I really thrilled. One of the things we are trying to do is respond to suggestions and i want to say that it is a real pressure for me to be back because this is my third winter haveng and i am honored to the opportunity to kickoff this topics session here today. Of this session will consist and presentations and we will cover everything from Civic Engagement to the National Infrastructure bank to state successes. Pressing its use for all of us and these are issues we need to pay close attention to, if we are not already. The presentations are designed to introduce food for thought and give ideas that we can take in our ownd value to states with a Forward Focus on the future. Im going to kick it off, because i have the privilege to talk about Civic Education in this country. There is a saying among governors that you always remember your first bill that you sign into law and, for me, it was the first law we signed in arizona and we were the first filled aand it for Campaign Promise and it is something that the people in this room are really good at. It filled a need in our system. In many things do you have front of you in this environment ,hat passes with bipartisan popular, and wide support, well, the american civics act will make sure that all of our students graduate with a basic understanding of our National History and guiding principles. Was theay oconnor first woman to serve on the Supreme Court and called this a on education and i felt compelled to address it. 16 soon. Looking at as youutchison know, the Arkansas House passed their version by a landslide vote and we are excited that the bill is on its way to the senate and we are encouraged that it will meet the sing jurors the desk for signature soon. I am asking you to direct your eyes to the screen to show you a sort video. The educated citizen knows how much more there is to know. Informedn educated and people will be a free people. Lets start with some basics. More emphasis on American History and civic ritual. The ignorance of one voter in democracy adds to the insecurity of all. It is clear that the future activecountry requires and engaged citizens, but Many Americans cannot name a branch of the government. Ofwithout a knowledge civics, people are deprived the ability for change in the country losese out. The Civics Education initiative is an effort to ensure that all 50 states have a graduation requirement that students must pass the same civics test that all new americans take. This 100 question test provides schools maximum flexibility to implement it in the way that works best for them. Unlike standardized tests, it cannot negatively impact funding or job security. This commonsense legislation has been passed and proposed in states across the nation. Im proud that we were the first state in the country to require of civics test. It was the first bill that i signed as governor. This Important Initiative is a First Step Towards a more engaged and typically minded youth. We prepare students for life. By putting civics on statewide assessment, we are showing students that knowing how government functions is is important as math, science, or english. So many people are not aware, let alone engaged in the issues. Our generation needs to understand the structure of our government. This initiative was so easy to implement. Because the teachers and Study Materials were already in place. This is not like other tests that require major funding and resources from the state. The test is free, the Study Materials are free, and it is easily accessible online. To become a citizen, i had to pass a civics test. I was very emotional when i became a citizen. It was something i had desired for a long time and it did not come easy. It took a lot of time and sacrifice, but it felt like this country was finally my home. How can we expect new americans to know this information and not the grade school and high school kids, upon graduation from an American Public high school . From my experience, when my students know that something is on a test, they pay attention. This is our first step to help students have a basic understanding of civics. If you are going to be involved in a community, you need to understand the levers of power and how to move things forward. Its a great way to produce more active, engaged, and knowledgeable citizens. This is the kind of legislation we can all get behind. Protect the future of our nation by creating active, engaged citizens, ensuring that America High School students understand how it works. Lets pass the Civics Engagement Initiative in every state. [applause] want to give a big thanks to everyone involved in that video and for helping us to spread the word on this great idea. I especially want to thank governor and jay nixon, the former governor of missouri. It is a testament to the strength of this organization that when i came in as a new governor there was a class for new governors and it was Governor Nixon of missouri that was one of the instructors. I called him up and asked him to be the cochair and champion on this National Bipartisan effort. He was an easy yes. Im grateful for that. While im on the subject of recognizing leadership, i also want to express my gratitude towards norm mcclellan and foster freeze, for their commitment to this program. They are both with us today. It is because of their generous philanthropy and dedication to this issue that the discussion has been raised from the state level to national level. So, thank you very much. [applause] governor ducey and as i mentioned before, in this political environment, Civic Engagement is a bipartisan issue. Im proud to stand shoulder to shoulder with the individuals who bring action to this vital cause. Some, as you know, i dont come from a traditional political background. 