Transcripts For CSPAN3 Unaccompanied Children From Central America 20141106

Capital accumulation in the middle. One of the important steps that your administration signed into law was just making it easier and more automatic to save in your 401k plan. Now the majority of Companies Default people into savings and default into auto escalation in saving policies. Next step is take nearly half the population that doesnt have savings accounts at work and give them access to automatic ira. Thats an idea that came out of the Heritage Foundation working together with brooking. Theres a lot we can do to focus on a positive story to create well. For most families, homes are principle source of wealth. We have a bipartisan efforts to put people in houses from the tax codes and regulatory. How do we go back look at housing policy in a more reasonable way . We want people in homes. Its an important asset for most americans. How do we rejuvenate the Housing Market without creating the same we had before . First of all we should be reforming Housing Finance system, should be phasing fannie mae and freddie mac out. That is a backstop after youve gone through a cushion of private capital. Its a backstop that is explicitly financed. As far as goals and affordable housing, those should be explicits. See where the money comes from and goes to. Youre not making it contingent liability. There was bipartisan enthusiasm in the Senate Banking committee from johnson and crepo following up to do that a. There was a bipartisan lack of enthusiasm to take that idea to the senate floor. You had a good start there. It would have would still be i think the basis of where were going in the future getting there sooner would create a lot more certainty. Do you think we can get freddie mac and fannie mae in 2015 . I have a hard enough time predicting the economy. Im not going to predict congress. It would be good to. Theres a core bipartisan proposal. A lot of challenges. A lot of that is because youre taking cost currently impolice impoli as impolice it. Mike negotiates the tpp asia and t tip trade authority. Is the white house fully behind policies . Is that something you think you can get done next year . Is there a near term macro boost if you can get these done . Were absolutely behind them. Theres probably short term mac co boosts. The main argument is medium and long term structural adding to our potential growth rate. We can argue short run long run either way its good. Im confident that its something we can get through congress. Every president has needed trade Promotion Authority has gotten it. Right now theres an open question. Ambassador froeman wrote about this few days ago about the japanese commitment to types of Structural Reforms. They enter tpp they were enthusiastic making sure we see the follow through we need to to conclude a deal. The one thing we dont want to do is lower our standards, narrow the range just to get something done. This is an ambitious agreement, one if not the most ambitious weve negotiated and cant think of a better person to do it than mike. Is the issue of inequality, challenge of income create obstacle to getting trade deals done . Has u. S. Support for free trade, has that now diminished because of Economic Trends weve been talking about . I think it has but hasnt diminished to the point it would threaten getting something done. Ive talked to senators who considered themselves life long free traders and are getting more skeptical. You see leading Academic Research from researchers at mit and elsewhere who are finding that trade with china really did play a big role in the reduction manufacturing jobs since the year 2000. We have to be quite frank about that. I also think this is something i explain to progressive friends. We have to distinguish between globalization which is a phenomenon and particular agreements. We have high standards, high environmental standards, race to the top. In that way, they actually help deal with the challenges people face. That can be confusing. Thats a difficult message to get across. You saw the governor on the stage. Before he became head, he was ibf. If you google financial globization and find work hes done years ago. Were doing work of our own. Its caught up in the globization debate. Its seen as bad, a negative force. How do you think about financial globization given the flows since the crisis and has it returned to precrisis levels . I think the right question is how do you best take advantage of those financial globalization and flows . In many ways its been a good thing. A lot of flows we used to have were aid. They were replaced by Foreign Direct Investment. It increases productivity growth. Its been a period last several decades of enormous tushs lens from crisis to crisis. Its been a period when you take those crises, average growth rates have been high. If you were in those countries youd rather that i canning the growth rate for 1960 from 2010. The question is what you can do to have the Growth Without the crises. Theres some types of steps. In some ways you can look at places like imf. Thinking has evolved from completely free Capital Movement to understanding it. In some circumstances, some c s constraints can be stabling. The other idea is leverage. If you look at the u. S. Economy in the 1980s, debt was 150 . 1990s, 250 . Up to precrisis as high as 350 . We had a long era in the United States of good solid growth. It came at the expense of higher leverage. I think martins book hits on this. We have a credit bubble thats always rashing up. Can we live without leverage . What is that going to feel like . Will the political economy allow the u. S. Economy to grow 22. 5 in a non leveraged environment . We have seen deleveraging our debt to gdp that has fallen from the high. Its still well above what it was 15 to 20 years ago. My guess is its going to continue to rise. Youd like to see it rise at a slower pace and see it matched by the asset side of the balance sheet. Theres no question that leverage a lot of you know, n create the combination of risks that made this crisis so much worse than the Economic Situation that the country faces in 2001. There you saw a broad burst of the stock market bubble. You didnt have leverage as the extra ingredient. And it resulted in lower consumption growth spread across the board, lower investment growth, and a relatively shallow recession. Lemplg can be much more toxic. Thats why trying to deal with it at the household level, the corporate level. We have a tax rate on an integrated basis minus 5 , on equityfinanced investment its 30 . That disparity is the largest of any country in the world. Its inefficient tax policy. We should move closer to equalizing those so at least you dont have taxfueled leverage. You mentioned investment, corporate Balance Sheets are incredibly strong in the u. S. , another positive aspect. Theyre flush with cash. Why dont we see more domestic investment . Its certainly the case that investment hasnt been the shining bright spot we might have hoped. It has picked up. If you look at investment growth in the last four quarters its been faster than it was in the eight quarters before that. Its part of whats sped up our Overall Economic growth. I think an oldfashioned accelerator model, frankly, enplains a lot of it, which is your investment doesnt depend on your cash flow or cost ofal but the demand youre facinfaci and the biggest factor in growth is consumer spending. As consumers spend more, businesses will see more reason to investment and well see more investment. Theres probably other factors. U uncertainty im sure is one of them and hopefully were bringing that down. Were going to turn to the audience for some questions. Let me just ask you about the external environment. Lots of focus on europe in the last 48 hours, germany in particular, but but there is the potential of a third recession in europe in this cycle. Is it something you worry about and worry about in the west wing . Anytime the imf tells you theres a 40 chance of a recession in a Major Economic area, in this case the eurozone, you have to Pay Attention to that. Thats an unacceptably high risk for a critical part of the world to face. And theres tools. Most, you know, structural forums can be part of that equation, but most of the dials you have, if you want to take that percentage, which the imf puts at 40 and bring it down, most of those tools are aggregate demand, and thats Monetary Policy. Youve seen them be very creative about it. The good news on fiscal policy is countries are contracting less quickly next year and the year after. The bad news is that the countries are contracting next year and the year after. And just textbook economics would give you a very different answer to, that especially in the types of countries that have fiscal space, especially in the types of countries that are beyond what, you know, the European Commission worries about in terms of current account surpluses and those types of imbalances. Any of those countries have names youd like to mention . Certainly i would observe that germany has the largest current account surplus in the world. It has an economy that has had a string of weaker data and certainly would benefit enormously from fiscal investment in areas like infrastructure in a way that would benefit germany and its partners. I think theyve heard that from a variety of voices over the last few days. Lets turn to the audience and get a couple questions. Right down here. Near the front. On the inequality topic, you talked about education. And ive seen a lot of innovation in things that seem to be kind of starting to get figured out on the College Readiness piece, but fundamentally i guess about 75 of the population wont go to college. Im