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tv   Representative Peter Roskam Discusses Tax Policy  CSPAN  February 11, 2017 10:00am-10:42am EST

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national captioning institute, which is responsible for its caption content and accuracy. visit] anouncer: next, congressman his bill an outlining to change the tax code and the future of the u.s. postal and at 3:30 p.m., live coverage from the chair of the democratic national committee. congressman peter roskam talked about his proposal code.rhaul the u.s. tax he made the remarks monday during an event hosted by the heritage foundation. 40 minutes.
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mr. roskam: good afternoon. on behalf of our president, jim to the heritage foundation. it is my pleasure to introduce o you our guest today, congressman peter roskam. congressman roskam is serving in representing illinois's sixth congressional district. he is a graduate of the illinois and earned a law degree from the chicago kent college of law at illinois institute of technology. the congressman is a member of the house weighs and means serves as here he chairman of the panel subcommittee on tax policy. fortunate to have the congressman with us today, because in this role, he will no doubt be playing an important in the effort to develop, debate, and pass fundamental tax reforms. remarks today, congressman roskam will discuss three main goals that should work in the 115th congress.
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that is reform should field job creation and deliver opportunity americans. it should simplify the tax code in order to make it fair and finally, ensome, and reform should refocus the internal revenue service on its customers, the american people. my hope that members of the house and the senate will follow the lead of our guest and develop and to pass fundamental tax reform that is consistent with these goals. ladies and gentlemen, please me in welcoming our guest lectern, congressman peter roskam. [applause] mr. roskam: it's great to be today, and thank you very much for the honor of at the some time heritage foundation. 'm joined by my wife, elizabeth, and she was telling stories as we woke up -- as we -- that 30 years ago when she came, they were serving coors beer. butn't know if that changes it's not necessarily in the middle of the day, but we'll later.or that so in 2015, i went to china f
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you're an american policymaker china, you get a bunch of briefings before you go and people tell you how great tell you and they about the infrastructure. they tell you about state enterprises. they tell you all of these things, and so i went to china, and i came back and i conclusion.fferent the conclusion i came to was got challenges, and they've got troubles. china's troubles quickly? umber 1, they have a demographic problem. the one-child policy is out of sync. they have too many boys who have been raised by six parents, two grandparents, and those of you who are fathers of sons, you know that doesn't end particularly when you have a whole culture like that. they've got a corrupt military, we were told. takes $100,000 to get one star in the chinese military because these are largely enterprises. they have bitten off more than
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they can chew in the south china sea. control the north korean peninsula. the only thing worse than a from a chinesela point of view is the prospect of a nuclear peninsula with kim un being so aggressive. and -- they're out of sync with political rights and the took my literally breath away. i couldn't believe how incredible it was. so i flew back and landed in hicagoland, and i'm at o'hair i'm havingtarmac and a pope moments. this is great. i love this country. we have so much opportunity here, it's simply amazing. okay. what's the nature of what we have going on but what are the challenges we have? nature of the challenges of part what we have
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going on. we have an economic milieu that innovative and dynamic and restless and aggressive. we have an economic culture in his country that is completely unique. f somebody tries something and fails, we don't characterize them as losers. we say, oh, how charming. nice for you. you're in the fifth paragraph of fortune magazine feature story. idea that somebody goes out, tries something, fails, tries something, fails succeeds.tely all of these things eneur to our benefit. got a challenge. what are some of our challenges? we're here today to really talk them, and that's our tax code. working for is not us anymore. our tax code was created in know, and we've