10 years ago i was running an Ice Cream Company called cold stone creamery. Let me tell you, you get a lot of undeserved popularity when you are selling ice cream. I want to assure you, that all goes away when you balance your first budget. It wasnt until i sold cold stone in 2007 that i first got involved in elective politics. Thats when i really started to pay more attention to what was happening in government. I wasnt happy with the direction that things were headed. I decided i wanted to do something about it. Public office seemed like a good place to get started. In 2010 iran for straight state treasurer in arizona. As i started my campaign i realized i was spending an inordinate amount of time having to explain to Business Leaders in the state of arizona that the office of state treasurer was an elected office. I even had one Business Leader that many people would recognize his name in the state of arizona who said oh, you dont have to run for that office. I can get you appointed to it. That just wasnt factual. I want you to think back on your own years campaigning. Im sure that you had to explain basic principles of governing and civics to voters in your state. So, for years later, when i was elected governor of arizona, i made the american civics act an important part of my education platform. As we saw in the video, the idea is simple. All graduating seniors must be able to pass the same test required of a new United States citizen. This is common sense and i think it is more crucial and important to healthy political debate than ever. It was john adams who once said that all children should be educated and instructed in the principles of freedom. I think that is something that we can all agree on. How can we expect our children to protect the principles on which this country was founded if they dont even know what those principles are. We talk a lot about how important it is to vote, to be a good citizen. To get involved in Public Service. We tell young people that it is your civic duty, it is your responsibility. And yet after every election we are disheartened by low youth voter turnout. We expect them to do their part, but i would challenge all the governors here, who have wheeled on our part . Here, have we all done our part . We saw only 59 of eligible voters actually cast a ballot. Meanwhile, as Governor Nixon mentioned in the video, numerous studies and surveys show that a majority of americans lack the basic understanding of how our country was founded. How it is governed and what it means. And what the responsibilities are of a citizen. The statistics are alarming. According to the National Assessment of educational progress, only 9 of fourth graders can identify a picture of Abraham Lincoln and tell us two things that he did that were important. Just 7 of eighth graders could correctly identify the three branches of government. And overall, only 24 of High School Seniors scored proficient or above on the nape civics test. In general, interest and proficiency in traditional and basic civics is declining. In a december 2014 survey, only 37 of adults said that it was important to be informed about public issues. Down from 56 in 1984. The picture is even more grim for young citizens. The voting rate of the Millennial Age Group dropped from 51 in 1964 to 38 in 2012. More recently, only 16 of this age group said that they trust government. What people do not understand about the system, when people do not understand the system and how they affect change within it, they are naturally going to be frustrated and too often this leads to them disengaging from the political process. The american civics asked addresses this and it begins with all of us in this room. This is something that we can touch all of our High School Students with across the country. Because as i like to say, its cute when a fiveyearold doesnt know who the president of the United States is. But when 10 of our College Graduates believe that judge judy sits on the Supreme Court, its just not that funny. Let me give you a feel for what some of the questions are on the american civics test. What country did we fight in the revolutionary war . When was the declaration of independence adopted . What are the first 10 amendments to the constitution called . These are not difficult questions. These are questions that every student should be able to answer before graduating high school. I think that when we were growing up, we dont even remember where or when we were taught these things. They were with our coaches, our scoutmasters. Today, unfortunately the statistics tell the story. Too many of our kids do not know the answers to these questions. But it is not all bad news. Because like any national crisis, we have some wonderful people that have stepped up, organizations all over the country, to find a solution. One of those is the Joe Foss Institute. I only got this idea that he is to dinner as Richard Dreyfuss was speaking to this dinner, with charles krauthammer. One representing the right, one representing the left. They said that they disagreed on every issue under the sun. But the only issue that they have 100 agreement on was the american civics act. It was the way that they had a healthy, respectful, civil kind of debate on the direction they wanted see the country go. Like i said, there are not many issues that, as a governor, and when i was running for office i adopted this the next day, would get spontaneous applause when i said we were going to bring this back to american high schools. The Joe Foss Institute had a model bill. I want to take a brief moment to briefly recognize one of the biggest champions of this effort. My friend, dr. Lucian [indiscernible] he had planned on being here this morning. Sadly, a death in his family has rerouted him back to ohio to be with loved ones during this difficult time. Our condolences and prayers are with the family. While we are looking forward to hearing from him today, on behalf of him, karen summers is here to speak for the institute. Will everyone join me in giving a warm welcome to the Vice President and director of communications, karen summers . [applause] miss summers good morning. Im happy to be here on behalf of dr. [indiscernible] and i want to thank you personally for your efforts in your vital role. You took an action that is effective leadership and great governments. Governance. Today the Civics Initiative has grown into a National Effort with strong, bipartisan support. I am proud to say that it all started in arizona. However, i think you all consents the magnitude of this endeavor. It is a significant step forward. And yes, it is a big lift. With this in mind, i would like to talk to you about our involvement in this initiative, why we are going with it and why you should care and how you can help. First, let me tell you about jf i. The enduring with legacy of a medal of honor recipient who founded the institute in 2001. Serving nearly 2 Million Students through its veterans inspiring patriotism program, which works with vets to deliver educational materials, including the u. S. Flag and founding documents to classrooms all over our country, in all 50 states. Through this endeavor we were able to see firsthand how the emphasis in the classrooms has shifted away from civics, creating, as governor ducey said, the education crisis that we find ourselves in today. So, in 2014, jf i launched the Civics Initiative. Now, as you can see on the map, 15 states have enacted our proposal. 