do this. [applause] we hope this will be a back-and-forth kind of discussion. feel free to interrupt the president if you feel like it. [laughter] my first question, mr. president. the obvious. a friend of mine said, when do presidents do panels?

what came to mind was the late admiral stockdale. who am i come a why am i here? -- who am i, why am i here? [laughter] this is an unusual venue for a president to put himself in. where do you hope the discussion will lead beyond today? and i was struck with something you said last week. politicians talk about poverty and then gut policies that you alleviate policy. -- alleviate poverty. and reverse any quality. how do you want us to come out of here? president obama: i want to thank the groups who are hosting this. and this terrific panel. i think that we are at a moment in part because of what has happened in baltimore and ferguson and other places. in part because of a growing

awareness of inequality in our society. where it may be possible not only to refocus attention but also to bridge some of the gaps. the ideological divides that have prevented us from making progress. there are a lot of folks here who i have worked with. they disagree with me on some issues. but they have great sincerity when it comes to wanting to deal with helping the least of these. and so this is a wonderful occasion for us to join together. part of the reason i thought

this venue would be useful, and i wanted to have a dialogue with bob and arthur, is that we have been stuck, i think for a long time, in a debate that creates a couple of straw men. the stereotype is that those on the left that want to pour more money into social programs and don't care anything about culture or parenting or family structures, and that's one stereotype. and then you have coldhearted free market capitalist types who are reading ayn rand -- [laughter] you know, think everybody is moochers, and that's -- and i think the truth is more complicated. and i think there are those on the conservative spectrum who deeply care about the least of these. deeply care about the poor. exhibit that through their churches, through community groups, through philanthropic efforts, but are suspicious of what government can do.

and then there are those on the left who i think are in the trenches every day and see how important parenting is and how important family structures are and the connective tissue that holds communities together and recognize that contributes to poverty, when those structures fray, but also believe that government and resources can make a difference in creating an environment in which young people can succeed despite great odds. and it seems to me that if coming out of this conversation, we can have a both and conversation, rather than either/or conversation, then we'll be making some progress. and the last point i guess i want to make is i also want to emphasize, we can do something about these issues.

i think it's a mistake for us to suggest somehow every effort we make has failed and we are powerless to address poverty. that's just not true. first of all, just in absolute terms. the poverty rate when you take into account tax and transfer programs has been reduced 40% since 1967. now, that does not lessen our concern about communities where poverty remains chronic. it does suggest, though, that we have been able to lessen poverty when we decide we want to do something about it. in every low-income community around the country, there are programs that work to provide ladders of opportunity to young people. we just haven't figured out how

to scale them up. so one of the things i'm always concerned about is cynicism. my chief of staff, we take walks around the south lawn, usually when the weather is good. and a lot of it is policy talk. sometimes it's just talk about values. and one of our favorite sayings is our job is to guard against cynicism, particularly in this town. and i think it's important for us to guard against cynicism and not buy the idea that the poor will always be with us and there's nothing we can do, because there's a lot we can do. the question is, do we have the political will, the communal will to do something about it? >> thank you, mr. president. i feel as a journalist, maybe i'm the one representative of cynicism up here. [laughter]

so i'll try to do my job. i want to go through the panel and come back to you, mr. president. i want to invite bob, and i'm going to encourage us to reach for solutions. before we get there, i think it's important to say in your book, bob, it's above all a moral call on the country to think about all the kids on the country who have been left out as our kids in some deep way. you make a point that the the better off and the poor, now so far apart that the fortunate don't even see the lives of the unlucky and the left behind. you wrote before i began this research i was like that. and following on what the president said, you insist the decline in mobility, the blocking of the american dream for so many is a purple problem. and i may have questions later on that. but i would like for you to lay out the red and blue components. and also how do we breakthrough a politics in which food stamp recipients are cast as

privileged or the poor demonized? but i would like you to lay out sort of a moral call of your book. >> thanks, and thanks to the president and arthur for joining me in this conversation. in this domain, there is good news and bad news. it is important to begin with the bad news. it we have to know where we are. the president is right, the war on poverty did make a real difference. it made more of a difference for people my age than kids. with respect to kids, i agree we about some things that would work. some things that would make a real difference. what the book that you referred to, what it resented was a lot of evidence of growing gaps between rich kids and grow it -- poor kids. things have gotten better and better for kids from well-off homes. and worse for kids from less

well off homes. i don't mean bill gates and some homeless person. i mean people from college educated. and high school educated, they are not. and it's not just that there's a class gap. the class gap on our watch. i don't just mean on the president's watch, but on my generation's watch, that gap is growing. you can see it in measures of family stability. you can see it in measures of the investments that parents are able to make in their kids, the investments of money and the the can see it in the quality of schools kids go to and see it in the character of the social and community support that kids -- rich kids and poor kids are getting from their communities. church attendance is a good example of that. churches are important source of social support for kids outside their own family, but church attendance is down much more rapidly among kids coming from impoverished backgrounds.

