Levin talks about trade policy. The National Governors association closed out its annual winter meeting today with a discussion that included senators mark warner, Lamar Alexander and joe mansion, all former governors. They talked about the relationship between states and the federal government. This is an hour 20 minutes. Governors, i think were ready to begin. Welcome, one and all. Its good to see you here this morning. We had a great opportunity to gather at the white house last night and be hosted by the president and the Vice President and the first and second ladies. It was great to see you all. I think we all enjoyed ourselves and had a good chance to just kind of be in a casual environment. Although, we were in black tie. And associate one with another. Good to see you this morning. We enjoyed last evening. As i call the meeting to order, we welcome you all. One thing that we need to make note of is the passing of governor enos who passed away december 29th of this past year. So if you would join with me as we pay tribute to the governor and his service with a moment of silence in his passing. Thank you. As we get started here, let me just make a little bit of a reminder. I know we have some slides that have been going on. We have talked about this in our opening session. But my initiative really on states finding solution s improving peoples lives is an opportunity for us to really highlight the successes of the respective states. I know in this town, we seem to be concerned and see observation of some dysfunctionalty and a propensity to kick the can down the road and not solve problems. And yet the states are having Great Success in dealing with the respective issues of their states and regions. And with innovation and creativity, bringing people together from the private and Public Sector and finding significant solutions. So we plan to highlight that. We have 83 recommendations so far. We would like to have more. Want to make sure that every state is recognized with two or three different issues. And we will compile that and it will be presented to each and every one of you and others at our summer meetings in iowa. And i know on behalf of Governor Terry branstedt, we want to put that on your calendar. We will have this opportunity to have this broooklet which will highlight the successes of your state. Theres a lot of them going on. Its quite encouraging as i have had these come in, as we have tried to spotlight your successes. The Great Successes that are taking place. For example, in mississippi, phil bryant has led an effort to reform the states criminal justice system, something that is being taken up and talked about here in washington, d. C. By our congress. And rather than just warehousing inmates, theres a significant effort to do rehabilitation and see if we can address the causes of their issues and see if we cant help them transition back into society. So phil is doing a great job there in mississippi. Governor bentley in alabama has announced a plan to reform the states medicaid system by increasing the efficiency and improving the patient care. And again, the medicaid system has been something we have had since the late 1960s. The ability for us as states to modify and improve and find more efficiencies, he is doing what he calls regional care organizations, which rewards providers for deliver heing quality healthcare outcomes instead of just reimbursing them for the services that they complete. Virginia, terry mccaulif, launched initiative to protest peoples rights when it comes to Digital Identity and prosecute cyber crime. They have more Cyber Security companies in virginia than any state east of the rockies. So it will be fitting that the governor and his state would help to lead in that effort. In my home state of utah, im proud of the fact that on a very difficult and emotional issue, whether when it comes to balancing lgbt rights with those of religious rights, finding the ability to do that and bring people together is a unique situation that we have had in utah. And we created legislation that respects both sides rights and concerns and put it in one bill. We said that if you bring one bill up, i will veto it. If you bring another bill up on the other side, we will veto it. So we forced people they were willingly to Work Together and come up weaponith a piece of legislation. Utah is a very religious state. If we can get it right in utah, its an example for how we can get it right on this and other issues around the country. Im proud of the work of the states and you and what you are doing to in fact find solutions, be innovative. And at the end of the day, its about people. Its about what we do with the people we represent. What we can do to help improve their lives. Congratulations. We look forward to the compilation of your successes. We will display that to the country. Part of the effort, too, i think is as we have talked about with my initiative is really to bring back and restore if its out of balance i think that it is the balance of power between the states and federal government. Again, part of the challenges i see is that we the people are asking our federal delegations to do more than was envisioned by our Founding Fathers. Its not that theres not good, competent people. Even what we look at some of the hyperpartisanship. I think we just are used to asking. Our congressional delegations is wanting to accommodate. So theyre doing more and more. When i believe that the states ought to be the ones that are probably the first line of defense and the people of american should be asking local people. Thats really where we have i think more efficiency and more effective use of the taxpayers dollars and can deal closer with the people as opposed to the remoteness we find in washington, d. C. So i think what were talking about today is not only highlighting the solutions that come from the states but also making sure we have federal partisanship of the states thats working and probably working better if we put our minds to it better than it is today. The concept of federalism and reinvigorating that concept as envisioned by most of us here is one we can improve peoples lines by finding solutions at the state level. Today as i focus on that, as we together focus on this, we have some very special guests here with us. All former governors. And now working here in washington, d. C. Or have