The Obama Administration and harry reid have both said they won at least 1 trillion over a decade in any tax reform. They want it to drive the tax increase between one and 1. 4 trillion. What we ought to be doing is leaning in instead of going to the full extent expense. You get it on expend something when you spend it. Would buy machine, it appreciate over a year. There are some missed opportunities. This was always a discussion draft. We should not be unhappy that it is not more than a discussion draft. It has been such an issue in washington. Is talked about all of the countries. People have been fighting about the minimum wage. They say it is a mandate that employers have to pay people a certain amount. On the other end is that earned income tax credit. Republicans seem to be saying maybe we would play with the earned income tax credit a little bit. Maybe we could alleviate some of the problems of inequality, that we see by making these families a little bit richer. How do you see the benefit of the earned income tax credit . When you asked to write the check for people, this is not a tax credit. Weve asked to spend more money, obama has kind of spent money that wasnt nailed down. The argument that we are all focused on income inequality, the government is capable of fix. Has the president wants to fix. If he wanted to the minimum wage he could have done this in your 1 and your 2, when he had the super majority. He did not want to. This burning concern that he has is not true. They talk about this because we have had 50 years of the war on poverty, the government could not make people not poor. They dont want to talk about the last five years, but we have shoved away jobs by spending a lot of money. So now there is a new metric, which is making everyone in the country poor, and still have less income equality, that government is probably capable of doing. I am not sure that you want to do it, but you could make everyone poorer. And more equal. What you think of the earned income tax credit, is this useful against income inequality . I would not use the tax code in that sense because it makes you spend money make it clear what you are doing and have a vote on it. And theres a certain amount of fraud, to go after that when they want to come in and be serious and have multiple checks going, then you could begin that conversation. Until theyre willing to do that, no. A lot of people talk about how frustrated they are with the act that nothing can be done in washington. He brought up the good point that in 37 states you either have an entirely democratic majority or entirely republican majority, and the house and the governor level. Possibly useful way to compare the trajectories of these dates states going against each other. You draw any lessons from that . Absolutely. In washington you have the house and the senate that want to go different directions. People will talk about the good old days of bipartisan compromise, by telling you how old they are. Because it is true that 30 or 40 years ago the republicans would get together with the democrats and they would argue about todays topics. All fights in washington dc work bipartisan. Going up to nixon. During reagans nice lifetime the twoparty sorted themselves out. One wants a more constrained view of the government, one wants a expanded view, and they are heading different directions. One wants to go east and one was wants to go west. What would compromise look like . Nixon wanted bigger government, and we have revised between bigger and much bigger credit each guy would go back to his corner and say you know, i got us a really good to have more goo deal. Goo good deal. We were always compromising for bigger government. Which was not the direction that we want to go. Now we have one party that wants to go to less government, once that wants to go to bigger government, and theyre not going to agree. Each one can say no to the other. To give you some idea of you could quantify this. Congressional funds that invest when congress is out of session and goes into cash when they are in session. The reason they do this is that for 30 years, when congress was in session, the stock market was up about 1. 6 . When they are out of session it goes up 17 . 17 bytes better when congress is not sitting because you could wake up in the morning and something bad had happened. It gives you some sense of the advantage of good law. The markets are paralyzed whenever Congress Goes into this situation. The state level, with opposite of gridlock. 24 states have republican governors and Republican House and Senate Thanks to the redistricting. Republicans have held those legislatures for a decade. The democrats were asked, would you like one landslide or two, and they said two. So they got two landslides that lasted for four years, and one landslide that asked for 10 years. Not just in washington where we tend to focus on congressional redistricting, but for state legislatures is probably even more true. The democrats redistricting did to make illinois and california and bulletproof for democrats, and the 13 days that have both legislature and governor. The republicans have 24 states. Republicans have half the population live in another state. The democrats have a quarter of the population living in their states, at a quarter of a places like becky and i over the legislature is divided. 13 states, democratcontrolled state going as quickly as they want. 24 states becoming texas or hong kong. They are moving in very different, some more rapidly than others. Every single democrat state raises taxes, and all the republican states top cut taxes unless several years. You see several differences on how they treat publicsector unionism. Crisis of taxes and spending, markets for tax reform, by 2050, to get all 50 state to abolish the state income taxes. Nine have no income tax now. North carolina and kansas, republican governors, both houses, have announced that we are going to zero. They got about a quarter of the way there so far. Watch aerosonic of what oklahoma got weird word to see more movement more quickly. And then we can judge. If you think that more Government Spending and higher wages make people healthier, wealthier, and were successful, and the economy will be better cover than he can do it all loads loads of good enough to wake washington will be better. They can do that. You do not have to wait to washington. Filibuster proof majority have they want to reform the Corporate Tax code they want to fix obamacare. They seem to be troubled by the same gridlock that troubles the administration. To worrying about the changes that you want me to the way that the National Government treats the National Economy . We have a senate and house race in november. It looks very good for the republicans, with the number of senate the that are held why democrats that are engaging. Are indeed your. In danger. In 2016, there are a number of seats that you worry but in illinois, perhaps, which is one intent but it which is not only republican territory. 