quorum call:

quorum call:

mrs. boxer: madam president, i ask that the quorum call be dispensed with. officer without objection. mrs. boxer: i have five unanimous requests for committees to meet during today's session of the senate. they have the approval of the majority and the minority leaders, and i ask unanimous consent that these requests be agreed to and that requests be printed in the record. the presiding officer: without objection. mrs. boxer: thank you, madam president. the presiding officer: under the previous order, the senate stands in recess until

today, step by step we are putting ourselves on a better, more sustainable path and pushing ahead on the road to growth. >> find and watch this year's state of the state addresses as well as gnawing rals from the nation's governors on line at the c-span video library. search, watch, clip and share with every program since 1987.

>> at the world economic forum, finance ministers from britain, france and germany, representatives from china and india as well as the world bank president discuss the global economic outlook. panelists talked about the relevance of the g20, signs of market confidence and the strength of the euro. this is the about an hour and 20 minutes. >> it has been my great privilege to moderate this session for a little while for some years and very interesting over the years how it's changed. we have a panel which, as you can see both immensely distinguished and quite large because we're going to present a sectional problems i'm sure for the moderator but i will do my best. the, we'll, despite the fact we've got a little more time than usual they will be

incredibly and wuffli disciplined. let me introduce the panel very, very briefly because really you know everybody. and i think i probably know everybody too. so, on my left immediately is bob zoellick, president of the world bank group and a new member of the fan club of gold which we'll come to in a minute. next to him is montek ahuluwala i often remark was my first boss at the world bank. and, is now deputy chairman of the planning commission. very close by to the prime minister. next to him, another friend of mind, yu yongding, academic at the chinese academy of social science. next to him of course is christine lagarde, ministry of the economy and industry for france which you remember is now in the chair

of the g20, a very important point we'll come to in a moment. next to her is mr. george osbourne, chancellor of the exchequer of the u.k. next to him is bob diamond, who is very recently become chief executive of barclays. congratulations. finally next to him is wolfgang schauble, federal minister of the, of finance of germany. just to put very, very briefly the context which i think you all know but, it's important to stress at the very most recent imf economic update at the world economic outlook shows, last year, 2010 was exceptionally good. i think much better than most people expected. 5% growth in 2010. though it is important to remember that purchasing

power number is funny money. in real money the stuff most of you deal with it is up 3% growth. if you look it at that 5% growth is very diverge ability picture. 2% into the countries, 7.1% in emerging countries and in big developed countries 2.8% in the u.s. and 1.8% in the eurozone. next year the imf suggests the growth will slow a bit to 4.4%. 2.5% in the advanced countries and 6.5% in the emerging countries with the u.s. at 3% and the eurozone at 1.5%. i must say that the discussions i've heard here and participated in suggest that the general mood significantly more optimistic than the imf. the second big point i make in the introduction is this is very much a two-speed

world economy. it has been a two-speed world economy really since 2000 but the crisis has emphasized this dramatically. i just put forward a number which ben bernanke gave which i think is very, very striking, two numbers, very striking in a speech in frankfurt last year in which he pointed out if you look back on what happened to the gdp of the emerging world in aggregate and the developed world in aggregate, since the beginning of 2005 the former has grown by roughly 45% and the advanced countries in aggregate over those five years have grown by 5%. so, one part of the world crisis, what crisis and the other very much, very much sort of in aggregate almost close to stagnation. final points, there are some very, very big risks and challenges which everybody knows about. is inflation is big risk?

not, clearly a very big problem in a number of emerging countries. second question, oil prices and commodity prices more broadly what's going to happen to them? and obviously events now occurring in the political sphere raise some questions in that regard. third issues, currency wars, quote, unquote. broad issue of rebalancing. there has been a lot of shift in the global current account balances but there is a lot of concern that this will reverse and clearly the friction over exchange rates, exchange rate policy focusing between particularly the u.s. and china remains very significant. the fourth big issue, fiscal tightening, fiscal consolidation. how quick should it be. what are the risks of doing it too quickly or too slowly. unto the that thely we don't have a representative of the u.s. government here because the u.s. position is so divergent from other developed countries. still a very big issue. 5th issue the eurozone.

where is it going to go. has it resolved a series of crises? there is clearly improvement in mood now but is this really, is this really --. 6th issue how will we exit from this massive monetary stimulus we've had? a quite extraordinary monetary stimulus. what shocks will emerge when interest rates begin to normalize. many people expect that to begin this year. finally there is always geopolitical risk. i want to remind you whatever the general optimism and there is clearly a lot now around, we still have the capacity for plenty of things to go wrong. as an economist it would be depressing if that weren't true. so with that introduction may i turn to you, bob, to give your sort of brief overview where you think we've got to and where we're going and in the world over the next year or so. >> well i think, martin, building on what you said about the multispeed recovery, in the emerging markets in general we're now

in the context where they have come back so strongly that i think for many of them the challenge will now be overheating. issues of inflation. potential bubbles and ultimately the risks of boom-bust. the causes of inflation obviously are different in each economy. some of them more on the supply side, some demand side. but those will be issues a number of policymakers have to focus on. in the case of the u.s. as tim geithner said yesterday, some reasonable growth numbers but still big challenge on just creating jobs. and of course breaking the wave of the debt and deficit that overhangs the country. in the case of europe, obviously the focus is on some of the issues related to sovereign debt. and, trying to navigate through that iceberg. and for all, i think, there is also the concern of keeping one's eye on the

fundamentals of growth, the structural agenda and also how this relates to what you have written a lot about on the rebalancing side. >> thank you. so a big and powerful agenda for the world and, very much a hot and cold world economy still. some parts very heart. may i turn to you, christine lagarde, on your perspective what you see on the situation in france and perhaps in the eurozone. >> yes, martin, thank you. clearly growth is picking up and has picked up for the last few quarters with acceleration at the end of 2010. i think this is true in quite a few of the member-states in the eurozone let me give you just three numbers on eurozone. i keep hearing trepidation and anxiety and worries about the eurozone. let's not forget the deficit in the eurozone 2010 were

numbers pretty much the same between the imf and the european commission is roughly 6.4%. that's the deficit relative to gdp. concerning debt, the debt is in range of about 804% within the eurozone. debt wilt be 1.6 and 1.7 -- 84%. when we continue standly bash europe. there is not much bashing which is good. i think there is general concern on many issues but not bashing which is good. but the numbers as far as the eurozone is concerned are not bad relative to other numbers in other parts of the world. having said that, growth is picking up but it's not picking up at a very rapid speed. like in emerging markets which i don't find, you know, particularly stressing because there is currency, this big catching up process that is it taking place between the developed countries and the emerging, reemerging, emerged

countries which is good. when we look at gdp per capita, then it's you know, shows us there is still a long way to go for the adjustment to occur so, tetonic plate to actually settle in a more harmonized way. but you know, picking up a little bit slowly for 2011. if we look at the forecasts, a little bit slower than the end of 2010. but, with the massive restructuring that is taking place on an architectural point of view which i'll be happy to expand upon later on, i think that we'll restore the confidence that is needed for growth. >> thank you very much. may i turn to you mr. schauble. germany have clearly a very successful year. at least this is the view outside. relatively strong growth. germany's export success remains of course outstanding. are we also seeing a strong pickup in domestic demand in germany and how do you see issues from the point of

view of germany also in relation to the eurozone? >> just to follow up of course we had 3.6 growth in last year but you have to look, you have to have in mind that we have 2.in 2009 on behalf of the crisis of 2008. therefore we are still behind the level of 2008. and, of course we have returned to come over the level of 2009 and 2011 but we will be about, the forecast is about 2.2, 2.3 in germany. i think, there are --, half year ago i was germany said we would destroy growth in early germany in euro, in europe and all over in

global economy by reducing our deficit. i always have fought against because for germany we are, decided that reducing deficit is a precondition for sustainable growth and as you can see in last year we were successful and we will go on. and i think major risk from my view for the forecast for global economy is that we would face a danger to get another crisis like in 2008. we had two main reasons, too much, too less regulation and too high deficits and too much liquidity. and therefore we have to go on in fighting the main reasons for the crisis in 2008 and we must not forget, we must have to stick to the lessons we learned in 2009

and we must not lose the momentum. >> thank you very much. at one point you reminded me which is very important, that if you look at, this is, if you take the six largest advanced countries, three of which are represented here, in the third quarter of last year and, the i don't know if fourth quarter numbers are out for all countries, gdp is still below where it had been in the first quarter of 2008 i think in all of them but i understand on the basis of the latest u.s. numbers the fourth quarter they're now above it. i don't know whether that would be true of others but it does give you an indication of how deep the recession has been and how and that we are still in many cases below the preceding peak. let me turn now to you, george osbourne. where do you think the u.k. is? obviously there were some rather unpleasant numbers

this week but you might like to comment where you think the u.k. is now going and the, and the challenges for the u.k.. >> well i think the challenge is to move on from securing financial stability. and of course i sit on this panel as the finance minister for a country with the largest deficit in the g20, to securing sustainable growth and i think the two are linked in the way that wolfgang was just explaining. we did have disappointing gdp numbers early this week with you no one was forecasting. even the statisticians because there was big weather effect because we had coldest december for 100 years. even without that they were disappointing. so the challenge for the government over the next year or so is to remove the supply side obstacles to, stronger growth and that is what we will be focused on. i mean there is a silver lining which is at the moment the u.k. economy is

rebalancing. manufacturing is growing fairly strongly. exports are up fairly strongly. business confidence is improving and the government's plan is based on three pillars. one, comprehensive and credible deficit reduction to put beyond doubt the u.k.'s credit rating. to keep its, market interest rates low and we set out that plan and i can talk about it at great length if you'd like later. second, competitive tax reform and we are cutting our corporate tax rates and reforming control of companies, changing the control companies regime. interesting, president obama independently is proposing quite similar things in the united states. and third, structural reform. big and ambitious structural reforms to the welfare system, to further education, to some of the regulation around nonfinancial business. and i guess the challenge for me and for the u.k. is

that u.k. corporates are sitting on cash on their balance worth around 5% of gdp. what i've got to get them to do over the next coming months is to start spending and investing that money. >> thank you very much. we'll come back to these issues and what is clearly a strong european consensus on the balance of policy to be pursued now. i'd like to turn to you montek. bob zoellick has talked about overheating, inflation risks. that seems to be me to be relevant from what i understand of india. when you hear this sort of discussion and you try to, and the consensus of the europeans, when you look within your own context at home what do you think of the likely out comes and priorities and the risks to stability? >> well i think india's

experience roughly reflects what people say about emerging markets. we had a very smart recovery from the first effects of the recession. our estimate this is year, the year that ends in march 2011, is growth will be about 8.5% but some people say well it could be a little higher. i think the imf, which has been criticized by you for being too pessimistic is actually erring on the other side in india's case and thinks we might do even better. wonderful in we do but inflation really is a concerned if had india. good news is gdp growth is 8.5%. the bad news in december inflation was 8.5%. well above what we think it should be. there we have taken a number of steps on the monetary side. we completely reversed the loosening of monetary policy. there were some supply side shocks. they are being reversed with the new harvest coming in. so i expect to see an easing

of prices. of course on the fiscal side we like everybody else are withdrawing the fiscal stimulus. i mean which will know the exact numbers only at the end of february but the finance minister has clearly signaled that he intends to continue the process of fiscal consolidation. so we expect to see a reduction in the fiscal deficit for year 2011-2012. i think taken all this together india's objective remains how to maintain a robust growth rate. we are hoping to get 9% next year. there's not that much unutilized capacity. so really from our point of view, to get the 9% we need to have a pretty smart investment rate. it is a private sector-led growth process so we'll be doing the best we can to promote investment and to promote foreign direct investment the on the whole things look quite good but you know there are uncertainties which are pretty much what the global community is worrying about. clearly oil prices are very

important. if you have a large and unexpected spike that would create problems. we are also concerned about financial stability possibly because of the concern about sovereign debt dangers in the eurozone. i mean our concern is is if the global financial situation remains stable and slows to emerging markets and is not disrupted by any untoward debt event i think we would be in the position of achieving the objective getting to 9% growth. this is not decoupling as is sometimes talked about. this is an increase in the trend growth rate of emerging market countries which is simply going through a process of catching up. true that industrialized countries are going a little bit more slowly but stability in the global system is important. i don't think emerging countries will not continue growing if we don't bring about stability and balance. we're as interested as

anyone else making sure that global balance is somehow maintained. otherwise on the supply side things look good and i think on the price run it is manageable. >> thank you very much. much the same issues i think arise in china. certainly there is a big discussion of inflation at the moment, managing monetary policy. managing extraordinary growth. so from your perspective, yu yongding, how do you see the challenges for china? then perhaps we can come to perhaps some of the policy implications in discussions for the world an for you? >> compared to you with the other countries china's economic situation is much better and china's problems i think are serious but, mostly these programs are created by china's success. wanting to growth from initial crisis. last year china's growth rate was more than 10% and now we are facing the

challenge in areas of inflation. and definitely inflation is the biggest concern so far for the chinese economy. at the same time we're also worried about real estate bubble. though china has been quite successful in recent months in slowing down the growth of housing prices but the demand, potential demand for houses is still tremendous. so there's tug-of-war between the central bank and real estate developers and. it becomes really a loosen the policy and perhaps there will be revival of the real estate bubble. but so far, so good. and i'm not too worried about the short run prospects of the chinese economy. just like in 2008, we had the debate about china's economic prospects. i said definitely i have no problems about china's ability to achieve more than

8% growth even in 2008. actually the situation is better. why am i so confident? because china's fiscal position is extremely good. china's debt-to-gdp ratio is less than 90% or something, this is public debt. talking about net public debt it might be --. there is growth for chinese to use fiscal stimulus to stimulate the economy. i think chinese economy is okay and we'll be okay. from longer run i have no doubt about the stability if china fails to really make fundamental adjustment. over the past 30 years, china's economic growth has been tremendous and china's growth model is characterized by two things. investment driven and secondly export promotion.

these two policies have been very successful. i think this sort of growth pattern has run up a to make changes and change faster. if we can really make fundamental changes of course the cost will be to slow down the growth. then the growth will be better and more sustainable. i think the chinese economy is, is aiming in this direction and now we are formulating next five or six economic plan for. according to our intentions next five years, china's growth rate will be lower, maybe lower than 8%. we hope china's growth will be maintained for another decade or two. >> thank you very much. i think that very much sets out the agenda. of course it brings out very clearly the extraordinary success of these two giant countries and the way this is reshaping the world. i think it is very helpful to remind us because i was

one of the skeptics so i'm very happy to admit this, that back in the 2008 many people were skeptical about the ability of china to achieve its targets and it did and that is pretty important to remember. finally turn to you, bob diamond. this is your opportunity to respond to these very distinguished policy-makers. how does it look from the point of view of the financial sector and we're going talk a bit later about the financial sector, from the point of the view of the financial sector, hue does the economy look, and what do you want the policymakers to do to make it better. >> thank you, martin. we did have a lot of time. the bank and insurance companies ceos to discuss our perspective over the last few days. i think what the chancellor says resonates very much with our feeling t begins with jobs and economic growth.

and jobs is really the single biggest key. i think it begins with the recognition that after a period of fiscal and monetary stimulus and in particularly strong fiscal stimulus, that the developed economies at least will be reducing spending from the public sector and the chancellor talked about the program in the u.k. the president talked about it in his state of the union address. and so, the conclusion is we're not going to see stimulus coming, additional stimulus in terms of jobs, particularly, from the public sector. so it's time to really move, the mantle of growth, to shift the mantle of growth from the public sector to the private sector. there's $8 trillion. not just on the balance sheet of corporates. i think numbers in the u.s. and u.k. combined are three to four trillion in cash, sitting on the balance sheets of very healthy corporate sector. so if we can get the confidence to get the banks,

and the companies, the private companies working together to drive jobs and drive economic growth, we can get pretty optimistic. i think most recently in the u.s., for example, where they have had very, very stubborn unemployment. i think it is currently at 9.4%, the consumer confidence reports have looked better, as dod frank has been resolved and line drawn under that. business confidence is returning, the post the difficult elections and more after bipartisan attitude and strong "state of the union" address. and our feeling is if we can keep up that kind of confidence and momentum in the u.s., that the unemployment rate when we sit here next year will be 8.5% or lower, not nine 1/2%. >> i think it is pretty clear then from this first round, sort of general perspective of cautious optimism with large challenges is very much shared by everybody here. . .