wondering if theres any innovative thinking or examples around the world or things youve been thinking about for the broader population as it relates to workforce readiness, training, and helping there. Yep. We actually are getting a higher fraction into college now, but youre certainly right naps not the answer for everyone. Thats not the universal solution. I think Community College is a place where we actually put some of the First Federal investments. And a lot of those investments were designed to catalyze partnerships of local businesses, local Community Colleges, nonprofits to train people in a way that could more directly link them into jobs. I think the Training System as a whole is really critical. The important thing to understand in the Training System as a whole and im going to get these numbers wrong but its going to convey the right impression we spend about 10 billion a year, the federal government, on training, businesses spend 500 billion a year. So were a tiny piece of the overall equation. Were much smaller as a share of gdp than most other or maybe this any other oecd countries. So we can improve our federal training, but, you know, a lot of what we need to do is figure out how to use the resources we have to help leverage, catalyze, convene more, for example, demanddriven training by the private sector by Community Colleges that have other sources of funding. If you had a plumber or electrician at your house recently you know those are good, highpaying jobs. Right in here. Thank you. I come from india. Were very interesting to read a lot of media on the grade in u. S. On the future of u. S. And i dont know whether you have a policy take on that or could you make any comment. The credit agencies globally in many other countries are so, when we listen to whats the debate in u. S. , should we change our policies in other parts of the world, particularly for india . So anything youd like to share . My first e job in washington was at the usxm bank. I think they play an Important Role in the economy. What do you think . I didnt know you worked there, but im not surprised to hear you think that. I think they play an Important Role in the economy pip think its frankly shocking that theres a large faction that wants to abdicate and a very Cost Effective way to promote american exports as well as to help our companies and countries around the world. I think youre certainly right, its turned into quite a big debate and quite a flashpoint. We were able to temporarily extend it. Im quite confident were going to be able to extend it and that cooler heads and rationality is going to prevail on the issue. Great. Right here, please. Then well come back over here. Thanks. Assuming that congress is not going to approve more money for a boost in ift, is there any sort of workaround for the administration either to spend other money or to catalyze infrastructure through some sort of incentives in the private sector. Right. We cant spend money unless Congress Authorizes us to spend that money. So theres no dollars that we can put into anything without that. There are certain things we can do, for example, trying to, for example, speed up the permitting process on infrastructure. Its something weve done with a number of demonstrations. Were taking the lessons we learned from that and applying it more globally. Were trying to do what we can to attract and interest private investors in the United States. The treasury had a conference on this recently, a lot of highlevel investors there to talk about infrastructure and what the barriers are. Weve set something up at the department of transportation to try to create different types of model contracts and other instruments to help with Public Private partnerships and to help both educate states and localities about many of the benefits of them but also investors and facilitate some of that. So were trying to do what we can, but i think we have to be realistic that the most efficient thing the federal government can do is borrow at 2. 3 and invest in infrastructure and we need the permission of congress to do that. The second best thing we can do is a lot of it is at state and local level in terms of whether or not you can have these types of p3s. Certain amount of leverage we have. You mention infrastructure, which makes me think of energy. Last month ive been in mexico and canada, mexico, because the constitution changes, incredible optimism about the Energy Sector there for more exploration and production. We see in canada also enormous reserves, having to challenge how theyre getting it out, going west or east because they cant come south. Why cant we have an integrated Energy Network or infrastructure in north america . Because potentially north america could be Energy Independent. I know weve been saying since richard nixon, but there really is the capacity given Unconventional Oil and gas in this country and whats going on in mexico and canada to have an Energy Independent north america. Were getting a lot closer. Were importing 12 Million Barrels a day. In 2006 people thought that was going to rise. Its fallen to 7 Million Barrels a day and thats partly that were producing more, partly that we are consuming less. Under nafta, we have free trade in energy with mexico and canada, so we already have quite a lot of energy integration. Mexicos Structural Reforms and their opening up of the Energy Sector are i think an important reason why. If you look at this, they downgraded the growth rate of pretty much every major emerging economy in the world relative to what they thought a few years ago except mexico, which got the lucky distinction of having the same growth rate that the imf had projected a couple years ago. So i think youll see more integration, but, you know, you didnt mention any particular pipelines, you know, for certain things. We have to look at the question of what it does to carbon emissions, for example. What about expormts of energy for the u. S. . Gas, i know theres enormous interest in japan to buy u. S. L g. Theyre buying from other places, qataris, australia. Where is the west wing with respect to Energy Exports . When it comes gas and oil are under different statutes. With gas it is a casebycase process. We have to look at what it means for our economy what it means for our environment, what it means for our National Security. And youve seen us approve permit after permit after permit. I think weve now approved permits equal to Something Like 30 of the worlds lng to be exported from the United States. Weve expedited that process. Theres two steps in it that we basically collapsed down to one. As i said, National Security is a part of that process. And the National Security considerations frankly are different now than they were a year ago. Oil falls under a different statute. Its something that, you know, weve take an look at and will continue looking at. Great. More questions from the audience . Well, let me ask you i know youre not in the Political Part of the west wing, but if you look at the polling on the economy, despite a recovery, despite a falling Unemployment Rate, the president is not getting much credit. I know what that feels like from other administrations. Why do you think that is . Why isnt a better economy showing up with respect to the attitudes and views of the average american . You were certainly correct when you said i didnt know the answer to that question. But, you know, i think the typical household has an income lower today than what it was 15 years ago, that the Unemployment Rate is a lot lower than it was in 2009, its come down faster than anyone expects, that the United States has had more job growth than the rest of the rich world combined even though were only onethird of the population. All of that is terrific. But at the end of the day, theres a very severe challenge in terms of incomes, and i understand that frustration. You know, i relate to that frustration and thats what we need to you know, why we need more growth and why we need better shared growth. The middle class in some of the polling shows that the optimism that weve seen in the past where one generation believes the next generation will have a better life, so those numbers have flipped. So again, we go back to the west wing. The president calls you and says what can we do in a concrete fashion . The Vice President s worked on middleclass policy issues. Is there more you could be doing and want to do and will do in 2015 . Look, i mean, theres things that are direct. If we raise the minimum wage, everyone who made 8 an hour now makes 10. 10 an hour would know exactly why it happened and know who to thank for it. Then theres other things like reforming our Corporate Tax system. We have the highest Corporate Tax rates in the world. We have a very narrow Corporate Tax base. We have an International System thats deeply broken. It basically collects almost no revenue on overseas income while imposing substantial distortions. Thats an area where, for example, theres a real opportunity to Work Together. I dont know if the day passed if our poll numbers would go up, down, left, or right. I have no idea. Whey do know is we have a stronger economy, and when you have a stronger economy people will be more satisfied. Soy think you need to do the types of things that people see and know about and help the economy and you need to do the types of things people dont see, dont know about and help the economy. Try one more time. If not, ill ask the last question. Great. Well, its simple. What worries you most . What keeps you up at night . Id say the potential growth rate for the United States and for the world. We talked about a little bit with Robert Gordon and the United States. Right. I tend to be on the more optimistic side of the spectrum, but im not certain. And i think an awful lot follows from whether, you know, we can grow at, you know, 2. 