The Failure of American Hegemony: Why Nationalism Trumps Liberalism Every Time | John Mearsheimer


Today’s episode of Hidden Forces is made possible
by listeners like you. For more information about this week’s episode,
or for easy access to related programming, visit our website at hiddenforces.io and subscribe
to our free email list. If you listen to the show on your Apple podcast
app, remember you can give us a review. Each review helps more people find the show
and join our amazing community. And with that, please enjoy this week’s episode. What’s up everybody? My guest today is John Mearsheimer. Dr. Mearsheimer is professor of political
science and international relations at the university of Chicago, and someone whose writings
and lectures I was assigned to study early on in my undergraduate coursework in American
foreign policy. His intellectual contributions have had a
profound influence, not only on me but on the thinking of an entire generation of students
in international relations. He’s been a vocal critic of neoliberal hegemony,
nation building, as well as the so-called forever wars that America has been engaged
in ever since our invasion of Afghanistan in 2001. He’s long argued on behalf of the realist
school, which views the international system as fundamentally anarchic and where the most
dominant concern among the great powers is defined by their desire and competition for
security, that sometimes leads to war. Our conversation today focuses on two major
themes of professor Mearsheimer’s latest book, “The Great Delusion,” where he attempts to
explain why American foreign policy since roughly the end of the Cold War up until the
present day has been such a colossal failure. And how much of that failure can be ascribed
to a fundamental misunderstanding on the part of America’s foreign policy elite about the
relationship between nationalism and liberalism, arguing that nationalism is by far the more
powerful of the two forces, and that therefore liberal hegemony was always destined to fail. He makes the argument for a more restrained,
humble US foreign policy that acknowledges not only the limits of nation building but
also the realities of international conflict that the United States is at risk of instigating
with countries like China and Russia with whom it is currently in a deep security competition. This conversation continues well into the
overtime. And this week’s rundown is particularly useful,
I think, for anyone trying to grapple with some of the concepts of international relations
that we lay out today. So if you’ve been on the fence about subscribing
to our Hidden Forces Patreon page, I think this might be a good opportunity to try it
out. There’s a link to the subscription page in
the description to this week’s episode as well as information about how to link your
overtime feed to whatever podcast application you use to listen to the regular episode. So you can listen to everything through the
same application. So make sure you do that. Also, remember there’s no forward commitment. You can cancel at any time. And subscribing even for a month is a great
way to show your support for the show, especially if you’ve been a regular listener and have
gotten consistent value from the work we do. So without any further ado, here is my conversation
with professor John Mearsheimer. Professor John Mearsheimer, welcome to Hidden
Forces. My pleasure to be here. It’s my pleasure having you on. How long have you been in New York? I’ve been here just today. Oh, you just got in? Yes. Although I was born in New York of many moons
ago and lived in New York city and then in West Chester County for most of my early life. Where did you grow up initially in New York
city. I was born in Brooklyn and grew up mainly
in Queens in an area called Richmond Hill. Oh, interesting. Where in Brooklyn where you born? I was born in an area called Crown Heights. Oh, that’s interesting. Well, you’re in Chicago now, how long have
you been at the university of Chicago? I’ve been there for roughly 37 years. I went there in 1982, it was my first teaching
job, and I’ve never left. So I told you that I first read your work
when I read the Israel Lobby, and I think it was 2007, is that correct? Yes. And you co-authored that with Stephen Walt,
and we had Steven on the program, I think he was episode 92. I see. So I’ve been waiting to have you on ever since
and I’m so happy we’re able to do this in person. You are now out with a new book. It’s been out for a couple of months now. It’s called the Great Delusion. What are you on now? Is this, like your fifth book? This is my sixth book. Your sixth book. So this is sort of a continuation of The Tragedy
of Great Powers, except that instead of being a rubric for realism, this kind of traverses
liberalism, realism, and nationalism. It looks how they all interplay. I like to think that I’ve written two major
theoretical works. The first was The Tragedy of Great Power of
Politics, which is really a realist track. It lays out my theory of realism. This new book, the Great Delusion goes beyond
tragedy, and it talks about the relationship between realism, nationalism, and liberalism. So the scope of this book is wider than the
scope of tragedy. So what was your objective in writing the
book, and what did you feel was missing from your body of work up until this point that
you wanted to address here? Well, I had two reasons for writing the book. First of all, I was very interested in explaining
why American foreign policy from 1989, when the cold war ended, up until roughly 2018
had been such a colossal failure. In other words, what went wrong? If you think back to the early 1990s, there
was so much optimism in the air about the direction the international system was headed,
about American foreign policy, and something went badly wrong. So number one, I wanted to try and figure
out what went wrong. Number two, I was also interested in writing
a book about the relationship between realism, liberalism, and nationalism. I always thought that nationalism was an incredibly
powerful political ideology and I had not written hardly anything about that. I’d written a little bit about liberalism,
and of course a lot about realism, so I thought it was time to write a book that dealt with
all three of those isms. And in doing that, I thought I could say a
great deal about what went wrong with American foreign policy over the course of the post
cold war period. What made you focus on nationalism? I thought from just watching how the world
works and reading different books and articles over the years, that nationalism was incredibly
powerful. Because of course, nationalism made a comeback
after the 9/11 attacks in a big way in the United States. I think that’s true in a certain sense, but
the argument that I make in the book is that nationalism is always there. Sometimes it’s below the surface and you don’t
see it. And I think what happened in the 1990s is
that liberalism was paid an enormous amount of attention and we talked liberalism, liberalism,
liberalism. And people began to think that nationalism
had disappeared, but of course it had not disappeared. And, as you point out, after 9/11, and certainly
in the last few years, it has begun to rear its head and become very obvious to almost
everybody in the West. So the book is really interesting because
like I said, it’s a theoretical treatise. There are references to historical facts,
but they’re there in service of helping build a larger theoretical framework, and there’s
also a lot of philosophy. And you pay a lot attention to that. And much of that really has to do with like
questions of human nature and also the individual, like what comes first, the group or the individual? I guess my first question is when did you
begin to study these writers like David Hume or Machiavelli or Plato or some of these philosophers
that dealt with these questions, and how important do you think this is? And perhaps also, how much is this missing
in political science, in the kinds of educational experiences that students have in college? How much are these foundational texts missing
and how important are they? Why did you include them basically? Well, my view is that to understand how the
world works, you have to have theories in your head, right? And if you have theories in your head, the
question you want to ask yourself is, what are those theories? Where did you get those theories from? And I therefore began to think, as I embarked
on this project that deals with liberalism, realism, and nationalism, about the great
writers who had written about subjects like liberalism. And of course I went to people like Thomas
Hobbes and John Locke and so forth. John Rawls. John Rawls for sure. Of course. Yes. And I began to examine their works very carefully. Now I want to emphasize that when I was a
graduate student at Cornell, in the latter half of the 1970s, I studied these individuals,
but it was my first introduction to them and my knowledge was quite superficial. But for purposes of writing this book, I had
to dig really deeply, and I had to figure out exactly what I thought nationalism is,
exactly what I think liberalism is, and then how do they compare to each other. And that involves dealing with big theoretical
issues. And by the way, these are not issues that
the average person cannot understand. I think these are pretty commonsensical and
pretty straight forward issues. It took me a long time to figure them out,
right? And figuring out how all the pieces of the
puzzle fit together. But nevertheless, I think the story that I
tell in the book, even though one would say it’s theoretical, is a book that a well-educated
person could understand. Totally. And I actually would recommend to listeners
not only to read your book, but to read it together with Jonathan Haidt’s “The Righteous
Mind.” Because I’ve read that book also, I don’t
know if you’re familiar with Jonathan’s work, but that deals basically with why people are
divided along politics and religion. And I think it embeds really well with what
you did in this book because both books, I think, help really bring a lot of clarity
to people who struggle to understand why are we so divided, why we argue along so many
lines. I mean so much of what I saw in his book in
terms of how he talks about conservative versus liberal, I saw in the way that you talked
about nationalism and liberalism. So what was the story that you’re trying to
tell in the book? Well, one of the main themes in the book is
that nationalism is a much more powerful force than liberalism. And the question you have to ask yourself
is why is that the case? My argument is that liberalism and nationalism
are built on a very different assumption about human nature, and that nationalism is built
on a more solid foundation. Now what exactly am I saying? Liberalism is predicated on the assumption
that we are all individuals from the start and that we come together and form social
groups. We form social contracts, but we are above
all else individuals. Nationalism, on the other hand, assumes that
we are from the get go social animals. We belong to groups. We belong to tribes. We belong to nations. Now the question you have to ask yourself,
the $64,000 question, so to speak, is which one of those assumptions is correct? And the fact is that we are all social animals
from the beginning, who later in life, this is when we get to be say eight or nine years
old, begin to carve out room for our individualism. So our individualism is subordinate to our
tribalism. That’s a very different way of looking at
the world than the liberal perspective, which starts with the individual. And I think is basically wrong headed. And for that reason, I think nationalism is
a more powerful force than liberalism, which is not to say liberalism doesn’t have any
power or any attractiveness at all. It certainly does. America is a fundamentally liberal country,
but America is also a very nationalistic country. We are a liberal nation state. That’s liberal nationalism. So there’s so many things I want to kind of
drill down in what you’re saying. One of them is this distinction between what
is a more primal force, which is nationalism, it sounds like, and liberalism, which is something
that relies much more on reason and reason thinking, right? You make this contrast in the book. My argument just about liberalism, and your
question is an excellent one because it gets at the essence of what liberalism is all about. Liberalism is predicated on the assumption
that we have powerful abilities to reason, but we cannot reach universal agreement on
the big questions about life. In other words, is abortion good or bad? Is affirmative action good or bad? Is democracy the best political system or
not? Human beings disagree over first principles. And sometimes they disagree so fervently that
they will kill each other. Liberalism is designed to deal with that problem. It’s designed to deal with the limits of reason. And the way liberalism works is that it privileges
individual rights. Remember the emphasis on the individual. And the idea is that if you and I disagree
on a particular issue, what happens in a liberal society is you have the right to live your
life the way you see fit and I have the right to live my life the way I see fit. If you want to be a Catholic, and I want to
be a Protestant, there’s space for you to be a Catholic and space for me to be a Protestant
and space for this person over here to be an atheist or this person to be a Muslim. So we all have rights, we all have freedoms
to live life as we see fit. And then the other thing that liberalism does
is it preaches the norm of tolerance. You have to have tolerance to make a liberal
society work. If you want to be a Protestant or Catholic
and I’m the opposite, I have to be tolerant of you and you have to be tolerant of me. So again, liberalism is predicated on the
belief that we cannot reach agreement on some of the core issues about human life. And therefore we have to carve out space in
civil society for each of us to be able to live our life the way we see fit. In other words, we have to have the right,
the freedom to live as we see fit. And we also have to be tolerant of each other. That’s really what liberalism is all about,
and it’s what makes it so attractive. So we should probably try to define some of
these terms like what is nationalism, what is liberalism? But you’re kind of doing that already. I want to throw out a couple of thoughts that
I had while you were talking. One is just in terms of moral philosophy,
this is the ought problem, the fact that the world is a certain way, but we have a sense
of how it should be. And everyone has a different idea of how it
ought to be. And this is sort of the fundamental problem. But two things that came to mind. One was when this country was founded, it
was founded with a certain set of Judeo-Christian principles and ideals. And I assume that most of the people, most
of the founders are, if not all of them, had some sense of universal morality that was
not something that they had to arrived at through reasoned investigation. And I wondered to what extent how liberalism
has transformed over the decades and centuries where we’ve become a more agnostic or atheist
society and we’ve had to sort of update how we think about universal morals. Because we still have a sense of right and
wrong in America, and we see that very much in foreign policy, so I want to throw that
out. And the other thing is you mentioned tolerance,
and you make this great point in the book about… I think you call it the liberal paradox, which
is that on the one hand a liberal society needs to be tolerant but at the same time
it can only tolerate so much. Because if it tolerates anything then the
state, which is integral to securing those rights, which really aren’t inalienable, goes
away. What are your- Well, let me deal with your first point, and
then if I forget the second- Oh, [crosstalk 00:17:35]- … I’m sure we can go to that one. … I scraped it down. I don’t think that this country was created
on the basis of Judeo-Christian principles. I think that this country was created on liberal
principles. And I think the founding fathers were not
that religious, and what they wanted to do was to create a state that left lots of room
for people to practice religion as they saw fit. And that’s what a liberal society is all about. Now, liberalism, I believe, has evolved over
the years in the sense that in the beginning the emphasis was mainly on negative rights. You had the right to live the way you saw
fit. And what’s happened over time is that liberals,
not all liberals, but a lot of liberals have come to emphasize not just negative rights,
the right to free speech, the right to assembly and so forth and so on, but they have begun
to introduce positive liberties into the story. In other words, people have the right to equal
opportunity. That’s a positive right. The right to equal opportunity. So what we have done is we have moved from
classical liberalism, with an emphasis on negative rights, to progressive liberalism
where there is an emphasis on positive rights. So like libertarianism, right? When we think about it, that’s- Exactly. Libertarianism was, in a sense, classical
liberalism. All you did was concentrate on negative liberties,
on freedom in the libertarian story. And libertarians don’t like positive rights. They don’t like the idea that you create a
state that goes out of its way to help people achieve equal opportunity. That’s a positive right. And libertarians don’t like that. But the fact is that libertarians have lost
the game. We live in a world of progressive liberalism. We live in a world where progressive rights
really matter. I do want to talk about that because you make
some interesting points in the book about the forces that have made it difficult for
libertarianism to actually exist in America, which is really interesting stuff I have thought
about before, like including industrialization. I want to go back to this point though about
the founders. So in that case, in your research, where did
the founding fathers, so to speak, the founders of this country, what was the foundation for
their sense of morality, which informed the drafting of the constitution, the bill of
rights? Well, the founding fathers were almost all
from Great Britain or from England, and they had been heavily influenced by liberal thinking
in England. And here people like Thomas Hobbes, who, although
he was not a liberal, I believe, was the person who laid the foundation for liberalism, and
people like John Locke, David Hume, Adam Smith, and others just mattered enormously. And the founding fathers, in putting together
the constitution, thought long and hard about how to create a liberal state. They were dealing with a country, and we’re
talking here about the United States, that had a whole slew of different religions within
it. Most of them were Protestant religions, but
there were puritans, there were Baptists, there were Methodists, there were just all
sorts of different kinds of religions in the United States of America at the beginning. And they didn’t want to privilege any one
religion, they wanted to give people the right to practice religion as they saw fit. That’s what liberalism is all about. Well, America, at its founding, was a more
liberal… Am I correct to assume that it was a more
liberal society than the Great Britain? And are you saying that that was in part a
reflection of the realities of an extremely diverse country? I’m not sure that it was in practice more
liberal when it was founded, mainly because of slavery. Right. But when did they abolish slavery in Great
Britain? They abolished that later, after 1783. But the point is there were many more slaves
in the United States. And the slave trade was an enormous business
in the US. Absolutely. During that time. Absolutely. Yeah. I think in principle, the United States was
a fundamentally liberal country from the beginning. And again- … it was a fundamentally liberal nation
state. It’s the combination of liberalism and nationalism. But it was a fundamentally liberal state in
principle from the beginning, but in practice it was not, mainly because of slavery. And I would also note when the European immigrants,
the so-called hyphenated Europeans begin to come in in the 1830s, from 1830 up until world
war II, they’re actually treated- The Irish and the Italians. … very [crosstalk 00:22:33]. Those, Yeah. Yes, exactly. Especially the Irish. Yeah. Also, of course, there’s the native peoples
of the Americas. A couple of days ago I downloaded a C-SPAN
podcast. I used to listen to C-SPAN stuff a long time
ago. It’s been a while. But I came across a couple of lectures, fascinating. They weren’t really good unfortunately, but
they had a fascinating title, and it was basically looking at the policy, what would effectively
be the foreign policy of the settlers towards the natives in the Americas at the time. It’s interesting, because I was preparing
for this conversation, I just thought I’d never thought of it that way. And of course I’m pretty sure what was the
Bureau of Indian Affairs was like one of the first departments that was created in the
United States. I don’t know that for a fact, but I’m sure
that was the case. It was an old one. So let’s go back to this question I had, which
was to really define what do we mean when we talk about nationalism? I mean, you’ve talked about some of it, but
what is nationalism? Nationalism is, as I said before, predicated
on the assumption that we are all social animals and that we, in the modern world, are born
into social groups called nations. We’re born into the Italian nation, the American
nation, the Japanese nation. There are all these different nations around
the world, right? That’s the first part of the definition. And the second part of the definition is the
belief that each one of those nations should have its own state. Its own physical territory also. Yes, physical territory. Of course, if you have a state, you have physical
territory, you have control over that territory. And very importantly, you emphasize the importance
of sovereignty or self determination. You do not want other nation states interfering
in your politics. That’s what sovereignty is all about. But anyway, to go back to the definition,
the word nation state, and of course the planet is filled with nothing but nation States,
if you think about it. The word nation state encapsulates the definition
of nationalism. We are all social animals born into nations
and those nations that we’re born into want their own state. Think about Zionism, right? What Zionism is basically Jewish nationalism. Theodore Hertzel, who was the founding father
of Zionism, his most famous book is called the Jewish State. Jewish nation state, the Jewish state. Think about the Palestinians. What do the Palestinians want? They want a state of their own, a Palestinian
state. This is what the two states solution is all
about. So you can see when you talk about Zionism
and you talk about Palestinian nationalism, that it’s really all about this concept called
the nation state, which again embodies nationalism. Well, I mean the same was true. I’m Greek and the same is true also of the
Greek nation. And it’s interesting, we saw also, by the
way, the same thing happen after the breakup of the Soviet Union and also during the world
war one interwar period. There was also, I guess, historically, a lot
of the great powers used nationalism to try and reorganize the world, whether it was in
Africa, Eastern Europe, et cetera. And so like nationhood would be considered
the largest social grouping that we have ever devised in the world. The largest sense of grouping. I don’t know if it’s the largest grouping
ever, right? Some people might say that civilizations are
larger grouping. What would be an example of that? Like the Huntington style? Yes, exactly. Sam Huntington wrote about civilizations,
which is a broader concept than nations, but I believe that civilizations are nowhere near
as powerful as nations are. And that would be one of my fundamental criticisms
of Huntington’s book. Talking about civilizations doesn’t take you
far, if you want to understand the modern world, you want to talk about nations. And to get to your question, there’s no doubt
that what’s happened over the past 200 years is that lots of the political institutions
that were out there like empires, think of the Austro-Hungarian empire, the Ottoman empire,
the Russian empire and so forth and so on. They have all fallen apart in large part because
of nationalism. And that’s why the world today doesn’t have
any meaningful empires, its instead comprised of nation States. What happened to the Austro-Hungarian empire? You now have Austria, you have Hungary, you
have the Czech Republic, you have Slovakia and so forth and so on. What happened to the Ottoman empire? It completely fell apart. You have Turkey, that’s the remnant state,
and then you have all these different States in the middle East. That’s so interesting. It’s been a very long time since I read that
paper. I didn’t read the book, I read the paper,
and it was 2003. But I recall Huntington saying that China,
the Chinese nation is not really exactly a nation, it’s kind of a civilization. I think it was sort of an interesting point
that he made and I don’t know if you remember that. I mean it’s just come into my head now, but
it’s a remarkable country because it’s 1.4 billion people that manage to basically have
a very strong sense of nationhood and identity. But it’s a nation state. It’s not a civilization. It is. But I’m just saying, I remember him saying
that in the paper. Or I think at least he said it. And it just came to my mind because it is
such a large community that has a sense of nationhood. Yes. You know what I’m saying? And that’s unusual because we don’t have like
anything near that size, I guess Indians. But Indians are very tribal too, right? It’s almost like confederal in a sense. It’s not confederal, but- No, I think you can talk about an Indian nation
state. I mean in all of these countries, whether
you’re talking about China or India, there are divisions. For example, in India there are Muslims, huge
Muslim community, and there are Hindus. And in a place like China, there’s Tibet and
then there’s the Uyghurs. There are all sorts of tensions among different
groups in both of those societies for sure. But they aren’t both nation States. Does it matter in your view? And also how would you even go about measuring
this? Measuring social cohesion within a nation? Like we saw, for example, one of the issues
with US social engineering trying to build democracy in the Middle East, the challenges
that the United States government had in a country like Iraq where you had these tribal
divisions, where this country was sort of clubbed together. How do you think about that when it comes
to looking at nations and nationalism? Well, I think that there are a number of nation
states around the world, which are comprised of different groups. And one might even say comprised of different
nations that are looking to break away. Like Syria. Syria would be one. I mean Spain is actually another example,
if you think about Catalonia, right? I mean the Catalonians for the most part would
love to gain independence from Spain, and the government in Madrid is doing everything
it can to hold Spain together. There are many people who think that as a
result of Brexit, Great Britain will break apart. Scotland. Scotland, Northern Ireland, Wales will go
their separate ways. So I think what our discussion here highlights
is that although I talk about nation states as if they were closely knit coherent holes,
that’s usually not the case. And the nationalism in many cases is quite
thin. But nevertheless, I believe it is there. We’re going a little bit off topic now with
my question, but I’m going to ask, as it popped into my head. When I was in college, I was studying for
a year abroad and I wrote a paper based on some of the stuff that we were learning in
a class on European Union, and it was around the irony of integration. That as the European Union was integrating
more and more, there was fractures were happening within the nation states themselves. And I think this is a really fascinating example
of the power of nationalism, the European union, right? Well, the European Union was designed to ameliorate,
if not do- Exactly. Yeah. … away with nationalism. What you wanted to do is take Germans and
turn them into Europeans, take Greeks and turn them into Europeans, take Spaniards and
turn them into Europeans. That did not happen, number one. And number two, as you’re pointing out, if
you look inside the various states that comprise the European Union, inside most of those states,
you saw quite significant political cleavages. You saw real centrifical forces. This is true in Spain as we were talking about. France also. Yeah, France, it’s true. In Belgium. And this is true in many countries around
the world. When I was studying this, the country that
I looked at closely was France with the national front. Le Pen. Le Pen’s party. Europe’s fascinating because it really… It seems to me that Europe was the attempt
by the Europeans to do… Basically it came right after a world war
where Hitler and the Nazi Reich had attempted to unify the continent by force, and then
the project basically look to still unify the continent but do it diplomatically over
a long period of time. And it seems that it’s failing. I don’t know what you think of where the European
Union is at this point. Well, I think almost everybody agrees that
the European Union is today in trouble. I think up until roughly 2009 when the Euro
crisis hit big time, most people were quite confident about the direction the EU was headed. I mean at the end of the 1990s, the Euro was
introduced, and the 1990s were a period of great prosperity for countries in the European
union. I think most people thought the EU was headed
in the right direction and in fact nationalism would be ameliorated over time. Then starting in about 2009, things began
to go south. And I think in 2016 with Brexit, a hammer
blow was delivered to the EU. And now if you just sort of look at what’s
going on in countries like Italy and countries like Greece, and you look at the differences
between France and Germany over how to run Europe, it doesn’t look like a happy future
is in store. It’s so fascinating because this brings us
back to what you said at the beginning, which was really how we went from the 1990s to where
we are today. And the 1990s was such an optimistic time,
not just in the US but Maastricht was passed in the early 90s, Germany reunification happened. The Euro, monetary union, when they were… It’s remarkable to go back, because I had
studied this period in college, when the technocrats in Europe would debate… As you know, I’m sure, the technocrats in
Europe were debating Maastricht and the Euro. They saw the problems that they could encounter,
but they saw them as opportunities. They saw the discrepancy between fiscal monetary
policy, the tensions it would create as crisis opportunities for further integration. They saw it optimistically. Now, these things are sources of instability
on the continent. Yes. It’s quite remarkable. It is quite remarkable. I think the article, one of the most important
articles written in modern times, it was Francis Fukuyama’s piece that appeared in the national
interest in 1989, entitled, The End of History. And basically what Fukuyama argued in that
piece was that the liberal democracies had defeated fascism in the first half of the
20th century. They had defeated communism in the second
half of the 20th century. And now the only viable political form of
government that was left for every state on the planet was liberal democracy. So Fukuyama’s basic argument was that over
time we were going to have more and more liberal democracies until we reached the point where
the planet had nothing but liberal democracies on it. And in a world like that, we were going to
live happily ever after. And if you read the Fukuyama piece carefully,
he says at the end that he believes the greatest problem that we are likely to face in the
future is boredom. Boredom. Because he thinks that liberal democracy is
on the march and it’s for everybody. And of course it’s not turned out to be the
case at all. It’s amazing these periods of optimism. Now who was it in the early 20th century who
wrote similarly about industrialization? The optimism around the type of wealth that
industrialization would create, where people would become effectively bored. That was the- Well, there was a book called The Great Illusion. Oh, Angel’s book, right? That’s right. Norman Angel. Right. Yeah, exactly. And the title of my book is a play on Norman
Angel. It’s interesting. I think I had read pieces of Norman’s book,
and I had seen it referenced often because of course it came right before World War I. And had effectively predicted that World War
I would not happen- Correct. … on account of economic interdependence
that the great powers would no longer go into conflict because their fates were so intertwined
economically and that the importance of their economies would trump security. Yeah. This is a common argument even today with
regard to US-China relations. Many people believed that United States and
China will not ever fight each other because of all the economic interdependence. The basic underlying assumption here is that
prosperity trumps security. That states care more about prosperity than
anything else. And because you have all these economic interdependence,
if you go to war, the end result will be that you’ll damage the prosperity that both sides
or all sides are enjoying. And many people thought this was the case
before World War I. But obviously security concerns trump prosperity
concerns and you had World War I. Countries like Germany, and I believe Germany
was principally responsible for starting World War I, were concerned about the balance of
power. The Germans were deeply fearful that Russia
was going to grow and grow and grow, and because it had such a large population, it would become
the dominant power in Europe and it would threaten Germany. So what the Germans wanted to do was attack
Russia and weaken it before Russia got so powerful that it could attack Germany. Those calculations trumped calculations about
prosperity, which were largely driven by all of the economic interdependence in Europe
at the time. That’s also a really fascinating period. We covered it only peripherally in an episode
with Bruce Schneier on cybersecurity because I used the Cult of Offense, the Schlieffen
plan as a stepping stone to where we are today with cyber warfare because of course mobilization
mattered during World War I. It mattered enormously. They were incentivized to mobilize. And we’ve just talked about it in the context
of cyber war, where now not only is there an advantage to striking first, if you don’t
strike fast enough, you could lose your weapon because the weapon is an exploit and the exploit
could be patched. That’s just a fascinating period to study. Yeah, well the Germans had a problem in World
War I, not to get too far- No, please. I love these stuff. But the Germans faced the two front war problem. They had to fight the Russians in the east
and the French in the west at the same time. Actually the French and the British in the
west, and the Russians in the east at the same time. So they had a deep seated interest in striking
as fast as possible against France and Britain in the west, defeating France and Britain
in the west while leaving themselves exposed in the east, and then shifting forces to the
east to deal with the Russians. That situation created incentives for the
Germans to strike in the west with the Schlieffen plan as quickly as possible. This also makes me think about something. I wonder, have you found in your research,
historical research, that there is a correlation between being landlocked and being nationalistic? Are countries that are more exposed to threats,
that are more threatened, are they more nationalistic than other countries? Than an Island country, for example, like
New Zealand? No, I don’t think so. I think that nationalism is everywhere. I think that every country is nationalistic. I think countries that operate on real estate
where they have next door neighbors who can attack them, think about war differently than
countries that are basically islands. If you’re Great Britain, you’re not going
to think about attacking France or attacking Germany because you have this huge body of
water called the English channel between Britain on one hand and the continent on the other. But if you’re Germany and France or you’re
Germany and Russia or you’re Germany and Poland, and your next door neighbors, and your armies
can just cross the border that separates these different countries, you think seriously about
war all the time. So I think it’s just how you think about war
that’s different between Island countries and let’s call them land powers like Germany
and France and Poland and Russia. Because this also makes me think about something
else. You mentioned Russia and the concern that
the Germans had about Russia’s population growth. Well, not its populations growth. They took its population growth for granted. What they were worried about was its economic
growth. It was population growth plus economic growth. So population, economics, and I think geopolitical
or geo-strategic positioning or territorial positioning are probably the sort of three
classic pillars that manifest as sort of power in a nation state. I don’t know if I’ve got that right exactly. But what I’m basically trying to say is that
we have sort of analog, traditional notions of what power politics is about, or what military
strength comes from rather is what I meant to say. Military positioning. So where you’re positioned, the size of your
population, and the strength of your economy. But we live in a very different world today
where technology has disrupted modern warfare at the very least, and we also see changing
demographics, but it’s not clear to me that let’s say a country with very poor structural
demographics like Germany or Japan for example, would be at the same disadvantage today as
they would’ve been a hundred years ago militarily because of their population. You don’t talk about that much in the book. I don’t know that you did or didn’t really
come across, but do you think about that at all? How does that work in your mind? Well, I talk about this at great length in
the Tragedy of Great Power Politics. My argument is that the two principle ingredients
of power are population size and wealth. You have to have a large population and you
have to have a lot of wealth. China was not considered a great power during
the cold war in large part because it didn’t have a lot of wealth. I mean it did have a lot of population, a
lot of people, but it didn’t have a lot of wealth. China today has a lot of people and it has
a lot of wealth, and that’s why we are so worried about China. So those are the two key building blocks. I don’t think where you’re located geographically
tells you much about power. It tells you a lot about your potential for
fighting wars against neighbors. Now there is one major qualification to that
argument and that is the presence of nuclear weapons. One could argue that even if you’re not very
powerful, you don’t have that large population. Let’s just say you’re Japan compared to China,
right? Japan is a much smaller country, population-wise,
than China is. And let’s hypothesize a situation where they
have the same per capita gross national income, right? So wealth is pretty much equal. One could argue that Japan doesn’t have much
to worry about because it has, in this world I’m describing, it would have nuclear weapons. Japan with nuclear weapons would be okay. It would be secure versus China, even though
China is much more powerful in terms of those traditional indicators of population size
and wealth. And that’s because of nuclear weapons. But the fact is, if you look at how states
behave, most states don’t think that nuclear weapons buy you that much security, and they
do care about the size of their army and the size of their Navy. So nuclear weapons do matter, but they don’t
matter that much. And what that tells me- That’s interesting. … is you can go back to the story I tell
in Tragedy of Great Power Politics. The story that existed well before nuclear
weapons, which is that what really matters for measuring the global distribution of power
is population size and the strength of your economy. That’s really interesting. I wish I had read Great Power of Politics
because I have two questions that seem to run counter that, or they have embedded in
them some sort of assumptions or beliefs. So when you were talking about nuclear weapons,
I was thinking about Iran, of course, and I was… Actually I should have also mentioned North
Korea, but also thinking about Ukraine, a country that gave up its nuclear weapons. And I wonder would they be in the same position
they are today, vis-a-vis Russia, had they not given up their nuclear weapons? Question number one. And question number two, in a world, let’s
say where we experience climactic changes, significant climactic changes, for example,
is there not an argument to be made that perhaps there is a point at which population becomes
a liability for national cohesion in a country, let’s say, like India? Could that actually be counterproductive? Let me deal with your first question. You probably don’t realize this, but I wrote
an article in 1993 that appeared in the same issue of Foreign Affairs where Samuel Huntington’s
famous Clash of Civilization- No, I didn’t know this. … article appeared, where I said that Ukraine
should keep its nuclear weapons. That’s so interesting. And that it should keep its nuclear weapons
because- That’s ironic, given what we were just saying. Yes, because the day will come where the Russians
will cause trouble in Ukraine. I shouldn’t be laughing. I shouldn’t be laughing. And the Ukrainians will- Interesting. … wish they had nuclear weapons. So interesting. So how do you square that with what you said
before about, it doesn’t really seem to matter so much? Well, I think almost everybody agrees that
nuclear weapons make it almost impossible for another country to invade that nuclear
armed country. My point to you was that countries with nuclear
weapons tend not to feel very secure. Just think about Israel. Israel is the only country in the middle East
that has nuclear weapons. Nuclear weapons are the ultimate deterrent. Yet the Israelis worry constantly about their
security. During the cold war, in Western Europe, we
had the American nuclear umbrella over every country in NATO. Yet we built very powerful conventional forces
and we constantly worried about a Warsaw pact conventional attack into Europe. In other words, the Israelis don’t think nuclear
weapons provide that much deterrence and NATO forces, NATO countries didn’t think nuclear
weapons provided that much deterrence. So it’s how countries think about nuclear
weapons. But my point is if Ukraine had nuclear weapons,
I think the Russians would not be in Eastern Ukraine today. I think they still would have taken Crimea. I think that Ukrainian nuclear weapons probably
would not have prevented Russia from taking Crimea, but I do not believe they’d be in
Eastern Crimea. And I would believe the Ukrainians would feel
more secure, not totally secure, given what I said about how countries think about what
nuclear weapons give them in terms of deterrence, but they’d feel more secure than they now
do if they had nuclear weapon. I also wonder to what degree there’s an asymmetry. In other words, the North Koreans, I think,
benefit much more, and I think the Iranians would too, by having nuclear weapons because
there’s a disproportionate threat that they can deliver against the United States. In other words, for Israel, they would be
using the nuclear weapons against countries within striking… I mean very close to themselves. They’d be threatening those countries directly. Whereas in the case of like a North Korea,
they can basically have a completely dilapidated economy and maintain their grip on power entirely
because they can threaten the United States, which is basically a proxy of the country
that’s immediately to their South, which is the real concern, which is South Korea. Well, the North Koreans would have a similar
problem to the problem that Israel has in terms of using nuclear weapons against countries
that are close by. Well, I mean against the United States, they
basically can threaten the US- Not yet. North Korea can’t threat us yet. I thought the debate was that they might actually
be able to do it. They haven’t tested an intercontinental ballistic
missile to prove that they could do it, but theoretically they might have something that
could hit California. That’s not correct? Not yet. Oh, interesting. Not yet. I do not believe that they’re there yet. I do believe that they will get there. I think the greater threat at this point in
time is that they would use nuclear weapons against either the South Korea or Japan, and
you want to remember that there are large concentrations of American military forces
in both South Korea and in Japan, and I wouldn’t be surprised if the North Koreans would use
nuclear weapons, that they’d target those American forces. But you’re correct that it is somewhat difficult
for North Korea to think about using nuclear weapons in its neighborhood. And the same thing is true of course, of Israel,
with regard to Israel. But I would just say turning to Iran, I think
from Iran’s point of view, it should have nuclear weapons because if Iran had nuclear
weapons, I believe the United States and Israel would not be threatening to attack Iran. Now it’s not in our interest for Iran to have
nuclear weapons. I want to be very clear in that. From an American point of view, and certainly
from an Israeli point of view, you don’t want Iran to have nuclear weapons. But from Iran’s point of view, having a nuclear
deterrent I think would force the Americans and the Israelis to stop threatening Iran
for fear that Iran might use those weapons. I want to come back to those contemporary
issues and what you think are some of the strategic challenges facing the world as we
move forward into this new century. But I want to again, come back to your book
and explore some more of these themes. So one of the things that you write about
in the book is that nations want states and states want nations, which I thought was really
interesting. Can you explore that here a bit? What do you mean when you say that? Well, you want to remember that when I talked
about what is nationalism? Nationalism is all about nation states, right? And that came out of the treaty of Westphalia? The nation state? No, the states that existed at the time of
the treaty of Westphalia, which was back in the 17th century. I think in 1649. But back then, you were dealing with dynastic
states, not nation states. Most people believed that nation states came
on the scene in the late 1700s. Usually either France or the United States
are categorized as the first nation states. Post monarchy? Post French revolution. Post French revolution. Napoleon actually- Pre Napoleon? Yeah. Well, just immediately before Napoleon. So if you look at the key works on nationalism,
it’s usually the United States or France that is sort of treated as the first nation state. And that’s why nationalism is a powerful force
in the 1800s, the 1900s, and of course in this century. It’s a force that’s been around for a little
over 200 years. But before that, before the French revolution,
before the American revolution, you did not have nation states, you had dynastic states. Right. And those were different political forms for
sure. We have this great quote by David Armitage. Is there any relation with him and Rich Armitage? Not that I know. Are they the same generation? I wasn’t familiar with him before that. But he has this great quote that you have
in the book, and the excerpt that you have in the book is, and I quote, “The great political
fact of global history in the last 500 years is the emergence of a world of states from
a world of empires. That fact more than the expansion of democracy,
more than nationalism, more than the language of rights, more than even globalization, fundamentally
defines the political universe we all inhabit.” Would you agree with that? Yeah, I would agree with that. And he’s basically saying that if you look
at the planet today, it’s filled with nothing but nation states. Again, this emphasizes, or this makes clear
how powerful nationalism is as a force. But if you were to look at Europe, let’s say
in 1450, or you were to look at the globe in 1450, it was filled with all sorts of different
kinds of political forms. Europe had principalities, duchies, city states,
empires. It was fascinating. Yes. It was a remarkably heterogeneous world. And what happened over time is that all those
empires went away, right? Europe came together as a body of nation states,
and then all over the planet in places like Africa, places like Asia, what happened was
nation states were formed, and that’s the world that we live in today. I think that’s basically what Armitage is
talking about. And he in effect is saying, in my opinion,
that nationalism is more important than globalization or any of these other forces that we pay so
much attention to. This is not to say that things like globalization
don’t matter, that would be ridiculous. Or to say that nuclear weapons don’t matter,
or that liberalism doesn’t matter. That’s not the argument. My argument is nationalism is just so powerful
to just shape the world in profound ways. So what would a map of Europe in 1100 AD look
like? Well, a map of Europe in 1100 would be filled
with a whole sort of smorgasbord of different kinds of- You wouldn’t even be able to make it out. I say that because- It’s one of those things where if I gave you
a week to memorize all the different places on the map in Europe, you probably would fail
the exam. There are probably like werewolves and elves
and stuff in there. Yeah. It was just a very different world than exists
today. This was medieval Europe. Yeah, yeah, yeah. When I was in high school in 10th grade, I
was in an AP European history class and the teacher was very passionate about European
history, and he had us read “A World That Only If By Fire,” which is a sort of history
of the middle ages. I’ve mentioned this before some years ago
in another interview, and some people got on my case about it, saying it wasn’t accurate. I don’t know how accurate you can get about
the middle ages. But it was fascinating. It was a fascinating read just sort of describing
this world. One of the things that she mentions in the
book, the author was that basically beyond borders, there were… Literally maps also would show like unicorns
and things like that, which I guess brings me to the thing that I was really thinking
about, which is how our world, to go back to Armitage, that our world is defined by
the nation state, and that in fact we think about the world, that very much our mental
constructs of the world are in terms of nations. And I think that’s a powerful thing to recognize. I think that in the liberal west, that is
not always true. I think that most liberals in the west, and
this certainly includes the United States, think about liberal states. Most Americans don’t think of the United States
as a nation state. They do not think of the United States as
a very nationalistic power. They think nationalism is a force that doesn’t
matter that much here in the United States. What really matters is liberalism. But of course my argument is that they’re
wrong. Elsewhere around the world, once you’re outside
of the United States or more generally outside of the West, nationalism is just a well-recognized
force, and people consciously think in terms of nation states. Is that because we’re an empire and we have
felt for so long so secure in our position? No, it’s because we’re a liberal state and
liberal ideology is so deeply baked into our DNA that we gravitate to thinking about liberalism
above all else. And you want to remember our earlier discussion
here, where I pointed out to you that there’s a real tension between liberalism and nationalism. And liberals tend to dislike nationalism intensely. So they don’t want to pay nationalism much
attention, therefore they’re not going to tend to talk, this is Americans, in terms
of nation states. They’re going to talk in terms of the liberal
state. This is Fukuyama. Yeah. Early 90s. This is early 90s. Nationalism was a scourge that the Europeans
in particular, the European project, The EU was about eliminating nationalism from Europe,
which was seen as the cause of war. That’s correct. Do you see that argument being made all the
time? So it’s very important to understand that
this tension between liberalism and nationalism exists, and that in liberal countries like
the United States and most West European states, at this point in time, nationalism is seen,
to use your terminology, as a scourge. But the French, the French have always been
hyper-nationalistic and they are a very liberal state. Yes, that’s true. And my point to you is that everybody’s been
nationalistic. Most countries have not been that out front
about it. But let me give you a good example. This is one of my favorite quotes from an
American policymaker, who is viewed as a card carrying liberal, who, if you think carefully
about what she is saying, is talking in very nationalistic terms. And this is Madeline Albright, who was asked,
when she was secretary of state, why the United States was intervening all over the world. And she said, “It is because we are the indispensable
nation. We stand taller and we see further.” Just think about what she’s saying. 1990s again. We are the indispensable nation. There’s the word, nation. She recognizes we are a nation. We are the indispensable nation, we stand
taller, we see further. That’s the chauvinism that invariably comes
along with nationalism. So Madeline Albright, who is a profound liberal
imperialist or profound liberal hegemonist, is also a first order nationalist. Absolutely. Again, it made me think about the 90s. As you were talking, I was looking at another
quote that I had here of Hannah Arendt that you have in the book, where she talks about
the abstract nakedness of being nothing but human, as the greatest danger to the rights
of the people, specifically in the case of Germany. But again, it brings us to this tension between
liberalism and nationalism because nationalism is so empirically important for securing the
rights that liberals hold so dear. Right? So I mean, what are we seeing today, in your
view, in terms of this resurgence of nationalism in the US, in the UK, in Europe, what’s being
tapped into that’s causing that? I think there are a number of things that
are going on here. I think that liberalism has failed in a number
of important ways, and what it has done is that it has brought nationalism to the surface
in ways that we didn’t anticipate in the 1990s. A really good example of that would be open
borders immigration. And in Europe in particular with the case
of Syrian refugees, which harps on the strings of liberal impulses and yet it’s destabilizing
to the nation state. Yes, this is a really good example of the
tension between liberalism and nationalism. You want to remember that liberalism privileges
individual rights, and liberalism says that those rights are inalienable. This is of enormous importance. That means that every person on the planet
has the same set of rights. Therefore, there’s going to be a powerful
tendency in the liberal approach to international politics to favor open borders or porous borders,
to worry about the rights of people in the Middle East and to see them in very similar
terms to the way Europeans are supposed to see themselves, because we all are part of
this body of people who have universal rights. So liberals are going to have no trouble with
open borders. In fact, they’re going to like open borders. But nationalism is all about tribalism. It’s all about the belief that you belong
to a particular tribe, you operate on a particular piece of real estate. You control those borders, you control who
comes in, you control what the nation looks like. And then if you really begin to think about
it, is at odds with the idea that you can just let anybody in the country. And you see the same thing in the United States. Trump understands full well that the American
people are very nationalistic, and they just don’t want open borders. Illegal immigration drives most Americans
crazy. The idea that just anybody can come in. Americans are not against immigration, but
the belief of most Americans is that the government should control who comes in and the government
should reflect the will of the people. But liberalism, in very important ways, again,
pushes in a very different direction. It favors open borders. It doesn’t favor discriminating against people
who come from other countries and want to come here because we all have inalienable
rights. There’s a certain similarity between all of
us. That’s interesting, and that brings us to
your distinction about Universalist and Particularist strands. Also, something else that’s really interesting
here is that liberalism celebrates diversity and yet too much diversity begins to chip
away at the national solidarity that’s needed to keep the state together. That’s exactly right. Professor Mearsheimer, I want to continue
this conversation into the overtime where I really want to talk about liberal hegemony,
and that’s really a way of talking about American empire, and that’s not a traditional empire,
but the American hegemony since World War II. And then I also want to see how much we can
tackle in terms of some of these current geopolitical issues we face, in particular China. And I know you’ve talked a lot about China. I’ve seen a number of recent talks that you’ve
given. For regular listeners, you know the drill. If you’re new to the program or if you haven’t
subscribed yet to our Patreon audiophile, autodidact or super nerd tiers, you can do
so by heading over to patreon.com/hiddenforces or going directly into the description to
this week’s episode and there is a link that will direct it to the Patreon page. There is also a link. This is very important. If you’re already subscribed to the overtime
feed, you should have an RSS link embedded in your podcast application of choice integrated
so that you can get these shows automatically downloaded to your phone just like you listen
to the regular podcast. I don’t want you guys not to have that. It’s awesome. It’s a great feature. Make sure you check that out. And if you have any issues, email me. Also, the rundowns, this week’s episode is
pretty epic. Lots of beautiful pictures, lots of great
excerpts from Dr. Mearsheimer’s book. I highly suggest it if you haven’t subscribed
to that tier yet. Professor Mearsheimer, we’re going to be right
back. I look forward to it. Today’s episode of Hidden Forces was recorded
at Creative Media design studio in New York city. For more information about this week’s episode,
or if you want easy access to related programming, visit our website at hiddenforces.io and subscribe
to our free email list. If you want access to overtime segments, episode
transcripts, and show rundowns full of links and detailed information related to each and
episode, check out our premium subscription available through the Hidden Forces website
or through our Patreon page at patreon.com/hiddenforces. Today’s episode was produced by me and edited
by Stylianos Nicolaou. For more episodes, you can check out our website
at hiddenforces.io. Join the conversation at Facebook, Twitter,
and Instagram @hiddenforcespod, or send me an email. As always, thanks for listening. We’ll see you next week.

