did on the spectrum, at the time of the 700 megahertz option there were two classes of spectrum, one that was the open access see blocks beck from and we purposefully bid on a section of the spectrum that didn't have those requirements so i think the fcc in its wisdom at the time set up the block that had the open access requirements as a test to see how the industry would deal with open access requirements. we actually bid a higher price because of the the uncertainty about what those requirements would mean and we want to make sure we could run our business as we had been accustomed to doing. subsequent to that option, and even before the spectrum is put into place, there appears to be a change in the rules. isaiah pier because we have not seen the final rules, and so i am being conscious to say it appears to be but a thin that we

have to bye-bye rules that we purposely try to avoid and in that big a higher price, to me that throws into question how we can guarantee a few were option that po reinvest money in spectrum. ..

that was spending a night auction can be guaranteed that the outsource, the rules under which which the worlds were held will retain that in the future. >> host: this is c-span communicators program our guest is ralph de la vega who is president and ceo of at&t. paul kirby is our guest reporter. mr. ralph de la vega if he would give us her background. it's a rather interesting background. if you give us your professional and personal background and you've also just offered a book. >> guest: gas, thank you for mentioning that. i just offered a book called obstacles welcome and it chronicles my life from the time i left cuba at the age of ten years old. it was probably the most germanic point in my entire life because my family because of the

no opportunity and the persecution they felt was in cuba at the time as a result of the revolution i decided to leave cuba. you can see how difficult it is to leave your data country. they have to feel the situation was to the ballyard material possessions behind and move to another country to get freedom and opportunity that you felt would be lacking in your own. except when we got to the airport to my parents were told that at that point in time only my papers were correct. that only i could leave that day and the family had to make a choice. we could all stay behind or they could send me a hat and then follow later when the papers were straightened out. my father made a very courageous decision to send me a head. he called some friends of the family and told them to look after me that it was going to be like a sleepover. they would be following soon thereafter and then it would be four years later before i would ever see my parents. so i came to the u.s. at the age of time by myself without

speaking the language, without any family here. and those were different call times. a couple took me and. also immigrants here and raised me as their own child. but ever since then everything in my life was easy, relative to that. and so i tell people that sometimes the obstacles that you face are opportunities in the skies because in those early days i really thought that what happened to me was somehow a punishment. i couldn't understand why all my friends were with their families that had things that i was used to and i was in a new country, couldn't think the language, did not the people i was with them at the end it turned out that i wouldn't have changed a thing about leaving that day. i think it may be the person i am today. i realize that yes it was a difficult situation but my god i was in the greatest country in the world with a wonderful set of people who were taking care of me. and so, my team in the book is

that inside every obstacle there's opportunity here at if you look for it and you see the future is yours. >> host: and mr. de la vega has worked with a broadband internet services there. he was ceo at similar wireless and has been with at&t since 2007. mr. kirby, next question. tesco another question early termination fees are getting more access to washington. more the chief competitive that it would raise her easy outs on advanced devices. if at&t to get into a knot in there a concern that kind of the growing momentum may result in legislation regulation by ats. >> guest: we currently have no plans to raise transcend peace. i understand verizon had done so and i also understand there's been a bill introduced. i think that in cases like this it's always best to let the free

enterprise system in the marketplace play out rather than immediately react with regulation. and so, you're going to buy me to be a proponent of letting customers have choices, choices of devices, choices of service plans and even choices of etfs if that's what they would like. look for the customers choose rather than burn the industry with additional regulation. >> host: how much time do you spend lobbying in washington or working with the converse for the fcc? >> guest: i actually don't spend a lot of time lobbying but i do respond to their requests for information i find that the new icc administration has really impressed me with how they are reaching out to various constituencies and when they ask for comments they will give us an opportunity to tell our story. i don't have to stay to do it, but i always spend a lot of time there. we have people on the hill and in d.c. that do a lot of that work for us.

whenever i'm asked as if they want to talk to me personally i'm always glad to do it because i think it's an important function of the process that we are in to make sure that the people on the hill here from our perspective direct billy. >> host: s. co. the subscribers of one used another network when the area where their service don't have. there is increasing at the fcc. they don't even need to be modified. and regional is modified. can you give us a sense for why you don't think they should be modified bikes >> guest: while our point of view in bromine is we're not opposed to bromine and we were glad those new roaming deals with carriers. but what we don't want to do is send a carrier to use our network instead of building out their own. so we clearly, it's not an issue of wanting to do it.

and i think most carriers at least the ones i've spoken to want to use roaming for their customers when they leave out of reach and are supposed to on every cell basis. i think if they're not careful and use some regulations or dictate pricing it could lead to a disincentive for companies to invest on spectrum that they hold. so i think it's a fine balance of making sure that we do have roaming, but that the rates are such that they don't encourage certain companies to not build out, not invest, not improve their networks and just use variable rate to the detriment of others. if we have a fair and a balanced approach to roaming and very supportive of roaming and we have many roaming agreements with our partners throughout the country. >> host: mr. de la vega when we spoke with german julius genachowski a few weeks ago on this program we talked with him about universal service fund.

we want to play a little of that interview and get your reaction to what he said about usf. >> guest: >> the bad news is the program is struggling given the changes in the marketplace. as the contribution base for the program shrinks, there are other issues that are creating stresses on the program and there's a wide group bipartisan that has sought the form of the universal service for quite some time. the last element of the program that needs reform is that as you said it's targeted at the kind of communication service that we had when we return up, ordinary telephones still of course very important. what we need to do is reorient the universal service fund to support the next generation of communication services broadband. that's something that's widely recognized as desirable. there a lot of hard questions in figuring out how we get from here to there.

it's something we'll be looking at as part of our broadband plan. it's going to take a while to devise a way to reform universal service and to implement it. but there's widespread agreement that we need to reorient the universal service fund to broadband for our communications infrastructure in the 21st century. >> host: mr. de la vega. >> guest: i think that reorient enough onto broadband is a fun and mentally correct thing. i think that our focus would eat to direct those two unserved areas, areas where people don't have broadband and we actually are working with ctia two figure out if there's a way where we can attack those areas, not just on a wireline basis but with creative wireless approaches so we can make sure that every american can have access to broadband one way or the other. >> host: would you see that as an additional tax at all? >> guest: i don't do that as an additional tax, no.

>> host: >> guest: congress has talked about and vouchers are expected to introduce a national framework bill that would say that we regulate wireless services at the national level inside of each state. can you give us a sense for how likely the wireless support system you think something like that will be to actually get through and what role is therefore states to actually enforce such legislation? >> guest: yacht, i know that is ongoing for a while. i think what we're hearing is you know there's other more pressing issues right now. but that's something likely could have been sometime next year. we have been supporting a national framework in order to move some issues on the national level to get them expedited. but we're fairly flexible in how to deal with the different viewpoints on that. so we think it should be a national framework and i think a

national framework would help the industry in general. but when you legislation forward sometimes you really don't know what finally comes out so we're going to wait and see what the final bill looks like before we decide how much we want to support it. >> host: and finally mr. de la vega we have about two minutes left. we can't talk to at&t mobile without talking about the iphone. when does your agreement with apple and and would you like that agreement to continue? >> guest: we don't comment on when the agreement ends. we are under nda not to do that. but we're very happy with the agreement. apple is a great company. the iphone is just the best device out there and we're glad for it to continue as long as possible. so we're very happy with our relationship and it bore fruit for both apple and at&t. >> guest: verizon and at&t recently dropped lawsuits for each other over advertising. can you tell us why the two

companies decided to do that? >> guest: i think that's rather than fight the issues in the courts i think we'd rather fight them in the court of public opinion. so i think it was a good idea to put the legal weapons down and just talk to her customers, get them the facts. and in the end let the customers make the choice. >> host: mr. de la vega, the broadband deployment plan is due in february of next year. at&t is running commercials saying they support broadband deployment. are you supporting what the government is doing right now to roll out broadband nationwide? >> guest: i tell you, we have seen some of the work time of the early work that the task force has done and it has been excellent. i've seen the presentation, i've looked at them. i think it's very detailed, very well thought out and we're very purged by the early efforts. it may seem like a long time but february will be right around

the corner. we hope that the final product will be every bit as good as what we've seen so far that we're very encouraged by the great work that's done in this area. >> host: has at&t been applying for some of the grants are taking some of the governments money to help rollout? >> guest: no, we have not applied for the governments money at this time. >> host: paul kirby final question. >> guest: how difficult is it to bridge the various views of members typically large numbers, medium-sized and smaller members in particular carriers. sometimes the cti will just stay away from an issue. can you address that since you're a chairman >> guest: absolutely, that is a great question. one of my goals for the incoming year for ctia is to reach out to all members of ctia to make sure that we focus on the things that unite us and other things that divide us. when you look at all the issues that we have in common for the good of the group and for the good of the industry. we have many more issues that unite us than divide us. so you're going to see me reach

out to rural carriers are meant to new carriers, and make sure that we act as one ctia moving forward in addressing the key issues that are facing this industry, which is such a critical industry to the country. and so, you're going to see me be reaching out. already then so out to our members and asking us to be more united. i think the more united we are the more effective we are going to be able to operate. >> host: ralph de la vega president of at&t mobile. thank you for being our guest on the indicators. paul kirby has been our guest reporter.

