October the congressman needed to extend the debt limit. We kept him closely informed literally every week. And there was not a negotiation over the debt limit. It was a question of congress figuring out how it was going to deal with the thing they had to deal with. That is protecting the full faith and credit of the United States. An budget conference is intrinsically congressional process. One of the few things that does not come to the president to be signed. The house and the senate agree on a resolution and it sets their government on how they will handle operations in budgetary matters. Budget Experts Consult with people on the hill and answer questions. It is intrinsically a congressional process. Clear. W is quite the president has budget is something he sticks by. It represents what he offered to the speaker at the end of last year. It is i think the right solution. We have to see where this conference goes. Lex let me ask you one specific issue on appropriations. Max baucus, the chairman of the Senate Finance committee will which he has on for corporaten tax reform. In particular the issue of taxation of overseas earnings. There is a lot of as you know, you hear a lot of concern about this issue. I do not know if you had a chance to see this latest proposal. Of this budget, this may be an opportunity to do with this issue which does worry business people. I talked to senator baucus yesterday. I think it is a very constructive step that he is putting forward a draft. I look forward to studying the details. From what i understand it shares some significant characteristics with the president s framework which i think has a certain amount of convergence between democrats and republicans. I hope the democrat engage with him on it. When you let the majority work of actually do the right thing. If you let the majority work on tax reform, the president outlined in july every possible path. If you cannot do everything, have our statutory rate not be something that drives business out but attract business. Taxinate some of the provisions that skew decisions and there is the benefit in business tax reform, in tax reform in general. There is some onetime revenue that comes in. The president said in july we ought to use that to jumpstart our investment in infrastructure. You cannot use it to lower tax rates forever because it would not pay forever. It is onetime savings that we inc. Would be an anonymous shot in the arm to the economy. It would build the foundation for strong growth and job creation economy Going Forward if we put it into infrastructure. I am hoping this conversation can move forward. Theres an awful lot of issues moving through congress where i do think there is the potential of consensus. Reform and tax Immigration Reform and the farmville. That october represented something of a threshold that we crossed over. If we can see processes where ideas are put forward, where it is about trying to see if there is common ground. Be a good thing for the country for its would you see the u. S. Economy . We have had a couple of months of better employment growth Area Unemployment is still high. Youreal Unemployment Rate, account for those people who dropped out of the workforce. Growth has been pretty soft. What is your expectation now Going Forward over the next year or so, are we going to be stuck in this rut of over two percent growth and still high unemployment . If you look at the Economic Data from the last few months there are a lot of encouraging signs. We are seeing the housing sector doing much better. We are seeing manufacturing doing better. Private sector, jobs. The jobs numbers that came out a week ago went back and corrected numbers for the previous couple of months showing that we have had 200,000 jobs which is higher what the original numbers were. Significantg a trend in the right direction. If you look at what has been going on the last year we have had an anonymous amount of fiscal drag. Some of it was intentional, the phasing out of payroll tax holiday. The imposition of lower spending levels. Some of it was unintentional. Sequestration kicking and because congress was unable to ande on a set of medium longterm alternatives. That fiscal drag runs its course. There are various estimates but of fiscal 1. 5 of gdp drag. Andy the year with just over two percent gdp, it gives me reasonable optimism that going into next year it will be better than that. You look at the jobs numbers from last month, we have seen state and local employment declines inr federal employment. During the depth of the recession it was the other way around. State and local government was shrinking. If the headwinds abate which they will and the rest of the economy from housing to manufacturing to state and local government are doing better, those are all indications that we ought to go into next year stronger. We had the strongest employment growth in october for quite a while despite the Government Shutdown. Some people suggested we might shut down the government more often. Jobight get private sector growth. The economy would have done better if we had not had that debate here in washington. And 2013 we in 2011 debate seen government policy uncertainty, putting a kind of call on investment activity, we might be seeing the kind of recovery we all want. I am curious what the views in terms of are in marginal Investment Decisions and how the debate in washington effects the decisions that people in real businesses are making. From the conversations i have had with ceos it is substantial. And want to come to questions from the audience. Let me turn to financial reform. We have had dodd frank, we have this issue and a number of issues related to that. One particular thing i want to ask you about is the volcker rule. Using their own money for proprietary trading. You have said that you want atlines from the regulators the end of the year. I do not want outlines, i want to rule. What are we going to get, is a clarity . Im optimistic we will see a role by the end of the year. I have met under pretty regular basis with the regulators. Five different agencies have to come to the same place. It is a consultative process. It has to come to closure. It was an important part of dodd frank. It is important in terms of financial regulatory policy. It is important in terms of confidence in government. I think that if you look at the time from dodd frank being enacted to now there were a every of years when effort to delay the implementation of dodd frank was used from slowing down funding agencies urging congress to repeal dodd frank. For the last year we have seen a different and vernon. We have seen an environment that need for certainty and acceptance, that dodd frank is the law of the land has replaced the effort to delay and perhaps repeal it. But i became secretary i moved in on that opportunity and pulled the regulators together and said you need to figure out what it is that are the differences between agencies and we have to come together every few weeks to talk through the issues. You need to make decisions. The major issues are resolved. Is aare figuring out it complicated piece of business. On the one hand they have to preserve the ability of firms to make markets and on the other ofd because of the policy stopping proprietary trading, needing to shut down the kind of risky positions that firms were holding on their own account. I am optimistic that they are getting there. You expect there to be the role will be agreed and published by the end of the year. That is what i have urged them to do and just last week the president reiterated it. It does look like a pretty hostile environment for Financial Institutions right now. You look at what is going on at jpmorgan, the way the dealing withn is financial issues. There is concern on wall street as you know. Maybe this is going too far, and the environment you are creating opportunity, the incentive for companies to take risks and that will jeopardize the economy. Are you concerned you have the balance wrong . We have the deepest, most liquid Financial Markets in the world. It is part of the vitality of the economy. We have come out of the worst economic crisis since the Great Depression and it was an economic crisis that was brought on by practice this is should have been better regulated. In my view going into this has been consistent. We have to try to figure out the right thing. A question of do everything you can or do as well as you can. It is a question of trying to get that balance and do it right. I have said that on that line when youre not sure given the crisis of 2008 and 2009, you can err and corrected if youre doing too far. Others say you less and come back and toughen it up. The American People are still recovering from the economic crisis. We have to be able to assure them that will not be another financial crisis anytime soon. We have a few minutes for questions. Lets get a microphone. Yourself,ld identify take your name, rank, and serial number. Early in the conversation he made a couple of almonds about the debt ceiling. Comments about the debt ceiling. [no audio] [inaudible] what would be the scenario [inaudible] the important thing to remember about the debt ceiling is that it has been at the end of decisions that have been made. Money,s has appropriated revenue rules have been set. In the end, the debt limit comes after all the policy has been made. So there really is no raise thee but to debt limit when you need to borrow in order to pay the bills. You can be a full throated debate about what our policy should be on any of those other areas but there cannot be a question once we have made commitments as a government that we keep our commitments. It cannot be that we have contractors who have done the work and we say we will not pay them. It cannot the that people have entitlement benefits but they do not get paid. The full faith and