pays the lowest income tax rate, would the senator agree with me that perhaps we ought to increase that rate? this person comes home and his spouse says honey, how we doing? and he says, well, pretty good, $3.6 billion. that's $300 million a month. that's $10 million a day. honey, are we doing? well, pretty good. i made $10 million today. but guess what? i get to pay the lowest income tax rate in the country because i declared us carried interest. do we want to plug that loophole and ask that person to pay the same income tax rate that the people who get up and go to work and then have to shower after work because they got dirt under their finishing nails they have to pay? how about making those changes? i'm for all of those things. i want to work with the senator from alabama and every other senator that wants to do all of these things, but this is -- you know, what happened at the start of this past decade is, you

know, somebody put sand in the gas tank here and the car won't run and we're up in the engine compartment trying to figure out how the carburetor works. this is not difficult. going to go to war? pay for it. pay for it. going to cut spending? then take a look at the most egregious abuses and pay for those by cutting the spending out. but take a look at the history on this floor. and we have been through a long, tortured decade of what i consider irresponsible fiscal policy. i understand that it is not the case where one side is all to blame and the other side not. i understand all that. but i also understand this -- i was on this floor saying let's pay for the cost of war. i did 20 hearings on the most egregious waste, fraud and abuse in this country by contractors doing work in iraq and afghanistan. i spoke dozens of times on this floor on those issues and

couldn't get much support. cutting spending for contractors that were abusing the american people, sending contaminated water, more contaminated than raw water from the euphrates river to the military bases in iraq for the soldiers to use and getting paid for it. getting paid bonuses to do electrical work at the military camps in iraq and afghanistan that was so shoddy, done by third country nationals hired by our contractors, done by third country nationals, such shoddy electrical work that mr. massov goes in to shake a shower, a green beret, that he is electrocuted in the shower, killed in the shower, and we paid bonuses to that contractor for that work. it's unbelievable to me. so we have a lot to answer to, all of us do. every single person on the floor of this senate has a lot to answer for. but we can work together on spending and asking those who aren't paying their fair chair of taxes -- by the way, the president when he gave his state

of the union address over in the house chamber said something that i have had a vote i think four times on the floor of the senate and lost all four times. the president said let's shut down the tax break that gives tax breaks to companies that shut down their american manufacturing plants and fire their workers and move it to china or some other foreign country. you know we do that? and we have tried to shut that down. we give a tax break. if you lock up your manufacturing plant, shut the plant, fire every single worker and move your manufacturing to china, we give you a big fat tax break for doing it. that is unbelievably ignorant. the president said in his state of the union address shut that down. i have been trying to shut that down for four, five, six years. unable to do it. so it's not as if there aren't candidates for some common sense and some sanity in fiscal policy to bring us back into some balance. need a revenue base that is a reasonable revenue base. we took a lot of that away about

nine years ago with a vote that i didn't cast. and then you need to tighten your belt on spending and get rid of the things that don't work. so i know i have gone far afield here, and the senator from alabama, i haven't heard him gritting his teeth but he probably is. look, my point is this. he raises an important subject, an unsustainable fiscal policy. this president inherited an economic wreck, there is no question about that. we're trying to get out of this, but you can't look out five and ten years and see what we see without understanding this is unsustainable and all of us have to work together to fix it, all of us, and i'm committed to doing that. i would only say to the senator from alabama i hope that you will find another vehicle in the next few days to offer this amendment to because senator rockefeller and i have put together this f.a.a. re-authorization bill, along with senator hutchison, and we

have worked very hard after so many years to finally get it to the floor of the senate, and we want to get this passed. air safety, modernization, all of it depends on our getting this legislation through the senate soon. so i thank the senator from alabama for staying and listening to that. i expect he will retort or respond, but, again, these are all important issues, but we must get this f.a.a. re-authorization bill done. mr. sessions: mr. president? the presiding officer: the senator from alabama. mr. sessions: i thank senator dorgan for his comments and frustrations that we all share. he comes at it from one party's perspective, and i have got my party's perspective. we can argue these things for a lot of time. i have sort of gotten now to the point -- and i think senator mccaskill and a lot of the members of the body, we need to do something that might actually work. and senator dorgan, the reason i do feel like we should go forward on this because we -- we

had a bill with 56 votes of bipartisan support. then the last time was 59. we made some more changes to primarily assuage concerns of my democratic colleagues, and senator mccaskill feels like it actually put us in a position to pass this legislation. it would make some difference. i was at a town hall meeting and the questioner criticized me for something, and i said well, i wrote a letter about that to the cabinet person and complained. he sat there and looked at me and he said you wrote a letter? thank you a lot. i didn't have much to say -- so at some point, we have got to do something. i have made speeches. senator dorgan, one of the most eloquent members of this body, has made speeches, but we're not doing anything. deficits are surging beyond

limits. and so we have got a possibility here -- and that's why i think we should go forward, we have got a possibility here of reaching at least this agreement for three years to place in statutory form the budget that essentially my democratic colleagues passed that's really higher than what president obama is saying we should spend, and we could -- we could at least have that as a firewall that would be difficult to go above, but it would not eliminate or make it even any harder to pass a -- an emergency bill because we have amended it to change that part that we previously had in there and it made it harder to declare something an emergency. one thing i would like to share with my colleagues -- i see senator dorgan is gone -- about the allegation which is not all wrong, that president bush and

mr. greenspan were insignificantly concerned about deficit spending after we had a series of surpluses. first, let me go back. one of the great political efforts in this congress, and it has had some success and partisan success, is to give president clinton credit for the balanced budget. not a dime can be spent by any president that's not appropriated by the united states congress. republicans took over the congress in 1994, shut down the government in a dispute with vice president over how much money he ought to be spending and called it -- caused a big

controversy, but they fought and fought against spending. people were sleeping in their offices and all that stuff, but the budget got bald -- got balanced for several years. so after 9/11, we slipped into a recession. we were in a war. i don't think it's any doubt mr. greenspan -- as a matter of fact, i heard him in effect say this. i felt the country could take on more debt. senator rockefeller probably remembered essentially that. he served on some of these committees. essentially we could take on more debt. what mr. greenspan and i think mr. bush didn't realize was that once you start taking on more debt, it gets harder and harder to stop. and we started a trend of taking

on more debt as if it didn't matter. some people even said deficits don't matter. some republicans said deficits don't matter. we can handle it. well, we got in a bad habit and we both -- and both parties got into that habit, and it is roaring away today at spending levels, the likes of which we have never seen. we have passed a budget that i think has reality in it. i think if we hold to that budget, we might surprise ourselves how much progress we can make, and these kind of statutory caps were part of the success in the 199 1990's. so i -- in the 199 1990's. so -- in the 19090's. so i would ask forgiveness of my colleagues for pursuing a vote on this, because if we get the 60 votes, i would say to my colleagues, that would be an indication it would not in any way burden the f.a.a. bill.

in fact, it might be attractive to some members of this senate to vote for the bill if this count was in it. they might not otherwise vote for it. so i don't think it would doj damage the prospects of the bill's passage. it's building up with increased votes each time. we're near to success. it would be a great bipartisan statement, i think, of commitment to financial responsibility, and that's why i feel like it is important to go forward. i thank the chair and would yield the floor. mr. brownback: mr. president? the presiding officer: the senator from kansas. mr. brownback: thank you very much. mr. president, i rise in support of the f.a.a. bill that has been put forward by senator rockefeller, senator hutchison. they have both worked hard on this. i have worked on this for a number of years as well. my general aviation industry is centered in the state of kansas, it's centered in wichita. it's an industry that has had a lot of difficulty lately with markets and the recession, the

problems overall, and it needs a bit of good news, and this would be a good bit of good news, having this f.a.a. re-authorization in it. this is an industry that's roughly $150 billion in size. it's located primarily in the united states. it's created and has over 1.3 million jobs. it's key. it goes across a broad array of disciplines. it is a high-tech manufacturing business that we are very good at, and this is something that we need to have is this nextjen that's in the bill on the technology that's implementing that for navigation and for travel across the united states. also in the bill are maintaining inspection procedures that are important for the inspection of aircraft. there is increased funding for essential air service for a state like mine that has a lot of need for essential air service in places that it's tough to get in and out of and

the population pool isn't large. the travel needs that to be able to expand forward, expands passenger rights, provides increased federal support for small airports. i think it's also important that this legislation does not include language imposing disproportionate and onerous user fees on the general aviation industry. and this is something i have been concerned about. my seatmate, senator roberts, has been concerned about for some period of time, that the general aviation industry would get stuck with a disproportionate share of the funding for the overall f.a.a. infrastructure. that is not in the bill. if it comes back to this body from the house with that in the bill, it's going to be something i'm going to fight strongly against. i think the bill is a good bipartisan bill. i think it's been worked out. it's certainly not perfect, no bill is, but it's one that has been worked out over a period of time, over a serious of -- a series of years, over a lot of

interests, and it's the way we ought to legislate and move forward. i say as a sawtionary tale again to my colleagues that if the bill comes back with things from the house that are problems for this body, it's going to stop the bill, and it then isn't going to happen. and my urging to my colleagues here and across in the house would be let's keep with the primary design of what this bill has and not try to load it with other things that might be special projects for individuals that are going to kill the bill. i have -- i have concerns on any side, whether it's on my side or on the other side being added to this that would kill this bill that has been a hard fought, long legislative process for us to be able to move forward with this. it is a bipartisan piece of legislation, it will create jobs, it will spur further development in our nation's aviation sector, a sector that needs some help and support now, and this bill does that. i can see a lot of ways that this bill could get -- could get

damaged and hurt along the way. i'm not opposed to putting amendments in it, that makes sense, and that they continue to move the bill on through the legislative process. i am opposed to those amendments that would kill it and that would substantially harm it when this is something that's worked a long time through several committees to get it on moving forward. for those reasons, i support it, i support it as it is. i think we ought to move forward with it and move forward with it with some speed to help this critical industry in our country to support safety in flying in this country, to support this piece of legislation. mr. pre mr. president, i'd yield the floor. mr. baucus: mr. president? the presiding officer: the senator from montana. mr. baucus: i would like to say a few words about the safeiation trust fund authorization. i support the bill, and i strongly urge my colleagues to support it as well. in addition to discussing the bill's specifics, i'd like to

give some perspective about our current aviation system. our current system relies on the use of radio detection and ranging. more commonly known as radar. radar was once a tremendous leap forward. that is, it was a tremendous leap forward, right before world war ii. let me take a couple of moments to retrace the history of air traffic control, starting before radar. before radar, pilots followed prominent landmarks such as rivers, railroad lines to navigate their routes and naturally bad weather made travel hazardous. in the 1920's, commercial night flights relied on something called the transcontinental lighted airway. now, that's an impressive sounding name. a, a series of bomb fires. local farmers maintained these bonfires across many parts of

america. more areas could use gas fuel beconsequence. by 1922 the first civil aviation midair collision happened in france. that collision created awareness of the need for some sort of air traffic control. they i use the word "control" loosely. it took more than another ten years before this country's first air traffic control center opened up in newark, new jersey, 1935. the following year, additional senatorcenters went up in cleve. all that changed with the establishment of radar shortly before world war ii. during the war, radar gave the british an extraordinarily positive tool, a defensive tool

for propelling attacks. cont allied powers were using it for offensive purposes. radar provided air cover in normandy. it enabled air raids deep into germany despite overcast skies. it helped us disrupt access power, shipping routes and attack the japanese navy. we spent more during the world war on radar than on the atomic bomb. no less an authority than german grand admiral durnes, when captured at the end of the war, said this, "we fell behind technically. we were unable to build short-wave radar to compete with anglo-american improved radio equipment." following the war, radar was adapted for civil aviation. it spawned the tremendous rise of commercial air travel. incidentally, in led congress to properly fund aviation.

