see and ask questions of the witnesses. >> were our rule without objections ordered. >> the oversight committee's mission statement is that we exist to secure two fundamental principles. first, americans have a right to know that the money washington takes from them is false and an second, americans deserve an efficient and effective government that works for them. our duty on the government oversight -- the government oversight reform -- on the committee on oversight government only by committees to protect these rights. our solemn responsibility is to hold government accountable to taxpayers because taxpayers have a right to know what they get from their government. we will work tirelessly in

partnership with citizen watchdogs to deliver the facts to the american people, bring genuine reform to the federal bureaucracy. this is the mission of the government -- this is the mission of oversight government reform committee. today's hearing continues the committee's effort to examine crisis brought on by out-of-control spending and mounting debt at the state level. let me assure you that is not to say that every state is out of control, the virtually every state in the union in many localities have increased that loaded his time in which that service is at an all-time low. the american people are well aware of the fiscal crisis washington faces on a national level. they are ready for to cut ending and even president obama has lot increase in spending cut championed by the house republicans. what is less known is severe

fiscal problems that some of our states and municipal governments face. already this year, our financial services subcommittee under the leadership of chairman patrick mchenry has to make great service by highlighting problems created by some irresponsible spending. i think chairman mchenry for his efforts. the facts we have learned from the subcommittee are telling. currently states face a combined budget shortfall of roughly $112 billion for fiscal year 2012, an amount equal to approximately one fifth of their budget. that, if nothing is done, will pile on more debt for the future. the evidence why this has occurred is clear. since 1990, state and local government spending has increased 70% faster than inflation. when the recession hit, state and local tax revenues simply no longer sustain that growth.

looming just around the corner, unfunded or underfunded pension liabilities pose a daunting for it to state municipal budget. his burdens taxpayers with an estimated $3 trillion in debt. i say estimated because nobody knows the full it assured the taxpayers have to -- the fact that the bond markets are not transparent in the reporting rules do not force adequate disclosure. additionally, as we have seen here when we have talked about the correct amounts to be withheld for our postal carriers, we find that there is up to $5.5 billion -- up to $6.5 trillion -- this is not in the script, folks, so bear with me. up to $6.5 billion discrepancy between two opposing sides on this issue.

indeed, over the past 20 years, state and local governments have promised to government workers that they knew they could not keep in some cases, hoping that future wealth would continue to propel them. today we have two governors with us and we are pleased to welcome wisconsin governor, scott walker and vermont governor, peter shumlin. they come from two very different states, one lurcher, once mueller, one in the mid-debate with half downturn that may in fact continue for a long time as many of the core industries and wealth became a change in the transition may be long and painful. vermont, on the other hand, a wonderful stay focused a great deal of industry may be facing challenges today, but are likely to be slightly less systemic than what wisconsin faces. this doesn't change the fact that both governments are dealing with the issues of shortfalls in their own way and

each day we look forward to hearing how they are going to retain the viability of their state on after their terms and then. unionized federal workers don't even have collective bargaining rights. governor walker's book reforms seem reasonable to those of us in washington who understand that our retirement and health care system at the federal level is not subject to collective bargaining, but in fact it is based on a single system uniform throughout the federal workforce and not debatable as to withholding arrested the benefits. that's not to say that federal workers don't have a good program. they do, but their program has been based on a long list of requests considered by congress intended. we deal with federal issues. hopefully we do is state issues who in many cases have less room

to maneuver, are looking for more room to maneuver and believe they can achieve it through changes in their lives. lastly, insolvent v. of portugal, italy, ireland, greece and spain, most often called the pigs, tells the states within a greater union can in fact be a challenge for the union. the independent countries of europe that belong to the european union are more loosely configured than our own states. that means that if we have insolvent the and three, four, five of our states, with a greater challenge to her combination that does the european union. yet the european union has been constantly trying to figure out these days within the european union, helped unveil themselves out and in fact insist that they change policies that have gotten into this problem.

we are not here today to intervene in a sovereign state that are before us. we are here to understand what they are doing in socal. without them i recognize the ranking member for his opening statement. >> thank you, mr. chairman. yesterday on this consent the national associated dated 142011 be admitted into the record. >> mr. chairman, i strongly support efforts to help states continue their economic recovery and eliminate the budget shortfalls caused by the most severe financial crisis since the great depression. many states have been forced to make significant cuts in their budgets, trimming critical programs that help our nation's veterans assist development league disabled, supply health care services to the poor and provide nursing home services tourist in years. these are difficult decisions in the great respect for our governors who are able to work

with governmental and nongovernmental entities to develop innovative ways to preserve as many services as possible for their citizens while making fiscally responsible choices. however, i strongly oppose efforts to play middle-class american workers for these current economic problems. we know better than anyone else in this committee why those problems came about. this recession was not caused by them. working america, firefighters, teachers and nurses and so many others who are in the words of theologians swindle so often unseen, unnoticed and unappreciated and un- applauded are not responsible for the reckless actions of wall street, which led to this crisis in the first place. i also strongly object to efforts by politicians who try to use current economic downturn to strip american workers that

their rights. mr. chairman, we are a country who is consistently increased rights, not taken them away. as a matter of fact, if you were not for the principal weapon and be sitting here today and women in this congress would not be sitting here today. the rights to negotiate working conditions that are safe, the right to negotiate due process connections against being fired arbitrarily and the right to negotiate fair pay for an honest day's work. today's hearing as a study in contrast. we are fortunate to have with us to state governors. governor shumlin from vermont and governor walker from wisconsin. both face budget shortfalls this year. they oppose the right workers in different ways. they taste about $176 million for fiscal year 2012. state employees who accepted a two-year, 3% pay cut.

vermont teachers also agreed to work three additional years before retiring and to contribute more towards their pensions. and the vermont state employees association voted to increase pension contribution by 1.3% over the next five years. in addition to obtaining confessions, governor shumlin also did something else. he opposed additional cuts across state agencies as well as as well as facing additional revenue through select surcharges and assessments. in other words, he developed a plan to spread out and shared sacrifice is across state and we should know that those employees went along with it because they too wanted to strengthen their own state's fiscal situation. governor walker took a very different approach in wisconsin. he faced a projected shortfall of 137 million in the current fiscal year within days of the governors announcing budget proposal to address the

shortfall, labor leaders in wisconsin agreed to accept all of the financial demands. they agree to increase women twentyfold and agree to double their share of the health insurance premiums. governor walker did not accept these concessions. instead, he went much further by stripping government employees have collective bargaining rights and demand numerous provisions that had nothing to do with the state's budget and no fiscal impact. for example, you wanted to require unions to hold annual boat to continue representing their members than he wanted to prevent employees from paying union dues through their paychecks. governor walker refused and declared publicly he would not associate with them. one of the big questions we will have a governor walker today is why did he not say yes to the unions may agree to meet all of the financial demands. on a broader level, what is motivating this extremist or to dismantle the unions themselves.

in my opinion, it is shameful to play politics with american workers and their families. these are real people, middle-class americans who are trying to put food on the table for their family, keep a roof over their head, educate children and plan for retirement that does not worsen their loved ones. we should be helping these workers, not attacking them because they are the engine of the american recovery. with that, mr. chairman, i yield back. >> i think it's a moment chair recognizes distinguished subcommittee chairman, patrick mchenry for an opening statement. >> thank you, mr. chairman. thank you so much for holding a hearing today. governors, thank you for being here. i was then quickly if the ranking member of my subcommittee without hearings on state budgets and pensions and their impact on the municipal bond market. two essential questions that really stood out. first, what is the true debt burden facing our states and municipalities?

and second, what must be done to mitigate the media crisis about all forms of government acronyms found that fiscal trajectory? after holding hearings the scholars from a state senators rating agencies and other parties about state budgets and pensions, we confirmed through reading the comments are predicting what we'll hear from testimony today. the 2012 will be one of the most difficult budget years for states and municipalities on record. 44 states and the district of columbia are now protect shortfalls totaling 112 billion for this year alone and it only gets worse from here on out. if that wasn't enough, their infinite pension liabilities upwards of $3.2 trillion for states and $383 billion for local government, some of which is kept off of state accounting books, representing trillions of dollars in the shadows county. today some of my colleagues on the other side of the aisle will

use words like extreme, tax increases and use those words repeatedly to describe what is either happening in terms of cuts or what is necessary to get out of the situation. we are not facing a revenue problem. it is a spending problem. as always, numbers don't lie. since 1990, stephen local governments have increased spending by roughly 70% faster than inflation. in addition to the unchecked reckless spending, looming burden of peanut trillions of dollars in lucrative public pensions and health care benefit the state and local governments in dire straits. i've seen it before that there will be severe consequences if we are dishonest about the fiscal obligations before s. and refuse to change course or the cost of action will be borne by the young teachers who are told their cash strapped school districts can no longer afford their retirement and if it's because it must finance the exorbitant assets of others.

many public servants like firefighters and policemen their vital jobs will no longer provide in the end, the people that we count on to teach our children and protect our homes and families will realize that their government has failed them and actively hurt their retirement security. we have an opportunity to change that. numerous states is seen writing on the ball and decided to take action. in recent years, at least 15 states passed legislation through their pension system. governor mitch daniels of indiana successfully reformed to more efficient and collective government. governor walker has boldly set out to push through similar initiatives in wisconsin. he sent us in the national news. even in the face of extremely heated political tax, governor walker has shunned the understand the genuine

commitment to reform and needs to prevent the fiscal calamity. the governor's proposals were recently welcomed by the bond market and movies, which said governor walker is plan would have a positive effect on the credit rating of the state. in the end, that would mean less cost and must expand to its taxpayers in to get landing. change is never easy. if we wish to ensure an honest retirement for those who teach our children were protect our families and make the next generation a country as economically vibrant as the one that we inherited, we must be serious about the problems we face. it is our responsibility to be fair to our current retirees and honor our commitment to them. while at the same time, not punishing america for today's free spending ways. we take the necessary steps

before it's too late. that's what this discussion here today is about. moreover i think it's important to taxpayers have the transparent heat necessary to understand the fiscal situation states are in. and the people deserve that. thank you forwarding this and i yield back. >> i think the gentleman or what he's done on a bipartisan basis. we now recognize his partner, ranking member of the subcommittee on t.a.r.p. financial services and bailouts of public and private programs, mr. quigley for his opening statement. >> thank you, mr. chairman. and i to thank you for convening the third hearing that's taking us both that. i like to thank the chairman for

his efforts in the first to committee meetings. i also like to think or six witnesses for contributing time and expertise today. let me begin by saying in the end i do think we have a relative problem and the revenue problem it shrunk local governments. it was a revenue problem. that doesn't mean we should raise taxes because i understand where you're coming on. but raising taxes during a recession is a bad idea. we have to recognize that in the end this was in large part a revenue problem. so having addressed that comment the other things we live in these hearings as many states have these big challenges and you don't have to tell me. i come from illinois. illinois failed to hold testimony one should say the seven good years to survive during the seven lean years. while illinois current

administration didn't take the whole day god, it has to move forward on fiscal reform. illinois and other states with similar situations over to the taxpayers to fix budget. in states like illinois and new jersey and california don't get nervous about reform, though never be able to keep the basic promises they have made. reform should be emphasizing reinventing, streamlining and adapting the time. reform should not demonize public sector workers. states have the right to make their own policy, i strongly support collective bargaining rights for public sector workers, the recognize we have to work together collectively to solve what will fix state budget deficits are commonsense reforms to restore budgets to a sustainable path, consider public sector collective bargaining figures. a simple calculation that show public-sector

collective-bargaining have an average project did budget of 14% relative to their budget. 14% of it, but state for big public-sector click to bargaining have project a deficit at 16.5%. and it won't reduce budget deficits. workers have to play a role to meet the fiscal realities. it's obvious we have to reduce deficits of long-term debt, but we shouldn't take advantage of the economic downturn to achieve ideological goals. public sector should continue to have collective bargaining rights and we need to work together to achieve responsible reform. soon we'll be releasing part 2 of this series of reports. this reform will recommend over a trillion dollars in savings over the next 10 years. this report builds on part when i released in november, but also in a series of reports i released in the cook county

commissioner. i bring this up because i remember how frustrating it was to try to achieve substantive reforms at the local level. the truth is the same frustrations are present here in washington but we can't let those frustrations get the better of us. dates like illinois the fiscal reform. we need to streamline, consolidate and reinvent government, not because it's unimportant, but because its mission is so important. it is where the wheels hit the street and if we can remember the true heroes of 9/11 were civil service workers and that's why we should restore the local government sustainability rather than tearing them down. thank you, mr. chairman. i yield back. >> i think the gentleman. the chair will have -- members may have seven legislative days in order to submit statements of extraneous material. we now like to recognize. no one on this side of the day

can introduce them as well as their own members, so with that i would call on chairman jim sensenbrenner to introduce as governor. >> thank you, mr. chairman. it is my pleasure and honor to introduce my friend and constituent, governor scott walker. i first got acquainted. republican politics. he was elected 17 years ago to this day the assembly and in 2002 he won a recall for chief executives or county executive milwaukee county. he was good to two full terms as republican and democratic and his political success has been based upon the fact that he tells people where he stands and when selected implements them. he faced him in milwaukee county

as a result of outrageous pension scandal that his predecessor was at the heart of. he was able to pass nine county budgets or propose nine county budgets without a tax increase in the background allowed him to be elected as the 45th governor of wisconsin last fall. very few people here know who scott walker was until the last two months or so. however, those of us who have known scott walker and his commitment to principle we're really not surprised at the proposals that he made two not $137 million budget deficit, but a $3.6 billion budget deficit through the end of the next budget period. so again, i am sure that you will find governor walker is interesting as we in wisconsin have. he is a very polarizing figure

for those of us who love them in wisconsin really thinking for the job he's done. >> i thank the gentleman and with all the people that governor shumlin could've had introduce an eco-those >> thank you, mr. chairman. on mr. ranking member, members of the committee that i serve on a couple of things as he is a private-sector person. he and his brother established an expanded a very successful private business in southern vermont. he has been on the frontline of creating jobs and having to pay good wages and good benefits and do with the practical realities of keeping the business going day in and day out, expanding and growing and being an employer. he also served in our citizen legislature first in the house

of representatives and then for several terms in the state senate and peter, as the president pro tem of the state senate, the desert senate leaders served more years as senate president than any other moderate in history. so he comes to his job with legislative experience with private turks parents, with the obligation to pay bills in the trains run on time. he is now serving as governor of vermont after being a lack did in this past election. just to give you a sense of how vermont operates, he won a primary with four other democrats because his original market history was 200 votes. with four under he went on a unity to her.

