<html><body>The Future of Conservatism June 28, 2005 Unedited transcript prepared from a tape recording. <TABLE width="100%" border=0> <TBODY> <TR> <TD width="16%">8:15 a.m.</TD> <TD width="21%">Registration</TD> <TD width="63%"> </TD></TR> <TR> <TD width="16%"> </TD> <TD width="21%"> </TD> <TD width="63%"> </TD></TR> <TR> <TD width="16%">8:30</TD> <TD width="21%">Discussants:</TD> <TD width="63%">Newt Gingrich, AEI</TD></TR> <TR> <TD width="16%"> </TD> <TD width="21%"> </TD> <TD width="63%">Mike Pence, member, United States House of Representatives</TD></TR> <TR> <TD width="16%"> </TD> <TD width="21%">Moderator:</TD> <TD width="63%">David Frum, AEI</TD></TR> <TR> <TD width="16%"> </TD> <TD width="21%"> </TD> <TD width="63%"> </TD></TR> <TR> <TD width="16%">9:30</TD> <TD width="21%">Adjournment</TD></TR></TBODY></TABLE> Proceedings: MR. FRUM:  [In progress.]  A young firebrand Congressman from Georgia came through the precincts, wherever Republicans gathered, to bring this astounding message: Republicans can win Congress. And wiser heads, of course, dismissed him.  He was getting carried away.  He was overenthusiastic.  He was overexcited.  Certainly, Republicans could do better, but the idea that they could actually win this was just not something that wise heads took seriously. He was right then.  And now, he is here to say at this very high noon and apogee of Republican dominance that there may be trouble ahead. And he has come here today to talk about this message.  With him is one of the most interesting, most important members of the House of Representatives, the Congressman from--who represents the very center of American life, the famous Middletown, Muncie, Indiana, and who is going to tell us from the front lines--to talk a little bit about the challenges that this party faces at this high noon of prosperity. I am going to introduce each of them to you.  Congressman Mike Pence will speak first, then Speaker Gingrich; then we'll open the floor to question, and I may press them a little bit after they immediately speak to explain or elaborate on some of their thoughts. But let me begin with Congressman Mike Pence of Indiana, who is going to say a few words--talk for about 10, 12 minutes first, and then Speaker Gingrich. CONGRESSMAN PENCE:  Thank you, David, and I want to thank the American Enterprise Institute for letting me be seen publicly with Newt Gingrich. [Laughter.] CONGRESSMAN PENCE:  I want to disabuse you all of the rumor that I dye my hair to look like Newt Gingrich. [Laughter.] CONGRESSMAN PENCE:  Although I have said to Speaker Gingrich other than the voice of Ronald Reagan, when I entered politics in 1987 in the State of Indiana for what became the first of the three campaigns that took me to ride in Washington, D.C., other than the voice of Ronald Reagan, it was the clarion voice of the back bench bomb thrower who would become Whip, who would become Speaker that most influenced my early nascent thinking about the Republican Party, and I'm truly humbled to have the opportunity to speak about the future of our movement and the future of our party with Speaker Gingrich at my side. A few minutes, and then I'll yield to my betters. I believe the conservative movement is, as David suggested, the conservative movement is at a crossroads in America.  And I think as the Republican Party did 40 years ago, as then actor Ronald Reagan said 40 years ago, I think we've come to another time for choosing whether we're committed to the ideals of limited government, fiscal discipline, and traditional moral values, or whether we will continue to sacrifice those principles on the altar of preserving our governing majority. I offer that the 2004 campaign became a referendum on conservative principles. Most of us remember the rhetoric of that campaign.  The President was supposed to lose because he had been "taken captive by the Right in his party." And inasmuch as before the election, the media made it a referendum on conservative ideals, I believe the President's reelection was an endorsement of the conservative agenda on the national level. And today in Congress, I'm proud to report as Chairman of the House Conservative Caucus, known as the Republican Study Committee, that there is a new generation of men and women who aspire to do as those before us have done, and namely do the work that the American people elect conservatives to do, to lead this country on behalf of limited government and traditional moral values. But as I've said, on a number of occasions, since I had the privilege of keynoting at the Conservative Political Action Conference a few short years ago, there is work to be done. In light of two consecutive sessions of Congress that saw--one that saw a 52 percent increase in the federal Department of Education, the creation of national testing in Math and English, by Republican majorities and a Republican President, and the creation of the first new entitlement in 40 years, record increases in federal spending in every branch of government, I likened then the conservative movement to a tall ship plying the open seas of a simpler time; a proud captain, a strong and accomplished crew, but beneath the waves, imperceptibly, I argued that the rudder was veering off course into the dangerous and uncharted waters of big government Republicanism, for despite the enormous conservative achievements of the past four years, I see troubling signs that the ship of conservative governance is off course. And as we come off of this extraordinary reelection of this good President and the preservation of this majority, I think we've come, with 2008 seemingly closer every day, to another time for choosing. Ronald Reagan said famously, "government is not the solution to our problem.  Government is the problem." But many Republicans today see government increasingly as the solution to every social ill. Our party and its rising generation of new leaders I submit face an age-old choice: the choice between the belief in limited government and tradition and the siren song of the central planner who says big government is good government if it's our government. Let me say this point again because it's at the very essence of what I would observe about our movement today.  Our choice between the belief in limited government and tradition and the siren song of the central planner, who says big government is good government if it's our government. Ronald Reagan spoke of this choice in his famous speech in October 1964.  He said, you and I are told we must chose between left or right, but I suggest there's no such thing as left or right.  There's only up or down. Up demands age-old dream, the maximum of individual freedom consistent with order or down to the ant heap of totalitarianism.  The 40th President summed up his generation's choice--and I offer ours--as saying, "whether we believe in our capacity for self-government or whether we abandon the American Revolution and confess that a little intellectual elite in a far distant capital can plan our lives better for us than we can plan them for ourselves." So how do we find our way forward in this new governing majority?  How do we ensure that a second Bush term and a 109th Congress reflects our party's commitment to limited government and tradition? Well, I submit that, as I began with a maritime analogy, that we may find our answer in another maritime analogy.  Many of us have read of popular contemporary accounts of the circumstances that surrounded Sir Ernest Shackleton's ship, the Endurance; 19 January 1915, after five months at sea, the Endurance was beset by an early ice pack in the seas north of Antarctica, and, as many know, the crew survived on the ice until the ship was destroyed, made their way to the edge of ocean, and it was there that Captain Shackleton made a decision to take a single life boat in an attempt to cross 800 miles of inhospitable ocean to make for the South Georgia Island and help. He made it across that 800 miles, 16 tumultuous days, chipping at five and 10 inches of ice from that small craft, using an ancient form of navigation known as dead reckoning, for, you see, they could not find their way through the traditional means of navigation.  They lacked both the equipment and they lacked other than for a very short period of times any ability to navigate off of the stars or off of the sun, because of the nature of the weather.  But they used this ancient system of dead reckoning, where the navigator finds his course by measuring the course and distance he sailed from some fixed position.  If the navigator has a fixed starting point, tracking heading and speed, he can calculate the exact location of the ship at any time. Dead reckoning saved the Endurance.  And I would submit to you today that dead reckoning can also save the course of Republican governance in the 21st century, namely I believe that conservatives must dead reckon off the starting point of what we know to be true about government, about the nature of government, and then we won't lose our way. These are themes that Ronald Reagan and Barry Goldwater brought into the national debate; before him Russell Kirk and Friedrich Hayek, and I would say before them Edmund Burke, and the man who sits to my left only physically today brought them to the national stage as none other of his contemporaries. But here are the principles as I see them. Conservatives I submit know that government that governs least governs best.  Conservatives know as government expands, freedom contracts.  Conservatives know that government should never do for a person what they can and should do for themselves.  And conservatives know that societies are judged by how they deal with the most vulnerable--the unborn, the aged, the infirmed, and the disabled. I submit that as we navigate off these fixed truths, the way forward is clear.  We must as a movement rediscover the principles of limited government that brought our party to power in 1980 and in 1994, and put them into practice. But this requires that conservatives have an agenda built on the principles of limited government and tradition, an agenda that comprises what conservatives must do and also candidly what conservatives must undo. Let me touch on those briefly before I yield to the speaker for his remarks. First, in the category of what conservatives must undo, the negative, some hard truth: I submit first and foremost that conservatives must be a movement dedicated to the principles of freedom and liberty, and conservatives must dedicate themselves as we are purposing to do in the next month on Capital Hill, to bringing freedom back to our campaign finance reform laws. We must reassert the freedom of speech in American political life that was so damaged by the bipartisan Campaign Reform Act, and even more significantly by the affirmation of every element of that Act, with all of its speech restrictions in the decision by the Supreme Court in the McConnell case that I was privileged to be a plaintiff in.  