of congressional quarterly. a senate majority leader,.com and baucus spoke to reporters after democrats met with reporters tonight but they didn't say anything to the substance of the caucus. what happened during a meeting? >> they didn't say anything at all. that was very newsworthy unfortunately and they appointed the avoided account of really

onto virtual subjects notably what happened in the public option in this health bill. we're told by other senators who attended the meeting that during this meeting they talked about the state of the house bill and the state of this very important issue to liberals, the public option as well as a second policy that some democrats have proposed to replace the public option. this policy would allow seniors or not seniors people age 55 to 64 to buy into medicare. some democrats are proposing is is replacing for the public option figure and it's more acceptable to moderates. >> what was the decision about that? >> it looks like both ideas are out of the bill. the public option and the medicare buy-in. >> what was senator lieberman's role in that decision to drop the expansion of medicare? >> while senator lieberman said yesterday as your viewers might know that he would not support the bill if it included this medicare buy-in. he already said he wouldn't support the bill that included any kind of a public option. so senator lieberman because

they need all 60 democrats to vote for this bill has become a very powerful and influential senator in this debate. it looks like he's getting his way. >> what other issues that senator reid need to pass out. >> abortion is an outstanding issue. he and senator nelson are working on some new language. we really haven't seen it yet or understand what it would do. senator reid hopes it will bridge the gap between senator nelson and basically the rest of the democratic caucus on this very difficult issue. >> what the purpose of tomorrow's white house meeting between senate democrats and president obama? >> well, i think what the president needs to do at this point from the perspective of a lot of democrats if you've got to sell this bill to liberals without a public option in it. a lot of liberals have said they wouldn't support the bill with the public option. they think it's a mainstay of

localization. other looking at a bill that doesn't have that policy. so obama has to tell them i think that the bill is so important to him that he needs to vote for it even though it doesn't have this policy they thought. >> alex wayne of congressional quarterly, i appreciate her time. >> thank you. >> now than under spoon and franken talk about what is health care will take effect. >> i have heard the president talk about reading jobs, number one priority will be created jobs and give incentive to small businesses. i've heard my colleagues on the other side day after day talk about job creation and how important it is. and yet, everything that is coming out of washington, whether it's a form of heavy-handed regulations like this endangerment finding that coming out of the epa, whether it's in the form of a cap-and-trade proposal that's coming through the congress right now, whether it's this massive expansion of the federal government $2.5 trillion expansion of the federal government. to created new health care in

this country. all these things, madam president, are raising clouds over the small-business sector of our economy which creates about 70% of the jobs. and were essentially telling small businesses that, you know, you may end up with these massive new energy taxes. you may end up with his employer mandate that's going to cost you up to $750 per employee if you don't offer the right kind of insurance. you're going to be faced with all these taxes that are going to be imposed on health insurers on prescription drugs, menu under and medical device manufacturers that are going to be passed on to you. and i were single and create jobs and lied about his policy and searched in washington, all these proposals to tax them to spend and to borrow more money by their federal government. and so you can't blame small businesses for acting with a little bit of hesitancy when it comes to making major capital investments, when it comes to hiring new people. and those are the very things we

want small businesses to do. we want to encourage that type of behavior. we want to encourage that kind of investment. we want to encourage job creation. unemployment is a 10%. we lost 3.3 million jobs since the beginning of this year. who is going to put people back to work? it's going to be the small businesses in our economy. in my state of south dakota there about 96% of the game when it comes to employment in south dakota. and so here we are debating a health care reform bill which in addition to spending $2.5 trillion to create this new health care entitlement raises taxes on small businesses, cuts medicare and that the end of the day according to a the experts the congressional budget office, the chief actuary at the center for medicare services, which is the so-called referee and all this that tells us what these things are going to cost and with the impacts are going to be. they've all said that premiums are going to stay the same or go up. the best in small business can hope for under this is the status quo. so i hear our colleagues on the

other side coming down here day after day after day, making statements about this is going to be good for small businesses. this is going to help small businesses deal with the high cost of health care. the problem, madam president, with all their arguments is one thing. they are completely and utterly divorced term reality. you cannot look at this proposal, this health care reform proposal and come away from it and say this is a good and for small businesses when small businesses are saying this is going to drive the cost of doing business. this will raise health care costs in these taxes that you're going to hit us with is going to make it harder for us to create jobs. and so, why do we proceed in the face and defy what all the small businesses are saying, while the experts are saying and what increasingly the american people are saying. and that is this is a really bad idea. why do you guys go back and reconsider this and start again and do something that actually will lower health care costs.

that's our small businesses are saying. and so we have people down here saying at this good for small business. but our small businesses saying? and large businesses for that matter. nfib represent small businesses all of the countryside this will not deliver the way the promised help to the small businesses community. they go on to say it will destroy job creation opportunities for employees. create a reality that is worst in the status quo for small business. is the wrong reform at the wrong retie and and will increase health care costs and the cost of doing business. at the national federation of independent business which is other side represents all businesses all over the country. large businesses, the chamber of commerce expressed their disappointment with the senate health care bill and is weighted and strong opposition against it. the national association of wholesaler distributors him of the small business entrepreneurship council, the association of builders and contractors, the national association of manufacturers, independent electoral contractors, international

franchise association. list goes on and on and on. in fact there's a organization called the small business coalition for affordable health care and that's 50 organizations around the country who are members of that group. including members in my state of south dakota will not the least of which is that american farm bureau federation which represents farmers and ranchers who are small-business people out there trying to make ends meet. they submitted a letter which said this. our small businesses and self-employed and printers have been clear about what they need and want. lower cost, more choices, and greater competition for private insurance. they go on to say, these reforms fall short of long-term meaningful relief for small business. any potential savings from these reforms are more than outweighed by the new taxes, the new mandates, inexpensive new government programs that are included in this bill. that, madam president, is what the small businesses across the country are saying. now, the reason they are saying that is because of a mentioned

earlier, not only are they had with these taxes every year, there's a tax on health plans that will amount to $60 billion over ten years which will be passed on to small businesses. there's a new payroll tax medicare tax which incidentally for the first time ever instead of going to medicare will actually be used to create a new entitlement program. that tax will hit about a third of small businesses across this country we're told. as i said earlier, have the employer mandates which is going to have a whole lot. it's another $20 billion that's going to hit small businesses across this country. and so you have all these new taxes and all of them keep it up on her small-business sector. and so the small businesses are saying what are we going to get out of this? what will this do to affect our health care costs? well, i want to show you what it is going to do their health care costs. this represents what the cbo has said. health care costs would do if this bill is enacted. the blue line represents they

are the cost essentially a few bill of doing nothing. in other words, the blue line represents what will happen if congress does nothing. that is the year-over-year increases that were already seen. represents the want to call it the status quo. what we forgive, from the other side they want -- we've got to do better than the status quo. the president, the vice president, you can't ask that the status quo republicans are attacked for being in favor of the status quo. we'll madam president the blue and represents the status quo. the blue line is what's going to have been year-over-year in terms of increases in health insurance premiums and small business and individuals in this country will be dealing with. it doesn't matter where you get your insurance in a small group, individual market. ironically he did in the individual market our rates are going to be 10% to 13% higher. and ask unanimous consent to extend for another five minutes? >> without objection. >> madam president, it doesn't matter which you get your insurance in except if you're an

individual market you'll pay much higher insurance premiums than just the status quo which is lucky man -- it is inflation for the foreseeable future. but the redline represents the spending under the bill. this is what the congressional budget office says will happen. you will see the cost curve bends up him and not down. so you're going to have more money coming out of our economy to pay for health care in this this country than you do today. that's madam president is why small businesses are reacting to. and why they are coming out as strongly and adamantly opposed to this legislation as they are. it ends the cost curve up, it increases the cost of health care in this country rather than banning it down. and you are the same thing come out of the actuary of the center for medicare services just like week. again, the experts are saying, the referees, the people who don't have a political agenda in this debate are coming on saying repeatedly this is going to increase the cost of health care. this is going to drive health

insurance premiums higher in this country. now, the other point i want to make because after i've shown you how health care costs are going to go up under this legislation is the other amazing thing about it and this is again, this is one of those phony accounting techniques or gimmicks that washington uses, sort of symbol business in washington, so mold washington smoke and mirrors way of describing what this thing really cost. in order to bring this thing in at about a trillion dollars which is what the democrat majority wanted to do they have to use a lot of budget gimmicks. the senator from new hampshire is here and knows all about this because he's all of this very closely as the chairman of the budget committee for many years. but he can't have it back to one of the things they did is they started the tax increases immediately. so one january 1st of this year, next year, which is now 18 short days away all these businesses across the country are going to see their taxes go up in 18 days.

at the amazing thing about it since many of the benefits don't start getting paid out for another 1479 days. so they frontload all the tax increases. so while these tax increases will be passed on immediately and by 2013 every american family is going to be paying, starting next year $600 up to the year 23rd team so every american family will feel the brunt of these additional taxes and a premium increases that will follow from those. but the amazing and remarkable thing about it is the action structure to the that would punish small-business and people who will pay these taxes on junior wearing one of 2010, 18 days away. and don't start paying out the benefits under the bill for another 1479 days. what does that do matter and president? in the tenure window they used to measure what this is going to cost it dramatically understate the cost of this legislation. and so what we're faced it is not a 1 trillion-dollar bill but

a $2.5 trillion bill when it's fully implemented. and when all these budgetary gimmicks and sort of phony accounting is actually taken into consideration. madam president, this is a bad deal for small businesses are doswell small-business organizations have come out opposed to it and you cannot get up on the other side yesterday and defy reality. and if i logic and defy reason and defy facts. and that's what those who are trying to push this huge government expansion and this huge takeover of health care in this country are trying to let people believe. they are just dead wrong and i believe the american people are tuning into that which is what increasingly in public opinion polls they are turning a thumbs down on this by majorities of over 60%. and i see the senator from new hampshire is here. i'm happy to and i appreciate him indulging me for an extra few minutes and would be happy to yield back the balance of my time. >> i ask unanimous consent to

engage in a colloquy with my colleague from vermont and ohio. >> without objection. >> madam, thank you. madam president i rise today to urge my colleagues and i consent to support amendment 3135 to place the reposed excised tax and replace it with the surtax that would affect only those making was really millions of dollars a year. senator brown and senator sanders with whom i'll engage in this colloquy has shunned him and his leadership on the issue and i want to thank them and join them in their efforts. before i get into this i just want to answer a couple things i've seen on the floor. i walked in and my good colleague from south dakota, senator thune had a chart up. he said when your taxes will kick in and when your benefits will kick in. so i didn't hear the whole

speech and i feel bad about that, not having heard his whole speech and of an up-to-the-minute that i didn't hear your whole speech and he said that's too bad. but i said to do mention any of the benefits that do kick in right away? and he said, no. which i think -- again, we are entitled to our own opinions. were not entitled to our own facts. benefits kick in right away. and if you're going to hold up a chart that says when taxes kick in and win benefits kick in you say 1800 days. you better include the benefits that do kick in right away. >> the senator from minnesota guild for a question? >> absolutely. >> of the senator from minnesota when i was pointing out on the chart understand the point i was making that the taxes increased

start 18 days from now and that the benefits, the spending benefits under the bill -- which are the premium tax credits and exchanges that are designed to do design the benefit under this bill don't start until 2014? the senator missed -- >> does the senator understand the spending benefits start right away? >> at the senator missed the point -- >> i asked you a russian senator. i'm asking you a question. >> the senator from minnesota may only yield for a question. and the senator from minnesota has the floor. >> past two what? >> has the floor. i have the floor. the senator from south dakota said i realized that i was talking about the spending doesn't start for 1800 days on health care. the benefits don't start.

