medicare fund trustees released their annual report on the financial solvency of the federal programs. manual here from two of the trustees the future outlook. the forum was hosted by george mason university. it's an hour and 20 minutes. [inaudible conversations] >> good afternoon. that afternoon. we are going to go ahead and get started. i know people are still sort of coming and then you need to visit the buffet and that's fine. please continue to enjoy lunch. in the interest of time, we like to go ahead and get started. i know our panelists has

panelists only want to get underway. i am jim messier. i am director of economic education at the mercator center at george mason university. as i am looking around, i see some old friends and welcome back to you. a number of you i don't recognize, some new friends, welcome. i hope this is going to be the first of a number of kinds of events shall join us for. i think today's program should prove thought-provoking and interesting to you. it is our commitment as an organization to do solid, university-based academic peer-reviewed scholarship. it is always informed by economics regardless of the issues that are scholars are working on. but we try to make sure that we are bringing new programs and research that is timely and going to be useful in your work in the policy world. economics permeates everything

and certainly permeates the way we think about things. we can tell you what kind of political decisions you need to make, but we can help you to ask the right questions and that is our job. for those not familiar with the mercator center, we are based on the arlington campus of george mason university. a short trip across the bridge and we are here to be helpful to you. please feel free to colonists. amongst her brilliant scholars is your moderator for today's program, dr. jason fichtner, a senior research fellow and previously served in several positions at the social security administration. he is uniquely qualified to moderate today's panel. jason was the deputy commissioner of social security, chief economist and associate commissioner for retirement policy they are. but it is much deeper than that. prior to social security administration,.dirt fichtner

was with the joint economic committee in his primary research interests are social security and federal tax policy and budget issues to increase savings. the career with the research division of the internal revenue service, where he forecasts return volumes and developed econometric models to assist tax compliance and administrative initiatives. he has received a bachelor first degree from the university of michigan in ann arbor in a public policy degree from georgetown university and his phd in public administration and public policy from virginia tech. he served as adjunct faculty at georgetown public policy institute at virginia tech center for public administration policy about where he teaches courses on public policy process of public management and budgeting processes and i think you're about to add another university to johns hopkins.

without further ado, i will turn you over to my very learned colleague,.or jason fichtner. [applause] >> good afternoon, everyone. thank you for coming to the event. my name is jason fichtner, research fellow. i was recently at the administration we had the privilege of serving in every positions including deputy commissioner and chief economist. while social security, one of my responsibilities is to say the secretary to the social security board of trustees. the trustees consists of six members. the secretary of the treasury, labor, hhs and commissioner social security along with those for our two public trustees nominated by the president and confirmed by the senate. unfortunately over the career switch over to the trusty reporters, we didn't have the benefit of the trustees. those positions were vacant.

an unfortunate circumstance i'm glad it's been wrecked beside a confirmation of charles bob wallace and robert reischauer. before he introduced a series blahous and reischauer, 50 million americans rely on social security for a dignified and secure retirement and about 47 and leaving americans with in 2010. approximately 150 million people are payroll taxes. these programs are just for the old. spouses, spouses of deceased workers and children and social security is also disability insurance program. i thought the trustees of social security and medicare released their annual update on the financial status and health of these two programs. though i don't want to steal thunder from our panelists come a few quick highlights are important for the discussion. social security now faces a permanent cash flow deficit with

respect to payroll taxes no longer put in enough revenue and to cover benefit payments. today the social security trust fund is now 2036 for the combined trust funds this breaks out into the retirement fund. the da program to trust and is expected to become insolvent in the next several years in 2018. insurance trust fund is not expected to be insolvent in 2024. this is five years earlier than last year's report. they have repeatedly warned the reform is necessary. that is importune reform also have been sooner better than later. without reform, social security would eventually be able to pay for three fourths of scheduled benefits in 2036. medicare also faces funding

shortfalls. after 2024, tax income alone will finance costs and assign 26% of jobs in 2050. yet attempts by various politicians and policy groups over the years to drive change, it seems true reform is difficult to actually achieve good this morning, senator lieberman introduced or announced in the "washington post" to reduce legislation to reform medicare including increasing eligibility age. the reform takes place in the legislative process. today we're honored to have with us for two public trustees of social security and medicare trust funds. first off i want to introduce dr. charles blahous. charles blahous hoover research fellow who serves as one of the two public trustees and social security and medicare programs. in 2,722,009, dr. blahous served as deputy director of president bush's national economic

council. in 2001 at 2007 he served as assistant to economic policy. even a variety of issues that the senate as a staffer. he's also done a recent book on social security with unfinished work and pensions lives confronting employers pensions, understanding and other various publications on each 21. dr. blahous is a phd in quantum chemistry at the university of california and a basher from princeton. are there public trustee is robert reischauer, president of the urban institute and second in the public trustees. a former director of the congressional budget office or before that he spent at the brookings institution since 1995. dr. reischauer serves on the board several educational and nonprofit organizations. he was a member of the medicare from 2000 to two dozen nine and was vice chair from 2001 to

2008. he's very knowledgeable and medicare payment issues. dr. reischauer hocus-pocus science from harvard and phd in economics from columbia university. chuck and bob alicia provide a presentation. check woodrow social security and social security bubble tackle medicare or after the presentations, i'll provide comments and start a discussion. we'll then open the floor for questions from the audience. chuck and bob are two of the most respected political servants -- political servants in d.c. in public service upon the pleasure of working with the nighttime in d.c. before check presents, please join me in welcoming both chuck and bob here today. [applause] >> thank you very much for that warm and generous introduction. i want to begin by thanking the murky the center for putting this important event together. i want to thank jason for his kindness in opening remarks in the region as for reaching out to me and dr. reischauer.