We must undo that damage.  We must recognize as Congress tries to wrestle with the aftermath of what I call the summer of 5/27ths.  Congress must recognize as our legislation does that the only proper answer to inequities in the political economy of a free society is more freedom, not less freedom. And so we've drafted what's come to be known as the Pence-Wynn 5/27 Fairness Act that actually answers the inequities of our system with the antidote of freedom. Thomas Jefferson said and I paraphrase that I would rather be faced with the inconveniences that attend too much freedom than those that attend too little a degree of it.  And our party and our movement must once again be a movement dedicated to the principles of freedom. Secondly, we must again embrace the principles of limited government by undoing the entitlement aspects of the Medicare Prescription Drug bill.  I was one of 25 members of Congress that facilitated the longest vote in the history of the United States House of Representatives--nearly three hours in the wee hours of Congress just a year and a half ago. It was a difficult time for everyone involved in the debate,  but it was a matter of days following that vote that we learned that the Medicare entitlement estimates were literally hundreds of billions of dollars off, and the price tag continues to grow.  I submit to you that President Bush was right in the 2000 campaign when he articulated a vision of compassionate conservatism that said that we're a better country than that we would ever require any American to do without medicines that they need.  But let's not create a program, a one-size fits all program and that provides free prescription benefits for every senior regardless of their income.  We must undo the prescription drug entitlement. Lastly, I think conservatives must undo the fundamental expansion of the federal government's role in our local schools by reforming the No Child Left Behind Act, and embracing the principle that education is always should be a state and local function. I believe Congress should apply the successful lessons of welfare reform that Speaker Gingrich brought into the national debate to education spending.  We should think of Washington, D.C., as a place where we should produce resources, not red tape, recognizing the cure for whatever ails our local schools can be found in our local communities, with parents and teachers working  in partnership to achieve them. Well, these are three items that I believe conservatives must undo, but what conservatives must do is a bit more evident and more optimistic, and so I'll close on that point. First, conservatives must be prepared to rally support in Congress and throughout the country for the President's agenda, where it conforms with the ideals of limited government.  And the good news is that all the big three agenda items outlined by the President this year are worthy of vigorous conservative support.  Modernizing Social Security, overhauling the Internal Revenue Code, and reforming the legal system all reflect conservative commitment to limited government in principle. I'm particularly pleased to see the progress that colleagues  of mine, like Paul Ryan and Sam Johnson and Clay Shaw have made working with Senator Jim DeMint and John Sununu in developing a modest and positive first step for Social Security reform.  It would simply use the Social Security surplus that's being generated over the next 12 years, stop the raid on the fund, and use those resources to create modest personal savings accounts for every working American.  It's an important first step down the road for reform. It's an expression of the President's vision for an ownership society, and it's one that conservatives should embrace. Also, House conservatives should put on the green eye shades and put our fiscal house in order.  That means passing additional tax cuts to ensure continued economic growth; passing a balanced budget amendment to the Constitution, achieving fundamental budget process reform, which House conservatives were proud to accomplish earlier this year as the Wall Street Journal noted, where we achieved modest but meaningful reform, giving members of the Congress for the first time ever the ability on the floor to enforce the budget, the first time that was accomplished in the last 30 years with the point of order protection that House conservatives negotiated during the last budget debate. And we must be prepared to uphold a presidential veto on a spending bill that exceeds the budget. These are tough decisions.  And sometimes it's squares you off with Big Bird, Bert, and Ernie, but it's terrain that Speaker Gingrich was willing to traverse, and it's terrain that this Congress and this movement must be prepared to traverse again. Lastly, in the category of freedom, we must recognize the heart of the American people is--beats with a commitment to moral freedom; that conservatives know that freedom means more than just actuarial perfection.  It means gains in moral freedom. Congress must take action to free the American people from the cultural consequences of an activist federal court that would impose their view of morality, patriotism, and the recognition of our most cherished institutions and symbols on our communities and our families. The decision by the Supreme Court yesterday, the Solomonic decision, slicing in half how was as Americans might display what is, however inconvenient, the cornerstone of our system of law in Western civilization is an expression of that. We must lay the groundwork to defend a strict constructionist nominee to the Supreme Court.  We must pass the Federal Marriage Amendment by sufficient majorities to send it to the states, and we must pass additional legislative limitations on abortion and human cloning and destructive embryonic research. So these are some suggestions, and I simply believe that they represent the very core elements of how the conservative movement can find its way back to those energetic days of early 1995 or even 1988, when it was in its ascendancy. Let me close with a thought, though.  These are difficult days in which we live.  There are threats at home and abroad.  We'll hear the President speak passionately about them tonight.  There's expansion of government at home.  There seems to be an erosion of a recognition of values in our communities as well as the law. But I'm not discouraged because I believe that these are precisely the times, these crossroads, as David described them, are precisely the times when Americans are always at their best. I'll quote, as I sit next to one of my favorite historians, from a letter Abigail Adams wrote to John Quincy Adams, 19 January 1780, when I think about these times. She wrote to her son, who was anxious about another trip to France with his dad, "these are times in which a genius would wish to live.  It's not in the still calm of life or in the repose of a pacific station that great characters are formed.  The habits of a vigorous mind are formed in contending with difficulties.  Great necessities call out great virtues.  When a mind is raised and animated by scenes that engage the heart, those qualities which would otherwise lay dormant wake into life and form a character of the hero and the statesman." Let me say that we live in such times, and while this Middletown Congressman is hardly a genius on this panel, it is a time that has been invigorating to me and a great privilege to be able to serve in the 109th Congress.  Thank you. [Applause.] MR. FRUM:  Very good.  Thank you, Congressman. It is pretty remarkable I think to hear Congressmen who came to Washington the same year as President who has become a leader of the conservatives in the House of Representatives offer a plan, which at its core calls for redoing and undoing two of the three most signal accomplishments of the--or actions anyway of the President's first term--the prescription drug benefit and the No Child Left Behind.  And I think that this fact in itself may tell something of the mood of American conservatism at this crossroads moment, and if that's not enough fireworks for you, I present Speaker Newt Gingrich. MR. GINRICH:  I'm not sure how many fireworks I'm going to bring, David.  I don't want you to presume that's the standard. I will say first of all that I thought that Mike Pence gave a great example of how far the conservative movement has come and the leadership and the thinking and the ability.  I doubt very much if that speech could have been delivered 25 years ago.  I think it's a very solid step in the right direction, and gives you some sense of the kind of leadership that's emerging across the movement. I want to start out actually with a couple of very optimistic points. First of all, Mike quoted Reagan in Time for Choosing, October 1964.  I first ran for Congress in November in 1974.  We were wiped out of the 1964 presidential election after Reagan's great speech. I ran at a time when the Republican Party, through Watergate, was collapsing to a point where shortly after my first defeat, we were at 19 percent party identification and the country was 51 percent Democrat.  And there were literally articles about will the Republican Party survive or does it need to be a new party.  And so I start with the notion that the last generation has already seen a profound revolution, one which is I think undervalued and understated when people measure where we are today. We are for all practical purposes at parity I think among the approximately 7,600 state legislators.  We are ahead by two nationwide, and I think you or somebody said the other day that we today have the largest number of legislative bodies at the state level since 1912.  We have a majority of the governors, a  majority of the House, a majority of the Senate, and we have the presidency. Now, I just want to start with and it's important for conservatives to have a sense of where you're operating from because there's an underlying perennial sort of pessimism at the core of conservatism, some of which is valid; that is, evil is always apparently available.  People are always capable of being stupid.  