command the confidence of the whole house economies. as i say, take very careful consideration over your request about having a statutory requirement for review after five years. i wouldn't say yesterday, but i've just confirmed it is possible beyond the legislation that certainly we believe there should be review. the question of whether should be in primary statute or not ever look at it and get back to you. >> thank you very much on that, too. it's very good news that i'm usually the government has pretty much accepted the payrolls we've made that we've had a significant body. there's just one of those recommendations that you've

made. can i turn to the issue -- the vexing issue of the internet sessions already about the carriage. there's only one question i want to explore, which is what you and the government did, which you realize that you had this astonishing contract which given the decisions you're going to take come with aircraft carriers for 10 years with no aircraft to put it in. how carefully was renegotiation of that contract would be considered? >> well, can i make a broader point and then joe very specifically with your question. this was clearly, of all the problems we face, probably the greatest. it was an incredibly difficult

contract for a government that committed whoever had won the general election to an extraordinary amount of expenditure on tudor aircraft carriers which have increased significantly from 3.9 billion pounds to 5.2 billion pounds. this was confirmed by the previous chief secretary to the previous government in january of 2010, which is in these contracts have been further confirmed after the intermediary station in 2008 in 2009. in other words, it was confirmed was very clear that the country was going to be short of financial resources going forward. and what i propose to do with your permission, mr. chairman, is give to you, the committee, the confidential letter that was sent by the chief executive of bea systems to the prime minister on the five out over 2010, the 80 systems are happy to provide this letter to you. it goes through some detail --

[inaudible] >> i pointed out to be a system that this committee had over the last few days taking considerable and cost that i thought it was appropriate that members of the situation we inherited the contract had been negotiated by the previous government in the complete line that the average taxpayers. and as you will see it will show to that the cost of canceling the carrier, the second carrier, would have been more expensive than building and not proposing to have it operational in order to save resources. what i propose to do, mr. chairman, is give you a copy of this letter and we been up to you and your committee to decide when i need to put into the public command, but that will be yours. >> more transparency that can be brought to this once if they can extraordinary decision and part

of the public find it quite incomprehensible as i'm sure you know. but let's leave it there since others may want to come and a bit late to see that that letter has to say. and he loves. >> it is a 2000 night conference when the prime minister said, sometimes the competitive using we'll have to stop because in the end it leads to inflation. you don't really like quantitative. >> if you allow me to repeat myself, the monetary policy committee meeting is actually meeting as we speak. and i don't think it would be appropriate for the chancellor to see whether meeting with their public position as a couple hours away for me to comment on the merits of the different forms of monetary policy. >> let me ask you and answers on

the house of commons, you have two get this you would follow the same policy is your predecessor. in effect, given the greenlight to the monetary policy committee and relation to quantity of easing. why did you do that? >> well, with the original arrangements were created for the independence of the bank of england on monetary policy, it was very clear that the nbc had complete independent in the setting of interest rates again to an inflation target set by the chancellor. and i became clear some time ago arrangements around the granting of permission for quantity were not so clearly set out in the original statue. so my predecessor came forward with arrangement that would

to concept using. and i thought it was appropriate to continue with that arrangement. i think one poses a counterfactual, which is up by a torn up those arrangements is that of a whole new set of arrangements people might have regarded that as quite an extraordinary decision. >> will understand your elation of that to the situation in the united kingdom which some of us have united states. but the situations are very, very different. in fact, situations here but suggest that is persistently higher than i think expected with long-term interest rates already reasonably low. i'm wondering why in the context the overall economic situation and come with you suggesting we would have a fiscal policies while you needed to educate and

leave the freehand to be saved upon. the situation was this. i was asked a question by a journalist. but i continue with the arrangements of my predecessor put in place for quantity of easing. and i said yes. i found guilty of answering the question. and that is what i think is appropriate. the counterfactual, which is a fight that actually about considering the arrangements between the treasury and the bank in this regard, what would've been the reaction to that? so i've actually made this clear as it happened when i was in opposition and was asked this question but i became a chant or, what i continue to arrangements? i said yes i would. i didn't regarded as particularly newsworthy. a more newsworthy event would have been the specter is. >> there's been quite a lot of speculation in the news media.

with resection to the rest of the economy, in the sub quarter was greater than expected although there is still signs the economy is slowing. with those great uncertainties quest quantities easy in should things go wrong, how do you respond to them? >> well, as i said in my opening remarks, in my opening answer to the chairman, you know, what i believe you've got to do in this situation the united kingdom has found itself in is provide credible fiscal policy. that was obviously the overriding need to continue to take my job anna mae. i've done that that. the governor of the bank of england has himself drawn attention to the fact in a speech at the mansion house that a credible fiscal policy was

eight, essential, but beat, provides flexibility for monetary policy. and i think that is a good way to govern the country. >> you indicated earlier on in the year to your preference was to have 80% of deficit reduction from public expenditure cuts with 30% for tax tax tax entries. you subsequently changed that to roughly 70, 30. why if you do not when you play such great emphasis on the need for the predominate stevens to come from public expenditure? >> well, first of all, the parliament develop. and that's partly because the tax lover is an easy one to polls in the public expenditure and other. in other words, you can increase tax if you have to, the poet

expenditure savings can take longer to come into affect. so we moved to a the 20 during the parliament. i said at the time and i said repeatedly covered either regarded in absolute number have to be 8020. i said that was a good rule of thumb. that was a good guideline for a credible fiscal consolidation package. and i would not simply be my own personal view. that was the view of most international studies into fiscal consolidation packages around the world. the ones that tackled the root cause of the problem, which was a fairly dramatic increase in the structural deficit brought by an increase in study of the best way of doing that was to tackle the increase in spending. >> wasn't not related in any way to the resistant to it. dane, the treasury was experiencing in trying to implement such high levels of government departments?

is that not taken into account in trying to readjust it? >> as i say, seeking to readjust the figures, i mean, on the tax front i've made my announcement in the budget. obviously when i reserved benningfield was the public expenditure decisions. and i have not met resistance as it's been a collegiate process. and i think the world productive process what would've been able to deliver what i believe is a credible package from what chevron international you looked at this and the british business regards as a package. >> let me say the former secretary are laying up last week that the four year time scale of cut in successive years is unprecedented double the incredibly difficult to deliver. i say that in the context of the report from the national office

on the efficiency savings of the previous government. i know you say it was overflowed the previous government, but the reality of that report is to show how difficult it is to get the level of efficiency savings being requested. but the weight of the problem of being able to deliver on the public expenditure cut is a gargantuan spin on views somewhat chastened by the experience so far? >> well, of course it's a big task. it's not a big task for the government, but for this parliament to face up to the largest deficit we have had to confront the second world war. and i believe we all have to take collective responsibility for trying to solve it. now, i would make two observations. first of all, i seem very long-term with the cabinet secretary under the previous government >> and former members were the

chairman of the secretaries are in the security. >> but i read both evidence. it is very clear to this committee that this was an absolutely necessary consolidation, but beat, the pace is appropriate. and he makes interesting observation which permits officials can make, which is weber won the election will pretty much be doing the same thing because of the facts on the ground. so you know, i think that's an interesting observation from him. i would make another observation about the pac report which i've been reading this morning. i mean, i think it points to the dangers to announcing just enormously efficient targets. for this reason, some great efficiency justice and government departments can deliver. it says when this was done in 2007, there is no robust evidence about what can be achieved. and there is a lack of financial

performance data. now we are trying to resolve that. we have had a more specific approaches some of the efficiency savings, for example, administrative savings in production and quangos in the light. we've also tried and are currently trying to improve the quality of financial data and what i thought was pretty, you know, shockingly weak at the moment you were trying to improve that appeared were also using other tools like for example transparent these so that public expenditure is available for people to see that we can create a nation where the taxpayers money is going. so i mean, were used in a number of different tools. but as they say, we all face the same challenge. every single person in this room. it's a very large structural budget deficit. we have to do with it. i think the most appropriate way to deal with it is since the

international evidence support is by touching the root cause, which is very rapid increase in public expenditure and the fact scene up resumes have it way above its long-term average. and the measures i've set forth, which were of course in the individual measure. what i've tried to do is put together a package that is credible, deliverable, does not rely on efficiencies which are being delivered as for seaman 2007, but instead more specific and gives more control to developments about how to deliver it. >> on both those fronts, we now know that your predecessor wanted to increase. the last government was planning. did you find any evidence when he started work in the treasury? >> well, i want to say it was not made privy to me as the papers of the previous government. what was clear, frankly, was all the work had been done on the

back rise and i confirm recently she would go ahead with the vat rise and also work had been done on the housing and a fat cat. that was a policy that was worked out. and of course, if you read now the labour manifesto. so there had been with some work done on some specific policies, which are not the policies are now mostly attacked for introducing, but in terms of a broader plan there was none. there was just an addition to cut 44 billion pounds from department to expenditure set out in the march budget with no plan behind that to deliver that 44 billion. >> and i press you on these efficiency savings? the pac report this morning really does make clear that at least a dozen would never achieve at all the last of the efficiency were serving in your

document. how can you reassure us that your efficiencies really will be different to these claims we've had in the last four or five reviews? >> well, first of all, we have agreed with individual departments in very explicit reductions in their administrative budgets. that is a fact on the ground. they're having the administrative budgets reduced. as part of its process, i required to reduce their administrative budgets. second, we are actually eliminating and they are disappearing as a fact. third, we are putting in place, i believe, reports that will improve the efficiency of government through, for example, the place budget and which will extend more broadly through the use of personal budgets and the more extended areas of public policy in the light. and i am actually the budget to these departments.

so the challenge to them will be yet, to deliver that through greater efficiency, greater productivity gains in the treasury, the center of government will remain absolutely on the case to deliver those product improvements. because of course one of the great challenges in this department is the productivity of the other, declined to the last decade. at the same time it was increasing in the private sector. >> if you're remiss to turn, how will we know whether you've been successful for the benchmarks? how we know whether these services are more efficient? >> well, i think there will be a couple of tools at people's disposal. the first of the complete transparency, not where money is being spent. this committee and other members of parliament and the public will be able to see what is being spent on the administrative budget in a way that has been not so transparent as before. second, we will be publishing much more data on the outcomes.

