a policy change that accommodates the 60th senator let alone the 70th or the 80th to build a bipartisan coalition so i think i come out of that claim -- a mixed set of evidence whether it, in fact, does good or does harm. finally we take a look at the claims that the rules are stable. rules 22 is impervious to reform because the majority prefers super majority rules. and the more you get into that it turns out that's pretty tough to test as well because quite often when motions and efforts to reform the filibuster have come up, all right, it's hard to get a majority on record because there's a filibuster getting to the vote on reform. so we can come back to some of these claims but by and large many of them have no basis in the history. many of them have more mixed evidence. on the second topic here of the politics of senate reform, when steve and i first started our book, i was here in d.c. in '93 and i noticed a group was set up on k street when clinton came

into office and we had a unified democratic control and the banner outside the office and the name of the group was action not gridlock and it was a group set up to push for reform of rule 22. and i clipped a couple of articles in '94 and then in '95 with the change in party control. i said let me find action and not gridlock and see what they're talking about. they had closed up shop. i could not find them anywhere. they could at least cut up the banner, gridlock not action but that wasn't really going to work. but it points, i think, to the situational ethics that pervades people's views about senate procedure. and that is where you stand depends on where you sit. senators like to cloak their procedural principles or positions in principle but it's almost always about politics. there are very few not to say there aren't any but among senators there are very few procedural purists in the senate. and we certainly see that played out in views about reconciliation and whether it's appropriate to use in this instance or whether it's ever been used like this before.

finally, on this issue of reform, i would just remind us that debates about rule 22 and debates about changing the way the senate works -- these are not new to 2010. these are debates that senators themselves have had for over a century. we had them in the 1990s, 1980s. we had them in the 1970s, 1960s. 1920s and 1910s before cloture reform. we had them in the 1890s and 1830s. these are not new debates. senate leaders actually have fought for filibuster reform for nearly 200 years but more often than not those efforts for filibuster reform have themselves been filibustered. okay. finally on reid's predicament here. i think senator bunning incident over unemployment benefits and the refusal to grant consent to move to a vote was pretty instructive for folks who don't normally pay much attention to the floor process. in reminding us that it's easy

to take the senate hostage if you're willing to stand the heat. and it varies a bit depending on the bills but one senator with a little bit of party support is willing to take the senate hostage you can imagine the predicament that the majority leader finds himself in. that he has relatively limited tools in order to move the senate to the basics of a vote. and, of course, the majority leader's job made harder by cohesive republican team play and not cohesive democratic team play on many issues. i would conclude by suggesting that we shouldn't feel too bad for senator reid. he's not the first leader to confront these issues and we've seen a whole host of issues of leaders since the '70s try to grapple and to innovate to try to come to terms with the difficulties of legislating. there's one leader asked about a rule that would require or provide majority cloture,

majority debate in the senate and that leader said, quote, that rule would be one of the greatest improvements of the age. henry clay? 1841. i'll stop right there. >> thank you. well, thanks for having me. i wanted to talk a little bit about the filibuster from my own experience of having worked in the white house. as john mentioned i worked for both president bush 41 and then did a brief stint doing confirmation with president bush 43. so a lot of my views on the filibuster is kind of shaped from kind of that perspective. i think where i come down on all this is i agree with bob that i wouldn't want to change the senate rules related to legislative filibusters. and i'm going to get into a little bit why that is in a minute.

i have some more mixed views about changing the rules or procedures related to judicial and executive branch nominations partially because of the battle scars that i have from trying to push some of those people, nominees through the process and some of the experiences that i had with that. let me talk a little bit about -- just a little bit about the dynamics filibuster reform discussion. part of it is really shaped by short-term events. i mean, we're having this event today and talking about filibuster reform. i think as sarah mentioned, it tends to come up a lot in the context of unified party government and that's when one party controls both the white house and the congress and they kind of want to push things through and you hear a lot of discussion about filibuster reform.

i will say this that when president bush 43 was re-elected in 2004 and he wanted to push social security reform through the senate in 2005 and was blocked, there wasn't a lot of discussion then that i recall at least from the democratic side about the need for filibuster reform. so i think, you know, to some of the points that some of the panelists have made kind of, you know, where you stand does matter depending on where you sit. i think in many ways, though, the proponents of filibuster reform really drive the -- their argument is driven by valuing one thing maybe more than anything else and that's legislative efficiency. my point from kind of having observed the senate, studied the senate, you know, worked with the senate is that i'm not sure that legislative efficiency

should be the primary goal that we're kind of after when we're talking about the senate. i think there's other values there. sarah talked a little bit about the historical context so i won't spend a lot of time on that. but i would -- i'll give a plug for her book -- or books. i learned a lot about some of the things that happened particularly in the 19th century when it related to filibuster reform. and there are a lot of myths about the filibuster. i mean, one of the things that they talk about in their book is that, you know, people tried to reform the filibuster often during the 19th century. and they did reform it successfully in the 20th century. i think the -- if you go kind of down the list of the various changes that were made, you know, you had changes obviously

in 1917 when rule 22 was first adopted and then you had further changes as sarah points out in her book 1949, 1959, 1975, 1979 and 1986. so there have been changes in the filibuster rule over the years. it's not like it's been this kind of stagnant progress that hasn't changed and that's something that's going to continue. the bottom line, i think, of all this is that reformers -- or people who want to reform the filibuster rules, i think, in many ways are trying to drive the senate to look more like the house. and i think that's a fundamental mistake. and while, again, one of the things i learned from sarah's book is that the -- you know, it wasn't that the founders necessarily wanted the senate and the house to share identical procedural rules.

it was never really much of an issue at the time. i think a lot of people would agree that they did want the two institutions to be different. that they wanted there to be some kind of institutional distinctiveness between the two bodies. and i think to the extent that we focus a lot on efficiency in trying to move things through the senate in a really quick manner, i think it tends to make those two institutions look more alike and i think that's a mistake. former majority dick armey, one of my favorite political philosophers used to say, you know, the pain is inevitable but the suffering is optional. and i think, you know, if the majority in the senate is going to do exactly what a majority in the house is going to do, you know, why go through the suffering of even waiting? so i think that's something to keep in mind.

filibusters do have their costs for the body itself in transacting quickly. but again this is i think where we need to kind of widen the lens. i think that there are other things -- other values that we should look at in terms of what the senate is trying to accomplish. you know, is it, you know, quick legislative change or quick policy change? is it creating more programs or more rules? is it just creating legislative accomplishments? i think one of the things, you know, to norm's point about how the people in the senate have changed or the senators themselves are more partisan now, political scientists like gary cox and matthew talk about this concept of team production that now in the congress there's a lot of emphasis on team production. just kind of getting things done. and i think that's a function of a more partisan and polarized senate.

but, you know, so are the only overarching goals here to get things done quickly? i'm not sure it is. big issues like healthcare and healthcare having a hard time getting through the process now, kind of again drawing more focus on the issue of changing the rules, but, you know, what about some of the other values? what about building consensus in the senate? what about protecting minority rights? what about the notion of even policy stability. that was actually one of the things i think that the founders had in mind particularly james madison in terms of the design of the senate. they didn't want to have to just another institution that would change things real quickly. you know, there have been a lot of proposals out there about changing the filibuster. bob walker, who a former republican congressman wrote a piece a couple months ago that i thought was kind of interesting where he was actually arguing to move in the other direction

instead of maybe having a three-fifths vote for a filibuster. he was arguing to go back to the two-thirds. and his idea is that when the three-fifths rule was put in place, nobody really ever contemplated that one party would get to that point. well, they did after the 2008 election. his point was that if you went back to two-thirds people would realize going into the process that you needed to have a broader consensus and that might foster more consensus-building and bipartisanship. again, despite all the concerns about the impact of the filibuster on the senate, i'd also remind people that, you know, things are still getting done. you know, in recent times, you know, the congress and the senate passed no child left behind. you know, the government hasn't had a shutdown since the 1990s. more recently, you know, the

democrats have been able to move, you know, stimulus legislation, schip legislation through the process. so things are getting done. i even -- i went back and looked at some statistics on the number of laws that have passed -- or i'm sorry. the number of bills that have passed the senate over the last 20 years thinking that if filibusters were an increasing problem that the number of bills that the senate would pass would have also declined. and while there has been some reduction in the number of bills, the average over the last 20 years was about 551 bills passed per year and last year it was 478. so it was a little bit below the average but you have to actually go back all the way to 2001 to find another year where the senate passed less bills than the average over the last 20 years. so anyway, just to conclude on

the legislative side, i'd say that, you know, we don't want the senate to look more like the house, to become more like the house. i think there have been a number of changes in the senate rules already over the past two centuries that have moved it in that direction. and getting rid of the filibuster or changing it significantly so that the senate becomes a pure majority rule institution i think would be a mistake. just a couple last comments on the other piece where filibusters come in to play and that's in judicial and executive branch nominations. i think there may be a little bit more of an argument to make some changes there for this one reason. once you get into a situation where senators are using procedural rules, procedural

power to basically block the executive branch from installing people into place, it has an impact on more than just the senate or just the congress. it becomes very hard for the executive branch to do its basic functions. and the other point i'd make is that the problems with nominations and holding people up in the senate is really not just a partisan issue, too. we faced a number of problems in 2001 trying to get the bush administration people confirmed that were actually being held up for republican senators for one reason or another. and i could go into a few of the specific examples of that later if you'd like. but it wasn't just a partisan issue. it was people from the president's party that were holding people up. and i think the same is going on today to some extent. so let me just conclude by saying i think it would be a

mistake to try to make the senate more like the house. i think changing the filibuster rules is another step in that direction, although i have a little bit more sympathy for doing something on the nomination side. >> let me just have some discussion on the panel here. but i do want to throw one other issue on the table which i think is in many of your minds is the process of reconciliation. in fact, i'll let our panelists get a better definition than i will but say certainly a process that came out of the budget act which will allow some matters to be considered without unlimited debate and ultimately be decided by a majority vote. so when is it appropriate? i point to norm's column on the "new york times" a couple of weeks ago which had a chart of when it's been used and some of the various circumstances for your reference. but when is it appropriate -- more particularly, what are the potential pitfalls that the

process will hold for using reconciliation for making changes to what we think will be the passage of the senate bill through the house and then some additional changes made through this process. one of the pitfalls and in particular and i think i want to engage bob dove on this, could we imagine this being pushed -- pushed further where there's some talk that maybe within the reconciliation process there might be other methods of delay, in particular the proposing of endless amendments at the end of the day of reconciliation where maybe some new ground will be broken procedurally as to whether that should be allowed in this process which typically doesn't allow unlimited debate but maybe through the proposal of endless amendments we may come to a kind of loggerheads and have some significant rulings made. so i'll open it up to whoever. >> just a few comments that build on where i started. it's great to have historical perspective. and i think most of us believe

that we don't want the senate to look like the house. the real challenge today is how can you operate with these rules in a sharply partisan, ideologically polarized and hyperindividualized senate where you have 60 times as many cloture motions in a year as you had in the period before the reforms of the 1970s. where you have four times as many as you did when bill clinton became president. and whereas i said, they're done on routine matters and those that have overwhelming support only for the purpose of delay and there are ways of dealing with that while preserving the basic quality of the senate. the notion that you can have two bites at the apple on a given bill, a filibuster on a motion to proceed and then a filibuster on the bill itself. and each one takes days out of the senate's limited time to actually do its business it seems to me is easy to change in

concept although, of course, getting votes for anything will be difficult. having 30 hours of debate on each of these motions -- if you simply said it's divided between the majority and the minority so that you can only delay for 15 hours would be a nice little thing to do. i don't see any particular reason to have a two-day layover after a cloture motion is filed. you know, you can take six or seven days on any given cloture motion and what that does is even though you're getting bills passed authorizations aren't done anymore because it just takes too much time. that damages the fabric of governance. the hold is a nice thing if you have a notice. but we're now having dozens even hundreds of nominations held up not because people object to the nominees but as hostages for other things. it's wonderful for senators to have individual power. when you have the human cost of people who are making the sacrifice to come to serve in a position in government and they're left twisting in the

wind for months or even years, can't move their families, have already announced they're leaving their jobs, for no reason other than leverage for something else, there's something wrong there. and finding a way and there are ways, i think, to reserve filibusters for issues -- admittedly it wasn't used that way when any individual could take the floor and go on and on and on. it was individual leverage. but at least for significant issues where you have an intense minority feeling and then have a limited time and get to an action or a vote on nominations or bills that don't reach that point is theoretically doable, admittedly the chances of reform where you need two-thirds of the senators to go along are as george w. bush would say slim to none and slim just left the building. and just finally, broadly on the reconciliation point, a majority under those circumstances is going to look for any tool and leverage that it can find. there are tools in the senate where you can bypass.