before it began, i would like to say it is a great privilege to be a part of the trustees process. i've been particularly fortunate with dr. reischauer is an ideal partner in this work and certainly has been just varied in form very rewarding to be associated with what i believe is a very vigorous process of projecting social security medical or finances which is serving the public quite well. as jason indicated, our charge is trustees is to report on the financial health of the social security and medicare trust funds. and that's an important thing to specify because if you talk to people about the trust funds that social security and medicare, look at a lot of different views of trust funds. at the end of my remarks today, i would like to leave you with one editorial comment, which is

basically come and try not to get too caught up in what is sometimes a metaphysical debate about what the trust funds are and what they really mean because the bottom line is regardless of which side of the trust fund issue one looks at, you are right at the same conclusion, which is a hefty deal with finances social security and medicare. simply in the interest of spelling out on the trust funds work and what are the different sources of income to the trust funds, obligations of trust funds, at what i would do is begin or walking through some nuts and bolts of trust and financing is manifested in 2010. basically, this table shows the trust fund operations as they occurred last year. read about $713 billion in annual expenditures. the vast, vast majority of benefit payments in extremely administratively efficient programs. in terms of revenue services cannot trust funds have a lot of revenue source is.

some revenue sources are for not need the government. some of them are revenues that are transferred from one government account to another government account, the theology of the balance of the social security trust fund. by far, the largest source of revenue is the social security payroll tax. there's a 12.4% payroll tax levied on workers which compensation. there's an additional 24 billion or so they came in last year from taxation of social security benefits. so if you want to just stop right there and answer your question, what is the balance of program operations with respect to the balance of income in tax revenues the program is bringing in an outgoing benefit obligations program is sending out, you would find my sugar program renewed deficit of $51 billion that would be how you look at the program if you're going to look from the unified budget standpoint. the revenue outside the government coming in and revenue being sent out.

excuse me, obligations being sent out. he on that, there was another 2.4 billion last year in general fund reimbursements. a relatively small amount. that is going to be a bigger number this year in 2011 because we've had a temporary reduction in payroll taxes that reduction is going to be made up a larger reimbursements from general revenues. last year and in most years this number is quite small. for the fallout that to a total non-interest income level of 664 billion or so last year. now if you read through the trustees reports, you'll often see references to non-interest income, basically if you're looking at the net balance of the trust funds over time, the net actuarial balance of the system, their places in the trust fund that distinguish the money that was originally deposited in the trust fund in the interest earnings upon the original deposits. the non-interest income basically refers to the first of

those concepts, the money directly in the trust fund before it earns interest. put that together anybody not interest income deficit relative to expansions that are to 9 billion you'll see that referenced in the summary. the trust fund currently has a balance of $2.6 trillion. the balance earns interest. those interest payments are made from the general funds to pull security trust funds. when you have sources of income last year's social security had about $781 billion in total income, causing a net increase in test friend of a 69 billion. so basically those in the nuts and bolts. different people emphasize different sites if you want to emphasize with happy with the trust fund and that the trust fund is to raise income you look at the increase after 69 billion. if you want to emphasize the social security operations from unified budget standpoint, you would look at the 51 billion deficit figure. this is basically to walk you

through those different nuts and bolts. now, going forward, a lot of things and the trustees report are spread as a percentage of taxable payroll. basically as a percentage of social security's basic payroll tax. the program is predominantly financed by a tax levied upon wages earned by workers. if ui sense of how much the program is costing workers and employers, you look at these tables, which translate everything into percentages of those amounts. whatever draw your attention to on this graph is a couple things. one is last year in 2010, you have a deficit of expenditures over tax income for the first time since the mid-neds. what is new in this year's report is the findings that the era of tax income relatively benefit expenditures are now a permanent feature program

finance. this is the first such trustees report censored than public trustees that it's made such a finding. the other thing important to understand is how costco in the future as a consequence of population aging. if you look where expenditures were in 2007, before baby boomers started claiming benefits and before the recession had, it was about 11.5% of the tax base. that cost rate is going to rise to 17 cents on the dollar by the mid-20s 30s. as i will explain a little bit more later, predominantly reflects population aging. now, it's a little bit disguise because if you look at this graph, you'll see a spike in costs could prevent 2009. of course that is the recession. the recession persist the gdp. the recession stimulated and if it claims, especially disability claims. if you work for that fight, what we see on this chart is a pretty

steady, uninterrupted growth of cost stretching from about two dozen eight through 2035 inclusive. what ultimately happens in 2036 under current projections is the trust fund would be completed at that point they would only be enough revenue coming in to fund 77% of benefit obligations. an important point to make is this in no way implies we have until 2036 to solve this problem. obviously, that is the nightmare scenario, which i will describe a little later. even by 2020, if you look at the relationship between annual expenditures and income in tax revenue, the gap would be larger than ever before experienced in social security, even in the so-called crisis of 1977 and 1882. so while we still have positive trust fund for several years here, they should not be taken that we can wait till the

2030s for program finances. another cross appears very similar. it shows the same cost growth as a percentage of gdp can be useful primarily for understanding social security in relation to medicare. you can't prepared to payroll taxis. as a percentage of gdp coming you can see the relative cost growth in each program going forward and you concede they have very similar cost to the mid-2030s based primarily on again population agent. if you look at this picture, this is the ratio of covered workers paying in social security per beneficiary. if you look at it carefully, you'll see it is almost the reverse of the dishes you in the previous chart. as the reissue is going down cut annual costs are going up. population aging consist of a number things. integrity is one of them.