people appeal to judge themselves whether outcomes are improving or not. >> can i ask you about the spending process over the summer? i think you are the first chancellor to send and of the process. looking back, did that help? >> yes, i think it did. i think setting the date in october, so early on, focused on everyone's mind, i think image you could come and, not knowing when the spending review was going to take place, whether it be october, november, december. people on this committee who remember from the last parliament will know it was will doubtless indicate to what the spending review, when the pvr, with the budget? i think it's perfectly sensible to put into place some structure and process but there's no reason why you can't make a forward announcement of the date to get the whole machinery of government working for that day. >> what have you learned?

looking back over, what would you have done differently? what would you do for next time? >> well, i personally think the process of your sitting in judgment on this. i think the process went pretty well and was a collegiate as possible. what i learned -- to say i have learned that i think setting clear date that go months in advance for the quarter is a good idea. >> we've long recommended to have the pvr data in the budget should be adequate notice giving. first proper notice of these things. what the budget going to do? >> i'm going to tell you, the answer is the 23rd of march, 2010 -- 2011. and that is over four months notice you're getting. i think the treasury committee in the previous parliament of two months -- recommended to none giving the chancellor should get two months notice. so the 23rd of march will be the date of the budget.

put it in your diaries and no doubt i will put it in my diary of the appearance before this committee. [inaudible] >> i'm already looking forward to it. >> just going back to the spending review. would you build to tell us of the most difficult minister was? >> i don't think i can, unfortunately. >> i was about to say, wait for my memoirs. but they're so boring, i'm not sure i'm going to write them. >> might be a long way. >> chancellor, i'd like to press you a little bit more about the process because having das involved that they change management programs, anyone will tell you it's hard to come up with the plan, but it's not impossible to implement it. just to press you a little bit more in terms of how you know to the plan into the reality. for example, would you have a finance director in every department, ensuring the budget, who will be the people on the

ground that ensure this gets rolled out? >> ultimately, secretaries of state are accountable and indeed the prime minister and myself are accountable to parliament on the public for the delivery of the spending review. now it's an departments we are trying to increase the capacity in terms of financial management to make sure there are proper finance director roles, but the quality of data is improved. and of course, permanent secretaries are also accountable cometh not to this committee, the public finance committee. in a number of ways we are trying to improve the quality of the data, which as i say is a shocking report. in fact it, the accountability to the delivery of the spending review. but i've made this observation, what are not trained to do is

start out for every encounter of what every director needs to do with the group found of its budget. there are many different public-sector employers at hospitals, schools, local councils, government councils and so forth. and in the end, i want them to take responsibility for the delivery of their budget. now, i take responsibility for the budget i've given them. they take responsibility for the delivery of that budget. >> is that the revolution and accountability than? >> i think were trying to increase accountability. i think frankly there's a much greater public focus now on that money that has been the case. and it has been brought about by the real-world situation. and partly i would say because it's of the focus of this government that we have made this the focus of people's attention. >> so specifically than on the

forecast, our senior officials telling you that the inevitable reduction in headcount for example could cause having the political stand there with the accounts? >> know, we have not received that message. i mean, i think it's also the case that this consolidation is coming and after a period of very rapid increases in public expenditure. so they're certainly a capacity the government to make these savings. and i think it is not that different from previous administrations and had to come on the backhaul leaners already. if you look at the late 1970's, there really from the arrival of the imf, since the beginning of the new decade they have been attempted to control public expenditure and attempt to control and the new government

has to come in to make further efforts. and of course it's very difficult. i'm not underestimating the difficulties, but police were dealing with the situation where there's been no attempt to control public expenditure. >> absolutely. just turning the to manage it in the church, do you worry that with the reforms combined with the cuts and budget, that you might undershoot. do you ever worry it might be extremely difficult to achieve the level of savings and expenditure? >> know, i think that's one of the big challenges facing the treasury, the expenditure bill because there is no incentive on government departments to control those budgets. and we are looking at whether actually this whole framework of doubt come in amy is to be

revisited, particularly to any part because this is a very large budget. i think actually have with the government spending, it's not really managed. and so, we are looking at a new framework. i'll say more about that in the budget on the 23rd of march. >> thank you. and another question, is there a part of me that worries if there is a reduced sail to deliver the cuts, that it may be necessary to give them a further round of cuts of some of our european colleagues have had to do? >> is certainly not my attention. when it sought to do is set out a credible plan that delivers on our fiscal mandate. and the fiscal mandate is to bring the physically adjusted structural budget into demand. and i aim to achieve that because i built in some caution

into the plan. actually, this relates to another question about the ob are. it's a misunderstood point that the government forecast now are built around the essential as image, so the previous government in previous government would announce the forecast ramped up in the treasury of say we don't some portion and see what the portion was. but we've moved to as a system where we have an independent body that produces estimate what they forecast with a central forecast and where were building the caution now is into the delivery of the fiscal mandate. >> thank you. >> thank you very much, mr. chairman. chancellor, i want to get back to the question of the aircraft. every member of this committee has a sense of absolute bewilderment. how is it possible that a

government facing an 80 to 100 billion pounds deficit can be signing that kind of deal of? how is it possible between more expensive, not to build and does this point to mod being captured by the industry? india and do you think the prime minister itself will be including those over the interest margin spectrum? [inaudible] [laughter] >> i'll leave this committee and the public to draw their own conclusions about the last point, although we very much welcome the return of the body to the house of commons to bring up the subject. but the broader point i think is a good one, which is i think they're going to be an enormous amount of lessons to be learned

and stemmed from this contract. i think it will be one of those things that hopefully at a meandering school for years to come they will point out as a very, very bad example of the absurd taxpayer money. we ended up with a situation where it would actually cost this country more money not to build a second aircraft carrier than to build one. that is a world that is unfortunate situation we found ourselves in. what we also discovered and this is the reason we found out is the decisions delay, for example, in this last year cost 600 billion pounds. it's that simple decision to delay the taxpayers 600 billion pounds. and of course, we also face a situation where the carriers were going to be equipped to take a particular version of the

joint strike version of the original take-up version that was the most of the three barriers.

>> it does seem like an unfortunate thing that hospitals and schools need while other schools and hospitals maybe very

badly affected by the squeezing and public spending. >> that's not the easier thing to do. by definition. what the protect sector has done. private sector companies have gone back to the supplies and thought to reopen. we are doing that at the moment. in the ministry of defense, there's certainly an expectation from myself and i know from the prime minister they are going to get absolutely stuck into the contracts to see if they can be renegotiated and see if we can get money from some of them. and i know that the commercial job at the mod is currently vacant. i think we need to get someone of real quality to lead the work. >> thank you. you've talked about the poor quality of data available. and at the moment.

it does seem to me that part -- one the conclusions that comes from the arguments about regressivity and progressivity and some of the things made there, i wonder if that's something that concerns you. and if they do exist, simply improve. >> i don't think there are -- churchill maybe guilty of many things. i'm not sure there's a weakness in terms of that kind of analytical ability and the tables that we produced and in a bunch of documents on the impact. as i said, i think the last time i was that here, i would say again today, this is not the perfect science. we didn't claim it. we are trying to do something that has not been done before by any british government. we are trying to mobile the impact both of changes to benefits and tax levels. but also changes to public

expenditure. now this has been done in other countries. but it's not been attempted in the uk. we are drawing on the best international evidence to do this, you know, what we hope to do is stimulate a proper debate in the international circle of matters work. obviously, we also very much welcome the input of this committee into this. and as i say, this is not a -- this is work that i want to see developed. and so that there's an agreed, instead of there being an argument about the methodology, there's an argument about the actual policy measures. and we get to a point where everyone agreed about the methodology, then i think we will have achieved something. we will have a proper debate about whether this is the right measure or not. >> do you think the debates over the technicals is included the wider debate about the rules of the pleasures? >> you know, i think there's

been a robust debate about all of these things. what i can tell you is that in all honesty, this area of the treasury has sought to produce the data in the best possible way that it can. it's not supposed to include things for particular political reasons or exlewd things for particular political reasons. it's done with the evidence. i think speaks for the officials in that part of the treasury, they would welcome input on that work. i think we need to come to an agreed form of methodology, this committee, or with the help of the public account committee as well, they agree as the methodology that we are going to use in the future of -- the future budget under whoever is the chancellor. as i say, you can have a debate about the substance. i don't know who i should bring in the permits. >> at the same time? >> they actually, i think, the party of the analysis around the

distribution is pretty impressive. this is cutting edge stuff. now, you know, ineligibly, things like public goods, how to sort that out between individuals. the analysis is clear, very transparent, and i think it represents an improvement length. it's a credit to the analyst and the treasury. >> this is -- it certainly isn't cutting edge stuff. they have been doing it for at least a decade. how can you call it cutting edge stuff? >> to be fair to the treasurer, the distributional analysis is certainly something they have been doing for many, many years. and we're attempting to assign in the treasury. the -- i'm sorry the publishers work has always been done in the treasuries. this -- my predecessor had all of the information available on the distribution impact of tax

and benefit changes. they just chose not to public it. but what has not been attempted, and i think they mentioned to this in the appearance, is the impact on the public expenditure changes and the benefit in kind that come from those. that is genuinely new work, cutting-edge work from the undersecretary. which it is in his world. and, you know, -- [laughter] [laughter] >> and we really welcome -- again, we welcome not just in this committee, the broader academic community. i don't want to speak for members of other political parties. if we can get to the point where they aren't arguing about the methodology, but the public policy measures, we'd all be in a good place. >> to be fair to those who have taken issue with you, chancellor, you said in your

budget, this is a progressive budget. and it wasn't a progressive budget. was it? measures in the budget for progressive. subsequently, as the many measures were progressive. look at the csr and say this is fair or not fair, according to criteria. but it was over rating it a bit, wasn't it, to call it a progressive budget? >> i don't agree with that. i think the disturb -- returning to the budget, i think the total fiscal consolidation, which includes the budget, which includes the measures announced by the previous government, many of which i have to take it to the house of commons, some of which i've had to completely change, like the taxation of pensions and enough to completely redo that. of course, the house of commons will pass the judgment on that. and the measures, we take them together, i believe they are progressive. and the richest pay more than