8 a year or 1. 8 a year. Those are compound pretty quickly to pretty large differences in standards of living, pretty large differences in our fiscal outlook, pretty large differences in the amount we can afford to invest and innovate as a country. Then i look around the world and i think thats even more acute. If you look compare the wio from four years ago in october 2010 to the wio now for the advanced economies theyve downgraded mediumterm growth by a tenth. For the emerging markets and developed economies, theyve downgraded it by i think it was a point and a half. Some of thats china, which everyone talks about, but its also virtually every other country with the exception again of mexico. And so i think what we can do as a world to increase innovation, increase total factor productivity growth, the types of reforms we need to feel that innovation, you know, are the best way to deal with that. This isnt a crisis. This isnt tomorrow. This isnt an implosion. This is just sort of slow and steady are things going up or are they going, you know, more sideways. Great, jason. Thank you so much. Ladies and gentlemen, please give him a round of applause. [ applause ]. All right. Welcome back, everyone. I hope everyone enjoyed their lunch. Fascinating insights in our ceo panel. We are going to get started here shortly. Delighted to reintroduce you tim adams, who you know very well from the iif. Hell host a conversation with governor Raghuram Rajan from india and ill turn it over the you. Governor, welcome back. Good to see you. You hold a special place for me because we wouldnt listen to you and we paid for it. Youre the guy who can see into the crystal ball. I want to peer into your crystal ball in india and lets talk about the future. But i will say the Prime Minister was here last week. He was in new york. Theres enormous enthusiasm and expectations. We at the iif have upgraded our forecast for india Going Forward. The expectations are very, very high. How can india meet those expectations Going Forward . I think the first thing is to bring down expectations. [ laughter ] seriously, think we are in the beginning phases of a recovery which i hope will strengthen over time. Its still an uneven recovery, my guess is this quarter may be a little weaker than the previous quarter. I think the course of this year, we will be solidly in the 5 growth range and by next year we should be solidly in the 6 growth range, and beyond that, i think we will grow, depending on what we do over these couple of years. We have to do our basic homework. The good news for india is theres lots of lowhanging fruit and we have got to pluck them. The big question is why we didnt do it before. But i think theres environment and theres a willingness at this point to do what it takes. What that means i would caution people on is not at this point grandsounding announcements, because thats not what we really need. We need to fix the plumbing. We need to do the basic stuff which will get the economy back on track. From on the real side, it means getting the projects that are stalled going again. It means fixing problems in coal and gas, which are not the stuff of headlines but are quite important. And it means getting, for example, businesses or Government Departments to make payments on time. Right. We have a lot on the Financial Sector we can talk about, but at this point, execution is important. Since you were here last year youve been incredibly busy. Inflation is down and expectations are continuing to drift downward. Youve got a macrostabilization framework which appears to be working. Youve been busy. How do you build on that . And then looking at your fivepilars reform, how do you take those to the next level . So, the inflation path or the glide path that weve proposed has wide acceptance, but its still not enshrined in the law. And what the finance minister has proposed in the budget is that there will be a conversation between the government and the reserve bank to create a more structured inflation framework which will then give us explicit objectives, a, you know, Monetary Policy committee, and all that. So thats going to be discussed over the course of the year. But for now, i have what i need, which is a glide path which has at this point i think convinced the Financial Markets that we mean what we say and will do what we say. Now, apart from that, apart from clarifying the monetary framework, which is one of the pillars we are focused on, the second is creating a more vibrant Banking Sector. We have licensed two new banks. We have proposed to license a number of different banks, what we call smallfinance banks, which will have the ability or the mandate to lend to individuals and small enterprises. The payment banks, which will perhaps more Bio Companies or retail firms that can actually take in deposits in remote areas and send it mobile everywhere. So theres a whole restructuring of the Banking Sector thats going to happen. Were going to deepen the Financial Markets. Thats an ongoing process. It implies bringing in more investors, including foreign investors, into those markets. The fourth is fixing financial distress. We have some distress on Banking Sector Balance Sheets. We need to make the banks come together to resolve those problems and move forward. The earlier they resolve it, the better. The last big item that we need to fix is Financial Inclusion. We need to bring more indians into the financial fold and also lend to most modern enterprises that dont have access to credit. Lots of plans on all these. I can elaborate if need be, but this is really our framework for the next few years. I want to come back to Financial Inclusion because it is on our agenda here. 2. 5 billion adults around the world dont have access to formal financial service. I think theres a great growth story buried somewhere, bringing them into the formal financial services, but one thing you have done is built a high level of official reserves, over 300 billion, i assume some is anticipation of a change of Interest Rates next year. How are you thinking about what the fed maybe planning next year and other Interest Rate Monetary Policy changes around the world . Well, if the fed starts raising Interest Rates, as i presume they will, when there is significant signs of strength in the u. S. Economy, and thats what they have signaled time and again, it will be good for the rest of the world. The rest of the world will benefit from u. S. Growth, and there will be confidence elsewhere. It will create some modernity for the emerging markets, as the imf suggests we have got 550 billion worth of overflows, new imf term, into the emerging markets, over and above what would otherwise go there. So, you would expect some of that to reverse. My hope is that after the initial volatility, there will be differentiation and the Financial Investors will try to see where there is some macrostability, where there is money to be made, and i hope india comes out in the group that looks like it has stability. I am not therefore overly worried about that process. I know well to handle some volatility when it comes, but weve got plenty of reserves relative to where we were last year. Weve got inflation coming down in a substantial way. We have fiscal deficit on a glide path to 3 in 2016. And i think, as i said in the beginning, we are in the beginning part of much stronger growth. Governor trujillo here with us this morning. We talked about macroprudential tools. How do you think about macroprudential tools . How do you think about it in india with respect to Interest Rates . At this point, the primary place where we use macroprudential is really on managing flows. We have, over time, pushed the debt flows in government securities into the longer maturities by asking people who come in to reinvest at the longer end. And that was precautionary because we saw last summer the bulk of the outflows came in the debt markets at the shorter end. So we try to push them out, not because we think people cant sell and walk away at that point but because somebody investing for three years may spend more time reflecting on their investment than somebody who has an overnight or a fewweek position. Its a gentle nudge towards more screening or asking people to spend more time thinking about that investment before they come in. Weve also i think verve buildup is really a macroprudential tool. We are not trying to manage the Exchange Rate. In fact, by many sort of metrics, the rupee has kept pace with the dollar even though our inflation rate is somewhat higher. So, we are not overvalued at this point, but what im saying is the reserve buildup hasnt come at the expense of the value of the rupee. The rupee has maintained its value. So reserves and maturities trying to get longerterm investors i think is part of the macroprudential. Going forward, if credit builds up strongly, well have to look at other macroprudential tools as and when the need arises. I think one of the biggest areas where they have been applied moderately successfully is in the housing sector. If prices going through the roof and loantovalue ratios are falling or rising, i should say, you have to mumbai prices are its pretty pricey. Mumbai is pricey. But, you know, in the cities where space is at a premium, where permissions to build are at a premium, prices are highest, so, new delhi, one of the most expensive places in the world. Mumbai also. But i think more broadly in the country, you know, its more moderate. Over time, what we have to do is expand the supply housing so that house prices rise a bit. Youve had a good monsoon, food