>> which i suppose it fiscal with the class or sometime. a new focus on domestic concerns in india. these are the international factors of importance to you. what would you like to say to the developing countries about that? >> i think this is a good example of where decoupling is the wrong thing to say. we are not decoupled.

what happens in the global economy affects us. so as far as excessive easing of monetary policy is concerned, one side of that reflects the policy choices emerging from the effort to rebound. we don't know whether there are different ways of achieving that difference rebalancing, and that's something that 5020 process is being discussed. given the fact that there is a huge amount of liquidity sloshing around, i mean, i can't speak for other developing countries but we are shortly concerned that we don't want to be stuck by short-term flows that would be highly volatile. as it happens we're currently running a deficit. from that point of view, it is contributing what little it can to generate. but we need to finance that deficit. we are welcoming long-term, we very much want foreign direct investment. actually quite happy if money comes in into the stock market,

but not happy with money coming in which can somehow be described as hot money or coming in in form of debt. we do have some capital controls. parts of the -- over some is restricted. i think developing countries would, in fact, use the flexibility that the system gives them to make sure that they don't get swamped by those beyond their ability to cope with them. and you are saying that around the world. different countries are doing it different ways. there's no global agreement or rules of the game here, which gives countries flexibility. but certainly, to the extent to which the liquidity is the result of an unsatisfactory overall balancing, it's having some collateral damage effect. i don't think it is affecting india anymore because as far as we're concerned, we are not at the moment seeing two large and

info here there is some weakening in the last few months of foreign direct investment flows. we think that's a time lag effect, because at the height of the crisis in 2008, 2009 a lot of foreign direct investment decision must have been postponed. and you are seeing in the year 2010 with slower info. but otherwise i remain -- india remains an attractive destination for investment. we expect that to pick up. >> can i just follow without? might address this question to you, yongding, it is a big issue for china. if i remember correctly, china's foreign currency reserves have risen by about 800 billion just over the last two years. flexibility is restarted but there's been a slower appreciation. i know there's pressure. you talk about inflation concerns. one solution to this set of problems for china to accelerate

appreciation. and what you want the rest of the world policy to become how big an issue is that? >> firstly, i should say that i am speaking on behalf of myself. okay? >> understood. >> and i think that china's share india's worry. but there's fundamental difference between china, india. india -- china is to difference. exporter. of course, exporter with which u.s. can use fiscal policy, management policy so united states can get higher rates so we can export more. is something wrong with united states, but in deficit the

increasing public to debt-to-gdp ratio,. [inaudible] >> i think these are very big worries. so from this prospect i argued about. china should be more flexible. because if we continue to run separate, this is very important, china also run -- last year china's -- $180 billion, and capital is 100 billion. so this mostly resulted. on one hand, whether china's reserve evaporate, has evaporated all the time. on the other hand, we still continued to run and buy. this is not a rational.

so this is opportunity for china to allow people be more flexible. because if we don't want to buy more, then we have to -- china has to reduce or stop and china must market. by doing so i think this new argument. allow people to be more flexible. >> you need to go back to the mic a little. you are a little too close to the mic. go ahead. >> this is not only in the interests of the united states but also in china. he only concerned, how fast it should be, this is more difficult. >> that leads i think very, very naturally properly into the g-20 agenda. i know there are skeptics of course journalists are always among the skeptical classes within their definition. some people think the g-20 basically had its glory days in

the crisis and it has become a talking shop and there is no real further progress to deal with the big issues. one of them of course which was just discussed, global rebalancing. france clearly has the agenda. quite an ambitious agenda. can you set out what you want to achieve this year, what you think of their priorities in terms of animating forward movement into g20 on these bleak -- big global issues because sure, martin. let's see, the g-20 was only worth attorney the times of crisis, and what we really want to demonstrate is that it will be useful in times of recovery as well. and hopefully the agenda will resonate not just with -- but with everyone. i would like to point out two chapters if you want. one which is the chapter where we are curators of proposals that have been made in the last couple of years that are implemented. and that really includes

financial regulations when we need to be careful, that we do it and that we don't get -- the second is this framework for growth initiatives with the process that has been sort of handed over to the imf for the implementation. but where the actual action and decisions will need to be made within the g20 to make sure that recording our economic policies and we take into account the spillover effects of whatever is decided. i would call that the sort of the curators job that we have to make sure it is done. not to make sure the non-cooperative jurisdiction fight that we initiate and needs to continue. on the new chapter, the new initiatives, i think it resonates with what montek was saying. number one, the improvement and possibly the reform of the international monetary system. being very humble about it, and understand we will not change

the articles overnight or reverse the tables, but simply with a view to making sure that number one all players are at the table and number two, we restore the level of confidence, particularly emerging markets do not have this fear of this massive inflow, outlaw capital that will hurt them summary times over the last decade. does a mighty are the two objectives that we need to address customers international monetary system is concerned. we can see about the issue of proper transition towards reserves and all the rest of the. i think this is as important as well so everyone is in again. that's despite the international monetary system is concerned. the second part of that concerns the commodity prices. with a special focus because we don't want to be diverse too much, special focus on agricultural products. i think it is a key issue, the key issue of civilized countries, because simply they need stupid the world is going

and will continue to grow and we need to make sure that there is enough transparency, enough anticipation, enough thinking put into the process, not just speculation but really an attempt critically important. third chapter, sarco first section in my second chapter is the issue of development. on that one we haven't talked about development in the world bank has been fantastic in conducting initiatives. what president sarkozy wants us to focus on is the topic of infrastructure. to arrive at a list of the project at the end of the g20 year under french presidency where we have identified particularly in africa the projects that are worth it, that would be conducive to development, proper agricultural work and delivery. and that we actually finance or financial. that will be a special focus of the development chapter.

and i've not mentioned, martin, the global government stopping which includes the fact that all players, the emerging countries but all those are not sufficiently represented are at the table. >> thank you very much. i would like to turn you, bob zoellick, on this. the issues christine has raised is very much in your area of the world bank. you have written a bit on the reform. you might want to comment on that but clearly agriculture projects and the whole issue of commodity prices and agricultural prices, act -- agricultural supply and food, general. a very big global issue. we don't have -- we'll have representatives on the countries most affected. what is your view, what is feasible for the g-20 did you are what should a duplex what what are the priorities and how would you comment on the agenda that christine lagarde has laid out. >> first, i compliment president

sarkozy and christine and the french government. they been doing an excellent job of trying some ideas and outreach. the reason why this is particularly import is there is sensitivity among countries not in the g-20. the world bank and the imf work g. 187. we can play part of the role but i think president sarkozy is going to the african union as well. it's critical because i think to go to some legitimacy of the g-2g-20g-20 would also have to effectiveness, at a certain topics where you can nudge along as christine said, but there are some that are targeted for action. i think the agricultural topic is one where is very important. we have financial safety nets. i think everybody here in dallas recognize there may be some need for food safety nets as we are headed forward. so we suggested that food first on the agenda. this has two different dimensions. one is a topic that has been discussed in president obama took leadership on which is the broader food security agenda.

this is going to the question of all across the value chain with a number of private coverage are, how can we bring in the private sector connected agribusiness, take advantage of the increasing demand increase some opportunity. there's also the food price volatility issue. and as christine mentioned, there are different approaches to this. i have suggested some where we a better information of stocks and weather forecasting and focus on the most vulnerable, particularly in poor countries, maybe some modest stocks in area that poor infrastructure like the horn of africa, that we could come up with a package that could be very practical working with local food program, and others. so i think there's a good combination on agriculture. on infrastructure, montek and i were just discussing this this morning. the developing world as you come it is about -- has been a lesson coming out of the '90s where particularly in the case of china you can invest in infrastructure today to create jobs but you are also creating

future productivity and deal with some the supply-side politics. huge interest in public-private partnerships. how to make this work. is one of the topics that has lost at the sole summit. so i think there's a lot of important work already going on in this area. i frankly agree with the french suggestion that we try to focus on connecting this to sub-saharan africa. we have some good projects in energy, transport, key mutations. that could help break the barriers down a somebody smaller economies working with the african union and others. on the monetary system, i think you've touched on the elements that i think christine has properly said look, we're in a state of evolution. and i think the best one can look for but this could be useful was to develop a framework with -- where this might encourage the future shape. one key point that people should lose sight of is the g7 used to have a practice of having

flexible exchange rates, nonintervention and less they all agree. i think that's a very important normal system. i think for the emerging markets we would want to urge to move towards exchange rates and autonomous and monetary policies, but we have this capitol issue. and i think there's people can develop lessons and codes of conduct on this. clearly, doctor, you mentioned your the issue of china. so some people are talking about can use the sdr not as a new international currency but as a form for trying to encourage china to move more quickly toward internationalization and open its capital account. then you have the imf as a referee in this. and an important issue, you've got the provision in the wto at article 15 that reflects the linkage of trade and exchange rates. maybe there's an aspect of that. these are the types of topics i think you could move the process forward, not necessary -- that's

an evolutionary process but these could be productive results. the final point on governance i think has come back to where i started. they key thing when i see an added sensitivity, particularly the developing world countries is a g20 needs to proceed in a way that also recognizes attention for non-g20 members. i think this agenda -- spectacular much. i would like to go on with this but, unfortunately, we have a few other issues. we can always come back to this and ask questions. i would like to turn out if i could to the eurozone and where we have got to. we're in the middle of europe, a country that is not -- there's been a big crisis, or significant shock put in the last year. many people have felt that the eurozone was behind the curve, but now by people are much more optimistic this week.

about a sense that very strong statements have been made by the heads of government of france and germany, here, that there's a very clear commitment and that seems to change the mood about this. i'd like to start with you, wolfgang schauble. what you think we've got to in managing the crisis and what happens next? we know that there is a discussion on the longer-term reform of the surveys is well rested and a lot of discussion of how debt restructuring should occur, when you're and there's also discussion of more money. if you could just say what you see from the german point of view a pivotal player, this eurozone thing, still clearly an imf report itself, because there might be for the big shocks. >> no, i don't expect that there will be ultimatums like that.

i think the euro will be stable, and i think -- in fact, the economic forum there will be built up and you will see a build a. the main problem as i understand it is that outside the euro group, people don't clearly understand what is, your currency, common monetary policy without comment economic policy. but i think it works that we had to learn that there was systemic contingency problem, and we draw the consequences from this, and we deliver. you will see. and we are already and we are able to defend the stability of the euro.

of course, it's difficult. there's a lot of discussed, and my view is we have too much discussion and one of the reasons we suffer problems. they are not as bad compared to other parts of the world. it's not so dramatic. of course we will draw the consequence in the eurozone to improve the mechanisms to make -- [inaudible] and more efficient. it's already decided. we hit the target force under the european president. we agreed on a lot of proposed, and it will be set in place. we will harmonize our common economic and foreign policies to improve in all member states.

to increase the competitiveness of member states in eurozone which are a little behind others. it will be work, and we will have instruments for the eurozone as a whole, to defend the eurozone as a whole if some member states will be equalizers. it will take time but we are totally convinced that we will succeed. >> i'd like to go to you, bob zoellick, others. there's been a major financial sector shock your shocks concerning some countries in the eurozone. do you feel that confidence is returning? still huge spreads on the debt of some countries. do you think they're doing enough? what would you like to see? >> well, i think -- >> go ahead. i hope that -- >> sorry. i think the sense from the

banking perspective is that we had a period that was a cute. and the crisis was truly acute. and that the worst-case looking forward because of the commitment and the strength of the euro was going to hold together is that we will have from time to time, i guess we have the ability to have a backrest but it would be more chronic as opposed to acute. and i think you would agree with me that i don't think anyone is saying the volatility in the markets is completely gone, particularly given some of the fiscal issues, that different countries in europe are facing around spending and deficits. but that what was a chronic issue -- excuse me, what was an acute issue a year ago is at worst a chronic issue today. >> christine lagarde, do you want to add anything on where we are on the eurozone was one pretty big issue is clear from some discussions in moderately

reputable organizations, that some people expect, restructuring of the deaths of some member countries and that some people don't think it's quite normal. we still don't know how that's going to happen. and how we would persuade people to land large amounts of money to recover when they think the debt might be restructured the following day, or at least the following year. i meet that seems rather a conflict. spent i'd like to disagree with bob diamond because when he said it's gone from acute to chronic at worst, i understanto say what he said, i disagree with that. we went to crisis in 2010, no doubt about it. we had to put in place rescue package for greece and ireland and in the process we transgress all the rules of the, you know, sort of common principles that would prevail that would take no bailout. but we went through that. we went through that talking a

lot as wolfgang said but in a very committed fashion at the end of the day. we put in place the european financial stability fund in a matter of nearly what, we wasn't? it went to market a couple of days ago, and it was oversubscribed overnight. it's an indication that on the market of confidence, i think the eurozone has turned the corner. having said that, we are working hard. i disagree with you, bob. i think in terms of fiscal consolidation we are all heading in the same direction. we are consolidating. some people will criticize us and we'll say our study, you're going to cut growth. i say look at sweden, for instance. it is outside the zone but it has produced very strong fiscal consolidation measures and it is growing at a rate of 7%. so let's not short europe and let's not short the eurozone. we are heading in the same direction.

we are consolidating. we are producing significant reforms and we're determined to let's say take the job growth left unfinished. that's the way i would put it. we decided and it was great that our predecessors decided to have single currency because that was a symbol of european unity and something that we strongly believe in. but we also had to go a little bit further by having in place not just the stability and growth, but also additional factors. macroeconomic review, preventive action, corrective action, proper sanctions, real discipline. this is what we're all hearing now. some people will say it's fine, but in 2004 u. the germans and the french did not comply with the rules. well, we learn from our mistake and we will learn from the crisis. this is what we want. we want to be together. we have helped those who are in trouble. we have a fund in place and we are working on refining it, improving it and certainly are prepared to close ranks.

>> i turn to you -- [applause] >> george osborne. wild enthusiasm. wild enthusiasm. [laughter] >> we are -- our countries member of european union, not the eurozone. we contributed to packages support. are you looking as it were an inside, an outsider, insider. are you happy with what has been done? is enough to restore confidence? you don't yet see it in the market. >> i think we've got two out of three things right. the thing that we've got right, the eurozone itself is working flat out on the permanent mechanism. and the next couple of months we expect to see that in place and the u.k. has a huge interest in that working and we are contributing to putting it together in terms of the technical work. the second thing that i think is

working is the individual european countries, and i include the u.k. and is, are addressing their domestic problems. and actually, governments in countries like spain and portugal, and elsewhere on the european continent, are taking difficult decisions to address their own problems. in different countries have different problems. ireland where we made a contribution to the rescue package clearly has a huge banking problem. were as portugal has a competitiveness problem. so individual countries, and i include as i say the u.k. in this, are putting their own houses in order. the third thing which i think is a challenge for all of us where i think we do need to do more is the overall competitiveness of europe. and i think the european union has been good at sort of presenting the challenge to us. so we had the lisbon agenda. we've had now the 2020 agenda. but the proof is going to be in the pudding. the proof is going to be can we

actually make the european union a more competitive place to do business? and i think if you start with an assessment of what is the cost of doing business in europe, the cost of doing business in the united states and the cost of doing business in the developing world. and look at the measures of that. that would not be a bad place to start, and see what we can do. and people are skeptical that your can address these problems. i would point to one of the enormous achievements of the european union, which was a single market, which there were plenty of obstacles in the path to greatness single market. we still need to go on and complete a single market. the creation of the single market was a remarkable achievement, that run increase in productivity, and growth to the european union. and i think the challenge for all of us, not just wolfgang, christina myself, but the others countries represented in the european union is to really drive this agenda forward to

over the next few months. >> you will like this i know, but this is a dialogue which british governments of both persuasions have been mounting for many years, and i wish you success. >> one more heat. >> one more heat. we're going to come back to this, but there is a very nice shift in this, the last subject i want to address, which is a situation, the financial sector. one of the things that has come out, and central issue here, we talked about ireland. ireland is just taken a very large package, it's very controversial, clearly. absolutely clear. if you look at irish public debt, which is now scary, injury significant measure, not entirely, because the debt of

irish banks do not any depositors, but other creditors outside creditors, has been nationalized and is now going to be clearly a burden on the irish people for a long time to its very, very controversial. it just reminds us in very strong we this incredibly incestuous relationship that emerges in the crisis between government and the financial system. so where from the financial systems point of view, from your point of view, have we got to india agenda of ensuring that doesn't happen again? ..

>> we saw it through in the first couple hours if we had an opportunity which we had this morning to meet with the finance ministers and what was the message that we wanted to deliver, and, you know, it was a very heartfelt thanks. i think we have to recognize that, of course, there is some fatigue. but an awful lot has changed in the last three years. and we should, we should safe thank you to the central banks, to the finance ministers, to the regulators because banks are operating in a safer and sounder financial system. we've answered a lot of questions about capital ratios, about liquidity, about leverage. i don't think anyone thinks the system is absolutely perfect, and as i said, there is some fatigue. to christine's earlier point on

g-20, as you said, during the crisis the g-20 came together in a way that was very beneficial for the financial system. and there is some worry as the crisis recede and we're back to business as usual, if i can say it that way, that there's a very strong wish on the part os of -- part of banks and insurance companies that the positives of g20 integration and how well it's worked together to create a balanced set of proposals and rules and regulations also ensues. and i think, finally, the message, martin, was i think the banks and the insurance companies definitely want to play a role in helping, in helping the major economies create jobs and create economic growth. so those were the messages that came out. i think it was a very constructive meeting and a meeting where we recognize that a lot has changed and that the system today, while not perfect, is certainly safer and sounder. >> so if we have another

significant set of difficulties in some institutions which is, obviously, something that in the industry of banking has happened, could we actually manage them, in your view, without another round of public rescues? >> well, i think there's two answers to that. one is the difference between the strength of the individual institutions and the risks -- >> to the system. >> -- to the system, right. and i think, and i think we have to balance both of those. and i think there's a level at which, you know, you can focus on the individual institutions when the focus should be, should be more on the system. and that led in to a pretty good discussion, again, in the meeting this morning, the combined meeting about too big to fail resolution and recovery and what would happen. and, you know, the situation is very, very clear. we have clients, governments, corporates, pension funds who have very complex needs financially. so we need large banks that can operate across border.

so we have to be able to wind them down if a problem ensues. and i don't think there's a sense either with the regulators or the banks that today that could be done over a weekend. but i think there's a lot of very positive work going on. i know we're working closely with the fsa on resolution and recovery, on structures for contingent capital securities, and we do believe that the way we run larger financial institutions can be done in a way that's consistent with resolution and recovery. and so while i don't think that is final and i think, chancellor, you'd say that's probably 6-18 months of work, again, through the g20, through the sfb where mario has been very, very construct i, we do believe -- constructive, we do believe we can get there. >> george osbourne, if i may ask you and ask others to respond, there certainly have been some complaints we get in the paper from some people here that governments are overregulating,

that there are dangers associated with that, growth may be throttled, and you, as you pointed out and other governments, you're contracting demand for the public sector, so you really want the private sector to motor. are you giving them missioned messages -- mixed messages, or are you getting it about right? >> well, i think, you know, when you face the biggest banking crisis for 80 years, fixing the system was never going to be something that took place overnight. i think a number of components are in place. i think the because l 3 -- basil 3 agreement was achieved remarkably quickly, the fact that it took 12-18 months to get to basil 3 was good. we now need to see all the countries sign up to it and implement it, and europeans need to, including britain, needs to put it into european law, the americans need to implement it as well. i think individual companies are

looking at their own regulation, we're getting rid of the fsa in if britain and putting the bank of england in charge and looking at the issue which is particular to, you know, particular of interest to the u.k. because we have such a large banking system relative to our gdp of the, you know, the so-called too big to fail. and i pointed you, martin, to the commission that's looking at this, so you're the one who's got to give me the answers to that. >> no worry. coming soon. >> i'm sure you'll be very certain about your views. [laughter] but the -- >> [inaudible] >> and as this week you've demonstrated you're completely independent as well. [laughter] the third thing, the third thing i'd say is, and this is very difficult because, you know, there is very understandable anger in the political system and with public opinion not just in britain, but with what happened. and the british government is

trying to reach a new settlement with the u.k. banks. where they lend more into the economy, where they contribute more taxes, where the bonuses are smaller than last year, and they make greater contribution to society. and at the same time the u.k. government makes it explicit that it wants the u.k. to be the undisputed home of finance. now, we're working on that. we haven't discussed it here in davos, but we've been working on it in britain, and we'll only do it if it's a good deal. i'm sure that applies to both size of the discussion -- sides of the discussion. but i think it would be a good thing if we can achieve it, and that's what we're working on at the moment. >> bob zoellick, would you -- what was your perspective on the regulator in general, and give others a chance to respond very briefly before we go to the floor. are they making a big mess of

it? >> i'd like to add a slightly different note, and that is from the scars of experience with the s&l industry, commercial banks, beware of unintended consequences and whatever regulatory fix people think they're putting in today will probably not be designed for the next crisis, and there will be a crisis given the way markets go up and down. so one other aspect that i've suggested in the g20 agenda is to do a review and feedback loop of these new basil requirements. and just to give you one very clear example, trade finance. and we had this discussion with the basil people. they have assigned a capital requirement for trade finance that is way out of sync with the duration of those loans and, frankly, they're just blank connectly assuming that all these developing countries' banks are weak. so if you talk to, say, standard charter, the difference in terms of capital allocation on their risk model versus what comes out

