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tv   Capitol Hill Hearings  CSPAN  August 23, 2011 8:00pm-1:00am EDT

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task. a task of leading people to freedom. a task of healing the festering wounds of a nation's original sen. >> was this entire event at the c-span video library. during the week, we had other events ken [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> notice the color of the
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bourbon. that pretty amber color that you see is all coming from the jar on the inside of the barrel. -- from the char on the inside of the barrel. this char is where bourbon gets a lot of its color and flavor. weekend, we highlight frankfurt, kentucky on the tv and american history tv. look for the history of literary life of the kentucky state capital. on c-span 2, vice, violence, corruption, and urban renewal. about john porter. and on american history tvs, and a visit to buffalo state the
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seller. both tv and american history tv in frankfort, ky. this weekend on c-span 2 and c- span 3. [applause] >> good evening, ladies and gentleman. [applause] thank you all for braving rain and welcome to listeners on
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aspen public radio. and most of all, they welcome to you, just as kagan -- just as kagan -- justice kagan. >> thank you. it is my first, but it will not be my last. [applause] it is great to be here and it is great to be here in this terrific community can i have been taking advantage of all of the music and all of the beauty. it is a wonderful place pierre >> comparing notes on hikes. many of you will see her on the shelves over the next few days. we will take your offer seriously to come back as often as possible. in 1998, a profile of the young in a kagan -- young elena kagan
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after being promoted to the chief of domestic policy in the clinton white house, she was discussed as the white house's all purpose brain. an adviser to the president on all things legal and constitutional, she developed a reputation that just grew over the years of being able to bring together people of diverse ideological positions with enormous skill. in the white house, for example, she was the one who convinced john mccain and the republicans to allow the fda to have regulatory authority over tobacco, which was not a mean feat. after her experience in the white house, she returned to her roots in the law. she had been an editor of "the harvard law review," a assistant
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to thurgood marshall. she became the first woman dean of harvard law school. [applause] interestingly, there again, she became highly regarded for her ability to bring conservatives and liberals together in a very fractured faculty. she was appointed the solicitor general of the united states by president obama in january 2009. i think i am correct say that you were also the first woman ever in the opposition. [applause] and then, of course, she was nominated to be an associate justice of the supreme court by the president and was sworn in just about a year ago this week. she is now -- she has not completed her first term.
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when she began, there was a lot of discussion about how there would be havoc because of all the opinions you have to recuse yourself from, having been solicitor general. perhaps a third of the cases this term. but there was not that much difficulty as a turned out. >> as it turns out, i was not indispensable to and how the court managed without me perfectly fine. i was recused from about a third of the cases, about 30.28 of them -- about 30. 20 of them, it was up to the judges to decide. the only thing that made me think was that i appear to be expendable. next year, i will now be recused in so many. >> we will talk about the term in a minute. even though it was her first term and even though there were recusals in a third of the term, i think it is fair to say that, after this term, she has
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received extraordinary high claim for her opinions in this first term and her influence. indeed, linda greenhouse, who is probably the dean of supreme court reporters and a professor actually report that justice kagan was the biggest winner, which is really remarkable for someone who is just in her first term. let's start with questions about the expectations you had about the position given the kinds of experiences you had before. you are the only member of the court who has no prior experience of being a judge. what did that mean for you? were there things you had to learn that your brethren did not? >> i think that there were. i separate out two things. i think all justices, when they
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start, they find some things difficult. it does not matter if you have been a judge or not. my good friend and colleague, justice sotomayor, said this she had been a judge for an empty number of years. but the expense of the supreme court was different because all the cases were so much harder. and you do not have any kind of backstops. the decision you make is a final decision. that increases the sense of responsibility and the pressure. even when you come from a circuit court, there are real differences in the experience of being a justice that my number -- that a number of my colleagues have talked about. but because i had never been a judge before, there were some things i had to figure out that my other colleagues have already figured out. that was certainly true of what
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i call the mechanics of the job. my colleagues had been judges before. they knew things like when it was most valuable to them to read the brief. do you read them three weeks ahead of the argument or one week ahead of the argument? or the prior day? and people have very different styles in this respect. they have figured out what to do. the question of how you deal with your clerks, what do you last year clerks to do? what functions do they perform? exactly how do you write opinions? do you read the first draft? or do you ask the courts to right the first draft? if you ask the court to write the first draft, what do you do with it exactly? the clerk tok whethe right the first draft, what you do with it exactly? [laughter] their experience clerking for
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me is different from any clerks i will have in the future. it was in some ways exciting as i tried to figure it out and in other ways not so much. in terms of the mechanics of the job, it was a little bit of a trial and error and trying to figure out what works for me, how i learned best, who wanted to with -- who wanted to talk with when, when to read, all of the stock. i was definitely trying things and seeing what worked for me. i think i will continue to do that. >> what about the fact that you had spent most of your career as a scholar in the academy? did that affect your experience in ways that perhaps surprised
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you? park>> i was thinking about this recently. it occurred to me at one. that i it approach writing opinions in the way -- it occurred to me that the way in which i approach writing opinions is with of the teaching part of legal academia. i think what makes a good law school teachers not how much you know. everybody knows a lot if you are a professor at a law school. but trying to figure out how to communicate complicated ideas to people who know a lot less than you do about a given subject. not only how to communicate them so that they understand it at the moment, but also how to communicate them so that the points kind of stick with them, trying to figure out a vivid
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ways of explaining things that stick with people and make them look at a subject in a particular way. i realized one day while i was sitting, writing an opinion, that i was going through the same kind process, really trying to figure out how would i teach the class and if i could figure that out, to make people really get something, then i could really figure out how to convey the idea is in an opinion to make the reader's get that sense. >> what about your experience as solicitor general? you argued six cases before the supreme court. how did that help you in your first term? >> for one thing, it gave me a lot more sympathy with the people on the side of the podium. [laughter] i share that with a few of my colleagues did a few of them have argued before the court. the chief justice may have been the best oral advocate in the
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history of the supreme court. he has had a great deal of experience. justice alito has. justice ginsburg has. i think it does give you a sense of what they are up against. it is a lot easier to ask the questions than it is to answer them. i am reminded here of the thing that a lot of law professors say to their glasses. it is just as hard to write the exam as it is to take it. [laughter] truly, that is no. [laughter] that is the same thing here. being solicitor general, i think, give me this great perspective on the court in some ways. this job that is most like being a supreme court justice is being solicitor general could you were not decide in the cases, but you are focused all
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the time on the supreme court. your job is trying to figure out how to persuade nine supreme court justices to take a particular position. now my job this figuring out how to persuade eight supreme court justices. [laughter] the solicitor general, for those of you -- i know a lot of you're not lawyers -- but the solicitor general is the lawyer who represents the united states in the supreme court and supervises appellate litigation generally. the solicitor general actually participates in about three- quarters of the cases that the supreme court decides each year. so the supreme court decides 80 cases and the solicitor general is participating in 60 of them. sometimes as a party and sometimes as a friend-of-the- court, somebody who is not a party to the case, but has interests in how the court rules on the case and participates in
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the court's decision making. when the solicitor general participates this way, it is almost always given argument time. it is treated for most as if it were a party. and about three-quarters of the cases during the time that i was solicitor general, i was there and i was watching the lawyers who work for may argue to the court. sometimes i argued to the court myself, about once a month. and watching the justices, trying to figure out what they were concerned about and what their questions were all about and what it showed about their various interests. so you learn a tremendous amount about the court by doing this job, which is just to focus on the court and tried to convince the court to do things. >> let's bring you back to your very first supreme court argument. if i am not wrong, it was a case called citizens united. [laughter]
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tell us what it was like to argue that case. then i will ask you to tell us what it was like to hear the decision. >> obviously, it was a big case. it was my first supreme court argument. it was my first appellate court argument of any kind. i had argued in district courts as a young lawyer, but i had never made an appellate court argument. so that was a little bit nervous making. it was this big case. the case had been argued. work,rget what the year's but the prior term, it was argued by a wonderful lawyer in the solicitor general's office. it was the day after i was confirmed by the senate. i went to my job and my first day and the first thing i heard was the wonderful lawyer in my
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office arguing citizens united. he would be the first person to tell you that that argument did not go well. so everyone thought we would lose this case. but then the weeks that by and the court -- the weeks went by and the court did not make a decision could then issued an order that it was to be reheard the next year. it is something that the court very rarely does. accompanying this order with a set of questions that the lawyers were supposed to focus on the next year could basically, what the court said was that we want everybody to argue that the court should overrule two prior supreme court decisions. when they say that they want to review this case and you want to tell us whether you think we should overrule two prior supreme court decisions, it does not take a great supreme court
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expert the same the court is pretty much of their. [laughter] there.tty much of thei [laughter] as the solicitor general, i was going to take over this case. it was an important case because any time the solicitor general's office decides to defend the constitutionality of legislation, it is important. this was very important legislation. it was this campaign finance law that had been in the making for many years it was extremely important piece of congressional legislation. my job was to defend it. the only thing that made it in little less nervous-making was that everybody i talked to said, you know, you will lose. [laughter] it does not matter what you do up there. just have a good time. but i prepared. i work hard. i prepared heard that summer. i went up -- i prepared hard
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that summer. i went up and argued one of four lawyers. i was nervous. but when i got up to the podium, the words started coming out of my mouth and i thought, i can do this, i guess. actually, it was a very thrilling and exciting experience. but it was also clear to me when i sat down again that all those people were right. i was going to lose. [laughter] there was no fifth vote out there. >> so there was no surprise. >> i was not all that surprised. >> let's talk about a different kind of surprise. given all of your experience before, studying the court, arguing before the court, and now being one of the nine justices, what was your biggest surprise being a member of the court compared to what you expected the institution to be like?
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>> i am not sure what was the surprise surprise. i suppose just how warm everybody is, how collegial the institution is. i think that this comes as a surprise to many people when i talk about my experiences on the court, and to me as well. you read the court's decisions and, often, there are some pretty sharp given takes. -- give and takes. people accusing judges of a wide variety of conduct. [laughter] and you think, my god, they hate each other. if they did not hate each other before their that opinion, there will hit each other after. and the truth is completely not so. it is an incredibly collegial and warm institution with good
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friendships throughout the court and across whenever people think of as ideological divides. that was the nicest surprise or the nicest feature of joining the court, feeling that, feeling what a warm welcome people gave me but also just how warmly people feel toward each other and how well and respectfully the members of the institution operate together. >> why do you think that is? it is really remarkable when you consider the kind of partisanship and lack of collegiality there is across the street. [laughter] one would hope that there would be some way to follow this. i wonder if one of the reasons actually is that everything you'd do is in writing and it is all recent.
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there it -- even if the language as strong, there's a degree of mutual disrespect -- mutual respect across the divide our political branches are just sound bites and things are not reasoned and argued. there are just conclusions. why do you think it is like that? i was a law clerk to there. i remember how collegial it was. it was a shock then could it still is that way despite the appearance of ideological divides. >> wright. >> it is wonderful. too bad it is not contagious. [laughter] >> your theory is an interesting one. i had not thought about it is interesting in part because sometimes the writing makes you think how could they really like each other after that. but you're exactly right. it is not for the most part sound bites. it is reasoned argumentation. i think some part of it may just be locked.
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although, when you court it was collegial -- there have been times in the supreme court's history when it has not been so. i read a great book about the supreme court in the 1940's and 1950's recently appeare. it is a fabulous book. it really makes you feel that you're lucky having this collegial court. the court in those days, he focuses in particular on four justices. they're all appointed by fdr and when they were appointed, they were thought to be natural allies. and they hated each other in the relationship with pathological. >> scorpions in above. >> partly, it could be just lock and contingency. -- just luck and contingency. i felt we will be dealing with each other for a long time.
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[laughter] the minute after the senate confirmed me, the first phone call that came into me was from the chief justice. i took the phone call and he said, i wanted to be the first to congratulate you and tell you how excited i am to serve with you. he said, you know, we will be serving together for 25 years. [laughter] and i said, only 25? [laughter] it's true. i think that makes people -- i do not want to say that it is an incentive to like each other. you can live in an institution happily or you can live in an institution sadly. you can live with people respectfully or you can live with people without that. if you are going to be someplace for a long time, boy, it makes
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you value collegiality. >> i think it is fair to say that the supreme court is by far the most respected institution in government today. it is certainly true today. yet it is also the least understood. >> i hope that is not related. [laughter] >> i hope not, to. >> if they knew more about us, they may dislike the smart. [laughter] >> they would know more about you if it would allow cameras in the courtroom as we have here. would that be a good idea? >> with the light glaring in my eye right now, clearly, no. i have said before that i think it would be a good idea. in this, i differ from some of my colleagues. in this last year, i have come better to understand the opposite position. i guess the reason that i
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thought -- i came to this view when i was solicitor general. i was sitting there watching case after case after case. this is an unbelievable court to watch actually. this was the court before i got onto it. everybody was so prepared, so smart, so obviously deeply concerned about getting to the right answer. i thought if everybody could see this, it would make people feel so good about this branch of government and how it was operating to and i thought it was such a shame, actually, that only 200 people a day can get to see it and then a bunch of other people can read about it. reading about it is not the same experience. it is actually seeing it. it is an incredible court the court that i watched appeared the level of preparation and encasedness and intelligence and
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real concern. i thought it would be a good thing. some of my colleagues disagree. the reason they disagree is because they are worried the that would change. they worry that, if you put cameras in there, everybody will start playing for the cameras. the actual thing that is so good about the institution will diminish. it is a fair point. i think i am still coming out with trust that we would continue to do the same thing and that lawyers would continue to do the same thing. but i and stand the concern. >> in the spirit of greater understanding of how the court works, i wonder if you can take a minute to talk to us about how the court decides, particularly from the perspective of the junior justice and the significance of oral argument. then describe the conference where, as the junior justice,
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you have to give your opinion before anybody else does. if you could just walk us through that. >> i wish it with that -- i wish it were that. [laughter] it is actually the opposite. i go night. i think it has changed over time. so i go ninth. let's start there. the chief justice starts in every case. he sort of introduces the case. then he says what he thinks and how he would vote. it goes around the table in seniority order. i am the last to speak. there is a rule that nobody can speak twice before everybody has had a chance to speak once. you think that that is a sort of artificial and formal role. but let me tell you, when you are the ninth justice -- [laughter]
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it must've been the ninth justice who thought of this rule. [laughter] after i speak, it is not so bad. the ninth is actually better than the eighth or the seventh. there is some drama to going ninth. [laughter] rarely, but you can -- then there is more general discussion. the general discussion varies. sometimes it can be very quick and sometimes it can be very lengthy. it is not a tremendously -- it is not tremendously related to the case in the public eye. i remember my first conference. it was a case that was kind of a front-page newspaper case. we voted and then we all went around. then we discussed it a little bit. then there was another case which no newspaper in the united
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states would write a sentence about. we discussed it for 40 minutes. i thought why is that? but the discussion is relative -- we discuss when we think there is something really to discuss and votes might change and consensus might be reached. there are some cases where, in the end, you go around once and ityou can discuss it until the end of time. there are some cases where discussion really helps. it changes minds. we talked a lot of long beach other to try to do that. that is the way it works.
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we actually have time to think about the oral arguments and what we learned. i find this very valuable. there are some courts where they go straight from oral argument into a conference. i find it die able to digest. that is to think about what the lawyers have said and what my colleagues have said. a large part of the value of oral argument is to listen to each are other -- to each other. when they ask a question, i can figure out what is bothering them about a case and where they are leaning. that can be extremely valuable to think about. it may be convincing to me.
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it may help me to figure out how i can convince them. oral argument i think is an important part of our process. >> they said it takes five years to go around the track once. it takes a long time for a new justice to find his voice and influence. it is fair to say yet that quite a remarkable influence. you are really the winner of this in terms of this. some days they will be
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convincing. he broke that one of the remarkable things about this year was the elegance and eloquence of your pros and how you have emerged as a convincing writer. it used it takes a very long time. it compared it to holmes and brandeis. >> showing he has no credibility whatsoever. >> it will actually bring some context of what you said earlier. the other opinions are very forceful. you write in a way that is so understandable for anyone.
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let's talk about this term. the clean systems act was one where they wrote the majority opinion. you have some very strong language. i wonder if you can describe what it is about and why he felt so passionately. -- and why you felt so passionately. one provision was the way the
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arizona one word. they had decided that if all candidates are privately financed that they will be too great a chance of production. they have all this private money. people are gillian's billions of dollars. people are bundling billions of this. they will have the ability to go to eight candidates and rep. public financing systems are immense for political corruption. it worked by way of a matching funds. the particular plaoint, amount of money that they would get depended on how much money
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there privately financed opponent would spin. if we get a certain amount of to a certain ceiling. the reason they had this in system is to make it work. either you do not give them enough money to people say you're not giving enough money to run a competitive campaign or you say in order to prevent that they will give you a lot of money. it turns up a lot of mixed waste some money. they tried to say you're going to guess them enough to run a
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competitive campaign. this will strengthen our public financing system. do you want me to keep on going? it burdens the candidates speech. this counted as a burden on the publicly burden finance speech. my response was that this was not the case. the majority kept on thinking about this in terms of the language. if you looked at this system and do the debt the way it works, it was producing more speech and
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competition. this should not count as a first amendment injury. it is subsidized. there is a long line of first amendment cases that say that when the government pays people to speak that is okay as long as the government does not discriminate. anybody could have this money if the person decided to enter the system. they point of my dissents was to say that the same role should follow. we should not use this as a restraint. even if we did, it would reduce
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political corruption. that was a dispute. >> to any of you have a dell? >> against all this, they claim to have found three smoking guns but review the nefarious attention to level the playing field. this is the kind that goes with mirrors. [laughter] [applause] if you like -- >> i will not read any more. >> let's stay on that.