You know, those who would like control over your life are always trying to get it.  I mean, it's not irrational to have some sense of concern. But what are recognized that the discussion that is now starting is a discussion from a base of enormous strength.  And I also think it's not a small thing to recognize that, you know, this president has some great strengths, and he has some ways he doesn't have great strengths to.  That was also true of Ronald Reagan. I remember one of the seminal moments of my life was about 1986 really at about where Mike's at now, about 10 of us went down to see Ronald Reagan.  We represented the Conservative Opportunity Society.  We were both his strongest supporters and his fiercest critics.  And we saw him for an hour, and we told him all the things he wasn't doing.  And on the way out, he put his hand on my shoulder.  Now, anybody who's ever been with a President will tell you, any President gets your attention when they put their hand on your shoulder.  Reagan was a historic figure and we already knew that, so he really had my attention. And just put his hand on my shoulder, and he stopped me for a second and he said, you know, it took us 50 years to get into this mess.  I'm just doing the first eight. You guys may have to do some heavy lifting on your own after I'm gone.  And, in a way, you could argue that was the beginning of the Contract with America. But I think we have the same thing here: some of the things President Bush has done are equal to anything Ronald Reagan did.  I mean, the moral strength he has had in saying terrorism is an act of war, not part of the criminal justice system and Carl Rove was essentially right in his quote the other day.  That's why liberals got so angry.  They spent a decade trying to deal with terrorism through the FBI, the courts, and really good psychologists. They wanted to understand our opponents.  Bush just wanted to defeat them.  I take the Bush view.  You know, that's an act of great moral strength.  The size of his tax cuts was an act of enormous leadership at a time when we really know the natural pattern of this city is spend it before the American people get it back. And if you think about how much spending we've had with the tax cuts, you can't imagine how much spending we'd have had without the Bush tax cuts. So just start with the notion there are an awful lot of good things in addition politically I think he has helped us by raising the concept of an ownership society as a replacement for the entitlement state, and he has reached out to Hispanic Americans, African Americans, and the young in a way which is historically unprecedented for a Republican, and which was one of the keys to why the 2004 campaign was different than democrats thought it would be.  And despite all the current doldrums over Social Security, the Democratic Party and liberalism in general are running an enormous risk of losing an entire generation if they continue to be stubbornly opposed to personal Social Security Savings Accounts. And if I could trade everybody under 40 for the Democrats blocking a bill for two or three years in the Senate so it's clearly obvious that you don't have your savings account because your Democratic Senator didn't want you to have it, I think the cost to them in 2008 will be incalculable, because they're becoming the anti-young party.  We're seeing the clearest emergence of reactionary liberalism that we have seen.  It's a theme I think Republicans ought to be taking in and conservatives ought to be taking that on the one hand, there is an effort to come to grips with the modern world.  That's called modern conservatism.  On the other hand, there is an effort to defend every entrenched interest group of the past.  That's called reactionary liberalism, and that's the heart of the modern Democratic Party. So in that context, I nonetheless think we have huge challenges.  And I think this is a really important moment of decision because inevitably in the second term of a president, there are tremendous cross pressures about where the party and the movement go.  It's absolutely inevitable. And I think that we're a peculiar period of this change, and I want to break it into three challenges: a challenge of performance; a challenge of production; and a challenge of style. And I want to assert in a minute that all this is within a framework that's very, very--where I'm very optimistic. Let me first explain the optimism and those of you who've read my book, Winning the Future, will understand the framework for much of this. Last July, July of 2004, and all this is in the handout you have, I wrote--we wrote a paper called "What is at Stake in 2004:  The Gap between the Kerry-Edward Ticket and the Values of the American People." Now, this paper lists 34 issues.  On 33 of the issues, Kerry's average position was 17 percent.  On an average issue for 33 out of 34 topics, he was behind by 77 to 17.  The only one that the Republicans don't dominate is in the environment, and that's because of cultural assumptions and stylistic problems. But the Republican Party--any morning we're prepared to create an effective high technology market oriented focus on how to get maximum biodiversity and how to have the healthiest possible environment, we will sweep the environmental movement. But up until now, we just refused to engage it, and so it's the only topic on which you couldn't say we have a decisive advantage. Now, this is not change, by the way.  Let me give a couple of numbers. On the question of whether or not the Pledge of Allegiance should be part of--should include the phrase "one nation under God," that's 91 percent support. Now, at 91 percent, even a tactically incompetent party of timid people unable to communicate, has a huge advantage.  It's just really hard for the secular and atheists swings of American culture to win.  On the 10 Commandments, where the Court yesterday or day before yesterday was hysterically schizophrenic and utterly indefensible, and where Justice Souter proved he really shouldn't be on the bench, 'cause he's never read the Constitution.  I mean he says, the Constitution protects no discrimination between religions and it protects no discrimination between religion and non-religion.  It's just not true. You can't find a single line in the Constitution on secularism.  There's no place in the Constitution that says you should not allow religion to make people feel uncomfortable.  And, in fact, every one of the Founding Fathers thought just the opposite, which is why if you go and I come at this--this is so central to our future that at the back of Winning the Future, I put a paper, which we also included so you can hand out to your friends, this can actually be downloaded for free at Newt.org.  It's called "A Creator in the Capitol: A Walking Tour of God and Washington."  And the reason I did this is the current legal structure of the United States is utterly incomprehensibly out of touch with America.  You cannot read the majority on the Indiana case--I' sorry--on the Kentucky case with anything except a belief that none of them ever read American history.  They read a lot about, you know, quoting from Zimbabwe, quoting from Jamaica, quoting from the European Union, and they clearly are quite comfortable with their many friends when they go vacation in Europe.  And they hand around in salons and have contempt for the American system, but clearly they don't have a clue about America. And I think this will be I believe by 2008 one of the three or four biggest questions in American politics, because I absolutely believe that the legislative and executive branch have an absolute obligation to protect the United States against judges who are trying to become--the judges today, and Scalia has said this in dissents, the judges today form a nine-person Constitutional Convention, in which any five judges, any five appointed lawyers can rewrite the American Constitution without going through the amending process and without calling a convention, which makes you wonder why did the Founding Fathers put in the amending process and why did they put in the provision you could call a convention, since clearly the judges can, in fact, by five to four, rewrite it anyway they want to and do routinely. Their most recent decision on the death penalty for people under 18 was a direct reversal of their last decision by the same people.  And apparently, several of them got up one morning, having had too many Twinkies or something and decided, you know, I just no longer feel that's right because in Europe, they don't do this.  That's literally was their argument. And so these are issues, by the way, where yesterday's decisions, 76 percent of the country disapproves of it.  Seventy-six percent of the country supports the right to have the Ten Commandments displayed, not quite as big as the 91 percent who support one nation under God.  But on the other hand, you also haven't had a long debate yet, because my guess is the number will grow. A couple other examples.  Ask the question are you proud to be American?  This is, by the way, why Durbin got in such desperate trouble.  Ask the simple question are you proud to be an American.  And give people five choices.  Extraordinarily proud, very proud, proud, a little proud, not at all.  The Michael Moore wing of America--not at al--is one percent.  A little proud, which I'm guessing is where Durbin may fit, three percent.  The proud is 12 percent.  Now, my guess is that 16 percent block was probably 95 to 5 for Kerry.  Sixty-one percent of the country is extraordinarily proud to be an American.  Twenty-two percent is very proud to be an American. Now, that's the 83 percent base for a national security majority.  And you'll notice, by the way, in today's Washington Post, when asked the question how many think the U.S. should leave Iraq without having won, only one out of eight Americans said yes, about 12 percent of the country.  If you ask people do you think things are going well, the answer is no, and I'm with them.  I mean do I think it's good when we have Americans killed by a roadside bomb?  No.  Do I think we should have figured out how to solve this before now?  Yes.  Do I think we mismanaged it for a year by having an American Administrator?  Absolutely.  I said that publicly during the period of the Administrator. On the other hand, do I think that the Teddy Kennedy, Dick Durbin, let's compare ourselves to really bad regimes and cut and run Tuesday evening is either right or if we had the nerve to take them on defensible?  No.  