here's one. $5 billion in immediate federal support starts immediately. for a new program to provide affordable coverage to insured americans with preexisting conditions. i don't know about anyone else in this body-- >> that's exactly right. what senator frank and insane it is for the high-risk pool. people who have the most trouble because of preexisting conditions. the behavior of the insurance companies and this debate is really about the insurance companies, my friends on the other side of the i'll always come down on the insurance companies. the insurance companies really are the ones that are driving so much waste and so much bad behavior in this system. and the other thing in this bill that's very, very important now is the medicare buy-in, that the medicare buy-in that we've been discussing that somebody that's 58 years older 62 years old and can't get insurance they been laid off or the other

preexisting condition or maybe they're a part of a small business that doesn't answer them 58, 62 years old. they simply can't get insurance. this legislation will allow them so far to buy into medicare. i know my republican friends can't make their minds up what they think about medicare. they've opposed it mostly for 40 years. they opposed its creation come to try to privatize in the mid-90's. they succeeded in partially privatizing it. now when we've simply at the aarp's request in part have pushed legislation that will cut them up with that of medicare. all of a sudden they're big fans of medicare but then they don't like medicare again because were doing the medicare buy-in. so i guess i'm confused by it. >> with the senator from ohio yield for a question? >> we gave the other side 30 minutes. >> senator thune wants to monopolize our 30 minutes. >> the senator from south dakota just said that when he gave his

presentation he was saying that nothing that we're paying for starts until 1800 days from now. there's a whole -- i have a whole list of things that start. >> the senator from minnesota has the floor. he may engage in a colloquy. he does not have to yield to any further questions. >> the patient and protection and affordable care act will inhibit insurance from opposing lifetime limit on benefits. starting day one. starting day one, senator. he doesn't want to hear it. he doesn't want to hear it. we are entitled to our own opinions. we're not entitled to our own fax. the fact is benefits kick in on day one in the large majority of benefits kick in on day one.

and we shouldn't be standing up here with chart to see the act opposite senator mccain a week ago said facts are stubborn things. these are stubborn things. small business tax credits will kick in immediately. the senator from south dakota just said that nothing, no payments, nothing that cost any money will kick in right away. that's not true. we are not entitled to our own fax. and i stand here day after day after day and hear my colleagues, my good friends from the other side to say things that are not based on fact. we hear the 78 trillion-dollar unfunded lab -- i remember

during the social security we would hear a 11 trillion unfunded mandate and social security. the man of the estuary what this is about. and the senator secretary snow and what it was the american action barrel got mad about this. you know what it was? it was into the infinite horizon was the liability. it was into infinity and that was a figure used by the president of the united states, george bush at the time. women. what was the thinking behind it? into infinity and people would live to 150 years old. one second, i want to explain the end of this. so this was the unfunded liability as human people live to 150 and still retired at 67. that was an 83 year retirement.

and that we lived to 150. i assumed the first 50 years, the next 50 years not so great. the last 50 years horrible. we did kill us stuff. let's have an honest debate for goodness sakes. let's not put a chart that can tend one thing and that are just not true. >> while i appreciate the senator from arizona yielding an average of the discussion of our colleagues on the floor here this evening who are pointed out not only how flawed this process is and that it's being conducted behind closed doors in contradiction of all the promises and commitments were made that this is going to be transparent open process. the senator from arizona has been great but i think holding the other side accountable when it comes to these all these pronouncements about how this is

going to be an open and transparent process. clearly that's not the case. there's something going on right now that we're not privy to a night to get some point they're going to throw something at the senator from arizona said at the while hoping this latest thing will stick. but i do want to make one observation with regard to the discussion that's been held earlier today because someone, a member of the other side, the senator from minnesota indicated he thought this chart was somehow inaccurate or misleading and i want to point out again, madam president, that the chart is very accurate. in fact the taxes and the bill began 18 days from now on to your january 12,010. an impact on the $72 billion of taxes will then collect data before the benefits that started to kick in before the paid out reman subsidies that will support the exchanges that are supposedly going to help those who don't have insurance get access to it.

that's 1479 days from now. now what the senator from minnesota got up and said and i quote, we are entitled to our own opinions we are not entitled to our own facts. as benefits kick in on day one and a large magenta and and we shouldn't be standing up here with charts that say the exact opposite. well, madam president, it's not me saying this. it's the congressional budget office. the cbo has said that 99% of the cover spending in this bill doesn't kick in until january 1 of 2014 or 1479 days from here. now i say to my colleagues and to most americans around this country, do you think it's fair to construct the bill that in order to understate its total cost starts raising taxes in 18 days, that doesn't start delivering 99% of the coverage

benefit until 1479 days from here. now if the other side wants to have an argument about whether 99% of the coverage benefits kick in in the year 2014 or 100%, i'm happy to have that argument. the point is simply this. taxis are at 18 days now. tax increases, $72 billion in taxes will of been opposed upon the american people and the benefits, 1479 days from now. the madam president, i wanted nick that point and refute the argument that was made by the senator from minnesota that a large majority of benefits kick in on day one. 99% of the benefits to kick in until then. now incidentally i have an amendment that i hope it a chance to vote on that would lead to tax increases until such time as the benefits begin. we think it's only fair to the american people that we synchronize the tax increases with the benefits. many of us don't support the tax increases in the first place which is what will be supporting

the crapo amendment tomorrow to recommit the tax increases back to the committee and hopefully get rid of them. but if you're going to tax increases and you're going to start raising revenue immediately, then you want to start paying out the benefits of the same time or decrease them so they are synchronized. that seems like a fair way to conduct into public policy for the american people. this clearly isn't the case. and the reason it was done this way and let's be honest about it in the newspapers have made it pretty clear that in some of the statements that they've made the "washington post," the measures of the effective date was pushed back by one year to 2014. i represent the biggest cost savings of any legislation to become before the house and at this year but the measures effective date was also pushed back. they keep pushing the date back to understate the costs. the reason they want to start collecting revenue right away and not start spending until later is because they know that if they start the spending earlier on they're going to

start inflating significantly the cost of this thing and the goal was to try to keep it under a trillion dollars. we all know now and they've acknowledged that the tenure fully implemented cost of this isn't 1 trillion bits $2.5 trillion. the american people deserve to know the facts. that's a fully implement a cost of nearly reason they can say that the first ten years it comes in at a trillion dollars is because the tax increases start january 12,010 in the benefits, 99% of the benefits don't start kicking in until january 1 of 2014. i think the senator for letting me clarify that. i tried to do that when i come down here and speak and i'm happy to have the opportunity to restate the facts as they have been presented to us by the experts by the congressional budget office and by the cms actuary, both of whom have concluded the same thing when it comes to the benefits and what the impact this has on premiums in this country which i think is the most devastating low to the

argument he other side has made in support of this bill when the cms actuary came out last week and said this is actually going to increase. this is going to increase the cost of health care in this country by $234 billion over the next ten years. so madam president, and happy to yield. as the number of our colleagues on the floor. the leaders here as well and i would certainly yield some time to the leader. >> republican national committee chairman michael steele said his party is committed to stopping health care legislation making its way through congress. mr. steele also announced a new effort to oust health care related events outside washington. this is about 25 minutes. >> good afternoon.

i thank you all for coming out this afternoon. i wanted to take a moment to bring you up to speed on how we see the debate right now on health care in the country. and to share with you a few thoughts of some actions that we are hoping to take at the grassroots level to more involved the american people in their voice that i think has been sort of lost in translation over the last few months especially. and so, we'll go through that and then we'll share with you also a little radio spots that we are going to be launching today. first i want to thank the leadership in the house and senate, senator mcconnell and the leader for their extraordinary effort to understand difficult

circumstances to get in front of the leadership, nancy pelosi and harry reid and certainly the president, a series of proposals that we thought would go a long way to addressing some of the commonplace concerns that individuals and communities and business owners have with respect to health care. they made several attempts, certainly to stop this madness, this worked towards a government health care takeover. i've heard time and time again against this great thrust of bipartisanship. just haven't seen it. instead what we've been met with legislatively is a lot of whining and complaining and noise about republicans obstructing and blocking health care reform. while we have been talking about creating a patient.are centered on a path process that is more

reflect to other concerns with respect to cost especially. and other concerns that the citizens have out there. in case there's any confusion, about where the republicans in the house and the senate are and have been for four or five months now if not more on health care. i have here a list of ten steps that we had proposed, reform ideas that we thought again were commonsense oriented and based on the reality that a wholesale makeover of our health care system was was not what was called for, but folks one of these incremental steps taken and then we can get back to the business of dealing what's really at the heart and soul into the minds of the american people, jobs.

so we wanted to lay that out just to reiterate what we think our appropriate bottom up response is to the terms of health care. we've been revised bill after bill, amendment after amendment at the scene over the last few weeks. some folks were surprised last week when i sent the memo around to the leadership and to republicans across the country in which i stated very clearly that we wanted to stop this lurch towards health care that we wanted to stop and slow down and prevent a takeover of our health care system. at this experiment was not the way to do it. and the bottom line still remains, that's exactly what want to do. this is not in the best interest of the american people. it's not in the best interest of small business owners in this country. and i still, you know, find that

it's amusing to the point of being fat that you're we are some 11, 12 months into this year and certainly in this administration nearly a year and are just having a conversation about the one thing the president says he was going to address and that was jobs. the health care battle is before us and before the congress right now. and the american people, some 60% of them, it in poll after poll have stated very clearly over and over again they do not want this. this is not my opinion and not the opinion of elective officials. it is the opinion of the american people. and i think they have been very clear going forward about what they want us to do. they don't want washington to spend a trillion dollars they don't have. they don't want washington to create that their children and their grandchildren and their

grandchildren can't pay back. they want washington to focus on the fact that a neighbor just had their homes foreclosed on. a relative just lost their job or their own small business is drinking and cannot access the beer capital and credit the president at the white house is talking about today and beating banks up for because the weight and the burden of this economy, the regulatory burden, the tax burden. before we even get into what they want to do on health care is too much. the creation of a new entitlement program is not the best interest of this country. it is not the best interest of the american people. cutting $500 billion out of medicare is not in the best interest of the country, not in the best interest of seniors. certainly not in the best interest of those who are going to be relying on the system in the next five years let alone in

the next ten to 15 years. and certainly increasing premiums on health care and driving us further in debt are again not in the best interest of the american people. as i try to run the country and spent the better part of this year in well over 30 of the 35 states talking with grassroots activists, talking with citizens, talking with people who have been expressing very clearly how they feel. i've come to find the one thing that matters most to them is leadership that's listening. leadership that's paying attention to what they're saying. those town halls were about something this summer. ladies and gentlemen, folks coming to washington on september 12 was about something. when a grandmother leaves her home in the middle of the day or a business owner shuts down his or her business or an employee,

an hourly wage or is risking lost wages to go meet a congressman or senator to tell them face to face what their concerns are and what's in their heart and what their fears are. it's about something. there's something that's moving them to do that. in the essence of that is that they want their leadership to listen to them. they want the people that they sent to washington, they want the people that they sent to their state legislatures to listen to them. and there hasn't been a lot of listening going on. we've seen the error against the power displayed in some of the amusing and some not amusing ways, this past year. and the american people have taken note of that. and they are just a little bit tired. they're just a little bit fed