talking together rather than finding we trust our town clerk and let them do that can't and do the result. he also comes to the job with the benefit of the tremendous history we in vermont are proud of, a bipartisan tradition. it embraces two things. number one, we fight hard in vermont, republicans and democrats capriciously quick to hear. but in vermont, democrats think that republicans usually house to merit to their and republicans think democrats have something to say. and we actually do our best to listen to each other because both sides have enough humility to appreciate that in fact there is truth on both sides of me got to come together for the good of the states. a little bit of background, we had governor richard snelling,

very respected and revered with the downturn in the 80s. he did something with the democratic speaker of the house to try to adjust the fiscal situation because we pay our bills. vermont has a balanced budget amendment, but were cheap and we pay our bills. we are frugal. the democrats agreed to cut programs that were really important to them. the governor agreed to a temporary surtax because we needed some revenues. it worked out. we came in the balance. taxes went down. we were able to support programs. we then had governor dean in good times cut taxes. he is a democrat. and when he did that, he implemented some tough budget reforms to make sure we didn't spend because we had a surplus. we sent me back to the taxpayer can put into place budget controls. peter shumlin is carrying on the tradition when we got into a fiscal situation because they work with the unions and say we have to share the sacrifice.

they sat down at the table and went out and there was a sense of common purpose it's been embodied in vermont that has to be sustained just to give. you get mentally tested around your feet get it. they listen to each other. it is my pleasure to introduce governor peter shumlin of vermont. >> i thank the gentleman. pursuant to committee rules, i

will be sworn in. but you please rise to take the oath and raise your right hand? do you solemnly swear or affirm that the testimony you will give will be the truth, the whole truth and nothing but the truth? let the record reflect that all witnesses answered in the affirmative. please be seated. gentlemen, we have congressmen who come before us, senators who come before us and governors who come before us. governors are always the best witnesses. they understand the five minutes left for the q&a that in fact your entire testimony will be placed in the record. to help you with this, you will see the typical green, yellow and red lights as my predecessor on the committee said in all 50 states we know what red means. so with that, i recognize we didn't to a coin flip.

he wants to go first? governor walker. >> thank you, mr. chairman. distinguished members of the committee, visiting members as well, we got to know each other a little bit after the election with the new training for new governors. it's an honor to be here today. as was mentioned by several in testimony, we are not above the wisconsin. there's 44 different states and the district of colombia facing deficits. in total, over $111 billion in total deficits ranging from 2% to 45% of budgets. in our case in which content starch july 1, we face a $3.6 billion budget deficit. governors across the country, democrat, republican alike face a challenge in many cases proposals received from one into the other governors cutting. in many cases they cut billions of dollars to a local governments, school districts and others and in turn many of the states is one of two things.

massive layoffs or a massive property tax increase it in many cases, sadly some of both good and wisconsin with a different option. progressives and the docents are progressive options. for his forgiving data and local the tools they need not just to balance the budget this year, but for the next two years and for generations to come. that's important. some here in other places around the world may say that it's a bold political movement, but i would argue it's a very modest request. what we're asking for governor employees like myself is a 5.8% contribution for attention in a 12.6% contribution for health care. thus protecting the middle class. that protects middle-class jobs and taxpayers and if you ask middle-class workers in my state, both say they think were offering pretty reasonable. i don't have to go too far for now. my brother, david, works at the banquet manager part-time as a

bartender. his wife works for a department store. the two beautiful kids. when his turn the other day. your typical middle-class family. when the debate for starter tommy said i pay $7000 a month for health insurance premiums and the little bit i can set aside for my 401(k). at the two have a deal at which are offering. bigger than all across my state when i go to plants and factories and small business finds the activity like that because on average middle-class taxpayers pay about 20% of the health insurance premiums. federal employees be on average 28% of their health-insurance premiums. as the chairman alluded to, federal employees for the most part do not have collective bargaining rights for benefits and ultimately for salary. makes me wonder why protesters in madison in columbus and not here in washington v. you've got to look at the facts. it's very clear out there. we are offering more generous than what you offer federal government employees and if the

average average is not here it's in our state capital. more important now than just the fiscal way back because what we're talking about here ultimately save $1.7 billion to state and local government spending over the next two years. it's not the only lose balance the budget, but it's a piece of that. the other important elements remembers this makes government for battery. i can think of no better example than a young woman by the name of hampson who a year ago was named to any teacher of the year, teacher of the public school system at a time a week later she got a pink slip. she was one of the teachers it off. why? are collective-bargaining agreement required a contract that protected a system that pays more than $100,000 in total compensation for teachers, with no contribution for health care and ultimately a case of seniority. our reforms allow schools and other local governments to hire and fire based on performance and americana pain performance with the best teachers and workers are from. but ultimately is going to make

things were better. it worked in indiana when mitch daniels said the six years ago. was mcgovern more efficient, effective and accountable to the public and most likely workers in the state continue to be rewarded today. the last thing i tell you is this ultimately is good for the economy and our state as well because in the end, investors want to look at a state with the state and local government is stable. we are showing wisconsin is open for business. the thing that's most important is when you think about overdoing, we really make a commitment to the future. at the two high school. in fact, some classmates are here today from east high school. our proposals are about making a commitment to the future so our children don't face even more dire consequences than what we face today. for more than a 200 years, this country has been based on leadership relators care more about children and grandchildren than they did about themselves. it is time you're in then across this country. we have leaders began to worry more about the next generation

than the next election and that's exactly what we're doing. thank you, mr. chairman. >> thank you, governor. governor sheldon. >> thank you so much, chairman issa, ranking member for this invitation today in on members of the oversight and reform committee in particular thanks to my friend and congressmen, peter welch who does an extraordinary job for a start in washington. thank you for the warm welcome. it's great to be here also with governor walker. as governor walker mentioned, we met at governor's school out in colorado and i don't want to give you any ideas of congress people running for governor, but if you do get to the school made a wonderful dinner together and governor walker and myself and his wonderful wife share common challenges we are among the biggest cause of governors in america and we share a very challenging job. in fact, i say to governor walker earlier if they told us to be governor's school, the

message we were taking over, we might have rethought it, but it was too late. but we are dealing with some extremely tough economic times as you know. i hope to make governors walker trip to washington. i want to make clear that with the number one maple producer in the country. governor walker's number four and it is the company better. >> as one of the advantages of being governor. there's no more tsa's. but thank you. we are both safe in the first 100 days, creating jobs and raising incomes of those that are earning less money and vermont are on average the same money as earning 10 years ago. as both of our challenges and respective states and the other governor cherie. mr. chair, i want to directly address the question of not -- what is causing the fiscal

crisis that those governor and i find ourselves in. we know it's a result of the greatest recession in america and his dream. the result for us is declining revenues and expanding expenses as we face higher unemployment rates, higher service calls and arrests. that's the challenge. without getting into how we got here because i know that's been debated and we'll save that for another day, i simply want to talk a little bit about what our challenges as governor to reach economic opportunities and balanced-budget. when i look at it, i don't start with collective-bargaining. i don't start with my public tensions. i start with the true cost. and vermont and this is true of most states of the country, hope here is my biggest rising cost. i've watched health care costs and vermont double over the last decade from 2.5 billion to $5 billion a year.

in 2015, my bank and insurance commissioner tells me vermonters and an additional $1.6 billion on health care and that's the biggest cost in the state budget. what does that mean in real dollars? in the $2500 by 2015, 1.6 billion, $2500 out of every vermonters pocket from those born yesterday to those at the other end of life in a state where on average people and making the same wages they were making 10 years ago. so i'm going with the money is for both the statement people of my state to grow jobs and economic opportunities. we're trying to get health care costs under control. the second driver to leave it or corrections. our direction specialist doubled in the last decade. other governors face similar challenges. so we're trying to go with the governor is. i want to talk a little about our experience with state pension and retiree health publications for state employees because i think it really matters in this debate.

what we learned in this area is that there are steps you can take to significantly reduce the cost of tax tears without undermining traditional defined benefit plans, which most objective parties agree to provide your retirement security, served to retain quality employees and are more efficient than a defined contribution plan. that's what we've learned. how did we get there and how do we work together to get the job done? what we did and i was then president of the senate with republican governor and republican speaker is we brought the union together and we understood that it was going to be an example of shared sacrifice and so did our state employees is congressman welch suggested. what did we get? in this discussion, the lesson we learned was we get more with maple syrup do we do with vinegar. we brought it to the table,

talk.and here's here's the result. shared sacrifice. 3% to 5% cuts over a two-year period with no increases. to come with a higher retirement contributions from our state employees. three, we raise retirement ages for state employees to help us with the problem. for, we reduce health care benefits to her state employees and some of her teachers and five, we required what this resulted in was a 25% reduction in our annual payment to pension funds and still have them fully funded. so the point i'm simply trying to make as you can get this job done. you can balance the budget. you can create jobs in your state without taking on the basic right of collective

bargaining. the reason i feel so strongly about that if i asked the question, who got us into this mess and under riccio at that? i can tell you from my perspective the governor we just came through the toughest winner in about 20 years. lots of snow, lots of ice. plow trucks were out almost every day. i've got to tell you if a network poltrack as i'm sure governor walker is done. and when i got behind the windshield of the plow truck in a driving snowstorm this type of chart driver working seven or eight different mothers come to 14 for plow in front of and a tractor-trailer truck passing on the right compass and yahoo! on the left, i've got to tell you working a 12 or 14 hour day for 14 bucks an hour from the plow truck driver to get us into this mess. when i go and visit schools and they see the children -- the the

challenges their kids are dealing with. they didn't get us in this mess. my public employees didn't get us here. we has to share the sacrifice in getting this out, but it doesn't mean we take away collective bargaining, which is what made the middle-class in america strong and folks under assault in this recession. so in closing, mr. chair, i will simply say this. we have found, as i mentioned, that you can bring folks around the table to compromise, get the job done, balance your budget, create jobs, be fiscally responsible come but you don't have to take on the basic principle of collective bargaining. you don't take an firefighters, police officers, teachers and he don't take on your hard-working employees. he work together with them with maple syrup, not vinegar. it works. thank you. >> thank you, governor. >> i will not recognize myself for the first round of

questions. governor, the sign behind me we don't normally point to the science. this is the title here today, but the last part where it says, choice or necessity, the cuts he made in cooperation with your various union groups of public workers is probably close to an 80% of you spend time you spend directly or indirectly in people who were for the government. was it a choice? was a necessity to in fact find a way to provide essential services for less money and not go into deficit and name? >> u.s.a. and assess me. well, we don't have a balanced budget amendment is congressman welch suggested. we have to balance their budgets to get the job done. so he made choices we do and vermont because we really like her triple-a bond rating. and the business person. we understand we can't take care

of the most vulnerable among us to balance the budget. the >> i like to ask governor walker same thing. we are rather in love with the title today so we thought we'd get the title entrance answer out. >> we've seen in the past for her to us making critical decisions right now for many it was a choice and the reason they failed to make the right choices wayward here today and that includes democrats and republicans before. for many, many years, lawmakers and governors in our state failed to make the right choice, pushed the decisions to the future. they raided segregated funds, delayed payments coming as one-time federal stimulus a two years to balance the budget and that's along with the meltdown of the economy largely why we another state are facing major budget crisis. >> one of the reasons retitle today's hearing that we know you'd be here if i happen to be from california and we too in our state under republicans and democratic governors have an

increasing debt claiming to balance the budget. in business and light governor shumlin, if your assets are per se going up in your liabilities are going up to me don't claim you are in balance and that's a problem i've seen in many states and particularly my own. government shumlin come you mention one thing that's interesting to me. he said a defined benefit plan is more efficient. i'd be interested to see what efficiency do you get by having a plan which promises something in the future that no one can be sure of actuarial strike, but obvious if they failed because you see this large adjustments. what is efficient about that versus knowing an amount of money is going into a fund in that amount of money will be invested fairly and in fact be available at the yield. which one is more efficient from a standpoint of predictability?

i'm not talking about 401(k)s or individual. i'm saying for example union -- trade unions in my state if you're an electrical contractor, you can't control a contractor that hires you today versus tomorrow, so even though you try to define benefits come you are defined contribution plan because you only get the year in which your employee is an electrical contractor to come the employing you'll get that much money and the next or you can't control -- can't crawl back the way your employees can call that tiered so why did you think of the sufficient? the efficiency question kind of lost me. the mac is efficient for two reasons. the first is against the employee guaranteed retirement plan. i think there's been tremendous misunderstanding around the country, which is vermont as an example, our average pension -- the >> i understand what is more desirable for the recipient. you're in the federal government, we have a defined benefits plan.