credit of the United States whether it is bonds or contractor benefits have to be honored. I think that the whole idea of debt limit reform is something we should think about because the kind of brinkmanship that we saw in 2011 and 2013 i think did harm the economy. It did hurt confidence. It did reduce investment act committee. And hiring activity. It does not serve a useful purpose because it does not really affect the policy. About what a debate we should do in tax reform in terms of how much revenue and how much entitlement reform to do, that is a different matter. On president has put a plan the table and we have been ready on multiple occasions to reach an agreement on a bipartisan basis. It cannot be that you get to the end of all of the taxing and spending decisions and say the government cannot pay its bills. I do believe congress has to do it. I think if you look at the comments that have been made by congressional leaders, republicans and democrats, i do not think october was something they want to repeat. I am quite hopeful they will do it in a businesslike way ahead of the scheduled expiration of the debt limit and certainly without the brinksmanship we saw a few weeks ago. We have come through a difficult time in terms of the economy. You mentioned about the marginal decisions on investment. Polled the if you businessmen they would say they had a particular lack of influence on policy today. Ofother words, the view industry and commerce are not really reflected in policies coming out of washington and so on. Any viewif you have about why that is. Im not sure i agree with the premise. I know i speak with ceos on a regular basis. The policies we designed, we designed them with the real intention of trying to meet the needs of businesses that want to expand and grow the economy. Our tax reform principles reflect much discussion with the private sector. I think that there has been a bit of an evolution of the parties in this country. I think that some of the traditional support in the for largerparty businesses and Financial Enterprises has changed a little bit. That may be what you are referring to. Businesses thought we were listening to them in september and october. What i heard them say is we go to the hill and we do not think people are listening to us there. I think a lot of people on the hill were listening. Peoplee are 50 or 100 who do not have a traditional view it does not mean no one else is listening. I urge people not to focus on 50 more radicalhave a idea of what to do but focus on the core of members when it came to a vote on october 16, the overwhelming majority did what business made sense thought made sense. I think you could find a bipartisan majority that would do the right thing. A hard break at 930 and the stock market is about to open. You have got to get to your day job. Hank you for joining us. On the deficits and Economic Growth. This is 35 minutes. It is my great honor and privilege to be here with larry summers. When he was two years old his parents took him to his pediatrician who happened to be my father. Father, ato larrys story he told, his parents expressed concern that larry was not talking much at two years old. Supposedly my fathers response was i would not worry about it once he starts. He will never stop. So with that. Moving right along. Had been able to post questions i would have asked you but i will ask for a show of hands. To pick the top priority, the single top economic rarity for the u. S. Government right now and they give you a choice between reducing the longterm deficit and doing something to spur growth in the shortterm and the longterm, deficit or growth, you only get one vote. How many people would choose the deficit over growth . How many people would choose rose over the deficit . Here watching for 30 years. For much of that time we have been obsessed with reducing the deficit. That has been true in the last few years. You think that is a dumb idea and so do a lot of people here. Why . Guys are right. Guys are right. They are wrong. You guys are not getting your way. We have had 10 bipartisan budget processes, we have zero bipartisan growth processes. We have had budget some is summits up the union. Somehow, the business immunity was complicit because they have been substantial financial supporters and encouragers of it. We have gotten the idea that addressing the deficit is the defining challenge facing the country. There are three relevant realities. On the current forecast the debt to gdp ratio will improve of the over the next decade. The debt forecast online with the way they looked in terms of decline after the 1993 budget deal. For 10 years this problem is at hand. Second, basing policies on these that iss is longer than kind of a crazy thing to do. If you take the confidence interval around the deficit forecast, not 20 years out, not a 95 confidence interval but confidenceout, a 90 interval, that confidence interval is 10 . It is plus or minus 5 . If the geomet Climate Change people were telling us it was negative three degrees to plus 6 degrees we would not be acting on the problem and we do not know what the long room run deficit will be. The most important thing is if you take the longest run deficit , you take the official forecast of it, if we increase the growth 1 , pointint two of two of 1 to my you solve the entire identified fiscal gap problem. Im here to tell you that in a country that is stifling entrepreneurship in a variety of ways to my in a country that is star for Public Investment that lets canidae airport languish the way we do, in a country that is missing a huge opportunity on Immigration Reform, and a auntry that is maintaining regulatory and tax environment that does not recognize the confidence is that confidence is the cheapest form of stimulus, increasing the growth rate is easily attainable. The truth is that if we get past protracted perhaps bout with secular stagnation and get the growth rate up, that it the debt bubble will stay in control. And if we continue to the a country that does not increase the fraction of adults that are working mother does not catch up with its gdp potential, that grows at two percent or less what we can have all the entitlement summits in the world and we are gradually going to accumulate debt and have a serious debt problem and so we tot have gotten our focus the wrong thing. We should be focusing on growth. A virtual circle which creates more growth. Employers work harder to train the next generation of workers. In a growing economy, there are more ladders for kids to get on which puts them in a better position to lead 10 years down the road. There is more profit that can be reinvested in r d and longterm capacity. The growing u. S. Capacity, there is a stronger World Economy which is ugly to be a successful world. World economy. This is where our priorities should be and we have just in my to say, lostad track of it as a country. Why is it wrong to say that we know we have an aging society, we know we have some benefit promises that are going to be expensive to keep, and what he not be prudent to do something about growth and package that with things that we know take a long time to save money and do it now rather than bequeathing the problem . There were some real problems in the kitchen on the titanic. There were. They were the wrong problems to be working on given the challenges the titanic faced and given that management had only some much attention that he could vote itself to. It is the same thing. It would be better to be thinking about a range of long term adjustments about 2035. It would be. E really cannot do very much we had difficulty passing any legislation. Right focusext the is on what is most important. Things that contribute to growth. What is surely necessary is things that contribute to growth. I think that the odds are were going to need to make entitlement adjustments at given the uncertainties in the forecast, these forecasts are wrong by five percent of gdp all the time. They were wrong on the high side. The forecasts were to pessimistic in the 1990s, they were wrong on the low side, they were too optimistic in this period. When people are talking about entitlement reform, they are talking big numbers. Theyre talking about one percent of gdp. 1. 5 of gdp. It is the right thing to be thinking about. One thing a group like this camera member. It is the right thing to be doing. If you contribute the absolute maximum you are legally allowed to every year from the time your 19 to the time you are 65, your Social Security benefit is less than 40,000. And so there may be a case that we need to adjust the formula in various ways. How excited can you really be about the Central National project being adding this benefits for the best of the Social Security recipients from 38,000 dollars to 36,000 rather than figuring out a way to grow the economy faster so there can be more benefits for everybody . The right debate to be having is not the debate about containing the budget. It is about how best to spur growth. Frighteninger phrase about secular stagnation. Do you mean that we are at substantial risk of having an that perks along at two percent growth and has one in six men between 25 and 54 on the sidelines of the labor market for years to come . Predicting it. I do not see how you can look at the data and not say that debt and that is a substantial risk. There are two points. Now,years ago right financial repair had happened. The tarp money had been repaid. Credit spreads had largely normalized. There was no panic in the air. With respect to thinking institutions. It has been for years. Ofhave not grown the share adults who are working in the United States all since that time. At all on theined potential of the economy. And so the growth machine we predicted, the forecasters have been consistent. Absolutely consistent. Ofeturn to accelerated rate growth