20 more states are considering the legislation this year. By the end of 17, we hope to have passed the legislation in over half the country. State to have adopted this requirement are already engaging students in showing transformative changes. For example, in jamestown, north dakota, not one freshman passed the pretest given on the first day of class last year. In fact, most of the scores were under 45 . However, by the end of the semester, 95 of the students not only passed the test, but they scored over 70 . In terms of the model of the test and how it is given, we know that there is no one size approach that fits all. The states are, in fact, the laboratories of democracy. We are seeing many of them take ownership at customizing the legislation to fit their own states and needs. For example, some states have increased the threshold of passage from 70 to 60, adding their own questions to 70 from 60, adding their own questions. Regardless of how each state implements the initiative, its clearly a very different experience than current standardized testing models, where students are pulled out of the classroom and they spend hours coloring the bubbles on the scantron paper, hoping that you dont have to erase anything. The citizenship test, however, is not that. It is a very straightforward test that can be taken on paper, online, or even on an app. And it costs nothing. I would like to repeat that, it absolutely costs nothing. It is not tied to teacher salaries or School Funding and all it does is establish a baseline of knowledge which is absolutely necessary to understand higher topic levels. We all know that before you can read, you have to learn to spell. Before you can spell, you have to learn the alphabet. Before you can solve complex equations, you have to memorize your multiplication tables. These concepts are fundamental, Critical Thinking to those subject areas. We believe that these questions, posed by the civics test, are just as fundamental in civics. As Thomas Jefferson envisioned, its our responsibility to pass on these civic views and set High Expectations for our children and for future generations. And now, before i turn it back over to the governor, i have a question for all of you. I am going to ask you to think back to your days as a student and some of us will have to think further back than others. What was the one question you could count on someone asking in your class every time, every lesson, without fail . We may have even been one of those that asked the question. Is this going to be on the test . Ms. Summers is this going to be on the test. You remember how it all went. If the answer was yes, we all took our notes. Now they get out their computers. We had had in paper. We engaged in the subject matter and paid attention. On the other hand, if the answer was no, the entire class leaned back, took it easy, drifted back, disengaged. Today they check facebook and their phones. From a student perspective, having civics on a test that matters is important. It tells them that the topic is important. As it relates to america, the same is true. We want our students leaning forward and informed. We should expect no less of ourselves. This can be a team effort. I hope that you all will throw your shoulder into this and help us to get it done. In a moment, you will have in front of you packets that tell you how to move governor ducey thank you. I would like to thank you for making it so easy for us governors and legislature. Im so optimistic. I think karen gave a great example. You memorize your multiplication tables so you can move forward with math. If you know the answers you can move forward in civic debate. We had this crisis that Justice Oconnor spoke so eloquently about. It will be a good first step as a solution and that is why i am encouraging it, but at the very least, this will entice students to learn basic civics. It can cause lifelong engagement among american citizens of all ages. If you care more about computer coding than you do civics, i want you to know a number of students in arizona created an app so students could study civics on their phone. That has been a real positive as well. I know not everyone is on board yet herein that is ok. Arizona was the 48 state to join the union, the 48th state to join the union. We know good things can take some time. I like to save the rest politics are good policy. So consider this. According to a poll of 804 likely voters nationwide, 74 would support a bill making a civics test a requirements of graduation. 59 said they were more likely to support you, their elected officials, if you supported a proposal like this. So, factor that into your thinking. You and i are chief executives of our states and this is one of the most important things we can do, to make sure when we eventually pass the torch, we did our part to leave our state better and stronger and smarter than we found them. Please put civics on a test that matters so when our childrens become leaders and stand at the same podium you stand at at home, they would make our framers proud. I look forward to working with all of you answering any questions you may have, and i would like to once again thank karen summers for her help with this project. So, next up, we have leo hindery. He is the managing partner of Intermedia Partners who will lead a discussion on the hot topic of our nations infrastructure. He is an accomplished Television Executive holding a role as the chairman and ceo of the yes network, the Regional Television network for the new york yankees. During his tenure there, he won five executive producer enemies