heath: principal economics, a formula for growth and sustainability. this obviously is an important conversation because there's not a lot of leadership right now on principles or economics, i would say. so, it is important to have this discussion about the facts. i don't know if we could have a more esteemed or accomplished panel to discuss it with us. i will introduce our moderator here who will then introduce the

rest of our panelists. it is my privilege to introduce our moderator. mr. bob bushman. he's an original principles firster. he was at some of our earliest meetings in atlanta, back when we were 10 people around a chili's dinner table. just kind of talking about conservatism and the principles that ought to define our country and our politics. he's a state economist of georgia now, appointed last summer by governor brian kemp for advising on tax policy and other economic matters. he was previously with georgia state university and worked with the state government to score proposed revenue legislation. also, occasionally taught macro economics but otherwise focused on tax policy and public finance

research. take us away. bob: good afternoon, everybody. let me introduce the panelists first. mya mcginnis to my immediate left, president of the bipartisan committee for responsible federal budget where she oversees community projects, including the grassroots coalition, fix the debt. fix u.s. a project better seeking to understand the root causes of our nation's growing divisions and deteriorating political division. mya is also a returning principles first panelist, having come here two years ago. doug holtzeakin. before founding aaf in 2009, he taught economics at syracuse university and served as chief economist on president bush's

council of economic advisers. as director of domestic and economic policy for the john mccain presidential campaign. and on the end, we have brian reidel, senior fellow at the manhattan institute. his area is on the area of federal spending, tax policy, and the debt, as well as issues like inflation and economic growth. he has also served as chief economist for senator rob portman, staff director of the senate finance subcommittee on physical response bloody and economic growth. and in policy positions with the mitt romney and arthur rubio president of campaigns. welcome to all the panelists. thanks to all of you in the audience for spending your saturday afternoon with us for the dismal science panel. [laughter] most of you probably recall from

the clinton years the line the economy is stupid. polls tell us that the economy is the number one topic voters want government to vote on. voters have different ideas of what economic issues are important now. and depending on their political leanings, widely divergent views on the state and direction of the economy. according to a suffolk university poll, 46% of americans think we are in a recession or depression right now. another 21% think we are in a period of stagnation. only 29% think we are in a period recovery or economic growth. the reality, the u.s. economy grew at an inflation adjusted rate at 2.5% last year and averaged 3.4% real growth over the last four years. unemployment last year tied for the lowest level of my lifetime, reaching 3.4% for the first time

since 1969. we are only slightly off that level. wage and salary incomes of americans have grown by 5.2%, over and above the rate of inflation since the last quarter before the pandemic. does the economy stink or is it strong? that is where we will start. this will be sort of a lightning round. how is the economy today really? and what are the top economic policy issues we should be concerned about? we will start right here. >> thank you. i want to say thank you, it is great to be here. this is truly an organization i am such a fan of and i am glad to be part of it. the volunteer coordinator out there. i will volunteer, sign me up. i think it is an important organization. how great it is people have come together for this conference. how is the economy doing? i think the economy is doing

really pretty well in the immediate which is not interest me the most. i think the economy is strong. i worry about inflation probably more than a lot of people are worried about inflation. i am not sure we have it under control but given the challenges that it took to get us here, it is a generally strong economy in the moment. i think i will give three things that i worry about the most and that is what i spend my time worrying about. i could also do top 10 but the three biggest, not surprisingly for me is the fiscal health of the country. i could go on. we could all go on with a long list of the numbers but we are so in debt. we are close to the record we've ever been in debt. the last time was after world war ii. this time, it is after no war. we are spending more on defense. it is a long list. it means we are weak not just from an economic perspective,

but also from a national security perspective. the two others i would add to my list, i am very worried about income inequality on its own, but also more so because it is causing people to lose trust in the economic system. many people think the system is not fair, it is rigged against them. that if they play by the rules, they still will not get ahead. that leads to my third worry, which is i am particularly worried people are starting to walk away from the system of capitalism and markets being used for the allocation of capital because they are losing trust in our economic system, and we are thereby going to end up with things which are really bad for the economy and slow growth dramatically. we will stop considering growth as much as we should in our policy decisions. the smaller economic pie will lead to more political tension than we already have. i am both worried about the problems of capitalism, but i am worried that people are about to reject it rather than making some tweaks to improve it and

that would be very dangerous. doug: the voters are always right. first of all, thank you. this is my first time. a fantastic organization. i question only how you spend your saturday afternoons. i think the voters are onto something. in the near-term, the remains an elevated possibility of recession. the genie is not yet back in the bottle. those two terms are real. the larger concern is the fact that in the 21st century, we grew quite rapidly. gdp per capita grew at 2.4% per year. all you need to know is in one working career, 29 years, the standard of living would double. in between for century, we are growing -- in the 21st century,

it is true, people feel like they cannot get ahead. has we kept growing in the 20th century rate in the 21st century, everyone in this room would have another $19,000 in real gdp. i want my 19, and i think you should too. we have an enormous problem. part of that problem feeds the deficit. we would have another $1.2 trillion a year in revenue. given the deficits we face, $3 trillion over the next 10 years. the deficit and the structure of the federal budget and is the biggest headway of economic growth. if we take on the deficit, we take on the growth problem. brian: the best thing about the economy is the unemployment rate is low. the bad thing is it is low because of a typical