I think they would collapse of their own weight, because they would fit into the 16 percent minority, not the 83 percent majority. Eighty-three percent is a big majority.  So part of the thing you got to focus on is that we underperform.  We underperform politically; that is, there's a huge gap between our natural ideological majority and our partisan majority, and we underperform in terms of change, and this is--let me go back to the three things we have to work on--performance, production, and style. And I literally wrote Winning the Future to try to lay this out.  Performance.  A very simple test for Republicans:  never get away from this.  People have only one question for a governing majority:  Are you delivering? They don't want to hear about ideology.  They don't want to hear about Senate rules.  They don't want to hear about, you know--fighting is terrific if you're in the minority, and it's sort of funny, almost ironic, that I'm the person now teaching this, because I spent almost a generation teaching my party how to fight, because if you're in the minority, you should fight.  If you're in the majority, you should deliver.  And that's all people care.  Did you--you're in charge.  Did you deliver? It doesn't do you any good to go back home and say I know we had the President, and the Speaker, and the Majority Leader, but, after all, the Senate is really hard.  Or we had the President, the Speaker, and the Majority Leader, but, you know, the Transportation Committee really wanted the money.  Well, people want to know and when they said performance, they mean in a most practical way.  Can I drive to the soccer field for my child?  Are they physically safe?  Do I have a job?  If I save for a pension, will the money be there? And so the first job for us to recognize is we have to continually meet a performance test.  Now, it doesn't have to be 100 percent.  But people have to have a general notion that things are better off because of our performance than they would be from somebody else's performance or they will fire us, and they will fire us in September and October, and all of our consultants will be happy in July and August, and I lived through that.  That was the '94 election, and it was the 1980 election. So it's very important to get up every morning as a majority and say, okay, how are we performing and when we're doing something that isn't working, change. Second, production.  I'll give you an example of the conversation that we just had this weekend that, for me, was very liberating.  The left has had a very long tradition going back to the late 19th century of offering a free lunch.  Somebody somewhere is rich.  You should have their money. Okay.  So I get up on the morning, and I think to myself, I wouldn't mind that.  I'll give you the left's answer on Social Security:  pay for it by having Bill Gates pay for it.  It's not hard.  If you want to get into a fiscal fight over Social Security, everybody on the left has an answer:  uncap the FICA tax.  Absolutely statistically works.  CBO had scored it as a big winner, and why shouldn't Bill Gates pay for all of it?  Did America not make him rich?  Doesn't he have an obligation to share with the rest of us?  And if he shared with the rest of us, I wouldn't have to worry. But that's been the left's answer. The right, particularly starting under Franklin Delano Roosevelt, became the anti-left.  It ceased to be the right, and became the anti-left.  And if you doubt this, go back and read, for example, Theodore Roosevelt, or read Henry Cabot Lodge's introduction to the Collective Papers of Alexander Hamilton in 1881.  Because the new anti-left Right said, we should have no lunch.  I mean the only time I flinched was when Mike talked about green eye shades for this reason.  Green eye shades among too many Republicans is the excuse for pain.  They'll probably defeat us so we better get that pain in this year because we might not keep the majority. My view is totally different.  Governing majorities create lunches that are worth working for.  Notice our position on a personal Social Security Savings Account isn't Bill Gates ought to put the money in your account.  It's you ought to have the right to put the money in your own account.  Totally different model. So I think we ought--we have to go back to being what we were as a governing majority between 1860 and 1929, and that is a majority that said our job is to craft public policy, and this is pure Hamiltonian, to craft public policy in such a way that you will end up thinking this is a contract worth enforcing because you are better off with that contract, so you get the right to buy a house.  You get the right to have your own pension.  You have the right to control your own health care.  You get to make choices about your life.  You know that if you're dissatisfied with your child's education, you can actually change it as opposed to being told by the school board why they're helpless and the state legislature why they're helpless, and the state superintendent why they're helpless, and the Secretary of Education in Washington that doesn't even know where your town is, but they issued the regulations that totally control your school board.  I mean see you really want to get back to a system where you're in control of your life to a remarkable degree within a framework which protects you. So and by that, I mean I'm for a Theodore Roosevelt model of regulations but not bureaucracy.  So I like knowing if I go into McDonald's the water is drinkable.  And I'm prepared to defend the idea of the government has certain standards that we ought to meet, and it's okay to set those standards.  But the Hamiltonian model was to create frameworks within which people were productive, not to create bureaucracies that did the work for you.  A very different distinction. Now, in that framework I think that we have a core challenge about production, and I'll come back to in a second. The last is style.  And this is something I think that we don't appreciate yet that I just say because I've been out across the country and making speeches in so many different places and listening to people and listening to the tone of their questions. When I tell people I would like us to abolish presidential debates in 2008, because it is a Mickey Mouse system of two people surrounded by 40 pages of rules carefully studying what their consultant believes can be memorized to maximize the focus group, matched up against a moderator who asks whatever questions they egocentrically believe will make them become the moderator of memory.  And you go back and look at those debates, they were embarrassing.  They were painful. And I said, what I would like to see us do is have a national dialogue:  two adults, no moderator, 90 minutes.  Tell us about America.  Tell us what you're going to do. And I've gotten tremendous response from this perspective.  People are sick of a style in which both parties behave like they're in the minority.  The Democrats are fighting as they should.  They're the minority.  We're fighting as though we're still in the minority.  And so you're stylistically out of sync with the country right now, because stylistically what the country wants is a governing majority that is comfortable, relaxed, and says, oh, we're doing the right thing for these four reasons.  Let's have a discussion because that--and people don't understand--I was quoted in the Post yesterday.  I want to repeat it:  Governing is two orders of magnitude more complex than campaigning.  It is--that's a hundred times.  You study campaigning and then you study governing.  Campaigning is simple, and I've done a lot of it in my career.  Governing is really hard.  I've done a fair amount of that in my career.  And people want people who govern to feel different, because they should govern the whole country, because they are leading the entire system.  It's a different style. So let's just assume for a minute, we could solve the performance, production, and style question.  My argument is that most of this is engineering.  And let me be very clear by what I mean by that.  This comes in part from Drucker's brilliant work, Defective Executive, which is the best single book ever written on being effective. And Drucker says in that book, the key to being effective is that it's all habits.  He said anybody can be effective.  It's not about looks.  It's not about IQ.  It's about habits. Well, the key to governing is about habits.  And here's my simple model:  You can design a bridge or you can design an airplane.  Don't confuse the two.  Okay. Bridges almost never fly.  Airplanes cannot carry heavy vehicles across a river for very long.  They break. Two examples of confusion on the right:  Having an American Administration in Baghdad.  It was an airplane that was--it was a bridge that was never going to fly.  And just think about it in your own life.  I mean the minute you wake up and hear somebody in a foreign language speaking to you on television, you go, oh, thank God, I'm liberated?  Or do you go that must be the occupation?  I mean it was a profound strategic mistake, and we have to be honest about it.  And now, we're recovering from it. And we have, by the way, the Ambassador there today who pulled off in Afghanistan, Mizal Khalil Haddad [ph.], in three weeks organized a meeting in Bonn, Germany, which picked the President of Afghanistan so that the Afghans have never once had a speech from an American.  And the result is not that Afghanistan is perfect, but it's Afghans arguing with Afghans.  Mizal Khalil Haddad had done the same thing for Iraq, and was prepared in the middle of the summer of 2003 to have an Iraqi in charge and was overruled.  It was an enormous strategic mistake. And you have to be honest about this.  How can you govern for a generation if you have to walk around and pretend everything is perfect when people go, well, that's not perfect.  You can't learn if you can't tell the truth. Second, the current Social Security effort is a bridge.  The President is perfectly correct morally.  I am totally committed to what he's done.  It's an act of great courage, but you can't simultaneously have a debate about benefit cuts, argue about solvency in 30 years, and get personal Social Security accounts.  It is more than the system can bear. You can get personal Social Security accounts, and you can create a huge sense of urgency.  Every young person in this room is cheated today of a lifetime of interest on the money they would have saved today if they had been allowed to do so. So every one of you has been cheating today.  