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opportunity to reflect back on that. let me sort of do a freeze-frame discussion. election in novemb november -- nationally, the monday after the election in came out to the house of representatives, obviously, and i delegated with of colleagues. they were thunderstruck, thunderstruck. believe that they had lost the election to donald trump. they were thunderstruck, almost disorientation. now, when something jarring like that happens to you, what's the do? to reflect, contemplate and move forward. in my opinion, nationally, not they're reacting. they're sort of doubling down. that's their problem. problem right now, but it is a word to us. n other words, it's what to
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avoid. e need to reflect on the fact that our tax code is not working for us anymore. illinois is an example of avoidance behavior out of s completely control. so by avoiding one problem after another roblem after time, m, over a period of illinois has fallen into a period of crisis. let's not do that. recognize the nature of the debate right now. let's reflect on it and look at opportunity. going back to 1986, and to put context of how long ago 1986 was, the bears won ferris bueler was out. that was the happy things. year of the as the chernobyl incident, the challenger disaster. so think about that. t was an incredibly long time
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ago, yet that's the chernobyl duration of our current tax code. has happened in the last 30 years from an economic point of view? digital economy, none of which existed essentially back in 1986. what else? the global nature of the economy fundamentally shifted all the way around. there was obviously trade in a before but there has been a fundamental shift in erms of integration all across the spectrum. so now we've got to reflect back say this is our time. convinced bsolutely we are at a national inflection point as it relates to tax reform. at a national inflection point. what do you mean by that? i think there are three key driving this. first is, defendingbody that is quo.status nobody. there is no voice, no person, no
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entity out there today saying codenow, what the u.s. tax is great, just leave it alone. nobody. there's people, obviously, that ike some elements of the tax code, clearly, but nobody in its communicating that they like it the way it is. what are some of the things they don't like about it? they don't like the complexity. so think about this. an expectation and a esire for simplicity that rivals all of your desire for simplicity. you can act like you're above me. not.e we're all in this together. we want simple, quick, easy fast think about this: i have an expectation -- not a i have an execation that i can go on my iphone, i can lick on my airlines app using two thumbs, by the way, i can click on a flight, a seat, an e-ticket and get a boarding pass sent to me on this device within eye.winkling of an
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i expect that. level of hat simplicity. i don't want to be on the phone with a travel agent or on a 1-800 number. take my point, we have a real interest in simplicity. so the fact that nobody is defending the status quo as significant and simplicity is that.of the other thing, the second reason that i think we're at a point is theection fact that the shine is penny of the the internal revenue service. penny.tely off the not just single asset in particular. let me take you to a story about the last congress. it's poignant because it drives debate about the enforcement agency. named mr. anduple mrs. sowers, dairy farmers, and got into the farmers market business, which is a cash
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business. deposits of making cash, and they were told by their bank teller, hey, you when yous a big hassle come in here with cash, because when you do, we've got to make a to the federal government. would you mind just not coming up with $10,000 at a time, the threshold. would you mind coming in with less money. nicest mrs. sowers, couple ever, said sure. well, upon reflection, that was a ad idea because that's felony. that's called structuring. they were structuring their avoid a so as to reporting requirement. down in se this story the interest of time, the i.r.s. got wind of this and essentially went in and shut down mr. and mrs. sowers' operation. did a civil assets forfeiture, the likes of which midst of a n the casca novel. what ould not figure out was going on.
