which we will make sure that every citizen in this country including portable populations are cared for can be found in our budget? and so, with that in mind, we put this program together and we look forward to hearing from men and women who are giving us their time to come out and work with us and to present maybe another side of what we have been reading about and i will present now doctor rockymore. >> thank you, chairman cleaver. i'd like to give my congratulations to chairman cleaver and colleagues of the congressional black caucus for doing an excellent job of

launching what is absolutely necessary project. the first-ever congressional caucus commission on the economic crisis and wealth creation. what is going on in the country? we know that the u.s. is experiencing a severe economic and budget crisis scott that is primarily caused by the great recession which is a combination of the financial crisis and the housing crisis. we know that we are running significant deficits and we have a very large debt. in fact the congressional budget office just yesterday released the projections for 2011 if nothing is done with regards to the loss the federal budget would show a deficit of close to $1.5 trillion that's 9.8% of the gross domestic product. we also know that we need to spend because we are in a recession that there is a need for investment because investment by the federal

government has the ability to stave off the ill effect of the recession. so we have a tension between spending and revenue, spending and revenue. and early last year, the president of the united states, president barack obama, actually appointed a commission. it is called the national commission on fiscal responsibility and reform, and they deliberated for the better part of last year, considering various measures on the discretionary budget of the united states, the mandatory spending that we do, and certainly they also get the tax reform and they came up with their own a proposal. the proposals didn't pass the commission. the commission actually requires that 14 of its members actually vote in favor and the did entry set thresholds. however, we are of the understanding that many members of congress, particularly those in the senate are considering using those proposals as the basis of what they will consider

going forward. is this in the best interest of the african-american population? is it in the best interest of people of color? is in the best interest of the country? these are the questions we will be considering here today as we talk about the recession and the impact on the debt and what we need as americans and people of color what of what. we know the recession has had an impact on people of color. african-americans especially who have higher unemployment, higher rates of foreclosure, higher poverty levels, and certainly we will hear later on today about the effect, the devastating effect of the great recession has had on the black middle class. here to speak to you today is an all the last panel of experts, and in fact in looking over the agenda pulled together by the members of the congressional caucus the experts from today's session largely comprised of experts that are aligned with

the closing racial well forget initiative which is an initiative of the in sight for community economic development across racial, across ethnic but comprised of the leading economists and economic experts from across the country based in both academia and also think tanks and advocacy organizations. with that, i would like to introduce you to the lineup. but before i do, we have some very, very important members of congress. we have congress when maxine waters from the great state of california. [applause] we have congressman bobby scott from virginia. we of congresswoman donna christiansen from the virgin islands faugh . we have congressman green from

texas. [applause] and we have the honorable gwen moore ny will not forget from wisconsin. thank you for to joining us and we will be joining your expertise as well. with that, dr. margaret is an institute fellow at the urban institute in washington, d.c. where she directs the low-income working family project. prior year to joining the urban institute in july, 2007, she was the vice president of the joint center for political and economic studies. she has all the economic appointments at atlanta university and the university of california at santa cruz. she has edited many books and monographs on black economic well-being and has written extensively on issues of employment and training, education, income, poverty and minority the filament. dr. simms serves as the editor of the political black economy from 1983 to 1988 to beat she is an elected member of the

american academy of arts and sciences and recently served on the national research council committee on the fiscal future of the united states. after dr. margaret simms, we will be joined by dr. darrell gaskin, associate professor of health economics at the johns hopkins bloomberg school of public health and he's also the deputy director of the hopkins center for health disparity solutions. his primary research interests our health care disparities, safety net providers and access to care and quality of health care for medicaid, minority come on in short and other vulnerable populations. dr. gaskin earned his ph.d. in economics at the john hopkins university and his m.s. degree in economics from the massachusetts institute of technology and be a degree in economics from brandeis university. dr. william spriggs was the chair of the department of economics at harvard university what is now the assistant

secretary for policy and the u.s. department of labor. in his role as assistant secretary, dr. spriggs brings to the department of labour a unique sensitivity regarding workplace justice, issues affecting low-income working families, the strategy is to assist small and disadvantaged businesses. in the spring of 2008, dr. spriggs offered, co-authored beyond the mountaintop descriptions for policy for the rosenberg foundation to commemorate the 40th anniversary of the assassination of dr. martin luther king. in addition, dr. spriggs served on boards including united food and commercial commission, the independent health care trust for the uaw retirees and the ford motor company, and i have to say, he was also the director of the national urban league think tank here in washington, d.c. and my former boss when i worked there. with that we are willing to go in the order i introduced them and i would ask you to hold your applause until the end. thank you.

>> thank you, maya, mr. chairman, members of congress. i'm pleased to kind of kick off the conversation and in my remarks i am only going to touch on the surface of the many issues that are involved here. there is a consensus among the many economists and policy analysts the federal debt needs to be reduced from its current level. in order to do that, the annual federal deficit must also be reduced. however there are significant differences among those who study this issue on several things. when the deficit reduction should begin in earnest, how fast the budget gap needs to be closed and how much of the gap reduction should be achieved through spending reductions and how much through tax increases. the national debt, that is the total amount the federal

government owes to others has grown rapidly in the past decade and reached 62% of gross domestic product in 2010. it will continue to grow in the access of the over action to change if passed. this is a source of concern for many. a large debt can be problematic for at least two reasons. first, the larger the debt the more concerned there is that creditors might not be willing to continue to hold it or increase their holdings. second, this debt has to be serviced through interest payments. projections indicate the current debt will require future interest payments that will in combination with a growing and medicare, medicaid and social security payments crowd out all discretionary spending. however i think we need to make a distinction between the fact that something needs to be done and the timing and speed at which it should be done.

many think that it is more important to plan now for how the deficit should be reduced and how the debt should be reduced than it is to take immediate action and we need to have a plan calling for an old tv to how to get on to a sustainable path. it may take to 1020 years to get there, to get to your debt preferred destination, but it is easier to plan ahead to do that and probably in some ways less painful. but there are also many tasks of the federal debt reduction and flexible the national academy of sciences fiscal future committee on which i serve and which dr. spriggs served until he entered the at bat station. the committee describes four tasks of that control. the brackett recommendations made by others including the president's commission on fiscal

responsibility and reform. the law we passed in the committee's review would pull spending towards revenues which are now in the neighborhood of 18 to 19% of gdp. this would mean a much smaller public sector and would require the sacrifice of many public programs. the proposed ipad would move revenue up towards spending eventually reaching about one third of gdp resulting in a much larger public sector than we have now. the intermediate or to propose the national academy report would keep the budget of around 25% of gdp and these intermediate paths can allow for any number of accommodations of program adjustments. one pass the was proposed would protect the elderly and another would tilt more toward young degenerations.

but none of these was a balanced budget requirement that the whole idea is to bring the deficit under control it could be around 2% of gdp and things could move fairly well. many of the proposals under consideration would follow or closely parallel the lower half behind above to read the proposals focused on three areas. social security, medicare and medicaid and domestic non-defense spending. all three areas are important to vulnerable populations. low-income and minority groups. there is considerable overlap in these groups. african-americans and hispanics are disproportionately represented among the low-income population. flexible, looking at families with children who had incomes below 200% of poverty in the 2007 before the recession had its impact on families we find

that african-americans with 22% of these families hispanics were 30% about twice the representation in the overall population. african american families are less likely to have a working family member even before the recession than other low-income families. in part this is due to the family structure. hispanics on the other hand were likely to hold full-time but still below and come. because of their low-income minority population they are more likely than others to be beneficiaries of income support programs. african-americans are 12.4% of the u.s. population hispanics 15.1 but they are a much higher percentage of the participants in the number of government programs. some statistics show the african-americans and hispanics is proportionally represented as

recipients of the support from programs such as temporary assistance to needy families, supplemental nutrition assistance programs and medicaid. if they work, these families are more likely to be eligible for the earned income tax credit because of their lower earnings. interestingly, the eitc appears in the budget in the same way that expenditures to. it's the only tax expenditure that is as visible as if it were a support program. the other tax expenditure is we somehow don't see visibly and i think that is perhaps interested people of color are also more likely to seek or be eligible for the government assistance in an effort to improve their economic position. in terms of work force investment programs for a sample african-americans are almost twice as likely to be enrolled

in work force programs as the representation in the overall population would suggest. because of relatively low earnings during the working lives, african-americans and hispanics have fewer resources to see them through their retirement years. the benefits from social security while lower than those of the counterparts constitute a larger share of their income. since the workers have been much more likely to be in a physically demanding jobs they are more likely to turn to disability programs when their health and stamina fail. due to earlier debt, the survivors are also likely to be the recipients of social security under the survivor aspect of the program. there are a number of ways of approaching the deficit reduction without making these vulnerable populations bear a disproportionate burden.

obviously one way to put at least part of the burden on closing the gap is to put at least part of the burden on closing the revenue side to increase the introduction of new taxes, and again, given that we are in a recession it may not be something that you would want to take now, that they could be something that could be planned for so they could move into place as the economy recovers. but there are also ways of reducing or modifying programs so that model of the board in the to the burden is borne by the low income groups to provide just mentioned a couple of examples. one comes from a number of sources, for example the national academy of social insurance has put out several publications that look at how you can modify social security programs.

among them they mentioned three come increasing the contribution tax to 90 present wording space scheduling future increases that would not take place for a number of years but having them in place just as was done in the 1983 revision to allow people who can to plan and also proposes to treat all supplemental retirement as 401k. at the same time under these proposals, you would not only be able to preserve the basic social security but he would be allowed to provide for better benefits for the lowest income workers and for the oldest of the old. another way to shift to make some reductions or adjustments is to reduce the mix discretionary programs through select combination of reductions in the block granting programs of the state and local government. again, you probably would not want to do this immediately but you could do it based on the

program objective effectiveness measures to be there are also a number of subsidies for businesses that could be adjusted to meet in some areas of this discretionary spending, increases might actually be needed if the u.s. economy is fully utilize its resources. for the disabled of investments in education and infrastructure with increased productivity as with investments in research and development. if we don't make these investments, the chances are that our growth path will be much lower it that will mean that problems that we have with regard to the revenue generation and safety net programs will get worse, not better. you can make many of these adjustments and a way that holds domestic non-defense spending to around five to 6% of gdp which

is the level it was in 1999 and these are just a few things to think about. i haven't talked about ways in which you could adjust the defense spending for civil though it is more a part of any bird and then you might want to make on the spending side. thank you. >> first i would like to thank the kokesh and emanuel cleaver for giving me an opportunity to share my perspective on this pressing problem. i also want to certainly acknowledge our facilitator, maya, and the other panelists who are here. >> can you speak into the microphone? >> so, i want to also just add that i, while i am a health economist also a.m. a minister i

tester a church right here in the washington, d.c., and in some ways my perspective on these issues not only reflect my academic and a scholar research but also by practical experience of dealing with people who have been found themselves in difficult experiences. my advice to the congress would be to address the current economic crisis. let's not be penalized but foolish. at the heart of the matter is the fundamental disagreement of with the proper role of government in the society. there are those who believe in the so-called limited government that says that the only role for the federal government is to provide national defense to be if you look around the world and look at nations where only the only effect of the surface of the national government is to

provide strong military, i think most of us would agree that we would not want to live in such a nation and you don't have to think very hard to come up with one of the six nichols -- examples. we should be clear on how we find ourselves of the skyrocketing debt. the policy of the blindly cutting taxes, shipping services to the private-sector began to evaluate and demonizing persons and give their lives to public service in the civilian sector. that policy is bankrupt. and this worship of the private marketplace the wood is a panacea for all that ails our economy and society is just all we -- folly. anyone that has taken a course in economics notice there is such a thing as market failure and market failure requires government intervention.