The actions of the economically right wing people are anti-state occasionally


Now coming to the other side which is also
anti-state is the economic right. I don’t believe that libertarian economics
is, you know their view point it against sustainable. I thinks that’s entering kind of a thing
is absolute nonsense in my opinion. But right wing has started appearing to be
anti-poor. We have started to be appearing to be anti-poor,
anti-farmer and even anti-youth and this is, here we have to step back for a moment and
start rethink about positions that you can’t argue against the subsidized health and education
to the people. You might disagree with that even I disagree
with lots of things in that. But if you are a right wing person, and if
you really want to stop as you say that, you want to stop these missionary schools working
in the countryside, for goodness sake, give the people free education. If that all it needs to stop it. But I was talking to a person and he had to
go to a hospital for something for some emergency purpose and he had to pay 700 rupees fees
and 100 -200 rupees again for the medicines. It may be not a big deal for us. We can pay it. But for majority of the people in this country
they just can’t afford it and by the end, once the government starts a policy or they
starts a program where subsidized the health care, the right wing is there on the social
media, the newspapers and everywhere calling it free loaded economy, and these people is
the free loaders, for goodness sake stop doing it. If you believe in a nation, a nationalism
please stop calling your own people freeloaders. Of course, they are people who are corrupt
who are burden on the system, they take undue advantage but don’t call people free loaders
when they are being given subsidized food, when their education is being subsidized,
when their health care is being subsidized. Live in the reality as I say, as a conservative
look at the reality and these things are absolutely needed. These things are absolutely needed not onlyfor the poor, poorest of the poor but even the urban neo middle class. They just can’t afford to survive with such
high cost.

Twitter Bans Political Ads For 2020 Election & Fracking Blocked In California


Twitter announced recently that their ban
on political advertising is going to extend to legislation and social causes, a move that
could hurt candidates in groups who aren’t funded by big money donors. Farron, you said, you’ve said this a couple
of times. Anytime you see social media saying we’re
gonna, we’re, we’re really gonna make it difficult for you to use social media to advertise your
idea, your legislators, legislative concept, your candidacy. Who suffers? The, well the people who are grassroots mostly. And one of the things that’s really so awful
about this new decision is that you can’t even run an ad on Twitter anymore because
they ended it November 22nd. You couldn’t run an ad saying, you know, vote
yes or vote no on proposition one. You couldn’t explain the benefits, you know,
proposition one just to generic. But you can’t advocate or any outcome in any
kind of race or legislative battle. And that is absolutely devastating to the
people who use this as the tool to talk to their constituents. Well, here’s what it says, it says that it’ll
define political content. Now follow this. It’s going to define political content as
anything that references a candidate, a political party, a pointed government official or referendum
or ballot measure or legislation or regulation. What in the hell, I mean, that’s what journalism
does. We talk about these things. The problem is that we, that this is being
run, these decisions are being run in an in an environment where politically correctness
is killing us. I mean, we’ve got, we’re like, we’re, it’s
almost like are we too stupid to be able to read something or see something and make a
decision ourselves? They want to think for us and it’s not just
Twitter. We’re seeing it across the board right now. It’s like, it’s like this millennial snowflake
concept that is killing us. It’s all based on political correctness and
we’ve got to get away from it. The first amendment matters. We ought to be able to talk about a ballot
issue. We ought to be able to talk about legislative
issues that concern us on things like the environment, dangerous products, corruption
in government. This is saying we can’t do that. Well, the problem is they saw Facebook. Facebook took a lot of heat and rightfully
so, but then Facebook said, listen, our decision is we’re not going to fact check anything. You want to run an ad, you run an ad. If somebody reports it as being bad, we’ll
look into it. But we say whatever, run, whatever, and Twitter
says, wow, that’s, that’s one extreme. We’ll go to the other extreme and say nothing
at all. You can’t do anything. But Twitter is a far greater tool to reach
a huge amount of people in the shortest amount of time. And that is what these grassroots candidates,
these, you know, consumer organizations, they rely on Twitter far more than they do on Facebook. Okay. Let’s, let’s put it in a real, healthcare,
okay. Universal healthcare. What do we have with universal healthcare? You have a concept, a cause. Correct? And you have a bill legislative bill, and
according to the rules, you can’t talk about that on Twitter. Now, that’s how ridiculous it’s become. Now the other part of it is we’re going to
have, who is it that’s going to make these decisions? I mean, you’re going to have people that understand
that all of these issues so well that they can define, well, this is actually, this is
actual political discussion. We can’t permit this. Or is this discussion that ties into a bill
that’s pending that we ought to be able to talk about? You see, the problem is anytime you go down
this avenue, you’re saying to the American public, you are so frigging stupid that we
can’t trust you to be able to read something and figure it out yourself. That’s what this is. This is, this is, this is let’s take care
of stupid people because we’re smarter than they are. And what’s going to happen is that eventually
something’s going to squeak through and if it’s a right-leaning thing, the left is going
to be furious and claim a bias. If it’s a left-leaning thing, the right’s
going to claim a bias because eventually, because of the people they’re going to have
doing this, something’s going to sneak through and this is going to come back and bite Twitter
because regardless of which side it is, they’re going to be accused of having a huge bias
and it’s going to throw it all out the window. I, I hope it comes back and bites them. Farron, thanks for joining me. Okay. Thank you. And finally tonight, some good news. California has issued a moratorium on hydraulic
fracking processes and new fracking leases in the state. This is just a temporary halt to these procedures,
but it could potentially lead to a permanent ban on the state, throughout the state. This move by the state came after activists
and researchers put tremendous pressure on lawmakers to finally consider the risks involved,
specifically the increased risk of earthquakes that’s been associated with fracking. This risk is so great that several European
countries have already banned fracking all together. You can’t do it, period. They also highlighted the dangers of chemicals
used during the fracking process, which include countless carcinogens and toxic heavy metals
capable of poisoning drinking waters and entire aquifers. Unfortunately, the public is still in the
dark about all the chemicals used thanks to a law that, oh by the way, Dick Cheney helped
pass years ago. That’s a real comfort. This story shows how effective activism can
be to influence major positive change in this country and when the voices of the public
are loud enough, even the fossil fuel industry better pay attention. That’s all for tonight. Find us on Twitter and at Facebook on facebook.com/rtamericaslawyer. You can watch all RT America programs and
Direct TV, Channel 321 and also stream them on YouTube. I’m Mike Papantonio and this is America’s
Lawyer, where every week we’re going to tell you the stories that corporate media is ordered
not to tell because their advertisers won’t allow them to do that. Have a great night.

Madeleine Albright: On being a woman and a diplomat


Pat Mitchell: What is the story of this pin? Madeleine Albright: This is “Breaking the Glass Ceiling.” PM: Oh. That was well chosen, I would say, for TEDWomen. MA: Most of the time I spend when I get up in the morning is trying to figure out what is going to happen. And none of this pin stuff would have happened if it hadn’t been for Saddam Hussein. I’ll tell you what happened. I went to the United Nations as an ambassador, and it was after the Gulf War, and I was an instructed ambassador. And the cease-fire had been translated into a series of sanctions resolutions, and my instructions were to say perfectly terrible things about Saddam Hussein constantly, which he deserved — he had invaded another country. And so all of a sudden, a poem appeared in the papers in Baghdad comparing me to many things, but among them an “unparalleled serpent.” And so I happened to have a snake pin. So I wore it when we talked about Iraq. (Laughter) And when I went out to meet the press, they zeroed in, said, “Why are you wearing that snake pin?” I said, “Because Saddam Hussein compared me to an unparalleled serpent.” And then I thought, well this is fun. So I went out and I bought a lot of pins that would, in fact, reflect what I thought we were going to do on any given day. So that’s how it all started. PM: So how large is the collection? MA: Pretty big. It’s now traveling. At the moment it’s in Indianapolis, but it was at the Smithsonian. And it goes with a book that says, “Read My Pins.” (Laughter) PM: So is this a good idea. I remember when you were the first woman as Secretary of State, and there was a lot of conversation always about what you were wearing, how you looked — the thing that happens to a lot of women, especially if they’re the first in a position. So how do you feel about that — the whole — MA: Well, it’s pretty irritating actually because nobody ever describes what a man is wearing. But people did pay attention to what clothes I had. What was interesting was that, before I went up to New York as U.N. ambassador, I talked to Jeane Kirkpatrick, who’d been ambassador before me, and she said, “You’ve got to get rid of your professor clothes. Go out and look like a diplomat.” So that did give me a lot of opportunities to go shopping. But still, there were all kinds of questions about — “did you wear a hat?” “How short was your skirt?” And one of the things — if you remember Condoleezza Rice was at some event and she wore boots, and she got criticized over that. And no guy ever gets criticized. But that’s the least of it. PM: It is, for all of us, men and women, finding our ways of defining our roles, and doing them in ways that make a difference in the world and shape the future. How did you handle that balance between being the tough diplomatic and strong voice of this country to the rest of the world and also how you felt about yourself as a mother, a grandmother, nurturing … and so how did you handle that? MA: Well the interesting part was I was asked what it was like to be the first woman Secretary of State a few minutes after I’d been named. And I said, “Well I’ve been a woman for 60 years, but I’ve only been Secretary of State for a few minutes.” So it evolved. (Laughter) But basically I love being a woman. And so what happened — and I think there will probably be some people in the audience that will identify with this — I went to my first meeting, first at the U.N., and that’s when this all started, because that is a very male organization. And I’m sitting there — there are 15 members of the Security Council — so 14 men sat there staring at me, and I thought — well you know how we all are. You want to get the feeling of the room, and “do people like me?” and “will I really say something intelligent?” And all of a sudden I thought, “Well, wait a minute. I am sitting behind a sign that says ‘The United States,’ and if I don’t speak today then the voice of the United States will not be heard,” and it was the first time that I had that feeling that I had to step out of myself in my normal, reluctant female mode and decide that I had to speak on behalf of our country. And so that happened more at various times, but I really think that there was a great advantage in many ways to being a woman. I think we are a lot better at personal relationships, and then have the capability obviously of telling it like it is when it’s necessary. But I have to tell you, I have my youngest granddaughter, when she turned seven last year, said to her mother, my daughter, “So what’s the big deal about Grandma Maddie being Secretary of State? Only girls are Secretary of State.” (Laughter) (Applause) PM: Because in her lifetime — MA: That would be so. PM: What a change that is. As you travel now all over the world, which you do frequently, how do you assess this global narrative around the story of women and girls? Where are we? MA: I think we’re slowly changing, but obviously there are whole pockets in countries where nothing is different. And therefore it means that we have to remember that, while many of us have had huge opportunities — and Pat, you have been a real leader in your field — is that there are a lot of women that are not capable of worrying and taking care of themselves and understanding that women have to help other women. And so what I have felt — and I have looked at this from a national security issue — when I was Secretary of State, I decided that women’s issues had to be central to American foreign policy, not just because I’m a feminist, but because I believe that societies are better off when women are politically and economically empowered, that values are passed down, the health situation is better, education is better, there is greater economic prosperity. So I think that it behooves us — those of us that live in various countries where we do have economic and political voice — that we need to help other women. And I really dedicated myself to that, both at the U.N. and then as Secretary of State. PM: And did you get pushback from making that a central tenant of foreign policy? MA: From some people. I think that they thought that it was a soft issue. The bottom line that I decided was actually women’s issues are the hardest issues, because they are the ones that have to do with life and death in so many aspects, and because, as I said, it is really central to the way that we think about things. Now for instance, some of the wars that took place when I was in office, a lot of them, the women were the main victims of it. For instance, when I started, there were wars in the Balkans. The women in Bosnia were being raped. We then managed to set up a war crimes tribunal to deal specifically with those kinds of issues. And by the way, one of the things that I did at that stage was, I had just arrived at the U.N., and when I was there, there were 183 countries in the U.N. Now there are 192. But it was one of the first times that I didn’t have to cook lunch myself. So I said to my assistant, “Invite the other women permanent representatives.” And I thought when I’d get to my apartment that there’d be a lot of women there. I get there, and there are six other women, out of 183. So the countries that had women representatives were Canada, Kazakhstan, Philippines, Trinidad Tobago, Jamaica, Lichtenstein and me. So being an American, I decided to set up a caucus. (Laughter) And so we set it up, and we called ourselves the G7. (Laughter) PM: Is that “Girl 7?” MA: Girl 7. And we lobbied on behalf of women’s issues. So we managed to get two women judges on this war crimes tribunal. And then what happened was that they were able to declare that rape was a weapon of war, that it was against humanity. (Applause) PM: So when you look around the world and you see that, in many cases — certainly in the Western world — women are evolving into more leadership positions, and even other places some barriers are being brought down, but there’s still so much violence, still so many problems, and yet we hear there are more women at the negotiating tables. Now you were at those negotiating tables when they weren’t, when there was maybe you — one voice, maybe one or two others. Do you believe, and can you tell us why, there is going to be a significant shift in things like violence and peace and conflict and resolution on a sustainable basis? MA: Well I do think, when there are more women, that the tone of the conversation changes, and also the goals of the conversation change. But it doesn’t mean that the whole world would be a lot better if it were totally run by women. If you think that, you’ve forgotten high school. (Laughter) But the bottom line is that there is a way, when there are more women at the table, that there’s an attempt to develop some understanding. So for instance, what I did when I went to Burundi, we’d got Tutsi and Hutu women together to talk about some of the problems that had taken place in Rwanda. And so I think the capability of women to put themselves — I think we’re better about putting ourselves into the other guy’s shoes and having more empathy. I think it helps in terms of the support if there are other women in the room. When I was Secretary of State, there were only 13 other women foreign ministers. And so it was nice when one of them would show up. For instance, she is now the president of Finland, but Tarja Halonen was the foreign minister of Finland and, at a certain stage, head of the European Union. And it was really terrific. Because one of the things I think you’ll understand. We went to a meeting, and the men in my delegation, when I would say, “Well I feel we should do something about this,” and they’d say, “What do you mean, you feel?” And so then Tarja was sitting across the table from me. And all of a sudden we were talking about arms control, and she said, “Well I feel we should do this.” And my male colleagues kind of got it all of a sudden. But I think it really does help to have a critical mass of women in a series of foreign policy positions. The other thing that I think is really important: A lot of national security policy isn’t just about foreign policy, but it’s about budgets, military budgets, and how the debts of countries work out. So if you have women in a variety of foreign policy posts, they can support each other when there are budget decisions being made in their own countries. PM: So how do we get this balance we’re looking for, then, in the world? More women’s voices at the table? More men who believe that the balance is best? MA: Well I think one of the things — I’m chairman of the board of an organization called the National Democratic Institute that works to support women candidates. I think that we need to help in other countries to train women to be in political office, to figure out how they can in fact develop political voices. I think we also need to be supportive when businesses are being created and just make sure that women help each other. Now I have a saying that I feel very strongly about, because I am of a certain age where, when I started in my career, believe it or not, there were other women who criticized me: “Why aren’t you in the carpool line?” or “Aren’t your children suffering because you’re not there all the time?” And I think we have a tendency to make each other feel guilty. In fact, I think “guilt” is every woman’s middle name. And so I think what needs to happen is we need to help each other. And my motto is that there’s a special place in hell for women who don’t help each other. (Applause) PM: Well Secretary Albright, I guess you’ll be going to heaven. Thank you for joining us today. MA: Thank you all. Thanks Pat. (Applause)

The ocean’s falling oxygen levels are putting fish species at risk: report


Well the world’s deep oceans are in deep
trouble. This according to a new report presented at the UN climate conference
in Madrid today. The International Union for the Conservation of Nature says
there are many reasons for that but a big one is the steady fall in oxygen
levels. Now fish need oxygen just as much as land animals but the number of
so-called dead zones, which are places with little or no oxygen, is growing
quickly. When research began in the 1960s scientists counted 45 dead zones but
today there are more than 700. The lower oxygen levels are especially hard on
larger species like sharks. Minna Epps is the director of the Global
Marine and Polar Program with the International Union for the Conservation
of Nature and she joins us right now from Madrid. Minna thank you for joining
us today. Thank you for having me. Listen I want to begin first and foremost with
impact. What does a lower oxygen level in oceans actually translate to? Well the
concrete things that it translates to on a general scale would be the loss of
biodiversity, loss of biomass. Loss of habitats as these are shrinking or it
could be also alternate of alteration of the energy and the biochemical cycling.
So what is causing this lower oxygen level that’s now being tracked around
the world? Well the primary cause of deoxygenation
which has occurred far most in the coastal areas what’s been 30 to 40
kilometers offshore like you would have seen and then lower the Gulf of St.
Lawrence. That is caused mainly by nutrient pollution so that’s a primary
course in general what we’re seeing now is also the linkages to climate change
as increased CO2 levels emissions has resulted in ocean warming. So warmer
water contains less diesel – less oxygen – which means that the oceans due to
climate change are becoming warmer more sour and ultimately breathless.
Breathless but I do wonder what is the impact on that on humans?
Well it’s it’s all connected so from the oceans you know we get food, it’s
it’s a carbon storage, it generates oxygen, it’s part regulates,
heat, excess heat so it’s part of a regulatory system and we all need oxygen
as well to breathe. But what climate change does is weaken this ability, the
support system, of of the ocean and you mentioned in the 700 sites, I mean the
this two per cent decline in oxygen levels is an average within that you have massive
huge regional variations. So this could be some areas up to 30 per cent etc but we’re
also seeing that the future projections is another three to four percent both
under high and a lower emission targets. So it makes it harder to actually regulate
oxygen and global temperatures you’re saying and talk about the economic
impact of this because I think for many people this is part of the picture as
they try to understand the impacts of climate change. Yeah so I think that now
they’re talking about or looking at the ocean saying, well if the ocean was a
state it would be in in terms of GDP it would be the seven largest. So because
we’re looking at all the benefits that we are getting for the ocean and its
services and the potential that’s there so we really need to think about this
and a concrete thing would be commercial fishing which is important for the socio-economics. So look at the tuna fisheries for example they need a lot of oxygen-rich waters and so we’re seeing migration to more nutrient and ocean
and rich waters but so it’s it could be habitat loss but it can also affect us
in the way that’s important commercial species which is like code for example.
It can actually hamper their growth as well because they don’t have oxygen
enough oxygen they have enough to sustain but they might not grow or
reproduce as much as they would under more optimal conditions.
Well of course cod is a species of fish that Canada is very familiar with. This
deoxygenation as you say happening all around the world,
can you pinpoint the kind of effect this will have on Canada in particular? Well I
mean this report that’s been put together it’s from 67 scientists around
the world and there’s different geographical studies. So it’s 600 pages
of these different sites. There are studies looking at the Gulf of St.
Lawrence and looking at cod but also in some areas where they have actually
found deoxygenation has half since the 1930s in those areas.
So it’s an area I think 1,300 square kilometers of deoxygenation so so that’s
something that’s very close to home for you and as you mentioned before the cod
fishery. So can this be stopped are there things on a practical level
the people can do to stop this from happening? I mean there is a solution. I
mean the primary cost which is nutrient pollution of course there’s action that
that can be taken there but we need to ultimately cut emissions or have much
more ambitious targets towards cutting emissions. We need to invest in nature
based solutions so that’s in protecting and restoring ecosystems both from
mitigation and for adaptation but we also need to reduce other non climate
change stressors such as overfishing. We need to have sustainable fisheries that
can sustain and be more resilient to these changes that are occurring and so
that’s really here I think the decisions being made at the COP here in Madrid
will actually determine the future of our oceans whether there will be
thriving and marine biodiversity and oxygen-rich environment or whether they
will be damaged and irreversibly lost so I think that has an impact and then as
we said on a personal level we you know we can engage we can put public pressure
and we can make sure that we source sustain from sustainable sources.