prices well behaved, oil prices are low. How do you as a central banker try to see through the volatility of found oil which can vary from month to month, season to season, year to year . Do you try to look through that cycle . And how do you do that, especially with respect to the politics of food prices . Well, food prices have been very high for quite some time, and the first readings of the monsoon were it would be very bad and there were some price pressure there also. Since then, its come to be mediocre monsoon but not terrible one. As a result, theres more expectation that harvests would be good. One of the reasons why its better than one might think the monsoon are the places where theres been liquid rain is the places well irrugated, for some theres some correlation, not perfect. So, as a result, we expect next year there will be some perhaps some reduction in Food Production relative to this the previous harvest, which came on the back of a very good monsoon. But it wont be terrible. I think there are disinflationary forces are under way. One can never rely on oil prices staying low because of geopolitical concerns. But i think the supply sort of increases have been considerable and demand has been relatively weak, so just looking at the demand is up blind balance, there is a rationale for it to perhaps be where it is. I dont expect a huge trending downwards much beyond this because at some point, people stop producing highcost shale and so on. I think that these forces are helpful. The reduction in the price of oil from lets say 110 to 90 adds another percentage point for the year to gdp because thats so much less so much more net exports. So those are good developments, lets see how long they go. You dont want oil to fall too low because that implied mediumterm supply disruptions, pease people dont invest. All together we look at temporary fluctuations, including vegetable prices, but food prices on a more permanent climb upward, cant look through them, we have to embed them in our forecast. The good news there is i think they are moderating, especially because a number of food commodities in india reached world prices. Theres not so much more they can go up. There are supplyside issues with respect to inflation. You mentioned energy, in great demand. Certainly sustainable, dependable energy. Youve allowed the banks to lend for infrastructure. Is there more of that to come . Well, theres a massive infrastructure push, of course. On energy, what we have to do is get the pricing of energy right in india so as to give people incentives to explore. Right. This means gas pricing. This means coal pricing. The incentive to explore and invest. So these are the big issues the government is tackling. What is the appropriate price for gas . What is the appropriate price and the flexibility to produce for coal . I think the next few months, these Big Decisions will be made. And i think that will create a more a much clearer environment for investment in energy, which india needs tremendously. On other aspects of infrastructure, were trying to ease financing, but a lot of financing in india is bank financing. We are very open to other forms of financing from the rest of the world, including private equity, you know, financing that is willing to provide risk capital. But of course, we have to do our homework in providing the environment where the investment feels the project will not be held up for a variety of reasons, that tax rates remain relatively stage and so on. Right. Under australias leadership, the mckenzie study says we need between 56 trillion and 67 trillion worth of infrastructure by 2025. There are issues with respect to the funding from traditional sources such as Insurance Companies because of regulatory changes. Do you think there is a regulatory component to keeping more longterm funding going into infrastructure . If it is, what with can we do about that . Im not sure its well, there is some regulatory component in the sense that the Insurance Regulatory Authority has to allow more investment by Insurance Companies in infrastructure as and when it feels more comfortable that those evaluations can be appropriately done by Insurance Companies. Typically you would assume that for longterm projects Insurance Companies would come out with takeout finance or sit behind the banks with the banks doing the Construction Finance and knowing how to do it. Theres another component to Insurance Companies which is the expansion of Foreign Direct Investment in insurance, which will bring in more capital and allow the insurance sector to expand and therefore bring in more long term finance. So we get both aspects, which i have no doubt will happen over time. Some longterm financing would be available. My sense is we still need risk capital from the rest of the world and i think we should be open to it. But given demographics of india, obviously developing Capital Markets, you have to capacity to funnel, channel savings from the domestic population into longterm investment. So the Capital Market Development Obviously is that key opportunity for you as well. Absolutely. And in Capital Markets, equity markets for big firms is very developed, very liquid, stateoftheart technology. The real issue is with the Corporate Bond markets. Our government Securities Markets are also very liquid, very well developed. We need to increase the liquidity across the spectrum of bonds right now as focused on certain maturities, but my sense is that is will happen. Theres nothing standing in the way. The real place where we need development is the corporate debt market. Now, weve set up yet another committee internally to see what do the committees say we havent yet done . Can we do them . We hope we can do what we were counseled on, but one thing more that we need for vibrant corporate debt market, and that one piece is a good Bankruptcy Court. This why could would somebody invest in risky projects, baa and so on, when theres some chance it lands up in bankruptcy and dont know where they stand in the priority structure, et cetera. The ministry of finance looked at creating a new Bankruptcy Court. There is a Bankruptcy Court embedded in the company law which got into a little difficulty with the supreme court. We need to figure out how to remedy that. My hope is that it will have a solid, well functioning Bankruptcy Court in a relatively short period of time that will have the Corporate Bond market. Ive always heard the phrase capital is a coward. The more you can give it Legal Protection through protected property rights. Lets come to Financial Inclusion and then a couple questions from the audience. I know its priority for you, tell me what you are doing with respect to Financial Inclusion. If you want to reach everybody in india with the big distances, sometimes difficulty in communication because the road network is not that well laid out, you have to work with technology. Often, that means mobile technology, but means tough work with new institutions. You have to figure out a way to create 100,000 branches without actually putting 100,000 brick and mortar branches in place. So this is why we are thinking about how we use a new approach to do Financial Inclusion. How we involve the cell phone companies, how we bring them together with the banks and always doubted as model but we need a model which has security embedded but also has the ability for people to access the wider financial system, not just transfers and small accounts. So we are pushing the banks to work with the mobile companies, but we are also offering the mobile companies an opportunity to get into some limited banking through these payment banks. But theres lots of innovation going on in india, so today, for example, there is a entrepreneur who has done an overlay on existing banks, where by, somebody can go to an atm from their account. They can basically send money to any telephone in the country. That telephone will basically get a number, which they then take to an atm, punch the number in, and get out money. You dont have to have an account elsewhere, so long as one person has an account, he can send it using the atm to somebody else who has a cell phone. There are innovations like this that are coming up, which would allow easier remittances and also easier savings, cash in, cash out, and so on. My hope is that when you couple savings accounts and easy access to them with a unique i. D. , which we are rolling out, with direct benefits transfers of subsidies, do you many things at the same time. First, you bring these guys into the financial system, you give them a reason to have an account, which is they will get the direct transfers. The banks profits, get some share they get a commission for every transfer they make. And then once you have got these guys into the system, they dont see leakages as they get their subsidies. Nobody takes 10 off the top. Right. You dont have to distort prices to give subsidies, dont have to subsidize kerosene. The guy buys kerosene, send some money into his account. A few get subsidies. Not everybody. Now it becomes expensive to use kerosene to adulterate petro. Lots of good effects and you can go on. I think technology and new organizations are key. We need to make them happen. We are in the process of doing that. I completely agree. Lets open it up to the audience for a couple questionings, then ill come back and close. Right down here, the very front. Thank you, governor. United bank for africa. Are there companies, and specifically banks, fairly valued right now in the market . You are asking a guy from the university of chicago. Yes, they are fairly valued. Markets, whatever now, what people have in mind by fair value sometimes is theres a condition. Fair value, given