of basil is the widest range of anything of their asset portfolio. so we've tried to bring to the attention of the people in basil that there are going to be big consequences of this, and when we brought it to their attention, they said, oh, yes, we assumed everything was one-year maturity which straight finance is not one-year maturity. we can offset that one. but i think whatever is done, build in feedback loops because you're going to have to learn as you go. >> martin. >> just one point, and that is this whole issue of whether regulation will throttle credit. i think from one aspect of looking at it from are the point of view of of developing countries i think a lot was directed at trying to present in the industrialized financial markets instruments that were supposed to be very low risk and yet get a good return. and, frankly, the real returns are in developing countries,

and, of course, there's a little bit more risk. so in one sense i would say that some of the financial innovation that we now discredit actually prevented enough loss from going with high returns with the risks that actually are associated with them by pretending there were a lot of high-return, low-risk instruments. so as some regulation of this sort of financial innovation, i would hope that what it will do is to redirect finance, that if you really want high returns, there's a lot of high returns. if develops countries are growing at 6.5%, india's growing at 8.5%, china's doing a little better than that right now, may slow down, i mean, really that's where capital should be going, and we with ought to be trying to reduce the real risks associated with that. i think we'll be helped in doing that if too much financial be regulation isn't producing competitive instruments which we know exposed were actually

enormously high risk. and i don't know whether that's been taken into account. from a developing country point of view, we have a huge advantage because a new consensus on how to run a sensible financial system is emerging well before we are anywhere near sufficiently globally integrated. so in some sense we can watch all this evolve. we still have to actually liberalize our own rules, but we are going to be able to do it and be better positioned if you have a better disciplined, better regulated financial system internally. and i think that you shouldn't push it too much. i mean, some of the skepticism about a g20 misses the fact that major institutional changes are taking place with a lot of the major developing countries around the table. and actually, even if they're not driving the change at the moment, the very fact that they're there gives a greater sense of ownership and, ultimately, will lead to a better evolution of an institutional framework where

there's a real consensus with, obviously, country deviation. i should add that you'll be looking forward to the french presidency of the g20. you know, this is going to be the first normal g20 which is going to meet after one year. i mean, every one earlier has met every six months. >> right. >> and that creates too much of a pressure of what are we going to do for our next miracle. so this doesn't -- [laughter] you have a little bit, a little bit of patience and see what happens at the end of the year. >> it's worth noting that there's -- we've discussed this here and in other meetings -- a very, very close connection between this agenda for financial innovation and finance sector regulation and the global monetary system and macroeconomic discussions we had earlier because, obviously, if you describe what's going to happen that risk capital is going to flow very heavily into emerging countries, that has implications for the exchange rates, it has implications for monetary policies, it has

implications for reserve management policies. it is part of what -- it is like, we haven't discussed this, but it's part of this currency wars. that's part of what they mean. with all this money coming in and you yourself earlier talked about money flows, so this is a very close integration of these, yeah, two agendas. we've gone into this detail now, but, obviously, these are just two sides of one coin. >> but i would emphasize, you know, don't look to the g20 to produce a magic bullet every time. the fact that there is an intergovernmental process of discussion with the major players involved is actually helping to evolve better understanding of the limits of what's possible and also a better examination of what are the alternatives. i mean, take international monetary reform. are we doing the sort of silver bullet approach? sometimes, i mean, some people think of the sdr as the silver bullet. there are other views. are we trying to do it by

getting better coordination? there are a lot of problems there too. i don't expect this to get resofted in one year. -- resolved in one year. everybody's sitting around the table and having a better understanding of what the issues are. >> i suppose what we hope is however much we muddle through, we don't muddle through into another crisis on this scale. that would be the minimum. christine lagarde, did you want to add anything on this question? is. >> i was just going to follow up, the best way for the banking sector to say thank you would be to have good financing of the economy, sensible compensation systems in place and reinforcement of their capital. >> in other words, i think what's -- [laughter] the madam minister is saying gratitude is not enough. [laughter] and i have no doubt at all that bob diamond fully understands that. i'm going to -- we don't have much time, i always fail with this. but we've had, i think, a very

fascinating conversation. i hope it cheers you all up. questions. i need a light, i need some light so i can see people. very brief questions, i'll take a few together, and i'll address them to the audience. start with -- [inaudible] say who you are, address your question. >> hi. i'm joe, i'm with xl partners. we're global venture capitalists, we back companies like facebook. so this is about the global economic outlook, and half the world's population is probably very close to under 25. this is a generation that as we're seeing is totally connected and whose unemployment rates generally, particularly in the west, are probably twice the average unemployment rate of the population as a whole. what kind of problem is this going to present as you've got this totally connected generation, and we're seeing one example of that this week in the

arab countries, what kind of impact is that going to have, how serious a problem is it? >> very good question. any other questions? somebody at the back. is there someone at the back? good. then -- is there? yes. that person. yeah? fine? could you stand up, perhaps, and say who you are and question? >> >> dennis snowe, president of the institute for the world economy. george osbourne said one very important component to tackling the european problem is for countries to make bold steps to get their house in order. why doesn't every country that wants access to the rescue package in europe formulate it own fiscal rule and then establish a commission that implements this rule by simply telling the government what its deficits and surpluses should be in order for this rule to be fulfilled?

>> okay. i'll take one more question, then -- address this. yes, this person there, that's fine. >> case finance. bob zoellick wrote an editorial about gold standard. i wonder what other ministers think about it. >> request okay. that's enough. okay. first question. i think a very deep question. youth unemployment around the world. connected youth, as we can see, even in poor countries. what with sort of problems does that create for the economy and politics? should we start with you, bob zoellick,ing on that? you must see this problem in so many of your member countries. >> yeah. it's something that comes up with real increasing frequency. and if you just take some of the situation in north africa today, what's interesting, some of those countries have made good

progress in terms of reducing poverty, in education, but in some ways that also created expectations that they weren't able to meet because, in if my view, some other economic reforms but also other non-economic topics. but what i find now almost everywhere i go from countries like africa, india, elsewhere is the original focus on the millennium development goals of primary education, getting kids in school, is then expanding to the quality, to secondary education and, critically, the work force connection to jobs. and i think this has been a davos context something that we're trying to find and many countries are finding that the connection of the private sector to try to see how to prepare people better for the job market will be an important part of policy. but i also take the flipside of this. you know, when you talk about some of these bigger trends, we didn't talk much about dem graphics. -- demographics. if you've got younger and educated populations given some of the other issues we talk about, that should be a real

plus. so we need to figure out how to capitalize on that. >> i wonder if you'd like to focus on this from the point of view of very large emerging countries, vast numbers of younger people, china's smaller than india because of the reduction in the size of families, but you've both got stupendous challenges. look what's going on, can this become political? very different political context, but how do you see this challenge, martin, and can you actually meet it? >> it's absolutely true that the fact you have a large number of young people and they're connected essentially means that governments are constantly made aware of the tremendous expectations that have been raised. but, you know, i think the democratic process provides a lot of outlet and a sense of participation being heard. so i think we're facing the consequences of a young,

connected population virtually all the time. it does put pressure on the system, and that's why when we talk about growth in india, we're emphasizing inclusive growth. inclusive means different things to different people, and we just have to add up all the different kinds of demands for inclusion. as far as the young people are concerned, the dominant thing is they need to be skilled and educated in a manner where they can have a pretty good expectation that they will benefit from this enormous opportunities ahead. i don't find amongst the young people in india any pessimism. i do find tremendous demand. i find a sense that a lot of opportunities, and there are going to be even more, and better educate them better than we're doing. and i think that's not, that's not a bad set of pressures for a government to be under. and that's why education in india today at all levels including skill development is one of the top priorities. >> yu yongding, how do you see

the challenges? >> this is a question i don't feel in a position to give very good answer. i see this in very positive light. you see it now in china. i think we have 900 million -- 300 million people using the internet and so on. young people are connected, they know lot of things and so on. so what i want to say here is listen more. fail to find this kind of change in china. they thought china is closed country, people know nothing about inside -- that is totally wrong. china is very open. people can say whatever they want in the internet. this is tremendous new development. i don't know what we will be consequences, but i think this is very good development. >> i'm going to move on to the second question, and i'm going to address you, mr. schauble.

he put forward what i must imagine you would regard is the shocking idea that each member country of the euro zone should have its own fiscal rule and policy implemented by some independent body. but it does raise a fundamental question, what is the relationship between national parliaments, euro zone rules and ultimate fiscal responsibility within this unique hybrid structure of the euro zone? obviously, you're very unhappy with what's happened, so how do you go forward on this absolutely central issue? >> it is a key problem of the common currency in the euro zone. we don't have common fiscal policy, we have a common monetary policy and, therefore, we have -- [inaudible] the danger of contingency.

therefore, we have to learn, and we are working on the true consequences. the principle is working because given the spread if member is not able to anticipate, it has o to -- sustain, it has to ask for assistance, and then it suffers -- [inaudible] therefore, they don't like to ask for assistance because it's a hard thing to accept it. maybe we are working and we try to work in the european mechanism which we want to create up to 2030 in a more comprehensive and more sustainable way. but at the end it's quite clear the only -- there are two alternatives. the one is we find better way to

coordinate our fiscal policy and the most important even in global governance, g20 as well, that we not only have agreements that the most important thing is that we stick to the agreements that we set in place. but we have agreed if we were set in place what we have all agreed in the g20 in the last two years, the world would look much better. there's a lot of thing to do, and it's the same -- [inaudible] i think what we learned in this last year is that we have to draw clear consequences to convince markets as well as the european currency will be convincing and will be sustainable. and in this way the end will be

that everyone has, we will be better for every member state also to stick to the obligations which have been agreed, which have been violated. that's true, the beginning of france and germany, but we have learned from this, and now our friends to draw the same consequences. >> so i think the answer to that original question was institutionalization, yes; doing whatever you like, no. bob diamond. >> since we're on europe i wanted to go back to the earlier discussion. and when i referred to market volatility, i think for all these reasons we'll still see some volatility. and i recall i think it was 1992 when the bank of england issued its first ecubond, i worked on that issue. and from the beginning, you know, the mote for what we're doing in -- motivation for what

we're doing in europe, as christine said, the euro-wide issue i thought it was 10 or 11 times over subscribed. you said nine times. i think the key to that in terms of taking the issue off the table of europe, the real thing was the investors. and the investors were real money. it wasn't hedge funds, it wasn't speculative money, it was real long-term, long-only pension fund type of money. and so i think the question of of the strength of europe and, and -- is the euro going to stay together was last year's issue and is off the table. but i think the consensus of the meetings i've been at is we'll still see some volatility in the markets. but the big question of europe being here and staying together is gone. >> let me also suggest that if there were a genuine euro-wide bond market, it could be a very, very attractive market. i'm going to talk about -- i'm going to push this further. i know this is a big issue that we don't have time to discuss.

gold, bob. what did you mean? [laughter] >> well, i welcome the ft headlines pushing the op-eds, but i would urge you to read the op-ed as well as the story about the op-ed. i never suggested a gold standard or return to bread and woods, and what i actually said in the op-ed which i said again today is i believe we need to have the system move towards flexible exchange rates and autonomous monetary policies. but within such a system i believe that gold will be an indicator, so it's not an operational tool, but it's an informational tool. now, it's not surprising to me that traditional central bankers don't like this because they don't want people to ever question the nature of their policies. but what i was suggesting is that markets reflect a reality. and i believe learn the hard way, you should face realities. and i think what you are seeing in terms of the price of gold -- not alone -- but was an indicator of lack of confidence in the core currencies for

various reasons. euro because of the problems we're talking about, dollar, yen, the one they would like to get into was the rem inb, but it doesn't have an open capital account. so where i fit this in with what i said today which i actually wrote a couple months ago was if you have the imf play this referee role and look at indicators to try to see how the different policies are relating, i believe that gold as well as other commodities should be one of those indicators. that's not a gold standard. >> is an impliation of -- implication of what you've just said and looking at the gold price at the very least you think there is a perfectly reasonable concern about the thoughts of monetary policies that have been pursued by a number of major central banks? and this is all -- and if they looked at this as an indicator, the impliation to me would have been they should have raised the rates already. >> i don't think it's the only

indicator but, yes, i think that markets are telling you not only something about monetary policy -- and this is another topic -- but, also, what they believe the long-term growth -- >> and the fiscal position, presumably. >> but you're using aggregate demand all the time, and i keep trying to go back to some of the microeconomic. >> of course. >> i think that as well as other indicators tell you something, and if you're going to have a flexible, floating system, i don't think it's so bad to have a market check which the imf can look at about the prospects of growth and monetary policies. i think you talk to a lot of people in the markets today, they will expect an inflation in the future. that's how they're going to think a lot of governments are going to get out of of this big debt issue. they're either going to restructure or have inflation, and i don't think that's a shock to people in markets. >> does anybody -- i should close this now, but is any of you brave enough to comment on why the monetary policy is

defective right now? i thought so. pity we don't have a central banker on the panel. i would have loved to have discussed this question with jean claude trichet or ben bernanke but, unfortunately, neither is on the panel. we've run out of time. before i sum up, incredibly briefly, i've been sad to remind -- asked to remind you that the japanese prime minister will be giving a message immediately after this, and you're asked very kindly to stay and hear him. we haven't had anybody from japan here on the panel, so it's an opportunity to find out what this very important country actually thinks. i just make four points. as usual, i have failed to shake the policymakers from their, their confidence that they're in control and everything's going to be fine. at the moment we are definitely in a post-crisis mode in davos.

as i like to think of it, a pre-crisis mode in davos. [laughter] confidence is very substantial but, fortunately, there are enough worries out there that maybe confidence won't become excessive over the next years. it's very much my view that maybe we can get through the next year. there's a very strong sense of that on this panel. but, of course, there's been a long list of risks mentioned including by members of the audience, youth unemployment as well, unemployment -- i didn't address that at the beginning. a long list of very, very large issues out there, number one. but a general perspective, we got through this crisis. thank you, as mr. diamond said. second, there was particularly striking confidence, i must say to me quite astonishing but nonetheless, striking confidence that the political commitment to the euro system is such that though a lot of the things that are going to happen are

completely obscure on many of the issues we raise, that this system is going to you survive. and i think it is important to stress that this is ultimately a political structure, and the political heads of government that are relevant have clearly committed themselves to this. and i think you've been warned on that. third issue, we have added to already a very substantial g20 agenda on monetary policy, financial regulation, international -- a number of very important issues which christine lagarde has laid out, but it's going to be a very busy meeting. this is perfectly clear. and if any person can push through such an agenda successfully, it is somebody as dynamic as mr. sarkozy, but it's going to be an enormous agenda. and finally, we got a very nuanced picture on the financial sector here.

gratitude, not too much complaint about overregulation though we've heard a lot of that. i have to say i kid attend -- did attend one meeting in which one senior banker expressed very strong positive confidence about the future both of the financial sector about lending, about financial sector and lending, and that was the single most frightening moment i heard in the conference. [laughter] but i think we've had a very wonderful, deep discussion of the many, many issues, and i would like to thank the panel. and, please, thank them on your behalf. [applause] [inaudible conversations] >> the u.s. senate is set to return at about 2:15 eastern, about ten minutes away, to begin

consideration of reauthorization of the faa. we'll have live coverage here on c-span2 when they gavel back in. >> so we're expecting them back at 2:15. until then, a preview of the legislation ahead. >> well, our guest is dan friedman of the national journal, senate leadershipwe reporter, and the senate leadership this week has decided to bring up the faa

reauthorization bill which they're actually calling a jobs bill. how so? is. >> guest: they've been calling every bill going back a little more than a year are a jobs bil. they are, obviously, eager to tout their efforts to address the economy. so they, senate majority leader harry reid said b yesterday, ore cited an estimate from an industry group that the bill would create 280,000ing jobs largely through a portion of it that funds airport construction. so that, it's about $8.1 billion in the bill. and they are, they're going to continue, obviously, to tout every bill that they bring upe that has evenve the slightest economic component as a jobsghte bill. >> host: now, this bill did come up last year or and, actually, passed but why are they taking it up again. >> is. >> guest: because it didn't pasp the full a congress. the house and senate passed different versions. there was a provision, there's several provisions that they differed on, particularly one dealing with organization of

fedex workers which is wit unrelated to the faa. but there had been a lot of pressure from ups and laborom unions to change the rules under whichnion the rules under which unions work could organize. that is not in this bill. that was a push by james oberstar, former chairman of the house transportation committee. he lost control of the house, so the bill faces better prospects now than it did last year. host: what else is big about the bill? guest: there is a passenger bill of rights. it is a big deal for many of us who fly on planes. the provision talked abou oneut most is the amount of time that an airline can force you to wait on the runway. and host: phone numbers on the

bottom of the screen for our guest, dan friedman. we have lines for republicans and democrats and independents. our guest covers the senate leadership for the national journal. we expect the senate to spend a few days on this bill. guest: i think it will be more than a few. reed said they want to open mmi process on this bill. last week they reach this unofficial agreement read. that read would allow the open read. that means there could be hundreds of amendments, so it could take quite a while. the democrats have a retreat next week, and i think it is unlikely it will close before that. host: you can watch it all on c- span2. tell us about the next gen

satellite system. guest: they have a ground-based free thsatellite system. the one to replace it witha a gps system. proponents of ofnest gen argued that almost all major industrial countries have the systems and that despite having developed the technology in the united states, the united states is one of the last to switch to it. host: of big safety benefit? guest: safety and economic benefit. you can move people more quickly so you can have more flights. host: what is the overall price tag? guest: it authorizes 35 million in spending, however, most of that is raising its own money. the proponents of the bill argue

there is a funding airport fees that pay for a lot of the airport infrastructure. host: who is leading the way in congress on this? give us the big movers on this. guest: jay rockefeller from west virginia will lead the way. he said yesterday in a conference call that senator patty murray -- maria cantwell would help manage the bill on the floorwith a lot of new or members of the house. >> guest: generally, he's going to advocate for this, so it's interesting to see interestinge

what extent he can get what he wants in the bill and what extent members, new republican members will push back on that. host: lots to talk about. john is on the line for john. on the line for democrats. caller: good morning. i keep hearing about we want more oilwells, drilling in alaska, but when it all comes down to it, we do not have any refineries. the keep shutting down refineries, and deceiseems likee gas prices are rising more of right now to pay for the bp oil prices. host: to have anything specifically to talk about with infrastructure? -- we wanted to talk specifically about the faa.

guest: there is infrastructure in general. the spending has called for more infrastructure spending. the democrats in the senate and probably the house are describing this bill as a first up toward the broader vision that president obama laid out on infrastructure spending. this bill already passed the senate 93-0 so they can call this the bride away. it is the same one that passed the senate last year. it -- this bill already passed the senate 93-0, so they can call this up right away. host: how does the process work? how often our airports built around this country? who pays for them? who decides when new ones are being built? guest: they are built and frequently. i do not want to get into construction that i do not quite understand, but the faa is

obviously the oversight in the building of airports. airlines are often responsible for funding through fees and that they may be paid directly to the passengers. at o'hare airport there is infrastructure improvements they want to make. host: let's hear from bloomington, indiana. nancy an independent calller. thank you for watching. is this nancy? caller: no, it is not. i am calling from binghamton, new york. callerone of the things that cos me is they say there is a shortage of air traffic controllers and the computer is there any 4-looking ideas to target both of these areas? guest: i am not sure about

hiring of air-traffic controllers. there is labor language dealing with the rights of air traffic controllers, which as been another area of dispute in the past it is a complicated piece of legislation that touches on all kinds of policies that the faa is involved in. host: jack, republican. good morning. are you there? what is your question or comment? caller: >> we're going to leave this and take you live to the u.s. senate. just outside the senate, republican leadership speaking with reporters. >> okay, good afternoon, everyone. shortly, i will lay down an amendment to repeal obamacare.

we pledged to the american people that we would seek to repeal the 2700-page bill that seeks to restructure all of american health care. and put the decisions in washington. i'm pleased to announce that all 47 of my members will be voting to repeal obamacare, and i want to call today on several senators who can give you the impact of the bill on several different sectors of our economy. i'm going to call, first, on senator ron johnson who used to run a business to talk about the impact of obamacare on jobs and the ability to expand employment, and then i'm going to call on dr. barrasso and dr. coburn to make additional comments about the impact of this new health care bill on the quality of american health care. so with that, let me call on ron johnson.