>> the efficiency from my perspective as governor is simply the returns for an investment, not taking a picture for the first recession, but over time in unlike general motors hidalgo bankrupt. they never have and i believe in crips he is exaggerated. it's not within the constitution. >> therefore relatively fairly different standard. the point being the average return for us has been around 8.5% indica says the ability to deliver your project the ability to deliver your project foreign employee who is often working for less foreign employee who is often working for less than you'd get paid. >> i've got your answer. i like to governor walker appeared along that line, why is that more efficient than knowing the amount you give any given year into the budget is the amount. even if you've invested and try to make the same returns that they make sure they're going to give a similar percentage. why is that more efficient

versus perhaps making sure that you budget without ups and downs, neil doesn't occur? >> when you look at benefit the public or private sector is ultimately more efficient, it's not what i'm advocating. and our case, like what the federal government and vermont, we have defined benefit as well although i think it's important for asking for is changing the benefit of. we're asking for people, get myself included to pay more as a contribution for the cost of that. mr. quickly -- representative quickly tucked in his opening statements about the state of illinois. that's an important distinction. in illinois earlier this year governor quinn the legislature raise taxes on individuals and businesses in an attempt to balance their budget. yet today they have a pension system that has funding. we went the opposite way. we made it easier to do business

in the state. we show wisconsin open for business and we have a pension system that essentially fully funded. that is important because you get to the heart of the spirit that is why illinois is in the category because they feel to make tough decisions to get finances under control. >> thank you, governor. i just want to make one thing clear for the record. the federal government currently for regular federal workers, 20% of what goes into our health care benefits are paid for by the federal worker. in the case of the post office, it is historically 20%, the one of the major unions has renegotiated it to 25%. that is what's happening here since lynn washington. they recognize the ranking member. the >> thank you very much, mr. chairman. you know, the thing i think stands out here is the fact that they say this to both governors

or we may lose sight of the night is like the postal workers we have a few days ago they were able to shed 100,000 employees out of 700,000 in three years. one of the things they said is they are americans, too and they don't find sacrifice in. and speaking of sacrificing, governor walker, when i listen to your testimony, you made it sound as if you had a very reasonable offers to the union, but that they have been unreasonable by rejecting their offers. for example, you ask employees to contribute by 20% for pension and 12.6% for health insurance premiums and knew not to say most workers outside of government would love our proposal. we talked about your brother and like many other workers in our states without a deal like the one i offered to government workers.

the thing i did not hear the was the unions agreed to double the care of the health insurance premiums and increase contributions. that's not true? what did they do? yeah, i went to hear what you say. read an article from the local paper. >> i'll answer the question, representatives. two of the statewide union leaders made a statement a week into the debate about suggesting that they thought they could suggest that. in the mix of thought into the bill was signed into law, nearly every local union that settled the contract, settled that without a pension or health care contribution. to me, actions speak louder than words. the two stayaway leaders could not speak for unions have nearly 1000 municipalities, 424 school districts and 72 counties. they're the ones who decide the local level and up until the

bill assigned amount they were not followed actions of their leaders. to me, actions spoke letter than words. the other key difference is begun in the struggle to make knowledge both turkeys. the public is democrats driven by philly to make tough decisions. if we were short-term fix, we push the problem to the future. will we give our permanent long-term solutions, the tool state and local government need can only get if you make those changes are in terms of workplace protections, wisconsin is the strongest double service protections in the country. that was more than a century ago. that was what the new law in place and that protects grievances in both hiring and firing protections remain after exchanges. the >> looking at an article from the wisconsin journals, i guess that the local and this article a democrat states senator john

work and back local employees have agreed to financial aspects of your proposal. and all they're asking for is to strip them -- that she not strip them of their collective bargaining rights. that is not accurate? >> again, does the statement made by stayaway leaders. the actions they took contradict the statement, that they did not -- the agree to the five and 12. you would've seen a james film across cross and all of their communities they would've put money with the mouth is into that. so i think you're right about the story accurately explains what was proposed at the time, but in terms of what they actually did, their actions did not represent what directions do not coincide with the statement said the state regulators. >> did you ever consider dropping their collective bargaining demands? did you ever consider that quiet

>> as a county elected official for eight years. we talk about shared sacrifice because my county faced a crisis. i gave river 275,000 by personal salary back. and maybe personal sacrifice again going to pay more for pension and more for health care as governor in the state of wisconsin. during the time i repeatedly met with unions and ask them to make modest changes, modest changes in pension and health care contributions. one year i asked them to consider a couple 35 hour work weeks in order to avoid massive layoffs every time the response i got with go ahead come away for 500 people. i don't care. as i when i talk about no class and not segment taxpayers outside government. the middle-class workers that would've been enough for people i represent us well, just like in the state of wisconsin. if i have to choose between massive layoffs are making these sorts of reforms, i'd much rather stay in the side of

middle-class child because remember the vast majority of people in the middle class in my state and across the country have been paying the bill for the expansive government year after year after year and to meet those are the people in standing up to protect. you never hear me speak throughout this entire debate the matter what others may fan of her son until word of any decent public servants who work the 300,000 decent people in my state for the local government. i have great respect for them. i just know in this together we've got to make changes to make sure their jobs are protected into the future. >> thank you. >> chair now recognizes chairman of the subcommittee, mr. mchenry for its unquestioning. >> thank you, mr. chairman. governor walker can't push your testimony. governor shumlin, thank you as well. there is this discussion a tough choice. now, when we look at what the government does, and there are

services that polities and state rendered today people of the matter is collection of tax release whether it's local governments providing police and protection through the police are making sure that if somebody's house is on fire you the fireman show up. so there are tough choices between the services that the government provides and the obligations it has. so governor walker, can you discuss this challenge for a governor who walks into a very tight budget situation? the challenge between do you continue to provide services taxpayers expect or do you continue providing a benefit for a select few, meaning you have a pension obligations health care benefits in these types of things that the people getting the benefit are largely not paying to receive?

in the near taxpayers footing the bills. can you discuss the challenge? >> sure. again, i'll tell you not only as governor for the last couple months, but a county official for eight years prior to that, first we saw the distinction. we saw the challenge under the environment before we pass this bill into law or local governments, in particular, would force of to sacrifice the guy faced with the problem we face, where when we attempt reggie time, one before to fascinate because of the pension scandal i inherited in 2002. we were stealing this ahead of the curve before the economic meltdown. we try to make some very reasonable changes when it came to us as government employees paid for things that pension and health care and even other adjustments temporarily as part of the work week. we did that for two reasons. one, try protect as many jobs as possible.

to enter in because jobs provide services to try and protect core services for the people we serve. that is essentially the impetus for me when i looked at the budget crisis we are facing in the next to your site 2.6 billion. i knew we had to make a fundamental change we were going on the path many other governors across the country, democrat and republican alike to cut billions of dollars for schools from university systems, local governments in other eras affect other things imagine. and instead they are saying there's the cuts will either make it up to massive layoffs or make it up through massive property tax increases. in my state i can afford to have anybody, public or private sector anymore massive layoffs. for a change in the business climate, republicans and democrats alike to pass legislation that it is one of the most proactive approach of agenda for the country. we had to do all that. we want to protect jobs. by the same token we know one of the other things that would cut down recovery would be a massive

tax increase. he saw two years ago my predecessor raise taxes on individuals. we saw the jobs leave. we want those people to come back. >> i understand competitiveness in the midwest in terms of job creation, so there's competition on tax rates. >> ups early. we love the 7.9% effect is now 9.5%. we love that distinction because we want more people to come to wisconsin. >> well, thank you. the other question i have is as opposed to a private-sector pension, where those receiving the pension benefit are the ones affected by the changes. they are the only ones really affect the. the difference with that public sector pension is that we as taxpayers have to foot the bill. so it is not simply a life perpetrated to the beneficiary or recipient of the pension, saying perhaps to receive

scenario on return on investment are underfunded pensions and so on and so forth. it is also aligned to those taxpayers have to foot the bill for those underfunded pensions or less underfunded pensions. so my question to you, governor walker, a steeply the sufficient transparency and disclosure with public sector pensions today? >> i think about the state and local level as well there needs to be more transparent the. one of the things we're most proud about that we balance the $3.6 billion budget for two years ago with the largest deficit in state history. in my budget, i presented the beginning of state legislature to reduce the structural deficit by more than 2000000000.90% reduction pointed out to call the present positive. but the last thing you heard anything related to a budget because we took control of what we should have been doing for years and work from both political parties. that's incredibly positive.

others because that differs in many cases to the next generation. we can't do that anymore. >> i know my time is expired, but certainly those arguing about public sector pensions. you have those same pensions are underfunded and it bad. those are the optimists. does the look of the pension system the optimists. does the look of the pension system the optimists. does the look of the pension system the optimists. does the look of the pension system are two well-funded. >> i mentioned the illinois wisconsin distinction. you have the speaker of the general assembly, a longtime union alleys took a month ago about the possibility of producing the benefit itself. that's what i meant to me to take you seriously. someone who's been a stalwart

union of reducing the benefit. that's me would be unacceptable. we made a promise to public service about retirement benefits would be. we should protect the matter what party were in. >> thank you, governor. we now recognize former chairman of the post-committee, mr. towns for five minutes. >> thank you very much, mr. chairman. governor walker, why do people in general talk to people from your state around the nation feel that your focus is on helping the corporations and basically the wealthy at the end of the middle class and the poor about when they have that perception of you. ..

the middle class people you >> when you see me dtc wendi amine event? giving tax breaks to big business? >> we don't give tax breaks to business. what we do is targeted for small and big alike. we have a tax credit as you create a job there is a tax incentive but it's tied specifically to job creation so the person who benefits the most is the recipient of the job. if there's not a job they don't tax break. >> what's began planning rate of

wisconsin? >> 7.4% unemployment rate pistol too high, obviously less than the average. we had about 13,000 jobs in the private sector, about a.d. 200 new jobs in manufacturing next week we put all the new job numbers and i think we are going to be on the right path. >> did you have to lay off workers and municipal workers and government employees in order to put your budget in place and get the 13,000 that was increased? i'm trying to get the balance. >> you're right. in our case putting this budget together we have to be avoided for the remainder of the fiscal year 11 the deficits of the fiscal budget put together my predecessor jim doyle we have to make up $137 million we had set the stage for the $3.6 billion deficit and balance the next two-year budget we have to be series of things and other changes, other reforms and we are talking about one part, about $1.7 billion the next two

years for state and local government on state government for the final couple of months which is the end of our fiscal year would have 40 million-dollar savings. bye getting the savings we avoid laying off approximately 600 state workers we avoided that way. >> have you thought about using maple syrup? >> i've got some now. it's pretty good. it's not as good as the cranberry juice we make in wisconsin but it's good. >> rhetoric in using benner utter? >> i tried as a county again if eight years and they basically told me lee of people and to me that isn't acceptable. if you are for the workers in this economy the last thing i want to do is see people laid off and this was a much, much better approach. >> how did you get people to have a different attitude i don't understand why people in wisconsin would think that way. wisconsin is just like a lot of other states in this nation any

way, governor schumer? >> thank you, congressman towns. i'm listening to governor walker and sitting here realizing we all have similar challenges as governors on like the congress we've all got to balance our budgets. so, they're real question is what are we arguing about? and my plate is if you want to go after collective bargaining which i believe it helped build this country and build the middle class that's been under assault in this recession, just come out and see if i'm going to go after collective bargaining but if you want to balance your budget you bring people in. you talk to them, you have a dialogue. i can guarantee this. what vermonters are looking for is the same thing they expect in wisconsin and expect in america, they want reasonableness, compromise, they want bright people working together to solve problems. and when you use vinegar and refuse to meet with units and don't sit down and talk with

them, when you take on an outright assault on a basic principle and a space society which is collective bargaining, the thing my grandfather when he got off the boat and others rely on and rely on to make a decent living, to come from the beet farmer to success in america that in the build our country that is a different debate so what we are talking about as i sit here and listen to governor walker talk about he's opposed to these challenges all the governors for doing the same things here folks. the question is are you going to bring people together to solve problems or go after assault on the basic principal in america of collective bargaining. >> i think we are trying to do two different things if we want to go after collective bargaining just say we are taking you on. but don't try to blame the worst recession in american history on the need to go after public pensions. the question over here let's be honest about this. tax payers have almost paid for a public pension retirement plan. this isn't something new, folks.