something. And i would say theres a lot of scope for certainly the Public Sector banks to increase their valuations, if the government structure was strong and more transparent, including the range of things that the Committee Report has suggested, separate chairman and managing director, give the managing director longer tenures, strengthen the quality of the boards all this thing if we do valuations will go up, basically because money is safer. Right. Great. Someone else . Out here, please. Yes. Thank you very much, governor. You have touched on the external course, that the fed would start raising rates. The other big thing which is going to be happening is quantitative easing from the ecb most likely. Europe remains very weak and outside of the u. S. , external environment remains very weak. How do you assess the prospect for the Indian Economy given given those developments as well as the idea of geopolitical risks . Well, i mean, what one thing it says money will continue to be relatively easy as opposed to when everybody is tightening at the same time. But it also means we will see Exchange Rate developments, which, you know, its easy to say that the dollar will get stronger visavis the euro, some of that has already happened. I dont know how much and whether theres more to come. But it also means that there will be, you know, volatility in how emerging market currencies behave relative to industrial currencies. Do we go closer to the dollar or go go closer to the euro . So i think there will be some adjustments that will need to be made on that basis. It will have effects on the direction of trade and so on. But i think to the extent that the stronger economys currency appreciates, it can draw in imports from the rest of the world, can be helpful for growth, and can be helpful for the weaker economy. And i think its in all our interest that the euro area also pick up in good measure as also japan. So lets hope the Exchange Rates do the right thing. We will see. We had martin wolf on the stage yesterday, larry summers, brad delong and others. Larry has written a new book and one of the central points of the book and we have a op ed in the ft this past week, the postwar era, had a history of credit booms driven by the political cycle, political economy, you have written in fault lines very similar to that. What do you do about it . How do you overcome the political desire for faster growth in an era in which we are now in the u. S. Growing well but only 2 1 2 . How do you keep the political economy from creating yet another global credit boom . So, two aspects to it. One is the domestic boom that is created, and the other is the cross boarder boom that is created by economies in different statements. So i would say both are important, that we have seen in the 1990s there were emerging market credit booms, funded partly by low Interest Rates elsewhere. And then they reversed, and then the emerging markets started building up big accounts at the time that you and i were talking when you and the u. S. Treasury and that created a rumor of another kind. The global savings, chairman bernanke, referenced to it, and now that that boom has collapsed, we have yet another boom which built up in the emerging markets, yet another credit boom. So its not just within country, but Cross Country. The Cross Country is not political but maybe driven by the domestic political cycle, which is spillover effects. Spillover effects. This is why i keep saying the real problem ultimately is Monetary Policy, that we central bankers are trying to do too much, and we should say at some point, you know, thats all i can do, now its your turn to do it, and push me however much you want. Thats true independence. Push me however much you want, i cant do anymore. And write all the opeds you want, this is write stand and i wont move. Final question because i know we have got to wrap this up. We tend to be the Glass Half Full in india, theres some who think the glass is half empty. What do you say to the skeptics who say we have heard this before, heard the promises . Whats different and what can you personally help do to promote growth in a different era of growth in india . See, talk is cheap. I think what we really have to do is deliver. So i have said this before. We have to start delivering. I think we are in the process of doing it, but, you know, watch this space and see the results and hopefully that will convince you. But i agree, we have as a japanese friend once said, the problem in International Conferences is getting the japanese to start speaking and getting the indians to shut up. [ laughter ] i guess we should end on that then. Governor, thank you very much. Round of applause. [ applause ] coming up in about 25 minutes at noon eastern here on cspan3 well bring you live coverage of a postelection wrapup at the American Enterprise institute. Several scholars with aei will be joining in a review of tuesdays results. Again, that starts at noon eastern. Well have it here for you on cspan3. House Speaker John Boehner will be talking with reporters about tuesdays results and the new membership in the house where republicans gained nine seats so far and others are still being counted. Thatll be live on cspan starting at 1 15 eastern. We have this for you from the hill on postelection changes for democrats. Congressman steve israel says hes decided not to continue as chair of the Democratic Congressional Campaign Committee after the major republican gains in the house. Im not going to stay on as dcc chair, he told the New York Times today, the lawmaker told newsday that house my naert leader nancy pelosi asked him to stay on for another term but he declined. Democrats lost at least nine seattles on tuesday and republicans are poised to gain more as votes continue to be counted, pushing the gop seat total to historic highs. Before the American Enterprise institute discussion coming up at noon, well show you now yesterdays briefing by the Republican National committee about those Election Results and well bring you as much of this as we can. Hi, everybody. Last night was a big night for republicans, and this is a great day for the country. I want to thank the voters putting your trust in the Republican Party. Thank you to our volunteers and supporter who is made last night possible. And thank you to our incredible staff here in washington, d. C. , and across the country, including our data team, who were spot on last night. We had a decisive win in the senate. It was a clear defeat for harry reids dysfunctional leadership. His refusal to allow votes in the senate to protect incumbents actually backfired and ak r ensured their defeat. Next month were going to add to our majority when we win louisiana. In the senate, it was a night of important firsts. Joanie ernest becomes the first female combat woman in the senate and the first woman member in congress from iowa. Shelly Moore Capital will be the first woman elected to the senate from West Virginia. Tim scott becomes the first africanamerican elected to both the house and the senate. In the house, we dont know exactly how big the majority will be, but it will be a majority bigger than most of us have seen in our lifetimes. Were proud to see mia love win in utah, willa hurd in texas 23, and Elise Stefanek no new york, who becomes the youngest woman ever elected to congress. And ill let greg talk a little bit more about house gains that are just unbelievably historic. In the governors races, americans affirmed their leadership of republican governors. And in the bluest of blue states, they rejected democrats. In maryland, in massachusetts, and in illinois. Even the president s home state where he campaigned vigorously elected a republican. Thats how big this victory really is. Finally, the statehouses. Republicans captured many of the state legislative chambers including the nevada senate, the assembly, the West Virginia house, the minnesota house, new mexico house, the colorado senate, and the New Hampshire house. Well have the largest number of Republican Chamber and state legislative seats held in history so, it was a historic night at every single level. This was all about a direct rejection of the obama agenda. A all of you know, president obama said very clearly that his policies were on the ballot. And voters were very clear in return. They want nothing to do with the policies of barack obama and Hillary Clinton. Up and town the ballot, these were the president s candidates, these were the clintons candidate, and they lost. Remember Hillary Clinton campaigned in kentucky. A loss by over 15 points. Then hillary went to iowa and joni ernest won by more than eight points. Hillary couldnt even save the democrat in the massachusetts governors race. We won in red states. We won in blue states. And we won in purple states. We won because our policies resonated with the electorate, our ground game mobilized voters, and our candidates connected with the American People. After the growth and opportunity project, we fundamentally changed our strategy to expand the electorate and build permanent relationships and communities. We made a strategic decision to prioritize lowpropensity voter, and we invested in a new datadriven ground game. The results speak for themselves. We won with our new strategy and we beat the other side at their own game. So i want to congratulate all of our candidates and our partners up here with me today. Senator moran, who did an unbelievably great job with the nrsc, our great partners over there, and congressman greg walden, whos overseen one of the biggest historic gains in the history of the house has done a fabulous job. And we wouldnt be here today without the leadership from our Sister Committee and the