corporation for development, estimates that even before the current financial crisis the federal government allocated $335 billion of its 2003 budget in the form of tax subsidies and savings to promote asset development policies. so we have an asset building policy already. the bulk of this allocation comes from mortgage interest deduction, exclusion of investment in, life insurance and annuity contracts people and reduced rates of tax on dividends and long-term capital gains, exclusion of capital gain to debt. total allocation which is 15 times higher than what is spent by the department of allocation does not involve tax breaks given to corporations or funds from state and local level policy. more recently, a 2009 budget estimates this allocation is close to $4 billion worth half of the benefits going to the top

5% of earnings. at issue is not the amount of the allocation but to whom the allocation was distributed. the top 1% of earners those earning $1 million a year received more than 1-third of the entire allocation. the bottom 60% received only 5%. furthermore individuals and the bottom 20% typically received a measly $5 benefit from these policies. perhaps if the federal asset promotion budget was allocated in a more progressive matter federal policy could be transformative for low income americans. in some, to address the enormous and persistent racial wealth gap we need a shift -- we need to shift our policy focus from persistence transfer programs aimed at income maintenance to bold, transform of, sustainable policy that leads to enhancements primarily for a tax

credit. the u.s. government is engaged in an asset promotion policy totaling $400 million per year. the bottom 60% of earners receive only 5% of these proceeds. in contrast of baseball's proposal would be more progressive, opportunity enhancements and allow less expensive. ultimately the ideal should be a ratepayer rather than rate neutral. 42 occur transmission of racial economic advantage or disadvantage across generations -- these provisions of a substantial trust from families that are well off port and passage of the full employment act would go along way toward achieving this. >> i should say for the record and gave chapel hill and michigan a shout out. he also worked at yale university in newhaven.

jim, are you ready? >> good afternoon. is this turned on? >> there you go. >> good afternoon. i am honored to be here today. i would like to thank congressman scott who is sponsoring this particular panel and chairman cleaver another distinguished members of the congressional black caucus for allowing me to share my thoughts today on the best ways to deal with the deficit and put america back on the right track to a prosperous economy. the current economic crisis has shown how current measures of economic performance increasingly map the reality of life for millions of americans. if you look at the economy and economic statistics i watch bloomberg news every morning. i am amazed that you hear conversations around gdp is positive or earnings at the nation's largest corporations are record levels, stock prices

sorry of large corporations and on trillions of dollars of cash and other liquid assets. i do a lot of reading during the course of the day as well and i am amazed by this, i get to work, unemployment remaining high at 9% and we know that number would be significantly higher if we take into account people working part time but who need full-time work or people who have dropped out of the market for lack of any jobs to apply for. poverty and the severity of poverty are large and growing legal small firms are struggling to keep their doors open and job creation is anemic and millions of families lose their homes to foreclosure. i felt based on the question that was posed on the last panel i have to digress because i want to be part of that q&a. that question was about a bank bailout.

didn't it work? i have to say i lean toward it was very inefficient. taking a few notes to walk for what i say that. it is true we averted the second great depression and that is a good showing. the bad thing is the approach we took really does explain the two world we are watching. a lot of people right now if you were to watch a lot of news shows you would say that shows big corporations are better position than doing better. no, it is because there were bailed out. it is that simple. it is not the invisible hand of adam smith. it is not the organic way the economy works. that is all nonsense and the way you know it is nonsense is this you look at a couple of things. you look a perfect the bailout is continuing. it is continuing a through zero% interest rate that the federal reserve is accessible by the largest corporation.