in 1970, we established the airport and airways trust fund commonly referred to as the aviation trust fund. that's what we seek to reauthorize here today. the aviation trust fund built on the success of the highway trust fund. the idea behind the aviation trust fund was for the system's users to pay for its upkeep and generally speaking the aviation trust fund is managed to do just that, to finance the needs of the air traveling public. the aviation trust fund receives about $12 billion a year in user-based taxes, much of this funding going into the airport improvement program. the airports in my state of montana prelie heavily on this. the -- rely heavily on it. the department of transportation has estimated that every $1 billion of funding creates more than 20,000 jobs throughout the united states economy. but now we need to do more. our system needs modernization.

we need to improve safety and efficiency. we need to enable direct routes -- rather than flying along zigzag flight corridors since we have since the transcontinental lighted airway. and we need to keep up with air traffic growth. just look at how bogged down our new york-new jersey airspace already is. we need continuous descent arrival to reduce amount of fuel that aircraft burn. this reduces both cost and air emissions. during a recent test in atlanta, delta air lines saved as many as 60 gallons of fuel and cut carbon emissions by up to 1,250 pounds for every flight. the senate bill would fund the aviation trust fund for little more than three years and importantly the bill would provide needed funds for the establishment of nextgen. nextgen is the federal aviation administration's plan to use

satellite-based technology in order to modernize the nation's air traffic system. we need to invest in it now. our 2010 trust fund established in the early 1970's is still funding ray damplet that's a technology that predates the second world war. some radar beconsequence are still located on the same sites as those early bonfires. nextgen will enable planes to use global positioning systems to continuously transmit lotion, speed -- transmit location and speed to controllers within 150 miles. that will improve efficiency and safety. this is a sea change. a number of other countries have already invested in satellite-tracking technology. the u.s. is behind the curve. we can change that with passage of this bill. so how do we pay for nextgen? the finance committee proposes the following: first, we set the tax for general aviation jet fuel at 36

cents a gallon. that's up from the current 21.9 cents a gavment the general air forceiation community agreed to this proposal -- the general aviation community greed to this proposal. second, we treat partially owned planes as general aviation rather than commercial carriers. owners believe that this change will reserve their ability to fly and land in uranium. all told it will raise an additional $180 million to get nextgen started. more will be needed, especially given the rapid state of technological change. i know that both finance committee and the commerce committee plan to monitor nextgen's implementation. mr. president, we'll have a pretty good debate this week. i look forward to it. but first i want to thank my colleagues, especially senator rockefeller. i thank him for his willingness to seek a common ground. we've worked on for actually several years.

we had an agreement a couple of years ago but due to the extraneous event was unable to be realized. senator rockefeller has written a very strong f.a.a. reauthorization. i especially appreciate his continued support for the essential air services program, a program that matters a great deal to my constituents in eastern montana. so let us adopt nextgen to improve safety and improve efficiency. let us reauthorize the aviation trust fund. it is time to bring american travel into the 21st century. mr. president, i suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

quorum call:

quorum call:

mr. lieberman: mr. president. the presiding officer: the senator from connecticut. mr. lieberman: mr. president, i ask unanimous consent that further proceedings under the quorum call be dispensed with. the pridinoffice without objection. mr. lieberman: i thank the chair. first, mr. president, i would ask unanimous consent that steven obenhaus who is a fellow involved in matters of education from our office be granted floor privileges for the duration of consideration of this bill. the presiding officer: without objection. mr. lieberman: i thank the chair. mr. president, i now ask unanimous consent to bring up amendment number 3456. the presiding officer: is there objection? since there's no objection, the court will report. the clerk: the senator from connecticut, mr. lieberman, for

himself and others proposes amendment 3456 to amendment 3452. mr. lieberman: mr. president, i ask that further reading of the amendment be dispensed with. the presiding officer: without objection. mr. lieberman: i meant the pending amendment to be set aside to call up this amendment. the presiding officer: without objection. mr. lieberman: i introduce this amendment with senators collins of maine, byrd of west virginia, feinstein of california, voinovich of ohio, and ensign of nevada. its purpose is to reauthorize and, in fact, to save the opportunity scholarship program or o.s.p., for students here in the district of columbia. we are introducing our amendment to this legislation. and i use the word save, because without prompt action by congress, there is a reasonable

probability that the o.s.p. program, the scholarship program, will not be just limited to the number of students who are in it now and, in fact, there haven't been any new students submitted in the last two years. but it will be doomed. as i explained here on the floor of the senate yesterday, the current administrator has advised secretary duncan that it will no longer -- the administrator being a corporation, an entity, that it will no longer administer the program without a reauthorization. no other entity has yet expressed a willingness to take over given the constraints imposed by congress so despite president obama's intent stated in -- his budget message to continue this program, admittedly only for those 1,300-plus students currently

participating in it, it appears that even that will become impossible. and i think that would be a really tragic result because this program has given a lifeline for students in failing schools in the district of columbia scholarship to go to private or faith-based schools where by all accounts they are receiving a much better education and being given the talents with which they can make something much greater of their lives. mr. president, we first offered our amendment to the american workers state and business relief act which was passed, of course, earlier today. i was proud to support that measure. good for our economy, good for people hurting in our economy, good for businesses hurting in

our economy. unfortunately we were not able to get a vote on this amendment on that bill. so, as promised, we are here today again in another attempt to get a vote in the senate on this issue because it is time sensitive. it is urgent the life of this program hangs in the balances and so -- balance, and so in a very real way does future of these 1,300-plus students in the district who are benefiting from the program. the truth is the f.a.a. reauthorization bill has been referred to as a jobs initiative. and i believe it is. and what's more important to getting a good job than getting a good education? and that's what this bill is all about. achievement gaps in our schools, including our schools here in the district of columbia, have a profound impact on the quality

of our workforce and on the future of our economy and in a classically characteristically american sense focusing on the individual on the -- on the individual individual who -- on the individual children who by twist of fate have ended up in schools that are not adequately preparing them. i'll have more to say about this. but these are schools that i'm not just personally judging to be failing schools, but under characteristics, standards created by the federal government under the "no child left behind" act are de designad as failing schools. the o.s.p. program provides these students, low-income students in the district with a chance at a better education. and, mr. president, dollar for dollar, this program accomplishes this goal at a very, very low cost.

personally, how did i get involved in this? of course, like all of us, i have an interest in education. i have an interest in overcoming the achievement gaps in american schools that are so often -- well, not just so often, but so profoundly related to income and to race. more particularly i followed the status of this program, this opportunity scholarship program in the district of columbia for several years in my capacity as a ranking member and now chair of the homeland security and governmental affairs committee because of the committee's traditional jurisdiction and its governmental affairs aspects over and regarding the district of columbia, our nation's capital. last year our committee held a hearing on this opportunity scholarship program and heard

testimony from students in the program and their parents. it was evident from their testimony that this program has served as what i -- the word i used before, a lifeline to many students who otherwise would have been assigned to schools in which they would not have received a good education as designated by "no child left behind". one parent whose annual income is only $12,200, testified that she had sought an opportunity scholarship, a voucher, some call it, for her 8-year-old son after her 17-year-old nephew was shot and killed at the school that -- at ballou high school.

her son since has really thrived in the opportunity scholarship program. loves his school and his teachers. is part of the reading and debate club and now wants to be a doctor. his -- his hopes have been fortified and elevated and his achievement has been remarkably improved. this mother believes, as she told her committee, that none of this would have happened had her son stayed -- forced to stay in the school he was in in the d.c. public school system. another youngman, ronald holassi, started in the opportunity scholarship program in sixth grade. he told our committee -- he's now a high school student. he told our committee that the d.c. scholarship program and i quote -- "has changed my life." end quote. and then he said and i quote -- "no one should take away my

future and my dreams of becoming a successful young man. no one should take that away from me and the other 1,700 children in this program." end of quote. now because of the failure of congress to support the program over the last couple of years or fill the spots opened by graduation, down to 1,300 children. ronald holassi became the deputy youth mayor for the district of columbia and he is now applying to college. what he said was right, this program provides a quality education to economically disadvantaged students at half the per pupil cost -- half the per pupil cost of educating students in the d.c. public schools. mr. president, our committee also heard from tiffany dunston. she told us another student --

quote -- "receiving a scholarship was a blessing for my family and put me on the path to success. i grew up in a neighborhood with a lot of poverty and crime. and there was such low expectations for kids in my neighborhood schools. i would watch kids hanging out on the streets and not going to school. my my motivation to get the best education possible was my cousin james, who was shot and killed at 17. i'm always thinking of what he could have done with the help of the scholarship my dream has been realized." well, those are very moving testimonies, personal anecdotes, affirmations of the worth of the program, but has there been an independent professional

evaluation of the program? yes, there has, required by congress. the person chosen to carry out that program is a man named patrick wolfe, dr. patrick wolfe, the principal investigator of the evaluation conducted by the united states department of education's institute of education sciences. this is a report required by congress, carried out by an institute under the u.s. department of education. dr. patrick wolfe testified that the opportunity scholarship program has had a statistically significant positive effect on the test scores of students in reading in this program. now, i know some of the critics of the program, some of the opponents of the program have downplayed these results. however, the fact is, as i've

learned, that most education innovation programs actually fail to show any significant gains certaint certainly in thew years. dr. wolfe has said that when compared to all other similarly studied education innovations trough our country -- we're not talking about -- throughout our country -- we're not talking about the district of columbia -- compared to all other similarly studied education innovation programs throughout our country, dr. wolfe said -- and i quote -- "the reading impact of the d.c. voucher program is the largest achievement impact yet reporte reported." and he went on, this principal, independent investigator, to say -- quote -- "the d.c. voucher program has proven to be the most effective education

policy evaluated by the federal government's official research arm so far." the most effect education policy evaluated by the federal government's official education research arm so far. so why, why stop it, why terminate it? certainly not based on this independent evaluation. certainly not based on the testimony that our committee and other committees have heard fr from, the parents and students involved in this program. the reasons i leave to others, but i fear it's because of the opposition of teachers' groups and others who don't want this kind of competition. in sum, this study used by the -- used the gold standard, dr. wolfe's study of research methodology, found that the opportunity scholarship program is getting very impressive

results. those who oppose o.s.p., opportunity scholarship program, argue, in part, that vouchers take away funds from the public schools here in the district. this is simply false. this program, when it was adopted in congress, to overcome the argument that it would take money away from the public schools, did exactly the opposite. we reached an agreement to get the votes to pass the program, that whatever amount of money was given for the opportunity scholarship program, the so-called voucher program in the district of columbia, exactly that amount of money would be added, not subtracted, added to the public school budget of the district of columbia. they otherwise would not have received that money for the public schools. and, incidentally, a similar amount was appropriated for charter schools in washington. so why?