for outstanding executive producer emmys for outstanding programming. He has been cabletelevision operator of the year, one of businessweeks top five executives of the year, and one of the cable industrys 25 most influential executives over the past 25 years. Ladies and gentlemen, please help me welcome to the stage leo hindery. Thank you, governor. Its a real pleasure. Thank you all very much. Its a real privilege to be with you today. The issue of infrastructure is, first and foremost the issue of the governors. It is not the issue of our governors. They will enable it. It is not the issue of our administration. They will approve it. It is first and foremost part and parcel of your stewardship. You know firsthand better than anyone that infrastructure in the United States has fallen well behind, whether in real dollars or current dollars, with the greatest means being in transportation projects, electricity, broadband, and an area close to my heart, airports and wastewater objects. These are the lowest level since records have been kept. Figures that have now become indisputable is the shortfall of projects is on the order of 3. 3 trillion over just the next decade. Fairly indisputably, about half of that number seems to be outside the ability of our municipalities. We believe that this is outside the capability of your state and municipal budgets. And yet we know firsthand that infrastructure investment, more than anything else is perfectly poised to take advantage of the growth sectors of our economy, whether they be in energy, driverless vehicles, tech, all of these just being able to wash over our initiatives. And especially notable, despite a nationwide decadelong program of investment with its massive, massive multiplier effects throughout the whole of our economy is best position of all of the things we might consider in congress and elsewhere to close the persistent real unemployment gap in our country and in your states. We have been asked this now for almost a decade. And there seem to be only three meaningful funding alternatives available to the administration and the congress. We are all accustomed to smallish block grants authorized by congress of the sort we have seen for decades. An alternative would be a new budgetary cap, which is a defined term in our system. This one would the for the infrastructure, since the gaps do not provide an opportunity today for congress to allocate funds for infrastructure, and then, as we suggest, a third alternative, which we will discuss at link, which is a new independent infrastructure bank. We know from the past, a block grant or a budgetary cap would have to be determined in a regulation bill enacted by congress. This means it would be practically impossible to prioritize projects as we have seen firsthand. Also, perhaps most important of all neither bloc grants or spending under a cap would leverage services in any way that comes close to meeting the figure we have discussed. In short after a decade of analysis and effort, only a new National Infrastructure bank would address these limitations and overcome these obstacles. We would have nonpartisan directors appointed by the president and confirmed by the senate. By law Investment Decisions would be made in a transparent, bipartisan manner and in order to make the bank as responsible as possible for the differing needs across your 50 states, we would regionalized the banks in ways we have done already with the federal reserve. The bulk of the banks capital structure would come from loans in the states Pension Plans and certain sovereign wealth funds, as we find in our way. Only the remaining 10 would be appropriated by congress. To repeat, the remaining 10 , only the remaining 10 would be appropriated by congress in the form of shared first dollar loss guarantees of these projects. In other words 355 billion would come from the judiciaries of our country and outside our shores. The first 300 billion dollars of losses on our projects, if there are any would be shared 50 50 by the bank and the u. S. Treasury. Importantly, it is the fiduciary plans relatively low cost of capital which matches up best with the objective of achieving for the bank the lowest possible cost of capital, which has seldom been the case with pe3s, as productive as they have been. The plans are induced to invest in the bank by the support by the shared federal guarantees. Its especially important to know because this is the obstacle that most confronts us. Because the investment rate is the minimus on the order of 1 or less, omb, we believe, after many discussions, omb should base on the president of the very low risk profile of the shared guarantees, support for congress only the cost of any drawn down guarantee, only if and when these support payments are made. In essence the amounts scored by omb for federal budget purposes will be much, much less than the 150 billion figure and that will only occur as and if losses occur. The major reason guarantees score so little is that lenders and ultimately borrowers pay a guarantee fee to cover the anticipated cost of default. Since they often run at zero subsidy, this should mean in the specific case of our National Infrastructure bank, little or zero cost to american taxpayers. I would contrast this with the promises we heard throughout the many 16 campaign 2016 campaign. 250 billion dollars here or there. None of which, with all respect, is possible under our constraints in congress. Wellmeaning and wellintentioned women and men who govern this country have often seen, with all respects, eyes bigger than their stomachs in this category. It is inconceivable for those of us who do this that anymore then tens of billions of dollars would be possible through this congress, no matter how the projects come out. 10 years ago this month, we started with a nonpartisan, bipartisan objective of advancing the trillions of dollars of needed Infrastructure Projects while minimizing the federal governments contribution. We have an objective of fairly valuing the broader array of projects out there through the states. We want to make sure that these projects are advanced as efficiently and creatively as possible and we hope that we would impact fully address the real challenges that confront this country. Objectives one and