>> thank you, leader mcconnell. i do bring the perspective as a business person who's been running a manufacturing plant for the last 31 years, and i think the point i've been trying to make is as a manufacturer, you learn to look for the root cause, not the mere symptoms of the problem. to me, sluggish job creation, a slow economy, high deficits are the symptoms of the problem, not the root cause. it's the size, scope and cost of government that are the root cause hampering job creation. and to me, exhibit a of large government, out-of-control government, intrusive government is the health care bill. that's why i totally support the repeal of that. i believe that once we do that, it'll remove -- it'll help remove uncertainty from this economy and help job creation. thank you. >> well, if you saw the latest thomson reuters poll of position bees, what you find is two-thirds of the physicians in this country think this is going to be disastrous for care in the country. for them and their patients, 80%

of them think it's going to result in lower care for patients while it doesn't do anything in cost. if you look at the independent payment advisory board numbers, the only people who have any control over that is congress. you can't sue in court, you can't stop it administratively. so what the actuaries for medicare have said that for us to solve the problems, the reimbursement for providers in medicare will actually be lower than it is for medicaid today under the guise of this bill. and then the final point i would make is the recent study that came out that said if you didn't have medicaid, which 18 million new people are going to have medicaid, and you went to the er with the same diagnosis, that your health care would actually be better having no insurance at all than having been placed in medicare. so the answer to our problems is not continue to put people in a substandard system, but to let

the markets work so that we can actually give people the care that they want. finally, this interjects in between the patient and the physician in terms of what the care's going to be. the most personal of things in our lives,ing we're going to have the federal government intervening in that process. that's rejected by 80% of the physicians and 75% of the patients in this country. >> there was a court ruling, as you know, yesterday in florida after the ruling in virginia. to me, this is a second stake in the heart of obamacare. the president at the state of the union said he was looking for those of us to come forward with ideas to how to increase quality and decrease the cost of care. we continue to come up with those ideas and bring them to the president. these are ideas he has rejected in the past. what we want, what i want as a doctor for my patients, what dr. coburn and others want is we want patients to be able to get the care they need from the doctor that they want at a cost

they can afford. the president made a lot of promises about bringing down the cost of care. the american people know that those promises have turned out to be false. this is adding to the cost of care and adding to the cost of business. it is much more expensive now to hire someone, and we want to make it cheaper and easier to create new private sector jobs. this health care law makes it tougher and more expensive to create new private sector jobs. i talk to patients, i talk to physicians, this is a bill that is bad for patients, it's pad for provoid -- bad for providers, the nurses, doctors, and physician assistants who take care of those patients, and it is bad for taxpayers. and that's why today with one poll that just came out 58% of americans still want this health care law repealed. and when they actually do the breakdown in the polls of asking people who have talked to a doctor or a nurse or a physician

assistant, those numbers of people who want it repealed go up. and yet just this past week the secretary of health and human services added another 500 waivers, people that are no longer having to live under obamacare. of those waivers we now have over 2.2 million people receiving waivers from the mandates of obamacare. only 7% of the private sector work force in this country is union members, but yet they have 40% of all of the waivers. these are the people that lobbied and spend significant amounts of money to get this law passed. if this is such a good bill, why do they want out? and that's why i want every american to have a waiver and to be out of this, out of this obamacare law, and that's why i'm going to vote to repeal and replace obamacare. >> we'll take a couple of questions, if there are any. >> do you have an agreement --

[inaudible] >> yeah. we don't have an agreement on the manner in which we'll have a vote, but everybody will have an opportunity to be on record. i think it'll be clear who is for repeal and who isn't. >> [inaudible] >> look, i think with regard to what's going on in the middle east, in my view, america ought to speak with one voice, and we have one president and one secretary of state, and i think they ought to speak for america with regard to the crisis in the middle east. >> [inaudible] >> just informed by you. thank you. look, i think we're all watching with great interest. we all know egypt is the most

important arab country that we care a great deal about how ends, and we hope that at the end of the day we'll still have a strong ally. in the government of egypt. >> in the court decision that was made yesterday, the court decision that came down yesterday have effect on how -- [inaudible] >> have any effect on what? >> movement on health care today? did it dictate at all -- >> well, we had already promised the american people that we would as early as possible vote on repealing obamacare. the house has already done it, and while i thought the accord decision was significant and further indication that the bill not only has trouble in congress, but trouble in the court t, we would have moved ahead in any event. >> mr. leader? mr. leader, there's some -- [inaudible] >> we're going to be looking at every conceivable way to reduce

spending. in the last two years, we've added $3 trillion to the national debt while we've lost three million jobs. so i think the view of most republicans is that nothing is off limits, and we're anxious to reduce spending. and i would go one step further and say we're also anxious to do something about our long-term unfunded liabilities which are enormous. and i hope the president will decide he wants to work with us on that as well. thank you. >> [inaudible] [inaudible conversations] >> republican senators outside the u.s. senate talking about the upcoming debate on faa reauthorization. cq is report what you just heard, republican efforts to repeal all or part of the 2010 health care law could receive

votes in the senate this month in the form of amendments to the pending faa reauthorization bill. the senate has come in, they're in a quorum call. we're going to take you back inside the senate chamber now live here on c-span2.

quorum call:

a senator: madam president? the presiding officer: the senator from west virginia is recognized. and we are in a quorum call. mr. rockefeller: we are in a quorum call. i ask unanimous consent that the order of the quorum call be rescinded. the presiding officer: without objection, so ordered. mr. rockefeller: i thank the presiding officer. i ask unanimous consent that the senate proceed to a period of debate only on the f.a.a. reauthorization bill for the purpose of opening remarks from the chairman -- that being me -- and ranking member, that being senator hutchison of the commerce committee. the presiding officer: without objection, so ordered. mr. rockefeller: i thank the presiding officer again. i want to thank the majority leader for bringing this bill to the floor so promptly, the first bill of this year, 112th congress. air transportation modernization and safety improvement act, it reauthorizes the federal

aviation act. it has been postponed 15 times over the last four years to the consternation of all of us who care about this subject. we have three commerce committee members in the chamber right now. we're all frustrated about getting it done. so it is the first piece of legislation. so that the bill that i introduce that we are considering is the text of the f.a.a. reauthorization bill that was approved by the whole senate last year by a vote of 93-0. and all of the matters of safety and air traffic control systems and all the rest of it that we talk about are all incorporated already in this bill. although the senate and the house of representatives informally conferenced, it was not productive and we were unable to come to a final resolution. so here we are once again. i thought beginning this year's

consideration of the f.a.a. reauthorization bill with the legislation that did pass unanimously last year would signal a commitment to bringing forward a bill that had broad bipartisan support at least last year. it wasn't that long ago. there are some new members, some issues still stand out. we didn't resolve all of them. i do want to say at the beginning that this is a monumentally important bill. i also want to say that i recognize without rancor that there are a lot of members of the congress that don't really keep up with aviation because they kind of take it for granted, and it's highly technical and not always interesting but always important. always important. and it employs 11 million people, just for a start. that's only direct employment, not indirect employment. you know, it's a vastly important bill, and we're vastly

behind where we should be. and this bill will help us move forward. so, i want to thank particularly senator hutchison, the ranking member of the commerce committee and my able partner, for her efforts on this bill last year. i look forward to working with her again this year on passing this bill, as i know she wants to have happen, and getting it enacted into law. she and i can't sign it into law, but we just want to have it signed into law. it's a good bill. i believe this bill reflects a shared vision and our mutual goal in making sure that the united states continues to have the safest, most efficient and most modern aviation system possible. given the importance of the airline industry to our nation's economy -- and, again, many people take this for granted, but it's a vast industry. i can't think of a more important piece of legislation to our nation's long-term economic competitiveness. it's the right bill to start with.

we know this legislation will create and support good-paying american jobs. it already does. 11 million is a lot of jobs. that's slightly more than the population of west virginia. and that doesn't include the indirect jobs which are, again, a couple more million which come directly from this industry and its activities. the bill improves the safety and efficiency of our tphaeufgs's -- nation's aviation system by preventing something called runway incursions, which people often aren't aware of unless their plane runs into another on the tarmac, which happens infrequently but does happen. but people would be shocked to know how often and how many times incursions are just about to happen until they're rescued by an understaffed control tower, which says, hey, head right, head left, stop; whatever. so it also modernizes our air traffic control system.

that's an easy phrase. it's a vast new concept. we have -- we're living in an x-ray age when everybody else is g.p.s. and digitalized. i include mongolia. i thought of mongolia being ahead of us is deeply disturbing to me. it's a way of making a point, i think one would agree. i want to reduce delays that from us fliers, and we do -- that frustrate fliers, and we do that. it opens the door to undeveloped areas. it makes a big point of that through essential air service, airport improvement programs and other programs. this bill helps protect our position as the global leader in aviation. i said global leader. we are. we are. the aviation needs and goals of texas and west virginia are the same. people might not believe it, but they are. my good friend, senator

hutchison, represents some of the largest airports in the country. i represent some of the finest smaller airports in the nation. but all of our airports are critical economic engines to their respective communities. she may have -- senator hutchison may have more flights in and out of texas than we have in west virginia. in fact, i guarantee you she does. but we both know the importance of air service to economic growth and global competitiveness. every one of our constituents wants the safest aviation system possible. before assuming our current role, senator hutchison and i rotated being chairman and ranking member of the aviation subcommittee, and we did that for ten years. so we're pretty heavily into this subject. we agree on virtually everything. virtually everything. but we share a passion for aviation because we know how critical this industry is to our

economy, to the comfort and mobility of our people and to our nation's future. we both share a strong desire to get this legislation enacted into law. i've already said that. it's been far too long -- four years -- since the last f.a.a. reauthorization bill was enacted. our nation cannot afford to wait one second longer. sadly, when many people think of flying, their first reaction is often negative. and that's usually what you hear, people complaining in t.s.a. lines, people complaining about delays, people complaining about weather. airlines control weather. actually they don't statutorily or otherwise. but people are not happy. so there's sort of a grumpiness about this subject which we don't address but we try to take away the causes of grumpiness. i'll be the first to admit from my own point of view that travel is not always enjoyable by air. that's a symptom of a number of expectations that we have

somehow developed over the years. air travel has changed with deregulation. how well i remember deregulation. american big jets at charleston, west virginia. united airline big jets at charleston, west virginia. deregulation one month later, no more jets. and we subsist basically on prop planes with two propellers. and if you're my height, it takes an hour or so to restore your blood flow after you get out of those -- if you're lucky enough to get an exit seat. if you're not, it may take two or three hours. so, anyway, some of the changes with deregulation have been for the better. not all those changes have been for the best. well, there have been frustrating changes for travelers as the industry has adapted to this new reality.

there have been many other benefits, primarily cheaper tickets to more places for the average flier. we must also remember that aviation is more than just a commercial air travel service. aviation counts for $1 trillion-plus worth of economic activity for the country and, again, supports more than 11 million jobs directly. and many, many more indirectly. it is a critical sector of our economy. boeing is the nation's largest exporter in aerospace sauls from large and small -- sales from large and small producers. provides tens of billions of dollars toward balanced trade for the united states with international buyers. this is our late great success story. we have been tending to it. that's why we're doing this bill

now. so, in 2010, the united states did not have a single commercial aviation fatality. that is a truly remarkable statistic. it is one that we should not only be thankful for, but very proud of. safety is the number-one priority of the federal aviation administration. the airline industry, and the people who work for both. and it is senator hutchison's and mine, the commerce committee's number-one priority. always is, has to be. it is through hard and dedicated work of the thousands of f.a.a. and industry employees that we do in fact have the safest aviation system in the world. improving the safety of our aviation system has been a huge priority for all of us. you can't rest on your laurels in aviation in any respect. the industry is always shaky.

the public is always a little bit shaky. times are sakey. bad times, fewer passengers. better times, more passengers. sounds like good news for better passengers. it isn't always good news that there will be more passengers in the future. i strongly believe that this bill is fundamentally about the future of aviation, and it is vastly important. this bill is about making sure that we have the most technologically advanced satellite-based air traffic control system in the world. this bill is about catapulting our air traffic control system out of the 19th century and into the 21st century with every other industrialized country in the world. we do not share that with them now. x-ray is an x-ray. more people drive around in cars with global g.p.s. systems than airplanes have. so it doesn't make sense, but that's the fact.

today, as i said, we're behind europe and even mongolia. and we have to remedy that fact that we have to do it quickly. this bill is about making sure that we continue to have the most dynamic aviation industry in the world. and i'll say it again, the u.s. civil aviation sector generates $1 trillion a year in economic activity and employees 11 million -- and employs 11 million people. all of the activity creates jobs. airport construction jobs, building airplanes from the smallest generation to boeing's state-of-the-art 787 dream liner. jobs at airlines, jobs in general aviation, like the small air parts that dot both senator hutchison's and my state, the ruler parts thereof. and the presiding officer's. and those, as i say, are the direct jobs.

airports and the aviation industry support millions of indirect jobs. that makes sense. one only need to look -- and this is sort of the most obvious presentation of it -- to look at the growth around dulles, dallas, fort worth and denver international. denver international is built out in the middle of a desert. not anymore. i don't think dallas, fort worth was ever out in the middle of the desert. it's extraordinary the growth. it attracts jobs. people don't want to bicycle to dallas. they want to go by air. business decisions are made by air. that point speaks for itself. in beckley, west virginia, which is not huge but has a wonderful airport, what's interesting is that it also has an enormously successful business port at that

facility. our major airports in huntington and charleston have direct points at major chemical companies that allow businesses to grow in west virginia. i believe that the future of the u.s. aviation system hats unlimited potential -- has unlimited potential. we face serious challenges in making sure we reach that potential, but i know that we are up to it. to make it work we have to upgrade our 19 50's era system. investing in infrastructure is a very good place to start. it is embarrassing that some of our newer cars have more sophisticated global positioning systems than many of our aircraft in the skies. that has to change. it costs moafnlt it's everything to do with lives and safety. and we -- it's going to get much bigger, much more passengers. we have 750 million people flying every year now.

in another few years it'll be one billion. so it's almost like a 50% increase in the number of people flying. everything gets more complicated. everything gets more crowded. it's eye-opening to see the speed with which china and other developing nations are investing in their air traffic control systems in their airports. they know what they're doing. they take nothing for granted. growth is on their minds. get al be left far behind. and i'm so, but that's the way it works. sentimental industry. it's one that needs to be treated we will, nurtured, and supported. so if we don't act quickly, we're at risk for falling behind global competitors, we'll lose the cargo hubs, the aircraft manufacturing plafntses and the economic development that that aviation causes. i cannot understate the

importance of a vie brand aviation system. i have made no attempt to be should i on that account. can't be. it'sed to our nation's long-term economic growth. it is fundamental to my state's ability to attract new investment. choose topic vest in an area, the quality of service is the prime consideration. i say "z," you can say "a." you can have a great quality of life, but it doesn't get you a factory. quality of life is good, but it isn't preemptive. the ability to fly one stop from west virginia to almost any corner of the world, which we now have, is critical for our ability to attract new businesses and jobs. why do we have 20 japanese companies in west virginia? i mean, that's actually an interesting question. the reason is because we have good air service and we have good workers. but if you have good workers and no particularly good air

service, we wouldn't have them. now, you have a lot more than that in texas. but for west virginia that's a phenomenal statistic. all of our futures are tied to modern aviation systems. over the last several years we have focused more on the inconveniences of air travel rather than trying to solve the underlying problems that make air travel so challenging. moc americans do not understand how fragile our air transportation system really is. the economic downturn of the last several years masked this fragility because fewer people flew, so there was less pressure on the system of but as our economy recovers, i am afraid that the inherent weakness of our system will loom larger than ever in years to cornlings as we goat a billion passengers a year. the possibility of a meltdown of the air traffic control system

may become reality unless we modernize it. and this will create more inconvenience, it will put pass injury safety at very substantial risk. these are not the only troubling signs, as i noted there was no aviation fay fault talents in 2010 but that doesn't take the system is working. over the last few years the f.a.a. and the industry have faced serious questions over their commitment to safety. that commitment has been called into question. the grounding of thousands of aircraft throughout the system in 2008 raised questions about the quality of airline maintenance practices and the f.a.a.'s ability to provide sufficient oversight of air carriers and their maintenance, not just domestic but also overseas -- another subject.