so i think what all of that evidence suggests is that we do face, i think a serious crisis in which increasingly the most important decision that anybody makes is choosing their parents. and if you -- like my grandchildren, did it smartly, the best decision was to choose college educated parents and great grandparents. [laughter] but out there there are kids just as talented and hard working and who you know, happen to choose parents who weren't well educated or high income and those kids' fate is being determined by things they had no control over. that's fundamentally unfair and also by the way bad for our economy because when we have this large number of kids growing up in poverty, it's not like that's going to make things better for my grandchildren, it's going to make things worse. this is in principle a solution that we ought to find solutions

to and historically, this is the kind of problem americans have faced before and solved and this is the basis for my optimism. there have been previous periods in american history where we've had a great gap between children and we have ignored in which i'm thinking of the guilded age at the end of the 19th century and both have written about that period in which there was a great gap between rich and poor and we were ignoring lots of kids and lots of immigrant kids and america seemed to be going to hell in a hand basket and a philosophy that said it's better if everybody is selfish. not unlike some of the ideology of ayn rand you referred to but that period was quickly -- not quickly but overcome by a real awakening of the conscious of america, across party lines with the important contribution of religious leaders and religious people to the fact that these

are all our kids and now is not the time to rehearse all of the lessons of that earlier period but i think it does actually give me grounds for hope. this is a kind of problem we could solve, as long as we all recognize that it is in everybody's interest to raise up the poor kids and not leave them in the dust. >> thank you very much. let the record show the president was not looking at arthur when he referred to coldhearted capitalists. [laughter] >> when the president said that, i was just thinking -- please don't look at me, please don't look at me. [laughter] >> when bob said this about the social darwinism, he pointed at me. [laughter] i am more outnumbered than my thanksgiving table in seattle. >> you just have to look into

your heart, arthur. [laughter] >> that is kind of what i want to ask you to do. your views on these subjects of actually changed. it is one of the reasons you want to join us today. in 2010, you talked about makers and takers and the culture of redistribution. in 2014, you wrote a very important article. you said, we have to declare peace on the safety net. i think that is a really important thing to say. as the president suggested, the safety net we had has cut poverty substantially. 20 questions. could you talk about how and why your own views have changed? in the spirit of nonpartisanship , in that spirit, where can

republicans cooperate with democrats, conservatives with liberals on issues like making the earned income tax credit permanent or expanding the child tax credit? where can we find not just a verbal common ground, but actual common ground to get things done for the least among us? >> thank you. thank you, mr. president. it is such an important exercise to bring catholics and evangelicals together and have a discussion. i talked publicly about issues and start a conversation with my colleagues in a way that i hope we can stimulate the conversation. we have a long-standing history of work on the nature of american capitalism. we are focused very deeply on poverty. it sends a signal to a lot of people -- my colleague is here and he came to aei because

poverty is the most important thing to hear. the reason i came into the free enterprise movement is because poverty is the thing i care about most. in point of fact, 2 billion people have been lifted up out of poverty because ideas revolving free enterprise and free trade -- the ideas of sharing through property rights and all the things the president is talking about in policy debates right now, that is why i am in this particular movement but we have gotten into a partisan moment where we substitute a moral consensus about how we serve the least of these, our brothers and sisters, we pretend that that is impossible and we blow up policy differences until they become a whole new war. it is completely unnecessary. it has got to stop. [applause] we can stop that, absolutely with a couple of key principles.

how are we, on the center-right talking about poverty in the most effective way? number one is with a conceptual matter. we have a great tendency on the left and the right to talk about poor people as the other. remember in matthew 25, these are our brothers and sisters. we go to campuses -- everybody wants to set up something right or left of base. it turns out we both have a commitment to the teachings of the savior when it comes to treating the least of these, our brothers and sisters. when you talk about people as your brothers and sisters, you don't talk about them as liabilities to manage. they are assets to develop. everyone of us made in god's image is an asset to develop. that is a completely different approach to poverty alleviation. that is a human capital approach. we can stimulate the

conversation on the political right, just as it can be on the political left. one concept that rides along with that is to point out -- this is what i do too many of my friends on capitol on public assistance, does not mean they want to be on public assistance. that is the difference between people who are making a living and who are accepting public assistance. that is an important matter to remember about the motivations of people and humanizing them. then the question is how can we come together? i have written it is time to declare peace on the safety net and i say that as a political conservative. because ronald reagan said that. friedrich hayek said that. it is not a radical position. the social safety net is one of the greatest achievement of free enterprise that we could have the wealth of a society and help take care of people who are poor. it has never happened before.