House Ways and Means Committee 12/9/19


>>I WOULD LIKE TO CONVENE THE WAYS AND MEANS COMMITTEE. WERE DELAYED I DON’T KNOW WHAT PROBLEMS WERE WE HAD A TEAM WORKING ON SOME TECHNOLOGY OTHERWISE WE WOULD HAVE STARTED EARLIER. WE DO HAVE A QUORUM PRESENT. REPRESENTATIVE HERTAUS/.>>THANK YOU MR. CHAIR I WANTED TO EXPRESS MY THANKS PERHAPS ON BEHALF OF OUR CAUCUS MAYBE ALL THE PEOPLE IN HERE FOR YOUR WISDOM AND INTELLECT AND INTUITION AND COLIN IS MEETING TO ORDER AT 1030 YOU MUST KNOW THERE WAS GOING TO BE SNOW EVEN TODAY?>>I HAVEN’T LIVED ANYPLACE OTHER THAN MINNESOTA SO YOU SORT OF ARE CAUTIOUS THIS TIME OF YEAR LET ME PUT IT THAT WAY. THAT WAS ACTUALLY I HAVE TO GIVE CREDIT TO THE WOMAN TO MY RIGHT; SHE MADE THAT SUGGESTION. …LAUGHTER… I CAN’T TAKE CREDIT FOR THAT BUT IT’S A GOOD IDEA THIS TIME OF YEAR.>>IT TOOK AN HOUR AND 50 MINUTES ONE WAY HERE THAT WAS A GOOD THING I DIDN’T COME TO A COMPLETE STOP EVER.>>I FOUND EVEN THOUGH IT WAS STARTING AT 1030 I LEFT HOME SHORTLY AFTER 7:00 A.M. THIS MORNING TO MAKE SURE I WAS HERE BECAUSE I WATCHED THE EARLY MORNING NEWS THERE WERE TALKING ABOUT ACCIDENTS AND SPIN OUT AND SO WANT WE HAVE TO GIVE SOME CREDIT WE HAVE SOME FOLKS HERE FROM NORTHERN MINNESOTA WHO MADE IN THROUGH THE WORST OF IT LAST NIGHT AND THIS MORNING. HOW WAS IT IN DULUTH?>>MR. CHAIR I CAME DOWN LAST NIGHT I SAW THE WEATHER FORECAST AND I KNEW REPRESENTATIVE ECKLUND WAS GOING TO BE HERE SO I HAD TO BE HERE.>>DID YOU COME DOWN LAST NIGHT?>>I DID MR. CHAIR.>>I HOPE WE HAVE IN THE NORTHERN MINNESOTA MEMBERS HERE OR NOT? WE DO HAVE A QUORUM AND THANK-YOU TO EVERYONE WHO IS HERE. WE WILL GET STARTED; WE DON’T HAVE ANY MINUTES IN THE PACKETS WE WILL APPROVE PREVIOUS MINUTES WHEN WE CONVENE IN FEBRUARY ON THE FEBRUARY 11TH OR SHORTLY THEREAFTER WILL HAVE THE FIRST COMMITTEE MEETING WE WILL TAKE UP THE PREVIOUS MINUTES. WE ARE GOING TO HAVE AN OVERVIEW OF THE BUDGET WE PASSED AT A FAIR AMOUNT OF PUBLICITY ON IT ALREADY FROM LAST WEEK THE WAYS AND MEANS COMMITTEE UNDER THIS PROCESS SHORTLY AFTER THE FORECAST COMES OUT; WE DO HAVE MMB COME IN AND GIVE US AN OVERVIEW. OK. MISS CONLEY POINTED OUT SHE MADE AN ERROR ON THE AGENDA. IT IS THE NOVEMBER FORECAST NOT THE FEBRUARY FORECAST WE’RE TALKING ABOUT. THAT WOULD BE LITTLE EARLY BUT WE WILL LET THE HEARING IN A COUPLE OF MONTHS ON THE FEBRUARY FORECAST. IF THE FOLKS WHO ARE GOING TO TESTIFY COULD COME FORWARD. COMMISSIONER FRANS ARE YOU GOING TO BE THE LEAD OF? YOU ARE LISTED FIRST.>>MR. CHAIR I WILL TRY. I WILL ” WE HAD ENOUGH TO THE SMART PEOPLE BESIDE ME TO GET THE INFORMATION YOU WOULD LIKE. THANK YOU MR. CHAIR GOOD MORNING TO MEMBERS FOR BEING HERE TODAY. WE’RE HAPPY TO PRESENT THE NOVEMBER FORECAST TO DATE AND WE WILL WAIT A FEW MOMENTS FOR THE FEBRUARY FORECAST ONE OF THE THINGS THAT’S SO CRITICAL ABOUT TODAY’S LAST WEEK’S FORECAST WAS IT CAME AT A TIME WHEN WE WERE ABLE TO MAKE A CONTRIBUTION OR ALLOCATION TO THE BUDGET RESERVE ACCOUNT I WILL TALK FURTHER ABOUT. AS WE SAID LAST WEEK THE BUDGET OUTLOOK FOR MINNESOTA HAS IMPROVED DR. KALAMBOKIDIS; I SHOULD DO SOME LAPS AROUND THE CAPITAL; WILL TALK ABOUT THE ECONOMIC ASPECTS AND BRIDGET REITAN THE BUDGET DIRECTOR WILL TALK ABOUT THE EXPENDITURE SIDE. ONE OF THE THINGS WE’RE PLEASED TO SEE WAS THE $1.3 BILLION SURPLUS FORECASTED FOR 20-21 PROVIDED ENOUGH BALANCE TO MAKE A PAYMENT TO THE ALLOCATION TO THE BUDGET RESERVE AND AND WE’VE HIT A BUDGET RESERVE TARGET OF ALMOST $2.4 BILLION WHICH IS WHAT WE WERE STRIVING TO GET YOU TO HAVE A RAINY DAY FUND IN THE EVENT WE HAVE AN ECONOMIC DOWNTURN. ONE OF THE THINGS WE TALKED A LITTLE ABOUT LAST WEEK WAS THE FACT THAT SO MANY STATES HAVE BEEN STARTED USING THE SETTING UP MORE SIGNIFICANT RAINY DAY FUNDS ACROSS THE COUNTRY AND THAT HAS ALLOWED THEM TO AVOID THE DIFFICULTY THAT MANY OF US AROUND THE TABLE I SEE A LOT OF FAMILIAR FACES FROM 2011 WHERE WE WENT TO THAT SITUATION WHERE YOU HAVE A LARGE DEFICIT AT THAT TIME $6.2 BILLION IN YOU HAD TO MAKE CHANGES AND HAD TO MAKE THEM VERY QUICKLY. UNDER THIS SCENARIO WE PUT FORWARD WITH OUR BUDGET RESERVE WILL TALK OF LITTLE MORE ABOUT THAT LATER PROVIDED SOME FLEXIBILITY IN THE EVENT OF AN ECONOMIC DOWNTURN. THE OTHER THING I WANTED TO MENTION WAS THE BUDGET RESERVE POLICY WE HAVE IS BASED UPON THE A PERCENTAGE OF THE GENERAL FUND REVENUES IN THE BIENNIUM SO THAT PROVIDES SOME FURTHER PROTECTION AGAINST THE RISK OF A GROWING BUDGET AS THE BUDGET GROWS SO DOES THE TARGET BECAUSE THE PERCENTAGE OF REVENUES SO EVERY NOVEMBER OR EARLY SEPTEMBER DR. KALAMBOKIDIS TEAM ANALYZES THE VOLATILITY AND WHETHER THE REVENUE IS CHANGED AND WHETHER THE PERCENTAGE SHOULD CHANGE OR NOT IT’S ONE WAY WE PROVIDE SOME RISK ANALYSIS ABOUT WHAT HAPPENS IN THE EVENT REVENUES CHANGED DRAMATICALLY. WITH THAT ONE WOULD LIKE TO DO NOW IS TURNED OVER TO BUDGET DIRECTOR REITAN TO WALK THROUGH THE PROJECTED BALANCE THE BUDGET RESERVE AND GO ON FROM THERE.>>I SHOULD ASK COMMISSIONER; IS IT YOUR PREFERENCE AT DO YOU WANT TO HAVE YOUR TEAM ENTERTAIN QUESTIONS AS A GOAL LONG ORDEAL WANT TO WAIT UNTIL YOU’RE DONE WITH THE PRESENTATION? AS CHAIR I CAN GO EITHER WAY.>>MR. CHAIR IS THE PREROGATIVE OF THE CHAIR WE’RE HAPPY TO TAKE QUESTIONS AS WE GO ALONG.>>WHY DON’T WE FIND SOME MIDDLE GROUND UNLESS YOU HAVE A REAL PRESSING QUESTION AS YOUR DOING THE PRESENTATION WE WILL WAIT UNTIL THE END OF QUESTIONS AND THEN IF NECESSARY WE CAN ENTERTAIN A QUESTION OTHERWISE WE WILL TRY TO WAIT UNTIL YOU FINISH.>>MR. CHAIR THIS PRESENTATION SHOULD GO FAIRLY QUICKLY . I THINK WE’LL GET TO THAT END IT PRETTY QUICKLY.>>GOOD MORNING I’M BRITTA REITAN STATE BUDGET DIRECTOR AT MMB. I WILL WALK THROUGH A HIGH LEVEL LOOK AT THE NUMBERS FOR FISCAL YEARS 20 AND 21 WITH THE SLIDE IS SHOWING IS THE CHANGE IN THE BUDGETARY BALANCE IN 20 AND 21. THIS COMPARES THE END OF SESSION ESTIMATES TO THE CURRENT ESTIMATES IN THE FORECAST. THE RIGHT-HAND COLUMN REFLECTS THE CHANGE BETWEEN THE END OF SESSION AND THE FORECAST. THE BOTTOM ROW THE CHART SHOWS THE BUDGETARY BALANCE IN THE MIDDLE COLUMN THAT’S WHERE YOU CAN SEE THE CURRENT PROJECTION OF $1.3 BILLION THAT’S AVAILABLE FOR 20 AND 21 AND THIS WAS AN INCREASE OF JUST OVER $1 BILLION FROM THE END OF SESSION ESTIMATES AND THIS IS ALSO AFTER THE ADDITIONAL ALLOCATION OF THE BUDGET RESERVE. AS YOU CAN SEE IN THE CHANGE; THE BIGGEST DRIVER OF THE CHANGE IS $891 MILLION IN INCREASE IN THE CARRY FORWARD INTO THE BEGINNING BALANCE THIS IS MONEY CARRYING FORWARD FROM THE CLOSE OF FISCAL YEAR 2019 AND ATTRIBUTING AN INCREASE TO THE BEGINNING BALLOTS FOR 20 AND 21. OF THAT $891 MILLION THE MAJORITY IS DUE TO HIGHER TOTAL REVENUE THAN PREVIOUSLY FORECASTED IN FISCAL YEAR 19 REVENUE PROJECTIONS ARE ALSO INCREASING IN THE FORECAST FOR THE CURRENT BIENNIUM IN YEARS 20 AND 21 OF $501 MILLION AND EXPENDITURE ESTIMATES HAVE DECLINED ONLY SLIGHTLY BY $7 MILLION WE WILL TALK MORE ABOUT THE DRIVERS OF THOSE CHANGES LATER IN THE PRESENTATION. THE NEXT LINE SHOWS THE CHANGE IN THE BUDGET RESERVE; UNDER EXISTING STATUTE WE ALLOCATE 33 PERCENT OF THE BALANCE OR THE AMOUNT NECESSARY TO REACH THE RESERVE TARGETS IN THIS CASE WE ALLOCATED THE AMOUNT NECESSARY TO REACH THE RESERVE TARGET AND THE TARGET IS $2.3 BILLION CURRENTLY SO WE ALLOCATED $284 MILLION TO THE RESERVE. THE NEXT LINE SHOWS $350 MILLION IN THE CASH FLOW ACCOUNTS AND THIS IS UNCHANGED FROM AND A SESSION ESTIMATES. THEN THE NEXT LINE SHOWS THE CHANGE IN THE STADIUM RESERVE BALANCE THE BALANCE IS PROJECTED TO INCREASE BY $25 MILLION IN FISCAL YEARS 20 AND 21 REACHING $124 MILLION BY THE END OF 2021. THIS IS DUE TO INCREASED GRAMBLING TAX PROJECTIONS FROM THE PREVIOUS FORECAST AND AGAIN THE BOTTOM LINE SHOWS THE BUDGETARY BALANCE OF $1.3 BILLION. THIS NEXT SLIDE PROVIDES A BIT MORE DETAIL ABOUT THE ALLOCATION TO THE BUDGET RESERVE FROM THE FORECAST. THE BUDGET RESERVE LAW PASSED IN 2014 ESTABLISHES A RESERVE TARGET THAT ANNUALLY DETERMINED WHEN THE COMMISSIONER TALKED A BIT ABOUT THAT IT’S BASED ON AN ASSESSMENT OF THE VOLATILITY IN OUR REVENUE STRUCTURE AND AN ESTIMATE DONE BY DR. KALAMBOKIDIS AND HER TEAM EVERY SEPTEMBER THE TARGET IS NOT A DOLLAR A MONTH IT’S A PERCENTAGE OF TOTAL REVENUES IN THE GENERAL FUND. CURRENTLY THE TARGET IS 4.9% OF BIENNIAL REVENUES. GIVEN THE CURRENT REVENUE PROJECTIONS THE RESERVE TARGET=$2.3 BILLION PRIOR TO THE FORECAST WE HAD JUST OVER $2 BILLION IN RESERVES. BEFORE THE ALLOCATION TO THE RESERVE THE FORECAST BALANCE IN FISCAL YEARS 20 AND 21 IS $1.6 BILLION AS I SAID STATUTE DIRECTS AT 33 PERCENT THE AMOUNT TO REACH THE RESERVE TARGET IN THIS CASE IF WE HAD DONE A 33 PERCENT IT WOULD OF BEEN $533 MILLION WE DID NEED TO ALLOCATE THAT MUCH TO REACH THE TARGET; SO THE ALLOCATION TO THE RESERVE WITH THE FORECAST IS $284 MILLION NOW I WILL HAND OVER TO DR. KALAMBOKIDIS TO WALK THROUGH THE ACADEMY AND REVENUE FORECAST CHANGES.>>THANK YOU I’M LAURA KALAMBOKIDIS THE STATE ECONOMIST I’M GLAD TO BE HERE TODAY TO TALK ABOUT THE ECONOMIC AND REVENUE FORECAST. I WILL START WITH THE U.S. ECONOMY I WILL MOVE TO THE MINNESOTA ECONOMY AND THEN TALK ABOUT THE REVENUE CHANGES. THE FIRST CHART COMPARES THE CURRENT U.S. GDP FORECAST OUR CONSULTING FIRM IHS TO THEIR PRIOR FORECAST THE DARK BARS SHOW THE HISTORY AND CURRENT NOVEMBER 2019 FORECAST THE LIGHTER BARS SHOAT THE FEBRUARY FORECAST THE ONE THAT INFORM OUR PRIOR FORECAST IF YOU FOCUS ON THE RIGHT-HAND SIDE OF THE CHART; THE YEARS 19 THROUGH 23 YOU CONCEDE THE OUTLOOK FOR U.S. ECONOMIC GROWTH THIS YEAR FOR THIS YEAR AND SLIGHTLY WEEKEND AND OUTLOOK FOR THE REMAINING YEARS OF OUR FORECAST IS SLIGHTLY IMPROVED SINCE OUR FORECAST WAS LESS PREPARED IN FEBRUARY. LOWER ACTUAL GROWTH FOR MOST OF THIS YEAR IS THAT I JUST LOWER THEIR EXPECTATIONS FOR 2019 REAL GDP GROWTH 0.4% IN THE FEBRUARY OUTLOOK DOWN TO 2.3% NOW THE OUTLOOK FOR GROWTH IN EACH YEAR FROM 2323 IS HIGHER THAN IN FEBRUARY; DRIVEN PRIMARILY BY A STRONGER CONSUMER SPENDING FORECAST. IF YOU LOOK THE CURRENT FORECAST FOR 19 THROUGH 23 THE DARK BARS ON THE RIGHT-HAND SIDE OF THE FORECAST; BUT CHART YOU CAN SEE THE PATTERN OF SLOWING GROWTH THROUGH OUR PLANNING HORIZON CARRYING OVER FROM THE PRIOR FORECAST THAT SLOWDOWN OCCURRED A DECELERATION GOING FROM 2.9 PERCENT DOWN TO 1.5% THAT THE SLOWING OCCURS AS THE CONTRIBUTION TO GROWTH FROM FEDERAL FISCAL STIMULUS DECLINES TARIFFS AND TRADE POLICY UNCERTAINTY UNDERMINE BUSINESS INVESTMENTS INTEREST RATES GRADUALLY RISE AND GROWTH IN HOUSEHOLD WEALTH FLOWS SO HOUSEHOLD WEALTH GROWS BUT AT A SLOWER PACE. AFTER MID 2020 HAD DECLINED IN THE U.S. LABOR FORCE PARTICIPATION RATE THE DEMOGRAPHIC DRIVEN IT’S ABOUT BABY BOOMERS RETIRING THAT THE CLIENT FOR THE SLOWS THE ECONOMY AND. DOWNSHIFT CONTINUES WITH AND YOU REAL GDP GROWTH EXPECTED TO DECELERATE FROM 2.9% ANNUALLY IN 2018 DOWN TO 1.5% IN 23 THE HISTORY OF THE CHART AND SINCE THE RECESSION; ILLUSTRATES ONE OF THE RISKS OF THE FORECAST THE DOLLAR BUYING AS A SHOWED YOU BEFORE IS AT 3.1 PERCENT THAT’S ANNUAL AVERAGE REAL GDP GROWTH FOR THE 20 YEARS PRIOR TO THE RECESSION AND THE POINT THERE IS TO ILLUSTRATE THE GROWTH WE USED TO BE ABLE TO EXPECTED HIGHER THAN THE GROWTH WE ARE EXPECTING GOING FORWARD. WHEN THE ECONOMY IS GROWING SLOWER THIS THAT AS MUCH MARGIN FOR ERROR IT’S HARD TO RECOVER FROM A SETBACK OR NEGATIVE SHOCK THEN WHEN THE GROWTH IS HIGHER. IN ADDITION U.S. EXPANSION IS NOT AS LONGEST ON RECORD SO MATURE LOW GROWTH EXPANSION IS PARTICULARLY VULNERABLE WHEN NEGATIVE SHOCKS OCCUR. RELATIVELY SMALL CHANGES IN THE U.S. GDP FORECAST IS THE RESULT OF SOME OFFSETTING CHANGES SINCE OF THE COMPONENTS OF THE GDP. SPECIFICALLY A STRONGER FORECAST FOR CONSUMER SPENDING; THE STRONGER FORECAST FOR CONSUMER SPENDING OFFSET LOWER EXPECTED GROWTH IN BUSINESS INVESTMENTS. SHOWS THE FORECAST CHANGE FOR U.S. GROWTH AND CONSUMER SPENDING THE GRAY BARS SHOW THE FEBRUARY OUTLOOK THE DARK BARS SHOW THE CURRENT OUTLOOK CONSUMER SPENDING CONSTITUTES ABOUT TWO-THIRDS OF REAL GDP IHS EXPECTS CONSUMERS TO REMAIN THE PRIMARY CONTRIBUTOR TO GROWTH IN THE ECONOMY. IHS HAS RAISED THEIR EXPECTATIONS FOR REAL CONSUMER SPENDING GROWTH BETWEEN 0.4 IN 0.8% IN EACH OF THE FORECAST AND THAT INFLUENCES OUR FORECAST FOR MINNESOTA’S SALES TAX RECEIPTS. THE STRAWSER FORECAST GROWTH AND A STRONGER CONSUMER SPENDING FORECAST IS SUPPORTED BY RISING INCOMES FALLING GASOLINE PRICES AND LOWER INTEREST RATE PASSED SO INTEREST RATES ARE EXPECTED TO RISE BUT RELATIVE TO THE PRIOR FORECAST THE PATH IS LOWER AND RISING HOUSEHOLD WEALTH WHEN WEALTH GROWS FOR EXAMPLE FOR AMERICANS THE WEALTH IS PRIMARILY THE VALUES OF THEIR HOME AND VALUES OF RETIREMENT SAVINGS STOCK MARKET PORTFOLIOS AND FINANCIAL ASSETS; WHEN WEALTH GROWS FROM RISING HOME VALUES IN FINANCIAL ASSET VALUES CONSUMERS TEND TO SPEND MORE AND THAT POSITIVE WEALTH EFFECTS HAS BEEN AN IMPORTANT CONTRIBUTOR TO ECONOMIC GROWTH DURING THIS EXPANSION BUT IT IS AT RISK IF WEALTHY CLIENTS OR POLICY UNCERTAINTY MAKES CONSUMERS JITTERY. THE STRAWSER FORECAST IN REAL CONSUMER SPENDING AS A SAID OFFSET THE REDUCED FORECAST FOR BUSINESS INVESTMENT AND THAT HAS BEEN ENCUMBERED BY A SLOWDOWN IN MANUFACTURING INCLUDING DECLINING MANUFACTURING EMPLOYMENT AT THE U.S. LEVEL; BUT STRONG U.S. DOLLAR DAMPENS DEMAND FOR EXPORTS AND TRADE POLICY UNCERTAINTY. NOT KNOWING WHAT THE FUTURE TRADE POLICY A PLAYING FIELD LOOKS LIKE MAKES BUSINESS OWNERS POSTPONED EXPANSION PLANS AND POSTPONE INVESTMENTS. NOW WE MOVE TO MINNESOTA AND COMPARE MINNESOTA TO THE U.S. AND THIS CHART I COMPARE THE HEADLINE OUT OF ONE A GREAT UNITED STATES TO MINNESOTA OF THE U.S. IS THE LIGHT LINE AND MINNESOTA’S THE DARKLING THE VERTICAL BARS ARE THE RECESSION’S. THE WHITE SPACE BETWEEN THE BARS REPRESENTS THE RECOVERY AND EXPANSION TIMES BETWEEN RECESSIONS MINNESOTA STEADY ECONOMIC PERFORMANCE CONTINUES EVEN AS THE U.S. EXPANSION HAS SURPASSED THE RECORD LENGTH. THROUGHOUT THE EXPANSION MINNESOTA HAS STEADILY ADDED JOBS DRIVING ON A PLANET RATES WELL BELOW THE U.S. RATE MINNESOTA’S UNEMPLOYMENT RATE REACHED AN 18 YEAR LOW OF 2.8% IN JUNE OF 2018 IT BEGAN GRADUALLY RISING AT A YEAR AGO REACHING THE CURRENT RATE OF 3.2% THAT 0.4% BELOW THE U.S. RATE. THE RECENT INCREASE AS A CONCESSION THE RIGHT-HAND SIDE OF THE CHART IS TO INCREASE FROM DECEMBER 18TH THE RECENT INCREASE IN OUR UNEMPLOYMENT RATE COINCIDES WITH AN INCREASE IN OUR LABOUR FORCE PARTICIPATION RATE WHICH IS THE SHARE OF THE OVER 16 POPULATION THAT’S EITHER WORKING OR LOOKING FOR WORK. WORKFORCE PETITION IS CONSISTENTLY ABOVE THE U.S. RATE AMONG THE HIGHEST IN THE STATES BUT SINCE DECEMBER 2018 ITS ENTIRE TO REACH 70.3% WHICH IS SEVEN PERCENTAGE POINTS ABOVE THE U.S. RATE AND THE SECOND HIGHEST AMONG U.S. STATES ” INCIDENTAL UPTICKS IN THE UNEMPLOYMENT RATE AND LABOR FORCE PARTICIPATION RATE MEANS THAT WE HAVE SOME NEW ENTRANT INTO THE WORKFORCE AND SOME OF THOSE NEW ENTRANTS DIDN’T IMMEDIATELY FIND JOBS. GREAT EFFORTS TO MATCH THEM TO JOBS WILL LOWER THE UNEMPLOYMENT RATE IN SUPPORT EMPLOYMENT GROWTH. THIS CHART ILLUSTRATES ANOTHER ASPECT OF MINNESOTA’S TIGHT LABOR MARKET THE GRABARSKI HAD A GREAT OURS SHOWS THE TOTAL NUMBER OF UNEMPLOYED WORKERS SO THE NUMBER OF WORKERS ASSOCIATED WITH THE RATE YOU SAW ON THE PREVIOUS CHART AND A RADAR SHOWS THE NUMBER OF JOB VACANCIES AND BOTH OF THESE NUMBERS ARE STATEWIDE. I’VE GIVEN YOU SOME HISTORY ON THIS CHART YOU CAN SEE HOW DIFFERENT THE RELATIONSHIP TWEEN THE NUMBER OF UNEMPLOYED WORKERS IN JOB VACANCIES WAS PRIOR TO THE RECESSION ESPECIALLY DURING THE RECESSION. THE DARK BARS YOU CAN SEE THAT THE BAR AND THE LAST DATE OF ONE OF THE CHARTS THE 19 DID YOU CONSIDER GRADE BAR HAS GONE UP A LITTLE THAT’S THE UPTICK IN UNEMPLOYMENT I MENTIONED BEFORE WE’VE ADDED A FEW MORE UNEMPLOYED WORKERS THAT WE HAD BEFORE THE NUMBER OF JOB VACANCIES HAS ALSO INCREASED AND THAT NUMBER OF JOB VACANCIES HAS RISEN TO A HIGH LEVEL ILLUSTRATING THERE’S HIGH DEMAND FOR WORKERS IN MINNESOTA. THE LAST FEW YEARS THE RATIO OF UNEMPLOYED JOB SEEKERS TO OPEN POSITIONS ACROSS THE STATE HAS BEEN LESS THAN ONE SO A MEASURE OF THE TIGHT LABOR MARKET MEANING THERE ARE FEWER UNEMPLOYED JOB SEEKERS THAN THERE ARE OPEN POSITIONS ACROSS THE STATE. THAT RATIO IS NOW 0.7 THE TIGHT LABOR MARKET IS BEING FELT ACROSS MINNESOTA IN BOTH THE TWIN CITIES AND GREATER MINNESOTA HALF YOUR UNEMPLOYED PERSONS PER JOB VACANCY FEW UNEMPLOYED PERSONS IN JOB VACANCIES. THE LARGE NUMBER OF OPEN POSITIONS ACROSS THE STATE AS I SAID AT A STRETCH OF STRONG DEMAND FOR LABOR AND WE EXPECT THAT DEMAND TO PERSIST AS LONG AS THE U.S. EXPANSION DOES. THE BABY BOOMERS’ RETIREMENTS HAVE MADE IT DIFFICULT TO DANCE TO THE MAT WITH INCREASED LABOR SURPRISE RECENT INCREASES IN MIGRATION TO THE STATE ; THE PERFECT TIME AND REPRESENTS A BRIGHT SPOT FOR MINNESOTA’S ECONOMIC OUTLOOK OF THE LAST TWO YEARS FROM 17 AND 18 THE LAST TWO YEARS OF DATA MINNESOTA HAS ATTRACTED MORE NEW RESIDENTS THEN WE LOST TO OTHER STATES REVERSING A 15 YEAR TREND OF NEGATIVE DOMESTIC NET IN MIGRATION AND MAKING IS AN OUTLIER IN THE MIDWEST. NEWCOMERS FROM AROUND THE COUNTRY A RUMMEL WORLD MADE 2017 THE LARGEST DEER FOR NET MIGRATION INTO MINNESOTA IN NEARLY THREE DECADES THAT’S NOT THE ONLY COMPONENT OF POPULATION GROWTH THE LARGEST COMPONENT POPULATION GROWTH IS NATURAL GROWTH WITCHES’ BIRTHS- DEATHS THAT RATE IS ABOUT MIGRATION SPECIFICALLY FINALLY I WILL SUMMARIZE OUR REVENUE FORECAST. TOTAL GENERAL FUND REVENUES FOR THE CURRENT BIENNIUM ARE NOW FORECAST TO BE AS YOU HEARD EARLIER $501 MILLION MORE THAN THE FEBRUARY FORECAST WE HAVE HIGHER THAN EXPECTED FORECAST FOR INDIVIDUAL INCOME TAX SALES TAX AND OTHER TAXES; THE LOWER FORECAST FOR CORPORATE TAX REVENUE THE LARGEST DOLLAR AMOUNT CHANGE IS THE INDIVIDUAL INCOME TAX WHICH IS FORECAST TO GENERATE $493 MILLION MORE IN THE REMAINDER OF FISCAL YEAR 2321 THAN WE ESTIMATED IN FEBRUARY AFTER ADJUSTING FOR 20 19TH LEGISLATIVE CHANGES. WE ENDED FISCAL YEAR 19 WITH MORE INCOME TAX RECEIPTS THAN WE HAD FORECAST INDICATING HIGHER TAX LIABILITY FOR TAX YEAR 2018 WHICH IS THE BASE YEAR OF THIS FORECAST. THE HIGHER BASE WITH STRONGER FORECAST GROWTH IN NON WAGE INCOME RAISED THE INCOME TAX FORECAST A SIMILAR STORY APPLIES TO THE SALES TAX; GENERAL SALES TAX REVENUE FOR THE CURRENT BIENNIUM IS NOW FORECAST TO BE TWO UTTERED $52 MILLION MORE THAN THE PRIOR ESTIMATE THAT INCREASE REFLECTS HIGHER THAN EXPECTED RECEIPTS SO FAR IS IN THIS FISCAL YEAR AND A HIGHER FORECAST FOR TAXABLE SALES COMPARED TO FEBRUARY. THAT’S CONSISTENT WITH THE HIGHER U.S. CONSUMER SPENDING FORECAST I SHOWED EARLIER. CORPORATE FRANCHISE TAX IS EXPECTED TO GENERATE TWO UTTERED $94 MILLION LAST THAN THE PRIOR FORECAST THIS STORY IS THE REVERSE OF THE SALES- TAX STORY; THE REDUCED FORECAST IS RECEIPTS SO FAR THIS FISCAL YEAR BETTER BELOW THE PRIOR FORECAST OF A LOWER FORECAST FOR CORPORATE PROFITS THAT IS FROM THE U.S. MACRO FORECAST. LET ME HIGHLIGHT SOME OF THE RISKS OF THIS FORECAST I MENTION THE RISK TO CONSUMERS WERE THE CHAMPIONS OF THIS ECONOMIC RECOVERY IN THE MAIN SOURCE OF SALES TAX REVENUE. THE RISK THAT GETS BOOKED BY POLICY UNCERTAINTY OR NEGATIVE WEALTH THIS FORECASTING CORPORATE ALL U.S. TARIFFS AND COUNTRIES RETALIATORY MEASURES THAT A BEEN PUT IN PLACE TO DATE AS WELL AS THE DECEMBER 15TH U.S. TARIFFS ON CHINESE IMPORTS U.S. TRADE POLICY ESPECIALLY REGARDING CHINA BUT REGARDING SOME OF OUR OTHER TRADING PARTNERS AS WELL HAS BEEN IN FLUX AND UNCERTAINTY IMPOSES COSTS ON BUSINESSES THAT HAVE TO ADDRESS AT SUPPLY CHAIN DISRUPTIONS. BUSINESSES ALREADY APPEAR TO BE PUTTING INVESTMENT PLANS ON HOLD AND PROLONGED UNCERTAINTY WILL EXACERBATE THE INVESTMENTS SLOWED DOWN ON THE OTHER HAND ALLEVIATION OF TRADE POLICY UNCERTAINTY IS A SOURCE OF UPSIDE POTENTIAL TO THE FORECAST. GEOPOLITICAL EVENTS CAN BE REAL GLOBAL GROWTH THAT SHOWING SIGNS OF SLOWING FOR EXAMPLE THE U.K. EXITS THE EUROPEAN UNION WITHOUT AGREEMENT IS STRUCK INTO EXPORTS COULD FALL AND FINALLY WITH 19 MONTHS BEFORE THE END OF THE CURRENT BIENNIUM EVEN SMALL CHANGES IN ASSUME THE GROWTH RATES AND PARTICULARLY VOLATILE INCOME SOURCES SUCH AS CAPITAL GAINS FOR CORPORATE PROFITS COULD MATERIALLY ALTER THE BUDGET PICTURE TO OUR PLANNING HORIZON. I WILL PASS IT BACK TO THE BUDGET DIRECTOR REITAN.>>THAT YOU ARE BRITTA REITAN STATE BUDGET DIRECTOR WE’RE GOING TO PIVOT TO THE EXPENDITURE SIDE OF THE FORECAST. AS I MENTIONED BEFORE THE EXPENDITURE SIDE SHOWS VERY LITTLE CHANGE OVER ALL SINCE THE END OF SESSION IT’S A $7 MILLION CHANGE HOWEVER THERE IS MORE SIGNIFICANT MOVEMENT IN THIS SPECIFIC BILL AREAS AND THEY’RE OFFSET THE TUSSLE WAIBEL WALK THROUGH SOME DETAILS THERE. HE 12 EDUCATION SPENDING IS $24 MILLION BELOW AND OF SESSION ESTIMATES FOR 2020 WANT THE BIGGEST DRIVER OF THE CHANGE INCLUDES A $30 MILLION REDUCTION IN GENERAL EDUCATION SPENDING COMPARED TO THE PREVIOUS ESTIMATES AND THIS IS DUE TO A DECREASE IN PROJECTED PUPIL GROWTH. PUPILS ARE STILL GROWING BUT NUMBER OF STUDENTS ARE STILL GROWING BUT AT A SLIGHTLY SLOWER PACE THAN OUR PREVIOUS FORECAST. THERE’S ALSO A $60 MILLION REDUCTION IN SPECIAL EDUCATION SPENDING ESTIMATES THIS IS DUE TO SLOWER THAN PROJECTED GROWTH IN DISTRICT SPENDING SO ACTUAL SPENDING AT THE DISTRICT LEVEL WAS SLIGHTLY SLOWER LAST YEAR FOR THE GROWTH IN THE SPENDING WAS SLIGHTLY SLOWER THAN WE PREVIOUSLY PROJECTED. THESE REDUCTIONS ARE OFFSET BY $30 MILLION IN ADDITIONAL SPENDING FOR STATE SAFE SCHOOL PROGRAM IN THE 2019 LEGISLATURE MADE THE SPENDING CONTINGENT UPON THE GENERAL FUND BALANCE AT CLOSE BEING>A WE HAD PROJECTED AT THE END OF SESSION AND THAT WAS IN FACT THE CASE SO THAT CONTINGENT APPROPRIATION FOR STATE SAFE SCHOOL FUNDING WAS MADE IN 20 AND 21 SOME $30 MILLION OF SPENDING FOR SAFE SCHOOLS IT WAS APPROPRIATE THAT WAS NOT COUNTED IN END OF SESSION ESTIMATES SO THAT SHOWN AS AN INCREASE. PROPERTY-TAX AIDS AND CREDITS HAS INCREASED $61 MILLION COMPARED TO PREVIOUS ESTIMATES THIS IS LARGELY DUE TO INCREASE PROJECTIONS FOR THE HOMESTEAD PROPERTY TAX REFUND; AND INCREASE PRODUCTION FOR TAX REFUND INTEREST PAYMENTS. MOVING TO HHS SPENDING; HHS SPENDING IS $97 MILLION BELOW AND OF SESSION ESTIMATES AND IS PRIMARILY DUE TO LOWER ENROLLMENTS IN AT A BASIC CARE PROGRAMS. FOCUSED ON PEOPLE WITH DISABILITIES AND FAMILIES WITH CHILDREN SO THE ENROLLMENT IN BASIC CARE FOR PEOPLE WITH DISABILITIES IS 5.2% LOWER THAN PREVIOUS FORECASTS AND THIS IS DUE TO CONTINUED DIVERSION OF CERTAIN INDIVIDUALS FROM THIS CATEGORY TO THE ADULTS WITHOUT CHILDREN CATEGORY AND THE REASON THIS IS HAPPENING IS THE BARRIERS TO GETTING INTO THE ADULTS WITHOUT CHILDREN PROGRAM ARE LOWER. IT HAS QUICKER AND EASIER ELIGIBILITY FOR INDIVIDUALS AND IT IS NOT REQUIRED A DISABILITY DESIGNATION AND IT HAS HIGHER INCOME AND ASSET LIMITS AND THIS CREATES SAVINGS BEFORE THE STATE BECAUSE IN THE ADULTS WITHOUT CHILDREN CATEGORIES WE RECEIVE A HIGHER FEDERAL MATCH AND THAT WAS GENERATED SAVINGS THERE. ENROLLMENT IN FAMILIES WITH CHILDREN BASIC CARE IS DOWN 1% PER YEAR ON AVERAGE AND IS PRIMARILY DUE TO FAVORABLE ECONOMIC CONDITIONS. MOVING TO THE DEBT SERVICE LINE DEBT SERVICE IS PROJECTED TO BE $51 MILLION BELOW PREVIOUS ESTIMATES; THIS REDUCTION IS PRIMARILY DUE TO LOWER BOND INTEREST RATES THAN WERE PREVIOUSLY FORECAST SO WHEN WE SOLD BONDS IN AUGUST WE HAD LOWER INTEREST RATES ON BONDS THAN WE INCLUDED IN THE PREVIOUS FORECAST AND ALSO IN AUGUST AND A SMALLER BOND SALE THAN WE PREVIOUSLY FORECASTED AS WELL. THE FINAL CATEGORY IS OTHER WHICH CAPTURES ALL THE OTHER BILL AREAS IN THE GENERAL FUND BUDGET. THE SPENDING IN THIS CATEGORY OF $104 MILLION ABOVE AND OBSESSION PROJECTIONS AND THERE ARE TWO MAIN REASONS FOR THIS CHANGE IN THE OTHER BILL AREAS THE FIRST IS OTHER CONTINGENT APPROPRIATIONS WE TALKED ABOUT THE CONTINGENT APPROPRIATION IN THE E-12 BILL AREA THERE WERE TWO OTHERS IN LAW AS A THE END OF SESSION. BECAUSE OUR BALANCE WAS IN FACT GREATER AT THE END OF SESSION THAN WE PREVIOUSLY PROJECTED A CONTINGENT APPROPRIATIONS WERE MADE AND ONE WAS A $20 MILLION APPROPRIATION FOR THE DISASTER ASSISTANCE CONTINGENCY ACCOUNT AT THE DEPARTMENT OF PUBLIC SAFETY THE SECOND WAS $30 MILLION FOR METRO TRANSIT AT THE MET COUNCIL. THE SECOND DRIVER OF THE CHANGE IS $71 MILLION IN UNSPENT APPROPRIATIONS FROM FISCAL YEAR 2019 THAT ARE CARRYING FORWARD TO THE FISCAL YEAR 20 MOST APPROPRIATIONS CANCEL AT THE END OF THE BIENNIUM BUT SOME SPECIFIC APPROPRIATIONS HAVE AUTHORITY TO CARRY FORWARD ACROSS THE BIENNIUM AND WHEN THAT HAPPENS THERE ASSUMING THE MONEY AT THE END OF SESSION FUND BALANCE WE’RE ASSUMING THE MONEY IS GOING TO BE SPENT IN THE YEAR THAT ITS APPROPRIATED BUT WHEN IT CARRIES FORWARD IT INCREASES THE SPENDING ESTIMATES FOR THE BIENNIUM THAT IT CARRIES FORWARD INTO. THE TWO MOST SIGNIFICANT AREAS OF CARRY FORWARD WERE $32 MILLION FOR THE BUSINESS AND COMMUNITY DEVELOPMENT PROGRAMS AND DEED THESE PREPARATIONS ARE ALLOWED TO CARRY FORWARD WITH THE ECONOMIC DEVELOPMENT WORK TAKING A LONGER TIME HORIZON TO PLAN FOR A TO GET PROGRAM SO THOSE APPROPRIATIONS HAVE CARRIED FORWARD AS WELL AS $24 MILLION IN OPERATING A PREPARATIONS FOR THE LEGISLATURE. MOVING TO THE NEXT SLIDE WE RETURN TO A VIEW OF TOTAL REVENUES AND EXPENDITURES IN THE GENERAL FUND. THIS SLIDE PROVIDES THE PLANNING ESTIMATES FOR FISCAL YEARS 22-23 YOU CAN SEE IN THE FIRST COLUMN THE AVAILABLE BALANCE IS $1.3 BILLION FOR 20 AND 21 AND IN THE PRESENTATION OF 22 AND 23; THE $1.3 BILLION IS ASSUMED TO CARRY FORWARD AND WHAT THAT MEANS THE $1.3 BILLION IS PART OF THE BEGINNING BALANCE THAT WE SHOW IN THE SLIDE FOR 22 AND 23 MEANING IT’S BUILT INTO THE 4.1 $6 BILLION SHOWN AS THE BEGINNING BALANCE IN 22 AND 23 THAT MEANS THE $1.90 BILLION THAT’S THE AVAILABLE BALANCE IS PROJECTED AN 22-23 ASSUMES THE $1.3 BILLION IN 20 AND 21 IS NOT SPENT BUT THIS CARRY FORWARD INTO THE 22 AND 23 BIENNIUM. GIVEN THAT IF I CAN BE SOMEWHAT DISTORTING AS PEOPLE LOOK OF THIS WEEK ALSO PROVIDED A BALANCE OF CARRY FORWARD NUMBER AND THAT’S $587 MILLION THAT SHOWS THE IMPACT IF THE $1.3 BILLION WAS SPENT IN 20 AND 21. ALSO IN THE 22- 23; AND WE SHALL FORECAST REVENUES AND EXPENDITURES FOR THE BIENNIUM. WHEN WE COMPARE TO THE FORECAST REVENUES AND FORECAST EXPENDITURES RECALL THAT STRUCTURAL BALANCE BECAUSE WE’RE TAKING OUT OF A CALCULATION THE CARRY FORWARD FROM PREVIOUS YEARS AND ALL THE CHANGES IN THE RESERVE LEVELS WHEN WE’RE LOOKING AT JUST THE COMPARISON OF THE FORECAST EXPENDITURES TO THE FORECAST REVENUES IN 22- 23 WE DO HAVE STRUCTURAL BALANCE IN THE OUT YEARS BUT IS VERY NARROW IT’S TOO HOT TO $20 MILLION THE DIFFERENCE BETWEEN THOSE TWO NUMBERS. MOVING TO THE BUDGET RESERVE LINE THE; CONCEIT THE RESERVE DECLINES IN 22-23 BY $491 MILLION THIS CHANGE IS DUE TO A LAW PASSED LAST SESSION THAT REDUCES THE RESERVE BY $491 MILLION IN FISCAL YEAR 22 IF YOU RECALL THIS WAS DONE TO ENSURE THE PLANNING ESTIMATES IN 22- 23 FOR A BALANCED AT THE END OF LAST SESSION. EVEN THOUGH WE’VE REACHED THE RESERVE TARGET WITH THE CURRENT FORECAST THE RESERVE BALANCE IS SCHEDULED TO BE REDUCED AT THE BEGINNING OF THE NEXT BIENNIUM. THE STADIUM RESERVE LINE SHOWS THE RESERVE IS PROJECTED TO GROW UP TO $240 MILLION BY THE END OF 2023 THIS GROWTH IS DUE TO CONTINUED INCREASES IN PROJECTED GAMBLING TAX REVENUES ALONG WITH THE FACT THAT BEGINNING IN FISCAL YEAR 21 THE STATE BEGINS RETAINING SALES TAX MOVE TO THE CITY OF MINNEAPOLIS THIS TO COVER THE PAYMENTS THE STATE IS CURRENTLY REMITTING ON BEHALF OF THE CITY FOR THE STADIUM EXPENSES. RETURNING TO THE BALANCE OF THE CARRY FORWARD NUMBER OF $587 MILLION AS WELL AS THE OVERALL BUDGETARY BALANCE AND 22-23 OF THE $1.9 BILLION IT’S IMPORTANT TO POINT OUT THE $491 MILLION REDUCTION IN THE RESERVE IS CONTRIBUTING TO THAT NUMBER. IF THE RESERVE WERE TO BE RESTORED IN 22-23 THE NUMBER WOULD BE REDUCED BY $491 MILLION. FINALLY ON THIS SLIDE WE DO INCLUDE AN ESTIMATE OF INFLATION FOR FISCAL YEARS 22 AND 23 AND THIS IS TO GIVE US A SENSE OF THE COST PRESSURES THAT EXIST OUT IN THE PLANNING BIENNIUMS BECAUSE THERE’S NOT A BUDGET SET FOR THOSE YEARS. THE INFLATION IS GENERALLY NOT INCLUDED ON OUR EXPENDITURES SIDE OF THE FORECAST THERE ARE SOME FORMULAS THAT BILL DIDN’T AND INFLATIONARY MEASURE BUT IN MOST CASES THERE IS NOT INFLATION INCLUDED ON THE EXPENDITURE SIDE. THIS IS AN APPLICATION OF THE CPI LEVEL OF INFLATION TO THOSE APPROPRIATIONS IN 22- 23 THAT DO NOT HAVE SOME INFLATIONARY COMPONENT TO THE FORMULA THIS IS TO GIVE A SENSE OF THE COST PRESSURES AND 22- 23. I WILL PASS IT BACK TO THE COMMISSIONER.