Transcripts For CSPAN2 Tonight From Washington 20121201

Done in nine days, and i was assured they can do the same this time. It doesnt look to be contentious. Both committees, house and senate, trying to keep it as a noncontroversial thing, coming to the end of the session here, so they need to move quickly. Will they will able to do it before the end of the year . Absolutely. We thank you for your time. My pleasure. Panelists supported the use of tbil buster stating its a powerful tool frequently use the by both parties to block or delay . As action on a bill. This is about an hour and 15 minutes. We, of course, welcome on each occasion those who join us on the heritage. Org website, and we ask everyone in house to check cell phones are off as a curtesy to the speakers, and we will, of course, post the Program Within 24 hours on the heritage home page. Those listening online are welcome at any time to send comments or questioning us, email us, and hosting the discussion this afternoon is mike frank, the Vice President for government studies. In this capacity, he oversees our work to help members of congress and the executive branch understand and defend conservative principles and exercise their constitutional powers. He previously servedded as director of communications for the House Majority leader dick army of texas, and prior to that, he was heritages director of congressional relations, and hes additionally served in the office of National Drug control policy and council for former representative of california. Please join me in welcoming my colleague mike frank. Mike . [applause] hello to everybody at heritage, good afternoon, and there are two types of people in washington. Those who really enjoy detailed discussion about Senate Procedure, and those who dont. Welcome. I can see which category you fit into. We have a great panel today to discuss something thats become more and more important moving forward, especially in the current nature of congress where the lines seem to be more and more stark and obvious than as any time as ive been in washington. We have four experts discussing the developments in cepsbly the filibuster, but the discussion will touch on other areas of Senate Procedure and precedent, and youll see a distinction between the two, senate rules and senate precedence on the other. Youll hear from four individuals who have a depth of experience in these matters that, i think, is unrivaled in the city. Ill introduce them briefly so they can turn it over to the discussion. Ill lead off with no particular order, james walden speaking first, working in the house of representatives and the senate, serving as the Senate Hearing committee. Hes an adjunct professor in the department of politics in the congressional and president ial studies program at catholic university. Hes gotmuy a degree with the university of scot lat, and a ph. D. , and authored numerous publications. Second speaker is norm, really doesnt need and introduction, writes for with the roll call, and hes an analyst at cbs news, author of several books which they may have read, the broken branch how the congress is failing america, its worse than it looks how the american constitutional system collided with the new politics of extremism. Hes been quotedded probably too many times for any data base to collect in one place. In the 1990s, there was an article i was in somewhere quoted, and you were quoted, and your quote was i have no idea. I thought to myself, you can get quoted for saying that, you achieved a unique status in washington, d. C. I congratulate you on that. [laughter] the third speaker will be bill who is currently in the policy public practice, serving assistant to george w. Bush in the white house, a policy adviser to bill frist, and chief of staff to joe pitts of pennsylvania. He has a very, very deep experience both in the house and senate, making him unique. Hes made of top of the pyramid in both chambers, and he was particularly active at the time on the issues concerning senate rules and precedent. Hes working on the sontorum campaign, culture upstream from politics, and other series. The fourth and final speaker is Brian Darling who is here at heritage for the time being before going to the senate to serve coup sill to senator rand paul. For now, heres here at heritage, monitors political events in the senate, the house, and the white house, and assesses their impact of the various policy decisions on things in general. Hes a very prolific media presence, and talk radio, cable tv, and hes had columns and events in other publications. Hes one of the most widely quoted analyst experts here at heritage. He graduated from boston, and he served previously in the senate for senators martinez, smith, and two other senators. He has a deep, extensive [background in the senate. Starting with james and moving on down. Thank you. Good afternoon. Please, bear with me, im slowly, but surely, getting my voice back. Seems like you are on the front end of losing your voice or back end of gaining it back. I thought what i would do this morning a start off with two quotes, which i think, help us frame the discussion that i think well have, and at least my comments, and ill briefly lay out a way to view this issue discussed today, a question of obstruction in the senate. The first quote is from a guy namedded william who wrote a book called the art of political manipulation, a professor of politics i believe, and in the book, he said it is true people win politically because they induced other people to join them; right . Thats how we think about politics. You convince and persuade other people to join you, you have a vote, and you win. He says winners reduced by more than attraction and persuasion, but win because they set up the situation in such a way that other people will want to join them or will feel forced by circumstances to join them even without any persuasion at all. This is what political strategy is about. It is about structuring the world so you can win. Thats the first, the second is from harry reid, and he said in december of 2010 that they, being the republicans, have had a lot of opportunities to offer amendments. The problem is not the offering of amendments, but well allow them to offer amendments, but they are not satisfied with that. They want the results. They are not willing to offer an amendment they may lose. They are only willing to offer amendments they will win. I think this is a good way to start the discussion of obstruction in the senate today, and the conventional view many of you are aware of. I think norm will do the conventional view justice here, and its the way people in ac academia and capital hill think about obstruction which is that the Minority Party in the senate and individual members have a lot of prerogatives under their voice with which to advance their own goals and obstruct the agenda of Senate Majority. The conventional view says that parties today have become increasingly polarized and partisanship at an alltime high. That reduces in the senate, the mar joyty, to use prerogatives to obstruct Senate Majorities because doing so brings electoral gain. Lastly, this results in gridlock; right . This scene seems like how people talk about ob instruction today, the conventional view. With that in mind, i want to go back to the second quote. When this was on the floor, it was two years ago, and in many respects, it was a situation like today. It wast the prefiscal cliff or fiscal cliff 1. 0. The 2001 tax cuts about to expire. Senator reid on the floor, the democrats did not want to extend all tax cuts, just some of the tax cuts, and he was trying to create an impression that, at the time, that republicans were obstructing the process and what the democrats wanted to do, but in reallots what reid was trying to do, i believe, was set the agenda and create an environment so that he could win politically and set up after the quote, a rare weekend session in the senate where he had two votes, no republican amendments allowed, and he set this up to show that republicans were obstructionists, and that they would not go along with what he said was good for the country, and this was a Public Relations ploy designed to shift attention from the democrats inability to come along with what republicans wanted to do, which is fine, their prerogative k to republicans saying we dont want to go along with what the democratsment to do. In short, he was seeking to control the agenda, and i think thats the real issue here. Certainly, there are times when minorities of both parties obstruct the majority because they need to or want to, but the real issue is one of agenda control. If you we actually have a way to think about this, you know, in political science, and, you know, norm knows more than i do, but look at House Majority parties, hey, that tells us a lot how they behave today. They try to structure the environment in a way to win, and they do so by controlling the agenda and preventing minorities to participate in the legislative process. Thats not a surprise to anyone. Thats whats done in the senate today and thats not the way the senate has been run. Theres a number of tools that they have at their di poe sure to do that. Third is filing cloture. Were familiar with that. Filing cloture is something done out of weakness by the party, but its actually a tool for the majority, a weak tool, but it is a tool to provide certainty, limit on amendments under circumstances, and allows the symbolic gesture on their part to create a line, a demarcation, clear for people who are for and against something. In the house, you do that with a closed roll, whatever you want. I think more egregiously, we have the same day closure. Typically, you file cloture, the idea is the bills on thennr fl, filibuster it, and the majority leader comes down, frustrated, and says we cant get it done. Its going on for too long, nont obstruction. Well, same day cloture is filing on a bill, not a motion to proceed, on a bill, the same day brought to the floor, the same day itsn r proceeded to. In the 110th, 111th, and 112th congresses, thus far at least, sameday cloture exceeded all other cloture motions. Then r third, fourth, fifth, ec, you get the idea. I find it hard to believe you can say in every circumstance that the Minority Party filibusters a bill because of cloture compiles. That is what the majority leader leads us to believe on the floor saying hes dealt with more cloture motions than any other leader in history, and those are all indicative of the moving on, though, he also fills the tree. This is a very important thing. You heard this many times. This strikes, i think, to the core of the minorities current criticism with the way the majority runs the senate. Those of you who dont spend time reading the precedents or follow the debates around here about the procedure, filling the tree essentially is the majority leader using his only formal tool which is the right of recognition to offer amendments to the legislation to exclude all other amendmentings. Once hes offered all amendments required or allowed under the rules, no other member can offer amendments until those are taking down. He doesnt take them down until he filed cloture, tip think on typically on the same day, shuts out all other amendments, and lets the clock run out. Reids done this more than anyone else, and weve all read the information on that. I find it incredibly persuasive used in tandem with the cloture vote. Reid says i fill the tree because i want to block that amendment because these amendments are just partisan employees, merely symbolic, scoring points, and this is not real deliberation. Thats what he says about filibusters and closure motions. When you take sameday cloture motions, and combine them with filling the free tree, theres two things, you excluded the process, and in the 110th congress, 56 of the all of the bills that had a same day cloture motion, the tree was filled. In the 111th, 98 of all of the bills, the tree was filled. 98 . In the 112th, i mean, we are not done, still going, but its likely to exceed that. Lastly, i think id like to say theres new developments in agenda control that the senate ma majority leader is now using in addition to sameday cloture in killing the tree. One is picking minority amendments that they filed to the exclusion of other minority amendments, and the making of public argument that minorities had a chance to offer amendments, not just the once wanted they offer, but ones they just filed anyway, and so, you know, they are complaining about voting against cloture because they doarnt get amendments is not legitimate. Its an important development. Lastly, a blocker motion to proceed. In the senate, the only power the majority leader has is priority of recognition, recognized before anyone else, allowing him to offer amendments. He also makes motion to proceeds to things, motions to proceed, those things because the senators have a vested interest in ensuring the schedule is orderly. Well, as hes truncated the ability by any member, not just the Minority Party, but the own members, what happens is more and more senators are not deferring to you anymore to move to proceed bills you want to because we are so frustrated with whats happening that we may also want to move to proceed to our own bills. What happens now is that the majority leader uses all of the tools together where he will file cloture on a bill, the same day its brought to the floor, fills the amendment tree to block out the amendments, and he does a blocker motion to proceed. He will move to proceed to another bill while the clock runs on that motion to prevent any other member to move to to proceed to a bill that he doesnt agree with. After two days, he has no intention of getting on that bill, after two days, the vote on the original bill comes up, invokes cloture or not, and then we go on about the business. East done everything he can to control the agenda in the senate in much the same way majority parties seek to control the party in the house. This is a very significant development, and i think it helps us when we have this conversation, i think its important to keep this in mind because its not necessarily a given that cloture motions are the same. Thank you. [applause] thanks, thank you, mike, delighted to be here. I promise not to speak for more than six or six and a half hours. [laughter] let me start with clearing out the underbrush that i think a lot of people hold about filibusters. First is filibusters unlimited debate, supermajorities to end debates are not in the constitution, enjigsed by the framers. The initial senates actually had something that the house has which is critical ton r moving o action which is a motion on the previous question, a way in which you have the simple majority to stop debate and move to a vote. In 1805, the president of the senate, Vice President , went for his farewell to the senate saying, you know, you have a rule book encrusted with a bunch of things, implicative, and many of them you dont even use, and why dont you just clean up the rule book, and heres some ideas. They said, okay, and adopted a set of rules that took out the motion on the previous question. It was not clear in the senate for awhile what that meant, that it basically meant that if one senator took the floor and kept talking or a group of senators did that that you could block action and block it indefinitely. There was no way to stop it until 1917 when we had crisis, really, over rearming prior to entry into the first world war, a ruling that created a process where you could, in that debate. Its been amended a number of times since then, but a lot of people think this is enshrine in the constitution, and its not, nor was the supermajority