And tomorrow if the Congress doesn't act, you'll be cheated tomorrow.  So you just have to decide how many days you're willing to be cheated before you defeat people, 'cause it's your money.  You're going to pay the taxes.  I think you ought to be able to put six percent of your income straight into a personal account.  It turns out over two generations it basically solves the fiscal problem.  But it doesn't solve them in three years.  It doesn't meet the CBO model. And by the way, if you use the Congressional Budget Office model, none of you could buy a house.  We would have no 30-year mortgages, because it wouldn't score. I mean we just have to be--and we need this debate at this level.  And with all the respect I have for the President, for Carl Rove, what they've got to do is simple:  back off of every debate except person accounts.  Go straight for personal accounts, and they can win a very substantial victory. But I'll give you one practical reason why you can't fly the current bridge.  I say to every audience, if you got a telemarketing call that said in 11 years your roof will leak, how many of you would sign the contract?  The answer is none. You'd say call me back in 10 and a half years.  And to try to artificially create a debate about a potential problem that might or might not occur, depending on the scale of economic growth and other activities 20 years from now, is simply beyond the capacity of the system.  Regan couldn't have done it.  FDR couldn't have done it.  And they were the two greatest politicians of the 20th century. One or two last quick things.  You have a set of handouts.  This particular handout is designed to say something very profound about the nature of what we're currently doing, and it's a real challenge.  I happened to use national security, but it's equally true in health care, education, to go back to David Frum's point.  And that is this:  We have inherited from the left a bureaucracy, regulations, culture, personnel that are antithetical to where we want to go.  But we now run them, or more accurately we preside over them.  We don't run them.  Where you want to go is a circle of them--I'm just using this to make a general symbolic point. Where you want to go is a very different world.  So we want a world, as Mike said, where local parents engage with the local system, make real decisions about education with real authority.  What happens?  Parents turn up again.  They really do care about their kids, because they have real impact.  They take real responsibility.  It's a system that still works in most of New Hampshire and doesn't work almost anywhere where you've got huge complex bureaucracies because people get the game pretty soon.  That's all a joke.  I have no impact.  You're just pandering to me.  I'm leaving; similarly, in national security in the State Department.  These are--we need real changes in the intelligence system. What happens to us, what has happened to us in many ways since Reagan took over in '80 is while we have had selected zones where we have forced the system to go the circle, for example, welfare reform was real.  Sixty percent of the people on welfare left after welfare reform passed, and they either got a job or they went to school.  That was real. Departments that had worked on dependency found themselves working on looking for work.  That was real.  Most of the system we've inherited is still a mess.  And so we've got to learn how to avoid that. A couple other things.  The entitlement challenge is very large.  The longer it takes us to start figuring out how to create the earned lunch, the more likely we are to raise taxes and cut benefits and end up in European style mess. So I wouldn't understate that.  The last thing I just want to reference is there's a paper in here on moving from bureaucratic public administration to entrepreneurial public management--just started.  This is draft form.  We'd love to have your reaction to it.  This started from two simple facts.  One in a year of trying we could not build a single mile of road in Afghanistan, because the paperwork wouldn't permit it.  And two, one of the first recommendations of the Inspector General in Iraq was that Bremmer should have taken 300 auditors with him in the first wave. Now, if you've said in World War II, when we get done with this Normandy planning thing, how many auditors are going to be out there in those boats in wave one, people would have known you were insane.  You're just out of touch with reality.  They would have sent you home.  But we have drifted into a world where bureaucratic public administration, which is essentially an 1880 mail clerk with a quill pen, codified by the Civil Service Acts of the 1880s and mutated by 125 years of activity.  That system is dead.  It's gone.  It's hopeless.  It will not work.  You need to start with UPS and FEDEX.  Look at the speed, accuracy, flexibility and efficiency of those systems and say okay, what would it take to create an entrepreneurial public management capable of doing that, and my closing example, a very simple one:  the National Zoo should be contracted out to the Friends of the Zoo, and they should run both the park here and they should run the wild animal park out by Front Royal, which would be the perfect analog to San Diego.  Every place in the country where cities who cannot run zoos have turned to private sector organizations, the zoos have gotten dramatically better, with dramatically better results, with dramatically better exhibits, with dramatically more money spent on scientific research, because you suddenly had an entrepreneurial, not a bureaucratic, spirit.  And I suggest that you go to any major zoos in the country that have gone through that experience, and then go up here on Connecticut and look at how pathetic the National Zoo is right now. The Smithsonian Board will never get it done.  And that would be just a small example of moving towards entrepreneurial public management. MR. FRUM:  Thank you. [Applause.] MR. FRUM:  I'm going to seize the Chairman's prerogative of putting one question to each of our speakers and then-- [End of Tape 1, Side A; flip to Side B] MR. FRUM:  [In progress] --Congressman, any constituency in your body of Congress for the kind of spending restraint that you outlined.  I mean there is a Republican majority after all, so it's sort of embarrassing that this has been the freest spending past five years since I think the Nixon or maybe even the Johnson Administration.  And to the Speaker, I know you're interested in military history, and you'll recall that back during the Cold War days, there was a team of Americans in Arizona who were outfitted with Soviet tanks captured by the Israelis, and they would invite American tank teams to come down and war game against them, and these Americans with Soviet tanks would always win. So in that spirit, I would like to invite you to say if you were to play the red team against the Republican Party, if you were to run--offer us an example of how Democrats could be Republicans in 2008, we'll promise to keep it in the room-- CONGRESSMAN PENCE:  Don't answer that.  Don't answer that. MR. FRUM:  What would you do?  Congressman first then the Speaker. CONGRESSMAN PENCE:  Is there a constituency for fiscal discipline on Capitol Hill?  Yes, there is. We--the House Republican Study Committee now has 105 dues-paying members.  And I believe that the successful negotiation in the budget of number one the tightest federal budget since the years of the Reagan Administration and number two the ability of members of Congress to exercise point of order protection to enforce the budget on the floor during the appropriations process.  And passing that by a narrow majority suggests that there is a will in the Congress for fiscal discipline and also I would say, David, that there is a great deal of interest and progress being made. I'm part of a working group that the majority leader who's organized that includes the Chairman of the Rules Committee, the Chairman of the Appropriations Committee to work on budget process reform.  I've been one of those people.  It is during the long summer season.  It's a great temptation for conservatives to go to the floor and shake our fists at appropriators.  But I have attempted in my short tenure in Congress to resist that temptation, believing that it is not bad people that results in reckless government spending.  It is bad process. The truth is that the budget process rules that we operate under today on Capitol Hill were passed into Congress by a newly minted larger Democratic majority in the early 1970s.  They were designed to make it harder to cut taxes and easier to raise spending.  And they have worked, and in my judgment, when you see the precipitous growth in discretionary spending, even under a Reagan--under a Republican presidency and Republican majorities in the House and Senate, that argues for--that it is bad process, not bad people.  And so we've got a budget process working group.  We expect the first major budget process legislation to be brought before Congress in 30 years to occur during the 109th Congress. Big Bird's victory last week, notwithstanding, where 78 Republicans voted against asking the Corporation for Public Broadcasting to do with four percent less for one year.  There is an awful lot of desire on Capitol Hill to put our fiscal house in order.  And I hope folks are encouraged. MR. FRUM:  Thank you, and, Mr. Speaker, with the--all the liabilities and disadvantages that you map out in this memo, you're in command.  What would you do? MR. GINGRICH:  Well, let me just start and talk about Big Bird for a second.  I think one step that will be interesting to pass that could I think be passed is to simply make all the financing transparent. I think if people understood how much money was made in the name of Big Bird by people who refuse to share it back with Public Television, they would lose almost all their moral authority.  And so I offer that as an example of something that could be offered in the spirit of public transparency and public accountability and let the left explain why they don't want people to know where the money went. I think there are five things I'd do if I were the Democrats.  One is I'd keep us fighting, because that puts us at parity.  So the more that the Democrats can fight with us and get us into fighting with them, the more they look like we're equal and remember as the minority fighting helps you. As the majority, people wonder why you aren't doing your job. Second, I would undermine everything that would try to move forward, at every step.  