the tragic accident -- downing of flight 3407 on the snowy night in buffalo -- exposed problems with pilot training, flight crew fatigue -- pillet particularly pilot if a teerks and the ability of the industry to ensure the trafficking public that there is only one level of safety throughout the entire system. that bill addresses that through a number of stipulations but they're just -- we're making it a rule. you have to get this into law. the f.a.a. spotting some of this into practice, but we have to make it into law. people have to get enough sleep, they can talk above 10,000 feet about soaring than aviation but below 10,000 fetal where the -- feet where the crowd feelly gathers and aviation is being scrutinized by aviation control folks, you have to have what is called a "sterile" cockpit. nobody talks about anything but

landing, anything but landing. so i'm deeply proud of the reforms that we've put into place in the area of safety and they offer even more incentive to pass the bill quickly. before i close, sort of, i want to recognize the efforts of former senator byron dorgan. i think senator hutchison would join knee in that -- for his incredible hard work on behalf of the safety issue. i'm pleased to say that the f.a.a. is currently working on implementing the two dozen provisions of the law he helped with others to create. i feel very strongly improving our aviation system is a national priority. my passion comes from a deep belief that our future said to to a healthy yaiftion industry. america is the cradle of aviation. i don't want to see that change. since 1988 i have worked diligently as the chairman of the aviation subcommittee and how as chairman of the commerce committee to support our aviation sanldz to address its challenges. to wirkts inadequate funding for

the f.a.a., a chronically unprofitable commercial aviation industry, and minimal investment in aerospace research. nobody moves forward in industry without doing research. we just won't pay for it. and so a lot of it isn't done. in some areas we've made. we have increased our investment in airport infrastructure, we've opened up new markets for carriers and we've begun to make serious investments in modernizing our air traffic control s it is a multiyear process, highly expensive. i know many of my colleagues will say that we cannot afford it make those investments in aviation at this time. but now it seems to me is the precise time to make them. the recession prevented widespread delays from occurring, so we were lulled into thinking everything was going we will. over the last two years airlines dramatically cut capacity,

parked hundreds of planes in the desert. we don't have deserts in west virginia. i don't know where they're parked. but somewhere in a desert there are hundreds of planes that were taken off-line because of lack of passenger demand. anyway, we can't make shortsighted budget decisions. the cost of action will be far greater. i want to ask my colleague from texas, i'm proceeding we will, but i am not finished. is that acceptable? mrs. hutchison: absolutely. mr. rockefeller: my colleague says it is absolutely acceptable. thank you. our comirks yes, has begun to slowly turn around and the demand for air travel has slowly begun to grow. airlines have cautiously increased capacity. if we act now, we can be prepared to meet the challenges of adding 300 million passengers to the system in the next decade. if we fail to act, congestion

will plague the system again, delays will be a fact of life, and today will look like the golden age of travel. a word of modernization: the benefits of investing in air travel l. trarveg control modernization extend i don't understand of ability to handle more passengers. the next generation air transportation system -- we call it nexit nextgen will provide ps and air craft controllers with better situational wearness. now we can't tell if there is a mountain in front of us. you can't tell about the ground situation. you can't tell about separation. it is inefficient. planes land but they could land more quickly. you can't read as efficiently as you can, the distance tbeen one level of plane flying in for landing or taking off from landing or another one.

so it is inefficient. it is dangerous, in fact. so we have to do this. we have to be able to see other aircraft and detailed weather maps in realtime, to be able to go from one place to another in a straight shot. that's what nextgen will do for us. now planes are going all over the place, avoiding this and that as go from one tracon to another tracon. g.p.s., nextgen does a lot of things. it saves a lot of fuel and time. and delays cost the american economy about $33 billion a year. so we've got play our pilots and air traffic controllers with better situational awareness. they will be able to see other aircraft and detailed weather maps and that becomes important. a new satellite-based a.t.c. --

air traffic control -- system will allow airplanes to move more efficiently by taking moree direct routes. greater operational efficiency will also create substantial environmental benefits. drastic reduction in fuel consumption means not only that we'll achieve lower carbon emissions, fewer of them will be spewed out, but almost every community near an airport will benefit greatly from this effort. also planes will be becoming quieter. in all ways they're getting to be better. we still have to guide them correctly. i noted the president clearly recognized the value of investing in our air transportation system and this was reflected in his budget request. the administration proposed a total of $1.1 billion in fy 2011

for nextgen programs which is more than a 30% increase from 2010. is that bad in this time and age of skepticism about budgets? i hope that we can continue this level of budget, even in lean budget years. modernizing the a.t.c. system will require a sustained focus and substantial resources. this legislation takes concrete steps to make sure that f.a.a. accelerates key nextgen program, puts on -- targets programs, how many to be done by 1014, how many airports, how many by 2018? it is laid out in the bill. so let me discuss a few of the key measures in 2003 that further addressed modernization. to improve accountability, this bill establishes an air traivelg modernization board, designates a chief nextgen officer to

provide specific oversight of the f.a.a.'s modernization activities. oversight is what the congress is really for, and we don't do it we will enough because we all are on too many committees and have too much work to do. so putting somebody in who is spue responsible for oversighting nextgen within if a is a good idea. the bill also establishes specific deadlines for the implementation of the nextgen programs. it's not fancy -- it's got fancy names. area navigation read r nevment v and required navigational performance procedures must be developed at the nation's largest 30 airports by 2014. where these technologies are already in place, we're seeing dramatic benefits and reduced fuel consumption and many other benefits. all aircraft are required to be

equipped with automatic dependent surveillance broadcasts. i won't bore with you that. but that's what it is about. ads-b is the cornerstone of the f.a.a.'s air traffic control modern d modernization effort. it provides controllers and pilots with an aisht's immediate position. pilots will be able to see the realtime position of other aircraft and receive the same information that controllers are receiving in their towers but they'll see them in their cockpit. the f.a.a. estimates nextgen will cost probably about $20 billion through 2025. and the airlines another $20 billion in aircraft equipage. in other words, they have to match the -- the airlines have to match to a certain extent what the federal government is doing. and they will do that. again, some will argue that we can't afford this investment. i would say it is the other way around. this bill is paid for.

it makes a substantial commitment to providing f.a.a. with the resources it needs. i've borked with senators inouye and baucus to preach a deal that -- i shouldn't say that. reach an agreement that moves news the right direction. s. 2k 23 will create a new subaccount with the aviation trust fund to fund f.a.a.'s modernization efforts. this modernization subaccount will dedicate $400 annually to nextgen efforts and to nothing else. so it -- so it's just boxed right in. and our colleagues have worked hard on all of this. a word on small community air service. that's another core challenge. every part of my state is basically rural in west virginia and every part of most states -- every state has some rural parts. everybody thinks laguardia,

j.f.k., et cetera. but try upstate new york. try around the serinacs or north of that into the buffaloes and others. they're dealing with small aircraft. that's where the crash took place, small aircraft, in buffalo. pilot was drowsy. so this continuing crisis has hit the u.s. airline industry very hard, and because it affects -- you see, rural communities are at the end of the food chain. if something bad happens at the top of the food chain, there will be some suffering. but the real suffering takes place at the bottom of the food chain. that's where the flights get cut off. that's where they get eliminated. that's where they suddenly stop not going to places. or stop going to places. so they call for better times but we don't have them yet so we're in crisis. the reduction or elimination of air service has a devastating effect on the community of a

community thereby. i stipulate that from the previous sentence. having adequate air service is not just a matter of convenience but also a matter of economic survival. without access to reliable air service, no business is going to locate their operations, and i've already talked about that. but small airlines, small airports are important. when congress deregulated the airline industry in 1978, we made a promise to small communities, an official promise, that they would continue to have access to the nation's air transportation system. i believe that the federal government needs to provide additional resources and tools for small communities to help themselves attract adequate air service. this legislation does this by building on existing programs. authorized funding for the essential air service program is increased to $200 million annually. the e.a.s. program is critical to dozens of communities throughout our country. i've made that point.

and it's an increase from the previous amount. it's needed. it also provides a lot of flexibility to e.a.s., what people -- what small airports can do with e.a.s. somebody may be phasing out of being a commercial e.a.s. airport and they're headed towards being a general aviation airport. well, this allows that transition to move forward. almost at the end here. consumer protection, that's key. we're about protecting lives, protecting people, protecting passengers. the bill strengthens passenger protections by incorporating elements of the passenger bill of rights, which came right out of the commerce committee, to deal with the most egregious flight delays and cancellations. talk about angry travelers. this is where you run into them. the industry would be required to take some basic steps to improve the passenger experien experience.

to wit, passengers must be provided with information regarding on-time arrivals and chroniclely delayed -- chronically delayed flights when they purchase tickets. most of them do that on-line so the airlines have to publish what is their record on on-time takeoffs or on-time landings. what is their delay, what is their cancellation. that has to be posted so that flyers who want to purchase tickets can compare and go elsewhere if they want. air carriers are also required to permit passengers to deplane after three hours have elapsed. we've all heard about nine-hour waits on the tarmac. it's usually not as dramatic as that. but, you know, if you're a mother and you have three children, three hours not moving is a long time. three hours moving is a long time but not moving is a very long time. so they would have after three hours the right to deplane. it's not mandated.

it's their right to deplane. airlines can't stop that. unless the pilot has a certain belief about they're just about to take off. they have to be given water. they have to be given food. they have to be given medical attention if they need it, bathroom facilities and the rest of it. now, the d.o.t., department of transportation, has taken steps to improve customer protections and i applaud their actions but i, for one, believe that statutory protections are better than when a government agency decides to do it. so in conclusion, when we began work on this bill, i at least had four simple goals. one, take steps to address critical safety concerns. two, reestablish or establish a road map for the implementation of nextgen and to accelerate the f.a.a.'s key modernization programs. three, make certain we adequately invest in airport infrastructure. and, four, continue to improve

small communities access to the nation's aviation system. this bill takes those steps. and i feel very strongly about the bill. the airport improvement program, which is a part of all of this, is estimated to provide at leave 120,000 jobs annually. that's now an $8.1 billion authorized amount. moving forward the nextgen will certainly help us keep our position as a global leader. so this is the culmination of more than four years of work with senator hutchison, myself and the hard-working members of the commerce committee. again, this language passed 93-0 less than 12 months ago. it's an important bill, important for the safety of the traveling public, important to our ability to create jobs, important to sustaining an aerospace industry, important to having healthy airlines, important to general aviation's future, and important to our competitiveness. i urge my colleagues to support this bill and i welcome their ideas about how we might improve

it. i ask for you to join me in my determination to complete our work and reauthorize f.a.a. thank you, mr. president. mrs. hutchison: mr. president? the presiding officer: the senator from texas. mrs. hutchison: mr. president, as ranking member of the committee on commerce, science, and transportation, i, too, would like to discuss the f.a.a. reauthorization bill and agree with the chairman, senator rockefeller, who has just spoken that we have tbhorkd a bipartisan way -- we have worked in a bipartisan way on this bill for four years and i am glad that he mentioned senator dorg dorgan, who was the chairman of the subcommittee who pushed so hard last year for us to come to a conclusion and try to pass a permanent bill. the bill that is before us is the bill that passed last year and there are many good things in this bill. it passed unanimously in the senate and we were on our way to

conference with the house but the house bill was quite different and we never got to the point of really being able to work out the differences. i do think that there was one part of the bill which i will discuss more later that we worked on a compromise to achieve, a goal of easing the perimeter rule at washington's national airport, reagan airpo airport, and we were not able -- we were able to come to an agreement among the leaders on the committee but we were not able to get the full agreement of the senate and that was a -- a gentleman's agreement, if you will, that we would work on putting that into the conference report but that never came to pass.

the other thing is the rule around national airport that has slot restrictions and mileage restrictions on how far you can go directly in and out of national airport from. the perimeter rule prohibits flights traveling to and from 90's are more than 1,250 miles from national airport unless there is an exemption. many western states would like more of those exemptions, especially given that the airport can now handle additional capacity. i want to be clear on the -- at the onset of this process. i cannot support a final bill that doesn't address this issue. we need to work out either a consensus majority or an agreement that addresses the issue rather than just leaving it out.

the f.a.a. has operated under a series of short-term extensions since 2007. 18 short-term extensions have occurred. that is not providing the policy that is keeping us in the forefront of modernization of our air traffic system. we need to have a bipartisan, commonsense, multiyear f.a.a. reauthorization to provide the stability that this agency, the f.a.a., and its stakeholders, our airlines and passengers, need to make sound investment decisions for our future aviation system. the current short-term extension expires march 31. if we address these issues in our senate bill, i believe that we can work with the house that has already begun to formulate the basis of its bill and have a

true reauthorization bill, multiyear, that would be able to pass on march 31 instead of yet another short-term extension. the house version last year was quite different from our bill and while a year now has almost elapsed, many of the bill provisions need to be updated. the one that we have before us would modernize the air traffic control system, nextgen, which was mentioned by senator rockefeller, it would improve aviation safety, and it would assure passengers are treated well, especially if they are delayed and stuck in an aircraft for more than three hours. i call it the captive passenger rule that we need to enact. first, modernization. probably the most important area that we address in this bill is expediting the f.a.a.'s air

traffic control modernization program known as nextgen. the f.a.a. operates the largest and safest air traffic control system in the world. in fact, the air -- the f.a.a.'s air traffic control system handles almost half of the world's air traffic activity. the u.s. has been a leader in developing and implementing new technologies to create a safer and more efficient airspace system. however, today's air traffic control system is not much different from that that was started in the 1960's. the system is based on radar tracking and ground-based infrastructure. nextgen will move much of the air traffic control infrastructure from ground-based to satellite-based by replacing antiquated, costly ground infrastructure with orbiting satellites and onboard automation. by doing this, the f.a.a. will

be able to make our aviation system more safe and efficient while increasing capacity at our nation's busiest airports of the some of the modernization provisions -- airnts. some of the modernization provisions in the bill establish clear deadlines for the adoption of existing global positioning system navigation technology. it mandates 100% coverage at the top 35 airports by 2014, with the entire national airspace system to be required to be covered by 2018. aviation safety. mr. president, as a former vice chairman of the national transportation safety board, i understand well the critical and difficult mission the f.a.a. has in overseeing our anything's airlines and aviation system. aviation safety and the public trust that go along with it are the bedrock of our national

aviation policy and we simply cannot allow any degradation of safety for the flying public. this bill goes a long way to advance and promote the air travel system. last august, as part of one of the short-term extensions, several of the important safety provisions were enacted into law that were the direct result of weaknesses identified from the tragic crash and aftermath of colgan flight 3407 in buffalo, new york. while those provisions were of great importance and will have an impact on creating one level of safety through all sectors of aviation, we still have important work to do and in this wilbill we do it. addressing inconsistent application of air worthiness directives by improving the voluntary disclosure reporting process to ensure adequate actions are taken in response to

reports. limiting the ability of f.a.a. administrators to work with air carriers over which they have had oversight -- mr. reid: mr. president, would my friend prosecute -- the presiding officer: will the senator yield? mrs. hutchison: mr. president, i will be happy to yield if the leaders would allow me to come in when they are finished and continue as if uninterrupted. mr. reid: i appreciate her courtesy. i have a consent agreement. mr. president, i ask consent that senator stabenow be recognized to offer an amendment relating to 1099 reporting forms. she will give her speech regarding this after senator mcconnell offers an amendment relating to health care. and the amendments be debated concurrently. senator mcconnell can do whatever he feels is appropriate. he will speak before senator stabenow. how much more time do you have to speak? mrs. hutchison: probably about

five or six minutes. mr. reid: whatever you and senator mcconnell decide on that is fine with me. mrs. hutchison: i can speak after senator mcconnell and before senator stabenow. mr. mcconnell: my statement is really pretty brief. if she wouldn't mind, i think senator stabenow is willing to let me do mine, lay down my amendment. mr. reid: senator stabenow would be willing to let you finish your statement. i ask senator stabenow be recognized to offer the amendment and then senator mcconnell would offer his. the presiding officer: without objection. ms. stabenow: i have an amendment at the desk. amendment number 9. i would ask for its immediate consideration. the presiding officer: the clerk will report the amendment. the clerk: the senator from michigan, mrs. stabenow, proposes an -- ms. stabenow: mr. president, i would ask that the clerk dispense with the reading. the presiding officer: without objection. the republican leader.

mr. mcconnell: mr. president, i thank the senator from texas very much for letting me make a brief statement about the amendment i'm about to offer. i apologize for interrupting her comments. mr. president, what we have today is an opportunity, an opportunity for the majority to reevaluate what it has done on the issue of health care and take another path. it's no secret the american people don't like the health care bill that was passed last year. and if you talk with doctors or nurses or anybody else involved with health care over the last year, most of them will tell you they don't like it either. employers big and small have been desperately trying to get the message across of how damaging this bill will be to their ability to create jobs. they tell us the impact of the bill is severe. higher taxes, penalties for hiring workers, new regulations that already to more than 6,000 pages, mountains of new

paperwork; all this at a time when businesses want to create jobs and millions of americans are looking for one. don't take it from me. here's how the national federation of independent businesses puts it: small business owners everywhere, the nfib has said are rightfully concerned that the unconstitutional new mandates, countless rules and new taxes in the health care law will devastate their businesses and their ability to create jobs. now yesterday a federal court in florida found the crux of the law to be unconstitutional. so we have an opportunity today, an opportunity, for all those who supported the health law, it's an opportunity to reevaluate your vote, to listen to your constituents who are desperately trying to get your attention. you can say perhaps this was a mistake, we can do this better. or you can continue to dismiss the majority of the people in this country as not knowing what they're talking about.

it's not every day you get a second chance on a big decision after you know all the facts. today is one of those days. for all of us who oppose the health care bill, today we reaffirm our commitment to work a little harder to get it right. we can't afford to get it wrong. so i urge my colleagues to move beyond party affiliation. just look at the facts before us. if everyone in this chamber evaluated this bill for what it is, we'd repeal it right now. and then we'd begin to work on achieving our mutual goal of delivering health care at a higher quality for lower cost. let's not miss this opportunity. mr. president, i send the amendment to the desk and i ask its immediate consideration. the presiding officer: the clerk will report the amendment. the clerk: the senator from kentucky, mr. mcconnell, proposes an amendment numbered 13. mr. mcconnell: and i thank the senator from texas, and i yield

the floor. the presiding officer: the senator from texas. mrs. hutchison: thank you, mr. president. i'm pleased that we are starting on the f.a.a. bill and have an open amendment process so that everyone can be heard. i will finish my remarks as the ranking member of the commerce committee, and then i know senator stabenow wants to speak on the first amendment that's going to be offered that is probably unrelated to our f.a.a. bill, but nevertheless very important for our country. let me go back to where i was on the parts of the f.a.a. reauthorization bill that address aviation safety. we do limit the ability of f.a.a. inspectors to work for air carriers over which they have had oversight, and we will require conducting independent reviews of safety issues identified by employees.

