Transcripts For CSPAN2 Key Capitol Hill Hearings 20131022

Others on the hill with a rewrite of the 96 act and one of the principle things we wanted to do was to be able to plan. I think you guys gave us 110 rulemaking said we had to do roughly in 18 months so we were doing an awful lot of planning and that just got eliminated which meant when we came back to work we were all working double time to try to catch up. Host were deadlines extended . Guest the deadlines in terms of the fcc were extended obviously for certain kinds of filings. But you know the most critical thing was congress didnt give us any slack and i dont think they shouldve let me pass the bill a couple of months later and said you get these things done in six months and these then 12 months and these in 18 months. It took an awful lot of work an awful or portability an awful or portability than we were able to meet up with deadlines. If we had a shutdown the middle of that there is no way we could have done it a luck its just a lot of extra work and if you were to take a business like ge and saved by the way we dont know whether we will be operating in a couple of weeks so we are prepared to shut down everything and we dont know how long it will last and give us a plan for when we come back and we will just go right back to work. Thats an insane amount of work in any company that did that would go bankrupt very quickly and again government is not like a normal enterprise. But their consequences of these things that i think can be completely missed by most of the coverage. Host commissioner furchtgottroth you in on the hill chief economist at the House Commerce Committee at the time. What was that shutdown the 95 and 96 shutdown from your prospective . Guest at that time i was working on the conference for what became the Communication Telecommunications act of 1996. I was working with tom bliley of virginia on the committee at the time and we were meeting constantly with senate staff, drafting the bills that became the law. We kept going right through. I remember senator pressler of south dakota who chaired the senate Commerce Committee bringing sandwiches and for the staff during the shutdown. So we kept working right through i cant say it had a great personal effect on me at the time. Host how about working with the fcc prospective . Did that put a crimp in your ability to move forward . Guest as layers that i think the fundamental what we were getting from the commission is how quickly can you do these and i have to sit where of all of the things that you did the one thing that is probably the most miraculous as you did meet all the deadlines. It was really quite an accomplishment. But there wasnt really a lot of other Congress Needed at that time. Host lynn stanton. Guest did the morale of agency staff take a hit when they came back from two, one short and one longer shut down . Did you sense from staff that there was any kind of discouragement or people have to appreciate their job and to be told they are important to be told you are not essential and to go home is not a good deal. Host guest there was a shortterm loss. Read who i have the greatest respect for one of his great strength was as a leader getting the staff morality was fantastic. He worked harder than anybody and he was there and he would do anything to make sure the work got done. The second thing was a couple of months later the United States Congress Gave the fcc the biggest mandate they had done in 60 years so clearly we were important agents at the time and i think that helped staff morale get up and actually there was an article in the post talking about how our utility bill there is an extra halfmillion dollars in the month of april because of how long everybody was working but i think everybody felt this was the normal time we did do that. The shutdown i think is different because we have a lot of Different Things such as fox news calling it a slimmed down such as David Vitters naf snarky things about the shutdown the focused on the epa but theres a tremendous amount of antigovernment feeling that underlies this one that i think is quite different from 95. At least we knew at the dispute was about. About. Theres this undercurrent of the county government at all that makes it very problematic and the consequences for staff morale will be much more severe. Guest i would take a little bit of an exception with that. I think in 95 there was a realization that government may have gotten big. In fact president clinton was giving an address in 1996 just after it shut down and perhaps the most famous line of this administration and maybe one of the most influential things he ever said when he said the era the government is over and i think that was a direct response if you will to the Government Shutdown which in some ways arguably president clinton won that but at the same time i think he got the message that unending government was going along. Guest having been on both sides of hill and the fcc in the conversation that goes on in terms of guidance from congress to the fcc something outside of pure legislation do do you think theyre things that congress can do acknowledging that it has made life a little more difficult for the fcc to get things done and perhaps a these are the things we wanted to focus on . Is there any way to guide the fcc . Guest i would be interested to hear players view of this. The reality is the fcc is not the top priory for very many members of congress and the issues that members of congress are aware of that the fcc probably three or four in probably the night not be the obviously one. They might be in distant indecency but the overriding issue is the auction the spectrum auction and whats going to happen with that and how that goes forward. I think there a lot of members of congress who do focus on that and when they hear fcc they say oh yes not outcast auction. Guest i think thats right. I do think auctions are important and i think the transition to ip is a very important element in terms of how we think about regulation. We have effectively developed a bunch of regulatory rules all around the network that is not really the Critical Network and one we have to figure out what is essential in terms of revelation and what does the public really need, how do we think about competition in this and barman etc. I think thats really important. I think there is a lot of concern about the rate and bandwidth in the classroom so i think theyre a number of different issues where congress can be very helpful. The problem is they often act in a way that is kind of like a critic from the sideline and that is actually not helpful. Host i want to go back to what you said commissioner furchtgottroth about congress not focusing necessarily on fcc issues are not knowing about them. From that perspective is that beneficial to the fcc . You have served on both sides of the but is that beneficial to the fcc so you can move forward or to zap put does that stop the work that you can do because congress hasnt focused on that . Wouldnt you prefer congress not to be focused on a . Guest it depends. And let me be clear there are some members of congress who has spent a lot of time focusing on the fcc. The chairman of the subcommittee on telecommunications in both the house and the senate and then the members of the Commerce Committee in each body focus more than other members do. On almost any issue at the fcc theres probably one member of congress somewhere he was actually very interested in it. On a whole there a lot of issues that the commission where there isnt a lot of interest on the hill. Just as an example, a the commission does routinely thousands and thousands of license transfers every year that are between small private parties and unless its someone who is a constituent in that particular Congressional District there isnt a lot of attention from the hill. Its a very important part of the work from the commission so that it operates smoothly yet its not something we are hearing about everyday on the hill. Some of the issues that i mentioned in the player mentioned, those are issues that the commission probably does care about. Host the fact that congress has been focused on issues other than those confronting the fcc recently such as budget issues and debt ceiling issues, does that prevent legislation such as cell phone unlocking etc. From getting forward and getting through congress . Guest well candidly in almost any congress there are very few pieces of substantive legislation that have any chance. The number of substantive pieces of legislation that any Congress Passes is one or two dozen. The number related to telecommunications as once every few years, if that. So its a good bet to bet against congress in substantive legislation on telecom issues in congress. That doesnt mean it doesnt happen. A couple of years ago congress did pass a law authorizing auctions including the broadcast spectrum auction. That happened but i dont think congress is going to address telecom issues anytime soon. Guest i agree with that. I too think certain small pieces of legislation are not stopped by the budget negotiations and they think you need a certain kind of force to get it through. I recall that i think it was a court in denver that overturned i believe the fccs do not call list and congress fixed it within 48 hours because there was such a consumer outrage for Something Like that. So you need some momentum to get something through. Guest you both have mentioned the incentive option but there is an h block auction coming up in february which coincidently as a couple of weeks after the next deadline in the continuing budget resolution and write about the time the debt limit supposedly will be hit again. How much gets done for an auction in those last few weeks and days before the auction takes place that if it were to shut down for another 15 days and then come back up in early february that would that be devastating and putting the auction for so will everything be in place by that time . Guest i think that auction is one that is consistent with auctions that have happened before so its not crucial but i think it may well be pushed that exist there a lot of steps that have to be taken. Incentive auction is a much more complicated thing and the most confiscated auction the fcc has ever done. I think the staff is doing a great job but it cant really move forward until wheeler gets there and the team that is going to actually run the auction is in place. So i worry more a about that auction or the aws auction which may become the come between those two. Guest the h block auction auction auction could get pushed back a few weeks. There are issues about who is going to show up for it in some of the