they're crude and imperfect tools. they have been used regularly by both parties. what we have learned from the reconciliation is that it has been used for sweeping legislation affecting far more than one-sixth of the economy and tax cuts that cuts across area area of the economy being among them but these are not the tools you would hope to use to make basic policy. more and more we're going to have ways to make up the basic process unless you can find some fashion of moving back to at least some reasonable sense of comity. >> would you like to say something about reconciliation? >> let me talk about reconciliation because i was part of the group in 1974 that wrote the budget act. and i remember as we discussed the reconciliation issue which

we discussed maybe for 10 minutes because it seem almost like an ministerial function. i mean, the name "reconciliation" comes from the fact that what it was supposed to do was reconcile the difference between the appropriation bills, which had been passed in the summer and the second budget resolution, which doesn't even exist anymore, that was passed in the fall. and it was seen as a very minor thing. we came up with really a couple of ways of dealing with that issue. one was to hold back on sending those appropriation bills to the president in which case we would pass something called a reconciliation resolution to change those bills or if they had gone to the president and were now law that this bill would make those minor little changes. it was never used for that purpose. but in 1975, just a year after

it passed, a very canny senate committee chairman russell long of louisiana came into the parliamentarian office. and he had been having trouble with his tax bills because of the senate rules. people were offering amendments to them that he didn't like. they were debating them at length, and he didn't like that. and he saw in the budget act a way of getting around those pesky little problems. and he convinced the parliamentarian at the time, i was the assistant, that the very first use of reconciliation should be to protect his tax cut bill. and so in 1975 you had the very first use of reconciliation. and i will say that a number of

democratic senators were, one, surprised, and, two, appalled. at the fact that they no longer could offer any amendment that they wanted to his tax bill. that they were going to be limited in debate time to 20 hours. you know, in the end he didn't win because president gerald ford vetoed that first reconciliation bill. but to me that was the first indication that what was designed as a very minor little thing could be radically changed. and then in 1980 it was radically changed. in the spring of 1980 which under the budget act as it was written that time you should never have seen a reconciliation bill. suddenly the majority leader of the senate, robert byrd, decided that in order to confront what was seen as an economic crisis,

namely inflation rates running at 13%, interest rates running at 17%, that the answer to that economic crisis was to balance the federal budget. and he basically took on the president of his own party, president carter, and proposed a budget resolution which rejected president carter's view of what the deficit should be. and i hesitate to tell you that it was only $35 billion. i mean, that's a rounding number now. but he wanted to reduce it to zero and he was going to do it using a process that no one had seen before. he was going to give instructions to all series of senate committees how they were going to change their programs to reduce the deficit to zero. in the end, of course, he was as disappointed as senator long because even though he got his bill and it was passed that

year, the country went into a recession in that summer and a recession you don't balance the budget. and the result was not a happy one for him. and i think it was particularly unhappy because having created that bill in the spring when the republicans took the white house in that november election and the senate, they said to themselves, a-ha, what was goose sauce for the goose will be sauce for the gander and we'll do a reconciliation bill in the spring, only it will be to implement the reagan economic program. and they proceeded to do just that. democrats still controlled the house. they thought they could thwart that. and, unfortunately, for the speaker, a group of democrats in the house led by then-democrat phil gramm voted with republicans defeating the rule on the reconciliation bill,

which is almost unheard of in the house. and basically we were off to the races on reconciliation. and for the next four or five years, reconciliation became a way of passing in my view just utterly outrageous things. i remember the senate commerce committee -- i think it was in 1983 decided they were having a lot of trouble with their legislative agenda. why not just send that entire agenda as part of their reconciliation language and have it included in the reconciliation bill. and there was no rule against that. and so in the mid-'80s the senate adopted what is now called the byrd rule, to keep that kind of thing from happening. but the result has not been happy. if there were anything i could undo in my life, it was ever helping create the reconciliation process in the budget act.

it is now a monster. and it is showing its monstrous qualities repeatedly as it's used by both parties. and the result, unfortunately, i think, is to eliminate what is to be the glory of the senate. is its ability to debate and amend. the amendment process is severely limited under reconciliation as is debate. and both parties have been guilty of using this cheap shortcut to stop debate on things that i think ought to be debated and ought to be amended. >> but it's perfect? >> as i have always said, the senate rules are perfect. >> anyone else want to weigh? -- weigh in?

one last point on the reconciliation process is going to -- would result in a finite debate but there is some talk about the question of republicans being able to offer dilatory amendments and whether that might cause the parliamentarian or the chair to rule, somehow that there is -- that those are out of order. without getting too in the process here, what's your thoughts on that? >> there's no such thing in the senate as dilatory amendments unless you are using the cloture rule and you're under cloture. for amendments to be ruled dilatory outside of cloture would be a total departure from senate practice. it has never happened. i hope it doesn't happen now. >> okay. we're going to open it up to the audience for questions. and please, we have a microphone here coming around if you could

identify yourself and -- >> i'm don richie the senate historian. we answer a lot of these questions so i'm really -- but the former eugene mccarthy used to say it wasn't worthwhile learning the rules of the senate because they were suspended all the time in regular order. they ask unanimous consent not to read the entire bill and go through all these processes. are some of the rules of the senate essentially vestigial organs of a bygone era that don't provide things to slow down. i think the reading of the bill that we came up in december on a couple of occasions. it seemed to have no other purpose other than to take up time? i'm asking everybody but i think

bob is probably the -- >> okay. it is true that the senate rules -- most of which were written in 1884 at the time the senate didn't have the post of majority leader or minority leader. ...

>> in senate logic is two hours. the first two hours after an adjournment is not a bill. senator byrd knew that. and regularly use that rule. majority leaders haven't used that other than senator byrd. i'm not sure exactly why. but i always kind of, in the back of my mind, thought one of the reasons they might not use it is that it's a nice test for. you make a motion that is debatable into file cloture on a. if you can't get the cloture, you have wasted absolutely no time on the bill because the motion can be withdrawn. you have the vote. if you don't have 60 votes, what's the point of proceeding? that's at least the supposition that i have about the fact that

that rule is not just. but it is true that rule does exist and could allow the senate to get to any bill. by a non-debatable motion. >> i would add, too, that the house has a lot of rules as well, that may be considered vestiges of the past and are routinely way to do so. it's not just the senate that does that. >> let me break it on the house rules because i have been criticized so often by house staffers, that the senate only has two rules, unanimous consent and exhaustion. my view is the house doesn't have any rules at all. and has the house rules committee, which is just a wonderful way of changing the way they take up bills by bill by bill. and the absolutely no attention to that very thick rulebook that is in the house.

dane just to comment on don's point. i actually having been said the chance of changing the rules are slim to none, i would offer a caveat to that. i have had some conversations with at least a few republican senators, who are interested in cleaning up the rules a little bit. and we make it a test of this on the reconciliation issue, not just with a number of amendments offered but i can imagine someone tried to offer a 500 page amendment and insisting it be read as another way of stretching out the debate. and there may well be at the beginning of the next congress enough votes to streamline this process so that you at least begin to return to the use of a filibuster for something that people actually oppose and a significant number of them do, that you got to move to a super majority. and not just one individual denying unanimous consent and

having debates stretched out in the way that brings discomfort to everybody, but has nothing to do with an intense minority viewpoint except by one individual. >> i was just going to weigh in for a second. another way of thinking about these questions and to respond to bob's point. there are other non-debatable motions in the senate rulebook, and why don't leaders use them? right. i think if i had to step back and look from the '70s to the present, there is the sort of procedural arms race going on between oftentimes between the party. certainly the '70s across coalitions. when majority leader encounters a form of abstract and come and so he changes the practice to try to do with that abstraction. so today we have, the notice is sent out to get clearance for a bill. but they didn't always do clearance, but when the majority leader institute's clearance, then it is an easy opportunity for the minority or others to register a complaint.

and that, of course, then pushes the majority leader to try a new tactic. and then of course that begins other response. today's latest response of course is probably that astronomical number of cloture votes that north pointed to. that's not an isolated problem. that's response to the ways in which the senate has developed. the question is, if the majority leader were to take the birch gadget using the morning hour of going to the motion proceed, what other response would that provoke. and then the increasing cloture motions might be we don't talk about him or because there is some of the problem on on the floor. so the dilemma i think for majority leaders to try to figure out how are you going to solve this procedural arms race that shows no sign of stopping? >> if i could say one response, is the majority leaders filling the amendment tree. that has been used, i think, repeatedly in conjunction with

cloture votes to, in effect, put the minority party in the position of either voting for cloture, in which case they have lost their right to amend, or voting against it. and to me, one of the course of the senate is the right to amend. and that use of filling the amendment tree by a majority leader to restrict and basically eliminate the right of the minority to offer amendments, to me, is a part of this whole war that has escalated on the senate floor. >> could the majority leader used to link the amendment tree on the reconciliation bill to head off a filibuster by amendment? >> at some point those amendments get disposed of, and at that point then you can offer endless amendments. so it would not eliminate amendments, but it could be used

to recruit them for a considerable period of time. >> i will immediately confess to being a totally ignorant ram is when it comes to anything that happens on the hill, much less the senate rules. but norm, i would have to come as a victim of the whole under bush 41, i want to assure you the practice was alive and well before the clinton era. let my question really goes on the unanimous consent issue. and why is it that the senate permits itself to get put in the position of being held hostage to needing unanimous consent? in the case of bunting on the jobs bill, couldn't the senate, with foresight, have put the

bill in transit was not subject, so that unanimous consent would not be required? >> well, the use of unanimous consent agreements as a regular practice was perfected by the majority leader in the '50s, senator lyndon johnson. and he would preclude those unanimous consent agreements through his contacts that were referred to in the '50s as the club. and frankly, it worked very well. now, it is true that any single senator can object to a unanimous consent agreement. and that frustrates whoever is trying to get it. but the use of unanimous consent agreement is simply a reflection of the enormous power that

individuals senators have. i don't know how you're going to eliminate senators right when anybody ask unanimous consent to do anything to simply say, i object you. >> my name is steven roberts. perhaps this is just me being an old fogey, heavily for bygone days, but you know, when folks used terms like bison teen and outdated, a guy automatically cringe because it seen is that history has proven that a lot of these things actually do work, especially as opposed to these modern paradigms of efficiency. and for you folks love a good knowledge of the history of senate, i was wondering if this is merely an expansion of the old jeffersonian, john adams debate over a country of laws, country of men.

and whether the senate is necessary supposed to be a sufficient as a restraint upon popular web so that to quickly evolve into a country that forgets its histo and becomes captive to build its subjective efforts on capitol hill that you mention, ma'am. >> it's a very reasonable question. i think i would think about it this way, is i'm not sure the choice is between changing senate rules on one hand, and inefficiency. i'm not sure that the opposite filibuster is seeking efficiency. if you go back to jeffersonian views about the senate who he wrote sort of the guidelines for the senate and senate rulebook. they believe that the senate should come to a vote. there wasn't any evidence here that there were ruminations about minority rights and so forth. and individual rights. that there shouldn't be a vote in the senate. the fact that filibuster prevent from getting an apple and downhill, that's sort of a matter of creating a real

legislative body. i can't come up, another way to think about it, i can't come up with sort of a theoretical basis for supermajority threshold. what's the basis for it? how do we get to the magic number of 60? well, one answer is it's arbitrary. that's not very rewarding theoretically. the other answer is that's the outcome of political bargaining in 1975. that's not very rewarding philosophically or theoretically either. but we do have a history of majority rule, both classically, right? and i don't think you say that you think about the rules that were necessarily seeking efficiency, but there's some of the value there that is being sought by trying to find a way of amending rules that would leave as soon as a legislature to be able to cast up or down votes. >> you know, one point i want to add to that, and it kind of goes back to the comments i was making, is that i do believe that the founders wanted the

senate to be almost like intra- institutional check and balance. they wanted it to be a different type of institution in the way that it operated. one of the things that we have seen over the years is not only a chance, but actually successful attempts, to change the senate over and over again so that it operates more like the house. it isn't completely gotten there but it is moving that direction. one of the things that, in addition to the changes in the filibuster rules that i outlined, that have been done repeatedly during the 20th century, is even more recently than that, reconciliation is another example of how the senate rules will allow major pieces of legislation to move through, you know, with a certain time requirements and things like that. but also, it's not in effect right now but we have done that over the years on trade

agreements as well. as another example of where the senate rules have been changed to make it more efficient, i think. and i'm not sure that's always the highest value. >> i will turn back any minute but i want to follow up on something that sarah said. sarah mentioned that 1970s, we had more cross party coalition's for and against the filibuster, against the majority. and that was true of much of the 20 century that our parties were not as polarized as they are today. so does our situation today with the parties in most voting studies show that the parties really are well situated on the right and left of each other? is that putting more pressure on the senate, more likely that we will see these continuing, not only times when a party of 60 votes or just showed a 60 votes, but just giving a party in the senate, pressure from the house, the house is often a place that stalled reforms as well because

the fracture coalitions, is that putting more pressure on the senate and senate rules? >> i would offer one way of thinking about that. it's the issue that procedure has become a matter of -- it's become a party cause within the democratic caucus and republican conference. that's become the issue. so that we get not only sort of polarization on the policy issues, but they're sort partisan on top of it. that gets played out through voting on cloture, old pushing the majority leader cafaro cloture motions in the majority are always thinking has to file a cloture motion. so it's all about procedure all the time. and then it's very hard i think to unwind from that wants it all becomes about procedure. >> i think another thing that's happened as the members have become more polarized is that both parties, republicans and democrats, whether they are in

the majority or minority at a particular time, the minority party has kind of recognize that hanging together maximizes their power. and i think that's maybe something that didn't, you know, maybe didn't always exist that way. but that certainty seems to be something that operates very often right now. >> we are our here and then he here. >> the mike is coming right here. my name is james. i work on the hill in the senate, and my question in a popular and academic narratives about the filibuster, basically cloture is always use as a measurement of minority obstructionism. my question is, to what extent is it the measurement of majority obstructionism? ivan, seems to me that there is several occasions where when a bill is brought to the floor for debate the majority leader in after procedure will file cloture on at the same day.