two, being of size and being fairly appropriated, we believe that is all taking care of by the bank. Regarding project approval and employment, we believe since the current approval architecture is not at all conducive to a major infrastructure project, the major legislation should also reconstitute the project approval process so that projects are shoveled through in no more than a year. We believe the white house should be granted authority to appoint one agency as a onestop shop. We believe that environmental reviews should be coordinated through a single designated federal agency with reasonable limitations on the extent of the subject matters of such reviews and we believe the commencement of such legislation should be completed within the first 90 days or not at all. Finally we believe that all Infrastructure Projects approved by the bank should require that major associated purchases be made in america with it leads with at least 90 of the content made in america were manufactured within americas borders. And we believe in that Infrastructure Projects should require that all associated work should be covered by prevailing wage laws and by the related project. Scott and his colleagues have asked that we share these comments with all of you in a mechanism we are not yet familiar with. Let me close by looking back a bit too countless administrations since the Eisenhower Administration where an infrastructure need that is exceeded by billions of dollars, now met by three chilean dollars has only 3 trillion has only had plot grants that address a small fraction of those needs. With all respect to congress, we cannot begin to address the half a trillion dollars of projects you need that are validated in all 50 of your states in a way that relies on congress for appropriations. With all of the good graces of the new administration they have identified, we understand, 51 projects throughout the country some in your states, some not in your states aggregating hundred 26 billion of expenditure. These are thought to be by the new administration Shovel Ready Projects and they are good ones. However they leave out a number of your states and that figure is so far beyond the can in capability of congress in the appropriations process as to cause us great alarm. But even if congress were to approve 226 lien dollars of Infrastructure Projects, that would be less than a fifth of the projects you have it in a fight for your states which your citizens you have identified for your states which are citizens need. In closing, we said it needed to be big. It needed not to be scored for federal budgetary purposes. It needed to be regionalized. We thought the governor of alabama and the governor of alaska and everyone in between needs to have these projects to be approved. We allowed for a few minutes of q and day. We are happy to follow up with any of you on this project that is being considered, as we speak, by the new administration and president trumps colleagues and leadership in the senate and the house on both sides of the aisle. And again, as i said, scott and his colleagues will make that available to you in some fashion later this morning. This is an enormous privilege to be invited here this morning and i hope this has been somewhat informative. But, scott, we do have time for a few questions from people in the audience as well as certain of you governors. Thank you very much. I have a quick question for you. You mentioned several different criteria that this was being proposed with. I think it is a fantastic idea. I think its innovative. I think it harnesses capital that otherwise is no more better deployed to serve a need. Im curious about one caveat you mentioned right there at the end that you felt it would be best done only at the prevailing wage. Why is that . Why could you not write codes and hold people to that that would really let the free market speak as to what is the most costeffective use of that capital . Governor, i think you could. You could do that ably. You have been a leader of that initiative in the state of kentucky. The problem is weve got to get something through congress. And in talking to the administration, this administration, they were comfortable with me putting in that phrase, but its above my pay grade. The thing that i find so daunting is the and norman he of these projects and the resulting user fees that will need to be generated. More than the amount of the bank, as attractive as that is as we talk about the full 1. 5 trillion, it is the cost of capital and wellintentioned projects throughout the United States have had an implicit cost of capital of 10 , 11 with the immediate feeling and the user fee. We said, who could we get to like the bank and get a 2 and 3 return of capital . There are fiduciaries who found that acceptable, provided we gave them some support. We tried three or four different variations of what that support might look like and we talked to the major fiduciaries in the United States, budget plans and overseas, and this shared first dollar of loss, which will never materialize so, we were big, we work nonscored for federal purposes i can with great conviction tell you except for the administrative cost of the bank, we will likely never score for federal purposes this bank. We did it in a way that we thought it the user fees in your states and in others at acceptable levels. I would as a progression i would, as a digression, this bank is not supposed to fix the broken lock in the mississippi. There is a levy under some distress in louisiana. This is the bank for projects of electricity transmission in hair, inroads, and bridges and broadband that you simply, with all respect, cannot afford to fund. Thank you. I appreciate the presentation here and it does give me some pause, maybe an outside the box need to look. Im still puzzled about why, if we have this need for capital, and certainly in utah, we have been building a lot of roads and freeways, but we have always been able to go to the private sector and borrow the money we need there. Why is it that we need this new government run whether it is a Public Private partnership, but what is the advantage of doing this as opposed to just going to the private sector . It is primarily the cost of capital. To repeat, there is about 3. 