if any of us had an actress to billions of dollars at 0% you could probably make some money. i am going to test that by asking that the fed give me $5 billion for two weeks. double come back and testify that i am wealthy. and i'm brilliant in business. anyone can be brilliant in business if you are saturated in cash and that is why large earnings are not good earnings and that why the bailout continues. at some .0% interest has to end and then we will see the real complexion of the economy and the largest banks are earning those dollars not based on contributing to productivity or creating jobs. is not a result of lending. it is a result of proprietary trading. all one has to do is look up the book of business and you will see something that is very striking and disturbing. hundreds of billions of dollars, not millions, billions of dollars, much of which are

overvalued because they're on houses that are upside-down. roughly 22% of loans outstanding are out upside-down. so this is a crisis of phenomenal proportions that hasn't gone anywhere. we are just ignoring and because we continue to bailout financial institutions and most recently we heard a lot about something called quantitative easing and so you see it goes on. and these disparate outcomes are do to when the problem the bank's head with something called toxic assets in the form of foreclosure. and what is particularly important for this conversation is those toxic assets were disproportionately bad loans, peddled to communities of color. had we addressed the bank's problem by helping homeowners maintain their home we wouldn't have the foreclosure crisis we have today and we would have averted the great depression as well because we would have short

up the assets that the bank had. in simply treated it as a liquidity problem, channeled trillions, not billions of dollars to financial institutions. and it. has propped them up and avoided the depression but hasn't fixed america's economic problem. we still have it and we have a major financial crisis that we haven't recognized. now back to my script. meaningfully reducing the deficit cannot be achieved solely by reducing domestic spending. in fact i have to come back to one last thing that was in the conversation and that is for the last two years the largest driver of foreclosures has been unemployment. there is a link as he suggested. meaningfully reducing the deficit cannot be achieved by reducing domestic discretionary

spending. the sharp tax on domestic spending could further damage the struggling economy by triggering less than promoting further job losses. this is not to say nothing can be done to reduce the deficit. we can close it with the repeal of many tax giveaways that do not lead to economic productivity but rather have a further drag on the economy. the congressional black caucus and several speakers have identified many of these concessions that could be reined in so i won't focus on them in my remarks. it is worth keeping in mind that america has more than just a budget deficit problem. this nation is experiencing an employment deficit, competitive deficit and shared prosperity deficit. the good news is addressing these deficits is the most efficient hallway to resolve the first deficit which is the budget deficit. some policy recommendations on will offer will not encourage any additional spending. i am sure that is good news to

members of congress. others will require new spending to ensure the long-term health of the economy and responsible deficit levels in the future. and the limited time i have today i will focus on three items. the first item i am going to focus on is the foreclosure crisis. i am amazed by the idea that somehow the u.s. economy is going to recover when the problem that was the epicenter of the crisis in the beginning continues. for most of 2010 foreclosure filings exceeded $300,000 per month, dramatic reduction in bank repossession at the end of the year not due to the number of families unable to pay their mortgages but rather the legal problems in the banking system. more problems be setting the financial system because we didn't resolve the foreclosures and as long as those foreclosures continue more and more problems.

we have legal problems i could talk about if someone is interested. there are 9,000,004 closures and the largest data collection entity that focuses on this estimate it could be as much as 20% higher this year. in other words the problem that started in 2007 as of foreclosure crisis has gotten larger every year and this year will be no different but here is the caveat. it may not be as large this year because legal problems with the servicers may slow them down. what does that mean? simply that we will be pushing the housing problem into next year in 2013 or even further which means we will have a drag on the economy. why am i so fixated on foreclosures? because they are hammering house prices. how prices are at historic lows. they dropped below what they

were in the great depression and still falling. stemming foreclosures shoring up the economy and reducing the deficit is worse pointing out that falling house prices have multiple effect on the economy. the typical family's largest source of wealth is the family home. as that home price declines so does the family's net wealth. that takes away additional discretionary spending to the extent they no longer have all housing equity and secondly creates a retrenchment mentality. consumer confidence wanes. coming of the 2001 recession it was housing equity that allows us to drive our way out of that recession. that bubble is done. hopefully it will never return. and how they replaced that loss.

i recommend three things, related to the foreclosure crisis. we need to increase the effectiveness of the affordable modification program. that was allocated $46 billion, two years ago. as of the close of december of last year a full $1 billion, $1 billion drawn down on that program. the program has worked painfully portly and if you look at the modifications that directly kept what was allocated, there are multiple programs within the federal government but the one that is tapping the environment where we have 300,000 foreclosure filings.