this started with pensions, with asking public employees to give up economic opportunities they might have if they did what i did and build a business and made a lot of money. in exchange for getting the lower wage and the less economic opportunity, the targeting guaranteed 25, 22,000 on average retirement once they are all gone. it isn't new news the taxpayers pay a portion of that and employees pay the other portion. what is new is ice-t and governor walker's state are asking the employees to pay more than the did before. >> the gentleman's time is expired. >> governor, keep using maple syrup. >> we are going to try. >> mr. chaffetz for five minutes. >> thank you. governor, i'd like to talk to you if i could about the pension plan in your state and coming from utah i think we have two

things that have served us well. one is in the state constitution we have a balanced budget amendment that forced the issue to actually balance budgets. number two, a defined contribution plan as opposed to the defined benefit plan and consequently the state has one of the lowest tax rates as business is thriving and we have hundreds of millions of dollars in the rainy day fund. now i went back and looked at the pew study on vermont and you're doing better than most states that funded about 92%. but you make a comment about the chairman of the predictability of the pension program and about talked about the health of the program because it can't imagine a defined contribution plan is not superior to the defined benefit plan because how do you account for that? >> all i can tell you is that is served my and other states well that used defined benefit plans

and that we have had over time -- >> somebody told me they thought they were going to get an eight to 8.5% return i would say they are smoking those maple leafs. and 8% return on investment nobody's getting that kind of return. >> if you look at the average for the state pension across the history of the defined benefit plans you'll find we get about an 8% return on average and obviously there are good years and bad years but unlike general motors since we aren't going bankrupt we have to look at the averages and that's what we've got that's why wall street -- >> you think you're going to get that -- >> going forward to you think we are going to get that? >> we do, that's why moody's and the other bonding agencies allow us to assume that way of return on investments. we aren't making this up as governors that's what they require us to do based on history. if you're a governor you have to deal with the real world and the real world receive were to move

from the defined benefit to the defined contribution plan hypothetically it would cost a ton of money in the first ten to 15 years for the reason that the current employees help to support the pension obligations of the states in defined benefit plan. if you pull the new ones out, you immediately have a high your up-front cost than he would otherwise if you've got to support your existing defined benefit as he moved to the defined contribution so there's a lot of reasons why the governors are not thrilled at the idea and you're hearing this from republicans and democrats, this notion that if you just move to the defined contribution of our problems are going to be solved isn't in the real world. >> with the gentleman yield very quickly? governor, if you are fully funded that isn't true. if you are fully funded be able to stop putting money in the moment you make the switch because if you are fully funded you are 8.5% would pay all your benefits so you can't have it both ways.

>> we are adequately funded. >> as long as we understand adequately is kicking the can down the road so this davies share with you like the right of return of the treasury would run out in 20, -- 2023. you would depend on the high return you cannot bank on in your own statement. >> if i can answer that, mr. chair --. >> both governor walker and botcharov on wall street to try to convince them we are running sound economic states that the bond rating depends on our economic future. we managed retirement funds based upon the expectations of wall street. vermont is doing that right since the aaa bond rating. one reason is we use the actuarial projections that wall street gives us which are hybrid and the treasury return and i tell you if you study this issue you find vermont isn't giving anything radical here, we are

doing but wall street expect us to do and it is a higher return than you'd get on the treasury. >> i don't want to go over my time. ausley really do think a flashing red light for investors for this country for the congress because we anticipate the states try to be running back to the congress we can't even find ourselves, we can't to manager. i don't want the states to think they're coming to the federal government to get a bailout. i think states that haven't made that difficult choice and made it difficult transitions to the defined contribution plans are putting themselves in peril and great risk. that's the experience in utah. we made that choice. it's on a more sound trajectory and i think you will find the states who did make that effort and make that transition will be much more sound financially. that's my perspective but i think it's going to be on one of the biggest issues moving forward mr. chairman on your back.

>> we now recognize the former mayor of cleveland ohio, dennis kucinich for five minutes. >> thank you mr. chairman. governor walker, you said union leaders agree to the financial kutz but then you blame the the local unions for not following through on these pledges. that's because you refuse to drop the demand of the workers and collective bargaining rights that have nothing to do with the budget, and refuse to negotiate and reject the offer. governor walker, if the unions and wisconsin agree to the financial cuts that you saw it, i don't understand how this can continue to be characterized as to the debate of the state budget deficits supposed to be a hearing of state and municipal debt. i don't understand how revealing collective bargaining rights for public workers shows us anything about state debt. let me ask you about some of the specific provisions in your proposal to strip collective bargaining rights, first, your proposal would preclude the need to require unions to hold annual votes to continue representing

their members can you please explain to me and members of this committee how much money this provision saves for your state budget? >> that and a number of other provisions because if you're going to ask and you are going to put in place a change like that we want to make sure we protect the workers of the states so they have a right to know what kind of value they get and the same reason we give workers the right to choose which is a fundamental american right, the right to choose whether or not they want to be part of the union and whether or not they want a thousand dollars bid -- >> how much money does it say, governor? >> it doesn't save any. >> [inaudible] >> it has no effect whatsoever. reclaiming my time, it had no effect whatsoever on the state budget. i want to ask about another of your proposals. under your plan, you would prohibit employees from paying union member dues from their paychecks. how much money but this provision save your state budget? >> it would save employees of to of thousand dollars per year the could pay for the pension and

health care contributions. >> governor, it wouldn't save anything. the cost if anything it's obvious the real intention here -- >> it's to give the workers the right to choose. >> i will back it up mr. chairman, right here from the state of wisconsin legislative fiscal bureau a nonpartisan state budget agency much like the congressional budget office the bureau was asked to identify provisions in the governor's bill that are non-fiscal policy items that have no state fiscal fact. this letter confirms the obvious that governor walker's effort to repeal the rights of the state workers is in on fiscal policy item. no effect on the state budget shortfall. i ask unanimous consent this letter be included in the record. >> reserving the right will inspected and plan to include it in the record. >> that's unusual you would reserve the right to object. >> the gentleman will suspend --

>> we fully expect to include in the record because it's not a publication that is widely distributed we simply would like to receive it and as soon as it has been quickly vetted during this hearing it will be accepted that is a consistent policy from both sides -- >> i would like to respond in the 14 years i've been on the committee have never had a chairman and reserve the right to object for putting an official document in the record that would central to the purpose of this hearing determining whether or not you stripping collective bargaining rights, governor, is a financial issue or not. it's not. it's a political issue. >> the gentleman is incorrect. chairman waxman they repeatedly. in most cases just as here by the end of the hearing items which were not part of the widely distributed documents were accepted. i expect to do this and i would work with the gentleman to get it done before the end of the hearing and the gentleman may

continue. >> just a matter of public record anyway. the title of this hearing is a choice or necessity. i think what we've been able to demonstrate here is that the attack on collective bargaining rights is a choice, not a budget issue. there are budget issues as well that need to be addressed in wisconsin for example according to the national nurses united and u.s. states facing budget shortfall revenue from corporate taxes have declined to .5 billion in the last year. in wisconsin two-thirds of corporations pay no taxes and the share of state revenue from the corporate taxes has fallen by half since 1981 savitt published in the nation by john nichols and i want to ask to submit by unanimous consent and also in the real news network the have a report that points out the short budget, the budget shortfall of 137 million wisconsin could have been

covered if the state had just kept going its state legislated taxes would say let expire after 2008 also points out if they had gone on to collect the estate taxes from the wealthiest citizens they could have paid down the debt. i just want to say in conclusion mr. chairman, that we really are here at the center of a great debate over the purpose of the government whether there is such a thing as the public's fear with public servants who perform duties on behalf of the public using resources that belong to the public or is the government going to be auctioned off it the highest bid to the corporations who privatized and inevitably drive up the cost of the government control of the cost of services, taxes that is where this debate is headed nationally. i think that the benner walker is inadvertently done a public service by exposing the extent to which this mind set of

privatizing what is the public's fear bringing this issue to the forefront, 72 for being here, both governors. >> thank you. >> the chair now recognizes the gentleman from oklahoma. >> thank you governors for taking your time to be here with us. five of a point of clarification you begin your oral statement talking about how you didn't want to balance the budget based on the facts of and i do country of federal employees as well. the employees might do with benefits and the after the real crucial issue that the new vintage or statement by saying in the previous given this time they did deal with payment pensions, retirement words, so what will your not starting your time, you did say that we have just dealt with a few months ago, is that correct? >> it's been an ongoing effort both the previous governor the middle forget i was the president of the senate and helped negotiate with the speaker of the agreement with the teachers' union.

sinecure talking about you didn't want to do that on the backs of workers at this point you didn't see the corrections and saw health care as a major issue but dealt with the retirement issues and such. >> i don't mean to suggest we didn't ask for more state employees to make sacrifice. we did and they did. all i'm suggesting is we did it by bringing up to the table. >> sure, is just a method on that side and the cooperation that the others had with all of the leadership as well it takes two to tango on that one as well as people come together. let me ask a question to you think the federal government should be involved in dealing out states when they have that issue is there a point in time would say it's so far in debt and out of bounds the federal government should step in and bail them out? >> that is a question i'm going to leave to do and i never want to run for congress. >> that is a question i'm going to ask because you represent the intent of the state. >> i don't think you're going to have to and the case for the bankruptcy states is greatly exaggerated for political

reasons. when i go to wall street and i say as i did a few weeks ago we are in pretty good shape in vermont, wisconsin is in pretty good shape. tell us about some of the states we are worried of, california, new york, illinois and others and they say this is wall street speaking, we think that the case is being exploited for political reasons that there are not states that need to go bankrupt. we need to see your way through this and that the case for the pension crisis is being overstated by washington. >> do think the government should be allowed individual states? >> no. >> let me ask if all but to both of you as we have time and that is our their things we are doing is a federal government the right of your cost as a state, but i'm looking for an am i committee has been dealing with are unfunded mandates, things that say i like the amount of budget and control, these i can manage and these i cannot because the federal government has the requirements, are there things we are doing to cause you more debt and problems in

spending. >> we have two minutes i'm not going to able to answer that question. >> you have to submit all you can for that. >> number one thing you can give us? block grant medicaid to be to get a block grant for medicaid i had to put $1.2 billion more in the general purpose revenue, the state funding into the next budget also to cut everywhere else, it's the biggest challenge out there and we have efforts the required to maintain things by the federal government and to manage the cost me to get the point we did places like gunderson luther had been ahead of the curve when it comes to the idea and concept of local homes pay for performance and don't come at of procedure and we have that option -- secular aware when on the budget committee we brought that lady we've been told the governors will certainly keep people out of nursing homes and be reflected the populations and you can't be trusted with these funds.

>> your dad was made in the 90's when the different connie thompson was governor and push reform that bill clinton ultimately increase the welfare reform and in the end for giving block grants and the charges made back then we had the most successful welfare reform during the generation >> there are areas we are doing that is causing pain as far as the financial side. >> we're concerned about the cost of medicaid and medicare. the only thing i caveat is just a block grant makes me nervous is the populations grow older which is happening in all their estates as the cost and the utilization goes up. i don't want it to be an excuse for the federal government to get out of its obligation on the sharing of the cost of the same. we are giving a block grant, you're on your own of the utilization was that it's your problem. so how that flexibility gets translated is important, the details matter. second, the biggest -- of the driver is the education costs and no child left behind and there is no question those

mandates are driving education expenses in the public schools requiring us to teach protest and require an extraordinary people work of teachers when they could be teaching. >> thank you very much and with that i yield back. >> i thank the gentleman. we recognize the gentleman from iowa. >> thank you. my name is bruce braley and i'm proud to be a public employee. in fact, governor walker, when you were a 6-year-old growing up in my field believe the planned field on the y got my first job with the county conservation board and i learned how to clean toilets and how to mop floors and scrape to come off the bottom of school desks and i also worked out in the blazing sun building bridges on the farm to market rhodes driving an act and the spikes and the lumber and when they on the job my left hand caught on fire so i know a little bit about what public

employees to and the groups from washington ran against you and yet you yourself have a large amount of support from secret to donor groups like the ones that attack me and my campaign are you willing to go on the record today to announce the influence of the outside secret money and political campaign ads? >> human campaign ads on the principal of good government, and i think that's what we are here to talk about today. in fact, you ran a campaign ad called real leadership and when the campaign ad ran it says your focus was bringing people together to solve problems you remember that? >> you ask the question and that's what i did -- the first month and a half when democrats and republicans can together to push economic -- >> this is my time, governor pete you answer the question. >> if you to do a political stunt go ahead.