>>MR. CHAIR AND MEMBERS LET ME SUMMARIZE A FEW POINTS AND THEN (QUESTIONS. I WANT TO TALK ABOUT THREE PRIMARY THINGS AND WE CAN SEE AT THE END WE’VE HIGHLIGHTED A $491 MILLION RESERVE TO CHANGE. ONE OF THE REASONS THE MONEY IS PUT IN THERE IN THE STATUTE REQUIRES THAT BE USED IN THE EVENT OF AN ECONOMIC DOWNTURN AND CHANHASSEN CRITERIA TO BE USED FOR THAT; WE BELIEVE IT’S PRUDENT TO PUT THE MONEY BACK INTO THE RESERVE ACCOUNT FOR THAT REASON IT WAS USED AS BUDGET DIRECTOR REITAN MENTIONED TO HELP US BALANCE 22 AND 23 AT THE END OF SESSION BY GIVING THE RESOURCES WE HAVE WE THINK IT’S A CORPORATE TO PUT IT BACK IN THEIR. THE OTHER THING IS I WANT TO FOCUS A LITTLE ON THE LONG RANGE PLANNING IN MINNESOTA WE PLAN AT LEAST FOR FOUR YEARS SOMETIMES MORE THAN THAT ACTUALLY OF THE GOAL IS IS THAT THE BUDGET FOR ONE YEAR BUT THE BUDGET FOR AT LEAST FOUR YEARS AND LOOK OUT INTO THE HORIZON I THINK THAT’S ONE OF THE REASONS WE’VE BEEN ABLE TO HAVE A SURPLUS AFTER SURPLUS AND ONE OF THE REASONS WE DID AT THE END OF SESSION WAS TO MAKE SURE WE HAD A BUDGETARY BALANCE IN 22 AND 23 WE MADE THE RESERVE CHANGE. KEEPING AN EYE ON THE BALL IN TERMS OF LONG-TERM PLANNING IS WE THINK THE RIGHT THING AND START PAYING WE ALSO BELIEVE CAPITAL BUDGET OF BONDING BILL OR INVESTMENT BILL WHAT EVERYONE TO CALL IT IS ANOTHER SMART INVESTMENT TO MAKE THIS NEXT SESSION. AS YOU KNOW WE DIDN’T MAKE ONE THIS YEAR AND IN 2019 WE BELIEVE GIVEN THE INTEREST RATES WE’RE ABLE TO GET IN AUGUST TRIPLE A INDEX OF FUNDS INDEX FOR INTEREST RATES WE ACTUALLY BEAT THE INDEX IN AUGUST IN TERMS OF WHAT WE WERE LOOKING TO GET FOR BOND SALES 1% AND 2%. WITH THAT KIND OF INTEREST RATES RIGHT NOW WITH THE RESOURCES WE HAVE AVAILABLE WE DO BELIEVE WE CAN MAKE A ROBUST BONDING BILL AND IN THE LONG TERM MAKE SOME OF THESE LONG-TERM INVESTMENTS IN THE STATE OF MINNESOTA THAT WE THINK WILL CONTINUE TO HELP MINNESOTA ATTRACT WORKERS FROM AROUND THE COUNTRY AND AROUND THE STATE AS PROFESSOR KALAMBOKIDIS MENTIONED WE’RE FACING THE WONDERFUL ASPECT OF A POSITIVE NET MIGRATION FROM DOMESTIC FOLKS AND AS WE ATTRACT PEOPLE TO MINNESOTA FOR THE JOBS AND OPPORTUNITIES AND THE BEAUTIFUL WEATHER THAT WE HAVE EVERY DAY SOMETHING ONCE AGAIN WE MIGHT NEED TO THINK OF A LONG-TERM ACCORD TO KEEP THAT TREND HAPPENING AND WE DO BELIEVE INVESTING IN EDUCATION HEALTH CARE AND THOSE THINGS IS THE RIGHT THING TO DO. WE ARE CONCERNED ABOUT INFLATION AS BUDGET DIRECTOR REITAN MENTIONED WE WILL BE LOOKING TO TALK ABOUT WAYS WE SHOULD RESTORE THAT TO THE PROCESS OR TALK ABOUT MAKING SURE WE ACCOUNT FOR THAT BECAUSE INFLATION IS REAL AND IT REALLY DOES MAKE A DIFFERENCE IN OUR BUDGETS. WITH THAT I’M HAPPY TO TURN OVER FOR QUESTIONS.>>COMMISSIONER; I THINK OUR LAST FEW AS YOU WRAPPED UP WITH THE COMMENTS ON THE INFLATION. IF YOU COULD GIVE US A LITTLE BIT OF HISTORY THERE. THERE WAS A TIME WHEN WE DID ADJUST FOR INFLATION AND THEN THERE WAS A CHANGE THE NUMBER OF YEARS AGO AND IF I RECALL I THINK THE COUNCIL OF ECONOMIC DIVISORS IN THEIR REPORT TO LOSS VIRTUALLY WITH EACH AND EVERY FORECAST REMINDED US WE SHOULD INCLUDE INFLATION. BASICALLY MY QUESTION IS WITH THE HISTORY AND WHAT’S IN AND WHAT’S OUT BECAUSE THERE ARE SOME ACCOUNTS THAT ARE ADJUSTED FOR INFLATION AND AND OTHERS THAT ARE NOT. I’M NOT SURE HOW THOSE DECISIONS WERE MADE IN TERMS OF HOW OAT GIVEN ACTIVITIES QUALIFY FOR AN INFLATIONARY ADJUSTMENT AND OTHERS DID NOT?>>MR. CHAIR THANK YOU FOR THE QUESTION. I THINK IT WAS 2002 OR 2003 SOME FOLKS MAY REMEMBER THAT BETTER THAN I WHEN INFLATION WAS REMOVED FROM THE EXPENDITURE PORTION OF THE BUDGET AND IT’S BEEN WAY THAT EVER SINCE. OBVIOUSLY IT’S AN ISSUE WE HAVE SOME CONCERN ABOUT I THINK BUDGET DIRECTOR REITAN TO GIVE YOU A BETTER INDICATION OF WHAT’S IN AND WHAT’S OUT IN THAT CALCULATION.>>AT A HIGH LEVEL I WOULD EXPECT ALL THE DETAILS; JUST A FEW EXAMPLES PERHAPS.>>MR. CHAIR; WHAT INCLUDES INFLATION OF THOSE PLACES WHERE THERE’S A FORMULA IN LAW THAT’S EITHER INCLUDING AN INFLATIONARY MEASURE AN EXAMPLE OF THAT WOULD BE THE SPECIAL-EDUCATION FORMULA IN EDUCATION OR FORMULAS THAT ARE BASED ON COST. THEIR FORMULAS WITHIN OUR HEALTH CARE AREA WHERE WE PAY BASED ON COST AND AS COSTS RISE WE PAY MORE AND INFLATION IS NATURALLY A ACCOMMODATED THROUGH THAT. OUR DEBT SERVICE FORECAST WE PROJECTED DEBT SERVICE PAYMENTS SO THERE’S NO NEED TO APPLY AN INFLATIONARY FACTOR TO THAT. WE LOOK AT THE PLACES WHERE THERE ARE FORMULAS IN LAW THAT WILL BE PAID ON ACTUAL COST AND WHEN WE PROVIDE OUR ESTIMATE OF INFLATION AND EVERYTHING ELSE WE EXCLUDE THOSE FROM THE CALCULATION BECAUSE THEY ALREADY HAVE SOME COMPONENT OF INFLATION BUILT IN.>>FOR EXAMPLE NOW BONDING I THINK WHEN I LOOKED AT YOUR REPORT YOU POINTED OUT THAT WAS FACTORED OUT WOULD BE AN EXAMPLE OF ONE WHEN YOU’RE CALCULATING THE NUMBER OF $1 BILLION PLUS BECAUSE YOU ISSUE BONDS AT THE INTEREST RATE IS FIXED SO THAT’S FACTORED OUT THAN?>>MR. CHAIR THAT IS CORRECT.>>IF I COULD GO BACK TO THE $491 MILLION AND CLARIFY FOR THE COMMITTEE; WHAT IS HAPPENING THERE WAS WITH THE $491 MILLION AND HELP THEM HOW THAT APPLIES TO ADDRESSING THAT ISSUE?>>YOUR CHAIR; THE DEAL THAT WAS REACHED AT THE END OF SESSION TO GET TO THE BUDGET DEAL IN TAKING OUT OF $491 MILLION ON JULY 1ST OF 2021 FISCAL YEAR 22; AS BUDGET DIRECTOR REITAN MENTIONED THERE WAS DESIGNED TO MAKE SURE WE HAD A BUDGETARY BALANCE IN 22-23 BUT THAT DID NOT CHANGE THE CURRENT LAW OF ALLIANCE WITH RESPECT TO THE BUDGET RESERVE SO GOING FORWARD AND THE YEAR AFTER THAT IN THE NOVEMBER FORECAST THERE IS A TARGET AND IT HASN’T BEEN REACHED AND THE TARGET AND THERE’S A CALL TO PUT MORE MONEY AND BECAUSE WE HAVE NOT REACHED HARD AND AS OF NOVEMBER BALLOTS ONCE AGAIN 33 PERCENT OF THE BALLOTS WOULD GO TOWARD THE RESERVE. THE CURRENT BUDGET RESERVE PROCESS IS IN PLACE HASN’T CHANGED IT WAS JUST A ONE TIME IT DIRECTION TO REMOVE $491 MILLION ON JULY 1ST OF 2021 TO BE USED AND MADE AVAILABLE AS ASSETS OR RESOURCES IN 21 FISCAL YEAR 22.>>WHAT’S THE STANDING OF THE $491 MILLION;?>>IT IS A FUTURE CHANGE RIGHT NOW TO RESERVE IS $2.3 BILLION AND IT WILL NOT CHANGE BUT ON JULY 1ST OF 2021 AND WILL DROP BY $491;000;000.399 $91 MILLION WILL BE AVAILABLE IN THE GENERAL FUND.>>THAN WITH THE FOLLOWING FORECAST THE NOVEMBER FORECAST AFTER JULY IF RESOURCES ARE THERE WHEN ASKED ABOUT CURRENT LAW THAN WITH THAT FOR 91 BE PAID BACK WERE PART OF IT PAID BACK AT THAT POINT? I’M CURIOUS HOW THE LAW APPLIES.>>MR. CHAIR IN NOVEMBER OF 2021 OF THOSE OF FOUR CAST BALLOTS A 33% ABOVE FORECAST BALANCE WILL GO INTO THE RESERVE IF THERE IS WOULD BE RUINED IF THE 491 CAME OUT AND IT WOULD BE 33% REPLACE THE 491 AND PUT IN 33 PERCENT OF WHATEVER THAT BALANCE WAS IN NOVEMBER OF 2021.>>AUTOMATICALLY APPLY THAT TOWARDS THE 491 IN THAT WOULD CONTINUE TO HAPPEN UNTIL BUT ULTIMATELY PAID BACK TO THE RESERVE TO MAKE THE RESERVE HOLDS?>>FORMULA WILL IGNORE THE 491 AND OPERATE GOING FORWARD AND SEE IF THERE’S ANY GAP THERE WE’RE NOT A TARGET WITH THE NOVEMBER BALLOT ALLOCATION WILL OPERATE EVERY YEAR THERE’S LESS OF A TARGET AMOUNT IN THE RESERVE REGARDLESS OF WHAT WE DO WITH THE 491.>>BEFORE GO TO OTHER QUESTIONS I HAVE A COMMENT I’VE ALWAYS BEEN INTERESTED IN HAVING A RESERVE. SOMETIMES I MAY SHARE MORE FREQUENTLY THAN I SHOULD SOME HISTORY WHEN I WAS HERE WHEN WE DIDN’T HAVE RESERVES WE HAD SIX SPECIAL SESSIONS. WE WERE CONTINUALLY TRYING TO BALANCE THE BUDGET AND THE GOVERNOR AT THE TIME WHEN HE LEFT OFFICE WAS ASKED BY ONE OF THE REPORTERS IF HE WOULD DO ANYTHING DIFFERENT THAN WHAT HE HAD DONE DURING HIS TERM OF OFFICE HE SAID YES I WOULD HAVE A RESERVE. THAT WAS THE GOVERNOR FROM THE OTHER SIDE OF THE AISLE SO I THINK WE CAN SAY IN A BIPARTISAN WAY THERE IS RECOGNITION OF THE IMPORTANCE OF A RESERVE. I AM PLEASED WE’RE REACHING THAT TARGET THAT’S MY EDITORIAL COMMENT FOR THE MORNING I GUESS WE’LL START WITH REPRESENTATIVE HERTAUS.>>THANK YOU MR. CHAIR I HAVE TWO QUESTIONS. LOOKING AT HOW THE GENERAL FUND BUDGET HAS GROWN OVER THE LAST 10 YEARS AN AMOUNT OF MONEY THAT WOULD OF BEEN REQUIRED TO MEET THE FULL FUNDED AT BUDGET RESERVE AMOUNT; THE GROWTH IN OUR STATE GENERAL FUND SPENDING AND REVENUES IS APPROACHING MERELY BY MY CALCULATIONS ALMOST AN ADDITIONAL BILLION DOLLARS THAT’S REQUIRED TO BE IN THE BUDGET RESERVE. IN MANY RESPECTS THAT COMPETES WITH LEGISLATIVE PRIORITIES WHENEVER THEY ARE. I NOTICE THAT THE PERCENTAGE REQUIRED HAS JUMPED FROM 4.3% UP TO 4.9% THAT’S SIX TENTHS OF A PERCENT IS A 13.9% INCREASE IN REQUIRED AMONG THE BUDGET RESERVE MAYBE YOU COULD TALK BLEYHL WHY THAT PERCENTAGE HAS INCREASED OUT OF INCREASED AND WHO AUTHORIZED THAT HOW THAT COMES OUT? MY SECOND QUESTION RELATES TO THE CONVERSATION WE HAD ABOUT POSITIVE NET MIGRATION IN MINNESOTA AND I DON’T DOUBT THAT IS TRUE. THE IRS DATA THAT I’VE CRUNCHED IS SUGGESTING MINNESOTA IS LOSING ABOUT A BILLION DOLLARS A YEAR OF TAXABLE GROSS INCOME AND NET MIGRATION OUT OF THE STATE. WOULDN’T IT BE WISER TO MEASURE THIS METRIC ABOUT GROSS TAXABLE INCOME AND THE GROWTH OF THAT AS OPPOSED TO NET MIGRATION IN OR OUT AS TO WHO THESE PEOPLE ARE OR WHAT THEIR INCOMES ARE? IT WOULD SEEM IT’S IMPORTANT TO UNDERSTAND THAT NUMBER BECAUSE SO MUCH OF OUR GENERAL FUND REVENUES REAPPLY DISPROPORTIONATELY FROM OTHER STATES ON THE INDIVIDUAL INCOME TAX.>>MR. CHAIR AND MEMBERS I WILL TAKE A SHOT AT THE FIRST QUESTION AND LET THE BUDGET THAT PROFESSOR KALAMBOKIDIS TAKE THE SECOND PART. ONE A I WOULD DISAGREE WITH THE FACT THAT THE RESERVE OPERATE TO NOT SUPPORT LEGISLATIVE PRIORITIES. ACTUALLY THAT’S EXACTLY WHAT IT’S DESIGNED TO DO WHEN THERE’S A DROP IN REVENUES AND IT PRECIPITOUSLY IF THE REVENUES DROP THE RESERVE FUND IS THERE TO KEEP THE FUNDING TO HIGHER EDUCATION TO THE EDUCATIONAL FACILITIES TO THE PROGRAM SETTER IN PLACE WITH THE BLOOD THIS LETTER PASSED SO IT’S DESIGNED AS A MEASURE TO ALLOW THOSE PROGRAMS THE LEGISLATURE VOTED WANT TO BE FUNDED UNTIL LEGISLATURE HAS TIME TO DO JUSTICE TO THE NEW ECONOMIC SITUATION AT THE TIME IS PRESENTED I THINK ACTUALLY THE RESERVE REALLY IS THE ULTIMATE IN AFFIRMING THE LEGISLATIVE PRIORITIES ABOUT WHY WE THINK IT’S THEIR. DR. KALAMBOKIDIS CONTENTS OF THE OTHER PARTS OF THE QUESTION.>>REP AND OTHER MEMBERS OF THE COMMITTEE; THE ONE BE I THINK IT’S ABOUT THE PERCENTAGE OF THE BUDGET RESERVE. BUT 4.3% LET ME GO BACK TO WHERE THAT IS ON THE SLIDE. THE BUDGET RESERVE BALANCE PRIOR TO THIS FORECAST WAS 4.3% OF GENERAL FUND REVENUE THAT’S NOT WHAT THE TARGET WAS THAT’S WHAT WAS IN THEIR. THE TARGETS MY OFFICE SETS THE TARGET AS A PERCENTAGE OF GENERAL FUND REVENUES BASED ON OUR ANALYSIS OF THE VOLATILITY OF THE REVENUE SYSTEM SO IN OUR SEPTEMBER REPORT WE ANALYZE THE VOLATILITIES OF REVENUE ESTIMATES AND SET THE TARGET OF 4.9% WE HAVE BEEN SUGGESTING THAT TARGET WITH OUR SEPTEMBER REPORTS SINCE THE LAW WAS PASSED ITS REQUIRED IS TO BUT THE STATE HAS NEVER MET THE TARGET UNTIL NOW. IF THAT ANSWERS YOUR QUESTION? THEN THE QUESTION ABOUT IN MIGRATION; SO THE DATA NOTE I REPORTED THE CENSUS OR AMERICAN CONSUMER SURVEY DATA FROM THE SENSES ABOUT POPULATION CHANGE SO IT DOESN’T INCLUDE INCOME CHANGE YOUR TALKING BUT WHICH COMES FROM THE IRS WHEN THOSE STATES THAT ARE UPDATED IT WILL BE INTERESTING TO SEE HOW THOSE CHANGES. THE POINT THE REASON I PUT THAT POPULATION CHANGE THE IMMIGRATION CHANGE INFORMATION IN THE SECTION ABOUT LABOR MARKETS IS BECAUSE IT’S HELPFUL FOR US TO SEE PEOPLE COMING TO THE STATE REGARDLESS OF WHAT THEIR INCOME IS BECAUSE WE NEED THE WORKERS ACROSS FROM THE CITY’S OUT TO GREATER MINNESOTA SO THAT’S WHY I THOUGHT THAT WOULD EMIT A BRIGHT SPOT FOR MINNESOTA AND THROUGHOUT THIS TIME EVEN AS DURING THAT TIME WHEN ARNETT IN MIGRATION WAS NEGATIVE BUT DEFINITELY INTO THIS TIME WHERE OUR NET IMMIGRATION IS POSITIVE OUR INCOME TAX RECEIPTS HAVE GROWN. REGARDLESS OF WHETHER THE NEW PEOPLE COMING IN THE OR ITS PEOPLE WHO HAVE BEEN HERE AND THERE INCOMES GROW THE RECEIPTS HAVE GROWN DURING THAT TIME.>>REP HERTAUS.>>THANK YOU I APPRECIATE THE EXPLANATION ON THE PERCENTAGES. I’M NOT REALLY OUR REBUTTAL BUT I AGREE WITH YOU COMMISSIONER FRANS AS TO WHAT YOU SAID ABOUT THAT ALLOWS US TO ESTABLISH THOSE PRIORITIES YES IT DOES; BUT NOT ALL LEGISLATIVE PRIORITIES WITH REGARD TO PARTISAN PRIORITIES ARE ENABLED TO BE ENACTED OFTENTIMES BECAUSE OF THE GROWING BUDGET RESERVE. I GUESS I WOULD SAY THERE ARE THINGS THAT ARE STATUTORILY PART OF OUR CONSTITUTIONAL REQUIRED FOR US TO DO SUCH AS TRANSPORTATION AND EDUCATION THINGS LIKE THAT BUT THERE MAY BE SOME OTHER AREAS THAT SOME OF US WOULD LIKE TO SEE SOME PROGRESS WITH REGARD TO TAXES AND OBVIOUSLY WHEN THERE’S A SHORTAGE OF MONEY TAX REFORMS ARE USUALLY OFF THE TABLE THANK YOU.>>REPRESENTATIVE MARIANI.>>THANK YOU MR. CHAIR AND DR. KALAMBOKIDIS; I GREW UP I ACTUALLY SPOKE GREEK WHEN I GROW UP I GREW UP WITH A LARGE GREEK COMMUNITY. I FEEL AT HOME HERE. I HAVE SEVERAL HOPEFULLY CORRECT MACRO LEVEL QUESTIONS. BECAUSE I WANT TO GET AN AIRING AND A FEEL FOR HOW OUR STATE IS EVOLVING AND PERHAPS WHAT MAKES OUR STATE UNIQUE PARTICULARLY RELATIVE TO THE MEMBERS BEFORE US. IN NO PARTICULAR ORDER YOU TALK ABOUT THE UNCERTAINTY ELEMENTS HAVING TO DO WITH SOME OF THAT IS SPECULATIVE BECAUSE IT’S A MOVING THING AND LATELY IT SEEMS TO BE MOVING QUITE A BIT. I WONDER IF YOU HAVE ANY INFORMATION TO SHARE ABOUT WHAT ARE MINNESOTA’S CARROTS THE SENSITIVE IMPACT ON AREAS WHAT ARE OUR BIGGEST SECTORS THAT ARE SUBJECT TO THAT KIND OF UNCERTAINTY IN OUR STATE?>>REP AND MR. CHAIR AND MEMBERS; THERE ARE TWO DIFFERENT IMPACTS OF TARIFFS AND CURRENT STATE POLICY ON INDUSTRIES BETTER TRADE AFFECTED OR TRADE IMPACTED. IS THE DIRECTOR OF SOME MUCH MORE MONEY ARE YOU PAYING FOR PEER MANUFACTURER PAYING FOR THE INTERMEDIATE GOODS COMING IN FROM OTHER COUNTRIES AND THEN HOW MUCH THAT CAN YOU PASS FORWARD TO YOUR CUSTOMERS THERE’S ALSO THE EFFECT OF RETALIATORY TARIFFS FROM OUR TRADING PARTNERS AND HOW MUCH OF THAT IS REDUCING DEMAND FOR THE GOOD WE’RE TRYING TO EXPORT OUT OF MINNESOTA. THAT’S THE DIRECT IMPACT AND THEN THERE’S ALSO THE IMPACT OF TRADE POLICY UNCERTAINTY SIMPLY NOT KNOWING AT ANY GIVEN POINT WHAT POLICY IS GOING TO BE IMAGINE BEING SOMEONE IN A TRADE AFFECTED INDUSTRY IN MADRID AFFECTED INDUSTRIES WOULD BE AGRICULTURAL; MANUFACTURING; LOGISTICS AND TRANSPORTATION AND THINKING YOU HAVE YOUR SUPPLY CHAIN FIGURED OUT OR HAVE YOUR CUSTOMER FIGURED OUT YOU DEVELOP A CUSTOMER BASE IN ANOTHER COUNTRY AND NOW YOU’RE NOT SURE IF THAT’S COIN TO CARRY FORWARD FOR THE NEXT YEAR OR WHAT’S GOING TO HAPPEN? THOSE TWO IMPACTS IHS THE CONSULTING FIRM USE IS EMPHASIZING THAT UNCERTAINTY AS BEING LARGER BECAUSE IT REQUIRES FIRMS TO ENSURE AGAINST RISK THAT THE MARKET MAY NOT BE AIRPORT TOLD BACK ON POSSIBLE VENTURES BECAUSE THEY DON’T KNOW WHAT TRADE POLICIES WILL BE. WHAT INDUSTRIES ARE AFFECTED IN MINNESOTA ON AGRICULTURE IS FOR SURE HAS BEEN IMPACTED IN IMPORTANT WAYS WITH REGARD TO RETALIATORY TARIFFS ON BY OUR TRADING PARTNERS ON EXPORTS OUT OF THE UNITED STATES. MANUFACTURING HAS AS WELL AND SPECIFICALLY ANY MANUFACTURING BAT AND MANUFACTURERS THAT IMPORT INTERMEDIATE GOODS IN NEEDED GOODS IS SOMETHING YOU USED TO PRODUCE A FINAL GOOD THEY’RE IMPORTING INTERMEDIATE GOODS FROM COUNTRIES WHERE THE U.S. HAS LEVIED TARIFFS AND AIRPLANE THAT COST COMING IN AND THEN IF THE MAY ALSO BE SHIPPING OUT TO COUNTRIES THAT IMPOSE TARIFFS ON US SO SOME MANUFACTURERS ARE GETTING HIT ON BOTH SIDES THERE.>>MR. CHAIR IT DOES OCCUR TO ME I SUSPECT TO EVERYONE HERE AT THE TABLE THAT THE VOLATILE TRADE POSTURE ON THE PART OF THE FEDERAL GOVERNMENT IS NOT OUR FRIEND IN THE STATE OF MINNESOTA. DR. KALAMBOKIDIS YOU MENTIONED QUICKLY IN THE SLOW- GROWTH EXPANSION ENVIRONMENT THERE SEVERAL FACTORS YOU TALKED ABOUT IT’S INTERESTING BECAUSE I GUESS MOST OF US SAY THERE’S GOOD THINGS HAPPENING BUT THE THING IS THEY COULD BE BETTER BUT IT’S KIND OF AN UNUSUAL ENVIRONMENT PERHAPS. ONE OF THE FACTORS HAS TO DO WITH CONSUMER SPENDING. CAN YOU TELL US WHETHER OR NOT MINNESOTANS ARE DIFFERENT IN TERMS OF CONSUMER SPENDING AND WHAT IS IT THAT MINNESOTANS ARE SPENDING ON THE THAT’S PARTICULARLY HELPFUL FOR THE NUMBERS BEFORE ROSS?>>MR. CHAIR END REPRESENTATIVE AND MEMBERS SPECIFIC; WAIT OUT OF MINNESOTA’S CONSUMER SPENDING MAY DIFFER FROM THE U.S.? WHAT WE DO WHEN WE FORM OUR SALES TAX FORECAST IS WE LOOK AT SPENDING ON THOSE ITEMS BETTER INCLUDED IN MINNESOTA SALES-TAX. WE LOOK AT WE DON’T HAVE MINNESOTA SPECIFIC DATA ON THE SPENDING ITEMS WE LOOK AT THE U.S. SPENDING FORECAST ON DOZENS OF FUNDING ITEMS THEN WE CONSTRUCT A SIMULATION OF BRAZIL’S TAX BASED ON THAT I DON’T HAVE SPECIFIC INFORMATION ON MINNESOTA SPECIFIC INTERMISSION AND DIFFERENT KINDS OF SPENDING.>>MR. CHAIR PERHAPS COMMISSIONER FRANS CAN HELP ME LATER IN TERMS OF PERHAPS CONNECTING WITH WHO AND STATE GOVERNMENT I CAN PURSUE THAT SPECIFIC INFORMATION? MR. CHARREN SEVERAL QUESTIONS I KNOW OTHERS DO AS WELL I’LL ASK THIS LAST ONE IT SEEMS TO ME PARTICULARLY WHEN IT COMES TO INDIVIDUAL AND SALES TAXES AND THOSE OF BABY BOOMER RETIRING IN VARMINT THE QUICKER OUR STATE CAN FIND REPLACEMENTS AND THE HELP MOVE EMPOWER AND WHAT WITH WHATEVER THE METAPHOR IS TO ASSESS THAT REPLACING COMMUNITY TO CONTRIBUTE TO INDIVIDUAL SALES TAX CAN YOU TELL US QUICKLY WHO ARE THESE NEW ENTRANCE TO THE WORKFORCE? I HEARD IT’S NOT MIGRATION FROM OTHER STATES OTHER INTERNATIONAL IMMIGRATION CONTRIBUTORS AS WELL ARE THE YOUNGER FOLKS? ARE THERE RACIAL OR CULTURAL DISTINCTIONS BETWEEN THAT AND PERHAPS THE RECENT HISTORICAL GROWTH TO GET A FEEL FOR WHO WE’RE TALKING ABOUT HERE BECAUSE I THINK MR. CHAIR AS WE CONTINUE DESIGN OUR LEGISLATURES BEEN DOING A GOOD JOB OF THAT FOR THE PAST FEW YEARS OF BEING ABLE TO ASSESS AND WALK WITH THOSE FOLKS THE MORE WE KNOW ABOUT WHO THEY ARE THE BETTER WE WILL BE ABLE. TO DO ABLE .>>MR. CHAIR END REPRESENTATIVE THAT’S A GREAT QUESTION I AGREE THERE’S A ROLE TO BE PLAYED WITH TRYING TO EASE THE TRANSITION AND THE SOONER WE GET PEOPLE INTO THE WORKFORCE A BETTER. THERE’S A ROLE FOR EMPLOYEES TO PLAY AS WELL SO EMPLOYERS WERE GOING TO THRIVE AS A GARMENT OF ONE TO FIGURE OUT HOW TO ATTRACT THE NEW ENTRANTS AND HOW TO TRAIN THEM AND HOW TO RETAIN THEM AND HOW TO BE FLEXIBLE WITH THE WORKERS THEY DO HAVE AS WELL TO HAVE MORE FLEXIBLE WORK HOURS; RAISE WAGES WHATEVER IT TAKES TO KEEP PEOPLE IN THE MARKET. I DON’T HAVE DATA ON THE SPECIFIC NEW ENTRANTS WE TALKED ABOUT IN 17 AND 18 OF THE DOMESTIC AND MIGRATION BUT HISTORICALLY OVER TIME AS MINNESOTA’S POPULATION HAS AGED AND AS THE BABY BOOM GENERATION HAS MOVED INTO RETIREMENT AGE AT THE SAME TIME OUR POPULATION HAS BECOME MORE DIVERSE. POPULATIONS POPULATION GROWTH AND INTERNATIONAL AMONG NEW IMMIGRANT COMMUNITIES AND IN MIGRATION FROM OTHER COUNTRIES HAS BEEN AN IMPORTANT FACTOR IN KEEPING OUR LABOUR SUPPLY GOING KEEPING OUR LABOUR SUPPLY ROBUST ONE OTHER REASON WHY THE NET DOMESTIC IMMIGRATION CAME AT SUCH A GOOD TIME IS BECAUSE IN THOSE YEARS INTERNATIONAL IN MIGRATION FELL. DURING THE YEARS WE OF NEGATIVE DOMESTIC MIGRATION WE STILL THE POSITIVE POLE IN MIGRATION BECAUSE WE HAD INTERNATIONAL MIGRANTS WERE MAKING UP THE DIFFERENCE. INTERNATIONAL MIGRATION TO UNITED STATES HAS FALLEN IN RECENT YEARS IT’S NOT A MINNESOTA PHENOMENON IT’S A NATIONAL PHENOMENON AND WE HAVE SEEN THE CONTRIBUTION TO OUR POPULATION GROWTH FROM INTERNATIONAL NEWCOMERS GO DOWN IN THE LAST COUPLE OF YEARS BUT WE HAD THESE NEW PEOPLE FROM OTHER STATES; AND TO MAKE THE DIFFERENCE.>>THANK YOU.>>REPRESENTATIVE NELSON.>>THANK YOU MR. CHAIR I GUESS THE QUESTION I HAVE BEEN LOOKING AT THIS THIS CAME UP LAST YEAR AT THE END OF SESSION AND EVERYONE WAS EYEING THIS MONEY THE STADIUM RESERVE ACCOUNT. IS THIS AN ACTUAL A SEPARATE ACCOUNT THAT THERE’S MONEY IN THEIR GROWING THAT’S NOT BEEN SPENT OR IS THIS PART OF THE GENERAL FUND BUDGET THAT’S A BEAR AND I GUESS THE OTHER QUESTION IS A LOT PEOPLE WANT TO SEE THAT AND THEY’RE TRYING THAT AS A WAY TO TAKE THAT MONEY AND SPEND IT ON OTHER THINGS. WHAT IS THE EARLIEST WE CAN START PAYING OFF THE CURRENT BONDS ON THE STATED EARLIER HENNEPIN COUNTY TO GET THAT OFF THE BACK OF THE STATE?>>MR. CHAIR 2023 TO GO TO THE LAST QUESTION THAT’S WHEN WE CAN BEGIN TO START PAYING OFF SOME LOANS AS YOU KNOW WE STARTED THEN I THINK IN 2013 OR 14 AND I THINK IT’S 2014 TO SEVEN YEARS IS THE FIRST SO 2023 IS THE FIRST AND THAT WILL BE PART OF THOSE THEN WEAKENED PAYOFF THAT CERTAINLY WOULD BE OBVIOUSLY SOME SAVINGS TO PAYING THE INTEREST SAVINGS AND PAYING OFF OLD LOANS AND THAT’S ONE ASPECT OF THE BUDGET RESERVE. THE STADIUM BUDGET RESERVE IS ACCOUNTED FOR SEPARATELY THAT MONEY CANNOT BE SPENT WITHOUT SPECIFIC LEGISLATION AUTHORIZATION OF THE MONEY IN THE U.S. BANK STADIUM RESERVE IS SPECIFICALLY SET ASIDE AND ACCOUNTED FOR SEPARATELY REQUIRING ANY CHANGE. AS THE MONEY GROWS AND WHERE IS THAT CHART? IN 2021 YOU CAN SEE WE WILL HAVE $124 MILLION IN THE ACCOUNT AT THE END OF 2021 INITIALLY GOING BACK IN TIME A LITTLE SOME OF YOUR HAIR WHEN WE PASS THE STADIUM LEGISLATION IN 2012 AND 2013 WE AMENDED THE STATUTE TO MAKE UP BECAUSE THE REVENUES WERE COMING IN AS FAST AS REAL AND ANOTHER COMING IN AND MORE THAN WE ANTICIPATED SO THAT’S WHY THE BALANCE IS GROWING SO RAPIDLY NOW. ONE OF THE THINGS WE ALWAYS WANTED TO IS WE WANT TO MAKE SURE WE AT LEAST ONE YEAR’S WORTH OF DEBT SERVICE AND OTHER OBLIGATIONS IN THE RESERVE ACCOUNT AT A MINIMUM AND THAT’S ABOUT $40 MILLION YEAR WHEN YOU INCLUDE THE DEBT SERVICE PLUS THE OTHER ALLOCATIONS THAT ARE MADE OUT OF THE U.S. BANK STADIUM ACCORDING TO LAW THAT’S ABOUT $40 MILLION HERE THAT WAS WHAT WE HAVE MMB TALKED ABOUT AND I’M MINIMUM THAT WE THOUGHT SHOULD HAVE BEEN THERE BUT IT GOES BEYOND THAT AMOUNT THAT IT BECOMES AN ISSUE I THINK FOR THE POLICY MAKERS LIKE YOU TO DECIDE WHAT IS THE APPROPRIATE USE? YOU LEAVE THE MONEY THERE AND LET IT CONTINUE TO GROW AND USE IT IN 2023 TO BEGIN MAKING THE REPAYMENT OR USE IT FOR OTHER NEEDS? ONE OF THE REASONS IS GROWING IN ADDITION TO THE REVENUES THAT ARE COMING IN FASTER THAN WE ANTICIPATED AND 2021 THE CITY MINNEAPOLIS BEGINS MAKING THEIR SHARE OF PAYMENTS SO VOTE AND 2021 THERE WILL BE SOME ADJUSTMENT NEEDED BECAUSE WITH THE ADDITION OF MINNEAPOLIS PAYING THEIR SHARE THEY COULDN’T DO IT INITIALLY IN 2012 BECAUSE THE DEBT SERVICE OBLIGATIONS THAT HAD ON THE TARGET CENTER IN MINNEAPOLIS. THERE’S ALWAYS BEEN THIS AWARENESS THERE’S GOING TO BE SOME POINT WHERE THERE’S GOING TO BE MONEY IN THIS RESERVE ACCOUNT THAT GOES BEYOND THE NEEDS OF THE ORIGINAL INTENT OF THE LEGISLATION SO I THINK YOU HIT ON AN ISSUE THERE THAT HAS TO BE THAT YOU NEED TO DECIDE AND TALK ABOUT ALL I CAN SAY THIS A LOT OF US HAVE BEEN WATCHING A THINK ALL OF THE $1.3 BILLION INCLUDING THIS MONEY WILL BE SPENT ON TWITTER ANOTHER COUNCIL THE LAST SEVERAL DAYS MANY TIMES OVER …LAUGHTER… YOU RAISE THEIR REALLY LEGITIMATE POINT WE’VE GONE BEYOND A BASIC NEED OF HAVING RESERVED FOR THE DEBT SERVICE AND NOW WE’RE HAVING MORE MONEY IN THERE AND WE HAVE TO DECIDE LONG TERM WHAT WE DO WITH THAT?