that they will do it in an effort to head off potential amendments from minority members. if you look at a lot of the bills final passage, the breakdown partisan breakdown would be final vote is actually quite bipartisan. i think if they were given the opportunity to offer a few amendments, maybe wouldn't necessarily translate into this cloture battle. >> well, that was actually the point i was trying to make when i brought up the old issue of filling the amendment tree, which to me is another side of this coin. the tradition of the senate to freely debate and freely amend. and anything that attacks those two traditions, i think it's a problem. >> i would just say it's very hard for scientists like to take those numbers and disentangle the two alternatives that julia. one is the possibility there is obstruction so majority leader he feels he needs to file cloture but the fact that the majority leader wants to have some sort and so he filed

cloture. those are sort of observation it will because i just had a cloture vote. so you have to, there is a different view about in the majority side would give you counter evidence, well, no, we couldn't get consent agreement. we weren't willing to agree to those amendments. but the minority party will give you a different view, and it's tough to arbitrate between those, between those views. >> sometimes it's not just stopping the minority from offering amendments, because the majority leader wants to move the process along, oftentimes feel the amendment tree because you're afraid there's going to be politically embarrassing amendments that could be offered as well. it's not just trying to move the process along by trying to maybe protect your caucus, too, from politically embarrassing oaks. -- folks. >> my name is mimi. i am an attorney with the center

for justice. to me, what's most troubling about the filibuster, as it is playing out in the current senate, is that it leads to a lack of accountability. i mean, this is not, i heard a reference to a game. this is not a game. like these people are supposed to lead our country. and the combination of the stealth filibuster and anonymous holds, and in constant filibuster is that lead to constant obstruction. we have a situation where people are not actually making decisions where they're supposed to make decision. i would just love to hear your thoughts on that and understanding that there is some important reasons to keep the senate rules as they have historically been. you know, whether not we could reach a point where this is so troubling for our, you know, little d. democracy. that something has to be done.

>> since i'm the one who referred to the senate as a gain, it is a game in the sense that there are very intricate rules. and it's important to be able to use those rules to play it. and i will say sometimes i am reminded of what casey stengel said after coaching the mets in the 1960s, does anybody here know how to play this game? it can be played. it can be played very well. it has been played very well by a couple of leaders that i mentioned, lyndon johnson and robert byrd. so that i don't think the problem, frankly, is in the rules. >> one thing i would just add, i'm not sure if it is directly to your question but i think it's important to keep in mind, builds on the point that sarah

made that i agree with, is that the rules in the way they are applied, really is a constant kind of changing process to some extent. so i'm not sure, you know, just because there's some problems right now, that that's necessary always going to be the case. i mean, going back again using a house example, in the 19th century, the house had big problems towards the end of the 19th century with obstructionism and disappearing quorum's and things like that. there was an adaptation that was made to correct that. and i think as these things kind of play out over time, there's going to be adaptations in the rules or adaptations in the way the senators operate. >> my name is adam foster. i had a quick question for the

professor. in a world where the most conservative democratic senator is generally, you know, more liberal than the most liberal republican, what measures would you say the current majority leader or future majority leaders can employ kind of bridge that gap like you're talking about in the '70s? what avenues are available that they are not using? >> the same avenues that were used by senator baucus in the finance committee last summer. when he managed to get the vote of olympia snowe for his bill. those opportunities are out there right now, and being followed by, for example, senator lindsey graham of south carolina and the senator kerry on the issue of climate change. to me, those opportunities are not gone at all. and it is the way the senate operates. you do need to form some sort of bipartisan consensus to pass

important legislation. >> i want to take the opportunity to ask the last question here of the panel. i think all of us, we talk about reconciliation but maybe we could ask the panelists to give us a preview of what we might see in the next several weeks or month or so of procedure dealing with the health care bill. what are the things you like to highlight, what are the likely, what's the likely course of the health care bill and what are the likely obstacles and will we do, what's your top pick on something that we should watching for that we might not be? >> i can go first, and you say that i think that the real challenge is going to be actually passing the senate bill in the house. and so i think that's probably the main thing to look at. i think the fixes that they may try to make in reconciliation in

the senate may or may not happen. and, you know, there's the issue of what things could get knocked out on. on rules violation i saw today that senator mcconnell had a letter from all 41 republican senators saying that they would hang together on not voting to waive the rules on any byrd rule, anything that comes a. i think it could be a number of things that could get knocked out. and i think it's going to become it's going going to be difficult to figure out which changes can be made in the reconciliation process, and i think actually, bob knows better than anyone, i love those things will not be decided for really a little while now, and tell the language is actually presented.

>> a friend e-mailed me a bloomberg story is one that trotted out an old tom foley, i think that that was the republicans are the opposition but the senate is the enemy. and i think if it were just a matter of speaker pelosi doing whatever she could to get 216 votes, she could do it, right? house majorities can get there. they can secure and by those votes eventually. but it's embedded in this intense by dispute, and i think we lose sight of the impact by campbell is a monster to make. it arises typically in these present unified party control. when we least expect it. and that is what i think has the potential here for the rating health care off the rails. >> well, i will go back to the lovely title parliamentarian emeritus, which is a friend of michael the americas comes from the latin, out in marriages meaning ought to be. [laughter] >> i am very glad.

i am out of the parliamentarian's chair. because what i will be watching over the next few weeks is the role that allen from, the commentary of the senate will be playing. it is enormously important role. i have every confidence he will play well. and i'm really glad i am not doing it. >> well, i would use a prerogative that i have asked moderator and chair of this meeting to bring the debate to a close. a power that the senate chair does not have in many cases. as we have learned today. so thank you for all coming today. thank the panelists, and we will look for choosing how this all plays out over the next several weeks. [applause] [inaudible conversations] [inaudible conversations] [inaudible conversations]

[inaudible conversations] [inaudible conversations] [inaudible conversations]

[inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations]

[inaudible conversations] >> the u.s. house turn to present obama's revised health care plan next week. "the associated press" reports the president is delaying his trip to asia next week to focus on health care. the asia trip was scheduled to coincide with his daughter's school vacation. but not ap reports the family epidemic isn't going. the house budget committee meets monday to discuss the revised health care plan with the rules committee meeting wednesday to set the parameters for floor debate. we'll have live coverage on the c-span networks. house speaker nancy pelosi holds her weekly briefing at 11 eastern. she is likely to get questions about next weeks health care schedule. we will have that live here on c-span2.

>> senate banking committee chairman chris dodd announced this week his committee will be considering new financial regulations starting next week. not fdic chairman sheila better on financial regulation. she spoke at an economic policy conference here in watching to and hosted by the national association for business economics. it's about a half an hour. good morning. for those of you who do not know, i am the president of the national association for business economics. and i would like to welcome all of our members here today. for those of you who are not

members, nabe is the nation's largest organization of this is professional economists. we are extremely privileged this morning to have as our first speaker sheila bair, chairman of the federal deposit insurance corporation. ms. bair has held that position for the past four years, appeared which i believe would have tested the mettle of any mere mortal. ms. bair holds her law degree from university of kansas and has broad and deep experience in various banking and financial issues. she has worked in academia at the newark stock exchange, on the hill with the senate, the treasury, and the commodities future trading exchange. she's received numerous awards, including awards for her various publications. some of you know she also has written a number of children's

books. in fact, her first book was published in 2006, and it was called rock, rock, and the savings shock. and i was thinking last night if more of us had read this book, we might have avoided all of the financial trauma. chairman bair has graciously agreed to answer a few questions after her formal remarks, although for those of you in the media, because this session is very short, we would ask you to contact andrew gray, who was with her this morning, for additional questions after the session. so with that, please join me in welcoming chairman sheila bair of the federal of the federal deposit insurance corporation federal deposit insurance corporation. sheila? [applause] >> thank you, lynn, that was a

very nice introduction. did more to everyone. i'm very pleased to be with you this morning at the opening of nabe's washington office. the last time i spoke before nabe was that your 50th annual meeting on october 6, 2008. that seems like a distant memory at this point. it was at the height of the financial crisis when a range of extraordinaire policy actions were being undertaken by the federal governments to restore order to our financial markets. the federal reserve had already introduced a number of special liquidity programs and with subsequent create many more. president bush had just signed into law the emergency economic stabilization act establishing the t.a.r.p. but at that time it was envisioned primera as a way for treasury to buy mortgage related assets, not make government investments as banks as we subsequently did. one week later, the fdic would announce its temperate liquidity guarantee program whereby participating institutions could

purchase a guarantee on certain amount of senior unsecured debt and on transaction accounts of of the deposit insurance ceiling. truly an extraordinary measure. as we meet today the initial crisis has receded, thank goodness. many market spreads have returned to normal levels. and banks are holding record amounts of liquid assets. most of these emergency programs are now gradually being unwound. but we continue to deal with the aftermath of the crisis, which includes persistent high unemployment, and parent household balance sheets, and high levels of problem loans and troubled financial institutions. we still face many immediate challenges. in the fdic is working on a number of fronts to address those challenges. but what i would like to discuss this morning is our longer-term future, and how it is now being shaped on capitol hill. as needed, financial regulatory

reforms are being considered. we need to maintain our focus on the lessons of this past crisis. the last major financial crisis, the thrift and banking crisis of the 1980s, you remember that one -- resulted in an act in a laws to include financial predatory system, primary the banking system. these lost strengthen bank regulation and provided banks with incentives to operate at higher capital levels with less risk. the reforms of the early 1990s were designed in large part to limit more hazard, or the incentives for banks to take risk at the expense of the deposit insurance fund. they said the state corporate of remarkable stability within the insured banking industry. but these reforms also created incentives for financial services to grow outside of the regulated sector, and in a so-called shadow banking system. credit intermediation continue to move outside traditional

banking as businesses found more and more of their funding from commercial paper and other market mechanisms. homeowners, too, found more and more of their mortgages with non-bank mortgage firms. this regulatory arbitrage undermined our financial stability by allowing risk to migrate towards gaps in our regulatory structure or oversight women will. mortgage lending provide some prime examples of regular toward arbitrage. in 2002 and early 2003, encouraged by record low interest rates, there was record one of mortgage originations. origination platforms grew to accommodate the surge in mortgage demand. by 2004, house prices were rising at double-digit rates, setting the stage for dramatic changes in the structure and funding of mortgage loans. because many prime borrowers had locked in their loans by 2003, the mortgage industry shifted its attention and it's apples

and in capacity toward less credit worthy borrowers and home buyers struggling to cope with the high cost of housing. one result, was a rapid increase in subprime loan originations which peaked in 2005 at just over 20 percent of all the originations. declining affordability in high-priced housing markets also contributed to a shift toward nontraditional mortgages. such as interest only and pay option arms, and we still continue to struggle with these. the lack of strong consumer protection for mortgage borrowers, especially in the non-bank sector, encourage the spread of these increasingly complex loan types. combined with opec marketing these products proved toxic to consumers. we continue to see the consequences of these practices, about 5 million homes that entered foreclosure in the past two years alone. the causes are foreclosures are many, and they have evolved over time, but we must remember that

the problem began with a risky financial practices that first surfaced on the fringes of our regulatory financial system. for example, subprime and nontraditional mortgages were originated and securitized by merely by brokers, mortgage companies and by non-bank affiliates of fdic insured institutions. securitization provided much of the funding for these loans. the share of u.s. mortgage debt held by private issuers of asset-backed securities, more than doubled between 2003 and 2006, to over 20 percent of the market. growth in these private-label mortgage-backed securities was facilitated by the use of complex and opaque ceo and cds instruments. virtually all of these mortgage instruments perform well as long as home prices continue to rise. the rating agencies ratified this performance by granting these instruments their highest ratings, thereby encouraging a misplaced confidence in their

quality. but the performance was highly contingent on the housing boom which was never a possible outcome. when the boom ended and the credit losses in these incidents became apparent, they had become embedded throughout the financial system and in a way that undermined confidence in general. the story of regular toward arbitrage and mortgage related instruments leads us to the largest complex banks and non-bank companies that package and sold so many of these securities. the capital market activities behind the growth of securitization entities could only be undertaken by the largest financial firms. and the compensation schemes employed by many of these firms were based by merely on deal volume, not the quality of risk management. as a result of their too big to fail status, several large firms enjoyed funding at the low market rates that did not reflect the risks that they were taking. indeed, the credit rating agencies themselves recognize

the simplistic guaranty providing to ratings for major financial institutions. one with and one without government support. in short, market discipline was ineffective as a disincentive is taking in the run up to the crisis. standing before a group of economists as i am today, it is worth asking why market forces failed to rein in the risky taking that led to this crisis. over the past two decades, the prevailing worldview has been that markets are generally self-regulating and self-correcting. happily overstay the a building of markets and private firms to arrive at optimal decisions? does this mean the only way our financial system can effectively operate is under heavy handed regulation? i would offer a somewhat different perspective. markets remain the best mechanism for making decisions that involve risk, but only if they operate under an institutional structure that requires all firms to bear the downside consequences of the risks they take. we have long recognized that

deposit insurance can't excuse these instances that is why we charge deposit insurance plans and capped to protect are merely smaller retail depositors. this is why anti-i see insured institutions are subject to both potential supervision and rules that are required to afford to close them when they become critically undercapitalized. most important, and resolving these institutions, the fdic is required to choose at least costly methods which typically involves imposing substantial losses on debt holders and shareholders. our receivership powers provide a clear priority of claims and are ready access to funding allows us to pay those claims promptly, thereby minimizing the description that occur in the wake of a bank failure. however, as it stands now, when non-large make financial firms in bankrolling companies get into trouble, they are subject to the commercial bankruptcy process. in contrast to receivership, bankruptcy is not well into tuesday the financial operations in the largest financial firms.