sometimes people think of population aging, they equate that with longevity. the reality is very different contribute factors to population aging. even if we can have longevity growth, we would have substantial population aging over the next century simply because the ratio of people in the population at different ages is training as baby boomers get the ranks of taxpaying workers and enter ranks of beneficiaries. right now there are about three workers who support each person receiving social security benefits will be closer to two to one ratio by the mid-2030s. jason rattled off some figures in his opening remarks, but it wouldn't be a trustees report that there weren't certain summary numbers that are going to reports on trustees findings has to know. one is that under current projections for social security trust funds, combined trust funds be exhausted by 2036. separate trust funds and social security are in very different financial conditions.

the osi, old-age survivors insurance, the retirement program is not going to be depleted totally 2030s, but the disability insurance trust fund this project is to be exhausted by 2018. in 2036, if we were to delay resolution until that date, we would have basically -- i would go so far to say almost an insoluble problems that you have to reduce benefits by 23% across the board are high for taxis to 64% or the equivalent. you cannot get later into by the actual problem is even larger than those figures probably imply. a third member important to know is the so-called actuarial balance security. that is 2.22% over 75 years. it's expressed as a percent of taxable payrolls. that's a traditional way of expressing in the trustees report to show how large the

shortfall relative to the program's tax base. now that is not a figure that tends to fluctuate wildly from one year to the next. but by the standard of social security history, we've had a pretty large swing in the last year. we've had a deterioration of 0.30 in the previous year's report. the section of the largest single year deterioration we got along with comparable deterioration in the 2000 report are the largest single deterioration in an airport since 1994. we don't tend to have large wild swings from one to the next in social security simply because relative to medicare, most of the fact there's determining social security financing the future are well known already. and if it's peter but the next quarter century are already occurred. baby boomers have heard he been born, the party not have as many children as their parents had. those factors are all quite well known. you don't seem to have qualitative shifts in projections.

the 0.0 changes a pretty large one. i'll get the reasons for that later. there isn't a trustees report an attempt to put the size of the shortfall in the present value terms. a present value of $6.5 trillion. you say wait a second that doesn't account for the cost of paying off the trust funds. if you want to throw that income is $9.1 trillion unified budget shortfall. let me just say one thing about this number in.or reischauer can neither associated or disassociate himself with it as he chooses. my view is that these numbers, while they are important and we put them in the report, i tend to caution people they shouldn't put members like this. present value tax relations summarized over really long spans of time are incredibly sensitive to these rates. if we as a 2% discount rate or a

4% consider the 2.9% of this company, those numbers would look very, very different. so yes we put the numbers in the report and people have a desire to see a single number shortfall associated with social security, but i would caution it's usually imprecise. the final thing of cms chartists in league is often observed in the trust fund balance of social security still rising due to interest payments made from the general trust fund. and that is true. we have to remember that the trust fund is fair to finance benefits. in terms of its purchasing power to finance benefits, that is 30 begun to decline. the so-called trust fund ratio, which measures duration of the time the social security trust fund can finance benefits and payroll tax revenue peaked in 2008. the reason for that obviously is he shares rising faster than the trust funds. so yes, trust and is still rising in nominal terms about

the purchasing power is actually declining. here is the pie chart, which i stole her previous presentation with dr. reischauer, but basically this show is basically what is the main reason for deterioration from usher's report to this. bottom line is mostly longevity. we're living a bit longer than previously projected. that is the lion share changes for the democratic assumptions that there is actually a piece in the map it's another data, which also is longevity based, basically the way which we extrapolate forward longevity trends in the near term is influenced by recent on jeopardy trends. the piece of longevity in both of those slices of pie. overall we look at roughly half the deterioration this year coming about as it increase on jeopardy. here you can see this is a trend that takes place in the last few trusty reports continuing at dates of mortality data at death

rates so we live longer than projected in the last few reports in this causes a bit of a worsening in the long-term outlook. they further point jamaica simply that certainly relative to medicare, really relative to most areas of government productions, the qualitative nature of social security shortfalls is really quite certain. one other thing is frustrating to me as a social security analyst of the last few years was what he regarded as an urban legend that had risen, but somehow the projections for the social security shortfall were suspect and perhaps a little more optimistic reductions the problem might go away by itself. you don't hear as much anymore found that social security finances are substantially worse than previous trusty reports are projecting. it was actually never true. each are trustees are pretty probably stick analysis in the report that shows how the picture changes that you make any substantial alterations in the underlying assumptions for

demographics and economics. and as you can see here, you look at this fantastic series of scenarios and you see the basic -- the same basic story for the decline of the trust fund in the years to come. the 50th percentile probability has the trust fund exhausted in the 2030s. even if you don't intend or centile to the 90th of others containable scenarios, were looking at just a span of a few years in terms of the difference in the trust fund exhaustion date. qualitatively we'd be quite certain this is going to play out for the most part is currently projected. if returning to dr. reischauer, want to make a couple bottom line points to vp with. one is a point emphasized in the trusty report repeatedly that the earlier behalf to do with these problems, the better off we'll all become is certainly the better off foldable populations will be in the better were able to protect

people receiving benefits, people on the low-end and so forth. second is the point i hinted at before. obviously the trust fund is important asset for social security are things people say about the trust fund on different sides of the debate are all true. he has come a real asset to the social security program. on the other hand, not a net asset as a whole. yes, the interest earned by the trust fund adds to the balance of the trust fund for social security perspective. the same time, interest payments made to the general fund don't improve the deficit outlook of those perspectives are all important. what is most important is no matter how you look at the trust fund, we still have a problem to solve. whether you look from a trust fund give, you still have the same story, which is dear much better off dealing with the program, dealing with the shortfall earlier rather than later. the final point would make it simpler that we have a trustees report include various illustrations of how much we have to exchange benefits or