up. they are just a bit disappointed., and this leadership. when you have as was noted today in "the wall street journal" rather peter or side, the presidents budget your site quotes we don't know enough to produce results right away with respect to this health care bill. the key is to encourage continuing improvement through pilot programs and demonstration projects, cost containment will actually take years to decades to address. now, i labeled this in the very beginning an experiment. and if that doesn't sound like an experience to me i don't know what does. but wait, there's more. last week in the new yorker as reported this morning in the editorial pages of "the wall

street journal" noted there is no master plan for dealing with the problem of soaring medical costs, only a battery of small-scale experiments. they don't think the american people are concerned. you don't think the american people are worried? when you finally get people to admit what it is we are dealing with, small-scale experiments. is this where we're taking our health care? i don't think the american people want that. in fact i know they don't want that. they want their stories to be a part of the solution. they want their experiences to be a part of the solution. they don't want a government to experiment on their health care. but the real story is not just about left wing ideology or some

frankenstein-ish experiment on a health care system. the real story is about a party that is consumed by their own monopoly of power cure in town. democrats control house the senate, the white house. they have the love for of power and they are hand and yet at every turn they look at others to blame. they look at others to call out to embarrass instead of addressing in an honest way with the american people want addressed. they believe that they can trample the system of checks and balances and that they have protect it themselves through their rhetoric and through the shields that they throw up

calling individuals un-american, calling people out of touch. those who disagree with them somehow been different. but the american people aren't different. they are unique in that they are a cross-section of a lot of attitudes and a lot of experience as and all they're looking for is leadership to appreciate that in my neighborhood is a little bit different than over here. and so go create something that allows both of us to achieve what we want. the give and take. it's the arrogance of unbridled power that counts is that the precipice of nationalizing won six of our economy. now is a party, our situation is simple. we can't force the democrats to listen to the american people but we can certainly hope the american people lift their voice up to be heard by those in washington. so i'm announcing today just

launch of a national listen to me at first, asking the democrats in washington to do something different for once and that is listen to the american people. we are going to be deploying staff to six states to help lift the people's voices. in north dakota, nebraska, virginia, arkansas, louisiana, and connecticut. we are focusing on senators who haven't yet made it clear how they would vote. the people who elected them i think would like to know that as with the rest of us. the american people certainly have a right to ask these senators and all members of congress to listen to them. and in the states we will do everything we can to help people get their elected representatives to listen, to

pay attention, to hear their voice. will be hosting telecom halls. we have to that are scheduled for today. we'll have other scheduled throughout the week. our state parties are going to be very, very active as well in creating opportunities for the citizens voices to be heard. we are offering up a multifaceted internet campaign providing people with a platform to express their opinions, letting voters say, listen to me. letting voters speak directly to their members of congress. we've got several coalition calls to actions that are going out today and throughout the week and into next week. again, touching into a cross-section of the community, doctors, health care professionals, business owners, those who are involved in the health care industry and those

who are ultimately affected by it. and certainly a grassroots activist campaign that again will allow for those voices that are often times dismissed or taken for granted to be heard so that as we get close to a vote of some sort or some decision on this bill, those members of the u.s. senate will know exactly what their people are thinking about it and will have heard directly from it. ..

>> new chairman steele you said you were surprised of the reaction and yet the democrats

have been making the argument all of you are trying to do is stalled in a long time. why is it both sides feel it is their political agenda for the same argument? >> well, we haven't been stalling for a long time. i think certainly the leadership, the republican leadership in the house and the senate have been very much engaged in trying to get the leadership in the white house, certainly in the congress, to come to the table over some ideas that we have, some of which are listed here. the fascinating part of this for a a lot of fuss has been that while, you know, nancy pelosi or harry reid but talk about the republicans stalling as i've said repeatedly you have the votes, pass the bill. but they seem to have a small problem with that. they can't pass the bill. and the fact that with, you know, 60-40 advantage in the

senate, you're looking to republicans either to blame or provide you with the vote you need tells me that there's something desperately wrong with the bill when you can't get your own people on board. so i think, you know, from my standpoint the idea that we are going out and saying let's slow this thing down, let's stop it is consistent with what i've been saying and i certainly know what others have been saying for some time. let's create an environment which we can do a patient dr. senter approach bottom-up that focuses on key things. if you don't like this one how about that one? if you don't like that one how about this one? you have a menu of choices that can be very easily introduced and not as complicated as this 2000 page behemoth they've got

running around the senate. so there are challenges, yes, in terms of getting all of this through the senate and house because they want to block it in return. but despite this challenges i think the leadership is fairly consistent in making sure at every turn people knew exactly what we were arguing and what we were arguing for. when i've been out in the community talking to you every day and getting feedback from them these are just a few of the things we know we can do right now to begin to address this issue and not have to turn this thing over to the federal government to make decisions about health care. so that's the reality. >> mr. chairman, will there be repercussions to vote in favor of a final bill in the house and senate? >> i feel really confident right now, given certainly in the house and senate where the

republican leadership has laid out on a think a well-founded case to stay together on this, and i feel we've seen that. i think many of the members in the senate there certainly have different perspectives on health care have all kind of come together around the idea what the reform should look like, and this is something everyone can come to the table on. certainly as we have seen those who have worked with the senate leadership in particular have been rebuffed by that very leadership, and because they were not serious about health care reform, and so i think that i feel really good as i know the leadership does that republicans are unified on this because we believe in the final analysis. it's not what the u.s. senate once or u.s. congress. it's what the american people

want. and to their great credit they feed a lot of attention to the american people. and i think that's reflected in this bottom-up common sense approach to health care policy and reform as opposed to a top-down government centered, government from mandated government tax system. and if that wasn't enough i'm sure there's more out there. thank you very much, and if you have any further questions or a follow-up please let us know. you can hit the website, there will be a lot of information there as well www.gop.com. i look forward to seeing a lot of you on the road as we continue to go round the country and listen to the american people. thank you. [inaudible conversations]

next, we will hear from senator dodd, who responds to rnc chairman michael steele's remarks about the senate health care bill. >> mr. president, let me -- we've had a lot of talk obviously in the last, well, going back to last more than -- go back years i guess we've been talking about health care, but in the last year if you try to calculate the number of times there's been meetings, conversations, not including the ones that occur on the floor of the united states senate, but throughout the capitol, both the other body as well as here, because members and staff is been voluminous to put it mildly. and we've come down here what appears to be the remaining may be just a few hours before we

will decide as a nation as to whether or not to move forward or to basically leave things as they are with the hope that one way or another things may conduct themselves in terms of the cost of health care, the affordability to individuals as well as quality of health care for many. and so, the next few hours, debate, days could largely determine whether or not, once again, the congress of the united states, democrats, republicans as well as the administration called the first to grapple with this administration for many months will succumb to what has afflicted every other congress and every other administration and every other group of people since the 1940's and that is our inability to come up and answer the question of whether or not we can do what almost every a third major competitor asia hours around the world concluded decades ago, and that is to

provide decent, affordable health care for our fellow citizens. if nothing else, this debate has proven how complex this issue is and it's showcased in the wide variety of viewpoints that exist within not only this very chamber but people across the country. certainly that was evidence of this summer in the so-called august period of town hall meetings. i held a five of them, madam president, in my state earlier this year and actually the winter and spring before they became quite the celebrated event of august. i know one of my colleagues, one way or another did either telehall or town hall meetings in their states. because this affects one-sixth of our economy, 100% of concessions, not only here today that the millions yet to come, our debates have been spirited and disagreements at times are emotionally charged, not only here in this chamber but across

the country. and so to my democratic colleagues who still have concerns over aspects of the legislation everyone of us do, to any republican colleagues who desire to put people as i know they do well ahead of partisanship and to my fellow americans who worry that politics will once again triumphal for progress, which it has in every single debate on the subject matter now for six decades let me offer some context for the date that once again begins this afternoon and is going to arrive at a closure in a matter of hours and days. and the answer ultimately would be whether or not we move forward and did which i think the majority, overwhelming majority by fellow citizens want us to do or fall back once again into the same paralysis that affected congress's administration and generations before. the consensus that we have already reached as the united states senate is health care reform would represent a significant victory for the

american people. we all agree on that point and it would be a significant moment in our nation's history. all of us can agree insurance companies should not be allowed to be my coverage because you have a pre-existing condition. at the same companies shouldn't be able to ration the benefits that you and your family received and that you as citizens of the united states should be guaranteed the coverage you pay for will be there for you when you need it. i think all of us in this chamber regardless of party or ideology, reform should make insurance more affordable. it should protect medicare and keep it solvent so that it will be there for future generations and that it should improve quality of health care for all americans, focusing on preventing diseases, reducing medical errors and eliminating waste from our system so that our health care dollars are used more effectively. i think, madam president all of us can agree regardless which

side of this divide that exists in this chamber that reform should empower families to make good decisions about purchasing insurance. power small businesses to create jobs and power doctors to care for their patience instead of filling out legions of paperwork and intel were the sick to focus on their illnesses instead of fighting of their insurance companies. these are the common sense conforms that will make insurance a buyer's market, keep americans healthier and save families and the government an awful lot of money in the years ahead. but i think all of us share these views. at least that's what i've heard over the last year i've been intensely involved in this debate in formulating the policy that is now before us. if you listen to the distinguished minority leader, good friend from kentucky, might be surprised to learn that his conference has decided not just to oppose our legislation but

unfortunate obstruct further progress. after all he called for a bill that incentivizes the board place wellness, allows people to purchase insurance across state lines and reduce cost. our bill does all three things, madam president. let me be specific age because page 80 of this bill i were bill includes a bipartisan proposal allows employers to offer large incentives for workplace illness programs. on page two and injured 19 of our bill, madam president, it includes a republican proposal allowing it plans to be sold across state lines. and on page one of the congressional budget office analysis of this bill, the congressional budget office concludes that our bill would cut the deficit of our nation by $130 billion over the next ten years. the single largest budget deficit reduction since 1997. in a lot body of 100 as we are in which both parties claim to

agree on these principles we should be able to achieve one would think a bipartisan consensus on a matter of this import. but sadly it would seem our work colleagues, to many of them again on the other side of this divided don't seem to care what is in this bill specifically. i'm reminded again as others have what is actually included in this bill. not that i would expect them or anyone on this side of the fight to agree with everything that's here. we don't. there's not a single member of this body who would not write this bill differently if he or she could. there is no doubt in my mind whatsoever about that but we serve in a collegial body of 100 where we come to consensus with each other even when we don't agree with every single aspect of this. and yet when i read the words of the chairman of the republican national committee and again, speaking on behalf of the party, this is why i find this is so disheartening, madam president. a time of this i expect there to