competitive markets and pure competition do not always lead to the best societal outcomes and competitive markets are on their ideal conditions and in reality conditions are not always ideal. and sometimes competition ends up being a race to the bottom instead a race to the top. this is one of the reasons why i am a public health economist today. the health care marketplace is complex and full of market failure that require government intervention. these market failures in the health care marketplace it's not new information to lead a seminal article by a nobel laureate blease these out and as early as 1963. so these are things in which we already know about the health care marketplace. so, in light of that background,

there are three areas where i did the congress should be careful when addressing the budget deficit. we should not - on our obligation to care for the poor and vulnerable persons in our society. we shouldn't forsake our responsibility to care for disabled citizens, and we shouldn't neglect on the investment in the public health infrastructure which we all benefit from and if necessary to ensure our communities are healthy. they are established if roosevelt's moodie wind johnson's great society and demonstrate compassion that makes our nation great and separates us as separating the sheep from goats because we care for these. at the time when a nation is recovering from the deepest recession of our lifetime, it is

unwise to cut spending and raise taxes. however, if we must cut spending, the last thing that we should cut is the nation's safety net at the time when the four americans rely upon the safety net for their very survival. to be clear, we must protect medicaid and chip. medicaid is only 7% of the budget and provides health care from 19% of the population and almost half of these persons are children to read medicaid over the last two decades has undergone a significant reform. almost 72% of the medicaid enrollees are already in the managed care or primary care case management programs and these programs are designed to cut cost and food quality increase access and eliminate waste cutting medicaid is penny wise but pound foolish because it limits the enrollment and

reduces reimbursement especially physician and both of these measures only cause the support to deily care and until they are sick enough to be seen in the emergency room and that ends up only cost of the society more. the affordable care act includes several provisions designed to improve medicaid. people chronic conditions or bundle payment to try to help better rationalize care and the elimination of payments for health care required conditions. these are things of which we should proceed with. another program that we should protect is medicare. opponents of medicare want to destroy the integrity of the program by turning it into some sort of defined contribution program will get the pending deficits and the trust fund that

the next generation will face and cry like chicken little that the sky is falling. medicare is a safety net for the seniors. many of us in this room are too young to remember the burden of illness imposes upon a generation of seniors and their families before congress of the wisdom to enact medicare. as i told students at the university of maryland and johns hopkins if medicare did not exist today, it would be you and your families caring for your grandparents, and what medicare does is allows us to collectively care for the seniors and take the burden off of individual families to have a dedicated tax base that should be adjusted to meet the needs of the future generations raising the payroll tax and adjusting

the availability age on appropriate measures that should be taken to preserve medicare for the next generation. the affordable care act mcnair when also includes provisions for the capitol and into to care organization and eliminating payments for health care required conditions and one important provision that was included in the affordable care act is closing the doughnut hole in medicare part b. the doughnut hole is that portion after the of a certain amount of expenditures seniors are left on their own to cover their health care, i mean their prescription drug expenses. this has a disproportionate effect upon low-income seniors that do not have the financial resources to cover those expenditures, and by closing this will not hold what we do is

the seniors' no longer have to delay or undergo the prescriptions and they can choose -- the builder have to choose medicine over other necessities. if we cut here all we are going to do is again incur higher costs in the future. the other thing i want to raise is we must protect the nation's public health infrastructure. this is why i am concerned about and talk about the cost cuts in discretionary spending. there are programs that promote community health benefit for everyone in particular the honorable populations. this starts with smaller agencies such as the cdc and health resources administration, samsa which is the substance abuse and mental health services administration.

these agencies foster programs critical to addressing health and health care disparities that negatively affect communities of color, and communities of color suffer from high rates of mortality and morbidity and have more access to quality health care services and these agencies sponsor programs that promote disease prevention, healthcare screenings lead to the fight against kunkel and chronic diseases and the farm to the community health centers and promote and trade and physicians and other health care workers that work in underserved areas, and they provide substance abuse treatment and many other community-based services that enhance population. small cuts in these agencies have large impact on the community, and these impacts are disproportionately the most vulnerable in our society. so this time coming instead of

reducing our deficit and the debt on the back of the poor, disabled for kaput children and seniors, let us talk about real shared sacrifice and let those of us who are more affluent be first in line. samsa. -- thank you. >> i want to start by thanking the chairman of cleaver and fisa chair chris jensen and the other members of the cbc, gwen moore, space, sheila jackson lee, and all of the members of the congressional black caucus of the 112, chris, thank you for inviting me to join this panel and thank you, dr. rockymore for the introduction and the good work that you continue to do on behalf of everyone. i want to applaud the cbc on the

budget deficit on the vulnerable communities and help to investigate how this economic crisis affect wealth creation. you heard from dr. simms that when we think about the budget deficit is often put in the context of the long term. well, the long term is now. when you think about the future, we can look at those who are under age ten. they are the ones we are talking about. and when we look at those who are under ten, those americans under ten, well over 40% of them are either latino or african-american, and that over 40% who are our future of that 40% latino and african-american one elbe -- one out of three live in poverty. that's our future. those are the people we talk about balancing the budget in the long run. those 47% latino and

african-american children, one in three living in poverty. .. >> an economy that was shrinking is growing again, instead of rapid job loss, more than 1 million private sector jobs were recreated in the last year. we know there's still a lot nor work to be done for the millions of people that are either out of work, or struggling to offset their rising cost with their shrinking paychecks. the overall unemployment rate of

9.6% for african-americans of 16.3% is unacceptable. the president has said it is unacceptable. secretary, my boss, knows it is unemployment. we cannot live with the unemployment rates. together we can win the future by out innovating, out educating, and out building the rest of the world and ensuring that we prepare workers for the good jobs of the 21st century. when we talk about budget prove -- budget priorities and what we might think about in the terms of deficit, i want to talk about those things that we are doing for the biggest problem that we currently have. those who are unemployed and those who are marginally employed. what does the budget do? i want to talk about in the context of the department of labor where we want to highlight how the current budget serves to prepare the most vulnerable workers for the good jobs in the

21st century. specifically, i want to do some further highlighting. because i want to talk about how those programs are connecting african-americans to employment opportunitying. last fiscal year, over 4.3 million participates served by the department program were african-american. so when you look at cutting -- that's what you would be cutting. access to employment services for 4.3 million african-americans. the work force enviesment act programs that we have, served over 570,000 adults, roughly three and five of those were african-american. when we look at what we were doing in terms of specific grant programs, the ones that sometimes people say we can't cut the big programs. we'll cut the little ones. even the things that we are doing at the smaller level, the

community-based job training grants in the last fiscal year served 28,392 african-americans. when you look at the last fiscal year of those who were helped because of displacement from trade, close to 12,000 of those workers who receive trade adjustment assistance for african-american workers. when you look at a program that some people may think is trivial, not important because who thinks about farm workers, our farm workers job program provides funding to public agencies to assist migrant and seasonal farm workers in the families, obtain greater economic stability. the last fiscal year over 1,000 of the individuals who exited that program receiving core, intensative, and training services for african-american. when you look at the big problem that we face in terms of those who are leaving incarceration,

those who need to be reentry grated back into -- reintegrated back into society. given the chance to get good jobs. 26,000 people in the reentry programses with over 60%, over 15,000 were african-americans. when you look at what we did on the recovery act and these funds have now unfortunately ended. when you look at what we did with the recovery act funding, we had over 155,000 african-americans served directly by recovery act funds. over 14,000 of those were youth who we were able to place thank to the effort for the bbc to make sure that something was there for the african-american. 44% of the people served through the work force investment youth funds were african-american. programs such as the youth bill

which is designed to give job training and educational opportunities to young people who are from low income households who are at risk so they can help to gain skills and rebuild their communities. over 8400 of the people, the young people, who were served through that program. that's 60% of those who were served were african-american. so we are working hard to make those budget dollars go to make sure the communities, especially communities of color, receive attention to help reduce this unacceptable unemployment rate. that's what the budget goes to do. that's the numbers of people that we have targeted to make sure that it helps them. and for those who aren't helped, who don't get a job, we need to remember that the unemployment insurance system which had a boost up in benefits thanks again through help from the cbc, over 2.4 million of those

americans who draw unemployment were african-american last fiscal year. thanks to the cbc and others and secretary sai lease have fought for the extension of unemployment. as president said when he signed the extension in december, 2 million americans looking for work who lost their jobs through no fault of their own can now with certainty know that they won't lose their emergency unemployment insurance at the end of the year. that would have been in december. over 600,000 americans would have faced being cut off from that safety net if those dollars had not been extented. and every dollar, every dollar that goes to support unemployed workers gets recirculated into the economy many more times than

extra dollars from the take home of tax cuts. so that's what we did in the last fiscal year. that's what the budget goes to do. that gives you some context for some people who are served on the ground. looking forward and thinking about what we need to do, we just recently announced competition for $500 million in trade adjustment assistance, grant competitions to community colleges. that money is going to be used by community colleges to develop new curriculum to retain workers and to get new jobs in emerging sectors. it's programs like these that will help to reverse the trends of growing unemployment and economic crises in vulnerable communities. if we, as the panel has tried to do, continue to look forward. if we think about winning the future, and you think about what

the budget does now, you can get a sense of what it would mean to cut off access to vulnerable populations. if we lose sight that our future is here today, that those under age 10, those children, those 40%, one in three of those 40% living in poverty are our future. that's what the budget fight is about. it's about having programs that connect those children to their future, our future. that's what we have to win. >> thank you, dr. spriggs. we were joined by sheila jackson lee who will be joining us again shortly from the great state of texas. i see that we have a question already. congressman cleaver. >> thank you. yesterday a new proposal was

floated. which is a debt service first policy. that is to say that if this proposal is approved, then the nation would pay it's debt service on the debt before any other expenditures. now that's approximately $140 billion a month. the third highest ever. the third highest monthly debt service ever. and usually the debt service is anywhere between 1/3 and 5th highest expenditure in the national budget. so the proposal is before social security, before medicare, before anything else, we pay debt service.

what impact would such a policy have overall? and certainly what it would have if there's no consideration given in the budget close to the top for both the populations, the aged, the young? >> well, it seems to me that that is only binding if they say when we run out of money, we won't fund anything else. so i mean currently the debt service is paid, and other things are paid, and we increase our deficit. but if their point is that we'll pay the debt and then when we run out of cash, you know, sort of like when you have more month than you have money, you don't spend for the rest of the month. that would have serious things.

because impacts -- as dr. gaskin pointed out, and medicare is really paid out of it's own trust fund. it maybe -- trust fund maybe running out of money. but that's the place it comes from. and the same is true for social security. so we are really looking at many of these programs for vulnerable populations because they are ease discretionary or some case mandatory, but you could adjust the eligibility criteria so that you can reduce the expenditures. so i think we would really be concerned that this is a binding constraint that will have an adverse affect on the populations that we want to protect. >> actually, can you clarify just for the television and internet audience the different between deficit and debt? >> the deficit is the annual budget when you look at the annual budget, it's the difference between the revenue that you take it, and the expenditures that you have.