so that out of the way, let me just add a couple other observations. The rules been changedded a number of times, most significantly the last time was in 1975. In 1975 when it was changed, there was a shock wave in the political arena because the Vice President nelson rockefeller, no one else realizing he was about to do this, at the beginning of the new congress announced it was not a continuing body, and the senate basically said, woah, timeout, went back, con tim contemplated what would happen if the rockefeller ruling stood, and it would change the senate, and decided with robert byrd leading the way, to come up with a bipartisan agreement that would not allow that to happen. That changed the filibuster, and the fundmental change was moving from a requirement to end debate to invoke cloture of present voting down to three fifths of the senate. I would argue, and will in a minute, that that changed which seemed to lower the threshold actually altered the senate in the fundmental way meaning that the whole idea that its an issue of significance where the majority leader decides to bring to the hold to a halt went away. There was no need to take to the floor and dramatize an issue, come to the floor, now the burden on the majority to provide 60 votes. The rule has been in place since 1975 leading us to another conclusion which is if there are problems with the filibuster and issues now, which, obviously, there are, its not because of the rule. The fact is that from 1975, really, until 2007, while there were brief periods of problems, flair ups, frustration, every majority felt the frustration of a minority using the tool, and the majority, by the way, has not always, in fact, rarely has been simply a party acting together. Sometimes its been an individual rogue member of your own party. Democrats had that frustration with jim of south dakota, with howard of ohio, democrats and republicans had it with james allen of alabama, with jessi helms, and theres been a number of others. Sometimes its been factional, but it has not been a party based process. There was periods when there was great frustration, but, mostly, the senate went along and worked because its a body of individuals and a body where the Party Leaders tended to try to work things out, sometimes to isolate those individuals because the senates also a place which basically operates and has to under broader set of rules than the filibuster by consensus because everything requires unanimous con cement. Things changed. It was a cultural change, really. Its a cultural change building before that period of time. It was a cultural change that, as no doubt well hear, frustrated the hell out of bill friers as majority leader, and its one thats affected every majority leader before and sense, but its changed rather dramatically since, and the change is really of two parts. The first is that for the first time, really that i can see ever, you have a party acting in unison using the filibuster on a regular basis as a tool. Now, if you look at prominent examples of the use of the filibuster in the past, and, remember, for most of the history in which it existed and which weve had supermajority or cloture rules to end debate, it was used very, very rarely, and it was used on issues of Great National significance where a minority felt very intensely about it, were willing to put everything on the line to make it happen, but in the civil rights era, for example, when we had those celebrated filibusters, they were not partisan in the sense. They were factional. The fact is the filibusters done by southern Democratic Senators to oppose civil rights or Voting Rights legislation were opposed by republicans just as they were by notary nonsouthern departments, and civil rights legislation, overcoming filibusters being enacted was at least as much to the credibility of the Senate Minority leader as to Lyndon Johnson so what weve seen now is a regular use of the filibuster now as a partisan tool and not just a group of members of the party, but the entire party as fashioned by the minority leader. The second is the use of the filibuster routinely, not on issues of Great National significance, and not simply on those issues with the majority leader kills the amendment tree, but on issues and nominations which ultimately pass unanimously or near unanimously, and keep in mind on no , nomins where holds, which are notices that you will deny unanimous concept, and in some instances have been filibustered only executive nominations, you dont have amendments to nominations. You dont have a process where you would basically have a protest in order, and they have been used simply and frequently as some its called weapons of mass obstruction. Now, why and how do we know this is the case . Among other things, theres very interesting reporting done by a journalist who wrote a terrific book called the new new deal, and following up on something that joe biden said after becoming Vice President , and he said afterwards, went to the senate to talk to some of the republican colleagues who he had known, many of them for the full 46 years hed been there, and seven said were not cooperating, joe, we have orders here, well block everything you do. He went around to talk to senators and found a few off the record and one on the record, bob bennet, lieutenant to Mitch Mcconnell saying, yes, mitch told us all were going it try to block everything we can, and if we cannot, throw sand in the works, as much as we can, and, of course, the process of filibustering, which requires the two days for the cloture motion to ripen, a lot of time on the floor as you go through the process, and then if you achieve cloture, allowing the 30 hours of the post cloture debate, and you can demand the full 30 hours, and you dont even have to debate becomes a very tempting tool to use to soak up an enormous amount of floor time because if you have an ambitious agenda as the majority, floor time becomes a very precious commodity, and its that process, then, you know, you can point to examples of bills and nominations that ultimately pass unanimously that were taken through. In the case of bills, in many instances, a motion, filibuster on the motion to proceed, which ended up with a cloture motion that passed overwhelmingly, but then another filibuster on the bill itself, and then we see filibusters on conference reports if and when they come back, all designed to use up more floor time. Thats the frustration of the majority. Now, we can get to the frustration of the minority. The fact is we do have something that in part is a chicken and egg problem. It is the case, and we saw it with trent lock. We saw with it bill. Weve seen with it reed. Majority leaders want to move things along, and, also, dont want amendments that are politically embarrassing. There are a temptation to fill the amendment tree, and there are many instances in which harry reids done that, and theres a legitimate complaint on the part of the majorities here on that front as well. What do you do about all of this . Well, in an ideal world, and i would like to see something closer to an ideal world, you dont go back to the process either that rockefeller proposed, that Walter Mondale suggested thats actually come up from time to time which is to say the senates not a continuing body. Were just going to change the rules by majority. You dont use the option at any time during the session which majority leader frist proposed, chafes then called the socalled Nuclear Option of using the rules and the presiding officer by majority in midstream after you have already ratified rules to make a change. You may use that option at the beginning as a shock value to bring people together, but ideally, you get an agreement that would satisfy some of the grievances of the majority and minority. One proposal on the table by democratic senator levin, one of the most respected senior members of the senate which is basically we will provide opportunities for timely and relevant amendments, and a process for getting those, and there can be lots of them on the tail. 234 return, cutting off filibusters object motion to proceed and clean up the process a little more. If i had my brothers, i would take it a few steps further. Fist of all, i think some of the options for using the fill filibuster as a tool of obstruction, including the 30 hours of post cloture debate, used to be a hundred hours, now its 30 hours. Should be 30 hours dwoided between the two, on the floor debating if you are going to take the 15 hours that you have. I see no reason why you cant expedite action further so if you m to raise the bar to 60, you can do it, but you have to move further. Then one of two things. I think so what happened here, and in particular, and whats made this a tool that becomes particularly attractive to use on a more regular basis is that since 1975, basically the way that the process has worked is its put the ownous on the majority to move to action. Instead of what really was the whole idea behind filibuster which develops over time is a minority, whether its a partisan, ide ideological, regi, or other minority, that feels so intensely about an issue that it is willing to sacrifice enormously to make its point of view known and to block as long as it can. That is appropriate. , you can do it in one of two ways. Simplest is return to a standard, three fifths present voting. Then if you decide, only on an issue of great significance, that you will go around the clock, its up to the majority to ensure they have members waiting close by because if they are not, if at three in the morning they decided to let the majority to keep 50 members there because you can note the absence of a qowrm, and they got to be quorum, and they can be around, and they just can prevent any destructive unanimous consent agreement. They have to show up. You can invoke cloture with 40. My preference, because it deals with a larger number of potentially frivolous amendments is to switch the burden from 60 senators in the majority to 41 in the minority. You want to keep dont going, you better produce 41 votes on a regular basis, and that ends what i view as a farce seen a couple times, a couple years ago, which was the democrats being forced to drag 92yearold harry byrd out of the hospital bill to come to the floor to provide that 60th vote. The burden should not be on the majority, but the minority. Theres ways of doing these things that ought to meet with approval. It doesnt end the filibuster or the ability of the minority of whatever sort to raise that bar, but it puts the burden where it belong, and it also gives minorities back something they deserve, even if they are embarrassing amendments, the right to offer amendments. One final point. I would like to see further changes when it comes to executive nominations. The biggest dispute we had in the past was over filibusters in judicial nominations. Frankly, i dont have a problem with filibustering judicial nominations, because they are lifetime pointments, ten its not just the preference of the president , but something that will be there, someone to be there potentially for 2040 years after a president leaves the officer. These ought to have the highest level of scrutiny and standards. They ought to be used rarely, but executive nominations are different. Theres a lot of there ought to be if not a bias, but a dent in favor of a president able to have his or her nominees in place in the executive branch. I could see a process of reducing levels required for cloture gradually down to a majority. Allow time for debate. Allow time for consideration. Let a president have his or her people in place. Thank you. [applause] does it matter what happens to the procedures . Anything to do with the health of our nation or future of the nation . If you dont think so, you are not in the audience or watching online, but the founders of the nation thought it mattered. In fact, they labored many months during the Constitutional Convention to get it right and spent hundreds of pages in the federalist papering arguing for that constitution. Its true what was said, the filibuster was not part of the constitution or even of the original senate not until 1806 was the filibuster even possible. The spirit of the filibuster was resident in the founders conception of what the senate should be, and deluding the rights of the Senate Minority is not just a question of who is partisan ox is getting gored today, but it goes to the heart of the founders concerns about preserving minority rights, and ensuring the deliberations are permitted to improve law making. Now, Senate Leader is poised to engage in a power grab for his party and will have consequences beyond the 113th congress. Sometimes, if hes successful, that helps democrats. Sometimes it helps republicans. It will rarely help the American People. It will serve to reduce the quality of new laws made and further exacerbate the toxic political environment reducing collaborative and facile story compromises that help to civilize our national politics. Three points today. First is that we are not a democracy, but were a republic, and why that matters. Second, the senate was intended to be a check on the house to preserve minority rights, and that will might prevail, and, third, more deliberations produces better legislation. First, were a republic, not a democracy. The founders did not form a democracy, but a republic, and few americans know this today. The fact if youre are as apt as i am in political theory saying were a republic, not a democracy, and people look at you, but theyve lost the understanding of the difference between the two. Democracy never appears in the constitution. I remember asking during my 10th Grade High School civics class, what was wrong with johns democracy . What was wrong with the french revolution . How was that really different than ours . I remember the teacher being at a loss to explain the difference because it was clear he didnt really know. Our republic is not founded on the notion of the voxday. The voice of the people is the voice of god, but, yet, 50 plus one, thats just. The framers had a different notion believing justice exists and was there to be not to be determined, but discovered. They therefore put in those less democratic elements of the constitution, in our new government precisely so justice was better achieved. It was not that some con tended it was one they could not see beyond the blinders, wanted to protect slavery, no. They believed that the simple majority rule in every case does not always produce justice or the best result. The founders had tough words for democracy. Ill read a few. Madison said democracies have been spectacles, turbulence, and con ten contentious. The known propensity of the democracy is to the ambitious call and ignorant believe to be liberty. Another says democracy establishes the wild. Rush said a simple democracy is one of the greatest of evils. The point is that the undemocratic elements of the constitution are there on purpose. Among these, the veto, the indirect election at the time of the u. S. Senators by state legislatures, the independent judiciary, the bicameral legislature. Next point, loss of minority rights. The senate is one of the less democratic elements for the government for good reason. Its purpose is to check the majority impulse of the house and preserve minority rights. I was a creature of the house before i was a creature of the senate, and like every good house staffer, i hated the senate for my 15 years in there because it was the graveyard for all the legislation that we wanted to push through. I went later on to the senate, sat at the feet of gold, the far most expert on parliamentary procedure, and then went back to the senate. Theres