we should be proud of that. when i talked to conservative policymakers, i say how should you is doing with yourself from the traditional positions in a marketplace of ideas from progressives? you should talk about the fact that the safety net shouldn't be limited to those truly indigent. the third part is, health should come -- help should come with the dignifying power of work to the extent we can. with these three ideas declaring a safety net, safety net only for the indigent, and always with work, then we can have an interesting moral consensus and will see competition of ideas and make progress. e.j. dionne: i'm hoping people will challenge each other with what that means in terms of policy and i want to invite the president to do that.

i will ask you to go in a couple directions at once. one is, i am hoping you can enlist arthur as your lobbyist in this. one kind of question i want to ask is, john boehner and mitch mcconnell were watching this and suddenly had a conversion and a lot of religious people in the audience -- president obama: they are not watching this. hypothetically. e.j. dionne: it is a religious audience -- they believe in miracles. they were persuaded that it is time we do something about the poor. tell us a few things that will pass. when you think about -- we can talk abstractly about the family on this side and what government can do, what do you think would make a difference? that is one question i intended to ask and maybe you could put that in the context of bob's mention of the gilded age.

i was taken by that. help me. president obama: a couple of years ago. e.j. dionne: it did put this conversation in context where we seem to be having the problems we had back then. what would you tell congress please help me on this -- and how do we move out of this gilded age feeling? president obama: let me tease out a couple things what bob and arthur said and challenge them. they may want to respond. let me talk about big picture and then we can talk about specifics. first of all, i think we can stipulate that the best anti-poverty program is a job which brings income, structure,

dignity and a sense of community. we have to spend time thinking about the macroeconomy, the broader economy. what has happened is since 1973, over the last 40 years the share of income going to the bottom 90% has struck from about 65% to 53% -- has shrunk. a big transfer. we cannot have a conversation about poverty without talking about what has happened to the middle class and the latter's of opportunity into the middle class. when i read bob's book, the first thing that strikes you is, when he's growing up in ohio, he is in a community where the becker desk anchor -- banker,

living in proximity to the gender at the school, the gender's daughters -- janitor's daughters may be going out with the bankers son. they may attend the same church, the a member of the same rotary club. they maybe active at the same parks. all the things that sketch -- stitch them together contributes to social mobility and a sense of possibility and opportunity for all kids in that community. now, part of what has happened -- and this is where arthur and i have some disagreements. we do not dispute that free market is the greatest producer of wealth in history, it has lifted millions of people out of

poverty. we believe in property rights, rule of law, so forth. but, there has always been trends in the market in which concentrations of wealth can't lead to some being left behind. what has happened in our economy is that those doing better and better, more skilled, more educated luckier, having greater advantages, are withdrawing from the commons kids to private schools, kids start working at private clubs instead of the public parks. an anti-government ideology that disinvest from those common goods and things that draw us together. that, in part, contributes to

the fact that there is less opportunity for our kids -- all of our kids. that is not inevitable, a free market is compatible with making investment in good public schools, public universities investment in public parks, a whole bunch -- public infrastructure that gross our economy and spreads it around. -- rose our economy. -- grows our economy. that has been under attack. rather than soften the edges of the market, cap turbo-charged it. we have not been willing to make those common investments so that everybody can play a part in getting opportunity. one other thing i have to say about this -- even back in bob's day, that was happening, just

not to black people. in some ways part of what is changed is that those bias or restrictions to who had access to resources that allowed them to climb out of poverty -- who had access to the firefighters job? who had access to the assembly line job, the blue-collar cap that pays well enough to be in the middle class and guide you to the suburbs and the next generation was office workers? all those were closed to a big chunk of the minority population in this country for decades. that united -- that accumulated and built up. people with less resources more strains, it is hard being poor. people do not like being poor, it is time-consuming stressful

it is hard. over time, families afraid, men who could not get jobs left, mothers single not able to read as much as their kids. -- to their kids. that was happening to african-americans and that we are seeing those same trends have accelerated and are spreading to the broader community. the pattern is no different in your stories, when william julius talk about the truly disadvantaged. i know that was not an answer to your question -- [laughter] i will answer, but i think it is important to a knowledge if we are going to find common ground, we have to realize we -- there

are investments we are willing to make as a society as a whole in public schools and public universities. today, i believe early childhood education. in making sure that economic opportunity is available in communities that are isolated. and that somebody can get a job and there is a train that takes folks to where the jobs are. that broadband lines are in rural communities and not just in cities. those things are not going to happen through market forces alone. if that is the case, then our government and budgets have to reflect our willingness to make those investments. if we do not make those investments, we could agree on the earned income tax credit which i know arthur believes in we could agree on home visitation for low income parents, all those things will make a difference, but the