so there's a deficit if you spend more than the outflow is more than the inflow. the debt is the accumulation of all deficits in the past that have not been paid off. so it's the difference between again putting in a household analogy, if you spend more each month than you take in, you are adding to your debt. and your debt is bigger than your monthly deficit. so it is true that for the nation, the debt is accumulation of all of the that -- the deficits in the past that have not been repaid. >> we actually have a question from the congresswoman christiansen. >> do you need to be at a microphone? >> you do need to be at a mike. come on up. >> thank you, dr. rockymore, thanks to all of the panelist,

and really thank the chair and the committee for putting this on. it's really important. dr. gaskin, you knew my question was coming to you; right? you made a very potent, moral and ethical argument for why not cutting programs like medicare, medicaid, s-chip, and so forth. you have a powerful economic one i know. >> uh-huh. >> in the affordable care act, we are modifying medicare, for example, through the things that you mention, the accountable care organizations, the medical homes, and through prevention. and there's one study that showed that kind of prevention could save between $652 billion to $1.4 trillion over 10 years in medicare spinning. -- spending. you authored another report which showed that if we eliminated health disparities we

could save $1.24 trillion over four years. how can we use these studies to make an argument an impact how we go about doing the deficit reduction and to compound the problem we don't get to score things like prevention. how do we factor these two reports into this discussion? >> well, i think what we have to do is we have to change the paradigm in the way in which we think about both health care expenditures and expenditures on infrastructure that improves health. any growing society has to have a healthy population. and as dr. spriggs pointed out, those persons who are below ten years of age, 40% of those persons are people of color. and if we are going to tolerate

having higher rates of diabetes, higher rates of hypertension, higher rates of stroke, if we are going to tolerate those higher rates of disease in this population, it's eventually going to cost us more money in the outyears to care for them. so it makes perfect sense, to me, that we need to do the things that we are supposed to do now in terms of providing both access to quality health care, access to quality food, the things that access to the environment that allows these young people to grow up and live healthy lives. if they are healthy, then they can be productive workers, which turns them into taxpayers, which are certainly something which we like. if they are working, then they are not actually drawing on

other public services that potentially impact the nation's budget. so it's -- the way in which we change our -- the way in which we think about these things. some of these things are actually investments in good health, investments so that people can be productive citizens. not just consumption for today. >> do you actually know why the congressional budget office will not score primary prevention? >> no, i don't. >> congresswoman? >> they have just -- they just don't. and they also score within a ten year window. >> right. >> and a lot of the prevention impact coming outside of the ten year window. >> right. we have a situation here. we have experts, and unfortunately we don't have our roving microphone. we certainly have experts down

here. i want you to answer if you know the answer, and i'd like to invite you to ask questions. and then we're going to open it up to our audience. with that, i have a couple of things i'm going to quickly throw out. one is the budget of the deficit proposals kind of cast social security in the light of the deficit. if somehow linked to -- it was framed in the larger media has being linked to and somehow perhaps causing the deficit. dr. simms, can you tell us what the distinction is between social security and why it is actually not connected? >> as i mentioned earlier, social security is funded out of it's own trust fund so that the dedicated social security taxes or fica that we all pay when we are working goes into the trust fund. and the payments of -- to current recipients then go out of the trust fund.

i think sometimes people get confused about a lot of aspects of that. you don't get your social security out of any other tact or -- other tax or revenue that the government has. it's a self-contained fund. it does have some issues in the outyears. it currently is not running a deficit. but the current projections are that inflow will not be enough to pay current levels of benefits some year into -- in the future. and in the not too distant future to those of us who are younger. but it is not a part of the current deficit/debt problem that we have. it has a separate adjustment that is needed. i think implicit in what people are trying to have you believe is that if the trust fund runs out of money, somehow social

security is also going to be dipping into the general revenue. and there's no indication that that would be -- would ever be the case. >> dr. spriggs, we have -- i frame this in terms of a great recession. for african-americans, it's actually the great depression. for younger african-americans, it really is a huge depression. you talked about the work that you are doing, and certainly the administration is doing to address that issue. is the work that you are doing sufficient for the magnitude of the challenge in the african-american community? and what else needs to be done to if not, what else needs to be done in order to make sure that it is sufficient? >> by order of magnitude, just so people get a sense of it. if you took all of the downturns of the 1960s, the downturns of the 1970s, the downturns of the 1980s, take all of the

jobs that we lost in the '60s, '70s, '80s, add them all up. that's the number of jobs that we lost in this one recession. and when you look at how long it took us to stop the loss of jobs in those previous recessions, so take the one that occurred in 2001. for over 24 months, the economy continued to lose jobs. in order of magnitude, not as much jobs as we lost. we continued to lose jobs for 24 months, for 29 out of the first 30 some months after 2001. after january 2001, we were losing jobs. we succeeded in stopping job loss in nine months. even though this was a far more severe downturn. so i would say in sort of order of magnitude and dealing with

the problem, we at least succeeded in stopping job loss. and we have at least returned to saying we are gaining jobs at a faster method than has occurred before. has it address the problem? obviously not because the unemployment rate for african-americans has continued to rise after we started gaining these jobs. and when you look at young people in particular, whether black or white, this is the worst job market that young people have ever faced on record. we don't have records from the great depression. we imagined what the data looked like. this now we have now recorded as the worse on record. we invested a huge amount of money on job training to make sure that as we come out of this, that those young people would be well prepared. so thanks to the work that the cbc put in on the recovery act,

over $500 million got invested in job training. a large part of that went to green job training, aimed at young people, and particularly aimed at vulnerable communities. those with high unemployment. we'll see. i think it's a little early to totally judge us. we'll see how well all of that plays out. that was mirrored with that investment of job training was mirrored with big investments that the administration has made in green job technologyies. in the end, it may not be enough. and we may need to do more to make sure that we actually have the jobs in place. but we do know that we have achieved stopping the job loss in a record short period that we have started generating jobs, that we have made huge investments in the training linked to the investments that

we're making at the federal level. and as the recovery continues to take strength, we have to hope that's the right direction. >> i just wanted to make two quick points. one is on the job creation, the obama administration inherited a huge deficit. and we made an affirmative decision to deal with the job situation before we dealt with the deficit situation. because we cut the deficit, we cut spending, if we increase taxes, that would make the job situation worse. and so we made a deliberate decision. and the deficit as a result better than unacceptably high. another thing, as margaret indicated, we have the social security system is a is where all of the money goes into social security and goes out of social security. we have complicated that situation with last year's tax cut. because we, in fact, cut the

quote payroll tax money going into social security, but have made it whole by going into the general fund and putting the money back. that involves the general fund. next year we may decide to make a priority decision and not put the money there. so there is, unless -- this is supposed to be a one year thing. unless we get right back on track where we have been with social security all along, social security will be in jeopardy. and i will tell you, there are a lot of people in congress that don't think that's a bad thing. they want to privatize it anyway. so we need to be very careful about the impact of that tax cut bill where we -- the flow of money, in fact, does involve the general fund for at least one year. and we need to make sure that's not permanent. >> thank you, congressman. i think what i want to emphasize that he said that the tax

package made things more complicated. certainly the payroll tax holiday which sounds great. it does have actually some negative outcomes if we actually look at 2012 and beyond, actually extenting anything like that. because it is actually tied to the social security funds. so with that, and thank you also, congressman for contextualizing the fact that the obama administration did inherit a deficit and has been trying very hard to address the issue of unemployment in the recession, and, of course, on top of the huge debt that the nation is facing. with that, i would like to thank. would you please join me in thanking our panelist, for lending us their expertise. dr. simms, dr. gaskins, and dr. spriggs have been wonderful. we are now ready for our next panel. we will be getting ready for our next panel. thank you.

[inaudible conversations] >> good afternoon, ladies and gentlemen. i'm maxine waters, member of congress, representing the 35th congressional district in the greater los angeles area. and i'd like to thank all of you for joining me on this panel today. this panel is entitled "surviving the recession and accelerating the recovery." before i begin my remarks, however, i want to thank the chair of the congressional black caucus. mr. cleaver, mr. emanuel cleaver, who you heard from earlier today, i don't know if you know it, but this perhaps wraps up a weekend, a very productive weekend, that we've been involved in. mr. cleaver organized a retreat where we had the opportunity to explore the many issues that confront us to set some

priorities and develop a plan of action. so i would like you not only to join with me in giving a round of applause to our chair, congressman emanuel cleaver, but also to all of the members of the congressional black caucus. thank you. thank you very much. [applause] >> now allow me to take a moment to introduce our distinguished panelist who are joining us here today. our moderator is jonathan caphart. he's an editorial writer for the washington post, specializing in national politics and environmental issues. mr. january hart joined in 2010, prior to joining "the post" he was a part of the news board from 1993 to 2000. he then became the national affairs columnist for bloomberg

news from 2000 to 2001, and left to work as a policy advisor to michael bloomberg and his successful campaign. the major of the new york city. he returned to the deputy editor of the editorial page from 2000 to 2005. mr. caphart and the daily news editorial award won the prize for editor writing for the editor series on the apollo theater in harlem. please welcome him. a round of applause. [applause] [applause] >> we also have serving as our first panelist today, mr. dr. austin. dr. austin is a sociologist on racial relations with a specializations on african-americans. prior to join the policy institute, he was assistant director at search at the foundation center and a senior

fellow at the demos think tank. from 2001 to 2005, he served on the faculty of westland university. he's the author of "getting it wrong: how black intellectuals are failing black america and achieving blackness." race, black nationalism, and centralism in the 20th century. he has published scholarly articles in ethic, racial studies, qualitative sociology, race, gender, and class. please welcome him with a round of applause. our next panelist will be dr. william derty. he's professor of studies and professor of african and african-american studies in economics at duke university. previously, he served as

director of the institute of african-american research, director of the moore undergraduate research apprenticeship program at the university of north carolina. his most recent books are economics, economist, and expectations. microfoundations to macroapplications. and a volume called "edited" entitled "boundaries of clan and color: transnational comparisons of inner group disparity 2003." both published by rutledge. give him a round of applause also. welcome him. and, of course, our final panelist will be ms. donna simms wilson. in january of 2011, ms. simms

wilson joined the firm leading new york boutique investment bank as executive vice president. she's formerly president of mr bill and company. she has over 25 years of experience in equity sales and corporate and mortgage finance. she serves as chair of the legislative committee of the national association of securities, professionals, and is vice chairman of the cole childrens museum of greater chicago, and a board member of the john g. shed aquarium, and let me just add has been an advisor to me on finance and economics for the last 15 to 20 years. please welcome donna wilson -- donna sims-wilson. thank you for joining us here today. the 112th congress will be

defined by the current $1.5 trillion deficit. lawmakers are concerned about what impact the deficit would have the economy, on our ability to borrow funds, and on the continued financial viability of our country. however, even more concerning than the threats, the deficit post, are certain proposals to address the deficit. while some members of the other party believe that the best solution is to back away at all -- to hack away at all programs, including those that help the most vulnerable, we in the congressional black caucus are very concerned about the impacts of any budget cuts on african-americans. we are concerned about the brunt of this economic crisis and how it has been felt by african-americans. i'm especially concerned about the impact of foreclosures on

our communities. over one million homes were repossessioned -- repossessed in 2010, and the federal reserve predicts another 4.25 million foreclosured filings in the next two years. unfortunately, a high number of these foreclosures will be experienced by african-americans. we are now at a point where about one in ten african-american families have either lost their homes or are in imminent danger of losing them. as a result of these foreclosures, our community stand to lose stability, investment, and wealth. all told, the center for responsible lending estimates that the foreclosures crisis will result in african-american communities losing about $193 billion in wealth through 201. we know that the foreclosure crisis is driven by dual

challenges, creditor products, and deep job crisis. unfortunately, african-americans are more likely to be impacted on both of these fronts as they are more likely to receive high cost subprime mortgages and are about 85% more likely to be unemployed. so this is a bleak picture for us. a picture that makes it clear before we can consider slashing away at the budget, we must be willing to help preserve the african-american middle class. but we have to recognize a few public policy victories. over the last congress that provides some bright spots in this otherwise distressing situation. i'm proud to say that because of the concerted, strategic, and organized work of myself and my colleagues in the congressional black caw with -- black caucus,e

will soon a financial protection bureau. this bureau will have the power to stop predatory financial products before they spread like a virus through african-american communities. payday lenders will be regulated, mortgage disclosures will become regulated, and arbitrators won't be able to raise interest rates, and the financial services industry will be required by law to establish an office of minority and women inclusion to advise the agency administrator on the impact of agency policies and programs on minority. furthermore, the law also calls on the director of these offices to direct standards, to increase the participate of minority and women own businesses in the

programs and contracts of the agency. in those provision, we caught to end a culture in the financial services industry that perpetuated the exclusion of qualified women and minorities. and businesses they own. and never again do i want to see the practices used during the financial crisis where the same large firms that contributed to the crisis were selected to manage the millions of dollars in contracts to so-called rescuers from the crisis. simply because they had exclusive access to these agencies. i'd like to just take a moment and thank mr. donna sims-wilson on our panel today and other partners sharing our goal of inclusion for working with us so closely to develop those offices of women and minority inclusion that i just eluded to and some very other important things that