nine months from now. There has been the forecast for the last four years and he has always been wrong. It might be right this time. We studio to be right but i do not see how you could be certain that it is right. And if you look at, there is a troubling feature it seems to me , the experience before this crisis and that is what has caused me to be more alarmed. Betweenout the years 2004 in 2007. We had what consensus opinions think were excessive budget deficits. Opinionhat consensus now thinks were excessively easy monetary policies. We had what universally is regarded as having been a massive commit him prudent, and excessive credit expansion. We had what is regarded as having been an inordinate housing bubble which created a false impression of wealth and created vast and excessive construction. You might think that with all those things going we would have an economy that would be overheated. But if you look at the unemployment statistics, if you look at the inflation statistics, if you look at the growth statistics, the economy was bubbling. There were bubbles, all right but the underlying real economy with a huge support to demand for all of that was not overheating. By any stretch of the imagination. Decadeit has now been a since we have grown at a rapid rate in a remotely healthy and sustainable way. And that commit seems to me, has to be the deep concern as you look to the next decade. Things happen. When i came into the Clinton Administration in 1993, we did a comprehensive exercise and the treasury was part of it, the fed was part of it, the imf was part of it. We asked all the outside forecasters. Looking to the long run, there was a debate. There were pessimists who thought japan would grow by three percent a year 3 a year over the eight years and they were optimists who thought it would grow by 4 a year over the succeeding 20 years. It has grown by about. 6 a year. Over the succeeding 23 years and is only slightly more than half today of what we universally believed then because permanent stagnation was kind of inconceivable. Wasapan, what happened growth was very slow and growth was slow and after a while, everyone got used to it and they stopped calling it a demand cap and they started saying it was all that could be done and to some extent, that became true because after all those years, the companies do not reinvest month the companys lost the mojo, they were not in the position to compete so at a certain point, supply came down to demand. Used to the idea that japan was a different kind of growing country. I am not saying we would have a gap but we are aspirationsning our as measured by potential gdp way down. So if you ask is there a risk of this emma absolutely. Does the risk, does the prospect seem as likely or more likely, then the high optimism scenario 4 re we go back to an era of growth . Between the pessimistic scenario and the hyper optimistic scenario, i would choose the pessimistic scenario. Things have a way of working out. Betters is it will be than that. The thing that policymakers is thebe accessing about risk of this secular stagnation thing. That is a much more urgent threat to every American Interest than anything about Social Security benefits in 2035. That is a much greater risk to American Interests than anything about the emergence of hyper monetary coming from policies. That is where the concern not to be. The gap between winners and losers in our society is wide by historical measures and has been widening. Should we worry about that and if so, what should we do about it . We should be worrying about it. If the only thing that was happening was that, i would argue that we should be worrying about it but i would understand why other people would feel that is what the market was doing and that eitherot make preoccupation. But here is what is really scary. For 240 years since george washington, and has always been true that we became a country with more equal opportunity every generation. True. In thenger United States. Life prospects between the children of the rich and the children of the poor has years. Over the last 40 the gap in the College Attendance rates between the children of the rich and the children of the poor has widened over the last 40 years. It is not that we do not know how to make progress. If you look at the achievement gap between black and white students, that achievement gap in 1970 was twice as large as the gap tween the children of the rich and the children of the poor. You look today, the achievement gap between the children of the rich and the children of the between twice the gap lex and whites. O we know how to make problems with 40 years of effort we have a long way to go. We have made enormous progress. With respect to civil rights. Color linelem is the in the 20th century, the home of the 21st century is the class divide and what it means for opportunity. And so widening Income Distribution combined with more and more ways in which the theirate can advantage children, i think is profoundly corrosive. What is it that should be done . We need to find ways to ensure that the Educational Opportunities open to every kid are like the Educational Opportunities open to the kids of the people in this room and we are not close to that as a country. Sure that were there are slots to be given, it is the government giving rights to spectrum or mining rights are whatever it arethat had those processes open and inclusive and open to everyone and are not processes , it reward the fortunate have written a lot of papers about the important incentive effect of taxation. We cannotthat punitively taxing we cannot go back to the kind of tax rates the country had in the 1950s in the 1960s and the 1970s. Here to tell you that there a substantial set of loopholes, special interest privileges, and the like that distort the allocation of resources, make the economy function less well and also act to reify and reinforce any inequality and that serious tax reform that went after those inequities could both make a fairer economy and make an economy are somethingaxes people care about. What would you do if you could write the Corporate Tax thing, how would you handle the question of overseas earnings, what is the right way to do this for the economy and the social good . And d me and him indulge me if you will in an analogy. You have a library in the library has a lot of overdue books. You could have an amnesty where people got to bring back their books and they did not have to pay the fine. That would make sense. Another thing you could do is you could say, were never going to have an amnesty. You had better bring back your books because no matter how long you keep your books youre not going to get an amnesty. That would be kind of harsher but that would make sense, too. A really idiotic thing to do would be to put a sign on the door of the library saying, no amnesty now but stay tuned come a there might be one next month. That would be the dumbest imaginable thing to do. What has been the u. S. Corporate tax debate for the last five years . It has been exactly that. O break on repatriation now the constant hope that there may be a break on repatriation in the not too feet distant future and so why would anyone ring back their money in the face of that . What should we do . I think the principle is clear. You could call it territorial with a minimum. A lot of Different Things you could call it. We should eliminate the distinction between repatriated and nonrepatriated profits. We should establish in a balanced budget way a minimum tax on global income. And so whether the rate would be in the neighborhood of 15 , you pay that, if you brought your money back, you would pay that, if you left your money in ireland, and there would be no longer an incentive to keep money offshore. If you did it right, there would no longer be there would not be any revenue loss to the government. But look, there are things we need to fix to stimulate investment in the country. But i do not know that much about multinational business but here is something i think i do know. If you measured it right, the places abroad where the American Companies make the most profits would be places like china, japan, terminate, and france. That have germany, and france that have a good economies. If you look at their tax returns, the places to show up having the largest profits are places like the netherlands, and ireland, in case youre not getting it, the kaylynn the cayman islands. It really should not be that way. It does not need to be that way and it is not really making the country more competitive or creating jobs to have it be that way. So, the principle is, do not try but try tore money, raise money in a better way and do not keep a set of uncertainties that all but forces everybody to leave their money abroad. I could keep going but if you have a question. Ok. Healthcare. Gov is a disaster. How much damage has that done to trust in the government to do anything . We will see. It cannot be good. [laughter] is an unhappy tale. Many of you know from your own experiences that the right general rule on large i. T. Say,cts is, take what they double it, and then move to the next higher unit of time. So days become weeks and weeks become months. I could continue the sequence. That is true when it is done in the private sector. And there is no organized constituency for failure. And when it was done in the Public Sector there was a massive organized constituency for failure that organized as best it could to ring about failure by starving the funds and objecting to the procedures and so on. It was nextdoor nearly difficult task extraordinarily difficult task that was massively underestimated and i do not think there is any legitimate excuse for how badly it was underestimated. I think you have to say, if you look at the capacity of government to do things, you have to be less optimistic about