it is designed to protect creditors, not the public. the disruptions caused by forcing large non-bank financial institutions through bankruptcy can create significant risk for the real economy that has us on the case of lehman brothers in the fall of 2008. the potential for these disruptions in the lack of a credible process to on one large non-bank institutions and bankrolling companies helps explain why there are such overwhelming pressure to bail them out when they are threatened with failure. the irony is this. the very measures put in place after the last crisis to limit moral hazard in banking helped to push risk-taking outside risk-taking into the shadow sector. thereunder privy of our banking system where there were gaps between regulatory protections for consumers, the risks grew unchecked. the lack of a credible process to close large complex and non-bank institutions lead to an inability close the financial behemoth's without creating

great destruction in our financial system. the resulting bailouts reinforced the notion of too big to fail and dramatically increase moral hazard. based on the combination of events that led to this crisis, it is clear we must take a more holistic approach to regulation. to be sure we can improve oversight of insured depository institutions, but if reforms only later more regulation upon traditional banks, they will just create more incentives for financial activity to move to the less regulated markets. such an outcome would only exacerbate the regular toward arbitrage the fed this crisis. what's needed now is fundamental reform into three key areas coming into big to fail, plugging gaps in the regular structure, and finally, protecting the consumer. first, we need to get serious about leveling the playing field and protecting the taxpayer by ending too big to fail. this is not an impossible goal. one way to ensure that financial companies bear the full consequence of the systemic risk

they take is to make the largest firms bear the burdens of the risk they pose to the financial system. this can be done with higher capital requirements, for instance, for various types of regulatory limits. but what we need most is a pre-funded mechanism similar to the fdic's receivership authority for failed banks, and a clear mandate to close large systemically important firms when they get into trouble and to quickly sort out the claims against them so that key financial relationships can be preserved in the taxpayer can be protected. so let me be clear. this would not be another bailout mechanism. shareholders and creditors would bear the losses, not the public. but the process would be orderly and help prevent a catastrophic collapse of other firms. it would be a conscious departure away from the reflex of bailouts have tended to occur during crises in the absence of such a resolution of 40. the lack of a resolution mechanism for these countries is not some minor loophole that needs to be closed. on the contrary, it was a

fundamental cause of the financial crisis and enormous economic costs resulting from it. we cannot afford to let the status quo continue. unless too big to fail is addressed now, we will surely repeat this episode down the road again. we also need to address the gaps between existing regulatory jurisdictions where risk taking a rose under inadequate oversight. as for how to do this, i think the consensus points to a systemic risk council. under this approach the agency that currently have the authority and expertise in specific as a financial regulation would come together to share data and knowledge and take collective action. this would help to ensure that risks do not go undetected because a regular gaps between these jurisdictions. we need to do a better job of assessing macro that can openly disrupt individual institutions and as we have seen, the economy as a whole. but it is also essential that we do this without taking a one size fit all approach towards

diverse and innovative financial sector. finally, we must reestablish the central role of consumer protection and financial services. and unfortunate byproduct of the prevailing worldview about the self-regulating and self-correcting nature of markets is a misconception about the body and purpose of consumer financial regulation. to some, the regulation of consumer finance represents heavy-handed interference and otherwise well functioning markets in order to achieve some social or political objective. this bear some rethinking. there is ample evidence that consumers did not understand the consequences of the subprime and nontraditional mortgages that were sold to them. economists understand a great deal about the effects of asymmetric information and how it can prevent markets from existing in the first place. in this light i think there's a strong case to be made that basic consumer protections help markets function better by reducing information gaps between lenders and borrowers. let me put it a different way.

if lightly regulated companies at the privy of our regulated financial system are pushing complex and risky mortgage products that consumers really do not understand, they are exploring this information gap at the expense of companies who wish to do legitimate business and more suitable financial products. where standards are not uniform and consumers are not well-informed, there will be a race to the bottom and credit practices. the losers in this race will include both legitimate financial providers and consumers that the system is supposed to be serving. from this perspective you can see that basic consumer protections are a fundamental piece of our regulatory infrastructure, the market cannot function efficiently without them. it's time we had a level playing field for all market players. we need strong rules that apply and that are enforced across the board for banks and for not banks. let us recognize that consumer abuses are one of the root cause of the financial crisis, and the regulatory reform legislation should squarely addressed this problem. financial service reforms now

winding their way through congress could go a long way toward preventing another crisis. but as the congress puts together its financial reform package, it was you to think about other long-standing u.s. economic policies that may have contributed to the problem. this crisis is a culmination of a decades long process when national policies have skewed economic activity away from cities and towards consumption, away from investment in our industrial base and public infrastructure, and toward housing, with from the real sectors of our economy and toward the financial sector. examples of these policies include federal tax and credit subsidies for housing. a tax code that can favor short-term profits and implant government backstop for financial firms that have now in many cases been made explicit. no single policy is responsible for these economic distortions, no one can reform, restore balance to our economy. we need to examine national policies from a long-term view and ask whether they create the incentives that lead to a

sustainable, higher standard of living. our financial sector has grown disproportionately in relation to the rest of our economy. were as the financial sector claim less than 50 percent of total u.s. corporate profits in the 1950s and 1960s, it is share grew to 25 percent in the 1990s and to 34 percent by 2008. we know that a vital and innovative financial sector has long been one of the key competitive advantage of the u.s. economy, but we must also recognize that the excesses of the past decade were costly diversion of resources from other sectors of the economy. we must avoid policies that encourage such economic distortions. fixing regulation can only accomplish so much. rules and regulations can help restrain our animal spirits, but alas economic incentives are also appropriately aligned, regulations alone will fail. longer-term we must develop a more strategic approach that utilizes all available policy

tools, fiscal, monetary and regulatory, to lead us toward a longer-term more stable, more widely shared prosperity. thank you very much. [applause] >> thank you very much, chairman bair. i think you all agree that she has given us some very important issues to think about in this conference. now we have time for a few questions. so please, come to the microphones. these are being broadcast on the air. >> thanks for telling the truth, and appreciate you doing that over the last couple of years. it seems like the new banking law is -- [inaudible] >> real estate and business.

i'm curious. i'm kind of curious about how long this model will have to be in place, how long will grandma have to suffer a decline in their living standards from her 4% cd to her one half to go out the banks. how many years is going to take them to earn their way out of this rather than recognizing the losses today and moving on? re: replicating japan or not? >> well, you have several questions in there, and they are all good ones. i think a policy of low interest rates is clooney appropriate, giving the struggling economy. improving the still struggling economy. but the whole idea is to get credit going to prudent lending, to credit whether borrowers to but we do want critical to occur. it is frustrating. there was too much credit leading into this crisis and there had to be some pullback. but i am concerned we're going to for the other way. i think the smaller, if you look at loan balances. the smaller banks seem to be doing a better job than the large institutions in making loans, armed making longhouses.

there are some very asian. some are doing better is that others in terms of providing credit. so i think the light needs to be shined on this and explanations need to be made where credit is not being provided. are regulars on it regulars on interagency basis just issued some guidance, focused particularly on small business lending. and made clear that we do want to improve the small business loans to be made and to discourage any kind of models that gets categorized certain types of borrowers or g geograpc location. back to basics on the part of a so the credit worthiness of the individual borrower. and so we will continue our advocacy on this. i do think, if you cross a line, where regulars are trying to order banks to lend, the history on that isn't good. but i do think signing a public spotlight on it and maintain the public pressure is something we can do.

>> andrew hodge, bea. absolutely outstanding speech with solutions, and i applaud every word. wonder if you can explore this resolution authority, question a little further. and i guess i would put it simply, let's go back and look at drexel in 1989 and in effect solution, that avoid moral hazard and was pretty clean. so i guess my question was, some folks say that we only have a problem now because recent laws in bankruptcy that didn't allow the capital markets be frozen, everybody comes in and makes the claims. i mean, is that itself a significant fix? and do we have such bigger problems now, such huge greater complexity in the capital markets book that, are you sure

that you still couldn't do it or pass it that way like was done 20 years ago? the ultimate problem only being right now that things are so awful that every single contract is buried, two hugely different prices between creditor and deader. thanks to. >> let me be clear. we still think bankruptcy should be the first choice. there should be presumption in favor of bankruptcy. and if the regulars are going to put an entity into this new special regulation mechanism to need to be a strong demonstration to get need to be very high bar, highest demonstration business or to protect against systemic risk that and you're right, part of the problem was good exaggerated by close out and ending when the counterparty thousand bankruptcy. that is not the way the fdic rules work. we can't accept, reject derivatives counterparty.

if that is in the best interest of the government. another thing though that we can do that is more difficult in bankruptcy is, there are several things, if you have fdic process you can prepare. i love these institutions, it was know for some period of time that there were troubles. and i think now that everyone is under the number of potential supervision by the fed, that will be even more so the case. so you can prepare for a process, several months in advance and this is what we do with smaller institutions out. you can also set up a bridge and provide temperate funding to the bridge to unwind the transactions and maintain the credit flows. that's something we can do that is not more difficult obviously in difficulty. i think it was the bankruptcy profession was suggested to be some kind of bankruptcy process which i shudder to think about the. i do think if you are provide some short-term government funding for an orderly wind

down, i think again greatest our process that is what the fdic does. is helpful. so again, presumption always should be in favor of bankruptcy. we do think you should have this all back. but it also, our clients are is pretty much the same as bankruptcy and shareholders, unsecured creditors take losses. with this mechanism you would be guaranteeing like those that what you do with deposit insurance for banks. so i think the chance of a government ever taking a loss on that are pretty remote. and again, i think they would have first time on priority. the assets are close and they with the pre-funded mechanism, the tax they would never be on the hook. i think the difference between now and 20 years ago, you're right. i think derivatives have grown considerably. the structure products that we had today we didn't really have so much 20 years ago. and so i think this did multiply the risk. as mortgages went bad there were exponential consequence is out that from the ceos and cbs's.

so i think that is also a stand-alone problem, and i didn't mention it in my remarks, but greater oversight of the odc derivatives market is absolutely essential for a more transferred and better disciplined and that market. and i think long-term that will help a lot. >> thank you. thank you for being here. i have a follow-up question with regard to this resolution authority pre-funded or large financial institutions. if it is pre-funded, we're going to know who is paying the assessment and who is not. in effect, who is covered, which a large institutions are covered by this new scheme, and which ones are not? and also, it seems to me there is a sense with creditors that they, in fact, they are protected but the weight insured depositors are protected today. doesn't such a program in effect reinforced too big to fail by

saying to the capital, to the capital market and credit markets and foreign depositors in u.s. banks that your large company is paying premiums into this new special assessment fund, and therefore, you as a non-us depositor are just as equally protected against the failure of the institution as if you were an inch or deposit in a u.s. branch? >> well, no. i think, i think the assessment based -- well, i think abbott agrees with it is pre-or post-assessment that industry should pay for any costs that associate with this mechanism. what the what taxpayers on how confront our whether you or whether you want the industry to front it up front that the process should be very clear the presumption in favor of bankruptcy and will be a case-by-case determination about whether a particular entity should be put in the special resolution mechanism. but even if it is, the resolution mechanism will be no more generous than the

bankruptcy process in terms of shareholders and creditors. it will provide some government funding to wind down into the overtime. there is no commitment quite the opposite. but there have been any guarantee and liabilities. the priorty claim would be the same as for bankruptcy, and again, the presumption will be in favor of bankruptcy and no one would know for sure who, if anyone, would ever be put into it. i think that's absolutely key. though i do think, and you can say the house will have 100 billion or 50 billion, those of that size and above, i think all that recognizes is that institutions out that large could benefit from the stability, the extras to believe that this type of the vote of this type of mechanism could provide. that doesn't mean they themselves would go into. and even if they did, i don't think it's any more generous than the bankruptcy process. thank you. >> i think we're out of time for the session. with that, again, thank you very much, chairman bai

[applause] >> president barack obama is delaying his trip to asia next week to focus on health care. going before the house a senior official tells "the associated press" that the president now plans to leave washington the following week. house democrats are meeting again today to talk about the still evolving health care plan. house speaker nancy pelosi says it will take at least a week to work through the process. speaker pelosi talks to reporters in about a half an hour. we will have live coverage.