a story thats too good because it captures the truth about the senate. Namely that when jefferson had been our ambassador to france in the Constitutional Convention, came back, sat with washington for breakfast and asked what was the deal . Why did you do the second bicamera body . The senate. Did you cool the coffee before drinking it . Of course, my throughout is not made of brass. Even so, we pour it in a saucer to cool it. The house is made for speed, shorter term, two years, make sure closer connections to the electorat, smaller districts, a little more coraltive, but the senate was made to be a break. It was made as a speed bump, and, often as a dead end. The seeds of the filibuster were planted in the constitution itself. When they are unable to shut off debates, and when the first filibuster did not occur until 1837. Cloture was established in 1917, the twothirds of the vote. During the presence of the filibuster in the period was hugely significant on how the senate went about its business. It was the sword above the chamber in all that it did forcing compromise to move legislation. The filibusters were rare to recent years, but they constantly forced a kind of difference body of any house member whos served in the senate will tell you. Gold talks about then buauaq beg the place where the defense is the offense is in the primacy, and in the senate, the defense is in the primacy. House minorities, as i knew for sen seven years, get curbed. Theres an effect in legislation that it tampers the momentary political passion that are moving through the house, and the more enduring will, the will of the American People, more likely to triumph over the passion. It will make it less efficient, but as we know, that was not the main game of the framers, inefficient government. To the extent the Senate Becomes a mirror image of the house, which were seeing with the one man rules committee named harry reid, well still have the benefits of the bicameral legislature, but tempered, and the deliberation, especially, is going to be hurt. Thats the third point. The liberation is really the proposed power grabby the majority underminds deliberation, thats really intended to improve legislation. The issues not whether or not harry reid continues his unprecedented efforts to fill the amendment tree r was mentioned and prevent the minority from offering amendments to improve legislation. I mean, thats hugely important, and, in fact, senator reid told senator mccain, quote, that the days of amendments are over. He told the new senator rather than offer amendments to improve legislation, he could, quote, always vote against the bill. Thats how it is in the house of representative. Thats not the way its supposed to be in the senate. Its a by their choice in the legislation, Congressional Research Service Found that senators senator reid blockedded senators from offering amendments 68 times since being the majority leaders, and 17 times greater than six prior majority leaders combined blocked the offering of amendments. Working for the Senate Majority leader frist, and republican senator who came to us and asked for the amendment tree to be filled to block out amendments, i remember the reaction inside her office, done rarely, and, no, that creates an implosion in the senate because thats violative of minority rights. We did it just 15 times, senator frist did when he was majority leader. When senators cant offer amendments, that means their constituents are disempowered. In contrast, deliberation promotes justice. Thats what the framers believed. Alexander hamilton in federalist paper number 70 said this, in the legislature, prompt to decisions is an evil rather than a benefit. Senioring of the government, although they sometimes obstruct plans, yet, arch promote deliberation and serve to check excesses in the majority. This is a fear of the, which it is not in the original senate or constitution, the sees seeds of it were, and it was important that the framers act as that check. Is there a perfect number . No. Theres. Changes as we discussed, but the drift, the direction, the trajectory is bad for deliberation. I want to close with these words from then outgoing liberal democratic senator kris tosser dodd, who in the Farewell Speech in 2010 said this, the history of the young democracy, the framers decided, should not be written seoully in solely in the hands of the political majority. In a nation found against tyrannical rule seeking to crush defense, there should be an constitution that provides a space where dissent was valued and republicked. Our founders were concerned not only with what happens legislated, but just as importantly with how we legislated. Thank you. [applause] im briern darling, senior fellow here at the senior foundation. My feeling is the current push to reform the filibuster is merely a partisan power grabby Senate Majority leaders harry reid with the sort of president obama. He wants to determine nate the procedure allowing members to filibuster a motion to proceed. He wants to force the socalled talking filibuster, but he wants to do so in the way he wants to do so he would have to break the rules to change the rules. We would use the socalled Nuclear Option, which weve been discussing, when the majority leaders forces a change to the rules with the majority vote. Putting the substance of the changes talked about inside, its important to note that the senates rules have never been changed while following the rules and following the without following the regular order, without following the rules. There have been changes to precedent and the interpretation of the rules using the Nuclear Option with the simple majority if not changed without looking at the regular order. Back in 1979, senate ma yourty leader at the time did use a version of the Nuclear Option to change the debate, the nature of the debate when debating executive nominations, but that was an r change in precedent. Its never happened that the senate changed the rules by breaking the rules. Now, article 1 section 5 of the institution gives a senate and the house the right to set its own rules. According to senate rule 5, the rules continue from one congress to the other. Rule 22, you need a twothirds majority vote to change the rules before you have a simple majority vote on the issues. Now, rule 5 exists because the senate is a continuing body. The most of its members carrying over from the previous congress. Now, when the senate convenes in the next congress, whats going to happen is onethird of the senators sworn in, but the other twothirds are going to continue to maintain the membership in the United States senate. Youre not going to see Senate Majority reid or mcconnell sworn in. They remain members of the institution because they have been previously elected and continue membership. What you will see is youll see a third of the senate will be sworn in under the existing rules. The first thing the senate does convening the congress is to use the senate rules to swear in the new members, and that undercuts fiction that Senate Majority leader reid is trying to promote, and rules are suspended or not part, not actually implemented in the new congress when you start up that first day. Were hearing the argument that that first day you come in session in the congress, theres no rules, yet, all the senators are sworn in under rule three. Now, looking back during the fight in 2005 over republican threats to use a Nuclear Option on judicial nominations, senator reid denounced breaking the rules to change the rules. On april 26, 2005, senator reid said, quote, i would never, ever consider breaking rules to change the rules. This is exactly what Senate Majority leader harry reid is trying to do today. Reid made the case against the Nuclear Option in 2005 when he argued for people to suggest that you can break the rules to change the rules is unamerican. The only way you can change the rules in this body, is through to change a rule in the senates rules, break a filibuster, still requires 67 votes. You cant do it with 60. You certainly cant do it with 51. I agree with senate reid in 2005, that the promise that the Senate Majority leader now, harry reids actions, are against the will of the American People and against the intent of the founders. On april 1, 2005. Senator barack obama of illinois argued removing the filibuster for judges from the rules causes more partisanship. He said, quote, the American People want less partisanship in this town, but everyone in the chamber knows if the majority chooses to end the filibuster, if they choose to change the rules and put an end to democratic debate, then the fighting, the bitterness, and gridlock will get worse. Senator schumer of new york joined the debate arguing may 10th, 2005 saying, quote q the the basic makeup of the senate is at state, what americans prize are at stake. The idea of bipartisanship, where you have to come together, and not just ram everything through because you have a narrow majority is at stake. The very things we treasure and love about this grand republic are at stake. Senator durbin argued, quote, those who would attack and destroy the institution of the filibuster are attacking the force within the senate that creates imroms and bipartisanship. Theres an event in 2005, april 20, 2005, at the center for american process called Going Nuclear the threat to the system of the checks and balances, with a speak by robert byrd of West Virginia citing the long history of the filibuster that proceeded our republic saying, quote, in my 53 years in congress, ive never seen a matter that came before the congress, before the senate, or the house as a matter of fact that is so dangerous, so out of the mainstream, so radical as this one, obstructive tactics in the legislative forum, although not always known as filibusters, are of ancient origin. It was reported while caesar was in spain, the election of consuls was approaching. Applied to the senate for permission to stand a candidate, but they reject the request and prevented his success gaining time with which he spun the debate until it was too late to conclude on anything that day. Its only been around 2064 years. Dont believe the left when they say it was created in 1865. Byrd would say otherwise. Another speaker, norm, glad hes two seats away from me as i quote him, from 2005, said some things about republicans attempt to use Nuclear Options, options that i agree with. Now, let me imp size this is a radical step its taken. This will require breaking the rules, steam rolling the parliamentarian, and ive been disappointed in the reporting on the issue which tends to ice a kind of gloss and shorthand over matters making it appear as we are appearing to do it with a majority, just not elected to do it before. Thats not the case. Its clear in the rules if you challenge a rule on constitutional grounds, that challenge is debatable, and the debate, itself, can be filibustered. What they are going to do, haved too in the case, and senator frist calls for a point of order suggesting a filibuster is unconstitutional is ignore their parliamentarian saying it can be debated or steam roll over the parliamentarian, and basically break own rules by not allowing debate in the case. He also argued, quote, basically the essential character of the senate in the system, a republican form of democracy trying to avoid the motions of the majority is to provide some outlet of minorities of one sort of the other. Change that you can really do this, do move this sorry change that, and you really do move to the potential of tyranny of the majority. There are always will be a present, always a congressional leader who desperately wants to achieve a goal, and that temptation overrules precedent and the rules will be there. Its there today. What reid is trying to do is wrong. Yet, the only way for con receivertives to fight back is conservatives to fight back is engage in the fite. If he operates under the rules that there are no rules, he has provided an unprecedented opportunity for conservatives to push real senate rules reform changes. If theres no rules, and reid cant stop conservatives from offering a never ending stream of rule changes that may actually improve the senate, too quick ideas are a new twothirds point of order against any infringement in the Second Amendment rights of all americans. This would be subject to a simple vote creating a supermajority to pass anything that ever infringes on the Second Amendment. Looking at the voting history of the senate, theres a progun majority in the senate, and this is subject to a simple majority vote, would have a chance to pass. Another thing thats very, very important is getting rid of the Senate Majority leader reid and future majority qq s for that sake, power to fill the amendment tree and block amendments. There needs to be a new point of order to rid of that. They used the tactic about 68 times, far more than the preed sees predecessors all combined, something allowing all members in the senate to participate in the process, offer amendments, and if you pass this through the regular order, its great to pass the votes or shutting down debates with 67 votes, you might not have the whole problem of the with the left called filibuster is it might go away if republicans were allowed to participate in the process, but were seeing now a cop constriction of the Minority Partys rights and individual members rights on the front end ridding of the motions to proceed to bills, during the bills by forcing the socalled talking filibuster, and after debate, if you can strict post cloture debate time, and for a legislation, try to curtail motions to go to conference. Thank you. [applause] thank you, everybody. As a monitor, ill request a quick question. Filling the amendment tree, a number of you referred to that, to the benefit of those watching that dont know how that plays out on the mechanical level, one of you maybe show how that what happens when the leader goes to the floor and asks for recognition and fills the tree . What amendments are we talking about and so on. Maybe james . Sure. So the only basis of power for the majority leader in the senate is the primary basis of power, and so, he goes to the floor, and he asked to be recognized by the presiding officer, and hes recognized. He offers an amendment, and only three are at any given time for simp cation. The amendment he offers is pro forma not meaning anything. It strikes and changes the number in the title, Something Like that. You offer the amendment, and then hes recognized again before anyone else gets recognized, and hell offer another amendment, change something that doesnt matter, and so on and so on until you fill up the number of amendments that can be offered. At that point, he will typically, almost exclusively, file cloture, and because theres a timetable associated with it, he needs the amendments in place to block unmented amendments to control the agenda as i referred to while the timetable goes up. Thats why its such a powerful tool when used with the same day cloture motion to basically control the agenda in the way the House Majority does. The filibuster that follows that tends to be, in efforts, to undo two amendments that have a nature that have it in debate, offer app amendment to have in what we think of a legislative process. Is that a right. Its important to note that the tactics that majorities use to respond to obstruction can actually precede minority obstruction. We see it in the house all the time. But its also instances where senator reid has said im going to fill the tree, therefore republicans to proceed to a bill is the promise of filling the tree to hunt up the process. Just make a couple of points first. Im glad to ryan