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have we lost power deck? i do not know if we can do anything about that speaker. i want to the time for questions from the audience. there are a number of first amendment cases. it was a banner year. this was for purveyors of minors. they were considered outrageous protesters. there were victories for rich people who defied funding and drug companies the wanted access
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to dr. prescriptions. is there something you can say about all of these first amendment opinion sex but obviously did not agree -- opinion that? you obviously did not agree with all of them. >> i think it is the case that justice kennedy and justice scalia agreed with all four of them. and none of the other people to be most speech protected position. we did have some cases where they decided against the expense. there is one case which dealt the public employees. it was rejected. there is another very interesting case where we
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rejected the first amendment claim of an elected official who loss.arry's -- use of various laws. you are right. we have to say is that this is a court that is extremely protective of the first amendment's ban speech. to the extent that they see something as restricting, it is likely not. that restriction is going to go down. there are disagreements about what counts as speech. there are disagreements about what counts as a restriction.
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there is no question that this court has a very expensive mmm. >> was one of those cases particularly difficult for you? >> i thought that the video game space was the toughest that i decided all year. there is the case where i struggled most and thought most often i am on the wrong side of this. this came out of california. it involves extremely violent video games. there was a question about how big video games was defined and whether the definition was vague. the question was whether the states could prohibit the sale of video games to minors.
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you can see why why the government would want to do this. this is what they have on young people. in some ways, it was very easy to say i understand what the state was doing here. it seems kind of reasonable. i cannot figure out a way to square that with our first amendment precedents. it is very important to me. a shy to think about what they have said and what analysis is needed. it seems to me that they
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required us to evaluate the legislation. it is to say that the state had to have the most compelling interestnds of they are doing it in the most narrow way possible. i thought this that she cannot guarantee that. it was clear that the standard was the one that had to be applied according to our various precedents. i ended up coming out in that case. i sweated over that perio. i told the president two things.
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i said ok. he said the first thing was that i did not want another circuit court judge. the other thing was that i did that what a person from harvard or yale. i said i hope one out of two is good enough. there are lots of great lawyers in the world that did not go to those two schools. it is ridiculous that they have all nine justices between them. he said aided them had been circuit court judges. most of us have of us of our lives on the amtrak of this.
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most of us come from this picture in the problem is is that there are so many measures of what people think of as appropriate diversity. there is the ability to dominate them one by one over the course of many years. it is hard. it is hard to figure out how to do this. >> we cannot see this. we want to have questions from the audience. we have microphones. if you can just give us your name?
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>> when is this country going to get tough on immigration, porn, and toughen criminals? [applause] >> they're likely to come before the court next year. a do nothing she can answer that. we function as an institution in a very particular way. we decide cases. we do not decide big issues. we decide controversies between two parties.
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we take seriously the idea that we really look carefully and closely at the controversy before us. this way, we function very differently from the legislatures. there's always the way i am going to go. this is limited to cases or controversy.
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>> i'm going to london. we had the extraordinary experience. in your decision making, are you looking for the moscow justices in s?
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-- too bad.
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it is to resolve ambiguities and fill gaps in the ways the u.k. congress -- ways you t hink congress intended to do so. you are doing law. you're trying to figure out what the competition means for the constitution means. -- you are trying to figure out what the constitution means. >> we have a question somewhere. i have to rely on our runners. what is given what you said about what you had to do during
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the first term, i'm wondering what you are going to do when the health care legislation comes before you? >> i do not announce it prior to the case. there have been cases. if you make a study of this, you will see this before. i never do this. no member of the accord does a. >> still have a question someone in the middle? >> i am a lawyer in washington, d.c. they have expressed their views.
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one is the domestic standard. there is the authority of multiple countries around the world's us to what should be considered in deciding a thin mints -- deciding opinions. >> the standards to be applied. and may relate to the particular issue. >> there are some kind of cases where you have to look there. if you're interpreting the treaty, you're looking to international law. the cases in which this has been controversy all are not those cases.
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there are particular provisions of the u.s. constitution. they have made reference to interpret this. when you are interpreting the u.s. constitution, what matters is we have a very distinctive constitution with a distinctive set of provisions. another thing a country does will settle that question. on the other hand, there are some people who say he can never say a foreign one.
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this seems wrong to me as well. they have a good idea in it. you may say a former president. in doing so, you have to be really super cognitive that it may be entertained a provision with a very different history and tradition. i do nothing that we're never going to look at what they do is appropriate. it is tremendously important that we realize that there's not some sort of transcendental body
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of law out there. we are looking at the american constitution. they have made choices that other countries have done. >> my name is ryan. if miners are allowed to buy videogames, why then not a lot to see r-rated movies in the theater? not because of any legislation. that is a voluntary system. the video game industry has a rating system of its own. one of the questions they argued about was whether it was more are less affected than the
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system for movies. there is no law that says you cannot see and our movie. the reason you can is because the industry has said that you should not be able to. the video game industry has decided the same thing. the question and california is whether in addition to a voluntary rating system that the state can, but various restrictions on it. >> no. time for a couple more questions. you were handed a position to argue. ?ow did you handle this that's what i had a job to do.
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there were a whole set of rules and traditions that enabled them the interest to the united states. as you say, sometimes it is not the position that i would have favored. they are saying that there was an inappropriate establishment. the solicitor general argued against the standing of the parties. i said they did have the right
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to bring a claim. as a judge, i said they had no doubt that i would have taken this. this is with respect to cases involving standing. that is the job you take. when someone asks you to be solicitor general, if you cannot do that, you cannot -- should not take the job. your job is to represent the long-term interests of the u.s. as the office has to find those interests and you better put in a box and keep it there any views you might have. >> we have one final question in the back. >> thank you.
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>> we have to in the back. we can take two of their quick. why don't you give your question. >> when sandra day o'connor was appointed it was revolutionary to have a woman. i wonder if you could speak to how that has changed the corporate >> i will tell you what saturday o'connor says. she has been in the court in a few occasions this year there to argue before the court, she came in on a couple of the arizona cases. there were three important cases involving arizona. she came in one or two of those to see how her state was bearing. she has talked about this. she said -- sat there as a spectator. the way the bench works is justice sotomayor's it's on the far left of the bench and i sit on the far right and justice
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ginsberg sits near the middle. justice o'connor said i was hearing women's voices coming from all over. [laughter] [applause] and the that was a remarkable thing to her. i am sure did she remembers those days when she was the one and only. and it is kind of great that that has happened. i think -- i am glad to be part of it. >> i think that is a great way to end. we would like to thank you very much. we welcome you [laughter] back to -- we welcome you back to aspen. [applause]
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>> good morning, everybody. i would like to thank you for coming to our release of second quarter results for the banking industry. the latest data indicate the banks have continued to make gradual but steady progress in recovering from a financial market turmoil and severe recession. that infolded from 2007 through 2009. the turf before you here shows that earnings improved year- over-year -- the chart before you here shows that earnings improved year-over-year. this trend has expanded to include a growing proportion of insured institutions. you can see in the next chart 60% of banks reported improved earnings this quarter while the percentage that were not profitable fell to the lowest
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total in more than three years. the recovery and industry profitability has been based on improvements in the credit quality of banks' loan portfolios. as this next chart shows, credit quality has been improving since the first half of last year. loss rates and current rates remain well above historic norms. at the depths of this crisis, expenses for bad loans absorbent more than half of all bank revenues. long " -- as loan quality has improved somewhat expenses for bad loans has declined. for loan and lease losses, a 11.5% of banks' net operating revenue. reductions in loan-loss provisions account for most of the improvement we have seen in industry earnings over the last eight quarters. however, as you can see in this
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next chart, industry revenues have not been growing. in the last two quarters, revenues were lower than a year earlier. lack of revenue growth limits the pace of earnings improvement. as the levels of loss provisions approach their historic norms, the prospects of earnings improvement from further reductions and provisions diminish. the business of taking deposits and making loans accounts for two-thirds of the industry revenue. increased lending is essential for future revenue growth. our latest data shows that insured institutions increased by $64 billion in the second quarter. while modest, this is the first time in three years that we have seen actual growth in lauren --
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loan portfolios. loans to commercial and industrial borrowers increased for a fourth consecutive quarter. at the same time, a significant portion of the overall growth in loans represented intra- company lending between related banks. lending activity has a long way to go before it approaches more normal levels. deposit growth was strong in the second quarter, particularly large denomination accounts of the biggest banks. deposits in domestic offices increased by 3% during the quarter. deposits in accounts with balances > $250,000 increased by almost 9%. nearly 60% of the increase in large deposits were in accounts that deposit insurance coverage. banks have made considerable promise -- progress in improving the balance sheets. in the last four years they have
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charged off almost $585 billion in bad loans and added more than $713 billion in lost provisions to their reserves. they have raised capital levels to historic highs. they have improved liquidity, reduce portfolio risk, and expanded capacity to make loans. we saw improvement in the number of problem banks and bank failures from the second quarter. the number of institutions on our problem bank list fell from $888 8882865. this is the first decline since the third quarter of 2006. -- the number of institutions on our problem bank list fell from 888 to 865. there have been 68 failures in
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2011. during the same time last year, we had 118 failures. these trends are obviously favorable. the current levels of failures and problem institutions remain very high. by historical standards. after seven consecutive quarters of negative balances, the fdic 's deposit insurance fund is positive. standing at $3.90 billion as of june 30. the deposit insurance fund balance has risen six quarters in a row for a cumulative increase of almost $25 billion pointhe negative low from 2009. assessment income and fewer than expected bank failures were behind the growth in the fund balance. as of june 30, the fdic's cast
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position -- cash position was $45 billion. we have a clue it -- arising from bank failures. we saw further income growth based on improving trends and asset quality. lending activities should. the number of failures continued to diminish. the number of problem banks fell for the first time in almost five years and the deposit insurance fund balance returned to the black. these were all positive developments. we also saw continued weakness in revenue and we're mindful that earnings growth cannot be sustained indefinitely. only by reducing loss provision. recent events have reminded us that the u.s. economy and u.s.
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banks still face serious challenges ahead. the fdic will remain alert to these challenges going forward. that concludes my statement. i will be glad to try to respond to your questions. >> you took revenue from trading and security related activity, is -- what would the revenue picture look like?
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>> what would your assessment of the banking industry's health be with those numbers back down? >> your questions are relative to trading? >> yes. >> trading is generally concentrated in some of the largest institutions. when you are looking across the aggregate, it will not have as big as an effect. with those institutions that have trading operations there is going to be a significant impact. that did have a profound impact on their earnings over the last couple quarters. for the industry as a group, with those numbers -- with those numbers back down, should we feel serendipitous about the industry's condition or should we be concerned that outside the central banks, our local banks are having a tough time and they are struggling.
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in a way that is not portrayed as the numbers. >> the trends have been improving for the smaller institutions as well as the large ones regarding credit quality. that is what the chairman has brought up. all institutions have been impacted by narrow interest margins. and that is a problem. i think when you look at an aggregate at these institutions, you can look at it from a credit quality standpoint. the trends have improved. you -- your point regarding the money institutions and the dependence on trading revenue, we're looking at earnings improvement was the largest institutions. they have been improved by reduced provisions. also a significant amount of trading activity. it varies quarter to quarter. i do not know that you would want to take -- draw conclusions
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based on a few of the money- center institutions when you are looking at the aggregate industry performance. >> just to quantify it for the second quarter trading revenue. totaling 7.5 billion over 100 billion of operating revenue. >> i think we will need to generate more loan growth. >> that is -- this is a follow- up to that. what impact has various policies curtailing the fees that banks can charge having on their revenue growth? do you see that it is getting worse in october or having a bigger impact in october? >> it will -- will have to have particular policies in mind. >> there have been overdraft
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fees and other things that have taken effect. is that having impact on revenue growth? >> among the factors, there has been some decrease in revenue fees from the regulatory actions on overdrafts. it is about $2 billion. for the quarter. >> the new assessment system based on assets rather than [unintelligible] went into effect. i wanted to know how, you reported a 3.9 billion balance. what was the impact in the
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switch in assessment? >> i will ask staff to respond. as a general matter, the intention here was to while shifting the base for deposit insurance assessment from deposits to assets. the overall revenue was supposed to be a revenue neutral. the amount of income taken in would be capped about the same. >> the change in the base in the new methodology did go into effect but both were in an aggregate, revenue neutral. we accrued $3.50 billion in assessment revenue which is what we have been recognizing in prior quarters. >> in times -- terms of the lower revenue, the lower asset deals to the larger institutions, i am wondering if you can explain why was that and
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how should the industry respond to that kind of information? >> i think as a general matter we have had compressed net interest margins. that is the key factor. i do not know if there is anything further to add. >> do you have any indication of why banks are keeping their balances, keeping larger balances at the federal reserve? there is economic uncertainty. any other logical reasoning would be doing this? >> to a great degree is -- some of it is oeconomic uncertainty. the industry still struggles with flat long growth. there are not a lot of alternatives to putting money in investments and holding
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larger amounts of cash or near cash results in lower net interest margins. that has been a challenge. recently, there has been a lot of fluctuation in the market, especially among banks. some investors have said there is a concern about bank capital. >> [unintelligible] as a general proposition, the answer is yes. in the aggregate, bank capital is at record levels. the level of capital has been substantially strengthened. as a general matter, the answer to that question is yes. >> both the quality of capital and the level of capital. when you look across the industry, it has been
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strengthened and the banks are in better shape than they have been in quite some time. >> one more question. >> and you cannot comment on open and operating institutions. we have one of our largest banks was trading for less than $5 a share. we have another closing in on that level this morning. do you feel you have the tools that you need to cope with any situation that may arise if it is dismantled, one of the larger banks? do you have what you need or are we years away from having that authority? >> we have indicated that we really do have sufficient authorities to address whatever circumstances may develop. >> as soon as the next couple weeks, you think you have got what you need now? it is -- you are going to be
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left with pieces of authority or if you will, and developed pieces of regulation? you're going to have to improvise? >> we have had this authority for over a year now. we have had sufficient time to engage in necessary planning. we feel we are prepared to carry out our responsibilities under the law. thank you. >> we can transition to the technical panel. >> until last updated about future failure, i wonder if there is any further updates or
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is it still the same? >> the last update we did for the board was in april. we projected $21 billion starting this year. the next update will be this fall. >> i noticed in the details that banks' holdings of u.s. government securities were down for the quarter. almost 8%. is that a surprising fluctuation? in the context, is that still in debate? i did not know if that was it for substantial decliner. >> i do not think there is anything unusual. they reduce their holdings. where are -- yields have been [inaudible]
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. opie did see an increase in mortgage-backed securities. somewhat higher yields. margins are under pressure in this environment. that could be an adequate explanation for those changes. >> and a technical question. temporary and unlimited deposit insurance. that was a part of dodd-frank. when you say temporary, when does that thiexpire? >> at the end of next year. >> even when the loan balance has been negative, they were creeping up gradually. quarter by quarter. this quarter there were a little bit. is there anything different about the lending environment compared to past or recent quarters? how was the environment for lending? >> in this cycle it is characterized by a divergence
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between the commercial and industrial lending which has come back. it has grown in recent quarters. real-estate lending has been difficult. there is almost 11 million mortgages. also in terms of collateral value. the real-estate loan is about 56% of the total loan book and that is holding back growth. part of a loan book -- that is coming back better. banks to report their having some problems having creditworthy borrowers. that is an issue. standards were tight but they have loosened in recent quarters and in some of the regulatory surveys. we're seeing some comeback in the commercial side. it will take some time to work that out. >> the decline in the number of
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banks on the problem list. to what result is that a result of those banks failing or merging or has the banks can better? >> i would say it is a combination of both. banks are working through their problems. it is a long process. that will continue over some time. it is a combination. >> do you have any specific number of banks that have graduated off the list? >> i do not have that information. >> we can get it for you. >> i was hoping you could
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elaborate on having sufficient time to -- [unintelligible] are you saying you have done enough planning? is that on a separate track? >> we have done a tremendous amount of work preparing even prior to the rule enacted that have thisd responsibility. different structures and institutions, even preparing internationally with various groups. there is a lot of work that has done so far. i think working with my counterparts, we're well positioned to deal with any issues that we maybe facing. a lot of the regulations have
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not been written. even the institutions themselves have made a tremendous amount of progress in preparing for the eventual need to create living wills. >> thank you. >> for politics and public affairs, nonfiction books, and american history, it is the c- span networks. all available to you on television, radio, and online. and on social media sites. search, watch, and share our
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programs anytime with c-span's video library. we're on the road with our digital bus and local content vehicles, bringing resources to local communities and showing events from around the country. it is washington your way. the c-span networks. created by cable, provided as a public service. >> thank you. it is a pleasure to be with you this afternoon. i appreciate having been invited here to your western summit. there should be more new mexicans. let's make this into state effort next year. it is also a great pleasure to be here today to wreak -- reintroduce arthur burks. he is one of the nation's leaders on one of the most important lessons we should take with us from this experience this weekend. this opportunity to refresh ourselves and to reassure jars
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ourselves from the luxury of coming here together. too often, when we talk about economic policy, our words are not words at all. there are numbers. unemployment rates and interest rates and margins and returns on investment and bottom lines. i graduated from the air force academy. i started and ran a successful small business and reform the state child welfare agency. i am comfortable with numbers. free enterprise is not about the numbers. it is about the dream. [applause] it is about the dream. my grandfather was a pilot in the first world war. he was in the raf. he helped with a small group of other engineers and not even
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high school graduates to synchronize machine guns with the propeller. because it made for a much better day if you did not shoot off your own propeller. that was innovation. after the war, there was not much work to be had in scotland, hcity came to the place where dreams are made, he came to america. the land of opportunity. where he could build a small business and opened airports and started a welding business, started hopping of barnstormers in the 1920's and 1930's and for $5, he gave people the chance to fly like a bird over their own farms. and their towns. and to see things they never expected to be able to see in their lifetimes. my grandfather started flying shortly after the wright
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brothers and he lived to see a man walk on the moon. that lunar lander that was short four years ago landed on the moon and planted the american flag had left computing power -- less computing power than the cell phone in your pocket. we believe as americans in free enterprise. we believe in free enterprise because innovation of lifts the american spirit. and is essentially, quintessentially american. there are few people who understand that better than arthur brooks. his path to the presidency of the american enterprise institute has been, shall we say, unconventional. i can only imagine what his parents thought when he decided to, at the age of 19, to drop
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out of college and tour with a brass quintet and record albums with jazz guitarist charlie byrd. god help my kids to the go that route. he returned to college and he earned degrees in math, economics, languages, and public policy. he is a classical french horn player who has worked on a theater level combat model for the u.s. air force. there is a combination. before joining aei, he was a professor at syracuse anniversary. his latest book is the battle. how the fight between free enterprise and the government will shape america's future. please welcome arthur burks. >> thank you to all of you.