because there's no one answer at this moment to the -- to the challenge to give every child endowed by our creator, as the declaration of independence says, with the equal right to life, liberty and the pursuit of happiness, which in our time is -- is very, very much equated with the right to an equal education. the fact is that we were prepared, previous congresses have been prepared to support all three of these ways because they were focused not on a single method of educating our children but on benefiting each and every one of our children. i know that some say that these scholarships are not the solution to the problems that beset the d.c. public schools. i agree, they are not the sole solution, but they can and should be part of the solution,

certainly while the reform efforts of the chancellor, michelle rhee, are going forward and until they reach a turning point, a tipping point where the schools really have been broadly improved. i strongly support chancellor rhee's efforts to reform and improve the public schools in the district. i strongly support efforts across the nation to improve our public schools. that's always where we will educate most of our children. that's always where we should put the greatest emphasis. chancellor rhee, with the backing of mayor fenty, has moved aggressively to turn around failing schools in the district. she is getting results and she has certainly my full backing when it comes to the reforms she is working to implement. but chancellor rhee has said something so honest,, in my in y

opinion, so compassionate, so fair, so focused on the well-being of the children in washington, d.c. that, to me, it should end any argument against the amendment that we are proposing. she has said herself, chancellor rhee, that her reform effort in the d.c. schools is making progress, but it is -- it's not going to happen overnight. as one of the students i just quoted said before our committee, the d.c. public schools didn't get to the troubles they're in overnight, and they're not going to get out of the troubles they're in overnight, but chancellor rhee has said this is a multiyear process. in the meantime, many district schools are failing our most challenged, economically challenged children. for this reason, chancellor rhee, michelle rhee, the head of the public schools in the

district has said the o.s.p. program should continue. i ask my colleagues why wouldn't we want to use every means at our disposal to provide the best education possible to all children here in washington, d.c.? chancellor rhee has been very explicit about this. she said that it may take five years to turn around many of the schools that are failing, officially failing to give a decent education to the students in the district of columbia. she said in a very personal and moving way, until she could say to parents who are in schools now designated as failing that they were no longer failing and the parents could be confident that their children will receive a good education in those schools, she would support the opportunity scholarship program, five years. based on that assessment, our

amendment re-authorizes the o.s.p. program for five years. our amendment also continues to ask for a rigorous evaluation of the merits of the program. at the end of the five years, we will have better information on both the effectiveness of this scholarship voucher model and the reform effort in the d.c. public schools. i want to suggest to my colleagues at the end of this five-year period, we can determine whether we want to continue to provide federal support for these opportunity scholarship school choice programs based on conditions at that time. our authorization proposal includes a number of improvements and enhancements to the program, including many sought by my friend and colleague, senator durbin, chairman of the appropriations subcommittee that has in previous years funded the opportunity scholarship program. specifically, we require that all schools in the program have certificates of occupancy, that

core subject matter teachers have appropriate credentials, that schools meet the accrediting standards of the d.c. public schools, that regular site inspections be conducted, and that participating students take the same test as students in district of columbia public schools. mr. president, there are currently 1,319 students benefiting from opportunity scholarships in the district of columbia. i repeat that no students have been allowed in for the last two years because of congressional inaction. at its peak, 1,930 students were enrolled in the 2007-2008 school year. because no new schools could enroll, enrollment declined to 1,721 last year and then 1,319 this year. last year, 216 students who were

offered a scholarship had the offer revoked by the education -- secretary of education of the united states because of failure to support the -- the program. and i want to repeat, over 85% of students in this program would otherwise be attending a school in need of improvement corrective action or restructuring. another where its failing school is designated under the no child left behind act. so in closing, mr. president, i would say this -- 1,300 and 1,900, the number of students benefiting from the scholarship program. if we don't re-authorize it at this point, there is no one to run the program, and it probably will simply die. those are 1,319 reasons to save this program and offer hope and opportunity to these young boys and girls in this city who want

as much as any child in this country to live a life of success and self-sufficiency and deserve that right as much as any other child in the country. so i ask my colleagues to consider what we would want for our own children. all of us here have the resources to essentially exercise school choice, and that's precisely what many of us do because we want the best for our children. but there are many parents around america -- in this case particularly who live in our nation's capital, the place where we work. we will have much more limited resources and also want the best for their children. they want to make a choice which the opportunity scholarship program allows them to make. so i appeal to my colleagues to take up this amendment. let's have a vote on it, and let's act favorably on it to preserve this life line for a

gifted and hopeful group of children in our nation's capital. i thank the chair and i yield the floor. mr. rockefeller: mr. president? the presiding officer: the senator from west virginia. mr. rockefeller: i ask unanimous consent that the senate proceed to a period of morning business with senators permitted to speak for up to ten minutes each. the presiding officer: without objection. a senator: mr. president? the presiding officer: the senator from maine. ms. snowe: thank you, mr. president. i ask unanimous consent to speak in morning business and ask unanimous consent for ten additional minutes. the presiding officer: without objection. ms. snowe: thank you, mr. president. i rise this evening to speak to the urgent imperative of job creation in our country and impress upon my colleagues that if we are serious about assisting our nation's small businesses, the very catalyst that will lead us out of the longest and deepest recession since world war ii, we couldn't

devolve once again into more delays. and to that end, i filed an amendment to the tax extenders legislation before this chamber which included a package of six bipartisan achievable policy reforms designed to facilitate an entrepreneurial environment under which our nation's almost 30 million small business firms can create new jobs. i had hoped to offer this amendment which i am introducing today as a free-standing bill called the small business job creation act, but after talking with the majority leader at length last week, i decided to forgo that opportunity as the leader indicated to me personally and to the entire senate that he, too, is anxious to address a small business jobs bill in the coming weeks, and now that we have cleared the tax extenders package today and taking up the long overdue federal aviation administration re-authorization legislation, i hope that the senate as well will consider the jobs package that will include small business

initiatives that are so vital and imperative to the well-being of small businesses throughout the country, and that we can address this issue before the easter recess. as ranking member of the senate small business committee, i want to begin by taking a moment to tout the work that our committee has accomplished in this congress as one of the most -- as one of the most bipartisan panels on the congress, i appreciate the chair, senator landrieu, who has built on the foundation of 22 hearings and roundtables and reported out a series of bipartisan bills on topics ranging from access to capital and exporting and just last week, mr. president, small business contracting reform. i truly appreciate chair landrieu's approach in building a collaboration on the committee on these key issues, and most of the provisions i'm championing here tonight originated from the work that we have accomplished together in the committee as well. now, mr. president, when it comes to this jobs agenda, i would have preferred a different approach to advancing it, one that was more comprehensive and

robust, frankly. this kind of piecemeal strategy is not one that i would embrace. it's not one "the new york times" approves of either, for that matter. in fact, an editorial this week contained the following observation, and i quote." the danger is with stop-gap measures boosting the headline job numbers, congress and the administration will avoid the heavy lifting that is required to clear away the wreckage of the recession." end quote. so it's not enough to say jobs, jobs, jobs as the new mantra. they must be the new singular mission of this congress that deserves rigorous action, not just in dribs and drabs, but as a full tilt agenda of this institution. make no mistake, mr. president, time is of the essence if we are to assist our nation's small businesses. nowhere is that test of meeting that challenge more immediate than with our having to struggle at not only their own expense but the expense of job creation and reversing a dire economic downturn. and based on what i have heard

firsthand from numerous small business forums in maine that i have held not only this year but last year, throughout the entire year of 2009, business owners are desperate for relief, and they want answers to the pervasive uncertainty they are confronted with on so many levels. for example, as indicated in this chart, in the economic climate devoid of continuity and tax policy, skyrocketing health care costs, owner us regulations -- onerous regulations, volatile energy prices, how can small businesses expect to hire a new employee, buy additional equipment, expand operations or accurately forecast their operating costs? the regrettable fact is they can as long as they remain not just unsure but understandably anxious about whether or when washington will exact another tax, levy a new mandate, promulgate another regulation or create more bureaucracy. a solid foundational starting point would be enacting the provisions in the amendment that

i filed, many of which i underscored in a letter that i sent to both the majority leader and the republican leader. frankly, mr. president, there are such wide agreements on so many of these ideas. in fact, the small business committee has approved many of these provisions unanimously and the president has called for them to be included in a jobs package. so i think that most people would be shocked to learn that they aren't already enacted into law. and getting back to the original proposition, mr. president, it's the point of the fact that there is uncertainty with respect to the policies that are emanating from washington that creates a lot of anxiety and disenchantment about the direction we're taking, but more importantly, the costs that it ascribes to their cost of doing business. what is it going to do to increase the cost of doing business, whether or not they are prepared to hire a new employee or make investments in capital and equipment if they don't know the certainty of the propositions that come from washington that could add to their costs for doing business. for example, mr. president, the

centerpiece of any jobs agenda is assisting the best-known jobs creators we have, our small businesses, and bringing some certitude to the expensing provision of the tax code is unquestionably the place to begin. now, i know that the senate has already enacted this legislation extending what had been part of the stimulus plan to increase expensing immediately for small businesses to write off up to to $250,000, and that expired the end of last year. and we have extended that proposition for the remaining ten months in this year, but then again it will expire. and so at that point in 2011, then small businesses will only be able to write off up to to $25,000, so that's a $225,000 decline. exactly how does that contribute to greater confidence for small business owners? how are they supposed to look to the future in the face of a draconian measure of that