specific rules associated with the auction that for any auction change up to the last minute. Every auction has had many and this one will be no exception. They will be in effect but i dont think you will be longterm. Host finally gentlemen what is the Lasting Legacy if any of the shutdown . Guest i believe with harold in the long run. It shouldnt have an impact but of course John Maynard Keynes said [inaudible] i feel that this one is the beginning of the cycle for a variety of reasons but i think they are very troubling for how we operate government and i think unless there is a clear signal from leadership and from the electorate that look disagree and write laws and do whatever but dont shut down the government and dont play with the full faith and credit. I think the longterm implications are horrible. Guest i think the longterm up with implicatiimplicati ons for the fcc are quite limited as allaire said and agree we need to do something together budget structure in order. This is not a good way to run a government. I do think there are Serious Problems with the way we do budgets in in the United States we need to get those in better shape. Host gentlemen thank you for being on the communicators. And lynn stanton the editor of telecommunications report. President obama says there is no excuse for the problems people are having trying to sign up for health insurance. He was speaking at the white house and he said the Health Care Web Health Care Web site hs had 20 million visits. Heres a little of what he said. There is no sugar coating it. The web site has been too slow and people have been getting stuck during the application process. And i think its fair to say that nobody is more frustrated by that than i am precisely because the product is good. I want the cash registers to work. I want to the checkout lines to be smooth. So i want people to be able to get this great product. And there is no excuse for the problems. These problems are getting fixed but while we are working up the in the system i want everybody to understand the nature of the problem. First of all even with all the problems at health care. F. The web site is still working for a lot of people. Its not as quick or efficient or consistent as we want and although many of these folks have found they had to wait longer than they wanted once they complete the process they are very happy with the deal that is available to them. Second, i want everybody to remember that we are only three weeks into a sixmonth open Enrollment Period when you can buy these new plans. [applause] keep in mind the insurance doesnt start until january 1. Thats the earliest that the insurance can kick in. No one who decides to purchase a plan has to pay their first premium until december 15. And unlike the day after thanksgiving sales for the latest playstation or class 3 tvs the insurance plans dont run out. They are not going to sell out. There will be available through the marketplace. [applause] throughout the open Enrollment Period. The prices insurers have set will not change so everybody who wants insurance through the marketplace will get insurance, period. [applause] everybody who wants insurance through the marketplace will get insurance. The this is Eleanor Roosevelt typewriter the Office Typewriter that mrs. Roosevelt wrote her my day columns. What i have here are the original drafts of the mighty columns i wanted to share. The first one is Eleanor Roosevelts first my day column and sets the tone for the columns to follow. What she is talking to hear the comings and goings in the white house as they are getting back to the regular schedule after the holiday season. This clipping is in my day clipping from november 6, 1940 election day. She talks about how at midnight a larger cloud venetia came in from hyde park with wonderful placards. The president went out to greet him. This was a tradition on Election Night in and the roosevelt took him to hide park gather family round and await the election results. When they were announced the folks would march down and the president would come out and greet them. The head of the u. S. Chamber of commerce says his organization has not yet decided decided whether or not to challenge incumbent republicans and 2014 but tom donahue said the chamber does not want democrats to win back the house. He was hosted by the Christian Science monitor for little more than an hour. He rico folks. Thanks for coming. Tom donahue presidency of the u. S. Chamber of commerce and the chambers executive Vice President bruce josten of the Worlds Largest notforprofit business federation. Both up have been our guest before me welcome them back. Mr. Donohue has just led the chamber since 1987 and served 13 years as president chief executive officer of the American Trucking association and prior to his tour at the ata he was Vice President of the chamber for eight years and in an earlier chapter of his life postmaster general and Vice President of connecticuts Fairfield University in new york native and has a bachelors degree from st. Johns university and an mba from a delphi. Bruce josten is the Political Affairs executive starting as a telemarketer in 1974 came to the organization will touch it quits for rapid rise. He is a degree from harvard and oversees six divisions of the chamber. So much for biography and now i want to go through the process portion of the program. Please no live blogging or tweeting and no filing of any kind while the breakfast is underway. There is no embargo in the session ends except that our friends at cspan have agreed not to air the session until one hour after the breakfast and to give orders in the room time to file. We if you would like to ask a question to the traditional thing and send me a subtle nonthreatening signal. I will start by offering our guests a chance to offer comments and move around the table and with that thanks again for coming. Thank you very much. Good morning ladies and gentlemen. Thanks for giving up on an early monday morning for this and i will be brief and you can then have at it. Thank you david. We always enjoy coming here. Its the one place you can have a conversation. Joining me as you saw is bruce josten and tom who handles all of our Communications Issues which become more complicated every day. I know the buzz is still all about the cr and the debt deal and whove won and who lost who is up and he was down on what going to happen next but i would like to open todays breakfast by looking a minute to the future and of course the Business Community overall is flat and the immediate crisis has been resolved of do we are planning now for the next three rounds of this go. However it temporary however imperfect it current agreement is gives us a chance to think their way through this and get ready for whats next. The fact is we have got a lot of work to do in this country and we need to get back to it now. We need to fire up our economy and speed up the recovery. We need to get our fiscal house in order and clearly if you dont hear anything else from me we have got to reform our entitlement system before it eats smack us alive. We need to modernize their health and retirement immigration and regulatory systems so we can continue to ramp up productivity and reclaim and what i would say accelerate our competitive edge. We need to get busy seizing the extraordinary opportunities we have in this country today to create jobs drive growth and generate government revenues. How . By developing all kinds of energy and more on that in a minute but by rapidly expanding our commercialization commercial relationship within the two biggest trading blocs in the world europe and the asianpacific. Until we act on these underlying challenges and opportunities the time of spending and debt standoff we endured over the past few weeks will repeat itself over and over again. Our debt will climb higher and higher. So the chambers going to focus its efforts on a few Key Opportunities and key challenges. First the opportunities. Immigration. We are in a good position. There is still an appetite to get comprehensive Immigration Reform done this year and im sure maybe we will extend this year a few months but we are really hot after it. There is still strong support among lawmakers and are nation and our economy businesses and their workers need it more than ever. The chamber is keeping up the push for reform as an opportunity to show the world we can get a big thing done that we can all benefit from. Energy is another major opportunity. Do you want more jobs faster growth revenues pouring into government coffers and manufacturing renaissance stronger National Security . Then take advantage of the vast Energy Resources this nation has been blessed with. We have got to tear down barriers to exploration and development and put energy to work for the good of our country and then there are still some challenges over regulation is a big one. We have got to move on this very quickly before it consumes us. By the way we need regulation in this country. Any Orderly Society does but when the regulation becomes bigger than the thing we are trying to regulate it gets really worrisome. We have a threefold approach to dealing with this. Work with the congress to advance legislation that will restore balance and sanity to the process, work with agencies to improve the regulations that are being drafted and when all else fails, sue them. The chamber will not take applied to the court says many of you know. Our track record there is something to write home about. Before i conclude i want to say a word about obamacare. Is a prime example of regulation run amuck. The intention of what people set out to do was write. But we ended up with was more than we thought. We are finding ways to fix the obvious flaws in the law and i expect the administration will join in some of those. While continuing to search for general reforms that will lower costs, improve care and expand access. Now let me and where i started. In addition to these key priorities that ive just highlighted the chamber will of course be very focused on the budget talks established by last weeks agreement to reopen the government amid the debt ceiling. Who knows if they will succeed but they better. At the very least its another opportunity for some serious truth telling to our elected officials and to the public. The truth is unsustainable entitlements are the root cause of our deficits and debts and by the way please note that is no administrations fault. It is a demographic reality. We are all living longer. Let me give you one number. 