3 trillion of need, roughly 1. 8 trillion of which seems to be within the capabilities of your states and minas of pahlavis. It is the 1. 5 trillion above that. We could fund that in wall street terms, but we would probably fund it with double digits implicit in it. We thought, where can we go first for low single digit rates of return and that took us to the fiduciary community. We started with the premise, governor, that we could not get anywhere close to these figures to congress. Wellintentioned administrations in the past typically have asked congress for 40 to 50 billion of block grants and even those have struggled. So what we are saying the capital is in the marketplace. The capital, youre saying, is in the marketplace, but through existing banking policy, we cant get that through the federal government, but through existing banking opportunities. You are suggesting that the cost is too high and this will be a less expensive way to borrow money . Its a fact it is a less expensive way, governor. Its a nonpartisan way so approval projects do not fall into the morass we sometimes encounter and of the 50 governors, its only their budget strength that calls us into being considered, not the politics. It is fundamentally because of capital. It is low single digit i would expect that the marketplace would not care about politics either. It will look at the merits of the project and decide whether we should lend the money or not. I agree. With all respect, you could hear from congress and the administration to just do p3s against these massive numbers and contemplated, knowing historically, and we can prove it, p3s give you projects, sometimes give you unaffordable projects. A big round of applause for leo hindery. I know there are more questions. I saw governor walker. He will be here. There will be the speech will be online as well. We have two more speakers scheduled. I want to give them time. This is the editor of u. S. News and world report, brian kelly. Here to introduce prying kelly is the cochairman of u. S. News world report and the new york daily news. Eric . Thank you, governor, and thank you, leo, for a perfect discussion. I know the Perfect Place for you to write an article and continued the discussion. And by the way, we pay the same rates as the nga for your article. So, u. S. News has been here in washington since the days of president roosevelt when he was riding and enacting the new deal. Now, we all know the most important biographical piece of information about president roosevelt. He was a former governor. So, although our mode of distribution has changed in the 80plus years we have been here in washington, from the magazine to what is primarily now a digital platform and we service over 35 million unique users each month, our values have not changed. We stand for credibility in journalism and we are the authority on ranking, news analysis, and helping users make important life decisions. Some of you here may have kids thinking about college and you probably have looked at our best colleges rankings as they think about the college process. Or some of you may have turned to our best hospitals rankings as you try to navigate through the health care system. So, today, brian kelly is going to discuss our most recent projects. Brian has been at u. S. News for 18 years, boston of which he has been the editor in chief content of this or any is been the Digital Transformation of our company. Prior to that he was a Senior Editor at the Washington Post. I can think of no one more knowledgeable and expert in working on this, and i know, theres a lot of competition in this room. So, i now turn it over to brian kelly to discuss our latest project. Thank you. Brian eric, thank you. I did not realize i was the editor for 10 years. When i started, i was the same height as governor baker. This will be on the exam, so please take notes. The result of the exam will be published on tuesday. Eric said where doing the rankings, so the rankings will be out on tuesday. Let me give you a little context about how we got here. When i was two years old, i thought i was going to be a genius. I look around the room and i realize im probably in pretty good company in that regard. The reason was i could do the jigsaw puzzle of the states. I could put all of the pieces together, including arkansas and missouri, which are really hard when you are two. Later that fascination led to winning the, i believe, the geography bee. I could list all of the capitals. Including frankfurt. And salem, not portland, is the capital of oregon. I dont want to show off. I did well on the civic exams that karen was talking about. I became a reporter. Was very fortunate to have covered National Politics and a lot of venues, a lot of them in state legislatures. Madison, charleston, west virginia, illinois, where we spent some great time. We have an appreciation for what goes on in the states. We have some of the funny rituals about stopping the clock to make sure that the budget is passed within six months or so. Fast forward when i came to washington. One of the things that i have an appreciation of is how much emphasis the media plays on washington. In the 30 years ive been in washington, that gap has only grown. We see, you know, evidence, even now, as my business is changed, as the Media Business has changed, fewer resources. There are fewer great regional papers. Resources come out of the statehouses. Theres lots to write about. Much of it not very substantial. Theres a lot of hysteria. There are a hell of a lot of people she sing that hysteria. Our sensibility, our dna has always existed the tween the coast. We dont revere new york and los angeles the way that some of our competitors do. We see an opportunity to refocus attention on the states. It is a ranking of the states, but its really a new website. Its a new website called best state, which i will give you more information on that, what the components are. Its about journalism, is about storytelling, its about the two way street in gaining insights and gaining insights from you and your constituents. Why u. S. News . You have been doing this a long time. We have been ranking. We have become an influential force. We view this as important journalism, powerful journalism that helps drive decisions. There are