magnitude? so it really is important to extend the small business expensing level of $250,000, not just for ten months, but at least for five years. as we have seen in this chart that i am showing here this evening between republicans and the democrats and the administration, they support extending small business expensing. they support enacting zero percent capital gains rate for small businesses, so we have bipartisan solutions across the board with respect to these initiatives. so it's also important to make sure that there is continuity in these policies, which is really the troubling point, mr. president, because it's so important to make sure that they can look down the road. they might not be making a decision within the next five or six months or ten months, but it's important for them to be able to see down the road, beyond the ten months, that there is certitude with respect to the policies that we are enacting, especially regarding

tax relief and tax policy. the types of initiatives that frankly are going to be instrumental in making a difference in job creation. so we have two initiatives here, and that is extending the small business expensing and enacting zero percent capital gains rate for small businesses that i joined with senator kerry in introducing that legislation. so it is true that we can reach an agreement on some issues. that's important, and we're moving forward, but we have to give more longevity to these tax policies, given the severity of the downturn, given the severity of the economic situation that we face today, that it is a jobless recovery. we need to create jobs. if we're going to create jobs, then we have to create more permanent tax relief. and we have seen that with the credit crisis. why can we not join forces and address the stifling credit crunch that is placing a perilous chokehold on our economy across the country? why can we not agree on doing

something viable and bowled to -- and bold to confront such a universally acknowledged problem? it remains an unmitigated outrage, frankly, that the federal reserves' in a junior and senior loan officer survey found that banks easing credit terms for small businesses was an astonishing zero percent. zero percent. the same is true in october, the last time they conducted this survey. so if you wanted to not just freeze credit, but phos aislize it -- fossilize it this would be the way to do it. lend something critical. it is the lifeline to our economy. it is the lifeblood and it's certainly a lifeline for small businesses if they're going to be able to add jobs, to preserve jobs or to make investments in the future. but here again is another area which we could take immediate action, right here and now, that aid can turn this deplorable

trend around beginning with boofght the s.b. a.'s compass for facilitating access to. my provision includes key lending provisions from a bill i introduced in the small business committee with chair landrieu which was reported out of our committee by a vote of 17-1, 17-1, so overwhelmingly b. bipartisan, to increase the maximum limits for the s.b.a.'s 7-a program and the 504 loan program from $2 million to $5 million, raising the maximum microloan limit from 35*dz,000 to $50,000, and allowing for the refinancing of conventional small business loans through the s.b.a. 504 program. now, if fully utilized, the loan limit increases would create or retine up an estimated 211,000 jobs. and i would note that enhancing s.b.a. loans has already paid tremendous dividends, as in the stimulus bill because we

included these provisions which have been credited with increasing loan volumes by a racialg 86% nationwide n my own statstate ofstate of maine, 227. that's already as a result of what we included in the stimulus package last year in increasing and expand the loan volumes under these programs. so it obviously is indicative of what can be accomplished. so with numbers like this -- not to mention the endorsement of 80 business organizations -- it is essential that we give these critical programs that ability to grow more small businesses. just as there is much we can do right away domestically, how about finally taking action to help our small businesses compete globally, give than fewer than one percent of our small businesses' exports, all the morevite that will we take advantage of this untapped market and help those enterprises sell their goods and services to 95% of the world's

customers who live outside our borders. in the state of union address, president obama made clear that we must double our exports over the next five years. and small businesses are a critical component of the administration's strategy and our national competitiveness. for this reason, my provisions were included in the small business exporting legislation which i introduced with chair landrieu. as this chart reveals again, the provisions in the bill, larger s.b.a. export loan limits, expanded export technical assistance, enhanced assistance for trade promotion have bipartisan support. they were reported unanimously by a panel passed last december -- unanimously. they have the administration's support. they have been endorsed by the u.s. chamber of commerce. so we have solidarity on this initiative, and for good reason: because it could create roughly 36,000 new american jobs in the year after enactment and 170,000

jobs over the next five years. so there's no reason oarnlg why we could nolt move on this bill today, mr. president. so while whether we're debating trade or climate change, whatever the issue, its a also a time we retool our thinking so that in every matter before us we are striving to create a climate in which our job creators are k. not only survive but thrive. for example, for years we've had environmental impact statements. well, 2010, it's high time we require job impact statements. consider that in 2509 alone, there are close to 70,000 pages in the "federal register." the annual cost of federal regulations now totals more than $1.1 trillion with small firms bearing the brunt. mr. president, there's enough built-in impediments to starting a small business, not to mention sustaining one, without the federal government compounding the problem. and that's why i've included language in my legislation that i introduced last week with senator pryor requiring the

congressional budget office to provide such job impact statements for every single major initiative before congress to evaluate its effect, positive and nextgen tirvetion on job creation, job preservation. we didn't stop there. our bill would also require federal ageses to full analyze the cost of regulations on small businesses which too often usurp the entrepreneurial spirit that has efined every -- defined every generation. our bill is supported by the nfib, the u.s. chamber and the national small business asoasmtion my provisions include $50 million in funding for the small business development centers which again provide critical technical assistance and counseling to small businesses at over 1,000 locations nationwide. the program has a proven track record of job creation and dorgan annual report by dr. jam

krisiman, employment levels have increased 10% more than for businesses in general. as a result of the additional funding i'm pressing more, the doctor estimates that over 20,000 new jobs would be created while tens of thousands more would be saved. finally, it's paramount that we move forward this initiative. i've also included an offset for this legislation, mr. president. i do happen to think it's important that we provide offsets. i think we have to reexamine the stimulus package that we enacted last year, much of which has -- has been meritorious, much of which has worked but there are other parts of it that has yet to be implemented or expend. i think that's the point. the fact is that the projected $1.6 trillion deficit this year alone is essential that we look at ways in which we can pay for legislation, especially targeted towards job creation, that can be accomplished immediately.

that's why i'm proposing to fully offset the cost of my provision with unspent, unobligated funds that we appropriate as part of the stimulus. now, i understand some of my colleagues oppose using unobligated funds as an 0 offset, citing congressional budget data. citing that it has preserve many jobs across this country. at the same time i believe it is our obligation to continually assess and reassess whether the recovery act is working because, after all, stimulus is supposed to be timely, targeted, and temporary. and in two of the three instances many millions of dollars, it has not met those goals. in fact, as we have noted in this following chart, that just $288 billion of the $787 billion that was enacted last february, only 37% of the total has been actually spent. and when you consider just the

$275 billion in the stimulus is appropriated funding for expenditures such as contract grants and loans, just $81 billion, or 30%, has been paid out. that's where i think we need to reassess the three critical criteria on timely, targeted, and temporary. and obviously on the timeliness and being targeted, they have not met those goals. and that's why i think we should redirect some of these stimulus funds to other purposes that are more effective, more immediate to do the job and that's where a small business enters the equation. on these initiatives that i have identified that are absolutely paramount to helping small businesses to create jobs across this country. after all, mr. president, we're depending on small businesses to lead us out of this economic downturn. they have been the job generators in the past. they have created two-thirds of all the net, new jobs in america. we need to create millions and millions of jobs.

you have 100,000 new intrantszs in the -- entrants in the market every month of the we have to move expeditiously. that is the point here tonight. i have an away ray of initiatives that are -- i have an array of initiatives that are very vital to small business and job generation. one, we have to do it immediately. two, we have to be focused, and we have to provide continuity of policy. and certainty so that small businesses can look down the road and see what types of policies are emanating from washington, d.c. and as i've said to the secretary of treasury recently, would you take a risk in making investments today? would you make a risk knowing what you're hearing in washington, whether they need more costs as a result of potential health care legislation, adding more cost to small businesses. there is no question with that, with the medicare payroll tax that's embedded in that legislation that really is another hidden tax similar to the alternative minimum tax. it'll raise taxes 62% and it's

not indexed for inflation. so we know what the exponentialal tax will become for smawfnls that's an example. again on expensing, while ten months does not make a policy of certainty, we need to provide a continuity of that policy with respect to tax relief, and therefore small business expensing is certainly part of it. we can expand the loan limits under the s.b.a. loan administration's programs, the 6705-a-4. they did work in the year in which we expanded those programs. it's been demonstrated nationwide conclusively in my state. so why not move expeditiously to address those issues? and finally we can pay for it, mr. president. we can redirect stimulus. i think that's the most conservative, effective approach for paying for this legislation because, after all, if we've only spent 30%, you know, of the

appropriated funds under stimulus, and only 37% overall of the stimulus, we may not even spend $6 billion at the end of this year, we -- spend $600 billion at the end of this year. we need to spend it now, mr. president. that's the point. we need to spend it now. what are we waiting for? there is no question about the sense of despair across the landscape. we're not creating jobs. we're losing jobs every month. albeit it has improved, the fact is we need to create millions and millions of jobs in addition to offsetting the new entrants into the market every month. we have a 9.7% unemployment rate. that means we've got to get to work. the only way we can do that is helping small businesses. and the only way we can do that is to put these initiatives to work before the easter recess. let's not delay and defer. we have time to do it now.

it has broad, unanimous support in the small business committee. there is no reason why we cannot accomplish this goal now. so i appreciate the majority leader's indication and commitment that he'll bring a small business package to the floor. i urge the leader, i urge all members of the senate to support doing that before the easter recess, because we need to adopt it now, not months from now, because people depend on these jobs. where there's uncertainty is when people look on their main streets ant comiewjtses and when do they see? they're seeing trouble. they're wondering whether or not the hardware story i store is go stay open, the barbershop, stores in their downtowns. that's what creates either certainty or uncertainty. that's what creates despair or hope. soiled hope, mr. president, that we would move and that we would move the sense of urgency with respect to small businesses. if we're depending on them, then we've got to get to work now. there is no reason, no

rationale, no excuse for not taking action in this chamber in this congress that it can be signed by the president and that we can move forward. so we should strive with every fiber of our being to help these becovens our economy that will give hope to our -- these beacons of our economy that will give hope to our citizens, give them the kind of resources they deserve and do it in a fiscally responsible manner. with that, i yield the floor. mr. dorgan: mr. president? the presiding officer: the senator north dakota. mr. dorgan: mr. president, earlier today we passed some legislation in the senate that is important and will create jobs in our country, and i wanted to indicate that i had filed an amendment that was not considered. i didn't know that was the case with many amendments on the

bill. one of the amendments that i filed that was never considered, unfortunately, i hope will be considered in the future. it deals with the recommendation that the president made during his state of the union address. the state of the union address had the president speaking about jobs and said one of the things that we ought to do to try to preserve and to keep and create jobs in our country is to shut down or eliminate the tax loophole that rewards companies for moving jobs overseas. the president specifically asked in his state of the union address for the congress to eliminate that tax loophole. i have tried to eliminate that loophole, i think, on four different owe educations on the floor of the united states senate. we've had four votes. on each occasion i have failed. and one might ask, well, 0 how on earth can you fail on an amendment like that? well, there are a lot of big companies and the groups in this town -- the chamber of commerce, as an examplees -- that like that loophole and they fight very hard to keep that loophole.

