have on someone who is flying at a full-size jet. yet the number of hours and the distinction that is made in terms of experience and what you allude to as quality versus quantity distinction. i am interested in hearing you elaborate on that. this seems to me that the number of hours the public has has got to be a part of the equation to determine whether or not the pilot is equipped and qualified to fly some of these planes. " it wouldn't matter to me whether they had one passenger or 100. they should be as qualified as we can make them. weather flying a regional jet or a 777, they would have to have an air transport rating. what comes into question is who

could be the co-pilot. under today's regulations, the person can have a commercial pilot's license. .

>> i also think that when we get past here, i think we need to take a look. we have come along with technology and we do a lot more today than we did win this world was written. i think some of the elements the need to be revisited, the same

things i just mentioned, the icing, the high-altitude upsets, all of these. carriers put them in, but we need to have the assurance when you go to work that you have those as a requirement the one thing i'm suggesting is that i think there is a point at which quantity does matter, where you have experienced enough hours operating some of these aircraft. and i'm not disputing the notion that quality and ability fly different types of circumstances is important, but i think there is a point at which these pilots -- there is an assumption sometimes that these smaller planes are not as difficult to fly, and therefore you do not need as much experience. certainly, i do not think that is the case. i just want to focus a little bit on that.

>> i think that some of the operations at the smaller ports are very complex and require a high level of skill. >> i want to mention, too, with regard -- and i think senator joe hanna has touched on it -- in flight to 37 you had both pilots who wanted to commute. one of the things in the letter we signed to you trying to get the focus on, the flight limits have not been changed in a number of years. faa had a proposal, i'm told, that language -- that languished for years. after some reason crushes they have revisited the issue, which is why the letter, i guess, urged them to move forward. but as you can imagine, the airlines are not very receptive to the idea that lowering flight

times for the crew, because obviously will have to hire more pilots and that cost more and scheduling and everything else. but i'm wondering if this issue commutes to before someone gets on a plane and flying a plane, and the way you calculate the limits on the number of hours they can fly. we have talked a lot about this, but i want to hear your thoughts and perspective about how that can be addressed. and it is very much at issue in this incident, where you have pilots that came in, were sick, and have long commutes, you know, sleeping in the where the crew is. it clearly adds to the amount of time they have been flying. i'm sure it has to affect their ability to be alert when it comes time to actually fly the plane.

>> that is an issue. we have talked about it several times here. i am concerned that a and to simply come up with a push to give role that identified -- to simply come up with a prescriptive role that identified private commuting, that the product would just have to leave home earlier to get some amount of time. i'm presuming that everybody is saying, well, you need to be in some place, in some zone. but it is very difficult when you think about -- who decides who commutes and who does not? i will give you an example. i am based here in washington d.c.. much of my career i was based in washington d.c. is 55 miles into dulles from annapolis. were they commuting? most of their trips were out of baltimore, but sometimes they had to fly out the list. -- to fly out of dulles.

was i commuter? i lived here. i've was based here. this is my domicile. there are so many ways that somebody could show up fatigued. it is very difficult to put your arms around whether it is a fatigue issue or whether there is some prescriptive or rule that says, you have to be your 12 hours if you commute. we do not know if that was good rest. we do not have any way of measuring the quality of the rest you got. we do not have a way of measuring that any more than if i live here and i had a child up at 2:00 and i fly out at 8:00. these are some of the difficulties that we are faced with. the burden would be on the pilot, not the carriers. i will tell you on the probable that we mentioned, some concern on the carriers saying it could

cost more money, if it is uniform to everybody, it does not make any difference. if the price of fuel goes up 2 cents for all of them, it goes up 2 cents for all of them. collectively, they will not like that, but at least is not an unfair burden. in this case, it is in the interest of safety and it is a burden they would bear. i am not overly concerned about the fact that we might have some additional pilot staffing that might come from this. >> i know when you are living somewhere and you commute to my it may take an hour and a half or two hours to get to the airport to fly. but i think there's a big difference between that and commuting from seattle to a flight that departs from new york. that is a very long flight and fatigue would come into play. >> that is one of those where professional responsibility -- i certainly would not. if i knew i had to fly at 8:00

in the morning, i would not get on a flight at midnight and have any expectation i would be ready to fly. >> administrator babbitt, i have a number of questions, but i believe we have a couple of other colleagues that probably wish to ask a second round. let me just -- i have questions about pilots' records and the equipment outage from november 19. i want to have them. let me ask you about the cogan crash, if i might. just generally speaking. i thought you said earlier that you felt that the training was sufficient in that cockpit. i have tried to read as much and learn as much as i could about the crash. 49 people lost their lives in the airplane, including the crew. and that includes one person on the ground. it seems to me there are a number of things that caused

significant questions about that cockpit. i do not know whether it is just an aberration and it just allowances as one airplane out of a lot of flights, but because a lot of things went wrong, this is one that crashed as well and it does exist elsewhere. or the question of the training, just as an example, you're a pilot and you have flown allowed. -- flown a lot. the crew -- let me ask the question differently. first, you indicated this was not isolated. the reason the nose -- this was not ice. the reason the knows how to go down was because it was picking up ice. that is why i assume the stick pusher was reacting.

my understanding is that neither people in the cockpit had had in-flight training on a stick pusher. if you, god forbid, had been a passenger on that flight, would you feel that there had been adequate training on that portion of the procedures with respect to the cockpit crew? >> i think that this accident has shown us that the fact that they were exposed to the stick pusher, which is the action of last resort -- the airplane had been in icy conditions, but the airplane was not icing. it had its equipment on. >> but we are dealing with icy, right? >> right, and what they had done is they had begun to slow the airplane down and put out a lot of the devices, flaps and so forth, and had failed to monitor the speed drops off. instead of giving full power, which they should have done, for reasons known only to them they

thought they could recover with partial power, which they could not. the airplane went to the back up phase and said, if you're not going to lower the nose, i will. that is when the stick pusher to go over. they had been exposed to the training, but not in the way that it could have been. >> i'm just asking, is there a training issue here? the answer seems to be yes. and then the question is, is there and experience issue here? the person in the right seedbed talked during the recording, did they have much experience or understanding about ice and so on? also, the pilots record in the left seat. is there and experience issue in the cockpit? >> i think the investigation is going to point to that. someone not doing what they were

trained to do befuddles most of us. >> and it was there a commuting issue on this flight? if you, god forbid, had been a passenger on this flight and one person from seattle to new york and of the other from florida to new york, is there a commuting issue in terms of causing fateh? -- causing it fatigue? >> commuting is an issue. why would you think that you could come home from vacation for hours before departure? >> but what i'm trying to say is that i think a whole series of things came together in that cockpit that were troublesome to me as an observer after the fact. training, experience, pilot record. as you know, the ceo of cogan indicated that he had access to all of the pilots' records and that pilots would not have --

that had he had access to all of the pilots' records that the product would not have been hired. are you aware of that? >> yes, sir. >> training, experience, the record -- i guess my question is, is that just an aberration on that one cockpit or in order of things to come unless something significant changes? >> i think it was a very bad collection of events, but i think we have the wherewithal going forward to remove each of those. any action is always the culmination of a series of things. if we had removed any one of them we would not have had an accident. >> i have said before and i always want to say that the pilot and co-pilot were wonderful human beings, sure, and they cannot speak for themselves. i always feel bad talking about the two people in the cockpit that lost their lives. on the other hand, we do not have a choice to talk -- but to talk about that.

most of us here fly all the time, all the time. and we know that a lot of management -- men and women who fly those plans do a terrific job. greek people, great skills. i do not want this -- great people, great skill. i do not want this to reflect on the profession, but i do want to be sure that the things that we now know -- and i have cited some of them -- represent and urgency in the f. a. in terms of a response. mr. babbitt, when you were nominated i expressed that i was pleased with that nomination. you have a wealth of experience. and you also now understand -- i have described previously about trying to get through the labyrinth of government agencies, like walking through wet cement. it is very hard to get things done.

and yet, i think you understand that we are saying, boy, we want you to move aggressively. and i think you come to this job not wanting to be a caretaker. you want to move aggressively. i have other questions, but i will call on senator rockefeller. >> i just wanted to comment. i agree with what senator dorgan is saying. i have an icing question, but i think that has been answered. and thank you, i want to say the you just sitting there and having observed what you do, you are a take charge. your pro-active. -- you are proactive. you are protected by nature. this is one of the most difficult jobs in all of washington and it is also one of the most powerful jobs in all of washington. i fly into west virginia almost

never on a jet. i serve myself champagne if i'm actually at the end of a jet. we just do not have those. i am always worried about the icing thing. we have a lot of bad weather in those hills. but what i want to say is what i said at the beginning, that the nature of this committee has changed on all fronts, on all subjects. it ended yesterday -- and it used to be a sort of go along tie committee, keep the trains running, the plane's running. we are not that now. we are delving into -- we have a crew of investigative lawyers who report just to me. they can go anywhere they want and uncover any wrongdoing they want and they have access -- they use the subpoena power free

the. -- freely. that is what we do. we are fighting for people here. this is not a statement to you. it is a statement to everybody. we care, first and foremost, about consumers and their safety. and we understand we are in economic difficulties. we understand that every corporation that has a small jet or a big jet or a small prop or a big croprop, they're all under pressure. so is the aviation industry. i talked to a guy last night in texas. he said their sales are down by 70%. you can buy a $20 million plan for about $9 million i understand that. but we cannot be affected by that in terms of at the interest of consumer safety.

i want that message to go out loud and clear. i thank you. i respect you. i think you are doing an excellent job you have that straight ahead look. you answer questions directly. you cannot avoid. and you are proactive. thank you. >> mr. babbitt, let me ask about pilots' records. the faa has made it part of their call to action the ability of a potential employer to access all of the pilots' records, correct? >> yes, sir. >> good cooperation on that? >> yes, sir. >> use of wireless devices, laptops, and other devices during the commercial operation of an airplane in the cockpit, my understanding is given the -- what we saw with the commercial airline overflying by about an hour and 20 minutes the city it was aiming for, the pilots indicated they were working on their laptops on pilots'

schedules. i do not know what the real facts are, but that is what we know from public disclosure. we introduced legislation tuesday that personal use of wireless communication devices like laptop computers during the operation of commercial aircraft would be banned. again, personal use. i understand are wireless devices that can be used as part of the operation of the aircraft, but personal use -- do you support our legislation? >> yes, sir. >> i was surprised to find that many commercial airline companies already prohibit this, but faa regulations would not. we just felt like there ought to beat a federal regulation that prohibits this. >> this may be one of the area's latest so obvious that you thought no one would need guidance. but anything that is destructive in the cockpit and -- distracting in the cockpit, my only thought would be that i

would limit. and laptops can be quite useful and carriers have databases for take off information. somehow the aircraft manuals -- somehow the aircraft manuals stored on board. that is fine, a very appropriate use of it. but magazines, so do proposals, anything that is distracting -- soduko puzzles, anything that is distracting -- my old carrier, we were not allowed to have anything distracting in the cockpit. >> and the massive delays across the country, very briefly, what caused that and how can we ensure that does not happen again? something similar happened to that again a year ago. >> i was very aware of this from about 5:25 a.m. on. what happened was a lark -- a

large rubber in the network was being -- a large roger in the network was been replaced in los angeles. it had been mapped improperly. -- a large router in the network was being replaced in los angeles. it had been acting improperly. it was a human error. 18 had suppressed a warning system. had it been -- a member of the team has suppressed a warning system. had it been put on with the warning system, that would not have happened. i think is important to understand that safety was never compromised. what we lost was the ability to have our system automated, the ability to process a flight plan information on an automated basis. the system worked. it identified that it had a problem. it identified that the data coming was erroneous. and it essentially warned us to shut the system down, but it gave was that warning much later the nature of due to human error. as a result, as of about two