fewer the mortality rate in cardiac care has been diminished because of the u. S. News rankings, because of the transparency. We have been able to have likeminded hospitals look at each other and say, why are more people dying in my Emergency Rooms than yours . Is very powerful data. I think you will have a strong platform to stand on. In this project, we partnered with another system, the consulting firm. Mckenzie. They have been a terrific partner putting together this vast amount of data in the rankings. We understand that states matter. We think the components of what happens in the States Education is at the top of the list, infrastructure we just talked about, public safety, fundamentally the economy, how do you rate the economy, equal opportunity, a very important part of who is benefiting from the system, and government efficiency or if those are the buckets we looked at in great detail. What we found were the things we measured are not just top level. We have 68 of the seven buckets that we think are significant components of the quality of the state. We have 68 measures are we are were looking at things very granular early. Hospital readmission rates. Thats a tremendous proxy for the quality of institutions. We look at access. One of my favorites is completion parole completion. We are beginning to understand that. That is a real metric i know you are familiar with the talks about the quality of rehabilitation systems in terms of crime and corrections. What we found a lot of surprises. Im not going to tell you what we found, ok . Unpromising we will tell you on tuesday. We did find some very surprising things. Its not the usual suspects. A lot of the states of things that they do well. Not too many states have many, many things that they do well. 49 ranked states. Low infrastructure, estate with infrastructure problems could be number one with health care. Each of those components becomes its own ranking. How do we look at those in terms of health care, in terms of education . In health care, with mckenzie we did a citizens survey, what matters to you . Where not just randomly taking these numbers. High insurance rates, though states are going to do well. High achievement rates, the achievement gap between minorities and majorities, these are all key factors that roll up into what turns out to be a best state, but within those components, theres very interesting things that everybody can draw on and hopefully benefit from. So, this is, as i say, a new websites. It will be produced, launch on tuesday. It will have news. It will have profiles of states. It will have opportunities to interact with tourism and economic development. We are primarily a consumer facing company, but we have a thought leader audience. We want to make it as accessible as we can make it, so we have charts and using all of the wonderful capabilities of the internet to give people things that they can understand and measure. Were also interested in hearing from you, contributions from governors, talking about what it is that you are doing. We have interviewed, i know, at least a dozen or so governors already. We think the point of this being a hub or this bigger conversation is really what is going to be, i think, the most useful thing. Why do we do this . We are in the journalism business. We are in the information business here and we try to come at this as objectively as we can. We think we are pretty good at compiling the data. We dont have any ideological issues in this. We live in the United States. We have u. S. News in red white and blue on our logo. We think that there is some disconnect. We get to feel that and maybe make a little money doing it. It is part and parcel with our Public Service mission and as journalists to engage in something and fill spaces that are vacant, which we think is what we have here. Our philosophy in our rankings is, you cant improve we are giving it a starting point for a broader conversation. Surely we can be having this with your constituents. We will have many millions coming in and taking advantage of this information over time. What we want to do is keep in our heart the notion that this is our mission to provide information, to provide transparency in a usable form were decisions can make decisions about the government they have to live with. We think that we have something very exciting and we would love to hear from you when this launches on tuesday. We appreciate your time, scott and tiffany, for having us here. We think we have Something Interesting that we can Carry Forward with you. It is a cliche i am from washington. I am here to help. I realize that can be overstated. But im from a different part of washington. Maybe we can help. Thank you for your time. I look forward to hearing from you in the future. [applause] governor ducey i want to thank frank kelly for being a, and finally jason furman. I was able to first see jason and year ago, and i think we are in for a treat this morning. Jason is with the Peterson Institute for International Economics and the discussion is going to focus on the continued impact of automation and Artificial Intelligence on the economy and the labor market, something i think is affecting a lot of our states. He joined the International Institute for senior economics. He served as the top Economic Advisor to president barack obama for eight years. He served on the council the divisors council of advisors, acting as both obamas chief adviser and a member of the president s cabinet. Please welcome jason furman. [applause] jason thank you very much, governor. Is this working . Its working. I dont have anything super practical for you in terms of a civics lesson or ranking or an infrastructure bank, although all three of those seem great. At least the rankings might depend on what some of my favorite states do. I will reserve judgment until tuesday. I went to talk about a question all of us get all the time. Will the robots be taking our jobs . This is a question that cnn asked in a story last year where they said smart robots could soon steal your jobs. In 1980, they set a robot was after your job. And the new york times, you can find this also in the wall street journal, worried in 1960 about whether the robot was gone to take your job. You can go back to 1935 and the Washington