inflationary overheating we've had over the last couple of years. the inflation rate has come down but prices haven't. prices are still up 18% since president biden took office. you see it when you go to the grocery store. wages have generally not kept up. they have started growing a little bit more but depending on how you calculate wages, compensation, whether you remove composition affect, a lot of real wages are still down and ultimately real wages is what matters the most. are you getting ahead? it is not even the numbers on growth. the cost of buying a home has doubled since the last three years if you take into account the rising interest rate at the same time of a rise in prices. the mortgage on a median priced home is double what it was three years ago. moving forward, my first concern about the economy is that we

have been powered by a series of bubbles. in the late 1990's, we were powered by a stock market bubble. that had a painful burst. then, we had a housing bubble power us for the next eight years. that burst painfully. now, i am worried we have a debt bubble that has been powering us ever since and i am worried that will be the worst burst of all. i really hope we can talk more about the deficit numbers because we just have the deficit double to its highest level in american history outside of war and recession. it went from $1 trillion to $2 trillion in one year. depending on what you think about the tax cuts and interest rates, we could be heading for deficits of $3 trillion to $4 trillion by the end of the decade. my concern is just like the other two bubbles that if we don't get a hold of our budget, this bubble will not end well

either. bob: ok, thank you for all of that. there were some issues i had and i thought you would mention. we will start with -- that is an excellent segue. a deeper dive on deficits and debt. maya, i recently watched your policy director. if you all are not familiar with the committee's website, there is so much content that is very informative. there are video presentations like this when i am talking about. it was called richest to rags. i figured we would start with the question he tries to answer with regards to our massive national debt which is basically how did we get here? what policy choices over the last couple of decades have been the biggest drivers of deficits and debt? maya: this is a study we undertook because anytime we would go testify for congress or

talk about the issue of deficits and debt, it starts into this painful finger-pointing game between the two political parties. it is your fault. no, it is your fault. just right there. i'm always afraid while i am doing a congressional hearing, i will suddenly lose my temper and start yelling. you guys are breaking the country. none of you care about this. you are acting like children. i am embarrassed for my children to watch you. i should stop testifying until i learned to meditate or something. it has been an incredible blame game going around and the biggest part of it started, on the democratic side, there was a chart that showed if we had not cut taxes under the bush era, the trump era, the budget situation would be fine. we went and i said, i bet that is probably true but i am sure that's not the whole part of the story. basically, it showed whether you look at spending or revenue,

they have all on their own contributed so much that we kind of deteriorated the situation from when we were riding budget surpluses to deficits many times over. there are two ways to look at this. the legislation that you put in place and what we found, the deterioration was one third from tax cuts, one third from spending increases, and one third from recovery from crises. of that legislation, close to 80% of it bipartisan. this is not a republican or democrat situation. both parties love to borrow. the other way to look at the issue is where are we with spending and revenues at gdp compared to where it was when we were running the budget surpluses? if you look at it that way, one third of the problem is revenues and two thirds of the problems are spending.

so much of our spending is automatic growth in the budget. you don't vote for it. legislation does not change it, but social security and medicare keep going up automatically. get over the blame game. almost all of you voted for these things. if we hadn't done any spending increases, the debt could be close to paid off. if we didn't do any tax cuts, our deficits may be lower than it is. everybody has contributed. one other study we did because i was getting frustrated with the no new taxes pledge. just curious how many of the members have promised not to raise taxes have raised spending. in my mind, a courageous pledge would be no new spending or no new borrowing. it turns out roughly 80% to 90% of the folks who have taken the pledge not to raise taxes have also increased spending. it is a hypocrisy on both sides.

you can look at people promising not to touch social security. there are very few clean hands in terms of how we got here and if we don't stop and look forward to the tough choices we will have to raise taxes, fix social security, cut all sorts of spending, then we will be lost and this continued fiscal deterioration. bob: just to give you all some quick numbers. last year, the federal budget deficit was $1.7 trillion and the federal debt held by the public today is 98% of gdp. just a few years ago, there were so-called economists promoting theories for why deficits and debt don't matter. we can keep printing money and spending as long as we keep with debt, u.s. dollars will not matter. why is it important that we

address the deficits and the debt? doug: it is very important. i want to touch a little bit on what maya went through. i was in the white house in 2000 through 2002 and ran the cbo for a few years after that. i was on the mccain campaign and ran a think tank. people ask me what happened? you were there. you did this. [laughter] it's my fault. thanks, doug. i have thought a lot about it. there's this old saying that his policy. -- budget is policy. george w. bush said we would win the war on terror at all costs. you look at the obama budget, they said as long as they pay their fair share, it is all good. president trump did not say one thing about debt reduction in

