mike: we're going to take some questions later. we have some questions prepared for the senator. [inaudible] mike: we will have opportunity for questions from the audience a little later. don't support climate change -- mike: apologies. sen. flake: no worries. mike: may not be the first one. sen. flake: won't be the last today, i'm sure. that thedwater felt conservative movement and the republican party had been

compromised by the new deal. he felt there needed to be a manifesto or a blueprint for conservatives to follow. he wrote "the conscience of a conservative" at that time. this book that i wrote isthis bn homage to senator goldwater. [no audio] sen. flake: i'm very concerned with a couple of things. one, this -- and anti-free-trade. [no audio] concerned: and i'm where the party might go there. and also, a good half of the

book is on what the subtitle is, a rejection of destructive politics. i'm a conservative, but i'm just not in a bad mood about it. [laughter] sen. flake: i think that is something that is an affirmative, positive philosophy, not built on anger or hatred, and i'm concerned about where the party might be going there as well, if we follow the lead of some individuals who would give into that kind of destructive behavior. i address that in the book and talk about growing up. i was talking to mr. adams here. snowflake, of course, is the center of the universe. i'm sure the eclipse will be most prominent there. i grew up with a great example, my father, the mayor of snowflake, on the parks board, judicial advisory council, and uncles that were in politics,

jake flake from snowflake, my uncle, stan, speaker of the house and senate president, and they found a way to govern in arizona, and work across the aisle, and do so in a collegial manner, looking for compromise. i feel we are losing some of that in this sort of shirts versus skins, winner take all, winners and losers type of environment. i address that in the book. mike: you addressed in very well. there was a quote in "the atlantic and put a wild back that maybe you were too nice to be a senator. it shows that you can be nice and a conservative too. try not to get grumpy. we appreciate it. you mentioned free-trade. you've been a strong supporter of free trade, very important to

the state of arizona, to the southern part of the united states, and the whole country. can you share some thoughts and insights on what is happening? clearly some of your directions broke with the administration. sen. flake: overall, trade has been extremely important for the state of arizona. we are a border state. we take advantage of that. we have $19 billion in trade with mexico last year. that is something we should seek to expand. i've been very proud of the east valley chambers, the arizona chamber of commerce, all those folks who pushed this, and people in arizona understand better than some other states the value and importance of trade. in this country, we are just 5% of the worlds population, less than 5%. we are less than 20% of the world's economic output, and

shrinking. the developing world is growing faster. we cannot grow economically. we cannot have a better standard of living if we shun trade and build barriers to trade. i'm very concerned about where we are going. the rejection of the transpacific partnership was a big mistake which will haunt us for a long time. parties to the tpp are seeking to do deals amongst themselves. they will leave us behind. once these international supply chains are set, it is tough to break back in. i'm very concerned not just on the economic front, but on the geopolitical front as well. rejecting the tpp means, particularly those countries in southeast asia, we want them to

be in our trade orbit. we are giving them little choice now. those pacific rim countries, they are looking elsewhere for trade partnerships. we have to get away from the idea that we are the only game in town. we are not. we can harness free-trade and make it to our benefit, as it has been over the past several decades, but if we reject these trade agreements, the administration has said they want to go forward with bilateral trade agreements -- great, do them. bilateral trade agreements usually grow out to be multilateral trade agreements. i am concerned about that. with regard to nafta, prior to nafta, our total trade with mexico was between $50 billion and $60 billion a year. now it is over $500 billion a year. the administration seems to

ofate on this trade deficit $150 billion. we will take it, if you are trading near $600 billion. trade deficits, when they are having to do with the energy sector, aren't as detrimental as some people think them as. we have to move forward. i'm concerned that the early rhetoric of the campaign was to reject nafta. that has evolved to, let's renegotiate it. i hope that means, let's modernize it, and make it better and stronger. pointsent negotiation that they are moving forward look better. i'm encouraged, as are my colleagues. mike: you spoke about that very well in your book. if we create a vacuum, somebody will be waiting to fill it. sen. flake: just after the

election, i was in new mexico city. it was a plea print -- a preplanned trip. while i was down there, the mexican senate was working on the tpp that we had just rejected. their efforts were moved in that regard, but right around that same time, the chinese president and the russian president were both in south america, telling these countries that would have been part of the tpp, we are here. something about where we need to go, and that we are going to be left behind if we don't aggressively look for these trade arrangements. mike: thank you. let's talk about something closer to home. you are a fifth-generation arizonan, so you know very well that water is important in the life blood to arizona. we are fortunate that we have

you as subcommittee chair for water and power. we appreciate the support. if you could talk a little about your efforts to preserve water in arizona. sen. flake: thank you for all you do there. it has been wonderful to fly over northern arizona when i fly from back east, to see all the greenery. whenever i fly over northern arizona, i can pick out snowflake. i can see what was a tomato facility, and point over to my parents house. i always see myself on a horse, riding mile after mile, and i never remember it being this green. it is gorgeous. wet monsoonrom a period. having said that, and having a