>>THANK YOU MR. CHAIR THE OTHER QUESTION I HAD I THINK YOU KIND OF HIT ON THIS; THE CARRY OVER BALANCE LOOKING OUT YEARS 22 AND 23 THE CARRY FORWARD BALANCE WOULD BE 587 TO TAKE A 419 AWAY FROM THAT THE BUDGET RESERVE IS GOING DOWN WERE TALKING ABOUT $96 MILLION AND I DON’T THINK THAT’S A LARGE IT’S A LOT OF MONEY FOR EVERYONE WAS AT THE TABLE HERE BUT I DON’T IT’S A LARGE AMOUNT CONSIDERING OUR BUDGET AND IT WOULDN’T TAKE MUCH WITH MY MIND IT WOULDN’T TAKE MUCH OF A GROUP IN THE ECONOMY TO GO AWAY AND GO THE OTHER DIRECTION.>>MR. CHAIR AND REPRESENTATIVE THAT’S AN EXCELLENT POINT AND THAT IS THE NATURE OF SOME OF THE ONE TIME MONEY IF YOU WILL THAT WE HAVE WITH 20 AND 21. WHEN YOU LOOK AT THE STRUCTURAL BALANCE THE BUDGET DIRECTOR REITAN MENTION THIS TO A $21 MILLION OF ONGOING REVENUE INCREASE THE REVENUES WERE OUTPACING EXPENDITURES BY $222 MILLION IN 22 AND 23 IF YOU LOOK THAT IS THE ONGOING BALANCE ITS ABOUT $1.1 BILLION OF THE $1.3 BILLION YOU COULD LOOK IT AS ONE TIME MONEY BECAUSE WE DON’T SEE THAT ONGOING. AS WE ALL KNOW WHEN YOU SPEND MONEY IN ONE BIENNIUM WITH ONGOING PROJECT TO PUT MORE EXPENSIVE AND YOU HAVE TO DOUBLE IT AND THE NEXT BIENNIUM OR MORE. CLEARLY ANY SERIOUS SPENDING FOR ONGOING PROGRAMMING IS GOING REPRESENTATIVE TO BE WE’RE GOING TO THINK ABOUT WHAT THERE WILL DO FOR A LONG-TERM BUDGET STABILITY IN THIS WHOLE CONCEPT OF HOW MUCH WILL HAPPEN THE WAY RESOURCES AND 22 AND 23 IS SOMETHING WITH THAT ISSUE FOR SEVERAL FORECAST YEARS IN A ROW NOW WHERE THE RESOURCES IN OUT YEARS THE OUT BIENNIUM IS LESS THAN THE CURRENT RESOURCES IN THIS BIENNIUM OR THE CURRENT BIENNIUM. IT PROVIDES CHALLENGES AND I THINK WITH THIS SORT OF BE VERY CAREFUL WHAT WE SPEND THIS YEAR AND LOOKING TOWARDS THE LONG TERM ESPECIALLY IF THE $491 MILLION IS ADDED TO THE BUDGET RESERVE.>>I MIGHT INTERJECT WITH REPRESENTATIVE NELSON YOUR FIRST QUESTION; TENTATIVELY WE ARE GOING HAVE OUR FIRST WAYS AND MEANS MEETING ON THE 17TH OF FEBRUARY AND ONE OF THE ISSUES I HAVE TENTATIVELY HAVE ON THE LIST OF THE STADIUM RESERVE. WE WILL HAVE A FURTHER DISCUSSION ABOUT THAT THERE WAS A GOOD QUESTION NOW BUT SO YOU ARE AWARE YOUR INTEREST IN THAT ISSUE WE’RE GOING TO AS THE COMMISSIONER INDICATED SHOULD HAVE A DISCUSSION ABOUT WHAT’S NEEDED THERE AND HOW THAT IS HANDLED IN THE FUTURE. HAVE ABOUT NINE PEOPLE ON THE LIST WE DON’T HAVE A FLOOR SESSION TODAY …LAUGHTER… I WANT YOU TO NOTE WE HAVE A LIST HERE IS WE’RE GOING TO TAKE PEOPLE IN THE ORDER THE HANDS WITHOUT A. REPRESENTATIVE DRAZKOWSKI.>>THANK YOU MR. CHAIR. MR. CHAIR AND MEMBERS THE APPARENT GIDDINESS AND ZEAL OF SOME OF THE MEMBERS IN THE ADMINISTRATION AROUND THE TABLE HERE TO SPEND THE PEOPLE’S MONEY IS PALPABLE AT THE SAME TIME I THINK IT’S IMPORTANT TO NOTE THAN LOOK WE HAVE OF ANNUAL BUDGET NOW THAT’S THE LARGEST IN THE HISTORY OF THE STATE AT $48.5 BILLION ROUGHLY. ADDITIONALLY IT’S APPARENT POLICY AND DECISIONS HAVE SOCKED WITH A LOT WAIT ANOTHER $2.5 BILLION OF THE PEOPLE’S MONEY FOR FUTURE SPENDING YET TO BE DECIDED JUST ANTICIPATING TO SPEND IT THAT FUTURES ZEAL AND GETTING THE STATE MIGHT SOMEHOW PRESENT ITSELF THEN. ADDITIONALLY MEMBERS IF WE LOOK AT THE SPENDING SIDE OF THE EQUATION PRESENTED HERE IN THE REPORT; IT’S APPARENT THE LAST LEGISLATIVE PROCESS RENDERED DECISIONMAKING ON BUDGETS THAT OVERESTIMATED THE AMOUNT OF MONEY THE GOVERNMENT WOULD NEED. THE C AND E-12 EDUCATION WE ACTUALLY BUDGETED AT $24 MILLION TO MUCH ALMOST $100 MILLION TO MUCH OF HEALTH AND HUMAN SERVICES AND DEBT SERVICE WE BUDGETED $51 MILLION TO MUCH NETTING ACTUALLY AND OVER ESTIMATE IN THE AMOUNT OF MONEY WE NEEDED THAT IS ACTUALLY BUDGETED. I WOULD HOPE MR. CHARREN MEMBERS AND A QUESTION FOR COMMISSIONER FRANS IS WILL THE GOVERNMENT BECOMING BACK NEXT SESSION FOR A BUDGET RECONCILIATION PROPOSAL THAT WILL DECREASE THE BUDGET TO MATCH THE ACTUAL NEED ESPECIALLY AS I LOOK AT H H S AND E- 12 AND DEBT SERVICE WILL WE ACTUALLY HAVE A PROPOSAL FROM THE ADMINISTRATION TO SPEND LAST IN THE BUDGET BECAUSE AS WE CAN SEE WHAT WE OVERESTIMATED THE AMOUNT OF NEED TO HEAR IN THE BUDGET PROCESS THAT ENDED DURING A REGULAR SESSION.>>MR. CHAIR END REPRESENTATIVE WHAT I’M GIDDY ABOUT I’M GIDDY ABOUT THE PEOPLE NOW HAVE A 3.5 COURT $2.4 BILLION IN RESERVE THAT WILL PROTECT PROGRAMMING THAT YOU VOTED THEY SHOULD HAVE OF. WHEN YOU LOOK AT THE EDUCATION CUTS WE MAKE A RECESSION WHEN YOU LOOK AT THE HIGHER EDUCATION AND K-12 BORROWING WE DO WHEN YOU CUT SERVICES WE CUT THIS IS DESIGNED EXACTLY FOR THE PEOPLE TO BE PROTECTED IN THE EVENT OF AN ECONOMIC DOWNTURN THIS IS THE PEOPLE’S RESERVE IF THERE EVER WAS ONE THIS IS AT. I’M GIDDY ABOUT THAT BECAUSE I THINK THAT’S WHAT WHEN YOU BUY INSURANCE OR IS SET ASIDE MONEY FOR A RAINY DAY RAINS IT’S NICE TO HAVE IT THERE AND THEREFORE PURPOSE NOT TO RUN GOVERNMENT IT’S THERE FOR THE PEOPLE TO GET THE SERVICES YOU VOTED THEY SHOULD HAVE. THAT’S WHAT I’M GETTING ABOUT IN TERMS OF MATCHING REVENUES TO EXPENDITURES; THIS BUDGET EVERY BUDGET IS DIFFICULT EVERYONE IS HARD TO GET RIGHT ON THE MONEY AND CLEARLY WHAT WE TRY TO DO IS PICK THE BEST POSSIBLE ESTIMATE RECANT AND THINGS CHANGE. I THINK IT WAS JOHN MAYNARD KEYNES WHO SAID WHEN THE FACTS CHANGE MY MIND CHANGES WHAT DO YOU DO SERVE? THAT’S WHAT I DO I LOOK OF THE NEW DATA THE NEW INFORMATION I DECIDE IN WILL SIT AROUND AND SAY LET’S THIS HAPPENED WHAT’S DIFFERENT? NEVER GOING TO GET IT EXACTLY ON THE BUT WE DO TAKE SERIOUSLY WHEN WE’RE WRONG WHY WERE WE WRONG WHAT PEOPLE NOT IN ROLE AS FAST AS WE THOUGHT THERE WOULDN’T? SOMETIMES OF A GROWING ECONOMY LIKE WE HAVE YOUR INCOME LEVELS FOR CERTAIN PEOPLE BETTER GOING UP AND THEY SORT OF PHASEOUT OF SOME THE PROGRAM WE HAVE IN HUMAN SERVICES SO THERE’S A WIDE RANGE OF ISSUES THAT WE HAVE AND WHAT I CAN GUARANTEE AS GOVERNOR WALZ WILL HOLD OUR FEET TO THE FIRE HE WILL SAY AS WE START WORKING IN A BIENNIAL BUDGET EARLY IN THE NEXT YEAR FOR THE NEXT BIENNIUM AFTER THIS WHAT WE NEED AND WHAT WE REALLY NEED WHAT IS A COST AND HOW CAN WE START EVALUATING MORE EFFECTIVELY WHAT IT IS WE’RE DOING? ONE OF THE THINGS WE AGREED ON THIS LAST SESSION WAS TO INCREASE OUR RESULTS MANAGEMENT OR USE RESULTS ON EVIDENCE BASED DATA TO EVALUATE PROGRAM IN. I TAKE THAT CHANCE SERIOUSLY REPRESENTATIVE THAT WE SHOULD DO MORE TO MAKE SURE WE’RE DOING IS WORKING ITS EFFECTIVE COST-EFFECTIVE AND WE HAVE THE RIGHT AMOUNT OF MONEY. TAKE THAT VERY SERIOUSLY AND APPRECIATE YOUR CONCERN ALONG THOSE LINES.>>REPRESENTATIVE DRAZKOWSKI.>>Q. MR. CHARREN THINK MR. FRENTZ I DIDN’T HEAR YES BUT MAYBE SOMETHING AROUND THE EDGE OF THAT. I’M HOPING THE ADMINISTRATION DOES COME BACK AND HELP US RIGHT SIZES BUT OBVIOUSLY IT’S TOO BIG WE FORMED A BUDGET THAT WAS LARGER THAN THE NEED WAS IT’S VERY APPARENT IN BLACK AND WHITE HERE AND HOPEFULLY WILL LEAD THE BUDGET RECONCILIATION PROCESS THAT WILL TURN SOME OF THE MONEY BACK LOSE TO THE PEOPLE WHO TRULY BELONGS TO AND THAT’S THE HARD WORKING PEOPLE OF MINNESOTA THEIR WORK OUT EVERY DAY TO GENERATE THIS. THE SPECIFIC QUESTION COMMISSIONER COMMITTEE BUDGET DIRECTOR REITAN COULD HELP OUT AS WELL IN THE HHS AREA WE OVER BUDGETED BY ABOUT ALMOST $100 MILLION IF YOU COULD REVIEW FOR US AGAIN AND BUDGET DIRECTOR WHERE THAT MONEY CAME FROM AND WAS THERE ANY MONEY THAT ISN’T GOING TO BE SPENT BETWEEN NOW AND THE END OF THE BIENNIUM IN THE HHS AREA THAT’S DUE TO THE ADMINISTRATION GOING AFTER AND ROOTING OUT FRAUD WASTE AND CORRUPTION IN THE DHS THE MULTITUDE OF DHS PROGRAMS THAT’S REALLY PLAY THAT AGENCY? I’M CURIOUS IF ANY NUMBERS ARE REFLECTED IN THEIR IT THAT STARTS TO REALLY ADDRESS THAT ISSUE THOSE MANY ISSUES?>>MR. CHAIR END REPRESENTATIVE WHAT I WOULD LIKE TO START WITH ON THE HEALTH AND HUMAN SERVICES CHANGE IS THAT THE 0.7% CHANGE FROM END OF SESSION ESTIMATES. ON A PERCENTAGE BASIS IS RELATIVELY SMALL IN TERMS OF THE MAGNITUDE OF CHANGE AND HEALTH AND HUMAN SERVICES IN PARTICULAR IT MORE DIFFICULT BILL AREA AND TO FORECAST BECAUSE UNLIKE THE-12 EDUCATION WHERE WE HAVE A FAIRLY GOOD UNDERSTANDING OF HOW MANY STUDENTS ARE IN OUR PUBLIC SCHOOLS AND TO THEIR PREDICTABLE PROGRESSION RATIO FROM ONE GRADE TO THE NEXT AND HEALTH AND HUMAN SERVICES ALATAS DRIVEN BY ECONOMIC CONDITIONS AND TERMS OF WHO ENROLLS IN PROGRAMMING. THE BIGGEST CONTRIBUTOR TO THE CHANGE IN THIS FORECAST IS FEWER PEOPLE ENROLLING IN AND A BASIC CARE AND THAT FOR THE MOST PART IS DUE TO IMPROVED ECONOMIC CONDITIONS. I JUST WANT TO HIGHLIGHT SOME OF THOSE CHANGES IN FORECASTS ARGUE TO CONDITIONS IN THE ECONOMY AND CONDITIONS OUTSIDE THE CONTROL OF THE DEPARTMENT OF HUMAN SERVICES MORE ABOUT THE NUMBER OF PEOPLE USING PUBLIC PROGRAMS. TO SPEAK TO YOUR SPECIFIC QUESTION ABOUT FRAUD I WOULD HAVE TO DEFER TO THE DEPARTMENT OF HUMAN SERVICES THE FORECAST REFLECTS THE BEST ESTIMATES FOR CURRENT USE OF EXISTING PROGRAMS.>>MR. CHAIR AT THANK YOU BUDGET DIRECTOR BERT; A DIRECTOR ARE YOU AWARE OF ANY OF THE $97 MILLION THAT’S ATTRIBUTED TO ACTUALLY RECAPTURING SOME OF A WASTE FRAUD AND ABUSE THE HUNDREDS OF MILLIONS OF DOLLARS IN WASTE FRAUD AND ABUSE AT DHS?>>MR. CHAIR END REPRESENTATIVE THIS FORECAST DOES INCORPORATE SOME OF THE ISSUES THAT HAVE BEEN IN THE NEWS RECENTLY IN TERMS OF PAYMENT ERRORS AND HOWELL THOSE WILL BE CORRECTED GOING FORWARD. ONE OF A MORE SIGNIFY ONE’S THAT WAS IN THE NEWS WAS THE TRIBAL GAMING ISSUES THAT NETS TO ZERO THE FORECAST ASSUMES REPAYMENT TO THE FEDERAL GOVERNMENT BY AND ALSO ASSUMES BASED ON CURRENT LAW A COLLECTION BACK FROM THE TRIBES.>>MR. CHAIR BUDGET DIRECTOR REITAN OF THE $97 MILLION HOW MUCH OF THAT AND A DOLLAR AMOUNT IS ATTRIBUTED TO RECAPTURING FROM SOME OF A WASTE FRAUD AND ABUSE THAT THE HUGE DEPARTMENT OF HUMAN SERVICES INTERSTATE HEALTH AND HUMAN SERVICES HAS HAD A?>>MR. CHAIR AND REPRESENTATIVE I THINK WICCAN FOLLOW-UP ON THAT AND INCLUDE THE DEPARTMENT OF HUMAN SERVICES AND THE ANSWER I’M NOT SURE ON TRACKING ALL THAT YOUR INCLUDING IN THAT NUMBER. DISCUSSING IT WITH THE DEPARTMENT OF HUMAN SERVICES OFFLINE TO HELP GIVE YOU AN ANSWER WOULD BE BEST.>>THANK YOU MR. CHAIR THINK BUDGET DIRECTOR I CAN’T LIKE YOU THE WAY FROM ABUSE IS SO WIDESPREAD I TO HAVE A HARD TIME REMEMBERING ALL THAT BANK.>>REP LILLIE .>>THANK YOU MR. CHAIR I APPRECIATE THE CHAIRS; EARLY ON ABOUT THE RESERVES. YOU FIRST STARTED TO TALK AFTER THE PRESENTATION I’VE BEEN HERE AS LONG AS YOU BUT I’VE BEEN THROUGH A REMEMBER WHEN REPRESENTATIVE HAMILTON AND I CAME IN AND WE’VE GONE THROUGH SOME TOUGH BUDGET YEARS WE DIDN’T HAVE THAT RESERVE AND IT’S NOT FUN FOR ANYBODY AND YOU’RE CUTTING STUFF THAT IS REALLY IMPORTANT TO PEOPLE AND YOU’RE HURTING PEOPLE AND THAT’S OUR REAL THING THAT REALLY HAPPENS. I VALUE ON A LOT OF THE GETTY IS THE WORD I WOULD USE I’M PRETTY I THINK WE ALL SHOULD BE PROUD WE HAVE A RESERVE I THINK IT’S THE RIGHT THING FOR MINNESOTANS AND I THINK WE CAN LOOK AT THEM IN THE FACE AND SAY I DON’T KNOW WHAT IS TOO MUCH BUT I THINK OF OUR OWN SITUATION AS A FAMILY IF YOU DON’T HAVE A LITTLE BIT OF A RESERVE YOU GET IN TROUBLE FAST IT COULD BE A FURNACE FOR TRANSMISSION IN YOUR CAR; YOU JUST DON’T KNOW BUT ANYWAY I’M HAPPY WE HAVE THAT I THINK SHOULD ALL BE REALLY PROUD OF THAT AND LEADING THAT LEGACY FOR MINNESOTA AND. MY REAL QUESTION IS; I’M LUCKY ENOUGH TO BE ON THE BONDING COMMITTEE I’VE BEEN IN MANY YOUR DISTRICTS I’VE BEEN DOWN TO FINAL COMMISSIONER FRANS AND YOUR TEAM YOU BEEN OVER THE STATE AS WELL WE HAD 18 DAYS OF STOPS AT ABOUT $5 BILLION OF REQUESTS; TO LONDON 30 PRESENTATIONS SO WE’VE SEEN A FEW WE HAVE BEEN TO REPRESENTATIVE HAMILTON AND REPRESENTATIVE SCHOMACKER TO SAY WASTE WATER TREATMENT WE’VE BEEN ALL THE WAY UP TO INTERNATIONAL FALLS EVEN WENT TO MINNEAPOLIS OF ALL PLACES. THEY’RE AMAZING PROJECTS IN NEED ALL OVER THE STATE; WE ALL LOVE THE CHATFIELD WHERE WE SOUGHT REPRESENTATIVE DAVIDS WHERE HE WAS A WRESTLING CHAMPION AND THEY’RE TRYING TO BUILD THAT THE POINT IS THE NEEDS ARE GREAT ALL THE STATE AND I COULD LOOK AROUND AT EVERYONE OF YOU I HAVE SEEN THE YOU IN YOUR COMMUNITIES AND THE NEEDS BETTER OUT THERE. MY QUESTION IS THIS; WHAT COULD WE DO IN THE BILL HOW BIG AND A LOT OF IT IS NOT FANCY KEEP IN MIND I SEE CHAIR BERNARDY HAD TO STEP OUT BUT A LOT OF IT GOES TO GROUPS AND DIFFERENT THINGS ON COLLEGE CAMPUSES AROUND THE STATE A LOT OF IT IS A WROTE ON WASTE WATER TREATMENT ROADS AND BRIDGES HERE IN ST. PAUL THERE’S A BRIDGE THAT’S FALLING MY COMMUNITY IN THE EAST METRO HAS IT INTERSECTION THAT NEEDS HELP. THESE ARE COMMON ALL OVER THE STATE SO WHAT WOULD A BILL WHAT SIZE OF A BILL COULD WE DO TEND MAINTAIN OUR GOOD CREDIT RATINGS AND I REALIZE WE’RE NOT GOING TO GO TO THAT NUMBER WHAT IS THE NUMBER HOW BIG IS IT? HISTORICALLY WE’VE NEVER GONE BEYOND $1 BILLION MY UNDERSTANDING IS IT’S A PRETTY BIG NUMBER WE COULD REASONABLY AFFORD AS A STATE AND PROTECT I THINK MAKE INVESTMENTS SO WHAT WOULD BE THAT ROBUST BILL THAT YOU MENTIONED?>>MR. CHAIR END REPRESENTATIVE ; ROBUST NO. I’M NOT SURE WHAT THAT RIGHT NUMBER IS ONE OF THE THINGS WE’VE HAD A DEBT SERVICE GUIDELINE IN PLACE SINCE I THINK 2008 IT’S BEEN ABOUT 11 YEARS AND WE OF THREE GUIDELINES IT’S DESIGNED TO MEASURE HOW MUCH DEBT WE HAVE OUTSTANDING OR ISSUED WITH RESPECT TO THE TOTAL PERSONAL INCOME IN THE STATE OF MINNESOTA. WE ADOPTED THAT IN PART BECAUSE THAT’S A CLUE HOW THE RATING AGENCIES AND OTHER PEOPLE LOOK AT THE ABILITY TO PAY OF THE STATE AND OUR THIRD GUIDELINE DEALS WITH PAYING OFF DEBT AND A CERTAIN NUMBER OF YEARS VERSUS OTHER YEARS. WE ANALYZED THE FIRST TWO GUIDELINES AND COME UP WITH ABOUT $3.5 BILLION IN DEBT WE COULD ISSUE IN 2020 AND STILL NOT GO BEYOND THOSE DEBT CAPACITY GUIDELINES FOR GUIDELINES WENT INTO IT WOULD DISRUPT PAYBACK TIME A LITTLE THAT WE WOULD HAVE TO WORK ON; THAT’S SORT OF THE OUTSIDE #I THINK ONE OF THE THINGS WE’RE LOOKING AT AND REMEMBER THE RATING AGENCIES TO EXAMINE THIS FROM THIS PERSPECTIVE AS WELL IF YOU LOOK AT TOTAL STATE DEBT THAT POLL STATE DEBT MEASURE AS A PERCENTAGE OF OUR STATE’S TOTAL PERSONAL INCOME; OUR STATE’S TOTAL PERSONAL INCOME IN THIS FORECAST IS $354 BILLION A YEAR THAT REPRESENTS THE MINNESOTA A RELATIVELY SMALL STATE INCOME WE’RE RIGHT IN THE MIDDLE THE PACK WHEN IT COMES TO OTHER STATES IN TERMS OF OUR TOTAL STATE DEBT COMPARED TO TOLD A STATE PERSONAL INCOME. IF YOU LOOK AT THE DEBT SERVICE THE AMOUNT WE PAY EVERY YEAR EVERY BIENNIUM AS A PERCENTAGE OF THE STATE REVENUE THAT ALSO IS LOWER IN THE TOP 18 STATES WHEN IT COMES TO HAVING LOW DEBT SERVICE COMPARED TO OUR GENERAL FUND. IRAN SPOT WHERE WE BELIEVE WE HAVEN’T BEEN OVERLY USING BONDING OR BAR WING AS A WAY WE FEEL WE CAN MANAGE THAT WELL CLEARLY THERE’S A LOT OF DIFFERENCES WE HAVE HAD OVER A BILLION DOLLARS BY THE WAY THE KEY IS DECIDING WHAT WE ARE COMFORTABLE WITH IN TERMS OF TO THAT ANNUAL DEBT PAYMENTS BUT I THINK I’VE TALKED ABOUT THIS ON THURSDAY THE GOVERNOR REITERATED AT THE SAME SAYING; WE WANT TO MAKE SURE WHAT’S IN IT IS WHAT WORKS FOR MINNESOTA. THE KEY IS WHAT OTHER KINDS OF PROGRAMS THAT REALLY LOCAL COMMUNITIES OR UNIVERSITY MINNESOTA OR MINNESOTA STATE OR THE WATER TREATMENT FACILITIES WHAT KIND OF INVESTMENT OVERALL WILL HELP THE STATE CONTINUE TO MAKE PROGRESS ONE OF THE THINGS WE’VE BEEN GOOD ABOUT IN MINNESOTA IT IS INVESTING IN A LONG TERM WE’VE MANAGED OUR BUDGET LONG TERM WE TRY TO MANAGE OUR RESOURCES TO LONG TERM I THINK THAT’S ONE OF THE THINGS THE CREDIT RATINGS AGENCIES LOOK AT US AND GIVE US A TRIPLE A RATING IN PART BECAUSE THE ABILITY OF MUST HAVE A RESERVE BUT ALSO TO TAKE CARE OF OUR INFRASTRUCTURE IN FACT IF YOU REFUSE INTO LIVE UP TO WHAT YOU SHOULD MAINTAIN IN YOUR INFRASTRUCTURE CREDIT RATINGS AGENCIES WILL START LOOKING THAT AS A CREDIT RISK BECAUSE OF SOME POINT A FINGER OR TO FAIL AND NOT GOING TO BILL TO MAINTAIN THOSE. OR ARE SO MANY AREAS WHERE WE CAN AROUND THE STATE HELP WITH LEVERAGING THE MONEY THE ASSETS WE HAVE BY BAR WING THE MAKING THOSE LONG-TERM INVESTMENTS. THE GOVERNOR IS YOU KNOW AS BEEN TRAVELING AROUND AS WELL WHICH IS A LITTLE BIT UNUSUAL AND VERY ENGAGED AND INTERESTED IN WHAT IS THE RIGHT BONDING BILL WE WILL RELEASE THAT ON JANUARY 50TH WE’RE WORKING ON IT FULL TIME NOW TRYING TO DECIDE AT PRESENT TO HIM AND THE LIEUTENANT GOVERNOR WHAT IS THAT PACKAGE LOOK LIKE SO PEOPLE AROUND THE STATE WILL KNOW THIS REALLY IS A BONDING BILL THAT FITS ALL OF MINNESOTANS AROUND THE STATE. WE’RE FOCUSING ON THE NATURE OF WHAT’S IN THE BONDING BILL I DON’T HAVE THE RIGHT NUMBER YET BUT I LOOK FORWARD TO COMING OUT AND WORKING WITH THE GOVERNOR WITH A NUMBER THAT SERVES THE PURPOSE WE NEED TO ENGAGE IN HERE.>>REP LILLIE AT THE BEGINNING OF THE MINUTE I THOUGHT SOME QUESTIONS ABOUT THE CAPITAL INVESTMENT BILL MIGHT COME UP AND I ASKED MR. MARX TO PUT TOGETHER A FEW NUMBERS AND I DID EXPRESS SOME OF THOSE SPOTS WITH THE COMMISSIONER. JUST DIFFERENT SCENARIOS WHAT THE DEBT SERVICE WOULD BE THIS COMMITTEE DOESN’T DEAL WITH THE PRODUCTS WE DEAL WITH THE DEBT SERVICE. MR. MARKS WITH THE BACK OF THE ENVELOPE NUMBERS YOU HAVE THE TICKET TROUBLES WITH THE COMMITTEE AND THEN WE CAN REFINE THOSE LATER IF NECESSARY.>>MR. CHAIR AND MEMBERS THESE AREN’T EXACTLY BACK OF THE EMPLOYEES AND MEMBERS MMB. HAS SUPPLIED US MMB …LAUGHTER… THE FORECAST ASSUMES A $755 BILLION BONDING BILL IN 2020 AND TWO UTTERED $40;000;000.20-21 GOES A TENURE AVERAGES IS NOTHING MAGIC ABOUT THEM WHAT HAPPENED IN THE EATING YOUR THE LAST 10 EVEN YEARS IS THE AVERAGE OF THOSE NUMBERS AND WHAT HAPPENED THE LAST CANNOT YEARS. $755 MILLION IS WHAT BUILT IN THE FORECAST FOR THE 2020 SESSION BONDING BILL EACH ADDITIONAL MILLION DOLLARS IN BONDING IN 2020 WOULD COST TO ABOUT $60;000 IN DEBT SERVICE IN FISCAL 2021 AND ABOUT $127;000 IN DEBT SERVICE IN FISCAL 22- 23 TO PUT THAT IN PERSPECTIVE A BILLION DOLLARS BILL WOULD COST AN ADDITIONAL $3.9 MILLION IN 2021 AND $31;000;000.2023 OF BILLION 0.5 BACK ON THE BILL WOULD COST AN ADDITIONAL $11.9 MILLION THIS IS AN ADDITIONAL ABOVE THE FORECAST 11 . $9;000;000.21 AND $94;000;000.23 I $2 BILLION BONDING BILL WOULD COST $19.8 MILLION IN 21 AND $157 MILLION IN 202322 OF 43 COST BE MUCH HIGHER WITH THE FUNCTION OF THE TIMING ON WHEN THE BONDS ARE SOLD AND THE ASSUMPTION OF NO DEBT SERVICE ADDITIONAL DEBT SERVICE COSTS OF 2020 MORE TO BEGIN FISCAL 241 AND RAMPS UP AN 22 IN 23 AS MORE BONDS ARE SOLD.>>HAVING SPENT A LITTLE TIME ON THE COMMITTEE THREE YEARS THE TYPE OF PROJECTS AND WHICH ONES ARE SHOVEL READY AT ALL THAT CAN INFLUENCE THOSE NUMBERS AS WELL. BUT HOW QUICKLY A PROJECT COMES ON LINE OBVIOUSLY WHEN WE GET READY WITH THE BUDGET RESOLUTION WE WILL HAVE FURTHER DISCUSSION ABOUT THE SIZE OF THE BILL WITH INPUT FROM THE GOVERNOR’S OFFICE AND ALSO WHAT WE HAVE AVAILABLE FOR RESOURCES. WHY THEN ADDED I SHOULD POINT OUT I DO I’VE MENTIONED THIS AT A PRESS CONFERENCE THE OTHER DAY; THIS FORECAST IS A BENCHMARK IT TELLS US WHERE WE ARE TODAY WE’RE GOING TO BE BUILDING THE BUDGET OFF THE FEBRUARY FORECAST AND THINGS MAY CHANGE UP THEY MAY CHANGE DOWN; THEY MAY REMAIN RELATIVELY FLAT I DID ASK THE STATE ECONOMIST THE OTHER DAY ABOUT THE PROBABILITIES OF DIFFERENT SCENARIOS MAYBE YOU COULD SHARE THOSE WITH US AS WE MOVE AHEAD. BASICALLY THIS IS BUILT ON A STATE OF COURSE SETTER IF YOU COULD SHARE THOSE PERCENTAGES YOU TALKED ABOUT THE OF THE DATE WHEN HE GAVE US THE BRIEFING?>>MR. CHAIR AND MEMBERS OF THE COMMITTEE; THE CHAIR I BELIEVE IS REFERRING TO THE SCENARIOS BETTER PROVIDED TO US BY THE MACRO ECONOMIC CONSULTING FIRM THEY GIVE US A BASELINE ECONOMIC SCENARIO WITH THOUSANDS OF DATA POINTS AND WE USED THE BASELINE IN CONSTRUCTING OUR FORECAST THAT YOU HEARD TODAY. THEY ALSO PROVIDE US WITH TWO ALTERNATIVE SCENARIOS ONE MORE OPTIMISTIC SCENARIO AND THE OTHER MORE PESSIMISTIC AND EACH OF THOSE AS A NARRATIVE ASSOCIATED WITH IT MEANING HERE’S HOW WE THINK THINGS FORGOT BETTER THAN WHAT WE’RE BASE LENDING AND HERE IS HOW WE THINK THINGS COULD WORK OUT LESS WELL THAN WHAT THE BASELINE SAID MAS I’M NOT SUBJECT TO PROBABLY TO THOSE THREE SCENARIOS. THE GIVE 55 PERCENT PROBABILITY TO A BASE ON WHICH MEANS THAT’S THE ONE THEY THINK IS MOST LIKELY TO PLAY OUT THEY GIVE A 10 PERCENT PROBABILITY TO A MORE OPTIMISTIC SCENARIO AND A 35 PERCENT PROBABILITY TO A MORE PESSIMISTIC SCENARIO AND THE PESSIMISTIC SCENARIO HAS A RECESSION STARTING NEXT YEAR. THE PROBABILITY ASSIGNED TO THE PESSIMISTIC TO ALL OF THEM HAS CHANGED OVER THE COURSE OF THE LAST 12 MONTHS THAT HAVE TAKEN SOME OF THE PROBABILITIES THEY DECIDE TO THE BASELINE IN THE OPTIMISTIC SCENARIO MOVE THAT TO THE PESSIMISTIC SUBMIT INCREASED THEIR EXPECTATION ON THE PESSIMISTIC SCENARIO BUT THE BASELINE SCENARIO YOU SAW TODAY AND SOUGHT IN OUR THE REAL GDP FORECAST DOES NOT HAVE A RECESSION IN THAT ENHANCED THE GROWTH THAT GOES DOWN TO 1.5% IN 2023.>>I SHOULD USE THE PHRASE THE BASELINE TO STAY THE COURSE THAT’S ESSENTIALLY WHERE IS REFERRING TO.>>TO CHAIR THAT’S HELD FOR PERMISSION. I DO WANT TO REMIND EVERYONE EVERY YEAR IS DIFFERENT ALL THE RISKS ARE ALWAYS DIFFERENT IN THESE FORECASTS BUT THE DIFFERENCE BETWEEN THE LAST NOVEMBER FORECAST IN 2018 AND FEBRUARY 2019 WAS $500 MILLION THE CLIENT. THINGS CAN HAPPEN AND I WARN THOSE PEOPLE OUT OF SPENDING MONEY AND FOR IF THE $1.3 BILLION IS HERE TODAY WE NEED TO WAIT UNTIL FEBRUARY TO DECIDE WHETHER WE OUGHT TO MAKE DECISIONS ON GOING FORWARD.>>I’VE HAD A FEW PHONE CALLS ALREADY. NEXT IS REPRESENTATIVE ALBRIGHT.>>THEY TO MR. CHAIR. A FIRST QUESTION IS FOR DR. KALAMBOKIDIS IS RELATING TO THE SLIDE FOR THE FORECAST SURPLUS VS BUDGET RESERVE. DOCTOR FOR CLARIFICATION YOU MENTIONED IN YOUR REMARKS YOU SAT THE PERCENTAGE BASED UPON AN ECONOMIC ANALYSIS YOUR DEPARTMENT PUT TOGETHER IN CORONATION WITH IHS AND OTHER ECONOMIC FACTORS I’M HOPING YOU MAY ELABORATE A LITTLE MORE ON THAT IN TERMS OF THE VARIABILITY IN THE TERMS OF HOW OFTEN IT’S CHANGED AND WHAT DETERMINE IT’S GOING TO RAISING OR LOWERING THAT’S? I HAVE MORE FOLLOW-UPS MR. CHAIR.>>MR. CHAIR END REPRESENTATIVE AND MEMBERS; OUR WE GENERATE THE BUDGET RESERVE TARGET PERCENTAGE WHICH AS A PERCENTAGE OF GENERAL FUND REVENUES IS NOT A FORECAST SO IT LOOKS AT REVENUE VOLATILITY THAT WE CAN UP TO THIS POINT IT’S NOT FORECASTING VOLATILITY GOING FORWARD. THE TWO MAIN THINGS THAT CAN AFFECT THE FORECAST AFFECT THE TARGET THE PERCENTAGE IS IF THE VOLATILITY OF ANY OF THE UNDERLYING TAX BASE IS CHANGES OF THE TAX BASE FOR INCOME-TAX; BASE FOR THE SALES TAX AND; BASE FOR THE CORPORATE; IF THE VOLATILITY OF THOSE THINGS CHANGES THAT WILL AFFECT THE TARGET THE MEASURED AND VOLATILITY AND THAT CAN HAPPEN IF SOMETHING FUNDAMENTALLY CHANGES IN THE ECONOMY. WE LOOK AT DATA ON THE TAX BASES AND WHEN I SAY MEASURE OF VOLATILITY WE LOOK AT HOW THOSE THINGS GROW OVER TIME IF YOU DRAW A STRAIGHT TRENDLINE YOU CAN SEE HOW THE BASE GROWS OVER TIME BUT IN REALITY THE BASE THEIR REVENUES THE TAX BASE MOVES AROUND THE TRENDLINE WE’RE MEASURING HOW MUCH IT MOVES UP AND DOWN AROUND THE TREND LINE WHEN IT MOVES MORE AROUND THE TRENDLINE THAT MEANS VOLATILITY HAS CHANGED. IF VOLATILITY OF THE THE UNDERLYING BASIS CHANGES THE MATCHING IS OUR BASIS AND THE OTHER THING THAT CAN CHANGE THE PERCENTAGE IF THE REPORT TAX REVENUES AND A TAX SYSTEM CHANGES IF WE SHIPPED A LOT CHANGES TAX WHAT CHANGES THE SHARE THAT WE HAVE FOR AND FROM SALES CORPORATE AND OTHER TAXES THAT CAN AFFECT THE OVERALL VOLATILITY OF THE SYSTEM SO WE LOOK AT IT AS A PORTFOLIO OF THESE REVENUE STREAMS. THOSE OF THE TWO THINGS THAT CAN AFFECT AT; 4.9% SINCE WE HAVE BEEN DOING THIS AND IT’S BEEN PART OF STATUTES THE TARGET THE TARGET IS THE STATUTORY AND WE ADD MONEY TO THE BUDGET RESERVE ” WHEN THERE’S A POSITIVE FORECAST BALANCE IN NOVEMBER AND THIS CHANGE THE PERCENTAGES CHANGE YOUR LITTLE IT’S BEEN IT IN THE VICINITY OF 5 PERCENT OF THAT TIME. THAT’S AT FIVE OR 5.1% I CAN PROVIDE YOU THE HISTORY OF THE TARGET BUT THE PERCENTAGE HAS NOT CHANGED THAT MUCH. THE DOLLAR VALUE OF A LEVEL OF A TARGET CHANGES EITHER IF THE PERCENTAGE THIS CHANGE OR TO FORECAST REVENUES HAVE CHANGED. WE SET A TARGET IN SEPTEMBER AT 4.9% AND THEN WE FORECAST REVENUES IN THIS FORECAST AND THEN APPLY THAT TARGET THE THAT PERCENTAGE.