days ago i have put together an oversight team. and remember, this was a contractor for us. i have asked the cio's of the faa itself along with the omb, representatives from the department of defense and the dot, all with a couple of outside experts to take a look at the system and i want answers on two grounds, number one, the short-term, what happened? how did we allow this to happen? and number two, how what do we do to make sure it never happens again? the second phase of this report will be taking a good look at the network architecture. we are building a completely new infrastructure on this and i want to be sure that we have a robust architecture that is protected, that is redundant and will never allow this to happen again. >> we are working with the faa, air force, and others on the

issue of air space for unmanned aircraft. as you know, a a uav's or uas' are a significant part of our future. i believe there is in august 2010 target date. -- there is an august 2010 target date. i think is important to continue to meet the deadlines there. i want to call on senator lautenberg in a moment. i want to make one final comment and then i have to depart. i will ask senator lautenberg to ask whatever questions he wishes to ask. i said to ms. gilligan who was here about a week and a half ago that we intend to monitor very carefully what is happening with respect to your rulemaking. ms. gilligan indicated that some of that had slipped. you were originally talking

about december. she talked about january. you talked about today how difficult it is to do these things, which are committed to, but time lines are hard. for example, just on the icing issue, after 19 years on the most-wanted list, we really are going to be pushy. the we are doing that because we think is essential at long last to get to the end stage of this. you have been very short time, i understand that, and you inherit these things that are unfinished. is your responsibility to finish them. and you will not like, perhaps, that we push, but we are going to push really hard. we want a good relationship with you, one in which we push and you delivered and america's skies are safer as a result. again, i said when i started, i am very pleased that you became faa administrator, frankly. i think you bring it wealth of that -- of experience to this

job and you have the capability to do really good things. we want to give you the tools to do it and we want you to meet deadlines. i thank you very much for coming here. i will send you a list of additional questions, especially on the subject of next gen because that is a significant priority of ours and targets and time lines are there. >> i would be happy -- as a matter of fact, have suggested to some of this stufstaff, browe could give you a quick tour entire line of the things we are doing. there is acceleration here. the components are coming together. i appreciate the push that you give us and you can rest assured that there is some of the push going on internally from me. i would be delighted to escort a group to show you live and in color what we are doing with

next gen and with the potential is for us. i welcome that. thank you. >> administrator babbidge, thank you very much. senator lautenberg, would you proceed and adjourned the hearing when you're concluded? >> how long shall i proceed? [laughter] >> until you run out of breath or questions. >> or five minutes. >> or five minutes, as the administrator suggests. [laughter] >> thanks for being here and thanks to the senators for their constant attention to matters of air travel. i am informed that we have some of the people from the families of those who lost their lives in the cogan flight. while there is not a lot that we

can do for consolation to let them know, but their presence and interest can help us. perhaps we can make sure that something like that does not happen again. we're certainly pleased to have mr. babbitt as the administrator. he has, as it has been described, extensive experience and we're pleased at the chance to get to know one another and i am interested in the action that he is committed to taking. -- committed to taking to provide safe travel. it is amazing when you think about the record that has been composed over the years in

aviation in this country, but even one slip is one too many. we should never have that happen. runway safety and aircraft overruns continue to be significant problems, mr. babbitt. recently, dot inspector general report highlighted dangerous runway procedures at newark airport. these procedures were brought to the attention of the of fayed nearly two years ago by a new -- newark air traffic controller, but yet, the faa has just now proceeded to act. which we are pleased to see, but why did it take a day so long to act on safety concerns -- take the faa so long to act on safety concerns raised by the air traffic controller? >> that is a very serious issue for us. i think you should know that since i have been the

administrator, my chief counsel has created an office to completely revamp how we deal with the whistle blowers. i guess the most important point i want to make is, when someone raises a question and a half to "blow it was a" to get the information to us, we have already had a breakdown. when people bring us things, we should be dealing with it. i want this handled differently. something went wrong. we had a failure to communicate, a failure of understanding. something went wrong at, and i want to change that. >> so, we can count on you to be willing -- a willing listener, or an unbiased willing listener if complaints come to the system? >> that is precisely what we're trying --

>> in the past there has been some concern about security of their jobs by raising complaints. we do not want to hear about that anymore because you get them to the witness table. >> and that's completely flies in the face of what we're trying to achieve with safety management systems. i have testified here and other places and i have spoken about id before every profession -- about it before every professional group that can bring action and pressure for us that we need to have a system that allows people to point out safety flaws that will guide us in avoiding accidents, avoiding problems, avoiding conflicting runway issues, any of these are worthy of being addressed. we need to have a way to allow them to express it. >> certainly, when things go the other way, when a mistake isn' learned about, when bad practice is threatening, the faa

should be quick to jump on it. and they should certainly be equally as quick to respond from something that comes from an experienced and working flight controller. i want to talk for a moment about cogan flight 3407. the first officer of the flight had a base pay of around $20,000. she traveled from seattle on a red eye. she carried around some concerns, obviously, about her income, lived at home with her parents. and she may also have been ill at the time the flight -- the time of the flight, but was afraid to lose the time that she would not be paid for. so much pressure.

uni talked about capt. sully, the pilot on the miracle on the hudson. he was cut 40% in his salary in recent years, forcing him to take another job. given all the responsibilities that commercial pilots shoulder, should there be some review of salaries? it would be extremely unusual, but they do not send anybody of in nasa -- in a nasa shuttle unless they know they're in a -- in good health. there are so many other situations where a heavy response ability relies on an individual or their health isn't a concern, their condition is not a concern. health includes reductions in

stress and with unease of a facility to get to work and so forth. i am not against people having to travel to get to work. but the thing that should happen is that there should be sufficient time to get to work and to have enough of a time lapse that they can have some recovery time before they get in the cockpit. the question of incomes ought to be somehow or other reviewed. i would like for you or your department -- or we will do it from our offices -- to get some indication of what the sellers are and see whether they are consistent with the responsibilities -- what the salaries are and see whether they're consistent with the responsibilities that go in the

cockpit on an airliner. regional airliners operate half of all domestic departures. they move more than 160 million people a year. if we have one level of safety for both regional and major network carriers, shouldn't the pilots of the regional carriers be trained and compensated the same level of -- as pilots for a major network carriers, particularly if they are find identical routes? -- flying identical routes? >> the data you mentioned earlier what the compensation records are, those are readily available. as a matter of fact, they -- they report them to the department of transportation. a form 441 collects the data so we know what all the carriers pay. the data is available to us. that is an area, compensation dairies from every carrier --

varies from carrier to carrier. when i was flying i took a pay cut of 20% myself and i lost a substantial portion of my pension plan. i'm very familiar of what the economic impact is when a carrier does these things, and the stress when a carrier does these things. but it continues to concern me and should continue to -- should concern all was that we will not continue to attract the best and brightest to this industry if they are now or to be compensated. i testified in 1992 about pension reform and the obligation that i thought carriers had. that is not my role here today, but i am concerned that if the wages are not supportive of attracting qualified and intelligent people to these jobs, in the long run they will suffer. it is not anything that the faa

can undertake, but i think the commercial airline industry -- and i would applaud secretary lahood who has called together a group to study long-term. he brought a group together from the airlines, manufacturers, labor unions and the question was, what do we want this airline to produce? do we want to produce service to small city, high-paying good jobs whether it be pilots or mechanics? i applaud his action there. he is going to empower that within about two weeks. this group is going to get together and he has made it clear that he does not want a series of nice things to do. he wants a series of actionable items that we can take. >> good, we had an incident in this room sometime ago when there was a takeover attempt of one airline by another. the acquiring airline was

willing to pay $17 billion in cash to buy the airline. the room was full of pilots of the acquiring airline, and i asked the question about the ceo of the company -- if they had $17 billion available for the purchase of another airline, why were they reducing pensions? the room broke out in applause. i was not looking for that, but the deal was broken. because there was a different set of evidence of responsibility that the of -- that the airlines had to take, and we need their cooperation in determining what the compensation ought to be there to make sure that the pilot is lined as much as we can with a respectable salary that says,

look, this job is worth it. because people love to fly, as you know. and they will fly for almost any price, not just for income, but for love of job. in 2006, the former faa administrator stated that newark liberty air traffic control tower needed at least 35 controllers to move traffic safely. but right now, there are only 26 certified controllers and eight trainees manning the tower. they're supposed to have 35 trained, but they have only 26 trained, fully trained. i have been asking this question for the past five years. this time, i would like to have it be the last time that we discuss this. and i trust you, mr. administrator, to make sure that

if you do not have the resources to do this, then you have to let us know. when will the new york tower -- newark tower be fully staffed with controllers? when will the oftlaguardia -- when will laguardia? also, j.f.k.. maybe there are technological reasons that say, ok, we can get by with it. but if that is the case, you're going to have to tell us about it. lastly, the faa has taken major aerospace redesign and -- in the new jersey, new york, philadelphia region. the major overhaul of flight patterns has raised safety concerns from controllers and

could increase the noise levels over many parts of new jersey. in 2007, the faa dismissed the noise problem, at best, as a side issue. we cannot say in good conscience that the quality of life issues affecting hundreds of thousands of new jerseyans should be considered in the redesign process. there is also concerned about living in the path of the glide platpath of an airport or take . can we count on you to do that, and also, will in this to hold a town hall meeting in new jersey

to address the safety and noise concern regarding aerospace design projects? >> yes, sir. i have indicated in the past -- i think one of the areas that we have not done well is when we talk about airspace redesign, people immediately focus on some new daughter of lines that did not used to go over the area in -- some new dotted lines that did not use to go over the area in which they live. we have a new contract with the air traffic controllers association. we are making a lot of efforts to have a much better dialogue and ability to communicate with them and the ability to collaborate with them on issues. i want their participation in this airspace redesign. i welcome their participation. this is an environment in which they live. they do this day to day and you can have a lot of academic studies, but having the academic

and the technical solution parallels and mated with the practitioner gives you a far better product and experience. i want to do that. but secondly, it is incumbent upon us to let people know that we are doing more than just changing dotted lines. this redesign it -- we are not redesigning it because is working so well now. it is not working so well now. we will be able to utilize a lot of new techniques. the crux we look forward to that and i'm going to close this hearing -- >> we look forward to that and i'm going to close this hearing. once again, i convey our condolences to those who lost loved ones in the flight to buffalo. we are trying very hard, honestly -- and i address this to the people here -- to make sure that we learn from and how

terrible mistake that was. how terrible an error in judgment that was in terms of having the kind of person in the cockpit that you can feel good about, or obvious it was unable to assist in that moment of emergency. with that, i close this hearing. thank you for being here, mr. babbitt. i thank all of you for being here. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2009] >> c-span, christmas day, a look ahead to 2010 politics

including republican congressman eric kanter and nbc's david gregory, buzz aldrin and fellow astronauts on the legacy of apollo 11, a discussion on the role of muslims in america and the world. later, a former cia intelligence officer on u.s. strategy now -- against al qaeda in afghanistan. and remembering the lives of william f. buckley jr., and senator ted kennedy. >> in the mid-1990s, news -- "newsweek" named omar wasow one of the 50 most important people to watch in cyberspace. since then, he helped found a charter school in brooklyn and explain to new technologies on oprah. sunday night he talked about his -- talks about his current studies on c-span's q&a. >> the senate passed an $871 billion health care bill. the vote was 60-39 along party lines. the only senator who did not

vote was kentucky republican jim bunning. nebraskas and a democrat ben nelson was the last senator to vote yes on the bill. he spoke following the vote. remarks that the majority leader made about all of the people that work at the capitol during the difficult an intense time. we thank you very much for your outstanding service. it's early and i'll be brief. the most obvious problem with the bill before us is it doesn't do what it was supposed to do. the one test for any bill was whether it would lower costs. this bill fails that test. it's also clear that even many of the people on this side who are going to support this bill don't like it. otherwise, the democratic

leaders wouldn't have had such a tough time rounding up the votes. otherwise, democratic leaders would not have had to have votes in the middle of the night or at crack of dawn or over the weekend or even during a blizzard. otherwise, they wouldn't be rushing it through congress on christmas eve. the first time this body has had a vote on the day before christmas in more than a century. this debate was supposed to produce a bill that reformed health care in america. instead, we're left with party line votes in the middle of the night, a couple of sweetheart deals to get it over the finish line in a truly outrage -- and a truly outraged public. the problem, they were told

would be fixed wasn't. i guarantee you the people who voted for this bill are going to get an earful when they finally get home for the first time since thanksgiving. they know there is widespread opposition to this monstrosity. and i want to assure you, mr. president, this fight isn't over. in fact, this fight is long from over. my colleagues and i will work to stop this bill from becoming law. that's the clear will of the american people and we're going to continue to fight on their behalf. mr. reid: mr. president? vice president the majority leader. mr. reid: like so many endeavors that have benefited so many americans, making health insurance more affordable and health insurance companies more accountable is a process.