we actually do have a circumstance where if you are 0 on one side of a street corner and you have a competitor on the other side of the street making the identical product that you do, earning the identical income that you earn, and you desired a going to move your plant to china, fire your workers, put a padlock on the front doofer your manufacturing plant and move to china, the only difference between you and the person across the street that you used to compete with and still do is that you now have lower labor costs, but you also have a tax break given you by the federal government. it is astounding that that exists, but regrettably it does. the president's call to eliminate the tax break is very important, and we ought to heed that call. i filed an amendment on the bill, the one that passed today. did not get a vote on it. i intend to file it again on other pieces of legislation. because this congress, at a time when so many millions of people get up in the morning and put on

their clothes and go out looking for work and can't find it, this congress has a responsibility to deal with this issue. think of this issue of trying to find the jobs that are necessary to put 17 million people back to work, think of it as trying to fill a bath tub. we're working on a faux sit trying to in -- on a faucet trying to incentivize and find new jobs. the drain of existing jobs going overseas is wide open. going overseas in search of cheap labor because this country rewards you if you move your jobs overseas. this is hershey's chocolate. many people have eaten york pepper mint patties. they were made in a pennsylvania plant, but no longer. it's now mexican food. this plant is -- this is a newly built plant in monterey, phebgs.

on its -- phebgs phebgs. on its web site, hershey's said that cool refreshing dip of dark chocolate will take you miles away, apparently meaning even mexico. an american brand goes south. that is not unusual. hallmark cards, when you care enough to send the very best. privately held kansas city company, been around #00 years -- been around 100 years, founded by a high school dropout who started the company in 1910 with a shoe box of cards he sold while living in a ymca. an unbelievable success story. the company had a reputation for treating its workers fairly, a really good company. under current management, annual

revenues of over $4 billion, they started to move jobs from kansas city to three plants in china. it moved thousands of jobs overseas. though it's not required to disclose specific numbers. but what kind of card do you send to a hallmark worker whose job is now in china? the very best? well, you know, we have a right in this country to be concerned about that. i have talked at length about radio flyer, little red wagon gone from illinois to china. huffy bicycle gone from illinois to china. i've spoken about those at length. but there are new ones as well. whirlpool, at a time when we are losing so many jobs because of the deep, deep recession, whirlpool refrigerators, whirlpool announced last year that it was shutting down a 1,100 worker factory in evansville, indiana and moving the work to a factory in mexico.

whirlpool made this decision even though the company accepted a $19.3 million grant by the u.s. department of energy as part of the recovery act to develop -- quote -- "smart appliances." and, by the way, this is a picture of a whirlpool worker walking out of his place of employment, the last walk on the last day. one can wonder what was going through his mind as he understood that he's going to have to tell his family he's now out of work. his job still exists, but it exists in a foreign country. this is national -- natalie. she worked for whirlpool, 42 years old. worked at whirlpool for 19 years. november of last year was told her job is moving to mexico. $17 an hour was too much to pay, and you can get cheaper labor

elsewhere. she described that plant closing like a punch in the gut. well, you can imagine what it's like. i'm told that local workers and local officials did everything they could to try to keep that whirlpool plant in evansville, indiana, but they were unsuccessful. now, mr. president, we do see a lot of people wearing football jerseys. this is a reebok payton manning jersey. my guess is they sell a lot of those things. there is not a better quarterback in professional football. he's quite an extraordinary football player. this reebok is made in he will

salvador by a chinese company. this jersey is sold for $80 in the united states and workers are paid 10 cents for the work they do in el salvador to make it. the workers get 10 cents -- one thin dime -- and the company gets $80 for the payton manning reebok jersey. here is a photograph that shows the conditions of this sweatshop, a sweatshop in el salvador owned by the chinese. according to the national labor committee, who investigates these things, workers are forced to put in 12 to 15 hours of unpaid overtime each week. they earn wages that are 77% lower than the basic subsistence wage for the region. and this is a photograph of the home of a worker at one of the chinese-owned sweatshops. you can see the aggressive poverty that exists here. and they get a dime for a jersey that the companies pay $80 for

on the store shelf here in the united states. lazy boy chairs announced that it would eliminate 1,050 employees in dayton, ohio, and move production plants to mexico. i've spoken about lazy boy previously. a few days ago when i talked about jobs, i talked about lazy boy went to pennsylvania and bought pennsylvania house furniture. it is a high-end furniture company using special pennsylvania wood to make really terrific furniture. and they have great craftsmen that work at that company. lazy boy bought the company, and they didn't want to have competition for lazy boy in the country, so they moved pennsylvania house furniture to china and shipped the pennsylvania wood to china, put the furniture together and shipped the furniture back to the united states. and the last day of work at the pennsylvania house factory, a

company that had been around for 100 years, at the last day of work, the last day the plant was open, all of those craftsmen who were proud of their jobs and proud of their work, when the last piece of pennsylvania house furniture came off the assembly line, they turned it over and on the bottom of that last piece of furniture every single worker at that plant came over and took the pen and signed their name. somebody in this country has a piece of furniture that they don't quite understand. it has on its bottom the signature of craftsmen who worked for a company that for 100 years made fine furniture in america. they wanted to do that because they wanted to sign their name to a quality piece of furniture made by an american worker that was proud of their job. well, so lazy boy chairs sent pennsylvania house furniture to china. now we understand that lazy boy furniture will, has announced it

will eliminate 1,050 jobs in dayton, ohio, and move the production to a plant in mexico. they had moved other jobs to china. in a statement describing the 2008 layoffs, the company said -- quote -- "we regret the impact these moves will have on families and the lives of employees affected, and so on." i think i have demonstrated enough. i have a lot of examples of this, and i have over the years provided a lot of examples. but i want to demonstrate that as -- on wednesday, today, 17 million or so people got up, wanted a job and couldn't find it, struggling to try to figure out how on earth can they make a living, how can they provide for thr family. here's part of what's happening. this shows the deepening trade deficits that our country is experiencing, and all of this red demonstrates jobs moving elsewhere. american jobs moving elsewhere.

this is a description of our trade deficits with china, the largest single bilateral deficits in the history of humankind. and i know where some of these jobs have gone. i know where they make huffy bicycles. i know where they make radio flyer little red wagons. i know where they make etch-a-sketch. i know where they went, went to china. i know why they went there. they can hire people 50 cents an hour, work them 12 hours a day, 7 days a week. so the people in ohio are told, you know what? you can't compete with that. we have to pay you $11 to make bicycles. you can't compete; we're sorry, we're out of here. the question of a century is when we have developed plants to lift america up -- safe plants, minimum wages, retirement benefits, health programs -- the question at the end of a century is: do we decide that those

standards don't matter? the lifting of those american workers to good jobs that pay well doesn't matter because we're now saying to them, you compete with third world conditions, you compete with chinese sweatshops in el salvador making football jerseys. you compete with people living 12 in a room sleeping at night, when they get a chance to sleep, in cinder block rooms in china making children's toys? is that the kind of competition we want the american people to have to compete with? because they can't. nobody can make a living working for 50 cents an hour here. you can't make a living here if they stripped away your retirement, your health care and given you 50 cents an hour and telling you to work for seven days a week. so the reason i raise this point is the president said a month and a half ago, when he spoke to the nation and spoke to the congress, close this tax break that rewards companies that move their jobs overseas. you know, my position here is

not antibusiness. i want american businesses to succeed. i want them to be able to make profits and create jobs. i just want an understanding that trade agreements must be fair agreements in order for us to compete. i'll give an example. this is an example of automobiles in korea. 98% of the automobiles driven on the streets of korea -- south korea -- are made in south korea. is that an accident? of course not. that's exactly the way the koreans want it. they want to ship korean cars to be sold in america, but they don't want american cars to be sold in korea. that has always been their position. the same is true with china. we now have an agreement with china by which in the next couple of years we'll have massive influxes of cheap -- i should say a massive influx of cheap chinese goods coming into this country in the form of automobiles. cheap auto -- they probably

would want me to say less expensive automobiles from china. we have an agreement that when chinese automobiles come here, we will impose a 2.5% tariff. if we ship american cars to china, they will impose a 25% tariff, and we agreed to that. that's fundamentally ignorant of our own economic interests. those are the kinds of things that we've got to address. if we really care about jobs, we need to do two things. one, work on the legislation of the type we're working on. senator reid and senator durbin, myself and others have worked very hard on legislation to try to incentivize the creation of new jobs in our country. and we passed a bill about a week and a half ago, passed another bill today that is job-creating. but that's the faucet. we're trying to turn the faucet on to put jobs into this tub here. the problem is the drain is wide open, and we have jobs moving out just as aggressively. and we've got to plug the drain by saying trade matters. fair trade matters most. you must stand up for the interests of good jobs that pay

well here in america. that's just a fact. and so, mr. president, i will speak more about this at another time. but i did want to say that i offer that amendment -- or i should say i filed the amendment on the bill that we finished today, was not able to call it up, as was the case with many amendments. intend to file it again on another bill. i hope very much we'll get a vote on it. and i hope when we get a vote on it, that given the things i just described that are happening to jobs in america, given the fact the president has said let us at least plug this unbelievably pernicious, ill-advised tax break for companies that ship jobs overseas, let's at least get that done. let's try to save some jobs in this country. if we can do that, we'll have done something very significant for the people that wake up in the morning who are now jobless, who we hope can find work at some future date. as we restart the economic engine and try to put american workers back on payrolls once

again. mr. president, i yield the floor and make a point of order that a quorum is not present. the presiding officer: the clerk will call the roll. quorum call: quorum call:

mr. dorgan: mr. president? the presiding officer: the senator from north dakota. >> mr. president, i ask consent that the -- mr. dorgan: mr. president, i ask that the quorum call be vacated. the presiding officer: without objection. mr. dorgan: i ask that the senate proceed to executive session to consider calendar 706, 707, 708, 709, 713, 714, 715, 1716, 719, 720, 721, 723, 724, 725, 727, 734 and 735 and

all nominationings on the secretary's desks in the foarn sftion. that the nominations be confirmed en bloc, that no further motions be in order, any statements related to the nominations appear in the appropriate place in the record as if read. that the president be immediately notified of the senate's action and the senate then resume legislative session much. the presiding officer: without objection. mr. dorgan: mr. president, i ask unanimous consent that the judiciary committee be discharged from further consideration of s. res. 158 and the senate proceed to its immediate consideration. the presiding officer: the clerk will report. the clerk: s. res. 158 to commend the american sail training association for advance in international goodwill and character building undersail. the presiding officer: without objection, the committee is discharged. the senate will proceed. mr. dorgan: i ask unanimous consent that a kerry amendment to the resolution which is at