So if I can hold up John Bolton's nomination for six or eight or nine weeks, that's terrific.  If I can slow down every single thing, every single appointment that Bush sends up, that's terrific.  All I'm trying to do is make the machine run so slow that it's very hard for the President and the Republicans to meet a performance standard. The third thing I would do is I'd cooperate in everything that's really bad.  Take something like the McCain-Kennedy Amnesty bill on immigration, and I'd say that's terrific.  We ought to do that tomorrow morning.  I'm really for that, because I would know that it would just drive the right crazy.  It would arouse on the left a new standard, and it would eat up time. Fourth, I'd maximize racist appeals.  And they will do this.  I mean they have got to resolidify their base among Asians, African Americans, and Hispanic Americans, and so you'll see those leaders revert to a level of rhetoric that was not believable about Bush, but they will desperately hope in '06 and '08 to make it believable about Republicans generically. And lastly, I would hope that Republicans decide to run a negative personality campaign in '08.  I mean one of the reasons that I keep trying to get people to rethink how they're going to take on Hillary, you will not beat Hillary with a negative personality campaign.  The country has discounted all of that.  They know everything they want to know.  And you will beat Hillary by having bigger ideas of stronger values with better performance and creating an environment where she can't compete; and, therefore, she's irrelevant because she's not the team that wins.  She's not the team that delivers. People used to say that if FDR had not had polio, he would have been the nominee in the '20s, and he would have been eliminated, because no Democrat in the '20s, no matter how good they were was going to win.  We could create that environment.  We're right at the edge of creating that environment.  But it means you've got to meet the performance standard, and you've got to meet the production standard, and you got to meet the style standard and then the other team frankly doesn't become very relevant. MR. FRUM:  Thank you.  That's clear.  Let's take some questions from the floor.  Please raise your hand.  Do we have a microphone?  Thank you.  Okay.  So wait for the mike. MR.   :  [Off mike.]  Okay.  I'm very interested in the new activism on the campus of [inaudible]. MR. GINGRICH:  If I were you, I would take the pages we have on the scale of the entitlement challenge, which indicates you'll be paying 50 percent of the total gross domestic product by the middle part of your working lifetime just to sustain current plans, and I'd go back out and say, you're about to decide what level of taxes you want to be paying your entire working lifetime.  So if you'd like to have a much higher tax, much lower growth society with more unemployment, where you can't buy as nice a house as you want, you can't go in as nice a vacation.  You can't have as nice a car, and by the way, the middle of the century, you also may not be the militarily leading country in the world--China may be--it's a terrific future. You know, you, too, could live in France and Germany and decay elegantly. [Laughter.] MR. GINGRICH:  And I think you need to drive that notion that arguing about the next generation is really important if you're the next generation.  It's not all that important if you're folks who aren't going to be here. So, you know, at my age, telling me about the crisis of 2050 doesn't strike me even as an optimist as a likely thing for me to worry about.  But you look at your age, and you start thinking, all right, how old will you be.  When you're your parents' age, what kind of America will you live in?  And one of the thing I'd like to see the college Republicans do who have huge growth in the last four years is I'd like to see them launch a debate series nationally where maybe once a quarter, they offer a debate topic.  Like this fall, if they would offer a topic this fall, resolve that younger Americans deserve the right to have a personal Social Security Savings Account and challenge the young Democrats to take the other side.  And if they won't, then say fine.  We'll invite the young socialists or we'll invite the Green Party, but we're going to have somebody stand up on behalf of ruining the young and explain--you know, or we'll invite our Democratic Senators to send a staffer to explain why they're anti-young. But I think we need to be people who take on the campuses head on, create a level of ferment, define the issues in our terms, and let the Left come and impale themselves in being on the wrong side. CONGRESSMAN PENCE:  I'd love to take a swing at that, although you directed to the Speaker. I started my career in youth ministry, and I'm in a classroom in my district every two weeks.  I love being around young people. My counsel to you is just be real, be candid, be straightforward about what we believe as Republicans and Conservatives.  Don't mumble when you talk about your commitment to the sanctity of human life.  Don't mumble when you talk about your commitment to traditional values.  I think all of the enormous ideas that the Speaker just touched on are very significant.  But I really believe that MTV is not this generation of Americans.  But those that hold different views than that are going to wait until they see people who are authentically willing to stand up and express a commitment to conservative ideals.  And so, you know, be real, be candid, and I think that you will be surprised at the number of young people who will be drawn to that kind of leadership with integrity. MR. FRUM:  A question between the aisle and the pillar.  I'm sorry.  But the aisle and the pillar.  Yes, sir? MR.   :  Thank you, both of you.  I have a question for I don't know--obviously both of you.  It starts with some of the things you mentioned, Mr. Congressman, about--regarding conservatism and traditional values and then limited government.  What happens when both of them are on opposite sides?  For example, like you had mentioned towards the end you mentioned the federal marriage amendment and then you mentioned reaffirming against activists judges.  What side--which of those two principles should conservatives tilt towards. And then also the Speaker talked about regulations and not bureaucracy.  Do you think--how do you think that--how do you interpret that with regards to two of the programs that you criticized--the Medicare program and No Child Left Behind?  Do you think either of those offers more regulation than bureaucracy or do you think both of them are just, you know, Republican created bureaucracies themselves? CONGRESSMAN PENCE:  Well, thanks for an easy question.  Well, let me begin by saying that I don't think that defending a--the 5,000-year-old tradition of marriages, defined between a man and a woman, represents activism.  I think it is the very essence of conservatism to defend those institutions and values that represent the bulwark of Western civilization.  And there's much--I thought you might talk about the Terry Schiavo case and say, ah; here you wanted activist judges to intervene.  No.  But I want incapacitated Americans to have due process of law. I wanted Terry Schiavo to have the same access to the federal courts that Scott Peterson has.  When he was ordered--has been ordered to be executed, Scott Peterson has full access to our federal courts under habeas corpus.  But simply because of her physical and mental infirmity, Terry Schiavo did not.  And that's why helped Dr. Weldon draft the Incapacitated Persons Act, which the Senate refused to take up, which would have corrected this hole in the fabric of American justice for all incapacitated Americans, mental and physical.  We didn't do that.  The Senate would only deal with the Schiavo case, and in the category of wanting to do justice, love kindness, and walk humbly with my God, I voted aye on that.  But I still believe that before the end of this Congress, the Senate should take up the Incapacitated Persons Act and extend what amounts to habeas corpus rights.  And those things I see as very, very consistent with conservative values. As to your question, you know, I haven't seen the Speakers hand out about the growth in entitlement spending, but one of the great contributions that the leadership of Newt Gingrich brought to America was he put into practice Ronald Reagan's rhetorical challenge to the entitlement state. I mean correct me if I'm wrong, Speaker, but President Regan didn't make too many gains in welfare reform.  It wasn't until there was a Republican majority, led by Speaker Newt Gingrich, that said we are going to take these Republican conservative values and we are going to challenge the very center of the ethos underpinning the entitlement state in welfare, and then block grants were formed and literally tens of millions of Americans have been freed from what Stewart Butler rightly described years as the welfare trap.  There were generations of Americans--were caught in dependency on government support. I would submit that as you look at the direction that we've begun to take in education under this Administration, which was the same direction President Clinton tried to take the Congress, when Speaker Gingrich was there, and they rejected national testing and an expansion of the federal Department of Education.  I believe we have moved toward more bureaucracy and more centralization of education in Washington, which I believe is the wrong course. Similarly, I simply believe--I oppose the Medicare Prescription Drug Entitlement, because I saw it as more of the same of what we have in a program that is expanding beyond our ability to comprehend that or certainly our ability to reconcile it from a fiscal perspective, and it's one of the reasons I support Congressman's Flake's legislation to delay implementation of the Medicare Prescription Drug Entitlement.  Give us a year to think about how we're going to do this.  But at the end of the day, the greatest challenge of the next generation of Americans is going to be how do we deal with mandatory spending and keep our commitments to national defense and keep our commitments to everything else the federal government needs to do without breaking the back of that generation of Americans, 'cause Newt's numbers at 50 percent GDP are right. MR. GINGRICH:  I'd divide it into two things.  