10,000 people will retire every day this year and that comes to 65. Every day for the next 17 years until they are our 77 million of them. Figure it out. The truth is we dont have a revenue problem. We have a spending problem. We have a growth problem and of fundamental entitlement reform and conference of tax reform and until we face up to these hard truths and take an even harder step on asking acting on them any future vigorish agents of the budget and sequestration will be basically disconnected from the actual needs of the country. I know a lot of you are anxious to hear what they think about 2014 and how its going to impact the chambers political engagements in the next cycle. I will do my best to answer those questions as fully as possible while avoiding the ones i dont want to answer. With that let me take your questions. The wall street journal reported last week that the chamber is considering taking site in the republican primaries next youre in hopes of replacing Tea Party Conservatives with more businessfriendly pragmatists. Having given tens of millions of dollars to republican candidates you research and what 2014 candidates might be viable next year. It quick look at the history of the chambers political efforts show us engaged in primaries on a regular basis. We have no idea what we are going to have on the table. We still have to see who is running. We still have to see what happens in the next set to be on the deficit. We still have to see what the circumstances are. We have a formal process for doing this. We will pursue that process. Be able to whatever seems to be the best thing for the country and the american Business Community. This is not about party. This is about how this country is going to be run and how this economy is going to be driven and what role we can play in that. It i assume its a safe assumption that you are disappointed with the tea Party Faction who is the key chamber alert for mr. Josten last week saying the groups calling for default that clearly less interested in the mainstream concerns of businesses large and small city you feel badly used by some of the people you supported in 2012, sir . No, we are not a single issue or a single vote organization. We worked very hard for as long as i have been here and for as long as bruce has been here to go after the issues of concern to the Business Community without crippling the country. I cant stress enough what a default on our foreign debt, cannot on our private debt and not on the debt to the Federal Reserve for any of that but a real default with put us in the position that changed our position around the world, that increased their interest costs and put us in a very very challenging position for creating jobs in running our economy. We continue to say that and we fundamentally believe that and we at the same time think the members of various different other groups, and i dont like to say tea party. We have all sorts of people that are weighing in on these issues that come from all types of groups. Im not sure that they are all tea party and im not really sure what that is but maybe that is what republicans and democrats are like. They are not all the same. We think many of the issues that some of these folks have raised are really important issues. What are we spending . What is a revenue stream . What are we doing about health care . What is going on in this country we do believe to advance those interests by putting the countrys whole Financial System at risk is not a good idea. We are going to start with anna palmer Peter Nicholas and john stanton. Hi. I wanted to ask you about how when they covered you guys 10 years ago. [inaudible] is that a concern to you . [inaudible] zvi seriously i am glad to have a lot of people trying to get into this issue and getting serious about it. Hopefully we will be able to bring them to a consensus not on the issues. People have a lot of agreement on the issues but on the best way to move forward. The chamber continues to do well we have had an extraordinary continuation of our success in the courts. Go back to the end of last year when we have had the last one of these debt and deficit issues. I looked at what happened on the tax side. I looked at what happened on the sequestration side. I looked at all of that and i came away and said we continue to do well. The most important thing to understand about your question is the two things that we actually do. We are advocates and we build coalitions of people and groups to try and get something done. No one Organization Makes anything happen in this city. Bruce josten and his team are probably the best people in this city on building coalitions bringing large groups of people who differ on other issues together on specific issues to achieve some consensus. I still think we are doing very well and i welcome more people to come and and grow in the boat. If you are rowing venue have got to be playing. [inaudible] [inaudible] let me back into that question with my own background. En masse we have a particularly clear look at infrastructure and the nations ability to move its goods and its people and its information. We have for the longest time avoided taking steps that we need to take to strengthen our infrastructure. Steps that would not need driven by incremental expenditures by the broad population but would be paid for by user fees and until we get smart and to understand that have our infrastructure is not working well no matter what part it is then that drives down our productivity and increases our accidents and it has a very negative effect on our society and by the way this is one issue that none of us should lose sight of. We drive on the streets in this town. This is the worlds capital and any day now we are going to fall into a sinkhole. That should remind us that we need to go forward. And i make one other point if i might. Ive been in this town for a long time. If its important its contentious. If its important and its expensive or it demands difficult decisions its contentious. Contention comes for three reasons. Number one if its hard you are going to have disappointment and if its hard and you were going to have disagreement you had better get out there and if you are in the congress is a great opportunity to run fundraisers and do things like that and thats the reason some of these things take a little longer. Finally and very importantly sometimes these decisions are not easy. You have to debate them and you have to sort them out and you have to figure out what the body politic will stand and what the politicians will vote for and that is what we do. If there is no contention we are not looking at the right issues. I would add two things to that. One with respect to the club and heritage things always felt the way you articulated. [inaudible] with infrastructure the problem is far bigger than how your question related it. Everybody in town be at the administrative Republican Party and the democratic hardy refuses to bellyup to the reality that we need to fund to toms point infrastructure. We and the unions and others have been calling for more than a decade to raise and to inflation index it but even as labor hood said last week the former transportation secretary to this administration able to speak openly called again for the vehicle mile tax which he was chastised on when he was transportation secretary. So everybody is against how to deal with that issue. Its far greater than the tea party. Every member of every party and the entire administration refuses to fund it. They all call for funding and call for spending but they ought refuse to pay for it. One fact, 20 years since we had an increase in the federal fuel tax. What kind of the car around the table were you driving 20 years ago and what were the miles per gallon . Where collecting half the revenues we were and have been increased in 20 years. Bridget. We wanted to go back to the shutdown as well. I wonder how it will affect your activities Going Forward to enter a key vote . If you are interested in what we are going to do we are going to continue to talk to the members and to our Members Around the country and to the leaders in the cities and states where we are very very active about a rational settlement on the issue of budgets and debt. We will obviously start and end with a question that there is a guerrilla, an elephant in this room that nobody wants to look at and it is the entitlement expenditures over the long run. And by the way there is nothing, no thing as big and as compelling and challenging as that and what we simply want to do is tell the truth. Lets start by telling the truth here. Then when you look at all the rest of it is a small problem. If you look at whats going to happen in the next 10 years we are going to increase our government out base by a minimum of 2. 5 trillion. Thats the governments numbers, and not the. Those numbers when we get there you will find they will be about 21 or 22 net available out of what will be a 6 trilliondollar expenditure. There will be 20 available to run everything in the government accept entitlements and payments on the debt. That is challenging. And not back it is pursued to change cpi. In the end the Administration May put off some of these issues. As we listened over the weekend and getting going on more energy today is this pressure on the administration not to touch any entitlement. By the way thats an interesting approach. We could just leave it a wild and then we would have the next american revolution. Have you ever talked to your parents and grandparents about what they think about Social Security and medicare and in some instances medicaid . They say they owe it to me. They must pay this. Well they dont must pay it and we have a moral responsibility to get on this. I hope that the administration in spite of the pressure begins to understand that. On wondering if you and the chamber have noticed . I think there are a couple of reasons for that by the way. I think froman who is now the trade rep and we have three or four pretty hot trade deals going. He is all over over the Business Committee in a constructive way. I think pritzker the new secretary of commerce has been in business for a long time and she is everywhere. I think the chief of staff with his background on the hill is bringing more people and to visit and sending the president not to visit but more important i think there are more quiet gatherings and pull taking and i think we are in better shape than we were. On immigration but the speaker being as weak as he is and democrats today so Tea Party Movement what is the realistic reason . That is a great question and its pretty simple. Number one we are to have a dell out of the senate and remember we have another whole year plus of this congress. All of the arguments in the house have been on budget issues come to on issues dealing with the debt and sequestration and