wet winter last year in the sierra nevada's, and everybody thinks that probably solved the drought issue -- it really didn't, but we were given a little reprieve with regard to lake mead and the water level there. water is the lifeblood of arizona. well,a has planned very better than other western states, because of the foresight of those who came before us. worked with the project, republicans and democrats together in the 1980's, a 100 years supply of water, so we are in better shape here in arizona. the key is to make sure that kind of planning continues. it has been great to work with senator mccain and other members of the delegation, to sit down with the governor, and say, what are the priorities for arizona. we did this a couple years ago

to make sure our efforts were best spent on arizona's real priorities. we were told that one thing we needed to do was make sure that voluntary arrangements to leave water behind the dam at lake mead would be honored by the federal government, to make sure that water didn't disappear down some canal in california. they have a bigger delegation than we have. we got an agreement from the department of interior to make sure those water arrangements would be cast in stone, or honored, because that was done in an appropriation bill. we have to do the same thing this year. ,e've got to make sure that one, the colorado river, that we have the drought contingency plan, that that involves a lot of other water users obviously,

so these are important things. but just as important for arizona is to make sure that every drop of water that falls in arizona is captured, and that we make best use of it. until we better manage our northern forest, we're not going to get that. srp has done a lot of work on this subject. watershed we have a with, traditionally in the ponderosa pines forest, there were about 20 to 50 trees per acre -- now there are more than 200 on average. that is a lot of straws in the ground. it also is fuel for fires. just in the past 15 years, eckstein years, we've lost about 20% of our northern forest. that has terrible consequences in terms of this watershed that is so important to arizona.

srp obviously knows a lot about that. when you have floods after these fires, it washes sediment into the reservoirs. that has implications and costs to municipalities and others. mike: thank you. you really can't talk about water without talking about the watershed. from a perspective of water quality and life in the northern arizona, the mountains, appreciate all your efforts on that. you really can have -- you can't manage a successful watershed control without a forest industries process that is more developed than we have now. sen. flake: we have a lot of forest out there. we don't have enough money in the treasury to have the federal government properly manage the

forest like they need to. they need to partner with private industry. prior to the rodeo fire, that industry was gone. growing up in snowflake, we had southwest forest industries, the paper mill, a lot of activity in the forest, but that all went. the was partly the reason fires were so devastating. we knew that we needed to get private industry back into the forest. we started the stewardship contracts. that was one area where congress worked well with the administration, and we were able to bring back $135 million in private industry, biomass plants , and othert plants

uses for these forest products. the difficulty has been to get the federal bureaucracy to move quick enough to prep this acreage we have. the problem is just getting pratt dan ready for private industry to go back in. it has been an ongoing process, one that senator mccain and myself we work on a lot. we tend to work together on that to have better leverage. tidwell ofh chief the four service frequently in washington to make sure they are privatized -- prioritizing arizona. the four fry initiative. we've had some problems with the primary contractor but we are working through that. we will dothis year, as much as 50,000 rake -- 50,000 acres.

if we can continue at that pace, we will make some progress. >> we appreciate your support on that issue. let's talk about tax reform. it takes a lot of leadership and commitment to get a piece of legislation that make through in an environment like today. can you talk about your direction her? sen. flake: we have got to lower our rate if we want to be competitive globally. if we want to be competitive globally, we have got to have a lower tax rate. that is priority one. every proposal we have seen has lowered the corporate rate. i am pleased that the houses abandoning its efforts on the border adjustment tax.

i think anything that is maxing out a tariff is not good in this environment. we should not be putting up new barriers to trade. we are moving away from that. that is a good thing. i know secretary mnuchin has been calling senators. it looks as if the administration will be pushing for traditional lower-the-rate, broaden-the-base kind of reform. they lobby hard. it is not going to be easy by any stretch but i think when you compare to health care, it is different. health care is personal to individuals and families in a way that tax reform is not. tax reform, like i said, it will no doubt be tough but we are got to do it. we have congress need a victory here.

when you look at what it has done, the economy, hiring, the unemployment rate, i think it is baked in that we are going to do tax reform and if we do not come through, it is going to be a big blow to the economy. we are feeling the pressure on this. >> you mentioned health care. let's talk about that. clearly, there has been a lot of controversy over the strategy replacing affordable care. talk about your direction and path forward. sen. flake: this morning in arizona, about 200,000 families or individuals woke up without health insurance. they will have paid the fine to the federal government. more than 180 3000 people will have paid the fine but they cannot afford the insurance.

so they paid the fine and still do not have any entrance. you have an even greater number that has insurance on the exchange, the obamacare exchange, but nobody can afford to use it. when i go to the gym in the morning, like i did this morning, inevitably on the treadmill next to me somebody will come up in give me their obamacare horror story about how they had insurance and lost it. [chuckling] sen. flake: i have a friend who said he is paying $1500 in premiums every month. when you totaled the deductibles for his family, it goes to nearly -- and combined with a premium -- he pays more than $30,000 out-of-pocket before the first insurance dollar kicks in. that is just not a situation that can continue. looking out in his room, i'm sure many of you have similar issues.