that than you were today. Huge think it is a imperative to do something that will give confidence and as i the greatw days ago, danger at a moment like this the great wager for a Football Team that is down by two touchdowns and danger for a Football Team that is down by two touchdowns in the Third Quarter is that they will abandon their playbook and start throwing hail marys in every direction. The great danger at a moment like this a is you will have promise that she will promise days when you have Great Results and make confident claims about what will happen next, you will try to jury rig something rather than recognizing that given the that of the hole youre in, it will be difficult. This is going to take as difficult as this was to do it right in the first place, it is going to be more difficult to fix. Think it is hugely important that it be fixed. Think same time, i do that we do need a kind of compact in this country where we debate things a wee debate things and we debate things, and when we come to a conclusion, everyone tries to make them work, and if they do not work, at a certain point, we draw lessons from that. To bring about failure and then say we saw failure, therefore we cannot rely on government, i do not think they are performing in a way that they should be proud of either. I do not think there is anybody aswashington who is emerging appears. From how this i do think that if i may say so, who i suspect is majority of people in this room, are of a more conservative and bent than i, strategieshat of the that could happen pursuit that would result in universal health care, the one that was pursued was the one that was most respectful of the traditional market, that went with a grain of the current system, was the one that was closest to what had been proposed by republican think tanks like the Heritage Foundation and implement it implemented by conservative state administrations. And so if it does not if this kind of commendation combination of government operating at the edge rather than taking over the whole system is too difficult to make there are conclusions from that could that could be drawn in both directions, but my hope and my thistation would be that fixed and time, be made right. And i think it is worth remembering, just as a general matter, having lived around washington things for quite some time. Lesss only two months ago, than two months ago that the budget deal and the budget and the fact that the republicans were face down on the debt issues meant that they could have been seen as being in deep nterminal difficulties and that now is completely out of everyones mind and no one remembers that as an important event all of six weeks later. To so it is a great mistake think that whatever the mood is that that is the mood three months are now, let alone three years from now. There is a larger universe of possibility. Ask you mentioned japan, slow growth, more than a decade, two decades. With an approach of three arrows. We see one of the aeros fired, maybe the second one is in the quiver, the third is not out of the talking shop yet. I wonder what your evaluation of that Economic Policy is and the likelihood of success. It is a little bit like pulling your goalie and a hockey game. It is not that great a strategy. It is just if you do not pulled the goalie out and the clock runs out, then you lose for sure. And the so you have to try something new. So the basic thrust of a substantial commitment to one. Ion was the right think there have been some encouraging signs so far in increasing growth expectations, and the reduction and deflation and expectations. The prospects for japan looked considerably better than they did a year ago. That is a tribute to the policies. I do not think we will now know until nine months from now. They will put the value added tax in and either the economy will have weathered that and the growing continue to be growing in a reasonable way, or as it happened in the past, there will be a runup of gross until they do that, and then there will be an air pocket of spending afterwards and they will be back in the soup and i cannot confidently predict between those two possibilities. Both i think are real possibilities. A question from one of the ceos here. You talked about the secular challenges to longterm growth. Could you talk about the role of labor in society . It feels like the combination of globalization, automation, we had a wonderful discussion at lunch that said even at the University Level there will be increasing pressures on traditional jobs, maybe not at the top universities but at many others. It seems that if you are at the top, todays world offers more opportunity to contribute globally and if youre not, the pressures for middleclass jobs and other things are just enormous. Do you see an underlying trend here and what do you think it means in terms of longterm growth and the inequities in society that you described . Calledhe issues that i secular stagnation around lack of demand and all that are the issue for the next decade, the centuryor the next half is the issue that you raised. There were some guys who wrote a book nine years ago about technology and its impact on employment. One of the most striking passages was they said, computers can do some things, but computers are not going to be able to do other things. Their example, something that computers would not be able to do was make a left turn against ongoing traffic. One withined that less than a decade. If you one of the things i have done since leaving government was spend a bunch of time out in silicon valley. And the set of things for which they are developing capacities mindboggling. It has always been true before people, jobs were eliminated in one sector by productivity increase and they went to somewhere else. And the people thought he could not happen. That is true with respect to agriculture, that is true to with respect to the luddites, it has always been true before. The fact that it has been true before does not mean it was always true before. House prices in america always wind up. It has always been true before is not a conclusive argument. Chances are maximized if our educational system is repairing as many people as possible to be as creative and flexible as possible. I think we are going to have to recognize that in a world where the potential rewards and leverage to the most creative are larger, that we are going to have to find ways of having some redistribution from the most creative to everyone else. Is example i like to give George Eastman had some fantastic ideas about photography. He was very successful, and along with his success, the city of rochester supported a thriving middle class for two generations. , equally fundamental innovation or more fundamental innovations, produced even greater success for him, and for his shareholders, but there was no comparable, largescale, middleclass job creation. That is what we are going to have to work through. It is going to require us to be much more a manager imaginative and thinking about different kinds of service work and thinking about the quality of jobs and the dignity of jobs serviceed with the sector. Everything weoing can and there is a lot that we can do that is still not done to bring about a renaissance of american manufacturing. But china has gained competitiveness, gained share, innovated and raised its efficiency as much as any country ever will, and there are fewer workers in chinese manufacturing today than there were 20 years ago. There are fewer workers in chinese manufacturing today than there were 20 years ago. Success, if and when it comes, is going to come from various kinds of service work, various customization. R it is a tragedy that on the one hand, you are saying, and you are right, and i understand why you are saying it, that there may not be enough work to do. On the other hand, there are several million kids in this profoundly need individual attention and mentoring of a kind theyre not close to getting. Bringing have a way of the people who want to Work Together with those and i do not think it is traditional government that will do it but i do not think it will be turning the country into some kind of libertarian paradise. Join me in thanking larry summers. [applause] tonight, ben remarks before the National Economist club. Then remarks by president obama and paul ryan at the wall street ceo conference. Tonko of new york talks about problems with the healthcare. Gov website. Featuresr spotlight wiredhlman of magazine. Live every day at 7 a. M. Eastern here on cspan. Wednesday look at National Security issues related to the federal workforce. In a series of hearings by the Senate Homeland Security Committee as it investigates who gets access to classified information. Live at 2 00 p. M. Eastern on c span3. Marks the 150th anniversary of president lincolns gettysburg address. But for our coverage from Soldiers National cemetery. Week, thanksgiving day at 4 00 p. M. And 10 a clock p. M. Eastern on American History tv. Outgoing Federal Reserve chairman ben bernanke spoke about the economy tuesday. Bond buying her a gram disappointment with the latest job numbers. This comes two months before the end of his tenure. This is 50 minutes. Thank you. Gettysburg address, huh . A little fresher. It is nice to be back to again again with the nec. Nearly eight years ago, when i began my time is chairman, one of my priorities was to make the Federal Reserve more transparent and in particular, to make Monetary Policy as clear and transparent as reasonably possible. I believe then as i do today that transparency, Monetary Policy enhances understanding and confidence, promotes informed discussion of policy options, increases the accountability of Monetary Policy makers for reaching their mandated objectives, and ultimately, makes policy more effective by tightening the linkage between