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they go to the bank, the bank anything, thet do deposits are being seized by the internal revenue service and you can imagine how this goes. oxed.ere really flum over a period of time, on a ipartisan basis, we were able to get the internal revenue service to issue a public birthingwhich was like a calf getting some of that done, and we've been able to change some of the statutes and and have been able to return some of this money to similarly situated people but my ou've got the enforcement agency of the tax code who 20 years ago, a quarter century of toughthe reputation but fair. pay your taxes, don't mess around with those guys and everything is okay. that reputation today and as a result, i think that's driving part of the taxonal inflection point on reform. and then the third reason i at a national inflection point, is that these
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inversions are going to continue to happen. the base erosion of the u.s. economy is really, really us to sit , and for back and basically wring our and get fretful and anxious about it and not come up ith an action plan is really foolish, in my view. and it's not as if there haven't been attempts on both sides of to get this done. the house republicans, we worked n the last congress coming up with base erosion rules, you're familiar with some of these, boxes, and earnings strippings, and this, that and the other thing, none of which the crank ally turn on to make them particularly satisfying. obama inistration, the administration, came up with their approach, which was really, really concerning, these 385 regulations recharacterizing 40 and equity, upsetting years of treasury doctrine, so making., and rule and that's not going to be
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particularly nimble. and i think the analogy that i with is it's pretty simple. it's like look, we are trying to basement and we're patching here and patching there and patching there, and you,ly, it just dawns upon we've got to fill the whole hing in, change the dynamic entirely. we've got to move away from this model entirely, and i think that's really where we are. some of these inversions, ohnson controls, leaving wisconsin going to ireland, arres international leaving u.k..ia going to the restaurant brands going from burger king going from florida canada. horizon pharma going to ireland leaving illinois. leaving illinois for the u.k.. interestingly, in many of these cases, these are companies that where? ng they're not necessarily going to a, quote, tax haven. hese are companies that are going to places, going to close in our nd close friends commercial architecture, so to
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speak. is say we've got to do how is it that we make this a attractive jurisdiction? i had the chance a couple of ago to meet naton sheranski. stick with me. it's like a seinfeld episode. it will come together. i met with him on a trip to jerusalem. of the jewish r refusniks. during the course of this breakfast, i wanted to ask him, is true.f this story here is what i heard. i heard that when he was a refusnik, he heard of ronald reagan's speech. gulag, and he heard ronald reagan's speech where he alls out the soviet union as the evil empire, and the story
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had a profound impact on him, and everything in the gulag, both prisoners and alike. why? because the notion that the was calling ident something what it was was basically for them a foreshadowing of the beginning end.he when there was clarity about what was being discussed, it had impact.nd he heard that story and goes, even ssman, the story is better than that. when i had a visit with president reagan in the oval and e, he described this told president reagan this, and at that point, reagan apparently called in his staff because he to hear this ff from sheranski, probably the staffers that told him, don't in the speech. it's too controversial. [laughter] rep. roskam: so where are we? his is the value of naming things. this is the value of reflecting, nd this is the value of
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recognizing where we are. we have a tax code that doesn't work. we have an inversion problem that is going to continue and it exacerbate itself, notwithstanding all these attempts to try and mitigate against it. and so now, here we come, and print, and i lue would argue that we have ssentially a collapsing window of opportunity right now to get his done, and you've got a speaker of the house in paul ryan who is going to create as as legislative space possible. you know, he would actually of the weighsrman and means committee. let's be honest. end, he's going to create as much space and as much entirely y as is possible. tax reform, however, is not for of so when i first got on the baker,ee, i called james
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i'm a james baker fan. reform lking about tax and i thought, i'm going to call the one person who was in the baker.of it all, james he gets on the phone with me, was very generous with his time, insightful and had anecdotes and stories and perspectives but at the end of said one call, he something they haven't forgotten. he said, peter, remember, this 1 ronald reagan's number domestic priority in his second term. he has as rything ronald reagan. he used every tool he had at the house. he used every tool at the treasury department. bicameral rtisan, powerful advocates and sponsors and it collapsed three times and almost didn't happen. woop, got to run, see you, click. so you know, when i say this is not for the faint of heart, this heart. for the faint of so the ebb and flow of this discussion is going to continue, and we'll hear stories about so so says this today. today. so says that
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but the name of the game in this up is to g recognize that the status quo is unsustainable. so you are familiar with the blueprint. familiar with this document, and it's a proposal, essentially an invitation all across the country for people to engage, that we f the things learned from the passage of the affordable care act is how not to do this. but people feel jammed, if they feel like nobody is listening, if they feel like they don't opportunity to get their word in or to express theselves, then the system, process will actually seize up and it will collapse in on itself. similarly, you can talk yourself to death. you can contemplate yourself to death, and you can also create an environment where decisions are not made. pleased at the
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pace with which chairman brady things. moving the blueprint was articulated in july. it gained a great deal of momentum beginning in november, andously, with the election then moving forward, it's been a focal point of conversation, not just at our retreat, but obviously with the trump and particularly with the public at large. i represent suburban chicago. chicago, there are any number of first, second, companies that are small subchapteresque and one of the things that i have heard time and time and them is the om difficulty that they have from point of view l and this is where the blueprint is trying to speak directly to that. we have all stipulated that we want to enhance a manufacturing base in this country. recognized that we need this to be revenue neutral.