>> no a portion of a conference on efforts to reduce global nuclear stockpiles. we would have on the undersecretary for nuclear security, exchange monitor publications is hosting its second annual nuclear deterrent summon. this is half an hour. >> tom, it's all yours. [applause] >> thank you very much. thanks to all of you for being here. probably want to start off with a quick story. many of you who probably know me, read the bio, know that i've been involved in the nuclear business for most of my life, professional like that actually goes, ashley goes back further than that. i remember vividly, i think i was about eight or nine years old. my dad was working at the nevada test site. i was a kid out there, and him taking me out on one of those

family days with my sister going out to visit the test site. it was an opportunity to see the technology that the department of energy, the atomic energy commission at the time was working on. and frankly, i was really struck by the size of the building of the pipes and valves, and stewart members seeing these gleaming stainless steel structures out there. and it really hit me at that point that science and technology, and i didn't know at the time of course, but as i look back, that was really the beginning of my particular formation and understanding how important science and technology is in addressing the nation's problems. and i would say frankly the world's problems. and in effect you've heard a previous speaker, a distinguished speaker talk about that. you're absolutely right, sustaining our science technology engineering capabilities is so important for the united states, so important for the rest of the world in the

presence budget that you have, that i'm going to talk to you about a little bit today, will emphasize that particular point. because it's that science and technology that has addressed so many problems, other than just taking care of the nuclear stockpile. and that is an incredibly important mission, one would do in the department of energy. but it is science and technology nation that has allowed us to address other problems that you may of heard me talk about argument may have read a few years ago, two years ago i think exactly, the nation was facing a problem. there was a satellite tumbling from outer space and in a satellite the size of a school bus, i understand. and then that sound like there was tank of hydrogen gas that we felt, and the national security instructor felt in that tank had survived come into the atmosphere, and if it survived, and it had a popular area could

cause a tremendous amount of damage. and so the united states in an unprecedented, and array of demonstration franklin of different agencies working together got together and solve this incredibly complex problem is how to get something is lying through his base at incredible speeds with a missile flying at an incredible speed, and not only hitting it by hitting that hydrogen tank and taking it out. and not only that, knowing that you actually took it out because it's not right here on earth. you can't exactly check. 's our national security infrastructure called on the department of energy specifically saying, it could've been anyone of our other laboratory, but we had the capabilities, the horsepower, particular the scientist and engineers in the algorithm to develop code writers that really understood what it was like, what you need to do, what target you need to hit, but in how you going to knock it out of the sky

and how you would know about it. at any rate, i think you will recall from that incident that we did it that satellite, not only did we hit it we hit it at the tank that not only that, the images from radar exactly matched over the simulations we had to demonstrate once and for all that we actually hit that tank and there was no problem for anybody on earth. that was something back in 1995, 1994, 1995 time frame when they started the stewardship and particularly the program. didn't realize that was it from we're going to have to solve out there. we can predict 10 years out, but what we did know is that you have to have the scientist. you have to have the engineers. we had to have code writers. we had to have the platforms. we had to have u.s. industry. you have to have have essentially that thinking that fifth pillar, if you will, of

science propping that it. and to me, when that happened, that was a real validation of the foresight of doctor vickrey's and neil pulling it together. i was blessed to be part of that group of a program first started. and i continue to be blessed to be able to stand to be for you to describe the president's fiscal year 2011 budget request, which has the speakers before me, deputy secretary and alan undersecretary, described over 13% increase in the indian as a to deal with getting ourselves back on track. and getting ourselves back on track reflects a couple of things that this budget does. one is it reflects the president's real commitment to the unprecedented nuclear security agenda that he laid out in prague last april. never to come it demonstrates the administration's view that the department of energy and

nnsa particular has a lead role in implementing this agenda. and this is an agenda that is going to be difficult and it's not going to beat down just by the nnsa but it will be sorely done with the rest of the department of energy laboratory. and more important, particularly the effort on securing most lovable high around the world that will require efforts in partnership with the rest of our international partners. within that total, the weapons activity account essentially that which supports our stockpile and infrastructure increases by nearly 10%. to a level of $7 billion. it really reflects the need to fully fund investments in a critical infrastructure that will be required to maintain the safety, security and effectiveness of the nuclear stockpile with that underground testing. and we will do in a manner that is fully consistent with what she described this morning as a stockpile management program. you just did have to hear from her descriptions. congress passed a law and it did. we plan on following that law

and putting together the program and the plan which provides the details that we need to demonstrate to congress and show that we have the details behind what the npr will be describing here in the not-too-distant future. based on the early analysis, the budget reflects the reality that a college and this taskmasters at lower numbers will require increased investments to strengthen aging fiscal infrastructure and restore our technical work force at our nation's national security laboratories. as a result, the presence budget request includes increased funding for nnsa to support necessary infrastructure, and scientific and technology activities. specifically, it will support in the our priorities the following areas. completion of the design and construction of the chemistry and metallurgy replacement this of at lost almost that this is a for a that is almost, almost 60 years old, frankly.

in another few years it will be 60 years old. completion of the design commencement of the construct of uranium processing facility. this will replace additional facility is almost 60 years old. 9012, 9212 structures at and what will. they have done a great job. they are today, to old. they don't have them our safety and security, or the modern safety features that i would like to see and they don't have the right kind of work environment for our workforce to their very expensive to maintain. they will also intricate of those that are available to commence our life extension activities. consistent with what the review will be describing here in the near future. and as i said earlier, strengthen science and technology and engineering base, which is so important. these increases really represent the beginning of a shift from taking us from an old old war

nuclear weapons complex into a 21st century national security enterprise. in fact, that's what the nnsa has. that's what the department of energy has. we need to make that shift real. we need to make it real for ourselves. we need to make it real for the people that work on the nnsa, and we need to make it real in order to sure that we can take care of our stockpile. most importantly, there's a whole range of other national nuclear security missions that the nnsa takes care of. that depend on this infrastructure. in addition to stockpile stewardship, it includes nuclear nonproliferation, includes nuclear counterterrorism, nuclear management, intelligence analysis, the emergency response, powering the nuclear navy, and monitoring arms control treaties. the same facilities, these same scientists and these same core capabilities that support our stockpile support all of these other nations. that brings me to the presidents request of the nnsa's nuclear

nonproliferation programs. because of the critical role we play in implement the president's commitment, nuclear material around the world, worldwide, nnsa's budget in this area goes up by nearly 26 percent to $112.7 billion. this is the largest most effective nuclear nonproliferation program in the world. the men and women working on these programs are working with their partners in over 100 countries to secure vulnerable nuclear material, preventing the smuggling of dangerous nuclear material and minimizing the use of certain materials, particularly highly enriched uranium. president obama has described as a nuclear weapons as greatest danger to the american people. we'll hear from some of these people later on in this program. programs like the global threat reduction initiative our follow-on efforts through the second line of defense, and plutonium disposition programs are receiving highest level of attention and support.

the upcoming 2010 global nuke security summit that deputy secretary talked about will continue to build on solid foundation for expanding nuclear security nonproliferation work with a growing list of our international partners. in addition progress is anticipate on completing a new start agreement along with the coverage of test ban treaty, fizzled cut off trade and other key agreements to keep the united states and the international community on the path to achieving the presidents vision. budget request supports all of these areas. our naval reactors request increases by more than 13%, to level at $11.1 billion, to assure the development of the next generation. specifically the rack to design and develop act for the system for the ohio class submarine. a program priorities are to ensure strategic posture. our stockpile, and our infrastructure along with our nonproliferation arms control

emergency response counterterrorism and naval proportion programs are all melted together to one comprehensive strategy, that protects america and its allies. the fy 2011 budget request reflects the expanding and essential role that nnsa place in addressing these missions. managing the growth will be critical to mission success. we cannot expect congress to simply trust us with these new resources. nnsa, the department, and our contractors have a responsibility to work together to reduce unnecessary burdens and requirements, reduce administrative and and directed ask. and make sure that we're doing the best job possible. at nnsa we are committed to being an effective steward of taxpayer dollars. i want to tell you about a few of the many efforts underway to improve the way we're doing business which create a leaner, more efficient and more cost-effective enterprise.

for example, we can instantly begin a zero-based security review is help drive down our security costs while sustaining core fiscal sustainability's across our sites. we steps a supply chain management center that has already saved taxpayers over $130 million since its inception in 2007. through two key elements. one is the sourcing, which is an electronic seal bid and reverse auction function that is done over electronic online. and the second a strategic sourcing, where contractors use their combined purchasing power to negotiate multi-commodity contracts with key vendors. our actions in human resources have been in a debate of reform within the department that in leading the way on pay and results together. and one of the efforts that we start in a few years ago was making sure that the senior

leaders within the nnsa are all working towards a common mission. and suggestion actually that david beckham might be hearing it is, and i talked about at a number of years ago which is that we're all working on the same team. we all have to work together, performance standards for senior executives need to be tied together. and what good is if a star basketball player scores a record number of points in the game but the team loses? this is about the team winning. this is about all of us banding together. and so if dave is out there, he might be, thank you very much, dave. that was an excellent idea. and i think it really push the effort and teamwork within my organization. we're going to try to expand that into other areas in the department. my point in raising all of these matter is that nnsa is not operating on a business as usual basis. we are making continuoucontinuous improvements and improved taxpayers, to the taxpayers that we are good stewards of their money. i strongly believe will continue to be a leader in reform.

program and financial reform within the department, and what's great, debbie secretary and secretary cheerfully believe that management reform is a key element of their own. they are developed i think he put his idea and how we are operating across other departments. along that line i am pleased to announce that we have recently issued new nnsa principles that will implement the departmentwide conference was that the secretary just mentioned to you are here today. we want to emphasize to our folks that we want to maintain ourselves as a high liability organization. these are principles that guide our priorities, our decision-making and our collaboration partnership. and for those, we have those posted on her website at nnsa dot energy.gov. so i want to lay them out specifically. feel free. our mission is as important today as it ever was.

we are seeking this and this budget request to support this broad range of what the president has laid out for his nuclear security vision. because of all of this, for the first time in a long while, our nation is arriving at and urgent consensus that now is a time to make investment in nuclear security enterprise. we will allow the united states and its allies to ensure its security. they key example of the consensus and investing in our nation -- by senator nunn, secretary shultz, kissinger and very entitled a world free from nuclear weapons. i'm looking forward to working with congress over the next few months to get the budget and program passed in working with each of you on moving and making the president nuclear security mission a reality. i welcome comments and questions. thank you. [applause]

>> please raise your hands. again, we have an active left side of the room. >> todd jacobson with nuclear weapons and monitor. as he administers move to modernize the complex, nnsa will have to redo the contract to manage the production sites, something i know you're working on right now. how important is it for nnsa to have competition for these contracts? how you going about ensuring what's going to happen? >> first, i would like to refer it as a national security enterprise versus nuclear weapons complex. with the weapons programs, serious, you know, firmly embedded in that, so you will hear me refer to it a few times. recognizing i may have to change the name of your company. it will be a little difficult

for you, maybe that. >> that's fine. >> at any rate let me get back to your question. competition is incredibly important. as when we put out our acquisition strategy here in the not-too-distant future, i know people want to pay me down on exactly, i will get pinned down on that. but what i can tell you is that competition is incredibly important piece of this. we are cities about competing each contract. we will compete in these contracts. we will be looking for new ideas. there's been no secret and what i've been saying for the past couple of years, that in addition we have for strategy to making change. one is work with the department of defense to look at what it takes to transform our nuclear arsenal itself. the second strategy has to do with putting together the right

kind of program to recapitalize our infrastructure. both of those are reflected in the program we have here. the third strategy it has to do with driving our science and technology base and i can talk in some detail about that. business.ourth has to d with to make sure that we have a more integrated and more interdependent enterprise that works together that doesn't work separately in eight different sites across the enterprise. competition will provide new ideas, new approaches that we may not know about. we probably don't know about here in washington. the best way to get that is through a solid, strong, fair competition. and i encourage a lot of participation on that front, because i think we will get a great product in the and when it is done. and that's why it has taken so long at this point in the front stage at getting this out because we want to make sure we to put out our strategy that makes sense and get input from

the contracting community, layout our schedules and then we will move forward in a way that encourages the maximum amount of competition possible. >> we have a question here ended up here. >> thank you for your comments. the administration has been criticized for not modernizing the nuclear stockpile. i would say looking at the life extension program to give ministration is in fact increasing or extending the life of the stockpile. can you tell us what the administration's plans are in specifics, if you can, for lifetime extension programs in the next few years. a specifically there's been some confusion or controversy about the be 61 life extension program, what that will involve whether new will be involved in that, i would appreciate. >> some of the specifics will have to wait until the nuclear posture review comes out the next few weeks. so i will do for those.