>>MR. CHAIR; THANK YOU ; DR. KALAMBOKIDIS ON THE NEXT PAGE WE TALK ABOUT THE SUPPORT YOUR RECEIVING FROM IHS THE ECONOMIC WITH REGARDS TO FORECAST FOR THE GDP BOTH FOR PAST AND FUTURE YEARS. I’VE NOTED THAT EVERY SUBSEQUENT YEAR WHEN COMPARED WITH IT WILL MATCH TO GO BACK AND SEE WHAT THERE WERE FORECASTING AT ANOKA SOME VOLATILITY IN OBVIOUSLY IT YOUR MARKETING YEAR WHERE’S YOUR NOT GOING TO SAY WHAT YOU’RE FORECASTING MR. WOULD YOUR ACTUALS ARE YOU MAY RUN OLD ADAGES IF YOU PUT 10 ECONOMISTS AND ROOM PRESENT CABINET ACCEPTED IT OR DID IT 12 OPINIONS. I’M WONDERING IF YOU YOU WOULD AFFORD US THE OPPORTUNITY TO SEE WHAT THE FORECASTED GDP MIGHT HAVE BEEN A FOR THOSE YEARS VS. FORECAST BECAUSE ” BETTER PART OF THE DECADE WE’VE BEEN KIND OF MENTION AT 1.5 PERCENT GDP WAZLAWIK OF 04. SUBSEQUENT TO THAT WE GET SOME VERY ROBUST QUARTERS AND SUBSEQUENT TO THAT NOW THE NEW NORM IS SOMETHING NORTH OF 215 OR 3% AND TO EXPECT THESE NUMBERS AND IN OUTLYING YEARS TRILLING OFF AND GOING BACK TO MY EARLIER SUBMISSION RESPECTFULLY I THINK THESE ARE ALL FORECASTED NUMBERS SUBJECT TO CHANGE EVERY TIME WE GET TOGETHER. THAT’S JUST A COMMENT ON THAT ONE IF WE COULD RECEIVE WHAT WAS FORECAST FOR RECORD OF THOSE YEARS AND WHAT CHANGE OCCURRED THAT LED YOU TO CHANGE YOUR FORECAST? I WILL MOVE TO BUSINESS INVESTMENT SLOWED UNDER FORECASTED RISK. COULD YOU QUANTIFY IT EITHER IN DOLLARS OR PERCENTAGES WHAT YOU MEAN BY INVESTMENT IN SLOWDOWN?>>MR. CHAIR; REPRESENTATIVE MEMBERS OF THE COMMITTEE; FIRST LET ME ACTUALLY START TO ANSWER YOUR FIRST QUESTION ABOUT FORECAST CHANGE. WE CAN TRY TO FLESH OUT A MORE COMPLETE ANSWER FOR YOU. FOR REFERENCE ON PAGE 69 OF THE FORECAST BOOK WE DO PRESENT A TABLE SHOWING HOW IHS FORECAST HAS CHANGED FOR PARTICULAR YEARS OVER THE COURSE OF THE TIME WE’RE FORECASTING THOSE YEARS YOU CAN SEE HOW THEIR FORECAST FOR REAL GDP OF 419; 20 AND GOING ALL THE BACK TO 2014 YOU CAN SEE HOW THOSE FORECASTS CHANGED OVER TIME YOU CAN SEE THAT WE ALSO PRESENTS AN ALTERNATIVE FORECAST SLIDES FROM OTHER FORECASTERS YOU CONCEDE THOSE AND THE CAN’T COUNSEL OF AMERICAN ADVISERS STATEMENT ” WAS ALSO AN AIRPORT GIFT BOOK WE ALWAYS MAKE AN ASSESSMENT OF WHERE IHS IS RELATIVE TO OTHER MACRO ECONOMIC FORECASTERS AND WE POINT OUT WHEN THEY DIFFER . FOR THIS ONE THEY’RE VERY CLOSE TO WHAT BLUE CHIP CONSENSUS FORECASTS ARE FOR 2019 AND 2020. REGARDING A SINGLE FORECAST HOW FAR OFF THE FORECAST MIGHT BE WHEN YOU END UP THERE WE DO PRODUCE THAT TWO WEEKS AFTER EVERY FORECAST WE PRODUCE A REPORT SHOWING HOW BASED ON OUR HISTORY OF HALT OUR FORECAST AND IT OR HOW THE BIENNIUM ENDED UP RELATIVE TO WATER FORECAST WAS. I WELCOME YOUR FEEDBACK ON THAT REPORT WHEN YOU SEE THAT IT IN TWO WEEKS. I’VE FORGOTTEN WHAT YOUR OTHER QUESTION WAS.>>YOU MENTIONED AND BUSINESS INVESTMENT SLOWDOWN NEWLY ELABORATED TO EXTEND WELL CONSUMER SPENDING HAS INCREASED IN A NUMBER OF REGARDS ALLERY; I’M CURIOUS AS TO THE CONNECTEDNESS TO THE OTHER FORECAST RISKS THAT YOU SHARE IS THEIR DOLLAR AMOUNT OR PERCENTAGE POINT THAT IHS OR OTHERS ARE ATTRIBUTING TO BUSINESS INVESTMENT SLOWDOWN?>>MR. CHAIR REPRESENTATIVE AND MEMBERS OF THE COMMITTEE; WE DISCUSSED THAT ON PAGE 13 OF THE FORECAST BOOK AND WE HAVE A BAR CHART I DIDN’T PUT A PRESENTATION BECAUSE ABOUT READ TOO MANY CHARTS BUT IT SHOWS THE FORECAST CHANGE FOR SPECIFIC INVESTMENT FOR EVERYONE’S BENEFIT IF WE MEAN BY BUSINESS SPECIFIC INVESTMENT IS BUSINESS PURCHASES OF EQUIPMENT STRUCTURES AND INTELLECTUAL PROPERTY IS SO WHAT BUSINESSES PURCHASE IN ORDER TO PRODUCE GOODS AND SERVICES. IT’S TIED TO THE MANUFACTURING ECONOMY ALTHOUGH IT’S NOT ONLY THE MANUFACTURING ECONOMY SO WE DISCUSSED IN THE BOOK THE RELATIONSHIP AND A SLOWDOWN IN MANUFACTURING OF THE U.S. LEVEL WHICH AS RESULTED IN THE DECLINE IN EMPLOYMENT IN THAT SECTOR AND THE CHANGE IN BUSINESS INVESTMENT AND IN THAT CHART WILL SHOW THE FORECAST CHANGE FOR 2019 WAS SEDENTARY I JUST EXPECTED 3.6% ANNUAL PERCENTAGE GROWTH IN BUSINESS FIXED INVESTMENT IN THE FORECAST ITS 2.2% FOR NEXT YEAR THEY HAD 2.8% IN FEBRUARY NOT HAVE 1.7% AND THE RELATIVELY SMALLER CHANGES IN THE SUBSEQUENT YEARS THAT OVERALL IT’S A DECLINE IN GROWTH IN BUSINESS FIXED INVESTMENT THROUGHOUT THE FORECAST HORIZON.>>THANK YOU. FOR THE BUDGET DIRECTOR; ON THE NEXT COUPLE PAGES WHEN WE TALK ABOUT THE CHANGES IN THE SEPARATE ACCOUNTS OF THE STATE BUDGET; I WANT TO DRAW YOUR ATTENTION TO HEALTH AND HUMAN SERVICES PARTICULARLY IN SEE A LOWER ENROLLMENT FOR THE M.A. BASIC CARE AND STAND ABOUT THAT BASIS ON THE RESURGENT ECONOMIC OUTLOOK IT SEEMS LOGICAL. I’M WONDERING IF YOU ARE THE COMMISSIONER WHAT IT ELABORATE IN TERMS OF WHAT’S GOING ON IT DHS RIGHT NOW AND WHAT IF ANY CONCERNS ARE CONSIDERATIONS YOU MENTIONED YOUR WORKING ON IN THE NEXT BIENNIAL BUDGET DOESN’T SOUND LIKE WE SHOULD BE THINKING ABOUT A SUPPLEMENTAL BUDGET BASED UPON WHAT’S ON THE BOTTOM LINE AFTER YOU SUGGEST WE INCLUDE INFLATION BUT I’M WONDERING WHAT EFFECT THAT WOULD HAVE ON TRIBAL COMMUNITIES INDIVIDUALS OR PARTICULAR COUNTIES THAT ARE NOW SAYING WE’RE GOING TO HAVE KIND OF ANSWERS CONVERSATION ABOUT MONEY THAT’S OWED BACK TO THE STATE. COUNTIES ARE VIEWED AS ADMINISTRATORS OF STATE APPROPRIATIONS NOW WE’RE ASKING THEM TO COME UP WITH EXTRA MONEY FROM THE TAXPAYERS IN THOSE COUNTIES. I’M WONDERING HOW YOUR RECONCILING THOSE DIFFERENCES?>>REPRESENTATIVE DAN MR. CHAIR I TALKED A BIT ABOUT THE TROUBLE PAYMENT ISSUE WITH THE QUESTION FROM REPRESENTATIVE DRAZKOWSKI WE’RE ASSUMING A REPAYMENT FROM THE TROUBLE GOVERNMENTS IN THIS FORECAST WHICH MEANS THE REPAYMENT TO THE FEDERAL GOVERNMENT IS OFFSET BY RECEIVED BACK FROM THE TRIBAL GOVERNMENTS THAT’S BECAUSE THAT’S WHAT CURRENT LAW REQUIRES. MORE FORECAST IS A CURRENT LOSS FORECAST WE FULLY RECOGNIZE THIS WOULD BE A DISCUSSION DURING THE LEGISLATIVE SESSION BUT OUR FORECAST IS THE CURRENT LAW FORECAST SO THAT’S OUR WE ASSUME IN THE FORECAST. THE SAME WITH A SEPARATE ISSUE THAT’S BEEN COVERED IN THE NEWS ABOUT CHEMICAL DEPENDENCY SERVICES OFFERED AT WHAT’S CALLED I’M THE INSTITUTES OF MENTAL DISEASE INSTITUTIONS WITH 60 OR MORE THAT’S ANOTHER TOPIC THAT’S BEEN COVERED THIS FORECAST DOES ASSUME REPAYMENT TO THE FEDERAL GOVERNMENT AND THERE’S A PORTION OF THAT THAT’S ATTRIBUTABLE TO COUNTIES THE COUNTY SHERIFF IS ASSUMED IN THE FORECAST AND AGAIN THAT’S BECAUSE CURRENT LAW REQUIRES COLLECTING BACK FROM COUNTIES AND TRIBES ON THE TROUBLED PRIVATE ISSUE AGAIN IT’S SOMETHING I’M ASSUMING WILL BE DISCUSSED DURING THE LEGISLATIVE SESSION BUT WE ASSUME CURRENT LAW WITH THE FORECAST.>>MR. CHAIR; AND REPRESENTED BY WOULD LIKE TO GO LITTLE FURTHER WITH YOUR INVITATION AND I’VE BEEN SPEAKING A LOT WITH COMMISSIONER HARPSTEAD AS YOU KNOW WHO IS BETTER DISTAL OVER 90 DAYS AND I THINK I CAN TRUTHFULLY SAY THE GOVERNOR AND COMMISSIONER HARPSTEAD AND A SENIOR MANAGEMENT A DHS IS CONCERNED ABOUT SOME OF THESE ISSUES THAT COME UP IN TERMS OF DISCOVERING THEM AND NOT DISCOVERING THEM AS EARLY AS THE WOULD LIKE TO. CLEARLY THERE SOME CHALLENGES TO MAKE SURE OUR INTERNAL CONTROLS WHICH IS HOW WE TRY TO MANAGE THE STATE GOVERNMENT BOTH FROM A MACRO POINT OF VIEW AS WALLACE AS A FORECAST BUT FROM A MICRO POINT OF VIEW FROM THE DIFFERENT AGENCIES IT’S SOMETHING IMPORTANT WAS TO MAKE SURE WE DON’T HAVE ANY FRAUD WASTE OR ABUSE WHEN ISSUES ARISE ONE OF THE THINGS COMMISSIONER HARPSTEAD IS DOING IS FOCUSING ONE OF WAYS YOU CAN INSTITUTE MORE CONTROL MORE ANALYSIS OF WHAT’S CHORION SHE’S SETTING A LOT OF DIFFERENT WAYS TO MANAGE THAT AGENCY AND STUDDING THE BEST RECORD AGENCY TO BE STRUCTURED AS WELL WITH THE ONGOING ISSUES HOW WE SHOULD GO ABOUT DOING THAT. WE’RE IN THE PROCESS OF DOING A LOT OF THAT WORK THINK I’M CONCERNED ABOUT I KNOW THE GOVERNOR IS CONCERNED ABOUT IT AND IN NO COMMISSIONER HARPSTEAD IS WORKING DAILY ON TRY TO MAKE SURE THESE UNUSUAL CIRCUMSTANCES ARE DEALT WITH AND THEY DON’T HAPPEN BUT WHEN THEY DO HAPPEN YOU KNOW ABOUT THEM EARLY THE GOAL IS TO ANALYZE AND PUT IN BETTER CONTROL OF TO MONITOR THESE KINDS OF ISSUES GOING FORWARD. I KNOW THAT’S WHAT SHE’S WORKING ON FULL- TIME.>>COMMISSIONER THANK YOU MR. CHAIR; WHILE I APPRECIATE THE STRONG AND ROBUST PROCESS CONTROL THAT’S FORWARD-LOOKING. WHAT WE’RE LOOKING AT NOW AS COMMISSIONER HARPSTEAD TALKED ABOUT WHEN SHE PRESENTED HER 90 DAY PLAN BEFORE HEALTH AND HUMAN SERVICES FINANCE LAST WEEK I DIDN’T HEAR A LOT IN TERMS OF WHAT THEY’RE GOING TO DO TO RECTIFY AND TO YOUR ANSWER TO MY EARLIER QUESTION; IT SOUNDS TO ME LIKE THE ERRORS OF THE STATE AND THE LARGEST AGENCY IN MINNESOTA ARE GOING TO SOME EXTENT BE THE RESPONSIBILITY FINANCIALLY OF THE COUNTY’S BASED UPON ASSERTIONS AND PROMISES OR STATEMENTS MADE BY THE AGENCY TO THE COUNTIES IN TERMS OF HOW THAT WAS SUPPOSED BE DONE IN THE PAST AND BY THE WAY NOW WE MADE AN ERROR IN EUROPE; PUT THE MONEY. WOULD YOU RESPOND COUNTIES SAYING IT WASN’T OUR FAULT YOU OVERSPEND MONEY AND NOW YOU’RE MAKING US A DOUBLE DOWN HAVE TO COME UP WITH MORE MONEY OUT OF OUR COUNTY TAXPAYERS TO PLACATE AND FIX THE PROBLEM AT A STATE AGENCY HOW WOULD YOU RESPOND TO THAT?>>STICKER AND REPRESENT I KNOW HOW THEY’RE RESPONDING ANALYST TO TALK TO THEM. ONE OF THE ISSUES THEY WANT TO DISCUSS WITH THE COUNTIES IS THE BEST WAY TO PROCEED THE FACT WE HAD THESE ISSUES AND OUR CURRENT LAWS BUDGET DIRECTOR REITAN DESCRIBED THE BE WE CAN GET TOGETHER AND TALK ABOUT WAYS TO SOLVE THOSE PROBLEMS TOGETHER. I KNOW DHS AND COMMISSIONER HARPSTEAD IS IN DIALOGUE WITH THOSE COUNTRIES ABOUT THAT VERY SPECIFIC ISSUE.>>MR. CHAIR AND COMMISSIONER I’VE A QUESTION WITH REGARD TO PAGE 12 WHEN YOU’RE TALKING ABOUT PLANNING ESTIMATES AND TALKING ABOUT THE BUDGET RESERVE. THE ONLY RED NUMBER ON THAT PAGE IS TO MY WAY OF LOOKING AT IT IS AN ANOMALY WE HAVE ESTABLISHED IN STATE STATUTE AS DR. KALAMBOKIDIS SAID IT IS HER PURVIEW TO SET WHAT THE PERCENTAGES I UNDERSTAND THAT; NOW IT SEEMS TO ME I WOULD WELCOME RESPONSES SINCE A $491 MILLION TRANSFER WERE TALKING ABOUT STRUCTURAL BALANCE IS REALLY TO COVER THE OVER EXPENDITURE THAT WAS PUT INTO LOT IN THE LAST BUDGET BASED UPON THREE PEOPLE IN THE ROOM DECIDING WHAT THE BUDGET IS AND YOU TOOK IT OUT OF THE BUDGET RESERVE AS OPPOSED TO HOLDING THE LINE ON SPENDING BECAUSE WHAT’S THE BUDGET RESERVE WITH ALL RESPECT THE BUDGET RESERVE IS THERE FOR A RAINY DAY WHEN ECONOMIC CONDITIONS TO THE DOCTOR’S POINT CHANGE MATERIALLY. THE ONLY THING THAT CHANGED MATERIALLY IN THE LAST BUDGET BIENNIUM DECISIONS WERE THREE PEOPLE THE ROOM DECIDED TO SPEND MORE THAN WHAT BOTH CAUCUSES AGREED TO THAT’S NOT AN ECONOMIC CHANGE THAT THE DECISION PROBABLY MADE BY THREE PEOPLE THAT AFFECT ALL THE MINNESOTA TAXPAYERS. HOW WOULD YOU RESPOND THAT?>>MR. CHAIR AND REPRESENTATIVE I THINK WE NEED TO BACK UP TO THE BEGINNING OF THE SESSION NUMBER ONE. CERTAINLY THE GOVERNOR HAD PROPOSED BUDGET THAT RAISED REVENUES AND THE SUPPORT OF ALL THE SPENDING HE PROPOSED THE HOUSE HAD OPPOSED THE BUDGET THEY PASSED THAT WOULD INCREASE REVENUES AND PAID FOR THE PROGRAMS THERE WHAT IT TO SPEND AND THE SENATE HAD ANOTHER PROPOSAL THAT WAS AT ODDS WITH THOSE DIFFERENT BUDGET PROPOSALS. IN THE CLASSIC SITUATION WHERE YOU HAD DIVIDED GOVERNMENT NO ONE IS BORN TO GIVE EVERYTHING SO I THINK WHAT YOU SAW WAS A COMING TOGETHER OF THREE DIFFERENT LEADERS THE SPEAKER THE MAJORITY LEADER AND THE GOVERNOR TO TRY TO RECONCILE THE SPENDING THAT THEY’RE ALL THOUGHT WAS NECESSARY AND YET ON THE OTHER HAND THERE WAS A DECISION TO HAVE A TAX NOT TO RAISE REVENUE AND INCREASING REVENUES IN A POSITION THAT LEFT THE AGREED UPON SPENDING NOW WITHOUT AGREED UPON REVENUE RAISING AMOUNT TO COVER THE SPENDING THAT’S WHY THE $491 MILLION WAS USED TO COVER THE SPENDING THAT WAS APPROVED TO MAKE SURE THERE WAS NO BUDGET IN BALANCE IN 22 AND 23. IT WAS AN ACCUMULATION AND CULMINATION OF A LOT OF HARD WORK BY A LOT OF JURORS WORKING WITH LEADERS COMING TOGETHER AND I DURING THE END OF SESSION AND ALLOW A LOT OF WORK WAS DONE AT THE COMMITTEE LEVEL IT’S TRUE THAT THE AND THERE WAS AN ACCOMMODATION THERE WAS REACHED BY THE THREE LEADERS BECAUSE OF THE NEED TO REACH A BUDGET AGREEMENT. THIS WAS THE BUDGET RESERVE CAN ALWAYS BE TAPPED IF THE LEGISLATURE SAYS NOTWITHSTANDING THAT THERE WANT TO TAP INTO IT FOR WHATEVER REASON WE BELIEVE THE PROPER STATUTORY PURPOSE FOR SPENDING ON A THAT IS FOR ECONOMIC DOWNTURN BUT IN THIS CASE IT WAS USED TO REACH A BUDGET DEAL AND ALL THREE LEADERS AGREED UPON. I THINK I WOULD REITERATE THE FACT THAT ALL THE PROCESS WORKED IT WAS DIVIDED GOVERNMENT WE REACHED THE BUDGET DEAL ALL THREE LEADERS WERE ABLE TO SIGN OFF ON TIME AND I WILL LEAVE IT AT THAT.>>MR. CHAIR I WILL RESPECTFULLY DISAGREE WITH THE COMMISSIONER THAT WE HAD TO USE. IT’S IMPORTANT WE BECOME A PROCESS WHERE PROCESS IMPROVEMENTS ARE MORE IMPORTANT CONSEQUENCES FOR PAST ACTIONS ALSO IMPORTANT OUR BUDGET DECISION MAKING PROCESS HAS MORPHED INTO IF YOU CAN’T COVER WITH HIM THE CHECK BOOK WILL FIND ANOTHER LITTLE STATE BUDGET RESERVE AND PULL WHAT YOU NEED OUT OF THERE TO COVER THE TALES. IT WASN’T A RAINY DAY FUND THEIR MAKING IT INTO IT’S NOT A RAINY DAY FUND TO COVER THE LARGESS OF THIS DID MINISTRATION AND THE DECISIONS OF INCREASING THE BUDGET THAT IS OUT OF CONTROL. RATHER THAN AN ECONOMIC DOWNTURN WE SEE CONTINUED ECONOMIC GROWTH THAT DOES NOT SUPPORT RATING THE RAINY DAY FUND. THAT SUPPORTS MAKING SURE THAT WERE DILIGENT ABOUT WHAT WE’RE SPENDING MINNESOTA TAXPAYERS MONEY; AND I WILL LEAVE IT AT THAT.>>THANK YOU REPRESENTATIVE DAVIDS. IF FOLKS CAN BE BRIEF SO WE CAN UNDER OUR GENERAL TIME FRAME OF ABOUT TWO HOURS.>>DID HE SAY THAT YOU ADDRESS? THANK YOU MR. CHAIR A COUPLE OF THINGS FIRST I THINK THESE RESULTS I WOULD LIKE TO THANK THE THREE FOLKS WHO TESTIFIED TODAY. IT’S A NICE FORECAST A DIRECT RESULT OF THE TORIES 17 TAX BILL GENERALLY TAX BILLS TAKE ABOUT TWO YEARS TO SHOW THE RATE OF I THINK THAT’S VERY CLEAR UNDISPUTED THE 2017 TAX BILL HAS PUT THIS IN THIS SITUATION. THAT BEING SAID WITH COMMISSIONER FRANS I WAS CURIOUS ABOUT YOUR DEFINITION OF ROBUST BUT I THINK YOU HAVE A BAT WELL CHAIR AT DAUDT LILLIE QUESTION EITHER QUESTION ON PAGE 20 OF THE BUDGET FORECAST IT SHOWS A PERSONAL INCOME IS ABOUT 4 PERCENT SPENDING IS MORE THAN NOT; LONG IS THAT SUSTAINABLE HOW WE SUSTAIN THAT?>>MR. CHAIR AND REPRESENTATIVE THANK YOU FOR THE QUESTION. ONE OF THE KEY CONCERNS I THINK WE ALL SHARE WITH THE LEGISLATURE ENDED MINISTRATION WILL SHARE IS MANAGING AND MAKING BUDGET DECISIONS THAT TAKE INTO ACCOUNT THE REALITY OF HOW FAST REVENUES ARE ANTICIPATED TO GROW OR DO WE WANT TO CHANGE THAT WE ARE TO ADD TO THAT OR SUBTRACT FROM THAT? THE SAME THING WITH EXPENDITURES THE KEY WE HAVE THE FISCAL DISCIPLINE WITHIN THE COMMITTEE AND OTHER COMMITTEES TO ANALYZE PROPOSALS TO WAIT KEEP THE EYE ON THE LONG-TERM REVENUE GROWTH PROJECTED REVENUE GROWTH AND EXPENDITURE GROWTH AND NOW WE ARE AFFECTING THOSE IN THE DECISIONS WE MAKE GOING FORWARD. YES; IF YOU LOOK AT AT 22 AND 23 SEE THE TWO UTTERED $20 MILLION DIFFERENCE IN REVENUES GROWING FASTER THAN EXPENDITURES IS PRETTY CLOSE. WE CAN EASILY BE CHANGED BASED ON DIFFERENT FACTORS IN THE ECONOMY WE’RE CONCERNED ABOUT THAT AS A THINK YOU ARE AND I THINK THE KEY IS TO MAKE SURE WE MAKE SOUND LONG-TERM FISCAL DECISIONS TO KEEP US ON TRACK THAT’S ALL I CAN REALLY ADVISE.>>REPRESENTATIVE DAVIDS.>>THANK YOU MR. CHAIR I’M SPLASHING BACK TO THIS TIME OF THE YEAR IN 2010 WHEN WE WERE PRESENTED TO WITH A $6.2 BILLION SHORTFALL. IN MY MIND WHEN I LOOK IT IS FORECAST I DO FEEL VERY GOOD ABOUT WHAT WE OF DONE BECAUSE WE DID AT $6.2 BILLION SHORTFALL AND TOOK CARE OF VAT AND UNI WHEN WE BOTH HAD DIFFERENT ROLES AT THAT TIME SO I DO WANT A THANK YOU FOR THOSE EFFORTS BACK THEN AND WHAT YOU’RE DOING TODAY. MR.>>CHAIR END REPRESENTATIVE I TELL THE STORY AT THAT TIME WHEN I MET THE GOVERNOR IN LATE 2010 TO BE DIVERTED TO BE READY COMMISSIONER AND HAD A GOOD MEETING AND HE OFFERED THE JOB AND I TOLD MY WIFE ABOUT SHE SAID THAT RITCHIE SAID DID YOU EXCEPT I? SAID GUESS SHE SAID HOW REGARDLESS OF THE $6.2 BILLION DEFICIT KNEW THOSE WERE TOUGH TIMES I PRITCHETT RECOGNITION THERE MR. CHAIR REPRESENTATIVE BACK IN THOSE DAYS THOSE WERE TOUGH DAYS A BANK YOU.>>SEVERAL THIS HAD DIFFERENT ROLES AT THAT POINT IN TIME. NEXT IS REPRESENTATIVE VOGEL .>>THANK YOU MR. CHAIR. I TEND TO LOOK AT THE BONDING THING A LOT AND I’M HEARING $3 BILLION AND I THINK THE COMMISSIONER MAY HAVE SAID THAT IN HIS PRESENTATION REMIND YOU GIVE SOMETHING LIKE THAT. I HAVEN’T HEARD EXACTLY ONCE THAT IS FULLY PHASED IN WHAT THE ANNUAL DEBT SERVICE WOULD BE ON BACKED. I KNOW I SOUGHT A 3.9 AND $31 MILLION IS THERE ANY ESTIMATE OF WHAT $3 BILLION IN BONDING COSTS THE GENERAL FUND EACH YEAR IN PAYMENTS?>>MR. MARKS SAYS HE DOESN’T HAVE THAT READILY AVAILABLE.>>FOR THE SAKE OF DISCUSSION; LET’S JUST ASSUME IT’S 4 PERCENT THAT’S $120 MILLION A YEAR AND $240 MILLION EACH BIENNIUM. WE JUST GOT DONE TALKING ABOUT THE 27% DECREASE IN THE BUDGET RESERVE ABOUT WE NEED TO PUT. I GUESS AS I LISTEN TO THAT EITHER WE SHOULDN’T BE PUTTING IN 4.9% OR 3.6% IS OK BECAUSE THUS WHAT WE’RE GOING TO. I TAKE THAT $491 MILLION ESPECIALLY BEING IN THE FINANCIAL INDUSTRY HOURS ANALYZING THAT I WOULD SAY THAT KIND OF FUNNY MONEY THAT’S BEEN THERE. THE BOTTOM LINE IS REALISTICALLY IF WE WEREN’T PLAYING WITH THOSE NUMBERS WOULD HAVE A TWO UTTERED $71 MILLION DEFICIT IN THE OUT BIENNIUM OF 22-23 WHICH IF YOU HAVE ANOTHER $120 MILLION A YEAR OR TWO UTTERED $40 MILLION EACH BIENNIUM AND DEBT SERVICE OR WELL OVER HALF A BILLION DOLLARS THAT YOU’RE PROJECTING IN THE OUT BIENNIUM BY SPENDING MONEY ON BONDING WHICH I’M NOT SAYING WE DON’T NEED TO D O THINGS I’M NOT SAYING INTEREST RATES ARE LOW; BUT WE’RE PUTTING OURSELVES IN A POSITION JUST LIKE IF YOU BUY A NEW HOUSE YOU BUY A NEW CAR YOU’RE GOING TO MAKE THOSE PAYMENTS WILL LENGTH OF THE TERM. IF WE TAKE THE FUNNY MONEY OUT OF IT HAD THE ADDITIONAL DEBT WE’RE DOING WE’RE LOOKING AT PUTTING THE TAXPAYERS OF MINNESOTA POSSIBLY ON THE HOOK FOR HALF A BILLION DOLLARS DEFICIT IN 2822 AND 23 AND I KNOW AND MAYBE WILL UNFAIR TO THROW NUMBERS AND SAY COMMISSIONER WITH THOSE ASSUMPTIONS I’M MAKING THE CORRECT? ANY COMMENTS ? MR.>>CHAIR I THINK THE BUDGET DIRECTOR HAS A COMMENT.>>MR. CHAIR END REPRESENTATIVE I WANT TO MAKE SURE I’M TRACKING WITH THE MATH YOU WERE JUST DOING. THE 491 WAS COMING OUT OF THE RESERVE THAT DOESN’T CONTRIBUTE TO THE STRUCTURAL SITUATION BETWEEN REVENUES AND EXPENDITURES BECAUSE THAT ADJUSTS THE RESERVE TARGET LINE. EVEN WITH THE 41 BEING RESTORED THEY’RE STILL TWO UTTERED 20 IN STRUCTURAL BALANCE BETWEEN REVENUES AND EXPENDITURES.>>MR. CHAIR END REPRESENTATIVE YOUR POINT ABOUT ADDING THAT; WE WOULD NEVER DISAGREE YOU WANT TO BE CAREFUL TO WHAT IS OUR ANNUAL DEBT SERVICE? ABOUT 14 $1 BILLION SO AND THAT’S LIKE I SAID IF YOU COMPARE THAT TO THE OTHER STATES WERE THE TOP 18 STATES IN TERMS OF HAVING MODEST DEBT TO GENERAL FUND REVENUES. CLEARLY YOU WANT TO WATCH THAT WE DON’T DISAGREE ABOUT BEING CAREFUL ABOUT HOW MUCH YOU HAD AND I’VE NEVER SAID WE SHOULD DO A THREE OR $3.5 BILLION YACHT. I DON’T DISAGREE WITH THE NEED TO BE CAREFUL ABOUT THAT AND MONITOR WHAT IS THAT GOING TO DO TO THE BUDGET CORING FORWARD? I DON’T KNOW IF THAT ANSWERS YOUR QUESTION.>>THANK YOU MR. CHAIR I REALIZE. IT WAS AN EXAMPLE OF WHAT CAN HAPPEN HERE. I THINK IN PRUDENCE I HEAR THIS WE HAVE THIS SURPLUS AND A WICKED BOND FOR MORE; I DID HAVE A QUESTION WHEN YOU HAVE DEBT SERVICE OF $1 BILLION DOES THAT INCLUDE JUST GENERAL OBLIGATION OR IS THAT ALL THE APPROPRIATION AS WELL AS G O BONDS FOR THE BIENNIUM?>>MR. CHAIR AND REPRESENTATIVE I’M LEARNING FOR MERCK MY READ IT’S JUST THE GENERAL OBLIGATION BONDS THAT NUMBER REPRESENTS.>>IT MAY BE HELPFUL IF PEOPLE ARE LOOKING AT THINGS TO ACTUALLY HAVE THE ACTUAL DEBT SERVICE WE’RE DOING. ONE OTHER CLARIFICATION OF THE COMMISSIONER YOU SAID THE TEST WITH A TEST FOR DEBT SERVICE AND IT’S ALWAYS BEEN MY UNDERSTANDING WE HAVE THE TEST FOR DEBT OUTSTANDING AS WELL AS DEBT MATURITY. WE DON’T HAVE A TEST FOR DEBT SERVICE IN OTHER WORDS LOOKING HOW MUCH OF OUR GENERAL FUND WE’RE HAVING TO EXPAND FOR THE PAYMENTS WOULD THAT BE FAIR TO SAY?>>MR. CHAIR AND REPRESENTATIVE YES.>>I THINK AS WE LOOK AT THIS AND I’VE ALWAYS ADVOCATED FOR PRUDENCE WE REALLY HAVE TO START LOOKING AT HOW MUCH COVER BUDGET ARE WE SPENDING IN DOLLARS THAT COULD BE GOING TO OTHER THINGS FOR DEBT SERVICE? IF WE GET AGGRESSIVE TO GET INTO THE $3 BILLION RANGE HOW MUCH MORE WE TAKING FROM EDUCATION FROM ROADS AND EVERYTHING ELSE BECAUSE THAT’S GOING TO BE THERE FOR 20 YEARS AS IT AMORTIZES I THINK WE HAVE TO BE CAUTIOUS ON THAT THANK YOU MR. CHAIR.>>WE HAVE NEXT REPRESENTATIVE HAMILTON .>>Q. MR. CHAIR COMMISSIONER MY QUESTIONS PERTAIN TO THE HEALTHCARE ACCESS FUND. I WOULD LIKE TO KNOW WHAT THE CURRENT PROJECTED BALANCES OF THAT FUND WHAT THEY ARE IS IT REFLECTED IN THE FORECAST AND I HAVE A FOLLOW-UP QUESTION.>>MR. CHAIR BUDGET DIRECTOR REITAN WILL ANSWER THAT AND SHE’S LOOKING FOR THAT MEMBER I WANT TO REITERATE THE FACT WE HAVE A BUDGET BOOK THAT’S ON OUR WEBSITE AT MMB. GUV AND IF YOU HADN’T HAD A CHANCE TO LOOK AT THAT IT’S A GOOD READ AND I RECOMMEND IT HIGHLY.>>MR. CHAIR AND REPRESENTATIVE THE HELL; CARE ACCESS FUND IS CARRIED IN OUR CONSOLIDATED FUND STATEMENT WHICH IS BEING RELEASED TODAY ON OUR WEB SITES. IT’S USUALLY A COUPLE OF DAYS BEHIND THE GENERAL FUND FORECAST THERE’S ALSO THE NARRATIVE EXPLANATION OF THE CHANGES TO THE HEALTHCARE ACCESS FUNDED. CURRENT PROJECTIONS FOR THE END OF 2021 THE PROJECTED BALANCE OF THE HEALTHCARE ACCESS FUND IS $538.9 MILLION THE END OF 2023 THE BALANCE WOULD BE $279 MILLION SO THIS IS A DECLINING BALANCE AND THAT IS BECAUSE BEGINNING IN 2021 THE STRUCTURAL BALANCE IN THAT FUND IS- CURRENTLY.>>THANK YOU MR. CHAIR. TO THE DIRECTOR DOES THAT REFLECT LEGISLATION THAT WAS PASSED THIS LEGISLATIVE SESSION REINSTATING AT LEAST A PORTION OF THE PROVIDER TAX?>>CHAIR AND REPRESENTATIVE YES IT DOES.>>THANK YOU MR. CHAIR BY. FINAL QUESTION IS THE WAY THOSE DOLLARS ARE ALLOCATED IS THAT CLEARLY OUTLINED AS DIRECTED BY THE LEGISLATURE GORING FORWARD?>>MR. CHAIR END REPRESENTATIVE IS YES THERE’S A PORTION OF IT THAT’S PAYING FOR MEDICAL ASSISTANCE AND A PORTION THAT IS PAYING FOR MINNESOTA CARE AS WELL AS SOME PROGRAMMING AT DHS AND MDH AND THAT’S ALL DETAILED IN A STATEMENT THAT WILL BE POSTED ON LINE.>>THANK YOU MR. CHAIR.>>THAT TEXAS TO THE BOTTOM OF THE LIST. JUST A QUICK COMMENT REPRESENTATIVE ALBRIGHT I’M NOT THAT INTERESTED IN DEBATING THE USE OF THAT MONEY BECAUSE I WAS NOT WANT THAT WAS FAVORABLE TOWARD TAKING THAT $491 MILLION FROM THE RESERVE ACCOUNT WHEN YOU FOLKS WERE IN CONTROL WITH THE PREMIUM SUBSIDY PROGRAM; YOU TOOK THREE ADDED $26 MILLION OUT OF THE RESERVE ACCOUNT FOR THAT PURPOSE. MY ONLY POINT RATHER THAN DEBATING IT IS TO SIMPLY SAY BOTH SIDES OF THE AISLE HAVE SOME GUILT ON THAT AND I’M NOT DEBATING THE PURPOSE IS SOMETHING THAT HAPPENS WHEN WE HAVE THE PRESS CONFERENCE I ALLUDED TO THE OTHER DAY; BOTH THE SENATOR COHEN AND I COMMENTED ON THE NEED TO PROTECT THE RESERVE BECAUSE I DO VIEW IT AS A RAINY DAY FUND. I WAS AT THE TABLE IN NEGOTIATIONS GOING ON UNTIL THE FRIDAY NIGHT BEFORE THE DECISION WAS MADE TO NARROW IT TO THREE PEOPLE; AND I KNOW HOW DIFFICULT THINGS WERE NEAR THE EMMER TO A GET THE PACKAGE TOGETHER AS WAS POINTED OUT BY THE COMMISSIONER WITH DIVIDED GOVERNMENT. I WOULD HOPE AS REMOVE FORWARD WE DO PROTECT THAT RESERVE ACCOUNT BECAUSE AS I POINTED OUT I WAS HERE I CHAIRED THE EDUCATION DIVISION OF APPROPRIATIONS WHEN AN APPROPRIATIONS COMMITTEE BACK AND WHERE WE HAD SIX SPECIAL SESSIONS. WE DON’T HAVE A RESERVE ACCOUNT THERE’S COST SHIFTING ECHOES ON AT THIS POINT IN TIME FOR EXAMPLE THE UNIVERSITY OF MINNESOTA HAD HAVE SOME SIGNIFICANT TUITION INCREASES AND THEY DID IT AS A ONE TIME APPROACH AS FAR RECALL CORRECTLY. THERE WAS A BURDEN SHIFTED TO STUDENTS BECAUSE THE STATE DIDN’T HAVE A RESERVE TO BACKUP WHAT THOSE OBLIGATIONS WERE. THE OTHER SYSTEMS WE DIDN’T HAVE MNSCU AT THE TIME IT DID MUCH THE SAME THING I COULD POINT TO SEVERAL SPECIAL SESSIONS WHERE WE HAD MELTDOWNS AND MORE THAN ONCE I’VE BEEN A CHAIR OF THE FISCAL COMMITTEE WHEN THAT HAPPENED. I’M NOT SAYING WHETHER THE OUTCOME OF THE 326 WAS QUARTERBACK; IT’S JUST THE RESERVE WAS USED FOR THAT PURPOSE AND REPRESENTATIVE DAVIDS WANTED TO; I THINK YOUR BALLED WITH THE ISSUE AT THE TIME?>>THANK YOU MR. CHAIR IT WAS MY BILL IT WAS A BRILLIANT WAY TO HANDLE THINGS BECAUSE WHAT THE PREMIUM SUBSIDY DID IT SAVE THE PRIVATE INSURANCE MARKET AND REDUCED PREMIUMS 25% TO. PUBLICLY THANK YOUR LIEBLING FOR RENEWING THAT THIS YEAR FOR CHAIR LIEBLING ENTERING THE BILL TO RENEW THE PREMIUM SUBSIDY IF SHE HAD NOT DONE THAT WHICH I FULLY SUPPORT IT SHE HAD NOT DONE THAT PREMIUMS WOULD OF GONE UP 50% AND THIS IS A RESULT OF OBAMA CARE DESTROYING THE PRIVATE HEALTH MARKET.>>I’M SAYING WITHOUT DEBATING THE PURPOSE I’M NOT ARGUING ABOUT THE PURPOSE BUT THE RESERVE WAS USED AT AT THAT POINT IN TIME TO ACCOMPLISH WHAT TURNED OUT TO BE A POSITIVE GOOD. JUST SAYING THAT BOTH SIDES OF THE AISLE HAVE USED THE RESERVE FOR SOMETHING OTHER THAN THE PURPOSE OF THE DOWNTURN IN THE ECONOMY AND WHAT THE RESERVE IS GENERAL THEREFORE. IF YOU’VE FILLED OUT YOUR PER DIEM SLIPS I WILL BE HERE TODAY AND TOMORROW I CAN GET THEM SIGNED AND TURNED IN. WITH THAT I WANT TO THANK THE THREE OF YOU AND WITH THAT THE MEETING IS ADJOURNED.