Monetary Policy, financial conditions, and the real economy. To these, responding financial crisis and its aftermath soon became the Federal Reserves main focus. Out, however, following the stabilization of the Financial System, supporting our economys recovery from the deepest recession since the Great Depression has required a more prominent role for communication and transparency in Monetary Policy than ever before. In my remarks this evening, i will discuss how the Federal Reserves communications have evolved and how enhanced and terrorists he is increasing the effectiveness of Monetary Policy. Despite the challenges inherent in communicating in an unprecedented economic and holocene environment, about a future that can be in imperfectly foreseen, i will explain why i believe that ill see transparency remains policy transparency remains an element of the strategy for meeting economic objectives. To understand the Critical Role that the Federal Reserves communications about Monetary Policy have played in recent years, it is useful to start by discussing the role of Monetary Policy communications more generally. Including the relationship between policy communication and the broader policy framework. Making Monetary Policy is sometimes compared to driving a car. With policymakers pressing on the accelerator or the brakes depending on whether the economy needs to be sped up or slowed down at that moment. Analogy is imperfect for at least two reasons. First, the main effects of Monetary Policy on the economy are not felt immediately but instead play out over quarters or even years. Hence, unlike the driver of a car, Monetary Policymakers cannot simply respond to what lies immediately in front of them, but must try to look well ahead. Admittedly, a difficult task. Second, the effect of Monetary Policy on the Economy Today depends importantly not only on current policy actions, but also on the publics expectations of how policy will evolve. The automotive analogy clearly breaks down here because it is like the current speed of the car depending on what the car itself expects the driver to do in the future. Expects the driver to do in the future. The publics expectations about Monetary Policy matter today because those expectations have important on current financial conditions which in turn affect output, employment and inflation over time. For example, because investors can choose freely between holding a large security or rolling over a sequence of shortterm securities, longer term Interest Rates today are closely linked to Market Participants expectations about how shortterm rates will evolve. If Monetary Policy makers are expected to keep shortterm rates low, karen longerterm Interest Rates are likely to be low as well. In short, for Monetary Policy, expectations matter. Indeed, expectations matter so much that a central bank may be able to help make policy more effective by working to shape those expectations. Experience demonstrates that a useful approach to managing expectations, one that dovetails well with basic principles of transparency, involves policymakers stating clear objectives as well as their plans for taking those objectives. Past twole, over the decades, many Central Banks have introduced explicit numerical targets for inflation. Supplemented by regular publication of the Central Banks Economic Forecast and provisional plans for achieving objectives in the medium term, american inflation goals have helped increase transparency and predictability of policy in a number of countries. Openis spirit, the federal Market Committee has clarified the Federal Reserves objectives and policy strategy. Because of its dual mandate from the congress which specifies both maximum employment and price stability as policy objectives, the Federal Reserve could not adopt an inflation target as his exclusive goal. Norwood active nor would it have been appropriate to provide fixed objectives for unemployment in parallel with the inflation objective. Inflation which is determined by Monetary Policy, the maximum level of employment that can be sustained over the longer run is determined primarily by nonmonetary factors such as demographics, the mix of worse force Workforce Skills and enhances advances in technology. As these factors evolve, the maximum Employment Level may change over time. Consequently it is beyond the power of a central bank to set a longer run target for employment that is immutable or independent of the underlying structure of the economy. The approach on which the fomc agreed is described in a statement of longer run goals in policy strategy issued january, 20 12 and reaffirmed in january of this year. Statement begins by affirming the fomcs commitment to being meeting both of its objectives. It then indicates that in the context of the fomcs to amanda, the Committee Sees price stability as corresponding to a two Percent Inflation goal. On the employment side of the itsate, the Committee Makes best assessment of the maximum level of employment at any given time recognizing that such assessments are necessarily uncertain and subject to revision. In practice, the committee often expresses its objective in terms of the longer run normal rate of unemployment. Currently fomc participants estimate the rate of unemployment as publicly reported in the Quarterly Survey of Economic Projections ranging from 5. 2 to 6 . Explicit objectives are most useful when a company has provisional plans for achieving them. Many Central Banks supplement their objectives with published forecast that lay out plans for achieving their goals. The size and diversity of the Federal Reserves policymaking committee has made achieving a single Consensus Forecast difficult, the quarterly summary of Economic Projections reports each fomc likelypants view of the future path of inflation, unemployment and output growth conditional on that individuals view of Monetary Policy. In recent years, the survey has included participants projections of shortterm Interest Rates that they see as most likely to achieve the committees goals. In general, the committees two objectives of employment and price stability are complementary. Not, the fomc has stated that they will pursue a balanced approach in the pursuit of the dual mandate, working to ensure that both inflation and unemployment are close to desired values in the longer term. In short, the Federal Reserve like many Central Banks has made significant progress in recent years in clarifying its goals and policy approach and providing regular information about the future path of policy. This increased transparency about the framework of policy has aided the public in forming policy expectations, reduced uncertainty and made policy more effective. The financial crisis and its aftermath have raised even greater challenges for and demands upon the Federal Reserves communication. We have had to contend with the persistent effects of the seizing up of the Financial System, the collapse of housing prices and construction, new financial shocks in europe and elsewhere, restrictive fiscal policies at all levels of government and of course, the enormous blows to output and employment associated with the worst u. S. Recession since the Great Depression. Moreover, for the First Time Since the fomc began using the federal funds rate as its policy rate, that rate is effectively at zero and thus cannot be lowered meaningfully further. Consequently, it has provided support to the economic for risk ofd minimized the deflation. The Federal Reserve has adopt new policy tools. In the remainder of my talk, i will discuss how the fed has used communication to try to further inform the public expectations about how the fomc will employ what are currently its two principal policy tools, its plans regarding shortterm policy Interest Rates and its largescale purchases of securities. As the economy weakened over 2008, the fomc repeatedly cut its target for the federal funds rate. Year, ther of that target for the funds rate was reduced to a range of zero to 0. 25 . Meansusing the standard of policy, cutting the target Interest Rate was no longer possible. Boundcalled zero lower was not the only challenge that the committee faced. First, the depth of the recession combined with ongoing concerns about the functioning of the Financial System raised significant uncertainties about both the likely pace of recovery and the effectiveness of Monetary Policy and supporting growth. For most post world war ii u. S. Recessions have been relatively rapid with production unemployment and other key variables returning close to normal values within six to eight quarters. In such cases, the policy most relevant is in the next several quarters. Recentermath of the crisis the committee had to consider the possibility that a highly accommodative policy might be required for a number of years. Second, the federal funds rate effectively at zero created asymmetry for policy planning. On the one hand, the economy recovering rapidly and inflation increasing, Monetary Policymakers would be able to respond in a normal way by raising the federal funds rate. On the other hand, if the economy were to remain weak or recover only largely gradually, the fomc would not be able to cut the funds rate further. Moreover, in the latter case, the economy could face increased risk of deflation or falling prices. As the case of japan illustrates, deflation may impede Economic Growth while being very difficult to escape. To preempt such outcomes, a strong case existed for Monetary Policy to be more accommodative than suggested by standard policy rules calibrated to normal times. The committee faced a situation which more Monetary Policy accommodation was needed, possibly for quite a long time, yet its basic policy tool, the federal funds rate target had been pushed to its limit. To put the committees problem another way, standard policy rules