taxes out versus 2036. but in reality, i would suggest that because decision-makers have to do with practical policy constraint committees, these illustrations we put together would probably understate the case. and the reason is that policymakers don't want to do certain things. they don't want to cut benefits and they do want to cut benefits for people already receiving. if you look at the scenario i outlined earlier, we would have a 22% benefit reduction in 2036 in the absence of legislative action, that assumes we be content in 2036 to allow benefits to be cut 23% across-the-board for people receiving them, including the poor 90 federal would've spent on the rules for decades and has no opportunity to get more retirement income. i vesely policymakers to want to do that. historically social security,

policymakers want to make changes prospectively so they affect future retirees rather than people in retirement. take that into consideration until the delay amounts much more quickly than ulceration show. in 203651 all benefit constraints to apply prospectively, you would have a system in balance of 100% is an offense for new retirees cut off. to start work into the problem that words can be realized if you want to avoid an unprecedented level of tax increases and avoid changing benefits no one retirement, our window of opportunity for effecting a solution that works within those constraints closes quite soon. so don't get too caught up in the trust fund at josh and dave. don't get too caught up in the trust fund metaphysical debate. in terms of practical policy constraints, this problem is approaching ice much sooner than the trust funds point of exhaustion. and with that, i hope i can turn this over to dr. reischauer and someone else can figure out how to get the next presentation a.

>> thank you. [inaudible conversations] >> okay, i want to start by thanking jim and jason and the folks at iraqi designer for providing us with this opportunity to have a dialogue with all of you. i work to appear on adult toys, six years each. and i know how important that the rule you folks play in development of public policy and the explanation of public policy to the american people. and so, it's always a great opportunity to have a chance to

dialogue with you. i'd also like to reiterate chuck's evaluation of the role as public trustees. it's been educational i think for both of us. we've had a great construct is relationship and they think we have made positive contributions to the continued excellence of the trustees reports, which we hope serves you as well as the american people. like chuck, i am going to begin with just a few remarks about the medicare program, some descriptive materials. that is because the medicare program is really unbelievably complex and especially for a relatively young crowd who is

immersed day and i cannot care issues. medicare in fact medicare is not like the health insurance you folks have, which comes in largely a single package. at times in three components, divided into two large categories. ..

it also has some incumbents that comes from interest earned on the balances that are in the trust fund and a bit of income from premiums paid by those individuals who are not eligible for medicare but choose to buy yen, but this is a tiny fraction of the total. the important difference in the payroll taxes between social security and medicare is the medicare taxes imposed on earnings without limit whereas the social security program has a maximum amount of earnings subject to taxes.

there's also a bit of income that flows to the trust fund that comes from taxing the benefits of higher-income social security beneficiaries, the portion of their benefits that is subject to an income tax part of it goes into the social security trust fund, and some of it goes into the medicare trust fund. like social security, medicare hospital insurance can only provide benefits to the extent that money is flowing into the system from all sources each year and when that money is short of the amount one needs to pay for benefits there are resources and the trust fund that can be drawn down, and so it is a system that is very similar to social security.

the other components of medicare are called a supplementary medical insurance, and one of them is part be, and the other is part d. both of them are voluntary. those people who participate have the option of signing up for one or both of these other insurance is. and the vast majority do, over 90% of the beneficiaries sign up to receive part b and 70% sign up to join part b. part b covers physicians' services, outpatient hospital services, diagnostic tests, lab fees, a bit of home health and medical equipment, ambulance, things like that. people who participate in part d

are charged a monthly premium. the premium right now is set at $96.40 for most that for reasons i won't get into about a quarter of the participants paying $115.40. the rest of the cost of the program are picked up through general revenue. part de provides prescription drug coverage through private plans, the most recent addition to medicare. the average premium for this kind of coverage is $31 a month, and it is set to cover about a quarter of the cost of the standard benefit package. but both part b and part de have

subsidies for low-income participants. so if you have low-income, you're premium and some of your cost sharing might be picked up through payments of general revenue, and if you have high income, income above certain thresholds, you are required to pay higher premiums. so the income the premiums of these two components of medicare. now, post part beyond part de have distinct trust funds, sounds just like part eight, hospital insurance. but in fact it's quite different, and it's quite different because the funding for these trust funds can never be depleted. as i have explained, the premiums that form one stream of revenue into the trust funds are set to be a fraction of the cost

of the benefit. and the balance is made up through general revenue and the treasury automatically replenishes these funds with sufficient general revenue to ensure that they will never run out of money. so that is sort of the confusing picture of what the medicare and false. now let's go on and talk about some of the components of the trust fund reports that are of interest. the first point that i would meet is that since 2008 medicare spending, hospital insurance spending is exceeded in come and it is expected to continue into the indefinite future. this in fact is a new development in the sense that last year's report and previous reports have projected that when the economy recovers, the inflow

would exceed the outflow although only temporarily. so the fact that we are looking now at the future that involves nothing but years in which the program costs more than the income flowing into is a new development. for a number of years, we've known costs were going to exceed income, and as those costs grew, the trust fund would be depleted. we would take money out of the trust fund, and it to the payroll taxes and other income that are flowing into the trust fund to pay benefits each year. the trust funds balances at the beginning of this calendar year

or 272 billion which was about 122% of medicare spending, a mere trifle when compared to what chaka was talking about with respect to social security. but important nevertheless. this year's trust fund report project is the trust fund will be depleted by 2024, and this is about five years earlier than was projected in last year's report. after -- i am a few slides behind. this is a picture in which you can see the years in which the trust fund is being depleted and then in 2024 we have a gap, and

at that point, the medicare program absent changes to either cut cost or increase the revenue flowing into it would not be able to pay for full benefits, and the size of the gap in the year after depletion will be about .45% of taxable payroll implying that we would have to raise the payroll tax by 4.5% percentage points to make up for the gap, and the gap what grow to 1.26% of the taxable payroll by 2046 after which it would gradually decline through the projection period.