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this has become one of the premier conservative offense. i see many who support my institution. there are so many of you that have been involved in the free enterprise movement with so many in -- organizations that matter, thank you. i am honored to have the few minutes with you here to date. i am going to report to you from washington. do not leave. first of all i would like to say it is a tough assignment to follow my friend, dennis prager. he started off by giving his
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liberal credentials. in the spirit of competition, i would like to mention that -- he says he is from brooklyn. i am from seattle. some of you know i am from a family of artists and professors from seattle, washington. liberal artist and pressures -- professors. i'm effectively from the soviet union. [laughter] what heather did not mention, my parents work disappointed when i dropped out of college at 19. relieved when i went back to college when i was 28. by the time i was 28, there was another great disappointment in their lives, when they heard a rumor that something might be amiss with my political views. my mother decided she was going to get to the bottom of it and got a per courage one night. i have to ask your personal question. an uncomfortable personal
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question. i said, what is it? what this can be good. when you'rr mother asks if you can ask a personal question. she said "have you been voting for republicans? reporting from d.c., these are tough times in a tough town. when i first moved to washington three years ago, my colleagues told me, get ready for tough environment. you know who your friends are in washington because they are the ones to stab you in the chest. [laughter] the conversation today is over the debt ceiling, obviously. tomorrow will be a big spending bill at the end of september. a major omnibus spending bill from senator reid and that will be a knockdown, drag out fight like this one. and another conversation over
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the battle and over and over again from 2010 through 2012. that sounds kind of unpalatable to a lot of americans but i say, bring it on. that is what we elected in 2010 is to have this battle. [applause] for a lot of americans, these are complicated budgetary issues. very esoteric and confusing arguments. but really, there are four facts that americans need to remember about this debate today. number one, this is not a fight between republicans and democrats. this is a fight between statism and the american dream. we have been sliding for 75 years toward european-style social democracy. in 1940, the federal government, federal, state, and local government occupied 15% of gdp. by 1980, it was 30%. in 1988, it was 32%. today is 37%.
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by 2030, it will be 50%. that is not the america of our founders. that 50% of gdp goes to the government. it is not right. it is too sad to be an applause line. fact no. two. government spending lowers the quality of our government. a 10% government increase in spending is associated with a - 1% gdp change. if you want a lower growth, increase the size of government. we are sacrificing our future. we're pulling the letter up behind us. our kids will have a poor country because what this government is doing. fact no. 3. people hate it and are screaming for people in washington to stop. they think that people in washington are not listening. not -- that reminds me when i was a kid, my dad, who was
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politically confused but very funny, used to say, "when i die, i want to go peacefully in my sleep like my grandfather, not screaming in terror like his passengers." [laughter] that is how americans feel right now. fact number four, there are not many ways to get out of this problem. we can borrow, we can cut spending, we can raise taxes, we can do some combination of those things. burrowing is pretty much out of steam. we have -- and borrowing is pretty much out of steam. if you look ghent -- listen to the president of the united states which i know you do, when you listen to the president, you here we need a balanced approach. we need a balanced approach to solving the problem. we will cut the government a little bit. we also need to raise taxes. now, he will claim and it is not
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an unreasonable claim that polls support the idea of balance. this has started to put conservatives into a real panic in washington. conservative consultants are starting to tell politicians, give some ground on this one. the president is actually making inroads into the american population by talking about balance. we got to have an argument as to why that is wrong and we do. the argument against balance is this. it does not work. the economic argument basically comes from facts around the world. economists at my institute have looked at 21 countries over the past 37 years. oecd countries, the rich countries, the developed countries that have had debt crises over study seven years. sometimes they try to solve their debt crises with borrowing. sometimes they try to solve their crises by cutting. what works?
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it turns out the answer is really clear. the average failed fiscal consolidation which is the average debt crisis for the solution failed and the country either defaulted or went into depression, tried to do 50-50. try to get have done with cuts and half with taxing -- tax increases. the average successful country was 85% cuts and 15% tax increases. the best countries of all, the most spectacular recoveries of all in their economies were ones that went completely over the top with spending cuts and gave tax decreases. like in the 1990's. [applause] those are the facts. those are the facts from eight -- economists who got the data. politicians can talk until they're blue in the face about needing balance. i can tell you it is not going to work. here's the problem. that is a pretty compelling argument to me. that is probably a
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compelling argument to you. not everyone is at the summit. not everyone works at the american enterprise institute. a lot of people are living their lives and getting kind of a light weight understanding what is going on with the issues and they say, let's be reasonable. they need a better case for why we need to cut government. you can give a common-sense case, we have a spending disorder in this country. you have to fix it by spending less. that kind of works, too. let me tell you the real problem. it is true that 70% of americans agree with you and me that free enterprise is the best for american economy despite severe ups and downs. that comes from the pure research organization in washington, d.c. that asks that question. is free enterprise best and 75% of americans say yes. 70% say we need less government. at the same time if you ask americans, should we make any changes to the social security
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system, 77% say no. that is the paradox of american politics and it shows you that the common sense and economic arguments that you and i know and love are not going to cut it anymore. we need a better way to sell and that is what i want to talk to about right now. how do we sell the case for free enterprise? the rowe question is not how to sell it. the real question is, why do we care? why do we love this country? what is it that makes this exceptional and unique. the answer is this. free enterprise is not important to us because it mixes rich. although it does. free enterprise is important to us because it brings us liberty, makes us happy, and it is the fairest system.
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what is written on my heart and doors about the liberties that make us exceptional -- endorse about the liberties that makes us exceptional, it is time to start making moral arguments. the problem is, people on the political right always tend to make materialistic arguments because we have materialistic arguments. we have the data. we know how the economy works, they do not. they talk about, the act as if if you make prices go up, people buy more. if you wreck the incentives to do something, people will do that anyway. they will defy the laws of economics routinely. we do not do that consequently, we rely on arguments about economic efficiency. they do not resonate. here is the irony. we believe in the morality of free enterprise. we want to equal opportunity for everyone including the poor. we make our case in materialistic terms. they are the true materialists.
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they believe you can solve the cultural problems of poverty with a welfare check as long as you call it social justice. that is the most materialistic philosophy possible. they are materialists who speak like moralists. we're moralist's but we speak like materialists. -- we are moralists but we speak like materialists. we need to start to get comfortable with the moral terms for we care. now, our founders knew this but we have forgotten. remember the second paragraph of the declaration of independence, which insures as we have available will -- rights of life, liberty, and the pursuit of happiness. you have heard this a thousand times but what you may not know is that document was essentially a derivative of a document called the virginia declaration of rights that came 30 days earlier from george mason. that document, the annett -- inalienable rights were life, liberty, and the possession of
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property. the discussion of the document between thomas jefferson and benjamin franklin was over that last part of the phrase. possession of property did not seem quite moral enough for the most radical experiment in human freedom in the history of the world. they changed it to the pursuit of happiness because they wanted to move from materialism, from mark -- materialism to morality, from property to proceed. it is time for us to make that change once again. to remember the very founding concept of this country. modern social science research shows our founders were right. you want to convince people to stand up for freedom. if you want free enterprise to be paramount in our understanding of the economy, you had better talk about morals. fundamental new economic and social science research show that people are less rational and more immoral. the parts of the brain that
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process morality will crowd out rational thinking and make moral hoursuncements sometimes ou earlier. our experience shows that this is how big changes in policy happened. for many years, in the 1960's and 1970's, this country was destroying the lives of the poor with welfare. we remember this. generations did not work and were in poverty. they were degraded in public housing. they were stuck in systems in which they would get checks from the government and had no skills to create value for themselves or value for other people. it was a scandal and it was immoral. in 1984, a scholar by the name of charles murray wrote a book called "losing ground." he said the problem with the welfare system, not that it is expensive, it is hurting the people it is supposed to help. that is a basic violation of
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stewardship. he made the moral case and that is what won the day. for years, for decades, people have been arguing against our traditional welfare system, making economic arguments. it was the moral arguments that have traction. it took 12 years and it will take us 12 years also. we have to come back here year after year for 12 years and fight the good fight for a decade. i am up for. i bet you are, too. but remember -- [applause] it took from 1984 when welfare reform was proposed as a moral issue until it was signed into law in 1996. it was the best single thing that america did for its poor in our history. it was a great moment and that is the kind of moment we need to have. what is the moral case for free enterprise? in the shell, it gives us the best life and is the fairest system.
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i want to talk about those two points and how we should be talking about them. what is the pursuit of happiness? we have heard this a thousand times and we thought about it a little. does that mean the ability to make a lot of money? clearly not. that is not what our founders of man. money in fact, as her mother taught you, does not buy happiness. sometimes we seek money but that is not what we crave. the research shows that what we truly want as individuals, what brings this happiness, the pursuit of the most satisfying life. it is what we called earned success -- what we call our success. we have studies that show that people who believe they are earning their success are the happiest people. we have one study that compares to people that are precisely equal across a vast population. this is data collected by the university of chicago. if you take to people who are
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the same in age and race and religion and education, and they both feel that they have burned their success but one earned eight times as much money as the second, they will be equally happy. sometimes richer people are happier than poor people but it is not the money. it is the earned success. the government cannot spread around earned six desperate they can spread around tons of money but they will not make anybody happier with redistribution. only opportunity will do that. earned success is the moral process to us from our founders and from us to future generations. are we pulling that moral promise? i asked myself that belote in an environment where we cannot seem to get below 9% unemployment. 20 years ago, 19 years ago, my wife and i moved to this country from spain. my wife is a spaniard. she had never lived in the u.s. before and as an immigrant, she
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was worried that there would be discrimination, she was worried there would be limited job opportunities because her english was not very proficient at the time. in the first month, she had four job offers. she said to me, this was paradigm shifting stuff, i was a musician in those days. i was still a little bit mixed up politically. she said, "this is the greatest country in the world if you want to work." [laughter] is that still true? is it still true? it has got to be true. we have to work for that. it still has to be the greatest country in the world for people who want to work. if that is not true, that is not an economic problem. that is not true, that is a moral problem. for us and our kids and for our kids' kids. if you ask a liberal about the
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most moral system, they will talk to about fairness. listen to every ninth word in what barack obama says. we need a tax system that is fair and balanced. say we need more fairness by increasing taxes on families making over $250,000 a year. he will say the rich need to pay their fair share and he wants to live and raise his daughters in a fair country. that sounds great if you do not think about what fair means. what he means by fare is equal. he means redistribution. when he says we need a fair system, we need to spread the wealth around. that is something we call redistributed fairness. it sounds great when it is not examined. if you do not think that this powerful, consider that 18 to 29 euros voted for obama by 60%. how did it get done? looking at the exit polling? he did not get it done because he said he was going to give an innovative treatment or he was
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going to do any of the policy he was talking about. he got those votes from 18-229 euros because he kept saying furnace and republicans had nothing. they had nothing to say about fairness. that, my friend, has got to stop, and it will start with you and me. [applause] what is fairness? the answer is, rewarding merit. that is what true fairness is. if you ask americans, what do you believe in -- is the fairest system, they will tell you. one in which words go too hard -- rewards go to hard work and ingenuity and where penalties go to corruption, and incompetence. that is what most americans believe is free. if you work harder than others, you deserve to have more and if it is -- that is mayor
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autocratic fairness. it is time for us to argue for fairness. that is why your ancestors came here. there were not saying they want -- i can imagine some potential immigrant in india saying, i want to get to america because i want cash for clunkers. that is not what is going on. they want the fairest system where they can get the right break for their hard work. if we cannot remember that is what is true fairness, shipman's. fairness based on merit only exist if there is real opportunity. you do not have real opportunity, marriage is not real. here is another question we have to be able to answer. that sounds great but people are born different and some people have advantages and some have disadvantages and that is true.
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in point of fact, i have really good luck. i was born into a family where my parents had christian faith and they loved each other and they had high value on education. even though i apparently did not. it was something that is responsible for virtually every bit of success i have had today. i realize that. i was a highly advantage person. and so we can try to base our society on the idea that some people are lucky and some people are not. that is a ridiculous way to base your society. there is a lot of opportunity that everyone has and our moral obligation is to create more opportunity. what are the facts on opportunity today? basically there is a lot of mobility in this country. if you look from the federal reserve bank of minneapolis's data on income mobility, the bottom 20% of earners between
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2001 and 2007, 44% moved up during that six years. the bottom did not stay stuck. one in to move data the bottom category. one in three move down. the fair is fair. you have to be good. if you are good when you are poor, there is plenty of opportunities to succeed. most americans believe that we are truly a land of abundant opportunity. the general social survey, the definitive source of data goes back to 1972 and asks, do you believe success is based on hard work or lucky breaks? 70%, year after year, have said hard work. it is simply a pathological point of view that we're not an opportunity society. that said, the moral imperative for you and me is to make sure
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we are an opportunity society. when my doing to make sure that more people who are economically and socially vulnerable are getting more opportunity? if i'm doing my part, it is reasonable for me to suggest that success and fairness are question of merit. i am comfortable going out and saying redistribution is not merit. it is not fair. incoming quality is not merit. it is not fair. and to say we have a concept of what true merit is, what true fairness is, we want to have a fairer economy and country. the entitlement reform is critical. it is not fair to steal from our children. it is not fair to hand money to tax -- tax money to unions because they have political power. it is not fair to make poor people words of the state. it is not fair to treat the american citizens like atm machines. that is the problem with our country. it is not fair enough and it is up to you and me to start going
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fairness to fairness with the liberals. if we do, we will start to win. [applause] i want to get to questions and answers, if you have any. some say there are two possible futures for us. future number one is social democracy. we have been careening toward it for 75 years. we like to pretend we are not. we like to pretend that sometimes, that stops and we remember our values and government stops growing. i have the data. you have seen the data. it just -- the government gets bigger and bigger. that is -- some people believe is inevitable. we will become a european-style social democracy and people will accustom themselves to a. right now 70% of americans take more out of the tax system than they put in.