but then the describe what we've got in our program and budget that we have before congress. our early analysis shows that we have to manage our stockpile. and manage in a way that is consistent in the way congress has laid out for us. we plan on doing that. we plan on doing that to the, and also and remind everybody that the president while he did set forward a vision of reducing the emphasis in both nuclear weapons and our nations security posture and the goal of global zero, he also said that we have to maintain the safety security and effectiveness of the stockpile we have today. that going to zero won't happen in his lifetime, but we have to demonstrate that we are moving down that path. when the specifics of the npr come out, i believe you will feel confident that he is true and he will be true to his word with respect to that.

in the meantime, we have to maintain because warheads are continuing to age. it's not going to take a break here and say i will stop aging for the next 15 years. we have to manage what we have. and so our plan is to finish the work that we have to maintain that right number of total number of w-76 warheads. is going to be a different number than what we had in the past, but it will be a number. so we have to take care of those. it will be to work on the b-61, not modernize, but managed that stockpile consistent with those principles on the b-61. as well as to start looking at what options do we have on the w-78. because of what's happening to them. so i can't talk specifically

about the pit on the b-61 is going to come out in the end, npr and our discussions with congress in our stockpile management plan, that will be coming out in further discussions. >> i'm from the "national journal." mr. d'agostino, i am one if you could walk is that a through of what your view is of the dismantlement of warheads on the road to zero, the role and what rate you are looking at doing that in the coming years? are you looking to step up the rate or stay about where you've been? >> thanks. was that you ask the question of -- i was you. i should have anticipated that. great question. many will notice that the president has asked for less money than last year in his fy11 request for dismantlement. there's always a very -- we try

to simplify, i think you in watching intently, more money means you are doing more or less, less money means you doing with that in many cases that means it is too. but let's analyze. here are some of the details. want is in fy can we had a significant increase from previous years, from our previous rate. to specifically work on the csa or secondary reduce that significant backlog in fy nine and fy can for the secondaries. so that work is largely not completed because we're going to continue to dismantle warheads. but that big block of stuff, oca, that work is what we plan on getting done in fy nine and fy can. the wizened we did that is because it's better to store this heu in the small form as possible because we're moving of all this material into our new storage facility or highly

enriched uranium facility at fy 12. and we're in the midst of a 90 day period and 512 and taking all the uranium that exist in that 150-acre security site, consolidating into our smaller facility. and instead of storing it in a large csa's, we want to start in smaller shapes. so this isn't classified by the way. the size of anything. i don't want anybody to get excited about that. just for demonstration only. [laughter] >> so the idea is to get the material in its ultimate storage container, put it in los alamos, allows us to rapidly shrink the size of the security footprint at fy 12, resulting in significant savings and security don't. so we have ulterior motives in some of this to moving out forward aggressive and fy09 and transixty. so what you're seeing in fy11, we're not doing as much of that work anymore.

that is it in one. item two is the warheads that were dismantling, not all the same. some of them are be 53, some of them are different types, basically. and all of them take different amounts of time to dismantle. so does that count were had by warheads, believe it i do, does that count how many kilotons dismantle because we tried to figure, giveaways can you describe how we're doing dismantle. kilotons dismantle, would say you know, you took apart, you know, 200 last year and only 100 this year. therefore, you are doing have as much work. that's not true at all. the 100 we're doing this year as an example, require twice as much work to get done. b-53 for example, is an incredibly big, incredibly complex, incredibly old. and i would say difficult system to keep it unclassified.

you don't go after these things with screwdrivers and crescent wrenches and you say have at it. you take a lot of time developing the tools. and that's the third piece is the tools that we spend a lot of time over the past few years working with the defense board and the labs making sure that we have a full array of very specific tools, jigs and things to these warheads so we minimize the number of movements, making sure these things get done safely. and those tools a century have been brought up to speed so the analysis on each warhead requires a different analysis. so that number has decreased shows that a lot of the prep work that has been done needed to take more warheads is getting largely completed. now we are undertaking them apart. the numbers classified as many of you, i've testified to this before. . .

>> at the right time we'll be able to talk about that, but at this point right now don't want anybody to mistake the decrease in number with the decrease in emphasis. because they're very different. >> thank you very much. [applause] >> okay?

[inaudible conversations] >> before tom leaves, i'd like to recognize someone he mentioned but didn't, i thought he would, but his dad is sitting here in the audience, and i'd like you to just stand up and let people know that you've given us this great guy to head nsa. [applause] all right. we're all for coffee break, and we'll reconvene at 10:25. we're cutting your break a little bit short, but we made it a little bit long to begin with, so we'll see you back here at 10:25. i'm sorry, we'll do it at 10:30. i just looked at the time. so 10:30. >> sunday, your chance to talk to karl rove live on booktv starting at 10 eastern. the former senior adviser to president bush and current fox news contributor will take your phone calls, e-mails and tweet on his new memoir, "courage and consequence." on "after words" senator bill

cohen and wife janet on race relations in america. and all this weekend live coverage of this year's tucson festival of books. find the entire weekend schedule at booktv.org and get the latest booktv updates on twitter. >> the u.s. house turns to president obama's revised health care plan next week. house speaker nancy pelosi is likely to get questions about that during her weekly briefing scheduled to begin shortly. we'll have live coverage. before the legislation hits the house floor, key committees will be meeting to review it. it starts monday with the house budget committee. the rules committee meets wednesday to consider floor debate parameters for the bill. while we wait for speaker pelosi, a look at yesterday's question hour from the european parliament. >> the first question from

mr. joseph doyle from epp. the floor is yours. >> translator: president, president baa barroso, if my group and others here have worked in order to get the lisbon treaty through and see it come in effect, that's something we can experience over the past three months. we need a policy that's worth it name in the international arena, and i think we should be on the right track, but i would ask you that, president, how can we say that 500 million europeans can have their rights defended? it's up to the european union to live up to it ideals and values. the external action service as provised for -- provided for should be coming into the light of day soon, and we will be involved in its inception.

now, the european parliament with council and commission will act as co-decider on the financial regulation and other issues, so my group is very keen on the fact that the european service for external action take full responsibility in terms of budget and policy. i look forward to your comments. [speaking french] >> translator: thank you very much, mr. doyle. you know the creation of the common external service is one of the most important innovations of the lisbon treaty. the service will assure the coherence of our foreign policy through the high representative. it will allow member states to participate more and to have, be more and more involved in the area of common foreign and security policy, so it's not putting this in the intergovernmental arena.

quite the contrary. an agreement was given to the creation of the service by the parliament. we had a, we will have a meeting at the college next thursday. we would like to have a strong european service that will be a strategic coordinating instrument that will allow for expeditious exchange between member states and the other institutions in this area. this will be under the responsibility under the high representative, and we, of course, must answer to the european parliament and look at all of the aspects of h service. >> translator: thank you very much. the progress alliance of social democrats, mr. schwartz. >> translator: thank you, president. mr. barroso, the euro crisis was

unleashed by incorrect figures provided by greece. i'd like to know from you whether you can confirm that at no point in time before the latest budget figures were supplied by the greek government you or any officers in our commission had already been informed about the correct figures? and secondly, can you confirm that the directer general, mr. rad macker, had considerable doubts as early as 2004 and 2005 which he reported in relation to the data from athens? and what did you do to support

the acquisition of data? and thirdly, is it correct that the inspector in eurostat informed you they had considerable doubt about athens' data? >> translator: thank you very much. >> it is precisely because we had doubts against, regarding the greek figures, namely commissionerral moon ya leading these files with great confidence and great impartiality and great objectivity that not only we made the point several times with the greek authorities, but in fact they have put forward regulation in the council to propose, to give to the eurostat audit powers. and fortunately, this was rejected by the member states. they did not want to give the eurostat european commission more powers to go in depth in

the national account of greece. i am very pleased to tell you that the decision of the new commission was to put forward, again, that regulation and that my information is that this time at least some of those countries that have voted against the regulation, this time they told me already this time they will vote for more transparency. >> translator: thank you very much, president. on the behalf of the audi group -- >> please. >> translator: thank you. i've understood that he was responsible, but i was asking about you intervention. did i understand you properly, mr. barroso, that the blame lies with the member states for the greek crisis because they refused to follow your propoems, and would -- proposals, and would you tell us, please, which heads of state and government

were involved? >> first of all, if you ask me about blame, i don't use that name. but first of all, lies with the greek authorities. it is because of this that we have a huge problem. regarding the commission, commissioner almunya performed his job in an exceptionally competent way, and this issue of the council of greece was several times addressed in euro area meetings. i cannot by heart tell you exactly, but i know germany voted gunmen, and it was germany that told me this time they are going to vote. >> translator: thank you very much. chairman, please. >> translator: president, today there's a consensus to say that

we need strong governance in the eu. that's a huge change vis-a-vis the past few years. last sunday mr. -- there are other options, for example, the creation of a european date agencies, euro bonds or perhaps a european accrediting agency. so, mr. barroso, we see that things are moving quickly at least for the time being, so i have three very specific questions. is it true that the commission is currently working on a proposal to create this european monetary fund? secondly, is it true as mrs. mackel states -- i have my doubts -- that it's mess to change the treaty in order to do so? third, do you agree that this

fund could only be a first step towards a true european treasury which we will need in order to sustain this monetary union? >> first of all, regarding proposal of emf, it was made that idea for, was put forward by the minister of finance of germany without giving any -- [inaudible] it seems, however, contribution to the current debate about the area, the emf is, however, a longer-term proposal which might probably require a change in the trity. -- tree treaty. we are preparing forced policy -- [inaudible] we cannot at this stage exactly tell you what will be the format of this. of course, generally speaking as you said, we support everything that goes in favor of increased

economic governance, but we have to see exactly details and to make the proposal at the right time. having said this, the issue of the emf could not solve the urgent issue of greece. it's a separate issue that requires more analysis and that is for longer term. >> [speaking french] >> translator: thank you very much. >> translator: first of all, i'd like to thank the president of the commission for the reply, and i would agree with them, the fund as such cannot solve the problems right away, and that's why i ask in the commission's reflection that there should be various options put on the table. you've got the emf that's a long-term project, you've got euro bonds, another idea that can naturally help in the greece case. then you have the credit rating

agencyies. of course, we've been working with foreign agencies, but we could have our own, and then we could have a european debt agency. we could put all these ideas together to come up with a coherent idea from the commission rather than from member states. yes, it's specifically to avoid what is happening now. everybody's proposing different ideas sometimes within the same government, and it's for this reason that we don't want to be hasty. we want to prepare this and the commissioner stated this already. we will be working on the basis on a communication on coordination of economic, strengthen economic policy and surveillance country by country within the context of the euro zone, and perhaps also within the general context of the european union. that's what we're preparing right now.