it's one that is required as to find common ground as we should. that's why, mr. president, we have a piece of legs that over the -- legislation that over the next decade will reduce the deficit by $132 billion. over the next decade, as much as $1.3 trillion. now, mr. president, everyone knows we've had votes in the middle of the note and on christmas eve because the republicans wouldn't allow us to have votes at any other hour. now, it's true when we go home, we're going to hear an earful. i'm going to hear an earful from young caleb. a boy, mr. president, that was born with legs that stopped right here, above his knees, he needed new prosthetic devices because the rest of his body is growing. but the insurance company said no, because he had a preexisting condition. i'll get an earful from caleb and especially from his parents.

an earful of joy. from this day forward insurance companies will not be able to deny coverage because of preexisting condition disability. people like caleb and people who have children with diabetes and other problems, it's over. with so, yes, we're going to hear an earful, but it's going to be an earful of wonderment an happiness that people waited for for a long time. this morning is not the end of the process. it's merely the beginning. we'll continue to build on this success to improve our health system even more and to further ease the terrible burdens on american families an businesses. but that process cannot begin unless we start today. the american people and the american economy cannot afford for us to wait for the next time. because, you see, mr. president, there may not be a next time. nearly 65 years ago, harry truman condemned a system that condemned its citizens to the

devastating economic side effects of sickness. nearly 65 years later we still suffer from the same. just months after world war ii came to crease, president harry s. truman wrote in a letter to congress to this body and i quote -- "we should resolve now that the health of this nation is a national concern, that financial barriers and the way of attaining health shall be removed. that the health of all of its citizens deserves the help of all of the nation." decades have passed and these financial barriers have grown taller, but we will never solve the problem unless we find the resolve, which we haven't found, until, mr. president, today. this is how long we've waited. think of those who are just 1-year-old in 194 a 5 -- 1945. there are far too many who have

lived their lives have not had any type of health care. any type of health care. coverage got more and more expensive each year. insurance companies found more and more excuses to leave them out in the cold. and for those who worked in small businesses or owned one or moved from job to job, the peace of mind health care can provide was merely a dream. today on the verge of the year 2010, those americans are finally just months away from qualifying for medicare. that's a long time for a citizen to wait for health care in the greatest and richest nation the world has known. how much longer? how much longer can we afford to put this off or ask the uninsured for their patience? until health care costs consume not just a one-sixth of our economy, but a third or a half or until premiums consume more than half of a family's income? we certainly don't have, mr. president, the luxury of waiting until america becomes the only developed nation on

earth where you can die for lack of health insurance. we already bear that blemish. that's why we're bringing security and stability to millions who have health insurance and bringing health insurance to millions who have none. mr. president, can we have order? the vice president: the senate will be in order. mr. reid: what we will do is ensure consumers have more choices and insurance companies face more competition. we'll stand up for insurance who deny health care to the sick and drive millions to bankruptcy and foreclosure. we'll add years to the life of medicare which will add years to the life of seniors. we'll trade a system that demands you pay more and get less for one in which you will pay less and get more. as we do all this, we'll slash our children's deficit in dramatic fashion. we may not completely cure this crisis today or tomorrow, but we must start toward that end.

we must strive for progress and not surrender for one of purity. our charge is to move forward. this is a tradition as old as this republic, one that has always comprised interests and opinions as diverse as the people who populate it. our founding fathers did not promise to form an unfallable new nation. they promised instead to promote the general welfare as we move toward a more perfect union. they valued progress. our nation's earliest leaders promised not absolute happiness but only the pursuit of that goal. they valued opportunity. and like other new programs that improve the lives of many and were since strengthened to improve even more, programs like medicare, medicaid, social security, progress and opportunity are what this historic bill represents. to those who so admirably care so much for their fellow man that they demand more, i say this is just the beginning.

with senator ted kennedy's voice booming in our ears, with his passion in our hearts, we say, as he said, the work goes on, the cause endures. opponents of this bill used every trick in the book to delay this day, this moment. yet here we are minutes away from doing what many have tried but none have ever achieved. we're here because facts will always defeat fear. and though one might slow the progress, they can't stop it. and though one might slow the speed of progress, its force cannot be stopped. mr. president, i'm sorry to say that for the first time in american history, for the first time in american history a political party has chosen to stand on the sidelines rather than participate in great and greatly needed social change. i'm sorry to see that many on the other side have resorted to

myths and misinformation and continue to rely on them long after they were debunked. and it's regrettable that they view our citizens' health care through a political lens, because affording to live a healthy life isn't about politics or partisanship or polling. mr. president, it's about people. it's about life and death in america. it's a question of morality, of right and wrong. it's about human suffering. and given the the chance to relieve this suffering, we must take this chance and deliver on a promise the american people have deserved for six and a half decades. the vice president: the clerk will read the bill for the third time. the clerk: calendar number 175, h.r. 3590, an act to amend the internal revenue code of 1986 to modify the first-time home buyers credit in the case of members of the armed forces and certain other federal employees, and for other purposes. the vice president: the question

is on the passage of h.r. 3590, which is amended, is the patent protection and affordable care act. there is a sufficient second. the -- there appears to be. there is. the yeas and nays are ordered. the clerk will call the roll. vote:

>> just after the senate approved the health-care bill, democratic leaders spoke with reporters for about 10 minutes.

>> i think i was able to accomplish that for a few minutes today. never before has the senate found the resolve to make health insurance more affordable and insurance companies more accountable until today. this is a victory in the american people, those fortunate enough to have health insurance will be able to keep theirs. those who do not believe people to have health insurance. we have a firm the ability to live a healthy life in our great country is a right and not a privilege for the select few. this morning's vote brings us one step closer to making kennedy's dream a reality. the dream of americans are also a part of that dream of ted kennedy's. every step of this long process

has been an enormous undertaking. i want to thank chairman baucus and harkin. i want to thank my leadership team. they have been remarkably supportive and i will always be indebted to them. senators are off to their families and they're not here with us this morning. i look forward to working with my friends in the house as soon as possible. we will hear from baucus, died and we are not going to take any questions. -- dodd and we are not going to take any questions. >> we're all very proud of this moment. we stand here at the finish line and we are not standing alone. we're standing with those who have blazed the trail ahead of us from roosevelt to our good

friend ted kennedy. we're standing with millions of american families who have been forced into bankruptcy is to cover the cost of healthcare. we stand with small business owners who cannot afford health insurance for their employees. we stand with americans suffering from diseases like cancer and diabetes and all of those who have been discriminated against or denied coverage because of pre-existing conditions. today, we make history for them and every american who has fallen victim to are broken health care system. i want to thank him for the way he has navigated the waters. this will be a day that we will look back upon as senators and are very proud of what we have accomplished. we're very happy to see people

getting health care. we're happy to see health care costs being much more under control. this is why we came here. this is very historic and important. thank you. >> let me also think senator reid. this christmas eve, i can think of a better gift that the united states senate could give to our fellow citizens then lifting of the burden of fear from their shoulders. the fear that they would not be able to get health care for their families or a loved one in their time of need. this is enormous -- this is an enormous victory for the american public. last year, it proved that the process was not easy. we were able to prove that it was not impossible. because of the leadership of harry reid and tom harkin and max baucus, we are now on the cusp of achieving something that has been going on for five

generations bridge -- five generations. this is probably the most important votes that every member will cast in their tenure here. i am proud to be a part of it. i wish ted kennedy were here with us today to enjoy this. mary christmas to everybody. -- merry christmas to everybody. >> i will tell you the contribution to this nation made by the senator from nevada will be one of the shining chapters in the history of the new united states senate and in our nation. he achieved what others have failed. he did it with the tenacity and

determination that i have never seen here in my time serving in congress. i am honored to have served beside can and so many others to see this great day finally arrived. this is a time of year when -- with long nights. people would gather and look for signs of hope and light a candle. this morning, this votes in the united states senate lit a candle of hope for 50 million americans who went to bed last night without the protection of health insurance, for millions " wonder if they were would ever win that battle for the coverage that they need. for the medication, for the surgical procedure. it is also a candle of hope for this nation that we are finally tackling a nation that every family knows that is central to our progress as a nation.

we have succeeded to the efforts of senator baucus and senator dodd and senator schumer and senator reid. also, with the inspiration of a president who made this the highest item on his agenda and told us that he would work hard night and day to help us reach this moment. we owe our appreciation to him and the vice president for presiding over this historic session this morning. >> thank you. happy holiday to everybody. the bill can be described in a single sentence. at the same time, it cuts costs, the waist, the fraud and at the same time, it covers 31 million people. who would have thought that we could do both in the same bill? who would have thought that we could do it without a single republican vote? who would have thought that we

could finally get a handle from the thing that is driving our budget deficit to great heights which is health care costs and at the same time, do so much good by covering so many people? this is an amazing accomplishment. it would be under ordinary times. it is even more amazing under extraordinary times. the three men of this bill stand behind me. senator reid did an incredible job. i just watched with awe. max baucus who never gave up. he started out early and just persisted and persisted and persisted and persisted. no matter what blog was thrown in the way. chris dodd who kept the flame of ted kennedy and the spirit of doing the right thing and doing the good thing and reaching for the highest values of this country alive. this is a happy day. mitch mcconnell said on the floor that we are going to go

home -- i do not believe that. i believe that the negativity that ms. mcconnell and others have continually displayed on the floor and now when people learn what is actually in the bill and all the good it does, it will become more and more popular because it is good for america and good for the american people and the true symbol of what we can do if we all pull together. >> over at the white house, president obama reacted having the latest departure -- having delayed his departure for hawaii

until the senate passed the health-care package. >> members of the senate joined their colleagues in the house of representatives passed a landmark reform package. legislation that brings us toward the end of the nearly century long struggle to reform america's health-care system. ever since teddy roosevelt first called for reform in 1912, seven presidents, democrats and republicans alike, have taken up the cause of reform. time and time again, those efforts have been blocked by special interest lobbyists who have perpetuated the status quo that works better for the

insurance industry than it does for the american people. with passage of reform bills in both the house and the senate, we are now finally poised to deliver on the promise of real, meaningful health insurance reform that would bring additional security and stability to the american people. the reform bill that passed the senate this morning, like the house bill, includes the toughest measures ever taken to hold the insurance industry accountable. insurance companies will no longer be able to deny you coverage on the basis of pre- existing condition. they will no longer be able to drop your coverage when you get sick. no longer will you have to pay on limited amounts out of your own pocket for treatment. you'll be able to appeal unfair decisions to an independent party. workers will not have to worry about losing coverage if they lose or change jobs. families will save on their premiums. businesses that would see their