we were able to get in the frank-dodd legislation. in addition to taking action on foreclosures, we must also protect our achievement in the 112th congress. like health care reform, we have already heard some talk of trying to repeal, defund, or otherwise undermine the bureau. the consumer financial protection bureau. and some of the other -- some on the other side of the aisle and in the media have taken to attacking these new offices of minority and women inclusion. we are already starting see a republican onlawsuit -- onslaught against the safety net for our most vulnerable neighbors. house republicans want to end the hope 6 program for the revitalization of the public housing. they want to end all legal services aid to help families avoid foreclosures. they want to privatize social

security, and provide vouchers were medicare. and they want deep cuts to critical housing programs like section 8 and the community development block grant, commonly referred to as cdbg, which literally can mean the difference between families, children, and the elderly becoming homeless. all of these cuts would fall disproportionately on poor people, african-americans at the top of the list, were already struggling with poverty. one in four african-americans currently lives below the poverty line. including some families who work every day but who never make enough to make ends meet. they don't have health care, they don't have pensions, and without the safety net, provided by some of these programs, i fear that life will get much harder for working poor people and african-americans in particular. and as a result, our communities will continue to lose out on

opportunities to build wealth. regrettingly, none of the talk of fiscal austerity applies to tax cuts for the wealthy. as we see from the recently passed $25 billion cut to estate taxes and $80 billion cut in the incomes of the richest 2% of americans. and certainly none of this talk applies to the $2 billion per week that we spend in afghanistan or the countless billions that we have poured into iraq. instead, they say a tiny sliver of the federal budget that 15% of the budget used for defense discretionary spending must bare the burden of reducing the deficit created by endless wars and tax cuts. i believe that there are other solutions. that other solutions really do exist. that's why i'm pleased to have our panelist here today not only to expand upon the current

economic situation, but to provide some solutions to how we grow and empower african-americans, their businesses, and their neighborhoods. i would now like to recognize our first panelist, dr. austin to share his perspectives on these issues. i believe that -- the moderators is going to have words first before we call on the panelist. so he's going to moderate the panel. >> i was going to introduce the panel. [laughter] >> well, i want you to know -- [laughter] >> i want you to know that we do a lot of things around here. we're pretty smart. but we follow these notes. thank you very much. now you can take it and do it whatever way you'd like. [laughter] >> thank you very much, congresswoman waters for that.

thank you, chairman cleaver for the invitation to -- excuse me -- to moderate today. by now, thank to the congresswoman, you know who i am, and you know who the panelist are. so i just want to say that they are each going to give opening remarks, and then i'll ask them questions. and we're set to end at 4:00. i would urge the panelist to be mindful of the time as they are giving their remarks, their opening remarks and when they are answering the questions. so without further ado, dr. donna sims-wilson. ms. donna sims-wilson. do you not want to go first? >> i was told i was going to go last. >> fine. so we are going to start. >> i thought -- >> with dr. austin. >> okay. great. thank you. i would like to thank chairman cleaver and the congressional

black caucus for inviting me to speak today. so i'm going to address the issue of increasing american economic growth and competitiveness. currently, there are over 14 million americans who would like to work but cannot find work. this is the most important immediate problem facing the country. although african-american workers make up only 12% of the american labor force, blacks make up 20% of the unemployed. our ability to create jobs sooner rather than later matters a great deal for the well being of millions of american families. our failure to create jobs causing people to lose their homes, it causes increases in family stress, and it results in children dropping out of school. a serious longer term problem is the economic decline of the united states relative to other

nations. in the 1950s and 1960s, the united states led the world on many important social and economic issues. today the united states has fallen behind. if we fail to invest in our people, in our infrastructure, and in research and development, we will continue to fall behind. even worse, we'll stand by as we watch our country literally fall apart. the good news is that we can go a long way to address these two problems, the immediate problem of the high rate of joblessness, and the longer term problem of america's declining competitiveness with one solution. and that solution is smart investments now. the federal government needs to make investments rapidly in education, infrastructure, and research and development to make us more competitive globally. these investments have done quickly and substantially will create millions of jobs to

address the current jobs crisis. i will now just give a few examples of how the united states is currently failing to make the necessary investments in education, infrastructure, and research and development. in education, recent unicef report ranked the united states 20th out of 24 countries in providing early childhood education. 15 year olds in the united states ranked 17 out of 65 countries in the 2009 program for international student assessment reading tests. u.s. students were 23rd in science, and 31st in math. the college board found that the united states ranked 12th out of 36 countries in college completion rates for 25 to 34 year olds.

so those are just some of the problems in the education arena. in infrastructure, the american society of civil engineers estimates that 2/3 of u.s. roads are in poor or mediocre condition, 27% of u.s. bridges are structurally deficient or functionally obsolete, 29% of all transit assets are in poor or marginal condition. each day in the united states, there are about 700 water main breaks. we lose 7 billion gallons of water from leaks in our water mains. and we put the public at risk from contaminating water. an analysis by the 21st century school fund found that we have neglected public school repairs to the amount of $300 billion. so that's some of the

infrastructure problems. looking in terms of research and development, the united states falls behind seven other countries, israel, sweden, finland, japan, south korea, switzerland, and iceland in terms of research and development spending as a percent of gdp. the economic policy institute found that the united states ranked 15th out of 30 nations in broadband penetration. mckinze estimates the total savings from revamping health it across the u.s. provider landscape could be as much as $40 billion annually. there are as much -- many areas where we need significant investments to increase our competitiveness. if the united states wishes to remain a leader in the global economy, we must make significant investments in education, infrastructure, and

research and development. if we make these invest:s now, the jobs created will help reduce the high levels of unemployment that the country is currently facing. disadvantaged children tend to begin school already begin their more advantaged peers. in these achievement gaps only widen through the children's educational career. to increase america's educational perform, we need to break these patterns. we need to make the necessary investments in early childhood education so that all disadvanced children attend high quality pre-kindergarten. we need to make the investments to increase the quality of teachers serving disadvantaged children. we need to increase the number of teachers serving disadvantaged students so that these students attend classes with a low student to teacher

ratio. and we need to make the necessary investments so that our public colleges and universities do not have to raise their cost out of the price range of low income students because of state budget crises. if we begin to make these investments now, we will create a substantial number of jobs in the education field. push the u.s. work force back into a top position educationally, and increase the economic growth and competitiveness of the nation. investments in infrastructure. the infrastructure needed for the productivity, safety, and health of the nation is falling apart. we need to make the necessary investments to repair, replace, and upgrade our deficient roads, bridges, power grids, and suers. we need to repair, replace,

upgrade, and expand the public transportation. we need to modernize our school infrastructure so that all of our students have access to 21st century technology and institutional -- instructional resources. if we begin to make these investments now, we will create a substantial number of jobs in construction, transportation, and technology. and we'll be laying the foundation for u.s. competitorness for the rest of the 21st century just as similar investments help to make the united states a dominant economic force in the 20th century. the expansion and modernization of the our public transportation systems are particularly important for our low-income population. these improvements to these systems will allow low income workers greater access to jobs. increase use of new and efficient public transportation has the additional benefits of reducing our deficit -- our

dependence on fossil fuels, and on foreign energy sources. investments in research and development. in the state of the union address, president obama stated in america, innovation doesn't just change our lives, it is how we make our living. yet, the united states is falling behind in it's investment in research and development. we need more investments in r&d it ensure that america tonights it's innovation leaderships. so many would ask, can we afford these investments? america cannot maintain it's leadership position in the world without these american -- without these investments. america will not continue to be a vibrant, healthy, and safe society if our infrastructure continues to decay. our roads will not stop deteriorating, our water mains will not stop breaking without the necessary investments. in the long term, the economic

growth that these investments will produce will make us a stronger and richer nation. we will have more and stronger businesses, and a better and more prosperous work force. our history and the history of other nations show that economic growth can affectively reduce a country's debt load. the greatest risk to the united states is economic decline. and we will decline if we may fail to make smart investments. there are many options for generating revenues to pay for these investments. a few of these options are to reduce defense depending, to tax capital gains and dividends as ordinary income, to repeal the bush era tax cuts for top earners, and to adopt a financial speculation tax. those are just some of the options for more options and more details, you can consult this

document available on my organization's of web site, the economicpolicyinstitute, epi.org. thank you. >> thanks very much, dr. austin. doctor in >> -- >> first i'd like to thank congressional black caucus for organizing this in the time of deep economic crise. special thank you to our moderator, representative waters, her office was the first to express an interest in the ideas that i have been add locates two years -- add -- advocated for two years. i want to urge everybody to pick up a copy. the impressive he detailed statement of what the deaf it

looks like. sorry, representative lee stepped out. her daughter was a student of mine at duke's masters of public policy program. a brilliant student. i'm still trying to encourage her to go on and do a phd. that said, i would like to propose a very specific policy initiative that i think will ensure permanent full employment in the united states. the bureau of labor statistics reports that about 14.5 million americans repained in the ranks of the unemployed in december 2010. december's unemployment rate of 9.4% represented the 20th consecutive month where the national jobless rate exceeded 9%. the longest span with rates that high since the great depression. while the december estimate represented a decline in the unemployment rate, it was in part attributable to the decline

in the labor force participation rate associated with discouraged unemployment. the employment population ratio remains unchanged at 58.3. the nation faces an ongoing and sustained employment crisis. to address the crisis, the federal government should establish a job guarantee program for all adult americans. the government should ensure that the opportunity to work for decent pay is a citizenship right for all americans. having americans out of work does immense damage to the human spirit, imposing extensive cost to the individual and the society as a whole, and creates and perpetuates deficit financial crises at all levels of government, federal, state, and local. the federal government should establish a national investment employment core, offering all citizens 18 years of age and above an employment guarantee at a minimum salary of $20,000 with $10,000 in benefits, including

medical coverage and retirement support. and upper bound estimate of the expense of such a program can be established if we put all 15 million persons unemployed at the peak levels of unemployment during the current crisis at a mean salary of $40,000, inclusive of materials and equipment for workers with $10,000 in benefits. such a total compensation package would amount to $750 billion. which is less than the first $787 billion stimulus package, and considerably less than the first bailout of the investment banks. ironically, that first tranche delivered is close to the magnitude of the current national deficit of $1.5 trillion. i would argue that this initiative would be far superior to the effects of stimulus

measures because it would constitute a direct mechanism for job creation. correspondingly, the wide array of cost savings from other programs that could either be significantly lowered or eliminated with the federal government acting as employ of last resort, unemployment compensation funding could be slashed and antipoverty, including free and reduced lunch, and food stamps could be reduced greatly. indeed, a job guarantee could eliminate working and jobless poverties. furthermore, the income paid to the employees would restore tax bases at the state and municipal levels alleviating their current budget crises, and in addition, we could stem the tide of the current foreclosure crisis. market interventions like minimum wage and social and enforcement could be eliminated.

the former no longer would be needed since the floor on the wage standard would be set by the minimum salary offered by the national investment employment, and the latter no longer would be needed because the presence of the job guarantee would mitigate the effects of fluctuation and investment markets on personal employment and income. states and municipalities can conduct an inventory of their needs and develop a job bank of task that require performance. the work to be done by employees of the national investment employment core would address the nation's human and physical infrastructure requirements. this could include the construction staffing and provision of high quality preschools, community repair, upgrade and maintenance, sanitation workers, flood and other disaster service workers in hospitals and schools and the extension, repair, and maintenance of the public transportation, including roads, bridges, and damns.