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51% have no federal income tax liability. when ronald reagan took office, the top 5% of earners pay 35% of the taxes. today they pay 59% of the taxes. at what point will we hit the tipping point? some people will say this is pretty good. let's let those guys pay for everything and we will become like sweden. the other possible future is to not be like sweden. it is to be like greece. the welfare state becomes unsupportable. the state collapses on itself and we get permission austerity. that is a scary or future. that is what a lot of economists think we're facing. -- that is a scare futuier futu. it is not a 15 month political struggle between democrats and republicans. it is at least a 10-year struggle against state ism from
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both parties. if we are -- against statism. republicans are almost as culpable as democrats for the state planned size of government. -- state and size of government. we need tectonics' changes and not just -- tectonic changes and not just filling. we are having to make the case for our success and true fairness. that is our moral obligation to our fellow citizens and future generations to stand up for the country that we love. if we do not, we will have violated the promises of our founders and we will have repudiated the dreams of our ancestors. i know that you will stand with us at aei and fight for us. that is why we are here. my last word to you is thank you. [applause]
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>> thank you sum much. please stand and wait until microphone is brought to you so our viewing audience can see and hear u.s. u.s. your question. -- hear you as you ask your question. could somebody get a microphone to carl hoops. >> my question to you, we have this great struggle in congress. whether to do the best we can with controlling one-third of
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the government or fight for everything which i think mr. carlson advocates. what would you advocate until we elect a republican president. >> that is a tough question. are there any other questions? [laughter] i answered this two days ago. i was confronted with that a couple of days ago. they basically said that this was a military campaign and we had two years given what republicans have with the very clear mandate the dot in 2010, you would say, what are the battles? what are the battles? the budget fights, the debt
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ceiling, the next resolution, the spending plan, her the debt ceiling fight again and plan it out and say what are we going to do to make sure that the moral case against government spending is coming up again and again and again. what we have to do is make sure your energy and troops are marshalled in the right way. my questions to the republicans was are you marshalling your energies given the fact the next big fight is at the end of september? are you ready for the next big fight or are you going to be exhausted? this is a long fight. the biggest fight is if republicans win. you will have to hold them to account. you have to make sure they do not go completely native and act like democrats. let me tell you, that takes more
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courage. it is easy to stand up to barack obama and to disagree with his values. no kidding. it is harder to say to a republican you are not representing my morals. [applause] my short answer to that is, remember the long fight. take your wins and go on to the next one. if it is a sustained effort with courage and understanding, the timeline has a likely -- higher likelihood of success. some of them disagreed but i think they took it well. thanks. >> i am glad to know someone like you is speaking to the republican congress. god knows they need it. my concern is language.
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i hear the nation is in two days away from default. the population has had this fear of default when there has never been a risk of the united states defaulting. how do we get our leaders when they get language like that to stop and say we're not talking about default and change the argument to our argument. >> it is true they cannot speak. in general this is the biggest problem we have. this inability to connect with people emotionally. we understand the economics and we rely on that. the second is an embarrassment because of of a delicate experiences we have had in a culture fights which is made for some tough times.
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that said, how should we be talking about the debt ceiling and the likelihood of default? one way to take care of this is to roll through august 2 to. americans will experience the whole train stops on august 2 is fiction. sooner or later it will run into trouble but the best way to it -- is to give them evidence. ed is almost certainly going to happen. republicans will learn to be able to seay "see." your focus on language is justified. it is what i am working for. >> i have a bone to pick with one of your comments. the president has said it is only fair the most fortunate contribute more.
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i heard you saying something to that effect, you were born into a good family. i do not feel lucky, i feel like i work hard. i was born into a good family but that is a reflection of my parents having worked hard. >> sure. my parents and grandparents worked hard as well. we were born poor. it turned out it cannot matter in an opportunity society. opportunity comes on the bases of a murder -- merit and virginia. but i also recognize there are some people who are in the unfortunate circumstances. one of my jobs is to create more opportunity. i want to create opportunity for people who have less. i want to convert them to the opportunity society. i want them to have the optimism you and i share. i do not want them to the
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claimants on the stage. i can say that is an idiotic philosophy but that does not have as much attraction is one i set up a program in the city or substitute a foreign aid for small business development. all the stuff we believe in. we believe in creativity from these things. i take your point. there is a ton of work echoes into this. we cannot stand for that. at the same time, let's say we do believe that certain people need help. let's give them the right kind of help. welfare checks are not the right kind of help. the right help is giving people what has led to our success such that their kids and grandkids can say one of the reasons i am ok today is my father or grandfather pulled our family out of poverty.
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thank you. >> back here. >> i concur with your decision to recommend that we use the liberals' own in terms and that we win and that way. i have one example of that and i would like to speak to the terms you're talking about. i helped start a sexual abstinence program nationally. as soon as we true -- chase did to a party prevention program, which began to make headway. give us more examples the terms we should begin to own as conservatives that the liberals are using against us. >> it is always a winner to say it is not that we are against sex, we are against poverty. that sounds like a big winner to me.
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[laughter] sorry. i am off my game here, ma'am. [laughter] any time you hear a liberal talking about the fact that the poor are stuck in this society, it is time to change the language. any time you hear them say what we need is for people to pay their fair share, that is absolutely true. that is the reason we need a flat tax. [applause] right? when you say we need rich people to serve others more you say that is right that is why i live in a country where the wealth the band together to give $300 billion away to charity which is more than the gdp of sweden. that is something to be proud
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of. that is the rich is serving the poor. you can talk about the fact that everything in the left wing a moral scheme is actually coming true. reason is because of the free enterprise system. the poor are richest here. where did they have the greatest opportunities? here. we know that in point of fact, if you are born poor, your luckiest shot is to be in the united states. that is why people are struggling to get in here. that says something. we can invert everything they say, but we have to be creative and have the courage to not just go back to the language. thank you.
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over here. >> i have a question for you. it seems that a large majority of americans understand that our moral values, from god's 10 commandments. is there any positive value in arguing that the commandment that says thou shalt not cover the neighbor's property ought to be enhanced in our moral argument? we have a culture that says it is ok to want someone else's property even if we do inter- governmental. >> that is a good point. that is a smart point. the problem with redistribution is that it is trying to build a society on the basis of envy. you and i both know it. this is the difference between the united states and europe. there was a survey when bill gates was the richest guy in the
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world that asked what is your opinion about bill gates. a warm feeling or a cold feeling? they ask to citizens in a bunch of different countries. what struck me was the difference between the united states and france. let me cut to the chase. people said i hope my kid is the next bill gates. in france they said let's take his staff and burn his house down. that is the difference between an envied based society any mobility based society. the difference between spite and opportunity. the only way we will maintain that is through the concept of a fairness. if we do not change the path we are on we will be in envy-based society. that is an on happier country.
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that is bad stewardship to leave to our kids. john says we are done. >> before you leave, you have witnessed history being made. i have heard him speak a number of times. i have seen him on tv and on the radio. i have never known this man to say "uh" or be at a loss for words. you just saw him rendered speechless. he did it to himself. i asked you to watch for the new bumper sticker, sex yes, poverty no. [applause] thank you very much. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011]
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>> and doctor martin luther king was not a president of the united states. and no time to be hold public office. he was not a hero of foreign wars or had much money. while he lives he was reviled at least as much as he was celebrated. baez on accounts, he was a man wrapped with doubt. in man not without flaws. a man who more than once questioned why he had been chosen to so ari to as a task. the task of leading a freedom. the task of healing the wounds of the nation's original century quashed --
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>> the memorial will be dedicated this sunday. during the week, we will have coverage of other events surrounding the dedication on the c-span networks. [applause] >> thank you. you should not stand before i speak. you might be upset. first of all, let me say how glad i am to be here. everyone has been wonderful. some people wonder why i am here. i out thought to myself of that scene in the wizard of oz where
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dorothy turns to tot. the character identify with. she says, "we are not in kansas anymore." unless you went to the denver international airport. [applause] don't get me started there. highlights earlier when he said a of promise to do some of both. sometimes some people do not like what i say. we were having a reprise on monday night. those of you who want to see more of that to, you can. let me start off by saying a little bit about my journey. when i left politics eyesore wanting to myself. when i got out of being a
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political hack. i would never not speak in my own voice or say what i believe and to hell with that. i know is at least, if you see me on tv when i commented, i try to say what i believe it. i refused to do talking points for anyone. some of you have seen me on fox. hopefully it will be broadcast. we do it every month for those of you who are real political junkies. ondo online for fox live mondays at 11:00. we have some wild things to say. about my journey, i left politics because i started when i was very young. i did a campaign when i was 21. i was the youngest person to ever be a major adviser to
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someone in american history. i spent 20 years in politics and became disillusioned with it. of course it did what nobody in and does i went to hollywood. it was like going on methadone. when i laughed all i never wanted to deal with that. i thought it had become -- a profession i was not proud of. and then something happened. my daughter gave me three grandchildren. travis and a 3-year-old. i moved to so i could be down the street from them. i found myself facing a question about what i would do, how
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could i stay out of politics. i have been working on a book called america is too young to die. the thesis is simple. every generation faces a test. a test of whether it will earn the right to call itself americans. before the united states there was an america. the ultimate moral commandment was simple -- give your children better than you had. give them more opportunity, greater freedom, it was a test of honor. for each generation, set to face that test whether they meet or betray their destiny, we are now part of the first generation to stand at the process -- precipice to fail that test.
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it is not something -- are watch these politicians talk about our children. they throw away like it is a line between potholes' and taxes they're going to give you back. it is not. it is a moral issue the defines each and everyone of us. let me tell you something. if we fail our children and that issue is in doubt, america will die. there will still be the united states. but there will not be an america anymore. if that moment happens, it is something history will not forget and god will not forgive. [applause] when i face the question of getting back into the political sphere, it came to me one day because i realized with my three
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care and -- koran children, i thought to myself, if i'm fortunate and god allows me to live another 20 years, 1520 years. and see my grandchildren grow up into young men and women, whether my going to say to them when they say how did you let all of this happen to us? it is the question that everyone of you should be asking themselves. now were the next paycheck is coming from or the next donation but how are they going to answer that question? let me tell you something. if someone was sleeping last night an intruder broke into the house, entered the window to do them bodily harm, what would you
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not do to to and protect your children and grandchildren? is there anything? that is the equivalent of what is happening right now. they are being robbed. their heritage and future and what they are owed which we owe them because it was passed to us is being taken away. it is happening now. this unbelievable exercise of politicians out for themselves always worried about their politics. they are all that way. the president, the republican leadership, when what they're doing is bankrupting this country. talking about cutting debt down. we know what they mean. they will never stop spending. that is what they do. they spend money. the republicans are only a little worse than the democrats.
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the fact is they never cut spending. they raise taxes and waste money. they never take responsibility. did you forget last spring, when they passed -- john boehner said we're going to pass these costs. it turned out to be 300 million? because they think we are all idiots. economy in this country is in the worst shape of my lifetime. it is getting worse by the menem -- minute. the president has no clue what to do it. washington has the highest realistic values in america. these people do not give a whit what really happens. they're just looking for a talking point. i was out last week in denver, one of three cities, talking to americans as focus groups. about what they were doing.
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i will tell you the resilience of the american people is unbelievable. they're trying to make a. they have no faith in the government. but they know what they have to do in their own minds. you hear the stories, they tell it about their families and friends and what prices are being paid, people losing their homes because there is -- our economy was looted and the people who did it are walking around free instead of being in prison including the chief of staff. [applause] a subject will talk about in a moment. all of this continues to go on. you heard today, you see what is happening with the chinese. i do not know how you think your independent when you are on
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your knees to your banker and your banker is a communist to represses his own people. today there is an article about how they are repressing churches. churches are trying to fight back. christian churches are trying to bring got two people and have been deemed enemies of the state. we have people who cannot wait to do business. they do not care about the moral law implications. we see what iran promises. they get nuclear-weapons, does anyone doubt they're going to use them against israel? we are negotiating with the muslim brotherhood in egypt. we have a president who seems to be impervious to understanding our responsibility to the state of israel. it is nighttime in israel as i speak. they are in great danger and with it united states. no one speaks out about it.
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the chinese military is building up. we have given space to the russians and the chinese. all this is happening. i have faith in the american people. the american people, i have had my heart broken but i've never lost confidence in their judgment in wanting to do the right thing. there is a great majority in this country. it does not identify itself by party so much as by a simple definition of being americans. i belong to a party of memory. you've heard foster this morning. i cannot believe he was in such good shape after the night he and i had last night. [laughter] discussing the fact that, all of that democratic and presidents, jfk, he said in his inaugural
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address that god's work is our own. fdr, if you're actually hear or read his prayer on d-day to the nation. i use it for democrats to claim we should not have republicans -- religion and politics. i pretend it is george bush and watch them grow crazy. president carter, i was honored to work with. ronald reagan, when you saw the demonstration on the display, when he took on communists when he was a union president. he was a democrats then. we have a two-party america. we of the corrupt party and the stupid party. they have a lot in common with each other. but they tend to distinguish them over and over. i am not going to tell you which
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is which because you know. i have been a democrat all my life. my father was a democrat. but the democratic party that i belong to is not what they have turned the democratic party into the period how i am making a stand. i am not leaving my party. i used to think -- i used to dismiss ronald reagan when he said my party left me. in recent years i appreciate that idea morning. i want to tell you where i stand. chuck schumer who was my classmate a harvard a couple of weeks ago in the hamptons. he was at a party. he went up to the dog would written a piece -- doug who had
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written a piece he said you are required to use as talking points even if you do not believe in them. it is -- my reaction to that is what woodrow wilson said in 1916. he said i loved the democratic party but i love america much more. when the democratic party becomes an end unto itself, i rise in dissent. i rise in dissent. [applause] it was once the voice of the common man. it has been taken over by a an elite and plunge of over educated people who have decided their job is to be dictator to the people, to the common man. to tell them what they must
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believe and do even when they do not lived up to it themselves. i know a lot of these people. when we were in serious and i was young we never let these people in the room. while we were not paying attention they took over our education system and our foundation. they are now taking over the government. if you knew them like i knew them, you would not sleep at night. i want to say something about president obama. i started in the civil rights movement. i was a southern boy. my family was from south carolina. i was involved in civil rights in the 1960's and 1970's. i helped elect all the first wave of black mayors a dent to america. when barack obama announced -- i was holding my granddaughter in
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my arms. tears were running down my eyes to see a black man announcing and running as a candidate for president. not as a black man but as an american. however i have been through politics so i am more cynical. by spring it was clear that he represented a certain kind of chicago way of life of politics. as i said, he has killed his administration with crooks. he has been protected by the press. we have the stupid party. i want to give equal time because they deserve it. anyone watches what they did with obamacare. they won the house of representatives, two-thirds of the 60 members elected were
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elected because of opposition to obamacare. i described it as a crime against democracy. it was 2000 pages of trickery and lies and deals. told to people, never in the history of this country have we passed a major piece of entitlement. that did not have the support of both parties. it was passed by doing deals with the drug industry so they would be exempt from that. with law -- lobbyists and the aarp and others. it was shameful. finally they had to by senate -- senators. now we find out about the waivers, the higher costs, and actually try to say it will
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make health care last. i don't know who they think they're talking to. there has not been a week and majority has favored a repeal of obamacare. republicans say, they were giving all the tea party people a bone. they are not interested in it. when they found out about the illicit funding, what did they do? they refuse to make it an issue. there are republicans who have spoken to you who went and told and major donors not to worry. it was not important. one major part of the leadership told members, which basically like a lot of what is in this bill. i want to tell you, do you know the republicans, and if you do not believe me, and you know
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they passed 95 republicans to extend obamacare to veterinarians. we are having enough money for doctors for people of the republicans did that. they are part of a washington political class and their whole idea, our job is to help people coming in. when i watch -- i will tell you another story. about this a law that frank talk about and the problem of moslems. wittiest on the tax front is outrageous. can somebody explain to me, you want to attack somebody?
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let's do ge. they pay no taxes. the head of it is your capitalist body. what is he doing sending jobs overseas? not creating them here. making all of the sweetheart deals. i would tax them. i would tax the hedge fund people who are paying 15% who chuck schumer defended and protected from having paid the taxes you pay. he went to engage in campaign money for the democratic party. you want to talk about hypocrites. molly norris was a woman who was a cartoonist when the whole thing about drawing mohammad became a crime to be punished by death. she was so outraged she suggested they have a cartoonist day. a fatwa was issued to have her
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killed. the fbi told her it was a serious threat and she should go into hiding. the fbi would not protector. she had to change her name and go into hiding because the fbi would not protect her. the same leader who became the attorney dern -- attorney general. he is an outrage. nobody ever calls for his resignation. he is put the -- a moslem woman in chicago and decided she wanted to take a leave of absence to back out. she wanted to be paid. the school board said she was out of her mind. we never give leaves of absence for anything. she filed suit. the united states has filed a suit on her behalf. that is what is going on in this
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country. no republicans talk about it. came, you hadtory a close senate race. the incumbent was neck-and-neck. the incumbent had actually said "we should not forget the good things that the modern did." -- bin laden did." i could not understand why no one would make an issue and of mauling norris who was in hiding. challenge the incumbent on that basis. his washington consultants, the corrupt corps in both parties who corrupted politics told him he could not do with. that was not on their agenda.