small business and particular is hit hard. 70% of arizona's still covered by traditional employer insurance for small businesses and contractors are really hit hard. arizona has that issue. we are kind of ground zero for the failure of the exchange. 14 of 15 counties have one insurer. the average for a family of four is more costly than their mortgage. in a couple of counties, it is double the cost for their mortgage. that is not sustainable. it is really not. and arizona is obviously an expansion states of more than 28% of the population is covered by our version of medicaid. in some counties, it is up over 60%. so, that is important to her

zone as well. how we deal with that has got to be sustainable. my principal has always been let's not pull the rug out from under those people who have insurance now. that is what obamacare did in a big way. a lot of people lost their insurance when obamacare came along. we do not want to repeat that. those are picked up insurance on the exchange, you cannot pull the rug on the medicare expansion. you can't pull the rug out from them either. you have to make that system sustainable. don't take insurance away from people 11 now and make sure the system we have is sustainable. when you look at the medicaid expansion, some of it is medical inflation plus one or two, depending on the population. we have to find way to make that sustainable for the long-term. i would've hoped we could have

kept the reform effort alive. we were not able to. i hope we can. senator mccain has pushed for it over and over his entire career, get back to regular order. with his back in the health committee. have them work out a fix. that is where we are now. >> this does not seem to be an environment where compromise and regular order prevail very easily. how do we get there from here? flake: we don't have a choice. that is what i was talking about in the book. the biggest by far is our looming debt and deficit. we have a debt of 20 trillion dollars. we have a deficit that is about 600 billion dollars now.

over the next decade, we will get back over $1 trillion a year. that is not sustainable. at some point i fear the financial markets will wake up one morning and they will have already decided we're not just a good bet. when that happens, it takes decades, generations, to grow out of it. other countries -- japan, greece, others are finding that out. i do not want to be in that situation. i want to fix this kind of thing before we get there and you can only do that if you work across the aisle. it happened when republicans, democrats, sat down together and said -- let's share the political risk because one party, when that party controls both chambers in the white house whether it is republican as it is now or democrat, that party will never take the chance because midterm elections are

never more than two years away and the party will never do on its own and so i think with this betrayal we have in this inability to compromise, it is in my view, as a conservative, it is preventing us from achieving conservative ends and we have got to get away from this notion that it is a bad thing to sit down and work across the aisle and it is just -- it is disheartening to be in that situation where you are attacked if you realize that we need a bipartisan solution for something. >> it is far more the on a fiscal and economic issue, it is a world reputation and national security issue.

in your work on the foreign relations committee, you are seeing that now. sen. flake: you bet. with regard to the challenges we face and our standing in the world, north korea is the most urgent, obviously. that is a big problem. i think our allies need to know we are there. that we are steady. that we are forgettable. that is why in my view that is what a conservative is. if nothing else, a conservative maybe boring. that at least predictable and sober. his use of diplomacy and force, our allies need to do that. we need to recognize our adversaries as well for who they are and what they are looking to achieve. russia did try to intervene in our elections. whether they were successful or not we will leave to others, but they certainly tried and we ought to want to know what they

did. and, we want to try to make sure it does not happen again here or in other countries as well. but we have big challenges around the world on the security front, on the trade front. certainly with nuclear weapons and proliferation that we need to make sure that we lead as we have in the past. >> thank you. let's talk about infrastructure. a big priority for both parties this year. it is important to all of the chambers and all of the cities. there has been some discussion and ideas raised about repealing tax exempt status of municipal bonds. that is clearly important to municipalities hand impacts our citizens. can you talk to us about your view on infrastructure proposals? sen. flake: obviously, the country is in need of a big boost with infrastructure. there is a lot of discussion on how we fund that. that is a big question. i have long supported a tax

holiday when it comes to repatriated assets. ring them back at a lower rate and devote a portion of that to infrastructure. those discussions are continuing. others want to lay claim on that revenue to bring down the rate further. we need a boost and infrastructure. the question as far as a state like arizona, do we farewell with regard to guess tax and other moneys they go to the federal government and then come to arizona. one thing i've always try to do is make sure every dollar we sent from arizona, that we get it back in a way that we can fully utilize in and part of the problem is that when the federal money comes back to arizona, it is tied up with regard to federal mandates and regulations that decrease the value of that money when arizona goes to build up infrastructure. that is why i have supported

things like pla to make sure that like in the bush administration, labor agreements, that the government is neutral with regard to project labor agreements and davis make it requirements. we should get rid of it when it -- >> we are going to break away live,eff flake and go that's dr. ben carson. live coverage here on c-span. we expect president trump in about 20 minutes. >> thank you. thank you so much. you