the paper called the five realities, a number of things to improve the have program without causing additional dollars. the second thing is to enact changes to the bankruptcy code for the outstanding debt on principal residence by bankruptcy judges. currently the family home is the only major asset that cannot be modified by bankruptcy. it rental property can be modified. this restriction serves no public policy purpose whatsoever, 9. you can modify your yacht but not your home. in the middle of a crisis we go back to the debate that ensued on the last panel. we don't have bankruptcy reform. instead we pass out $11 trillion in loan guarantees and other

supports rather than doing a bankrupt the modification which could have taken a third of the problems of the table. . i think i have said enough about that. i should point ought not everyone is in favor of bankruptcy protection. the opponents say it will undermine the housing market. i smile every time i hear that. how can you get more undermined than right now? there is no housing market? according to david stephens it is on life support. even major proposals on how to get the financial system back on its legs, almost every private sector proposal is proposing federal guarantees. but we can't have bankruptcy

reform. 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 we need to adjust principal outstanding on homes getting to foreclosure. there is resistance to third with government sponsored enterprises because of the federal taxpayer. or federal citizens. here is the rub. the losses are going to be the losses. longer we let those losses occurred the more homes will go into foreclosure and the larger the losses will be. when talking about deficit reduction we should have an accurate estimate of what the real projections are for the losses and if it costs less money to go ahead and accept the loss, $50 billion, $200 billion right up front we need to put a

floor on falling home prices and allow the housing market to pick back up because you would see a dramatic turn of the events if we stem the foreclosure crisis but as long as we ignore the cost of these foreclosures we are pushing the crisis of into next year and the year after and most of this deficit reduction in my view is going to be pure academics if we can't get the rudder seriously back in the water on the economy. a couple of other things we could do is reprogram the dollars allocated toward the have program. i won't go through the numbers because they are dizzyingly complicated but congressional budget office estimates that $12 billion in total of a $46 billion is likely to be spent for that program. there are a number of programs

like the hardest hit fund that was allocated in the neighborhood of $10 billion. there is an fha refinance program, just under -- $100 million was spent. close to $10 billion allocated to it. 15 refinancing has occurred. we should consider reprice or revising some of those. what would i agree prioritize? the neighborhood stabilization program. specifically funding criteria. it was well-developed and designed to go to the most distressed communities but i would do it with a spin. connect programs for employment

as well as programs for other social services with housing and foreclosure and let communities figure out how best they can solve their own multifaceted economic and housing crisis. we could have between 20 to $30 billion going to those communities in a way that they could decide to use those dollars. that would stimulate the economy and not require new dollars but using dollars that have already been provided. my final recommendation build off of the previous panel. the problem that brought the economy to its knees was a foreclosure crisis but the extreme economic distress we continue to experience because of structural and economic problems that long been in the making. migration of jobs out of the country, shifting of wealth to small share of healthy household, the inability of the nation to create new jobs and increasing economic distress for

the most economically tolerable families have been -- the nation has failed to acknowledge and respond to the shifting winds of global complication and implications for middle and working-class americans. the need of the competitive agenda that would include policy recommendations, trade and spending. also include infrastructure spending, job creation, economic mobility and shared economic prosperity. some policy changes in the tax arena could go along way toward offsetting the cost of such a powerful and comprehensive program. the deficit is a major worry but the most substantial challenge is whether we will invest in our future while we have our option. [applause] >> thank you to all the panelists. my first question to you is

this. listening to your opening remarks. at what point is dealing with the actual budget deficit--at what point does it have to deal with immediately? when do we have to deal with this budget deficit and that what point does it become a crisis we have to deal with and can't put off? are we at that point? how long in the future do we have? >> when you are in a recession and we are in a recession, doesn't matter what the numbers say. when you look at high unemployment and growing poverty that is not the time you say i need to tighten my belt. we need to stimulate the economy. what you can do and what are would say is urgent right now is to repeal unproductive holes in the budget called tax

preferences that don't stimulate the economy. tax preferences above 200,000. all these things that are great giveaways, the deficit really does count but one last thing i will say is it is not just a matter of is the deficit high or not? why is the deficit high? the highest deficit came out of world war ii and yet the following 30 years were the strongest period of sustained prosperity for america. we invested in infrastructure and that is what we need to do right now and we need to not waste time getting around that. >> at what point can we not put the deficit off any more? >> a little grid on what the various commissions were aiming for. the president's commission was trying to get to a deficit of 2%

of gdp to 2015. all thoughtful efforts are trying to echo what jim has said which is don't prune everything now in an emergency but where are we in 2015? we are in 2011 now. it is a tricky question which is what are we doing now in this budget. it sets us on that path. that is the challenge now. don't pay any attention to it. that makes our voices sound very week. we are paying attention to it. even the most progressive leaning are looking at deficits.