and a range of other analyses implied that to achieve the fomcs objectives, the target for the federal funds rate should be set well below zero which was not feasible. Fortunately, as i discussed earlier, the degree of accommodation depends not just on the current value of the policy rate, but on public expectations of future settings of that rate. The committee realized that it could ease policy further and reduce uncertainty about future policy by assuring the public and markets that it intended to keep the policy rate low for some time and for a longer period than the public expected. Employed the committee purely qualitative language to send that message. After the fomc stated in 2008 that it would be appropriate for the federal funds rate to be near zero for some time, it changed the formulation in march 2009 two an extended period. Such language did not convey the committees intentions. In august 2011, the committee introduced a specific date into its guidance stating that conditions would likely werent keeping the federal funds rate near zero at least through mid 2013. This guidance was more precise than the qualitative language that the committee had been using and it appears to have been effective in communicating the fomcs commitment to a highly accommodative policy. Following the introduction of dates into the fomc statement, Interest Rates and survey measures of policy expectations move in ways broadly consistent with the guidance. Although the datebased Forward Guidance appears to have affected public expectations as was desired, it did not explain how future policy would be affected by changes to the Economic Outlook. The date in the guidance was pushed out twice in 2012, first in late 2014 and then in mid 2015 leaving the public unsure about whether and under what circumstances further changes to the guidance might occur. Year, ther of last fomc addressed this issue by tying its Forward Guidance more directly to its economic objectives. Introducing socalled state contingent guidance, the committee announced that no increase in the federal funds rate target should be anticipated so long as unemployment remains above 6. 5 and Inflation Expectations remain stable and near targets. Formulation provided greater clarity about the factors influencing the committees thinking about future policy and how that thinking my changes the outlook changed. I haveolleagues and explained, the conditions stated in the guidance are thresholds, not triggers. Crossing one of the threshold will not automatically give rise to an increase in the federal funds rate target. Instead, it will signal only that it is appropriate for the committee to begin considering whether an increase in the target is warranted. This threshold formulation helps explain why the committee was willing to express the guidance bearing on the labor market in terms of the Unemployment Rate alone instead of following its usual practice of considering a broad range of labor market indicators. In the judgment of the committee, the Unemployment Rate , which despite drawbacks in this regard is probably the best single summary indicator of the state of the labor market, is sufficient for deciding the threshold given by the guidance. After the unemployment threshold is crossed, many other indicators become relevant to a comprehensive judgment of the health of the labor market. Including such measures as payroll employment, participation rate, and the rates of hiring and separation. In particular, even after unemployment drops below 6. 5 and so long as inflation remains well behaved, the committee can be patient in seeking assurance that the labor market is sufficiently strong before considering any increase in the target for the federal funds rate. The severity of the recession and the disruptions in Financial Markets and because shortterm Interest Rates were near the zero lower bound, it became clear early on that more monetary accommodation would be needed than could be provided even with the guidance that those rates would be kept low well into the future. Accordingly, at about the same time that the fomc reduced its began supplementing forward rate guidance with largescale asset purchases. Open market, purchases of longerterm u. S. Treasury securities and securities issued by government sponsored enterprises, primarily wordagebacked securities. Both lsaps, largescale asset processes purchases and Forward Guidance support the economy by putting downward pressure on Interest Rates. They affect longterm Interest Rates through different channels. To understand the difference, it is useful to decompose Interest Rates into two components. One reflects the expected path of shortterm Interest Rates and the other is called a term premium. The term premium is the extra return that investors require to be willing to hold a longerterm security to maturity compared with the expected yield from rolling over shortterm securities for the same period. Forward rateed, guidance affects longerterm Interest Rates primarily by influencing investors expectations of future short term Interest Rates. Contrast most directly affect term premiums. As the Federal Reserve buys a larger share of the stock of longerterm securities, the quantity of the securities available for private sector portfolios declines. As the securities purchased by the fed become scarce, they become more valuable. Consequently, their yields should fall as investors demand a smaller term rhenium for holding them. Dependsument importantly on the assumption that the longerterm treasury is not perfectly substitutable with other types of assets, and a suction seems well supported in practice. As both forward rate guidance and lsaps affect longerterm Interest Rates, the use of these tools allows Monetary Policy to be effective even when short term Interest Rates are close to zero. However, the committee does not view these tools as entirely equivalent. One reason is that we have much less experience with policies designed to operate on term premiums. As a result, a Strong Majority of fomc members believed that both forward rate guidance and the lsaps are helping support the recovery, we are somewhat less certain about the magnitude of the effects on financial conditions in the economy of changes to the pace of purchases or in the accumulated stocks of assets on the feds Balance Sheet. Havever, economists do not as good an understanding as we would like of the factors determining term premiums. As we saw earlier this year, shifts in term premiums can be a source of significant volatility in Interest Rates and financial conditions. Saps have other drawbacks not associated with forward rate guidance including the risk of impairing the function of Securities Markets and the extra complexities for the fed of operating with a much larger Balance Sheet. I see both of these issues is manageable. ,n deciding to employ lsaps the fomc has remained attentive to the possible cost and risk as well as the efficacy of this less familiar tool. The committee has regularly noted this in postmeeting statements. Of course, elevated unemployment , below target inflation, lingering economic fragility and the harmful effects of longterm unemployment on our society and economic potential also pose significant cost and risk. The committee has thus far judged that the balance favors the use of lsaps. 2008 and juneer 2012, the fomc announced or extended a series of asset Purchase Programs. It specified expected quantities of assets to be acquired under that program. Of datebased Forward Guidance, announcing a program has advantages and disadvantages. Programand, a fixed size is straightforward to communicate. On the other hand, a program of fixed size can easily adapt to changes in the Economic Outlook and consequent changes in policy accommodation. In announcing its fixed size programs, the fomc stated a willingness to do more as needed and it has followed through on that promise. Such statements left uncertainty regarding conditions that might werent changes in an existing program. Analogous toghly the shift from database guidance to threshold guidance now in use , in september 2012 the fomc announced a program of asset purchases in which the total size of the Purchase Program would not be fixed in advance but instead would be linked to the committees economic objectives. The committee initiated purchases of agency mbs at the rate of 40 billion per month and stated intentions to continue purchases until the outlook for the labor market improved substantially in a context of price stability. In december 2012 when a program to extend the maturity of the ,eds portfolio came to an end the fomc added purchases of 45 billion per month in longerterm treasury securities to the new program bringing the monthly purchase rate to 85 billion per month. It remains there today. As i noted, the committee set a criteria to substantial improvement in the outlooks of the labor market as the condition for ending the new Purchase Program. The Committee Also signaled its expectation that it would and purchases and return to Forward Guidance before that fully attained its dual mandate objectives, stating that the committee expects that a highly accommodative stance on Monetary Policy will remain appropriate for a considerable time after the asset Purchase Program ends and the economic recovery strengthens. The reason for this sequencing choice was the greater uncertainty about the cost and efficacy of lsaps relative to the more familiar tool of managing the shortterm Interest Rate through Forward Guidance expectations of future short term Interest Rates. To the extent that the use of lsaps engenders additional cost and risk, mike one expect the tradeoff to become less favorable as the Balance Sheet expands. Having seen progress in the labor markets as the beginning of the latest asset urges agreed, the committee this year to provide more copper answer guidance about the criteria that would inform future decisions about the program. In my press Conference Following the june fomc meeting, i presented a framework linking the program more explicitly to the evolution of the fomcs Economic Outlook. I noted the committees expectation at the time that the improvements in the job market would continue, supported by a moderate pickup in growth that would support those gains. The committee additionally expected that inflation would be moving back towards the two percent objectives overtime. If the incoming data were consistent, the committee would begin measure reductions in the case of asset purchases in 2013. If the economy of alt as anticipated, the end and purchases would occur in midyear 2014. The path the purchases would depend on incoming data and could be slower or faster than envisioned in the modal scenario. I noted that the pace of purchases could be increased for a time if warranted. The framework i discussed in june implies that substantial asset purchases over subsequent quarters were likely with even more purchases possible if Economic Development proved disappointing. Following the june meeting and press conference, market yields moved sharply higher. Ofween the fomc meetings june and september, the 10 year treasury yield rose about 0. 