health care. Generally there is a good feeling about the efforts that have been made in immigration and by the way we are doing this together with the aflcio and if you put the Business Community and the aflcio together and the labor unions and more of them guess what . It is a Significant Interest group. But theres a lot of support and not as much opposition. We have got to get a few things done in the house. I dont think they will pass a great dig conference at bill but i think they will do three or four more things that have to be in that bill and then we will have an opportunity to go to conference. The best thing about it, to just think about it. Pass a bill in the senate and pass a bill in the house, go to congress get a result and have the president sign it. Government still works. I would suggest the speaker may be stronger today than he was four weeks ago. He got a standing ovation last week by conservatives who were fighting him for months. No one can challenge him now so i think hes in a better position to letting the air out of the river beal polin if you will. The chairman of the Judiciary Committee like the speaker has several year he doesnt plan to move in immigration bill is a former immigration attorney and hes been very positive in discussing pathways to legal status Going Forward. I think the other concern we have is a committee with a pretty crowded agenda. From immigration to marketplace fairness and patent control while we have to first im going to guess clear the cliffhanger deadlines december january and february because again theyre not going to be here that much in the fall. By the way you know whats great about the chamber . Bruce and i agree on all the important things and we argue about the things along the margin. I keep saying i think youre probably right bruce but to get the february march staff bring it back closer and closer. Everybodys looking for something positive to take home. Mr. Rosen. Hi. Another issue that has been brewing in congress especially on the democratic side is a push to raise minimum wage and youre also seeing walkouts by fast food workers in different cities and i was just wondering how the chamber stands on that. I know we have raised the wage periodically over the years. Is this something youre going to be fighting or something you are taking a position on now or will in the future . We didnt support raising the way cheering the district and i think tom had an oped in one of the papers locally. The mayor vetoed it savings some important jobs. Several thousand people showed up at 300 or 400 jobs. We have historic enough supported raising the minimum wage and we have done so for all of these reasons. It isnt just a step on the run of the latter. Does have displacement effect especially for the skilled people in this society. I imagine we will getting gauge but i dont see it being a hot issue in congress anytime in the near future. Todd. Dont want to ask you about senator and what you make of the fact that he wont rule out using the same tactics again . How serious a threat do you think thats a credible threat . I dont know senator cruz and we are all getting to watch him. I sort of think about him as a tennis player. If you are going to rush the net all the time you had better have a lot of motion to the left and the right. He he hasnt proven that to me yet. But he has his right is a member of the senate to get out and push the things he supports or retract or resist the things he doesnt support and we are going to try to work with him wherever we can. Remember the issue. Its not the substance. Its what is the result and how are you going to try and get it done . We will see where it goes. When you say with him people are stemming the Business Community would like him to sit down and shut up. Well that would be one thing we could work on. [laughter] see what sort of language to have over him or could you over him . I dont know. I dont spend a lot of time thinking about it. We are really trying to look at this in a broader context than one person. You know there are a lot of democrats in the house in the senate, excuse me that are worried about the upcoming election and i think the senate to come on in to the senate and the there for short period of time he still has a lot of relationships to make and my view is he hasnt got the votes to do what he wants to do so than what does history show . After a while he will Start Talking to people about how to get done what he wants to get done instead of telling everybody how he is going to get it done. The next anthony and John Mckinnon and dale monroe and alex. Speeding the energy you mentioned air marks and her thoughts on the present Climate Change plan then i guess specifically his [inaudible] bruce and i will split that. The way we want to advance their energy agendas first of all in education. It was a mere 15 years ago or less we were running around saying where we going to get our energy . We will have to get it from nigeria and all the far reaches of the world. We have got a real problem and we have acrosstheboard every kind of energy and more of it than anyone else. Its accessible. We have proven in the last few years we have created a couple of million jobs in paid just in the last year in the fracking business the state has picked up 63 billion in income tax and royalties and individuals that were a part of that with very little stuff coming off of federal lands. We always keep talking the administration and others talk about whale we are going to open up these lands but you dont see the permits. But we have to do is continue to explain to the American People that without hydrocarbons we are not going to have any jobs. Sure we are all for green energy. We have supported 300 separate green energy type bills and projects. We supported them but the fundamental issue is if you think you are going to back away from using hydrocarbons is not going to happen. Look whats happening in europe. They turned off their Nuclear Power after what happened in japan and now they are increasing the amount of coal they are buying. We want to sell it to them. While we are using natural gas and trying to clean the way we use coal this is an education by the way its a happy education. We are we are not doing what we are trying to do in entitlement when we have to turn that dial back a little. We are telling them we have got to turn the dialup because its going to attract all sorts of manufacturing to the United States. Its going to create all sorts of jobs. Its going to help us clean the air and i really think this is a phenomenal opportunity for us and bruce will tell you about the fuel bill. As you im sure you know we are suing on the Greenhouse Gas deal with the epa while the courts have withheld the massachusetts decision dealing with shale pipes. We think the epa officials took some latitude in making a decision to go after them. That is it process argument legally which the Supreme Court obviously agreed with at least in context and accepting the petition for cerp while they rejected other petitions. We we are not the only ones involved that could i suspect Going Forward judges are going to ask for one brief but be my guess of that is kind of where that is. We have a disagreement legally with how we are approaching it great having said that to toms point we have also supported essentially Energy Efficiency type legislation including the one that stalled in the senate right now which we would like to seek it out as well. We will continue to do that. I think its important to recognize that the United States has had the single largest reduction in Greenhouse Gas emissions than the other countries that were already to go if you go back to the kyoto protocol. We are way ahead of them. We have achieved that to toms point through Technological Innovations on the one hand with respect to fracking in on the other hand we have reduced the cost and use of energy for even output manufacturing by close to 50 in the past two decades. We will continue to do. We have also done the same thing in mobile and driving up miles per gallon and cleaned up the output from cars. We have done what everybody else is talking about doing and hasnt done. You alluded to the term [inaudible] could you discuss some of the chambers agreement with regard to that . Lets go to the trade Promotion Authority first. I think there is a growing and a very positive sense in both houses and that both parties sufficient votes saying no we need to. They know we are going to have to have it. We have got to find a place on the calendar. If tomorrow we had one of those deals coming down the pike and ready to go and we didnt have trade Promotion Authority we would get it right away. Even though everybody out there wants to doctor the bill because theyll know that nobodys going to sign the bill on the other side if they think its going in for a threeyear haircuts by the house and the senate. On the bill with eu and with europe this is a very interesting issue and the reason we are so intense about it is europe as an area is our largest export partner. Canada and mexico are the largest individual countries but europe is a huge export partner for us. Their economy is flat or worsened according to a lot of the economists there its not going to get much better soon. By the way it happens to be chinas largest export partner and their economy is down that is going to help hurt us because we are expanding and exporting more to china. So this is an important thing to everybody to do that is generally a good feeling in both parties and by the way its going to be hard for the unions to oppose a bill with the european region because they have been telling us for years and years that is the way we have to be running our economy. They are not going to have work and labor it issues as they would have someone else. We really think we are we are making progress. Of course and a Perfect World and by the way we cant find anybody and if anyone has some wearing them. Hurry up and done something on export issues including tariffs and trade facilitation and so on and they have gotten to a things later but when youre doing a trade bill whenever you what he wants to run and jump on we have to do procurement and finance and we have to do services so i think we are moving very much in the right direction. Remember then there is the Transpacific Partnership which is going. Theres a big deal and services with 50 some countries. There is a Facilitation Agreement and by the way all of those it seems in some ways going to get easier as we start to solving issues that can apply to the other. This along with energy is a great opportunity for this economy. Mr. Mackinnon. When do you think the entitlement problem really comes home to