>> there's a few slides missing. i don't know where we are here. >> do you have a hard copy with you? [inaudible conversations]

>> this is the one they got electronically. we will load his hosam -- load his thumbdrive up. [inaudible conversations] >> i guess while we are finding that we will switch gears a little bit while he's trying to find a slide and chuck has a brownie in his mouth. [laughter] one of the things we are hearing over and over again, the cost challenges with those programs,

and as mentioned, there is a need to sort of look at reform now as opposed to leader and one of the issues looking at the social security is that if we were to act today we could reform the program and hope beneficiaries harmless. we could make sure those who are either age 50, 55 and above as well and he made this point because you want people to have time to make changes and plans and if you make it today for someone who's 25-years-old and they have got a good 30 years or so, 25, for 30 years but they can plan and save more for the retirement. if you change the program and 2036 and have a 25% tariff cut in the benefits that's going to impact their ability to have a dignified and secure retirement and so may be quickly you can address without any idea of the social security reform and to reform the system today what kind of leverage should we be looking at, how do we actually understand and look at reform?

>> is my microphone on? >> yeah. >> i want to be very careful obviously not speaking as a trustee and certainly for my fellow trustees, but i think there are on this day three or four letters one can think of and one is the eligibility age. that is a liver that works on the retirement program site. it doesn't do anything on the disability insurance side, but i would say a large number of proposals make changes to the eligibility age for good reason. we are living longer than when social security was established, life expectancy 65 is now about six years longer than when social security was first established and a typical claim is claiming benefits three years earlier because we created early eligibility at age 62 years after the original design of the

program you couldn't claim the benefits until 65. at the same time we had a number of benefit increases in the benefit formula over the years so not only are beneficiaries claiming earlier but they are actually claiming heitor benefits even in the relative sense that these earlier ages of claims. so even just to get back to where we started of the program plan alone to take into account the launch of the changes you have to make substantial changes to the early eligibility age and a normal retirement going forward which is why you see a lot of proposals doing that. you also have a significant cost growth driven by amendments made to the program in the 1970's. basically there was a system of benefit growth put in place and the 1970's that is and affordable in a stable tax rate with our current demographics. so a number of proposals slow down the growth of benefits and tend to do it in a progressive

way to make the benefit growth constraints higher on the high income or more on the high income and, and then the other two obviously our tax revenues and the work incentives and the program but i'm going to stop there if we are ready to resume on medicare. >> keep going. >> social security is a bigger program. >> but obviously the commission did a couple provisions would bring revenues to the program and a provision bringing state and local workers and the payroll tax revenues increasing the cap on the taxable wages, and i personally have done a lot of work on changes to the work incentives and the program. there are a lot of ways in which the current design of the program incentivizes people to leave the work force when they hit the 60's rather than paying a good reward for staying in the work force and this reflects the program's 1935 designed to move people out of the workforce who

are seniors or spouses to make room for younger people who couldn't find work during the depression. we have the opposite problem now in the 21st century where we have millions upon millions of baby boomers to part in the work force the next couple of decades and yet the program instead of giving incentives to stay in the workforce is giving many incentives to leave it and with that i will consult again and see if we are ready for medicare. >> a very interesting situation. several slides seem to have been eaten, and in mine just before this and they are not here so if they saw the slide as malicious element which manages to swallow the other slides the actuaries are very powerful.

so, what i was going to show you is a little hard to show at this point. what i had was a series of slides that show what the 2,009 trusty report projected and what the 2011 trustees report projects. 2009 was the last year before the affordable care act came to be part of blah, law and in 2011 projections showed a very pronounced improvement in in the outlook for hi medicare and medicare overall. it didn't solve the problem, but it got to third, two quarters of

a way to the solution and left a huge gap to be sure but less huge than the situation was before. the next slide went into the fact the projections that are in the 2010 and 2011 trustees report depend critically on the nation adhering to the cost-cutting measures that were in the affordable care act and ones that were in the current law right now before the affordable care act one of them is of the sustainable growth rate mechanism which tries to hold down the growth of costs on the physician's fee schedule

surface, and as i think all of you know, under that mechanism we are scheduled to have a reduction of 29.4% in physician fee payments on the first of january, 2012. many people have questioned whether we will comply with that. we have had very severe cuts required over the last nine years, and the congress and the president have not adhered to those and instead have substituted small increases or freeze on of the physician payment schedule. so there is a legitimate question of what we will do going forward but you should remember all the numbers you see in the trustees' report assume that we are going to impose that

discipline and stick with it. the affordable care act adds another important cost constraint, and that was to reduce the size of the annual updates that the various providers other than physicians get, various institutional providers, hospitals, home health agencies, skilled nursing facilities and others all get an automatic increase in their payment schedules that is based on the growth saying we will compensate you with the fact energy costs have gone up, the cost of hiring secretaries and clerks and other folks have gone up, so we will adjust all the payments by 1%, 2%, whatever the

estimates are of that sort. the affordable care act said we will continue that system but we will make an adjustment, and the adjustment is to subtract from that automatic price increase a measure of total factor productivity growth averaged over the past decade, which is about 1.1 percentage points, and so rather than getting an automatic adjustment for the underlying cost growth, they would get hospitals, nursing homes would get somewhat less than that. and the question is can they become more efficient every year and survive in that situation or are they going to say we no longer want to serve medicare beneficiaries or the quality of services might be in too