broader trend in our society will make it harder and harder for us to deal with old inequality and poverty. i think it is important for us to recognize, there is a genuine debate, that is what portion of our collective wealth and budget are we willing to invest in those things that allow a poor kid, whether in a rural town or in appalachia or the inner-city to access what they need, oh in terms of mentors and social networks, as well as these and books and computers and so forth. in order to succeed along the terms that arthur discussed. right now, they do not have those things and they have been stripped away. look at state budget, city budgets, and federal budgets, we do not make those same common investments we used to and it

has had an impact. we should not pretend that, somehow, we had been making those same investments, we have not been. there has been a specific ideological push not to make those investments. e.j. dionne: it gets to the underlying problem where we talk about let's tear down these ideological barriers but they get rejected. how do you change the politics of that? you said mitch mcconnell and john boehner were unlikely to be watching us, that has a political significance. president obama: they have votes. e.j. dionne: how do you tear down those barriers? you laid out a robust agenda.

how do you get from here to there? president obama: part of what happened in our politics, and part of what shifted from when bob was younger and seeing a genuine community. there was still class divisions in your small town here they were probably certain clubs or activities that were restricted to the bankers's son as opposed to the gender's -- janitor's son. we are able to live together, away from folks who are not as wealthy. they feel less of a commitment. to making those investments. in that sense, what used to be racial segregation, now mirrors itself and classic segregation.

this great sorting that has taken place creates its own politics. there are some communities where -- i do not know -- not only do i not know poor people, i do not know people who have trouble paying the bills at the end of the month. i do not know those people. there is less sense of investment in those children. that is part of what is happening. part of it has to -- there has always been a strain in american politics, where you have the middle class, and the question has been, who are you mad at if you are struggling. if you are working, but do not seem to be getting ahead. over the last 40 years, sadly there has been an effort to either make folks mad at folks at the top or be mad at folks at the bottom.

i think the effort to suggest that the poor are sponges leeches do not want to work, are lazy, are undeserving, got traction. look, it is being propagated. if you watch fox news on a regular basis, it is a constant menu -- they will find folks who make me mad. i do not know where they find a. [laughter] i just want a free obama phone. [laughter] that becomes their entire narrative. they get worked up. very rarely do you hear an interview of a waitress -- much more typical of -- typical,

raising kids and doing everything right, but still cannot pay the bills. if we will change how john boehner and mitch mcconnell think, we will have to change how our body of politics thinks, which means changing how the media reports on these issues. how people's impressions of what it is like to struggle in this economy looks like. how budgets connect to that. that is a hard process because that requires a much broader conversation than typically we have on the nightly news. e.j. dionne: i am tempted to welcome arthur to defend his network, but instead i want to invite him to -- [laughter] i want to invite you to the altar call, the president talked about basic public investments

that are old-fashioned. along the lines of somebody like president eisenhower supported. president obama: abraham lincoln thought land-grant colleges and infrastructure investment that's investments in basic research was important. i suspect, arthur, you would agree in theory about those investments, then the question would be, how much? robert putnam: -- arthur brooks: no self-respecting person denies there are public goods, there are public goods. we need public goods, markets fail from time to time. there is a role for the state, there are no radical libertarians appear. the veterans who believe the state should not exist -- libertarians who leave the state should not exist. we should not character the views of others -- caricature the views of others.

what we are talking about is, when are the public good, when can the government provide them and when are the benefits higher than the costs of the government providing these things. ? when we do not make cost-benefit activations at the macro level the poor pay. if you look at what is happening in the periphery countries in europe as george w. bush used to say, this is a true fact. [laughter] it is more emphasis, there is nothing wrong -- [laughter] if you do not pay attention to the macro economy and the fiscal stability, you will become insolvent and you will have austerity and if you have austerity, the poor way. -- the poor pay.' the rich never pay, they are never left with the bill.

if you join me in believing in the safety net is a fundamental moral right and privilege of our society to provide, you must avoid austerity and you must avoid insolvency, and the only way is by smart policies. i am 100% sure the president agrees with me. can you believe he said obama phone? [laughter] and he is against the obama phone. [laughter] only cause they took away his phone. since we believe there should be public goods, we are talking about the system that provides them efficiently. the president talked about the changing structure of the income distribution and it is true. what i would urge us to regret is this notion that it is not a ship but a transfer -- shift but

a transfer. the rich have not gotten richer because the poor have gotten poorer, they are not having their money taken away and given to the rich, we might be concerned with that because that reflects on opportunity. as an opportunity society, equal opportunity society, we should be concerned with that. to the extent we should get away from this notion that the rich are stealing from the poor, then we can look at this in a way that is constructive. why -- because the rich are our neighbors and the poor are our neighbors. getting away from that rhetoric is important. lastly, as we come to consensus is removing that capitalism or socialism or social democracy or any system is just the system. it is just a machine. it is like your car, you can do great good or great evil with it. they cannot go uninhibited so far, it cannot write on its own. the economy never will be able

to. capitalism is a system and it must be predicated on right morals. it must be. adam smith taught me that. the father of modern economics wrote the wealth of nations. 17 years before, he wrote the theory of moral sentiments, a more important book, the cause it talked about what it meant as a society to earn the right to free enterprise. it is true today. this is why this conference is important. from my point of view. because we are talking about right morality towards our brothers and sisters, and built on that, that is when we can have an open discussion to get our capitalism right and then the distribution of resources is a tertiary weston. -- question. e.j. dionne: i want to know how much infrastructure you are willing to vote for? arthur brooks: $41 billion.