roost . In other words you seem to think theres a possibility that deal this year but not really good one so when does the hand of washington get forced on that issue . Bruce just mentioned that the Social Security Disability Bank system goes bankrupt in 2016 or 15 but the real issue, the real issue gets very very difficult after another four or five years because then you have to use plutonian methods. Right now we can do a lot of stuff to make this work better and we are not talking about getting rid of programs. We are talking about changes along the margin which make a huge difference. Nobody is talking about going in and changing everything because someone is going to retire next thursday. We have got to find a way to do it Going Forward. But if we fail to do it and get down to eight, nine, 10 years i cant see anything but really really difficult times for all of us and by the way remember where the numbers come from. They come from the government of the United States and the only problem with them if you talk to the medicare overseers and others they will tell you some of the government numbers are a little squishy and its probably a little worse than what we are looking at. A followup. What do you think the likelihood of getting it fixed in the next four or five years it is and another was making this administration . I would say we will find out because the president spent the weekend saying he is now open as he did before the shutdown once the shutdown is done to negotiating everything on the Table Including entitlements and budget. Ryans protests vote to me was more of a statement vote against the deal because it didnt address longterm problems. We will find on out in the next few months whether not a frame or it falls out of that of negotiation. To take your question where it would end up. We have about 20 minutes. We will go to anna munro mark shields Ken Thomas Cathy Taylor and susan. Thanks. Senator rubio said a distrust would and Carter Johnson labrador all said the same thing that the hardedged tactics make it harder for republicans to sign the deal. Is there any concerns on your side that distrust will make an immigration deal less likely . I have serious concerns about trust all around in town right now which suggest to me the way to get out of that problem is with serious leadership and not with a lot of talk. We need leadership in the Business Community. We need leadership in the house. We need leadership in the senate and we need leadership in the white house. The president after the deal was inked his first comments were that he wanted to get on with a number of issues. The first thing he said was an immigration bill. If he wants to do it he will advance it in part by supporting it but he will also advance it in part by helping us, by getting involved in helping us come to a satisfactory and a progressive meaning moving forward contest set of solutions on tax and spend and on entitlements. And the president would benefit, in my opinion, from becoming more active in his issue becausic it would give him a better chance to get a good result and it would send a signal that not only in these areas, but in others, here and around the world hes going to be more active and i think that is in the interest of the United States of america. At the same time the president has publicly stated in a recent meeting as cro the street from the white house and cpi and others dealing with entitlement and still on the table for a negotiation with the republicans. So cant be both ways. [inaudible] do you worry theres nothing you can do . A lot of conservative groups pointed out if you back a candidate, they kind of get the establishment candidate and republican primary doesnt tend to work out very well. Do you worry about that . Theres nothing you can do . No. Do can you elaborate on that . No. Okay. But i dont worry about it. Well see what cards are dealt and we will react in the best way in the interest of the american Business Community and the American Country and our fellow citizens. Taking note of the cooperation reminds us that 50 years ago this country dealt with original in that was segregation. And the leadership of that movement, as you and i both know, we came with our political that time of under the organized labor. Concern considerable cost to themselves. There were a lot of irish catholicses and italian catholics were who posed to it. Can you give us an example where the chamber has taken plans to take the unsell blank on the right issue . First, just to continue on the history lesson, we have been very actively engaged in two ways with labor. We fight them with them on a lot of things. Sort of theyre the gladiators for one group. Were the gladiators for another group. We work with them a great deal. We have huge activities going on as we discussed a few minutes ago on the infrastructure in this country and many of the labor unions are significantic support in the coalition. We work on a host of other issues sometimes a little quieter than publicly. We do a lot of stuff. We have worked on immigration with many of the labor unions. We find ways to work with people on both sides. The question of whether we have in mind a great move forward like this country found i. T. In for a series of reason. I was thinking about this myself, we are getting old. Weve been sitting around thinking about things. [laughter] for the 50th anker have i are on the Martin Luther king issue. I thought about two things. I thought, first, i thought Martin Luther came to give the speech, you know, the tight of that speech was about jobs. And second, i thought that if one place where we have not achieved that objective at the great sacrifice that he offered is we really have heard that community in terms of k through 12 education. If dont have a fundamental education, its very, very hard to compete in the world that was then, and much harder to compete now with all the demand of the Manufacturing Sector and technology and global economy. And so i think if there is a place where we can achieve some Historic Movement its got to be in education. And, you know, the unions, the Teachers Union are at odds with many of the other unions about education, and certainly with union members, in communities are frustrated about the education their children are getting. While other communities are getting in the Public Sector getting phenomenal education. I think some coalition between union and business and we are working together on this. Between democrats and republicans, between every group in this country has got a fundamentally say every child should have an opportunity to get a quality education. They cant compete without it. It could be the next big thing. Another question on 2014 [inaudible] to support the bill to avoid the default of the shut down. Was this fault, in your view, a line in the sand, as you look ahead to next year in order to get involved in primary and support. And along the lines have in two weeks voters of new jersey and virginia go to the poll on two governor races. Im wondering for you think the races tell you anything about the state of the Republican Party right now. If there are any lesson for mid years midterms. The first point i would like that make. I think its a good point. When you look at the book, how many people voted for and against in the house. You know, its a free vote. Everybody knew they were going as many democratic votes they needed to get there. And a good number of those who voted were either making a statement as ryan was, or they were voting to avoid an unnecessary primary. But when we get down the Serious Business at hand of voting on Critical Issues for this country, i think youll see a more attractive ratio of votes for and against. Second, let me take the issue of the states. We generally dont do were involved in the state Supreme Court, state attorney general and every now and then a governors race that we believe is fundamental to the National Interest of the country and the Business Community. I dont know what is going to happen in those races. Theres a lot of money coming from around the country in to those races. Because people are trying to position themselves not for 14 but for 16. The whole question of whether a were going really comes down to this; were not looking at remember, we dont do everybody we dont do president ial politic. Cant all around the world we are. Talking to heads of state, be playing in plcial politics. We dont to it. We do the house, senate, Supreme Court, state attorney general. And occasionally odds and ends that run as cross our major issues. But, you know, we really believe that it is in our interest to be vigorous in those races and our first deal is sequential is twowrlt is the house. Let me be saying we dont do plcial politicses. Let me Say Something that sound a little about like president ial politics. On behalf of the american Business Community, gavin choice, i would like not like to see the i think it would be a long two years. And so you can be assure that well be very vigorous in the house. Well also participate in the senate. Well we will support some peoples discomfort numbers of democrat in both houses. The botment to line is this is all about the economy and for us all about the american Business Community and all about the country. Remember, 101 years ago we were founded for two things. To help and support the american Business Community and help our country when its in trouble. Cathy . Hi. [inaudible] could you give me a sense of the timeline. What evaluation of the landscape are you expecting when . When will you pull the trigger on saying its the depth e were going go. This is how vigorous were going go, and finally what is the funding level youre saying that you need . Were going need two times, three times what we have in the past. The honest answer, sometime next year. We have nine regional Public Affair task forces that make recommendation up to a national Public Affair task force that ultimately consolidate and make the recommendation to the chamber more. The Board Meeting isnt until essentially end of february, early march. To toms earlier point we are doing internal research here and on the ground. Were obviously going share that information with those task forces as well as gain their own. And that process will start in the first quarter. We havent even had an endorsement meeting yet. Hiring up to do that . We have expanded our regional field staff by three up from about 14. We have three more pending that we plan to hire shortly. We will approach these races based on the experience that we gained last time around. Which we do regularly. And so were expanding, as bruce indicated, our staff on the ground. We will further expand it. We will continue our