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neither was the mosque. the political corruption is unbelievable whether it is a dirty party contending -- and loses three states to the republican party in. whether it is the democratic consultants robbing widows and orphans. they're all in the business. the problem i have which republicans is you people do not know how to fight. it is unbelievable to me. wisconsin is happening. organized labor is putting everything in there. a lot of people are not doing anything. there'll be another recall in two weeks there will decide of a lot of what happens. i could go on about california, a gay marriage. i do not understand. to me the issue -- the issue is
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a pragmatic and real one. and a legal one. we saw what no-fault divorce did to the country. this sounded like a good idea. we have 30 years of evidence that the community [unintelligible] when we change the law about families not matter, you heard last night from rick santorum, and now is about what makes you happy. if the issue of her marriage should be what makes people happy, why is it limited to two? why not three. why not four. polygamy has a greater history in this country and worldwide then came marriage. -- than gay marriage. this family wants to apply under equal protection of a law with the rights to marry. if you think the country's divided over gay marriage, it is
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violent on the issue of polygamy which is an abuse of women to the first order. conservatives do not know how to fight. they sit around and complain. you talk about the access. it is not between liberals and conservatives. it is about a political class in in washington. there is a majority of 70% of the country that unites around fundamental concepts. about a quarter of the country who is -- political class is in power right now. it is determined to hold on at all costs. its basic means of operation are reading this system and looting it.
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85% of the american people believe congress only serbs themselves. -- serves themselves. 70% say they are somewhat correct. -- corrupt. what are like are the most important questions. when asked whether or not the government operates with the consent of the government, 23% say yes, 60% say no. members of the political class, 79% say they rule with the consent of the government. 75% of america says the do not rule with the consent of the governed. you might as well be indifferent universe is. that was the basis of the american revolution.
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a and-stock -- scott is whether people they thought the distance between those of you talk to your government, how did it compare to the colonies in the mid 1700's. 55% of americans said they believed it was worse to what was when the colonists faced the british. zero percent believed that. what we are discussing is what i used to term a revolutionary moment. the political class and the lobbyists and the money and all of the capitalism, they run this country for themselves. they're determined at all costs to hold onto power and privilege. even if it means the country goes to hell and fails.
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a me tell you something, it is like what john milton wrote in paradise lost 20 quoted say tennis chang better to rule in hell than serve in heaven. that is the political class. after this display of the last few weeks, if you do not think the conditions of 1992 which would have produced a winner of ross perot, those conditions are great. you saw what donald trump did. someone like him runs against the independent, something is going to happen. the one thing i want to talk about is born policy called secure american now which is to -- the grass roots involvemen
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involved. it is a non-partisan effort. the other is an idea i am working on and principles i have developed for my book. my model is simple -- we speak only american here. [applause] the principles of a, i will go quickly, america exception listen. we are the exception of nations. we have young people who do not believe that. we have a president who sits in the oval office who does not believe this. we voluntarily abdicated and surrounded our supremacy in space a week ago to the russians and chinese. nobody said anything in in washington of either party. i could go on with the other
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things. the second tied yet is that america is freedom. americans need to start acting like free people, whether it is tsa. this idea that we are a cheap and should be treated that way or that the government, there was a front page yesterday about how ordinary people are being caught up in the federal laws over a minor offenses that no one could know about. it is a government prosecuting its people to keep them in line. i urge you to read that story. that is going on every day. the third i talked about our generational commitment. we must have truthful discourse. unless we can be honest with each other and tell the truth, we cannot survive as a republic. all we are fed is lies after lies. we are also told there is no
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such thing as right or wrong or moral relativism. all things that undermine this country. that is said not to be a political issue. it is a political issue. the belief is, if you can get away with it, take it. until we start to demanding something different, that is a problem. and the great poison is corruption. it has entered the political system. we of corrupted every institution. you don't think the wall street could have done if politics were not corrupt first? they allow them to by both parties. the republicans wanted to defend that. -- them.
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fannie and freddie, the single greatest scandal. if you took all the corrections in the history of this country and combine them together, they would look like a tea, compared to fannie and freddie which looks like, remembered when we had that well blowout in the gulf? that is fannie and freddie. we have a law called the dodd- frank bill which i call washing the oil off the birds for others. it took unanimous consent to call it after those of two authors. everyone agreed to, that. i call it the dillon churc -- dillinger capone act. those were people who should have been in jail. did the republicans say no bill
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will passed with those people writing it? not a thing was done with fannie and freddie. they did everything but that including sanctifying the bailout. from the far left to the far right is what bailout state, the looting of america in order for the -- 16 trillion dollars in. you probably did not see that story. secretly lent to every bank. bernie sanders, he forced into the bill through his " they had to do an audit. 16 trillion dollars. even this week the faa, what did the airlines do? the taxes you pay for your airline ticket, they are
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keeping the money. they're changing their prices. we have lobbyists. we can do whatever we want. you do not have to believe in free enterprise to be against the routine. that is not free enterprise. my next principle is the ideology and america is not liberalism or conservatism. it is common sense. " we need is to restore that as the principle which we look at. everyone of you know what i mean when i say common sense. you're offended by what we read of the abuse of common sense. the seventh is one of the most important in my principles -- the power in the hands of the people. the ultimate sovereignty of this country is the people. all of us are responsible. when we did not get here by
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accident. everyone of us closed our eyes or did something. i did things a -- it helped. everyone of us is responsible for how we got here. everyone of us is responsible for getting us out of here. the notion that the political class wants to tell you is you will have no power and you are wrong. the truth of the matter is you are right and you have all of the power. [applause] it was said this morning and i invited somebody to come here. i met this person at cpac. i was speaking on national security there. a lady asked about getting information. you have to learn how to share it and how to the evangelize the information. the press was not going to give
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it to you. the fact of the matter is, this woman is a mother of three. she was never in politics until three years ago. she is turned texas politics on its head by having boot camps to train people like you how to communicate in use the tools that are there to restore democracy. that is the future of america. it is not the politicians parading around pretending to be a tea party people or the idea that people should rule. but people who will -- that is the next -- to the next principle. freedom of the press. it is given to this country for one reason, it was a deal. the only institution that has no checks and balances is the press. that was not done because the founders liked the press. they did it because they
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understood the country could not be free unless the people were protected by a free press that would protect them from the government and power. the deal was they would have no checks and balances and the commitment was they would protect the country. we have a press that has abandoned its role as the watchmen on the walls of freedom. they have abdicated that role. they have decided it is their job to be writers of a political party. they believe it is their right to tell you who you must vote for. they also believe what truths you may know and what truth you may not know. i want to tell you that in doing so, by deserting their responsibility, they have made themselves the enemies of the american people. until we restore free information, we will not be
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freed. my last point is, i am working on this. this country needs a good dose of what it believes in. enterprise and democracy. so far we do not have much of either one. we need them back. i believe we're at this critical moment. i have spent a lot time since salep politics steading history. one of my heroes, robert kennedy, he died in 1968. he said, our future may be beyond our vision put it is not beyond our control. either fate nor fortune or the tides of will determine our future. there is pride in that
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statement. there is also arrogance. but there is also great truths. is the only way we can live. abraham lincoln, right after he announced the emancipation proclamation did before he would actually release it, had a statement to the congress. in those days it was called, you did not have the stated the union, they were written messages. it was one of his most famous. it says everything we should be about. he said, "the dogmas of the past are inadequate to the present. the occasion is piled high with difficulty and we must rise to the occasion. we must think and act anew. we shall save our country. fellow citizens, we cannot
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escape history. we will be remembered in spite of ourselves. the fiery trials for and -- through which we pass will honor or dishonor the latest to generation. we say we are for the union. the world will not forget we say this. we know how to save the union. we hold the power and bear the responsibility in giving freedom to the slave. we assure freedom for the slave. we shall nobly save or lose the last, best hope of birth. other means may succeed. this cannot fail. the way is plain and generous and just. the world will ever of a plot and god will bless." i will close with one last quote, president reagan white
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tried to defeat twice. one of my favorite stories of his was about what happened with joseph warren, one of the founders. he died at bunker hill. he was the president of the massachusetts congress. he was commander in chief of the new wing when the army. -- new england army, . he was one of the last people killed. he was the person that paul revere and others rode out to unborn -- warn. he said that the country that we love is in danger. do not despair. upon you rusty's future of generations not yet born. act worthy of yourselves.
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that is the question i have for all of us, an act worthy. the road is not easy but it is a road of honor. at the end of that road you'll be able to withstand before your children, as our grandparents and parents have done and speak the saker words, we kept the faith. thank you. [applause] [whistling] >> pat caddell, thank you. >> every weekend, american history tv. 48 hours of people and events telling the american story. watch interviews about historic events on oral histories. some of the best known history
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writers. revisit figures and events during the anniversary of the civil war. visit classrooms across the country during lectures in history. " behind the scenes on american artifacts. the presidency looks at the policy and legacies of past american presidents. get our schedule at
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>> good morning. thank you for joining us. it is our privilege to welcome everyone to the auditorium. we welcome those who are joining us on a website and remind our internet viewers that questions can be submitted at any time. we would ask everyone to make that last courtesy check that cell phones have been turned off as we proceed. we will post to the program within 24 hours on our website. hosting our discussion is michael frank. he serves as vice president for government studies. he overseers our outreach. he has served as director of communications for dick army of texas. he has also served in the office of national drug control policy and as counsel for former
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representative william of california. join me and welcoming mike frank. >> we welcome everybody on this august day. as you all know, on september 11, 2011, americans experienced the single worst terrorist attack of modern times. 10 years later, the nation has undergone tremendous changes in terms of how we safeguard the american homeland. there have been a number of successes there should be celebrated. chief among them is that no fewer than 40 plots have been thwarted. some successes can be attributed to the courageous actions of ordinary citizens. others were the fruit of law enforcement. challenges remain. if we are to stay ahead of the terrorists and build an enterprise capable of tackling
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issues, we will need to assess where we stand on a number of fronts. today we are releasing a steady -- study 4.0, overcoming complacency the reality that state and local government possess the resources and experience to protect us from a physical threat. the second is complacency. if the in addis taste becomes complacent or focuses on the past, it will -- if the united states becomes complacent or focuses on the past, it will face the threat. we need to break down the
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bureaucratic barriers that prevent us from connecting the dots. and the third area -- politics. over the past decade, political considerations have colored far too many policy decisions. this is wasted billions of dollars in homeland security grants, create oversight's inefficiencies, and leaves america last -- alaskan certification -- less secure. we can do better. we're privileged to have experts in the field of homeland security who are the authors of this study. it will discuss the findings and go into much greater detail. i will introduce first, james carafano, the director here at heritage. allison's center for foreign policies purity is also the deputy director of an institute for international studies. jim is a historian, a teacher, a prolific writer, and focuses on developing a national security required to secure the interests
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of the united states car protecting the public, providing for economic growth, and preserving civil liberties. he is a columnist for the "washington examiner." his columns run in every major paper in america, not to mention appearances on cable networks. in his spare time, he has written six books, including one textbook on homeland security. he joined heritage as a research fellow in 2003. he is a 25-year veteran of the army where he rose to lieutenant colonel. he was the head speech writer for the army chief of staff. before retiring, it was the executive editor of "joint force quarterly." is a graduate of west point, a doctorate at georgetown, and a national bagri in a strategy from the u.s. for college.
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early in 2005, he said that -- michael chertoff said that " homeland security two. no" was the most red paper in the department of homeland security because it was the shortest period -- the shortest. he is the preeminent interest in the role that local and state governments play in the homeland security. matt serves as a senior official of the homeland security department of tom ridge. he advise the department leaders on policy and operations. he was charged with developing
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initiatives post 9/11. is the author of a number of studies in this area, including the 2009 book for heritage on protecting american from outside the beltway. before joining as a strategic consultant, an adjunct professor at ohio state university, and with that i will turn it over to a gym and then matt. please join me in welcoming james carafano. >> i want to thank mike for hosting us and all of you for coming. i wanted to go first to take a few moments to talk about how we got there from here. that is important in terms of stating what is in the report. i'm very proud of heritage. heritage was one of the first major thing takes in the united states to take homeland security
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seriously a. the first major report after 911, came out of the heritage foundation. other institutions where there are sunshine patriots, everyone did homeland security after 9/11. i'm very proud of the program that heritage is dedicated to resources and staff to be serious on this issue. i would argue that they publish more than any other think tank in the world. and we have done it and sustain manner over a decade. i'm very proud of the men and women that work on this and the support that we get from folks like mike. this report reflects that tradition. this is the third report we have done for the first two we did in connection with the center for strategic international studies. they are a great partner. we thought that it is a bipartisan effort in the first
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issue that we had a deal worth work inside the beltway for the first report we did in 2004, when you're up to the department was established. like any organization created by congress, it has to be a mess. compromise is the enemy of efficiency. much like the creation of the department of defense after world war ii, the first thing they had to do was reorganized. so we took a hard look at the organization of the department and we made some very clear and strong recommendations about the need, the imperative, to reorganize and strengthen various elements of the department. that was called "dhs dewpoint no." 2.0"dhs to point ou
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they did a second stage review where they made a serious effort in improving the department and a use many of their recommendations we did in a report. we then did a sector reported a year to letter called "homeland security 3.0." the argument was that this was just not about the department of homeland being hoarded that there are the common security being a national enterprise. we wanted to make the case that this was a holistic enterprise and not just focus on the department and its strengths and shortfalls and weaknesses. in order for the department to really play a leadership it needs to play, what does it need to do? what kind of partnerships and stuart ships does it need to take on? and one of the recommendations was to do an analysis, much the
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way the department of defense is required to, a quadrennial referenced review. they have been doing that for several years. they have to report to congress and say this is what we think our national security needs are and how we're going to meet them. we thought that would be appropriate for homeland security. indeed that was the first recommendation that was acted on in the report. the democratic-led house established a requirement for homeland security quadrennial reviews. that review did take place in many of the ideas and concepts that we argued for are reflected in the department pasqua journal homeland security review and we are very proud of that. this report is very different, though. we think the main issues are not inside the beltway issues anymore. they are very critical issues in
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terms of the role of state and local governments, individual communities, and our international partners that require attention. we decided to go beyond the beltway in this report and really engage with the stakeholders outside of washington who are out there doing this every day, and really understand their issues, their frustrations, their concerns, their ideas, and their initiatives. really making sure that washington had a clear understanding of what this enterprising community wanted from them. the other thing different about this report -- we know a lot. this nation has been doing this seriously for 10 years now. this is like 10 years into the cold war. we know a lot about what works and what does not work. we really need to start paying attention to that appeared we need to stop doing things that are stupid and wasteful and counterproductive. we need to stop blowing money
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out the door and for no payback. things that have actually worked, where we got something right. we need to strengthen what works right, stop doing stupid things, and that was the focus of this report. i'll turn it over to the mat to talk about what is in the report, but we've been working over a year and matt has done an amazing job. he has been a key research and did an amazing our reach. but there are three things in particular of the week focused on in this report. one of them as disaster preparedness and response. today we have what could be a class for hurricane bearing down on the east coast of the united states. for those of you who do not know what a class iv hurricane is, at the result is catastrophic. we need to take this very seriously and we make it one of we are unlucky.
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-- if we are unlucky. this issue will focus on his immigration. just last week we had the administration come out and make a major statement about immigration policy and enforcement and deportation. that has never been more timely. and then the final issue that we focus on is counter-terrorism, stopping terrorist attacks before they happen. just last week we have the secretary of homeland security come out and said they were very concerned about the run-up to 9/11 and lone wolf says. the desert issues that are front and center record while we're all talking about libya today and misstated the economy and whether the french banks are going to collapse, if you've seen the american ideal tour -- these are not things that are in the front burners, but the headlines tomorrow could make them big. i never -- there's never been a better time to think about the homeland security enterprise to make it the best it could be.
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aboutalso concerned counter-terrorism strategies, the flip side to this, protecting the home and bury the idea of going out and stopping the terrorists before they even get close to our shores. in short order we will release an alternative counterterrorism strategy which i think argues against what the administration has done. and it is done by our counter- terrorism network. it will be the second in a series of protecting american and it will be out shortly. >> thank you for having me and thank you for those who have come here today or are watching online. it is always nice to have folks be interested in this issue that we are talking about. i want to thank others before
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giggling. we are up to the 10th anniversary of the 9/11 attack. that is a point of reflection for americans. it has also been roughly eight years since the department was stood up. a lot has been done and a lot to look back on to figure out what can be done right. and me tell you how they came to this report. i've been with heritage for four years. my role has been to get out there and talk with lots of state and local first responders to hear what they think he is working and what is not. and we have done town halls all across the country, multiple surveys of first responders. i have travelled to tons of states to get their feedback and listen to what they had to say. over the course of the last two years, we have been building up on that knowledge base and
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coming to what is the culmination of that effort, his report the we're talking about today. the report has 18 specific findings. they are all in the report. you can get a copy online at our website. it has 18 specific findings covering a range of issues with 35 recommendations. we broke the report into three sections for the first section is titled "making federalism work." we often hear about federalism and the idea of the 10th amendment. there are states and local governments out there and mike talked about how what is more than that. it is more than just a constitutional doctrine or principal. we really see it in this context, homeland security, as the best way to protect america. when you look at the resources that the federal government has, it does not have an endless
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number personnel across the country. there are 40,000 fbi and other personnel across the country. the vast majority really resides and work for state and local governments, be law enforcement, the fire service, public health -- those of the folks that are the tip of despair and have not just numbers in terms of personnel, not just resources in terms of money and equipment, but also one of the most important things, experience. folks who have been walking precincts for 30 years, who know their communities in an intimate way, no work critical infrastructure is. so that when something occurs or is brewing, they're the ones most likely to detect it, help was prevented, or frankly respond in recovering the most effective manner. i think we've lost sight of that as a country of the last 10 years, when after 9/11, we looked at federal government
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response and the federal government rose up -- that was expected. but the pendulum probably swung too far to washington and outside of state and local government. this report reflects that we need to get the pendulum shifting back and get mayors and governors to take back their roles that they had traditionally for the first 200 years, really, of our country's history and reassert themselves and get back to being in control and being true partners with the federal government to keep america safe. some of the key findings and recommendations that we made really talk about the policy- making apparatus. here in washington, the way policy is made is washington makes it. they will send out copies of proposed policies to the state and local folks to comment on. but they can ignore that it will an issue what they want to receive your that is not the right way to do this.