the desk be agreed to the resolution as amended be agreed to, that a kerry amendment to the preabl be agreed to, the preamble be agreed to, the motion to reconsider be laid on the table and that any statements related to the resolution be placed in the record at the appropriate place as if read. the presiding officer: without objection. mr. dorgan: mr. president, i ask unanimous consent that the senate proceed to the immediate consideration of calendar number 228, s. 1067. the presiding officer: the clerk will report. the clerk: calendar 228, s. 1067, a bill to support stablization and lasting peace in northern uganda and areas affected by the lords resistance army and so forth and for other purposes. the presiding officer: without objection, the senate will proceed to the measure. mr. dorgan: mr. president, i ask unanimous consent that the committee report a substitute amendment be considered, that a feingold amendment at the desk be agreed to the substitute amendment as amended be agreed to, the bill as amended be read

a third time and passed, the motion to reconsider be laid on the table with no intervening action or debate, and any statements related to the bill be placed in the record at appropriate place as if read. the presiding officer: without objection. mr. dorgan: mr. president, i ask unanimous consent that when the senate completes its business today it adjourn until 9:30 a.m. on thursday, march 11th. that following the prayer and pledge, the journal of proceedings be approved to date, the morning hour be deemed expired, the time for the two leaders be reserved for their use later in the day and the senate proceed to a period of morning business for one hour with senators permitted to speak therein for up to 10 minutes each with the majority controlling the first 30 minutes and the republicans controlling the next 30 minutes. that following morning business the senate resume consideration of h.r. 1586, the legislative vehicle for the federal aviation reauthorization. the presiding officer: without objection. mr. dorgan: mr. president, roll call votes are expected to occur

throughout the day tomorrow. senators will be notified when any votes are scheduled. if there is no further business to come before the senate, i ask that it stand adjrn until

now, and even with the president and ceo of the federal reserve bank of chicago charles evans to read this is part of a conference hosted by the national association for business economics. it's about a half-hour. >> good morning everybody. i am bill strauss, a member of nabe's border of directors and it's my pleasure to introduce today's speaker. he is my colleague and my boss as well as a member of nabe. dr. charles evans, the president and ceo of the federal reserve bank of chicago. charlie and i have worked together since he joined the fed in 1991. as many of you know, the federal reserve bank of chicago was one of the 12 regional reserve banks across the country.

these 12 banks along with board of governors in washington make up our nation's central bank. charlie's background prepared him well for his job. before becoming president, he was the director of research at the chicago fed overseeing the study of monetary policy, financial markets, regional economic issues and banking. much of his personal research has focused on measuring the effect of monetary policy on u.s. economic activity. as well as inflation and financial markets. it has been published in the journal of political economy market economic review, journal of monetary economics, quarterly journal of economics and handbook of macroeconomics. charlie's academic experience includes teaching at the university of chicago, university of michigan and the university of south carolina said he does get outside the midwest.

he has a bachelor's degree in economics from the university of virginia, earned a doctorate from carnegie mellon university in pittsburgh and is in many ways his entire career serve as preparation for the current responsibility, helping formulate monetary policy. that is in the best interest of the american people. we are so very happy to with us today charlie evans. [applause] >> thanks very much. there was a nice introduction. i appreciate that. good morning. it's a pleasure to be with you today. this year's conference and topics discussed are of grave importance to us all. economists, regulators and market participants and policy makers. we share a common interest in fostering the economic recovery and return to strong growth in an environment of low and stable inflation. conferences such as this bring together diverse perspectives that will help in devising solutions to achieve these goals. i think this morning's breakfast

was another example of that. nabe is a great organization with such an expert audience. i wanted some solid messages this morning. accordingly, my speech today is a touch longer than it usually is so i apologize in advance for that. i hope i can make it worth your time to read today i would like to discuss a few challenging issues the labor market's present for monetary policy making. for a bit of context, i approach these issues not just from the perspective of the fed bank president but also as a macroeconomist and former state research director. i had the benefit of attending the meetings since 1995. i have observed firsthand some of the conflicts the fomc members face in addressing the dual mandate to promote maximum employment and price stability even in more normal times. for me price stability is 2% inflation measured by personal consumption expenditures over the medium term. when i became chicago fed

president in 2007, i never would have guessed my first two and a half years would have me voting continually for lower interest rates and more policy accommodation. i just wouldn't have expected the need for that. but with unemployment rate at 9.7% inflation significantly under the benchmark for price stability there is no conflict between the policy goals. so the directions for the policy have been cleared. today i will highlight a number of the market issues that lead me to think this accommodation will likely be appropriate for some time and let me emphasize as you know from all of the federal speakers to come here that these are my views and not those of my colleagues on the federal committee. let me briefly mentioned a summary of the economic outlook. i find myself in broad agreement with a view that restricted bank credit along with business and household caution will continue to restrain the recovery's strength that these headwinds

will have made as we move through 2010. most business cycle indicators have turned favorable already yet many households and businesses remained wary that a full-fledged recovery is in the train. that's not surprising as we all know in plan is often the last piece of the puzzle to fall into place and until the economy begins to add jobs in significant numbers for many it will not feel like much of a recovery. the latest reports on this front have been mixed. layoffs are subsiding, firms are hiring more temporary workers and after a large decline the average workweek is showing signs of stabilizing and perhaps reversing course. the developments usually are precursors of a broader skill recovery labor demand but today's employers remain cautious. job openings are scarce and there are few signs even anecdotally that the permit hiring is picked up yet. moreover, even one's labour markets turn the corner, there's a long way to go before they get

back to what we would consider to be normal. the ongoing weakness in labor markets and memory of the jobless recovery from the previous recessions have raised concerns that something is fundamentally changed in the we labor markets work. some worry the every srf to read given the decline in bell put in the recession and intern this additional weakness might impinge on the speed of the recovery moving forward. headline unemployment numbers are consistent with the recession. the usual starting point for thinking about this issue is the famous law relating gross domestic product growth to the change in the unemployment rate. the usual estimates of the law implied that the oman plan a rate should be at least a percentage point lower than the mine plant 7% we actually saw last friday. however this calculation assumes the association between economic activity and the unemployed and their rate does not vary across

the business cycle in fact many and when it indicators tend to dtv a great faster during recessions than the improve during expansions. a simple statistical model that uses the historical relationship between gdp growth and unemployment estimated only during recessions can actually account for the sharp rise in the unplanned garate. figure one compares the actual unemployment, i've got some figures, compares the actual unemployment numbers to the predicted values for models estimated using gdp data only from recessions. the two lines are just about spot on. but the green line, the prediction from the standard model that does not distinguish between behavior and expansion in recessions is not capable of capturing the current numbers. similar recession only models can also explain the rise in the broad measures of unemployment and underemployment like the

u.s. bureau of labor statistics for rate as well as the declines and payroll employment. we didn't just pull this out because it's convenient to try to explain these models but there is a rich literature on the regime changes in macroeconomics that this sort of fits in with, so there is a pre-existing literature. based on these exercises, i think that it is reasonable to include that the unemployment rate and employment growth devolved as we would expect in recession especially one of this size but other labour market measures are weaker than expected. once you look past the headline numbers other indicators are on usually weak and in particular the share of the adults outside of the labour force has increased more in the average length of a spell of unemployment has grown much longer in predicted by even recession only models.

i would like to spend some time elaborating on the implications of the increase in the duration and much of this material will be appearing on a forthcoming article by my colleagues at the chicago fed, dan errands in and shawnee. the consequences of long-term unemployment can be quite severe. such households especially those with little or no savings are susceptible to sharp falls in consumption. moreover, long-term unemployment often leads to significant loss in permanent earnings even after the worker finds a new job. unemployment duration has risen at an unprecedented rate over the past year or so. in february over 40% of the unemployed were in the midst of a spell lasting more than six months by far the highest proportion in the post world war ii era. now you can see this and figure to which plots from 1948 to the

present the relationship between the on the planet rate on the x axis and average length of on going spell of unemployment. i've got to admit as i was watching christi roemer today sort of try to deal with the fact her figures were not on the slide i was thinking about how i might describe this. that cloud. [laughter] that cloud looks a little bit like the state of kentucky. [laughter] what i'm going to point out to do is the progression it tries to turn into west virginia of the feet. [laughter] the red dots represent the monthly figures for 2008 and 2009. at the beginning of the recession the unemployment rate was 5% and the average unemployment duration was of 17 weeks. the duration was all ready for weeks more than one would be predicted based on the average historical relationship represented by the black regression line between the two measures.

this initial divergence is largely accounted for by a secular shift towards longer spells of unemployment due to the aging of the work force and stronger labour force attachment of women. so there's some secular change in this relationship we started out with. the first 15 months of the recession average duration increased with unemployment at roughly the rate he would have expected. this indicated by the series of red dots that fall along the top of the blue cloud and/or parallel to the black lines we started off following the trend path but since the first quarter of 2009 average duration is increased much more rapidly than the rise in the unemployment rate would predict. the extension of unemployment insurance benefits while helpful supporting unemployed house likely account for a portion of the recent rise in the unemployment duration. even so, we view the overall lead to of increases as an

indicator of labor market conditions are even bleaker than the unemployed and a rate alone suggests. this weakness may also explain why the share of those outside of the labour force has also grown so much. many people stopped searching for jobs given the lack of demand for their services at prevailing wages. now let's turn to the implications of the rise in long-term unemployment only outlook and the rise in long-term unemployment has ramifications for the economy going forward. the likelihood of finding the job tends to decline as an individual remains out of work for longer period. partly this reflects the fact those who typically have a difficult time finding work will tend to be unemployed plunker. in this case launders bills or a symptom rather than the source of an underlying problem. however a long on and lamb this bill could cause deterioration in a workers' skills leaving some of the long-term unemployed

with less bright job prospects even as the economy begins to revive. this could contribute to high average duration for some time. we can gain an insight into these dynamic from earlier period. figure three highlights the path of unemployment and duration during the last two recessions so here we picked out some of the time paths from those clouds. as you would expect both measures rise in tandem during the recession but during the recovery phase on implementation remains persistently high for quite some time even as the unemployment rate declines. we expect to see a similar pattern in the near future. and as i noted earlier long-term unemployment tends to lead to permanent earnings loss is particularly for those who previously invested heavily in job industry specific skills. so high unemployment regions can have long-lasting affects on consumer confidence and demand.