Post talking about taking our jobs. You can go back to 1812. This is a problem that people have been worried about for a while. So far, the answer has been no. This is the Unemployment Rate over the last 115 years. When it has gone up a lot, it has not because there have been more robots and when they went down is not because robots went away. Workers today are nine times more productive than they were in 1901. They have a lot more machinery, a lot more equipment. And they do the job of people who do those jobs, who do not do those jobs anymore. But all of that massive amount of automation we have seen so far has not created an Unemployment Rate. It has made people richer. The gdp per capita has gone up. They spend more on things from restaurant to travel. And not doing as much and that has created all sorts of jobs, making as richer in material goods, and also a little bit richer in leisure, although that process has leveled off in the last couple decades. In fact, the thing that i personally am most worried about right now is not that we are going to have so much automation and innovation it will replace all the jobs, but precisely the opposite. That we have seen a big slowdown in the growth rate of labor productivity. This is a way of thinking about automation. The United States had been growing, it was at a 1 rate, which is pathetic compared to what it was. We are doing faster than japan, germany, france, the u. K. , and italy, all of whom have seen bigger slowdowns and we have. So, the first thing i would say about Artificial Intelligence, about the robots, about automation is we need more of it, and we need more of it in order to increase our growth rates. Its not entirely without side effects and challenges. That is what i want to turn to next. Its not as symbol as every time you have a machine it takes a job in unemployment it is not as simple as every time you have a machine it takes a job in unemployment goes up. When you have jobs the subdued by automation is very substantial. They did not give you the time over which this happen, and for any of you in the prediction business, its already good its always good to predict the number or a date, never both. They put the number 9 and heart of the observation the part of the estimation was any given job you need to do five different things. If automation can do three of those five things, it cant take that job away from you. You still may be human for the other two. These are the range. What i get nervous about though is when you look at what jobs are being threatened by automation. It looks, based on you know, what the chance a job will be replaced, it looks by wage. Examples of radiologists and lawyers were automation might replace those jobs, there arent a lot of jobs when you look at 40 an hour and above that appeared to be very threatened by automation. If you look at less than 20 an hour, an awful lot of them seem like they will be able to be replaced. This is a different study. It reaches the same conclusion where you look at the share of jobs where these skills can be automated. Less than a High School Degree, its nearly half of them. With a graduate degree, its none of them, and that is why you are listening to me speak, rather than a robot. This then creates a challenge. Part of the challenge is the challenge we have seen in the last several decades with the rise of inequality. Theres a lot of different ways to measure the share of the income going to the top 1 . People at the top have had skills that have complemented automation, so they have done better. People in the middle and the bottom have been replaced by automation. That does not mean you necessarily lose your job, what it means that you get under bid by the robot in your wages go down. Related to be same phenomenon, a different way of looking at it, this is the share of prime aged men who were to dissipate in the workforce who participate in the workforce. These are people trying to find jobs. In 1950, it was 98 . It has fallen steadily. If you look, this is mostly people with a High School Degree or less. This is mostly the people whose skill has been more substituted by automation rather than complemented and if you look at women, there is a similar trend since the year 2000. Its not that one for one jobs are being replaced, but you have competition. Some people are thriving in that competition. Others are being left behind and potentially having a harder time finding a job or finding it at a lower wage. Ultimately though, technology is what tells us what is going to happen in our economy. It depends also on the policy choices we make. One way to see that is the same decline in participation of the net of the workforce. If you look at oecd economies from 1952 2016, it happened in the United States at a higher rate than other advanced economies. Italy had really bad productivity. It also had this. It also depended on the types of policies for the the Different Countries have made and i believe you with big pictures about what i think this implies for policy. First, we need more productivity growth this is need more productivity growth. This is not something we should fear. This is something we should celebrate. The second thing is job losses not inevitable. But employment loss is not when they look at training programs, whether they are training job search, apprenticeship, and the like, we have done less a good job in our country then some other countries. That is critical to helping people being employed. The third is the best insurance against technological change is education. This is a lesson we see in lots of different ways, but in coming to deal with the disruption, it is pretty hard to predict what the effect will be. But every time we have seen change, we have Better Change to cope with that. I dont think that you would not see a rise in inequality and the pie is growing so everyone can benefit from it. Thank you. [applause] governor ducey thank you, jason, thank you. I want to thank karen and leo and brian and jason. Each of your discussions were riveting and really raised the breadth of solutions available. Governors, this concludes our plenary session. I would ask you all to join me for a luncheon in salon one. Thank you very much. [applae]
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