the poorest, not just in cash tones, but as a proportion of their income. >> some of the other remarks that you've made. the statement that we're on the brink of bankruptcy. isn't that a bit over the top? >> no, i believe the situation that i found myself in in may this year was incredibly serious for this country. let us remember. >> that's not the same says we are on the brink of bankruptcy. we all agree there was a fiscal crisis. >> let's be fair. i came to the office in a middle of a european sovereign debt crisis. we had the highest debt in world and the investor was saying the uk guild was a no go area and sitting on a bed of nitroglycerin. this is the situation that i took on. i have done everything that i can to move britain out of the

danger zone and the market interests rates. it shows that. there was an acronym at the time, as one remembers, p.i.g.s., then there was another acronym, s.t.u.p.i.d.. the u was the united kingdom. i believe i have taken the steps in the financial danger zone. we are not on negative watch with the credit rating agencies anymore. it's pretty clear the credit rating agencies say that is due to the measures that we have taken and the question mark they will always have is can we see the measures through? i believe we can. but, no, i think we have taken those decisions as a government and parliament, we have been proud that we have done that. >> maybe the top measures and also the effort to make the budget fair would have come across more clearly if they hadn't been obscured in the

debates. there's something to look at when making the remarks that do look to me nor like the language of opposition and government. just tell it as it is. >> i'm supposed to tell it as it is. but inevitably, they are going to be controversial decisions. they go to the heart of what we affect, which is public expenditure, taxation, and the soundness of the public finances. as i say, when you got the largest bond investor in the world telling people that the uk -- that sterling is sitting on a bed of nitroglycerin, when you have the credit rating agencies putting us on negative watch, when you are thrown into a european sovereign debt crisis with the largest budget deficit in europe, i believe this is an incredibly serious situation. >> i take your point, chancellor. i accept and welcome the fact there's a high level of

transparency in the forecasting crisis and the decisions that you have taken, and you have made unprecedently bold step to look at the impact of the measures that you have taken. i hope you'll at least reflect on the point that i've made about trying to make sure that claims can be readily stood up. chuck umunna. >> thank you. can i ask mr. love about easing. i think andrew quoted the prime minister previously on whether he was pro. and granted the mpc's meeting as we speak. but kind of portray your position in neutral is rather absurd, isn't it chancellor? in march 2009, the conservative party unusually with the easing is a leap in the dark. you are quoted as telling the bbc, i don't think anyone should be pleased we have reached this

point. it's an admission of failure. can we take it from that. if there's an announcement, maybe today, maybe not, but sometime in the future, that to you would be an admission of failure. admission would be a move with the way you described the risk in last year. >> as i say, i know you were disappointed. i don't think it was appropriate for me to comment on the merits of the physical and monetary policies of sorts. it just would not be a very responsible way to conduct my job. >> okay. in some senses, i suppose the business secretary hasn't made a secret of his views on quantitative easing. he did an interview last week on "the today" program. there's been a lot of debate about whether you should have plan b or not. it was very clear there's an opportunity to use money in the policy as a way of introducing

some kind of flexibility in your approach. >> well, i -- this obsession with plan b, you know, i think we've got a pretty robust plan a. but plan a is all about providing fiscal creditability. and fiscal credibility allows the monetary policy committee to do what it needs to. which by the way, could mean either increasing interest rates or decreasing interest rates, or using any other monetary policy that has it. it gives them greater flexibility. they are not having to take into account that the government doesn't have a credible fiscal policy. that's where we were last year. what i have done, is i believe, allowed them to operate as they see best and others are not in any way prejudging what they may or may not do. that's an entirely independent decision for them. what i've done is enable, i

hope, enabled to provide the rock of fiscal stability on top of which they can operate. >> okay. it's their decision. have you asked the -- i guess have you asked the governor for an assessment of the likely affects of the further round of qa? it has an impact. >> okay. >> which should concern you. >> i beg the committees forbearance. i'm not going to go into the private conversation in chancellor and governor which shouldn't say i have or haven't asked for the information that you have mentioned. >> okay. is it fair to say that since you took the government, the prime minister has been quite keen to introduce proper cabinet government where, you know, the previous government was criticized for having the certain style of business. for example, your style changed.

>> no, i think -- probably shouldn't. my private view is this. which i will now make public. i think that the the -- i think prime ministers always in opposition talking about the merits of cabinet government. then they suddenly lose interest when they become prime minister. however, the fact of the coalition, which, of course, we weren't planning for, more was our partners, liberal democrat policy, has actually forced a degree of capital government that no one would have expected a few months ago, on labour or liberal democrat. it is forces in two ways. one is that our coalition partners need to be constantly involved. so, for example, decisions around taxation would be the chancellor and prime minister discussing it today and announcing it to the cabinet on

the day of the budget. here in every step, we involve the prime minister, chief secretary is much more involved than the previous chief secretaries would have been in the decisions. we establish a "lateral process. second, there's an interesting process. by consulting the liberal democrat partners, member of the conservative, and members of the cabinet also expect to be consulted and have a right to be. so it has introduced a much greater degree of process capital government that i think i would have predicted, frankly in the hearing before you nine months ago and giving you my candid views. >> on that point, you announced to fanfare the change in child benefit in the fourth of october. this, of course, was a change which is going to affect over a million families. was this something that was discussed in full cabinet before you announced it to the conservative party conflict?

>> no, it wasn't. i think that's well known. it was discussed extensively and for a long period of time. a couple of months, in the process. it has been discussed intensively with the relevant secretary of state. now, technically, on a technical reason. technically, it's a tax measure that involves the use of the tax system. requirement to take it to the cabinet. but also practically, this was in the run up to the policy conferences this was the best and most practical we couldn't bring the cabinet together when you have one part of the coalition having a party conference, another part of the coalition having a party conference. and so on. but, you know, not every single decision that is made in government is taken -- this government or any other government. but the relative -- the most -- the people with the direct responsibility and the deputy prime minister were involved for

many, many weeks beforehand. >> okay. >> this was not sprung on them. >> i heard what you said. you've been fond of saying we're all in this together. you've asserted that this emergency budget that we heard off in the summer, let's look at the child benefit change. if you say, take, a cabinet minister like yourself with two children, a great salary of i think 134,565 pounds. claiming child benefit, you'd be entitled to 1752 in child benefit. which is 1.3% of your gross salary. then if you take, for example, many of the newspapers have referred to households as one owner, where they fall just above the high income. i take sarah who's referred to the guardian a few weeks ago, who's husband, his salary justs

takes them above the threshold. they, as a result, lose all of the child benefit, which is 4% of their gross income. and so they fall in that kind of middle that's being talked about. they get hit hard like this. people like yourself, not really going to have a dramatic affect. but people like them, it's going to have a very heavy affect. net income less than 35,000 pounds. how is that fair? >> well, i mean -- squeeze middle is a phrase used by the leader of the opposition. i should congratulate you on the bbs. i thought to make the distribution. i think it would have -- the truth is that the -- many measures are means tested when maybe the discussion later in this area, for example, housing benefit. but there are many wealth measures that affect working families across the income distribution. and i wanted to make sure that

people who i completely accept are not the super rich. but they are all better off and high rate taxpayers are better off. that they too made a contribution to the fiscal consolidation. now, if this kind of thing that i'd like to do in completely benign economic times with a balanced budget. of course not. that's not the situation that i fail. -- i face. i face an 11% budget. i had to make sure it was progressive. that people in the richer deciles. yes. >> kind of where you have somebody falling off of the cliff there. you are in a couple, you have one earner in the higher income bracket. do you think it's right if the parent is going to work overtime or go for promotion if it means they are going to lose the child benefit? >> i was going to say what i

thought to do is introduce this in the simplest possible way. to use the existing systems that we've got which involve, you know, we know who higher rate taxpayers are. and the alternative, if i wanted to remove child benefit, or tax it in some way would have been to create some means tested system. i don't think that was sensible. because what i've done, preserves the way child benefit is claimed by the vast majority of people in the country. i have not had to introduce the brand new means test system. i've not for the first time had to go and try to set the joint household income on people of 60 or 70,000 pounds of year. i've tried to do it in a simple way. it's an interesting point. the treasury has looked at this before in 1998. gordon brown looked at taking part of child benefit away from high rate taxpayers. this has been looked up before in the treasury. so the work is long established in the treasury.

and the simple way to do it is the way that i want to do it. >> i want to ask you a question, in june, the prime minister, on the 7th of june in a speech said that taxing the deficit was going to affect our whole way of life. it was going to affect every single person in the country. and actually i went on to the famous internet forum so see what they were saying about the change, in the child benefit. meg buffett said this is going to cost me a 1500 a month. very similar comments. there's a lot of furry on that side. >> can we have a brief question? >> how has the csr affected your way of life and people in the kind of income bracket? today to prove the salary for the 3 million pound pay package. how is it going to affect your way of life? pm says it's going to affect their way of life.