be a fall through to debate and various disagreements. but reed, if you will, the words of the national chairman of a major political party in this country. here is what he's suggesting his party ought to be doing at this critical hour. i urge everyone, he says, to spend every bit of capital and energy you have to stop this health care reform. the democrats have accused us of trying to delay, stall, slowdown, and stop this bill. they are right, he says, and of quote. let's hear that again. the democrats have accused us -- the democrats have accused us of trying to delay, austal, slowed down and stop this bill. they are right. end of quote. madam president, it is awfully difficult to hear those wanting to get a bill done here, wanting to come together with the chairman of the national party is recommending they do everything in their power to stop a bill that in fact includes many of the very reforms that they, themselves,

embrace. make no mistake, anathema to president, if this prevails i would like to tell you today with absolute certainty the provisions in this bill are going to include the results i described. i can't say that. i don't know. i hope they do. i believe they will treat i think we've done a lot of hard work that draws me to the conclusion we will achieve those results but only time will tell if those are the evens and results of our efforts. one thing i can say with absolute certainty, madam president, with absolute certainty, if we do any of our friends on the other side and clearly what the chair of the republican national committee, i can't predict certainly the outcome and that is premiums will go up dramatically, health costs will continue to wreak havoc on small-business is. our deficit will grow exponentially. americans will see premiums nearly doubled in the next seven years. a family of four is the end of

the alleged dollars a year to date. it is predicted with almost certainty that those premiums will jump to $24,000 within seven years if we do nothing. that much can guarantee. for those that are to the so-called status quo or staying where they are and let's wait another day to get this done, those are the results you can predict. more and more people will lose their health insurance. more families will be forced into bankruptcy. hundreds of thousands of americans are going to die, on necessarily in my view, in the name of the obstruction. madam president, i don't think we can let that happen. and so it has fallen to the majority to do alone the job we are sent here to do collectively, the heart and honest work of legislating, as difficult as it is. the fact that it made the score card is unique to this debate and as history shows there will not be what is remembered a generation from now the words spoken here in this chamber, the charts, the graphs, all of these things are slowly forgotten by history.

today we hold medicare as an example of a program worth defending. how many speeches have been given the last two or three weeks about the glory of middelkerke? i only wish those members here today had been present in 1965. we might have been able to pass that bill without the acrimonious partisan debate that took place in those days. today again we remember no one talks about 50 years it took to bring medicare to the floor of the united states senate. no one talks about what the polls said in 1965, but it to cling to the debate involving more than 500 amendments, by the way, to achieve consensus on medicare. and i might add nobody taxed as socialized medicine as they did in 1965. it is always easier to envision, madam president, the legislation we want the and it is to pass legislation we need such as the case here this afternoon. we won't end up with a bill i would have written if it were up to me, and it won't be the bill

any of our colleagues would have written either, alone. i would ask for two additional minutes if i may. >> without objection to read some it will be, madam president, a bill that improves the health care of all americans. a bill that makes insurance more affordable, and proves quality-of-care and helps create jobs in the nation. we have a bill that saves money and saves lives, and it will be a bill that decades from now we will remember not for the difference is we had in this chamber, but for the difference is it made in our nation and for our fellow citizens. to get there, we must build on the consensus we have already reached, not tear it down with of the weapons of political gamesmanship. we must answer of the call of today's poll or tomorrow's election, but the call of history that we have been asked to meet the other generations, other congresses have failed to meet, but we are on the brink of achieving. my hope is that all of us will come together in these closing hours and do that which many predict we could not do.

again, the past legislation we need, not that we envision the ones we hope to create. with that, i yield the floor.

now, a discussion on the federal debt. which now stands at more than $12 trillion. we will hear from two former white house budget directors and others about ideas for changing the federal budget process. they are part of the peterson-pew commission on budget reform, which hosts this evening. it's almost an hour and half. in all conversations

[inaudible conversations] >> good morning everybody. >> good morning. [laughter] >> good morning, congressman. [laughter] thank you for coming to join today. i want to welcome you all to the release of the recommendations by the peterson-pew commission on budget reform. i am maya macguineas, the president of the committee for responsible federal budget. and i think there is no question it is a moment for fiscal policy in this country. it is unfortunately a very troubling time as we are both dealing with a recovering economy and massive amounts of debt that have been accumulated in part because of that economic downturn and because of policies we have been running for quite some time. i think the country as a result needs this report and the kind of recommendations we are putting forward and other groups are putting forward to work on focusing attention to the

critical question of how to deal with the united states fiscal policy challenges. the work here, i will show you because if the cover looks so good, i'm very proud of how this report looks as i would fried's but it reflects a remarkable partnership between the peter g. peterson foundation run by pete peterson and walker and the pew charitable trust run by rebecca and the economic policy group run by john morton and the committee for responsible for alleged who is board members made up the commissioners on this report and who are truly some of the greatest leaders on budget policy in the country, they are the folks that her from the office of management, the congressional bill to office, federal reserve, budget committees and we are joined by them to talk about the presentation of this report, red ink rising. it is a culmination of a tremendous amount of hard work from the commission all of their biographies are in the actual report. it is a bipartisan effort which i think is critical at this time

because solutions will only be done in a bipartisan manner and that means it reflects many compromises. there is probably nothing anybody that is on this commission thinks is perfect but they knew how they had to work together to come up with a solid framework for focusing on the debt in the economy. it is sensible, balanced. i think it is called -- thought fully thought out in a time when dealing with economy and budget problems. and it is a jury could start life and we need to do to move forward to actually changing the policies to bring down the national debt. it is not easy to do the kind of things it will take to achieve the goal really out here or is this a group of people anyone would describe as politically naive. they know exactly what is involved and came up with a balanced plan to achieve that. i'm going to turn the panel over to the cable knowledgeable david wessel, just off the plane from europe so hopefully he will not be hit by jet lag in the middle of this but i do want to thank

again the peterson foundation and pew charitable trust for supporting their work and work on the issue of fiscal policy. both these conditions are taking leadership roles dealing with fiscal issues. of course i want to thank the commissioners who worked so hard and went above and beyond the call in terms what they put into their hours of work writing in every riding on this report. i would like to thank technician's tremendous staff and a group of the advisers we worked with her about this process. i particularly want to thank victoria al-hurra, damien more and nathan atlas for all of their work on this report. we are proud of what we are going to talk about today and i'm going to turn over to david wessel. thank you. >> thank you very much, maya macguineas. i was at a conference in berlin, and joe ackerman, the ceo of deutsche bank said at one point that it's appropriate time of year to talk about fiscal policy. usually at christmas kids ask

santa claus for presents and the adults pay for them. but in this era of deficits adults ask the government for presence and tell their kids they will pay the bill. i think it is an interesting -- i'm a reporter so it's always looking for that little fact that illustrates that something is happening and one fact is that there is a discussion of the deficit and washington in a room that there are more people than chairs, so that's kind of a leading indicator of things. we see it at the polls in "the wall street journal" that a couple concerned about the deficit has definitely risen. as has opposition to the spending cuts or tax increases. [laughter] so i think -- the ultimate dilemma is quite clear as douglas holtz-eakin's successor doug elmendorf put it that the american people ask the government for benefits, many of them for retirees that exceed

the amount of money that the american people so far are willing to send to washington to pay the bills. so i admiral of these people for once again trying to deal with this issue. some of them have been dealing with it since i was a lot younger. and i think it's important to note that not all of them are on social security. douglas holtz-eakin is only 51 but as he pointed out to me, the way things are going in the senate health care debate, she may soon be eligible at least for paying for medicare. with that let me turn over to the panel. this is about discipline, and so that's not only physical, it is in use of time. what we are going to do is i'm going to ask bill frenzel to speak about ten minutes to outline the plan the commission has put together and i'm going to ask each of the people appear to speak about five minutes so we have plenty of time for questions. bill? >> thank you very much, dave and ladies and gentlemen for coming to this meeting.

i hope he will be as interested as we were when we were writing the report. mauney part of this is short and simple. while we were writing a larger report dealing with budget process it became apparent that our debt was running away with less us and we had to do something about fiscal policy before we could continue our work on budget process. so this report is step one and will be followed by budget process report which we hope will help the congress and the president come to some of these conclusions that we are laying on them today. the commission has said we asked

the congress and president to work together to commit immediately to stabilize the debt as a percentage of gdp. you understand that debt to as a percent of gdp is up a little more than 10% this year and is headed north of 80% by the year 2018. so we are saying let's stabilize that debt. and we say as step to you have to develop a specific and credible program in 2010. that is of course a large order for congress. its campaign year, and we think it is necessary to read as soon as possible and make the announcement. stat three weeks say you fees and the earliest policy changes in 2012. that allows the recovery to

proceed without unnecessary innovation. but the decisions are still we hope to be made in 2010. step four is to review the progress of the program each year and enforce meeting of the goals that have been set by the earlier commitment. and this envisions a program in which if you do not meet the goal that triggers effective that will inflict certain other kinds of pain of both taxation and spending cuts and a responsible enforcement program. stat four -- i'm sorry, step five is to stabilize the debt in the year 2018. we think that is as long as we can wait for stabilization. we've chosen the 60% gdp.