75 percentage. Financial market movements are often difficult to account for even after the fact. The three main reasons explain the rise in Interest Rates over the summer. First, the improvements in Economic Outlook warranted somewhat higher yields. Second, some of the rise in rates reportedly reflected an unwinding of levered positions. Positions that appeared to have been premised on an indefinite continuation of asset purchases. In response to investor losses and the rise in volatility although it brought tightening in financial conditions, this unwinding and the associated rise in term premiums may have had the benefit of reducing future risks of Financial Stability and of lowering the probability of an even sharper Market Correction at some time. Third, Market Participants may have taken the communication in june as indicating a general lessening of the committees commitment to attaining a highly accommodative stance of policy. It appeared that the fomcs guidance forward had become less effective after june with Market Participants bulling forward the time in which they expected the committee to start raising rates in a manner inconsistent with the guidance. To the extent that this third factor contributed to the increase in yields, it was neither welcome nor warranted in the judgment of the fomc. This change in expectations did not correspond to any actual lessening. The fomcs commitment to provide a high degree of Monetary Policy as critics emphasized. At its september meeting, the fomc supplied the framework communicated in june. The committees decision at that meeting to maintain the pace of asset purchases was appropriate and fully consistent with earlier guidance. The committee was looking for evidence that job market gains would continue, supported by a pickup in growth. As it happened, the implications for the outlook were mixed at best. While the ongoing fiscal debate posed additional risks. The committee elected to wait for further evidence. Although the fomcs decision came as a surprise to some participants, it appears to have strengthened the credibility of the committees forward rate guidance. Following the decision, longer term rates fell and expectations of shortterm rates derived from Financial Market prices showed and continue to show a pattern more consistent with the guidance. Meetings will continue to consider both a cumulative progress in september 2012 and the prospect for continuing gains. We have seen meaningful improvement in the labor markets since the latest asset Purchase Program was announced in september 2012. At the time, the latest reading on the Unemployment Rate was 8. 1 and both we and most privatesector economists were projecting slow reductions in unemployment in the coming quarters. Payrolleports on employment have also been somewhat disappointing. Since the program was announced, the Unemployment Rate has fallen to 0. 8 Percentage Points and about 2. 6 million payroll jobs have been added. Looking forward, we will continue to monitor the incoming data. As reflected in the latest summary of Economic Projections, the fomc still expects labor Market Conditions to improve and that inflation will move toward the two percent objective over the medium term. If these views are supported by incoming information, the fomc will likely begin to moderate the pace of purchases. Asset purchases are not on a preset course and the committees decisions about their pace will remain contingent on the committees Economic Outlook. As before, the committee will take into account its assessment of the likely efficacy and cost of the program. When ultimately asset purchases do slow, it will likely be because the committee has theressed sufficiently economy has progressed sufficiently for the committee to rely more on rate policies and a substantial continue holdings of securities to maintain progress towards maximum employment and price stability. In particular, the target for the federal funds rate is likely to remain near zero for considerable time after the asset purchases end, perhaps well after the unemployment threshold is crossed and at least until the preponderance of the data supports the beginning of the removal of policy accommodation. Began my time as chairman with the goal of increasing the transparency of the Federal Reserve and of Monetary Policy in particular. In response to a financial crisis and a deep recession, the feds Monetary Policy communications have proved far than i would have envisioned eight years ago. The economy has made significant progress since the recession. We are still far from where we would like to be and consequently, it may be sometime before Monetary Policy returns to more normal settings. I agree with the sentiment expressed by my colleague janet yellen at her testimony last week. The surest path to a more normal approach to Monetary Policy is to do all we can today to promote a more robust recovery. The fomc remains committed to maintaining a highly accommodative policy for as long as needed. Communication about policy is likely to remain a central element of the reserves efforts to bridge achieve its policy goals. I do. Thank you. [applause] [please until that time, we want to how concerned are you about we have seen technical change in what labor economists call skill bias how concerned are you about we have seen technical change in what labor economists call skill bias people can use computers and robots and the like and in that respect, even for a given distribution of educational outcomes, Income Distribution will widen as the higher returns improve to people who have the appropriate skills. It is hard to say entirely how to solve this. It is not a problem we can solve quickly, but trying to break down the barriers in social mobility and increase opportunities for trading, acquisition of skills, education from a very young age all the way through posthigh school, Junior College and the like is the basic approach, but it is a very difficult problem. To bring the Federal Reserve into it, there is not much the fed can do about longterm trends like this. They dont have much to do with Monetary Policy. Over the shorter period, our efforts to put people back to trying tod we are make extraordinary efforts to increase the number of jobs in our economy, that is going to be an important factor in reducing inequality. The unemployed will be much better off if they have worked. Probablye will have the most loaded and least loaded questions in the back. How would you respond to criticism that quantitative easing has provided trivial coupf and an absolute from wall street. Hate to shock you but i dont agree with that. [laughter] it is simply not true. To begin with, what is the fed trying to accomplish . We are using the tools we have to meet our dual mandate. Maximum implement and price stability. Jobs and low inflation. I can think of anything that is more mainstream than that. If you look and see what we have achieved, first, since the recession, there have been about 8 million jobs created. Not as many as we would like, but certainly the economy has been growing. Jobs have been coming back and the fed has been an important factor in maintaining that momentum in job creation. In addition, to the extent that , moreect asset prices than 60 of the population owns their own home. The number of people underwater in their mortgage has gone down considerably as house prices have gone up. That has increased household wealth. Low Interest Rates have also allowed people to buy cars and other goods. The u. S. Auto industry is at prerecession levels at this point. Broadly speaking, i think our financial the effect of our policy on Financial Markets including lower Interest Rates have helped american households improve their Balance Sheets and get themselves in much better financial condition. Broadly, i think the first of all our objectives are aimed squarely our objectives are squarely tied to main street. I think that while it would be better to have even a broader based effort in washington to attack these problems, the fed is making an important andribution to middleclass lower income folks welfare. Now, for the nonloaded question that we will conclude this with from elliott and robert, will we see more Washington Nationals baseball games next year . [laughter] and, what Research Topics and books are in your future plans . Say,rst, i would like to it is well known that i am a Washington Nationals fan and general baseball fan. Ino johnnycomelately have been there since 2005 when they lost 100 games every year. [laughter] [applause] thank you. Optimistic. Ously [laughter] that would describe my views. Forward before i i was anpolicy maker, academic and i worked on a lot of issues which are related to the things i have been doing for the last 11 or so years. Such as the role of the Financial Markets and Financial Stability in the economy, the ,ink to Monetary Policy thingsc growth, lots of to work on. I look forward to writing and speaking and having a little more time to contemplate some interesting issues. Thank you. [applause] just one final word, the chairman was here at the beginning of his tenure with the and the end of his tenure we hope we will see you at some future event in your career. You will always be welcome. Thank you. [applause] [captions Copyright National cable satellite corp. 2013] [captioning performed by national captioning institute] coming up on cspan tonight, president obama and House Budget Committee chairman paul ryan are interviewed at the wall street journal ceo conference. Panelists talk about the global Economic Outlook. Wednesday, the Senate Small Business Committee Examines federal Health Exchanges for Small Businesses. This hearing comes ahead of the planned Health Care Exchange rollout for Small Businesses in states with their own exchanges. See it live starting at 10 00 a. M. Eastern on cspan 3. Later, a look at National Security issues related to the federal workforce. It is the first in a series of hearings by the Senate Homeland Security Committee as it investigates who gets access to classified information. That is live at 2 00 p. M. Eastern, also on cspan 3. Today marks the 150th anniversary of president lincolns gettysburg address. Look for our coverage from Soldiers National cemetery including the keynote address from civil war historian James Mcpherson next week, thanksgiving day at 4 00 and 10 00 p. M. Eastern on cspan 3s American History tv. Hoyer said steny there was a lack of progress in the budget negotiations between the house and senate. Budget Committee Chairman paul ryan was resistant to negotiate. You can see more species from the house floor. Here are congressman hoyers remarks. Days. Speaker, we have 10 , this yours session session according to the schedule. We are supposed to a jorn on december 13. Somewhat ironically, friday the 13th. Yet, mr. Speaker, we see time is running out. We are not addressing the critical issue and the critical responsibility of funding the government. Of applying resources. Time is running out, mr. Speaker, for budget conferees to send us legislation so we can avoid another Government Shutdown in january. A budget conference agreement will require compromise from both sides. A step that budget chairman paul ryan and many of his colleagues seem unprepared to take. Mr. Speaker, it has been my premise that the reason we did not go to conference for the last seven months notwithstanding the fact that the Senate Passed a budget and the house passed a budget, is that chairman ryan knows there is no compromise that he can reach that he can bring back and have us have the support of his colleagues on the republican side. As a result, we have no compromise. Productult, we have no to consider. This is an extremely disappointing position because it is clear that the ryan budget is not a viable blueprint for governing. It was not when we passed it and it is not now. It was a pretense of fiscal responsibility without any of the substance of fiscal reality or courage. That fact was made evident this summer as republicans could only pass funding bills for defense and veterans programs. Bowling the transportation funding bill and not even bringing the other appropriation bills to the floor. Ago, actuallys yesterday, all 12 of the subcommittee republican subcommittee chairs of the Appropriation Committee sent a letter to paul ryan, chris van hollen, patty murray, and senator sessions. It said, we need to have a budget. We need to have a compromise agreement. We need to have a sequester number 11 in it. , and irrational number replacing it. A number that can work for america. They said, if you dont do it, we are going to have a meat axe, verbage, not mine, mr. Speaker. Not only on the education side of the budget, but also on the National Security side of the budget. We all know how the budget really achieves balance. Severe cuts, in the same vein as the irrational sequester that targets the most vulnerable americans and place our economic recovery in jeopardy. It is ironic that on the front page of the washington post, we see mr. Ryan is not focused on the budget. He is focused on the poor. That is a proper focus. This congress ought to be focused on that. But it is interesting that the ryan budget does exactly the opposite of what we need to do to make sure that the poor are reduced in number and the middle class are expanded in number. That is why, in my view mr. Speaker, regarding this budget, so many of his own party could not support appropriation bills within the framework of the ryan budget. That is why the bills were not brought to the floor. Some republicans are admitting that only a balanced approach will enable us to achieve the level of deficit reduction we need. Contrary to mr. Ryans duke view, that means revenues must be on the table. Representative tom cole, the former chairman of the Republican Campaign committee of oklahoma is one of them telling i think both sides would like to deal with the sequester and we are willing to put more revenue on the table to do that. Mr. Cole was one of the signers of that letter to which i referred, saying, lets replace the meat ax. Chairman ryan continues to rule out any talk of revenues which are the key to any meaningful compromise that will replace the sequester. Mr. Speaker, as you probably know and as i think my republican colleagues know, i have said now and i have said in the past, we must also deal with entitlements. Pla d a balanced land plan, not an unbalanced plan. About a balanced plan, the sequester will remain in place and hurt america. For mr. Ryan and republicans to show a readiness to compromise, to achieve results for the American People. Esther ryan is the chairman of the conference committee, yet he has to this date not put on the table what chairmen always do. Democrats have been clear that we are willing to compromise and are ready to do what it takes to achieve a balanced bipartisan deal on the budget. This was evident when we voted unanimously alongside 87 republicans to end the government shut down even when it meant supporting a cr at a level we believed was too low. We understood copper mines was necessary. We voted, all of us, all 198 democrats voted to open up the government. 147 republicans, approximately 62 of the republicans, voted to keep government shut down and not pay americas bills. I was encouraged to read the letter sent yesterday by chairman rogers, making clear how important it is for conferees to send us a budget by thanksgiving. That would be this friday. We are not going to be here next week. Rather than risk another painful government shut down and the continuation of the irrational year r this coming many republicans now agree with democrats that the sequester is unworkable. Hesaid so, mr. Ryan says doesnt like the sequester, mr. Cantor says he doesnt like the sequester and hal rogers has said it is unworkable and inadvisable. Mustudget conference rearrange the sequesters severe cuts. This is an opportunity for to replace the sequester with a sensible approach that allows congress to look at our Budget Priorities and longterm goals. If we do so, it will be the most important stimulus of our economy that this congress could take. Mr. Speaker, i hope that chairman ryan will set his aside and embrace the approach that his colleagues are recognizing is the only realistic path toward a compromise by this committee. To do so could usher in a historic agreement to achieve real fiscal responsibility for america for years to come. Leadershipryans will result in that objective. I yield back the balance of my time. A typical day would begin with her coming in in the morning, probably around 9 00 and she would come in toting a straw bag in each hand filled with some of the things you see on her desk that she had taken speechwritingng, or event planning, whatever she was working on. She would come in and get to work. Her desk was always very orderly. She worked on her desk with letters that she was processing. When she completed things, she put them on the floor. She loved this office because she could look out at her alma mater. We had three office staff at the time. We had a person who handled her calendar. We had a person who came from the white house as her press secretary who helped her work on speeches. And then i was in the office. I friday afternoon, she was ready to leave and go to the ranch which she called home. , iut 330 in the afternoon said, do i have anything else to do . If the answer was no, she would say, tell the secret service i am ready to go. What our program on lady bird see it at our website or saturday on cspan at 7 00 p. M. Eastern. Our series continues live monday as we look at first lady pat nexen. President obama spoke about the healthcare. Gov website, Immigration Reform and a runs Nuclear Program during an interview tuesday at the wall street journal annual ceo conference. He was interviewed by gerald side for 40 minutes. Some of our top businesses across the country who are hiring people, investing in run. Ca, making the economy run. The impact of the shut down and the default not only dealt significant damage to the economy at a time when we didnt rex the seeming incapacity to Work Together to advance an. Genda i think people are legitimately we have a because major problem with health care in this country, 41 Million People without health insurance, a lot of people underinsured. And once again, how we fix a Health Care System thats been broken for too many people for