how will it affect your way of life? >> i lose my child benefit. my wife does. >> you are claiming. >> yes, i have two children. like everyone else who is a higher rate taxpayer from 2013 onwards, you don't -- >> it's not going to change your way of life, is it chancellor? >> greatest in these encounters, you often play the man. not the ball. i would make the broader point. >> well. >> i would make the broader point. there's an enormous budget deficit. i've read your questions. you seem to be under a misapprehension and delaying it will avoid them. it doesn't go away. if we don't do the child benefit measure. which you are perfectly entitled to agree. that's 2.5 billion pounds that you have to find somewhere else. be my guest. come up with alternative proposals. but frankly. >> as i've said before, i'm not

giving you. >> very well you are not giving me benefits. because you've been asking. >> thank you, chuka. the council in the last year has been looking into what you like to preempt and working very hard on trying to make the savings. they work on the basis of 15% cuts over a three-year period. a three-year period, what happens is it's 28% over four years. which is quite a lot higher than a lot of people were expecting. could you comment on why that particular area of government has been hit quite so hard? >> well, local government is responsible for about a quarter of all government spending. it's an incredibly -- major delivery mechanism of public services. and the presence of the state in

our communities. and so it would not be immune from the changes that we make. now obviously there are individual decisions, there are individual budgets within the local government world like, for example, the school settlement, like, for example, the police settlement, which are less than that -- the number that you gave. the 28% number. but i have to make a decision about where to place our priorities. and what i've done with local government is a), important budgets like schools give them increase. but also give them maximum flexibility with the rest, by, for example, stripping away the grants and the like. which i think will give them much greater freedom to manage the budget and not for a second says this is going to be easy. the local government. but, you know, most people will have seen for some time that

whoever won the general election was going to have to take some difficult measures. >> sure. i mean one the things that the compensation is raised in it's written evidence is that these cuts are front loaded. you've got the 20.5 billion this year in 2011. 22 billion, next to 24, 24, 22. you see they are coming down. they are consequential terms. they want to hear what it was. reducing the cuts. a lot of their contracts are long-term contracts with private businesses and service budget on the collection disposal, and i do appreciate a lot of councils are looking to get the savings by sharing some of these services. but what is worrying a number of them is that actually where you got the greatest affects in the short term is when you have things like grants and organizations and that type of stuff. i think what i'm getting coming

back from the government is that it's going to be those types of areas that are going to get hit first, rather than -- not necessarily giving them enough time to actually start looking through the pfi contracts and other contracts as my colleague was referring to earlier. >> well, look, as i say, of course, like all there is in government, it's not particularly easy. i'm not claiming it is. what i think local government can do with the freedom that we've given them is, you know, make some of the -- some of the more ready to reach savings early on. which are there. and there's a lot of good councils has been preparing. and then as the settlement -- as we get further into the spending review period, some the groups of contracts and so on will come to them. the big -- the challenge with the consolidation is this. that if you make the whole thing back loaded, if you said we

aren't going to sort out our budget deficit, the largest in the g20. we are going to do it in three or four years time. this is not credible. no one from the imf, british business, the credit rating agencies, anyone who observed the market, no one would look and say it's credible. what i thought to do was a consolidation that falls the same amount each year. that's required different parts of government to make a contribution. as i say, local government, in a way they are a mini version of the central government in their own areas. there are some savings they already able to make in the short term and long term. as they do both, they can live with themselves. >> this is sort of highly -- this is a question on the 2.5% rebate that you are going to give to keep the tax increases at a minimum. that's fine. if you take the taxpayers that

pay 100 pounds, and that's times 50, you will give them back two pounds 50 on 100. there will be no tax rises. you will do that, i think, for two years. one the concerns that has been raised to me by the council of authority is that what will happen when that comes to an end in three years time?

which would have been inflation, so that is why i think it is good public policy. >> actually it is a check, because ultimately what it is trying to do is-- simply to make >> i think you know, all of us had this focus on the hard decisions and as i save parliament had to focus on the local councils and the need to look to their end budgets and as i say, i think our government out there has been preparing for this. it is a lot of work. there is enormous amount, less

well-prepared councils. the lords aren't going to look at what the councils are doing and shared services, shared chief executives. for example there were many innovations taking place in local government under councils of all different political persuasions. and i think. >> thank you very much. >> chancellor when you were born -- now it is around 85 cents why it was at the highest bread prices in our history? >> well, because both--. >> the the gdp is the highest in our history. >> is not the highest in our history.

>> the debt repayments we have at the moment, are they the highest with gdp? >> the total debt repayment is here is the highest percentage of gdp. >> for example we faced a fairly extraordinaire situation and they were particularly high event but the deficit is the highest outside of wartime, and debt interest paid out of the percentage of gdp. >> the national debt that we have, is that the highest in our history? >> it is in cash terms. >> in terms of gdp? it is the highest in your lifetime. >> well, it is-- [laughter] >> you are the chancellor, not

by. let me give you six countries italy, france, you can write them down if you want, italy, france, germany, japan the united states and united kingdom. of those six, which has got the lowest national debt today? >> well, what i would point poit out. >> which of those states has got the lowest national debt and percentage of gdp? >> welcome as as they say,. >> and four years time on the current projections, which will have the lowest? >> germany. >> why is that? >> well because they have been fiscally prudent. [laughter]

>> the percentage of gdp is 73%. >> i have got the imf figures here but. >> but my point being, we can argue, we can argue on the german versus u.k. but certainly it is very close. but my point is, up to six countries, we have the lowest national debt of any of them, significantly lower than many of them. so why are public sector workers paying the price of the extravagance and access of the risk-taking bankers? >> the point i would make here, which normally the question is, how do we handle national debt? you have just agreed we have got a much lower national debt and those.

>> but what i would say is this. the budget deficit is the amount in which the national debt increases by each year and when you are running an 11% budget deficit which is the highest in the g20, then it adds and our debt is rapidly increasing in the percentage rate and indeed up the ranking. but the question is, what you are doing far more than all the others, we have a lower national debt. >> first of all we have a much higher deficit and our debt is increasing faster. second, many many countries in europe are undertaking physical fiscal consolidation, including, we mentioned germany but we look at the-- what is happening in france and spain and other countries. look at the debate in the united states of america.

>> they have got a higher national debt. >> the deficit adds to the debt and the debt was rapidly rising up. it is rapidly rising. >> you are overstating. you are overstating-- let me take the imf numbers. is gone from 45% to 7476. that is by the way taking into account some of the measures in the budget. that is what their consolidation. so in other words, i think you know we have to accept that 100% national debt, many economic study show get themselves into very dangerous places and we are taking a risk. >> we are certainly today, today the lowest of those six in terms of national debt.

>> they imf hear--. >> the national debt which is actually the factor, the fiscal factor in this. let me ask you a question if you are overstating the case with your budget. your officials said that there will be families who will have to lose their homes and move. how many children as a result of what you were doing well have to lose their homes and move? >> no one should be without housing. >> how many children all have to move? >> as they say, we know the numbers of households affected by the benefits cap, household benefit caps, right? 21,000, 70,000, but as they say, they are going to get up to 20,000 pounds a year in housing benefits. currently, the maximum limit on housing benefits, the maximum

limit which is 104,000 pounds a year. >> how do you justify that? >> how many children will be moved out of their homes as a consequence? >> as they say no one should be without a home when we have a housing benefit. >> well homelessness increase or decrease under your watch as chancellor in this parliament? will homelessness increase or decrease? >> no one should be without a home under the housing benefit package. >> so you are saying homelessness should decrease? >> i'm nets making a a forecast. >> you make a forecast on all sorts of things. will homelessness increase or decrease as a result? will. >> let me remind you of what the labor manifest is. >> hold on. will homelessness increase or decrease as a result of your

forecast? >> i don't make a forecast. what i'm saying is world there be more full-time police officers? >> i'm trying to get some answers. i don't what the labor party policy is. i want to know, will there be more homelessness? i want to know will there be. >> what i would like to here is the reply on the police numbers, both the labour party and the liberal democrats have accepted there will be fewer police numbers. what we want to do is maintain the visibility and availability of policing on the front lines. there are currently many police officers working not on the front lines, it doing the tasks that qualify people. so what we want to do is maintain the visibility of policing at its current level and we would like to improve that, but--.

>> there will be no. >> and availability and policing in our community. they have regularly told us this parliamentarians there are significant efficiencies that can be made. >> will there be any reduction in special-needs provisions for children? >> special-needs education, which we are looking at this and the role of special schools. your best a very specific question which frankly goes to special education needs of the policy. but we are looking at the appropriate balance between special-needs schools provisions >> one last question. >> chancellor told me, i just want to know about the implications.

[inaudible] >> i say that leap oath take responsibility for the difficult decisions, since you voted for the budget. >> no, no. >> i am bringing these. >> we are not getting an answer. >> the exchanges between you and the exchequer. >> the floor is yours. [laughter] >> what i would like to do is go do something completely different. during the discussions, you seem to describe quick deals. i wonder if you can confirm to the committee that bp was happy

with that deal and bullet points the way forward in the future? >> first of all i think that-- whether they are happy with agreement. i mean i think it is a good agreement. i think it recognizes that they are a public audience effectively under former taxation for licensing and that they too need to make savings and they need to contribute, and you know i want to thank mark thompson for engaging in that process. and agreeing to take the funding of the central government funding through the foreign office budget and funding various other things as well. and, d.c. monitor and parts of-- and also agreeing to freeze the figures and i think that will help keep them a bills down over the next years. so i think it is a big-- good

package. the negotiations with the bbc were one of the last to conclude that actually discussions have been taking place for many many weeks if not months on for example of the elements of the package and have been engaging in discussions about licensing as well. so, they were brought together and i think a good deal was had for the bbc, for the british public and for the british government. >> thank you. on drugs, that will be an importantly-- an important part. the forecast of 290,000 public sector jobs will go. and rebalancing the economy going for world mean it should focus on the private sector for job creation. in the northwest, a number of people employed in the public your has gone up 70% of the last

10 years and the their flatlined at 24. so given that context, what degree of confidence you have for the regions who will deliver on jobs across the northwest? >> the first point i make is that the 490,000 figure comes from an independent body. it is a budget responsibility. it is not a secret it was published at the time of the budget, and if you are going to use that figure, you will have to accept the credibility that they give then you have to accept the credibility of the other estimates on employment. and they forecast a 1.3 million net jobs will be created, so they will be the first one and that of course comes from private sector growth.

now, what we are seeking to do, and this is a big challenge and again, something i would suggest an interest in is how we move the british economy from a model where there was excessive, economic growth was fueled by excessive leverage in the banking system in the households and in government and also a model of growth where too much growth happened in one quarter of the country in one sector of the economy, financial services and where we need to move to a more balanced economy in many respects, geographically and a balance between the private and public-sector. i think a striking fact is that for every 10 jobs created in the southeast england, one is created in the north. so that is a challenge. we are seeking to use a number of different tools.

capital investment in the regional growth fund. we are trying something which no one is tried in the country before which is a tax break for hiring new people that only applies to regions outside of the south east and the eastern areas. that is a geographically-based tax measure. we are also seeking to have a highly competitive corporation tax rate, and i believe the reforms to education, higher education will also produce structural improvement in the british economy. so, it is a number of tools. producing a new model of growth, which is not so dependent on dead or-- is a major turn for this department and i would agree with you. >> you mentioned about the-- an emergency budget. you said that needs to stop at 10 to 20%. hasn't started?

are there any signs? >> that has started and they are are quite encouraging signs, but actually one of the things we ought to do is make sure that many people are aware of this and it is being taken up in across the country. i was in west yorkshire the other day and it was a good take up there, but actually they the take-up was hired by some people who are eligible for it. that might be, as they come to complete their taxes, their new business so they come to pay their national insurance and they will be aware of it and certainly i will be instructing to make sure people are completely aware of all they are entitled to because i think it is potentially are useful. >> further communication requires. >> i would say it is working well. it is one to say it is working better.