four years. nothing. this crowd and promises build back better. whatever you want, more and more. the most important economic fiscal educators in the country have for the 21st century told the american people there is no problem. they don't think there's a problem, so if you vote to raise taxes, cut spending will fix the problem, you will lose your job. it is not complicated. the american people have to be told there's a problem. we do have a problem and the need to be told, and then they would be willing to vote for people who will fix the problem and vote against people who want. the problem is twofold. number one, we have the enormous deficit, $2 trillion, probably bigger with the projections. that is cash that has be raised

by the federal government. they are taking it at the expense of private firms and households and americans who want to invest it in education, technologies and businesses. so, they are competing for that and they are crowding it out. that is the most well-recognized channel. there's a really important channel that i don't people -- think people understand. our government is simply spending too much and when it spends money, does not invest, it subsidizes consumption. an economy can only grow if people save and invest in the future. what we do with our federal budget is we take those dollars and use it to subsidize consumption and then steadily erect a headwind against economic growth. that is why we are growing slower in this century than last century. we are not taking care of business and eating away at the quality of the economy that we

are leaving behind for the next generations. we are leaving them with a poor standard of living and a financial bill. that has to be recognized and corrected. brian: i will take a lot of the same points as doug and just put my own emphasis on it. i'm a numbers person so bear with me. interest costs two years ago in the federal budget were $350 billion. last year, they were 600 62 $3 billion. next year, interest costs will pass defense, medicare. a decade from now, depending on the extended tax cuts and every thing else, interest costs alone could approach to trillion dollars a year. at that point, 30% of your federal taxes will be paying interest on the debt. you will work and pay taxes for three months out of the year just to pay interest. it is not going to finance the social security check or build a

highway, just interest. and then, it keeps going. over 30 years, we are on pace to borrow anywhere from $119 trillion to $150 trillion depending on current policy assumptions. by the end of that, you could be paying half or more of your money to the government just for interest. it is such a waste of money. fun fact, every point that interest rate rises adds $30 trillion in interest costs every year. that is per point. all of this assumes interest rates stay low. here's the problem. let's say we will borrow $119 trillion over 30 years, who will lend us $119 trillion? china only holds $1 trillion. japan only holds $1 trillion, they are selling our bonds. the fed holds $5 trillion, they don't want to finance the debt

because that is inflation. how are we going to borrow $100 trillion, from what, mutual funds, insurance companies, bonds, state and local governments? that will raise interest rates. you will not be able to borrow $100 trillion from wall street without raising interest rates and that is when the debt hits you from that angle. higher interest rates, higher debt costs, higher mortgage rates, higher business tax rate or business investment rates, and you get less investment and growth, so that is bad. maya: would you mind if i add a couple more? >> can we do competing fun facts? maya: i will do more to worry about. >> these are numbers that you will not have any friends at cocktail parties. [laughter] this is the biggest group i have

been in in like six years. over the next 10 years, the federal government will spend $82 trillion. $12 trillion will be interest costs. $20 trillion will be things that congress votes on every year. the remaining $50 trillion are on autopilot, $32 trillion are social security and medicare. what are your nation's leaders pledged not to touch, social security and medicare. i win. maya: i will throw another concerns you have to have. doug is right. brian is right that the borrowing is growing interest rates and will lead to a spiral. beyond that, we need to be able to borrow when emergencies happen like covid or downturns. we have always been able to borrow and our rates have not gone updated that is an incredible privilege that we are squandering. they are going to be more

crises. it is going to be increasingly difficult for us to borrow when we should because we borrow when we shouldn't. another reason to worry is we have a social contract that is absurdly outdated. it fixed the problems of last century, not for this century at all. we also have social security and medicare that are heading towards insolvency and political promises not to do nothing. we need to think about a new social contract that insures against today's risk instead of the old risks. we don't have the money to even entertain that discussion. in terms of foreign policy because this is the one that freaks me out these days, wars are not about boots on the ground the same way they used to. they are economic and digital. our ability to be economically and fiscally strong is a huge portion of our national security. many people believe other countries are encouraging us to borrow more because it is weakening us. so, this is a huge national security risk at a time when global hotspots appears to be everywhere.

finally, there could be an economic crisis, meaning interest rates go up and you cannot get out of it. if you get through all of those, we still hosed our children because we said we have given a budget that is terrible. you owe all sorts of money on it. interest payments, all sorts of promises to support us even though we didn't do anything to invest in your future, and there will be generational tension. bob: ok. [laughter] brian: intergenerational tension is already here. maya: if you have teenagers, that is the status quo. bob: we've had lots of numbers and now we are going to do math and a couple more numbers now. you will not be tested on this. so, in spite of what some political actors would have us believe, we cannot just eliminate deficits to start paying down the debt overnight.