-- dams. in 2009, the same report in dr. austin mentioned, gave the country a grade of d as infrastructure. one in four bridges were truck -- structurally deficient. :

will be a permanent and universal job guarantee rather than temporary and a contingent on emergency conditions. it will however function as an automatic stabilizer in so far as the numbers of persons put to work in the national investment employment corps will rise during town turns and faltering upswings thus it will expand and contract countercyclical made the program also will provide assurance of employment from members of stigmatized population who are subjected to discriminatory exclusions from well played in point. princeton's is theologist all said it's the lead to audits studies in milwaukee demonstrated on long mails of comparable age and education white males with criminal records are more likely to get callbacks for jobs than black males with no criminal records.

moreover, in the first place white males with a criminal record face have the odds of receiving a call back as other white males with no criminal record. therefore, an employment job guarantee of the time describing what ensure that individuals who have completed their sentences would have an opportunity to definitely find work. but individuals who are stigmatized because of their race but also definitely find an opportunity to find work. the bureau of labor statistics indicates among 18 to 25-year-olds, white high school dropouts have an unemployment rate ten to 12 points lower than blacks who have completed some college. again, the program envisioned here would provide employment for all black or white male or female individuals with a criminal record or without a criminal record. in addition, the personal and

familial cost of damage to health and others faced by the unemployed would be mitigated by a program of this type. indeed the unemployed themselves often say they would rather be paid to work and receive unemployment compensation. a huffington post article by february 24, 2010, reports on martin who is described as a 57-year-old former executive chef and ohio who has been getting unemployment checks since june, 2008 and is quoted as saying instead of receiving the unemployment checks even if it is if dillinger of the would be doing good. i would be very happy to do that. a 45-year-old casino worker commented put me to work digging ditches or helping build roads anything preferable to sitting on my butt. this would give those of those on unemployment back pride and accomplish something with the money being spent. there's a work force of a million people sitting idle waiting for something to do.

that is a massive amount of lost labor that could be fixing america's infrastructure. instead of unemployment how your me to do that. there are closer than 15 million people sitting on a little waiting for something to do. there's plenty of important work for them to do and innumerable benefits garnered for having them do the work with in this implement a national program that provides a job guarantee for all citizens. >> now is your time. >> thank you. thank you very much and i would like to start by first thinking congressman cleaver and the congressional black caucus for inviting me here today to make a rather controversial statement. a number that is been banded around quite a bit that regards the amount of money spent by our federal government to avert a global financial crisis is

$12.6 trillion. now of this $12.6 trillion, only $700 billion had any legislation attached that spoke to the inclusion of minorities and women in the business of the economic recovery. and so at this point on the outset i need to thank congresswoman waters and the financial service ten of the 111th congress for having a profound impact on the inclusion of minorities and women in the business of the economic recovery. specifically because of section 107 mp3 of the emergency economic stabilization act in 2008, minority and women colin firmed involved in a substantial way with the treasury department as it managed and sold assets. for a simple, in the capitol assets purchase program, which

was a program where when the united states government put $700 billion directly into commercial banks they took back preferred stocks and then those securities had to be managed. again because the work of congresswoman waters the minority and women owned firms were involved in the management of specifically one particular firm piedmont investment advisors received a significant amount of these assets to manage. also in the public private investment part for ship program also known as ppip, they joined them with minority-owned firms to manage the nation's distressed mortgage-backed securities portfolios. it's a great success that came out of this program is to particular joint ventures the game came together because of

the government black rock teamed together with new cn and wellington and came together with the advent both of these institutions got to know each other through working on treasury business and because of that collaboration have decided to continue the relationship and are now actively marketing funds in the private sector. this is what government should be doing and we come command of the caucus for the system. yes, clap. [applause] then as it relates to treasury assets sales, i just mentioned the government now owns securities sales and preferred stock and common stock companies like general motors and aig and others while the treasury has been selling these securities, selling organs from corporations like bank of america, pnc

financial land this week citigroup. also the government owned 8 billion approximate shares of citigroup officially and hired 12 minority and women owned firms to work with those disposing of assets and ten minority firms involved in the general motors ipo and now we are working on a ayachi. again, none of this could have been possible without the legislation passed by the financial service tener and implemented. so again, thank you very much. now despite these initial successes, congresswoman waters were not satisfied. you see, the only covered 700 billion of the $12.6 trillion u.s. government allowed late so they passed section of 342 of the dodd-frank wall street protection act to

cover the rest of the mauney. justin did january 21st of this year section 342 covers all of the agencies and departments of the federal government that are involved in the business of the economic recovery. specifically the treasury department and the fdic from each of the federal reserve banks, the national credit union administration and the security exchange commission among others. each of these agencies and departments must and can office of minority and women inclusion that will implement the law which states that minorities and women and entities of owned by them must participate to the maximum extent possible in the business of the agency and those contracting in the sale of assets. investment banking firms, asset management firms, consultants, lawyers and many other types of professional service providers

are specifically cited. what impact could this have on the minority community if properly implemented and in first? first we believe section 342 could be a vehicle for wealth creation for minority and women entrepreneurs and investment banking asset management and commercial banking. the federal government is selling assets for the treasury department paid the fdic and eventually will sell assets house that the federal reserve bank of new york such as the meeting lane fund. what type of assets are being sold? first of all, they are selling banks. despite a depository financially institution, the engines of economic growth in minority communities. many people received their mortgage loans, their car loans, their business loans, their local community banks. if more of these financial institutions were minority-owned, our communities

could flourish. they are also selling a real estate. the fdic is selling all types of office buildings, apartment buildings, single-family homes and land. again, the purchase of these assets by minority entrepreneurs, resident and communities could have a significant impact on how the assets or redeployed. last been mindful of the time i would like to comment on the profession of section 342 of the dodd-frank which requires every corporation regulated by the sec to present a diversity plan annually. the measurement of both work force and supply diversity for every investment bank asset management firm of our nation's 8,000 commercial banks, private equity firms and u.s. corporations could have a profound affect on the employment, retention and advancement of the minority in

the the women in our economy. likewise, the purchase of goods and services for the minority and the women owned firms can be a tremendous vehicle for job creation. thank you. >> thanks very much. thank all of you for your opening remarks and for your brevity because we've got 25 minutes. maybe it's because, you know, change in leadership, office building, speaker boehner, republicans are in the majority. listening to all three of you, particularly doctors austin i keep thinking as you lay out your ideas for putting americans back to work, for making sure that they never are unemployed again i kept thinking really wonder where's the money going to come from, and i know that

each of you laid out several things, but also where is the political will going to come from? how are you calling to convince? you've got these folks convinced but how do you get the majority in this chamber convinced that your ideas are the way to go and they should from the them especially since a lot of those folks came into office this color around complaining about the $14 trillion national debt? sorry to be the skunk at the garden party but i had asked. >> i think that is a political question as you are well aware. [laughter] so what's really necessary is more political leadership because i think the general public, you know, if you look at the poll data, the general

public says the economy in jobs are the number one concerns. so we think their needs to be more people sort of mobilizing the public and organizing the public and listening to the public because really some of the concerns about the deficits i would argue has only risen as much as they have come in again, the economy and jobs are the number one and number two issues for the public at large but by the polling data that concern about the deficit is only risen because people falsely linking it to jobs, and really its deficit spending this necessary now to create jobs. but people have -- some people have been misled to cutting deficits will create jobs which

it won't. if the federal government spends less there will be less economic activity, more jobs and will be worse kuhl worse off economically so we need more leaders to step forward and make that clear to the public that we need to spend now and create jobs. >> the only pushback its transparent in the description of the various ways in which there could be other spending reductions that would be associated with an effective program of the job guarantee and those spending reductions would be substantial enough to make the expense such a program really not a major burden for the excess deficits. also i am a little trouble about people asking where will the money come from in the aftermath of the delivery of close to 13 billion -- $13 trillion to the investment banking committee. where did that money come from?

not to be labor this point but i think a lot of people would say it was the right thing, and tell me if i'm wrong to throw anything and everything possible to keep the economy from falling off the cliff because if it had, -- suppose $1 trillion had been used for the purpose of putting all the unemployed folks back to work instead of 13 trillion being delivered to the investment bank community. [inaudible] >> i would say $13 trillion delivered to the investment-banking community. $13 trillion was utilized to avert a global financial crisis by direct market intervention by

the government. we live in a very interconnected global financial system, and if one firm of significance were to fail in the united states the ripple effect could sink the global economy, and if you thought of the depression in the thirties was bad, if the treasury did not do all that the did and unfortunately president obama did not give enough credit for the work that he did immediately after being elected but before actually being inaugurated to avert the global crisis. >> i would respectfully disagree. the reason why there would be a ripple effect is because of the collapse in the u.s. economy productive performance, and i am arguing that if you have inaugurated a program that would

have guaranteed employment for all americans you would not have had the collapse in the u.s. economy productive performance regardless of what happened to the prices on wall street. what we need is a mechanism to insulate economy from the behavior of wall street, and i would propose a federal job guarantee would go a long way to providing the sort of insulation. >> i'm having a hard time following that, and again, correct me if i'm wrong than just the journalist, i am not a phd economist, but from where i was sitting at the time, what happened on wall street had nothing to do with the unemployment rate being 5% or 6% and everything to do with wall street doing things and taking risks that put working american people and potentially working people around the world at risk so how does a national investment employment core --

how would that actually stave off either the collapse of september 15th, 2008, or potentially another one? i'm not making the link. speed because the joblessness produced by that circumstance. you just said it yourself. >> the federal government employed all of these folks. >> we have a job guarantee. spaghetti individual subjected to an empire that has the option of turning to the federal government for a job, that is what a federal job guarantees, it functions as an employer of last resort. >> and their precedents, there's a program of the sort that's been implemented and argentina. we could look at the carefully to try to make sure that we replicate what is positives from that program and don't replicate the mistakes. there are precedents for doing

that. it's not outrageous and it functions as a social insurance program on the grand order that actually has people do something productive in the process of receiving an come. >> you look like you really want to help me out here. >> i want to respectfully disagree. [laughter] very respectfully because i am also not an economist, i am a practitioner of the capitol market, and what i can say is that our global economy came jury close to melting down because of the ripple affect caused by the lack of trust among the financial institutions no one wanted to finance anyone else and so our federal government had to be the finance year of last resort so if the

credit drives up and insurance and dries up there will be no corporation to employ anyone, so we could have a national employment regulation that you discussed but if all of the businesses are shut down those people will go to work and not get paid. >> with those corporations shutdown did where does the federal government -- >> to get the tax dollars, absolutely. >> [inaudible] [laughter] >> well i kind of -- i think this is a little -- we've just gotten off on a tangent because, you know, the jobs programs that the doctor next peak of what we've done with financial institutions doesn't prevent us from doing the job program, so it's not like we have to choose

one or the other. it's, you know, for me it's like we can view what we did as what we did but what are we going to do going forward? and as i said before, the problem is not one of can we afford. the problem is a matter of politics, not resources. as i mentioned, presented for ways of providing resources. we can also do deficit spending, and i mentioned there is also lots of other options i didn't go into. so it's not a matter of can we afford to create more jobs? we can. there is no question about that. the question is will we and will political leaders to step forward and do it? >> i appreciate your diplomatic

spirit and i think you are absolutely correct. there is no reason to necessarily substitute the employment program for a program of support for the investment banking community. the only reason i went in that direction is because i was asked where will the money come from and no one seemed to ask that question when the objective was to prop up failing financial firms at a much more expensive price. but i will say there is an interesting question when people ask where does the federal move government get the money one can also lost where does the private sector get the money given the vast number of contracts that the federal government actually does issue that provides sources of revenue to the private sector and i would love to see an accounting on that because i think it's a very fascinating

issue. >> very good point. you said this isn't a matter of funding because there is money to do all this. it's a matter of politics. each of you propose really despite apologies and gang up to the doctor. each raise interesting programmatic ideas if this isn't a matter of money but a matter of politics who are your allies here on capitol hill? and ensure that you can name a slew of democrats but in this age of bipartisan can't we all just get along major, who of the other side of the ogle comes maybe a little close to where you are and what you're trying to do? because these are interesting ideas. they should be debated. it sounds to me -- is there?