work that theyve done. I also want to gave shoutout to former rnc staff who had a good night winning their own elections. Barbara come stack in virginia, tim griffin in arkansas, elise steph neck in new york, leslie, and Boyd Rutherford in the governors race. An rnc Committee Woman won her race for delegate to congress from the american samoa. Its been a good night. At this point i want to introduce governor luis fratuna. Thank you. It was a historic night for the Republican Party, and i will talk about how historic it was at the state level. Actually it was a reaffirmation of the policies that republicans across the country are implementing at the state level. Were proud to say and announce this morning that republicans are at an alltime republican high at the state level both in the number of chambers and number of seats that we control. Ill go into more detail right away. Voters across the country, red state, blue state, purple states spoke clearly they want policies that republicans are implementing across the board. And actually i will add that our success has to do mostly on the one hand with the policies theyre implementing and number two with the candidates that actually are espousing those policies. And we made it a special effort to recruit and get elected more diverse and female candidates across the country, and we also broke some ceilings glass ceilings there. Again, before last night the oldtime republican high was 64 chambers. That was back in 1920. Now republicans will hold a super majority of chambers across the country somewhere between 67 and 69 chambers. The numbers are still pouring in, so well have more details later on. We appear to be on track as well to eclipse an allrepublican high of 4,001 republican state seats held back in 1928. We picked up actually in nevada senate, nevada assembly, West Virginia house, minnesota house, colorado senate, new mexico house, New Hampshire house, and were ahead in the race for the maine senate and the colorado house which both are too close to call at this moment. And the West Virginia senate where actually we have split control, 17 each. We have super majorities in states like california and maryland, and with the newly formed had tremendous success last night. Id also like to talk about the fact that and i want to commend our chairman and the other two chairs for the work they did. We are winning across the country also at the state level. And we are expanding the map to show our pathway to victory in more than one way in years to come. And ill go into that right away. Actually, by expanding our majorities in all competitive great lakes state that hold 64 electoral votes, if you add that to the 2012 Romney States that equals 270 states. But on top of that we did extremely well out in the west as well. Id like to add one more thing. Were electing a fully Diverse Group of candidates, and actually we had both a future majority project and the right women right now programs. As a result of those two proms, on the one hand, the rslc identified and helped 244 new diverse candidates across the country and 558 new female candidates across the country as well. And that means that actually we are well on our way and will have numbers, you know, further later this week, to a Record Number of diverse and female republicans at the statehouses across the country. Some of these candidates actually have made a difference. Jill upton in West Virginia, the West Virginia house, Beth Martinez in the colorado senate, harry lewis in the pennsylvania house, bob cortez in the florida house, victoria seaman in the nevada assembly, Sara Lawrence and conrad james in the new mexico house, sue serino in the new york senate and becky harris in the nevada senate. Actually in california, janet nugent helped to end the Senate Super Majority the democrats had. Finally, voters elected at least 12 statewide female Lieutenant Governors and secretary of state last night and five diverse statewide elected officials on the republicans side. Those include john sanchez, carlos lopez cantera, Boyd Rutherford and thia that doran. And ak chely we elected among them the only africanamerican Lieutenant Governor from either party across the country. We elected last night domestic candidates that promote policies that are favored by voters to create jobs, get america growing and moving ahead again, more choice in location and more opportunity for everyone. Im proud of our team over at the rslc for the excellent job that they did as well as our candidates. With that, i pass it on to chairman wheldon. Thank you, governor. And reince and jerry, great job. We ran a ducks offense at the house. Remind me of the old carpenters song, weve only just begun. And we have just begun. What you heard my colleagues talk about is how the Republican Party is back, were back with youth, were back with diversity, were back with women, and weve got a long way to go, but weve made great gains. If you look at the house races versus the senate, we were predominantly in blue territory. These were blue districts we were competing in, and we won. We won because we had really good talented candidates that republicans in those districts nominated. We worked with them closely. Barack obamas agenda was on the ballot. There was a referendum. Its historic in its nature. Were back to pa a majority as big as any of us have seen in our lifetimes. It may be a 100year majority. As i stand before you today, weve still not counted Martha Mcsallys race yet. Shes up, i dont know, 37 votes or something. But with the votes that are coming in we think Martha Mcsally will likely gain votes this time and become the first combat Fighter Pilot woman in American History to also become a member of congress. California, we think doug osie will win that seat and add to the number we have on the board right now. And there are a couple other seats in play in california that are too close to call. So it was a huge night, an historic night, but we also know we have to get to work doing the governing piece. Our party ultimately will be measured by how we govern, and thats what americans have elected us to do and were eager to get to that work. With that, ill turn it over the my friend and colleague from kansas, the gentleman who brought us a republicancontrolled senate, jerry rand. Thank you very much. Congratulations on your success. Governor, congratulations. Thank you for your success. And mr. Chairman, thank you so much for the success that we all had, especially for the relt of the rnc provided all of us as we went into the 2014 elections. We recruited and encouraged great candidates to run. Those candidates did run. We educated and trained them in their efforts to succeed, and they succeeded. There is a clear message to republicans in the future that who our candidates are matter, and they need to be people who are capable of appealing to the voters in the states in which they are seeking to represent. I am so encouraged by whats transpired so far. We anxiously await the outcome of alaska, but it appears very clear that there will be a new republican senator from that state. And i would tell you that we spent the morning gearing up for the runoff to cur in louisiana on december the 6th. We will take nothing for granted in louisiana, and it will be front and center for the nrsc as we engage now for a little less than the next month. I think when it comes to governing we are already at work and have been for months as republican senators having the conversation that if the American People trust us one more time to be a majority, what would that mean . The messages i take from last nights election as far as senate races is really twofold. One is that the president as he indicated, his policies were on the voters minds. They were given the opportunity to confirm, ratify or to reject them. And there is a clear message that in many instances, those policies are not popular with the American People. Reach out and find Common Ground. We certainly are, but it also means the president , he has seen his popularity of his programs is not is there. Therefore, its incumbent upon the president of the United States to work with members of congress to find a different solution to the challenges our country faces. And secondly and equally important in my view is the message voters sent. We are so tired of the inability of the United States senate to function. Every senator, republican and democrat ought to have the opportunity to present their views, argue and debate, and then ultimately votes will be occurring. In the 40 years ive been a member, is a place in which thats not the option. After being elected to the United States senate that i just needed to understand we werent going to do anything. We arent going to do anything until after the election. And the probe with that theory, that plan, after the next election, theres always another election. I think theres a second clear message from the American People when it comes to the United States senate. We reject that kind of leadership that says were not going to do anything. To demonstrate that we have the capability of working together as republicans, but also working with our democrat colleagues to find solutions to the countrys problems. Its important for us to do that politically for the 2016 elections, its important for us to do that in the political sense for the 2016 president ial race. But much more importantly for the politics of 2016, it is important for the United States senate to function for the benefit of the American People. I look forward to all my colleagues. Our candidates which we brag about so much, theres not a candidate who ran in last nights election who wants to come here and do nothing. They want to come here, Work Together, solve problems and move the country in a different direction than where weve been going. But make certain that the future is bright for american citizens. Let me take some questions. St. Louis post dispatch. Related to last night, you talked about the number, several new women that were elected. But its a fairly small number of new republican women that are elected. And the caucus is going to be less than 10 female. Are you satisfied with the results on that last night . Well, the women that are coming in, very talented group. They will help us grow the women members that we have. In the next cycle. Thats what i just said, weve only just begun. Theres a lot of work to do to diversify our party, grow our party. We just won seats from maine to american samoa. We may pick up san diego, Carlos Cabello down in florida. Were making big progress. But we have to continue to always work it. We have to focus on recruiting good women candidates to run. Help them get into office. Were building that. Itll take several cycles. Senator, on a followup. On the senate, you mentioned after the next election theres always another election. 