deteriorated in any case there is a question of whether we can hold this line going forward decade after decade. because of this uncertainty, the trustees had to ask the last two years that the actuaries come up with an alternative projection, which is available on the web. it's not part of the trustees' report, but it's worth your while to go and look at, and it answers the question what if we couldn't impose or decide not to impose the cuts required by the sustainable growth rate on the physician fees and instead we reverted back to the underlining authority which was that the position fi schedule would go up each year according to the medical economic index which is an index of the crisis faced by

physicians - a productivity adjustment. what if we phase out the productivity adjustment reductions called for by the aca over the 16 year period after 2020? and it changes the outlook rather substantially. i'm going to skip over those. and what and this shows you hear is the 2009 trustee report and has a fraction of gdp. what there would be in 2011 according to the trustee's report assuming we had here to the discipline that is embedded in the current law, and then the middle line would be the

alternative, what happens if we can't impose this discipline we have agreed to impose, and what it suggests is that over three-quarters of the savings were the improvement that we hope for after the affordable care act was enacted would disappear, and we would have a very big challenge remaining for us, even bigger than the one that faces us if we can succeed and that was the happy note i was going to leave you on because that is the challenge that you and we have going forward over the next decade or so. thank you. [applause] thanks bob am sorry for the

technical snafu. i do want to leave enough time to have a q&a that i want to ask you for the same question i asked why we were looking at the slides as we go through the process of assuming you feel the same way chaka does and i do we of to look at the reform sooner rather than later but how should we look at the reform as you mentioned in the presentation with rick foster who stole the slides has actually been pretty vocal saying he does not think that the cost savings that are in the aca are going to materialize, so what do we need to look at been thinking about reform, what do we need to do to get the system back in for medicare? >> i'm a believer we are not krin to fix medicare unless we fix the health care system at large. we can squeeze down here and press down there, but we can't

make the pro beneficiary cost and medicare substantially below what they are for you and me and then on public sector providers, and that doesn't mean we have to do the same thing in medicare has been done in the employer sponsored world or the individual market world. but we have to tighten a lot more the incentives in those areas to make sure that all of the -- the very hopeful innovations that are being tested now in the employer sponsored market get turbocharged and solidified. we are going to go into a very difficult era over the next few years in which we have supply

constraints in the sense of doctors retiring, physicians wanting to live normal lives, and other constraints, and increases, increasing demand from the expansion that are likely under the affordable care act and if the affordable care act is modified in some way there's going to be increased demand so it's going to be hard for employers and insurers for plans and moving forward in an aggressive way to moderate we need changes in the delivery systems and payment methods and the balance in that will make whatever changes we want to make in medicare viable.

>> and chuck, do you want to add anything to that? >> i don't have that much to add. i would say two things. one, we as trustees are somewhat constrained. obviously one can speculate as to whether or not we think the cost savings in the affordable care act are going to hold over time and obviously if providers are unable to make the sorts of productivity improvements that are implicit in the law and therefore begin to experience a substantial wage between the input cost and endorsements in medicare obviously that is going to increase political pressure enormously to override the cost-saving measures, but that is a set of political predictions and we as trustees

frankly are not especially well-equipped to predict what is going to happen from a political economy perspective going forward and that one point that i often make is people were giving the trustees' report or at least as good at making political predictions as we as trustees and we are bound to show the consequences of the current law on the assumption that they play out as an efficient. i would add my agreement to the comment but obviously if there is a wedge that develops between the rate of cost growth on the private insurance side and on the medicare side, obviously it's difficult to sustain that over time. >> i would like to say i'm not predicting that these things won't be successful. i think that there is an awful lot going on. some of it very innovative. there's also a lot of pressure

from individuals and employees and others they want to see a modification in the growth and they will tolerate changes in delivery systems and organizational structures that may be five or ten years ago they were less willing to accept. so why can spin out a scenario on either side of this and i think agnosticism is the appropriate position for anybody to do. >> even remaning at maastricht the programs by the challenges that both programs face our real and require more attention than kicking the can down the road. >> absolutely. i would say we know they are free on both sides. on the social security side they

are easy to kneel down and qualitatively things aren't going to look different from the way we are projecting. on the medicare side, the potential projection on certainty is enormous but i think we can be certainly we are low balling the shortfall because we are assuming the cost saving measures are going to be effective. >> with that we do have some microphones. i think you're going to stand up front so people can see the camera. if you have a question, up front and state your name and affiliation and make sure you ask a question. >> house oversight government reform committee. i have two questions one for each of you. i'm wondering what happened in 2018 when the trust fund doesn't have any money left and could

you talk about in 2000 talk about the medicare mechanism that's been highlighted recently, with the president is supposed to do and comment on why she hasn't done what he's supposed to do in that respect. thank you. >> on the disability side, basically each social security trust fund has to be solvent from the individual perspective, they are not allowed to borrow from one another so in the absence of legislation in 2018, we would have delays or reduction on the benefit payments when we hit the point the trust fund depletion. now, there is a thing that is section 709 we have to issue basically if we show the disability trust fund getting down to a trust fund ratio of 20 that means the net assets in the trust fund sufficient to fund benefits for one-fifth of the

year then we have to issue a warning say interest on the depletion is eminent and action needs to be taken and we issued this year because we will hit that 20-point and total exhaustion in 2018 so the short answer is we will have an interruption or reduction in benefit payments in 2018, and we testified on this issue in front of the ways and means subcommittee just last week and there was discussion about whether or not measures need to be taken, whether the tax rates would be relocated or other measures taken to make sure that doesn't happen. >> and they could also relocate the tax and put disability. >> and that has happened in the past. that happened in the early 90's when we had a similar situation where the disability fund was getting very low.