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ver the course of the past six years with the budgets that the house has passed, we have publicly debated and litigated persuaded the country that $20 is a serious issue, and trillion of debt is a serious issue. we've tried to come at this in a by shedding ourselves from scoring that defies logic, but instead said let's look at a dynamic basis to be sure we get a real-world evaluation, and it's our burden that it is a real-world evaluation and it's not just pixy dust that's thrown out there. but the idea is to create a evenue-neutral, pro-growth simplified tax code, and my prediction is this: that the more people that electric at alternatives, the more they explore things, the more choices, on different i think they'll come down and ay the elements and the architecture and the structure
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of the blueprint is the best way go. o the back story, quickly, on border adjustability is something that we really need to in as we all know, largely, every in the world has adjusted their borders, and it came to my attention a couple of ago that when border adjustability was first allowed n the global trading scene as it relates to that, in it was fairly de minimus. what happened? time, like other tax, the grown.s the adjustment then has grown as well. so as we know, the united states only country of significance that has a double tax, essentially. hand, we tax the cost of a manufactured good in the cooked into , is the income tax, and then it's
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also taxed as it goes into a jurisdiction. contrast, the foreign jurisdiction, they have their tax removed, and it's not taxed when it comes in here. these things are all -- when strongest biggest, economy in the world, you can endure a lot of pain and missteps, and i think that we've been able to endure those things in the past and basically muscle them, but i'm telling and those days are gone, what we need to do is heed these signals. these companies that are not leaving 're based on a natural disaster. this is not as if there is a hurricane. as if it's a flood. t's not as if it's a catastrophe that can't be mitigated. these are all rules that have are created, and if they rules that have been created, they are rules that can be recreated. making e just close by one point, and that's this:
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and i s a disposition, think an attitude, that we need embody. and one of the saints -- one of of the fourthhers century, i think, was saint context of in the his faith, he has acontributed this theme. e says, we don't impose on the world. we propose a more excellent way. we don't impose. propose a more excellent way. so i think the blueprint is a proposal. the blue print is a concept that says, let's recognize that the status quo is not working for us. let's recognize that we need to move, we need to move quickly, we don't n't need -- want to trip all over ourselves, need the same token, we to make some decisions, so i'm very upbeat about this. real, that there is a real opportunity for us to move forward on this, and i think a now, we're going to be
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celebrating this tax reform act importantly, we're going to be celebrating the type of growth that americans are hungry so thank you very much, and i'd easy py to try and answer questions that make me look good. [laughter] rep. roskam: happy to try to respond to anything. much. you very [applause] questions? : yes, sir. question] rnible >> those two and three and four businesses in the district, also the debt tax, and jobs allocating capital, would that repeal? yes, sir.m: that is one of the hresholds -- one of the absolute foundations is the of the death yes, sir?