used all of these eloquent quotations. Minus side, im a little surprised he didnt use them to eloquent quotation from Mitch Mcconnell from bill frist, orrin hatch and others explaining why doing what he is so terrible to the senate is just perfectly fine and desirable on this subject, too. This basically just a hypocrisy goes all around on this issue depending when youre the individual or minority. I dont want people to be left with the impression because harry reid is a predator and none of this wouldve happened if he hadnt just out of the blue use this process of filling the amendment tree and its only because of that we are because of protests. Again, no amendment nominations. Unprecedented number of holes on nominations, including traditional and executive branch. Filibusters were amendments were allowed and ultimately passed unanimously. Just a point about deliberation because i think the principles are all once i resonate and others do as well. When you have a filibuster you dont have to debate anything. You have to lift your baby finger and say im going to filibuster this. When you have 30 hours oppose cloture debate, when nobody debates come you dont even come to the floor. That doesnt enhance the declaration. If you want to liberation, it would be people on the floor debating. Maybe actually get some giveandtake. Its like to see many more opportunities for debate and deliberation. I think to see other changes in the senate rules. I continue to believe everything i said, including judicial nominations. But also about the real dangers of making these changes in this fashion. There is a distinction between making a change at the beginning of the congress and debating whether its a body and in the middle of the session for implicitly or explicitly agree about the whole notion and they can be changed except by supermajority. Imagine if democrats had the same number of those ahead in the the mid196 days. Say they had 70 senators. And and that should make a bet into a 75 senators in the past he rule that says you cannot cut spending in any program without 75 those and you cant change the rules without 90 those. That presumably fits under the same characterization. Would any of us like to see that happen . I think not. Theres two questions about whether you can have a rule that a majority said we been a supermajority that can set the bar so high that she could never change it again and maybe it wouldnt happen. But on that front, i dont want to see this happen. I would much rather see a bipartisan agreement that includes many more opportunities to offer amendments, even embarrassing ones in return for eliminating both frivolous filibusters and filibusters that could on the majority. Theres some questions here we could debate a lot more. In the senates rules is a continuing body and members carry from one party to another. Despairing members under senate rule, so he was smiling the numbers and make believe all this and theres no rules. That doesnt make any logical sense to me. I understand the hand of the past, but weve never had actual text of the senate rules changed in this manner if it were to happen. I know this is Senate Majority leader harry reid average to cut a deal that would be the best way to resolve this matter. To actually pull the trigger in the nuclear and make a leap in the first way there are no rules, i dont think thats intellectually honest. If i could respond to two points, one with a saved until the q a at the response they knew what was, on the first Nuclear Option. So first of all recalled the constitutional option not because he contended, but because its in the constitution allows for the senate on rules. What would have been done and which was almost done but it didnt gain precedence by the ruling of the chair, which was not new. I could never get the Washington Post to print this point, but bob byrd exercise the Nuclear Option four times. 1977, 79, 80 and 87. It goes back to the beginning of the senate whereby he said im the president and the senate by a simple majority rule. Furthermore it was extraordinary, one that i think would want she is a very verification only for extenuating his was done not too but an senate traditions, but restore them. For it to 2003, there have never been a Church Official nominee tonight confirmation due to a filibuster. Not one that had majority support. Never, never. Beginning with Miguel Estrada filibuster and ultimately five judges who had bush judges who are all denied confirmation due to a filibuster that had majority support. Prior to that it had never happened. We were charring to restore. That had not been the standard prior to 2003. On your question of time, youre right. The biggest vulnerability in the Senate Majority leader has this time. I remember when i came from the house and i came over to the senate and i think we were moving to cloture on a bill after eight days spent debating Energy Legislation in 2003. Our member senator dorgan say whats the rush . Weve only been on the bill for eight days. I remember cracking up just eight hours is a long time in the house. So youre right about the leverage of time is the enemy. But that leverages used to affect changes to the legislation because the obstructionists save us make this change and then ill get back time. It is just yet that makes on the thursday and friday. Whenever we had a recess, we suddenly had a flurry of the city because everybody wanted to become more accommodating. Time is an important matter we have not ignored. Output or audience [inaudible] would like to ask the first question . You seem surprised at the number of filibusters where you have nothing to do with anything other than to not relate it back to the ongoing mess in facility at executives to reach out to the Minority Party . Actually, you can take it back to the last two years of the Bush Administration when the number shot up dramatically as well. So its not simply a barack obama phenomenon. But i dont buy enlarge. I think what we see both from my own work inside the senate in observation from what we see with books like mike grunwalds is that it is a very deliberate strategy hatched at the senate the inaugural if not before to try to raise the bar and block things from happening in to get unanimous minority support and to do it not just on bills or you want to have amendments allowed, the bills are you have no interest in having amendment allowed to make it all messy and make it look difficult. Im not going to defend Barack Obamas outreach to the Minority Party, but i could go back to knot the use of the filibuster, but other methods of instruction with bill clintons who reached out all the time. So i think thats a factor, but a minor one. I think kerry reads use of filling the amendment tree, partly this is chicken and egg, but is been done too much and that could result in at least some protests and willingness of some senators on his side you might not otherwise join some of these filibusters to do so. But it had much more to do with a concerted party strategy, which i think its really the first time weve seen it. I think theres two separate issues. One obstruction on nomination and to come the obstructions on the legislative. On the nomination site, it is true you see these judge votes and they happen to go 992. One. Its important to remember what we are talking about. The alternative to that is to move it by unanimous consent. This is not like the house for thursday though. The member objects unanimous consent because they do not want to vote or dont want to be forced to vote for a judge with whom they may disagree but support, they say i will have the roll call. The majority leader at that point will consider or not. And many times he does it in the Minority Party or one individual is filibustering the judge. When we ultimately get around to having a vote, what you see happen is 99 to one, 92 to three. I dont think anybody in this room, including more and come with the justice or individuals would be required to vote yes for that judge, which is what unanimous consent as. Its not what the house does. Its not heavyhanded majorities do. They enforce those from a simple to pass. When it comes to cloture, you should hold the floor and talking. A postcloture you basically have to do that. If you stop talking under the rules, you could lose the question. Oftentimes we choose not to because we agree by unanimous consent to the ever now. The majority could keep this overnight in this minority senators dont stoked talk we could have it though. On the senate floor, excuse my voice was up to 1 00 with that in the morning they were doing that in passing a bill. And they were moving things. They would say, is there any further debate quake if no one is around they say okay, lets have a vote. It would be a voice vote and would pass. Thats frustrating to the minority, but as his prerogative as the majority and you can do think that way. If you choose not to do things that way, its because the say or do oftentimes are trying to control the agenda, when you look at cloture motions, when you look at motions to proceed from here trying to control the agenda and block things from happening on the floor beneath her disagree with her black amendments you dont want to vote on. That is what you see time and time again. The reason we havent had a budget three years is because you cant black amendments in the budget process. Thats why we havent had a budget in three years. Its difficult to do Appropriations Bills without having amendment because of the culture of the institution. We havent done an appropriations bill and i dont know how long because you cant offer amendments. Douglas back to the majority decide on the current leadership to control participation in the process. Anyway to the microphones . Harry reid may be be doing this if they attack it to go back and negotiate a deal might be better in the congress. He set up but he doesnt like the deal at the beginning but mr. Mcconnell. I know we didnt like the agreement they had. But different handshake agreement would he be looking for . What would be an acceptable deal for him . First of all, this has happened in the past, where leaders have said im going to use the Nuclear Option to change the rules and agreement was negotiated. If apennine domestication and ive also had precedent it is some precedence for the senate rejected the idea the senate is not a continuing body. At basic time and work, its best if they work and agreement of both parties because youre using regular order, allowing opportunity for senators to extend debate on rules change if they dont like it and there may be a vote in its 68 to whatever. That is a much better way to resolve the. As for changes to the rules, i have not heard Senate Majority leader harry reid or anybody for that matter put out a specific proposal saying we are ready to kid about price if you get rid of the motions to proceed bills and implemented a talking filibuster. Its a oneway street where senator udall of the next go in merkley and harkin of iowa all have a ds out there that dont have talents to them, dont provide enough rates to make it plausible. I would say first, look at the proposal of the carl levin put out at the end a few months ago. As a starting point its something that had been discussed in a bipartisan way in the Senate House Committee through several hearings on the filibuster over the last couple of years. Chuck schumer, chairman of the committee, lamar alexander, ranking republican and others talk about the idea of a tradeoff. Eliminating filibusters and the motion to proceed in return for some guarantee of amendment. Senator levins proposal is very specific on how that could work. I think you could use that as a starting point and maybe agree to some other changes. That would be very much like what happened in 1975. Part of the agreement and 875 was the put in for the First Time Ever been asked a silly day. Okay we came this close, but were going to put that in the rules. The you could imagine finding a bipartisan agreement. The other possibility is that she get another eager handshake for implicit agreement between reid and mcconnell that there would be changing the way they do things now commented to repeat my willingness to offer amendments and in return, fewer frivolous filibusters. We saw last year a very commendable step in a bipartisan fashion, some that couldnt be confirmable in creating agreements otherwise. The use of old son by all senators and done often not because of objections to individual nominations, but a hostage tape and mechanism has increased enormously in the last few years and finding a better way to run nominations may be part of an agreement as well. I dont its necessarily going to happen come the terror states of the deal that can work for both sides. I would say were over a time, but maybe we have time for one last question. Are we doing okay . Please join me in a warm round of applause for all of our panelists. [applause] and now attacked or a capitol Hill Reporter about senator, Defense Authorization bill. Frank oliveri is a writer for congressional quarterly. The senate has been a Holding Pattern in the Defense Authorization bill that they finally found a way to start consideration of amendments. What broke the logjam . Grandpa had desired to bring in an agreement to apply sixmember rates u. S. Citizen would take in the war on terror on the u. S. Homeland and as a result, he was concerned he would get in time. Senator mccain on the Senate Armed Service committee wanted to manage the bill assured him he would not try to block away and pauls amendment. Ultimately, senator Dianne Feinstein broadened the amendment that senator paul favors that would place some restrictions on the types of reasons you could arrest american edison to not hold them indefinitely and so on. That amendment was approved. Several other notable amendments to the bill. Can you point this out until us the outcome . In particular, the red sanctions amendment specifically would limit the types of materials related to shipping and other things that everyone does. The 10th amendment, but not as tough as with the house would prefer to do. That in fact this past by a large majority. Senator carl levin and senator john mccain are managing this bill. We understand they hope to finish in three days. That didnt happen come as to how much more work is there to do on a quiet it remains to be seen. A lot needs to be sorted out behindthescenes. I believe they would like to finish up by monday and thats pretty much wherever it right now. How superb Defense Authorization bill this year. I was speaking to people in the house side of senior congressional over the end they do not see any major difficulties in getting this done. Last year but at a conference on a nineday thing i was assured that they believe they could do the same this time. So does the look like its terribly contentious. Both committees and houses that were keeping this is a noncontroversial thing. As you know we come to the end of the sessions of any threat quickly. To think ill do it before the end of the year . Absolutely. Frank oliveri writes for congressional quarterly. We thank you for your time. By pleasure. Next, for metallic governor, Arnold Schwarzenegger takes part in a form in politics and hollywood. Housing efforts in the 16 billiondollar shortfall in the housing budget. Another chance to see a discussion of Senate Filibuster rules. Actor and former california governor, Arnold Schwarzenegger joins industry executives to impacts on culture and how industries have adapted to new digital technologies. From los angeles, this is about an hour and 15 minutes. [applause] thank you also much for turning up for this. Thank you. Its an honor to be here. Anyone whos been covering