>> with respect to the 45% trigger a number of years ago the congress passed a proficient -- provision that said if medicare depended on more than 45% on general revenue, the actuary should take notice if this occurred within the first seven years of the projection period meaning the current year and seven years further out. two years in a row, a warning was issued which required the president in his next budget, which would be next january, to provide a measure that would get the general revenue contribution down below 45%. that situation has occurred for the last seven years, and you were right to say so what

happened? the congress at times waved the requirement. the president in some instances has offered a proposal which has been largely ignored in this program like some other triggers that we have to be in effect will. this has happened under both democratic and republican presidents. >> i read this morning that the administration is considering another tax holiday, and we had one last year. can you explain for social security and medicare what is the impact of these cuts in the

payroll tax for the sustainability of the programs, the solvency of the programs, and whether there are other ways to go about, the real consequences in the programs >> it really depends on what is the size of the reduction and the duration and are there revenues provided for the trust fund to reimburse any revenues lost in the temporary reduction in the payroll tax as two points which is taking place this year which would have if no other measure had been taken would have reduced revenue to the trust fund by over $100 billion. if congress did at the same time is it said we don't want there to be a reduction to the trust funds so in the same legislation as a provision that said to the extent the people tax reduction reduces revenue to the trust fund we are going to put general

revenue beckon to reinforced the fund so there is no net effect, so basically there is the people tax cut enacted last year but was an explicit content to hold the trust fund harmless. basically what that means is that there's an additional debt held by the trust fund. for the most part when people think of the trust fund balance, and they think of it representing sort of the accumulated value of past excess surplus taxes paid by workers but it's not always that. sometimes it can just the money put in the trust fund that doesn't reflect the contribution. for the most part it is that some there are exceptions. if they did a similar things like to points of the employer's side and avian affect of 100 billion unless they took some actions to replenish from the general accounting.

islamic i have my own opinions. >> this didn't reflect medicare at all. this is getting out to working americans in proportion to the amount underneath the taxable maximum of social security and this was an easy mechanism for doing it. i don't think if there had been another device for providing a tax cut would necessarily would be selected. estimate whether it is a good or bad policy the result is the federal government had to borrow more money to finance the payroll tax cut made at some point down the road with more borrowing or higher taxes or reducing benefits. is that correct?

>> and obviously i have written on this in the past so on my own view is whether it is good or bad, but let me just say to the extent of the trust fund and explicit tight between worker payroll contributions and benefit claims i think this weakens that in a sense because basically you're saying there is a piece of the trust fund that doesn't reflect the contribution and we are sort of putting in the general revenue will finance benefits in the future. whether that is good or bad depends how seriously i think you take this concept that basically social security should be paying its own way. another question? >> line with dr. paul in the

subcommittee and my question i hope this is in your purview regarding the form. ravee sgr rumsfeld and the physicians would receive a 29% reimbursement cut. are there any mechanisms or things that also limit reimbursement to hospitals and insurance companies or is it just -- is it sold the legislation that is essentially -- >> the sgr so we applied to the physician fee schedule there is a whole lot of other things beside physicians getting paid under the fee schedule. there's other professionals and certain applications that are in that schedule, too. but that doesn't affect tall

hospitals or skilled nursing homes. >> to the extent the sgr is implemented in the cost for caring for medicare patients would far exceed the reimbursement for physicians would receive from medicaid, so what he will have is physicians either unable to care for medicare patients so is there any plan to fix the situation what are you going to do with medicare patients at that point. >> for you folks to decide not the trustees. we are going to face as we have many times before a huge challenge which is to decide how much of the discipline to impose

and how we are going to pay for that which we don't impose. >> that is a fair point to mention that if we were to implement the reduction, the chief actuary would foster that he believes there be a private act that the cost would exceed the reimbursement rate so one would physicians to this? so that's one of the challenges. how do we either reduce cost or find ways for productivity innovation to reduce the cost so we can use the sgr to match it or what are we going to do if we can't do that? >> jennifer freeman with the democratic staff. i have a two-part question. the first is you talked about the ones missing about the change from this year going from 20292024. can you talk about what caused

that and we would do to the state of the economy and second, it is my understanding the actuaries analysis what would happen to trust fund solvency of the affordable care act was repealed, so can you talk about that analysis it house well? >> with respect to the five-year advancement of the point at which the trust fund becomes insolvent, in a sense the explanation as largely technical. it has to do with the assumed value is in the base year. it has to do with a slight change in the economic forecast going forward with respect to real wages paid to a hospital and medical workers, and it isn't -- sometimes you see these

a significant changes in your insolvency, and they said just largest in the dramatic changes in assumptions, and that really wasn't the case this time. we had a relatively small surpluses going forward. they were pushed down into a relatively small deficits, the relatively small amount that was in the trust fund was depleted earlier. so i don't think that's a hit on story exactly. what was the second, jennifer? >> i guess i am not to speak on that.