51 is not what youre looking for, 54, 55 is what youre looking for. The house will strengthen going forward. The replica guns have repetitive it is for the republicans have better candidates than the democrats, much more than 10,012 2012 and we were sloppy about running for senate. Not being disrespectful to anybodys personal faith, i would refer to go with the scaling or something. Episcopalians or something and get elected. [laughter] you said greater than 50 . What percentage would you give . What factors do you think are behind the republican wave that is coming in november . The democrats who are sitting in republican states. West virginia is technically a blue state, democratic governor, democratic house, democratic senate. The house, yes. The senate, 50 50. Republican. L go so will louisiana and north carolina. South dakota. Left one of the seven out alaska. Alaska republicans have to make sure they pick one and not have a thirdparty and then they get the win. Those are the seven you need to get to cross the finish line area but now the republicans are pulling ahead in michigan, so in the senate race. We have serious candidates in New Hampshire and in colorado that are both in play. Of those together and you start to worry about georgia. Could you define warlock for the audience that may not be [laughter] one of the candidates had decided she was a witch, which was good enough to defeat the sitting republican. But wasnt good enough to get across the finish line in the general election in january. In delaware. She is a lovely woman, probably not a witch, she was probably making that up. [laughter] as optimistic as republicans are about 2014, changes a little bit because especially on the left there is a lot of days in the clinton machine if she does announce the extremely formidable race. Take us through the top candidates for the Republican Party for 2016 and what the strengths are . This field is so much superior to 2008 and 2012. You really had one of two people who are running for president of the others were running to be a radio talkshow host or marriage counseling. Or to sell books. They were buying a Lottery Ticket because maybe they would win a primary, and then the press would come and they would get attention. And then they would raise money, and then they would get a campaign together, and they would get a Campaign Manager and all the things that should have happened two years earlier for a grownup campaign. This time away arent we have six people who are either standing on the stage already, could step up on the stage and no one would laugh them off of it and ask what you are doing. Five governors, one senator. Start with chris christie, he has had some challenges, and maybe he does not make it, but he rights himself, he will be a serious person and a good raise the money, he has the capacity and the name to both raise money and run, and a narrative of successes in terms of reforming a deep blue state. Scott walker was a constant attorney blue state red. They reformed the pension rules there, they report that union rules. Every year they have to have an election if the union wants to keep going. They cannot take your money out of your paycheck, they have to come and ask you for it. Teachers are making 50,000 in cap and that was taken out of your paycheck by the city or the school board, and given to the union, and he never sought. Not since you and your pocket until the union guys come and say can i have 1000, and youre allowed to say no. Oddly enough, several do. He has dramatically changed the saint the state. And every republican has made a contribution to him when the unions tried to recall him. He is the only governor that defeated a recall and got reelected. Then you go down to rick perry, he faltered last time because he should not have taken Pain Medicine before debates. That said, he spoke with the conservative legal action conference, and the establishment press for saying he is agreeably articulate. He is when he is not taking Pain Medicine. He is a very successful governor for 14 years. There is a real narrative there. The governor of louisiana got an ethics law that minnesota would have been pleased with passed in louisiana. He got School Choice for those kids. Parents have that right as soon as schools are available for everyone who wants to take them up on that. He may well run. Jeb bush was governor for eight years, perfectly competent regular republican governor. He would be a candidate who could step up to someone would have to fall over for him to step up, but he could do that. And then rand paul, who starts with 15 or 20 based both and all 57 states. There you have a real opportunity as a senator. It other senator, it is very different very difficult to pass this bill. It is increasingly that they dont pass bills. [laughter] you can give speeches, but if you can compete with the guy who could wake up tomorrow morning who could do something edges on the front page of a major newspaper and the sugar is awfully difficult to compete with that. You said christine, walkabout. , bush, paul. Is there a top three . Real progress there. He could next year year asn exciting, scott walker did back in 2011. That could put him up front. Other than that, i do not see a governor that would work within that would do the kind of a mage amazing backflips where i know these guys are interesting, but look at this kid. Moving to the elections of the future, it was a poll that came out. A look at some of the trends among millennials. First, they tend not to identify as labels. They have a mostly independent. The gap for those who voted for obama versus republican candidate in 2012 and 2000 and eight was the largest of the last four years 2008 was the largest of the last four years. This of the most diverse generation in American History and the generation behind it. 71 said they want a bigger government with more services. This is a slight majority. These are filibusters. Party have ablican serious demographic graphic to look forward to . Sure. It need to look at the demographics in two different ways. Democrats think of race and gender. There are ways to look at the number of selfemployed people in the number of government workers versus private sector workers. People who have stock. Which is why there is talk about the Health Savings accounts and individual retirement accounts. The democrats answer everything with cops, teachers, and employment those under government employment. It makes you lower likely to be a democrat or republican. You can add into that the other things you can change. You add to the other things that you could change. This is why the demographics shift. You look at the u. S. 25 years ago. Homeschooling was illegal in just about every state. Had it legal. They know the modern Democratic Party wants to take that away from them. Add that to parents have a voucher in several states. We are building out schools and structures that allow people that choice, but they go to a different Public School were the one they go to now might be nicer to them when they walk in and say i have 5000 i have 5,000. I want to know how youre good to treat make it this year versus last year. What do you think . Could go to another school. Think of how youre treated when you walk in to buy a car versus the department of motor vehicles. I do not think the democrats ever come back in the states for School Choice has been won. Come backbor did not in Great Britain until they fundamentally changed their view. Remember when thatcher allowed them to buy houses and you could own it . And people did. The bolsheviks ran against them, and they said they will steal everybodys houses, and this will be great, and they got wiped out. They got wiped out in those areas where people would have said those are labor voters not when you not when you threaten my kids or my house or the education. 