unlike to say we are on the move, progress by 2015. even if you left it alone it will be 4.6% in 2015. the question is what are we doing now. the budget is 2011 or 2012, what are we doing that sets it on the right path? you heard a powerful argument dealing with foreclosures. what i would also add is if there's a call for tax reform, do the tax policies -- put something back in this economy. the trade of in the loophole. that will contribute to growth.

putting stocks, the new demand for stocks, putting forty million people into a savings system. that is a direct stimulus. we shouldn't be drawn into this where there is no investment that is part of putting the things on the right course or reducing the deficit and growing in come. >> we have to be careful about what is in your budgeting window. we passed what was marketed in a $20 billion tax cut. we have acknowledged the rhetoric that if you do not continue a tax cut that constitute a tax increase. we have cut the taxes for two

years to expire in the middle of a presidential election year. if we couldn't cut the law in a lame-duck session what chance that these will not be extended, at the rate these tax cuts are going in over 22 years, that was $4 trillion for ten years. and all the recommendations they're looking at $3.8 trillion. we are on track to spend all of that. if we adopt -- as far as we started off. we have to look at all of these and our recommendation is the easiest thing to do, the easiest choice would have been to do nothing. that would have given us as much

of a benefit as the entire commission would have done. maybe we can backfill the job-creating expenditures which would be easier to cut off in a year or two then increase marginal tax rates. one of the toughest ones was the payroll tax, give everyone a $500 check. the next year we should not give the check but if we go into weekly payroll to get 2% a week, you won't be able to increase the tax rate 2% in the middle of a presidential election. what are we getting for the dead? families never go into debt? that is not true. you by house you spend more than

your annual salary all at once. these are investments. you would not spend that money on a vacation. with nothing to show for it. so you go into debt for infrastructure, to make things better in the future, that is one kind of debt. balancing our budget is an entirely different. we need to make these investments that will create jobs. we had a ribbon cutting a couple of weeks ago in richmond where the federal government guarantee loans. they built a road. it was negligible. and yet you had 450 people working for the year or so it took to do the construction. we had a school in ports must

where they guaranteed a loan and we're going to get the money back and building schools. there are a lot of ways to create jobs. a lot are drawing paychecks down a summer and is relatively negligible. we need to look at what we are going to -- $850 billion, we can take everybody on unemployment tomorrow afternoon for that kind of money. we spend in tax cuts that will not produce jobs and only increase wealth for a handful of people. >> part of what i do is talk about politics and the politics around this question are a little different. on one hand you have republicans in charge of the house who say they want to cut the budget by 30%, maybe 40%. the president stand in front of congress and says he wants to

create domestic spending for five years. those are the two poles of the negotiation between the five year freeze, and a 40% cut. in between, congress said we had to open and get into these numbers. is there a place where we could do domestic cutting when we get into the growth place where you think it is appropriate, what is going to protect the priorities. >> earmarks are such a negligible part, way it worked is there's a hundred million dollars appropriated out of the $250,000 for program that is an

earmarked. we have a program that the president will decide -- you say it is zero money by eliminating earmarks. this is what they're talking about that don't amount to anything. we need to be -- child pornography with the fbi getting 150,000 leads on people distributing child pornography and vacant only chase down a couple thousand of them. and there is all this rhetoric that we need to do more. the republican proposals, 4,000 fbi agents will lose their jobs. let's talk about the generality and spending freezes and all of