effort of engaging state and local chamber at the much more aggress i have level than in past years. [inaudible] economic issues. Is that no longer the case . The Business Community has let me give you a fact. We have all kind of members here. We have 300,000 members. We have all the big companies. Almost all of them. And there are democrats and republicans all through the Business Community. There are democrats and republicans all through the chamber. So while we the press in particular has always built this relationship between business and republicans i spend as much of my time talking to democratic leaders. Because we have traditionally known where some of the votes were going to be. We were always looking for how we could, you know, if i didnt spend lot of time talking to the Union Leaders how would we have made a deal in the senate on immigration . We need to talk to those who are leaders or portend and want to be leaders Going Forward. Its our business to deal with everybody that has got a role in that from the white house to the leader on the senate on both sides and the leaders in the house on both sides. And im not particularly worried about some great failure of our relationships. Seem to me, theyre getting bigger. Anybody who hasnt who wants one. Let me ask you, yes, [inaudible] where should we go now . Adds any huge, huge piece of legislation, we should take a very clear look at what is working, what is not working, what needs fixing, what needs time table change. What needs reconsideration. Ive said all along and produce has said said all along. Theres no way youre going get rid of the bill. Suppose somebody could get the votes to defund it in the house . I dont think you can get the votes in the senate. And sure as hell, couldnt override a veto. Whether you thought it was a good or bad idea, you probably ought not spend a lot of time on it. We believe, theres lots that can be done to make this bill more what it was originally intended to be instead of what happened when, you know, the people that got in to start writing this bill took a good idea and continued to write and write and write. We have got to bring it back to a reality. I think some will work. They have to face up to the fundamental questions will they do it on time . What it work . What the hell is going happen with the computer system. Last question, el near. You said a minute ago you spend what it takes. What you didnt want unified government. I would say siewm that means you want to keep the House Republicans and, secondly, the president has put suggestions about the entitlement reform out there. It seems to want revenue in return. Would simpson bowls all the commissions that looked at this said you have to have some increased revenue. Would the chamber and the Business Community support closing loopholes or some or the of way of getting rev now get a deal . Go ahead. You go first. Ill go second. Two thing. We all along knead clear were not an inpoint to increase revenue. Theres a way to get increased revenue. To your point, yeah, the president has said that. I would say his chance of getting another tax rate increase ton of the 620 billion that oured occurred in january is a journey equivalent to the republicans trying to defund obamacare. It wont happen. But there are a couple of cant say you cant new revenues. Okay. We should dynamically restore tax reform and new jersey, energy has huge opportunity generate revenue. The immigration bill could generate revenue. I think its important understand in the upper income brackets there are huge hidden taxes. For example, you know, people over in the higher incomes. I think its over 250 individual and over 500. They pay on every dollar of revenue they make. All the way to the top in medicare. So many of them have added 4 or 5 to the overall rate. If you look at obamacare, theres another point in there plus a 25 negative effect on the Capital Gains tax. There are taxes hidden all over the place in addition to the ones with rerecognized. The bottom line here were willing to sit down and talk about ways to continue to strengthen the nations economy. We just had our little problem finding somebody to sit down and talk to. [inaudible] the possibility of revenue increases. We always have been open to the possibility of looking to ways to expand revenue including as bruce said, all of the thicks you can do if you move . Ensble way on energy and the things you can do if youre going look at some ways to alter the tax Collection System that make it better for Companies Giving up some dededuction to get some benefit. Were wide open to talking about fixing the country. Were just not wide open to continue the deal harry reid said we wont talk to anyone unless we get 1 trillion worth of new income tax. Good luck, harry. It aint happening. You talk about the [inaudible] that show growing inequality of income and in the country and i wonder do you think theres a certain point where it might be business if the middle class is so hollowed out and theres, you know, increase all on one end . , by the way, i think i was listening to your question very carefully. Then you got right question. Am i concerned about the middle class . Hell yes. And thats why im talking so much and mark and i were exchanging about the education issue. Theres great opportunity for people. You know, we have taken away 45 of the jobs in manufacturing. Their gone, theyre never ever cometting back. Information technology, processing engineering, robotics, supply chain management. What we could still here a million and a half or 2 Million People today to go to the Manufacturing Business they had adequate education. And, by the way, some additional people we get through infrastructure. My view is theres a lot we ought to do about the middle class but one thick we should never do. We should never say that were going do what lennon thought was a good idea. Was to screw down the people who make the money and pay the bills to make everybody feel good while you kill the goose that lays the golden egg. Thank you very much. Thank you, tom. Thank you, bruce. We appreciate it. [inaudible conversations] that was a strong close there. [laughter] [inaudible conversations] [inaudible conversations] you should think about the chamber as coalitions. We build coalitions around [inaudible conversations] colises around things that need to be passed. We have coalitions around even around lawsuit by getting a lot of people to file amicus briefs. Well make a series of coalitions to get done what we want to get done with likeminded people. When does that process be in . That is taking place now . Well, were talking to likeminded people. We still dont know who is running [inaudible] qhoo well support. When we get there well figure it out. Theres a race special election republicans in alabama in the house and [inaudible] i really dont know where we are there. You ask him. I will. Im not ducking it. I will. Okay. I know weve had at lough conversations about it. Thank you. Revenue piece of this. You know, one of the i would say the main reason were facing these dont is because republicans and democrats cannot come together. Do you think that republicans should have been more willing to give revenue. Do you think that democrats listen. Im getting a little frustrating that the republicans did. Look. The republicans passed three budgets and senate of the house. The senate has not passed a budget in four years. And there is another fundamental issue here. Everything you hear out of the democratic side is im talking about the notless not fleesly the leadership. Ive haered it often from the majority leader. Theyre not going touch a single thing in entitlement. The aarp saying well attack anybody that touches anything in entitlement. That doesnt sound like to me somebody that wants to discuss it. I think republicans are more ready to talk how to fix entitlement and than some of the other activists on the other side. Do you think that [inaudible conversations] thank you very much. I appreciate it. [inaudible conversations] [inaudible conversations] yeah. Yep. They work with you or against you . Club for growth . I think, you know, i think so you to stop and consider that the tea partyers lest use the name loosely here. Okay. Identified the right problem. Its not different i think the fracturing has been clearly the leadership has one role to play and later described it down eloquently. They had a faction the house and senate. That was unacceptable. It was clear from cruzs filibuster to what boehner was forced for four weeks over there. I find it more fascinating, if you go back after the fact it might be [inaudible] interviews for the every one of them admitted they couldnt accomplish the objective they set tout accomplish. Stop and think about that. Now at the chamber, if we set out a goal, raise a lot of money from our members and deliver complete failure. You know what i usually get . What . A resignation letter. [laughter] im just kind of wondering after the fact when they became honest with their constituents they raised a lot of money with. About 3 and a half to 4 million. You guy and the press. Okay. During that twomonth activity. Then the people who lead that say it wasnt going happen anyway. And we knew it all along. And never had im wondering what happens with the constituents. You couldnt survive putting that. Ask the unions. We feel pretty good. It was for ten years. Not because the tea party but the aflcio. We were cochair the coalition. Yep. Okay. For ten years. , you know, so a little different twist and turns here. And it wasnt easy working that, as tom mentioned. Dpum. They view Immigration Reform as a job threat. Right. They view an opportunity the afl side view it as its taking away the guys job. Its an opponent. Thats where some of the Tea Party Caucus members are. Ive heard some of them speak. They see it as, you know, cheap labor from abroad that is undercutting the few jobs. [inaudible conversations] right. And so just, you know, [inaudible] we have to be careful. [laughter] its like the question i get Business Community. Business community monolithic group. Im not sure. When is your expectations of any december 13th date that the patty murray another christmas here. [laughter] is that more i think me and the staff feel the same way on that. Do you think something will come out of the session . Murray . I think that literally we would all agree that the were produced werer reconcilable. We can focus on the differences or the foct what we need simplistically is a cr to fund the government for a year and not get involved in another shut down fight. We could focus on the similarity and the limited aspect of what they really need to do. That kind of number seems a little bit clearer to me. Its been clear than simpsonbowles 1. 