costs rise if they do not act, will save money now and they will save money in the future. this bill will strengthen medicare and extend the life of the program. it will make coverage affordable for over 30 million americans cannot have it. 30 million americans. because it is paid for and curbs the waste and inefficiency in our system, at this bill will help reduce our deficit by as much as $1.30 trillion in the coming decades. making it the largest deficit reduction plan in over a decade. as i said before, these are not small reforms. these are big reforms. if passed, this will be the most important piece of social legislation since the social security act passed in the 1930's and the most important reform of our health care systems since medicare passed in 1960. what makes it so important is not just its cost savings or its

deficit reductions. it is the impact reform will have on americans who no longer have to go without a checkup or prescriptions that they need because they cannot afford them and families who no longer have to worry that a single illness will send them into financial ruin and businesses will no longer face exorbitant insurance rates. that is the difference reform will make in the lives of the american people. i want to commend senator harry reid, extraordinary work that he did. speaker policy for her extraordinary leadership and dedication. we now have to take up the last and most important step and reach an agreement on a final reform bill that i can sign into law. i look forward to working with members of congress in both chambers over the coming weeks to do exactly that. with today's vote, we are now incredibly close to making health insurance reform a

reality in this country. our challenge is to finish the job. we cannot deal with another generation of americans with exploding deficit. we need to do what we were sent here to do and improve the lives of the people we serve. for the sake of their citizens and economy and future, let's make 2010 the year we finally reform health care in the united states of america. merry christmas and happy new year. i want to which the troops a happy christmas and to thank them for their service as they are posted in iraq and afghanistan.

>> ben nelson was the last democrat to agree to vote for the health-care bill. after successfully negotiating provisions to prevent the use of federal funds to pay for abortion. he spoke on the senate floor after the bout. senate will come to order. the senator from nebraska. mr. nelson: madam president, during the consideration of the health care bill, one of my primary concerns has been ensuring that the long-standing hyde amendment would be incorporated into the bill. i have strongly-held views on the subject and i fought hard to prevent the tax dollars from being used to subsidize abortions. i was pleased that the house included strong abortion provisions in its health care bill in the form of the stupak amendment. i modified this language to meet the senate bill and offered the nelson-hatch-casey amendment to prohibit federal funding of abortion.

and i was disappointed to see that that amendment was tabled by a vote of 54-45. i knew then that the underlying bill did not adequately prohibit federal funding of abortion and consequently i would not be able to support it. so i began to look for other language to accomplish the goal that no public funds should cover abortion in the new health care bill. and after long days of negotiations, i believe we came up with a true compromise that stays faithful to my principles. and i want to be clear: i stuck to my guns and stood for my pro-life principles. i did not look for weaker language. i looked for clearer language, and my goal stayed the same to:o maintain the standard that we've had in federal law since the mid-1970's. while i respect the senator from kansas' opinion, i have to respectfully disagree. the senate language fully uphold

the hyde principle -- upholds the hyde principle like the lange wimg in the hous -- langue house bill. the wording may be different but the principle is in fact upheld. urn the health care bill, if you cannot -- under the health care bill, if you cannot afford insurance, you will receive federal assistance to help pay for a plan. the stupak language prohibits that federal assistance from paying for insurance that covers abortions. if you'd like a plan that covers abortion, you must purchase a rider or an endorsement to your plan with your own funds. you could do that as well by writing just one check to the insurer. for that you'd get a separate piece of paper addressing abortion. the senate language with my added compromise also prohibits federal funds for paying -- from paying for private insurance that covers abortion. the only difference is that in the senate bill, if you're

receiving federal assistance to buy insurance and if that plan has any abortion coverage, the insurance company must bill you separately and you must pay separately from your own personal funds, perhaps a credit card transaction, separate -- your separate personal check or automatic withdrawal from your bank account. now, let me say that again. you have to write two checks: one for the basic policy and one for the additional coverage for abortion. the latter has to be entirely from personal funds. so under both the stupak and the new senate language, no federal funds can be used to pay for a plan that covers abortion. and if you choose to purchase abortion coverage, if it's available, you must pay out of your own pocket. furthermore, the senate language allows states the right to ban public and private insurance

from supplying abortion covera coverage. already, 12 states ban abortion coverage on public plans and five states ban abortion on both private and public plans. so, in short, the senate bill ensures once again no federal funds would be used for aborti abortion. i'd like to note that the senate bill goes beyond stupak in two life-promoting ways. one, it adds funding to support pregnant and parenting teens and women. and, two, it expands the adoption tax credit to help adoptive parents with the considerable expense of adoption by making that credit a refundable tax credit. this means that many parents -- potential parents who lack the regular resources to adopt will now be in a better position to do so.

the senate bill also contains the same strong conscience protections included in the stupak language. we tried winning approval for the nelson-hatch-casey abortion language in the senate but we were unsuccessful. however, we did not give up. i know people have very strong feelings about the issue of abortion and i respect those who disagree with my position. but i could not support health reform that did not maintain the 30-year standard barring public funding of abortion. i did not compromise my pro-life principles. we just found different wording, different language that both will work. i believe people see that no public funding will go to abortion. now, in addition, my provision empowers the states to pass laws that -- banning the sale of insurance that covers abortion. we make it clear that this new law, this new bill does not in any way preempt the rights the

states to be able to continue to make that ban in the -- and the decisions that they might make legislatively and we wanted to make certain that there is no doubt but what this bill has no preemption of the states' rights. but despite what some partisans and talk-show hosts say in their scare tactics, the conscience clause remains. also, despite what those same people and even some of my colleagues have said, the bottom line is that the senate health care bill will want allow taxpayer money -- will not allow for taxpayer money to pay for abortion, >> their health care legislation and it passed the

senate by a vote of 60-39. joining us on capitol hill, she is talking about to legislation. what is the next up in the process? >> it is going to be a lot of the same issues. it is the public option, the question of whether it should include a government run public option. abortion language. also, how the bill is financed. different mechanisms for paying for the bill. >> as is typical, a number of members and senators released some statements. senator fine gold released a statement a short while ago

saying, "i am deeply disappointed that the bill does not contain a public option." >> the house bill included a form of a public option, the senate bill did not. there were a number of liberal senators who really pushed hard for a public option. the bill that he originally unveiled did include a public option with the opportunity for states to opt out of that. in the senate, there was not enough support for that. republicans were unified against that. there were enough democrats, moderate democrats, who opposed it. most notably joseph lieberman from connecticut who said he was very, very much against it. the public option was eventually dropped from the bill. the contours of that debate are going to change. it seems pretty unlikely that there would be support come

january for something that there is not support their now. >> what about the differences between the house and senate? how will that be worked out? >> the abortion language was the main sticking point with senator ben nelson from nebraska. senator reid met with senator nelson for a marathon session to work out compromise language. cinder nelson is a fairly adamant that that language does not change in conference. the language he worked out did not change. i know that the congressman has been talking on his side about pressing for the house language. it seems as though moving in that direction, it will lose the support of liberals that signed off on the language. it >> thank you for the update.

have a happy holiday. >> thank you. >> the senate is on holiday break after passing that health care bill this morning. the vote was 60-39 along party lines. the only senator who did not vote was the kentucky senator. despite the holiday, negotiators will begin working by phone at next week on a compromise between the house and senate version of the health-care overhaul. >> christmas day, a look ahead at 2010 politics, including republican congressman and nbc david gregory. buzz aldrin and fellow astronauts on the legacy of apollo levin, a discussion of the role of muslims in america and the world. later, a former c.i.a. intelligence officer on u.s. strategy against al qaeda in afghanistan. starting at 8:00, remembering the lives of william f. buckley

jr. and senator ted kennedy. >> this christmas holiday, we have three days of the tv on c- span2. beginning friday morning at 8:00, books on history, politics, and public affairs. you'll see sarah palin on her recent book to work and you'll hear about a biography on supreme court justice scalia. tracy kidder from the miami book festival is also included. you can get a full schedule at booktv.org. >> an event now with former congressional staffer and scholars on what goes on behind the scenes before legislation is passed. hosted by the university of virginia, this last about one hour and 40 minutes.

>> if everybody in the room can do the same, we will be in pretty good shape. we have come pretty far and we have a little bit farther to go given the dimensions of the problems associated with debt and deficit. our last panel explored the possibility of policy reform. our panel is very well equipped considering that some of them have spent parts of their professional lives in the policy trenches. we have john hilly, g. william

holden, policy adviser to bill frist, francis lee, assistant professor of government and politics, and senior counsel of the federal bureau of investigation', -- the session s a moderated. he is especially appropriate -- appropriate for this panel. i would say that's it would make a great holiday gift. >> that was good. made the trip all worthwhile. thank you. it is a bigger panel than the

last panel. each panelist gets 5-7 minutes. we have a bit of a problem because three of the people on this panel have worked in the u.s. senate which knows no time limits. i will do my best to enforce it. >> it is difficult to find a cause for optimism about the government revenues an extension into some type of sustainable balance. it is easy to underestimate the need for a legislative bipartisanship. they have -- data collected over long periods of time testified to the great importance of bipartisanship for successful lawmaking. congress rarely legislate. including significant legislation on controversial matters.

according to yale political science, 84% of the legislation passed by congress in the postwar period have the support of at least two-thirds of the membership of both chambers of congress. 95% of all these laws gave that kind of at least one chamber. the highly partisan politics of health care reform currently in the news are not the norm for successful legislation. most of the legislation approved so far by the congress has been approved by two-thirds margin in both house and senate. including it on controversial matters like tobacco rep regulation, foreclosures, -- intent party conflict is a threat to progress and it presents a serious problem for fiscal reform. there are obviously wide ideological differences between the two parties on the

appropriate levels of governments and a chair. the goal of finding a long-term balance between revenues and expenditures is not itself ideological. neither liberals nor conservatives favor deficit. pundits and politicians alike regularly flow to proposals for some type of a grand bargain, perhaps facilitated by a -- by an independent commission. in theory, such an agreement ought to be possible, but politics also crete's extraordinary problems for the parties to engage in posturing. even if it is possible, to strike a policy, the politics of this policy -- to exploit the

partisan advantage. when the republicans -- republicans and democrats together are far more difficult than bringing liberals and conservatives together. even the long term fiscal balance is a consistent bolt across the political spectrum, incentives create a formidable obstacles. deficits are a policy problem, but they are also a potent political. a party out of power does not nearly object to the ideological direction of national policy. it also speaks to in p to the effectiveness of the party in power. rather than work on a bipartisan solution to a policy problem, incentives rarely drive a party out of power to reject compromise and to persecute the

party in power for incompetence and mismanagement. deficits fall into a category that political science famously called issues. issues are matters on which everyone holds positions on. everyone. liberals and conservatives alike against government corruption. everyone is against waste, fraud, and abuse. everyone favors competent management. precisely because there is a consensus in american politics the party out of power works on returning to power.