worked in washington, d. C. In different capacities. Were honored to have them here. First im going to call upon governor bill hasmond to introduce Lamar Alexander. Then senator joe mansion. Then we will call on the vice chair to introduce senator mark warner and then i will come back and introduce the former governor of idaho, former senator and member of the cabinet, dirk kempthorn. As we know, being the governor of your home state is a great honor and privilege. One of the things that makes my job wonderful is to have our senior senator be someone who was a governor himself. I never have to call to washington to explain the states perspective on something because Lamar Alexander knows the perspective better than i do. He has an advocate for the states role in the government. I thinkificant pieces legislati. It gives me honor to introduce the senior not Senior Citizen. I just about got in big trouble. I just about ruined all that. The senior senator from tennessee, Lamar Alexander. Will hear about that later. Its my pleasure to introduce my Senior Citizen i do like that. Its really my honor to introduce a longtime friend of mine, senator joe mansion. We worked together as state senators and were able to do a lot of good things that were still continuing to work on today and making West Virginia a better place. During his time as governor, i was the president and Lieutenant Governor and we had a great working relationship. Im very proud of the things that we have been able to do together. Joe was always one of those people as governor who always would reach across the aisle to both parties. It was very successful in our state. I know he continues to try to do that in the United States senate today. So, ladies and gentlemen, its my plush easure to introduce ou senior senator, senator joe mansion. [ applause ] its my honor to introduce our senior senator mark warner. Mark was a spectacular governor of the commonwealth of virginia. Has been in the senate, first elected in 2008. Reelected in 2014. Mark comes with a strong business background. Was one of the pioneers of the cell phone industry in this country. Has gone on in the Senate Finance and budget and Banking Committee as well as the inte l intelligence committee. We are blessed in virginia to have him as our senior senator. Its my honor and i will include Patrick Henry and thomas jefferson, the greatest governor in the history of the commonwealth of virginia, mark warner. [ applause ] this is an esteemed group here. Its my opportunity and privilege to introduce governor dirk kempthorn. So its probably befitting me because we refer to idaho as northern utah anyway. So governor, were honored to have you here. President and ceo of the American Council of life insurers. He started his Public Service as a mayor in boise, idaho. Comes from local government, which i have a great affection for. Elected to the senate in 1993 where he authored the Unfunded Mandates reform act. After one term in the senate, he returned to idaho to run for governor. Was elected there. In 2006, he was appointed secretary of the interior by president george w. Bush where he served with great distinction. Its honor to have with us governor dirk kempthorn. [ applause ] four former governors who have worked in the federal branch of government ors finished giving r state of the state addresses and talking about what has taken place and recognizing successes and challenges and looking to the visions of the future. So im going to pose the question and get us started here of asking you, as our panel, the question, what is the state of our state federal relationships . What do you see today, and what do you see as a way for us to go forward and improve them . So we will start with senator Lamar Alexander and we will kind of go down the list here. Thank you. Thanks for the invitation. Terrys comment reminded me of when former senator howard baker was introducing me. He said Lamar Alexander was the greatest governor the state has ever had. He looked down the row and there was former governor winfield dunn. He said the greatest since governor dunn. Thank you for having us. Congratulations to the governors for improving the state of relations governor herbert mentioned. You led the charge and are organizing to lead the charge to see that its implemented properly. During this next year by forming a coalition with all of the organizations that support it, which create a unique opportunity for the nea and aft and the governors and chief state school officers, everybody who ghot fed up with washington telling everybody what to do. You improved the relationships. Second thing you could do to improve it better we talked about this yesterday. Number one, implement the law. Its not worth the paper it is written on unless its implemented, we get all the power out of washington back to you. Second, the marketplace fairness act. How could you make it better . Let me use an example. We will pick on congressman fincher since he is retiring it. The way to this is the act that causes tennessee not to be able to collect 700 million, texas cant collect 1. 8 billion because Congress Wont allow a state to collect the sales tax from everybody who owes it, including people from who buy from out of state sellers. So the question is, how do you persuade people to vote for that . Here is what i would recommend. Governor haslam has a meeting in tennessee, which is senator finchers district, not here at home. Second, he invites 50 Small Business people in the district to meet with him. Then let them answer for congressman fincher the question, why would you prefer out of state businesses to us . Why would you put us at a disadvantage . Because as i told a group yesterday, dean russ said a govern floor in his home state outranks everybody except the thenpresident of the United States and outside of his home state, he outranks almost nobody or she. So at home, you are the big dog. Have a meeting there. Invite 50 Business People and you will get some votes for that. I think the state of relations is improving. If you will focus on a couple of big things like implement the education law and pass marketplace fairness. The last thing i will say is speaker ryan has said there will be a vote in the house on marketplace fairness. There will be a vote. I would recommend the chaffitz bill. Implement the fix on no child left behind. Governor