president ial politics and policy in washington and new york, which is that ive been doing for the last decade feels the Entertainment Energy in politics and public policy, but often as a dark matter. We dont fully understand how its effect dean and changing what happens on the east coast, but we have a remarkable panel of the central longtime leaders in that industry here to help explain that to me ntu. We have one regret. Im told jim chairman apologizes for joining us today, but his gun on a creative role with an avatar script, which is a good excuse easyjet. I guess without further ado or that you bring the panel in the first person on here is familiar. Governor short senator. [applause] governor schwarzenegger is our host at any size me not to throw if requested to him. It is somebody whos uniquely came into politics and policy can be staying at the intersection of those things is extremely active in things like this kind of starring in a new movie last january. The next person up is frohnmayer , president of universal since 1995. [applause] and hes someone whos seen the remarkable transformation. Hes been there. Prior to joining universal he was president agency which he founded in 1975. I guess ill try to keep these relatively short because if theres anybody who doesnt need a long introduction is the people on the panel. The next is right and 70, chairman of imagine entertainment. [applause] hes the guy behind shows like 24 and he won an Academy Award for the film a Beautiful Mind. Theres a great new yorker for him which people might want to look out. Its set in there he likes to make movies that are both hip and wholesome fear but theres a conflict between the two, wholesome will when, which i kind of love that. Jimmy iovine is the chairman of of hes got a lot going on. Hes an engineer for folks like john lennon producer chairman of interscope in peace by trade, which is a remarkable these headphones are a remarkable marketing story. Hes wearing his piece by trey hatch that will market to you if you can catch it on your phone. Also a mentor on american idol. The final person out there is rob friedman. [applause] , now. Hes the cochairman of lions gate and producer of governor schwarzeneggers latest. But a long career in the industry was chief operating is very paramount and created summit entertainment, which they are created the groundbreaking pilot series. Hes also very active and he doesnt still have them. So without further ado, thank you so much for coming. We will get rolling. [applause] the topic of the panel is innovation in the Entertainment Industry is sometimes seen not just as a source of innovation in the digital revolution, but also to the tom and the great successes with one of the top stories of industry peer grapevines that the figure in things like out. When being hit by kids at thy sons and hits on youtube. After this to you first activate studio. First of all, anyone whos buying our product, we are a content provider. So anybody whos licensing, buying our product as a friend. Any of the new innovations works to our advantage. The important part is they get paid for it. But its something we are getting paid, mostly are getting paid for. You are one of the most successful executives and much more. I wonder whether this license learned he seaplane out to film. In 1999, the entire record industry was terrified of Silicon Valley and the spaceship became getting music for free. So i was curious. I come from a music background, so i set im going to talk to one of these guys. And it woke me up. I went to tattoo last august, one of the founders of and i gave him a 20 minute speech on how this is impacting the lowest hourly people and investing in an Artist Repertoire and development. He looked at me. He was a nice man. He said jimmy, thats so incredible, but not every industry was made to last forever. I said chairman of universal music group, how did it go . So anyway, i realized that at that moment we had to do something to augment our business because i realized at that moment he was going away and we couldnt just wait with Technology Industry to do something to help us. It takes a very long time at dealing with this problem. But the basic facts are in 1999 the rate 36 billion. Today were at 18 billion. Were not going to get to 36 billion selling on itunes. If subscription doesnt hold the record business. Were there lessons the Film Industry and if you that youre never heard this language before, so i wont repeat it. From the situation of the Music Industry, we witnessing a car accident or train wreck, so we were on the verge of wringing our product to the dvd market and as an industry, we took a bit of a pause to make sure the drm same protection that we needed to release our product to these new devices was at least as diversity could make it at the time and that would encounter guard a industry that did not want protections. They wanted it universally able to be downloaded and consumed. We waited a long time industry before we allowed our product to come out on dvd. Piracy is a giant, giant issue, but we have implemented all sorts of activities to try to pirate on an ongoing basis. We absolutely learn from watching what happened. He took a fair amount of heat for that. There is people saying that the industry was moving so slowly. Are ice is melting a lot slower than the music i guess. I feel the same thing that robyn jimmy 10 years ago as creating another as to whats going on in the music business in parallel implications as i would participate in these antipiracy meetings that im still a producer. It was the only producer they are, but we just be under group that never really do much about it. But it does affect the mass. Is also at that shift has played into politics in a way that those covering the president ial campaigns have been straightforward, which is the money and with the power has shifted from los angeles to Northern California at least in part inside the democratic party. There is a list of Barack Obamas largest floating through week ago. He ran through you receive for first time for Technology Executives then there were studio executives and some executives. Their interests are not always aligned. This phase of her piracy laws to this year for the first in Silicon Valley one very convincingly. I wonder if you see that powershift affect senior industry. Other than saving you. Research may have our money than we do. In the short period of time to master Great Fortune in Silicon Valley. Piracy is of course a major issue and i think we are all in one form or another together looking for a solution to it. But i dont feel affect by. Theres a lot of pluses. Their search many advantages in the marketing and communication with audience good and bad. I think theres a lot of advantages to that. Which sat to find a way to write together. At the moment we are not a competitive business. We have to find a way to have a symbiotic relationship. D. C. Tension between the people on the content and the platform . I guess ronnie said, we are in the content business in the thing about the technology is its always going to be starved for content. Its an outlet for us and we are seeing different viewing habits on different devices based on age and experience. So now, as ronnies has come its a symbiotic relationship. They shift the issues we dont have in common, one of them being piracy. I wasnt sure if you are i guess one of the Big Industries out there and nothing that celebrated these changes is the oppressive social media, which is where the a lot of the time. Covering politics you see political campaigns competing as producers of content with people like me in the news business, folks like you in the entertainment business competing on the same screen at the same time in the case of the Obama Campaign producing highquality content for games is helpful for out here. Im interested in the shift towards social media, facebook and twitter has affected marketing have everything you guys do. I think its an interesting example of that. To try to address both questions, Silicon Valley and Technology Industry and platform industry, i think where the solution. Were starting to find that more and more. We are what differentiates them from each other. Verizon and at t. How do you pick a phone . Word is my sons girlfriend that . Thats how . Thats how he picks the service provider. So it knowledge accompanies usually outside of apple ever read where he founded it are culturally and not. So they had these platforms, twitter, facebook, but content is provided by the consumer. The user generated content, all of it. He said that you watch them on their own when they dont spot if i am rhapsody about these things and they are utilities, but they need culture. Its a service that has to project culture. We have an enormous advantage. Take you to the google cannot take apple to look at amazon and microsoft. If we unite as an industry, we could save for one of those companies and you know how much leverage we would have on each one of those companies . Takeoff and music videos off of youtube right now and the user generated content. What happens to you to . A lot of cranky people. So we have to be smart about this and not be intimidated endoderm platforms because we have what people watch. Facebook is great because the content is buy out the people here, but these other places need content and we have to know how to manage how we push it out. We just cant handle it do. But by 20 cents from youtube, 20 cents from microsoft that their strategy. Thats not a strategy. Were going to lose if we fight that. Theres a reason why the record industry doesnt control the User Experience on our own videos. He has 70 years of saying someone else does that. So i was just trying to prevent marketing concept. I set all these people advertise everywhere. Hardware companies are so intimidating. Is that im going to make a piece of hardware and tell it to our culture. I bet i can make a piece of hardware as good as they did because they make all their hardware in china, right clicks and they are creating it. Most of the technologies done in china. Heres a driver, heres a mick jagger. You know, thats what its like. So we built the best headphones in the world. Took us two years to make one and the money market or culture that we build and control. Do you think that wouldve been possible in an earlier media era . Welcome email come it took been scared to death to be motivated to do this, right . Stars look at the record industry in spain for two myers house and there is people all the time. Im not the record guys that gets invaded. I went there and somebody say gee, you know, it was 2002 and im really sorry about your business. Flick were talking about my grandfather dying. If it meant, that doesnt work for me. I used to be in the coal business. How did i end up in the same . I said im going to do Something Else that caught doug morris said you know what, if theyre not going to pay for right now to buy her music, maybe i can figure a way to charge them to listen to it. And thats how the headphones started. [applause] icu applauding, but i see the theres a sincere different successes and mistakes from the user industry other than the headphone thing . I think what robbie said is true. You know, the disadvantage to visit his nice house that you can listen to that everywhere and you can download it quickly people are used to having that ask for nothing that goes into the radio. Theyve always got me sick for no money with little money. You know, a movie you have to concentrate on. You have to Pay Attention for the hour and 45 answer to our site of the film is. Downloading this little harder to do. Theres a lot of lessons. Unfortunately soon as we learn a lesson, someone comes along and beats us that it. Its much easier to steal it then protect it. So we have to get smarter and find ways to make our product more entertaining, accessible, affordable and more interesting in many ways. Its not an easy thing to do. Our audience is not looking to steal it. We have to give them a reason to buy it. Said to shift from the policies and innovations that transfer administrate to delay the industry affects politics and policy my brother. There was a cover story new York Magazine not long ago, a note to hollywood that concluded by a liberal right that we owe my small measure of our success to Propaganda Campaign of a tiny disproportionately influential cultural elite, basically thanking hollywood for putting conservatives, ignoring conservative critics, going ahead with proand environmental programming and in this case view, joe biden bbq who said ella grace was a central theme in changing gay writes. Youve made movies and Television Programs and when it comes to minus 24, which got people used to the idea that what president. I wonder when youre producing it, whats the thought process . To think the impacts of the culture and politics . On that particular thing we did, we got through it can thought it would be interesting to do that and could expand your corridors on an ability to have an openminded point of view about how the vote in the future, how they see things in the future. On that particular one of his political. A lot of the movies i do of the ones i like are social and cultural which is a miniature for example and for example an apparent hit tv series for ticket with aspergers syndrome and in the same way with a Beautiful Mind what im trying to do is to not case destigmatize mental disability to the best ability we can and a message for them in the same time be entertaining and engage people. And also theres other examples. Genii also produce a plan together. The point of view there was that jimmy had a narrative and i had a manifesto that night was a kind of felt that hiphop is being perceived as a subculture and i thought if i could find a way to unify and prove that it was a subculture, and how the establishment and have it be introduced into the lexicon that way, it would interest me. So if theres anyway to elevate peoples point of view culturally artistically, thats something im excited about doing. Jamaica me produced a concert in philadelphia. Isaiah concert in philadelphia. And almost townsite producing it. You caught it made in america. I wonder if that was it was called made in america and it seems like it was some part from bilingual staff about project Team Division of america. Jimmy also a producer jc can speak to it very well because hes been doing it for at least 15 years. I think what we were trying do was to show that were going through revolution right now and that the revolution is about tearing the walls down and that everybody, you know come you dont go to record shops any longer. He put the map session we dont go to hiphop and you dont put a rock n roll. Everything is accessible to the internet and theres a unification with all these kids and they create their own message and there arent any walls. Jimmy, and the free to that. With hiphop in the 80s and going to the 90s, i noticed a lot of the children, their parents are friends of mine letter from brooklyn or france or whatever. One common thing they always say to me is theres many fewer racial barriers than there were when we were kids. You know, im not saying hiphop is the only reason, but i think hiphop helped an entire generation communicate better and understand and accept each other the way music never did before. There was no town, but there is still white and black. When hiphop impacted, one of the big thing this was the movie eminem and that her tray and jc is a brought together kids of all cultures and a way that it was so unifying, but also to do something together. It wasnt just listening to the music. There was a movement, an attitude. Which you see right now is the electric