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>> the autry put americans for taxation. you mentioned in the beginning of your speech, you were talking about structuring. that's a crime. are you telling us that congress address thegoing to criminal code that governs how deposits ually make within an income tax bill? rep. roskam: no. > because that's two separate issues. rep. roskam: they are two separate issues. with you. there's a separate piece of legislation that we moved through the house, got close in senate, that would deal with the structuring issue as it internal revenue code that would not be part of tax reform. i'll be advocating for that and reintroducing it, but your point is, these are two separate things. i brought it to everyone's attention was that the nature of the application of statute was too aggressive. officials whens. we were having a hearing on
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this, and in subsequent private i versations, i told them, said you're like inspector evert in "les mis." you're the guy nobody likes. what are you doing? so we want to limit the john valjean.want you know what i'm saying? question? >> congressman, thanks for your talk. i'm wondering about how this factions, and nto working for a manufacturing company who is based in the united states, we look at this there's a great opportunity to finally see the best place to serve our customers. about the think other factions in the cities hat are looking at this and concerned about, well, we overly ely on imports or others, how is that going to be resolved? rep. roskam: i had a discussion with the ceo of one of the companies that's concerned about this, and he laid out a number concerns, and i said nobody wants those terrible
10:28 am so let's move forward on this basis. that the ll, we think currencies are going to adjust, and you're familiar with that. it's interesting some of the original opponents said currencies are never going to adjust. shifted some of those folks, and they say we're concerned about the timing of adjustments. okay. that's different. that's good. with you let us work on transition rules, but i kind discussion back on the executive and i said, how is tax code t we have a that puts you in a situation where so many of your suppliers overseas? let's fix that. so help us in terms of transition. in terms of understanding the nature of the contracts that you have and work with the committee to give us input so that we can get so that you have stronger, and dynamic supply
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lines. so i think that --i mean, he didn't walk away and say, oh, great, i'm all for you. but in terms of our disposition we want to be e, having significant input from particular, from those who are -- you know, others who have expressed of the , because i am view that the more open we are to try and mitigate their and them , understanding -- i understand hat a ceo needs to be thinking in terms of -- a public ceo needs to be thinking in terms of weeks.ters, or 13 so every 13 weeks, he's got to be answering to wall street. got to be answering to boards. he's got to be answering to outside groups and shareholder price. we think we can help with that. your hat said, you want policymakers to be thinking beyond 13 weeks. to want your policymakers recognize generational shifts and generational opportunities, and i think that's the we have.n that we think that we can mitigate.
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help, k that we can and -- but you actually want us to be thinking much further out a time. quarter at yes, sir? ofwhile we're on the subject thinking beyond 13 weeks. uncertaintyt of the and the nerves of wherever you fall on the issue comes from the uncertainty of the time frame. a year from now, we'll all be celebrating the great success of the tax reform and has said he wants to get this going by august. t this. of the timeframe. from now wed a year will be celebrating the great success with this tax reform and the speaker said he wants to get this going by august. when will ways and means the marking this up? not give youi will
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a straight answer on this. let me duck and weave. you get a blueprint published last summer. it has gotten a lot of attention, obviously, since the election. doing isrman brady is gathering members together to we need to be thinking -- in a number of these discussions, the fact that our members are informed and have opinions, they are willing to share these opinions. and then it is a matter of trying to window these things down. things --ow these winnow these things down.
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there is a give-and-take that is chairman brady is doing a great job trying to get everyone involved in this. yes, ma'am. >> thank you for taking my question. question. so, going to health care a little bit in terms of tax reform, big health care taxes looking -- being looked at, having the exclusion on employer-sponsored insurance. what is your overall plan or vision for fixing the leaky basement, if you will? rep. roskam: all of these things, they interact and are not mutually exclusive. if you go that route, you got a series of choices. if you don't go that route, then you begin to say, well, how is it that you have a restraining influence on the cost of health insurance in particular? so, the health insurance debate is happening at the same time,
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it is contemporaneous with the tax reform debate. they interact and they touch at some points and they separated others, but those are the types of things that you don't want to necessarily do in a vacuum, and you want to make sure you have a wayr understanding of the around, and particularly, what are the other cost pressures on employee or. yes, sir. >> going to try to keep this as short as possible, but one of the pillars of progrowth tax reform -- [indiscernible] so they can do their tax the same rate for simplicity in general? rep. roskam: here is what we propose. the nature of your question, you are sensitive to this. there has been a lot of discussion the past few years