>> would you anticipate or look at the possibility of extending that, given the importance of growth? >> i don't want to actually write the budget here, and so i'm not saying that would be in the budget are not in the budget. i'm not going to comment on the individual tax proposals. obviously it would be more expensive to deal with the stock of businesses rather than the flow. >> i know that it will be talked about in more detail in a minute that you have made several comments about the importance of tanks providing credit and i think most people around the state and members of of the parliament would accept that view but what steps can you take to get the banks to do what we think is important to the states

economy? >> i think it operates at a number of levels, and i wish it would be-- right now. i think they are a number of tools some of which are working in some of which need more work. actually most important of all is getting international standards on capital liquidity and definition of capital because that at the moment is causing this problem not just in the united kingdom but many other countries, so this is not a unique problem to the u.k., but getting certain day on the capital liquidity requirements of the international banking system is essential and i hope the g20 at the end of next week, that will be-- second i think there are specific measures that the banks themselves can undertake and they have come forward with actually with a 1.5 billion version of small business lending funds which will help particularly startup funding. is a welcome thing that they have come forward with.

it is not the last word necessarily but it is a good important step forward. we have extended and you can underpin some of the funding guarantee. we are also doing that so there are those three things and actually as it happens, the new lords chief executive is someone -- spectacularly increased small business spending and his-- [inaudible] and that is our largest retail bank. >> can i ask you a question? you have given the licensing monies, get they are highly resistant to what they are asking for which is community enterprise funds leading to

that. will you use your powers to direct them to give monies to community enterprises imperative to the people? [laughter] i tread with trepidation in this area. one of the things i have had to sort out is the funding, because the mechanisms that have been in place for decades expired at the time of the general election and no arrangements had been put in place. you know what i sought to do is, with the agreement and consent of the palace, is put in place sensible restraints on current expenditures and as you correctly note, there is a freeze which is having an impact this year and next year, and

then trying to develop and by the way you will all be glad to know this is the subject of primary legislation in the house of commons, a future funding mechanism for the sovereign, which is linked to the growth in the receipts and the revenues. we are just trying to create a permanent mechanism as part of the specific.. i suggest that we have not decided before then to introduce the community measures that you propose and you might want to raise them. >> was a point in the last parliament in this committee when we did the inquiry. the serious point is that there is a real opportunity to help communities to grow for commercial developers to look at

that. calling on to-- speak and you just give us the likely timing of that legislation? >> the secretary and i have particular responsibilities for the royal finances. [inaudible] [laughter] >> if you could give us a rough idea. >> thank you. we have had evidence for a number of sources about the markedly different impacts that the measures taken will have within different regions.

and, my question is, in this regard, is it inevitable collateral damage that these regions will not prosper as well as others. or, if the government-- is the government taking specific measures to help those regions? >> first of all know, i don't accept them, the terms. any particular region should work out of the economic government policy. we have a bit more of a rebalancing of this economy geographically in the way that i was just describing. the absolute precondition of investments in a country where the private sector is not as private as anyone would like it a dubious economic stability and they think they keep going back to the big picture which is this kind -- my government was not prove providing credibility and all parts of the country would suffer potentially. the parts where investment is

marginal. the second, there are very specific regional tools that we are using that have heard for example that his jewish vision of the capital project, where they are located, partly through the regional growth regionally-based tax reduction which is again-- so there are a number of tools which also i think help. >> we were talking, you were talking earlier about traditionally in this country we have i think over relied on bank financing and i think it's response to financing a private sector recovery, where it says serious over capitalization of ritter small businesses, especially compared to the u.s. needs to be addressed.

how can we go about encouraging more equity, and making, and what forces will the government do to actually get us toward a culture of less dependent on banks the i think currently the use of various funds, some of which are provided by the banks themselves and some of which are provided by the government, flows from venture capital. i think there is the tax treatment of equity which is also an interesting area, where actually the playing field is not particularly tilted in the favor of equity investment, and that is worth looking at. as i say don't want to prejudge the budget on the so i think you are a number of tools, but it is quite-- because you you are exay right. by the way i think also this

applies to micro-businesses, what they are trying to get more of a corporate market developed in this country and the way of the united states. that is an important step again take. a number of tools to get away from a model that was over reliant on banks, and banks who around the world have in deleveraging. >> the banks 7.5 million growth fund he referred to could be very helpful and not, but not if they run-- which is to it to take sufficient and well-adjusted investment risks and companies that are looking or the same thing. how much will you be able to in the country, how much will you be able to direct so that

lending goes to where the book is going to come from? >> as? >> as i say first of all their incentives you can bring. i mentioned the tax system. second, a the growth they are creating. >> some of the riskier start up investments which there are not enough of in the u.k. and there's a striking imbalance between that market here in the u.k.. in terms of directing lloyd's and rbs and other institutions, my general impression has been my predecessors in this regard, which is i don't think the idea of a politician directly running the bank is a good idea and we have the u.k. set up by the previous government. but of course, in my meetings with those chief execs, and make

it very clear where i believe that prior to should be and as i say, the chief executive announced lloyd's, someone with a particular track record in increasing the lending which we were very aware that all so we are going to increase malt business lending so i think there are various tools. >> thank you. >> chancellor, think chancellor i should start by saying i'm going to enjoy future years when you are cheerful. seems to me this is a-- again i just raise something? i am going to raise regional spending but i just wanted to gently, peacefully get to the point where yesterday or the day before we were approached by--

who said your policies were right because the country was heading inexorably towards a financial crisis. the bad luck, were you not concerned chancellor that the final figure, the original estimate from that public borrowing in 09/10 was about $177 billion. the final figure is $165 billion so rather than having an economy running out of control, the last wave of government, we have actually taken over 20 billion off what was going to be borrowed. can i also ask you to confirm, just gently, that this year you might tell us how much money is coming out of med borrowing this

year but as i understand that your contribution is 6.5 lien. now the amount of money coming out is considerably in excess of that, from the march budget. now, i liked your statement where you said to a collie, whoever won the election would be doing the same thing. you see i think you played a magnificent game in terms of politics and i take my hat off to you as a professional politician. the fact that a crisis happened, receipts dropped as they were spending come in because we were in a crisis, we didn't think it was opportune to cut expenditure until they got onto firmer, more confident economic ground which is economically sensible. but it is clear from mr. dowling's budget last march, as you said, we were all going

to do what you were going to do. the difference in time. you are going to go further, shorter and the only difference between the two parties is that sensible in terms of the fragility of the recovery? do you care to comment? >> there a couple of points. a couple. a couple of points. first of all the fiscal forecasts of the previous of course was decided upon by the chancellor of the exchequer and the prime minister, and it is true that the march 2010-- turned out to be lower than they said it was going to be several months before. >> could i just interrupt you for a second? the point i'm making is the original estimate, the original project--.

>> there were various estimates given. there was an estimate given by the government and now it turned out to be less than the estimate one was being very cynical and of course you might say with an election approaching they put it up there. we have created and independent office with budget responsibility that makes these forecasts on a central-- you referred to earlier and i do want to take too much time with this but actually a budget deficit was emerging before and i know paying people-- at tony blair says he was the primacy of the time come we should also accept that from 2005 onward, labor was limiting or eliminating the potential structural deficit. the fundamental savings review was enriches that the much bigger error than i ever thought

of the time. he was the prime minister at the time and the institute of fiscal studies and the government have both made the point that the recession pudding and mourners damaged back an enormous strain on the finances but it was emerging in the middle part of the last decade and there was a--. >> when it was running at over 3% by the time the financial crisis came along, so it was designed to express the point made by the government of the bank. the fact is we came into this crisis with fiscal policy that was not sustainable in the correction was needed so we were ill-prepared. other countries use the good years to reduce deficit to build up surpluses and the opposite

thing happened in britain. so that would be the second i would make her. the third i would make and i think this is-- the third i make is you asked about-- all political parties in britain want to eliminate the structural budget deficit. the structural budget deficit is the structural budget deficit. with anything there are more dead interest you have to pay, so the decisions we have to take which are structural loans like reducing child benefit for higher tax benefits these are decisions that will reduce the structural deficit. they are the kinds of decisions that anyone would have to take whether one to four, five or six years or eight years or whatever stood. you have still have half left in you have to make a further decision. it is not simple enough to say if we stay longer we can avoid these decisions.