requiring enhanced safety oversight of foreign repair stations including a minimum of two f.a.a. inspections annually with exceptions for those that have comprehensive bilateral aviation safety maintenance agreements with the united states. our bill would also require alcohol and drug testing at any foreign facilities that perform maintenance on u.s. commercial aircraft. finally, the bill also provides infrastructure investment to our nation's airports. as we all know, you can have the best planes and the best air traffic system, but they mean nothing without the proper airport infrastructure in place. mr. president, this bill contains many important provisions and deserves the support of the senate. we have been operating under short-term extensions for far too long. it is also one of the reasons we need to finally address the d.c. perimeter rule which impeded the

passage of this bill on too many occasions. while i have been talking about what is in the bill, this is the one issue that is currently not included in the bill and must be addressed if we are to have a successful final passage. after months of negotiation last year, the chairman -- the subcommittee chairman, western senators and i and our ranking member on the subcommittee reached a compromise agreement that we hoped would finally resolve the issue. but we didn't have an opportunity to bring the consensus version to the floor before we adjourned. it is a very reasonable approach. here are the provisions of the compromise: it would add five new round-trip flights beyond the perimeter for new entrants or limited incumbents, tkh mean airlines -- which mean airlines that have very small bases at national airport now, meaning we would add competition with the

five new round-trip flights. it allows for conversion of 16 round-trip flights from large hub airports inside the perimeter to any airport outside the perimeter phased in over two years. the conversion concept seeks to address congestion concerns by replacing existing flights rather than creating more new flights. since 2000, there have only about 12 new flights in national airport since the year 2000. now we are asking for five more new flights, which would increase competition. and the conversion flights, which would have no impact on the congestion in the airport because they will not be new flights. it prohibits the use of wide-body aircraft for converted flights, to address any noise concerns from local residents.

but in reality, the noise issue is so different today than it was when the first aviation authorization was passed. we have stage 3 aircraft now, which are much quieter than the planes that have gone in and out in the past. and not to allow the use of bigger aircraft, i think really protects the residents that might live around the airport and in fact, i would argue gives them an add convenience because those residents would also have access to the long-haul flights at a convenient airport to them. the d.o.t. would evaluate the proposed flights and be able to disapprove of the conversions if they determine they are not in the public interest. the air carriers could only convert flights currently used to operate flights to large hubs within the perimeter in an effort to protect small communities. so, in other words, you would not see conversions from very

small airports to be able to take long-haul flights away. it would only be conversions from a big hub airport to another big hub airport. our small communities should not feel threatened by this. carriers would be prohibited from selling, trading, leasing or otherwise transferring the rights to fly beyond the perimeter. it also eliminates financial restrictions in place between national and dulles that would allow for revenue sharing between the two airports, which is comparable to other airport systems across the country to address any financial impact on the airport authority. mr. president, i lived through, dealt with and negotiated the wright amendment in texas and the lifting of the wright amendment that allowed an incremental easing of the wright

amendment restrictions at dallas love field that was put in place to protect d.f.w. airport when it was first built. that was much of the reason for the restrictions at national airport when dulles airport was built, to assure that dulles would be financially secure. dulles is financially secure, so it is time to deal with the issue of allowing national to have more service to the western half of america. the people out west deserve to have more access to national airport if that is where they choose to fly. i think that dulles has captured the international flights. i think that has been a good way for dulles to become really one of our busiest airports and certainly one of our most successful. so i know these are difficult issues because i dealt with it in my own state, but now i think this modest expansion of only

five new flights out of reagan national should be very doable. i think that the western senators have come up with a compromise with the conversions that will not affect the traffic or the congestion around national, but will allow better access, which i think is a win-win for everyone. so, mr. president, and especially for you, mr. president, with some humor i find it a bit ironic that tomorrow is groundhog day -- february 2. if ever there was a piece of legislation that fit the bill, this one is it. since starting this legislation in 2007, 18 short-term extensions later -- and this being the third consideration of the f.a.a. bill on the floor, it does feel like groundhog day. in a nod to that holiday, that esteemed, important holiday in america, let's hope that there are no shadows seen and winter

will quickly end. in a well-debated and bipartisan f.a.a. bill. mr. president, i thank the senator from michigan and the leader and the republican leader and my chairman for allowing us to start the debate on this bill and finish our remarks. i know we will have many amendments. i just hope in the end we'll have a good bill that does satisfy everyone's needs and that we can permanently say winter is over. thank you, mr. president, and i yield the floor. ms. stabenow: mr. president? the presiding officer: the senator from michigan. ms. stabenow: thank you, mr. president. first, i want to congratulate senator rockefeller and senator hutchison for their leadership in putting together what is such an important bill for 280,000 jobs that are saved or created as a result of this, focusing on

our ability to outinnovate and outbuild in a global economy. we can't do that without a 21st century f.a.a. system, airports, air traffic control, and so on. i join with senator hutchison in hoping that -- and i'm sure it will be true that at the end of the day we will have a strong bipartisan vote. because they're really moving forward in the spirit in which we've all come together saying we want to move forward. that is working hard, focusing on jobs that's what the american people want us to do, is focus on jobs. finding common ground, working across the aisle. that's what is evident from this bill. i'm very appreciative of the fact that they're focusing. i think to thank our leader for making sure hat very first bill we're bringing up is about jobs. we understand that too many families, certainly in my state, mr. president, are still looking for work. they worked hard all their lives and never thought in a million years they'd find themselves in

the situation that they're in. so they want us to be laser focused on jobs and the economy and outcompeting in a global economy, as the president said. and this bill is exactly the kind of policy that we should be focused on. what is concerning to me is that while we are doing that, we are now going to have a debate that is very divisive. really looking backwards rather than looking forwards. one of the things that the president talked about again which i agree with strongly is that in the area of health care, we know that there are things we can fix to make what we had last year to make our system more competitive, to make it better for families, to put families back in control rather than insurance companies. we know there are things that we can do to make it better and certainly no one has been more of a champion than our leader on

this legislation, the chairman of the commerce committee, but one of the leaders, the number two on the finance committee who brought his passion to the issue of health care as well. and so we know that things can be fixed and we want to work together on the things to make it better, but not fight old fights, create political fights and division and certainly not roll back the clock where we put all the control in insurance companies and we see our families losing the freedom and security to make sure that their children that their family has the health care they need. so let me first talk about my amendment and then why i believe that we should be focused on this kind of amendment to fix the bill that passed last year, the new law to make it better rather than rolling the clock back. and certainly we've heard now, if you follow the polls that four out of five americans are

saying, don't go back and just repeal what was done, but fix it. so the majority of people are not supporting going back to old political fights or going back, frankly, to a system that's an uncontrolled system where insurance companies can raise rates 20%, 30%, 40% every year without some plan, some focus to be able to lower costs to be able to get people out of emergency rooms and into the doctors' offices and, frankly, for people who have insurance not to be placed into a situation where they continually to see their rates go up to pay for people who don't. and so -- which is what we have put in place. but there is a provision that has been a concern of mine and many others. we've debated it now on the floor. we've attempted to get it fixed at several different times and i hope today, i hope tomorrow, whenever we vote on this, that we will actually be able to get this fixed. this has been actually supported on both sides of the aisle and

it deals with eliminating red tape and burdensome i.r.s. reporting requirements for our businesses, particularly small businesses. we are -- we are particularly concerned about what this means for small businesses. the provision that was placed into the bill that now as we look at how the i.r.s. will implement it, is clearly too burdensome and my amendment would repeal that, mr. president. it would allow business owners to spend their time growing their company and creating jobs instead of filling out paperwork from the i.r.s. we want them creating jobs. it's a commonsense solution to an issue that has come up and it basically would make sure that the provision that would require a 1099 form for every vendor when a company has a purchase of $600 or more for goods would not be -- would no longer be in place. this is a provision that actually doesn't take effect

until next year, but we want to send a very clear message to business who's have expressed very -- businesses who have expressed great concern about this, about what is coming for them at the end of the year. we want to let them know that we would not continue the new provision. we would allow small businesses who already create 64% of the jobs to be able to keep creating those jobs and we would make sure that we are not putting in place additional paperwork for them. one of the things that i think is important to note is that according to the i.r.s. the provision that -- that we want to repeal if left unchecked would impact about 40 million american businesses -- 40 million and 26 million of them are sole proprietorships, our smallest businesses. and they would be overwhelmed with the paperwork that's involved. and it doesn't make any sense. we've passed a great small

business jobs bill last fall that created eight different tax cuts and focused on making capital loans more available for small businesses. we don't want to now go the other direction and see a mountain of paperwork added to the small businesses that we have been very committed to fighting for and to be supporting. so unfortunately if this provision were allowed to stand, it would require a 2,000% increase in 1099 filings, and, frankly, mr. president, that just doesn't make sense. so this particular provision would repeal what was placed into the new health care law, repay for the -- we pay for the repeal by cutting $44 billion in unobligated spending. we do make it clear and certainly this does not affect medicare or social security benefits in any way.

i wouldn't support that. and i know my colleagues on the floor would not. it makes it clear that the department of defense and veterans' affairs an social security administration are not included, but it would give the management and budget office the ability to look at the possibilities in areas for cut and then would then report back to us in 60 days after enactment to secretary of treasury and congress concerning the amounts and the accounts that they would be using in order to cut back in order to save this particular provision. so this is an area where we can come together. where democrats and republicans on both sides of the aisle who care passionately about small business can come together, eliminate red tape and burdensome i.r.s. reporting provisions, get that off the table, make it clear now to small businesses that there is

no intent or actuality that this is going to happen. and we can do that together. but, mr. president, what we shouldn't be doing is what the next amendment, the republican leader's amendment, would do. because his amendment would take us back to the time of uncontrolled insurance company increases, no accountability and it would put the control of health care coverage and costs back in the hands of insurance companies. what i support and what the new law allows is the freedom and security for families to make sure they can get the medical care that they need when they need it. you know, i have two beautiful grandchildren, three -- a granddaughter age 3 and a grandson age 1, and they are the most beautiful children in the world, just for the record. i want my son and daughter-in-law to be able to

pick up the phone and call the doctor when they get sick, not fighting with the insurance company. if this is repealed they go back to fighting with the insurance company. i want them making sure that my grandchildren, as well as my children, as well as my mom an everyone else in my family and certainly everyone in michigan and the country to be getting the medical care they need, not fighting with the insurance company. not worrying because their child has juvenile diabetes or leukemia or some other disease or condition that the insurance company is going to say, tough luck. i don't -- i'm not going to cover your child even though your child needs care or you suddenly get sick and they say, well, you know, there's some fine print over here and we know you're sick, but we're going to cancel your coverage. or, well, we've got 10 treatments that we'll provide

you and the doctor -- even though the doctor says you need 20. the -- right now, because of what we've done, in the patient's bill of rights that was put in place, we put those decisions in the hands of families and doctors instead of insurance companies. and i certainly am not going to vote to take it back to putting it in the hands of the insurance companies. frankly, i have been -- having many, many families approach me to say, thank you for the fact that now they have the ability, the freedom, the security to put their child 22, 23, 25 on their insurance to get that first job, doesn't have health insurance, but they can go out, get started, and know that they've got the peace of mind that they have health insurance. that would be taken away under what the republican leader is proposing. we would see young people going back to no insurance as a result

of that. right now we have seniors that know that they're going to have their freedom of security to be able to get the cancer screening that they need, the wellness visit even if they don't have the out-of-pocket, the cosponsor and deductible that they were being charged in the past because there is no cosponsor and deductible now. they will be able to get what they need in preventive care. they will be able to have the peace of mind, the security to know that if they use a lot of medicine and fall in a gap in coverage, that the cost in that tbap is going to be -- in that gap is going to be cut in half, any brand named drugs issued are cut in half. what does that do? well, that means that my mom, who's 84, has the security to know that her great

grandchildren are going to have her around longer, a lot longer, i hope. because she's going to be able to play with those kids. every older person is going to know they have a better chance to be around for their grandkids because they're going to be able to afford the medicine that will help them stay healthy. that is taken away in the republican leader's amendment. the freedom and security for seniors to know that they can stay healthy, that they can stay in their home, that they can have the medicine they need or the doctors' visits they need to be able to stay healthy and live a long, healthy -- healthier life, that is taken away. the freedom and security for women to know that we aren't going to pay twice as much as men for insurance, which, by the way, in majority of policies, prior to passing this if women go out to buy an insurance

policy over half the policies women pay as much as twice as much. and we changed that. we've also said that things like maternity care ought to be a basic part of a health insurance policy. and maybe we won't be 39th in the world in the number of babies that live through the first year of their life if moms are able to get the prenatal care that they need and babies are able to get it through the first year of their life. this gives women the freedom in the security of knowing they're going to have what they need to be able to have healthy babies. isn't that what we all want? that is taken away with republican leader's amendment. and among many, many other things, i will just mention two others. for the first time we are putting accountability on the insurance industry. and, again, our chairman of the commerce committee led this

effort and the finance committee to say, you know what? when you pay a hard-earned dollar out of your pocket for health insurance and it's tough because these rates have been high and unfortunately until we get this implemented it's going to keep going up, try to keep it going up until they have to stop, that the majority of that is going to go to medical care. depending on the size of your policy, either 80% or 85% of what you pay out has to go to medical care, not to the bureaucracy, but to medical care. and what does that mean? it means that it will limit the rate increases over time and put more accountability on the companies. the republican leader's amendment rolls that back. we have companies now that spend 60% of every dollar you give on medical care, 70%. this would say 80% or 85%. the majority of your hard-earned dollars that are hard to come by in this economy.

if it's for health care, then it should be used on health care. and that is what is repealed in this, accountability on insurance companies. i will finally say this, what is also repealed is a major focus in this bill is on supporting small businesses to be able to get a better deal on health insurance. and this takes away the freedom and security for a small business to be able to get the leverage that they need like a big business to get a better deal on rates. so -- and i wish this is something that took effect -- if we're going to change something, i wish we'd speed that up. that needs to be faster, in my judgment, and not having to wait now for the next three years. because we've got all kinds of small businesses who are going to be able to band together and be able to get a better rate like a big business through competition in the marketplace, not government control,

private-sector competition. i had an opportunity to talk to a gentleman who runs a program for our automakers and other manufacturers for retirees. it's a health exchange exactly like we passed in this new law. and he said to me, i don't think, senator, you guys even realize how good it is -- what you have done in terms of creating a marketplace and competition it bring rates down. he said we bring rates down about 30% for the auto companies, for retiree coverage, about 30% because of competition in this bill, leverage for small businesses and tax cuts to help small businesses pay for it. in the new law, taken away by the republican leader's amendment. so, mr. president, i would hope in the spirit of the underlying bill, which is a great jobs bill. it's a great bill for innovation. it's about rebuilding our

infrastructure. it's about competing in a global economy. it's about being the best we can be. i would hope that in the spirit of the bill, f.a.a., we would not succumb to this backwards divisiveness, political debates on repeal, and if we want to join together on something on health care, i would strongly urge a -- a 100% vote on eliminating this burdensome provision for small businesses, eliminate the red tape, eliminate this i.r.s. provision on 1099. let's do something together that -- that both sides agree should be done. let's fix the things that need to be fixed, but let's not roll back the clock and put insurance companies in charge of everything, every medical decision, every rate increase

like it was in the past. so i urge the adoption of the stabenow amendment. we will have a number of colleagues that are in the process of joining. i don't have the whole list. we will have a number of colleagues who will be cosponsors. i also want to thank senator baucus for his leadership on this -- his ongoing leadership, but his leadership on this amendment as well, and i would urge adoption of this amendment to fix what we know needs to be fixed and then let us get on to jobs. thank you. mr. rockefeller: mr. president? the presiding officer: the senator from west virginia. mr. rockefeller: i don't see any other folks around who want to talk on the f.a.a. bill for the moment or on much else for the moment, so i am going to suggest the absence of a quorum but not yet. the -- i'm hoping that senator baucus and senator hatch will

come down to sort of oversee the 1099 argument that a whole number of us will speak on the repeal of the health bill, which is just about the worst idea i have ever heard, and i think it will be voted down and i think the minority knows that, and i think that -- i don't know who they are trying to speak to. when i think of the health care bill and all the work that went into it, the work that went into it is not important. it's the product that came out. when he says that the american people are against it, that was actually quite true for a year and a half, maybe, almost two years because we were in the process of making the bill. it was kind of like making sausage. some people just turned against it. and -- but now it's going in quite the opposite direction. now as people begin to get some of the benefits, they understand some of the conditions that they are going to be unbonded from.

they won't be slaves anymore to costs determined by others who don't really care about their health care. i think that the momentum is swinging, and i think what -- what we would be being condemned to if the motion were to pass and health care would be repealed in that there aren't really any particular ideas of note which were put forward by the other party about what we should do to make it better other than to repeal it. we would be here another two or three years trying to write a bill, not having a bill, and we would be in the situation as follows. i just recall in the year 2008, -- i just happen to recall this because we worked on this in the commerce committee. the five largest insurance companies in america, health insurance companies in america made profits of $12.4 billion.

i don't have a problem with that. what i do have a problem with is what they were doing and what will continue to happen if we repeal the health care bill, and that is while they were making all that money, they were through the process of rescission -- that means unilateral decision that because somebody has acne or has been through a c-section or asthma or any number of things, they actually insured three million fewer people while they were making that $12.4 billion, by the sole act which is their right under the previous law which we corrected to do rescissions. that is by their own decision to simply remove health care from people who have made an agreement with them, signed up, have been sending them premiums and all the rest of it. i also think about a young 8-year-old that i met in -- in

charleston at a meeting, town meeting, and he had had leukemia for a while. now, in this health care bill, lifetime limits and annual limits on what you can get in the way of health insurance and you have leukemia, the lid is lifted off. the boy died, and he died because he couldn't get insurance, and his family obviously couldn't afford to pay for it and he couldn't get it, and so he died. now, people say well, that's kind of an extradramatic example, but unfortunately it is not. it's very common. something else that would disappear if the health care bill were repealed is something which nobody else ever talks about but is the philosophical basis for a lot of this, and

it's called the fee-for-service system which we now have in america on medical care and particularly with medicare but generally. that is, the person who provides the service or the medical equipment person who provides the medical equipment or the hospital which provides the service, they provide the service and they just bill medicare. medicare doesn't ask any questions. medicare just pays the bill. now, that's one of the reasons -- of the many reasons why if the bill is repealed, we will go into $1.3 billion more dollars on our deficit because -- because our bill saves that kind of money. their bill would vitiate that kind of saving. fee-for-service is not the way health care ought to work. the way it ought to work is that, like anything else, --

this very bill. there is no tree on this bill. what happened in the senate? it was an epiphany of some sort. we decided to be transparent, to be accountable. so anybody can offer amendments on anything, and indeed they are and will, but accountability is called efficiency and makes better results, and under the bill that has been passed, people are held accountable for what they do and hospitals, for example, or doctors or medical equipment people, they are measured by what their outcomes are. in other words, it's evidence-based outcomes. what are the results of what you have been doing in health care? are they better? are they worse? did fewer people die? mrsa is a reason that hundreds of thousands of people in this

country die. basically, that comes from relatively unclean bathrooms in hospitals that don't pay attention to that, and accreditation folks don't pay much attention to that either. that is a disease which could be easily cured, one by cleaning up bathrooms all the time, but secondly it's -- it's just automatically a part of the expense part of health care, and it shouldn't be. evidence-based outcomes. you prove to me that you're doing a better job this year than you were in the last two or three years or whatever the -- whatever the range might be. and so it's not fee-for-service. it's fee after the explanation of the efficacy and the life-saving quality of the service. that's the direction that health care has to go. and that isn't discussed, but if this whole bill is repealed, that is exactly what will happen. i mean, i think that -- you

know, everybody is held accountable. we're being held more accountable. the big three automobile companies were held more accountable. they were embarrassed, but they have come back pretty nicely. i think the way we make our progress in america now is to make sure people do what they are meant to be doing, and they do it well and they can show it. that's actually some -- some of the paperwork. you have got to convince the folks from medicaid or medicare, whatever else it is, that you're doing a better job. i mean, if half of all medicare is spent as it is in the last six months of life, that bears -- i think that bears an analysis. why is that so? what are we doing? what are we not doing? don't just pay the bill because it's sent to you, but you look at it and you ask questions.