maybe 25 years ago, somebody might remember worrying about what happens if we pay off all the debt? that is not our problem now. the budget math is really against us. crfb on their blog had a couple of posts last week about the budget math. i just wanted to see if, maya, you could give some idea of the scale of the problem and how much you would have to actually cut spending just to stabilize the debt relative to gdp and start to bring it down to more manageable levels? maya: one of the things that i think is very important is you set out fiscal goals that a reasonable. first, it would be great if we can set out fiscal goals, period. we don't pass budgets. if we did, there would be no requirement for fiscal goals. we get around them by not passing budgets. the senate budget committee did

not even offer a budget this past year. i don't know how anyone gets to keep their job. the other problem is when people overpromise. you hear promises, i will balance the budget neither 10 years or four years. the answer is no, you are not. once you put out goals that you will completely miss, the whole process gets compromised. it used to be you would try to balance the budget which would require $15 trillion over a decade of savings. we adjusted the fiscal responsibly act which focused just on discretionary spending. i am a great fan to this. it is great we can generate some savings. that was $1 trillion to $2 trillion fee to we will not suddenly be able to save $15 trillion. people promise not to raise taxes, cut defense and social

security and medicare. the last time we raised anything close to $15 trillion was never not even close. i think about what is the best fiscal goal we can get to and i think the most aggressive would be to stabilize the debt where it is. keep it under 100% of gdp. that would require about $7 trillion in savings. we have done blueprints, no political aspirations so we can say things that are suicidal. to get there, you had to do everything. we raised a lot of taxes. we cut every dollar we could find. we cut money in defense and we are not going to be able to. defense is going up. that was a huge left. -- lift. my push to congress's pick as high of a goal as you can possibly get to, but is actually reasonable. if we have savings packages going forward of $3 trillion, $4

trillion, i would call that a huge win at this point. bob: one more political, another process perspective. i think a significant barrier to addressing deficits and debt, it is partly a process problem and a political problem. what is broken about fiscal policy making and makes it so hard to do anything to reduce deficits? and what are some process fixes that might enable progress? doug: i am firmly in the camp that was begun by the second cbo director where the process is not the problem, the problem is the problem. i don't think these are process fix. i think this is a leadership issue. the existing budget process and generate serious attempts to address it if we had

presidential leadership, first and foremost, that provided the air cover for congress to do things that is necessary to do. without that, there is no process that congress cannot execute on that would solve the problem. brian: we do have process problems. we don't pass a budget. 70% of the budget is on autopilot every year. but, the ultimate driver is not the process. it is that over the next 30 years, medicare faces a $77 trillion shortfall. social security faces a $38 trillion shortfall. and no one is pledging to do anything about it. you can have any process in the world but until it is not politically suicidal to point out that we can't borrow $116 trillion for two programs, we are not going to fix the problem. i'm going to level with you. there is no way to address

long-term deficits, no way to stabilize a debt at 100% of gdp unless social security is reformed and medicare is reformed and middle-class taxes are going up. i'm a conservative. i hate tax hikes. you can't get rid of $116 trillion shortfall just on spending cuts. the math does not work and the politics don't work. the reason the problem gets worse because the three things politics take off the table is social security, medicare, and middle-class tax changes. i hate the idea of raising middle-class taxes but i feel like it is my duty as someone who works in this policy to warn you, you should expect that your middle-class, the middle-class taxes will rise over the long-term because that is where the numbers are. maya: can i respond?

oh, clap for brian. [applause] i do think the process can make a difference a little bit. a huge part of the problem is that everything you need to do to fix the fiscal problem is the opposite of what our polarized moment has created. if you want to create fiscal progress, you need to focus on the long-term, not the short-term. not the immediate, the longer term. you need to focus on good policy, not good politics. you need to admit they are hard choices instead of pretending everything is a free lunch. you need to compromise which used to be a good word and that was a bad word. those are literally the opposites of the things i see going on with polarization. he leads me to think the process does have to be more of a fix. it is not very democratic, but our democratic leaders are not doing anything hard.

i would require there is a budget and if there's no budget that cuts spending across the board or spending and raises taxes across the board, something that encourages the budget, i would stick with the paygo rule. if you are new spending in place, you have to offset it. they have this whole work around where the end of the year, there is a scorecard. they pretend it didn't happen, they wipe it clean. i would make it very clear that paygo is the law and you have to stick to it. this is what budgeting is. you have to figure out how to pay for it. i have come around to the belief that we definitely need a fiscal commission or something that would insulate the politicians from the hard choices they have to make. the problem is the problem. the leadership is the problem but i also think the process could help nudge us towards a solution. bob: would either of you all would like to comment on the

fiscal commission idea? doug: there's a lot of information on maya's website. it is a whole faq on fiscal commission, and what it means and how it works. i will make two points. point number one, i really do not believe you can ask people to put politics aside and go do the right thing. they are politicians. they cannot put the politics aside. that is who they are. it is incumbent on people like me to make good policy and good politics. we need to get the education to the public and change the atmosphere that surrounds the politics so that it is good politics to do the right thing. i dedicated my adult life to

that mission. there is absolutely no evidence any of those things are true. that is number one. i do question whether you can trap them into doing the right thing. second, fiscal commission. i am not a believer. the very first commission was created by the very first president, george washington. it was supposed to solve the whiskey rebellion. commissions fail. they all fail. in the end, members of congress have to vote and they have to be willing to take the vote that will support the good policies. we are back to that issue. a commission will not get you around that problem. i want this commission idea that you can end run politics, that is an illusion. i was also on the financial crisis commission. two years, millions of taxpayer dollars accomplished nothing. no more commissions. brian: i have also had the joy