e.j. dionne: this is for president -- the president and bob. in this conversation about poverty, there is a consensus on the stage that you need to care about family structure, it really matters. if you do not worry about the economy, you're not thinking about why the battering rams against the families. the family conversation can make a lot of people feel uneasy, because it sounds like, you are not taking politics seriously or you're not taking the real economic pleasure seriously. i want to share two things with the president and bob and have you respond. one, i ask a lot of smart people, what they would ask if they were in my position. one smart economist said, what we know is when we have tight labor markets, unemployment down below 24% or lower, -- to 4% or

lower. maybe this person said, even though he said, family structure matters, let's stop with the moral lectures and run a tight economic policy and have good things happen to us. the other thing i want to share -- i am being pointed, because you know and i have heard you talk about this, not that often publicly, i have heard you in other sessions you do with opinion reporters. something was written in 2013 about your talk about what needs to happen inside the african-american immunity. -- community. it is hard to avoid the conclusion that this white house has one way of progressing the social ills that afflict black people particularly black youth and addressing everyone else.

i would have a hard time imagining the president the women of barnard that there is no longer room for any accuses as though they were in the business of making them. -- room for any excuses. maybe it is about economics primarily, because we cannot do much about the other things through government policy. answer the critique. i know you hear that a lot. robert putnam: i will try to respond to that. i want to comment briefly on that earlier conversation about public goods. i agree with the president's framing of the issue and that we have just invested in collected -- collective assets that would benefit everybody but are more important for poor people because they cannot do it on their own. i want to give one example where we have shot ourselves in the foot, for most of the 20th

century, all americans thought that part of getting a good education was getting soft skills, not just reading and writing and arithmetic. part of that was everybody in the country got free access to extracurricular activities band football and music. beginning about 20 years ago a view developed that is evil that that is a frail -- frill. we say if you want to take part in music and football you have to pay for. then poor people cannot pay for it. $1600 on average for to get in a family, to play football or play in the band or the french club, not a big if your income is $200,000, but if your income is $60,000, who would take. -- who would pay? it seems like the allegation, the benefits, of learning

teamwork and hard skills grit, were only on the individual, that was not true, the whole country was benefiting from the fact that we had a broad-based set of skills. i am trying to emphasize how the runs this antipathy in some quarters that these are all our kids and we have to invest in all of them. i want to come back to the thing we have not spent enough time on this is a purple problem. those of us on the left can see most clearly the economic sources of this problem and want to do some thing about it. there are people on the conservative side, who use a different lens and can see most clearly the effects of family disruption among poor families of all races on the prospect of kids. and the stories of kids we gathered across america, i want

to return not just the abstract discussion, but to real kids. but, part of that is because mary's parents paid in irresponsible ways. we interviewed a kid from duluth who is now on drugs, how did you get on drugs -- her dad was addicted to meth and wanted to get high, but did not want to get high alone, so her dad taught molly how to do math. -- meth. i don't even know how to do it. i have to check. we all know this. i am not making an attack on single moms who are often doing terrific jobs in the face of lots of obstacles, but i am saying it is harder to do that and therefore we need to think, all of us, even those on the

more progressive side have to think, how did we get into a state in which two thirds of american kids have only a single parent and what can we do to fix that? i'm not sure it is the government's role. all of us have to think about this purple side of the problem if we are concerned with poverty. this family side of the problem. those of us -- i am now speaking to my side of the choir, we should not assume that anybody who talks about family stability is somehow saying that the economics no matter -- of course they matter. [applause] president obama: a couple of things i would say. going back to something arthur said. about how we characterize the wealthy and do they take this extra wealth from the poor, middle class? these are brought economic

trends -- broad economic trends. turbo-charged by technology and globalization. a winner take all economy that allows those with even slightly better skills to massively expand their reach and markets and they make more money and he gets more concentrated and it reinforces itself. there are values and decisions that have aided and abetted that process. for example, in the era that bob was talking about -- if you had a company in that town, that company had a whole bunch of social restraints on it. the ceo felt it was a member of that community. the sense of obligation about paying a certain weight, or -- wage, or contributing to the

local high school, was real. today, the average fortune 500 company, some are great corporate citizens, some are great employers, but they do not have to be, and that is not how they are judged. that may account for the fact that where a previous ceo might have made 50 times the average wage of the worker, they might now make 1000 times or 2000 times. that is accepted fact is inside the corporate boardroom. that is not because they're bad people, they have been free from a certain set of social constraints. those values have changed. sometimes tax policy has encouraged that an government policy has encouraged that.