Briefing with Assistant Secretary for Near Eastern Affairs David Schenker


MS ORTAGUS: Thank you for joining us for this
important briefing. With us today is Assistant Secretary of State
for Near Eastern Affairs David Schenker. He’ll be addressing the protests in Iraq
and announcing the designation of individuals under the Global Magnitsky Act. Assistant Secretary Schenker will begin with
some opening remarks, and then we will take a few questions. David. ASSISTANT SECRETARY SCHENKER: Thanks, Morgan. Good afternoon. Today the United States is sanctioning three
Iraqis for their involvement in the brutal crackdown on peaceful protesters in Iraq,
and a fourth for corruption and bribery. Treasury designated Qais al-Khazali, Laith
al-Khazali, Husayn Falih ‘Aziz al-Lami, pursuant to Executive Order 13818 for their
involvement in serious human rights abuses in Iraq. Additionally, OFAC designated politician Khamis
Farhan al-Khanjar al-Issawi for bribing government officials and engaging in widespread corruption
at the expense of the Iraqi people. According to the UN, over 400 Iraqis have
been killed while protesting for better governance and a brighter future. For several months, the Iraqi people have
led a patriotic quest for genuine reform and transparency in government. They have gone to the streets to raise their
voices for a just government with leaders who will put Iraq’s national interests first. Frankly, without that commitment from Iraq’s
political leaders, it makes little difference who they designate as prime minister. As I said last week, Iraqis are fed up with
economic stagnation, endemic corruption, and mismanagement. They want better from their leaders, and they
want accountability. Iraqis are also demanding their country back. Three of today’s designees – al-Lami,
Qais al-Khazali and Laith al-Khazali – were directed by Iranian regime when they or the
armed groups they lead committed serious human rights abuses. Iraqis have paid a steep and bloody price
for the malign influence of Iranian regime. Tehran claims it is exporting “revolution”. It is increasingly clear to us and the people
of the region, however, that the theocracy’s top export is corruption and repression. As for Khamis al-Khanjar, he’s wielded significant
political influence through the bribery of Iraqi political figures. The Iraqi people are protesting corruption
of this very sort. The U.S. Government continues to support Iraq’s security,
stability, and sovereignty. As the Secretary has said on many occasions,
we are a force for good. We are the largest donor of humanitarian,
stabilization, demining, and security assistance to Iraq, and we want to maintain and expand
that role to include helping with economic reform to create jobs for Iraqis and Americans
alike. We offer an unparalleled partnership for the
Iraqi people, but we need to see Iraqi leaders committed to that partnership – equally
committed to that partnership. With that, I’ll now take some questions. MS ORTAGUS: Matt. QUESTION: I just – so when the Secretary
and you have, in the past, over the past couple weeks, warned that Iraqi officials themselves
– not only militia leaders or politicians, but actual government officials – could
be subjected to sanctions for their actions, why not take that step today? ASSISTANT SECRETARY SCHENKER: Well, thanks,
Matt. Listen, GLOMAG in particular has a very high
evidentiary standard. They take a long time to put together packages. If you want to know all the details and how
long they take in particular, we’ve got Marshall Billingslea sitting over here somewhere. Where is he? MS ORTAGUS: Over here. ASSISTANT SECRETARY SCHENKER: Over here, from
Treasury. He’s going to – we’re going to answer
some questions. QUESTION: You let him in the building? MS ORTAGUS: It’s Friday. (Laughter.) ASSISTANT SECRETARY SCHENKER: But we’re
not done. This is an ongoing process. We’re – these designations don’t prejudice
future announcements — QUESTION: No, I’m not suggesting — ASSISTANT SECRETARY SCHENKER: — and we will
be doing further designations in the future, which I can’t comment on right now. QUESTION: Well, does your – does that answer
mean that you just haven’t compiled enough evidence against actual official – government
officials? ASSISTANT SECRETARY SCHENKER: I’m not going
to say which ones that we’re working on or we’re not working — QUESTION: No, no, I’m not asking for names,
but is that still in the works? And do you still – do you put out the same
warning to them that if this continues, they’re going to get — ASSISTANT SECRETARY SCHENKER: Yeah, so if
you are a gross violator of human rights, if you are perpetrating violence against protesters,
regardless of whether you are in the government or outside the government, you’re at risk
of being designated, absolutely. QUESTION: Thank you. MS ORTAGUS: Nadia. QUESTION: Thank you. ASSISTANT SECRETARY SCHENKER: Hey, Nadia. QUESTION: Thank you. ASSISTANT SECRETARY SCHENKER: How are you? QUESTION: Good to see you, David. So some people say – well, three of these
people that you have listed are in militias that belong to Asaib Ahl al-Haq, I believe? ASSISTANT SECRETARY SCHENKER: Yes. QUESTION: Some people will say, what is the
effect of these sanctions? These guys don’t have bank accounts in the
U.S., they don’t travel to the U.S., so it’s just symbolic sanctions. So how do you respond to that? ASSISTANT SECRETARY SCHENKER: Well, we are
holding these people to account. When possible, we’re going after the assets. Regardless of whether the Iraqi Government
holds these people to account, we are holding them to account in the ways that we can. And there is an impact, but it is first and
foremost symbolic, but in many cases also has a financial impact on the ability of these
people to travel and do business elsewhere. QUESTION: Would you also – sorry, would
you also hold the Iraqi Government officials who deal with them accountable? Will they be also under sanction if they deal
with them directly, with — ASSISTANT SECRETARY SCHENKER: I’m going
to defer to Marshall on that. My belief is yes. MS ORTAGUS: We’ll follow up. We’ll get that answer for you. Francesco. QUESTION: Hi, thanks. ASSISTANT SECRETARY SCHENKER: Hi. QUESTION: How worried are you about Iran – Iran’s
involvement in the negotiations for the formation of the new government in Baghdad, and will
you be ready to work with any prime minister if he’s – you feel he’s too close to
Iran? ASSISTANT SECRETARY SCHENKER: Well, okay,
there’s two parts to that question. Listen, the United States Government will
work with anyone in the Iraqi Government who is willing to put Iraqi interests first. Right. This is a sine qua non. But we see in the process of establishing
a new government or determining who the next prime minister will be that Qasem Soleimani
is in Baghdad working this issue. It seems to us that foreign terrorist leaders,
or military leaders, should not be meeting with Iraqi political leaders to determine
the next premier of Iraq, and this is exactly what the Secretary says about being perhaps
the textbook example of why Iran does not behave and is not a normal state. This is not normal. This is not reasonable. This is unorthodox and it is incredibly problematic,
and it is a huge violation of Iraqi sovereignty. MS ORTAGUS: Humeyra. QUESTION: Thank you for this. Over the past couple of days, there has been
some reports about Pentagon officials citing fresh intelligence about maybe potential new
aggression from Iran. Do you have similar intelligence? What targeted and specific and new steps would
you be taking to counter that to avoid another Abqaiq? ASSISTANT SECRETARY SCHENKER: Listen, there’s
a couple of different reports coming out about Iran. There’s been great attention lately being
paid to these reports about Iranian ballistic missiles being stored in Iraq. This is something that actually Secretary
Pompeo tweeted about in 2018, and something that I have said for the past four or five
months on the record and on background to the bullpen and elsewhere, to all of you. And I think this is drawing greater attention
particularly as Iranian-backed militias are now shelling Iraqi bases with American and
Anti-ISIS Coalition forces on them – Balad, al-Asad, et cetera. So this is something of great concern. The Iranians oftentimes, or have certainly
in the past taken aggressive action when they feel under pressure. We see that in the response to, for example,
the maximum pressure campaign working over the months. The past five, six months, Iran has become
increasingly more aggressive. There is a trajectory, right, where they have
first increased the operational tempo of the Houthis against the Saudis, then raised the
rhetoric and the temperature in Iraq against U.S. personnel, moving on from there scuttling
boats in Fujairah, then kidnapping boats, then shooting down U.S. drones in international
airspace, and most recently Abqaiq, targeting directly with their own missiles Saudi oil
facilities. QUESTION: There – sorry, so you can confirm
that attack on Balad? Is that what – you just mentioned – I
just want to make sure. ASSISTANT SECRETARY SCHENKER: An attack on
Balad occurred. QUESTION: There’s one that was just reported
I guess overnight. ASSISTANT SECRETARY SCHENKER: An attack occurred. What would I — QUESTION: Yeah. ASSISTANT SECRETARY SCHENKER: Sorry, the — QUESTION: I mean, you mentioned it. ASSISTANT SECRETARY SCHENKER: I’d say that
we’re waiting for full evidence, but — QUESTION: All right. ASSISTANT SECRETARY SCHENKER: — if past
is any – if past is prologue, I’d say there’s a good chance it was Iran that’s
behind it. QUESTION: And then you seem to suggest right
now that the maximum pressure campaign is a success because it has resulted in greater
Iranian aggression and shooting down U.S. drones. ASSISTANT SECRETARY SCHENKER: I – no. QUESTION: Well, that’s — ASSISTANT SECRETARY SCHENKER: Maybe that’s
what you inferred. QUESTION: No, no, no, that’s – that’s
– well, no, that’s I think the way — ASSISTANT SECRETARY SCHENKER: The pressure
campaign is working. They are clearly under fear and pressure,
and they are lashing out. They are also — QUESTION: Yeah, but if that’s a success,
I mean — ASSISTANT SECRETARY SCHENKER: They’re also
having double-digit negative growth. QUESTION: Fair enough. ASSISTANT SECRETARY SCHENKER: The people in
the streets are protesting against the regime for its corruption and for its economic mismanagement
— QUESTION: Yeah, but surely there’s — ASSISTANT SECRETARY SCHENKER: — for spending
all the money of the Iranian people on militias abroad, like in — QUESTION: Surely the metric – surely the
metric for the success of U.S. policy, foreign policy anywhere, not just with Iran, is that
the country – the other country is less aggressive and less likely to shoot down U.S.
drones or attack U.S. bases or threaten — ASSISTANT SECRETARY SCHENKER: There is – no,
Matt, there’s – to be fair, there – things sometimes get worse before they get better
in those terms. MS ORTAGUS: Okay, Said. QUESTION: Thank you. Thank you, sir. Should the United States take some blame for
the current situation in Iraq? I mean, after all, Qais al-Khazali, Laith
al-Khazali, al-Lami, Asaib Ahl al-Haq, al-Hashd Shaabi, they were all – they have been there
for a very long, long time. In fact, they were – they flourished during
the years of the occupation and sometimes cooperating with the Americans and so on. That’s one. And second, would you support, let’s say,
redrafting another constitution, because this constitution is really what thrusted Iraq
where it is today. Thank you. ASSISTANT SECRETARY SCHENKER: Yeah, thank
you. So I’m not going to weigh in about whether
we should take blame for Qais al-Khazali or Laith al-Khazali. These people were there. They’re indigenous to Iran. They existed – U.S. Forces did not kill
them. We tried to work with whoever we could work
with at the time. That said, whether Iraq should have a new
constitution, this is up to the people of Iraq. I can tell you right now they are working
on a new electoral law. They are working on developing an independent
electoral commission. But yeah, they certainly need reforms. The politicians – many of the people on
the council of representatives, Iraqi people say that they are not accountable to their
constituents. And I don’t know what the solution is for
that, but the Iraqi people, I think, want some significant reform, both economic reform,
fight against corruption, and in terms of their political system. MS ORTAGUS: Go ahead, (inaudible). QUESTION: Yes. Yesterday in a briefing, a senior official
said Iraq is limited in what they can do in terms of sovereignty. How you are planning to help them? What is the U.S. strategy, just only sanctions? ASSISTANT SECRETARY SCHENKER: We’re doing
sanctions. We’re working to help Iraq Government strengthen
institutions. We are encouraging neighbors not to meddle
and undermine these institutions within the country and to corrupt politicians. So we are doing what we can. We are 5,000 miles away. We are the leading provider of foreign assistance
to Iraq, and we work very closely with the Iraqi Government. But as Adil Abdul-Mahdi has said, Iran is
our neighbor; the United States is our friend. I believe we are a force of good there, but
we are also 5,000 miles away. We are helping fight ISIS in Iraq, and we
are helping to build a capable security apparatus, and we are trying to hold accountable those
who are killing protesters, inciting violence, and undermining the basic rights of the Iraqi
people. At the same time, we are helping the Iraqi
people by doing things that the Iraqi people are demanding that their government has not
been successful with. We have, over the past four months, I believe,
rehabilitated some 500 schools, 100-plus hospitals, 50 water treatment facilities. That’s over – sorry, over the past four
years. So we are doing things that create a better
environment for the government to be able to handle difficult problems. MS ORTAGUS: Lara. QUESTION: Thanks. The sanctions against the three people who
are linked to Iranian-backed militias, I’m wondering if the State Department is also
considering sanctions or Treasury considering sanctions against the sovereign government
forces of Iraq that have cracked down on the Iraqi people. And secondly, I just want to clarify something. When you’re talking about the maximum pressure
campaign and how that has spawned more aggressive actions by Iran, would you include its crackdown
on its own people? Is the maximum pressure campaign a driver
for these protests in Iran? ASSISTANT SECRETARY SCHENKER: Well, I’ll
start with Iran. Listen, I think that the sanctions have put
additional pressure on the Iranian Government financially, forcing it to make more difficult
choices, and so maybe this has brought into clearer relief for the Iranian people just
how corrupt and I think callous their leadership is to the needs of the Iranian people, that
they would be prioritizing at a higher level, for example, sending missiles to the Houthis
or backing the Assad regime in Syria or funding Hizballah to several hundred – $700 million
a year perhaps rather than providing basic services to their own people. So I think this has exacerbated an already
frustrated situation for an already frustrated people. As for whether the United States Government
will sanction the institution of the security forces in Iraq, we don’t comment on things
like that. QUESTION: Or its leaders? ASSISTANT SECRETARY SCHENKER: Individuals
– like I said, if we can ascertain who they are, certainly they would be something that
would be well within the purview of our legal authorities. MS ORTAGUS: Okay, we’ll do one more. Go ahead. QUESTION: Thank you. Ahmed of Voice of America Persian Service. My question is about Iran, mentioned one too
many times here. ASSISTANT SECRETARY SCHENKER: Yeah. QUESTION: Do you have any – I mean, can
the State Department verify any number of death tolls in Iran? Is it around couple of hundreds, is it a thousand? And my second question is that — ASSISTANT SECRETARY SCHENKER: Did Brian Hook
say that yesterday? MS ORTAGUS: He talked about it yesterday,
yeah. ASSISTANT SECRETARY SCHENKER: I think it’s
hundreds. MS ORTAGUS: Do you have something that Brian
– a question about something Brian didn’t brief yesterday, something related to today? QUESTION: Yes. Yeah, more or less. So — QUESTION: I have something. MS ORTAGUS: No, you’re done for today. QUESTION: What? QUESTION: So this is – December is a month
that the U.S. would be the rotating head of the United Nations Security Council. ASSISTANT SECRETARY SCHENKER: Yes, yes. QUESTION: Would you take this opportunity
to exert any kind of pressure on the regime in Iran, especially the United Nations Security
Council Resolution 2231? On October next year it’s coming to an end,
and there are two issues there: Iran can buy arms, and also Qasem Soleimani will be released
of his restriction to travel. ASSISTANT SECRETARY SCHENKER: Yeah, listen,
the Soleimani UNSCR that banning – bans his travel is – obviously we consider this
to be a very important resolution. Likewise, the Secretary has spoken many times
publicly about Iran’s problematic behavior and how much worse it would be in some – I
don’t know, what is it, 12 months from now, when Iran can – according to the UN could
– when the ban or the limitation on their export – arms export stops. So yeah, it would be something that I’m
sure that USUN is looking at and would be a priority for us. MS ORTAGUS: I think Kelly Craft did a press
conference today, so you might want to check – I think it was today. QUESTION: Yes. MS ORTAGUS: Yeah. So you might want to check her. She might be talking about this, yeah. QUESTION: (Off-mike.) ASSISTANT SECRETARY SCHENKER: Yeah. Yeah, was there anything else I missed on
— QUESTION: You don’t have the – any figures
that – I’m sorry, the State Department can state and verify? ASSISTANT SECRETARY SCHENKER: Oh, the figures. Yeah, no, I – it was – I think it was
in the – I don’t know if we verified them. I think the figure that is generally being
bandied about is in the low hundreds. MS ORTAGUS: To a – yeah, we don’t — ASSISTANT SECRETARY SCHENKER: But we really
don’t know. QUESTION: Can – you probably won’t have
an answer to this, but the House – can you take this question if you don’t have an
answer? The House just passed a legislation opposing
settlements, Israeli settlements, and also — MS ORTAGUS: That’s a big surprise. No, we can’t take the question. QUESTION: Why not? And also saying that Israel should not be
allowed to annex the Jordan Valley. So since the Secretary just met with Prime
Minister Netanyahu and you were there, presumably, right? Both of you. ASSISTANT SECRETARY SCHENKER: Well, it was
actually – it was a four eyes meeting, but I did talk to the Secretary — MS ORTAGUS: Meaning it was the two of them. It was a one-on-one. ASSISTANT SECRETARY SCHENKER: Yeah, sorry. I can tell you that — MS ORTAGUS: Four eyes — QUESTION: Oh, oh, oh, oh. Sorry. I thought you were being — ASSISTANT SECRETARY SCHENKER: So I can tell
you that there’s — QUESTION: I thought we were going back to
the schoolyard insult. (Laughter.) ASSISTANT SECRETARY SCHENKER: Sorry. Yeah, no, no, no. So it was a one-on-one, but I can tell you
I spoke with the Secretary. I can tell you that there was no annexation
plan, full or partial, for any part of the West Bank was presented to – by Israel to
the United States during the meeting, and that has long been the U.S. Government position, that the ultimate disposition
of territory is to be determined between the parties. QUESTION: Okay. Well, could you find out, Morgan, or could
you from your bureau people whether there is any response to the bill that just passed
the House? MS ORTAGUS: To the House? QUESTION: Yeah. MS ORTAGUS: Probably not. QUESTION: The House of Representatives. MS ORTAGUS: Yeah. Yeah, thank you. I figured that. QUESTION: Well, thanks. MS ORTAGUS: Okay. Happy holidays, everybody.