that's, i think, the direction of the -- of the new health care, and i think it's a fair direction. it's one which i'm sure that the mayo clinic does routinely. but it's -- it's not a good idea. i will speak more on this later, but now i'm really waiting for senator baucus and senator hatch to get down here to really handle both matters since it's within their jurisdiction. i'm on the finance committee. i'm close to senator baucus but i'm not senator baucus, so he needs to be down here to do that and he has agreed to do that, so i hope he will be down here shortly. pending that situation, i note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

the presiding officer: the senator from texas. mr. cornyn: madam president, i ask unanimous consent that the quorum call be rescinded. the presiding officer: without objection. mr. cornyn: madam president, i want to just speak briefly on the amendment that has been introduced by the republican leader, senator mcconnell, that would in effect repeal the

health care bill that was passed on christmas eve at 7:00 a.m. in the morning about a year ago, a year ago this last christmas eve. since the time that the bill was passed, strictly along party lines, 60 votes, all of our colleagues on the democratic side voted for it, all of the folks on our side voted against it, we predicted that this bill would lead to increase in premiums for those who have health insurance, it would raise taxes on everyone in order to fund this huge expansion of the federal government, some $2.7 trillion worth of extra spending, and it would also take a half a trillion dollars from medicare, which as you know, madam president, is a -- one of our troubled entitlement programs that's sorely in need of reform. and it takes a half a trillion dollars from medicare to fund

yet a new entitlement program, this health care bill. we also know that on at least two occasions now, a federal judge has found that this bill violates the constitution of the united states because it says that congress -- both of these judges said that congress has overreached its authority under that constitution. the arguments were made that this was within congress's power but actually i agree with a law professor, jonathan turley, whose comments i saw today, who said that if the supreme court of the united states upholds this health care bill as being within congress's power, federalism is dead. there is no limit to the federal government's authority if the federal government can compel you or me or anyone else to buy a government-approved product. there are no limitations. the 10th amendment of the united states constitution that

says all powers not delegated to the federal government are reserved to the states and to to the people, it might as well be written out of the constitution. so that's why i think these decisions are very important, the one in florida and the earlier one in virginia, because they reveal a defect in this bill over and above the others that i've already mentioned: raising taxes, taking from medicare to create a new entitlement program, and -- and, of course, imposing this onerous mandate. but the real problem with this bill, madam president, is more nuanced and -- than -- than my remarks would suggest. what it does is by imposing a mandate on employers to provide government-approved health insurance or pay a penalty, what many employers are going to find out is that it will cost them

less to pay the penalty than it will to provide health insurance for their employees and, thus, many americans who have health coverage they like, which the president promised them time and time again they would be able to keep if they liked it, will find that that's not the case because employers will be making a rational business decision where it costs less to pay penalty than it does to provide the government-mandated health care at the -- health insurance, they will simply choose to drop their employees and, thus, they will have to go into the exchanges which are supposed to be created by 2014 under this bill. now, what's wrong with that? well, we know that 9 - -- that the -- that this bill was gamed in all sorts of ways to try to provide a congressional budget office score which actually only reflects a fraction of its true

cost implemented over ten years. the most accurate estimate i've seen is that this bill actually will cost some $2.7 trillion over ten years as opposed to the roughly $1 trillion price tag that the congressional budget office was given n. in part, because it was scored over a ten-year period of time but only six years of implementation. and through various other ways, as i say, that score, the true cost of this bill, was gamed. but one of the things that the bill sproiz that individuals who -- provides is that individuals who go to state-based exchanges to buy their health insurance because they tonighthey don't have it ae from their employers will be subsidized by the american taxpayers, up to $8,800 for a family of four. what happens if a whole lot more people drop their coverage or their employers drop their coverage and they're forced to go to the state-based exchanges in order to buy their health care which is subsidized to this degree? well, it's going to explode the costs of this health care bill

in ways that the congressional budget office score does not adequately reflect. i'm not -- i'm not quibbling with the congressional budget office. they take the assumptions that they are asked to take and they do the best they can to try to predict what the costs will be. but again, it's possible, and, indeed, this is an example, to game the congressional budget office scoring to make it look much cheaper than will be once fully and finally implemented. and so at a time when we're going to be asked to raise the debt limit, our credit card is maxed out, nearly maxed out at $14 trillion-plus, at a time when our deficits are $1.5 trillion -- that's just for this last fiscal year -- we are left with the question of can we -- all -- everything else

asidaside about this health care bill, can we and can the american people afford it? and i would say the answer to that is absolutely not, because we can do so much better by making sure the government doesn't get between patients and their -- and their doctor and by leaving the flexibility and the choices in the hands of consumers to make decisions that are in their best interests. i mean, we could if we really tried -- and i hope we will -- to come up with a better way of delivering health care, because unfortunately we -- this bill did not -- well, really squandered an opportunity to try to help bend that cost curve down. indeed, all of the evidence is that it bends the cost curve up and makes it more -- makes it more expensive. madam president, let me just conclude on this thought. at a time when the president's own fiscal commission that says our fiscal situation is dire and is unsustainable, at a time when

the president, i had hoped during his state of the union message would say this fiscal commission that i appointed has come up with a report. we need to take this seriously and need to work in a bipartisan basis to try to -- try to fix what is broke been our federal government's finances, the president didn't do that. he talked about investment, which we all know when the federal government invests money, it's really code for more spending. and we've been on a spending binge the last two years with 42 cents on every dollar borrowed from the next generation and beyond. and we know we can't keep it up. so beyond the fundamental problems with this bill -- number one, that it is unconstitutional, so held by two federal judges, that it will bend -- continues to make health care more expensive rather than more affordable, and denies people the opportunity to keep

what they have because of the incentives it puts on employers to dump their employees into the exchanges and that they will get the subsidies that congress voted on which will make this bill even more expensive than it was originally thought to be. this bill is one that should be originally be repealed. we can working together in a bipartisan basis do better. this is what happens when one side or the other overreaches, is they think the victory is worth it, when, in fact, what we find out, there's a tremendous backlash by the american people reflected in the november the 2nd election. the more they learn about this bill, they don't like it more, they like it less. and now that the federal -- two federal judges have held that this bill is unconstitutional, it's time for us to take this matter up again once we repeal this bill and do a better job that we should have done in the first place. madam president, i yield the floor. mr. kyl: madam president? the presiding officer: the senator from arizona. mr. kyl: thank you. madam president, i want to commend my colleague from texas,

a former supreme court justice of texas, in analyzing the legal issues as he has just done, yet another indication of why it is time for us to start over. and i join him in urging repeal and replacement of this health care bill. i'd like to speak just briefly about yet another reason why this needs to be done and it's a very specific example. it concerns my home state of arizona. and there are other states that are in the same position but i can -- i can speak to the specifics with respect to my own state and it has to do with just one of the many burdensome new mandates. in this bill, as we know, there are mandates on individuals to purchase insurance. for example, as my colleague was just saying, there are mandates on families and companies and mandates on states as well. and i want to talk about the mandate on states which, with respect to the medicaid provisions of the bill, are called maintenance of effort

mandates, or m.o.e. mandates. and let me describe what that s. the maintenance of effort requirement forces an unfunded medicaid mandate on states by denying them the full ability to manage their medicaid programs to get their own budgets and their own unique medicaid populations. this is a huge problem because arizona, along with most other state, is experiencing a dire budget crisis. our state has lost over 300,000 jobs in the last few years and revenue collections are down by 34% since the start of the recession. in the 2010 fiscal year, arizona collected about $3 billion less in gross revenues than it did just three years prior, in 200. and during this same period, enrollment in arizona's medicaid program has increase by 44%. i mean, think of that. more than 1.3 million arizonans are now covered by medicaid. that's more than 20% of the

entire population of yo our sta. ordinarily the state would be able to dial back that coverage in order to fit within its budget. but believe it or not, the obama-care law that was passed here prevents a state from managingity own medicare -- or excuse me, medicaid program by determining who is going to be covered by that program. right now, the arizona program consumes almost 30% of the state's general fund spending and that's an increase of 17% over four years ago. so arizona could, as i said, dhiel back except for one thing and that is obama-care. as our governor, jan brewer, recently noted in a letter to speaker bane, and i'm quoting, "the growth in arizona medicaid spending is a key cause of our state budget crisis and is unsustainable. we cannot afford this increase without gutting every other state priority, such as education and public safety."

so the arizona legislature has taken steps to address this. they have now cut $2.2 billion in spending from a $10 billion budget, but that doesn't go far enough to -- to address the rest of their budget problems. despite these cuts, the budget shortfall is projected to be $1.2 billion in the next fiscal year. so let me describe how this maintenance of effort requirement or mandate affects arizona's budget. in 2009, the federal government imposed a mandate on states by which states could not change their medicaid eligibility standards or methodologies and procedures in place on july 1, 2008. this sounds identical to the maintenance of effort requirement in obama-care, but there's one crucial difference. the federal government's maintenance of effort stimulus requirement -- the requirement i'm talking about was in the stimulus bill -- was funded by

the federal government. so the state was not advertly affected from a budget standpoint. under the stimulus, the states received an enhanced federal share of their medicaid costs. but under obama-care, the maintenance of effort requirement is still there except that the states have to pick it up. they are stuck with an unfunded mandate. so even though states like arizona can't afford their current medicaid obligations, obama-care has forced an extension of maintenance of effort requirement until 2014 but without providing any assistance to pay the exorbitant costs n. june o. in june of 2011 when stimulus funds expire, air's share of its medicaid program -- arizona's share of its med cared program will increase by an astounding $700 million. the annual cost of the machine at a time is almost -- cost of the mandate is almost a billion dollars, which is simply unaffordability. and this problem is especially accuse -- acute for arizona and

a handful of other states because we actually expanded medicaid eligibility for childless adults beyond federal requirements. so arizona, in an effort to cover more people, by law included additional people in the medicaid coverage, adults without children. rather than allow states like arizona to cut back to the level of other states -- for example, to forego that coverage, at least for now -- the health care law, obama-care, freezes in all of the existing disparities. so there are big difference between or among the states, depending upon how liberal, in effect, their coverage is. we have tried to do our best to find ways to ameliorate the problem. we have devoted more resource toward dmaid fraud prevention. there have been some very difficult decisioned made, for example including reimbursing health care providers with less money. as you can imagine, that hasn't gone over we will. -- as you can imagine, that hasn't gone over well.

arizona has stopped medicaid funding for several kinds of transplant surgeries on october 1. this is actually a kind of rationing that's required by obama care. the state cannot afford to provide the most expensive procedures. therefore it has to cut them back, all because they are prevented by law from dialing back the coverage of these adults without children. so the one place that they can cut is on transplants. a very sad day, as i said. there's nothing good to say about it. nobody is pleased with the outcome, but there's no other osmtion but even that option obviously doesn't save enough money to forestall this budget crisis. many of those who have been critics of the decision with respect to transplants have failed to tell the whole story, which is that the governor had to make that difficult decision because the health care reform bill eliminated a key option that she otherwise would have had to dial back the coverage to the level of other states.

before enactment of the president's health care bill, the federal government and states were partners in health care delivery. now states are merely a financing mechanism for the federal government's demafned d. what states need is permanent reduced medicaid demand by authority to reduce eligibility standards for their medicaid programs. as i'm suggesting, all arizona wants the authority to do is dial it back to where other states are. governor brewer recently made a formal request from h.h.s. secretary sebelius for a waiver from maintenance of effort provision. since the administration has granted over 700 waivers to companies and labor unions, one can only hope that the same fairness will be provided to states who are much more crucial partners to the federal government in the delivery of health care. under the terms of the waiver request, arizona would preserve medicaid consequently for 1 million arizonans who represent the core of medicaid's mission. the aged, disabled, the blind, pregnant women, and children.

i support the governor's request and i had urged the administration to grant the waiver. but ultimately, madam president, only repeal of this law will provide permanent relief to all of the states like arizona and all of the other states similarly situated. so i am strongly in support of the amendment that provides for repeal and replacement with something that will work and will not punish our families, our recess dents -- reserve ress and our states. the presiding officer: the senator from new york. mr. schumer: thank you, madam president. i have just come to address the two amendments that are before us. first i want to salute my colleague, senator rockefeller, and all of those -- senator hutchison -- and on all of those on both sides of the aisle who have brought this f.a.a. bill before us. it's something that's needed. it is something that's long overdue. it's sad that america -- in america we don't have a g.p.s. system, where just about every western country does, even

mongolia does. tibet does not. and to move forward and modernize our airports, it's important for jobs, it's important for travelers' convenience, but i would say most of all it is important for america's productivity. when people sit and wait on a runway, where planes are delayed or flights are canceled, the amount of output that our country loses is enormous. and we're losing. more than a france or an england or germany. because they have these modern systems and it is about time we put them n and aid just make one other point about it. there are some who say, let's go back to 25096 level of spending. in 2006, the budget did not have a g.p.s. system. wwell, certainly we have to cut where there's weavment technology advances, the world advances and we cannot just march backwards. there are certain things we need to keep this world strong and the president talked about some

of those in his address. investments in transportation has always been done. i came here to talk about the two amendments that are before us and it is of a do and don't, in my opinion. the health care bill we had a long debate. we all know how long it was. the american people decided. the majority do not want to repeal the bill. in fact 80% don't. even those who want to change it the majority say don't repeal it. just change t and that's the point here. senator stabenow is offering an amendment to change something in the bill that needs to very much change. the change in the reporting requirements to 1099 put an onerous obligation on small business people. my dad was a small businessman, and i know how small business people struggle. to ask them to file paperwork every time they bought something

new, even of low cost, it's a bit over the toip. so i'm glad we're repealing that. no one is claiming ownership. it is going to bass pass in a impt way. none of us on this side of the aisle are saying that the health care bill can't be improved. but to just repeal it without putting anything in place, there are a number of problems. one problem which we'll see tomorrow when the actual vote is called, it would increase the deficit by $260 billion in the first decade and $1 trillion in the second-degree. -- in the second. because the health care bill actually does cut some costs. there is a tremendous amount of duplication, inefficiency, waste in our health care system. it is the best in the world. it is probably the least efficient in the world. and our gold and our job is to keep that quality care for people, but at the same time reduce the inefficiency that cost the cost government and cost businesses. so it does reduce the deficit

when our colleagues offer repealing -- when senator mcconnell offers to repeal it, he is going to increase the deficit. so we have all this talk we have to reduce the deficit. then the first move that the other side makers whether you like the health care bill or not, is increase the deficit. why wouldn't they propose $260 billion in other cuts to at least keep the bill deficit-neutral? but the second point i'd make is this: repeal says get rid of everything. it's simple. it's easy. iters a quick. it's wrong. and there are many good things in this bill supported not only by the majority of americans, the vast majority, many of were i supported by the majority of republican voters who are polled, but even supported by many members on the other side of the aisle. i a heard them speak. even the new fresh mefn class that is -- even the new freshmen class that is coming into the house, very fill tant.

they say, but i am neat for repealing this or that. and so why can't our colleagues on the other side of the aisle at least acknowledge that there are very good things that people like? when they say repeal, do they want to repeal the provision that makes it easier for senior citizens to pay for prescription drugs? the so-called doughnut hole which says after you -- and this comes from the medicare bill that george bush put forth, not from this health care bill. but they didn't have enough known pay for t so they said that after $2,500 seniors would have to pay prescription drug costs on their own. any of us who buy prescription drugs -- i do; just taken one for my back. i back went out yesterday -- knows who expensive they are. you get up to 2*sdz,500 when you are a senior citizen and need eight commissions, one for your

blood pressure, one for cles clerks you name it -- you get up to that in no sometime. and our seniors in my state and i am esure in united states, madam president, and in every one of the other 48 states -- are having real trouble paying for drugs once they reach that doughnut hole, once they reach the level after which medicare no longer pays. in the health care bill we deal with that. rewe duce their costs 50% in the first year. that saves the average senior citizen darned this is not chicken feed -- $550. and by the time it's fully implemented, we save them $2,400 a year. you want to repeal that? when you vote for repeal, you're voting to repeal it. how about this one: there are countless american families who have kids in their early 20's. they get out of college, they get a job -- let's hope; it is hard to get a job these days. by the way, we should be

focusing on job creerks not on repealing this bill, the f.a.a. does that as i mention. and they have a dilemma. these new jobs -- their new, not paying top dollar, most of them, and dhee come with health care. what do these young people do? they can't afford the health care themselves. $8 oorks $900, $1,000 a month. they're not making that much money. but they know, god forbid they get into a car accident or get a serious disease, how can they be without health care? it has been a dilemma that has plagued american families from coast to coast. from north to south, from east to wevment the health care bill corrects it. it says that any young person 2 2k3* 1 to 26 can stay on their family's health care plan. it is a great idea, very popular. i want to ask my colleagues on the other side of the aislthe og

away the benefit of young people 21 to 26 to stay on their family's health care plan if they wish? i doubt it. how about this one: we all know that preventive medicine saves billions. in the health care bill every senior citizen on medicare gets a we willness check -- a wellness checkup free. the statistics show overwellcomingly and without doubt conclusively that when senior citizens gate preventive care checkup, not only are they healthier, but it saves the medicare system billions and billions of dollars. you carchtion goad forbid one has one, melanoma, before it gets into the lymph nodes, it is a simple operation. want to stop those checkups? you give people a colonoscopy or any of these other preventive

exams, mammography -- saves the taxpayers much money. the recipient is healthier. that's why we put it in the bill. you want to repeal those, want to tell every senior citizen you don't get that free wellness checkup which will save billions i can't believe you would want to do that, to my colleagues on the other side of the aisle. how about this one: small businesses -- small businesses are not required to have health care now and under our bill if they are there are under 50 imleerks they won't be required to. some of the them provide healthe for their employees. some do it because it is a good way to retain a good, young employee or a good middle-aged or older employee. some do it because the employer is just a good guy or gal. we will what we tell them is if have you a business that makes less than $1 million, we will

gave 35% tax cut for that health care. hundreds of thousands of businesses in my state will benefit starting january 1. and what does it mean? it means, anchts more people get health care, b, it means businesses have more money to spend on job creation, small businesses, because some of their health care costs are being defrayed, and, c, it may mean that a small business that wasn't going to provide health care for its workers can now. want to get rid of that? axe credit for small businesses, the mainstay of america? i don't think you do. how about this one: we all have heard of insurance companies -- you call up your insurance company, you say, my wife, my husband, my daughter, my son has gotten this terrible illness and it requires an operation that costs a whole lot of money. and then you get a call back

from the insurance company and they say, you know what? your policy doesn't quite cover this. when you sign trksd you were supposed to check in little box and you didn't. you're out. if you don't d.o.t. every die -- if you don't dot every i and cross every t, they usually let you get away with it. but not when you have a serious illness that might cost them thousands and thousands and thousands of dollars. now the insurance company calls you up understand it's basically tough rocks, jack. under our bill that can't happen. when the insurance companies decide to raise their rates dramatically, there's an insurance commissioner in the state and federal thowrtz who can say, you got to show us that you needed to raise the rates as much as you d wants to get rid of that? let insurance companies just rule the roost? i don't think so.