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about, hey, do corporate tax or form and come back and deal with individuals and the pastor is later. that's completely unsatisfying for a lot of obvious reasons. we propose to say, look, -corp. rate the c down to train percent and at the same time, move the business rate of the pastor is down to 25%. you would move those down the same proportion, so it's not as if there is a disadvantage there. we have to think through, and this is the job of the committee, what is the safe harbor for the past through on what is and isn't income? as you can imagine, there will be a lot of pressure to move it over into the 25% rate as opposed to be 33% rate. we don't want to leave that decision in the hands of the irs criticized five
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minutes ago. at the same time, we need to clear a clear rule, definition, and so forth. and that's just good hard work of us trying to put that together and then with that proposal open that up for discussion. we are still very much in the mode of trying to come up with those definitions that we can propose and get feedback on. all right. ok, yes sir. >> [indiscernible] a way to drive revenue? i'm just wondering if that is part of your plan? [laughter] no, 0, 0am: possibility in my view. here's the interesting thing. dave camp did a good job of driving the discussion on tax reform, and we learned a lot of draft.from the camp it was a very arduous exercise,
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but there were two self-imposed campations that bound the draft discussion. revenue you know, neutrality based on a static basis. we did all of these things, all of these proposed changes and discussion points, and then there was the distributional neutrality and those two things, what you found that the -- found at the end, it created something, and people went, hmm, where's the oomph? where's the growth percent? you just couldn't get there. we built on that knowledge, which is why we made the decision to move toward dynamic scoring to say, ok, let's look at this in a real-life context. at let's make sure it makes sense. let's make sure it is robust.
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for the bank tax discussion was essentially driving this towards revenue. an there was not necessarily interesting going that route. yes. >> [indiscernible] tot you think wto will do adjust? rep. roskam: look, here is the way i think it gets framed up. -- there is aot three-part test. wto has a three-part test essentially. one is, is it a financial contribution to a business? no, it's not. second is is it a national preference question mark know it's not. third is, is it an export subsidy? well, if taking the vat office
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not in a four subsidy, how is taking my tax off in a four subsidy? i understand that these he for me to say at a podium and it's a difficult -- is a different thing to be discussed at the wto. but we are moving toward the consumption tax. we are mirroring essentially what the rest of the world is doing, and we are essentially saying we are asserting a right to be treated in the same fashion as the rest of the world is. and we think that we have that right and we think when it all comes down to it, we will be exonerated on that. so. listen, i want to thank the heritage foundation very much just for the opportunity to be here. i look forward to our paths crossing. let me tell you one other quick story in closing. i had an old sunday school went to lunch with. this was about 15 years ago. he was a really wealthy guy. very, very successful guy. during the course of the lunch, i asked him a question. to be, what's it like
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that rich question mark i said i'm willing to run. but what's it like to be that rich? don't you feel like everybody who is approaching you is hustling you and all the sort of thing? doesn't it just feel bad question mark and he said something to me that day that was formative for me. formative. it shaped me. and this is what he said. he said, peter, i choose not to be cynical. , guard your heart against cynicism. if they are manipulating me, that's their problem. that's not my problem. he said, nothing good comes from a cynical heart. i know i am in this zip code, which is the heart of cynicism. and yet, there is a bow and see uoyancy i think.
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i would encourage you to look at this inflection point and think about what the possibilities are and i think there's a real brightness. thank you to the heritage foundation for this fine forum this afternoon. thank you. [applause] [captions copyright national cable satellite corp. 2017] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit] >> you can watch live coverage of today's dnc chair candidates forum in atlanta today. you can also watch on or listen on the free c-span radio app. >> sunday night on "q&a" --
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>> in all these years, i have -- theeen a case where standing case -- journalists have accepted so uncritically information from a single source, edward snowden, who is in moscow under control of the government. >> "how america lost its secrets andward snowden, the man the theft." chest he did in enormous damage. did enormous damage. his supporters, i don't know if they think he did damage. they think he did good. he started a conversation. but where trump is certainly right is this man has not faced justice and he deserves to face justice, what ever


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