this. there are a couple people doing stuff. if you cut government employees, like inspection of oil rigs in the gulf. food inspection, head start teachers. these are things that will not get done. when you talk about across the board cuts that is what we're talking about. we don't need head start pictures, we need to double up somewhere else. we need to triple up somewhere else. when you get to actually cutting something it is very difficult. we can cover everything we want to do. have an $850 billion tax cut bill and try to pay for it with those spending cuts. been on discretionary -- appropriations committee spent $550 billion on everything outside of defense, the deficit

was over $1 trillion. the committee could meet and go home and you would still have a deficit. if you are not doing it on the tax side just indicate as the republicans have said we will repeal medicare. repeal social security. there are a lot of ways to get this. you have to be serious and at some point you can't do rhetoric or make a constitutional amendment to save the because it will make matters worse. you have to actually do a budget and we showed in 1993 how you do a budget. we increase taxes and cut some spending and made some investment and created jobs. dow jones industrial average and mentioned the charts. the dow jones industrial average went higher with all of those tax increases and spending cuts,

any time in history. it is never gone in eight years under clinton. jobs are off the chart. if you are fiscally responsible you can do things well, but you can't do it talking about platitudes. until they come up with suspicious spending cuts we can assume they are not going to cut anything. >> i want to give derek a chance to get into this conversation and then open it up to the audience for five or ten minutes. >> people have some of the answer to a question already. i don't have much more to add beyond the fact that if we want to address deficits perhaps we should look at tax reform so that we can have a more progressive tax system where we don't have those that have the most getting a lot of the benefits and have a system where

we could have a government that is more inclusive. i don't have much more to add. >> any questions on the floor? >> why don't you just -- [inaudible] >> in a political conversation has room to do more and better about making the case against those kinds of things. i am not sure we have done

enough of that. my question is is it clear there is not opportunity to do more. the case economically against tax cuts for high income was pretty unambiguous. it was straightforward but i am not sure the case against those tax cuts made it past the beltway and i am curious about how to raise the conversation in a substantive way to make a positive difference. what political will will that take? >> when we get tax reform? >> that is a generality. after your reformed it you have a bottom line and get -- where are you getting it from? you have to decide whether to get serious or not. you cannot begin the discussion by how much people get in tax cuts.

that is how we began the discussion last month. we have a big deficit problem and we will have a tax cut bill that in aggregate is more than the general fund budget for all 50 states added up together. then we are going to get serious. if you are going on a diet you don't start with ice-cream and cake. that is what we do. you first have to get serious. once you are serious we know how to do it. what are left out is after we did it, after we balanced the budget and on the way to paying off the national debt and created record jobs and the dow jones off the charts, in the next election we lost 50 seats and control of congress. you have to have people willing to cast career ending folks and we can't get the job done.

if you want popular stuff the most popular thing is lots of spending and tax cuts. >> how does the panel feel about tax reform and getting the wealthy back in the game or paying down the deficit? >> what stands out in my mind is why are we having this conversation on deficit reduction when the public never pulled high relative to any national priority except under one circumstance. someone said this in the first panel. there is a link between something they really care about and that link is what they care about. we have high deficits which is why i don't have a job. they care about deficits, not the deficits, about the job. one of the things we need to do is ask ourselves, are we saying when with the straightjacket that puts us on a road that is the wrong road to be on. if you know that this is the

road that custer took because you're going back into history and you know it won't work, but you say it is a popular road or do you get off of that road and try to build a political constituency that connects what you need to do to how it will affect the people who are concerned about that thing called the deficit? where we fail is not making the connection to a globally competitive investment program that lets people know that that is where your job is. it is out of the country. it is not in the treasury deficit. we are not doing that. we have almost given up. that is the biggest frustration. when we talk about the tax cuts i don't know anyone who thought they were a good idea. but they went through like a rocket. we have given up before we fought it. we really need to read prioritize and ask ourselves if

we know the deficit conversation is not healthy for where we would like to go, where and how can we reposition it to do what we need to do and get reelected while doing it. >> i would just add that i am glad we have the other folks in congress because you are calling the bluff. we have had proposals where 70% spending cuts, 30% revenue. ten% revenue rates. if we are going to have shared sacrifice, this isn't it. you called the bluff. there is an added that says the one place you can do a tax increase is in a divided congress because that is when one party takes all the blame. bears a possible silver lining.