>> i'm not to been a stunt if dr. phill were here he would say how is that working for you? you also man and have called yes we can and said working together we can put government back on the side of the people again. you also ran an ad called me get right talking about government scandal benefitting politicians and he ran all those ads. this is your chance to make it right. are you ready to apologize to the people of wisconsin for hiring the 27-year-old son of one of your major campaign donors was a lobbyist and that individual had no college education, every little managerial experience and had to try to conditions to the convictions hired for and 81,000-dollar your job and you obviously had better qualified applicants? are you ready to make an apology to the people of the county? that doesn't sound like good government to me. >> please turn off the clock. the chair would remind all participants although members here have a right to speak for five minutes and say anything

they want and they will consider it germane. our witnesses are only asked to respond to items which they came here prepared to respond to and consistent with the subject of the hearing so it's for the witnesses to decide whether a question is germane and in fact members here have an almost unlimited right to say what they want to say during the five minutes. the gentleman may continue. >> when i grew of a man plainfield chuck grassley what is the state assembly back then there were good decent people many of whom are farmers who recognized many of whom were deacons of my father's church who recognized when the time for talks you have to make tough decisions particularly when the times were tough and the finances of the church and that is exactly what we are doing. we are talking about -- you may not want to talk about that and i will answer your question -- >> i'd be interested in your answer because people of wisconsin want to hear today.

>> i'm glad you're interested in the people of wisconsin because that person was five levels before me and when that position was brought to my attention i had my staff go back and have that person taken out of that position and i acknowledge the fact there were more qualified people and i asked what else would be put into that so that is the answer to the question. >> i reclaiming my time. >> we've written an article about this and noted that to of the highly qualified candidates for that administrative or oscar, former state cabinet secretary under the republican governor, scott mccollum who had a doctoral degree and eight years of experience overseeing the cleanup of the petroleum contaminated sites, the second bernice madison was a professional engineer who served since 2003 and the post to which mr. vv to he was appointed and had 25 years of experience in the state government and since the focus of this hearing is on good government practices and how that affects the that the states have a think it's time we

got some straight answers from the people who were radically reforming state government and that's why this is still important, and i would ask the chairman to hold a hearing and i have a letter for the chairman since we have rolled jurisdiction according to the committee website to look into the other factors that are impacting the state budgets including cronyism in state government and i have a letter to the chairman to that effect i ask unanimous consent for the article from the telegraph herald in title walker insults young worker with cronyism published on april 11th of 2011 to be made part of a record and i yield back. >> the gentleman from florida for five minute. >> thank you mr. chairman and thank you both for being here this is insightful for me especially my home state of florida but we are also going through some of the similar exercises you all have gone through. it's interesting because we look back at the history of collective bargaining and public-sector unions franklin

delano roosevelt and with president john f. kennedy who didn't feel there should be collective bargaining or there should be public sector unions so on this issue if it shows the evolution of this and why it is a crucial issue especially in light of the debt and deficits each state in the country are facing. the federal government in the office of personnel management have published consecutively for years up until 2008 a study of the amount of time that was spent by union employees on officials time. last time this was published was 2008 and showed the federal government union employees spent 3 million hours of officials time to engage in union activity. this is a cost the federal taxpayers about $120 million of 2008. unfortunately upon the repeated request by several congressmen and enterprise institutes under this president wouldn't seem to respond from that. in your perspective states and i will start with you, governor walker, do you keep track of any

official business or a union business done on officials time? >> i wouldn't have the numbers of the top of my head but state level we see this image the local level and we saw that when i was the county executive and it's an interesting cycle because in many cases they are paying money that normally goes to brokers but also goes to the employees' unions who then use it for political purposes and collect candidates who can advocate for more government and taxes under the middle class. it's a vicious circle. >> so wisconsin does keep track of official times and union activities? >> this time, for example, the state and local level that the employee -- people employees of the government designated as union officials have to account for time this taken as a part of the contract. in many cases we saw the local county the number of individuals who were on the payroll working for the unions. >> governor from this in such a region in vermont? >> it's not an issue in vermont, the unionized work hard and work

long days and long nights and we are certain that that is what they are doing and that is what they do with their time. we are a small state where everybody knows what everyone's digging, and in vermont, we work hard and public employees work just as hard as our private sector employees. in florida we are deliberating on the legislature something delivery did when i was in the legislature what was known as the paycheck retention act and would require the employees make an affirmative acknowledgment and confirmation that they will sign over a certain part of their pay check to the union dues and did it just having taken out regularly. it is something entertained in either of your states, governor walter? >> that's in the legislation i signed to the law approximately a month ago and the concept of that is in the interests of the workers they should have the right to choose if they want to have that money taken out and to be part of the choice is whether or not they give that money that

chooses them. >> it hasn't been a significant part of the debate. we are the governor facing a tough economy and budget challenge trying to balance it and thanks to the congress the deficit for all the governors haven't really had to be dealt with because they got so much money from washington and that's over and we have to balance the budget the old fashioned way so we are making tough cuts and tough choices and i'm doing it by focusing on what matters which is health care cost corrections and those are areas with explosive growth and i'm not worrying too much about the union dues. in accomplishing these objectives, whether they be pro union or anti-union, whatever they may be requires people to come to the bargaining table and people to come to consensus a compromise and one of the issues we saw in wisconsin is the were senators on the democratic side who left the state to fail to come to the table to address and as a public official to take personal offense to somebody that aggregate's the responsibility by not owning up

to their obligations to make these decisions as difficult as they may be. so, governor shumlin, i would ask do you condone such activities where elected officials who leave the state or aggregate their responsibilities to enforce their obligations as an elected official? >> well i've got to tell you i've got my hands full dealing with the challenges and facing in vermont and i don't comment much on what's happening on the other 49 states and is focusing on what is happening in vermont. in vermont everyone is working together with lots of maple syrup to get things done. >> thank you. governor walker? >> i have great concern and i talked factory workers the last month or two to point out the job for three weeks you wouldn't be working there anymore. i think it's pretty clear. so i think there is a real challenge and obviously the individuals in those working to decide whether or not it makes a difference long-term but you said something else about working together and i believe that but i also believe more important than working together

is people want results. and so in the beginning of this year we work together but devotee republicans and one independent in the legislature. we passed some of the most aggressive job-creating legislation in the country and show wisconsin was open for business. sometimes working together is a problem in the past democrats and republicans worked together and push the problem off to the future and in some point leaders matter what part the have to stand up and so we have to do something about it. >> thank you. i yield back. >> the chair now recognizes the gentleman from vermont for his statements. >> governor shumlin, i see behind you is a leader of the employ union firefighters sitting next to his brother from wisconsin. you're the governor, public employee union, did one of to not get the memo you're not supposed to get along.

>> i don't know if i can get it but we get along great as you know and there's nothing better than the fire fighters working hard for us risking their lives every single day. >> as i listened to governor walker described his problems, it sounds to me very similar to what you described to me this morning when we had breakfast the problems you face in vermont. governors cannot the escape the consequences of the greatest precision that we had since the depression and that recession is brittle and shows no mercy whether it's a republican governor state where democratic devin real-estate. you've described your approach, but clearly there are points of contention that you have to deal with as governor. a legislature that is pushing you and you're resisting to raise revenues and public employees who did cooperate but on the other hand they have a represented their members and up

for the wages and benefits. maybe give a brief summary how you manage to get from here to there. then a lot of people to talk to your governor walker i don't have that much time. >> i will try to be brief. as you know my guess is my approach is much different than other governors from the country, trying to create jobs and economic opportunity. i mentioned the middle class has been kicked in the teeth over the recession harder than in years and we are trying to raise their income and we do that by going after raising health care and the recidivism in the directors budget and what we have a high recidivism rate so by going where the money is while we've resist raising the taxes so that we can actually grow jobs and economic opportunities peaden heard governor walker talk about wishing to import jobs, illinois and we are all doing that. i'm hoping in new hampshire and massachusetts as we manage the budget and we are a great place to do business. we raised a family the best

place in my judgment. >> but we do it by getting along in using common sense. >> governor walker to make an observation we have a problem here in congress and this is my own personal observation but certain. there's a winner-take-all attitude i hear my republican colleagues say we have to deal with spending and i happen to think they are right. italy also think we have to look at other things, to back the tax code and in revenues i would say that quite candidly from some of my colleagues that one of the problems in congress is a winner-take-all approach where even if you see this in the health care debate, the democrats won on health care last year and now a repeal it. if you win in a way where the other side feels they didn't have a seat of the table or things were crammed down both sides can be doing this there's a price because you end of

winning the vote but you don't make progress on policy and obviously your state was the center of the storm with a very hard confrontation between the two sides, asking if you would just observe for comment on your thoughts about whether there is a price that may be paid in your state as a result of the fact that the approach that was taken did result in this enormous confrontation in a lot of controversy and a lot of pain that continues even after your policy i think was prevailed. >> a think the results obviously are frustrating. one of the things that frustrated the the most is it you're going to practice it a democracy you have to be in the arena and when 14 of my colleagues in the capitol decided to leave for three weeks they made it difficult to do that. in particular one of them worked with before on the jobs initiative to work with the sand

as he revealed in wisconsin state journal week ago sunday he was closer to less than his other colleagues. my hope is people like him and others will continue to come to the table and work on the jobs agenda and the things we need to continue i think we will be on the right track but again i go back to what i said before. people want us to work together but because they want results. when i look what mitch daniels did in indiana essentially for the state, he did what we are proposing in this legislation to do. his numbers were far beyond mine and that first six months he was an office dealing with the same passion just not as big because he did it through executive order not three piece of legislation but four years later he was active with 58% of the vote because people saw the results. the fear didn't materialize and the results proved in that state the government got better, more efficient, more effective and good public employees in indiana. >> i yield back. >> the chair now recognizes the

gentleman mr. kelly for five minutes. >> thank you mr. chair. both governors, thank you for being here. i come from the private sector so i will understand inlet having your own skin in the game and being able to sign the check. sometimes down here we lose perspective whose money it is your spending and when somebody else is picking up the tab it's easier to say go ahead and keep on partying. i want to ask specifically because the chair start with a discussion and also mr. chaffetz about the defined benefits and pensions and i know in pennsylvania that while all of us took a hit when the stock market went down and we lost quite a bit of it that the end of the day that was a loss. if you can in both of your states tell me who makes up the loss for the benefit that is -- i think the defined benefit is a complete illusion that gives the believe somehow the future is with predictable and reliable and we all know it isn't so please tell me the deficiency, the difference between what defined benefit is based on the actuaries are saying and the

equity who makes up the difference for that? >> i think it's really important to stick with the facts and the fact the matter is if you get vermont this is what happens. in the worst stock-market crash in the long time to go from roughly 12,000 to 6,000 the average person in a defined contribution plan sold the stocks when they got discouraged between eight to 6,000 those in the defined benefit plans of public vermont and raising them to hold on and hold out and that's what we did. so now retirement plans are higher than they were in the depths of the loss. the large investor now has lost what they saved for retirement. saddam, the great example where a defined benefit plan protects

workers more ably in a defined contribution plan in vermont example is exactly is a proof of that theory. >> who makes up the difference in the loss? >> my plan is there were no losses without the gains back. >> anderson there is somebody that does provide a safety net and we both know that. governor walker? >> it's the taxpayers, and in our case before this reform, we talked about for example my proposal for the five to 8% contribution it's clear in vermont and other states before this reform other than half literally a handful of state and please the taxpayers are picking up with the employee contribution and the employee. so i'm not a thing the impleader contribution to be financially having the employees of the state including me pay for the employee contribution. the employer pays part and the

other part. wires traveling in the midst of the debate particularly when i got an infection in plant 25 to 50% of the health insurance premiums most of them have retirement plan it wasn't a pension of the 401k and many of them to keep people working for suspending the match to be able to keep people from being laid off and when i'd walk them through what i was asking is with a minute you're taking all this money away. as an example in the basic family plan that my family has, we will go up to pay about $200 a month in premiums versus about $90 a month. again most people on the private sector wonder that's unbelievable. >> that's the most important thing to understand. if i have a defined benefit i can go ahead and stick with that plan because come hell or high water i'm going to get my defined benefit but when you are the person that is in real money in the program and you have a chance to opt out now and keep

what you have or lose it and you're putting it in the lockbox and my daughter and my wife is a teacher i've got a lot of friends whose benefits are guaranteed and they are guaranteed by people in the private sector who will see a reason the tax is to recover the loss on the pensions and i think that's where the deride comes. this isn't the union workers versus non-unions and versus democrats. it's about americans. and if we're going to share the games we are going to also participate in the payment but understand when you have your own money in the game it's just a difference between somebody who is guaranteed a benefit regardless of what they put in and that's the important thing. taxpayers make the difference in all these losses. that's the model and that's what's wrong with it. we don't have a safety net in the private plan but the public sector does but that is a vast difference and makes it easier to stick with the plan that is upside down. one way or another i am still may hold. thank you for being here. i yield back mr. chairman.