>> i would have to defer that question to the policy. the policy wing of the institute would be able to better answer that question. >> i was intrigued by the fact someone like kevin at the american enterprise institute while not proposing a policy of a permanent feature is very enthusiastic about the idea of having a direct mechanism for providing jobs to people who are out of work and if he is receptive to that that might suggest there is a wider receptiveness to people who we might not conventionally think would be allies with us. i think the magnitude of the unemployment crisis is so severe that it touches virtually every community in the united states. it touches people who are highly

educated, not well-educated at all and as a consequence i think they are going to be political representatives across both sides of the ogle who might be receptive to the direct job creation measures. >> i didn't ask the actual members of congress if they have any questions for the panelists and if you do, please -- >> i don't have a question i just have a comment. we can look at the district that have states where there's a significant minority population or where the unemployment is may be higher than others and you're going to find them on both sides

of the aisle, and while i can't point to a specific member of the senate or the house on the other side of the all we look at that for health care and we look pretty much at the health and where they are specific minority districts but i think that is one way to look for allies that might not be otherwise allies. still going to be an uphill battle but that this the way the we will start to look. >> we have just fillmore than five minutes left and i want to give you each of you would like an opportunity to make a last comment or to say something that came to mind during the discussion or you can lecture me about how wrong volume. [laughter] >> it is just a simple idea. assure everybody the opportunity to work for a decent pay i think we would cure a large range of

those that exist. >> dr. ross? >> i just want to reemphasize the number one problem facing the country is joblessness and that should be the top of the concern for the let the officials. i think when we put other things ahead of that we are losing sight of our priorities. >> and i would say in closing i think it's very important for our government and our nation to think about the concept of commercial diversity both in the work force, minority and women being gainfully employed and having an opportunity to rise to the highest level in the nation's corporations as well as

opportunity for minorities to grow and flourish and become full partners in our global economy and i believe the federal government needs to lead by example by being diverse with its own resources and section section 342 and other commercial diversity legislation like the 107 of t.a.r.p. i spoke about and 116h of the housing economic act that i didn't speak of and the federal bar to use its we pulled it and do business with minority and women owned firms and within the majority owned firms to the benefit of our economy.

i should speak to the tremendous amount of discussion generated around how do we develop the political will because i do think it is an important question not to be debated. one of the things important that is disturbing to me and i think our panelists brought up earlier the first panel is it is the different philosophies of government whether we would have limited the government and with the government has an actual launch of the middle market problems and really securing the wellbeing of its citizenry. i think the lexicon of the country where everybody is turned into taxpayers versus citizens is at the heart of this

problem of developing the political will. this was delivered. the word tax, we've got to get people back to the point at which the d.c. the baseline that we've got to look out for the common good whether we are talking about taking care of them were elderly, educating our children, having a decent, fair salary or guaranteed work for people having a safety net, making sure people are rewarded for their hard work, the quality in our economy we reward people who work hard and if they work hard they are allowed to become wealthy but there is no reason to deny the revenue to the federal government for the common good on capital gains on

dividend, hi and come and we have to change the lexicon of the political will has to come from all the people and right now we are engaged in a lot of class warfare. people like me taking care of the poor and vulnerable and other folks who want that the words come out of the mouse they're only concerned about the middle class. we hear people talk about the folks who need to protect those on the higher end. the common good is something we need to get back to and we need to really disaggregate this notion of the tax payers. the tax payers are part of citizens and part of a family of people come all of us are very happy to be america and we figure out how to make stuff and

export and how to get back on top. thank you. >> that is an excellent way to end this panel and on time. thank you very much, dr. william darity and austin, thank you very much. [applause] spirit this panel is entitled to using the 2012 budget to address the deficit reduction. we have heard a lot about the party's and we are going to see what we can do with the actual budget to get things under control. first as i indicated before we made a deliberate choice not to do with the deficit until the employment situation under control, the employment situation stabilized not where it needs to be pitied the

private employment is totally stabilized and state and local governments are cutting back the employment so much so its offsetting much of the private sector again. but in terms of the budget, we know how to balance a budget. we've done it paul we have the political will of 1993. it requires tough choices. it's not easy. one of the first things we do is paygo but we pay as you go if you have another program you have to pay for it. we cannot do deficit reduction with faint generalities and spending levels. you have to actually go to the budget and make some cuts and raise taxes. now, you also can't do it with a constitutional amendment. there is a reason why that constitutional amendment they keep talking about hasn't passed and that is because right before it's time to vote people read

the bill. the debate is all but title. we have a constitutional amendment to balance the budget did you to be the title. but you haven't heard of and the provisions of the ability to get the provisions of the bill those provisions have been in effect in 1993 we never would have balanced the budget to begin with so as that debate goes forward listen carefully not to the debate about the title, but about the provisions of the bill. in the 90's we balance the budget and created record jobs. the dow jones industrial average hit new records. we've reduced the deficit and eliminated. we are all the way to e eliminating the debt. the rate we are going by the end of 2000 if nothing bad happened to the budget we would have enough surplus to pass the entire national debt held by the public. that is what zero nobody to china, japan, no money to saudi arabia.

unfortunately, we also know what not to do, what we did in 2001. we've eliminated ps2 gough, we fought to wars, a drug program and are paid for it with lalinde offsets. instead of paying off the debt, we added significantly so the debt is now out of control, exploded out of control. traditionally we have been able to spend about 20% of gdp attacks and 18% and had a structural deficit. by the end of the clinton administration we were taxing 21% and will be spending 18% and that was locked in and we were all the way to paying off the national debt. unfortunately we are back now to taxing around 15% in the spending bill for 20, 23%. so we have a huge deficit.

one of the things in terms of gdp if we continue taxing 21% we can pay all of our long term expenses except health care. health care is growing greater than inflation and taking a larger portion of the gdp, and that is why the republican plan that seeks to balance long-term actually works. it will balance the budget long-term. the big complication is the way they do it is to eliminate and repeal medicare. if you don't mind repealing medicare, the budget problems are easy. this panel will explore how to get back of the right track and unfortunately we've already started last month the land in the wrong direction. we passed and 850 billion-dollar tax cut bill, $850 billion we indicated in the previous panel the social security is putting in jeopardy if you don't make those corrections.

but nobody talked about how big a bill that was. on the last panel $40,000 each you could hire 20 million people at the highest only 50 million with growing debt imply that. 20 million people could be hired at $800 billion, 850 billion-dollar tax bill. we also know 850 is bigger than t.a.r.p. and the stimulus and spends more in two years than the health care in the ten and we paid for the health care bill. incredibly i notice 850 billion virginia about 2% of the national population and our general fund budget is 15 billion a year. 2% of the 17 billion. we call the national council of state legislatures and found out if you add up the general budget of all of the state's it is

about $650 billion. add the additional money it gets up to a trillion did the general budget for all 50 states eds of 650 billion the past 850 billion-dollar tax bill and the congressional black caucus said all along this is a nice adel accept we want to know how you're going to pay for it. how are you going to pay for the $850 billion? i was at a program earlier today sponsored by nasa, and we are suspected we are not going to be able to explore space technology we have available because we need to help offset those tax cuts. education. you can't save for 850 billion without calling after education and pell grants access to college, healthcare, all of those priorities are glad to be in jeopardy because of the thousands of bills they are so bipartisan in everybody's looking get what they are going to get and mog with your going

to have to pay later. nobody complained about the huge size of the bill. so the panelists today will talk about how we will pay for it and how we can use the budget to get our deficit under control and address our priorities. the moderator is jamal simmons, a graduate of morehouse college where he recently received a presidential award of distinction and a master's degree in public policy from harvard and is a principal in the washington, d.c. based firm. his views have been featured in publications such as "the new york times," usa today, international tribune and even gq magazine. he's frequently on cnn.com msnbc, the news hour with jim lehrer and the bbc. please welcome our moderator, john paul simmons.

[applause] >> hello, everyone. i know it's getting late in the afternoon so we are going to try to keep this lightly. all this economic talk everyone is engaging in the to the volume when to start off with we are going to go least first and worked on the panel so we have to introduce everyone who's here. first we have fleece of the executive stricter of the aspen institute initiative of financial security. which is dedicated to the support of the idea of a new generation of individual development accounts available university to help low and moderate-income families build assets through retirement. before launching the initiative, she was a deputy director of the economic development to the ford foundation paid in her 13 years of the foundation, she was responsible for the grants to the community development financial the institutions and work of saving. prior to joining the ford

foundation, ms. mensah worked in corporate finance, citibank in new york. next to her is derek hamilton. derrick is an associate professor at the new school for management and urban policy and if we get the faculty member of the the part of economics at the new school for social research. the faculty research fellow at the center for economic policy analysis and the center for american progress and former assistant director of the american economic association summer research program. he earned ph.d. from the part of economics and university of north carolina at chapel hill in 1999. professor hamilton has done a bunch of other really important things. i'm not going to read all of them. but he did spend time at the university of michigan ann arbor which is near my home town of detroit so i'm going to give that to shout out. his work focuses on the causes, consequences, remedies of the ethnic eddy, the economic health

outcomes which include an examination of the intersection of identity, racism, color and socio-economic outcomes. welcome. next to him, jim car coverage e-business officer for the national community reinvestment coalition the executive committee member of american's financial reform and a trust blocker for the roosevelt institute new deal 2.0 initiatives. prodir to his appointment, and he was senior vice president for the financial litigation plan to get research for the fannie mae foundation. assistant to dr. for tax policy with the u.s. budget committee and research associate at the center for urban policy research at rutgers university. jim servile the research policy advisory board of harvard, university, for directly and university, for that he holds a graduate degree in urban planning from columbia and the university of pennsylvania and architecture degree from

hamilton university. so, welcome. this ought to be fun and interesting cattle. we are going to let the panelists get started but you'll have been sitting through this and you know like i know the president talks a lot about the deficit is of the main pillars of his planned and the other night the seat of the year did address. we saw the response from the republican party based on devotee of the response from the tea party, to the republican party based on the same thing. it's interesting to listen to everyone go back and forth about these because we all know that we have dug ourselves into a whole. we all know that the last really the eight years starting from 2000 but the wind up until now president obama inherited the trajectory we are on the we've gotten ourselves in a hole that is going to require all of us to do things we don't like to get

out of. the latter is what are our values and priorities, who is it that is going to bear the brunt of the decisions we have to make and how we make these decisions in a way that maintains our position it has opportunity for all of the citizens a of the ones who have guided us into the troubled and of having to bear the same cost at least the sale of the cost has everyone else did not getting off the hook with that i'm going to start with alisa and let you open us up and we will have some questions with the panel was finished. >> thanks, jamal in the congressman scott and members of the congressional black caucus. it's a pleasure to be here. i love the question you left us with getting our deficit under control and address in our economic priorities. i see that is the right way to go into the budget season.

for both of us who spent time in the policy circles of washington there is another star in the night of the state of the union de and the release of the president's budget which will come and i think that's what you have asked us to take a look at here and how could this budget be used to address the deficit but also to address our economic parity. i want to say three things like we should all keep in mind about the rationale the we did to this budget year and i want to say a few words about what you think, congressman scott, getting back on track and what to avoid it that i want to leave it with our best ideas from the aspen institute on how to go forward and getting the deficit under control in addressing our priorities. first of the rationale i want to talk about growth, savings and investment and some progressive tax reforms.

first, growth. we have a deficit because we have a huge crisis and recession and this is the demand constrain the economy. it means we don't have enough growth if we could speak at gdp growth we wouldn't have this deficit in one year, so - one thing we should be looking at is where are the drivers of growth? where do we create the jobs the would drive growth? i think the first principle revoking the remaining 40 billion in direct spending as part of the stimulus proposed by some of the house republicans was a dumb idea. it would only exacerbate and i need you know it but i would state of course we've got to grow in order to get the economy moving. that's the first week to reduce the deficit. that i want to reclaim the the term investment. it's gotten a bad rap.