to summarize this discussion the labour market headline in planned indicators appear to be roughly following a conventional track given the severity of the recession but these measures may not fully capture the weakness displayed in the rising unemployment generation and withdrawal of workers from the labour force. these development raise the risk the recovery in the labor markets can be slow even as output returns to a well established growth path. the other side of an economy experiencing growing output but low labor utilization is high productivity growth. indeed productivity has been strong of late particularly over the past three quarters. this is often the case in the early stages of recovery as firms meet higher demand for their products and services without expanding the work force. the key question today is the degree to which the recent productivity surge reflects a temporary cyclical development or more in during increase in

level or trend rate of productivity. if the gains are predominantly driven by intense cost-cutting they may be unsustainable once the demand revives more persistently. in this case we would expect hiring to pick up as the economic expansion takes hold. however if the level in productivity is risen due to technological or other improvements than hire structural productivity levels will continue. business is when i talk to them are very clear that they've undertaken very deep cuts in the work force that these given strong consideration and they've got than just about right size for how the expect to be producing and meeting the customer demand for quite some time. they would tell you they have achieved these efficiencies and they will continue. what if they are right? what if they are right this time in that implication? this case the implications are not clear. higher levels of productivity will show through in both higher

potential and actual output for the economy and so need not necessarily, and the cost of low labour input. that is a could be the technology of the dances lead to more hiring and expansion or laborsaving activity. the relative importance of these factors also has consequences for the assessment of the degree to which the resources lack exists in the economy. since a higher level of productivity applies a higher power for output this would imply the recent surge in the gdp increased both actual and potential. consequently no progress on resource closing would be in plight if that were the case. this is a stunning implications if that were true. in contrast some are skeptical that the economy is even operating far below sustainable levels. they might argue that much of the job output during the recession was the result of a

permanent reduction in the economy's productive capacity perhaps because certain financial market practices that had for the time enable the additional investments have now been discredited according to this view the ngnt qwtrters cono offset this deep delete could decline in the level of potential output. the implication here is vastly less resource lack exists and this would have sobering implications for inflation forecasts going for work and given the level of accommodation in place. of course the unemployment rate in some other way to infer the degree of slack in the economy. meijer earlier discussion of the rise in unemployment duration and decline in labour force attachment may lead one to think that slack is even greater than what is implied by the unemployment rate itself. however it is possible longer durations and lower labour force attachment could reflect broad structural changes in the economy such as mismatch between

the skills of the unemployed and those demanded by employers. there may also be other impediments that currently prevent workers from shifting to the industry's or locations where jobs are available. say having a house you can sell very easily get the price you paid for. under these scenarios, labor markets slack might be lower than one might infer from the on the employment rate alone. now if this feels a bit like a tennis match i apologize. i've just given you several minutes of classic to hand it economist speak. [laughter] but this is okay. it's nabe, right? [laughter] in the final analysis the magnitude of unemployment today is so large that there's little doubt in my mind that there is considerable slack in the economy incorporating alternative views about productivity and labor market behavior do not alter this general conclusion in my opinion. the debate boils down to whether the amount of slack in the

economy is larger were extremely large. okay now having said that a question that i've asked myself many times is should the fed have done more. given the large degree of slack there's a legitimate question whether monetary policy could and more fundamentally should have done more to combat the deterioration and labor markets. as we know many policy actions were taken. as the crisis perrault's we first use our traditional tools come substantially cutting federal funds rate and lending the banks through the discount window as we near the zero fund rate we turn to them on traditional tools to clear up the chokepoints providing liquidity directly to them on big financial institutions and supporting a number of short-term credit markets. finally we reduce long-term interest rates further by purchasing additional medium and long-term treasury bonds mortgage-backed securities and debt of government sponsored

enterprises. these traditional -- nontraditional actions help avoid would easily could have been a severe economic contraction but the on the employment rate still hit 10% this fall. had we done more the most plausible action would have been to expand large-scale asset purchases program. precisely quantifying the effect this would have had is difficult. a good place to start is to look at the recent empirical evidence and i think brian was here yesterday to talk about some of this when significant asset purchases were announced, our big financial markets built that information immediately into the asset prices. for example right after the march, 2009 church repurchase announcement, ten year treasury yields fell about 50 basis points. comparable declines occurred in option adjusted spreads on the

announcement of agency mortgage-backed securities purchases in november, 2008. it might be reasonable to infer say doubling the size might have doubled this impact on their reach. however i would attach more than the usual amount of uncertainty. part of my hesitation reflects lack of understanding about the interaction between the non-traditional monetary policy interest rates and economic activity. while research efforts of the federal reserve and elsewhere to assess the effect of nonstandard much repulse the have been revamped up considerably today we do not have a robust suite formal model to reliably caliber intervention of the sort. ..

at the margin they still might have had those of sex but the other blacks would have swamped them and we wouldn't have seen a. moreover is impossible to quantify a portion of the impact of our non-traditional actions may have come simply from boosting confidence. in those very dark times it was a year ago this month i believe households, businesses and financial markets were reassured that policy makers were acting in a decisive manner. further asset purchases would

not have had additional a fact of this kind, the confidence boost, it was already there presumably. in addition on a practical level the portfolio of future purchases likely would have a different and therefore their overall effectiveness might have been less effective than our recent experience. the typical monthly purchases of new issuance were so large that it left little floating supply for private investors, this could have forced larger program to concentrate more heavily on treasuries were existing in the as. the empirical evidence is limited these limits are less close substitutes the new and bs for their instruments to finance spending by on capital goods and consumer durables. consequently the effect of the purchase on economic activity may have been less. finally we must also keep in mind that more monetary stimulus also has cost. these can be considerable and

higher levels. many are already worried about the inflation implications of a the fed's extended down sheet and a large increase in the monetary base. currently most of the increase in the monetary base is sitting idly in bank reserves and because banks are not lending those reserves directly they are not generating spending pressure at the moment. but leaving the current monetary policy in place for too long, would eventually fuel inflationary pressures. likewise if the monetary base was expanded much beyond where we are today the risk that such pressures would build is the economy recovers would be significantly increased. furthermore policy makers already face the task of online is a sizeable balance sheet at the appropriate time and place. substantially increasing the size of asset purchase could have further complicated the exit process down the road, not today -- down the road. that said changes in economic conditions could alter the cost,

benefit calculation with regard to that and hopefully the recovery will progress without serious bonds and the road in the inflation outlook will remain benign, that's an accurate assessment. saddam as we've repeatedly indicated in the statements the committee will continue to air out of its purchases of securities in light of the evolving economic outlook and conditions in markets. i will stop there, thank you very much for your attention. [applause] >> thank you very much, charlie. charlie has agreed to take some questions from the audience. we could restrict those to the members of nabe that would be appreciated. please use the microphone. >> i know it's unfair for to me to ask a question to charlie, but one of the things that was striking when you're talking about the implications of our productivity is a structural

with an unemployment. >> wright and. >> have you used estimates of what the full rate of one of women may have changed to or is that -- my assumption is the implication is the full rate is significantly higher than what was here and how much higher could it be practice. >> that's a good question and depends a lot on how you like to think about the national rate of unemployment. the way i like to think is much more slowly moving measure of employment, full employment according to salomon measures. we probably used to think it was war in three quarters before this started. i actually thought maybe 5 percent was a better rounder number, certainly the case with some of the structural with issues i was talking about that affects unemployment to ration. you probably could get some estimate that a substantially higher baby as much as a percentage points -- that's not the way i think and i prefer to think about the longer-term

summit is three to five and a quarter, but for the what we're looking at in terms of policy issues over the medium term over the next three to four years, the gap between it and implement rate today in measure of the national rate is so large that i think inflationary expectation should be kept in check as long as we keep our focus on our mandate. >> good morning, wells fargo home mortgage. a few years ago the prime instrument of policy seemed to be the fed and hundred and obviously that's approached zero and the fed is managing the economy with other instruments. in france, yesterday he never mentioned this but did talk about the extra -- reserves and should we think of those rates as being the new fed rate policy instrument blacks supplanting the fed rate? >> where question. i did have the benefit of

hearing brian excellent presentation. but in terms of exit strategy we obviously have a lot of accommodation in place with a very large amount of excess reserves. when the time comes when it's time to move one to less than highly accommodative policy to only accommodative policy to essentially neutral policy we're going to have to either find a way to withdraw these reserves or to somehow extinguish their power. one way to extinguish their power would be to provide opportunity costs for banks to not be in the mood to lend as much of them. remember we're talking about an environment where the economy is growing well and we want to make sure that lending doesn't get out of hand, we want to take off, of course, so interest on reserves is a possible tool that would do that. reverse repurchase actions would also have that effect and will. but i think for myself as the

fed funds rate got close to zero in excess reserves very large the funds rate was off relative to what our intentions were at that time and i think will be concerned that there will be softness in the fed funds market as a move on up with excess reserves at levels like what we're talking about so i won't be surprised if we rely heavily on interest on excess reserves. we increased that and we will expect the funds rate to follow that but we would probably talk about that too great and first primarily in that environment along with the other tools we would be using and then eventually when the fed funds rate is re-establishing itself when it is up around 1% -- 2% would likely go back to that but frankly we will begin re-examining that.