0. That is part of the press report and that is because the president said to stay away, im not sure that has to do with obamacare, but he did advise us to stay away. So i think that the biggest error of the president is somewhere along the way of greasing simpsonbowles. We need to refocus things where it needs to be. Thank you so much. In a few moments, pat mccrory talks about challenges of the states. In a debate for detroit mayor. And a look at the parties of political agendas in the wake of the Government Shutdown. Coming up next, the philosophy of president andrew jackson. He said that americans should be suspicious of american power. A group of moderate republicans. We have David Wasserman of the Cook Political Report featured on washington journal. Us live every day at 7 00 a. M. Eastern. The student camera competition asks what is the most important issue that congress should consider in 2014. He sure to include cspan video and it is open to all middle school and High School Students for the grand prize of 5000. This year we have doubled the number of winners and prizes and the entries are due by january 20 of 2014. With more information, visit studentcam. Org. North Carolina Governor Pat Mccrory was talking about challenges facing states, including whether or not to expand medicare and medicaid under the Affordable Care act. This is the last than one hour. [inaudible conversations] [inaudible conversations] [inaudible conversations] please join me in welcoming ourselves guess, it is the Vice President of the Heritage Foundation, ladies and gentlemen, the governor. [applause] [applause] [applause] hopefully microphones will be working and we will start. Please get on the microphones and we will start. Okay. Well, welcome to the Heritage Foundation. Welcome, welcome. One of the things we love to do is bring reformers to our auditorium. It is the great thing to be a reformer and to use assertive principles and the founders principles as it is to do those kinds of reforms. Today we have brought to our stage a reformer. The governor of North Carolina, pat mccrory is the 74th governor of that great state. He also served as the mayor of charlotte if any of you have ever visited charlotte. He is very proud of that city and his experience there. He also served on the city council, but in addition to that he is a great individual who works for duke energy for quite a few years and also with Sales Consulting for a private Sector Company and strategic initiatives. All the these things do a good job of preparing someone to be the governor of the 10th largest state in the country. Its an honor. Thank you for having me here. It is good to see so many young people here. Thank you. We are going to have a conversation, governor. There are so many things on my list that we will just start right through it and try to keep and i on that. Tell us a little bit, if you will, first of all, about the governing principles and what you think about when you think about governing a state as large and diverse as North Carolina. One principle may surprise you and that the principle that i bring from the private sector that i dont think we have talked enough about in washington dc in that its operations. Its one of the things that people forget about is the executive of the template is saved in the United States of america. Not enough focus is put on operational issues. Everyone, including the media tends to talk about policy and politics. But i think one of the major challenges of this country in many states is how you get the work done in an efficient and effective way. And we are seeing that the debate about obamacare is primarily about policy so what is the detailed implementation what will it cost . What are the ramifications. And i see that and State Government also. So this includes state workers and how you deal with state workers that might not be doing a good job, how do you deal with transportation issues and does the policy really based upon where do we need the roads and is it based upon the politics of road building and therefore we have to think about the operational issues. We have budget issues. Budget issues from an operational standpoint. We have many budget issues and we are really dealing with the true budget issues of the day. Are we doing to accounting of the unfunded liabilities on and off the books and those are operational issues that our executives are dealing with every day and frankly i think that we, both you and the Heritage Foundation and the government need to be talking about operational issues. The other two basic things, two or three basic things is efforts that are inherited. That is the first requirement is that we must do what is right. The second requirement that i have is that we must work as a team. There cannot be a nature among my cabinet team and we need work as one team in the most effective and efficient individuals as possible. Plus, initiate the longterm impact on the state, not just the next election cycle that those that have generations to come that are not just putting bandaids on shortterm fixes but our longterm fixes for very complex palms at all as are dealing with and its a very competitive thing. That sounds like a lecture like given in the business school. We should be thinking like business people, but we should also realize were in a tough political environment and we dont think about the operational issues and i encourage all of the special young people to put your operational skills into place and some of your thinking. Of course, your shareholders are the taxpayers. Not only that, but they are our customers. We are doing a cool review of that right now and what better area than to think about it as a retail customer when you walk into the dmv and what is your First Impression is you wait an hour and 45 minutes to get a simple renewal of the drivers license and it is the First Impression of government. So we are doing a total business retail assessment of the dmv and we hope to have some major announcements where we will restructure how you get a drivers license in North Carolina and we hope to make it more customer friendly experience. That does sound exciting. You are also planning at the cusp of a historic find in North Carolina, for the first time you have a republican governor and a republican majority in the state house for the delegates and the senators. How is that going to change the outlook about your party and administration in going about and doing business . Whether it be republican or democrat, i still have the same code of ethics and longterm solutions and breaking down the barriers and the political turf. You are still going to have some of these issues that you must deal with. But it has been great working with a team and i would say my first nine months in office we got 80 of what we wanted from the Republican House and senate, which is a pretty good track record. But there were some things where i disagree. Tax reform is an example. We initiated the most dynamic tax reform and we were the only state in the nation that the tax reform. But it was not easy. There were some people in my senate who wanted instant tax reform and i did not think that their numbers added up. As a conservative i wanted to do true accounting and make sure that we have a balanced budget in the long run while also trying to stimulate the economy. So i had to require them to compromise and i had to compromise some and we came up with a pragmatic and reasonable tax reform which frankly stepped on the toes of everyone a little bit. But we knew that we had to become competitive with the nation and the world but i have to be nikki haley and others next door to me. Good republican governors that are my friends and my competitors, and we are fighting for jobs against each other. And in doing so, i am going to respect what virginia and tennessee and South Carolina are doing. I have told nikki haley that we will beat them for jobs and she says the same thing. She asked the same way. We are also partners. It sounds to me and correct me if i am mistaken. That you actually are personally and deeply engaged in coming up with solutions to work with the legislative branch which perhaps washington could take a few laps and 10 lessons from and then you have the principle compromise, but that that the compromises are where we can work with our differences. Yes, you know that you have to do this and i asked her when i focus primarily on these three areas come, the economy and education and government efficiency. And frankly everything outside of that area i did not put a lot of attention into it. I had certain state senators are focused on other things and i wanted to focus on the executive branch of the economy and in doing so, i have asked for tax reform and we have helped present the major plan for tax reform and we initiated the first transportation form sends 1988 and we asked for personal reform and i have about 35 of what we really need. We asked for major reform in congress. So much with customers and existing customers. The we had all of these know people that were involved and we are going to privatize part of this department. This is what someone say is a radical change and i think it is pragmatic change. That sounds exciting. Tell us about this reform. What was happening is that we had a lot of different departments that were set up many years ago for good reasons. We had a rural center, we had a partnership and we had all of these different groups that were working for commerce, but not in an efficient manner and we also had a lot of overhead. So who do we talk to if we are investing in North Carolina. No one person is in charge and i dont think thats good customer service. We are putting him under one on bella and we are making this more responsive to the customer and those in the private sector that will be rewarded and paid for, but its going to be based upon results and not based upon a kind of Civil Service mentality. Let me turn quickly as you talk about Economic Growth in and tourism and things like that to transportation. You know, we think as conservatives that government has the responsibility for what they do have, of course the infrastructure to allow people in goods and services to move around not only with the commonwealth and the state this state and nation, it is a responsibility. So please tell us about your transportation reform. I am an infrastructure fan. I believe that government has a major role in infrastructure to support the private sector. And i consider myself an eisenhower republican and i dont think that we as republicans talk about Dwight David Eisenhower and not. Not only was he great allied Supreme Commander in world war ii and an