of working on a commission that didn't work. i staffed the 2011 supercommittee that failed miserably. i will take the squishy middle between two of you on commissions. here's what a commission can't do. a commission cannot create the willful reform when no will exists. if congress does not want to fix the problem, the commission cannot make them. they will not get together. they will not compromise. they will not take the risky vote. my worry right now with the commission is even if you create one, if you don't have presidential and congressional leadership by both parties, they are never going to compromise. they will never build a realistic plan and never bring it to the floor and pass it. you have to have the will to reform first. if you get it, they commission can help structure the reform. it can get everyone in the room,

it can create a structure. it can create some credibility to the public and it can get fast tracked in congress. you can implement a will with commissions, but my worry is if you want to know a commission is serious, check who they can point -- they appoint to it. if they appoint congressional leaders and chairman of major committees, it is a serious commission. if they appoint backbenchers and ideologues who have no history of compromising and noreal creda check the box commission that will die a quick death. >> what kind of leadership issue -- we have got a leadership issue? that is a big part of why we are here. we have only got nine minutes left, we will not get to policy or inflation or regulation, i guess, unless you want to ask questions about those things.

you will use the last 90 minutes for questions from the audience. raise your hand in the front. >> [indiscernible] >> a blog post a couple of weeks ago. >> why are we not talking about billionaires? >> i wrote a report you can google called the limits of taxing the rich. billionare taxes are going to have to be on the table because everything has to be on the table. if we are going to tax the middle class like i said, you are right rich people should be on the table as well and they have the ability to pay and i think that they will be on the table. we also have to be realistic. if you seized every dollar from every billionare and i mean every house, yacht, every investment, every business, and right down to the basketball

hoop you can find of the government one time for nine months. that is gone. it is not a renewable resource when their wealth is gone it is gone. one time for nine months. the idea that billionaires can fix the problem i think is mathematically not the case. if you are going to ask plumbers and waitresses and teachers to pay more in taxes than billionaires, you are right. >> what contributions could more generous immigration policy making reducing the deficit? >> what contribution can more generous immigration policies make towards the deficit? there is no single economic policy that is more powerful than an immigration reform. the nativeborn population has suffered fragility and we have

talked in the absence of immigration, we get older and smaller and we get less potent on the public stage and the flipside to that is all of our future growth in population and workforce and composition and skill set hinges on our immigration decisions and we are currently squandering this opportunity away. [applause] >> you had on your blog or website, personal musings? [laughter] >> bailey something. just the other day, about how much money we spend on immigration enforcement. versus how much we would spend if we actually processed immigrants in the normal fashion and put them to work. >> yes.

it is the problem with being an economist, you find the least expensive issue -- answer to a problem. it is executing on the legal immigration and visa granting system, trying to close out the southern border which is a real problem, it is a serious problem. but it is cheap to get people into the economy. we have an enormous backlog and a wise man told me if you have a problem that can be solved by throwing money at it, solve it. solve the backlog and put people to work and generate tons of additional gdp and tax revenue if we just gave the u.s. customs and immigration services a bit more resources. it is a fee driven system, the immigration committee and the people who bring them here pay fees to make the backlogs

enormous which is extra money. >> let us go over here. >> you were talking about how congress meant make up the largest ruling party. social security is one thing, medicare is a bit different because there is a market behind it. can you talk about there is not so much faith left standing by there may be some public decisions to think about that would perhaps make it bring our medicare costs in mind closer to what it is? >> i think we all have ideas in this. why do you not go first? [laughter] >> here is the deal, here are

the important things on social security and medicare. social security is just money and anyone on this panel can fix it numerically. the important characteristic of social security and medicare sure that is they are growing much more rapidly than the economy will grow at any source of tax revenue will grow. it is not about cutting them or have them grow more slowly so that they grew at the pace of the economy and they go faster. with medicare, there are four parts to medicare. a b, c, and d. a is the one that has a payroll tax and the others are premium finance. when they designed them they thought we cannot have them pay the whole premium. the premiums cover about a quarter of the cost of the medicare program. three quarters comes from general revenue. unlimited drawn the treasury. that is a problem. medicare is responsible for our

federal debt outstanding. we should stop the unlimited draw, put medicare on a budget and save beneficiaries and doctors and providers and pharmaceutical companies, this is it, this is what you got this year. you can maybe take that 7% growth rate and get closer to what we need and still delivering medical services. printing medicare into a high-value system is the key. we spend a lot of money to deliver adequate care. everyone can do better on the quality front. it should process well as well. >> right here. >> what about raising taxes on social security? >> yes. [laughter] >> keep in mind the reason that the tax is capped is the benefit is capped. the question is if you raise the cap do you also let the benefit rise? or do you delink the tax and the

benefit? if you do it, and eliminate the cap, you eliminate half of social security shortfalls. social security has a balance of 1.8% of gdp by 2030. getting rid of the cap and giving no benefits gives you 0.9% of gdp. i think lifting the cap should be on the table and it will be a part of the solution along with aging benefits. the three real levers with social security is the tax, age, and income benefits, you cannot solve the problem with raising the cab, but it will be a part of the solution when they do it. >> you cannot follow with that because a lot of people have not lifted the payroll tax cap of that is not the solution. used to be a decade ago and it is a reminder that by procrastinating the cost of waiting to fix it has been huge. all of the things we could have