this is a structural deficit, not the actual deficit which of course is more volatile with the economic cycle. >> no, i think the conversation is a bit more calm and more objective. are you actually saying to the treasury committee that you would have no borrowing in the future? >> there is a fiscal mandate that is very clearly about the structural deficit, particularly adjusted so we are absolutely clear. >> it is a or dannatt. is very clear that the automatic stabilizers, and the fiscal mandates does not in any way-- so absolutely. >> just two years ahead, if that is not looking too far ahead what would you estimate? i am not trying to pin you down

but are you saying it would e.-- i would be surprised if there is a western world government, country that doesn't have it. the e.u. is 3%, is that? >> the previous consolidation plan by the previous government. we put it then they all make country not to hit the 3% criteria even with the year extension. >> that is what i'm saying. to try to take the hysteria out of that whole debate. european nations except 3% of the upper limit, 3%. it has been labeled a hysterical over spender and for most of the time the structural side has been about for. a 1% difference between our colleagues. >> i will go one to the regional

stuff. >> i just say by setting the fiscal mandate as the current structural deficit, and having a second target given extraordinary situation to get-- by the end of this parliament,. [inaudible] setting the fiscal mandate i think allows the automatic stabilizers to operate and actually also provides freedom among capital expenditure which is then matched by the debt target. >> i think there's a difference between us in the time and amount but it was certainly going the same direction. we were going slower and you are going faster. which brings me to the worry we all have. now one of the things we worry about is the defendants on many

areas of public sector jobs, and that rings us to the idea of-- now you have cut the rda and you have abolished the rda and taking the 4.2 billion pounds that would then spent by the rda's and you have substituted 1.4 through the regional fund. now the prime minister was saying, a relentless focus on growth, because of this we are going to be in some trouble. economy. >> my constituency -- make in my judgment of the constituency, the rda which covered all of the scottish border, just got too

large and unfocused and after all, if you ask a question how is it that even after a decade of having regional development agencies, for every one, 10 were created in the southeast. >> it is the amount of resources, and the resources have come down from four-point two-to-one .4 over three years, which is if these are the engines for growth, it is worrying. but as i say, i think the rda resources word deployed as effectively and the fact that the economy was actually becoming more and balanced variations were growing. >> the previous created-- to increase the growth in particular regions and deal with

the regional disparities in the economy, but actually at the end of more than a decade, the gap between the regions will grow so this was not an effective tool. >> the gap to train the northern regions and in the southeast was growing but we were still in better shape, but it is not about the ideas of, the ideas of body. is about the fact that he replaced it with the regional growth fund and local enterprise partnerships, and the funds available to the local enterprise partnerships are a third of what we have for rda's. >> if you would like to look at--. >> can i make another observation, which is, because we haven't really talked about it at this hearing. a reproach to capital spending has been very different from

previous government. we aggregated all of the potential capital decisions across all the departments and simply gave the departments and said you make your decisions. we aggregated them all as road projects, hospital projects, investment in science and infrastructure and took all the capital to the government and then we sought to actually make sure that they were distributed in a geographically appropriate way as well, which we could take because we could make that judgment. i think you'll find that some of the capital projects are very specifically targeted in parts of the country which have not seen this much growth. >> in my area, the gateway is a big project in the area that has been underfunded for years. we been able to fund it and that will provide growth. >> you one last question. are you aware, if you work it

through, how much money is coming to example to 11 local authorities. it will amount to just over 17 million pounds a year regeneration. now, that is not the price of one primary school. now, that is how the division reduce the sum. when you spell it out, it amounts to 17 million a year. >> the way he were coordinating economic policies across different councils and having the whole of the option under one regional agency. second their other decisions. for example, the traffic on the m. 62, the rebuilding of the lead station, which will help that economy, that local economy as well, as well as, and in leeds for the yorkshire businesn

referring to-- quite a good take-up of the national insurance tax cut or new businesses, so they are a number of tools that are available but i don't think the rda will be the be-all and end-all because we'll probably would not have this unbalanced economy if they were. >> chancellor, this relentless forensic focus on growth at the prime minister speaks about requires a green economy, green jobs, green manufacturing and green investment. that will be driven in large part by the green investment-- what is the setup of the bank? >> well, i want to get enough money as soon as possible and we will come forthwith proposals on how it is going to be structured in the next, simply between now

and christmas and of course i will set aside money to go into the green investment bank. in the csr, this is government money. i want on top of this, i want don't want this to be the only money going into the green bank that this is an important backstop. on top of that, future assets we should look at putting some of the proceeds of those into the green investment and also of course private money as well. >> indeed that was in the csr statement. the governments and business models of the bank, but that is not an inflationary at all. >> the thinking is pretty advanced. this is something new for the united kingdom, so we want to get them absolutely right and

even though it is not just a discussion within government, which is quite easy to have, we have just got to make sure this is actually going to work. if we launch something and then it doesn't attract the private sector capital, that it won't be a great investment. so it keep getting this right and there is not an off-the-shelf model in the u.k. but just a few months after coming into office we have committed funding to it and i think that is a good thing. by the way we would hope that the scottish government is able to engage with us on the-- and make sure some of that money can be spent specifically in scotland. >> i'm sure the scottish government is already engaging with the u.k. government, but in terms of scotland, for the growth forecast to be met, they

presumably need to tap into this 25% capacity, and the 20,000 jobs we estimate can be created in that field, bringing 7 billion plus into the u.k.. now, you will be aware i am sure of the decisions which made in the next six to 12 months. you must be concerned that the absolute-- may delay the investment decision. >> as they say we were elected in may. now and november, i hope i christmas to have the structure of this bank bear and the thing being created. more money coming from government asset sales and from the private sector and sitting alongside some other policies which are directly benefited to

the united kingdom this area. renewable heat incentives, support for wind turbines technology which is something the trade unions want to see and i met with tc-99 and we went ahead with that so i mean there are a number of things we are we are doing in this area which i think will help stimulate the green jobs that we want to see. >> the developments are incredibly important and very supportive of those but i'm trying to focus specifically on these other projects. you talked about finding a billion pounds in this is really the crux of this because a large chunk of the 100 lion so far is the fossil fuel levy that ought to have been available for use by the scottish government but would require a clawback on existing funding. why did you take the decision not to release that so we could

have stimulus of these activities in scotland rather than-- and my fears that the bank may not be ready perhaps until 2013, 14 when the investment decisions are taken this year? >> it has come to my attention, on the fossil fuel blending the previous government would have no discussion about this at all. my predecessor did and want to talk to the scottish government about this. now what we are doing is engaging, talking and engage in an and second of all without going into if all the details, as you well know the release of that money would lead to an increase in public expenditure and in a way that the scottish government-- what we are offering is a different route which is to have the money channeled through the bank. absolutely for use in scotland and no other parts of the

country, but i think that is, i hope-- we are trying to find their way through a problem which allows government didn't even want to look at. >> i mean, we will see if we get a solution to this, and they know the discussions-- [inaudible] the key concern and a new hope you take this on board that the possible delay in the investment decision to be taken quickly, we have a detrimental effect very quickly. that is the concern. >> i was one of the people in the development policy. we are seven months after the general election. is a complicated thing that has not been created before in britain. there are elsewhere in the

world, but we are working you know very very hard to get the proposals out there so that it works. the last thing they want is for us to announce some proposal that sounds great on the day. i would rather get it right, get it right between now and christmas than something does not attract private sector investment. i provided the billion pounds as a backstop has what i hope is that substantially more resources are found from government assets but also from the private sector, leveraging in the green infrastructure and the whole united kingdom. >> chancellor thank you very much for coming to see us this morning. you have given some good answers and you have engaged in all sorts of issues since he became chancellor, not the least the lvr, where we are now collaborating on the appointment

of the senior people at the odr. you have been announced to look at the tax policy, and we sent you a letter about that and we appreciate if you would consider that being put in the public domain today. today you have asked us to look at the methodology being used to assess the distribution again, and we will certainly do that. you have also responded to the great transparency by sending us a letter, which on the-- which i think is important. we are grateful for your openness on all of this, and i would be very grateful to the committee. we can adjourn for three minutes but--

[inaudible] thank you very much. >> thank you.

>> this year studentcam video documentary competition is in full swing. make a five to eight minute video on this year's theme, washington d.c. through my lens. upload your video to c-span before the deadline of january 20 for your chance to win the grand prize of $5000. upload your video and go on line to studentcam.org. >> now, wednesday's groundbreaking ceremony for in a washington d.c. memorial for disabled veterans. speakers include veterans affairs secretary eric shinseki, actor gary sinise and house speaker nancy pelosi. this is an hour.

's been now for those who can please rise for the presentation of the colors and the singing of .ur national anthem. advance the colors. ♪ oh say can you see ♪ by the dawn's early light ♪ ♪ what so proudly we hailed ♪ at the twilight's ♪

♪ last gleaming ♪ whose broad stripes ♪ and bright stars ♪ thro' the perilous fight ♪ ♪ o'er the ramparts we watched ♪ ♪ were so gallantly streaming ♪ and the rocket's red glare ♪ ♪ the bombs bursting in air ingave proof thro' the night ♪ air,at our flag ♪ was still there ♪ o say does that star-spangled ♪ banner yet wave ♪ o'er the land of the free o ♪ and the home of the brave

>> ladies and gentlemen please remain standing for the retiring of the colors. and now please welcome our master of ceremonies, former secretary of veterans affairs, the honorable anthony principi. [applause] >> thank o you. please be seated. good morning and let me add my welcome to all of you. our special guests and our long-time friends at the special gathering. speaker pelosi, veterans affairs

secretary shinseki, congressman mike rogers, deputy secretary of transportation barrera welcome thanthank you all for being here. theou a same-- lowest poe presit art wilson and the entire boardt of directors, disabled americans national commander and my colleague and my colleague, it is an honor and privilege to have you all with us. thank you for being part of this and then to break ground for the disabled for life memorial. this'll be the first national tv to the service and sacrifice of americans for disabled veterans and admiring the accomplishments. they ahe .. this year, a commemorative coin

was produced to help fund the memorial. today there are more than 3 million disabled veterans. many thousands of service members have been wounded or otherwise disabled in afghanistan, iraq, in the war on afghanistaterrorism. the values of duty, honor, and country. they carried the torch of freedom high when they were called upon to do so. many of them paid a high price for this service in our nation's defense. those disabilities are part of the continuing cost of war. that is why it is so important that the memorial become a reality. we need a reminder to future generations to the service and

sacrifice that these young men and women made for our nation and the ideas of freedom and democracy. let's get things started this morning with an invitation by chaplain cross. in a spirit of reflection, a thanksgiving, and some sense of joy. rave m as you recognize and celebrate our brave men and women who face danger and lives in the defense of our nation and are your providence were allowed opportunity to return home to their country and to their loved lessons on those who served on

this very special occasion as the break ground for the veteran -- disabled veterans for live memorial. this memorial will forever remind us of the suffering of the service and sacrifice of those to return this still continue the words. this is a source of inspiration and encouragement for all to experience. we recognize that it is made possible through the contribution. we also authored banks. we ask a blessings for all in attendance today.