your colleagues across the iowa or cleaning it is just a silly word for more spending, but i want to link the word adjustments to savings at the initiative on financial security we talk a lot about how to create a new culture of savings a nation can only invest with the saints, and in this country we have the need to generate true savings at all levels of the economy but because the second title of the gathering we have a huge wealth gap and also we need the savings and i think the true savings tax policy is the place to do this so we need some serious credits that rebuild the savings system and i want to give you my rationale to fold. it's both for households over indented and vastly under, do not have sufficient wealth and

it's great for the economy. if we can increase household wealth and by talking about stockholding this, real net worth and i know my colleagues will get to this the net worth we have a home-equity we will in fact increase be putting something in the economy that is vital. we need more growth, but the savings side of investment and to do this because it's good for households and the economy. let me say a word by getting back on the right track. i think we know we cannot cut our way to true surplus. deficits, yes, but if we cut it's like my dad overprinting my mother's flowers, they will just die. so i love the presidents engine and algae. we can't take the engine out and wonder if the plan will fly so there is a caution that there

are investments to stimulate growth and this is the way. another caution is that it's a difference between cost reduction and cost shifting. what we have seen the last decades are shifting burdens and costs to individual much more risk, proposals like voucher programs for medicare are huge risk shifting. i know you know that and this will hinder growth, and finally, the real driver of the deficit are the costs of health care, not social security. they are the drivers, so i want to encourage you to stay on the track and not falling for a mistake in place of where to look for savings and do focus on where we can gain health care cost efficiencies. so what are my best ideas? i have three of them. first is in our retirement system that i believe we will see the smartest tax credits we

could use it they will be right on your desks as you head into this budget season. the president proposed in the last budget $30 billion or for something called and expanded savings credit. it would literally be the first time that the tax credits went to the account of lower and middle-income americans to build their wealth i see it is a breakthrough policy and a vital to rebuilding mistakes so it is a refundable tax credit and 50% match if you save up thousand dollars $500 to your long-term savings account. it's powerful and i hope we see it in the budget as we have the last few years and i think it is a big one. second, we should be adding the children, adding the kids read this is the moment in this budget, and they did this time

to create accounts for all children. let's start addressing of the wealth chapter. we can do we did a very modest way with $500 carper account that would essentially be a number ira and let the children grow these accounts over their lifetime so they would be arriving with things more valued at 20,000 but they would have done it through growth matches and their own efforts and that would be a powerful addition. to add 2 billion to a 30 billion-dollar tag that's already in the budget seems to be to be a very modest revolutionary change. finally, and i know by copay analysts will also be speaking on this, but since we have had such a huge loss of wealth through foreclosures and the crisis and who motorship, i believe this is the time to start investing in the down

payment in the actual equity side should get the americans bring to the ownership, so our group is recommended a national system of accounts. again, this is matched monday to become money for people sitting for a down payment. again, it's another savings that to build net worth to be able to come right back into homes and rebuild what is arguably the most important asset in america. so jamal, i am going to hand it back to you. those are my ideas for the rationale to get back on the right track and how to get the deficit out of control but also address our priorities. >> [inaudible] -- thank you. i guess i will start by talking about the context of racial equality in the legacy of the

and i am going to talk about what i regard the transformative policies and then decide areas and our budget which i think are very regressive in the approach towards either of two big funds. the u.s. is characterized by longstanding patterns of racial equality to deepen further of economic downturn for a simple white unemployment rate is 8.5% while the black rate is nearly twice as high as 15.8%. over the past 40 years it's been less than five years in which the right to a white racist superseded 8% and contrast only one year in which the black race has been below 8%. also covered nearly 90 per cent of the u.s. occupation can be classified as racially segregated even after accounting for educational differences. with blacks more likely to be crowded the lower learning occupations and out of the haulier and occupations so the current crisis is not something

that is a one-shot deal for blacks like we are in a perpetual state of crisis. nonetheless it is a paramount indicator of the social well-being and perhaps paramount indicator of racial equality although there still exists the disparities of income and education this big reductions in the income gap until around the mid 1970's it continues to be reductions in the education gap albeit the flow as measured by the scores and high school graduation rates. in contrast despite these improvements in both education and become the wealth gap remains exorbitant and persistent. before the current crisis, the typical black family had less than 10 cents for every dollar of wealth of the typical white family and the racial wealth that exceeded one madrid thousand dollars. the disparity is so pronounced that the media and latino a black household would have to save 100% of their income for

close to three consecutive years to close the racial wealth gap. furthermore, 85 present of black and latino households have a net worth below the median white household. so regardless of age household instructor, education, occupation or in come black households typically have less than a quarter of the wealth of otherwise comparable white households. perhaps even more disturbing the median wealth of families who had graduated from college west of the median wealth of white families who had dropped out of high school. so why is wealth support? orloff your families are the positioned to finance the lead in dependent schools and college education access capital to start a business, finance expensive medical procedures, reside in the higher the birds come exert political influence through campaign financing, purchase better counsel confronted with the legal system to withstand financial hardships color resulting from in the number of emergencies.

a commonly held belief is that in search of immediate gratification blacks are less frugal when it comes to savings when it's not historically been the case nor is it now the case that blacks are more profligate than whites economists region from the conservative milton friedman to marjorie to the recently deceased founder of the black caucus found that after accounting for household income blacks had slightly higher savings rates than whites. more recently also find blacks have a slightly higher savings rate advantage once in congress controlled. careful economic study actually demonstrates inter family transfers account for the racial wealth gap than any other demographic and social economic indicator including the education, income and household structure.

these transfers to the primary source of wealth for most americans with positive net worth are transfers of more on merit resources. so why do blacks have less resources to transfer across generations? well, apart from the failure to in doubt his promise of the civil war, the blacks were deprived systematic property especially land and the accumulated between 1880 to 1910 by the government complicity fraud. during the first three decades of the 20th century prosperous black communities and associated property literally would destroy communities ranging from north carolina to also oklahoma. the historical use of the restrictive redlining in the general lending discrimination were also factors that inhibited blacks from the two leading wall. furthermore, oliver and shapiro

in separate studies document exclusions of blacks in depression and world war ii public policies that are largely responsible for the asset development of an american middle class. the treatment of blacks in the market is not limited to the past. for the civil the recent report on mortgage lending conducted by the institute of race and poverty at the university of minnesota finds the black residents of the highest earning categories such as those earning above $150,000 or twice as likely to be denied home loans than the whites of the wording categories below $40,000. it's also the case among those fortunate or on fortunate enough to actually get a load of your earnings lack three times as likely for this of primm loans to the lower earning whites. all of this is to let us know that private action alone is insufficient to address these racial disparities.

the most efficient way is to carefully target rate based policies. if it indicates this policy is becoming increasingly politically unfeasible, that we need a shift to more dramatic policies to lead to economic securities, mobility and sustainability for all americans. i am not optimistic about the public will to directly address the racial welfare. despite persistent racial disparities, public sentiment continues to move strongly away from race specific social policies, but all is not lost since the distribution of wealth as i mentioned also is so racially disparate, 85% of black families have households below the median what family the wealth can be an effective bonnet rate based instrument to eliminate racial inequality. ..

which guaranteed federal jobs for all willing and able idea americans would achieve some of these goals. the child development accounts with that address for 50, 75% of all newborns who average accounts of $25,000, but progressively rises to $60,000 for newborns born at the most poor families. the accounts would drive a federally guaranteed 1.5% to 2% annual interest rate and could

be a day when the child becomes an adult for some absent enhancing endeavor which is purchasing a home. financial data facilitate their ability to identify financial monitoring advances by the irs, service examples of the public site whose ability to measure financial acid. further, many localities are engaged in home values, electronic or appraisal based on market valuation of area home sales provided another example to measure individuals. to avoid savings card outcome of the transfer program could be structured in a manner similar to the earned income tax credit program, which uses the phaseout schedule and work incentives. finally, you may be a concern that program may influence the economy in which, grandparents or their relatives might make transfers to their offspring so

that the child -- children of these offspring can increase the federal bond support in which they follow. in order to address this concern, the government could reserve the right to tax future transfers to baby bond recipients in order to avoid potential moral hazards. does the public sector have the resources to tackle the racial wealth gap? the answer must be a resounding debt. the federal government's ability to raise $70 billion to t.a.r.p. along with the additional 2.5 trillion financial systems by april of 2009 is indicative to raise them leverage substantial sums of money quickly. in addition, a 2004 record who estimates that even before the current financial crisis, federal government allocated its

2003 budget in the form of tax subsidies to promote asset development policy. so we have an asset building policy already. the bulk of this allocation comes from items like mortgage interest deduction, exclusion of investment income on life insurance and annuity contracts, reduced rates of tax on dividends and long-term capital gains and exclusions of debt. the total allocation, which is about 15 times higher than what is the department of education does not include subsidy or tax breaks given to corporations nor funds from state and local level policy. more recently, a 2009 budget estimates its allocation and close to $400 billion of more than half of the benefits going to the top 5% of earners. so it's not the amount of this allocation, but do have the allocation would distribute. the top 1% earning over a

million dollars a year but it's more than one third of the entire allocation for the bottom 60% receive only 5%. furthermore, individuals in the bottom 20% typically receive a measly $5 in a fit from these policies. perhaps if the federal asset promotion budget was in a more progressive manner, federal policies could be transformative for low-income americans. in sum, to address the enormous and persistent epithet, we need a shift -- many to shift our policies from subsistence transfer programs that are aimed on income maintenance to bold transformative sustainable policy and enhancements. primarily through tax credits can the u.s. government is already engaged in an asset policy, totaling nearly 400 billion per year. unfortunately bottom 60% of earners receive only 5% of the

proceeds. in contrast to my baby bond proposal would be far more progressive, opportunity enhancing and a lot less expensive. so ultimately rhl should be a ratepayer in re central america, but if it occurs to mission of racial economic advantage or disadvantage across generations would have to see. the provisions of a substantial trust for newborns from families in the passage of an appointment i could go a long way towards achieving this ideal. >> thank you. i should say for the record i gave chapel hill in michigan they shot up. he also worked at yale university for a couple years. jim, are you -- are you ready? >> good afternoon. >> there you go.

>> good afternoon from. i am really honored to be here today. i like to thank congressman scott who is sponsoring this panel and chairman cleaver and other members of the congressional black caucus for allowing me to share my thoughts today on the best ways to do with the deficit and put america back on the right track to a prosperous economy. the current economic crisis has shown no current members of economic enforcement mask the reality for millions of americans. if you look at the economy and economic statistics, i watch bloomberg news every morning. i'm amazed that you hear conversations around gdp has positive, that earnings of the corporations are at record levels. stop prices are soaring in large corporations are sitting and trillions of dollars of cash and other liquid assets. but i also do a lot of reading during the course of the day as

well and i'm just amazed by the time i get to work i've read about unemployment remaining high at 9% and we know that number would be significantly higher if we took into account people working part-time to need full-time worker took into account people to infective dropped out of the market for lack of any jobs to apply for her. poverty and severity of poverty are both large and growing. small firms are struggling to keep their doors open and job creation in the making millions of families continue to lose their homes to foreclosure. my remarks are kind of in the order that i wanted to give them, but i felt based on that question was posed on the last panel i kind of have to digress because i wanted to be part of that q&a. that question was about eight inc. bailout. did network? well, i have to say i kind of lean towards dr. dirty. i did get was very inefficient. and i was taking a few notes to sort of walk through why i say

that. it's true we averted the second great depression and of course the good thing. the bad thing is that the approach we took really does explain these two worlds that were watching. a lot of people looking right now and if you're to watch a lot of news shows he say wow, that shows the free market enterprise and big corporations in a better position and are doing better. no it's not. it's because they're a buildout. it's that simple. it's not the invisible hand of adam smith. it is not the sort of organic way the economy works. that's all nonsense. the way you know it's nonsense is if you look at a couple of things. you look at the fact that the bailout is continuing. it's continuing through 0% interest rate at the federal reserve that's accessible by the larger corporation. if anyone of us have access to billions of dollars at 0%, arafat than you could probably make some money.