so there is so much in this bill that is good, that is supported by the overwhelming majority of democrats, independents, and republicans. there is so much in this bill that moves us forward. if you think there are things that shouldn't be in the bill, come talk to us. 1099 is a bipartisan effort. senator stabenow has been out front. i know last week senators cloab charks nelson and cantwell sent a letter so to speaker boehner saying please get us a 1099 bill. it is bipartisan. we're not saying everything is perfect in this bill. we're not saying it can't be improved. we're saying let's wok together in a bipartisan manner to make it better. what the other side is saying is just repeal. repeal the good things. repeal the things they don't like. create a huge hole in our deficit, and leave us with nothing. the slogan was going to be

repeal and replace. well, we've only heard the first part of that slogan. where's the replace? i'll tell you why there's no replace. it's hard. it's hard to take this huge, unwieldy, inefficient health care system and shape it up. that's why it took us so long, and that's why it created a great deal of controversy. i'll be the first to admit it. but i don't see a substitute. if you wanted to be fair and you were being straight with the american people about actually improving people's health care, you'd have a replacement on the floor, and then we could compare the repeal of what you want for what you propose. we'll wait. maybe we should have a clock. first day without replace, second day without replace, third day. i have a feeling we're not going to see a replacement, and you know what that would say? i hate to say it.

it would say this is just a political, throw some red meat to some on the hard right who want it repealed. but don't dare show a replacement because guess what? to replace is hard and you really don't have a solution for replacement. so i would urge we vote strongly against the mcconnell resolution. i would urge my colleagues on the other side to rethink it. and i look forward to hearing the remarks of not only the chairman of the commerce committee, who is head of this f.a.a. bill, but also the number-two person, the ranking democrat on the finance committee on which i serve who has made so many invaluable contributions to the bill both on the cost-cutting side in terms of the 80% and 85% rule, and all the other things that we have done. so with that, i would be happy

to yield the floor so i might hear my distinguished colleague, the senior senator from west virginia, speak for a few minutes. mr. rockefeller: madam president, after that -- the presiding officer: the senator from west virginia. mr. rockefeller: after that last sentence, i had to drink a little water so as to balance myself out. to be praised at such length by senator schumer is, you know, -- one can't take it lightly. i want to make a few comments on the health care bill which in and of itself interests me because we're here doing f.a.a. and if i remember correctly, i stood here at excessive length and gave a speech about the importance of the f.a.a. bill, and kay bailey hutchison did the

same. then all of a sudden here we are on health. but -- and that's very interesting because we've sort of opened and made ourselves entirely transparent. anybody can offer amendments. the leader doesn't fill up the tree. so it's open. and what happened is immediately everybody pops in with their favorite amendment. i don't resent that. i just say it's an interesting if he the senator -- interestinn which is showing itself on the very first day. whether that is going to last or not, i don't know. but in any event, i think they're still working, senator baucus, senator hatch, others are working on some f.a.a. stuff and the 1099 matter. so i want to talk about a couple of things about health care. i think it's really important that i mentioned this in my earlier comments, when you talk about the american people don't

want this bill. there was a period of time when that was correct because the bill was made in front of everybody on c-span, whoever watches c-span, but enough people did because there were lots interested in what was hafplgt and it wasn't a -- happening. and it wasn't a pretty process. the public option, for example. al franken and i put a public option bill on the floor. we thought it was going to save the world. then all the talk shows took it up, either blasting it or loving it in excess in both cases. there was only one little problem with the public option. it didn't have any votes in the senate finance committee, which means it couldn't have gotten very far. we did our public option, which was a, based on a $50 billion medicare benchmark. a real cost saver and a very good, obviously, go into a

nonprofit option as you buy your health care, that's very appealing, all of which is true but all of which is unpersuasive because it sound like too much. tpha*eub we called it the -- maybe if we called it the freedom option, maybe it would have been different. my version got ten votes. chuck schumer did another version it, got eight votes. we came up with a medical loss ratio which nobody understands because it is such ridiculous wording except that it works. i want to talk about a couple of things like that until somebody comes and then i will humbly and gladly yield the floor. the senator wish to speak? 0, i will not be too long, although for me that's not a safe statement. as it happens sr-rbgs people

over a period of months and months, they saw this thing happening, they didn't like it. people lined up on one side or the other and mostly it was the other and they didn't like it. it turns out "new york times"/cbs -- and i don't have to necessarily trust them because they took a poll. it says 80% of americans oppose repeal. i just found that inside the cloakroom in there. i don't sort of live by polls. but that's based on january 20 of this year. well, let's supposing it's off by 10%. let's supposing it's off by 15%. one thing that becomes clear from the generalizeation of that number, it certainly can't go higher. it could go lower, in fact is that people don't want repeal. and so then that takes you to a what if we do have repeal? what does the repeal then lead you to a thought-out process

that would then be substituted for what we created and the president signed? then very quickly one comes to the realization that there isn't an alternative from the other side. there never has been an alternative from the other side. and from that quickly follows the deduction that what they want is the present system. and if that's not true, then they can come down and tell me about that. that's what i have to believe because i haven't heard the new ideas of the alternatives to what it was that we worked on and accomplished over a very difficult period of many, many, many, many months, and much angst and agony and screaming at town halls and all the rest of it, all of which was worth it because the bill, although not perfect, was a real step forward. i talked about it looks at the

fee-for-service system, which has always been a fallacy in the american health care system. you automatically get paid for whatever it is you do if you're a doctor or hospital or sell medical equipment. you just get paid for what you do; no questions asked. you don't save money. you don't improve health care by doing that. productive efficiency, excellence is done by oversight, by accountability, by asking questions, by asking people to show through the evidence of what they've done for a particular service that it's better than it was the year before. and i mentioned the unpleasant, probably not fit for this floor, but one of the biggest problems we have in health care in this country today is something called mrsa. mrsa is in every hospital in the country, almost every hospital. unfortunately, it emanates for the most part from bathrooms, that bathrooms aren't kept that

clean. so if we don't do our bill and it's repealed, and so hospitals then are not judged on mrsa and many other things -- you know, too many m.r.i.'s in one hospital or too many m.r.i.'s in one town that can only support two but has seven because you have to make money off of them. all of these things have to be looked at carefully because that is the way people are paid. that is the reason why the health care bill which was finally signed saves $1.3 trillion over 20 years and $240 million or $280 million in the very first year. it's a cost saver. by definition, if we went back to the present system, you'd have to start with the fact that we would be losing that saving. and, therefore, adding it on to

our deficit. so we'd have $1.3 trillion more in deficit over 20 years and et cetera, et cetera. it's unwise. it's unwise. but then cost isn't absolutely everything. we understand that. the senator from new hampshire certainly understands that. we have to use good judgment. so then you look at the public option which didn't work. then you look at the medical loss ratio. a lot of folks don't know what that is even today, even in this body. but it's a very simple system where you simply say -- and it will disappear if senator mcconnell's amendment papas, that -- passes, that health insurance companies are required to spend 85%, if it's a large institution, 85% if it's a small business or individual it's 80%. they have to spend that percentage of their premiums that they collect on health care

and then have to show that to h.h.s. that it's being spent on health care that makes americans better, or at least keeps them where they are. and the bathrooms will get cleaner, to be crude about it, but actually quite accurate about it. now, that's a very good system because it isn't sort of mandating or -- it's called oversight. the american people should want to do oversight over their health care dollars because it's so much of their income they have to spend on health care. and the medical loss ratio -- very strange name but a very sound principle -- 85% or 80% of all premium dollars has to be spent on health care. it can't just be health care, but it has to be better health care than it was in the previous year or the previous two or three years. obviously we're not into that system entirely yet, won't be

entirely until 2014. is it possible for me to explain that i'm very disturbed that this bill that we're now wanting to repeal ensures 32 million people -- insures 32 million people that don't have health insurance? then i'm saying to myself, madam president, 32 million there,'s a lot more than that that are unshourd in this -- uninsured in this country. that's all we can afford to do. let's say it's really 45 million, looking into the future. let's decide there are many millions more than that who are underinsured. you may be dealing with 50 million people. and all of a sudden their prospects for getting health insurance disappear. they just simply disappear because we repeal the bill. now truth in telling, the 32 million people we weren't going to be able to get that all done until 2020, again because of

lack of funds. we had to do as much as we could as soon as we could, but we couldn't do it more than that because we didn't have the money. and everything was scored by c.b.o., which as everybody knows, is very tough. i'm astounded, i'm astounded by the prospect of the excellent people who are on this side of the aisle. excellent people. they're like us. different party, you know, so what. but they would say 32 million lose their health insurance that were going to get health insurance but now they're not going to get health insurance. so they're on their own. so what happens then? well, they take up the practice, which i saw first when i was chairman of the children's commission for four years in the early 1980's, late 1980's. and we went out to chicago, i remember on one visit to cabrini

green. chicago is a robust city. the folks out there told me in that particular year eight emergency rooms had closed down in hospitals. why? because they were being overwhelmed then even. secondly, they're by far the most expensive part of the hospital. they cost the most. they drain emergency care because of the services. people wait for five or six hours. we've all been through t. then they get their health care maybe, butit's fo so inefficien. so brutal, such an awful system where more attention because of health insurance would allow more cautious, attentive, logical work to be done on patients. so that's gone. that is simply gone. emergency rooms are really important, but a lot of them are going out of business because they still can't afford to stay.

they're too -- they're too expensive with a hospital corporation that makes that decision. i don't blame them for that. then i think -- and i'll try to -- because i know my colleague wants to speak. i think of when i was a vista volunteer and i sometimes talk about that on the floor, a long time ago, and we depended upon something called -- there were no jobs, there was no health care, nobody went to school because the school bus didn't come to pick up the kids because we were considered too far away. it was kind of a bad community. i really latched on to that community. that's the reason i went to west virginia and stayed in west virginia. they depended on a rural health -- rural community center. and it was right next door, the lincoln county community health center. it wasn't a hospital, so they didn't have to worry about going up in an receiverror, many of -- elevator, many of them hadn't

been in an elevator, they hadn't crossed with a traffic light. they deal with it that way. i suspect it's true in parts of new hampshire. although new hampshire has gotten sophisticated. but rural, community health centers people trust. why? because they're not hospitals. they're on the first floor. they're an old kruger store, old safeway store, old hardware store. but inside there are doctors, nurses and health i.t., which is in this bill and heavily promoted. this bill is really important to it, they can communicate with anybody, any university, any medical center, not just in west virginia, but in the world. and they can get experts to look at, let's say, a mole on a 14-year-old's arm. is that just a mole or is that cancer? and i've seen that done.

i've seen that done. the doctor at west virginia university, this was 20 years ago. i can't believe that. looking at a kid in moscow with a physician's assistant attending and they put the then technology on that mole and the doctor in west virginia was able to analyze it and say, it is not cancerus. so, you know, that was a wonderful event. but community centers people gravitate to. poor people gravitate to them, rural people gravitate to them. they're easily accessible. they have very good doctors. there's a lot in the bill to help with that kind of doctor, that kind of nurse and those staff in those kinds of places and the whole health i.t. issue which makes the work they do there checkable, accessible anywhere else in state or in the country or in the world.

those would be gone. we have $10 billion in our bill for 1,000 new community health centers all across america. i'm excited by that. i think that's great for rural america. and a lot of america is rural. most of america is rural. that goes. so then i think about subsidies for small business. i spoke to a chamber of commerce part -- in a rural part of west virginia, conservative part of west virginia. they didn't like the bill. that's why i went there. and there were -- they're all small business people. no big businesses down there. and i spent three hours with them, madam president. and i went through the whole health care bill. but what was unusual to them is i stayed around and answered all their questions. and that was -- that was

interesting. in other words, just -- you don't just say this is good, this is bad, here i am. you say, have at me and i'll answer you as best i can and where you don't agree with me, you tell me that. they had no idea that they get 5% tax -- 35% tax reduction -- you know, tax credit for doing -- giving health insurance. they can't afford to give health insurance. maybe 35% isn't enough. but they get that. and they get that until 2014, and then in -- after 2014, it goes up to 50%. they didn't know that. and all of a sudden the possibility of keeping their employees and doing the right thing by their employees because people in new hampshire, people in wyoming, and people in west virginia care about each other. that's one of the beauties of small states.

people really care. they want to do the right thing because they all live together. they don't commute out to the suburbs. not a lot of suburbs around. so that was really impressive to me. and when i left, i got a standing ovation. now, i've got to put that aside because i really can't -- still can't believe that standing ovation. but what i do believe is that they are interested. that at that point they don't know was in the bill and there was no reason why they should know it was in the bill. and someone who was a major part of writing that bill and comes and talks to them and answers all their questions at which the end point of which is three hours and i get up and leave. so that perplexes me if the majority leader's -- minority leader's amendment prevails in that i don't think there's an alternative coming, we go back to the present system so that

all goes. now the senator from wyoming, when he speaks and he says, yes, there is no alternative, of course we'll have to listen to that. if we do an alternative, that whole negotiation may be two or three more years. i don't people can the way that long. but, in any event, then i worry about the doughnut hole. you know that. it's so unfair that seniors pay up to a certain amount and they get their prescription drugs. they keep paying the premiums but until $5,000 -- from $2,000 something to $5thousand something, they have to pay premiums, they don't get any prescription drugs. that's the doughnut hole, which we closed. again, not until the year 2020, but they know it's going to close. and that's gone. that's gone. so they have to work the system as best they can, pay their premiums if they can and if they can't, they're just out of luck.

they get cut off. i won't go into the -- i'll say -- i mean, to me the preexisting condition for children, in particular, which starts right away, which is in effect now is so brutally devastating if it disappears. i mean, a child comes in -- i was speaking before i talked about it, an 8-year-old kid who had cancer -- a 9-year-old kid who had cancer when he was killed by the fact that he couldn't get any treatment because of annual limits, and that's in effect now. and -- and no lifetime limits is in effect now and annual limits comes in effect 2014. but he died, and i was a friend to that kid. i met with that kid's parents. kiep in touch -- kiep in touch with -- i keep in touch with them. he died. he couldn't get health care under the present system. under our bill, he would have gotten health care. you can say, maybe it's too late, but it doesn't matter in the sense that he's just an

example of somebody who is sick who could get health care and otherwise they couldn't get health care and so he died. and i'm haunted by that because i remember his face. his name was sam. he was a lovely kid and he's not around any longer because of the old health care system. so let me just conclude by saying that i don't think that -- you know, health care is a very hard subject. it uses all kinds of words and acronyms. it's true in the -- in the federal aviation bill, if reever get back to that -- if we ever get back to that. but acronyms aren't bad, they just aren't friendly. because something is complicated doesn't mean it's bad or wrong, it means it's complicated. health care by definition has to be complicated and people have to understand how the parts work together. very, very hard to do. but i would just plead with my colleagues to be cautious about

repealing something which is in place which appears to -- people just don't want to see it repealed. they certainly want to give it chance. they're certainly beginning to see the benefits from it. we're already reading about those things, and it's just started. it's just literally started. so it's a month and a half old -- or a month old. january, yeah, it's a month old. so i would just say we need to be cautious about that, but particularly on repeal if it means going back to our present system or any substantial part of our present system, that would be a tragedy. i thank the presiding officer and yield the floor. a senator: madam president? the presiding officer: the senator from wyoming. a senator: thank you, madam president. and i ask unanimous consent that when i'm finished with my remarks, the junior senator from south dakota will be allowed to speak. the presiding officer: without objection. mr. barrasso: thank you, madam president. madam president, i come today to -- to support senator mcconnell's amendment that we

repeal this health care law. i listened very carefully and i listened to the people back home in wyoming. in wyoming, the university of wyoming conducted a survey and 68% of the people in my home state want this law repealed. the people of wyoming have great concerns about the unfairness of the law. people on medicare, our seniors who rely on medicare, are concerned with the unfair fairness of a law -- unfairness of a law that takes ove over $500 million from them, from our seniors on medicare, not to help medicare, not to save medicare, not to secure medicare, but to start a whole new government-entitlement program for someone else. let's look at the specific cuts to medicare. $155 billion from hospitals. $202 billion from the 11 million seniors on medicare advantage. and there's an advantage to

medicare advantage, that's why so many seniors have signed up for it. nearly $15 billion from nursing homes. another $40 billion from home health agencies. and $7 billion from hospice. now, the president the other night in the state of the union said if you have some ideas on ways to get down the cost of care and improve care, i want to listen. republicans have been bringing ideas to the floor during the entire year-long debate and those ideas have been ignored and rejected. well, i'd suggest that the president listen to his own debt commission. he appointed a commission, they had a lengthy discussion and what the members of the debt commission have said is that if you cut medicare, a program designed for seniors, don't do what you did, don't do what you suggested, mr. president, don't do what the democrats in the senate have suggested, don't do what nancy pelosi wanted. if you cut that kind of money

from medicare, the commission says, you should use that to help and save medicare, not start a new government entitlement. the commission also said that we should repeal the class act. that's a part of this health care law, it's called the class act. it has been described by democrats as a ponzi scheme that would make bernie madoff proud because of the fact that they use trickery, gimmicks to say, well, bring in money now and the big costs won't show up until 10 years from now. and i heard my distinguished colleague from west virginia talking about small business and the tax credits. the small business owners in wyoming looked to that. what they found is if they want to hire an additional worker, if they're at 10 or 11 workers and want to go to 12, they lose part of the credits. and you know how low paid jobs they have to be to get the tax credits? the average income has to

be $25,000. it can't be higher than $25,000 a year. so if you want to give someone a raise, you're going to lose your tax credits. small business owners across the country who looked closely at this have said this doesn't help me at all. they're saying we need to make it cheaper and easier to create private sector jobs and this health care law, with its expensive mandates and obligations, makes it more expensive and tougher to create private-sector jobs. we want this bill -- this law repealed. madam president, just yesterday a court in florida ruled that this entire health care law was unconstitutional. there's been a separate ruling in virginia prior to the beginning of this year. i will tell you that that ruling in florida yesterday is a second stake in the heart of this health care law.