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wycherley expect experience and the resources of state local government, we have to give the man seated the table to make that there -- we need to make sure that there's voices are heard. it will make the policy better so that we do not call a national policy, but it truly reflects a national consensus, and national product of an element that allows us to do a better job and have better policies and does not get ignored and actually works. immigration is another area. we see this battle between state and national government. the i did that states are holding a federal responsibility has no basis in history. you cannot say to a mayor or governor, someone is creating a crime that you're powerless to deal with millions and millions
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of people within your jurisdiction. that just does not work. there is a shared responsibility to not determine who is a citizen, but once folks are here, there is a national shared responsibility for us to deal with us any way that reflects a reality that the costs and all the issues are occurring within states and cities, not here in washington. we have to make sure that disaster response does not become a federal identity. you may have seen a great chart we put out every once in awhile we talk about the number of debt relations coming out a payment. that number keeps accelerating. -- the number of debt relations coming out of fema. that number keeps accelerating. we have not had a single hurricane struck the u.s., hustling all earthquake overdone 6.0 -- a single earthquake over
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6.0, and yet we have had these relations. as jim mentioned, we have a hurricane i rain that seems to be bearing down on us. we have not had a hurricane hit the u.s. since 2008 and yet we are on pace to have more debt relations issued -- declar ations issued. states and locals of shifted resources elsewhere and have become dependent on this process so that the insect the cost out of their state, budgets are tight, and ships them on to the other states -- washington. we need to keep those resources and emergency response
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capabilities strong and deal with the disasters that we know happened every year. reno katrina, andrew, 9/11, those things have massive ripples across our company -- our economy. i had the great fortune of talking to that top counter- terrorism experts and the country and none of them live in washington. people like michael downing of the lapd, folks in new york, they have been doing this long before there was 911, back to the l.a. problems in 1984 predict continued to shake their heads and wonder why we keep doing this from the federal interest and point. we need to make sure did they are informing what is going on here in the washing -- in the country.
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it is natural as time moves on that people grow apathetic. we understand that. we have been very fortunate that we have either imported or because of john lott not had successful attacks on the united states since 9/11. and that is a good thing. but that means we have gotten complacent. we need to take it vanished that folks are taking -- keeping a safe. it that is the wrong way -- it only takes one good strike to see a massive amount of destruction. we need to keep our vigilance hide. we do that by a making some changes. if we have to get past the interagency squabbles in washington where departments battle each other, the executive/white house elements battle the departments, and that is human nature but we have to rise above it because it means
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the best in many situations. we have to come up with the intelligence framework that makes sense, that is coherent and reflects state and local governments and allows us to bring in our international partners, but really it's beyond looking down and saying, senator your information and paul more hay on the haystack to make it harder to find the needle. we're going to share a stop at an nt which doesn't happen enough. sharing that information so that what we do not have as another commission looking back after the next attack and saying that we continue to create silos. we have to make sure that we think -- see these things before they happened. and the science institute -- the science and technology
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director continues to make of -- to be a broken in boston organization. we have to get back to the requirement-focus agency that allows us to utilize technology, to do pilots, to experiment, where all the great things that it potentially has and get that unit operating in a way that makes sense. the third area is taming politics. we are not 90. this is washington. politics happens in washington. in this area, let's try and make it less. we see this way too often during no one wants to give up their turf. and it wants to send their press release to their hometown newspaper to say what money they have, none of the department. that has to stop. does not keep us safe. we have 108 committees that have some touch of the department. the four men and women who staff
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the department spent gobble amounts of time on useless bureaucratic reporting, question answering some of these things instead of focusing on their mission. and keeping congress up to speed on what really matters, not whether we can play this game that had -- or that game, but focus on the big issues that confront us. there may be an announcement in the next day or two, and we continue to have a pork merrill nature to those grants. we are happy to see the obama administration adopt an approach we had been a lone voice on, getting rid of the numbers of cities eligible for that grant program. it has ballooned up to 53 cities. that is an absurd number of cities to say there was enough higher risk there that we should be using fine and federal resources to help those cities, when their risk curvature has to be minimal. we're very excited to see the
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department cut that number down to 31. when i had a security clearance, that is much closer to the cluster number where the risk curve was actually visible. dow will allow us to focus on the places where the risk is palpable. finally we have to stop doing things that do not make sense from a security standpoint. jim called this stop doing steep things. i tried to be nice. you've seen all of these pictures, the boy being patted ground -- down. this does not make sense. there is lots of intelligence and we have to be careful and lots of civil liberty issues to be mindful of. but we could do a better job to make sure we secure our a system without doing this current model. back in 2005, someone in the
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audience probably remembers the spattered, -- is this better, but we're compensating with razor blades and shaving equipment. the reason we stopped doing that was because tsa agents were spending their time on those lines. once we hard in the cockpit door is, who cares? they can i get into the -- they cannot get into the pilot. now they can focus on other things rather than confiscating razors and nail clippers. we need to take more common sense initiatives. we want secured cargo, but in an economical way that does not harm our economy. many debt truly look in every single blocks and know what is in there, that is unrealistic. we need to put more common sense
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back into the system. that is that the broad contours of the report grid those of the highlights. you can hear us talk at you. we would love to open it up for questions as point. >> thank you. i will take the product of and ask the first question. matt, you touched on this toward the end relating to the part of security issues. in the summary of our report, you refer to how we have 35 specific recommendations for homeland security. while protecting individual freedoms and economic vitality, and as you well know, this whole policy area has triggered so many very tough balancing acts, i guess, between those concepts. can you address some of those
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concerns and how they are fleshed out in your thinking? >> if i could do the economic issue and civil liberties. a great question and there is never a better time to do this. why in the middle of this debate around the debt and deficit crisis and government spending and looking and all other cuts, this report is actually very helpful. first i would say that in the aggregate, national security spending is not a problem. if you throw homeland security spending on top of defense spending -- and i would say you're probably still spending about half the level of security spending that we spent during the cold war, subtle level is not dragging this economy down. we have a doubled the intelligence spending since 9/11. adding those numbers on their, historically speaking since the
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in the world war ii, we're still spending at a relatively modest level. that is not the economic problem. you can take national security spending to $0.40 years, it entitlements grow the current regime, they will consume the entire federal budget. spending not a nickel on homeland security or the defense department, we would still go broke. this is not a growing part of discretionary spending. how could you add up all the social welfare programs, they are bigger than the defense department. and the homeland security area is around off area in the defense department. looking at security spending is the problem is simply wrong in terms of economic vitality. what this report addresses,
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there are clearly areas where fiscal responsibility and homeland security could be better dressed. i would not argue for more homeland security spending for for less, but i will argue for efficiency. in tenure as we learn what works and what does not. there are things that we're doing that is literally stupid and is wasting money. a good example is we spend -- every person who applies for a visa has to have an interview, a requirement by federal law. that is not. we create all these resources to interview all of these people. what you wind up doing is spending a lot of time -- very little time talking to a lot of people and not learning much, rather than focusing on interviews subclasses and
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individuals that truly represents concerns for immigration. they're just dumb things that we should set stop spending money on, because they're not efficacious. my favorite one is a grant that go to small fire departments. they are literally in the billions of dollars now. and it is demonstrable that they actually have no effect. there's a great report done by one of our analysts have looks at the safety data and said that if you look at the communities they get these grant and the communities they do not, there is no difference. their safety record is no better. no demonstrable tied to success. and yet in the budget proposal last year, they actually went and in cut operational parts of the department and then they
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plus stop the grant program. all they get to do is send out a press release and say i got a fire truck. no more still spend money in the homeland department. there's another fiscal aspect to this. there are still drags on the economy created by inefficiency in a coma security programs. energy and homeland security programs. they will not free of gazillions of dollars, but they are on the back of a free and open economy treaties are self-inflicted wounds. something called a visa waiver program, which is not waiving
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any thing. countries with a bilateral agreement with united states, our citizens can visit their countries on visa-free travel and they envision hours. there is a homeland security stipulation to countries in the visa waiver program give you better data to help stop terrorist travel and help people stop violating immigration a loss. it has a security benefit. but it also has an enormous financial benefit. those countries are some of our most vibrant trading partners. when people move back and forth, it creates well, whether tourism or exchange of ideas are scientific education business. adding a country to the visa waiver program increases the wealth of both countries. they're more countries wanted to
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join this program better qualified, good allies of the united states. why are we not bringing them in? and the answers because we have a lot this is that we cannot. is just not. -- is just not. it is costing our economy money and forcing us to act less efficiently with our security requirements. we can spend our homeland security money more efficiently and make us say. and then not have a respectable amount. american stop doing things and start doing things that allow the flow goods and peoples and services, that increase this without adding security risk. you want to talk about the civil liberties peace? >> this is what my wife calls restating the obvious.
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it is really more light this. your left is closer to your right and it is to the metal. this issue of civil liberties, both the left and right have done a fantastic job in the past three years keeping and those of us have had time in government accountable. starting with good ideas were exposed transparency and accountability, the aclu or the tea party, saying wait a minute, this is going on. this is total information awareness, things like that which made us fear applications. those things never went anywhere. we are at a point in history and for there is so much transparency. still not enough but so much more than ever before. and the ability for folks to
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find information because of laws like the sunshine act and foia and stuff like that, the ability of folks who was a blow, who holds accountable with cellphones video, twitter -- all those kinds of media, it does allow us to hold our government leaders more accountable than ever before. i would argue. related to that, those in government -- you get the occasional bad actor who wants to ride roughshod over a civil- rights and civil liberties, but that is more overstated than in reality the vast majority in government have no interest in degrading our civil-rights and civil liberties. we did not come to washington or go and work for law enforcement in order to degrade liberty and security. we came because we believe that america is a shining city on a hill and we want to preserve liberty. those folks go out of their way
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to make sure that they always involve folks who are a check. they have groups who are oversight group said they occasionally will bring in an reference and explain what they're doing to get the feedback from them. the lapd has a unit where it or where washington has an entire office focusing on this issue. i think the severe -- a sincere effort of people trying to get us safer trended do so in a way that respects our civil-rights and civil liberties. sometimes things go right. it is called human nature and it happens. most not have an intent to really degrade. they're here to secure them. we need to keep in mind that because the history in the u.s., or that dossier system and a red files by the 1960's and '70's, they all got shot down
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and there are court orders that are still today active in places like new york and l.a. were that oversight continues to maintain itself. we have the civil liberties words to thank for building that foundation to avoid a lot of problematic issues that historic plea -- that had played. i think there are strong, ability efforts to make sure the major region that have degradation of our civil liberties. >> we went through the report and looked about the hot-button issues, but the workplace and for small or real id, a way to screen flight manifest, and we came to the conclusion -- or the patriot act, a counter-terrorism
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investigatory tools. we came to the conclusion that they can be managed in a manner that provides both security value and protect civil liberties. with a detail about how to do all these things. it is having our cake and eating into bread that is the lesson we have the capacity in years. >> the systems we have in place for attacks that. they're pretty vibrant. >> now we will go to the audience. >> thank you. i have a question in relation to homeland security and the arbitrariness of customs agents. i have travelled and people tell
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me i do not want to come to the united states, or get a visa, and it arbitrarily be rejected as either a businessman or a family man coming in third dulles or new york. that is from the middle east. the other is arbitrariness of these applications coming from europe, specifically germany, the application that has been misused. arbitrariness and looking at how our customs organizations are instructed, taut, and so forth not to exercise of arbitrary judgments in rejecting visitors to the united states.
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>> let me address that. we at two key findings and go to bed. one has to do with a visa waiver program. when a country is in that program, travelers register in esta. what does a stamp 1 -- what does it stand for? this is quite frankly the wave of huge bird everything is going to be doing this. you into that data on line and then you get prescreen. its decreases fell likelihood that you will get turned back. if there is an identifiable security issue, it is more likely to get a flag. you can talk to someone before you get over here. that is a significant way to decrease these false positives.
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and predicated on that, the value of the visa waiver program is that when countries joining it, you get better data sharing and much more likelihood to reduce terrorist threats, much more likelihood you reduce criminal travel and immigration violations. and you increase the value to the traveler. that will address part of that. you will never take away all of the agent's discretionaries power at the border for you never want to do that. that is what that threat once did they want absolute predictability at the border to go around that. you want to create an environment in which you are less likely to have the false positives. the visa waiver program will help with that. but your raise a great point. i go to the council and i apply for a visa and i get turned
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down. i had killed a week in 100 bucks and in my country that is a month's salary. joining the visa waiver program, you do not have to apply for a visa for short travel. the other initiative that we talked about in the report was a requirement never fully realized -- the visa security officer. of homeland security represented in the council working with the state apartment that identifies risks and emerging trends to help them better identified people that should be interviewed and rejected. this program has never gotten off the ground because there has never been the level of commitment from the debarment of homeland security, which is supposed to by law speak on matters of visa policy. there have been reticent and re- election -- they had been
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reticent to except them. we would address -- we would directly address that. that is what this report is about. this is a boring report. it is. >> that is great marketing right there. this is how to make the thing work right. this is like breaking news on fixing your car. you like the brakes to work in your life on the word. this is how to make the system work better. it is not about solving every homeland security that we have. it will not tell you about the next attack by an anonymous. it is about creating a system that is functional and in durable and flexible and affordable and efficacious. if we do the kind of things that
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this report's about, homeland security would never make the news. it would be like the mechanic fixing your car and giving it back to you. you pay for a service that you get. >> we talk about doing a better job on the international corp. front. so that those types of stories, if there is a there there for them, we can figure out what the issue is to address it. it is hard for either of us or anyone in a position on an individual basis, those types of anecdote, with a that was a smarter bad decision. we do not know all the information that a person had to make a decision that they made. we have to have a mechanism in place of the begin have that country-country conversation to take care of those issues. so that a person with no nexus to terrorism can come here and
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do business. we do not want to slow that down. >> the question in the back, the young lady. >> had a follow-up question on a visa waiver program. i'm sorry to hammer that issue but it seems important. it really has been one of the only voices in washington looking for that. we were very encouraging. one of the recommendations that you seem to highlight his to decouple the biometric system that dhs is currently required to implement before the visa waiver program for you also recommend that the program should focus on the overstay rates. how do you measure the overstay
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rates without the system? >> the barman of homeland security will tell you right now that they can measure overstayed rates and their measurement is fairly accurate. people are not familiar when the debate very there is a requirement that predates 9/11 which is that the u.s. government should in real time be able to check everyone out of a country like you check out of walmart. the requirement is for biometric exit. it means that when you leave the country, they -- when you enter the country, they get your or ice it sounds like common sense ideas and to you think about the tens of men's of people that come and leave every day and how massive at databases. doing that in real time is a challenge like putting a man on
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the mend. this goes into the category of wasteful spending. we spend a massive amount of money studying this problem homeland security can give you 57 reasons why it does not work. when the department was given authority to expand a visa waiver program and bring countries on that they met the additional security requirements and if their numbers were coming down on technical issues, there was something that's said by the way, i think it was in 2007 ra, if you do not have loved biometric exit plan in place, you cannot do this anymore. it is not in place and it is never going happen because it is impossible and unaffordable. and it is completely unnecessary. there two things you might want and exit program to do. to tell you who is obey the law or not.
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the data that we collect right now tells us that. is a perfect? no, but it does you reliable trends on who is doing what, what countries following the trends, and does it give you the information you need to make a decision as a leader and a manager about whether you want a change something in your visa program? the answer is yes. we do not need that system to get that. it gives us the knowledge that we need to manage our visa program. what else would you want? i want want to find a terrorist in real time. i would want to know if he was leaving the country so i could grab him. what we have done that. the times square bomber was leaving the country. it was put on the no-fly list, right? as soon as he was on the no-fly less, they saw he was leaving the country and we grabbed him. it was not the fbi.