mansion. Its an honor to be here. I look around and its probably the best time of our life being a part of this organization. We were all four chairs. That really says a lot for the organization or maybe not. Im not sure. Anyway, it brings back fond memories to be back and sitting here with my colleagues right now. Lamar touched on marketplace fairness. West virginia was one of the first to be part of that. We need it desperately. You need that revenue desperately. Its a fairness just a basic fairness were trying to make sure happens. I appreciate that. Also the no child left behind bringing the states basically more authority over that and giving direction. I think its tremendous and lamar shepherded that through. Let me talk about addiction. Addiction basically 80 of all the crimes in our states, each one, minimum of 80 of the crimes are committed because of drug addiction of some sort. Your prisons are overfilled. Budgets are being strained. You are being challenged every way possible. We have a hard time i was guilty 20 years ago of saying it. Anyone who abuses drugs is a criminal. What we found out, that hasnt worked. 20 years later we havent cured anybody, we havent fixed anything. Sentencing guidelines have to be changed. You can help us tremendously. Were a little tepid as far as stepping over that line. We need to do that. We have now dialogue going on on addictions. Were trying to get the fda to have a complete cultural change to look at how they are putting all the drugs on the market, the more powerful drugs that arent really needed. All this has to be done. Sentencing guidelines need to be changed so that we can. Treatment centers, how we take care of the treatment centers. We dont have enough treatment centers. How do we handle that, help you fund them, what direction do we go there . Overregulation, i dont need to tell you, were all fighting that. The overreach, if you will, of federal government has been very difficult. As former governors, we fight about the 10th amendment. We understand that and we remind our colleagues the 10th amendment is sacred to a lot of us. I think our Founding Fathers never intended for this place called america to be run out of washington. We need you all to do the job that you should be doing and can do and let you do it and try to give you the overview. Also the National Guard. We look at our National Guard. Finally, we have National Guard to a status of joint chiefs of staff. I think its important to it has taken a while to acclimate that. The army hasnt come on as agreeable as they should. They are coming. Air force is transitioning wonderful. Army will come. We have changes going on there. I think it will give you tremendous when you look at the reserve component, National Guard, how we do that more effectively and efficiently. Its a wonderful experience. The hardest thing is in transition is the patience. My friend mark over here, he was my recruiter, if you would say that. The patience is basically as governor you get up anxious to do something because you know you can do something. At night you go to bed fulfilled that did you something to help somebody. You cant wait until the next morning to do it again. That doesnt always happen in the senate. Or in congress. You take every little small step. Will give you one. We were able to change from a schedule 3 to schedule 2 all opiates. They were flooding the market like m ms. We took that to schedule 2, took us three years. We took a billion pills off the market. We saved some lives. Theres so much more that we can do. In the sense, you have to learn to grab one piece and claim that as a victory and move on. We can, with your help, change this country and lead the world. I was honored to be a part of this group. I keep i would encourage you all, please, keep the nonpartisan participation as much as you can. You are the last ones that we have hope that can Work Together to get something accomplished. So thank you. Thank you. [ applause ] mr. Chairman, mr. Vice chairman and governors all, this is an impressive setting. Because we are still the United States of america, not the federal government of america. I want to commend you for your initiative, federalstate relations. Let me remind you of the pedigree that governors have. When welfare reform occurred in the United States of america, it was not by congress. It was when the governors led the reform effort. No question. When you look at the issues that you have before you when i was in the senate and bob dole the majority leader named our efforts to reform unfunded federal mandates, Senate Bill Number 1, my partner in that was a wonderful american, john glen. We celebrated an anniversary when he was in space. I will tell you once again, it was the governors. It was mayors. I remember distinctly senator john brew of louisiana calling me and saying, i dont know all the details of your legislation to stop these unfunded federal mandates. I will say this. I have had a stream of mayors and governors here. Put me down as a cosponsor. Please, please, governors do not underestimate the power of the governors of the United States of america. I remember when i was governor standing before my legislature i took out a 1 bill. I said if this is the budget of our state, this 1 bill i held up a nickle. I said five cents is the discretion we have. Everything else is set. I would imagine your discretion continues to decline. I had a nice lunch friday with governor branstead. As he pointed out in iowa, the 200 million of new revenue that they generated, if they dontxd eg if the states do have more control over medicaid, then all of that 200 million will be consumed. When you think of the baby boomers that are retiring at the rate of 10,000 a day for the next 15 years, many of whom are not ready for retirement, longevity is a blessing. But many people will live longer than they thought. Those that hit age 65, 70 will need longterm care. That care on average is 2. 