european union uses it as a standard of sorts. it is no miracle number but you have to have a number and that is we think achievable yet it is a pretty good target for 2018. step six which may be the most important of all and maybe even more difficult than the first five is that in 2018 having stabilized the debt and 60% we are asking the congress and the president to go forward and reduce the debt ratio further and we don't tell them what it should be because we can't force either conditions of those times but we expect it should be considerably below 60% and may be more like 40%, which is somewhere near the average of these last many years since the

war. with that i deferred to alice rivlin. >> i should have introduced people. bill frenzel is the former chair of the house budget committee. alice rivlin's reza me is too long to go through the relevant things she is a democrat in the founding mother of the congressional budget office. one of the few institutions in washington that seems to function as it was intended. i wonder if he could speak a little about what makes this deficit reduction set of proposals different from all the other deficit reduction set of proposals to which your name has been affixed over the last 25 years. >> more than 25. yes i can. i think it is the urgency of the problem and the shift in focus from the deficit and to detect. obviously they are related. the debt is the sum total of the

deficits. but those of us who've been talking about deficit reduction for a long time have pointed out that in the future we are on and on sustainable course. we have made promises under medicare and medicaid and social security that any reasonable set of assumptions will exceed the revenue available from current tax law we so there is an impending problem. but that problem was always very far in the future. now it is upon us and the other thing that's happened is while we talk about the future problem of deficits the current debt level in relation to gdp has been quite moderate in this country and the range of 30 to 40% until very recently. so, we didn't have to worry so

much that immediately that we couldn't pay the interest on the debt. but now as a result of the major things that have happened in the last two years the cost of dealing with a financial crisis to the recession that followed the financial crisis in terms of revenues falling off and expense is going up and actions taken to forestall to help the economy recover from the recession as a result of all of that the debt has ballooned and now we are in a range is we haven't seen in a very long time so it makes everything that much more urgent. >> a lot of people say why in god's name would he want to even think about raising taxes or

cutting spending at a time of still comfortably high unemployment rate. so are you talking about doing this stuff now? >> nope, not this year. not even next year. what we are talking about is committing to a goal of that stabilization by the nine years from now. the goal is fairly arbitrary. the important thing is stabilization. that will mean getting the deficit coming down as the economy recovers. and it will mean putting in place credible actions in the future including reductions in the entitlement spending and tax increases. everybody on this group agreed that it was quick to take both. putting those in place. but not for the immediate future because it would be a real flair recovery if you did. >> doug holtz-eakin, who was on

the other things, director of the congressional budget office and of course most recently famous for advising john mccain. we've been hearing this guy was going to fall if we didn't do something about deficit for quite some time. we haven't done much except make it worse for quite some time. the sky hasn't fallen, and in fact interest rates have fallen. the united states is able to borrow extraordinary sums of money at very low interest rates. so, why should we worry about this now? what risks, if any to the economy are opposed by projections that show as this report goes rise of gdp? >> the budget deficit has for a long time been forecast dramatically as the bb boomers higher and we do the shift and the demography. but the point that alice made is i think the central one which is what used to be a three-decade problem has become a one-decade problem. we see enormous spite are lifted

to gdp over the next ten years. why would you care about that? we know that the debt deficits have costs, and those costs are in the form of diminished economic performance, higher interest rates, reduced kind of investments that we will make it productive capital, diminished exports around the globe were to our ability to compete and in general we will perform less well. the deficits matter because the shift who pays the bill. the kids pay the bill, and with a financial bill in the form of the debt, which they may go to foreigners and in an economy that is smaller than would be otherwise, and you get limits to policy flexibility. if you've got as we are on track to have interest about $800,000,000,000.10 years that is money that you don't have for other budgetary objectives. it also limits the flexibility of the reserves in combating economic shock. so we are setting ourselves up for not just the conventional

menu of cost but the dramatic size of cost. and in particular international lenders at some point will look at the united states and no longer say they've got 30 years to fix it and i trust they will do it. they will say they've only got a decade and don't seem to be serious. i'm not putting my money in the u.s. anymore. that's a recipe for a currency crisis, strikes interest rates and serious recession. so you would like to avoid that. it is true coming out of a worldwide recession and financial crisis we do not get see the conditions in financial markets that would suggest that's tomorrow. but the fact it's not tomorrow doesn't mean we should simply politely the one ury. it's time to take action. >> of markets are forward-looking and better than government at seeing the future you look into the future and see this fiscal catastrophe. why aren't we seeing this in yield for the long term borrowing now? >> you have to assume number one we are seeing the aftermath of the financial shock or we did see people with a flight to u.s.

treasury whether that is rational or not that is a traditional place to go in a crisis and number two financial markets are counting on the government to get its act together and the last thing we want to do is disappoint them and that expectation. that is why what alice said commit now to credible policies in the future can have dramatically beneficial impact on performance. >> thank you to read jim jones is another former budget committee chairman and the house, democrat and among other things for u.s. and i consider to mexico. doug mentioned on like in the past the distant past when we had deficits and owed money to ourselves, that now we are borrowing more and more from abroad, largely from china but also elsewhere. what do you see as the international dimensions of the u.s. on the verge of becoming what some might consider the largest sub primghar work?

-- subprime mortgages or word? >> this situation reminds me of a friend who was overweight, smoked, drank, had bad eating habits, didn't exercise and we all told him you've got to shake up and he said his grandfather lived into his 90s and drank and smoked and he will, too. not long thereafter he had a massive heart attack and is in the process of trying to recover. i think that's what we are facing. we don't know where the problem is going to come from. it likely will come from international sources, but we are living a life, fiscal life that is not sustainable, and so to me -- again i would go back to say that last week when moody's threatened the u.k. and the united states with a downgrading that was a major wake-up call. when the premier and the president of china told a

delegation led by kissinger and bob rubin we don't have any confidence that you are going to be able to deal seriously with your deficits and debt problems, when the imf and united nations say we ought to look for an alternative reserve currency i think those are all major wake-up calls the we ought to be heating. i told the story earlier after i left congress i was the ceo of the american stock exchange of new york and one of the surprises to me in getting to know wall street was how irrational financial markets can be. and they go on perceptions and react on a where they think things are going and i think our fiscal situation is something that is being perceived. right now it's not being focused on because all the markets are focusing on the global recession. but as the focus on the subsequent issues, the fiscal

policy, they do not see any serious attempt by the united states to get our house in order and so with this commission report does is give a blueprint to get our fiscal house in order. the perceptions and a lack of confidence if they don't have the right perceptions i salles also when i was ambassador to mexico on the surface the first year and a quarter that i was there on the surface mexico had a great fiscal and monetary policy, great economy etc.. but soon the lack of transparency, lack of candor of their monetary as well as fiscal policy began to show through. the markets saw this and stampeded out of mexico and mexico still has not fully recovered and reached the kind of economic level they should have since the 1995 peso devaluation caused by a perception, lack of confidence in the country and the

government. so i think we have to have a way to get the policy makers to deal with the deficit. in my judgment the current congress and process in congress is simply broken. it's broken mostly because of a strong sense and a growing degree of partisanship that disallows working together for common solutions. negative what this does and the bipartisan makeup of this commission is to show a way in which these issues can be dealt with. they've been dealt with in other countries flexible sweden if you look at the past two decades sweden and canada had an unsustainable debt and they took care of it. they got their house in order and made the political decisions and they are on the right path now. i personally believe that what is being talked about in the senate a commission as

bipartisan commission similar to the base closing commission that comes up with a bipartisan solutions and then forces the congress to accept it yes or no is the right answer, and answered. so i think we are really messing with a massive heart attack on fiscal issues if we don't act and that is why i think we have to do it right now. >> thank you. jade makes the excellent point that a lot of this has to do with the functioning of our political system and whether there is a political will to deal with problems outlined in this report. we are going to hear next from charlie stenholm and jim nussle. i wonder if each of you can speak about what do you think will force something to happen? if this can't go on forever, it won't, but how do we get from here to there without collision? charlie? >> well, i think that elections

have a little to do with that and that is why we are hoping the current house and senate will take a look at these recommendations and put forward a plan that they will run on for next november. that is one of the answers of that, but i think the significant part of this discussion now some of the skeptical questions that keep coming up is i think the american people now understand the difference between deficits and debt. as you build your credit card deficit ultimately you have to pay for it. as i like yogi berra's version of the quote that which cannot go on forever usually won't. and now hindsight most people know the home prices could not go on up word for ever and then use all certainly the market took over. you can see this evidence and many of their personal family

trials and tribulations that are going on now as a detachable american families have to deal with their own debt, and now you take a look at the current congressional discussion going on as a kind of more of the business as usual in the senate, a group of senators of going to increase the debt ceiling to $14 trillion on less to get a commission. not a bad idea. those who argue against it is a regular order of the congress should prevail, not a bad idea. we are just suggesting somebody do something that gets their fiscal house in order and on the right path. in the house my blue dog democrats are insisting again on a pay-as-you-go. i've never understood how anybody who claims to be a fiscal conservative can be against paying for that which we are asking to be done. but it's been very convenient to put it on a credit card and what our grandchildren pay for it. now we will see over the next few days between now and

december 24th what compromises are going to be reached and hopefully something positive will come out of this. but the big part of the political now is we are hoping we can get some troup by partisanship and have a target of 280 votes in the house and 75 votes in the senate to put ourselves on a plan that will satisfy home? the same people families are having to satisfy, the bankers, they have a plan where they're in, will pay for that which they have now -- donato and will get a sustainable path. if you really negate down to the simplistic things families understand and i think our families are understanding i think the politics will follow. >> thank you. mr. nussle? >> welcome those who are -- those who are c-span junkies or budget junkies know that charlie stenholm and i have had a few key dates and disagreements over

the years, just a few. but we come together on a commission like this and have proven i think in a bipartisan way that you can come up with a solution. you can come up with a mechanism. it isn't pretty. it isn't going to be popular. it isn't going to be easy. but like families, our you was that a family gathering over the weekend and part of the reason that we love each other that we wish to at night and there are many similarities between the parties when it comes to wanting things and not being willing to pay for them, promising things and not being willing to deal with the consequences in the short term and that's caught up with both parties, and i think that what you will hopefully see is a political solution to this problem. you don't want a market based

mechanism or market based event that will cause the parties to have to come together and deal with this. you want this to happen politically as a family coming together as americans and saying similar to many families who have to deal with this with their own mortgages before they went to their banker they had to come up with a plan. we don't want to have to go to our banker, which is china, without a plan. we don't want to have to be forced into a situation where we have no alternatives. we have nowhere to go accept what the market or in this instance what our creditors want us to do. we want to be able to deal with it. so we try to put together a mechanism. if you wear your political hat and those of my current colleagues who might be watching say it won't happen in an election year. it's always an election year. it's never got an election year. we are either waiting for

midterm or presidential election. we've proven in the past in our history in many different instances brought up today whether it was budget summit's or social security commission's or all sorts of different examples where leadership can prevail on both parties to come together and sit down and deal with a problem. what we point out is the problem is coming sooner than anyone probably realized. as dodd said it used to be a three-decade problem, now it is less than a decade. we show a mechanism whereby republicans and democrats can have both a political cover and the will to come together with a mechanism to deal with it. and we give them tools for their toolbox to approach the problem. that is what any of us who spend chairman of the budget committee have been at omb can do. now it will be up to them to address this.

but there's no question if they don't we will be less free as a result. this is about our freedom. we see what date does to families, what it does to individuals, but it does to people that max out their credit cards to a small business that is over leveraged and we see it every single day what happens. you will be less free if we don't deal with this problem and deal with it as soon as possible, and that is what this commission has tried to put forth in the mechanism we've put together in this report. >> thank you. it's clear to me that the committee shows great foresight having four members of the house and no members of the senate. [laughter] -- on the panel, given everyone's cup to their time. [laughter] want to ask a couple of questions. so the committee says -- the commission says basically the steady as she goes policy has led us to have government debt

about 85% of gdp by 2018, and the goal should be to get it to 60. alex, could you talk a little about how heavy of the left is it to raise spending or revenue to get to the lower debt-to-gdp ratio over the period? >> it is a pretty heavy lift but it is not impossible. depending really on what you think the baseline is. and we have chosen a baseline that does assume most of the tax cuts that were enacted early in this decade will be extended. if you didn't assume that would be easier, but we think that is realistic and we have made some other assumptions that make it harder. and that means we are going to

have to work hard to get on the glide path to stability. we are going to have to get budget deficits that are likely to be even after the economy recovers going up again at the end of the decade. we've got to get them coming down into a range of two or 3% of the gdp. we don't have to get to surplus. but it is going to be very hard to get to the range that will be necessary to stabilize. >> so, in dollars we are talking to -- what kind of dollars are we talking -- hundreds of billions of dollars annually? >> yes. >> , if you mentioned the president of the united states. what role does the president played in moving from fiscal --

one of you said earlier inebriation to fiscal sobriety. anybody? and charlie? >> i did mention -- our board asked the president and the congress to work together to make this go. traditionally when there have been summits when congress and the president working together, the presidential leadership has been required. it's been an essentials, and the president has as tough a job as congress does and applying some of this leadership. he really has to be the first actor. he's got to bring them together. he may have to lay out plans. but his participation is absolutely necessary to make this plan work, and in fact in the beginning he has to be a major player.