2 3 of the senators up in 2016, republicans. Many in swing states. Is there theres a danger of overreach at any point coming forward here . For instance, if the republicans went right after obamacare in an up or down vote and invited a veto. Would that be an overreach . What i attempted to convey is that the message that was delivered to us is we expect to have policies that are put in place that the American People support and we expect you to Work Together to accomplish that. And i think that means that those kind of things we would start with what i would say is the very much the basics. How about the United States senate abiding by the law that says we will pass a budget by april 15th . How about the normal things that used to happen in congress in which we would pass then 12 appropriation bills to fill in the blanks. It gives us a great opportunity to demonstrate that we can govern and sets a stage for successful 2016. Yes, sir. This question for senator moran here. Since you talked a lot about governing. This isnt the same question. But in the lame duck, going to have some very serious questions, you know, to deal with, funding the government. Do you think, though, some factions in your party might be energized to say, hey, you know, we need, you know, get the jump on obama here before we get to the lame duck. Do you think its an issue that they ask for more money for ebola or, you know, isis or whatever else and that adds on to keeping the government open. I think theres a desire on the part of the United States senate. The republican members of United States senate that we do the things that are necessary to govern the country in the lame duck session. But that issues that are not required to be determined now, not required to be determined in the lame duck session should be considered by new members of congress. The ones that the voters just elected. So i think youll see us doing the things that are necessary to operate the government, certainly the appropriations bill is one that would be front and center. And i cant imagine that republicans would not be supportive of providing the necessary money, for example, to combat ebola in west africa, as well as in the United States. A potential nomination for attorney general if the president decides to put that forth with his that majority before the new congress. In some ways, this question seems irrelevant to me. But when the rules were changed, republicans dont have much to say about the confirmation of executive officers when only 51 votes were required. Speaking of the lame duck session, should the gop congressional leaders agree to Fund Implementation of obamacare in the cr pass by december 11th or in this lame duck session. I smile at this question because im the ranking republican on the appropriations subcommittee. And we have grappled with the issue of the obamacare in my tenure in that capacity. And we have worked our way through those issues before. I think at the moment, this issue is one for the house of representatives, not the senate. Weve been able to pass within our committee an agreement to reach an agreement in regard to the labor h funding bill. And the question is, whats the status of what the house may do with this issue. At the moment, a very theoretical circumstance when it comes to us. I know hal rogers is working to determine those issues. Its one well try to address when we know what the facts are. Is that a yes or no . Its neither a yes or no. With control of the congress now in the publics hands, a great number of legislatures. What should middle america, the American Public expect . A faster rate of job creation . Higher salaries . More access to Higher Education . New access to health care . Or more trickle down economics . All right, look. Ive answered plenty. I think the point is, were going to breakthrough the gridlock here and grow america and jobs. The American Economy has not recovered as any of us have wanted. Weve been in this recession. Were kind of coming out of it. But ill tell you what, there are lots of dead hands at government regulation trying to shut down people in my part of the world in agriculture, Small Business. Youve got rate increases coming under obamacare on Small Businesses. Im sure you heard about it around the country. 30 to 70 . These are all real live issues. I was a Small Business person for 21 years with my wife. I know what this stuff does to the bottom line. So you want to grow jobs, you want to increase pay. Youve got to get the federal government out of the way where its not needed. You think about the 20,000 american jobs we could start tomorrow if we approved the keystone pipeline. Most of those are trade union jobs, they pay pretty well. Thats two years of digging ditch, building pipeline, putting American Workers to work. Thats not trickle down economics, thats real life jobs. They matter, they count, theyll make a difference in americans lives. If you do prevail in louisiana in about a months time, there wont be any white democrats in congress from the deep south. What do you make of that . You know, the southern voters are speaking. And, look, i think, again, its an issue involving the president s policies to run the ballot this time. We want to grow diversity, though. You think about senator scott who was in the house, now in the senate, reelected to the senate. You think about will hurd, africanamerican republican elected in texas. We are going to do our best to bring all americans together. And do the right thing for all americans. You know, growing jobs is good regardless of your party or your locale. Getting government out of the way in education so kids can actually get a break, get a good education, compete internationally, really important. Theres a lot of stuff we can do in this country that could bring us together, unite us, and get america on track. I get up every morning and wonder, what am i going to hear from all of you about what wheel came off last night . And thats how americans are feeling right now. Insecure about their economic future, insecure about disease. Heres what fred uptons going to launch, has launched, the energy and commerce committee. Fully bipartisan, we can do better than that. There were some exciting things out there, but government seems to be in the way. We want to cut out the government underbrush, move forward to make health yeariier. All of those are measurable, but they need to be done, they need to be done. This is a question for you, we saw last night ted cruz got a little attention when he wouldnt commit supporting mitch mcconnell. Conservatives in both chambers think there should be an aggressive effort against the white house as opposed to trying to Work Together. What would your message be, looking forward at the American People for the next two years judge how republicans govern. How do you get all of the republicans in congress on the same page . Well, it mean sure. For one thing, i think its really incumbent on republicans to really take a step back and think about what just happened last night. And what happened last night is that the American People were given a choice to either accept the policies of the Democratic Party or reject them. And they whole heartedly rejected those policies. At the same time, whats interesting about what happened last night, when people in the states were given the choice to continue the policies or take on the policies of conservative republicans like scott walker, rick schneider, bruce rauner, rick scott, larry hogan. They p went for the republicans. So wasnt just the rejection of barack obama. It was the embrace of the values of conservative governing. So, i think that what is really necessary is for the president to come down to capitol hill and look through harry reids desk and figure out what of the 370 bills that are sitting there hes ready to work on. I dont believe its incumbent on the republicans to suddenly capitulate on something that the American People have been very loud and clear on that theyre not buying, the president s selling, and theyre not buying what the democrats have been selling. And i think to do anything otherwise would be wrong. Thanks, chairman. You mentioned earlier the growth in opportunity project report, one of those components there, only policy recommendation was the Republican Party, you know, passing some form of Immigration Reform to date over the past two years, the Republican Party has slow walked that, partly because of the 2014 electorate. Now looking ahead to 2016, looking ahead on Immigration Reform by the end of the year, whats your message to republicans who won last night who on a you know, maybe