pants that meant a lot with hiphop along the path of itself bringing the same kids and seeing communities and festivals become one thats incredible thing to watch griffith show braindead has all Different Things in it. We wanted to have all different genres of music. But what it takes to have the vertical beat is to jcs perspective. If we can ever created, a lot of its going to be in postproduction and the concert itself one from the narrative, but is there such thing as a hiphop amadeus and see it through jcs perspective. States hand. To forget to promote stuff, im doing it. This earlier thesis that liberals that theres a Hollywood Campaign on certain values issues thats really change the country . I think there are plenty of movies that are conservative in how wholesome values inserted ground the whole spectrum of what we want from our society. I mean, many of us in the film and Music Industry may have more assertive liberal cultural views of our own. Some yes, some no. The governor. A little bit on the other side. I think we have a variety of which are to produce and communicate. One of the issues of the films for decades have address is Environmental Issues, climate issues. When i was reading up about it, the lorax is a dr. Seuss book about environmental degradation that you made into a film this year. But in 1995 apparently the National Wood flooring manufacturers assist haitian published a rebuttal to the lorax called a true act about how good the logging industry is for forest. I wonder what the thought processes in producing a movie like that and how deliberate it is. Crystal a contrary really an prior to making of the top or seuss book into the movie was very conscious environmentally. Certainly believed it would be commercial and was obviously very commercial. He believed there was a good positive message they are. My wife the environmentalist thought all the way. She said this is a movie that could educate children about the and the dangers of not paying attention to what going on in the local universe. So i think the studio we are fortunate to be recipient does. I would tell you that chris a letdown. Was an inspiration for bringing that to life. As you said its been around a long time with that those of us making dr. Seuss films out of his books frankly never thought it doing this movie. So we were smart enough to get in business with chris undistributed. But no one up to that time ever thought of that and the cat in the hat. We did the grinch. Weve all found ways to do, whether it be television or movies, dr. Seuss related projects and on the spot to do the lorax. As environmentally conscious as we are, i dont think any of us had the inspiration to do it. If theres any others coming, the leader sees this very political. Governor, Environmental Issues are one with it despite hollywoods best effort, people who want to regulate Carbon Emissions are basically losing the war of Public Opinion part of the story several years ago a turn. I wonder is that hollywoods failure . Sometimes the culture changed. I think the power of films and television is much more powerful than politicians ever can be in convincing the voters out there of going in a certain direction. Ive seen for instance when we used to promote fitness, i was the chairman of the president s count of unfitness and they were debating the policy and every school should offer an average of three times a week with 45 and the training, how much money should be put aside. Then all of a sudden came out the movie saturday night fever and disco and John Travolta looking handsome with a white suit on and have another gross convincing. Around the globe, they open up discos. There were more within one year than anything you can imagine. Even in my village of austria, they were to discos in the same year. So there was the young kids dancing and dancing and they figured out eventually the amount of people participating in how hip disco dance team became, the amount of calories burned off with all the policy debates in washington couldnt come close to what the calorie count was deeper and often at the same time having a great time. Government was involved. No break in relations whatsoever. Heres the limit, but you can bring none of that. They went and danced and burned more calories than any kind of a fiscal fitness program. It shows you the power of one movie every seen it over and over and environmental causes being promoted. I dont cost so much the last if someone is gay, we tolerate. Its not like youre promoting a lifestyle, you just except the person. If someone is an environmentalist, except. Someone who smokes, except that person. It has to be openminded. Hollywood has contributed to thought towards that. So when it comes to the environment, the question you asked, in a time of economic downturn and a worldwide recession, and the most important thing is to get a job. I think that will always be job creation rather than Environmental Issues if you know eventually someone would figure it out for california has done is created the jobs and at the same time protected the environment because there is a total relationship and also protecting the environment. Building the biggest solar plant, guess who is building not . Thousands and thousands. So these are all projects when you redo buildings to make the more energy efficient, chancellor merkel came over from germany and asked, how did she get the Unemployment Rate improve the Unemployment Rate that quickly . She said they immediately made a decision to whether i saw the homes in germany. Thats Energy Efficiency rate their future but all the people back to work and from the 3 as the kinds of things you could do. Picking people up the Inconvenient Truths at one point was that movie and avatar sometimes supposed to be that movie. Do you think theres an environmental movie to change peoples minds . The Inconvenient Truth is screaming loud for a sequel because the Inconvenient Truth has exposed the problem, but it is not ever really told us about his dissolution. I think the next step one has to do is people are waiting for a very important project as avatar with a convenient truth, other films are very good because no matter how you put it, as i said in my speech, people dont care if youre breathing republican era democratic era. People just want to breathe air. But when they go to the faucet, they want to turn on the water and know that water is clean and not packed with chemicals. And that groundwater is claimed sony turn the fuss it from the protected in every way possible. We got to Clean Environment no matter how we put it. Left or right, everyone is afraid of dying of cancer and chemicals on the ground will kill you. Thats why you seen the cancer. They talk about it during lunchtime about things things theyve done 70 . It was because the people around the area were dying and getting sick much more so than any other area. It was very clear the solution kills people have a hundred thousand people in the United States die every year. Its inexcusable. I think our political leaders can do better. Forget about arguing left or right. They should just solve the problem, end of story. [applause] have you talked to al gore about the sequel . [inaudible] were going to be taking questions from only. There will be stationary microphones in the aisles if students want to start thinking about questions. I guess continuing on the intersection of entertainment and public life, if in your career feature a Straight Line there and felt that was if he felt like the governorship was a logical progression from the movie finished the movie serological progression that. I dont know if its a logical progression, but i feel maybe a little different than most people because as an immigrant when you receive in a place like that with all the opportunities, as soon as youve made it a little bit, you feel like how can they give Something Back . Ive always had that kind of need to get Something Back in the president s council on physical fitness that was the chairman for bush and for bush senior in later on really heavily involved in the Special Olympics and then later on starting the Afterschool Programs in california to get 500 million for programs. That was the debate also with the conservative state. In the Afterschool Program its a great investment because the juvenile crime and putting them in jail costs much more. So they voted for it. So weve had great success, but it was felt i wanted to give Something Back. So when the recall came up from attacking about the power of the movie business, i dont think i wouldve ever one if i wouldve come from the movie business because that tv domain recognition in politics and movies you need the name recognition. Very important. You need to be likable unbuckling and made movies that i was likable. The terminator not so much, but even not actually was very accepted. But anyways, the movie industry helped me to run for governor, to have the name recognition, the likability and i won. Way ahead of my other opponents. So theres a relationship is the greatest honor and pleasure to step into that job and to serve the state for seven years. I will go back to the movie business and thats why cincinnati mens was one of the great believers if you win in became a farmer can afterwards. I think its cool to do that. You just go back again and do what i did before. Im having the greatest time being back in the movie business in it the greatest time in sacramento serving the people. To put you in the sky, does it change the identity of the star . Worst movie stardom at such a higherlevel than political starting the people dont even notice . Just on the name recognition issue, his new movie is called the last stand. What i call a . The last call. Opens in january. Last night for my company. Landscape. Dnc is the goodwill that the governor built as a performer, as an actor to carry through his governorship and continues to carry on in his return. The audiences cic continuous identity . Yes, i think the abrasive personality or the abrasive person and what he stands for noble man life, but on screen as well at the state and what he does as a performer. The enjoyment and entertainment he brings to the screen. Earlier you said hollywood gives us much away as any other industry, maybe more. And you can miss miss a set with the folders from your Special Olympics word meanings. I think sometimes some of you guys are a publicly traded company there is an investment of time and money. I wonder, how do you justify that . Not just is doing good, you know, which is obviously itself, but how do you justify it as a business. I think its not just are companies that contribute, but we as individuals. Everybody dedicates a lot of time and money and energy to charitable work and public service. Express them through the series, and this week i look at a rough cut that my son riley actually experienced when he was going to a normal public school, malibu high, and i found the Perfect School outside of malibu high for him to go to. Which took ten years to figure out, and one day i said, id like you to go to this particular school and i think youre going to really enjoy he was facing a lot of difficulties with it, with his disability, and he said i decided im going to run for office. I said, well, what office do you think youre going to run for . I was thinking treasurer, secretary im going to run for student body president , and his class was 800 kids. And the best and the brightest, smart kids, and he ended up winning. [applause] it was the most emotional moment that id had ever perhaps, because it was lifechanging to him, it affected his self image in a way that was so profoundation and i let him stay, of course, and serve as president of malibu high, and it was something just something that changed his life and now we were able to do an episode that almost replicates rileys experience and you get to help people and destigmatize mental disable and empower kids and parents that need understanding. And to the extent im able to do it, the extent look, other artists do this all the time. You find a cause, a subject, its either personal or something you really care about, or happening to your family, and you get to express it, and you get to find a narrative or a vehicle, and it Beautiful Mind, i found a different story about michael lauder, who was schizophrenic, and then i serviced the same goal and found john mash. So artists are doing this all the time, and ive just been fortunate ive been able to express it in me Television Series and movies. Do you think in this transformation of the way families have been portrayed, interracial companies, gay couples, is that something where hollywood led the way . No question. We did Brokeback Mountain and people thought, why would you make a movie about two men and their relationship in such a kind of serious poignant way. We believed it was the right story to tell at the right time. It obviously turned into a huge success, and treated importantly. But i think films like that, as brian said, you do those movies, and i think its great when it works, but i think they but we certainly do everything. I think all of us have done this before. Sometimes it works for me. We do something that makes a social impact, whether with family or events. For us, for me, the most important film i was ever involved in was in 1993, a lot of people involved in make that film but the story that was important to tell and it was about heroism and what people can do in the worst of circumstances, and i think we have a chance, as an industry, not always, because we in order for us to come back and fight another day we have to make hits, but you have a chance to tell a story that can make an impact, i think, on society, and on the way people think and feel. So i think that hopefully we do more positive than negative, but unfortunately in a business trying to entertain people you probably get a little of both. 1993 was a great movie that did well but not the biggest hit you made. But another kind of satisfaction you get from it . The satisfaction is beyond blow. Such an important film. Makes you proud to be an american and proud of what people can do in the worst of circumstances. It was a success, and thats the nice part of about it. When we agreed to make that film, it was made because it was a story that needed to be told and told in the right way with the right filmmaker and the right production company. So when Something Like that works, you all take great pride and feel quite good about it. This is maybe more a question about brokeback, but my emprecision is when you took over in 9 5 there was still a vocal conservative movement that would occasionally picket theaters, there were morality groups that were after hollywood and i think thats faded. Is there less political heat in doing these things . You never know what is going to incite a politician or public outrage. You do your best not to cause that kind of controversy, but on occasion you do. Go back and think about films like guess whos coming to dinner. Films like that were really important, and wasnt one of ours but a film like that is usually important in shaping opinions of society and how people feel and think, and schlinders list educate people. So i think its i think all of us as an industry take great pride when youre able to make a difference and make money at the same time. Obviously were in the business of making money, and you have to be very concerned about doing that. I think were all looking to be as responsible as we can for it to come out that way, and the different degrees of what is responsible and what isnt. Do you think that hollywood has won the kole temperature war won the culture wars from guess whos coming to dinner to broke back mountain. I