so many of voters have miss drawn ideological commitments. only slight the more than half of americans identified themselves with either a liberal or conservative. both parties continually by for these -- for support. cooperation on fiscal policy is frequently the casualty of the party's efforts to take their -- and their opponents as incompetent. it is the party out of power that expresses the biggest concern about the deficit. this power is evident in the politics of raising the statutory debt limit. a congress members willingness to vote is largely determined by which party is in power. during the reagan years,

democrats consistently voted against raising the debt limit -- debt limit while republicans opposed it. during the george w. bush presidency, democrats opposed debt limit increases while republicans supported it. the party out of power uses these kinds of issues to embarrass the power in -- the party in power. debate on budget and fiscal reform is highly -- because it is so often a vehicle for teaching the fiscal management. one recurring issue has been whether congress should rely on budget estimates from the congressional budget office. cbo generally uses more conservative budget assumptions. the party out of power seems to like the cbo numbers. democrats voted to use cbo

numbers during the bush presidency. republicans demanding for the use of cbo numbers of democratic objections. the out party has come to the table to negotiate. it may be the only way that these issues can be addressed effectively. reflecting back over the recent decades, it appears that most of the significant budget agreement that lower federal deficit were adopted when one party controlled congress and the other the presidency. ithis includes the clinton year.

the 1983 social security reform also occurred under conditions of divided government. bipartisan compromise is just about the only way that the american government functions. given the large numbers, the crowding of the agenda and the effectiveness of the party obstruction, major legislation is almost never passed any other way. the powerful political parties stand in the way of compromise. >> thank you very much. before we move on, we're talking to the earlier panel. it looks like the health care vote will be passed on a straight party vote. what do you think that means? how does that fit in your free market? >> it is unusual.

it is unusual to see that happen. it is quite striking. when it looks like a bill is going to happen, that provide some incentive for at least some members of the party out of power to come to the table and get something in it that they would like the kind of party discipline we are seeing on this legislation makes it very unusual. you should certainly not look to that legislation and tried to generalize the normal congressional politics. it is well outside the norm. >> i am going to offer an idea for a new budget system for federal government. the current one is clearly not working at all. i tried to design a system where it could be both fiscally responsible and politically viable, which is really the trick. it is called square one. let me give you the basic concept.

the system tries to create incentives for partisans to come together and work constructively together to reconcile the policy and political differences, but if they fail politically to do that, this system is a default mechanism for the federal government. i'm going to give a bare bones description and i will circle back and talk about the critical political attributes. you'll see that there are three interlocking elements involved. bear with me. i'm going to try to be precise and ask you to focus. first and foremost, the key element is to invert the problem of deficit reduction. rather than forcing our elected representatives to make tough policy choices to reduce the deficit, we set up a lot gen budget rule that to do the work.

the linchpin of the system is a comprehensive, generating budget savings. it must effect a broad swatch of the federal government. that provide the needed savings to be generated and to be done in a balanced way. a stronger version of the straightforward rules will freeze domestic spending, freeze defense spending, freeze adjustment, freeze the inflation -- you can see why it is called square one because it goes back to square one. of course, it is ruled were allowed to play out, it would lead to a balanced budget in some specific number of years. that is an element no. 1. all that number to -- elements

number two, you need to give our representatives a way to allocate their resources in a positive way. i do that by adding back what i call the fiscal dividend. in this context, it is an amount of budgetary resources that are made available by not cutting deeply as a comprehensive rule does if allowed to go into effect. there are a couple of ways of doing this. i want to take a very simple version of it. the simplest would be to express the fiscal dividend as a percentage, one-half of the annual savings that would be generated by the rule. however it is done, the key is to create this fiscal dividend would to the political system can back to. as part of the annual budget, elected representatives would

determine the use of the fiscal dividend. it could be used to offset tax code. it could be used to rein in the defense the spending of -- it is important that it would be free to make other budgetary changes as long as those generated savings by the rule. clearly, if they did not like the savings being generated they're completely free to offset the savings with others. it must all be within the budgetary box. here's element no. 3. this is the one that encourages partisans to work together and sets the default reading on the federal budget. the first element is to abolish reconciliation. it has been massively of used.

it encourages terrible behavior by both parties. the majority party tries to steamroll the minority. the minority stakes on the sidelines and has to make the majority meltdown. but the decisions would not be part of any privilege built like they are today. members of the two parties could either burk together to allocate the fiscal dividend as well as make other budget decisions or if they disagree, failed to pass the bill. in the event of such a political now down in the budget bill -- meltdown, the system would revert to existing law. and that includes a comprehensive budget savings. the savings would flood the deficit reduction. -- would float the deficit reduction.

let me talk about the attributes in some of the political aspect of this. our elected representatives will never agree to a budget system with the prospect of imposing pain. maybe, but maybe not. this concept is quite flexible. it seems to me that the really important part of a workable budget system is not at all how quickly begin to balance, but it is about having a permit system where we show fiscal responsibility. that is how we ensure all of the market about our sovereign debt. as importantly as having competition, in our professional lives, there have been too great structural implosions. in 1981 and again in 2001 and

2003. the first one took 16 years to correct. this one will certainly take as long. the prime objective should be to build a permanent budget box that is fiscally responsible and does not permit the kind of system implosion that have so hurt our economic standing. what kind of flexibility and i talking about? it must be comprehensive, but the rule does not have to embody a full freeze. you can make the fiscal dividend any size you want by manipulating the size of the percentage cut. you could delay or phase in the start of the regime until economic conditions improve. you could trigger the rule over all these measures such as unemployment. the one thing that is absol uni

i think actually that you would need in the present situation, i don't see a basis for increasing bipartisanship. i think the parties both have their strategic interests and the republicans will want to make moves to go ahead and regain some power in the 2010 elections. i think that there is one psychological mistake really whenever i was negotiating with the other side, i always assumed that they were acting in good faith and i was acting in good faith. there is a human psychological piece where you think you're right and the other guy is wrong, and that distorts things. but basically i don't see a large return to bipartisanship got three or four seats in the senate in 2010 which i do expect, i think you would see more bipartisanship in the

senate because they have enough on the filibuster and therefore you would have to negotiate with them. that's my little model. >> you hit on something important and maybe we can end on this we have been talking about partisanship and bipartisanship. there is a fundamental question of civility. tom cain, the former governor of new jersey told me that when he was a teenager in washington, his father was the ranking minority member on the ways and means committee when wilbur mills was the chairman. and he said every sunday, wilbur mills would stop by their house and sit and have a cup of coffee with his father to talk about the problems they had, they faced in the week ahead and ways that they might deal with those problems. >> are you sure it was coffee? [laughter] >> that was pretty good. >> i mean, is there some -- has there been some basic decline

in civility that is separate from this question that we have been talking about of partisanship that may also be part of this equation? >> yes, the answer has been but we're all senate folks, but you cannot -- like going to conference when you work at the white house or anything, it is unmistakeable the difference of civility between the house and the senate. in the house, they're at each other's throats constantly and that has to do with the rules. we don't need you. we can roll you. in the senate because there is the forced mechanisms to make them work together across the aisle in most cases, that's where that reinforces the civility and they get along better. >> looking forward, if congress is going to be successful in legislating that there have to be more bipartisanship. democrats are at their-water mark now. >> it's not going to get better in the next election. >> no. they need to negotiate across

party lines now. to hold 60 votes together in the senate is not something democrats are capable of doing. even on the issue, the top domestic party priority. and even there, they're relying on some republican votes. they're going to need to do more bargaining in the next set of elections. >> civility is an issue. we're a less civil society as a whole. on the media side, the blogs you're now getting you wouldn't have gotten 20 years ago. for some reason, we're a more wise guy in your face society and i think some of that spills over into politics. >> allen, i have to end on a slightly upbeat note. i agree that the civility issue in the years that we were up there going back to hubert humphrey and george mcgovern, it changed dramatically.

i will never, never forget one night very late, we had finished the budget, 1:00, 2:00 in the morning, nobody was around and going down those escalators to go down to take the trauma back over to the dirksen office building and there was these two senators in front of me, both elderly senators, both having trouble walking. one was helping the other that's a long time for a citizen to wait for health care in the greatest and richest nation the world has known. how much longer? how much longer can we afford to put this off or ask the uninsured for their patience? until health care costs consume not just a one-sixth of our economy, but a third or a half or until premiums consume more than half of a family's income? we certainly don't have, mr. president, the luxury of waiting until america becomes the only developed nation on earth where you can die for lack of health insurance. we millions who have we' slash

our end. we must strive for progress and not surrender for one of purity. our charge is to move forward. this is a tradition as old as this republic, one that has always comprised interests and opinions as diverse as the people who populate it. our founding fathers did not promise to form an unfallable new nation. they promised instead to promote the general welfare as we move toward a more perfect union. they valued progress. our nation's earliestany and were since strengthened to improve even more, programs like medicare, medicaid, social security, progress and opportunity are what this historic bill represents. to those who so admirably care so much for their fellow man that they demand more, i say this is just the beginning. with senator ted kennedy's voice booming in our ears, with his passion in our hearts, we say, as he said, the work goes on,

the cause endures. opponents of this bill used every trick in the book to delay this day, this moment. yet here we are minutes away from doing what many have tried but none have ever achieved. we're here because facts will always defeat fear. and though one might slow the progress, they can't stop it. and though one might slow the speed of progress, its force cannot be stopped. mr. president, i'm sorry to say that for the first time in american history, for the first time in american history a political party has chosen to stand on the sidelines rather than participate in great and greatly needed social change. i'm sorry to see that many on the other side have resorted to myths and misinformation and continue to rely on them long after they were debunked. and it's regrettable that they

view our citizens' health care through a political lens, because affording to live a healthy life isn't about politics or partisanship or polling. mr. president, it's about people. it's about life and death in america. it's a question of morality, of right and wrong. it's about human suffering. and given the the chance to relieve this suffering, we must take this chance and deliver on a promise the american people have deserved for six and a half decades. the vice president: the clerk will read the bill for the third time. the clerk: calendar number 175, h.r. 3590, an act to amend the internal revenue code of 1986 to modify the first-time home buyers credit in the case of members of the armed forces and certain other federal employees, and for other purposes. the vice president: the question is on the passage of h.r. 3590, which is amended, is the patent protection and affordable care

act. there is a sufficient second. the -- there appears to be. there is. the yeas and

>> just after the senate

approved the health care bill, democratic leaders spoke with reporters for about 10 minutes. >> i spent a very restless night last night trying to figure out how i could show some bipartisanship, and i think i was able to accomplish that for a few minutes today. never before has the senate found the resolve to make health insurance more affordable and health insurance companies more accountable until today. this is a victory for the american people, those fortunate enough to have health insurance will be able to keep theirs, and those who do not will be able to have hedge insurance. this is a -- health insurance. is this is a victory because the ability to have a healthy life in our great country is a right, and not merely a privilege for the select few. this morning's vote brings us

one step closer making ted kennedy's dream a reality, the dream of americans also are part of that dream of ted kennedy's, and that's also become a reality. every step of this long process has been an enormous undertaking. i want to thank chairmans baucus, dodd, and harkin. i want to thank very much my leadership team, durbin, schumer, murray, they have been remarkably supportive and i will always be indebted to them. senators murray and harkin are off to their families, they're not here with us this morning. i look forward to working with my friends in the house so we can send a bill to the president as soon as possible. we're going to hear from baucus, dodd, schumer and murray and we're not going to take any questions. >> it's been nearly two years since we began our work on health care reform here in the senate and we're all very, very

proud of this moment. we stand here at the finish line, though as we stand here, we're not standing alone, we stand with those who blazed the trail ahead of us all the way from president theodore roosevelt to our good friend who is with us in spirit, ted kennedy. we are standing with millions of american families who have been forced to bankruptcy to cover the cost of health care. we stand on behalf of 45,000 americans who die each year simply because they don't have health insurance. we stand with small business owners who cannot afford health insurance for their employees. we stand with american suffering from diseases like cancer, debeets and all those who -- diabetes and those who have been discriminated against and denied coverage because of a preexisting condition. today we make history for them and every american that has fallen victim to our broken health care system. i want to thank leader reid for the terrific way he has managed