there is a whole literature that justifies that come as that is what you need to get the best ceo and they are bringing the most value and then you do get into that iran -- ayn rand which, arthur, you would a knowledge -- acknowledge if they are not on a panel, they will say, we created all the stuff and we made it and we are creating value. we should be able to make decisions about what goes. there is less commitment to those public goods, even know a good economist has read adam smith's moral sentiments, what a knowledge that we are under investing or need a certain investment. point number two on this whole family values structure issue -- it is true that, if i am giving

a commencement at morehouse, i will have a conversation with young black men about taking responsibility as fathers that i probably will not have with the women of barnard. i make no apologies for that. the reason is because i am a black man who grew up without a father. i know the cost that i paid or that. i also note that i have the capacity to break that cycle and as a consequence, i think my daughters are better off. [applause] that is not something that -- that is not something -- or me to have that conversation does not negate my conversation about the need for early childhood education or the need for job training or the need for greater investment in infrastructure, or

jobs in low income communities. i will talk till you are blue in the face about hard-nosed economic policies. in the meantime, i have kids right now are graduating, and i want to give them some sense that they can have an impact on their immediate circumstances and the joys of fatherhood. we did something with my brothers keepers, which emphasizes friendships -- a pretty ships and corporate responsibility, and we are gathering resources to give concrete hooks for kids to be able to advance. i am going very hard at issues of criminal justice reform and breaking this school to prison pipeline that exist for so many young african-american men. when i'm talking to these kids come and i have a boy who says,

how did you get over being mad at your dad, because i have a father that beat my mom and has left? at has left the state and i have never seen him because he is trying to avoid $83,000 in child support payments. i want to love my dad, but i do not know how to do that. i will not have a conversation with him about macro economics. [laughter] [applause] i'm going to have a conversation with him about how i tried to understand what it is that my father had gone through. how issues of -- that were specific to him created his difficulties in his relationships with his children thomas so that i could forget him -- forgive him. this is what i mean -- this is

where i agree with bob, this is not an either-or conversation. the reason we get trapped in these conversations is because too often, not arthur, but those who have argued against a safety net, or argued against government programs, have used the rationale that character matters, family matters, values matter, as a rationale for the disinvestment of public goods that took place over the course of 20 to 30 years. if the most important thing is character and parents, then it is ok if we do not have been -- band and music at school computer that is the argument you will hear.

there are immigrant kids who are learning at schools that are much worse and we are spending huge amounts in the district and we still get poorer outcomes, so i was the money is not the issue. -- obviously money is not the issue. you hear logic that is used as an excuse to under invest in those public goods. that's why i think a lot of people are resistant. and are skeptical of that conversation. what i am saying is, guarding against cynicism, what we should say is, we are going to argue hard for those public investments. we will argue hard for early childhood education, because, if a young kid, 3, 4 years old is hearing a lot of words, science tells us they will be more likely to succeed at school and if they have trained and these only paid teachers in that preschools -- decently paid teachers they -- by the time

they are in third grade, they will be reading at grade level. we will argue hard for that money. if we do those things, the values and the characters those kids are learning in a loving environment, where they can succeed in school and being praised and read at grade level and they are less likely to drop out. it turns out, when they succeed at school, a are less likely to get pregnant as teens and less likely to engage in drugs and less likely to be involved in the criminal justice system. that is a reinforcement of the values and characters we want. that is where we, as a society have the capacity to make a real difference. it will cost us some money. it will cost us some money. it is not free. you look at a state like

california, it used to have by far the best public higher education system in the world. there is a direct correlation between proposition 13 and the slow this investment in the public university system, so it became expensive. and kids got priced out of the market. or they took on a whole bunch of debt and that was a public policy choice. based on folks not wanting to pay property taxes. that is true in cities across the country and states across the country. that is a big part of our political argument. i am all for values and character, but i also know that the values our kids have that allow them to succeed discipline and hard work, all those things and part are shaped i what they see. what they see early on.