I think that the expansion of the federal Department of Education is inherently a mistake.  And I think that finding a way to go back to a much more locally focused system--if you look at the percent of money now spent outside the classroom, and here we have the D.C. school system example, and look at how many millions of dollars are spent on bureaucracy, red tape, paperwork.  It will never get to the kids. And if you could return that power back to the parents--I don't want to return it just from the federal government to the state government--as a movement, I think we should be in the interest of having parents directly involved in decisions about their children, which is, in a sense, taking head on what has been over years of gradually increasing the power of professionals and diminishing the power of parents. And I think that we got to face this head on at some point; that one of the reasons people don't get involved anymore is it's just too hard.  I used to see school board members who walk up and say I have no power, and these are school board members.  Then you go to the state legislature.  They'll tell you they have no power.  And you go to the bureaucracy that says well, I have to do what the feds tell me to and what's in the state law.  Then you go to the teachers' contract, which is a unionized contract.  And you look at the totality.  It's a mess.  And I think it's got to be very profoundly changed, and I think some of the basic core ideas have to be changed, and I think in that sense I'm not a big fan of where we are in education. On Medicare, I think it depends on whether or not Congress continues to change the system.  The most important single provision of the Medicare Act was the Health Savings Account provision.  The Health Savings Account, which creates an opportunity to have a tax free investment in a savings account, a tax free build up of interest, and tax free spending on medical issues I think is being already to have a substantial impact on the entire health system because it's beginning to move us back towards ownership of our own health in a way that is profound. The second great change in the Medicare Modernization Act was the first really big shift towards preventive care and wellness.  And this is absolutely essential if you're ever going to get costs under control.  If you don't have a preventive campaign and a self-management campaign for diabetes and obesity, you can't afford the out-year system. The third difference--and here I think Mike and I just disagree--as long as you're going to have a Medicare program, it was irrational to not include drugs.  Because what we were saying to the country was if you have heart diseases and we could make sure you had a drug every month to take care of your heart disease that would be wrong.  But now the morning you need open heart surgery, we'll pay whatever it takes.  And so you ended up in a very, very badly designed medical system for seniors in which we were terrific on kidney dialysis, which is one of the biggest expense increases in Medicare, but we wouldn't help you control your diabetes, which is the leading cause of kidney dialysis.  So it was billions for acute care and nothing for preventive care. There are two examples of how I think you have to move in the next phase of Medicare, which I'd like to see the Congress holding hearings on.  The one is if you go to a Travelocity model of online drug purchasing for everybody in Medicare, where you see real costs and real capabilities, I think you take 40 percent out of the system.  That is, whatever your current trend line is for the cost of drugs, it will be 40 percent below that because that's how dramatic the decrease in cost is once you get to a competitive market with real knowledge. The other thing I'm very interested in finding somebody to do is I think we should take a very modest amount of Medicare money, maybe as little as a thousand dollars, and turn it into a voucher for those who are independently capable of going out and buying their own health insurance.  I mean the number of people who are very successful who when they realize that after 65 years of age, their health care is controlled by 110,000 pages of Medicare regulations, more than the IRS has, who say to me I'd really like to have the ability to buy my own insurance and just get out of this.  And I think you'd have a very significant tipping point in terms of--if you combined that with health savings accts. MR. FRUM:  Go ahead. CONGRESSMAN PENCE:  I actually want to take issue with what the Speaker said because I--only to the point that I don't think we do disagree on the Medicare prescription drug entitlement at its core.  And I think it's an important clarification.  We did take a different position on the bill at the time of passage.  But I want to endorse what the speaker said about the system providing absolutely no coverage whatsoever to anyone in Medicare for prescription drug entitlements, was resulting in some Americans cutting pills in half, but not, you know, missing groceries, missing rent payments.  That's why I and I think most House conservatives were prepared to support what the President initially called for in the 2000 campaign, which was an expansion of the Helping Hand Program at the federal level in Medicaid into Medicare, which would have provided prescription drug coverage to Americans up to about 200 percent of the federal poverty level.  At the time we passed the prescription drug entitlement, three out of four seniors already had prescription drug coverage, and statistics showed that they like that coverage.  They're pretty comfortable with it; could afford it. So our focus was not on denying any prescription drug coverage in Medicare.  That would be irrational and I agree strongly with the Speaker on that.  It was providing a one-size-fits-all and taking the entitlement model, which I believe at the end of the day the loyal opposition was unwilling to accept any version of prescription drugs that wasn't at its core an entitlement.  And I remember the night of the vote that Senator Teddy Kennedy literally walked off the floor of the Senate when a means test that at time a member of the Senate told me that they had 53 votes for a means test in the program itself.  Senator Kennedy walked off the floor, having a nose count, and said if you put a means test in, we'll filibuster the bill and this is over. So the Democrat majority principally in the Senate demanded that it be a one-size-fits-all entitlement and that was the core of conservative opposition.  But as to providing the benefit to those in need, that's something the Speaker and I would have agreed on strongly. MR. FRUM:  I'm going to try to [inaudible] two more questions.  I think we have time.  I want to take one from that side of the room and then I'll come back to you, sir.  So somebody on this side of the pillar. Yes, in the back row. MS.     :  Thanks.  I wanted to know how the Republican Party can espouse federalism and at the same time support the disgusting manipulation of the Commerce Clause that decided the Raich case. MR. GINGRICH:  I apologize. I don't know your reference. MS.     :  The medical marijuana. MR. GINGRICH:  The what? MR. FRUM:  The medical marijuana case. MR. GINGRICH:  Oh, you mean the ability of the federal government to decide as a matter of legality whether or not it want to takes a step towards a legalized drug culture, which is a matter of policing power.  It's not a matter just of interstate commerce.  I mean clearly the federal government has the ability to say that. MR. LUCIER:  Newt, this is Jim Lucier [ph.] with Prudential, also a former occasional guest in the Mike Pence Radio Show.  How do we deal as conservatives with the rise of China and the comparative state of confusion in Europe?  Is China something we should define as a national security problem and Europe is more of an economic free trade type problem?  Or is China not also an economic problem and a liberty problem in that you've got a dysfunctional nationalistic regime there that looks a lot like Tai Sho [ph.] Japan and Weimar Germany rolled into one?  I mean how do we deal with this, and how do we create a new foreign policy for the next generation? MR. GINGRICH:  No, I mean I think they're very, very different challenges.  I think in the case of Europe, we should dramatically increase our representation in Brussels and we should recognize that the European Union is here to stay.  I mean it may or may not expand.  It may or may not grow stronger, but clearly you're going to have 25 countries that have real economic relations built around a Brussels bureaucracy, and we need to be in the room arguing every time they adopt a regulatory position or a tax position because that has a direct impact on our economic interests.  And we're currently underrepresented in Brussels, and if we were to network our Brussels representation with our 25 bilateral ambassadorships, we could have enormous weight in the European Union, probably more than any single country inside the Union. But that's just something I think you just deal with the Europeans as sort of, you know, people who are broadly allied with us, who will always be kind of a pain in the neck.  It's a little bit like having a brother-in-law who, you know, the guy who shows up to watch the ballgame with you, and you don't totally like him but after all, you can't get rid of him.  He's your wife's brother.  You know, and so I think we want to have kind of a brother-in-law attitude or sister-in-law attitude that look, we're together.  We have lots of common interests.  We're going to have lots of arguments, but they're not a threat to us except to the degree that it just drains energy. I think the Chinese are totally different, and we need to be very careful about China.  The Chinese are not today our enemy.  There's no inherent automatic reason for them to become our enemy.  The Chinese are inherently our competitor, but there's a huge difference between enemy and competitor.  The U.S. and Great Britain were inherently competitive.  We were not inherently enemies after 1815.  And the British consciously managed the relationship to not allow it to drift into enemy status. And the reason I say that is simple:  one, our strategic goal should be permanent friendship with the Chinese people, not necessarily the Chinese government.  But to the degree that we help the Chinese people understand the modern world, and to the degree that we represent their interests in the rule of law, freedom, and the right to govern themselves, we want to be very careful to never weaken that. Two, the largest Chinese threat to us is our own laziness.  