>> thank you for those very inspiring words of prayer. let me introduce someone who is truly an interim -- inspiration into what this memorial means. nancy pelosi is in his second term in the house of representatives, and having made history in 2007. she made history in november 2002 when house democrats elected heard the first woman to

lead a major political parties. she brings more than 23 years of experience in the house, representing the city of san francisco since 1987. before being elected, she served as house democratic whip for one year. she comes from a strong family tradition of public service. her late father served as a baltimore after representing the city for five terms in congress. her brother also served as mayor of baltimore. please welcome into pelosi. [applause] >> good morning. what a beautiful morning it is.

we can have the perfect day to take an action and it is appropriate for us to do. i want to think any. we take great proud in each other's work. i think him for his general introduction. winning the bronze star for valor -- we are all very proud of you. it is appropriate that you are at our presentation today. he is a decorated soldier in his own right in firmly committed to the well-being of all veterans. thank you. i first met him in bosnia.

we went to visit him there to see his leadership. it forces protection. that has always been for the security of the american people. i need your knowledge -- i need of knowledge so many people who were responsible for protecting american people. chairman of the board. all of the leaders of the disabled veterans foundation. for your dedication to this cause entered determination to do right by our wounded soldiers. we think gary sinise serving the national spokesperson and not

been there for our veterans. very generously, the secretary reference my family and for my brothers. my father bought the baltimore orioles to a maryland. they had to build a stadium. it is clear it to the baltimore stadium in honor of the service of our veterans. it said time and not dim and the glory of their deeds they do every memorial to our veterans shares that thought.

i want to of knowledge of the soon-to-be chairman. -- i want to acknowledge the soon-to-be chairman and those who made the legislation possible. john mccain, bipartisan all the way. this is such a high priority for him. there is no question that the the funding for this memorial would havewa been. and so i want to acknowledge all -- acknowledge alldership. knoe of their strong leadership. we need to remember the true

cost of war and conflict to our troops and their families. we paid to the to the sacrifice of those who served in came home changed forever but not their spirit. they gave part of their lives abroad so we can do this. we need to be there for them and make sure everyone remembers the sacrifice. president kennedy was elected two days ago 50 years ago. he said we will pay any price. you know the rest. many of you have paid more of a

price than the rest of us. we need to the knowledge that in every way. veryecretary said i'm proud of some of the work that was done in congress for our veterans. i want to make the additional point that when we did the new gi bill and increased the reliable funding -- these were priorities that the veterans brought to us. there are so many neat for their -- needs. what are the priorities? those were our marching orders. i thank my colleagues for their leadership.

i think the veterans community for making all of that possible under the leadership of president obama. together all of these accomplishments are bigger than anything since their original g.i. bill in 1944. we need the parties to go forward. veterans,eall , past, present and future we break ground today to ensure that time does not dim the glory of their deeds. time holds the seeds in thest highest esteem that that flame there is not a day the wind by

my father did not reach a day that went by my -- there was not a day the web by that my father did not think about his brother. the tributes to those who lost their lives continues. today we take a very specific step in recognizing those who were disabled and to still continue to contribute to this strength of america in so many ways. as we approach veterans day, we reaffirmed our commitment to the patriotism and service of all men and women in uniform whether they are in the saddle or wherever. because if you, we are the land of the free in the home of the brave.

we are taking a critical step forward and the filling our pledge. this is our troops leave no one behind on the battlefield, when they come home, we leave no veteran behind. thank you to all of you who are working to make this memorial a reality. god bless our veterans. god has truly blessed america with our veterans. god bless america. thank you all very much. [applause] >> bobby barrera is a job he knows how to get the job done. avi has been an affront for a number of years. his immediate past national of e

commander of the american veterans and currently serves as chairman of the organization o is. bobby is a combat disabled u.s. marine corps veteran of the vietnam war. he was seriously injured in 1969 when enemy forces exploded a 500-pound bomb bomb who is burned over 40% of his body. he can overcome the mental challenges he faces the death. he received a master's of education degree predel. taught high school and had careers as a juvenile probation counselor and the director edit family support center in texas

beg. bobby has received many awards and honors including the disabled veteran of the year bill. his humility has taxed the lives of them. >> thank you so much. good morning to everyone. this is truly a remarkable day. we are here to mark a major milestone in the quest it created the first national memorial honoring the service

and the sacrifice of our nation's disabled veteran special. i want to thank each one of the for being with us here this morning. the memorial will rise from the ground that we break today and will make a very powerful .tatement upon th [inaudible] last year we participated in a flyover and the indy 500 race as bombers flew over the race ceremonies. on the two days before the race, of orientation flights were

provided to certain vips. the most important were returning troops who led been injured in iraq and afghanistan. one of the men had been paralyzed from the waist down. his father pushed the young man in his wheelchair. to enter the bomber, one has to climb up a stepladder under the belly of the aircraft. i had already flown in it. i knew what a challenge it would be for this young man to enter the aircraft. i can thinking, how is he going to enter this aircraft? when it does time for his plight, the father rolled a wheelchair under the aircraft. he walked around, knelt in front of the wheelchair.

the son leaned forward wrap his arms around his father's neck and shoulders and lean forward as much as he could. with his son on his back, the father climbed up the ladder and the aircraft. that moment to playback 40 years when i began my journey as a disabled veteran. at that time, i was carried. when i thought i could not take another step, when i thought that everything was so dark, when i thought i did not have the future, when i thought i cannot continue, i was carried. i share the story? what we are doing today,

breaking ground for this memorial, is a direct reflection of all disabled veterans and their attorneys that began -- their journeys that began when they enter the call to duty. the journeys continue their out there honorable service through the trauma of his injuries. it continues today through their recovery and their renewal of purpose. what the father did demonstrated that he would never abandon his son. this memorial clearly demonstrates that the american people will never abandon our nation's disabled veterans. [applause]

within full view of the capital, the memorial will be a poignant reminder that our nation has a duty, those lead given so much of themselves. all who served share the horror, brutality, and hardships of defending our nation, especially in wartime. the memorial is intended to bring a greater awareness of what disabled veterans have already sacrificed for as. more than that, and the american veterans disabled for like memorial is a tribute to what

they can accomplish. they know the challenges of rebuilding and resuming productive lives. they have excelled in life. those of you who are in the audience are the fine examples of what i am sharing with you. it will educate the public and remind the nation about ito issues concerning disabled veterans.

throughout our history, we have erected monuments to our heroes. di a traditionalstock in honoring's disabled veterans to continue to bear the deepest wounds and the scars of war long after the guns have fallen silent. by honoring these men and women, this memorial will be a declaration that america is forever grateful to her disabled veterans, a declaration that in nerco will never forgive their service and their continued sacrifice for their. it will become one of our nation's most treasured landmarks.

we are making the stream in reality. i take great pride in all our veterans. from our hearts, we say thank you, america. [applause] >> what a wonderful moving reflection of what this memorial means.

>> to treat the disabled veterans live a moral foundation. it is her fondest wish to honor the of disabled veterans who served in the war in iraq and afghanistan as a low of all of those throughout our history the memorial is scheduled to be completed and dedicated in 2012. one of america's leading philanthropists have provided awards for medical research, scholarships, summer camp programs, and humanitarian relief, and animal welfare. it is my great pleasure to introduce the heart and soul behind the american veterans disabled for life memorial. a lady of of a common vision and dedication, mrs. lois pope.

[applause] >> good morning. it is great to be here. as it has been done for decades, our nation will pay tribute to marron november 11 to marron november 11 to our veterans for the sacrifices they have laid for our people and our way of life. today in the shadow of the united states capitol, we break

ground on the memorial that will honor the 3 million living disabled veterans in the millions who have died and tragically all those that will become because the war on terrorism. the hundreds of disabled veterans who are with us this morning represent all of their brothers and sisters. they are soldiers of every race, creed, color. they have been severely injured while defending our freedom. far too often they have been neglected, suffering long after the battle has been one and the guns have grown silent. this is a small part of repaying of what we owed them. , a veteran's

liberated victims of nazi oppression and freed a continent from the yoke of tierney. in the 1950's, they were our warriors on the battlefield and korea. in the '60s and '70s, they bought in the marshlands and jungles of vietnam. they serve their nations in the hot spots around the world. today there defending is on the global war on terrorism. since the beginning of this conflict, tens of thousands of men and women have been wounded in action. some or minor wounds. far too many of these brave men and women will carry their stars

in disabilities for life. we owe them so much. we can never thank them enough. the memorial will go a long way to showing our admiration, respect and gratitude. our journey began in 1998 when i met with the jesse brown. the secretary of veterans affairs and with art wilson, ceo of the disabled american veterans. together we form the disabled veterans like memorial foundation and began our 12 year effort to build this permanent public tribute to these unsung heroes.

my personal commitment began a decade before. i was a singer back then and was performing for a group of vietnam era soldiers at the institute in new york. seeing them there, and realizing how much they had given to the country, was one i made a promise that if ever i had a financial means, i would do all in my power to honor their service in a more meaningful way. fast-forward to 1995 he told me

that no such moral existed. i said there has to be one for the he said there is the washington, it jumpers 0, lincoln, but none for disabled veterans. that is the moment when i realized what my life's purpose would be, to build a memorial to you. it is about the human cost of war. today that dream is one step to a re closer to becoming a reality. to borrow a phrase from abrahams lincoln, the world will little

note well remember what i've said here today. but we will never forget what you have done, what you have done for the land that we love and our liberty. thank you. thank you, disabled veterans. thank you from the sacrifices you've made for our freedom and our democracy. the american way of life. god bless america. [applause] you >> thank you, mrs. pope foring y making this a postulate of very, very moving word.

our next guest first caught the attention of the veterans community insensitive, respectful and utterly unforgettable role as the double ntb combats better and the widely acclaimed movie, forrest gump. that character, lieutenant dan has become legendary. pleasmy great, great pleasure to introduce gary sinise. >> tlause] >> thank you. hold, please. thank you very much. good morning. what a day. they asked me to try and explain a little bit of why i've been involved in so i'm going to attempt to do that for those of you that might not know. president john adams once said he will never know much it costt y generation to preserve your freedom.