to navigate the waters to get us here to final passage. this is going to be a day that we're going to look back on as senators and very proud of what we have accomplished, but more important, very happy to see people getting health care they now cannot get and very happy to see health care costs being much more under control. this is why we came here. this is why we hired out for these jobs to pass something very historic and important like this. thank you. >> let me also thank senator reid. on this christmas eve, i can't think of a greater gift that the united states senate couldn't give to our fellow citizens than lifting the burden of fear from their shoulders. the fear that they would not be able to have health care for their families and a loved one in the time of need. this was an enormous victory for the american public, i'm proud to be one vote cast in favor of this effort. last year, of course, proved that progress is not easy, but

today, we're able to prove that it's not impossible. and because of the leadership of harry reid and max baucus, tom harkins and some of the others, we're now on the cusp of achieving something that has defied other generations. there has never been a vote cast to do as much to relieve more security for middle class working families in america than this one. this is probably the most important vote that every sitting member of the senate will cast in their ten tour here. i'm proud to be a part of this. i wish ted kennedy were with us here to enjoy this. merry christmas to everybody. >> the corridors are filled with portraits and statues of political leaders whose reputations and contributions many times have faded into obscurity. but i will tell you the contribution to this nation made by a senator from search

light, nevada, will become one of the shining chapters of the united states senate and our nation. he achieved what others have failed in trying to achieve, and he did it with the tenacity and the strength and a determination that i have never seen in my time serving in congress and i'm honored to have stood beside him with so many others to see this great day finally arrive. this is a time of year of long nights and darkness when history tells us that from the beginning of time, people would gather and they with their families and friends would look for signs of hope and light a light and even light a candle. this morning this vote in the united states senate lit a candle of hope for 50 million americans who went to bed last night without the protection of health insurance. for millions who wake this morning wondering if they'll ever win this battle with the health insurance company for the coverage that they need for the surgical procedure, for the

medication, it's also a candle of hope for this nation that we are finally tackling an issue which every family, every business knows is central to our progress as a nation. we have succeeded through the efforts of senator baucus and senator dodd and senator schumer and senator murray and senator reid, but also with the help and inspiration and leadership of a president who made this the highest item on his agenda and told us that he would work hard night and day to help us reach this moment. we owe our appreciation to him and the vice president especially for presiding over this historic session this morning. >> thank you. and a happy holiday, merry christmas, happy new year to everybody. the bill can be described in a single sentence at the same time it cuts cost, the waste, the fraud, the duplication endemic to our system and at the same time it covers 31

million people. who would have thought we could do both in the same bill? who would have thought we could do it with not a single republican vote and getting everyone of the 60 democratic votes? who would have thought that we could finally get a handle on the thing that is driving our budget deficit to great heights which is health care cost and at the same time do so much good by covering so many people. this is an amazing accomplishment. it would be under ordinary times, it's even more amazing under extraordinary times. and the three horsemen of this bill stand behind me, leader reid did an incredible job, just amazing. i just watched with awe with how he could weave the legislative fabric. max baucus who never gave up. he started out early and just persisted and persisted and per cysted and persisted no matter what log was thrown in the way. and chris dodd who kept the

flame of ted kennedy and the spirit of doing the right thing and doing the good thing and reaching to the highest value of this country alive. this is a happy day mitch mcconnell said on the floor that we're going to go home and hear our constituents rail against this bill. i don't believe that. i believe that the negativity that leader mcconnell and others have continually displayed on the floor has peaked and now when people learn what is actually in the bill and all the good it does, it is going to become more and more popular because it is good for america, good for the american people, and a true symbol of what we can do if we all pull together.

>> over at the white house, president obama reacted having delayed his departure for a holiday break in hawaii until the senate passed the health care package. >> good morning, everybody. in a historic vote that took place this morning, members of the senate joined their colleagues in the house of representatives to pass a landmark health insurance reform package, legislation that brings us toward the end of a nearly century-long struggle to reform america's health care system. ever since teddy roosevelt first called for reform in 1912, seven presidents, democrats and republicans alike, have taken up the cause of reform. time and time again such efforts have been blocked by special interest lobbyists who

perpetuated a status quo that works better for the insurance industry than it does for the american people. with passage of the reform bills, we are finally poised to deliver on the promise of real, meaningful health insurance reform that will bring additional security and stability to the american people. the reform bill that passed the senate this morning, like the house bill, includes the toughest measures ever taken to hold the insurance industry accountable. insurance companies will no longer be able to deny you coverage on the basis of a preexisting condition. they will no longer be able to drop your coverage when you get sick. no longer will you have to pay unlimited amounts out of your own pocket for the treatments you need and you'll be able to appeal unfair decisions by insurance companies to an independent party. if this legislation becomes law, workers won't have to worry about losing coverage if they lose or change jobs. families will save on their

premiums. businesses that would see their costs rise if we do not act will save money now and they will save money in the future. this bill will strengthen medicare and extend the life of the program. it will make coverage affordable for over 30 million americans who do not have it. 30 million americans. and because it is paid for and curbs the waste and inefficiency in our health care system, this bill will help reduce our deficit by as much as $1.3 trillion in the coming decades making it the largest deficit reduction plan in over a decade. as i said before, these are not small reforms, these are big reforms. if passed, this will be the most important piece of social legislation since the social security act passed in the 1930's and the most important reform of our health care system since medicare passed in the 1960's. what makes it so important is

not just its cost savings or its deficit reductions. it's the impact reform will have on americans who no longer have to go without a check-up or prescriptions that they need because they can't afford them, on families who no longer have to worry that a single illness will send them into financial ruin, and on businesss that will no longer face exorbitant insurance rates that hamper their competitiveness. it's the difference reform will make in the lives of the american people. i want to commend senator harry reid, the extraordinary work that he did, speaker pelosi for her extraordinary leadership and dedication. having passed reform bills in both the house and the senate, we now have to take up the last and most important step and reach an agreement on a final reform bill that i can sign into law. i look forward to working with members of congress in both chambers over the coming weeks to do exactly that. with today's vote we are now

incredibly close to making health insurance reform a reality in this country. our challenge then is to finish the job. we can't doom another generation of americans to soaring costs and eroding coverage and exploding deficits. instead we need to do what we were sent here to do and improve the lives of the people we serve. for the sake of our citizens, our economy, and our future, let's make 2010 the year we finally reform health care in the united states of america. everybody, merry christmas, happy new year! >> do you have a holiday wish for the troops? >> i do and i will be actually -- i'm on my way right now to call a few of them and wish them merry christmas and to thank them for their extraordinary service as they're posted in iraq and afghanistan.

>> and recapping now the senate passed an $871 billion health care bill this morning. that vote was 60-39 along party lines. the only senator who didn't vote was kentucky republican jim bunning. nebraska senator jim nelson was the last democrat to vote for the health care bill after successfully negotiating an amendment to pay for abortions. he spoke on the senate floor following the vote. mr. nelson: madam president, during the consideration of the health care bill, one of my primary concerns has been ensuring that the long-standing hyde amendment would be incorporated into the bill. i have strongly-held views on the subject and i fought hard to prevent the tax dollars from being used to subsidize abortions. i was pleased that the house included strong abortion provisions in its health care bill in the form of the stupak

amendment. i modified this language to meet the senate bill and offered the nelson-hatch-casey amendment to prohibit federal funding of abortion. and i was disappointed to see that that amendment was tabled by a vote of 54-45. i knew then that the underlying bill did not adequately prohibit federal funding of abortion and consequently i would not be able to support it. so i began to look for other language to accomplish the goal that no public funds should cover abortion in the new health care bill. and after long days of negotiations, i believe we came up with a true compromise that stays faithful to my principles. and i want to be clear: i stuck to my guns and stood for my pro-life principles. i did not look for weaker language. i looked for clearer language, and my goal stayed the same to:o

maintain the standard that we've had in federal law since the mid-1970's. while i respect the senator from kansas' opinion, i have to respectfully disagree. the senate language fully uphold the hyde principle -- upholds the hyde principle like the lange wimg in the hous -- langue house bill. the wording may be different but the principle is in fact upheld. urn the health care bill, if you cannot -- under the health care bill, if you cannot afford insurance, you will receive federal assistance to help pay for a plan. the stupak language prohibits that federal assistance from paying for insurance that covers abortions. if you'd like a plan that covers abortion, you must purchase a rider or an endorsement to your plan with your own funds. you could do that as well by writing just one check to the insurer. for that you'd get a separate piece of paper addressing abortion. the senate language with my

added compromise also prohibits federal funds for paying -- from paying for private insurance that covers abortion. the only difference is that in the senate bill, if you're receiving federal assistance to buy insurance and if that plan has any abortion coverage, the insurance company must bill you separately and you must pay separately from your own personal funds, perhaps a credit card transaction, separate -- your separate personal check or automatic withdrawal from your bank account. now, let me say that again. you have to write two checks: one for the basic policy and one for the additional coverage for abortion. the latter has to be entirely from personal funds. so under both the stupak and the new senate language, no federal funds can be used to pay for a plan that covers abortion. and if you choose to purchase

abortion coverage, if it's available, you must pay out of your own pocket. furthermore, the senate language allows states the right to ban public and private insurance from supplying abortion covera coverage. already, 12 states ban abortion coverage on public plans and five states ban abortion on both private and public plans. so, in short, the senate bill ensures once again no federal funds would be used for aborti abortion. i'd like to note that the senate bill goes beyond stupak in two life-promoting ways. one, it adds funding to support pregnant and parenting teens and women. and, two, it expands the adoption tax credit to help adoptive parents with the considerable expense of adoption by making that credit a refundable tax credit. this means that many parents --

potential parents who lack the regular resources to adopt will now be in a better position to do so. the senate bill also contains the same strong conscience protections included in the stupak language. we tried winning approval for the nelson-hatch-casey abortion language in the senate but we were unsuccessful. however, we did not give up. i know people have very strong feelings about the issue of abortion and i respect those who disagree with my position. but i could not support health reform that did not maintain the 30-year standard barring public funding of abortion. i did not compromise my pro-life principles. we just found different wording, different language that both will work. i believe people see that no public funding will go to abortion. now, in addition, my provision empowers the states to pass laws

that -- banning the sale of insurance that covers abortion. we make it clear that this new law, this new bill does not in any way preempt the rights the states to be able to continue to make that ban in the -- and the decisions that they might make legislatively and we wanted to make certain that there is no doubt but what this bill has no preemption of the states' rights. but despite what some partisans and talk-show hosts say in their scare tactics, the conscience clause remains. also, despite what those same people and even some of my colleagues have said, the bottom line is that the senate health care bill will want allow taxpayer money -- will not allow for taxpayer money to pay for abortion, >> the u.s. senate came in on

this christmas eve at 6:45 eastern, shortly after 7:00, they proceededed to vote on their health care legislation and it passed the senate by a vote of 60-39. joining us on capitol hill is kathleen hunter who has been joining us a bunch lately talking about health care legislation in the senate. she writes for congressional quarterly, the bill passes today. what's the next step in the process? >> well, now that the bill has passed out of the senate, the democrats met their deadline of passing a bilbe christmas. now they have to resolve the differences between the bills. >> what is some of the most contentious issues between house and senate negotiators when that gets underway? >> it's going to be a lot of the same issues that were contentious during the debate. it's the public option, the question will the legislation should include a government-run public option, potentially abortion language and questions how the bill is financed. the house and senate have different mechanisms for paying for the bill.