american hero, but a great president for two terms and what he did was bring about a vision of infrastructure for the future and he connected rule areas in the east with the west with the highway system, which we are still enjoying today and to me that was well spent federal money. But with a vision. The economy and commerce that have government responsibility for infrastructure and here after the 1950s when he was president , we are still seeing the results of that today. I took that same philosophy as well. I introduce this in 1996 and 26 year infrastructure plan in the 18th or 19th year of the plan ended showing results. And what we did was show the taxpayers what the plan was before the taxpayers were asked to invest in it. What i want to do for this state is present a 25 year and even a 50 year infrastructure plan in four areas. Transportation, energy, water and communications. Sometimes its dangerous because youre afraid to say that youll forget one. But i think as republicans, we need to present a vision for the next generation. The vision of where will this take us with trades and jobs. To throw that this is the plan for your kids and grandkids. And then we do the same thing with Rural America and the Unemployment Rate is small rural towns in the United States and we have to connect them to the Economic Centers of the world, much less our states and one way to do that is through other types of infrastructure if we do not have cheap and reliable energy, we are going to suffer and that is what helped to build and manufacture the nation. I have no idea what our energy plan is and i think part of it is part of North Carolina and i plan to do the same. There is much of the private sector can do to come alongside the government ideas like this and provide the goods and services to people in will need. You envision them and the need for transportation ideas and obviously that would be the case. Absolutely. The private sector has been trucking firms and they want to be at the table and i think that they have incredible opportunities for private and Public Partnerships and the building of new roads and it shouldnt just be this. It should be incentives for them to build quicker and faster and have the hot lanes were money is paid and governor daniels did this in indiana. We are looking at certain ways to share the risks and future infrastructure. Most Companies Know that if you dont have the infrastructure for the future, people will not move here. And this is what stays for generations and the biggest mistake that i think that this administration has made in the senate when i was mayor and the wall street editorial, the stimulus money was almost 6 billion in most people think of that money was spent on infrastructure. When in fact very little was spent on infrastructure. At least roosevelt and eisenhower, they spent money on infrastructure that is still with us here today. And what we did during the last six years would put money on this shortterm infrastructure and repaving roads and widening the road a little bit and the money is gone. And that is borrowed money with your kids and grandkids will pay for for many years. That would be an excellent opportunity to invest that money that would stay while you pay the debt and now youre paying it for potholes and that is basically what i have said in wall street journal six or seven years ago and sadly that has come to fruition. As we talk about it being important for economic development, so is educated citizenry. Talk to me about the education reforms and some of the challenges that you see ahead. One of the policies that iran, i lost the Gubernatorial Election during president ial election time and i stressed than that there was not enough emphasis on Vocational Training in math and Science Training because i think one of the biggest dangers the United States of america has as theres no one to replace the baby boomers that were engineers or technicians at this point and even with a high Unemployment Rate in the country. There are job openings for welders and mechanics and electricians that pay a lot more money than a lot of for your college degrees. And i think that we have misled those people and saying that the only way to success is to have a Fouryear College degree. I think thats a great way to success. But i think that another pathway to success is to get a two year technical degree or certification. Very similar to what you see in germany during last 20 or 25 years for its wellrespected and it is seen as prestigious and i think we need to do the same thing in america and their economy has to have it. Companies have to have the next generation to understand the system and understand how to fix and repair something and innovate something. We are not talking about that. I think that we got caught up in academic elitism thinking that everyone had to have a masters degree and not everyone has to have a masters degree. You have to have Vocational Training. You need those for individuals. Thats right, had, had a person come in and put new wooden floors in my house and he was working his tail off. And if youve ever seen someone put down one of course, you have to understand geometry and algebra both and it is a science and after working on a very hot day at my house, he put it down. Here i was, college boy, saying what he stayover for dinner. And he said oh, no, im going to eat dinner at my house mirror a really nice place to live. And im sure he had a house boozer announced and he deserved it. He had a skill that the market needed and that is one area of education and the first bill that i signed as governor, a vocational career path for High School Students and a curriculum for which they have a choice, a Fouryear College curriculum for a vocational curriculum and you can change her mind. One curriculum is not easier than the other, but they are just different. And we should respect each one. I think it is an important point to underscore then not only are you emphasizing the options, but students and parents can make different choices as students mature and make different ideas and their minds. Yes. A lot of them who start this end up starting a business and they might end up getting a masters degree or a law degree to help them run a business that they have started and it happens in different orders and i have seen a lot of Fouryear College students go back. I have had a nisei graduated from east carolina and she got back and got her nursing degree at a vocational school. It doesnt have to happen in order that we think that the institutions require. The market might demand the order. You have also done some things to help students who might be in failing schools remapped no doubt about it. First of all, we need to start measuring results. One of the first things we do is even in our universities and twoyear colleges, we dont just take Government Funds just by by how many students are college hats, but what are the results of reading and math and basic skills and the graduation record in the results of getting those kids jobs. Not just student debt that jobs. So what we did with our twoyear Community Colleges is that we change the formula a little bit where we reward those classes that cost more and that have a smaller volume of kids in the classes may have about 100 job placement rates. And we should not punish them for that because it costs more. So we put in Technical Training funds for smaller classes that have higher job placement and we ought to think of the same outcomes for Elementary Schools and middle schools and high schools and so we are thinking about the longterm. How about the tuition Tax Credit Scholarship Fund that has gone in the place . Im a big promoter of Charter Schools. Which most people dont know our Public Schools. And i think theres a lot of mischaracterization of Charter Schools because they are Public Schools and we also have a voucher system where those kids who cannot get their needs met maybe do not have what they need. So we are doing a lot of Different Things and we also want to be paid for performance for our teachers and just in the last two weeks am putting together a Teachers Committee which will help me come up with an idea on how to reward good teachers. The principals and students and other teachers know who the good teachers are. Everyone knows who are the good teachers and who is the easy teacher. We all knew it in high school and we know in college and we need to start rewarding the good teachers. We also need to start paying our math and science teachers more money based on the market because they have a higher attrition rate. That can change your by year year in and year out and i was a recruiter were sunk sometimes uk electrical engineers more than the londoners and sometimes you pay a business major more than a liberal arts major and i think we need to adjust the marketplace standards to education of law. And it varies yearbyyear. One of the areas that heritage has been involved is the issue of common core and i know that in North Carolina, the legislation puts common core into place. As we understand it with some of our allies around the state, that is getting critical review and perhaps some reexamination. Is that something youre looking at . I am an advocate of common core as a concept especially with the emphasis. If we do not get better at math and science, as a nation we will not be competitive. I think that our standards should be worldwide standards. The problem is the location and i think that right now there are over 100 tests that happen to be given by teachers and they are only teaching testing by a test and i think that 14 more were added due to the race to the top stuff. And i am an advocate of the common core. But you cannot ask teachers to only do tests. So i think the problem is maybe not common core but maybe in the implementation of the common core and thinking this way instead of the bigger picture. Im a virginian. We are proud of the education as well. Sometimes we think this is better than the National Standards. I have no problem with National Standards and they are determining their standards but every state standards should be a worldwide standard especially in basic reading because that is what is hurting our country and i think it is the biggest challenge tour country. It is not something that heritage takes likely and we see firsthand that so many Young Children are actually forced to go to schools that are failing and nonstate. And you had a superintendent and the mayor who is pushing for Higher Standards and demanding results and they kicked them out. And that is a sad commentary. The competition is good. Is the best thing for education. Another thing about competition. It is going to connect the ritual of the poor