>> mr. jones? >> i think the health reform bill that is going through the congress now has to be the first test of the president. he's going -- he has said it has either got to be deficit neutral or not increase the deficit, and i think he has to seriously enforce that as the bill makes its way to his desk. secondly, the president can create an atmosphere nationally like no other members of congress can individually or even as a small group. so i think that he has to over the next year as part of the 2010 elections and beyond really set the story that we have a serious problem and we have to deal with it in a serious way. >> doug if i could ask a final question before we come to the audience, i know no one on this panel believes we can grow our way out of the deficit. but what role does economic growth play and how do you balance the need to encourage growth with the need to have a

more tight fiscal policy? >> i think number one you do what alice said, which is now announce a plan that puts the budget on a sustainable path. that's good for economic growth. that sends the message there will not be future -- certainly tax policy, uncertainty about interest rates and all of that is helpful. excuse me. number two, the way we set this up is to look at the debt relative to gdp. so if you can find a beneficial fiscal policy that helps the economy grow that helps solve this problem, you get faster growth and that won't be the single solution but you should always balance to choices about how to cut the deficit with one that is most programs, and i think in the end of this is about setting pro-growth long term fiscal policies instead of fiscal policies which fundamentally are about borrowing to hand out goodies. they don't go to a bigger economy and they don't lead to greater growth. >> let's turn to the audience to read a couple of rolls.

one is weak for a mic because it makes it easier for the people listening on c-span. member to, say who you are, and number three, a question in this with a question mark. [laughter] someone -- is it pete davis here. >> pete davis. thus ending the war in iraq and afghanistan over the next few years help very much? >> someone want to take that? alice? >> any decrease in spending helps. but the long run deficits are not being driven by a military spending. and we assume the war will eventually be over and that the military spending will come back down. but even if it continued the drivers of spending in the future are medicare and medicaid and lesser extent social security. >> there's a question in the

back. >> thank you. i am nicole woo for the center of economic research. he mentioned medicare and medicaid. i would like to ask a related question. what type of contributor to the debt is our private health care costs, and if we were able to reduce the costs and those of other developed nations, how would that affect the federal debt in the future? >> well, i think the short answer is the growth in medicare and medicaid share some common elements with the growth in private health care costs, and to the extent we get reforms that slowed their growth in general there will be some budget benefit to that. >> over here. >> joel peckerwood committee of education funding. one of our concerns and arguments has been that investing in programs like early childhood education, college financial aid, high school

dropout prevention actually over the longer term help the economy help people get education and lead them to better jobs so as you are making these proposals should there be some distinctions between spending and programs that might lead to future economic growth versus other spending? >> similar to take that? jim nussle? >> as a wendi chair i never heard the argument made for that was in the argument for every single program for every spending item, department organizations etc. so you make a good point there is no question but it is almost always in the eye of the beholder. i think what we have done is we have said different than past commissions, different for that matter than past even bipartisan efforts we have said everything should be on the table for discussion. spending both entitlement and discretionary an automatic and those that are -- those spending items determined every year as well as all taxes, whether it is

those who are interested in tax reform and those interested in tax increases or those who believe tax reductions spur growth. everything needs to be on the table and everybody needs to be at the table. you make a good argument, but unfortunately i am sure just about everyone will be counting their argument in the making priority. >> allyson? >> if you do nothing about the growth of the entitlement programs between medicaid and social security it will inevitably drive out other things including spending and investment in children. ..

for additional spending -- let us use education, which we all agree. i would say, it is a great idea. can you help us find a way to pay for? is there something we are doing in the education community that is less desirable than some of the other things? and that is the spirit in which the commission will be put asking all phases of the budget. take a look and come forward to congress and say every dime we are spending on education is being spent efficiently for the purpose of educating children. i doubt you can do that. and i can speak in almost every aspect of government. that is the spirit in which the commission is recommending a new look and a new process to go through. >> everything is on the table. no and the vocalise. -- annie oaklie but, everything else to be

considered for a program to have effectiveness or validty. >> just one point is, to establish one of the key things the report suggests is establishing a goal, a debt-to-gdp ratio and what that gives you is a way to say no. it has to be not just good but good enough to make the cut. we have no way to say no right now we don't say no. in fact-- >> can you explain in simple terms what happens if the debt-to-gdp ratio continues to rise? what happens to the share of our budget that goes to interest payments and make it real for people. >> you can be running a trillion dollar deficit. andras this 800 billion so we are very close to the point where getting a new credit cards to pay off the old one, and if you look around the globe we have seen argentina, we have seen countries which are the poster children for letting the debt to gdp ratios get so far out of hand a literally have no room to move on necessary

programs and they get cut off. >> a question here in the front and then over here. can you wait for the mic? >> antone with the executive intelligence review. if you have a quadrillion in derivatives, and maybe hundreds of trillions of on payable that's to finance ears, and you are not going to put money into mass of the infrastructure to shift, to get out of the collapse of the whole economy, what is your slogan rightfully be something like, this time around, we are not going to make the trains run on time? if you are going to try to force more austerity in the middle of the collapse of the whole economy? that is the picture you have presented, really. >> again the important thing to

stress is we are asking for a future, not of austerity but simply arithmetic that's up instead of what we have done in the past and we are not asking for 2009 or 2010. the planning has to happen now. the commitment has to happen now. the implementation happens later. >> good to see so many friends here in congratulations on a great report. i want to ask your thoughts on how to make this politically viable. charlie mentioned we need to lundrigan 80 votes. i would suggest a different metric a we need the majority of both parties because it is just to one polis on the sword and the of the demagogues and is to debate republicans scream about how wonderful medicare is and elsewhere in the house were applauding our cells for tax cuts. what are some thoughts we can make this real? those of us who have said no on the number of measures are getting flak from all sides and there needs to be some way or

someone running for office are serving in office as a metric by which they can be rewarded or recognized for the achievement and can be something so simple a support the balanced budget amendment. none of you are calling for that here that i'm hearing on this panel anyway so what are some thoughts about how we communicate to candidates and voters that this really does matter and sufficient that it should be a priority in casting a ballot? >> okay, does want to say something because i don't know anything about politics. >> you have demonstrated that. >> absolutely. [laughter] so, here are three ideas. number one, replace wessel as moderator. [laughter] number two, you have to find ways to unite around something good, or ways to unite around something to fear so one thing you can unite around is you may not think is fair to raise your taxes, but it is really unfair

to demand wealth and that is what we are doing. were handing them a diminished economy and saying now you have to have a tax to and lower spending. technically you do unite around fear of china as our banker, and i personally find it an embarrassment to this nation and the secretary of treasury goes to china and graduate students laughed at him. >> my assumption on the 280 was a majority of democrats and republicans because i don't believe you are going to see unanimity. congresses so fractured today right and left, that getting 435 those would be impossible but to 80 with the majority of both parties is something i think that is the goal of this commission. >> all of these things are correct. for one thing, the public now seems to understand the debt

ratio better than it understood deficits. i think we have to play that much harder. we have to play this story of international control. our of theirs being managed from abroad, which is difficult, and the important item of intergenerational that, and i suppose the last item would be to have you refile for office. >> i think to though, for me at least, i am not convinced that it is going to happen magically. this is not a situation like ebenezer scrooge where he wakes up the next morning having been visited by the ghost of budget passed and they all say hey, do you know gosh we really need to get together and talk about this. [laughter] there is going to be a triggering event in my estimation. i believe there is going to be a triggering event. it may be one of two things or a

combination. it is going to be a mid term collapse possibly. that might be the soonest example. it could be a presidential change or a race wehr this becomes the short could be a market, some kind of triggering market demand and a commination occurring at that point but as we have seen, and it is unfortunate, there is so much invested on both sides right now in the argument that it may be very difficult to impossible for that to be on wound for a magic. it will require i think a very unfortunate triggering event for that to occur. >> pass the michael we can then we will go over to the side, so the two gentlemen here. >> norman bailey, world politics. mr. holtz-eakin mention argentina. my question is, and support the goals of the commission and it is extremely important. my question is why do the matters of the commission believe that what they are suggesting is something similar is more likely to happen in the

way the situations are usually dealt with by countries which is either through and fleeting away the dead or by defaulting which is what argentina did and as a result that when on for several years at very high economic growth and if they had saved the money instead of wasting it would have been able to pay off the debt and would now be back in functioning normally. >> i think we need to modify crem metaphors and show some examples. i want to say a word on behalf of the average government which is actually taken fairly dramatic steps to cut the budget deficit. does someone want to take the gentleman's question? is a default or inflation an alternative? >> first of all i think the commission has a belief in the political system. it may be broken right now but i think we of the belief that the american people are fully informed, that the political system will respond to that. but there has been encouragement in the past. i had mentioned about how

important the confidence or lack of confidence and perception is in the early 90's. we raised taxes and we cut unsustainable spending, welfare reform and things like that. those issues of themselves did not balance the budget and yet we had a surplus budget by the end of the '90s because that plan gave confidence to the markets, to the private investors to start investing again. i think if we have a plan, we adopt this plan, we have some things that are serious like a pay as ecosystem, a commission system that requires congress to face the issues i think the private sector globally will respond to that and we will be back on track. >> alice, inflation? i no it is not the desired outcome but is that an alternative? >> it is possible in the long run, but at the moment, i think the kind of triggering event that most of us would fear would