some of those kids, because of no fault of those kids, and history, and some tough going generationally, some of those kids are not going to get help at home. the question becomes, are we committed to helping them? e.j. dionne: i want to follow up on a, mr. president. -- follow up on that. a lot of us feel that we made bargains with our friends on the conservative side, i agree with the idea that you have to care about what happens in the family if you're going to care about social justice and you have to care about social justice if you care about the family. yet, when people like you start

talking like this, there does not seem to be much give back on , ok, we agree on these values, where is the investment in the kids? when welfare reform was passed in the 1990's, there were a lot of people who said, we will not hear about welfare cheats anymore because all these people will have to work. we get the same thing again, it is as if the work requirement was never put in the welfare bill. how do we change this conversation so it becomes an actual bargain where the other half of the agenda you talked about gets recognized and we do something about it? president obama: i will ask arthur for advice on this. the devil is in the details. if you talk to any of my republican friends, they will say, number one, they care about

the poor, and i believe them. number two, they say there are public goods that have to be made, and i believe them. when it comes to actually establishing budgets, making choices, prioritizing, that is when it starts breaking down. i think that there will come a time when political pressure leads to a shift because more and more families, not just inner-city african-american families or hispanic families, but more and more middle-class or working-class folks are feeling pinched and squeezed. that there will be a greater

demand for core public goods and we will have to find a way to pay for them. but, ultimately, they will have to be choices made. when i make an argument about closing the carried interest loophole that exists, where i -- hedge fund managers are paying 15% on the fees and income they collect. i have been called hitler for doing this -- like hitler going into paula, that is an actual quote from a hedge fund manager. the top tweet five -- 25 head -- hedge fund managers made more than all the converter -- kindergarten teachers in the country. i am not saying that because i dislike hedge fund managers or i

think they are evil. i am saying that you are paying a lower rate than a lot of folks who are making $300,000 a year. you pretty much have more then you will ever be able to use in your vet -- and your family will be able to use. there is a fairness issue, and if we were able to close that loophole, i can invest in early childhood education that will make a different. that is where the rubber hits the road. that, arthur, the question of compassion and am i my brother's keeper comes into play. if we cannot ask from society's lottery winners to make that modest investment, this conversation is for show. if we cannot ask -- [applause]

that is where -- by the way, i am not asking to go back to 70% marginal rates, which existed in the golden days that bob is talking about when he was a kid. i'm just saying, maybe we can go tax them like ordinary income which means they might have to pay a true rate of around 23% to 45%, which, by historical standards, postwar era and would be low. if we cannot bridge that gap, we will not make as much progress as we need to. although we can find some areas of agreement like the earned income credit, which i did arthur credit for extolling because it could strengthen families.

-- which i give are the credit for. -- arthur credit for. arthur brooks: these are show issues, corporate jets are show issues. the real issue, middle-class entitlements. 70% of the federal budget, that is where the real money is. until we can take that on, if we want to make progress, the left and right want to make progress as they put together budgets they will have to make progress on that. if we want to increase taxes on carried interest, that is fine for me. not that i can speak for everybody, certainly not everybody on the republican side. by the way, mitch mcconnell and john boehner are watching, at least indirectly and paying attention. they care a lot about this. they care a lot about culture and economics. they care about poverty. we have to be careful not to impugn the motives and imputing motives on the other side is the number one barrier against

making progress. we should declare war on that and defeat. then we can take on issues. it is important for us to do that. who, by the way, you are having dinner with, when you're discussing ayn rand, and why was i not invited? [laughter] let's decide that we have a preference -- a rumble over how much money we are spending on public goods for poor people. republicans should say, i want to spend money on programs for the poor, but i think these ones are counterproductive and these once ineffective and democrats should say, no or not, we have never done them right and they have always been underfunded. we cannot yet to that when politicians -- get to that when politicians are conspiring not to touch middle-class entitlements. we are looking at it in terms of the right saying all the money

is gone, and the left saying, we just need a lot more money on top of these things, when most people looking at it realized that this is an unsustainable path for lots of things, not just programs for the poor, we cannot adequately fund our military. we would have a tremendous amount of agreement about the misguided notion of the sequester. for lots of reasons, because we cannot spend money on purpose. that is what we need to do. an automatic path to spend tons of money in entitlements that are leading us to physical and sustainability, we cannot get to these aggressive conversations where conservatives and liberals agree and work together to help poor people and defend our nation. e.j. dionne: if they carry interest is -- why can't we just move on?

here's what i would like to do. i would like bob to speak and i have one last question for the president. e.j. dionne: -- arthur brooks: we need to rise -- robert putnam: we need to rise out of the republican bubble -- washington bubble. we are speaking to an audience of people of faith, largely to america. i think we should not disempower ordinary americans, if they care about these problems, americans can change the politics that would, over the next five to 10 years, make a huge difference, i'm not talking about changing republican-democrat, making poverty and the opportunity to escape from poverty a higher issue on both parties agendas. [applause] i have hope that will happen. this may not be true, i understand there will be an election next year.