>> the gentleman from virginia, mr. connolly for five minutes. >> thank you mr. chairman and welcome, governors. >> governor shumlin, did understand your testimony that he said the pension fund in vermont has an eight come 8.5% annual return? >> that's correct and it's important to address the question of who pays and the taxpayers do at least in vermont maybe we are unique i don't think so, 80% of the benefits we pay out are paid for by the return on investment, 80%. >> that's correct. >> you're a member of the national governors' association. estimate is it your understanding from your fellow governors that vermont is unique and that most pension funds are in fact under water or are about to go so? >> it is not my and standing most were under water, no.

>> mr. chairman i would ask unanimous consent to enter into the record correspondence provided by the national league of the city's, naco nsa and other organizations pointing out as a matter of fact most state pension systems are very solvent that have been quite stable the last half century. >> have they been received by the parliamentarians it? >> received by the parliamentarians? >> we have copies here. >> we will bring them up and reserve and make a final decision by the end of the hearing. >> thank you very much. >> governor walker, when you campaign for governor, did you can pan on the issue of collective bargaining being a problem with respect to the budget? >> i took that wages and

benefits overall and ran campaigns but i didn't specify what for my talked about in the broad spectrum and in fact aft wisconsin, one of the unions, treen campaign for lawyers pointing out some of my statements about collective bargaining and other issues. so that was an issue that was part of the campaign. >> i didn't ran an ad i'm going to talk with this attack in a couple of debates about the fact the full spectrum of issues. >> that's a lot of debate. >> we didn't have that many. >> most members of this body. >> in your dates with your opponent you actually brought collective bargaining and said that's something i'm going to address as the elected a are. >> i talked specifically about the five to 12% and they said how far are you willing to go?

>> i'm willing to change the law from one and whether it is a outright change. i talked about it there and it ought to begin in the transition >> i'm asking a very specific question. due to explicitly -- >> nope. >> savitt might be -- you might see that some might be surprised that you made collective bargaining such a centerpiece of your so-called reform effort after you were sworn in. >> i would say no because 38 years as the county executive finally talked about it, broad and it was called the reali tour when i talked about the challenges we were unsustainable and the collective bargaining. >> from your point of view nobody should have been surprised when you were elected and sworn in. >> 100% correct. >> were you surprised of the reaction in generated? >> for eight years it took on the status quo in the county that every elected. i was elected 54 to 57 and 59%

because i think in a time of crisis people are not so much concern about republican or democrat, they want leadership. that is what we are trying to the state level. what did surprise me candidly is the level of the national attention the folks that came from washington and others to be part of that debate. >> thank you. let me ask a quick question. you got a famous phone call from somebody pretended to be david coucht. he said once you cross these bastards will fly you out and really show you a good time. youth responded by that same oil right, that would be an outstanding. what do you mean by that and what did you think he meant? >> at that point i was done on the call and i was trying to get off of call and get to the next issue. islamic it wasn't that you were mr. coke and he was promising to reward you for what you were doing.

>> did not on that regard, no. >> the foley out didn't strike you? >> no i didn't even know what cali is. >> have you ever had a conversation with respect to your actions and wisconsin? and using them to punish the members of the opposition party on this? >> nope. >> you've never had such a conversation? >> thank you. >> i've spent eight years talking about the challenges of the county officials and the fact i had a union or series of unions in the county that constantly told me to play people laugh as opposed to making modest changes. -- before. my time is up. >> thank you, mr. sherman and governors for being here today. governor walker, i believe your statement in my home state of tennessee has constitutional requirements to balance the budget. obviously the constitutional requirement doesn't exist in washington, d.c.. do you believe that these

constitutional requirements give additional support and leverage and to make the difficult decisions that need to be made to get your fiscal spending under control? >> yes, and i think both of us as governor talked about the fact that as governors regardless of the party, for us to succeed and have the states grow the economy we have to have a balanced budget within it is a constitutional requirement or otherwise i think the states are going to succeed regardless the governors or the states that take the fiscal challenges head-on. >> thank you. the last election is clear to me coming from the private sector that the american people have signed the referendum that they feel the government over always too large and intrusive and it's in the way of creating jobs, and so i would take heed to that as we sit in these hearings and justify the programs within the federal government and whether they are good or not and have discussions of whether or not private sector versus public sector pay its fair.

governor walter how would you gauge the workers in wisconsin? critics have said your reforms are hurting a group of workers already worse off in the private sector counterparts. or the wrong? >> let me point out too quick things in that. the debate is never about the level of pay for the compensation because i think they are a great people who work of the cities and county or school district state government. i said that repeatedly. with this is about is balancing the budget making sure we can do it long term getting the state governments the tools. there's plenty of studies over that show whether you have a higher education or not. when i toured the state and talked to the constituents and talk to people in the middle class looking at the factory from locations they realize they are the ones that fit the bill for the more government and they think it's realistic they're paying an average 20% for health care for the pension or the

401k they think it's realistic for the rest of us who work in the government and something similar to that. >> governor shumlin, you mentioned in your testimony earlier that you went where the money was to help get your fiscal house in order and you mentioned health care. i was wondering if you had in sight you could share with us as to how you went about that and if you have a solution to the health care crisis and the cost. >> how long do we have? the answer is yes, we are working very hard to pass a health care bill will be the first in the country where health care is the amount of privilege for the individuals and isn't required by the employer which we think will be the job creator but most importantly as governor walker was talking about health care will be reimbursed providers based upon keeping people healthy, health care outcomes instead of the fee-for-service model. and we've put together an ambitious plan passing the

senate almost as we speak it's all because the house and i going to sign it into law and come to congress and maybe for a few waivers so i'm so glad we had this the opportunity to start baking now. >> we will be interested to see how that turns out as we have our challenges here. do you believe that collective bargaining is a basic human right? >> i believe it's a basic right in the space society, and i say that as a guy that was born and raised in vermont. my ancestors like so many of us in this room came to the country with nothing and ended up picking beets in my great grandfather in the west somewhere and frankly were it not for the right to collective believe bargained i don't believe my relatives were most middle class americans would have the opportunities for economic progress the enjoy today.

it's a basic human right and democracy this is direct contradiction with franklin roosevelt who was a pro union percent and said the ticket was attention should be paid to the special relations and obligations to public service but public itself and to the government process of collective bargaining is understood cannot be transplanted into public service and he goes on to say a strike of public employees manifest nothing less than the intent to obstruct the operation of the government and until the demand is satisfied. can you comment on that? >> someone as great as roosevelt could be wrong more than once. >> i would disagree that my time is up and thank you for your comment. i yield back. >> i thank the gentleman and want to acknowledge mr. merkley from connecticut. >> thank you very much, mr. chairman, and both governors, thank you for your attendance today and for sticking with us throughout this

process. i guess i just had a simple statement in question for you, governor walker. i guess for those of us watching this debate played out and i think this has been covered by several of my colleagues it's hard to square the concession have been made by the unions and their willingness to come to the table and the continued drive to strip them of collective bargaining rights and there's been a lot of conversations among the country have to leave to how this plays into the much broader debate that's happening around the nation. when we looked at the amount of outside money that's been spent in wisconsin with respect to doherty election, to the site over the legislation and then most recently in fell last few weeks with respect to this election for the court. it's hard to make the argument that this debate only plays out in the context of wisconsin's

budget, and in fact some of the key players in this drama seem to be pretty open about how this is ultimately about trying to kill a pretty important constituency for working families and i think we have this quote on the board earlier when mr. connally was asking his questions, but let me read it aloud. the state senate leader scott fitzgerald said recently during an interview on fox news, quote, if we win this battle and the money isn't under the auspices of the unions, certainly when you are going to find is president obama is great to have a much more difficult time getting elected and winning the state of wisconsin. and in an e-mail solicitation on a fund-raising letter, excuse me, that he sent out, he was making the pitch that republicans should be supported because they faced on the big labor's bully tactics and democratic walked out on the senate to break the power of the

unions in wisconsin once and for all. this sounds a lot like a broad political fight to try to defeat your opponent to try to defeat the advocates for the working families, and i guess i'm sure you have a good answer to this question, but i'd like to know if you agree with the statements of your state senate leader scott fitzgerald and how you would address the concern of many of us that the reason that you have $2.1 million being spent on behalf of your candidate for the court, the reason that you have groups like the coke brothers pouring in thousands and thousands of dollars because this is about a much broader effort, and it seems some of the key players in the fight, certainly the state legislative level lower open about how this is a much broader assault on unions and the allies of the unions. ..

there's money coming off a rebound from sources and i think a lot of that in the multiple reasons. i shan't answer for scott strode for scott walker. i can tell you for me it's about the budget, but it's also ultimately about making government work better and i think it's a change in middle-class matches the middle class.

it's even middle-class individuals who work for state and local government because for as we ultimately believe in wasting the alternative that would protect the middle class jobs by avoiding what other states are doing with massive layoffs at both the state and local level and ultimately put in place a system that the government will work better. i've got two kids in a public school. i'd like to have a system like we do elsewhere in society who would pay for performance, i'd like to have people based on merit and performance. these reforms and powerless to keep our best teachers in schools and that's part of the package as well. >> my time is almost up. you can certainly a time as to whether you agree with your state senate leader when he said this is ultimately about trying to defeat president obama in wisconsin. >> i can say what it is for me. it's ultimately about balancing the budget now in the future,

not just temporary because it had too many people temporarily pushing problems in the future. it's the long-term answer about long-term reform in our government. our schools and local governments and states operate better. like millions of dollars being pumped into the state who disagree with that vision, but i appreciate your answer. >> i want to acknowledge my colleague from south carolina. >> thank you, mr. chairman. i noted the conciliatory tone and book your inch reduction in the statement. i've made a couple of notes. you mentioned the unity tour, which i found spidering. he said come to the table. you mention the word gracefulness in the knesset on four different occasions he said come together. my question is how do you do that when a site with whom you disagree has absconded from the state and is essentially a fugitive from responsibilities? with table to you set and you're

not in the same state? >> e-mail, you don't try the reasonableness please the heat of the crisis. to avert the crisis. i'll tell you by way of our experience under the republican governor, jim douglas, we need to get roughly $25 million out of our pensions for teachers to balance their budget. and things were going so well in those negotiations with the governor. so the democratic senate president, myself and the democratic speaker sat down and said listen, we're going to have to get the savings that we can do it with you or we can do it without you and really would like to do it with you. and they turn to us and said we want to do it with you. so my point is when you're going to work together, when you do at the american people want most desperately from politicians in washington right now it's a delight. reasonableness, compromise, you

have to start with that foot. you can't ask for it once you've created crisis. >> there's a concept of mutuality that is inherent or required for that to happen. i know you would agree with me. i also want to say inherent in your comments to me and in your testimony, frankly, instability. in the last two weeks alone, members of this body up and told by a colleague to go to, not purgatory, not tedious, not the river styx, but hell. my colleague from virginia made reference to a phone call placed to an elected official. will you help and join me in decrying the rhetoric and tax kicks in i just laid out? >> you know, i think that stability has to be applied to all public officials and i think we need to raise the bar collectively peered across this

country -- >> to think making surreptitious phone calls from pretending to be someone you are not enhances stability and discourse in this country? all i can say is i have no disagreeing with you that this ability tunnel runs both ways and we all have the responsibility of public statements and the american people expect for us to be so will all the time. >> you in response to doc your date charlie somebody may have misquoted collective bargain -- the ability to collective bargaining for basic human rights and democracy. what is your authority for that statement? what is your constitutional authority for same? >> well, free speech. >> and your abilities stack, where would you point me in the constitution for support for the

underlying notion >> you know, it is my belief as a governor of a state that collective bargaining is the right and something that insert disk country with extraordinary progress in distinction and it's allowed, as i mentioned, families like mine who came from nothing to succeed economically in the best democracy, the best economy in the best business climate that anyone could never design. so all i can say is i see it as a basic rate. >> are there exceptions? >> not they can think of. >> law enforcement? >> law enforcement should collective bargain like anyone else. they have in our state has had great results. >> in my state of south carolina, we laid all prosecutors and furloughed them for five days last year because we have a fiscal crisis to come

most every other state. if that's something you had entertained in your state? can you oversee furling the core functions of government, which all three of those categories are, could you ever see that happening? >> we actually did move arcades to a four-day week. >> federal courts are saying the judges have always been -- >> we noticed our state judges. >> basing my time is up. >> i acknowledge my colleague, mr. tierney for mr. chester cheeses. >> thank you, mr. chairman. let me just ask you, when you're trying to resolve your problems in a state, and you start off with unions by saying you are going to require them to hold annual votes and continue representing government employees they would no longer detect dues from the paycheck and expect them to come to the table and start a conversation with you? is that the way you begin? not know, that's not what is up

with. >> i just think that's a point worth making. >> what percentage of your annual state government spending is the contribution to your pension accounts? >> it's about 4%. i think it's important we remember that. when i talked about the real challenges governor having to balance the budget, my health care costs go in double digits. my corrections budget has doubled. my challenge is not pensions. of course it is a consideration, but are pension funds are not performing well and were doing okay. >> what percentage of viewers they spending is related to the pensions account? >> if you look over all and i don't know the exact vintage, but i can give you the numbers. >> if you don't know that, as it significantly more or less than 4%? >> total budget is about

$600 billion -- excuse me, $60 billion. the total amount of savings we have is 1.4. >> national association of state retirement administrators is less than 3% of all state and local government is used to fund public pension funds. do you think this is generally rough? governor walker, and you want to make >> i will follow up and give you the percentage. the >> we talk just a second about the defined-benefit. from the early conversation, my understand is you recognized when you switch the defined-benefit at the defined contribution, there's a tremendous shift in the risk to the beneficiary. is that right? >> risk and cost. >> rebook colonna shoulders -- >> basically generally inures it

and others that when the original station was set up, that was part of the progress of the employee may have taken some other area they were negotiating on and returned for having a little more security and retirement. my right? so it was the employer making the deal as well as the employee. seems like a fair deal to you? on the aspect both of you if i could not not come into either review as for the authority for the americas active state? >> no. >> to interview believe the bankruptcy court is better able to overcome differences in the political process in your state governors and legislature? >> no. what do they begin think of the court can restore fiscal stability in your states? the mac no. >> no. >> to give you think you'd be better better manage your state finances? >> no.