dont know we won the war but we continuously try. I think as a country we have come such a long ways. I have four children. I try to explain to them what took place in the south as we were all growing up, and how extraordinary segregation was, and i was in our lifetime. Its not like this was 100 years ago. This was 45 years ago. I mean, its a pretty extraordinary thing when you think about it. And i think all of us, as a nation, try to find ways to educate our families, our children, about what the horrors happened in different times in our life. That was in america. Wasnt a foreign country. And we as filmmakes and distributors, financiers, have an obligation to tell the stories and hopefully make a difference. Anyone else think hollywood is winning or losing . I think that hollywood i always was proud of our industry simply because no one out there raising more money for various different causes and charities than hollywood. I mean, think about it. When you see, for instance, you know, the 9 11, when it happened. Hollywood was the first ones to jump in and start raising money nor the twin tower fund. The first ones to have a fundraiser and raise millions of dollars. When you think about the whole campaign against aids, and Elizabeth Taylor and Magic Johnson and elton john and all these people, from entertainment, music, coming together, and you know, having fundraisers, and raising endless huge amount of money. Hollywood, is always the most generous in putting money up and supporting difficulties. So the rest of the world should look at this community, how active we have been involved in the political arena, you know, putting money up and having fundraisers and stuff like that, or being involved in policy issues or being involved in charitable and nonprofit issues and stuff. Its a place one can be proud of. I would just add to that, throughout history, culture has always been has changed the way the populations have thought, and were just a continuation of that between music and literature and film. We continue to try to educate and inform and change attitudes. I think were probably about 15 minutes left and theres a microphone over there and over there. And so if you have questions, head over there, and while you do that ill take the privilege to ask about things in the news lately. You have been at universal for quite a while and theres been a bit of chatter that you might be retiring and i thought id ask you directly about it. I wouldnt know what to do retiring. I have no plans to retire. I like what im doing, and i as long as theyll have me, intend to stay. So thanks for asking but im not retiring. Start over there and probably have time for three or four questions. First of all i want to thank all of you for coming. Such a wonderful for opportunity for students to hear from people who are so influential of your industry. My question is for jimmy. You worked exclusively for bruise springsteen. Obviously he is on your shirt. I know mr. Springsteen talks about the disconnect between the American Dream and thality. Do you think that has ohill sized americans to where they think they need to take an extreme to bridge that gap between the dream and the reality which is an economically depressed time at the moment. And just generally your experiences how asking me if Bruce Springsteen is dividing people . Im sorry. I should clarify. I know mr. Springsteen talks about how American Dream is often not met with the american actuality. Theres a divide between what we are in a sense promised and what we actually are able to achieve a lot of times, and im curious to know if you believe this is further politicizeing america, theres a lot of discussion of the stream left and stream extreme left and extreme right and not coming together. I cant speak for Bruce Springsteen. Were very good friends, but a lot of about what he sings about throughout when he was whether it be albums like boy porn to born to run or wrecking ball and his overall general america and its true its harder today than it was for my generation, but there are some opportunities, but i think that i think bruce is a very unique character. A real life force. You can always learn a lot by watching him and listening to him, and he is a working guy. When i first met him, he was broke. Living in a factory, and the most impressive thing about him, which ive always tried to emulate ever since, ive never been able to quit quite there he was completely uncompromising there was nothing that anyone had that he wanted to that would make him compromise his art or his position, and he is that guy. So, i dont i mean, i just think that americans are like everyone else, at a crossroads right now, and if you go to other countries, especially in asia and stuff, importing all their students to get educated here and exporting all the brain power out. Its a real problem, and but nothing i can do about that except try to make great music. Next question, please. I really enjoy the conversation you were having about the Entertainment Industry and how it relates to the Technology Industry. I come from an industry that merges voice, the video Game Industry, and i study at the school of cinematic arts. So my question for you and the topic of innovation and the spirit of all this great Information Exchange you do between the Film Industry and the Music Industry, and creative collaboration, what do you think are the big challenges in trying to work more together than the current state of affairs where were all trying to figure out how to work together. Getting closer to what seems like you all have between the film and Music Industry. Go ahead. Sound like im not sure you said made in america. I couldnt hear. I think you should dive in. You know, for me, i think that im learning theres made in america was a manifesto created by jay jayz, and the two days he sold this you know, created this concert in philadelphia, what we wanted to do is film it and turn it into something that would further his belief steam, chines kids with skate boards and berets and we just want to participate in his movement because we think thats what is going on. There arent any bay barriers and you can access any narrative from any location on the internet, and to help nurture that into a bigger platform is just something i think thats what im going to try to do try to find that alignment, and im sure you should speak it to, jimmy. This is your world. Thanks, brian. Narrow the question down for me a little bit. If any of you see i think part of the question is whether the video Game Industry deserves to be taken seriously as an artistic partner to what you do. I think they are. I think were possible and we are applicable, again. Success in all businesses is really about branding, and brand identity, and any opportunity you have from a marketing perspective to take advantage of a successful brand and to try to bring it into a new medium, to create new products, is something that we always try to do. We try constantly to take the video Game Industry and to work closely with them to bring their vision and creativity to our screens and medium. The answer is, yes, sometimes we do it well, sometimes we dont. Youre up. Hi. Since the music and Movie Industries are so prevalent today, do you think it would be effective to implement mandatory course besides math, science, english, and history, throughout high school, middle school, elementally elementary schools, to educate students on film rather than watching a movie with your boyfriend and jamming to music. Funny you bring that up. I was talk to people about that recently. I think whats being taught in school, in music right now, a lot of it is irrelevant. None of them are learning are teaching people how to get into the modern record industry. And funny, i was sitting next to president of your school today at lunch. Usually going to a music course and theyre teaching you jazz, which is nice, but it has nothing to do with actually what musicians do today. Musicians play the guitar or they have programmed drums, but they also completely understand the communication of music, house to communicate it to their audience, and i dont think in college or any schools, any of that is being taught. I mean, i ive been to nyu and none of this approaches the modern record business for the modern musician. You have deejays going out completely on their own, creating their own audience, without a record company. Without any of the things were aware of, because they had to grow another arm in order to evolve, and to create their own business. Now they get paid 200,000 a night and never had a record out. So no one is teaching the modern record business with both the greatness of and it the problems of it. So, i think theres time for a new curriculum in music, and im very interested in that. Thank you. Time for a couple more. Next question. Thank you. We touched briefly on the effect of social media for your respective industries. On youtube, stars are coming out of their living rooms and korean pop stars are shooting to the top of american charts. Live video on youtube. I was wondering if you ask discuss the pros and cons of youtube on your industry and how its actually changing how you guys are doing business. Im not sure that its just youtube. I think all of the sort of social media is having an effect on our basic business. I use we had a ed was our film, and had a million followers before ted ever came out. We were able to a Marketing Group was able to along with seth, treat ted as his own personality. First became sort of the personality and then became a star through whether it became through facebook or whether it was through twitter. He had his own ted had his own blog, and so before the film came out we were able to create this personality that really never existed before. And so when the movie came out, he had as much ted had as much recognition at brad pitt. And thats the reality of it. So i think all the social media has a real impact on how we market things and how we sell our products. Im not sure that but when you see a large i forget i watched a documentary about Justin Bieber who was discovered on youtube. I thought it was extraordinary. I saw a young agent who saw this kid on youtube and convinced his knew let him sign him. I think thats fantastic, and when we were all growing up in the business, nothing like that existed. Those opportunitieser in those are the the Artist Community is receiving but you have giant corporations all over , serving as the next guy, but when a company like youtube does, which is interesting, they have music generated content. Which is they take the song, put up a lyric video and hide behind safe harbor lies like theyre Just Technology and dont understand what is going on and a lot of piracy, theyre selling a tenth of the records they do because after the record comes out, it goes up on youtube and any other blog and gets listened to for free. The record industry and movie industry has a lot of leverage. Ill give you an example. While we were hit with piracy, we were also hit with the degradation of sound of our music. We spent millions of dollars, and musicians spend thousands of hours to make music sound powerful. The conduit for emotion with music is sound. And so we had bad mp3s all over the web site, come come pounded by the little ear bud that came with the ipod, and then commuters made for talk. Most computers, the speakers are facing down at the table top. It took me three years to convince one Computer Company to face the speakers up. Because they dont care. They think people dont care about sound. Thats kind of why we started an audio movement, but what i really tried to prove is how much influence we really have over the tech business. I dont know if you noticed this, but a month ago, apple just one of their ads is now, our ear buds sound better than they did. Thats directly in response because we put cultural pressure on them and they made their computer sound better, and now dell is advertising saying our computers sound better. And people are facing their speakers toward the listener. So we have a lot of influence over a lot of these tech companies, and we should take advantage of that and we should use that to make the experience for the consumer better, and help the artist really realize the request you asked know maine asked me before about bruce spring steen. And thousands or mew its a crazy cultural war ask theyre not getting paid. So thats why deejays exist. They said, screw that, im going to make my own career. We have a lot of influence, people up here. We can get Technology Companies to do whatever we want. Tomorrow we could shut youtube no, january to be frank. We could stop giving them music generated content like that. But the record industry doesnt have the guts to do it yet. You know why . Because youtube will come, google will come and write a idan tick advance and everyone will say, im going to make my numbered. Its it coulding. We have a lot of just in this area but we should make sure everyone in the ecosystem gets taken care of. Im afraid were out of 0 time. Youll have to tweet your questions to these guys afterwards. The institutes directors are going to come up just for a quick minute. Thank you all for coming out. Thank you guys for participating. [applause] thank you. I just want to nancy and i want to thank everyone who was here for the symposium, the launch of our institute, and we hope we teased you with the kind of brilliant leaders were going to bring together at the institute to explore public policy, innovate youressors like you heard from today, and like arnold said, doesnt matter their political persuasion or philosophies well bring the best and brightest together. And id like to invite professor schwarzenegger to join us. To close the day, governor. [applause] thank you. Thank you very much. I want to again thank everyone that was involved in putting this event together. I want to thank them because it takes a lot of people to put Something Like thats together. I want to thank the press for participating. I want to thank the panelists again. I know you are very busy running your companies, and are under pressure all the time to produce the noise and timeouts, and i think its its what the Schwarzenegger Institute is about is to expose students to the best. Doesnt matter the party affiliation, and to inspire them to become great leaders in the future. So i want to thank each and every one of you for your participation, and i want to thank all of you for being here today. Thank you very much. Thank you. [applause] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] s [inaudible conversations] up next, housing experts on the 16 billion shortfall in the fha budget. Then the discussion on Senate Filibuster rules. After that, another chance to see former california governor Arnold Schwarzenegger in a forum on politics and hollywood. The act federal House Administration commissioner was the key note speaker at the center for American Progress forum on the fha, according to a recent independent audit it shows the Government Agency more than 16 billion in the red because of lowInterest Rates and slowrising home prices. Following remarks, a Panel Discussion with experts. This is an hour and 45 minutes. Hello, everyone. Welcome to the center for American Progress. Im julia gordon, the director of housing, finance and policy here at the center and im delighted to see so many people here for this important conversation about the federal housing administration. Weve got a terrific twopart program for you today. First, well hear from fhas acting commissioner on the tee takeaways from this years annual report, and then steps fha is taking to improve its financial position and move into the future. Well then hear from a