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the fbi missed him. homeland security grabbed him because if there is really someone you are looking for trying to leave the country, we have a good mechanisms to do that. if we can do both of the main tasks he would want pretty well, then why would we shall allow money for a system -- at some point in occurred, you get 80% of you want for a certain amount, and then you give billions of more and get 2% more inefficiency? we are at the curb in in force in the stations at the border. why are we doing this? why are we stopping a perfectly good program from expanding which at the end of the day, expanding a program we do not want? that is why we argue for changing the law and using the
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existing data. >> i want to briefly comment because that statement it's too rigid made too often in the context of homeland security. we can put a man on the moon -- why can we secure our border? i would argue and i will get an e-mail from nasa telling me that i am wrong, that the challenges they remain in homeland security are harder than putting a man on the moon. s -- that is just college math. there's so many variables at the border including man might sabotage weather, environment, terrain, and we think that because we put a man on the moon, we should be able to do this easily. i think we have done a low hanging fruit in this arena. the rest involves complex algorithms, complex variables.
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so we have to have the patience to make sure that we're not expecting too much and throwing out the cliche of, we can put a man on the moon. >> they kept bouncing around and shooting back. >> yes. >> asymmetric corbett. -- orbit. >> we need to understand the true variables. security as hard and do not lose sight of how hard it is to do that. >> a question right there. >> i write for "front page." the people who work on main hsaria law stuff, i wish that had it in front of me to look at
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the new efforts that are being implemented. the events that occurred like to times square bomber and fort hood, and their people trying to connect the dots of the we understand the long wall and all that. they want to keep an eye on loan will spread to you have any comment reading -- the loane wolf. do you have any comment? >> the report is not boring. it depends on how fast. it is an issue that we have addressed. but i'm going to make people come back and listen to it. >> this gentleman down here.
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>> i want to make you feel good, because i think we're doing a of a job in progressive wing and trying to put our finger on things that are not useful. -- on progressing and tried to put our finger on things that are not useful. things never got processed but the intelligence community never gave up because they wanted more and more. if you can get a wider band, then do it. i was responsible for wiring up los angeles in 1984. we had a headquarters there, it was like the helipads and everything. we have the harbor patrol, everything, all tied together. but we had the local people they were very professional working with the fbi. it did in the munich hostage
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deal that perhaps this and put this on a fourth lane in 1984. but -- forward lean in 1984. i kept trying to strangle everything was going on. people wanted everything. they want to the moon. if i can talk all over united -- new york city, why can i talk all over germany? he goes into a lot things. but i want to make you feel good. i think we are doing very good in our progression on how we deal with this technological stop. i disagree with the people who say we are in the stone age in adp and so forth. i think we're not in the knowledge -- knowledge area, but i think we are in the information area. but we need more people to say, take this out. it is no longer worth what his
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paying. i watched this in camps all over the country, they could not identify anyone who came in. now they know exactly who you are with your drivers license and your plate. they had you in most cases. the local people are very important in homeland security. and they will even get better. my grandson is a bomb technician in tucson. i guarantee he is on the job 24 hours a day. i want to make you feel good that we have come a long way since 1984, when we had to add hoc and scramble to get together. and i had a lead that big contract with motorola to get radios that were compatible. we could talk to police and harbor patrol, so feel good.
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>> you guys feel better? >> we have another event later this week. we have done some research on the data base that tracks that. we'll look at trends against terrorist attacks in the united states over the last 40 years. and both of those data sets are very instructive. a big companion piece talking about what works and was does not, the remember when that event this? wednesday or something? thursday. come back thursday. >> show whenever you want. >> the gentleman with his hand up. >> i'm from the heritage foundation. i like to take you back to the biometric exit program and go
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deeper. you describe a program that is neither cost-effective nor actually necessary. i think stupid might be one of the terms you either reply to it or what have. my question is, we had in congress representatives who are a lot of things but they are probably not stupid, most of them. why is a requirement like this in the law in the first place chris margin that is partly of reflection of the dysfunctional oversight. in the department of defense, u.s. oversight from the arms services committee in the house and the senate, and some other issues in terms of intelligence. and then you have the appropriators. in homeland security, virtually every major committee has an oversight authority and many of the subcommittees have oversight
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as well. you could have something from your perspective seems like common sense. if you're sitting in judiciary and you're responsible for immigration reform, and you have no real technical expertise in a whole range of issues, the requirement seems like common sense. but there is no check and balance. the one thing we know congress does not do well is congress does not evaluate -- when they put system requirements and, they have no way of a by awaiting the system requirements of fun. think about that. if they want to look at the cost of doing something, they can go to cbo and run the numbers on the cost of implementing this law. but they cannot tell you from a systemic standpoint how all this is going to work, what this is going at, they cannot do systems analysis on that. and the government accountability office can look
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at programs that are in existence and tell you how well it is going. after they pass the law, the gao can talk about how screwed up is. but the gao cannot tell you beforehand that we did a systems analysis and this is a dumb idea. there is no real technical advisory thing in the department. if you add those up, it creates a perfect storm of coming up with good ideas and then only finding out it is not a good idea when you go try to do it. then it becomes the true perfect storm. you create a requirement that forces the government to do something stupid. the new have been hearing about how stupid they are. you beat them up over that period -- you beat them up over
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that period -- you beat them up over that and we go through an endless loop. because it was your stupid idea to begin with, you cannot write the law that says you repeal your stupid idea, because that would make you look stupid. cargo scanning is a perfect example. every responsible homeland security analysts said this is a stupid idea because the only thing we're really concerned about is a smuggled nuclear weapon. the last thing they would do is hide it in a shipping container. having said that, we put this requirement in any way. the department simply says this is not going to work. >> stupid is as stupid does. the only thing i will add to this, because we are running out of time, is imagine a fortune 500 company, many of which are bigger than the department from
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a market capitalization standpoint, having to run and being overseen by 108 different committees. that is the analogy. yet it is public money, so we want oversight. but there can be too much oversight. there is a point at which we are overseeing so much we louvre -- we lose sight over what we need. >> these committees are subsets of the board of directors of 545 control and design the budget of the company in the first place. that is a recipe for this functionality. >> this is my last commercial for the day. >> we have hit the noon hour. we have to cut off the questions. thank you for being here. please join me in giving a warm round of applause to our panelists.
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[captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> notice the color of the bourbon, the pretty amber color. that is all coming from the char on the inside of the barrel. this is where bourbon gets all of its color and a lot of its flavor. currently, they have discovered over 200 chemical flavors just in the oak and the char from the
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barrel. >> this weekend, we highlight frankfort, ky on a book tv and american history tv. life, violence, corruption, and renewal. crawfish bottom. kent masterson brown on the life of a ninth kentucky cavalry soldier, john porter. a visit to buffalo trace distillery, one of only four distilleries in operation during prohibition, for medicinal purposes, of course. the first 2 statehouses' burned to the ground. stop by the third, the old state capital. this weekend on c-span 2 and 3.
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>> good morning. good morning. come on. good morning, class. i am mike petrilli. for those of you who are not familiar with fordham, we are a leading think tank. we do work here in washington and in ohio. we do not just talk about education reform. we do it in real town -- in real time. we are proud of that. i am excited to be moderating today's session.
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the idea really came from rick and randi. they run into each other from time to time and said all the debate and vigorous discussion around the big reforms pushed through this year -- often, it is more heat than light. we could have a conversation that does not paper over our differences around some of these key issues, that admits there are serious disagreements about which way to go, but does it in a way that is not as personal and vitriolic. that is the goal for today. not to pretend there are not disagreements about key issues, but to identify what those are and see if there is common ground. randy weingarten is president of the american federation of teachers. frederick has is the director of the education policy studies for the american enterprise
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institute. we collaborate on a lot of things, including a podcast. if you're not listening, you are listening out. you can listen to rick's musings about pop culture. we did not know we would have c- span tape this. we are glad rick decided to wear pants for the occasion. otherwise, we would have been looking at his knees the entire time. we were not sure america was ready for that. what we're going to talk about today are the big reforms related to teaching that have been vigorously debated in the last couple of years, but especially this spring in states around the country. the education reform conversation has talked about a lot of different issues -- standards, accountability,
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charters. but it does not seem the conversation is getting to the heart of the enterprise, what happens inside the classroom, and directly around teachers' professional lives. we're talking about laying off teachers based on effectiveness, not just seniority. we have talked about paying teachers differently. we have talked about curtailing collective bargaining rights. these things get personal very quickly. we want to talk about these issues and have a polite but vigorous discussion and disagreement. i come to this discussion. we were a little bit recruited into playing this role, and happy to do so. i should admit there is some skepticism. i want to read a quote from steven brill, just to set the context. randi, i heard you sat for 24 hours of interviews with steven brill. pretty remarkable.
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>> actually, that is not true. but it did feel to me like it was. a root canal, steven brill. >> he says the kumbaya of feeling you get watching union leaders said on panels with reformers discusses a joint mission for children. but when you call through their campaign finance filings, you see how they continue to support the politicians who take the most hard-line anti-reform positions and referring to report even the mildest forms -- and refrain from supporting even the mildest reforms they claim to support. let us get started. we're going to start with a broad topic about teachers and reform, particularly this idea about teachers feeling under attack right now. let me start with you, randi.
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is it your sense teachers feel under attack? how do we know that? is this anecdotal or do we have good polling data? and what is making them feel under attack right now. >> thank you for doing this. there are people who actually do work in the summer in washington, d.c. this is proof of that. even mike, and thank you for moderating -- not the question, but even the introduction, think about what he said. as you were quoting that ", which is pretty demagogic, i was thinking, "i wonder whether my walking around colorado, a few days before michael bennett's reelection for senate, qualifies for one of those things."
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what ends up happening in this debate is it gets so polarized that opposed to engaging in a real way, you first have to defend yourself, which seems silly in the world where we are actually trying to figure wrote how to educate kids. this is what teachers feel under attack. a new poll just came out last week, two weeks ago. i'm losing track of time as i get older. one of the most interesting results of that poll said that even the teachers are respected more than ever before, more than administrators, more than principles, more than policy makers, -- [rincipa -- more
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than principals, more than policy makers, even more important than parents, who are important, 2/3 of the coverage is negative. when you have that drumbeat of negativity, being called names and grows characterization's that steven brill repeatedly makes -- people feel bad about it. they feel badly even when you're talking about this kind of session, about how we are focused on teachers. you used the words evaluating teachers, million teachers off, paying teachers. my teacher voice, and i taught part-time in brooklyn -- my teacher voice started saying, what about the tools and conditions i need to do my job?
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that is never in the debate, even know what teachers have said to us, their unions, is basically help us get the tools and conditions we need to do our job. you can look at lots of different things. but over and over again, that is why teachers feel badly. the economic situation has, i think, made it worse. >> art teachers under attack? >> this is where we come at it from different perspectives. first, let me stipulate i think riandi made -- i think she made reasonable points. holding anybody accountable, it makes sense talking about putting them in a position to succeed. there needs to be a balance. that is fair. second, she alluded to the coverage been negative. i am not sure what to make of that.
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i do not know the research on this. as i think about coverage on health care, transportation, airlines, and banking, it strikes me that 2/3 is a usual mix of anything that is in the public domain. in the poll, we know that in 198450% of americans gave teachers and a or b. to date is 69%. 53% ofearly 90's, americans said they would like a child to become a teacher. today it is 2/3. for all the talk about assault and accountability, somehow this team for the teaching profession seems to have raised dramatically. a fundamental point is there is a narrative out there that you have these mean-spirited
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republican governors who are on the warpath against teachers. i just think that is an enormously problematic reading of what these folks have said. what scott walker said was it is time somebody stood up and told the truth. he said i have great respect for the state and local government employees. they are good, decent, hardworking professionals. a wisconsin state senator said it is about money. wisconsin is broke. we do not have the ability to negotiate. governor chris christie said we have to get realistic in telling people the truth. nobody wanted the teachers laid off. i would argue this does not sound to me like demagoguery. i think steven brill is another question. but these elected leaders, i think, have been quite measured. in response, if you think back to wisconsin six months ago, it
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was compared to pre-nazi germany. it was compared to hitler and mubarak. the speaker of the wisconsin state house was threatened with a plan of assault with a bullet. a senator had nails scattered on his driveway and a windshield broken. he received an e-mail that we will hunt you down and drink your blood, and have your decapitated head on a pike. there were thousands of these reported to the wisconsin state government, and collected and investigated. the notion that somehow it was those pushing to roll back collective bargaining who were using vitriol on the warpath and their opponents were been responsible is, to me at least, a misreading of the dialogue. >> i agree with you that
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anytime -- i am very concerned about the demagoguery. in fact, years ago, i got in big trouble when i said that educators have a right of freedom of speech but also have a responsibility in terms of how we use it. i got in big trouble for saying that by lots of people who said, you know, you should just protect the freedom of speech. our wisconsin federation also got these kind of death threats. when i have seen people put up signs comparing a public figure to hitler, i denounce them. i think that is wrong. i think we have to be really careful about what the origins of fascism are. we have to be really careful in
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terms of protecting our democracy. where i diverge from you is that the facts are very different from what you said in terms of wisconsin. the fact about chris christie are different. i watched the youtube video of when a teacher said something to christie. he went right out of that teacher and believe that teacher. that was a public official doing that. i also watched the wisconsin unions basically tell, walker -- tell walker they would negotiate, and he refused. he never met with them once. the issue is not budging. the issue is whether or not they have a right to collectively bargain. what we saw right after scott walker was elected was that the
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contract that the last governor and the state employees had done, which included billions of dollars of concessions, walker found a way to reject using the state senate. this was not about the budget. this was actually about getting rid of rights. i think the piece that you did not say, and the peace but everyone is sort of looking at and shaking their head about is that when scott walker pushed through the budget bill initially, he also said he was going to call the state police out because he expected there to be violence. if you remember the punk call with the koch brothers, he went on and on about the things they were trying to do, including
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infiltrates the crowd to try to create violence. the issue in terms of walker or case it should -- or kasich, or rick scott -- no one is saying there should not be a dispassionate look at what we can do. but the unions in wisconsin agreed to the demands, and were not even given the respect to have a meeting with walker. he wanted to eliminate collective bargaining. >> let us talk more about that. as an educator, how can you support what governor walker did in wisconsin? he was clearly trying to score political points. he was going after teachers and not other public-sector workers. why we can the public sector and not the private sector unions? what is wrong with the idea that teachers should have a right to collectively bargain? >> there are a couple of things
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going on. again, to the point about -- it is important how this stuff is presented and addressed. i thought it was unfortunate that walker carved out safety and fire. >> the ones who endorsed him. >> which is problematic. on the other hand -- >> which is a litigation that is now happening. >> if you think about president obama strategy on health care reform, there were carpets for individuals and organizations that had been smart enough to get by a hot -- to get behind obama. part of the way dealmaking occurs in a democratic society is sometimes these issues are addressed in a manner that is less than we would like. there are two issues on the table when we talk about
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wisconsin collective bargaining. there was a short-term fiscal crunch. not only is she right that unions have indicated they were open about, to my mind, finally going to the table to talk about issues with both health-care and pension, but the more fundamental question is those givebacks were not going to make a big dent in the short-term fiscal picture. however, there is a second fundamental question. wisconsin, like the federal government, like just about every state government, has been living beyond its means. there are accumulated shortfalls and deficits. we have had governor after governor and state after state who has been content to kick the can down the road. the real rationale for trying to roll back collective bargaining and go after teacher contributions to pension and
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health care was not because this would help with the 2013 deficit. here i think walker was less than forthcoming. it is because it was to change a trajectory five or 10 years out in terms of the fiscal condition of the state. >> but why do you need to curtail bargaining rights to change that? >> because school boards and superintendents in wisconsin and elsewhere have made it clear they lack the intestinal fortitude to negotiate responsibility -- negotiate responsibly. the wisconsin teacher pension system stipulates that employers will make a 6.8% contribution to the pension system on behalf of employees. employees were to make 6.2%. milwaukee public schools negotiated to pay the entirety of the employee share. in addition, there was a supplemental 4.2% contribution
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made entirely by the district. they were paying 17.2% of each teacher position into supplementary pensions. employees were making no contribution. it is no shock that while the median compensation for a teacher was $56,000, with benefits, there were $100,000 a piece. the school boards and superintendents who engage in this have suggested they are not going to be trusted in these negotiations. >> when governor walker took away local control -- >> when we talk about public collective bargaining, first off, at the federal level, it was illegal until 1962, when president kennedy issued an executive order. it was illegal for state and local communities in tell the 50's. there is a letter from franklin
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roosevelt to the federation of government employees where he pointed out that government employees should realize collective bargaining as understood cannot be transplanted into the public sector and has limitations when applied to public personnel management. the reason it has unique problems in the public sector is in the private sector if you're giveaways are to unaffordable, if you are general motors, competition can come in and knock your block off. in the public sector, you do not have self-correcting mechanisms. >> there is also a "by ronald reagan, who says, and i do not have it with me -- who talks about how important collective bargaining was, including in the public sector. he gets -- what i am saying is that if fdr was alive today, as are his successors, he would
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have a very different view of it for the following week. -- for the following reason. there is a fundamental difference of understanding in terms of the workplace and what you can do using collective bargaining. i want to go back to the wisconsin situation for a second. there has been a lot of negativity about unions. in bad economic times, what we have seen a lot of people do is say they have benefits that are here, we have benefits that are lower than this. why shouldn't there be a race to
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the bottom? america is normally about lifting all boats. you can see the kind of negativity about health and transportation. a lot of times, you see districts that are doing well and have public confidence having -- you see a connection between public confidence and districts that are doing well. you see in education that the only opportunity in a capitalist democracy that is provided to own kids, in different states, but to all kids -- you see a service that is really about
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hope, not fear. there is a cognitive dissonance between those of us that are in education and those people around that our reporting about it, or thinking about it in this negative way. what collective bargaining does is it is the vehicle by which to create not just economic dignity for people, but to actually create a voice to enable the tools and conditions people need. that is what collective bargaining has done in districts that have worked effectively, both here and abroad. that gets missed in this entire debate. for example, in new haven, they really -- one of the most innovative, interesting contract in a long time. they actually used collective
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bargaining to problem solve. in toledo in the last few months, with the cuts they have, they used collective bargaining to problem solve. in baltimore, the problem solved. that is different than the issue in terms of pensions and things like that. a lot of that was statutory, not done through collective bargaining. my point is when the public was confronted with should people's rights be stripped away, the wisconsin and ohio, two-thirds of the public said rights should not be stripped away. does that mean we have to use these rights responsibly? yes. when you start thinking about what has happened in america, even you said it. we do not trust our elected officials. so let us strip away their right to do something. that is not accountability.