president obama: that is a true fact. [applause] [laughter] robert putnam: i think american voters should say the highest priority issue is the income gap. ask candidates what will you do about it and use your own common sense. is that the right way to go? we need, as a country, not just from the top down, from across the grassroots, to focus on what we can do to reduce this opportunity gap. e.j. dionne: mr. president, i want you to reflect on this religious question. one of your forced salaries paid for by a group of catholic churches. not a lot of catholic bishops noticed that. you were organizing or a group

of southside churches. you know what faith-based groups can do. talk about three things at the same time -- the religious community in calling attention to this problem. the issue as to how government can cooperate with these groups. and the prophetic role of these ideas for you where your own reflections on your own faith have led you. president obama: first of all it is true, my first job was funded through the campaign for human development, the social justice -- [applause] and i think that faith-based groups across the country and around the world understand the

centrality and importance of this issue. in a intimate way. in part because these faith-based organizations are interactive with folks struggling and no how good these people are and are aware of their stories. it is not just theological, it is concrete, they are indebted in communities and making a difference. -- indebted. what we have done is a continuation of work that had been done previously by the bush administration, the clinton administration. the office of faith-based organizations are working on an ongoing basis around a whole host of issues. my brother's keepers reaching out to churches and synagogues and mosques to try to figure out

how do we reach young boys and young men in a serious way. but the one thing i want to say is that, when i think about my own christian faith and my obligations, it is important for me to do what i can myself, individually mentoring young people or making sure -- making donations. in some ways impacting whatever circles of influence i have. i also think it is important to have a voice in the larger debate. and i think it would be powerful for our faith-based

organizations to speak out on this in a more forceful fashion. this may sound self-interested because there have been -- these are areas where i agree with faith-based groups and issues where we have had disagreements around reproductive issues or same-sex marriage or what have you. maybe it appears advantageous for me to focus on these issues of poverty and not as much on other issues. first of all, i will not be part of the election next year. this is more of a broader reflection of someone who has worked with churches and in communities. there is great caring and great concern, but, when it comes to

what are you going to the mat for? what is the defining issue? when you are talking in your congregations, what is the thing going to capture the essence of who we are as christians? or as catholics? that this is often viewed as a nice to have relative to an issue like abortion. that is not across the board but there sometimes has been that view and certainly that is how it is perceived in our political circles. i think that there is more power to be had there. a more transformative voice available around these issues. that can move and touch people. because the one thing i know is

that -- here is an area where arthur and i agree. i think people fundamentally want to do the right thing. people do not set out wanting to be selfish. people would like to see a society in which everybody has opportunities. i think that is true up and down the line, across the board. but they feel it is not possible. and there is noise out there and arguments and contention. people withdraw. they restrict themselves to what can i do in my church or my community, and that is important. our faith-based groups had the capacity to frame this and nobody has shown that better than pope francis who has been transformative through the sincerity and insistence he has

had that this is vital to who we are. this is vital to following what jesus christ our savior talked about. that emphasis is why we have had such incredible appeal including two young people around the world, and i hope that is a message that everybody receives when it comes to visitors. i can't with -- i cannot wait to post them because it will spark a broader conversation. e.j. dionne: everything is better with a reference to pope francis. thank you, so much. [applause] i want to thank arthur and bob and thank you bob for writing this book, and thank you mr.

president for being here, and john and so many others for creating this. if i may close by quoting dr. king, let justice roll down like waters and righteousness like a mighty stream, bless you all. thank you, mr. president. [applause] ♪

♪ >> sunday night on c-span q&a veteran canadian astronaut produced many videos on his activities on the international space station, and shares both scientific and personal aspects of life in space. >> the only time i felt fear was on the dark side of the earth looking at the one side of australia, eastern australia in the darkness and watching a shooting star come in between me and the earth, at first i had the standard reaction of wishing upon a star. then i had the sobering realization that that was just a huge rock from the universe going 20 miles a second. that missed us and made it down to be at mr., if it would fit of us, you could see it, we would have been dead if it hit us. >> sunday night at 8 -- it is

quite eastern and pacific -- 8:00 eastern and pacific. >> today on c-span, the house returns live to work on a bill authorizing 2016 defense programs. members will consider a bill to ban abortions after 20 weeks. and a meant a provision of the patriot act that would in the collection of american phone records. next, "washington journal" is live with your coming up, john duncan joins us to talk about his recent keys called the return of the peace party. he will explain why he republican party needs to move away from the use of military intervention overseas. then keith ellison will discuss his resistance to getting president obama more power to organize the transpacific trade

deal and effort to reauthorize the patriot act. later our guests will explain the new pole. ♪ ♪ host: good morning, everyone. happening on capitol hill, the house is expected to debate on the usa freedom act that would change provisions of the patriot act, ending the collection of american phone records. tune in here for the coverage of that debate. before we will begin with the headlines dominating the newspapers. senate democrats blocked the president on