Palestinians: Can a Zionist also support a Palestinian state?


Can someone be a Zionist
and still believe in a two state solution? Saib
Tul Karem About Jews, there is no
problem if he is Jewish but with Zionists Of course
In his mind there is a lot of problems in his mind he thinks he can do anything He thinks he can take
anything that is not his There are Zionists that want
to have Tel Aviv and Haifa but not Tul Karem They want you to have Tul Karem Maybe today But tomorrow, they are
thinking to take it Why? No, they think
this for a hundred years Of course Maybe not my son
by the son of my son he can’t live this life where they take his land so, it’s the same for me and for my son Ibrahim
Nablus No He can’t because we are against each other they occupied us We hate them and
they hate us Simple as that No, there are Zionists who say they want Palestine to be here in the West Bank and Gaza and Israel No… Two different countries That’s not how it should be Why? Because it’s our land they came here and occupied us They took Haifa Gaza all the good cities and give us Nablus and Bidya Abdullah
Jenin Someone who is a Zionist a Jewish Zionist but believes in a Palestinian state in the West Bank and Gaza and wants Palestinians to have
full equality and rights What do you think of that? I don’t know exactly but maybe anyone who
believes in humanity and believe in freedom believe that Palestinians
have rights in this country the West Bank, Gaza
and the refugees who want to return back Anyone who believes in humanity needs to believe in this equation Can you accept a Zionist who believes yes, I believe in that
it’s ok Yes, that’s fine Just to clarify When you say the refugees returning the refugees would return
to the West Bank not to Israel You need to ask the refugees on that one But I think all the refugees
need to return to their home their home, not the West Bank Homes meaning 1947 homes Why not? Ayoub
Bethlehem Can someone be a Zionist
and still believe in two states? Israeli and Palestinian? There is a portion of them (Zionists) meaning a side portion who would Meaning a small potion?
– Yes Is he okay with that idea? Can he agree with that idea? No, not completely because there are still
Zionists who are on our land They are still better than the other portion If there were no occupation
in the 1967 areas can he agree? Meaning there would be
a two state solution No, of course not No, only one country All Palestine? Yes, exactly Can the Jews stay? No Seja
Ramallah Yes of course There are so many people in Israel that believe in that and they are Zionists? Yes This comes from someone who
is an American Zionist Jewish Zionist who really does care a lot
about Palestinian human rights She wants Palestinians to be equal there to be two states
everyone to be equal and in good relations How do you feel about that? Equal for everyone? For Zionists and for us? To take our country? What does taking your country mean? To take our rights our place She means Palestine
in the West Bank and Gaza only Israel will exist
and West Bank and Gaza are Palestine I don’t understand No So you don’t accept that as a solution
– No, no I don’t
– Why? Because these are our rights The land is ours The land that they kicked us out of is ours
– Israel We have documents for these lands But as a solution, you can’t
accept that as a potention solution Not at all So then what happens to the Israelis? in your solution I don’t know Maybe they can go back to
the countries they came from like Germany But they were from here No They lived here but they are not from here Samer
Nablus Do you think its possible for someone
to be zionist and support the Palestinian cause? Zionists are against
the state of Palestine Zionists are all against
the state of Palestine? Sorry, the state of Israel there are against the state of Israel Zionists against the… Those are anti Zionists Can somebody be pro Zionist and I think he… There are Jews
He made a mistake The original Jews are different than the Zionists They are against the Israeli state No, but somebody who
is for the Israeli state and for a Palestinian
state, together It’s very difficult to find someone like that Jews the original citizens of the area in Yemen, Egypt even in Palestine, they existed Those Jews are against the state of Israel So the Jews today who
came from Yemen and Egypt they are against against Israel Yes, they are against the Israeli state the original inhabitants because they know who the state belongs to and they were Meaning the Palestinians?
– Yes and they were under the Palestinian authority But again, the question is can somebody be a Zionist and believe in a Palestinian state? It’s impossible Even if it’s a Palestinian
state in the West Bank Zionism is Israel and Palestine is the West Bank and Gaza Even if he supports that idea if he is a Zionist a real Zionist if he had a chance to get all the land he would take it all So that’s what a real Zionist is
– Yes Can someone be a Zionist
and believe in a two state solution? 20 something woman
Tul Karem Yes, yes How do you know that? To explain my point of view more Zionism is a project It is not a culture It does not have a root It does not exist in religion, Zionism So this system that the
governments are making creating and they planted in the
minds of the youth Some youth are convinced and they become Zionists and they become criminals Some of them aren’t convinced but they go into it just to
benefit from the Zionism Like housing nationality, country, anything It has many things to offer The Zionist who asked me this said “I believe in Palestinian rights
to have a state in the West Bank and Gaza” What do you think? Of course, they believe that Palestine
is from river to sea Who? the Zionists believe that Palestine is our land It belongs to the Zionists? (clarifying the answer) So the Zionists believe that Palestine is from the river to the sea for Palestinians but they are denying this so they can benefit from being here and to steal from the resources of the land Sami
Bethlehem What do you think of Zionists
who believe in two state solution? or Palestinian rights? (he thought a long time about the question) I don’t know I don’t know what to say Maybe ask this to them
This is how it should be asked This question should be asked to them Are they serious or not? The people who wrote me are serious Do you believe they exist? Do you believe they exist?
Zionists who want a two state solution There is a difference between
the Jewish people and the Zionists We don’t have any problem
with the Jewish people We have a problem with the people
who said they are they don’t believe in peace There are many Zionists who
say they believe in peace and they believe in a Palestinian state But what kind of Palestinian state? What kind? Two equal states The West Bank and Gaza is Palestine I don’t believe there are many people most of the people, they don’t really think that there can exist
two states here and I think also Most of which people? Palestinians? No, I am speaking about Zionist people Zionists don’t believe in two states I didn’t…
This is the word This piece of land isn’t capable doesn’t have enough space for two complete nations You say the Zionists believe that? Or you believe that? I believe that I think they don’t say it seriously They don’t believe it seriously Then why are they saying it? Because this is… We have seventy years of war here and we said that every government came here they said they want peace and none of them until they are from the right side or left side they didn’t believe they didn’t make it on the land they didn’t make it seriously I think also when the war ends when there is peace there are Israeli people they are scared they are scared for their existence

Kamala Harris Drops Out – Who should be next? | 2020 Election | QT Politics


As the crowded democratic primary race for
the 2020 election rages on, voters appear to be coalescing around a narrowing field
of realistic choices. The tier 1 choices at the moment appear to
be Joe Biden, Bernie Sanders, Elizabeth Warren and Pete Buttigieg. These four candidates are the top four in
the national polls, each with more than 10% support, according to the rcp averages, and
each has their own advantages. Joe Biden has probably the best name recognition
in the field, and is polling in first nation-wide. Bernie Sanders has raised the most money from
supporters, and has the greatest number of donors. Elizabeth Warren is the only candidate to
have, although briefly, surpassed Biden in the national polls, leads in her home state
of Massachusetts, and remains in second in Nevada, South Carolina, and California. Pete Buttigieg is currently surging nation-wide,
and leads in both Iowa and New Hampshire. It would difficult for any candidate not already
in the top four to break through at this stage of the game, but that doesn’t mean that everyone
else in the race should pack their bags. Andrew Yang, for instance, has shown remarkable
progress for a political outsider, and the longer he fights on, the more seriously mainstream
democrats are to take his central issues: data rights, automation, and universal basic
income. While there are good reasons to cast a cynical
eye on Bloomberg’s run, his financial power is formidable to say the least. Deval Patrick, too, just joined the race—and
while I doubt his experience at Mitt Romney’s vulture capitalist firm, Bain Capital, will
do much to earn him a place in the hearts of democratic voters—it may be a tad too
early to totally dismiss him out of hand. With a number of candidates recently dropping
out, Wayne Messam, Joe Sestak, Steve Bullock, and Kamala Harris, it seems reasonable to
ask… Who should be next? Tom Steyer has managed to make it onto the
debate stage twice, now, passing the polling and fundraising thresholds set by the DNC. For most, his appearances have been somewhat
overwhelming. But if he’s doing so bad in the debates, you
may ask, how has he managed to do well enough in the polls, and in fundraising, to make
it onto the debate stage at all? Well, unlike most of the candidates, Steyer’s
campaign is astoundingly self-funded. While most candidates release ads, in part,
to fill their campaign’s coffers, Steyer is losing astronomical amounts of money with
every ad buy. According to CNN, by October 10th, he had
spent over 30 million dollars on ads across televison and social media. As a result, he raised a paultry 2 million
dollars from less than 160,000 unique donors. Meaning, for every dollar he spends in ads,
he takes in less than 7 cents. Not exactly a promising return on investment. A businessman should know better. But, of course, Steyer’s goal is not to get
his message out there so that the people will help fund his campaign. His goal is to directly earn support from
uncommitted or uninformed voters through ads purchased from his own pocket book. His wager is, essentially, that he can buy
his way into the White House. This graph from 538 shows the ad spending
of different campaigns. Steyer’s ads are represented in green. As you can see, while Steyer remains a relatively
minor candidate in polling and fundraising, he is outspending his primary rivals many
times over. At the current count, Steyer has already spent
a whopping 46 million dollars. That’s a massive figure, but no suprise, given
Steyer is a billionaire, and in 2016 was the second-biggest Democratic donor in the presidential
race. Now, if we extend the graph just slightly,
to today, we see the big problem for Steyer. There’s another Billionaire in the race, one
with even more money than Steyer, who actually topped the charts as the number one biggest
Democratic donor in the 2016 race. Michael Bloomberg, in the last week of November,
and in December so far, is putting his resources at work, outspending even Steyer, many times
over. He’s already spent $31 million. If Steyer’s strategy is to just use his money
to outspend everyone else in the field, Bloomberg seems to be the only guy who can out do him. He’s quite simply got more money to burn. On top of that, Bloomberg’s spending is more
likely to drive his standings in the polls and with donors. He may be quite unpopular amongst Democrats,
but at least Bloomberg has experience beyond funding campaigns. He’s got actual executive experience, having
served as the Mayor of New York. Not exactly sufficient experience for most
Presidential hopefulls, but it is more than Steyer, and more than Pete Buttigieg, who
is currently showing strong promise in the National and Early State polls. Without original policy ideas, strong debate
chops, or experience in politics, he’s got virtually zero chance of catching fire as
a candidate organically. His only advantage has been his ability to
self-fund his campaign. Bloomberg’s entry in the race totally eliminates
that advantage. Not only should Steyer drop out, he should
do so ASAP, because unlike with most democratic candidates, it’s his own money he’s wasting. From the ultimate political insider, to the
ultimate outsider, Marianne Williamson should also drop out of the race. Williamson has said that she’s going to stay
in the race until the money dries up. Bless her heart. I love the orb mother, but it’s hard to imagine
that her campaign has any reason left to exist at this point. Early on, Williamson was able to get onto
the debate stage, and bring up her issues. At times, she even had reasonably good performances. She can even take partial credit for the fact
that one of her top issues, reparations, became a topic of conversation in the debates—enough
so that even Pete Buttigieg, who enjoys very little support from the Black community—would
attempt to win over black voters with his Douglass Plan. Despite having no experience in politics,
Williamson managed to make a bit of a mark. She should be proud of what she’s done, and
hang her hat on it. Now, there’s very little else she can do. Polling at .4 percent in the RCP averages,
she has no hope of returning to the debate stage, or gaining more attention in the mainstream
media, as the field narrows in on more serious prospects. Like Marianne Williamson, Michael Bennet is
no longer likely to gain any real attention in the mainstream media, or make it on stage
for future debates. Despite his past debate appearances, he’s
failed to make his mark, and is currently polling at .8% in the RCP averages. He was also one of the lowest-fundraising
candidates in the 3rd quarter, but for some reason he’s pledged to stay in the race, at
least until New Hampshire. There’s no reason for him to do that. As Colorado’s senior US Senator, he’s got
bigger fish to fry than a campaign going no where slowly. John Delaney’s reasons to drop out are so
numerous that a small wonder he even remembers what it was like to be on the campaign trail. Sure, unlike Bennet, he’s got little else
going on in his political career, having concluded his work in the House of Representatives in
January. But like Bennet and Williamson, his appearances
in the early Democratic debates gained him little traction. He is currently polling at just .6 percent
in the RCP averages: that’s 25% less than Bennett—although with numbers this small,
his total support is well within the margin of error for most polls. Delaney’s run is also comparable to Steyer,
as before Steyer came around, Delaney was the self-funded candidate. Delaney’s campaign is actually one of the
better funded ones—with over 27 million dollars. All but 3 million of that, however, came from
his own bank account. If Steyer should drop out, now that a bigger
self-funded campaign has entered the contest, it’s astounding that Delaney hasn’t caught
on that he’s wasting his money. Having launched his campaign all the way back
in July of 2017, Delaney has been in this race for literal years longer than the major
candidates. The only benefit to his enduring efforts would
be a Guinness World Record for longest-lived campaign failure. Although a far more plausible candidate than
anyone I have mentioned so far, Amy Klobuchar might seriously consider dropping out as well. When it comes to fundraising, she’s raised
about the same amount as Beto O’Rourke, who has already left the race. Polling-wise, she’s in 8th place, with 2.4%
in the RCP averages—not exactly remarkable for an experienced US Senator. And all of this is after two debates where
she clearly performed significantly better than she had previously done. If Klobuchar was going to surge into serious
contention, she would’ve done so already. The real trouble with Klobuchar is that she
offers very little not already offered by a higher-polling candidate. You want an experienced politician with moderate
ideology? You’ve got that with Joe Biden, the leader
in the national polls. Are you a moderate who thinks Biden’s better
days are behind him? Well, in fourth place, and surging in the
early states, you’ve got Pete Buttigieg—who clearly represents a new generation of moderate
dems, far more convincingly than Klobuchar. Do you not care about ideology, and are instead
focused on gender?, you want a woman president? Well, your best bet in that case would be
Elizabeth Warren. She’s in third place nationally, and in the
first two states. Booker, too, is showing weak numbers in the
polls, even after the 5th Democratic Debate, where he delivered what was probably his best
performance in the primary race so far. He’s polled at just 1 or 2 percent since then,
retaining an overall rcp average of just 1.8%. In terms of fundraising, he’s raised about
18 and a half million, and spend 14, meaning he’s not saving up much cash on hand for an
ad blitz in the offing. Booker has a ton of charisma, and solid experience,
but it appears that voters just aren’t buying what he’s selling. To paraphrase an expression Booker used in
a dazzling debate moment, he’s selling the Kool Aid but nobody wants the flavor. Julian Castro’s campaign has shown a number
of signs of impending doom. He’s begun to struggle to make the thresholds
required to make the debates, and as I’ve previously reported, he’s shutting down what
ought to be major campaign operations in New Hampshire and South Carolina. Sure, the official line is that this is to
focus on other critical states, like Iowa (where he his polling in 12th place), Nevada
(where he is polling in 10th place) and his native Texas (where he is polling in 7th place)… But with less than a million dollars cash
on hand, and declining presence in the press, it’s hard to see his prospects as anything
other than a wild long shot. The reality is that, despite being a recurrently
forceful presence on the debate stage, Castro was essentially put in a no-win situation
after his infamous clash with Joe Biden. After asking Biden “did you forget what
you said two minutes ago?”–and repeating that line of attack—the mainstream press
repeatedly reported the encounter as Castro making a distasteful swipe at Biden’s age. In my opinion, Castro was correct in calling
Biden out, and I broke that down in my analysis of the debate at the time. But I would go on to predict that Castro would
suffer in the polls, and that in the next debate, he’d be between a rock and a hard
place: he would have to chose to double down on his aggressive debate style—one of his
only advantages in the primary race—or bend to media pressure, and soften his approach. Castro seemed to do the latter. As a result, his last appearance on a debate
stage was unremarkable, and the low-polling candidate was lost in the shuffle. It may seem a little mean spirited to suggest
that many of the long shot campaigns should end soon, but as the primaries and caucuses
draw nearer, pruning the crowded field may be extremely useful for democratic voters. Crowded debates tend to translate into little
substance, as minor candidates attempt to make their mark with attacks on the major
players, who themselves benefit most by conveying as little meaning as possible—in order to
avoid rocking the boat. With numerous candidates, it also becomes
next to impossible for working Americans to sufficiently research each of their available
options. In this way, dropping out of the race is not
just the right thing to do in terms of time, and energy, and resources for a variety of
candidates—it is also the right thing to do, morally, for Democratic voters, and the
American people. For that reason, I will end this video honouring
the departed campaigns of the patriots who have respected the voters enough to remove
themselves from the race. But of the fifteen candidates still taking
up valuable air time, I ask, how many are wasting everybody’s time? How many are continuing on out of sheer vanity,
stubbornness, and fantasy?, and how many actually have a message worth listening to? And of those, how many really deserve serious
consideration? The Democratic Party has not always opted
for the best choice when it comes to presidential nominees. It may be time for the long shots to step
aside, so that the voters can inform themselves about the realistic options, and decide… Who should be next?

Can TRUMP CONQUER the LATINO VOTE? – VisualPolitik EN


In
recent decades, Donald Trump stands out as the president who’s been the most hostile
in his attitude towards Hispanics. Perhaps the most hostile in the entire history
of the United States. His comments against immigration, Mexicans,
Salvadorans… you don’t have to look very far to understand why a good part of the Hispanic
population can’t stand President Trump. But don’t get me wrong. Here on VisualPolitik, we’re all for people
changing their mind and their behaviour. Come on, I’m sure that ten years ago you
didn’t have the same views as you do today. That’s certainly true for me. After all, self-correction is a sign of wisdom… And you know what? It may come as a surprise but this is what
Trump is doing in his own weird way. You don’t believe me? Well… He really is! Check this out: What a change, don’t you think? So the question is… What on earth happened? Well… No, Trump didn’t undergo a deep spiritual
transformation, nor was he suddenly moved to empathize with the Hispanic community’s
situation. And no, it’s not even because he’s a fan
of Jennifer Lopez’s last hit. Do you want to know what really lies behind
this game change? Well… listen up. (INTRO) The Hispanic vote. Yeah, remember these three words because they
may be key in the 2020 US elections. To give you an idea, Hispanics already account
for 18% of the entire United States population and this percentage just keeps growing. (CHART) Hispanics are already the largest minority
group in the country. (CHART) According to every projection and demographic
model, by 2060 the percentage of Hispanics will exceed 26% of the population of the United
States. In other words, just over 1 in 4 Americans
will be Hispanic. Obviously, this will give them a gradually
increasing electoral influence. So making policies or giving speeches against
Hispanics doesn’t look like a great way to reap political success. Seems pretty obvious, doesn’t it? However, just a second, because nowadays the
electoral weight of the Hispanic community, is much, much weaker than it could be. Why? Because if there’s something that characterizes
the Hispanic vote in the United States, is that it’s very hard to mobilize. Hispanics are known for their low voter turnout
in United States elections – Bad, very, very bad. But… Why does this happen? What exactly is the Hispanic electorate? What concerns do they have? How is the Hispanic vote distributed throughout
the country? It sounds like a lot of questions, but I promise
you that we’ll answer each and every one of them. Do you want to get a cross section of the
Hispanic vote in the United States? Well… here we go… (HISPANICS, THE MAJOR MINORITY) If we take a look at the main ethnic groups
in the United States, we’ll notice that the Hispanic population has some peculiar
characteristics. And as we’ve said, we aren’t exactly talking
about a small community. Almost 60 million Hispanics lived in the US
by the end of 2018. This makes the United States the second largest
Hispanic country in terms of population. Although it seems hard to believe, the United
States has more Hispanic people than the entire populations of countries such as Colombia,
Argentina or Spain. The Hispanic community of the United States
grows, in demographic terms, at a rate of 2% per year. And in recent decades their standard of living
has also improved a lot. To give you an idea, the current rate of unemployment
for Hispanics is close to its historical low, below 5%; the dropout rate decreased from
29.4% in 1992 to 9.2% in 2015. And the rate of Hispanics enrolled in universities
rose from 25% to 47% in just 10 years, between 2005 and 2015. These are very, very good numbers… And these changes guarantee Hispanics a much
greater economic, political and social influence in the years to come. To illustrate this, just since 2000, Hispanics’
purchasing power in the US has increased by 181%, rising to $1.4 trillion. And… do you know what this means? That the United States is the largest Hispanic
economic power in the world. The Hispanic economy in the United States
is larger than the entire economy of Spain or Mexico. Hispanic power will only increase in the United
States. However, it’s not all good news. If we talk in terms of income and poverty,
the truth is that the Hispanic population is still far behind the white population and
other minority groups such as Asian-Americans. Despite their rise in upward mobility, more
than 19% of Hispanics, that’s roughly 1 in 5, are still below the poverty line according
to US standards and their average income per capita doesn’t surpass $19,000 per year,
which is half of what the average white person makes. But… let’s not get off track, let’s
RETURN to politics… which is what this video is truly about. The Hispanic population is very young. Their average age is 10 years lower than the
national average and 15 years lower than the average age of the white population in the
US. These demographics obviously influence the
community’s political preferences and their degree of participation. It may also explain why, while Hispanics already
account for 18% of the country’s population, in terms of potential voters they barely account
for 11%. And on top of that, they vote less frequently. That’s why their political influence is
still relatively small. But this is also changing. (THE DYSFUNCTION OF THE HISPANIC VOTE) Dear friends of Visual Politik, at first glance
of the map, the distribution of the Hispanic population could indicate that they are a
determining community when it comes to the elections. (MAP) Why? Because, as you all know, in the US elections,
the presidential candidate who obtains the majority in a state gets all of that state’s
delegates. That happens in virtually every case… It’s all or nothing. That’s why the presidential victory depends
on getting more delegates than the opponent, not more votes. And that makes the states with the most delegate
seats the prize that all presidential candidates desire. Well it turns out that Hispanics have a very
high presence in those prized states. The Hispanic population is mostly concentrated
in California, Texas, New York, Florida and Illinois. Five of the six states with the most delegates
distributed in the elections: 171 out of a total of 538. Do you see why at first glance they seem to
be so crucial in the elections? Well… The truth is that they are… and they aren’t. Let’s see, many analysts claim that the
Hispanic vote can decide presidents, but the truth is that it isn’t so clear today. At least not for the 2020 elections. The problem? We’ve already told you: Hispanics hardly
vote. Among all ethnic groups, Hispanics are the
least electorally mobilized. For example, in the last presidential elections,
in 2016, just over 57% of Hispanics with the right to vote registered to do so. That’s a low number, but what’s even worse
is that in the end only 47.6% actually voted. Almost 20 points less than the political participation
of non-Hispanic whites. (CHART) So why is it that Hispanics avoid elections
so much? Well… Well, there are many factors, but the most
important one is that it’s mostly a young population. And what can I say, outside the VisualPolitik
Community, it seems like many young people tend to skip politics. But that’s not the only reason. The lower average level of education and income
also feeds political apathy. But, at this point, many of you are probably
already thinking… Come on, this is normal, it happens in lots
of countries. Well yes… and no. We’re here to tell you: Little by little,
this divergence regarding the non-Hispanic white population is lowering. Hispanics are studying more, making more money
and voting more. For example, look at what happened in the
most recent elections, the midterm elections. (AUDIO: Latino turnout up 174% in 2018 midterms
elections, Democrats say. The Guardian) And, of course… you may be thinking… If the problem of mobilizing the Hispanic
community is being solved… Could they be decisive in 2020? Well… Let’s see. (COULD HISPANICS DECIDE THE 2020 ELECTION?) Do you have a good memory? Do you remember Trump’s words which we saw
at the beginning of this video? No, no, I’m not referring to the ones in
which he insults Hispanics, but the later quotes, in which he suddenly seems to love
them. Well, that change of opinion could have a
lot to do with what we’re going to see next. (AUDIO: Hispanics could make a difference
in 2020 (if they turn out to vote). – Univision) An important fact: the 2020 elections will
be the first elections in the history of the United States in which Hispanics will be the
minority with the most electoral power, surpassing the African-American population. Yes, With 32 million potential voters, by
2020 Hispanics will account for 13% of the electoral roll. There will be 2 million more of them than
African-American voters. And nowadays Hispanic dynamics are quite clear:
2 out of 3 usually vote for Democratic Party candidates. But the explanation for this isn’t that
they are Democrats or Republicans, it lies in the systematic commitment that the Republican
Party has had to oppose them in recent years. Yes, Despite what is commonly believed, the
Hispanic vote is extremely volatile, perhaps the most volatile. Most don’t identify themselves as dedicated
supporters of one particular party, but rather oscillate based on the candidates and the
political proposals they put on the table. And the Trump campaign is well aware of that. You see, all studies suggest that the economy,
along with the improvement of education and safety, are the three issues that Hispanic
voters care most about. And the truth is that the US economy has been
performing quite well in recent years. For example, the income of Hispanic households
is the fastest growing, and also remember that Hispanic unemployment is at a record
low. In fact, even though it’s still low, at
just 30%, Trump’s popularity among Hispanics has slightly rebounded. Therefore, although it may come as a surprise,
the Trump campaign hasn’t given up on the attempt to improve their support levels among
the Hispanic community. The “Vamos to Victory” campaign is a good
example of that. (AUDIO: More hispanics think that Trump’s
campaign have the community in mind, but those who say they will vote for him are a minority. – Univision) And the question is, could this be Trump’s
last card? A demobilized Hispanic vote would definitely
benefit him, but… What if they were to mobilize? Wouldn’t it be more sensible to reinforce
his position in that new voting ground? Or at the very least stop giving Hispanics
reasons to mobilize against him. The truth is that everything indicates that
in 2020, more Hispanics will vote. Their participation is set to break all records
for a presidential election, just as it did in the midterm elections. (AUDIO Hispanic voter turnout in 2018 increased
dramatically in six states, analysis finds. Hispanic voter turnout increased significantly
in the 2018 midterms as compared to the 2014 election, according to a Univision analysis
of turnout in California, Florida, Nevada, New Jersey, New York and Texas.” CBS News) Do some of these states sound familiar to
you? Exactly, you got it. Out of the five states where the Hispanic
vote increased the most, no less than four, California, Florida, New York and Texas, are
among the ones with the most delegates. In other words, they are the most important
regarding presidential elections. So, having seen this, will the Hispanic community
be the deciding factor this time? Will Trump manage to improve his popularity
among Hispanics? Because, in spite of everything, if the economy
continues to do well… it’s not entirely unlikely. However, the trade war with China is having
harsh consequences for the US and economic slowdown is a reality. If 2020 gets worse, it may even be Hispanics
who end up throwing Trump out of the White House. That would be ironic… Don’t you think? Anyway… now it’s your turn: Will Trump get re-elected by seducing the
Hispanic vote, or are we on the verge of an epic revenge? So I really hope you enjoyed this video, please
hit like if you did, and don’t forget to subscribe for brand new videos. Don’t forget to check out our friends at
the Reconsider Media Podcast – they provided the vocals in this episode that were not mine. Also, this channel is possible because of
Patreon, and our patrons on that platform. Please consider joining them and supporting
our mission of providing independent political coverage. And as always, I’ll see you in the next
video.