i'm willing to test that theory by asking that the fed gave me about 5 billion for about two weeks. i will come back and testified that i am sinfully wealthy commandline brilliant in business. anyone can be brilliant in business if you're saturated in cash. that's what both large earnings are not good earnings. and that is why the bailout continues. at some .0% interest as the end. and when that happens, we will see the real complexion of the economy. in fact come the largest banks are earning those dollars not based on contributing to productivity or jobs. it's not a result of lending. it's a result of proprietary trading. all one has to do is look at the book of business and you'll see something very striking and disturbing. the largest bank said on hundreds of aliens of dollars. not williams. billions of dollars a second glance, much of which are overvalued because they run houses that are upside down. roughly 22% of loans outstanding are upside down. so this is a crisis of

phenomenal proportion it hasn't gone anywhere. it still exists. or just ignoring it because for continuing to bail out financial institutions and most recently you've heard a lot about something called quantitative easing. and so you see the beat goes on. and these disparate outcomes are due to the fact that when the crisis first ensued on the problem the banks had something to something called toxic assets in the forms of foreclosures. what's particularly important for this conversation is those toxic assets were disproportionately bad loans, predatory loans peddled to communities of color. had we addressed the bank's problem, toxic assets, by helping homeowners maintain their homes, we wouldn't have the foreclosure crisis we have today. and guess what? we would've averted the great depression as well because we would ensure that the asset the banks had. instead we simply treat it as a liquidity problem, channel trillions, not billions of

dollars to financial institutions. and it's propped them up with this avoided the depression, but it hasn't fixed the americas economic problem. we still have it and we still have a major financial crisis that we haven't fully recognized. now back to my script. [laughter] meaningful or reducing the deficit cannot be achieved solely by what reducing domestic spending. in fact, have to come back to one in a conversation with dr. dirty and the other speaker. and that is for the last two years the largest writer of foreclosures has been guess what? unemployment. so there is a link as he suggested. not being fully reducing the cannot be achieved only by reducing domestic discretionary spending. in fact commissioner backs on domestics unanchored further damage the struggling economy by trickery and less spending and promoting further job losses. this is not to say nothing can

be done to reduce the deficit. we can begin to close the deficit with the repeal of many tax giveaways that do not add to economic productivity or rather act as a further drag on the economy. the congressional black caucus and several of the speakers today have already identified many of these tax concessions that could be reined in by while focus on them in my remarks. in addition is with keeping in mind america has more than just a budget deficit problem. this nation is experiencing unemployment to be sick on a competitive deficit in a shared prosperity data say. the good news is addressing the three letter deficits is the most efficient and effective way to resolve the first deficit, which is the budget deficit. some policy recommendations that will offer will not incur any additional spending. i'm sure that's good news to members of congress. others will unfortunately require new spending to ensure the long-term health of the economy and responsible deficit letters in the future.

now in a limited time i have today, i'm going to do with lisa did, which is focused on maybe about three items. the first item that i'm going to focus on is the foreclosure crisis. i have to say i'm amazed. i'm mesmerized by the idea that somehow the u.s. economy is going to recover. in fact come on the problem that was the epicenter of the crisis in the beginning continues, through most of 2010, foreclosure rate hired more than 3000 per month from a dramatic reduction in bank repossessions at the end of the year but not due to reduction in the number of families unable to pay mortgages, but rather due to legal problems within the banking system. yes, more problems besetting the financial system because we didn't resolve the foreclosures. as long as those foreclosures continue, more and more problems. now is that legal problems i can talk about if someone is interested in q&a. so there are roughly 2.9 million foreclosures flashier and the

largest data collection entity that focuses on this issue estimates it could be as much as 20% higher this year. in other words, the problem that started in 2007 at the foreclosure crisis has simply gotten larger every single year and this year will be no different. but here's a caveat. it may not be a surge this year because the legal problems and the servicers may slow them down. what does that mean? it simply means we'll be pushing the housing problem into next year in 2013 or even further, which means we'll continue to have a track on the economy. what a drag on the economy is in miami so fixated on foreclosures? because they are humoring house prices. house prices are at an historic low. we've now had house prices nationally dropped below what they were the drop of the great depression and still falling. foreclosures are therefore essential to shoring up the economy and reducing deficit and

it's worth waiting out the falling house prices of multiple effects on the economy. first of all, the typical home -- the typical families largest single source of wealth is the family home. so is the home price declines, so does the families not wealth. that has two effects. one comic takes a additional discretionary spending to the extent they no longer pose iniquity to tap. second of all, it creates retrenchment mentality. in other words, consumer confidence wanes. coming out of the 2001 recession and was housing equity that allowed us to drive our way out of that recession. that bubble is gone. fortunately and hopefully will never return. but the reality of it is we don't have anything on the horizon to compensate for or replace the housing equity. so i would recommend three tngs. first related to the foreclosure crisis. first we need to increase the effectiveness of the home of affordable modification programs for hamp.

that program was allocated $46,000,000,000.2 years ago and the fact of the matter is because of the close of december of last year, a full 1 billion had been drawn down on the program. the program has worked a painfully poorly. i believe right now if you look at the hamp modifications that directly tap the t.a.r.p. dollars that are allocated, there are multiple programs within -- within the federal government. the one that is tapping hamp is about 10,000 modifications in an environment where were having about 25,300,000 foreclosure filings each month. the special inspector general for t.a.r.p., the gao, several nonprofit research centers including ncr see in the paper i co-authored called the five realities goes into great specificity and detail on a number of things that can be done to improve the hamp program without costing any additional

dollars. the second thing we need to do is enact changes to the bankruptcy code to allow the outstanding debt on principal residences to be adjusted by bankruptcy judges. currently the family home is the only major asset that cannot be modified by bankruptcy court. yet rental property can be modified. this restriction serves no public policy purposes whatsoever. none. you can modify your yacht but matcher home. in the middle of a crisis. again, we go back to the debate that ensued on the left panel. we don't pass bankruptcy reform. instead reader to passing out over $11 trillion interrupt crampons guarantees and other support rather than doing bankruptcy modification would've to take in the third of the problems off the table. i think i've said enough about

that. now, i should point out that not everyone is in favor of bankruptcy protection. the opponents say will undermine the housing market. i smile every time i hear that. how can you get more undermined and right now? there is no housing market. it's completely moribund. in fact, according to fha commissioner david stevens, it's on life support. it's all federally supported. even the major proposals will have a get financial system on its flags in the housing finance this work on almost every private sector proposal is proposing federal guarantees. but we can't have bankruptcy reform. more effectively, we need to address the government-sponsored enterprises. they are facing massive losses in potential of the of billions of dollars. and unfortunately the real losses from those entities for this ongoing foreclosure crisis are not completely transparent

or clear to the american public. one of the challenges is that we need to adjust principal outstanding on home skinning to foreclosure. but there is a resistance to do that with the government-sponsored enterprises because those losses are born directly now by the federal taxpayer or federal citizens. i think it's citizens. but here's the rub. the losses are going to be the losses. so the longer we let those losses occur, the more will go into foreclosure and a larger losses will be. so when were talking about deficit reduction, we should have an accurate estimate of what the real projections are for the losses of the gics. if it costs us money to go ahead and accept the 50 billion, 100 billion, 200 billion right up front, we need to do to put a floor in the falling home prices and allow the housing market to actually pick back up because i believe you would see a dramatic turn of events if in fact we

send the foreclosure crisis. as long as we ignore the cost of these foreclosures, again, we're pushing the crisis off into next year and the hereafter and most of the deficit reduction conversation in my view is going to be pure academics if in fact we can't get the rather seriously back in the water and the economy. now, couple of other things we could do is we could reprogram some of the dollars that are allocated toward the hamp program. i won't go through the numbers because they are dizzyingly complicated. suffice it to say the congressional budget office estimates is about 12 billion in total to 46 billion is actually likely to be sent through the program. there are a number of programs such as the hardest hit funds was actually enacted it was allocated somewhere in the neighborhood of about $10 billion. isn't fha refinance program that

the hardest hit fund has just under $8 billion allocated toward it. i think 100 million has been spent so sparta. there's a special fha refi program that is close to $10 billion allocated to it. i think 15 -- like five, 10, 15 refinancings have occurred to the program. so i think we should consider reprioritizing them of those hamp dollars. but what i reprioritize them on? at reprioritize in the neighborhood stabilization program, specifically funding criteria in sp two. it was well developed. it's well-designed to go to the most distressed communities. what i would do it with this band. i would connect programs for employment as well as programs for other social services with housing and foreclosure and the communities figure out how best they can solve their own

multifaceted economic and housing crisis from this program. we cannot somewhere in the neighborhood of between 20 to $30 billion go into those communities in a way in which they decide how to use those dollars. that would be real stimulative to an economy and would not require new dollars. it would be using dollars for the party been provided. a final recommendation builds on dr. austin said the previous panel to the core problem that brought financial system was a foreclosure crisis, but extreme economic with economic problems that have been long in the making. jobsite of the country shipping of national golf to an increasingly small share of very wealthy households, receiving an ability for the nation to create new jobs and increasing economic distress for the nation's most economically vulnerable families have been growing for three decades. the nation has failed to public policy to acknowledge and respond to the shifting winds of global competition and its

implications for middle and working-class americans. the nation is in need of a competitive agenda that would include policy recommendations on trade, taxation and spending. i would say also include infrastructure spending, job creation, education, economic mobility shared economic prosperity. somehow the changes such as in the tax arena could go a long way toward offsetting the cost of such a powerful and comprehensive program. in conclusion, what's to the deficit is a major worry, the most substantial challenge for america in my view is whether we will invest in our future by we still have that option. thank you. hot back >> thank you will the panelists. my first question to you is this. glistening tear up in remarks, at one point is dealing with the actual budget deficit -- what

point do you think it becomes crisis? when do we have to do with the budget deficit? at what point does it become a crisis that we have to do with it and we can't put it off any further? are we at that point in our hall in the future do we have? >> my view is when you're in a recession, which in my view we are actually in a recession, it doesn't matter what the numbers say. when you look at the numbers of high unemployment, growing poverty et cetera. at that they need to take my pill. we all know we need to stimulate the economy and you cannot stimulate the economy by reducing your spending. which you can do what i would say is urgent right now is to repeal unproductive hole in the budget called tax preferences that don't stimulate the economy. so for example, tax preferences about 200,000. all these other things which are great giveaways are not helping

us. they are hurting us because the deficit really does count. but i think one last thing i'll say it is not just a matter of is the deficit higher or not. it's why is that deficit higher? the highest deficit we ever had came out of world war ii and yet the following years were the strongest sustained economic prosperity and shared prosperity for america. it's because we invested infrastructure and that's what we need to do right now and we need not to waste time getting around to that. >> for me ask you a question. at one point can we not put the deficit off anymore? >> here's a little creek we prepped on what various commissions were aiming for. the president's commission, both since then commission was trying to get to a deficit of 2.2% of gdp by 2015. i think all thoughtful efforts are trying to go which in hindsight said, which is don't

put everything now in an emergency. but where are we in 2015? were 2011 now. so i think he's asking us a tricky question, which is what are we doing now in this budget that sets us on that path? everybody is trying not to constrain demand further so we create a worse recession. so that is the challenge now and i love jim's point about hope. i think it's irresponsible to enter this conversation, saying don't pay any attention to it. that makes our voices sound very weak. i think we're paying attention to it. and i think even the most progressive leaning, you know, epi are looking to bring deficits, you know, to 3.7% in 2020. so i guess that makes turn -- and like to say we're on the move to bring things back. nobody's saying anything in

2011. the most aggressive or sanely make progress by 2015. even if you left it out loud and the cp square to be 20% in 2015. so i think the question is what are we doing out in the budget of 2011? excuse me, fiscal year 2012. what are we doing now that sets it on the right path? i think you heard a powerful argument for a deal with foreclosures in my estimation, what i would also add is you're going to -- if there is a call for tax reform, due to tax policies now have filled wells and put something back to this economy. those of you that things will be the trade-off and loop also actually contribute to growth. you know, putting a tax credit. what to say one more thing. putting stocks, creating new demand for stocks to a child account or three new kind of

ira, pulling 40 million people into saving systems. that's a direct stimulus to markets. it's not some welfare giveaway. so we shouldn't be drawn into this where there's no investment that is part of putting things back on the right course, reducing the deficit in the growing economy. >> we have to be careful about what some of the ten-year budget window because we passed what was marketed as a two-year $850 trillion tax cut. the majority kind of acknowledged the rhetoric that if you do not continue a tax cut, but constitutes tax increase. we have cut the taxes for two years to expire the middle of a residential election year. if we couldn't cut these tax cuts off in a lame-duck session, when election was far a