>> no. >> so you both agree with the letter that governors require a democrat from washington and governor heinemann from nebraska sunset congressional leaders that essentially made up point. allowing states to clear bankruptcy is not an authority in the state theatre. states are separate entities in which the public trust is granted to electric leaders and the bankruptcy proposal suggests the bankruptcy court is better able to overcome political differences can restore fiscal stability and manage finances of the state. the assertions are false and serve only threaten the fabric of local finance. each of you gentlemen be in agreement with that? >> that the ng's position and i support it. i agree. >> i yield back. thank you, mr. chairman. >> would the gentleman yield? >> the gentleman yields. >> let's go back to you,

governor shumlin. as i listen to you talk about the maple syrup in your methodology, there was one word that she left out. and the reason why i think you got the cooperation that you've got is because the restart. the workers felt that he respected them. i heard your story and i wouldn't be here either it's the were not for unions. no doubt about it. my parents were former sharecroppers come in many south carolina came to baltimore, got a union job and that's why it here today. i just wanted you to know they felt respected. >> i appreciate your comments and obviously we write for firefighters, four police officers, folks that are plowing the roads and all of our public employees is incredibly important to any chief executive. >> the gentleman from arizona, mr. gowdy -- i'm sorry,

dr. kosar. >> i want to get back to original topic of state and municipal debt. we are not talking apples to apples in your state. when we get this right. you actually are a tax giver to the federal government in your attacks taker from the federal government i'm not mistaken, right? for every dollar of tax to generate 82 cents back in vermont get $1.12 back, right? >> you know, i'm an expert on the cheese in our state, not the apples. >> but there's a difference. to my link here as back to the basic core problem with all states and the federal mandate that some of the state should be doing, right? particularly governor shumlin come you talk about health care and collections.

isn't that an amendment right? does she like the ability to have flexibility in regards to those oversight of those funds? >> well, yes, frankly, but you need to define what we mean by flexibility because my fear is that we have this -- >> if i can just finish what i was saying as we get a little bit towards the next budget discussion is that flexibility means were going to leave the requirements and take the money on behalf of the federal government and states of being tougher shape than we are already was under reimbursements with medicaid and medicare. >> and i understand because with the unfunded mandate, the same cost no one wants to talk about and that is for the federal law to be enacted in the state, we hire more workers that are not in the area. turn the public sector. therefore these rules continually go up. part of this is based upon the

maturity -- if i look across the board coming from arizona and holy cow, look at those numbers here in the second, but the problem is that the budget problem in each of the states are derived by the unfunded mandate by the federal government. >> i think that's an oversimplification. the veggie challenge and states are derived from the worst recession in american history run on by creed on wall street in housing bubble got transferred to main street. i was the culprit. >> i've got to stop either because did we also have a problem with the federal government and not? didn't the government establishes up in the risk pool and all the aspects of risk kind of regulators and telling banks and the financiers will do this. so this equal blame to go around and that's how we want to go about. >> i would argue if you want to get into that, there's no lack of regulation of wall street to let us to the crisis.

>> once again, government problems. coming from the federal government. what i'm trying to get back to us it's not an oversimplification because when were telling you a rule, if it is intrinsic to the federal government's mission, do you think they ought to pass the buck to you or they should fully fund it? >> i think the federal government should keep its promises to the states. >> are you prepared to honor those promises to communities? >> absolutely. >> okay, so when were talking about health care and corrections, i'm having a problem here on what this unfunded mandate is coming from because we constantly are kicking the can down the road and these are the core principle problems that you brought up his health care and corrections. >> it isn't the mandate -- we don't have federal mandates and corrections that are really budget challenge. >> wait a minute.

you know, i've got a few new sheriff in my neck of the woods in the federal government breathing down his neck saying yes you can do that, no you can't. there is some oversight in regards to the federal government that dictates exactly how you can incarcerate a prisoner. >> i not see a car striver in the state budget. >> how do you feel, governor walker? not only the federal government to state government, but many times the mandate for the local government and the extent to get more flexibility i want to make sure that doesn't cut it in half either. if you put the power in the hands of the people at the state level, states are better equipped to tackle the

challenges and in turn can once tapirs another staple at different needs and outcomes in the more we can adjust to not have the better will all be. the gentleman from new york -- the gentlelady from california california -- >> thank you, mr. maloney and thank you, mr. chaiman for your participation here today. i don't know if i would've done a severity two of you, but i'm glad that you have. let me start off with governor walker. i have here a website, debbie debbie w..stand with walker.com that is supported by the americans for prosperity and it is of course funded by the co-brothers. and then it went public site for

workers to sweetheart contracts filled unheard-of for taxpayer loses every time. she agreed that statement quite >> pirates in a statement before, who pays for the pensions and things of the taxpayers? i do know about that statement, but conceptually who pays for the pension health care benefits? at taxpayers including public sector employers are taxpayers as well. >> is a quick facts about repair legislation. the second point is respecting the public trust. the teachers choose not to cheese country in teach, do you believe this statement to lavish contracts? >> lavish contracts? no. you earned her the earlier, but i pointed out to me this is not about which one of the doctors asked whether that public employees are paid too little or too much and i said that's not what this is about.

this is about trying to balance the budget and provide long-term to make government work better. >> let me ask you this, excuse me for reclaiming my time. do you think teachers in wisconsin are paid adequately? >> if we could set up a system where we report based on performance and merit, i'd be willing to pay more. we don't have the system right now. >> to know what the starting teacher salaries in wisconsin? >> depends on the district. the lucky public school system total compensation package for an average employs about 101,000. >> is starting teacher salary in wisconsin is $25,222 in wisconsin ranks 49th in the nation in terms of starting salaries for teachers. >> and the reason for that is because that talks about -- >> really this now to go live to hear from president obama. he is speaking at a fund-raising event for his 2012 reelection campaign. the president attends three

fundraisers in chicago today, the son of the navy pier among lake michigan shoreline. you are watching c-span 2. >> we also owe my chief of staff to other units debt of gratitude [cheers and applause] for taking a city that i was always a great american city and turning it into a great world city, healing some of the divisions in the city what we are grateful for richard daley. give it up for richard daley. [cheers and applause] but i can tell you that i like to tease rham. i joke about him. this is one of the guide who stepped into one of the toughest jobs in washington said by my side every step of the way and

i've seen how he performs under pressure and seen the kind of commitment he has to the american people. you guys made a good choice. he is going to be a great mayor and i'm proud to call rham emanuel my friend. [cheers and applause] i looked around the room and just see if friends everywhere, people i've known for a long, long time. [cheers and applause] it's good to be home. [cheers and applause] feels good to be home. this is the city where i fell in love. [cheers and applause] this is a city where i got my start in politics 25 years ago, working with churches on the south side to bring jobs to the hopeless. it is where i stood with so many of you in great part almost two

and a half years ago when we show the world that all things are possible in the united states of america. [cheers and applause] some of you may have heard, this is where we are going to be basing our headquarters for the 2012 campaign, right here back home in chicago. [cheers and applause] now this is the first time in modern history that is president has faced a reelection campaign outside of washington. [cheers and applause] but i decided, i don't want our campaign to be just hearing all the pundits and powerbrokers. i want our campaign to be here because you are the ones who got me started.

[cheers and applause] i see people in this audience that have supported me when nobody could pronounce my name. [cheers and applause] i see folks who supported me when i ran for congress and got a beat down. and then halt -- you know, help to nurse me back to health. one of the things they've seen again and again over the last couple of years as the conversation in washington is very different from the conversation around kitchen tables and office coolers. i want to make sure our campaign is rooted in your popes in your dreams. i want to make sure we put the campaign in your hands, the same hand, the same organizers, the same volunteers who are at the last that together ordinary

folks can do extraordinary things. that's what this campaign is about. [cheers and applause] now, where all of the older. [laughter] some of us are a little bit grayer. [inaudible] >> all that michelle know you said that. i remember the excitement in the streets and that even as we celebrate -- remember what i said back then. i sent her work wasn't ending. our work was just beginning. because while it was clear that

i was going to have a full plate going into election day, i'd be lying if i said that i knew how full that plate would be. it has been a little fuller than we imagined. we took office in the middle of the worst recession in our lifetimes, one that left millions of americans without jobs, had folks losing their homes with the recession so that the any families are still grappling with the after shot even though the economy is going again. but the economy is growing again. we are creating jobs again. over the past four months the single largest drop in unemployment since 1984. [cheers and applause] over the last 13 months we've had nearly 2 million private-sector jobs.

that didn't happen by accident. [cheers and applause] it happened because we made some tough choices, like saving the american under industry. he said it could be done. there were some folks are going to write it off, but it was the right thing to do and that gm is hiring back every single worker they laid off and every one of the big three american automakers are making a profit once again. that is because of the tough choices we've made, because of the work you did. [cheers and applause] make no mistake, because of you, we've been able to make no progress over the last two years. because of you, we were able to prevent another great depression. because of you, we are making the most meaningful education reforms in a generation three competition called the race to the top, raising teachers that in praising learning standards

that schools and states across america. because of you, we overcame the status quo and reformed wall street, making sure we got some of the toughest consumer protection you won't get cheated when you apply for a mortgage or when you take out a credit card. [cheers and applause] because that view, we did what we have been trying to do for almost a century and we made sure that everybody in this society of ours, if you get sick, you don't have to go bankrupt. [cheers and applause] if you get sick come you don't have to mortgage your house. if your child has a preexisting condition, they will still be cared for because they pass health care reform that provided coverage to 30 million americans. [cheers and applause] because of you, we were able to

rein in the worst abuse of the health care industry. because of you, not here in the united states of america are we going to have people on the streets. along the way we did a few other things. we signed into law the lilly ledbetter bill, the idea that women need to get paid the same rate as men for the same kind of work. [cheers and applause] we finally over and turned the injustice of don't ask don't tout when we said everybody can serve their country. they are allowed to serve the country that they love. [cheers and applause] we put two women in the supreme court including the first latino

justice. [cheers and applause] we brought back 100,000 troops from iraq and ended our combat missions are because we knew -- we knew that it was time. and you know, along the way we had to deal with pirate -- [laughter] who thought we would have to deal with pirates? [laughter] that wasn't in my campaign clap for them. pandemic, earthquakes. now, oil spill -- don't forget oil spill. golly -- [laughter]

now, part of the hopefulness in anticipation we all felt in great part, it was also about what we could do to secure and restore america's standing in the world. so that is why we sing in our alliance. we signed the historic arms control agreements, reduce nuclear materials. that is why we are on the right side of history now throughout the middle east because we believe in prevent teen and a sense from getting slaughtered and we believe that human rights for all people. [cheers and applause] that is why we have taken the fight to al qaeda. that is why we are still working in iraq to make sure that transitions to a peaceful -- a peaceful democracy. that is why we are taking care of those veterans when they come home because that is a sacred obligation that we have.