if there is the wisdom of the '86 tax reform, you can do a tax increase when a lot is on the table and i don't know how serious the new leadership is about anything that would be a revenue raiser but it is time to keep holding feet to of a fire. you have put the right bluff on the table. the legacy of reagan is revenue increases are hard for any elected official to talk about. and yet sensibly, that is what we need to get. we need to be back at that table. >> one problem with budgeting is we take proposed spending cuts and say we can cut 10%.

and we actually cut taxes. what we ought to do is wait until we actually made the cuts, then cut taxes. you would have much better balance. that is what happened in the early parts of the 2001 tax cuts. in four years we cut spending and this year we're going to cut taxes and when you get down to be spending like medicare physician fees and that kind of thing we have to put the money back. if we just wait until we make the spending cuts before we cut taxes. a lot of these problems would go way. we pass a hundred fifty billion dollars worth of tax cuts and hope we will be able to cut our way to pay for it and it won't be there.

>> one question here and we have to get moving. >> really quick question. and want to know if washington has a revenue problem or do we have a spending problem? the second part of that question is how can you continue to cut taxes when unemployment is at 9.6% nationally which means washington is taking in as much money as it has previously. how can we afford to reduce taxes and at the same time pay down the debt that is ever living and we shall we be concerned with creating more jobs to take care of taxes and paying debts and all that? >> the panel agrees with you. >> can i make one comment on that? recently in terms of recession

dealing with revenue, social security was expected to go into deficit in six years. they calculate it might be in deficit this year because fewer people are working, which puts more strain on the budget because social security has been producing a surplus, building up the trust fund for the baby boomers coming through and we may have hit that already. >> let me get this question here. >> you mentioned ronald reagan. trickle-down economics came to mind. talk about the link between corporations sitting on a bunch of money, there was talk that they are waiting from the government as to what their tax rate would be. what is the message between tax

cuts and job creation, a symbiotic link of some sort? >> i am amazed that the ones complaining about the uncertainty don't know what the tax rates -- proposing the changes. if they would just stop making proposals people would know what the tax rates will be. we know what the tax rates will be. they want to make changes. the same people complaining about uncertainty are the very ones proposing the changes. the uncertainty is whether or not their proposals will be adopted. if they weren't making the proposal there wouldn't be the uncertainty. >> i want to add something more general. we need more integrity in our

discussions. if we were more honest in how we talk about these issues to the american people lot of it is simple. maybe i am confused but the issue of deficit, if you are passing a big tax deduction you're going to get larger deficits. the change the discourse had, we need to lower the deficit so we reduce spending, i don't think that is being honest. we need to have honest conversations in general and the american people would understand a little more. >> we are way beyond time. thank you very much. sorry to cut things so short. >> i want to introduce ellen with the budget committee. and david a. lee and christian

haines and several other staff people. they have been doing yeoman's work and these charts didn't just fall out of the computer. someone did a lot of work to put these together. >> thank you so much. let's give some applause to the last panel led by the hon. robert bobby scott. he is the chair of the budget appropriations taxation tax force. this is an important initiative. i want to thank representative cleaver for putting this on and thank all of you for spending so much time with us this afternoon. i think my task really is to wrap up and for those of you who have sat through the entire three panels justin told me a

little bit as i sort of review some of the things we talked about. use data out and laid the problem out. we have $1.5 trillion deficit for this session setting the tone for budgeting. dr. gascon really laid the problem out when he said that what is happening on a partisan basis is there is a huge debate around the role of government and maybe if we were honest with people that you suggested, dr. hamilton, if we were understand had an honest talk with people we could really -- it is not that one side is bad or good. there is a real difference of opinion. is the role of government simply to have a military force where

we can go to iraq and afghanistan and fight people? or is the role of government to intervene in the inevitable market failures and the competitive marketplace where it becomes a race to the bottom, housing crisis that conflicts with societal goals. we have goals to have a chicken in the pot and somewhere to live and somehow if government does not intervene and regulate their will be market. this is a debate we need to have in earnest. and i think dr. austin continues his discussion challenging the notion of a cut growth strategy. how are you going to cut to the bones and grow and educational work force that will help us the