done before that would have fixed it and if people word have not felt much difference at all, those are no longer available to us. we have to do every social security change that there is. i would lift the payroll tax cap but i wish we did not have to because i raised revenue from hiring from people and my first use of it is not giving pendants to people who do not need them. i need those dollars for other things more. much more or much greater priorities. believe the cost of waiting has been huge and i fear a lot of people thinking we should wait until the last minute. that is a fireball effect across the board. >> we already have. >> when we do social security reform and it was pushed at the cbo, my bumper sticker was well taken. i did not need the penchant i was promised. the demographic shift and if you

agree, you grandfather me and you grandfather the problem. they grandfathered me. >> violet baby boomers retire and catching them and i think it would say cutting the benefits to people who do not need them first would be along with raising the retirement age of the most sensible priorities. >> ok, i have a clock flashing over here that says 00:00, that is the rating? [laughter] [applause] [laughter] >> with that, i want to thank our panelists are coming out today and think of all of them for enduring this. [applause]

all right. how is everyone feeling right here at the end of the day? day one. a fantastic day, it has been great to see many of you, a lot of the returning, a lot of you for the first time in the hallways, we have a great day in store tomorrow as well. to cap us off this evening, to bring us home, i cannot think of a better person to put a capstone on what we are doing here today and this weekend. he has someone who i greatly admire, his leadership in maryland and also at the rnc, mr. michael steele, he made history when he became the first african-american to be elected to statewide office in maryland were he served as lieutenant governor for 2003 through 2007, when he was chosen to be the first african-american chairperson of the rnc from 2009 through 2011. i think it is important to understand what happened in both

10 years of -- 10 years of his leadership, under his leadership the rnc broke fundraising records and more than 198 million raised during the congressional cycle and i think, i do not think it went to pay anybody's legal bills. [laughter] you can correct. me if i am wrong. around of applause for that. -- you can correct me if i am wrong. a round of applause for that. he fixed the education system, the expanded economic development in the state, reforming the state's minority business enterprise program and sponsoring cooperation between faith-based organizations to help those in need, he is the leader of principles first, of the highest order, he is someone i greatly admire and i am looking forward to hearing his vision for not just our country,

but for the group of people and leaders in these chairs today. with that, i would like to welcome mr. michael steele. [applause] michael: what's up? what are you doing? how you doing? you had me worried here! [laughter] you know your rebels, right? i love it. this is a real honor for me to be a part of this conversation. more importantly, this movement towards preserving, protecting, and defending democracy. towards lifting up the values of america and the principles that we live by. and you, all of you are on the

front lines of that. the honor for me is to be here with you. and to thank youe to say for whu are doing which you are bravely enduring. and what you are about to do. because that is what i want to talk to you about and i want to lay down for you some tracks so that we understand to get our heads around the moment we are in. we cannot deal with stupid. [laughter] right? we cannot deal with ignorance and not understanding what this moment represents. thank you. for allowing me to share thoughts on that and thank you for the entire principal first team for bringing us together. in this way. [applause] because, it is important and like my buddies are in the

house, i know i am good. i am safe. i want to start with the 1970's. the 1970's. america was changing and the idealism of the 1960's was being tested by the trials of watergate and vietnam. from the full throated expression of conservatism by ronald reagan i recall as a young man, that this time was different. i recall what seemed so strange to some people today. that a 17-year-old black kid growing up in washington dc could find himself values, priorities, his beliefs, reflected in what he heard from a republican party and its leader whose experiences and

backgrounds were so very different from his own. in a life spent advancing republican principles since then, i have had the privilege to do so when it was not particularly easy. in fact, in many instances, it was unwelcome. yet, with all of my republican bona fides like many of you in this room, and outside of this room, this republican party is not enough. it is not enough. over time we would watch republicans lose their voice on things that mattered and they bent of the ark of the party towards the baser motives of one man who was neither republican, nor a conservative. more and more of the men and women who once stood on the front lines of moving the party into the future were forced to retreat from the future and watch this once honorable

political movement rooted in principal and core philosophies spiral into a cult of personality. i would like to begin this conversation with a defense of the things in a particular thing that our mothers told us as young kids that they did not have too much of. common sense. what are parents knew as common sense is the unsung hero of our decision-making. the silent died that goes unnoticed but remains as a central element of our daily lives. it is apragmatic at intuitive wisdom that helps us navigate the intricacies of existence. offering practical solutions to complex problems. in a world where we are bombarded with information and conflicting opinions, common

sense stands as a beacon of clarity. guiding us through the noise and chaos. what happened? how did we lose our common sense? common sense is supposed to be an equalizer. it levels the playing field where the wisdom of a sage aligns with the insight of a child. when it comes to our politics today, it appears that the children have gagged and bound the sages. the application of common sense is often overshadowed by partisan agendas. polarized ideologies, and sensationalism. however, harnessing the power of common sense gives any political movement and its decision-making