5 years. Who will pay for that . The states will. With medicaid. When i was chair, mr. Chairman, my initiative was longterm care. At that time, 104 companies provided longterm care policies. Today its 13. We need a solution. We need a solution on infrastructure. Im proud to be part of the American Council of life insurers. Because after 23 years Public Service, to be able to join an industry that i believe exists to help people i think thats our motivation for being in Public Service. Were the number one u. S. Investor in corporate bonds. We hold them 17 years on average. We look for great opportunities for investment. But normally, about 1 to 2 of the corporations portfolios have municipal state bonds. When the build american bonds were released, the industry bought 35 . They can put the pedal to the medal. As you look for sources for capital for infrastructure to stop these aging bridges and the collapse that can be another calamity thats on the horizon, working together with the private sector im not an advocate of the build america flaw bonds. You have the capability, ladies and gentlemen, as leaders of the states to come forward and to be the leaders, the points of the speer of reform that i think members of congress will appreciate and support if you give them that opportunity. So thanks for this occasion. Thank you. [ applause ] senator warner. Thank you, mr. Chairman. Let me also reactiacknowledge terry. If we can get him to come out of his shell. He may have a future. 36 years he and i have been friends. Its great to see him in this role as vice chair. We all here are in the recovering governors club. One of my fondest memories when i was chair following dirk, actually. 50 of us came together and set a common High School Graduation rate standard. There was no common definition for High School Graduation. You think that shouldnt be a big thing. If you compare, which we do need to do, you have to have that common definition. Im going to make two points. Probably my single biggest echoing of what joe said, single biggest disappointment i have had since ive been in the senate because we were able to wrestle this this the gound wh ground when i was in virginia. We got it done in terms of getting our finances fixed. I thought the overwhelming logic of the challenges around our National Debt would generate an opportunity to do that at the national level. I was leader of the socalled gang of six. I make the comment that i work on the only place in america where being a gang member sometimes is a good thing. We put together the plan. It was not perfect by any means. It sure as heck would have gotten us better than where we are right now. While Neither Party talks about it, we are at 19 trillion in debt. Its going up on a daily basis. I point this out. Joe and lamar and i there was a moment in time, due to lamars leadership, where we could have pushed this through. We were not unsuccessful. A couple of quick facts. Mention has been made by dirk of medicare, social security. Go to a College Campus today. I was at a number of them last week in virginia. Ask any group of younger people how many of them expect to see medicare or social security. You will find virtually zero take that. At the same time, fun fact, we have the worlds most complicated tax code by far. Yet some of you may want to throw stuff at me. When you add together state, local and federal tax on a per cap i ta basis out of the 34 industrial nations in the world, we are 31st. We are the bottom in terms of collection. At 19 trillion in debt where we are right now, Interest Rate goes up 1 , which they will. That alone adds 130 billion a year in Interest Rate payments. Thats a straight line. Thats more than we spend on Homeland Security and federal doe combined. This notion because our deficits have gone down for a couple years that we are out of woods, this is a blip. Its going to come rushing back. You are going to bear the burden of it. So any ability to continue to urge us in washington i think a few years back we could have had 70 votes on the floor of the senate on a comprehensive tax reform and entitlement reform plan. We need your help. Second point, this goes to federalstate relations but its an opportunity to get ahead on an issue that hasnt yet been polluted into democratrepublican. I have spent ten months looking a lot at the one component of our economy that is in many ways the Fastest Growing sector job growth wise. Thats the area that doesnt have a full name at this point. You know you are in the right spot. The ondemand economy or sharing economy. We all saw the tragedy with the uber driver. But this is uber and lyft and the ability to monitize their car or apartment or things. Its unprecedented. The up side of this is that it gives people enormous flexibility that they have never been able to have before. In a traditional work sense. The down side is if create a world where 60 , 70 , 80 of the work force is in effect an independent contractor, we have absolutely no social contracts. Things are going well until they dont go well. They will then fall back upon the basic government subsiding. You are either a w2 or 1099. Honestly, the social con traffic that was created that worked well for the 20th century, im not sure is going to work as well in the 21st century. We have the ability whether its done at the federal level or local and state level, to almost reimagine what a social contract would look like. We have a chance to think about portability of benefits that might be carried with the individual, because more and more people will work at a single job. They are going to receive a series of Revenue Streams that right now we have no ability to kind of bring together and travel with that person. An issue that is not democratrepublican or liberalconservative and has federal and state implications, but a lot in terms of experim t experimentation, could be done at the state or local level is getting this right that i will make you as somebody terry mentioned the fact that back in the early 80s, i was smart enough to get into lucky enough to get into cell phones when everybody thought i was crazy. This sector as we think about work being transformed i will close with this. Kind of a fullfledged job into a series of tasks. I spent an hour with Lindsey Graham on this subject. He can put things in terms better than i can. He said, what you are describing is you are saying basically a job is like your old cable package. You had to buy the whole package to get espn and a couple of other channels. Now you can buy a la carte. You will be able to buy a skill. We will go to that. Good side and bad side of that. Trying to get out of the binary choice of 1099 and w2 as the only two options. Love to talk to you if you have interest in this. Is an area where we can think about not as democrat and re