one -- >> like to follow-up on that question. i thought brian did an excellent job yesterday evening and as i enter stand it once the eggs in strategy has been fully implemented we will have free short-term interest rates, the hundred in the raid to reserves and will be closely related to each other. maybe the fund rate will be and not by the other two, that's not absolutely clear. but the thing i'm wondering about is two of these three interest rates are not set by the fdic. of course, monetary policy is the fomc job in as the fed reminded recently when they changed the discount rate changes in the two rates set by the board, don't necessarily coincide with fomc meetings so i am wondering if this is what issue when, if it makes any difference. this legal distinction that half the rate paid on reserves and discount rates are rates determined by the board, not by the fomc which is the monetary

policy-making authority will. >> that's a fair question given are different governance structures however is more theater than actually what will matter because 11 during the current environment the fomc has had a as we have for all the years i've been observing this had a collaborative approach to looking at monetary policy. the regional bank presidents come to washington and worked with the governors. we do that as federal open market committee and exchange views and talk about what the appropriate level of accommodation or restraint is given what we're looking at. over the past many years how that's translated into what should the funds rate be, should be higher or lower but i think the basic discussion of more accommodation or less will continue to have those discussions and the ashes will reflect the best thinking from the entire group. i hesitate to even say the

committee. remember how the federal open market committee is 12 individuals, not the entire 18 apple strength that are in attendance that contribute to the discussions so there are many ways in which our letter of the law governance structure doesn't capture how we go about doing the decision making process one. >> making interesting and compelling case and at the same time you say we don't have a reliable long-term model for assessing the impact of monetary policy on employment if i understood. i'm wondering -- >> that particular comment was about our non-traditional policies. >> non-traditional policies but i would assume the same would be more less the similar traditional monetary policies but what i'm driving at is the you have any way of getting at

changes in the labor market which could lead to a faster monetary policy at least questioning of monetary policy to assess those changes in the monetary policies labor policies structured klaxon will which are not direct the will such as outsourcing the use of asian labor and so forth. is there any way the fed can capture that? >> those are difficult issues to reliably will calibrate what, what the effect of different businesses practices are how the aggregate data proceed and that's why researchers such a driver in activity what universities and research institutions. there's a lot we don't understand and a lot we can learn. from the standpoint of making monetary policy and living within our dual mandate to focus on maximum employment at price stability, when i was talking about the labor market implications the first thing on

my mind was not want what's the best way to engineer who the lowest possible unemployment rate because it has to be sustainable level of unemployment, and got to be sustainable growth and that's what we're after. what was first on my mind is one of the implications of these developments for our inflation outlook and, because we have an awful lot of accommodation in place and if you didn't have some confidence there were factors holding back inflation, holding firms back from marking up prices in some very large fashion and then it would give great pause to be undertaking these policies but as i look at the unemployment rate as i look at long-term durations a look at measures of output gap as i see that. there seems to be many things holding back inflationary expectations and that's the way we try to use it. integrating these into a formal statistical model is a great thing for researchers to do. i've contributed to that

literature and and when i say we need a robust suite of models to capture these that's going to ask dr. brummer said well this morning that's going to keep back roy thomas busy for the next few decades. >> just a quick question charlie, the procedural not detail on and certainly not issues -- and could you want to spend a lot of time explaining to audiences and students have the fomc makes decisions and how you make decisions before you go? and just briefly run-through how you prepare for a meeting, what sorts of papers, materials and will come etc. iowa -- just procedural when not any detail. >> sure, that the reserve bank's we have a dedicated research staff that supports me and thinking about how the economy one -- how things are played

out. we also hovering supervision staff which reminds me of what banking conditions are at a grassroots level. how things are reporting well with local conditions and are management type operations. we begin this process to lease before the fomc meeting when the book is published, we already been getting a lot of information. research staff starts putting together a forecast and talk about special issues facing the non-traditional policies contemplating right now, should we -- would affect my have. when i said that they announced we are going to do one and 1/4 trillion dollars on mda's -- mbs, that changes in interest rates by 50 basis points and there's a ton of research that goes into that assessment and understanding the uncertainty that is attached to that. we need before we go to washington. i will tell you from the reserve bank standpoint we bring

information to washington outside of washington who said to see that in the course with a national data we also have the benefit of seeing the board's forecast, their analysis and so it's a value added process for my department in terms of you get to see this coming years of the things you should look at. then we go to washington in you've got it full strength with 18 people sitting around a table and all for use on a listen to and obviously the chairman plays a strong role of, but chairman bernanke has been tremendously will -- he has been a leader, he's been collaborator, he's been a listener and i think we have gotten about as good monetary policy as we could under the circumstances. maybe not in exactly the sequence that would have been perfect with the benefit of hindsight. but everybody talks 12 quote but everybody talks in this listen to.

this piragua thank you very much, charlie. [applause] been [applause] so have a networking break until 1045 and then resume and breakout sessions in these rooms. thank you. [inaudible conversations] a special time at c-span, it is the time we get to announce the winners of our c-span studentcam competition, lots of our work, of course,, thoughtfulness and creativity this year. we have more than ever -- more interest than ever before, over 1,000 young folks as videos on issues of the day and we start off with a look at our grand prize winners as they receive the great news. >> madison, lorna and >> yes. >> i'm glad you're altogether. my whole education team is here this morning and we've gone some good news for you girls.

you enter our student camp competition and was again your winners. so congratulations to you but what's even bigger news, you are our national grand prize winner slew. >> [laughter] >> we are incredibly proud. as i remember from last year we have winners and our middle school category and winners and a high-school category. you girls are all eight breadwinners and you compete in throughout most of our judging processes for the middle school category. but for grand prize we look at everyone and you've even beat out a high school documentary's. when. >> this is ian, didn't you say there was like 1,000 folks that entered or something like that

price. >> there were over 1,000 videos and this video i got the power is terrific. madison, let me start with you. tell us how you picked the top it. >> my uncle was that a nuclear power plant would and that the kind of thought about that and then we all were pretty interested and wanted to know more because we know its a much better what kind m. >> lauren, tell me what you learn a. >> i learned a ton. we went to visit one more her uncle worked as we learn so much about how it worked in house say that actually is because everything has so much precaution nine and is just totally misunderstood and. >> samantha, what was your favorite part of the process of making the documentary? >> i love swinton the nuclear power plant because it's hard to get in there and we almost didn't get in because you can't just have a school idea, it's

kind of hard. and there's a lot of cool stuff in there. we got to see everything, usually middle school doesn't go in there anymore since 9/11 so that was my ever part. >> we enjoy in the photograph of the three of you in the plans with your hard hats on in your city population for the nuclear fission reaction, how did you get so many -- were the adults are students to participate under playground? >> they were all students. in our school we have our four core teachers and then all of their study centers, we read that one study center in did that. >> it was very attractive, this is quite a topic. you have access to a lot of people to be interviewed and your video was just so well done. do you want to hear what you have won? >> sure. [laughter] >> the grand prize of $5,000 and

your teacher and, mr. johnson, has $1,000 for digital to prevent for your school. so that's pretty great news girls. did your minds changed about nuclear energy perhaps you did a great job of showing multiple size of this issue. whoever wants to answer the question -- what did you learn? what surprised you? >> it was surprising the amount of security that it took to get into the power plant especially and then all the precautions they tucked and drilling -- and we also didn't surveys. i think that we want -- it showed how people really perceive did and then how what was so different from nuclear energy is so different in how people perceive it. >> well, you just did an incredible job in presenting this complicated topic. i know i learned and i think all of our viewers will hear your videos available to be seen at

studentcam.org. and we think our time warner cable affiliates in milwaukee forgetting this on camera for you girls. we want to see you in just a huge congratulations from is to ensure big way in beating out all the other middle school winners and all the high school winners to be c-span 2010 when studentcam grand prize winners. congratulations girls. >> thank you. >> what a wonderful couple of minutes on your screen is meredith who is a c-span education program specialist. meredith, tell us more about those young ladies, with a car and tell us more about studentcam. >> good morning, as you saw on the clip we announced calling our grand prize winners of our studentcam competition. studentcam is c-span annual video documentary competition for students in middle and high school and in the clip you just saw those for our grand prize winners eighth graders from

wisconsin law and this year we had over 1,000 entries as you heard chelan say in only 75 winners out of those centuries. and what we would like to do right now is to give context to our viewers to show them a little of our grand prize winning video from a clip from it so we're going to watch at. >> when our research we identify significant lack of knowledge of the general public in relation to nuclear energy. >> for example, when we a hundred adults and students were would have a view that power plants within the united states on what the responses were all over the graph. >> have no ideas piragua the individual service with and the concept behind nuclear fission reaction. in every action demonstrated by the students from our school a slow-moving drive is an upsurge by uranium. of which in turn lip-sync this effort tremendous amount of

energy fast-moving later elements the neutrons and turn strike other atoms cause a chain reaction demonstrated by the use models. this energy is used to turn water into steam which turns turbines. in is this challenge for the benefit? >> 45 states and the district of columbia represented by the use of videos of by the wide range. what exactly were be asking students to do this. what kind of issues to they focus on? >> they could choose between two topics. it could focus on a strength of the country or a challenge that the country is facing so our grand prize winners focus on nuclear energy being a challenge to avert, energy consumption. and some of the ranges that we doppler challenges, we have the top five were the first and highest number we received were entries on the economy. on health care -- i'm sorry, and

the second is the economy. and third was education, fourth was a military war and terrorism and then the fifth top challenge we received was homelessness and poverty and students could also focus on the strength so we receive videos that were looking at strength that america has. our first prize high school winner did focus on its strength and their documentary quote this on diversity in america, the title is america's melting pot and we want to show a clip from that winner. >> my background is kind of a different one of this league. i'm chinese, jewish, greek and russian. a majority is chinese, then i'm the other three. the biggest majority is jewish religion and as the this. >> when you use the term culture and don't think of its caller want or religious that this city. i think of the whole social structure. i mean if you look at the beginning of the country the statue of liberty says san

mr. hungry, you're tired and poor. >> there are people from asia and europe author in south america would and just all these places and be all come together here at americaness. >> america, there is no one american culture. there's a whole big melting pot of lots of different cultures and if everyone was the same in other countries with one culture america would lose its originality. >> some great issues and individual stories out there. what was the criteria for judging this year? how did it work? >> the judging we have five things looking for in terms of judging and that was the first looking for inclusion of c-span programming, one of the things to do, the adherences of time limits which is five to eight minutes, the quality of expressions, showing multiple or varying size of their top pick

in in the last thing is also producing on want -- i'm sorry, the thoughtfulness of the actual scene so and they're focusing on the strength or weakness. and in the documentary we just shown the clip for first place high school winner was from a student in jinx, oklahoma. bristol, she's an 11th grader and that is a very intimate look into the eyes of four students as well as one teacher about the influence of diversity of culture in america. now what we like to show you is a clip from our first prize middle school winner who also focuses on the challenge and this is a great example of the incorporation of c-span programming so we're going to show a clip of that. >> weirdo in 10 years ago mw mom stayed at home and prepare meals for their families. kids rather bikes before walking to school.

in. >> now kids have about five hours of screen time in day including tv, video games. kids no longer play outside after school. kids take the bus to school or their parents try them. as of 2008 about 70% of unwed women with children under 18 are the labor pool. and this have become, in the nation. as a consequence childhood obesity has doubled and now one in seven low income preschool children are obese. what this is a challenge that affects us all. >> meredith, anything else about that particular video ended take this to production values, how the kids are doing and how the whole thing has evolved? >> that video was greeted by matthew, he lives in honolulu, hawaii was a seventh grader in

his video which he did it very attractively was the intertwine it c-span programming so well that he actually had c-span programming used as a voice-over where he shot his own and roll and to speak to your question about focusing on the programming element, we noticed that middle school documentary's this year in particular specifications of not only the technical components other documentary but the narration of heather documentaries, and that's why our grand prize winner and did over take the grand prize winner from a high school. they used one sky technology for all of their interviews so they were able into connecting with people, the cofounder of greenpeace as well as a nuclear energy anti nuclear energy presenter activists so we notice the technology that students are using is fascinating when it comes to putting