panel of experts to put these findings in perspective. The panellesses will discuss the role fha has played in the Housing Market since the crisis began, where we would be without fh zoo what past mistakes can be avoided in the future. Our discussion is particularly timely because as many of you know, two weeks ago fha released its annual report to congressment from this report we learned from the first time in fhas history the fund is projected to have a negative economic value. As most people know by now this number does not mean fha is going to be unable to settle insurance claims but according to federal budget rules the agency must hold enough capital to cover all expected claims over the next 30 years, and thats where the report indicates the potential shortfall. That news generated a fair amount of media coverage, and also provided an opportunity for some to engage in what my colleague john griffin in the back of the room has dubbed allout historia. There is nothing that can be termed a bailout and the housing team here has been working for months to try to take the conversations past overreaction to educate folks about fhas critical roles of stabilizing the Housing Market in tough time s. A few of our most recent publications are available in the back, outside the doors there. One is an issue brief that we ever so subtly entitled, fha saves the Housing Market. Some of the findings are remarkable. According to previously unreleased an analytics. In prevented home prices from plummeting an additional 25 and estimated to have saved 2013 three million jobs and half a trillion dollars in economic output and made sure that qualified borrowers still had access to the American Dream even in the middle of what turned out to be a long economic nightmare, and well skis that in more discuss that in more detail in our program. We have a few other publics available in the become as well. Many uauthorized by john griffith. Who is available available if you have questions or comments. Now to our program, were pleased and honored to welcome carl, the acting fha commissioner and assistant secretary for housing at hud. As acting commissioner, he has direct responsibility for overseeing fhas trillion dollar insurance portfolio, which includes Single Family and multifamily housing and insured Healthcare Facilities and also responsible for several of huds rental assistant programs. Prior to her nomination, she served has huds Deputy Assistant secretary for multifamily housing, and before that was president and chief executive of the Bridge Housing corporation. She was also voted one of housing wires influential women in housing 2012, with a very lovely photo, to ensure that we make it through the program, carol will join the other panelists later in the session to take questions. We wont do that right after her remarks. Without further adieu, i would like to introduce carol galant. Thank you. Thank you so much for westing this event. It really is an important occasion to be talking about the future of fha, under the current circumstances, and i am delighted to be asked to be here to do that. I do have a short slide presentation i think would be very useful to ground the conversation for the balance of the panelists. To be sure that all of news the room are essentially on the same page about the facts around the current status of federal housing administration. And julia said it better, frankly, than i could, in terms of one of the main points i want to make, which is that the work that fha has done, prior to the crisis but including in the rampup to the crisis, in terms of access to credit for home buyers and access to credit for people needing to refinance, has been crucially important to ensuring that the economy has started to heal and that he Housing Market has begun to heal, and without fha, a clearly we would be in a much more difficult situation in terms of the housing recovery than we are today. One slide i do want to show, and i dont know if it shows in color there very well is on this point of our market share and what we did and when we did it. And the reason this is important is, fha really had very low market share prior to the crisis. What happened during the crisis was a lot ofwhat should would call, reckless lending, subprime lending, fha didnt go there. The reason we had low market share is many people being sucked into the subprime mortgages during that period of time, and fha was still requiring 30year, fully documented, fully amortizing loans, and so when people could go somewhere else, they did. What happened and its probably hard to see for some of you but starting in 2007, 2008, if you look at the whether you blue bars, those are refinancing. What happened is as the Market Private capital was leaving the market and the bubble was bursting, people who had mortgages with resets, adjustable rate mortgages, they had nowhere to go to refinance. And theres a large number of folks who, frankly, got saved from foreclosure and default by being able to refinance into fha. And then, of course you see the continuation of when private capital left, very few places where people could continue to access credit to purchase homes and those are the pink bars there. Now, i want to say, this is a second important point. The first point is the work that we have done in the Housing Market, during the crisis, during the rampup, was critically important to the economy. The second point is, as this was happening, fha was taking starting to take in 2009 very strong steps, understanding that this was clearly putting stress on the fha fund, and ive said this publicly before, ill say it again, i give a ton of credit to former commissioner stevens, who you will hear from on the panel, for initiating some of the actions that fha took during this team. But if you look at the slide here, the point is the book of business that fha has been doing since 2009, really starting in 2010, when a number of the reforms that fha made started taking hold, is radically different in quality than the book of business that we were doing in the crisis and the rampup to the crisis. It really played out in two ways that i think people need to pay some attention to. These numbers look at what is the economic value of the book of business by certain cohort years. And what you can see is 2007 through 2009, the stream was 2. 8 . The value of the credit losses were 11 . So youre in a clearly negative economic value when you put those together. What happened since 2010 to 2010 through 2012. We signaturentsly increased the revenue significantly increased the revenue to cover the losses and the credit quality of the credit losses for that book of business went down, is projected to go down significantly over the life of these cohort loans. So you have a positive economic value, very strong in the new books of business, and what we are dealing with here is the hangover from the prior year. And thats where we need to focus substantial attention. A couple other ways to look at this, not to go into great detail, but if you look at the credit quality alone of the new books of business versus the old books of business, seriously delinquenty is way, way down, and default, so actually comparing the loans. So if youre two years out, you had a loan in 2008, what did it look like in 2010 . Or you got a loan in 2010. What did it like i like in 2012 . So, comparing twoyear seasoning for these different cohorts, radically different in terms of overall performance. After two years of age, the 2010 vintage is performing four times better than 2008 and five times better than 2007. These are the kinds of measures you can look at, hard data, not protections but hard data of why the new book of business is performing very well for fha and put fha on the long term on a good track. This is a graph that we updated from last years annual report. Different statistics that essentially are saying that in the bubblebust years of the economic value of the fund was down significantly, and the new books of business are quite profitable, given both the pricing increases and the credit quality of these loans. So, i want to take just a minute very high level to talk about the results of the actuaries, and some people have spent a lot of time understanding this and others have probably not dug in nearly as deeply into what the fha actuary is, what it does and what it doesnt do. And i think that this is important baseline to understand, at least for that near term of what were dealing with in fha. So the first thing is this is a point in time look at the economic value of the books of business that fha has done to date. And what as julia said, what this actuarial is doing, its an independent look into the fha business and uses commercially available house price indexes, and Interest Rate projections to protect the performance of the existing book of business over a 30year period, given certain Economic Conditions that are put into the actuarial. And it comes up with an economic value. And what this years actuary says is that, again, over that 30year period, we would be at a deficit of 16. 3 billion. If we had to pay out all of those claims at one time for 30 years was the book of business, and if we had no additional revenue coming in from the new books of business, which we obviously do. So its what we call a runoff scenario. Now, theres been a lot of talk about does fha need to tap into treasury resources in what we call our permanent and indefinite budget authority. I do want to be clear about this. This actuarial does not at all project what happens with respect to our need to tap into treasury dollars. That is done by an entirely separate economic analysis, and, believe me, living by two different steps of Economic Projections for the same time period is not anyones desire, but that is the way this works. We had a statutory obligation to do an independent actuary and to calculate a capital reserve ratio based on that independent actuary, and we have a separate obligation under federal credit reform and federal budgeting projections to use the president s projects for economic assumptions assumptiono determine whether we have enough money in reserve to pay for 30 years worth of losses. And that is the number that ultimately determines whether we need to tap into treasury or not. That number is projected to come out in midfebruary, when the president s budget is released. The other important aspect on this slide i want to mention is all of this is around projected losses over a long period of time. It is not a cash flow issue. Fha has 30 billion in treasury accounts to pay for current claims and run its operations. This is really a longterm projection of the this slide goes into a little more detail and similar slide is available on the fha web site. I encourage you, if you want to keep an understanding of these two different ways that we look at the actuarial projections of the fund, that we take a look at the web site to do that. Three important additional factors about the actuary that i do want to just mention. Theres some things about the results that some might feel are counterintuitive, and there are three many drivers of these actuarial projections. Again, recognizing that theyre over the 30year life of the books of business. The first is they look at how price appreciation and how that impacts claims and default rates. The house price projections used in this years actuarial were done by moodys an an analyts and these are lower than other projects in the market place, and the reason for that is both a timing issue of when they were done, as well as the particular they had to do it in a way that included a lot of refinancing with activities to get an index to be used at the metropolitan area which we needed in order to project the claims based on the fha book of business. So, a little counterintuitive, and probably lower than what most people think is really happening in the market place. The other is that Interest Rates declined from the time period from the actuarial done last year, so this actually drives prepayments out of the fha and could have an impact on the overall book. The last one, which i think is important, is that we not we the actuarial independently refine the model to predict the severity of claims in a much more accurate and specific basis. Actually followed characteristics of the loans, how long they were delinquent, what geography they were delinquent in and used that to make a much more fine projection of claims than prior actuarials have done. So its a positive improvement into transparency and what we think might happen. Now, let me spend just a few minutes to get the panel started, perhaps on some thinking around what should fha be doing, what has fha done about the fact that, frankly, we want to be in a position where we are covering all of our longterm projected costs, plus having a 2 accusation as required by congress. So. So we have taken action already and im not going to review those in detail except to say there are a number of steps we have taken during these past four years that have been critically important to the fha, being in the position its in, and we would be in a much worse position if we had not taken these steps. Number one was getting rid of the seller assisted down Payment Program as the actuarial reports, had we not done that book of business, we would be positive by 1. 77 billion instead of negative by 16point p billion. 16. 3 billion so that program cost fha 15 billion. We made changes in our down payment requirements. I credit commissioner stevens for this indianapolis this analysis, but raising down payments for the 10 for borrowers, that actually, again you can actually look at the impact of that on a positive basis for the projection of the fund. We increased premiums four times, and that raiseed significant revenue. Probably not as talked about as up is the development of an office of risk management. That actually now has and continues to build robust analytic capables to look at emerging trends and problems in the portfolio in a much more timely way than fha was able to do in the past. And thats i will show you in a minute is a very important improvement that helps drive other savings throughout the fund. Two things on the Asset Management side i really want to mention because, again, our beliefs, when you go back to the earlier slide, is the challenge for fha right now is in that people to business so we need to spend significant time and effort to ensure that were doing Everything Possible to make the loss severity of that book of business less, which will increase the overall value of the fund. We have enhanced our enforcement capabilities of lenders. So getting rid of fraudulent loans, for example, and ensuring we dont continue that going forward, has been critical to improving the quality of the fha book of business. The other on selling of notes as opposed to selling of the actual loans as opposed to allowing these loans to go all the way through the foreclosure, has very important economic effect to fha, and we ramped up this Program Starting in september. We did a large note sale and were going to continue that on an ongoing basis for the next year, year and a half, to ensure that we are getting the best recovery on the distressed assets that we have. Now, moving forward those are things we have done in the past. Were taking a number of actions today and will continue to take action to again do everything responsible and appropriate to ensure that we bring in revenue and stem losses of the fund in this stressed time. So again, on Asset Management side, we issued a mortgageee letter which gives directives to lenders where we redesigned our loss litigation waterfall to essentially help stress borrowers reperform under mod fix craigs in