merger from being -- having 700 other countries in front of us who are doing more research and development than we are? how can you grow creating products and increasing technology when we are 20th or 30th behind in educating our children. we need a national employment investment corp. was guaranteed job benefits program. it will create -- we could use this money more effectively than we could the other bailout funds creating $40,000 a year job, take care of fifteen million unemployed people, paying taxes, bring in revenue, having benefits such as health care,

save on costs for unemployment compensation, if the government where the employer of the last shall is. donna sims wilson gave us a great bit of information with respect to how even where there was a silver lining in the recession cloud for black professionals in the securities industry thanks to the work of congress woman waters and members of the financial services committee and the congressional black caucus when they secured provisions of the t.a.r.p. program, section 342 of the dodd frank bill which provided that every office has an office of minority and women inclusion which we need to continue to work and at least when it comes to managing the

capital asset purchase program and mortgage-backed security program that black professionals were able to get a piece of that work on a lot of insistence from the congressional black caucus and we had the chairman of the task force, bobby scott, present this great handout. you should take it with you and call his office and tell him to walk you through every slide. it tells you how we started out with a $5.6 trillion surplus and then we had eight years of you know who and here we are now with $8 trillion surplus. a deficit. two wars and $1.3 trillion worth of tax cuts that were not paid

for. and president obama has inherited mountains of debt and this is of starting point for our budgeting. he says that health care, not medicare but health care was growing faster than our economy and he is talking about not medicare but private-sector commercial driven health-care and one of the reasons we have to do the health care bill is we have to bend the cost curve to have a sustainable economy. he mentioned all the state budgets combined, combined, equal or are less than the $850 billion tax package we put together during the lame duck. he convinced me i should vote against that. we were in the minority. he said what can you do?

and that is the starting point. if i am reading his chart right, he also talked about the real danger. look at slide number 11. one of the dangerous things that happened is we gave a one year payroll tax holiday in that package. this was touted as something really wonderful but when fdr put together the social security program, one of his main premises was we will have social security paid for by people's contributions, not the treasury. it will always be sacrosanct from politics. now the fact that we have given people this payroll tax holiday, how do you take it back? if you can't take it back because politics won't allow you

be brittle democrats or republicans to raise people's taxes at will be strewed, is that what i am looking at? bent you will see social security being in a big problem. [inaudible] >> that is only one year. oh my god. so the profit is still here. the thing is that people of color, to the extent that we don't have other assets we are more dependent on the safety net programs than others so this does not bode well in terms of policy. we had lisa give us a very compelling discussion of we have

a demand constrained economy and we can only invest what is saved. if we have tax reform, tax reform should create incentives for household savings and increasing our net worth. and cutting -- i love this. cutting was like overprison in our garden. and claim you are going to grow again. actually has to do this strategically. we have to do something about the cost of health care. give people something like a refundable savings credit, give people incentives. even welfare recipients. there were provisions in welfare reform where people save a little bit that you would provide a matching fund. this would help a lot

particularly given the fact that mr. carr indicated black people -- dr. -- i keep calling you mr. carr. dr. hamilton. we talked about how we don't have any net worth. there are provisions in our tax code. there is much ado made of all the welfare money that people get that transfers what we get. there is a transfer of wealth from the treasury policy to and american unlike the mortgage interest deduction program. billions of dollars each year. based on non merrick. they are passed with no consequences has of current law. and all of these asset transfers mean the top 1% of the population gets 1-third of these

transfers and the bottom 60% gets 5%. some get as little as $5 of all of the asset transfers. we do need to engage not just in debating whether or not we are going to expand the bush tax cuts. even the bush tax cuts for people under $200,000 a year provide six times -- the rich as they do others. we need to throw in. from the national community reinvestment coalition and it did point out bailouts really work.

give him a zero% -- 0% interest loan one of which helps homeowners at the same level. what if we directly intervened? we actually shored up the value we actually shored up the value of homeowners. the foreclosure problem and the other shoe is about to drop. legal problems within the bank's. housing prices are steadily falling. hundreds of billions of dollars pacing the floor on the