>> as is typical after passage of major legislation, a number of members and senators releasing statements. senator feingold released a statement a short while ago saying, "i am deeply disappointed the bill doesn't have a public option to keep costs down. can a bill that doesn't include the public option pass the house? >> the house bill included a form of a public option. the senate bill didn't. there were a number of liberal senators like senator feingold who really had pushed hard for a public option. majority leader reid did include a public option with the option for states to opt out of it. in the senate, there wasn't enough support for that republicans were unified against it and there were enough democrats, moderate democrats that opposed it, most mostly independent joseph lieberman from connecticut who was very, very much against that.

so the public option was eventually dropped from the bill. it doesn't seem like the contours of that debate are going to change between that and january. it seems pretty unlikely to be support in january for something that there isn't support now. >> there are reports that congressman bartoletta stupak is happy about the languages. how will that be worked out with the abortion language is that >> that was the main sticking point with senator ben nelson, a centrist democratic from nebraska. and majority leader reid met with senator nelson for marathon sessions two days last week. i spoke to him after the vote and he is fairly adamant that that language doesn't change in conference, that the language that he worked out would not change. i know that congressman stupak is pressing for the house-passed language. it seems as though moving in

that direction could lose support of liberals over here who tentatively and grudgingly signed off on the language that they worked out. >> scath lean hunter, read her work at cq.com. thanks for the update and have a happy holiday. >> thank you, you too. >> the senate is on holiday break after passing that $871 million health care vote this morning. the vote was 60-39 among party lines. despite the holiday, house and senate negotiators will begin working by phone next week on a compromise between the house and senate versions of the health care overhaul, that from finance chair max baucus. and now a government conference on domestic high-speed rail manufacturing held by the transportation department. after remarks by secretary ray lahood, administration officials talk about creating a high-speed intercity passenger rail service and views from the private sector and labor.

this is just over two hours. . introducing our amazing [unintelligible] that is the reality. secretary lahood has many goals for this agency, but he stays very focused on key goals.

important is improving the safety and his focus on distracted driving and the crisis that exists in that area. he has spent a great deal focusing on we help rebuild me inner-city systems. it is a great honor to bring up ray lahood who brings great leadership to our agency. thank you. [applause] >> thank you all very much for coming. welcome to the department of transportation. we are grateful so many busy people would take time to join ask -- take time to join us. i want to say i, like all americans, are pleased that the

unemployment numbers are going in the right direction. when i see president obama , i encourage him to continue to have the jobs summit and the next day unemployment goes down, so i hope there is a correlation between that. somebody said before i came in here that this reminds them of the space launch or the start of the highway built in america. we are launching something very special. and something that i know all of you are very interested in. many of you will remember that i stood with president obama in april. it was an extraordinary day because as a result of the american recovery act, the

president and vice president announced $8 billion for high- speed rail for america. as so many of you have heard me say, that is 8 billion times more than we have ever had at the department of transportation, or that america has ever had for high-speed passenger rail. it is coming to america. here we are a little bit closer. the national response to this opportunity has been tremendous. there is an enormous pent-up demand for more inner-city rail service in this country. people want alternatives to congested highways and congested airports. i have seen the benefit of high- speed rail having traveled to france and spain. they had it all over us and

america. i intend to go to asia. i wrote on a train in spain going to hundred 55 miles per hour. it was very comfortable and efficient. all the people that board at that train -- all the people that boarded that train or paying a reasonable fee. the train in spain is late then people get their money back. i know every person that board it was hoping the train might be five minutes late. we have received an extraordinary number of applications and proposals. $57 billion worth from dozens of states seeking to connect cities and refine existing

service. we are narrowing the list down and will announce the recipients of the $8 billion next year. our mission is clear, we want to develop a high-speed rail networks that will provide more good transportation options for all americans. we will reinvigorate our manufacturing base and create permanent jobs for our work force. this is about expanding our assembly work and rebuilding -- rebooting full-fledged manufacturing. we need to get america building its own future. that is what high-speed rail is all about. if this program is perceived as not creating jobs, it will not succeed.

this is a tremendous opportunity for every facet of the rail industry to capitalize on an historic investment. many industry leaders agree with us. i am pleased to announce more than 30 rail manufacturers domestic and foreign have committed to establish their base of operations in the u.s. if they are chosen by states to build america's next generation high-speed rail lines. [applause] this is a significant achievement for america. it is a positive sign of things to come for our country.

i am confident this will create many new opportunities for your companies to orders for new rails and tracks, control systems, signaling equipment, passenger cars and more. this will be a win-win for private industry. there is great potential for many companies gathered today to ramp up production and begin hiring again. we will ask you for something in return.

as this goes forward we want to be sure that skilled americans who have been hardest hit by the recession who are unemployed get a chance for these jobs. this money was to create jobs. $8 billion is a part of a program to create jobs for americans. we don't want to see workers sidelined one day longer than is necessary. that is why we are hoping states that have been hardest hit where unemployment is high and manufacturing plants are empty, are given top consideration by the states receiving funds and

their private sector partners. there are places in america that are hurting. this money is to be used to put americans back to work. we know where those places are at. when these investments are made me want you to remember these dollars are to be used to get americans back to work. i am urging all companies to work closely with the states to come up with plans that focus on investment opportunities in distressed areas as much as possible. we are going to have that many new jobs to get our economy moving again. your leadership and our commitment as full partners, we

will build the efficient sustainable transportation network this nation needs. thank you all very much for being here. welcome to this meeting and this opportunity for us to move forward to help those who had dreamed about high-speed rail. i know this will be a good meeting. this is the start. maybe the opportunity people have been dreaming about for a long time. thank you for being here. [applause] i think we will's my the panel gets set up -- i think we will

pause for a moment. if i got that wrong you can say so. >> we will just be bringing our first panel forward and it a few minutes. you make stay seated. it will be five minutes or so. >> [inaudible] >> we will not make

announcements today. >> it will not make announcements about where the money is going. this is not dissimilar when the national highway system was started. this is the beginning. [inaudible] this jumpstart its opportunity to begin the process. this program is over subscribed. when we make our announcements next year we will try to do it in a way that reflects where we think the money can best jump- start opportunities. the other part is congress gets this. if you look at what they have done and bills they have

passed, in the preparation bills -- and appropriation bills, high speed rail is a priority. congress knows this is a down payment. and that this is one at the highest priorities for the president. -- and they know this is one of the highest priorities. i think congress will do better than that. they understand this is a down payment. it is the start. we are at the starting line. it is 8 billion times more than we have had. >> can i ask you to clarify remarks he made before? you mentioned you wanted to make sure that people were going to get employed in illinois and michigan. were you suggesting projects

submitted by those states are the top candidates? were you suggesting he wanted to have manufacturing facilities -- >> if you look around america and where the highest pockets of unemployment are, there are other states. the highest unemployment where people are out of work the longest is those states i mentioned. that is no advantage to any states. what we want to do is what the recovery act is supposed to do, use the money to put money to work. when we find it states to build roads and bridges, the law required us to look at the hardest parts of the country

treaty department of congress. we use their figures to determine the hardest economic places. we are not suggesting any more than what the law suggests. >> will manufacturing be another place? >> this money will go to those who have made proposals. proposals came from the states. we know that these states will use this money in a way that will help put americans back to work. we also know that there are shattered manufacturing capability and there are people unemployed that know how to work and how to manufacture. you get the point.

>> it was reported that the majority of the recovery act -- 78% will not be spent by the end of 2009. many members say this project was ready to go. was it your understanding this what not be spent or were there problems getting money allocated? >> i don't speak for the [unintelligible] 75% is out the door. all the money is out the door and it came under bid, so we spent $1 billion that was in the bill, we spent $1.1 billion because the bids were less than anticipated. we have obligated -- we know there are 10,000 projects, so we

have checked our boxes and it is up to the states to hire contractors. 90% of the money is out the door. transit districts are buying buses and using the money. the money that has not been spent has been $8 billion. this notion that our money has not been spent is nonsense. i have been to 32 states and i have seen thousands of people working around america building america's infrastructure. our money is out the door. thousands of people have gone to work and we will finish up these projects next year. this was an 18-month program. as winter comes on these projects will start up again.

people will go back to work and we will have made announcements about high-speed rail and our grants. when it comes to dot i know what is going on. you can see specifically state by state the number of projects that have been funded. we have worked hard on this. our money is out the door. people have worked all summer and many people were on unemployment in january and february. they had good paying jobs and because of winter it they have to suspend. we have done our job at dot. >> [inaudible] it may not be the best way to

jump-start this national plan of a high-speed system. >> tell me what your question is. >> the number one decision is to give the money that will create the most jobs. that does not make the argument that you're giving the money to the best systems. >> when you see our decisions on high-speed rail you will see we made decisions based on where we can jump-start opportunities quickly. >> [inaudible] [inaudible] >> we are working hard on what we are talking about here today. we are working hard on finishing up our work on making decisions about these dollars.

we have been in discussions with our friends on capitol hill, so we will see what comes out. >> that is it. >>, the secretary will come back and join us. for those who did not think one passionate speech was enough, we have a leader that cares deeply about transportation and jobs. now we get to move on to our first panel. it is called domestic rail manufacturing and the state of the economy. this panel will be led by the deputy secretary of transportation. he twice served as secretary of the maryland department of transportation and it is a leader on many transportation issues, including rail.

we will kick off with him. [applause] >> thank-you all for coming. we truly believe in the president's high-speed passenger rail system. we believe it has the ability to reinvigorate the economy. the hardship is out there. in the past few weeks there have been 500 layoffs directly related to the industry. about 2000 in the recent past. clearly it is an industry that is hurting we see a bright future for it. let me be blunt about what the deal is. we tell you -- we owe yo ua

sustainable program. -- we owe you a sustainable program. what we are asking for is a broad durable american manufacturing base based in america. that is the launch point for where we are to that. let me introduce our panelists today. i will introduce all three and mark is our associate minister for railroad development. he served in many leadership positions for over 30 years. many of you have gotten to know him well. he is responsible for supporting the area at inner-city passenger rail. he has direct responsibility for all federal programs providing investment in the rail industry.

then we will hear from an associate professor of management. he is co-founder of a global alliance, a consulting firm. he holds the term chair there and is a research fellow at the asian institute. he is the co-author of the best- selling book, "strategic alliances." then we will hear from ron bloom. he previously served as senior adviser to the secretary of the treasury on the president's task force on the automotive industry. he served as special assistant to the president of the steelworkers union. he is a founding partner of an

investment-banking firm where he was involved in numerous transactions on behalf of the unions. would you like to start? [applause] >> thank you and it will come to ever ready. as an observer of the rail industry for almost 35 years, these are truly exciting times. if it is an exciting time for passenger rail and the public- private partnerships that will help passenger rail achieve its potential to create stability. there are a number of factors aligning themselves that make this the time for real. the public views this as an

important feature of their high quality of life and are experiencing congesting in ways they have never known before. they are recognizing that the congestion they are experiencing will not be addressed by past models of infrastructure development. the public realizes energy is not cheap. the public also has a growing awareness about the pollution we put in the air and elsewhere in our environment. these are reflected in the department's strategic goals which include safe transportation choices, build a foundation for competitiveness and support livable communities. rail stacks up well against each

of these priorities. this is not lost on the confluence of leadership. we had a president for the first time and secretary of transportation and railroad administrator who comes from states where railroad transportation never lost its importance as part of the intercity travel and has had a strong synergy with transportation networks. rail is at the forefront of achieving our transportation goals. nowhere is this better than in the president's high speed rail initiative. the development of long-term program that transforms the way americans feel intercity travel options. it took decades to implement the interstate highway program.

that was only possible through the strong support of a broadbased constituency that made the program a priority. an important part was the manufacturing sector. we had an interest in the success of our efforts. the real capital investments was one of the engines that drove the economy. that is not the case today. one of the challenges we face is the -- is to stimulate domestic manufacturing. we need to recognize we have not had the size of the market that -- to support manufacturing on a continuing basis. that challenge represents an opportunity. when will look at amtrak most of their equipment is very old.