and we don't want to work with the new proposals every day. we want to work in an objective and responsible way. and i think it's in this manner that we'll be able to get the best results. >> translator: thank you very much, madam rebecca harms. >> translator: president, in u view of the situation in the european union that there is no real market or demand for the cultivation of gmo potatoes for which there are alternatives, i would like to ask you why you lobbies so hard to insure that gmo potatoes were fast tracked in the authorization procedure? i'd like to have an explanation when there was no need. what encouraged the new health commissioner simply to ignore

the w health care o tests? -- who tests? why didn't you wait until the next direct i have had been -- directive that had been written on risk appraisal in general, the writing from gmos and why the contamination levels of food stuff, potatoes, were raised to 9.9%? i think this is a risky strategy which will not find acceptance amongst our citizens. >> translator: thank you very much. i would like to thank you. we have seen your protest. thank you very much. [applause] >> well, mr. president, please. the floor is yours. >> the commission decided unanimously to move ahead with the decision in accordance with

european law. we have an institutional setting that we have to respect, and we had to take a position yes or no. a considerable amount of time has elapsed since the application was launched, and this because this was subject to scrutiny of our independent agency this terms of food security. we wanted all concerns regarding the presence of an antibiotic-resistant gene to be thoroughly assessed. after an extensive and complete review of this, it was clear that there were no new scientific issues that merited further assessments. base based on the opinion of our commission. so we believe that all scientific issues have been fully treased, and in fact i was expecting from you a word of congratulations. [laughter] because, because, because i've announced that i have the intention, the commission has the intention proposed to give

the member states possibility if they want or not to cultivate the gmos. this is, i think, h this is, i think, the reasonable position when we know, when we know that there are deep differences in our member states. some very much in favor and some very much against. >> translator: commission president, i got no answer to the question about the need for this genetic potato which is supposed to be supplied in greater wanty by industry. and what about the contamination level? why 9.9%? previously, we discussed the evidence threshold, i think, for foods and feed stuffs when it comes to an antibiotic- resistant potato, i think this is a significant risk. you didn't address this, and i'd

like to know whether additional authorizations in the pipeline before the directer is in place? for example, imported rice or maize, what's the time? >> thank you. [applause] >> well, mr. president -- >> i want to congratulate you for that, you have a strong position against, okay? any gmo, that's clear you have the right. i don't have the, i don't have any position many favor or against. it depends on opinion that is given to me by experts. i don't have any prejudice in favor or against gmos. in fact, no! and the commission, and the commission has a position -- >> we're going to leave this recorded program now and take

you live to the u.s. capital for briefing with house speaker nancy pelosi. >> to make health care more affordable, more accessible to the american people and hold the insurance companies accountable. each day we move closer in terms of narrowing the decisions that need to be made. we are still awaiting the report of the congressional budget office for us to finally put something in print and on the internet. but the, the cbo did come out with a report yesterday on the senate bill. mind you, the senate bill passed christmas eve, but -- and there was a cbo score going into the vote, but this addressed as amended. and what was positive about it is it showed over $100 billion in savings for the first ten years of the bill, a trillion over the second ten years. that is exactly what -- or

better what we hope to do with the reconciliation bill, to sustain those numbers. so the fact that it would start in a good place for us is very positive. of course, we're eagerly awaiting the final word from them. when they do, then we will be able to send a bill to the budget committee. the budget committee will pass that out, we'll go to the internet with that and discuss the specifics of the legislation with our members. and we'll take whatever time is required for us to pass the legislation. again, i feel very exhilarated by a caucus that we had this morning in terms of questions that members have. we spent a good deal of time on the substance, but then some on the process as well. and we stand ready to stay as long as it takes to pass the bill. i think members are eager to

pass a bill and, again, it won't be long before we'll be making a real difference in lives of the american people. so in the terms of the house, again, as i said, the cbo, the substance in terms of what the agreement is between the house and the senate and what the senate tells us they are prepared to act upon, and then the action of the house. i'm delighted that the president will be here for the passage of the bill. it's going to be historic, and it would not be possible without his tremendous, tremendous leadership, his persistence, his concern for the american people. always, always guided by his statement that we will measure our success by the progress being made by america's working families. this legislation not only makes history, but it will make progress for america's working families. any questions? >> are you saying by march 21st

you will pass -- >> i said we will take the time that we need to pass the legislation. >> but you just said -- >> well, i'm hoping that it will be in that time frame, but when -- our clock can't start ticking until the cbo, we get the cbo score. but that increases the prospect that he will be here since he'll be here three more days. >> do you think it'll be easier to get votes for health care by attaching this student loan provision also through reconciliation? >> well, thank you for that question. right from the start our budget instruction was about two bills that would be reconciled. one was health care and one was education. if i may just step back for a moment, this goes back to our budget bill that we passed in the house 100 days after the president's inauguration, so calculate that, in the bring of last year. -- spring of last year. in that bill the president had a blueprint in the budget for lowering taxes, reducing the deficit, creating jobs, stabilizing our economy well into the future around three

pillars. those three pillars were investments in education and ip novation which go together -- innovation which go together, investments in energy and climate change, and investments in health care. we have passed all three of those bills. two of them, the education bill and the health bill, were to be part of the reconciliation, so the budget bill we passed in the spring, the budget instruction we received in the fall was about that reconciliation would deal with those. reconciliation of education would bring us more savings and, of course, cost the taxpayers less and the students less for their student loans. so that has always been part of the plan. there was some question as to whether this would prevail in the senate until the senate parliamentarian, was it yesterday morning -- i'm losing track of time -- announced that it must be part of the reck

reconciliation. and so that's why it has emerged again as a subject of more public view. but it is really important. it's not there to the, no, i don't think it would make any difference in the house about passing the bill. what would make a difference is in community colleges for pell grants, historic -- i mean, minority-serving institutions of k-12 school construction. those are the kinds of things that will receive funding. the amount will depend on the amount that we hear from the cbo and from the senate. >> madam speaker, senator durbi said this morning, senator durbin said this morning if you include the public option in your version, he will aggressively whip it. with more than 40 senates, now, of course, is that something you're considering?

>> let me say this, and i know i can say this with certain assurance in this room, i have supported -- when i say support, signs in the street, advocacy and -- i have supported single-payer for longer than many of you, since you've been born, than you've lived on the face of the earth. so i think i have always thought that was the way to go, a. b, the public option,. [inaudible] that it is not in the bill, but in fighting for the public option which is, i think, a fight that was led in the house and we had it in our bill, we improved what is going to be in the final product because while we may not have a public option, we have the purpose of a public option served. the exchanges and what they allow are by the rate reviews which we insisted upon,

insurance rate reviews, and by saying that insurance companies should they be raising rates between now and the set of exchanges may be prohibited from participating in the exchange. so we, i believe we have a very strong bill that will increase competition, will lower cost for the american people and accomplish some of the same goals. it doesn't produce the same savings, and that's why, you know, we were fighting for it. the goal had to be served. we wanted more savings that a public option would provide, but it did not prevail. what we will have in reconciliation will be something that is agreed upon house and senate that we can pass and they can pass. so i'm not having the senate which didn't have a public option in its bill put any of that on our doorstep. we had it, we wanted it, it didn't have it, it's not in the

reconciliation. but it has nothing to do with whether we initiated here. we did initiate it. they didn't. now -- >> [inaudible] >> we're talking about something that is not going to be part of the legislation, so why tonight we talk about what is going to happen? because i'm quite sad that a public option isn't in there. but it isn't a case of it's not in there because the senate is whipping against it, it isn't in there because they don't have the votes to have it in there, or they would have had it in there to begin with. yes, ma'am. you're next. >> how, how troubling is the ruling that the senate parliamentarian did yesterday on president must sign the bill before they can do reconciliationsome. >> not very troubling. i mean, it is more of a visibility issue, but the fact is that once we pass the senate

bill, it is enacted. that remains for the president to sign it. maybe more on the subject than you want to know, so i know you'll stop me if that's the case. it's important to note that what we are doing is reconciliation. we're dealing with a very few points. affordability for the middle class, excuse me, affordability for the middle class, equity for the states to correct the nebraska fix, the closing the doughnut hole for seniors, and i'm finding out a lot of people don't know what the doughnut hole -- making prescription drugs more affordable for seniors -- and expanding the accountability, the insurance reforms. in addition, on the pay-for side, changing the pay-for from the excise tax to another pay-for. that's largely what is in the bill and some things that go with that.

it all must be central to the budget. nothing incidental or peripheral to the budget. central to the budget, that's what it is. the bills that have passed, ours with 220 in the house, theirs with 60 in the senate, will be acting upon the senate bill with changes that were in the house bill reflected in the reconciliation. so in order to have the senate bill be the basis and build upon it with the reconciliation, you have to pass the senate bill or else you're talking about starting from scratch. so we will pass the senate bill. once we pass it, the president signs it or doesn't, people would rather he waited until the senate acted, but the senate parliamentarian, as you have said, said in order for them to do reconciliation based on the senate bill, it must be signed by the president. so it is, it isn't going to make

any difference except maybe the mood that people are in. but the fact is that once we pass it in the house, it's going to be the law of the land, and it will officially be -- >> [inaudible] so many of the rank and file that they're -- >> well, that's another thing. but the fact is that they're committed enough to extending insurance to 31 million more americans, to making insurance more affordable to the middle class, for having reforms that say that the end of prohibition of denying insurance to those who have a pre-existing condition, they're committed to the goals of the legislation, and they're strong enough to do it regardless of if the bill is signed on monday or if it's signed on friday. because we will have already passed the pill -- bill. ..

and for that reason i'm very pleased that the senate has now agreed to have pay-as-you-go. it became the rule of the house the day i became speaker and a lot of land only recently when the senate agreed that they would abide by pay as you go.

second eighth -- >> [inaudible] >> i'm answering the gentleman's question. the second point is we had a the commission a that the president has by executive order put forth to talk -- take under consideration everything, revenues, expenditures and the rest, but to talk about and that has a short fuse, that will be this year phenomenon, and then the president has asked for a fee for a cut in the appropriations bills as we go forward in so what i say to members when they have an idea or a suggestion for legislation or an amendment to a bill does it create jobs, doesn't reduce the deficit. that is the course we have to take this on but let me remind you that once the president's underpay is -- under pay-as-you-go under president clinton, we came out to the last clinton budgets were either in

budget or surplus and the trajectory of $5.6 trillion in going in a positive direction. after the president bush's reckless economic policies and tax cuts for the wealthiest in gauging he did not pay for it but just added to the deficit, but even before it got all of that just in a couple of years the trajectory changed to about $6 trillion in deficit. the swing of about $11 trillion, a bigger than in history. in reno how to turn that around. president clinton did it following the bush reagan deficits. we have to turn around now and that is our commitment. >> [inaudible] >> their assurances in the senate, i rick realize leader reid can give ironclad reassurances because of the rules of the senate, but what assurance is have you gotten that they will probably take up in this reconciliation bill to

use your member spears? >> our members have sent a number of bills to the senate which have not been acted upon yet but let me say that that is largely because of the obstructionism of the republicans, they are requiring 60 votes on every bill. as i said before, senator reid has had the votes, he just hasn't had the time to address each one of these issues. so the concern that they had was about has happened in the past based on the 60 votes rule. under the reconciliation a simple majority, the constitutional majority i think members are much more comfortable about the fact that this reconciliation will happen. nonetheless, there are certain assurances that they want and that we will get for them before i asked them to take the road to, but i think we're at a good place because numbers are coming -- we are seeing from the cbo positive, we wanted to be

certified and so that we can go forward with this court bill as soon as possible and again, any hesitation that anybody might have about trusting the senate is offset by the great mission is that they have for health care for all americans and that we will be able to do it in a reasonable length of time. it will take a little faith, but what we do zero status. can we do one more? >> on time he said yesterday that to give your member so we took the legislation. >> when i said that's at least a week from yesterday before even have a vote. i hope that we would have the cbo score as soon as possible so we can go to budgets the beginning of the week and then go on the internet and take a quote. >> [inaudible] >> it is an independent agency, i wanted them last friday and i would hope that we have them

today. thank you. thank you. [inaudible conversations] when the u.s. returns to president thomas revise health care plan next week the associated press reported the president is delaying his trip to asia next week to focus on health care. the asia trip was scheduled to coincide with his daughter's school vacation but now ap reports the family apparently isn't going. the house budget committee meets on monday to discuss the revised health care plan with the rules committee meeting wednesday to set parameters for the floor debate, with live coverage on the c-span that works. meanwhile on the u.s. senate next week there will be working on a jobs bill from the u.s. house off the floor, the senate budget committee will begin work on financial regulations next week, this morning "washington journal" talked with virginia congressman bob goodlatte about his proposal for a balanced budget amendment. it's about half an hour.