30 years ago there was very little concealed issue. People allowed being able to carry a gun on them in their purse. Today they have concealed carry permits. The person who has made that decision is a different human being than the one who says that we have a government, and if something goes wrong they will draw a circle around me and this will be helpful. The person says i will be in charge of myself. Try to take that away from people, try to take that away from people thats what the democrats always get in trouble when they talk about gun control because they do not understand their threatening something that you that people consider important. We can, by expanding liberty, and that is where half the country that lives in red states are doing all of these expansions of freedom, and the immigrants are voting against that, and we would not want you to have that, and if we ever get back in power, we will take your dues out and you will never see it, and you do not produce a no, and we will go back to the way it was. That is not a real sales pitch to go to people. Once you give people more liberty you changed the nature of who they are as voters. I am not sure that the challenges that you mentioned continue out. We are not the same person at 40 as we were at 20. That said, i think a lot of Republican Party needs to be much more aggressive in being proimmigration and we need to be taking all the smart people from around the world and when they come here to get a phd, im not in favor of not letting them leave, but im in favor of encouraging them to stay, and stealing their airplane ticket home. We want all this talent. Theres a lot of people in a lot of jobs that we need more people. The reason that we are the future and china is not because we are allowed to have kids and a lot of immigration. We have one more question. Make it great. Right there. Good luck. John cummings. A writer. I know you just promoted liberty and individual responsibility. How do you feel about Corporate Responsibility . Companies, who through negligence or error, dump chemicals into a river and declare bankruptcy, how can our economy deal with situations like that that does not just fall on the government to bail them out . You want to have reasonable loss so that people who pollute the neighbors property paid for damage they do, just as they were in a vehicle. Real damage can be done. I think it is very important that we ask individuals and businesses to be responsible for real things they do. Which is why tort reform, where the trial lawyers have been getting rich going after people force the that the guy who owned the house before them did the some of the stop where you the guy with the deep rockets, again texas has passed a great number of reforms in terms of that reform that have dropped the cost of notable care in the state, more doctors are moving into texas as a result. Louisiana is about to pass the same collection of rules. I think getting those reforms so that the billionaire trial lawyers who have been abusing the systems is the thing we need to tamp down. It is killing the tech sector, being very unhelpful. Lets reform those so that we can focus on cases of real criminal activity. By individuals, or people can collectively in some company. We have time for one more question. The guy with the beard . Guys with beards get to go first. [laughter] new rule you have taken it to an extreme, sir. Sunshine press. Im wondering if he could set forth what metrics would make an economy better that is what is the purpose of all of these policies . How would you measure that the economy is better here than there . You pointed to some states where the democrats are predominant. Do you look at Life Expectancy . Education levels . How can you tell if the economy or Economic Policy is better or worse . You want to have metrics, if you do not have metrics, you end up with all sorts of problems. I talked to the budget guy when bush came into office. I asked what metrics are you going to use . Percentage of gdp . Total number of fulltime employees of the federal government . What is the metric youre going to have to maintain the cost of government. And he said we should do Something Like that, and they never did. It wasnt on the list of things to do to measure the size of government. What are you trying to get to . The per capita gdp is one measure. People decide to be monks or warlocks or something, and they do not care about that. Some people would rather have more than less. Few people are quitting jobs and few people are moving. In a vibrant, dynamic economy, where people are leaving their jobs because theyre someplace else to go to, they move because there is something to move towards. When you look at all the bad numbers not the employment levers, the number of people numbers,employment the number of people who left the workforce, we are not moving as much as we used to, we not eating jobs as leaving jobd jobs as easily as we used to. You do not want people handcuffed to a job. Generally, there are measures, and that is useful. We have done some fine work on earned success by what translates into happiness. Winning a Million Dollars does not, surprising, make you happy. People will make a lot of money, but because of lack of the draw they do not get to be happy because theyre not sure they have earned it. Earned success correlates with happiness. Happiness through money is probably easier, when you have money as the metric. Thank you very much. [applause] a big thank you to grover norquist. What is our funniest guy . Washington, d. C. s funniest celebrity. Stand up here for a minute. Grover competes every year and most years he wins. He has drafted me in from august through september. You have some extra time. Ive gone back to watch who has one in many of these cases. These won in many of cases. Grover won last year for impersonating dick cheney. And my strategy this year will be to impersonate grover norquist. We look