the newest equipment is approaching mid life. unfortunately some of it were the last equipment bill -- last equipment built 25 years ago. amtrak needs to place its entire fleet -- needs to replace its entire fleet. it is not significant enough to drive the change in the manufacturing base we are looking for. that will come from the development of the highest bill -- high speed rail program. as most of you know, the president's vision

[unintelligible] we've had expressions of interest from 40 states for $100 billion. we have received applications from 35 states for over $57 billion. while this reflects a wide range of planning, it demonstrated states are looking apple high- speed passenger rail to meet passenger mobility needs. there are many [unintelligible] experience in the northeast corridor shows service is needed to meet demand. it will require significant amounts of equipment. the california high speed rail authority projects it will need 800 cars to meet service needs. the growing demand for commuter service is also a place where we

find synergy in developing the manufacturing base. commuter rail has been the fastest-growing and lines continue to point up ports. commuter rail is governed by the same safety regulation and mechanically the requirements resemble those needed. the department sees a need for passenger equipment over the next decade. we also know success yields for their success. we have seen this growing trend line if we are successful in developing our program. the department sees significant benefits can be achieved from a strong degree of standardization. we think the economies of scale

[unintelligible] we see architecture as a way to bring domestic facilities regardless of where their headquarters are located in to the rail equipment manufacturing sector. this will help create a domestic -- a domestic space that provides incentives for improvement. we have no specific models. we hope our rail program will be robust enough that it results in its own model. we are open to ideas from manufacturers to achieve these goals. i will offer a couple of examples. the first vehicle i travel on was a pcc car.

it was the ubiquitous 3 car of my parents' generation. electric railway president's confidence committee -- conference committee developed a design for streetcars made available to equipment manufacturers. there were 05 many car companies. -- they were built by many companies. the major components were also standard with internal electric packages being developed and provided by ge. the current model is to look at the association of american railroads that is establishing design standards for various equipment that assure a

compatible rail system across the country. they can be built by many different companies but they perform the same. the parts are readily available to fix a freight car regardless of who manufactured at -- who manufactured it. the model can be found in section 305. the committee has the design of specifications and secure equipment. congress did not know that it created this section that we would be putting a new high-

speed rail program up, this aligns with what the department is attempting to accomplish to bring back manufacturing. we see departments are played a significant role in the success of this. we have undertaken research and development in the safety. we are interested in seeing the most promising results incorporated into the standards even that they are not required by regulation. we're looking for a new research program that will support these efforts to enhance technologies that will improve the standards on an ongoing basis. there is a strategy for ensuring high-speed rail.

finally, we will use the leverage in the grant program to share the state's in hearing to the standards. we will use that to insure that the equipment required also helps spur growth in the manufacturing capabilities. the preliminary start up for these discussions have already taken place. funding provided in the appropriations, the department will be pressing for an intense level of effort with a target goal by late summer. i would like to note we are trying to accomplish it rebirth of real manufacturing. -- rebirth of rail manufacturing.

we have aggressive goals. we are confident that your being on the fringes of policy, the new prominence will allow us to meet these goals. we will all the beneficiaries of our success. thank you very much. [applause] >> thank you. the next speaker. >> good afternoon. when i was asked to talk, the thing that occurred to me was everyone said he will support industrial policy in the u.s.? i had to start my conversation on that basis because [unintelligible]

they think this is an industrial policy. it is only fair [unintelligible] how we can use the approach we have here [unintelligible] when we favor railroad it is at the expense of something else. that means policies [unintelligible] most of the time of industrial policy meetings [unintelligible] i don't think we plan to do that here. my hope is it is not the intention to introduce a enormous subsidies. [unintelligible] one of the criticisms is it is discrimination against other industries. it violates [unintelligible]

and does not promote competitiveness. my view is it is possible to tailor policies and have a focused effort [unintelligible] and create globally competitive industries. how do we do that? start with this notion we have recognized the manufacturing industry is a supply. unless progress [unintelligible] that means we have to recognize the challenges for the industry. it has to be competitive. this is a simple notion of looking at how the supply industries [unintelligible]

[unintelligible] you can go by bus or by plane. they have to be very competitive as well. the industry has to be competitive as well. how do we do that? what is the challenge for us? the buyers are priced on [unintelligible] then i give anything free. -- they will not give anything for trade. -- give anything free. [unintelligible] the u.s. mill road -- the u.s. railroad has to take that into

account. the only way we can do this is if we understand what are the pieces the railroad manufacturing industry could do well? that is what i hope to do. i tried to take the railroad industry and [unintelligible] to marketing and sales. if you want to understand how the industry can be successful [unintelligible] it is in a particular product development with new technologies with a competitive advantage. [unintelligible] what i am looking at is if you look at the railroad industry,

there are a few areas where [unintelligible] but to domestic and to foreign manufacturers. -- both to domestic and to foreign. there are opportunities for they industry to add value. i want to focus on the site, because it is possible manufacturing wilkey supplying the equipment. -- manufacturing will be supplying de equipment. there is a flow of knowledge, which is going into manufacturing.

we may be able to get a double advantage in the short term. there are a lot of things we can do in the long term to build capabilities. if you look at the analysis, [unintelligible] [unintelligible] we may be able to say the new product development has more value in date that is where we should focus. -- and that is where we should focus. [unintelligible] as someone who looks at this issue in different countries, this is the areas where the u.s. has strength. [unintelligible]

a lot of capabilities in terms of having the ability to [unintelligible] to allow the flow of technology to diffuse it freely. this is an area worthy u.s. has a long-term advantage. [unintelligible] we have to think of the long- term and short-term. short term may be working with foreign purchase. the long term may be an advantage in technology capabilities. let's look at another company that has been doing it successfully. [unintelligible] they have to compete strongly against [unintelligible]

how have they manage to succeed for decades? focus on new product development. [unintelligible] 747 are technological marvels and the leadership in the world. it has been in service for more than 40 years. another way they succeeded is [unintelligible] they could draw on the capabilities and replicate their success. they have fostered innovative practices. [unintelligible] [unintelligible] some things which we can

replicate in high-speed manufacturing. the last thing they have done is their use of alliances. they have managed alliances with lots of folks. an area where we may be able to draw and use this in the manufacturing sector. what i would suggest is the u.s. [unintelligible] the critical thing is we should take technology investments [unintelligible] [unintelligible] we should be able to create a collaboration with universities for new ideas. we should learn to forge alliances with a number of

firms. we should be able to invest in training of new technology. these are not things where the government will be involved in. [unintelligible] that is an opportunity for us in this country. thank you. [applause] >> thank you. next is ron bloom. >> thank you. thanks to the department of transportation for inviting me to be here. my responsibility today is the senior counsel for manufacturing policy. i have a responsibility to try to focus on manufacturing issues.

secretary look good -- secretary lahoo d said everything i needed to say -- secretary lahood said everything i needed to say. one responsibility is there are many things the administration is doing to promote manufacturing and try to help entrepreneurs who can make things in america. sometimes those things get lost because this is a big place. part of what i try to do is work between agenc whether it is a transportation or energy, and maybe we could coordinate better. where there is something that going on, i try to see if it is

something i can be helpful with or shine a spotlight on. that is why i am here tonight. this is an extraordinary event and opportunity. it deserves some of this. i am glad to be a part of it. i don't think there is a better example of an opportunity government can take to do the right thing to stimulate the growth of an important industry. this is exactly the example of the american people expect. today's report was good, but it is not get a nap. there are still a lot of people out of work. this program to stimulate the beginning of a major reversal i nhigh speed rail is something we

want to talk about. it is important to talk about that story. i want to offer you a thought about how you should tell your story. there is a lot of competing demands who have a story to tell about what what they are doing is the most important. there is not one thing we will do that will fix the terrible problem that we found ourselves anin. the problems work a long time in the making. we will not tax them and one month for a year. -- we will not fix them in one month. i want to help think together about how we tell this story so we can gain a broader support

from the public within congress and the administration as to why this is important. we can talk about high speed rail in three pieces that form the core of where the president is talking about taking our economy. the president talked about not wanting to rebuild and the economy based on bowles. -- not wanting to rebuild an economy based on polls -- based on bubbles. when we make rail, we make something. rail moves people, and it is more important to move people and money.

the manufacturer of the products we need to put rail in the ground and make the [unintelligible] that is the creation of real wealth. the job required to do that work, whether they are manufacturing or construction, those are jobs that can be in america and employ americans hungry to go back to work. that is the wealth creation we need to have if we will rebuild our economy right. this is critical to tell this story. this is an industry that points to the future. obviously america will always have different modes of transportation. we will always have a lot of roads, an airplane spillane a

role, but rail has -- airplanes played well role -- airplanes playing a role. we will have to pay a price for the damage we do to our environment. rail has a great story to tell. it is one of the most efficient ways to move things from reducing congestion as well as from greenhouse gases. as we talk about a new way of doing the work of america, whether that is moving people or goods, to do a in a sustainable went with our environment is a test we have to meet. rail has a terrific story to tell. the third thing is to talk about

competitiveness. i would talk about it in two different ways. the skills that we will attain for the engineers we need, for he skilled workers we need, all those skills we will get if we get good at building high-speed rail will have tremendous spin- off effects in our economy. it is that kind of ecosystem that america let the world in. the professor talked about boeing and the effects of that. the learning they do is not just about making the airline, it is all the suppliers. and all the technology, whether it is materials needed or the

electronic or other technology needed. there is a tremendous ego system that gets built. -- there is a tremendous ego system. -- tremendousecosystem -- tremendous ecosystem. that is a critical part of the economy. rail has a terrific story to tell. where should be commending the department of transportation. -- we should be commending the department of transportation. i hope you can be part of its thank you. [applause] >> thanks to all three of the panelists. we have time for a couple of questions. do we have questions? >> [inaudible]

[inaudible] >> i start of challenging the notion that america has some kind of more abundant manufacturing sector with rail equipment. i might even say in certain sectors america has the best manufacturing for rail equipment. what we don't have is demand for certain products. when we think about high speed rail there is a division of to how fast is fast. including bullet trains we have the technology [unintelligible] in some of the higher speeds we don't have the technology because we have not had the demand that would require that technology. what is promising about the

discussion is the potential for demand and utilization of this already existing manufacturing capability to meet that demand. while that is a comment, my question is, what am i missing or in what ways might i be wrong? >> i think you put your finger on one of the problems and promises here. the challenge i put out was what we owe you and what you owe us. we have to hold up our end of the bargain which is a consistent program that doesn't go through this cycle. that is something we have not been able to deliver. we absolutely expecta borad

manufacturing base will thrive. that is the reason for the meeting today. we understand our part of the bargain. any of the panelists want to comment? >> as i travel the country i learned how much we do have. that is a great story to be told. i think the future will require more investment and moving further of the technology chain, but there is a demand side of that. the fact that we don't start from ground zero is only did this and it makes it easier to meet this challenge. we benefit from the fact that we had a robust freight railroad industry that has kept real

manufacturing going in this country for -- during the down cycle in the past ra youril -- in the passenger rail side. there is probably a commonality beyond locomotives were we are ready to go. we have seen a number of entities that build wheels start going away. we need to find a way to bring those manufacturers back. >> if the administration will invest in the high-speed rail connections, they will put high standards and then terms of speed -- high standard in terms of speeds.

if the administration can invest [unintelligible] we will be living up to a higher quality requirements. the fact that we started [unintelligible] we will be more globally competitive. >> thank you. any other questions? >> that sounded like a perfect introduction. i had the pil