For the very first time since 1840, we're going to face a competitor who has a market the size of our own.  And it's going to be a competitor who works really hard, has great ambition, and wants to get ahead. And that means you've got to reform education, litigation, regulation, taxation so that we're the most robust, dynamic economy in the world.  If we're the most robust, dynamic economy in the world, the Chinese will not catch us in the 21st century.  They might or might not in the 22nd or 23rd.  They have huge water problems.  They have big environmental problems.  They have substantial infrastructure problems.  They have great stress between Beijing and the rest of country.  I mean the rest of the country is like California.  They look towards Beijing and go why am I sending you the money.  You know, you're a long way off. So we should not build some mythical sense of who the Chinese are going to be.  But if we refuse to fix math and science education--I talk about this at length in Winning the Future--if we refuse to fix math and science education, if we refuse to have litigation reform, if we refuse to have regulatory reform, if we refuse to have a tax code that is pro-investment and pro-growth and pro-change in technology, then you could end up in a situation where the Chinese, in fact, are capable of actually being a threat and not merely a competitor. CONGRESSMAN PENCE:  Well, it's good to see you, Jim.  I think I ran for Congress for the third time, and it's probably only thing the Speaker Gingrich and I actually have in common, literally, is that it took us both three times to get to Congress. But I ran for Congress the third time after a 10-year hiatus from politics for two reasons:  to restore the sanctity of human life and to support decisions in our military that would result in us avoiding a military confrontation with China. Those are the two reasons I came to Congress, and I just--I have to tell you that as I observed weapons transfers, technology waivers, and what has been all over the headlines just in the last few days begin to percolate in the 1990s, I'll never forget my mother really didn't want me to run for Congress the third time.  I was making a pretty good living; had three kids, aged four, five, and six; and she was angry with me. And we went through a period where mom wasn't talking to me for about a month.  And we finally started to hash it out.  My mother is first generation Irish American and red hair, and so you can imagine.  And I finally looked at her and she said, well, why are you doing this?  This is vanity.  This is--well, you've got bills to pay.  And I said, mom, I'm not going to put that six-year-old boy on a bus in 12 years to go fight a war in the South Pacific and believe that I could have gone to Washington to do something to prevent that. And it stopped her cold.  And she looked at me and she said, run.  And so if you ever get asked--I don't know why you would--but if you ever get asked why this I've been called Gingrich clone is in Congress, it's those two reasons:  restore the sanctity of human life, and be part--that I've been privileged to be a part of--the kind of investments that will ensure that our relationship with China is as follows.  We have one extended in friendship, exchange, and trade, and the other hand resting comfortably on the holster of the arsenal of democracy, just so they understand the proper relationship with the most powerful democracy on the planet. MR. FRUM:  We've been successful enough with the shoe horn, and I think we have time for one more question.  This young woman in the front row here.  The second row has been waiting a long time.  So let me call on you and then I think we can adjourn.  Thank you. MS.       :  Thank you.  Congressman, I was very inspired by your description of conservatism as the combination of belief in limited government and the principles of the sanctity of human life and the consequent reforms that we need to bring about as a result.  And the question is somewhat along the lines of what has been asked before, and it's actually directed to both of you. One criticism both of the Left and the sort of more radical Right often makes is that you can't argue for a limited government, both economically and in a moral realm, and at the same time for a government that imposes restrictions on stem cell research, abortion, et cetera.  While I completely agree that those two things make sense together, how do we win that debate?  What is the rhetoric that we use? CONGRESSMAN PENCE:  Well, I'm going to be anxious about how he answers it.  But I will tell you that as a conservative and as a Republican I endorse the form of government described in the Constitution of the United States and in the founding documents like the Declaration of Independence; that Newt spoke passionately about the fealty of our Founders to the belief in the creator God.  They believed that we were endowed by our creator with certain inalienable rights:  life, liberty, and the parentheses virtuous pursuit of happiness. George Mason had a different take in the Virginia documents, which speaks to last week's Supreme Court decision. When he wrote his version, he wrote life, liberty, and property, which was seen as an inalienable right given to us by our creator. I'm an adherent of Russell Kirk.  I don't believe in--that conservatives should be about the business of trying to develop an ideology and then get up every morning and hold themselves to it. Rather, I think we ought to take the view that our job is to uphold and support and defend the Constitution of the United States of America, and when you speak about issues surrounding the sanctity of life, in my judgment, they center on the constitutional right to due process of law; that you may not in this society be deprived of life, liberty, or property without due process of law.  And whether you are an unborn American, an aged American, infirmed, disabled.  That's the fundamental principle that has driven western civilization, including on the issue of stem cell research.  I got--I actually picked up a vote on prohibiting embryonic, destructive embryonic stem cell research a few weeks ago from a member I won't name, with one question.  I looked at him, and he said, well, I'm kind of struggling.  You know, we want to do research, and he, you know, didn't want it--and I said, look.  I want you to ask yourself why this form of embryonic destructive research is completely illegal in Germany.  And he looked at me and said, is that true?  And I said, yeah.  Completely illegal.  I've met with members of the Bundestag.  We've talked about it.  And he said is it for the reason that I think?  And I said, yeah.  Yeah.  We've been down the road of experimentation on human life.  And they're not going down that road again. So let's not go learn the lessons that the German people learned with such pain for the world in the 20th century.  Let' not relearn them in the 21st, I said.  And so from my perspective, that--to me it's about embracing the principles of the Constitution, embracing due process of law, and that's where we can find a constitutional Republican safe harbor for that argument.  Mr. Speaker? MR. GINGRICH:  Finally, I've heard--first of all I think you did a pretty job.  But let me just give you a little more ammunition. A lot of people know that much of modern economics starts with Adam Smith's the Wealth of Nations, which was published the same year as the Declaration of Independence. Very few people realize it was the second volume; that the first volume is the Theory of Moral Sentiments; and that Smith as what in that generation would have been considered a political economist actually saw the cultural fabric of the Theory of Moral Sentiments as surrounding and defining the Wealth of Nations. So you have to start with the idea that Smith posits a moral universe within which the free market works correctly.  He does not posit a modern amoral, value neutral invisible hand.  He suggests that for the invisible hand to work in a healthy way, which is why Jefferson's use of the term pursuit of happiness, by which they actually meant in their generation what we would call wisdom and virtue, and they had a very specific meaning with the phrase pursuit of happiness. And even in Jefferson's version, they initially had property before they replaced it in the Declaration. Second, and this is why I think this whole issue of the courts is now so very important.  Our initial state document, the Declaration of Independence, is very unequivocal.  We hold truths to be self-evident, not debatable, not [inaudible], self-evident.  And we say we are endowed by our creator with certain inalienable rights, among which are life, liberty, and the pursuit of happiness. Now, there are two key phrases here.  One is creator.  And the other is inalienable.  It's totally different than the European model or the Asian model. In the European model, the king has authority--the state in the modern sense--and the state loans you rights.  But the locus of power is the state. In the American model, the citizen is the center--the sovereignty is inherent in the citizen and is loaned to the government, which is why our second great state document, the Constitution, begins we the people of the United States.  We are loaning power to the government for very defined contractual reasons.  And so I would start by saying to anybody that what--the core argument about right to life is not some random social policy argument, and you can be for or against where we come down, but the underlying key question is when does life begin and what is the--and if those rights are, in fact, inalienable--what does that mean?  And, therefore, how should you respond to it? And somebody can walk in and say look.  As somebody once said to me, I think it's just a malignant tumor.  So if you want to abort it, that's fine.  And then you say fine, so when does life begin? Does it remain a malignant tumor at one day, at three days, at two weeks, at a year?  I mean is infanticide okay.  We just need to know what the terms of debate are.  And I think you have to start with this question:  the market I am for is a market that operates with an enormous defense of your personal liberty.  And your personal liberty is a rights-based liberty that comes from God.  It is not a legalistic or situation ethics based model that comes from people sitting around a room somewhere. MR. FRUM:  Thank you, all. [Applause.]</body></html>