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accountability should be that the next election people are accountable for what they have done. the same is true in terms of, and then i will stop -- apart from the collective bargaining issues around the country, the other underlying issue that is very disturbing is voting suppression, voting rights. there have been many states that have actually, and many of these new republican governors, who have actually attempted to change voting rights and a lot of these states. so that is happening at the very same time people like you and others are talking about pensions. 36 states have changed pension laws to create more contributions on behalf of or on the part of employees. take a place like wisconsin. that was done, but at the same time, there were tax cuts in
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capital gains. so where is the fairness here, when you have entities who pay less taxes as a corporation than a wisconsin custodian? where is the fairness when the wisconsin governor says we need to go after this, in terms of benefits, when the average pension benefit across the nation is about $400, $450 a month? where is the fairness when that happens? and yet nobody in this fiscal issue, on your side of the debate, talks about taxing billionaires'. >> there are a lot of things to pick up on. i think rick was arguing that these local school boards are often selected by unions. the unions are the driver of
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getting school board members elected. it certainly happened in dayton. the performers come into office, the union will mobilize and get them out in the next election. >> that is not true. >> if that is the dynamic, doesn't it make sense to say that is a perversion of democracy and we have to take some of these rights away or move an area of control, or something like that? >> first, we now argue, it -- we now are you using the exceptions to make the case. there have been lots of elections throughout school board elections, senatorial elections, other kinds of elections where lots of people have gotten engaged. i have often seen the role of the union exaggerated when it comes to the elections of school boards or other kinds of things,
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and i have watched the role of money in all of this totally and completely change the relationship everywhere. people should have a right to engage politically. that is part of our democracy. separate and apart from that, take those situations like male control versus elected school boards. is there positive proof that any of these structures work better than any other of these structures? we supported, in new york city, mayor bloomberg, may your control. the unions stepped up to support that. we thought we needed to have a more cohesive accountability system. i suspect that when this version of merrill control expires there will be very little support for
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it, because of the way it was used. you could say the same thing about everything. if there is -- if a district is not focused on how we educate kids in a real way for the knowledge economy, they need to be held to account. everybody is going to be called to account. what we have been saying is let us all step up and tried to do far more to do with the real issues, which are how do we, as the economy races forward and we see so many differences, in terms of the knowledge and skills that kids need at the very same time as the bottom is still falling out for regular folk -- how do school district to engage? that is the real issue. >> would the assay to randy when she says we are trying to balance the budgets on the back of kids and teachers, who are
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making huge salaries? why aren't we talking on the right about taxing the upper brackets, which is a big part of the solution as well? >> the reality is we have been living beyond our means as a nation and in these individual states. leah and living beyond our means as a nation and in these states for 20 plus years. as of 2009, pension funds -- pensions were underfunded by $1.26 trillion nationally. at the federal level, we are spilling $1.50 trillion more a year than we have right now. we absolutely are going to be raising taxes. if we went ahead and did the tax increases president obama suggested this summer -- tax and corporate jets, ending the bush tax cuts for rich families making more than $250,000 a year, that would raise about $85
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billion next year. given that we are going to borrow $1.50 trillion, that would mean we were only bar when $1.40 trillion next year. that would also mean our top marginal tax rates for families making more than $250,000 in your average state are going to be about 55%. that is when you add their federal rate, their state rate, and their social security contribution. if you take that higher, which is certainly feasible, 70% of each dollar earned when president reagan became office. there were concerns to start to discourage economic productivity among people when they are paying 70 cents on the dollar, but you can certainly go there. the reality is that even if we did those tax increases, that would bring in $300 billion a
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year, which is terrific, but we are still spending money we do not have for the foreseeable future. i am sympathetic to the point that we're going to have to generate more revenues. but the notion that if we do so that will alleviate the need to dial back an affordable promises is nothing but a fairy tale. we also need to look at an affordable promises that have been made by irresponsible politicians over the past 20 or 30 years. that is going to address national entitlements like social security and medicare, and state level entitlements like pensions and health care. i am sympathetic to this point, and we need to be talking about all of this. i agree. but the reality is that we're going to have a choice very shortly. the tax dollars at the state and local level are not going to go into the classroom to educate our kids.
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is it going to pay retirement promises in terms of pensions and health care? i know which side of that issue i am on. >> this is a really -- this may be far afield from what instructional practices teachers should use to implement the course, but there is a constant macro and micro issue that we are all facing. as rick was saying that, i recollected an argument on the pension task force. one of the things we saw was that the fairly modest pensions that are done in the public sector still cost a bunch of money. the issue becomes when the market goes wild, as it has been going right now.
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how are the pension costs sustained? one of the things we said was let's have a modern pension system -- no spikes, constant contributions in terms of both employers and employees. but this is the point i think rick is missing in all this. there are modest salaries in the public sector. retirement benefits are part of those salaries. the macro point is this for america. what happens 10 or 20 years from now, when no one has a retirement benefit and people are 70 and 80 years old? what happens? what you see in the polling we have done is huge retirement insecurity. so rick is talking about how we solve -- how we actually make the situation in terms of
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retirement insecurity worse on a macro level by getting rid of it on a micro level. what we need to actually do is we need to actually think about what happens in this country long term. you have people getting older and older, and working until they are in their 50's and 60's. what happens afterwards? in some ways, the public sector and bargaining solve that by saying modest wages, but also deferred compensation in terms of pension. that is a big long-term problem. >> we are going to turn the page soon. >> i think we disagree a fair bit on how modest teacher compensation is. median teacher pay in the u.s. is $54,000.
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fully loaded, it is somewhere in the low 70's, with benefit cost. it depends on benchmarks in terms of how you compare. but keep in mind the typical teacher work year is 190 days instead of 240. there are issues when we start to talk about teacher compensation in current dollars and retirement. reasonable people can come at this in different ways. i think randy is right that the real issue is long term. is there a relatively simple way to start talking about getting retiree health care and pensions under control in the public sector? you can take the norm of teacher retirement from 30 years to 40 years, so teachers are expected to retire at 65 rather than 55, or 57, which is a legacy of a
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much earlier era when we thought of public sector pensions as fitting a different demographic profile in terms of how long we expected to live. i certainly think there is good and serious room for people to talk about how we build these solutions in ways that work. but i suspect that if we were to try to put together before a team of admirable teachers the notion they ought to extend by a decade their expectation of career longevity to qualify for benefits, that would not be received warmly. >> i am giggling as you are talking about that, because at the same time as we have seen those proposals, we have also seen proposals that say let us look at experience and let us be fairly negative about experience, and let us just
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have younger -- which i do not subscribe to. we need newark teachers and we need experienced teachers. we need that kind of balance in a school. that is fantastic. you cannot on the one hand say teachers should work longer and on the other hand say that we are not going to give them the opportunity to work longer. there are a lot of teachers that work 30 or 40 years. there are also some folks who, at their 20th or 25th year, say i have to do something else, or i am tired. one of the things we need to do is we need to actually do things like have different kinds of career ladders for teachers, so you can do something different with those skills. i do think we are losing huge -- at the very same time as skills and knowledge are so important,
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we need to maintain that experience. but i am not saying we do not have to confront pension issues and long-term retirement security and health security issues. but teachers are not zillionaires. what they do, as part of the benefit package -- if you are planning for retirement and saving for retirement, that is really good for the economy, and that is really good for a community. but the last thing i want to say is this on economics. i think there is a fundamental misstatement that happens. we saw it in the debt ceiling debate. it is about debt. the last democratic president in the united states of america actually ended his presidency not with a debt, but with a surplus. that was a decade or so ago.
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what is the fundamental reason that we have the debt we have right now? we have three words we are engaged in right now. we have tax cuts that were never paid for. we have a prescription drug benefit that was never paid for. there are a bunch of different reasons why we are in the crisis we are in. a lot of it is not because of the education spending we have done over the course of time. frankly, what has happened is that we will actually disinfest from our kids at the very same time the economy is changing, and then say the promises were made with the first pension to people who actually worked in this field when there were moderates salaries should not be paid. something is fundamentally off about that. >> i think randy makes a nice
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point. it is one i think performers often give short shrift. teachers have entered the profession with an implicit understanding. this also comes up when we talk about how we are going to treat seniority in terms of school assignment and classrooms. teachers have been in the field 20 years. they entered the field with a certain understanding about compensation and benefits. i think any of us, when we think we have one set of bills on the table, but then people come in and self righteously tell us it does not work -- there is absolutely -- any of us would feel we were being dealt with badly. i am sympathetic. a second point here. i can't remember. let us leave it there. >> i want to get back at other issues, but this is helpful. in terms of agreement i am hearing, you both are against demagoguery. that is good.
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i think you both agreed that in the case of wisconsin, there was evidence they were willing to deal, although with the point that would only have an impact in the short term. this retirement situation is a big issue. you both agree that there is concern that to solve the debt crisis there is going to be disinvestment from kids. there is this intergenerational concern going on right now that we might continue to transfer wealth from the young to the old. >> that was the point i wanted to make. unfortunately, because we have made expensive promises, we are having to dial back investment in all kinds of areas we care about -- infrastructure, schools, kids. partly, that is because we have made a set of bloated, and i think at this point unwise, commitments to the elderly. when we started medicare 45 years ago, the poverty rate
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among the elderly was substantially higher than it was among their children. today, the poverty rate among the elderly is about half what it is among american children. we have tied up substantial resources in spending dollars on the over 65. the pension and health care in education is part of it. i agree that if we are serious about doing right by our kids in educational improvement, we want to be putting more dollars into the kids, partly because it is a good investment and partly because it is the right thing to do. but we need the intestinal fortitude to say we cannot do everything in the world it would be swell to do. one of the things this requires is we have to take a hard look at what we have promised we are going to do for the elderly. >> i do not want to get too deep into a social security and medicare debate. the point about the race to the
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bottom instead of a race to the top, to the point where we are not saying let us have retirement insecurity for everybody. >> this is a really interesting economic discussion we're having, on a macro level. it would not surprise rick that i come from a keynesian belief that you have to actually create jobs and try to figure roadways of filling those jobs. but one of the things i am haunted by right now is that at the same time as we have this 10%, 9% unemployment rate, regardless of what the effective unemployment rate is for folks, there are 3 million jobs available in the united states of america that are not filled because of the skill list match. that is the kind of thing we
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should be working on on a micro level right now. it is the kind of thing that, if we actually had, in different communities -- what are the business needs? what are the skills of people? are there ways of creating a match? is there a role for community colleges and others to create wraparound services around schools in order to do that? these are the problems america should be able to solve right now, as opposed to ultimately simply thinking about the big macro problems. that is the -- at the end of the day, when you have an economic downturn, the likes of which we have had now, which most americans did not create, recklessness in wall street, recklessness on the housing market created it -- when you have this, you also have the
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safety net kicking in for more and more people. it means that are more of a burden. food stamps. medicaid. unemployment. they kick in when people have less and less jobs. when there are more jobs available, people are paying taxes. there is less debt. there is more surplus. i get to this debate saying jobs, jobs, jobs. we have said that in the labor movement for a long time. one of our proposals in terms of pension funds is that this is -- there is a tremendous amount of capital in pension funds throughout the country. let's use it for infrastructure. let's use it to create jobs. let's use it for the things we need to do. let's do things differently now that america used to do.
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we are so timid about doing big things. that is one of our ideas. that is one of the things we have talked to pension-fund around the country about. >> for those of you watching on line, you can send us questions. you can ask a question on twitter using the hash tag wrtt. we started this discussion and move away from it, but i want to get back to this question about teachers feeling under attack. let me ask you this. is there any way for reformers to promote the kind of changes we are talking about -- curtailing pension benefits and health-care benefits, changing evaluations, making jobs less secure -- is there any way of promoting that agenda that is not going to make teachers feel under attack? are these policies that are not going to like, or is it a
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communication failure? >> if the policies are how can we take something from you, as opposed to how can we make education better -- if it is framed as we are going to take something from you, of course there is going to be a reaction to that. if these are policies that say let's start with what the kids need to know and be able to do in the 21st century, and how are we going to help all kids get there, then that is an engagement strategy everyone should want to be involved in. >> but isn't that the steven brill point? we all love kids? >> i did bring one prop. i am really -- it is actually hard to create a trusting,
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innovative environment. i have been a boss for a long time. i have been the boss in the uft. i was the president from 1999 through 2008. but the american federation of teachers, i have been the president from 2008 to now. i have managed a lot of people. it is much harder as a boss to actually try to build a culture of trust and innovation, and to collaborate. it is much easier to order. it is much less effective to bar and order. it is much more effective to do this. this is not a kumbaya of. when people talk about it as kumbaya are, it trivializes our work. the issue in terms of teachers is they are on the ground, actually being the ones to implement all of these high- minded policies we talk about.
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the question becomes how do you engage them in that implementation. the implementation is often the hardest, even things we would all agree on. teachers should be qualified. whether you call it art -- call it effective or qualified. how do you make that happen? how you in sure -- pick another policy. i think on this stage we probably agree that there should be high standards for children. i think we probably agree there should be high expectations. let us get our sandals on. and the guitar. i think we probably agree there should be -- some of us may agree there should be a common
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core curriculum, some of us may not. but how you ensure that happens? if we engage in the conversation that way, that would be one thing. but if we engage in the conversation saying i am about to tell you that you have to work harder, but i am lopping off 20% of your salary because nobody can afford it, and you should just be happy you have a job, that is not going to be a pleasant conversation with anyone. it is going to be demoralizing. i think it is going to be a step backward, not a step forward. >> i think she is right. when you tell people they are not going to get as much as there used to getting, they're going to be upset. unfortunately, i think that is a position feckless leadership has gotten us in. one strand of reform is the kinds of things that are
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directly centered on instruction, on pedagogy, on sequence, pacing, and stuff for teachers know more about it than anybody sitting on the outside, looking in. it makes all the sense in the world to approach these things in a collaborative fashion, giving teachers opportunities to lend their expertise to shape what we are doing and hold them accountable. >> would you support getting some of that into collective bargaining agreements? >> i think it ought to have an outside the framework of collective bargaining. i think collective bargaining rigidifies it and healthfully. one important disagreement there is whether it is useful to do that in terms of collective bargaining are not. several people have talked about united mine workers and new unionism for a long time. i am skeptical this works out.
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randi obviously has a different opinion. one of the things i wish we could do more effectively is recognize that smart, thoughtful people can look at the same facts and experiences and come to different conclusions, without imagining the other person must have a nefarious plan. so there is one strand of reform where i agree on principle very much, even if i disagree with how to go about it. but there is a second strand, when it comes to staffing ratios, when it comes to benefits, when it comes to compensation structures. what we are doing is talking about saying to teachers we have increased nominal per-pupil spending threefold -- after inflation, threefold since the early 70's. most of this has gone into hiring more bodies. we have gone from a 23-1 student
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teacher ratio in 1973 to a 15.5- 1 student teacher and the issue today. this is more than we can train adequately. i would rather see fewer educators and pay them better. but educators may not feel this is a good trade-off. these kinds of policy determinations are going -- are frequently going to have to happen, whether or not teachers are comfortable with them. >> i think on the economics, i actually -- i am actually troubled by some of the global spending conclusions that i hear all the time. when you impact the numbers, you see what that spending is for. we have had a 50% increase from the early 80's to now in terms


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