>> [inaudible conversations] nine bob goodlatte is on your screen and for some reason and the balance budget amendment has talked -- come back into playing congress. >> i think it's because the american people are demanding its the attention on these enormous federal deficits and the accumulated national debt are probably the biggest threats to the economic security of our country into the future of our children and grandchildren and quite frankly if these huge deficits continue on the path they are an hour there is no foreside whatsoever for a balanced budget, that inflation, higher interest rates and so on are on the horizon that. >> host: this is something been talked about for 40 or 50 years and the progress. what has never been able to pass even and the republican control? >> guest: it's been talked about going all the way to the founding of our country. thomas jefferson who is not amongst those writing our constitution, our ambassador to france at the time, said

afterwards that his biggest regret about the constitution that, of course, is a wonderful document was there was not a limitation on the ability of the federal government to borrow money and sell this is not a new discussion, but is one that requires a constitutional amendment which is requiring a two-thirds vote in the house, a two-thirds vote in the senate and three-quarters of the state legislatures have to ratify it. i notice you just had former senator phil gramm on the air and he was lamenting the fact of the senate came up one vote short back in 1995 when we have a contract with america, the house passed a few times getting that two-thirds majority but the senate came up one vote short and i think that is one of the more regrettable moments in american history have had one votes been there. i think that to our country would be on a different path today office max so what efforts are your spending right now to get this past? >> guest: i'm working hard to

co-sponsor the legislation in both parties. we have a a new task force, in caucus that was just fonda around this legislation. i introduce it on the first day of this congress is house irresolution number one of a balanced budget amendment to the u.s. constitution and congressman mike kaufman and congressman jim marshall just want a bipartisan caucus to help in the recruitment of other members but we already have 100 services co-sponsors members of both parties. a lot more republicans than democrats so we will be focusing on trying to bring more democrats on board. it requires 290 votes, a two-thirds majority to pass since the wave at ways to go. >> host: [inaudible conversations] goodlatte, what mr. if there was a balanced budget amendment how would something like health care reform which would cost money or any other money program passed blacks would be through tax increases or cuts in other

areas? >> guest: first of all, this would require a balanced budget within five years. initially once it passes and ratified by the states then the tigers would have five years to bring a balanced budget into a fact. so legislation and that calls for massive new federal government spending like the health care reform bill on the table today would probably not be considered in its current form. instead of the kind of reforms i think most americans want which are incremental reforms of things like a lot of people buy insurance across state lines, medical liability reform, a lot of people form into large pools of the competitive rates corporations can't -- those kind of things would be examined first because of the fact that they don't cost taxpayers any money. where as the president's bill and there's great debate on how much it costs but many believe it will cost about $200 billion a year at a time when you're already projected next year to

spend $1.6 trillion more than we will take in in revenues so the congress would be forced to set priorities that they don't and have not done regardless of who's been president, regardless who's been in control of the progress, the priority is the need to be set haven't been set. members of congress say we will udall and then they kick the can down the road but that can is being kicked right at our children and grandchildren. >> host: so the iraq war began in 2003, $80,900,000,000,000 later, however, that have been funded in practice. >> guest: the amendment allows for an exception in time of war and an exception when there is a supermajority votes, 60 percent growth in time of national emergency. so the issue there would be was that the time of war since there was no declaration of war -- i would argue there would have had to have been a declaration of war under those circumstances.

had this bounce budget amendment been in the fact and with regard to the severe economic downturn of last year the congress could have by supermajority, that's one year when the budget wouldn't be in balance. but quite frankly over the last 50 years the budget has been balanced four times, those in the late 1990's when we had a republican congress and democratic presidents. and i think most americans think that should be the other way around although in the last 50 years there might have been four occasions when a national emergency or a time of war called for the budget to be out of balance and then all the other times of good economic growth the budget should have been in balance. you get to get to that point, it's going to be a matter of great sacrifice on the part of the government's just like families and businesses and local governments and state governments have all had to tighten their belts. in some instances quite severely

because of the economic downturn. that same kind of structure should be imposed upon the federal government and there will be difficult thing to do no doubt. >> host: besides tightening the belt on the government side would you advocate tax increases to get a balanced budget? >> guest: i would not advocate them. we have a round -- run this as a the government and the average american, not wealthy americans, the average american today spends more than 40 percent of their income on taxes at all levels of government, federal, state and local. when you consider they have to take the other 60% for all the basic necessities of life, food, clothing, shelter, health care, education, that's a tremendous burden to carry an additional 40% of your income going to taxes. i would be looking for spending cuts of all kinds in order to try to accomplish this. >> host: was here from our viewers, numbers on the screen.

(202)737-0002 ms seven congressman bob goodlatte, republican of virginia is our guest. mike warren, michigan, independent line. >> caller: good morning congressman. first of all, the health care bill budget to is neutral, we are not drawing cash from the treasury to support the health care bell. second comments: the crowning achievement of the republican party in the '90s, the impeachment of bill clinton. then we have bush and eight years of bush and day and the republicans controlling the progress and the white house and use census into oblivion. now we have to pull a rabbit out of our hat with a stimulus package which got us back even right now jobs are picking up in michigan. >> guest: first of all, let's

look at the so-called budget neutrality of the health care bill. this is a bill that provides for six years of health care benefits with 10 years of tax increases and cuts in medicare programs, $500 billion in cuts in medicare program. first of all, you can't unless somebody gets sick for the next four years you can't say that this is a budget neutral bill when for four years of the next 10 years cycle they will be collecting taxes on and cutting medicare programs on your not going to provide benefits. no one believes that. secondly, medicare which is a major government programs is growing now a manager at a great both in terms of cost increase in health care and in terms of the number of people becoming eligible for it because baby boomers born after world war to start retiring this. we're going to have to reform the medicare program but the

savings that come from this reform are going to have to go into making the program work for a far larger number of people. so to try to take that money out of the program and put it into a new federal government spending program is simply not right. those are just two major points of many others that most people believe make this health care bill a highly unlikely budget neutral proposition. >> host: miami beach, good morning, a democrat. >> caller: morning. my problem is traditionally we have always been talking about republicans have always been talking about the democrats being tax and spend it where as the republicans have traditionally been a barrault and spend the and in my opinion i will pay any day higher taxes so that people will get health care were as high paying higher

taxes because the rich are not paying taxes and eventually we will all have to pay for the taxes. they are not paying. >> guest: the most important thing to talk about with regard to the balance budget amendment is in order to accomplish this it has to be bipartisan and there has to be a great national debate about what the priorities should be. certainly part of that debate will be how much spending to you quds, how much do increase in taxes? as i indicated earlier my strong a priority is going to be for cutting government spending because i think the size and scope of the federal government in the areas is gone into relative to what have been traditional responsibilities of state and local governments has grown far far too much. but this is a requirement that would simply say of the congress has to set priorities like 49 out of 50 state governments do including my home state of

virginia where in richmond they have a great battle each year about what their priorities will be. will they cut spending or raise taxes by the tear the balance that budget and as a result while the states are in fiscal stress right now their problems are really very miniscule compared to the enormous problem of a national debt that now is approaching $13 trillion in the public portion of that dead, in other words, money borrowed by the government from individuals and businesses and foreign countries and so on. that portion of the debt is expected to triple in the next 10 years. that's simply unsustainable, is going to cause us to face hyperinflation or restore nearly high interest rates which are going to have damaging effects on people who of all backgrounds but particularly people on fixed incomes and people with lower incomes will be dramatically hurt by that. so it's very eerie important that we bring fiscal

responsibility to washington and i think the budget balanced amendment is one of the best tools to accomplish that this smacks you think reassessment of republicans is borrowing and spending as a fair assessment. >> guest: i think anyone who criticizes the overall actions of the congress whether democrats in control or republicans in control of the white house, democrats and republicans saying that we have spent too much money and run the size of the federal government is a good criticism. as congress i vote for the tightest budget offered, one that brings into balance over certain periods of years and i've done that in the recent congress is controlled by democrats, i did it's in the previous congress controlled by republicans in each congress we would get maybe half of the republicans and none of the democrats to vote for these very tight budget. nowhere near the two minute 18 votes needed to pass the legislation. in part because if people could make the decision to kick the can down the road and so congress is controlled by both

parties have a borrowed excessive amounts of money. is taken in dramatic turn for the worst year in the last three years before when two years ago when the highest deficit we've ever run in a given year was about four and a $50 billion. which is a staggering amount of money, but in last year's budget to about 1.2 trillion in this year expected to be 1.4 trillion, next year the budget offered by the present projects 1.6 trillion and at no time in the tenure horizon which is as far out as a project the budget does a dip below $800 billion. almost double the highest ever been before in our history. that is simply unsustainable and this is one of i think several tools that are needed disciplines needed in the congress matter who's in charge to force them to make these priority decisions. >> host: michigan, independent line, you're on with congressman goodlatte. >> caller: good morning. i have a couple, a question.

whenever a republican gets out there he says the majority of the people want this in the majority of the people what that, but the majority of the people voted for democratic house and democratic senate and democratic presidents. so i don't understand your logic. number two, your party has always been for the rich and if you had your way you wouldn't even paid by on unemployment which is to run out into lakes and i still haven't got a job because you're policies cent of our jobs overseas. so my question for you is, what are you guys going to develop a conscience and commit suicide. have a nice day. >> guest: that's a friendly comment on you're part. let me just say that the fact of the matter is when it comes to the future of our tapestry i think those who are concerned about the fact that families and businesses and governments of any level can continue year

after year spending more money than they take in is the party that is looking out for the people. but a balanced budget amendment of the constitution won't take place and certainly didn't get passed through the house of representatives without strong bipartisan support. that's what i'm very pleased to have a number of democrats who are joining cosponsoring this constitutional amendments. are going to need a lot more and we think we will get a lot more because more and more people across the past three or waking up to this reality. with regard to what the priorities are of the country it's up to each allied to the representative to listen to their constituents and make a decision based upon that fact and i think that people are hearing from their constituents now like they never have before. when i asked my constituents what their number one priority is for the federal government by overwhelming margins they say at of control government spending. jobs are also very much a priority, health care reform is a priority and should be but the

number one answer i get is the concern that the government is biting off we more than it can chew and we need to change that. >> host: cheryl is a republican at pennsylvania, go ahead. >> caller: thank you for excepting my call. my question is for your guests, and the stand he sits on the agriculture committee. my question is i understand that plank in has a family farm in arizona and she has gotten tons of subsidies from farm subsidies from the agriculture if a mandate and the government. that got me looking into the farmers and on community and i understand that most of them have gotten more subsidies that i make a year. if they don't really higher for many people because these farms are inherited from their parents and they continue to receive millions and millions of dollars in agriculture . >> host: what is your point?

>> caller: if they cut the subsidies to farmers when the subsidies or first said that we needed these subsidies in the seven days. >> host: you're asking about cutting subsidies? >> caller: yes because we spend millions of farm subsidies. >> guest: well, that's a good point. in the last farm bill that was just written, the subsidy is for larger farms were curtailed, not enough in my opinion but we made some progress in that regard. the balanced budget amendment in the u.s. constitution would again force the congress through all of these programs and decide which ones our highest priorities and i have no doubt that there would of necessity be significant curtailment of these programs. i'm on a agriculture committee and represent shenandoah valley virginia which is the largest producing area in virginia. it's an area where livestock is

the primary agricultural livelihood and it does not receive the kind of subsidies and never of the crop programs receiver on the country. we are much more free-market oriented and my constituents are much more accepting of the idea that agriculture should be free market oriented and and we need to move much more rapidly in that direction then we have. >> host: a balanced budget amendment, does it say that the budget process, the budget making process on capitol hill is broken? needs to be reformed? >> guest: i think it does need to be reformed. this is a constitutional amendment, it's a very straight for a document and does require the president of the united states to submit to the congress each year a balanced budget. >> host: is required to pass? >> guest: it does and this is an important thing for people to know, with the presence of mr. the congress each year is not something that is adopted and sent back for signature.

in the budget is simply held by the congress. we ask for i think the law requires the president to submit a budget and this would require to spend a balanced budget but require the congress which has the constitutional responsibility to adopt a balanced budget just like 49 out of 50 state legislators go through and do each year. so there problem when i have an economic downturn is basically a one your problem, have to figure out how to balance the budget to get to next. its economy grows and the pressure on as a government eases off. but with the federal government because we piled up this debt year after year after year, if interest rates spiked appier going to see dramatic increase in amounts of money the government will have to either borrow or tied in other areas or increase taxes in order to meet that huge obligation because the government can't afford to the falls on this huge amounts of money. interest rates have been low in

recent times and when they go up again that portion of the federal budget that has to be devoted to paying interest on the debt is going to go up dramatically. >> host: there's been base closing commission's in the past, they've taken the responsibility away from congress. this congress not have the discipline to make the funding choices to get to a gao's budget without this amendment? >> guest: well, not quite but i will talk about that because there is an idea that deserves some very careful examination as well. but it does require the congress to set priorities and quite clearly they have not said those priorities, they said we'd do more than we really are able to based upon our revenues coming in and we will worry about that next. next year. then next year never pounds. so this is i think it long-term reconstructive tool that the congress should put in place as soon as possible but in terms of

a free calibrating where we are there's a proposal by congressman frank wolf of virginia called the state commission that would establish a bipartisan commission that would examine government spending, government taxes, the entitlement programs and how they operate, make recommendations back to the congress and the congress like the commission would be forced to have up or down vote on this entire recommendation. i think to do that long-term would be an abdication of the congressman's responsibility but to do it wants to reset button and have this real calibration and make decision about what the commission recommends would be a good way to start the process of getting into the house budget every year. >> host: milwaukee, thanks for calling, you're on with bob goodlatte. >> caller: good morning, representative goodlatte. it seems like the republicans, the kind of remind me of the

taliban where upon everything that you want to you are fighting against the norms. the party at yes, yes yes during the bush administration with the energy program, yes with the war, yes with a prescription drug program and then we lost all those jobs at the end of the bush administration with 125,000 per month and then they blame barack obama for everything that occurred during the bush administration. >> guest: first of all, the massive job losses due coincide with the end of the bush administration and the beginning of the democratic majority in congress which, of course, was in the majority for the last two years of that administration and now in power for three