against Immigration Reform. How do you get them to move . I think theres another situation got to take a few steps back. And i think what you did what you had are republicans from marco rubio to rand paul talking about serious Immigration Reform. I think that the idea of serious Immigration Reform is still alive and something that both parties need to look at. However, since the president has continuously lied to many people in this country about his intentions on Immigration Reform, told them told many people, hispanics one thing and done another, even when he had a super majority in the house, he had 60 votes in the senate, delivered nothing on Immigration Reform. He then threatened the country with an illegal action on executive amnesty, which he doesnt have the power constitutionally to do. Then, he got into trouble coming into the midterms. He pulled back on that promise. Then, because other people got upset, he now is saying, well, im going to go forward with it anyway, using people as pawns continuously for five years. What hes done is unified the country. And hes unified the country against about anything the president wants to do on Immigration Reform because people dont trust them. They also have hes also unified the country on the idea that we cant get anywhere on Immigration Reform unless people are totally convinced that the borders secure. And although it sounds like and seems like at time a talking point, i think that the president s actions have sl solidified the view that we cant get very far unless we secure the border and ensure the American People that were not going to end up back at this place in 10 to 14 years. Okay. Do you think its possible to get bigticket items like tax reform done in the next congress . Well, ill make one comment on that and let the legislators make a comment. One thing i think people forget, you dont need the president s signature to set budget parameters. So i mean, we can get paul ryan and in the senate on the same page. And obviously you dont need the president to do that. Tax reform is a great opportunity for the senate and the house to come together. I think you see democrats, senator wyden, the Senate Finance committee has attempted to pursue and really fell into the same trap that we republicans. He as a democrat faced the same circumstance that republican senators face. It doesnt matter what your committee does. No bill is coming to the senate floor thats going to cause votes to occur. I think theres still a huge opportunity for the senate to find Common Ground on tax ref m reform. I think its a matter of the process now changing in which that becomes an opportunity. But i also think the countrys economy, peoples jobs significantly demand that tax reform. With paul ryan as probably the next chairman of the next ways and Means Committee teaming up with finance Committee Chairman and tom price teaming one the senate colleague. We can get a budget agreement. You think about it. The senates voted on what one budget in six years theyve passed. And we pass them every year. Now well have a partner we can dance with to get an agreement. Within that agreement, you can direct and within in reconciliation and if we get tax reform and produces the kind of jobs we think it will and generates a return of cash from overseas that we think it will, then you can also solve another problem in america and thats infrastructure. As you know in the camp draft, discussion draft, theres enough revenue to fund a Highway Trust Fund for eight years. Theres ways to pull these things together that generates revenues, jobs and solves problems. What about entitlement reform as discussed in 2011 at length . You talked about tax reform just now. What about the other side of the coin . You know all of these issues can be dealt with in a budget process and framework. And weve laid out plans to do that. Thank you. Thank you. Down in front, please. Down in front, please. Did i say that . Thanks for remembering. Were live for another look at post Election Results hosted by aei. Good afternoon. Good afternoon. Good afternoon. Im a senior fellow here, and id like to welcome all of you and our cspan audience to this election watch. Id like to begin by thanking the aei conferences staff. They do an enormous amount of work to make sure these events run smoothly. And id also like to extend a special thanks to heather simms, our new assistant. Shes been with us for only a few months and shes had a baptism of fire in election issues. Let me begin by congratulating my fellow panelists. Weve been at the business of elections for a long time. Election watch began at aei in 1982. We do politics the oldfashioned way. Studying individual races and historical voting patterns. Were not into the the aggregation business. I listened yesterday to our session from two weeks ago. And although there were a few misses, the panelists generally made very solid calls in senate, house, and gubernatorial races. We said we expected big gop gains in state legislatures. And we learned this morning that republicans have the highest number of state legislative seats now in 100 years and democrats the lowest number since the civil war. Let me say a few words about the polls, which is what i do here. I follow public opinion. While most of them predicted that the gop would have a good night and the poll averages did a good job of predicting the winners, many of the individual polls were wildly misleading. As the polling experts, Mark Blumenthal said this morning. Quote, the polls missed their margins nationwide by a mile. They continued. Public polls consistently understated republican candidates in almost every contested statewide race, including an unusually high number of remarkably large polling misses. Just to take one example, none of the polls predicted a close race in virginia where norms former student ed gillespie is still contesting the contest. Its becoming harder and harder to poll nationwide using traditional techniques. The designs have a Response Rate of around 9 . And polling states wide is more treacherous. Whether the business as we know it will be around in 2020 is not clear. But a lot of soul searching should be done. And this is not a particularly introspective business. The exit polls had a good night. Let me quickly go over a few of the findings that struck me. First, weve talked in the session before this one about the sour public mood. People dont trust this economic recovery. And that was evident in so many of the questions on the exit poll ballot. Only 1 said the economy was in excellent shape, while 70 said it was still in bad shape. Nearly half of voters expected that life for the next generation will be worse. Only 22 expected that it would be better. Democrats have been counting on what they call the rising american electorate, minorities, young people and women and particularly single women to propel them to victory. The share of the youth vote this time was down and republicans made gains among those who did vote. The share of the nonwhite vote slipped. Greg abbott in texas, like george w. Bush did well with hispani hispanics. At the marriage gap at 31 points. And gary langer, abcs excellent polling analyst reported that, and im quoting him directly. Single women, another core Democratic Group gave their party the smallest margin in exit polls going back to 1992. Women as a whole were more democratic than men, but less so in the past. Men were solidly republican. Republicans won the womens vote in Senate Contests in texas, arkansas, kansas, kentucky, maine, mississippi, and both South Carolina races, West Virginia, and women split their votes in iowa. Independents gave the gop a 12point margin, a third of voters and another question said they supported the tea party. I looked very closely at the Health Care Question on the exit poll ballot. Voters in 18 Senate Contests were asked to check a box indicating whether they thought the law did not go far enough, was about right or went too far. In only two states, oregon and maine, did more than 30 say it didnt go far enough. In all of the other states, 45 or more said that the Health Care Law went too far. In ten states, more than 50 of voters said it went too far. Whether most Illegal Immigrants in the u. S. Should be offered a chance to apply for legal status or deported to the country they came from. Only in arkansas did more people say they should be deported than given legal status. 49 to 45 . Voters in 17 Senate Contests were asked if their state should legally recognize gay marriage. There was a wide range of responses. At the high end, 70 of those in New Hampshire did. This was the issue that produced more diverse responses than any other. Voters in six Senate Contests were asked whether the use of marijuana should be made legal. Voters in maine and New Hampshire said yes. And finally, looking very briefly at 2016, only a third of voters in texas said that ted cruz and separately rick perry would make a good president. 39 of our kansans said that Hillary Clinton that once claimed that state would, 50 there said Mike Huckabee would make a good president. 28 in, i believe, that was louisiana said bobby jindal would. 40 in florida said jeb bush would, and 36 gave that response about rubio. In wisconsin, 42 said that scott walker would make a good president. And 46 said that paul ryan would. Thats just a quick summary of some of the exit poll data. We have a piece up on the website called exit poll trends a to z, goes into the issues in a little bit more detail. Now were going to turn to our panelists to talk about what was most surprising to them on election night. And were going to begin with Michael Brown to talk about house races. Michael, you said that, if i remember correctly, that at the