is not just an unofficial, it is imperative. it is imperative for the well-being of our society. at its core, common sense and politics involves approaching issues with practicality, rationality, and a focus on the common good rather than the personal or partisan gain. it requires a shift from divisive rhetoric and entrenched positions towards solutions that actually benefit the broader population. which brings me to our two political parties. political parties that many in this room have come to learn our a bit like a rash -- are a bit like a rash. unsightly, irritating, and lacking any ideological coherence. however, also like a rash,

political parties can be a problem. they cannot be safely ignored. a rash may prove inconsequential , a rash can heal itself, but in the case of our current political climate, it may be a symptom of a malady that is much more serious with consequences that could leave a permanent scar or worse. since our founding, the story of america largely has been about what we aspired to be. no doubt our recent presidential and midterm elections have tested that proposition as our elections have become more and more about what makes us mad.

restoring elections, there is nothing more dangerous than unmet expectations. it has been the unmet expectations of countless americans fueled by the lazy and often times incompetent behavior of elected officials compounded by the zero-sum engagement of both political parties that have defined the current political landscape. we have allowed our anger and frustration to be exploited to the point that we no longer recognize the face of america. or that it does not have to be the great america. america is blessed. we have lost sight of our blessings. we are blessed by the fruits of this land. we are blessed by the spacious

skies and amber waves of grain. we are blessed by the exceptional nature of the people who call themselves americans. at the heart of all of that, is the faith that weight place in freedom. -- is the faith that we place in freedom. the founders and trying to this ideal in these words. -- enshrined this ideal in these words. we the people of the united states in order to form a more perfect union, establish justice , insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty, to ourselves, and our posterity.

they wrote those words with a lot of people in this room not included in them. but we are now. that is the blessing of america. while the ideal in our founding would be transformational, so too were concerns about its lasting resilience. ben franklin noted upon the signing of the constitution are a new constitution is now established, everything seems to promise it will be durable, but in this world nothing is certain except death and taxes. [laughter] >> franklin would go on to cite the people must take part in and to support the government in order for it to be successful.

let me repeat that. the people must take part in and support the government in order for it to be successful. during his farewell address president george washington warned however fashions -- whatever factions are likely in the course of time and things to become potent engines by which conning ambitious, and on the bold men would be enabled to subvert the power of the people and to usurp for themselves the reins government, destroying the engines which have lifted them to unjust dominion. >> washington and franklin new what they were talking about. they saw us coming.

we bear witness to washington's warning, the republican party has become infected by such conning, ambitious, and unprincipled men who have done their very best to subvert the power of the people. we have watched senators and house members walk away from reelection because of this infection. representative ms. cheney lost her republican house conference chairmanship and her seat in congress because of this infection. our fellow americans stormed the halls of the united states capitol because of this infection. one is seized by infection, we must want to get better. to be better. to do better. how else do we go on to form that more perfect union? liz cheney was direct to the

point about this, we cannot embrace both the big lie and embrace the constitution or even democracy itself. defending the and dependable -- defending the indefensible time and time again has left a stain. it has left a stain on the contrary, it has left a stain on us. while the former president donald trump spent time successfully reshaping as much of the republican party into his image and failing that, setting the rest of it on fire. the fracture is not the biggest issue in american politics today. we have lost sight of that. in fact, this fracture was alone in the making before there was even a president donald trump. this fracture is significant in

highlighting the ongoing battle to preserve, protect, and defend american democracy. from the voting rights to constitution and rule of law, to the ones lauded choice of a partisanship, character over corruption, and country over party. we have witnessed a systematic deconstruction of the legitimacy of our republic, ultimately to the point that one of our two major political parties declares that the events that occurred on january 6th or political discourse. how messed up do we have to be to get to that point? americans are exhausted. physically, emotionally, and spiritually. but the question i have for all of you in this room and for those of you who are hearing these words is are we so

exhausted that we cannot begin to address our wounds? that we cannot begin to unify behind our shared beliefs? that we cannot again looked at each other and say let us do this together? to truly unify we must first be honest about what our nation is going through. more importantly, care about it! i presume that is why you are here. you give a damn about your country. you give a damn about your neighbor, your friends, about people you do not even know. they stepped foot on this soil i want to be a part of this great experiment -- and want to be a part of this great experiment. they want to find their own little piece of the american dream, as families in and outside of this room have.

that is our story. that has been our blessing we have shared with the world. you give a damn enough about it to protect it. our public ultimately -- our republic has reached the point that our minds are fogged over by the magnitude of post-covid life, and current global events, the distractions of politics, but we have always found a way to lift each other up as we lived the nation to do better and to be better. as others quoted, america is a more enlightened than any other nation, but rather, in our ability to repair our faults. as i said -- [applause] as i said it is not about

america's greatness. the revenue but how blessed we are -- but rather how blessed we are and we have the ability to face adversity and the difficulties that we encounter. to repair our faults, and to move our country forward. and now the hard part. this is where your leadership comes in. this is why each one of you are here. to help us heal, help us repair, help us reconnect with our fellow americans. to help each other understand why this wacky, crazy experiment still matters in the 21st century. you listened today and you will tomorrow to people laying out practical solutions and they are important. they are real.