sincpe you'll make good use of it. since the beginning of our great democracy throughout many generations, the young people would say notwe to work have pad an enormous price that we may live inen freedom aired so manyt paid with their lives. far too many have paid with parts of their bodies and in and in some cases, their minds. indeed of the more than 26 million veterans livingtodaye today, over 3 million are suf permanently disabled from injuries suffered in ourf' nation's defense. unfortunately, many of these brave heroes have not been treated as they should. far too many have been m marginalized or forgotten altogether. coming from a family where a number of relatives have warned the various uniforms of our services, i have learned about the tragedies and triumphs of war. my grandfather served in the army in world war roman one driving in angeles in the front lines in france. my two uncles surgeon of world

war ii. they survive 30 missions over year. my father served in the navy in the 1950's. my wife's two brothers both served in the army and fought in vietnam. one was a helicopter pilot. the other an infantry officer who graduated from west point, served two tours in vietnam and went on to become a lieutenant- colonel. a born leader, he rewrote the leadership manual for the united states army before he passed away from cancer at age 39. i have spent a lot of time talking in learning about the vietnam war from him. my wife's sister was in the army for 10 years and retired as a captain. when it you just returned from afghanistan would be 82nd airborne. i did not serve myself.

i'm especially proud of my family members who have. in the early 1980's, i directed a play in chicago that was written by a group of vietnam veterans and was based on their experiences during that war. the time spent with these veterans of all along with my wife's two brothers and another brother-in-law who was a medic in vietnam left a lasting impression on me. i commit in my time to veterans ever since. in 1993, i had the distinct honor of portraying a disabled vietnam veteran on screen. having spent some time of veterans, i felt i was well prepared and eager to play the part of lt. dan. such moments are rare for an actor. hoehling this rule change to me and educated me about the strange thing character of our disabled veterans.

the story is a hopeful and positive story of triumph over adversity. he was driven by his desire to serve and devote his life in service to this country. when he severely injured and his dream of becoming a great officer is alter, he goes through understandable pain and anger. he eventually learns to live with his disability. in the end, he finds peace. the final image is one of great power. lt. dan is standing strong and proud. he is but his injury in perspective and has moved on. the ultimate recognition for an actor is winning an oscar. for me it was another war that holds the most cherish spot in my heart.

that honor came in 1994 from the disabled american veterans which cited me at this national convention for my patrol lt. dan. it is a great moment. i cannot have been more moved. it was heart wrenching. but it was also heartwarming. i have met many veterans with catastrophic injuries. despite their disabilities, like lieutenant dan, if they demonstrated and unclenching will not just to survive but to flourish. i was so inspired by the first introduction that from that moment on i have stayed actively involved with the dav and was bumbled and art wilson asked me

to become the national spokesperson. i'm purpose to have helped raise money coming down public- service announcements. for the past five years, my band has performs dav be's national convention. [applause] starting in 2003, after we went into afghanistan and iraq three or four times a year, i visit our wounded at the medical center. rohm & hoss on each of these bids it, i am struck by the humility of the young men and women receiving treatments, their courage and determination, their acceptance and their

dedication to their country. lending a hand is one of the most rewarding things i have done in my life. for all they have done in sacrifice, they do not as much in return. knowing they are not forgotten it makes a world of difference. that is why we are here today. to make a world of difference. war is not like what you see in the movies or on television. war is very real. while many of these veterans have adjusted to their disabilities, there'll always be a constant reminder of the hell they went through. a reminder that they and their care givers lived with each and every day. they may have been which our nation's enemies, but their lives definedy l,

by physical and emotional scars, remains firm. we cannot give them back to their real arms and legs. we cannot give them back their eyes or ears are pieces of themselves that have been lost, the mines that have been altered, but we can give them and we must give them our respect and our everlasting appreciation. being part of this memorial effort for me and my involvement is a wasting thank you to my family and friends who have served into the thousands of disabled veterans i had met during my visit this may mean not just a better actor. you may need a better man.

it to be a way for all of us this memorial to say thank you to all of them to ensure that the sacrifices are always remembered. calvin coolidge once said, "a nation which forget its defenders will itself be forgotten. that is why the american veterans disabled for life memorial is so essential. it is more than the nation's first public tribute to more than 3 million disabled living veterans and the hundreds of thousands that have died. it will show america's eternal gratitude to the men and women whose lives were forever change in service to our country. american economic and will not

forfeit its defenders. it has been my pleasure to serve in this effort. thank you to all of you who have contributed to making the stream the lolas, art, and jesse had years ago into a reality. god bless you. god bless america. thank you very much. [applause] >> we owe you an enormous debt of gratitude. it is a privilege to introduce our next speaker. he graduated from the military academy at west point. in a few weeks, he and i will

what the big game in philadelphia. whoever wins the contest, they will go often served in afghanistan and iraq. secretary sinn secchi served two tours in vietnam where he was twice wounded. he remained on active duty. he served as commanding general and commander of the nato led stabilization force in bosnia. in 19909, he was appointed chief of staff of the army and retired in 2003 after 30 years of service in uniform. on december 7, 2008, he was nominated by president obama to

leave the department of veterans affairs and was confirmed by the senate on january 20, 2009 and was sworn in at c seven secretary of veterans affairs on january 21, 2009. secretary of veterans affairs and life member, eric shineski. [applause] >> thank you for that very kind introduction and also for your past leadership. let me was all the marines a happy bird then and -- which all the marines a happy birthday. let me further acknowledge nancy

pelosi. madam speaker, thank you for honoring us with your presence here today. thanks for your leadership along with president obama. you have done terminus work for veterans this year. we are indebted to you. senator bob dole i believe was trying to be here, a distinguished soldier and statesman. it is always great to have an opportunity to share time with them as i did last rickettsias looking forward to being released from walter reed where he had undergone some surgery. ambassador from canada and other distinguished guests from canada, thank you for being here this morning. thank you for the generosity of the reception and luncheon following the ceremonies. members of the va team, thank

you for what you do. i will add my thanks to low as hope -- lois pope and all the under a wonderful members for all of your work, and your devotion, your efforts for this wonderful private. scott brown is here. his dad has been mentioned several times already, former secretary of veterans affairs jesse brown who signed the original agreement with lois and art wilson. bobby andbarrera, i always learn sending when you get up and speak. thank you to all the butter and

service organizations who are represented here today. you all have contributed to making this memorial a reality. please join me in recognizing the disabled veterans who are here in the audience. there are several hundred of us. [applause] thank you all. it bears repeating, this ceremony and this memorial are all about you, acknowledging your service, honoring your sacrifice. other distinguished guests i may have missed, i am honored to join you on breaking ground

which will sure to enhance washington's landscape and the symbolism reflected in the landmarks and monuments. our deepest things go to lowest pope -- lois pope u.s. trade bill legions of supporters of across the country for this noble and were the idea. she has been the engine behind the enormous effort to honor men and women of every generation who have given so much. for some, everything short of life itself for our democracy. thank you. george marshall, are great soldier statesman, once described the value of america's defenders. it is impossible for the nation to compensate for the services of a fighting man or today

fighting lawmen. there is no pay scale that is high enough to bring the service of a single one of them, to buy the services of a single one of them during even a few minutes of agony of combat, the fiscal mysteries of the campaign, or the extreme personal inconvenience of leaving home to go to the most dangerous spot honor to serve our nation. america has been blessed with sons and daughters in view that unwavering sense of purpose to something greater than self, as dead as sense of duty to a nation that we all -- a steadfast sense of duty to a nation we all love. it has led so many to give what president obama called the last full measure of devotion to

safeguard our principles, mainly life, liberty, and the pursuit of happiness. as it was in lexington and concord, it is still today from bunker hill to basra and kandahar, the price of liberty has been paid by the valor of young americans to put principle and i feel the force of interest, comfort or safety. all too often their noble service ended in life altering injuring, stark reminders of freedom's costs. there are few who have given more to our country than the 3

million disabled veterans living amongst us. this tomorrow is putting tribute to patriots who answered the call of duty and you have -- and to have showed as a quality of courage in which we can only marvel. in the saddle of our nation's capital, and the disabled for life memorial will stand as an enduring tribute for the towering courage, a selfless sacrifice, and staff as loyalty of all of our disabled veterans. it symbolizes the strain of their warrior heritage -- the strength of their warrior heritage and will reaffirm their heroism. the passage of time will not dim the memory of such selfless

service. i extend personal regards and profound respect for your sacrifice. on behalf of the department of veteran affairs, i offer you our respect and admiration for your service and courage in living life every day. on behalf of president obama, i extend to you the heartfelt thanks, a great respect and dignity for you from your commander in chief. may god bless those suits served in to have served in the nation's armed forces and they got continue to bless this wonderful country of ours. thank you very much. >> thank you for your inspiring

words. now the moment we have all been waiting for. are from brokers take their place? -- may i have our distinguished groundbreakers take their place t?

[inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] >> ladies and gentlemen, please break ground. [applause]

[inaudible conversations] [inaudible conversations] >> with may return to our seats. thank you very, very much. [applause] >> leaders of the presidential

commission looking into ways to cut government spending released a preliminary report monday that include a proposed cuts in social security and medicare and eliminating tax rates like a home mortgage interest reduction. what's in the proposal? >> well come with the cochairman of this bipartisan fiscal commission had proposed the recommendations. the first or a series suspending

cuts they suggest totaling $200 billion. they also call for a major overhaul with the tax system that would reduce streets, simplify the code. through changes to the health system but are also fixes to farm subsidies and military civil service retirement. but the big issue is going to be proposed cuts and changes to the social security system. feedback they also make other specific cuts such as reducing congressional and white house spending by 15%. can you talk about that? >> the outcome in the make 58 specific recommendations. some of them reduce the congressional white house budgets, cutter and workforce 10%, reducing print cost, formate growth, even things like eliminating all earmarks with a $16 billion reducing contribution in the united nation and cutting funding to the smithsonian national park service and perhaps allowing them to charge fees to make up the difference, so really an interesting package of different

cuts. >> , should these changes reduce the deficit? >> bastinado connected all these changes but in that $200 billion. overall the entire package calls for $4 trillion in deficit reduction through 2020. and that would reduce the share the data set for gross domestic product below the threshold the president had actually called for would've put this panel together, put it below 2.2% of gdp by 2015. >> in your story, illinois senator dick durbin is quoted saying some of the cuts inspire hand and suddenly hates like the devil hates holy water. what has been the reaction to the proposal? >> well, we're seeing bipartisan opposition or what the bipartisan panel has recommended. on the left are your people like house speaker's nancy pelosi saying it's unacceptable. you're hearing the afl-cio say what this commission is recommending as workers shot dead. the pe