[applause] so here is the point, chicago. we have faced an extraordinary array of problems at home and around the world, but we wouldn't have made any progress if it hadn't been for you. i was talking to a group earlier when i said, you know, i grew up here in chicago. i wasn't born here -- [laughter] just want to be clear. i was born in hawaii. [cheers and applause] but i became a man here in chicago. [cheers and applause] and a lot of the people who are here today, the values, the

ideals, my beliefs, my core convictions about what makes america great were forged here because it is here in this incredibly diverse city, the people from every background, every creed, every color, from farm town, inner-city neighborhoods, that somehow come together, immigrants from all around the world, it is here that i was reminded about why america is so great. it is not the size of our skyscrapers. it's not the size of our gdp. it is the fact that we are able to keep two ideas together at the same time. one, that we are all individuals endowed with certain inalienable rights and liberties and were

self-reliant and more entrepreneurs and we don't want folks telling us what to do. you know, that's part of an individual is so important to us, but we also had this idea that we are all in this together -- [cheers and applause] do we look out for one another. but i am my brother's keeper, that i am my sister's keeper. and i want to make sure the child in on the south side or west side has the same opportunities. [cheers and applause] that i have had. and that i am looking after them not out of charity, but because my life is richer, my life is better than the people around me are happy in the people around me have a shot at the american dream. and those values that all of you help warning me, i carry those

with me to the white house. i wake up every day with them and i go to bed every night with them. i am thinking about you. and when i read those letters every night, from constituents all across the country and they talk about what it's like to send out 16 resumes and not get an answer back in the desperation that a parent feels, thinking they may not able to take care of their kids. a child writing a letter saying their parents are losing their home and they're going to have two move and if mr. president there something you can do. when i think about those things, i am also thinking back here, thinking back home, about what you have taught me. that campaign in 2008 was that my campaign. it was her campaign. it was about your best instincts

of your impulses, your vision for an america that is more fair and more just and more equal and has opportunity for everybody [cheers and applause] regardless of color, regardless of race, regardless of creed, regardless of religion, regardless of sexual orientation. if you had not done all those stories and called up all of your friends back in 2008 i wouldn't be. but you know what, you didn't come here tonight just to go down memory lane. [laughter] we didn't come here tonight to pat ourselves on the back. we came here tonight because we know for all the progress we've made, we've still got business to do. [cheers and applause] we are not finished and the only way we are going to finish is the same way we begin this journey that is together. we're going to have to keep on

working. together we've got to make sure any american who is looking for work can find a job that pays the bills. together we have to make sure hard-working families doing everything right aren't falling behind, but getting. we've got to reclaim the american dream for all americans that is the change we still believe in. that is what i think about every single day. that is our northstar. but as their destination and we aren't there yet. with your help, we can keep america on track. with your help, we will attract new jobs and new businesses to our shores. will make sure america isn't just competing, but competing to win in this economy. with your help, we make sure all kids are ready for college, all of our kids are ready for careers because a world-class education is the single most important factor in whether america succeeds in the 21st

century. [cheers and applause] with your help, we can rebuild our crumbling infrastructure. not just roads and bridges, but the high-speed rail lines, communications networks. with your help, we can continue to invest in cutting-edge medical research, breakthrough to allergies and finally have the energy policy to make sure that our entire economy is not subject to four or $5 gallons of gas, reduce our dependence on foreign oil and clean up the planet in the process so we can bequeath to our children and grandchildren the kind of planet that we have inherited. [cheers and applause] with your help, we cannot educate, out innovate and outcompete the rest of the world. and we can only do this, by the

way, if we get our fiscal issues under control. i gave a speech about this yesterday. [cheers and applause] when i was running for president, i talked about a new era of responsibility in this country and part of that remains restoring common sense about her federal finance his, restoring fiscal discipline in washington, living within our means. last week were able to prevent the government shutdown. the reason we were able to do it was we agree to spending cut, but we insisted on progressing on things and investment in medical research. [cheers and applause] now we have to reign in this long-term deficit and deal with this long-term debt because it threatens our financial stability. we won't deal to do all those good things if we don't get our fiscal house in order.

but if we don't deal with these issues, all of the issues we care about educating kids, caring for sick, looking after seniors, all of that will be tried. yesterday i tried to live division to how to tackle this problem. we did on compromises have manifestly, but we can't compromise on investment to grow. the investments we need to create jobs. we've got to reform defense spending. we've got to reform health care spending. [cheers and applause] but were not going to sacrifice our fundamental commitment that we make to one another through medicare and medicaid and social security, the safety net for people. [cheers and applause] and we need to bring some balance to our tax code.

back in december, i agree to extend the tax cuts for the wealthiest americans as much as i liked the only way to prevent a hike on the middle class. but the fact is we can't afford $1 trillion in tax cuts for folks like me. not now, not when so many other americans are struggling, knowing our deficits are so high. i think americans like michelle and me have been blessed. this country is given so much to us. we can afford to do a little bit more to make sure that every child in this country has opportunity in every senior is that after. that is something we can do. that is our vision for america. we have got a big vision for america of a passionate america, a caring america and an ambitious america, not a full america. it is a vision where we are

living within our means, but still investing in our future, wherever one make sacrifices. no one dares all the burden. where we live up to the idea that the matter who we are or what we look like, whether ancestors in the dock ellis island or kenya on slave ships are across the rio grande, we are connected to one another, that i my brother's keeper, my sister's keeper and we want to stay together. [cheers and applause] that is the idea at the heart of america. that is why we are going to keep fighting for immigration reform. because we can't have a nation that forget the immigrants were. we can have a nation that is a nation of laws, but also a nation of immigrants. this idea of bringing everyone together and making sure everyone is contributing, everyone is responsible, but

everyone also looks out for one another. that is the idea at the heart of our last campaign. that is the idea at the heart of this campaign. that is the idea at the heart of america. this is not my campaign. this is your campaign. [cheers and applause] and you now, i've got to tell you, there is going to come a time when i will fully engage in the space. when the time comes, i will be campaigning. i will be ready to go. but i've got to tell you right now, i still have his day job --

[inaudible] [cheers and applause] that is why i'm going to need your help now more than ever. this campaign is still in its early stages, but now is the time you can make sure it gets out of the gate strong. let me tell you, i'm a little dinged up. i know there are times where some of you have felt frustrated he cares we've had to compromise with the republicans on some issues. there've been times people are frustrated because we didn't get everything done in the first two years. there have been times where i have felt the same way you do. but you know what, we knew this would not be -- we knew that on a journey like this there are going to be setbacks, detours.

there will be times where you stumble, but we also knew something else. we knew at each and every juncture in our history, when her future was on the line, when we were at a crossroads where we are now, the country came together. we were able to make changes we needed. that's why earlier like lexington, concorde, stonewalled, blake cornfields of iowa and in wrigleyville and i need each and everyone of you to do one more time not for me, but for us. [cheers and applause] the future we hold in common for the days that lie ahead, so whenever you hear people saying how problems are too big to solve or we can't bring about the changes we seek, i want you to think about changes we've

made in all the unfinished business of life that had. i want you to be excited about the future and lies before us and i want to remind you that want you to remind everybody else of those simple words that sum up what we believe as a people. yes we can. [cheers and applause] thank you. [cheers and applause] ♪ go bulls! [cheers and applause] ♪

staring at the faces in a review mirror ♪ look at the promise of the promised land. ♪ one kid dreams of fame and fortune. ♪ one kid helps pay the rent. ♪ >> about 2000 people expected at the fundraiser tonight. reportedly the invitation said the donors first $2500 contribution will be used during the primary election. the next 2500 or go towards general election and any donation beyond that will go to the democratic national committee. but the three appearances in chicago today, the president first stopped in a series of fund-raising event and he will travel to san francisco and los angeles next week in new york the following week.

♪ only in america ♪ sun going down on the freeway ♪ newlyweds in the back of the limousine ♪ a welder's son and a banker's daughter ♪ all they want is everything. ♪ she came out here to be a knack for actress ♪ he wanted to see her in a band. ♪ just might go back to oklahoma ♪

and talk about the stars they could have been ♪ only in america ♪ be mean and red white and blue ♪ only in america, where we treat them as big want to ♪ if we all get a chance, everybody gets to dance music back only in america ♪ ♪ ♪ ♪ only in america, where we dream in red white and blue ♪ only in america, where we dream

as big as we want to ♪ we all get a chance, everybody gets to dance you >> only in america you ♪ yeah, only in america ♪ where we treat and red, white and blue ♪ yeah, we dream as big as we want to. ♪ only in america you ♪ ♪ ♪ ♪

♪ your love, lifting me higher than i've ever been listed before ♪ so keep it up with my desire and i'll be at your side forever more ♪ you know your love keeps on lifting, higher >> president obama talking tonight about the fiscal policy and the republicans budget for next year for 2012. on "washington journal" tomorrow, we'll get a preview of the houseboat on the budget plan for 2012. we are joined by pennsylvania republican congressman tim murphy and democratic congressman anthony weiner of new york.

recognized. mr. mcconnell: i ask that further proceedings under the quorum call be dispensed with. the presiding officer: without objection. mr. mcconnell: yesterday president obama outline what had ach toent obama outline what had >> yesterday, president obama outlined what he is describing as a responsible if roche to our nation's fiscal problems.tion t and my initial response to thell characterization is with all due respect, mr. president, with ale due respect the american people are not imply to take advice on fiscal responsibility from it in the station is on the president borrowing and spending has done so much to create the mess we're

in.after two years after two years of adding trillions to the debt and ignoring our nation's loomingscl fiscal air, the president may bg right in thinking the politically expedient thing to do is point the finger at truly others. but the truly responsible thing experiment has been unmitigated disaster for the economy in majo driver itself a major, major driver of othedebt and that is -- his inaction on the latter is the primary reason others have beenu forced to step forward and offer a meaningful solution, meaningful solutions of theireoe own. and that is what most people an. already believe anyway. the presidents attempt to stake out the high ground was i suspect hard for many americans to's swallow. despite the president's imaginative account of how we tn arrive at the situation wherein, the american people are welle

past the point of believing washington won't be able to makt good on all its promises if only we let the president and democrats raise taxes.ax americans know that we face a bu fiscal crisis not because we taxed too little, but because we spend too much. rec they do not support the reckless washington spending that has left us with record deficits ane debt and they will not support raising taxes to preserve anbles unsustainable status quo. besides lawmakers on both sidesn of the iona party rejected the kind of tax business through president obama endorsed again yesterday so it e was good for him to try tohtly revive it.efore as for entitlements, the president rightly acknowledge before we know the government ce takes medicare, medicaid sociali security in the interest on oure debt. last what he didn't say is that thear

health care bill he signed last trillion dollars out of medicare to pay for an entirely news entitlement that could be just as unsustainable as the caremiie itself and a which forces nearly 20 million more americans into a medicaid program, which is currently arranged his banker s. developers dave. socia so the president can claim to bm a great defender of the social a net. he may claim to stand for no provision of america than those who disagree with v him. for but the facts speak forwhen it themselves. when it comes to preserving the social safety net, theddress president's proposal simply did not address the things that havo caused our most cherisheurd entitlement programs to be unsus unsustainable in the first t place.round instead, the president would simply tinker around the edges,g and leave the hard work for others passing the buck to future presidents. and i just won't cut it anymore. americans are paying attention.

they know the fiscal policy we r face will not be sole.ved by mor continuing to jump to destroy policies that got us here. what is for the centerpiece of the president's proposal, the on tax hike on top earners mayhosey sound appealing to those whose primary goal in the debate is to protect the government. but looking at the most recentpo data, "the wall street journal" very morning that even if we were to lay claim to everyry taxable dollar -- every taxable dollar of every single american who was more than 100,000 a$100, year, if we lay claim to every taxable dollar of every american who made over $100,000 a year,we we still wouldn't raise enough 6 to cover the $1.6 trillion deficit in the president's take all of the tax money from everybody in america who makes y

over $100,000 a year, take it all,ea wouldn't cover the deficit for this year alone. the best way to bring down the debt and create the climate that will lead to good private sector jobs ands prosperity is not to repeat the polyps sent the past, but to change them and thateziny means cutting washington spending, not squeezing family budgets even more.portunit throughout the day today,on thot senators will have an opportunity to debate a down payment on those cuts for the rest of the current so i would like them to come to' the floor to discuss the proposal. after that, we'll move on to even more far-reaching debate,ut not about millions, but about trillions. t wills the debate tha show americans exactly where their elected representatives f. stand on facing up to the fiscal challenges we face. republicans are looking forward to d that debate and that brings me to a final point.ut the sizea

yesterday the president said tht debate we've been having innumbr washington about the size and scope ofs government isn't about numbers on a page.ry it is about the kind of country weel believe in. but he left an important point and that is this: there are a r great many people in washington and beyond to agree with them,he but to also believe in their court that the approach he has taken over the past two years represents the greatest single threat to the very future hea envisions. america will not continue to be a great nation unless we are fue able to keep our promises to current and future generations and stop spending money we don't at fut have.ur e the greatest obstacle to the future is not the everyday americans who want washington to balance a check book for thoseed who look to where the it.