they are doable. we digest and we go through and we kind of work out some of the angst and the pain in the frustrations we have had with all of it. it is time to get busy. it is time to get serious. it is time to stop making excuses, it is time for each one of us to stand up as part of we the people and the legacy that has been handed to each one of us to help strengthen the country and move it forward. you cannot sit down and think someone else will do it because they will not. you have to lead now. you have to be the leader now. our country has witnessed difficult times. it has witnessed an appalling injustice. it has fallen short of the ideal positive at its founding.

notwithstanding the sacrifice of prior generations, we remain vulnerable to the appeals of basic elements of our nature. how much do we really, truly appreciate the danger of unmet expectations? are you even concerned that at this hour our nation is moving further away from its ideals and hopeful optimism? are you just rationalizing all of what is happening because of the tribe you belong to? which do you value more? the price of gas or the price of freedom? what concerns you more, the increase in the rate of inflation or the rate at which state legislatures are decreasing access to the ballot box and fundamental rights? the problems we face are real. voters and those maligned as deplorable or as clean to god or

religion are coming from countries or from cities no human being would live in, those people, our fellow americans are right to feel marginalized and ignored. many of our communities, those far from washington, new york, and silicon valley are afflicted by a growing despair. it breeds pathology that further afflicts our neighbors and even our families to our basic truth and facts are no longer believed. one individual can come in and reshape the land. in his image. to the choices we have made and the scores of national and local elections we have abolished slavery and expanded suffrage and provided conditions that have heightened the standard of living unmet anywhere else on the planet.

more importantly men and women we choose to lead during these times understood that despite all else, our american purpose remains to work for achieving the ideals written on parchment years ago. more than most, abraham lincoln understood that those ideals if they were implemented would be transformational. a nation conceived in liberty could and it did empower us, each one of us. we the people. in this moment. to help our country. to stand with our neighbor. and to defend against a liberal -- against illiberal and ugly behavior. do you still believe in america? it is on us to understand and

answer exactly what that question is asking. finally, addressing a reunion of civil war soldiers in 1875 as grant predicted that dividing lines in the nation's next great conflict will not be masons or dixons, it will be between patriotism and intelligence on one side and superstition and ambition, and ignorance on the other. 8075. -- 1845. he just called us out. the narcissism and self indulgence in state capitals across the nation not only impedes the formulation of sound public policy but it has corroded our politics. turned facts into lies, and

allies into truth and made our personal relationships one to the other nothing short of nightmarish tribalist entitlements. everything is a fight. we have become like our public officials. either too afraid to speak truth or apoplectic about renal and observe nonsense -- over nonsense, we lose our mind over dumb stuff. a governing coalition that coalesces around a personality or the latest rantings of unserious people, rather than addressing the nation's needs is not just unsustainable, it is dangerous and debilitating. it is not leadership. that is what you are required to bring in this moment, each one of you, leadership. that is focused and driven by principal.

that people see themselves reflected in, their pains and desires, elevating up for them their freedoms and helping them understand why we are all connected. i have no ending here. that is why you are here. because the ending is left up to each one of you in this room when you walk out that door. you are riding it. you are going to live it. you will share it. you are going to make it possible for someone else. it will either be a good ending or it will not. dr. king knew that his dream, that movement towards civil rights and human dignity would not be realized on that national mall in august of 1963.

it would not be realized in his lifetime. it would rest in the dreams and ambitions of americans as they faced like his generation efforts to use the constitution and our civil rights against us. he understood that was the essence of the dream, that we would rise up in that fight. as we witnessed our leaders today using our rights and the constitution against each one of us. his faith in us led him to believe that we could nonetheless write this new chapter, on behalf of liberty, on behalf of of freedom, on behalf of opportunity, on the american dream.

the question is are we willing to pay the price to do so? defeating ambition and ignorance with patriotism and intelligence begins with applying a little common sense. as we do so, we must not only embrace but install outdoor democratic principles like civic responsibility to the rule of law and constitutional order. this is how we defeat the tyranny. the tyranny of donald trump. this is how we defeat the tyranny of the illiberal. destructive behavior. the undermining of the value of the proposition that all of us are free.

[applause] last point. we have work to do. this does not end well for any of us in this room or outside of these walls. do not screw it up. [laughter] [applause] >> day one in the books, thank you everybody for coming, i think for three quick announcements very quick, the first is if you did not get a chance to get your book signed by cassidy, she is coming back tomorrow, she will sign some books tomorrow if he did not get that chance. a second announcement is if you are interested in the grassroots leadership session, it is an

optional session in here at 7:00 p.m.. go get some food and take a break and come back. we will be talking about principles first and what we have planned. brainstorming ideas about how we can kind of take this energy and momentum throughout the course of what will be an important. year. . last but not least, what is the third thing? [laughter] i am like rick perry over here, what is the third apartment? energy? 1, 2, 3, the start time tomorrow, 9:00 a.m., we start with the panel, michael wood will be joined by their former commander of the international space station, that will be interesting. and after that we will have george conway, and others. come back, we will get going tomorrow morning.

[applause]