be a spike in interest rates and a falling back into serious recession, rather than inflation but i think the basic answer to the question is, we are not a small country. we have the status of the world currency. we would like to keep it a we have the status of the bonds everybody goes to when they think safety. we would like to keep that, and that is very, it is very important to us to keep this status that we have in the world. >> in reference to argentina, i think we should not lead people to believe that that is the way all countries in the world operate. within this report, there is a special inserts that shows you a dozen and a half countries who have come back in very strong

fiscal position from a position about the way ours is and it can be done. the other countries have done it. we hope that they are not that much smarter than we are. >> sir. >> roger erickson. i'm not represent thing anybody, just a research biologist. a quick comment on that point. it is my understanding there is never been a country that is the fault the that hasn't been on the single standard so we are in a completely different situation. my question really is that a fundamental point that nobody has asked here, it's the only way to a private citizen in the united states and with currency is as a result of trickle down from federal level public spending and they have to return some of that for taxes, al is taxation revenue to the government? >> someone want to try that? >> i guess the point where i disagree with the characterization is that it is not trickle-down income as a

result of trickle down government spending. it is the economy is composed of an marriott of entrepreneurs, and prose of the skills of its workers and the past accumulation, and so, those protective capacities are the core of our economy and we choose to measure and exchange them in dollars, which is the currency that the federal reserve is ultimately trying to guard, and i think one of the points that is important here is that there is an interplay between what the federal reserve can and wants to do and the enormous deficit the federal government is about to run and we should try to minimize that. >> i am eric with the fiscal times, the new digital start of focusing on the budget in the fiscal issues. i have a specific question for alice rivlin and jim nussle. all the panelists have said that it is essential that all issues

be on the table and trying to figure out what you do about the deficit in the debt. for alice rivlin, on the question of medicare savings, what are areas that he would look at that congress has not looked at already in trying to finance health care reform and for jim nussle, would republicans seriously consider raising taxes as part of an overall solution? does it seem likely? >> do you want to start, alice? >> i think that the first line of defense on rising medical care of costs is making the system more efficient comma and medicare is actually an extreme case of large and efficient medical care system because it is a fee-for-service system that does not emphasize managed care. i think we have need to change

the reimbursement rates in medicare, so that they reward more efficient kinds of care, and yet, and discourage treatments that don't work and excessive treatment. that is going to take time and it is going to take effort, and the problem for the administration and congress right now is to put mechanisms in place to do that, and the cbo won't score them, for good reason because in the past congress has the real them so the real question is, is congress serious enough now to allow greater efficiency in medicare and also medicaid? >> all things on the table mr. nussle? >> yes, but it is a wise question. that is why i said i don't think this happens to the magic. they are not going two of a

sudden say, i woke up today and everything is on the table and you are my list of tax increases if you are a republican or here is my list of entitlement cuts that you are a democrat, and frankly i'm not even sure it is fair to characterize the parties in that kind of way, that one would before taxes and one would be protecting of spending. i think there is enough to go around on both sides. that is why i believe it is going to be a triggering event. i don't think it is on to necessarily be there first calculation or their first impression or their first, pieno, place that they would immediately go. if it were me, i would look at it in terms of how the government collects such revenue through tax reform. hallet alexis, who would collect it from, how we can spur economic growth to that kind of reform and finally for once his a system like this or a process

like this, to give comprehensive tax reform on the table for the first time in a generation. the way it needs to be. if you were a democrat in the book at the same way for entitlement reform, a place for i know democrats are concerned about entitlements and their growth. because of their constituency maybe they have had a difficult time laying that on the table so i think using the process as a way to say look, we have a fiscal gold now for the first time, azamiyah likes to say finally we are to this process setting a goal. we are arrive at a result currently in our fiscal process. the result of everything we do at the end of the year we added up and we say that must be where we are adding. what we say now is, this is where we want to head. how are be going to get there so instead of building from the ground up the way we do now let's build from the top down, setting a goal and then moving toward that goal, knowing that

everybody has skin in the game in everybody has put everything on the table. >> the gentleman right there in the back. >> joe with the committee for economic development. mr. nussle may well be right that we needed triggering event to deal with this problem. i think he probably agrees that were put down the list of potential triggering events, many of them too terrible to contemplate. mr. jones answered the question earlier about the role of the president and i believe, it was mr. jones, in addressing this. i wonder if the panel could think about some scenarios of how, with presidential leadership we my head this mess off? >> alice? >> well, i think if the administration perceives, and they may, that if they don't take a strong position on the

long run deficits and make them concrete proposals in the 2011 budget, they are going to get killed in the midterm election. if they reason that way, i think we could get action in the next year, not to solve the whole problem. but, maybe sausage security reform, maybe some elements of tax reform, may be a serious commission, may be all of these things. as a preventive antidotes to a perceived landslide for the other guys in the 2010 election. >> i would agree with that. i think that the numbers all point to the fact that there is going to be some sort of drastic problem in the next few years.

most likely would happen before 2012 and maybe before 20 tense so i think it is in their political interest to take a lead in this and i think they probably know that. also the polls show that the debt is in the conscience of the american people. they are concerned about it. i think there is a natural constituency with young people and retired people together, and to say, if we are going to have, if we are going to turn over our country is better than it was which is the american thing to do for 200 plus years, then we are going to have the bite this bullet so i think there is both an emotional and political and practical reason for the president to take the lead and i hope that you will. >> joe, my only point and let me make sure i'm clear. i'm not suggesting that both parties and individuals within those parties including the president will fail to make proposals. i am sure the president will make a proposal. what i'm saying though is that

republicans, and i will be bold so don't his, on the republican side they will say the president is doing it because he finally saw the light and he is worried about what is going to happen in the midterm elections. the democrats are saying the reason you are attacking is because you have no alternatives to ourselves and they will blame the inheritance from george w. bush and it will go on and will continue to go on with that argument, with proposals coming up. what i'm talking about with the triggering event is something that causes both of those arguments to melt away and force them to the table to say, okay we have heard those arguments. regardless of that i'm willing to put some skin in the game to actually get that then. that is the triggering event that i don't yet see but yes i think there ought to be proposals but both sides will dismiss the other proposals in this next year until that event occurs. [laughter]

>> khai love from the british embassy. alice talked about the two-pronged approach and the announced plan to increase confidence in the economic pillage so you don't threaten the recovery. i think kind of with the proposal that has announced it now and there is some possibility that the public might be a bit skeptical about the culpability of the plants that could you say a bit more about that plan, what are the characteristics that would make the plan credible? >> that is not what i said. i said inactive now to take effect later. note is the question, but if we could do this in the next year, it would be good. and let me give you a couple of examples. the easiest one in social security. if we were to enact a social security reform that brought the

future social security deficit down to zero, we wouldn't possibly have anything happen immediately. if you are raising the retirement need for changing, whatever you are doing is going to take time, and you wouldn't have it take effect for current retirees, so that is a very good example. another, people talk about it value added tax. supposedly decided to do that. look at inactive but even if we enacted it tomorrow, it would take several years to get it up and running. >> another question, the gentleman there? >> ed graham of the investor's daily. several of you talked about interest rates responding favorably if we take some action now, and negatively if we don't. i am wondering if it would be helpful if that was built in

sued cbo's quiring and why isn't it? and i guess just be clear, i'm talking about the interest rates, the interest-rate and potential for a spike in interest rates. >> so, it is built into cvo's analysis of the president's budget which is the only comprehensive budget proposal in a season, and they cycle and in the context of doing that analysis looks at that, looks at the implications for interest rates and all the feedbacks that happen to the economy. the difficulty on a piece of legislation by piece of legislation bases is you don't nowhere the moving parts are so you can't figure out what the deficits might be. >> there is a question here and then there's one in the back on the right. >> thank you. i'm not with any particular group. i am a citizen who pays taxes,

and now on medicare and his work in health care, and i want to address this question to the whole panel. you mentioned mr. nussle about a trigger. i don't hear anyone here talking about, and i think the trigger is here for the average american. we understand we are not working, so if you talk about entitlement reform, social security and medicare and medicaid, i don't hear anything about creating jobs for people can get back to work, to put some money back into the government. i don't know if there is the political will for anyone in congress to say no to any constituent group, which i think they should, we don't have the money. there are wants and their needs, so why is there no discussion about jobs? and those people-- should the government's tax high income on individuals who create those jobs? thank you. >> does someone want to take that? >> i think the answer's pretty

simple. number one, everything is at once to the fact that it is a big part of getting debt down relative to the economy. uft growth to be successful in that regard. as with respect to the specifics will try card is a commission to not let the specific policies. with the size of a thing is to be on the table, that you have to have a real cool, a plan, a place where you are trying to take the budget and do it anyway which is beneficial to the overall economy. >> and not tighten fiscal policy now. >> we don't do it in the middle of a recession. >> i am bill, and i probably should not ask this question because i am talking with it there should be a substantial pay raise. i am very concerned that the chief justice of the united states makes only $232,000. the supreme court of canada makes much more, as well as singapore. now, what do why do? do i go to say, well,

mr. president whenever you go out to camp david you don't have to fly an airplane. if you took a car it would cost less. where could i go to prevent anybody to give more money and the white irritate either the congress or the paid executive branch of the government? >> which member of congress wants to take this one on? [laughter] >> okay everything is on the table except the chief justice's salary. we will take that off. [laughter] >> in the back. >> al milliken, and dme yet. did anyone have further commentary on former presidential candidate john mccain's impassioned reaction on the senate floor yesterday? the to get worked up enough? >> someone other than doug? >> you have not seen anything. [laughter]

>> you were talking about senator mccain, talking in the health debate? >> were you watching the senate in action on a football weekend? [laughter] >> do you have a question? are you going to answer it too? >> so, i was at a dinner party recently where i saw perhaps the best dinner track i have ever seen. someone took off the invisible caller and put it around their throat and walked up the invisible fence to feel what it feels like to get hit by and one of those and it was something to watch. >> you go to some weird dinner parties. [laughter] do you know what this is going to do to washington's audience in the c-span audience? >> as a result that has been my favorite analogy to the fiscal crisis for do we don't know when the tipping point is going to happen that as we keep warning

we know is really going to hurt and that is one of the scenarios, you get set up in some prices. the other scenario is a soft landing for we have an ongoing undermining of the economy but what i would like is it a couple of folks from the panel would boil that down to families because i think what we don't do a good job of this how this affects real people who don't spend their day will bring about budget deficits of those two scenarios, what with that feel like for families? >> anybody? alice, are you offering to start? >> i think the crisis triggered would be first our interest rates go up a lot, but then as a result of that, the job situation gets a lot worse, and the things that the questioner in the front row were worrying about get worse. the softer scenario, that doesn't happen, the economy recovers slowly, and what