>> time for one more question. >> damn miller with the joint economic committee. my question on medicare seems like the the date on medicare is shifting into the sort of two different approaches, one is a more market-based approach and the second is more of a government controlled approach of the independent payment advisory board. and my question is -- you don't have to comment specifically on the payment advisory board if you don't want to. based on your experience, medicare and health care, how successful have such attempts to suppress the market forces than in the past? and what does that say about the

future? >> well, i would say that i would suggest the world without the ipad is topics ackley the poster child for market forces, talking about this as if market forces were allowed to prevail they are not allowed to prevail now. it is a price system even much of the non-governmental component of health care one has to view it as a strange market as best. >> you can still try to control people's access to health care

services. >> what would allow it to do is the custom in the past which is adjust prices. i don't think -- just getting back to jennifer's questioned, where they disappeared the date of insolvency would move forward very dramatically it's just i don't have the date. >> it's definitely obvious it's a much more complicated program to try to figure out social security begins it in a room for an afternoon dillinger the mathematics to figure out how to get solvency with medicare and health care seems even if we try to pick some solutions we are not sure the solutions will work and that is one of the biggest problems we have to find innovative ways to interject market forces in the current system we have to bring the cost

down to still get coverage. with that i want to wrap it up. i would ask if the chaka or baala have any one line takeaways they want to leave people before we go. >> chuck? >> fix these problems, too. >> bob? i want to thank you all for coming and the staff for putting this on and again my thanks to chuck and bob for taking time to be with us. thank you. [applause]

house democratic whip steny hoyer held a town hall meeting with residents and staff at the evergreen senior living community in maryland to discuss how republican budget proposals would affect medicare. the senior adult communities located in maryland fifth congressional district which congressman hoyer has

represented since 1981. this is an hour. >> good afternoon ordered morning i guess. nice to see all of you. thank you for being here. appreciate it to read much. i don't have a podium, so i'm going to sit down because i want to go through this because it's very important information for you and for all of us of course in terms of medicare and medicaid and how we provide health care for people. we have had a lot of debate in washington gaziano, so i'm going to sit down. if you want to come forward, you can do that or if not, if you can't hear me, let me know. i'm going to use the microphone as well. c-span is here. they are taking pictures, so we

will see what happens here. >> [inaudible] >> i didn't bring any ice cream. we had wonderful ice-cream yesterday at simple pleasures and you were there and a number of us were there. it was great. so i appreciate all of you being here. can everybody hear me? all right. does everybody want to hear me? [laughter] for was a joke i love. he was giving a speech to about 250 people in the room and somebody in the back of the room raised their hand and said senator, i can't hear you. and immediately someone in the front row jumped up and said icahn and i will trade places with you. [laughter] that makes you feel badly doesn't it? all in please to be here.

i've been here before as you know and have an opportunity to visit with some of you before. i want to thank you for coming this morning. i know it is a little early, but let's get started. last year, as we know, and you know, we adopted the affordable care act. the affordable care act effort is to try to extend health care coverage to another 30 plus million americans to make sure that they have access to affordable quality health care and affordable quality and access is key. we have the best health care in the world here in america. the issue was whether or not we can afford or get it and so we have worked very hard to make the case. this legislation was important for seniors.

all americans but particularly seniors because it made improvements in the medicare program. some of you probably are aware of those, but i want to go over them. seniors in the medicare doughnut hole now get discounts on brand and generic drugs as a result of this act. the doughnut hole as all of you know is about 286400. in which there is no compensation from the federal government gone to the existing prescription drug program. however, we changed that so that we reduce that cost by 50% this year and we will phase it out by the next decade. so that you will have the opportunity to have a prescription drug availability that you will be able to afford. >> i want to say liz murray is year and is my expert on health care. she is one of the most

knowledgeable people in the house of representatives on health care. so when we get to some questions perhaps if i can't answer them she can. these discounts and as i said will grow over time until the doughnut hole is closed entirely so that that gap between 286400 will no longer exist. seniors no longer pay deductibles were pay for preventive care. now why is that important? we want to encourage people to get preventive care. clearly preventive care is cheaper than critical care. preventive care, preventing people from getting sick is a lot better investment than trying to get people well after they get sick. so, that's like having the that inoculation for smallpox or something and you don't get that it's a lot cheaper to get the shot. seniors now get a fee and you will lummis.

seniors get a free bonus exam. you won't have to pay a copay for your annual checkup, and again, the reason for that is to make sure to the extent we can we can keep you well, or if you have a problem that we detect it early because that will save us as a government, as the people money and it will also make you more healthy and see if you money as well. that wellness exam is to prevent medical problems before they get more serious. it also made important payment and delivery system reforms that will save medicare money and improve both the quality and coordination of the care you received, all of which is designed to try to bring the cost down. the cost we are incurring for

health care not just in medicare or medicaid but in our own private insurance, and businesses and families. it is not sustainable. the costs are rising at a rate that will not be affordable for any of us, for government, families, individuals and business if we don't bring those costs down. the congressional budget office, a non-partisan and a list determining what consequences we have passing of the medicare, excuse me, the affordable care act said we would receive about a quarter of a trillion dollars in this decade on health care costs and a trillion dollars plus in the next decade on our health care costs as a result of the reforms that have been adopted in the affordable care act. it also made important payment

and delivery system reforms would save medicare money and improve as i said the quality and coordination. the delivery of health care in america now is essentially done on a procedural basis as you know if a procedure is done the provider is reimbursed. as a proposed to an outcome basis quantity, not quality value, not volume is what we are talking about. quality, quantity, value, not volume, so what we are doing is trying to get a payment reimbursement system that is focused on the opportunity to keep people well and to intervene in their health care in the most efficient, effective, cost effective way. the result of the changes according to the office of the medicare program is as i said, but by the end of the decade

seniors would pay $200 less in annual premiums and the and if the affordable care act were not enacted. so savings, not just slowing the growth but in actual savings. the medicare program would be solvent for many more years. that was important. now a solvent in the sense that the formula that we have for paying for medicare will sustain it for longer period of time as a result of the reform we have adopted. it's time we pass the law, republicans who all voted against the wall attack us for cutting medicare benefits. i don't know whether you heard that, but there has been some discussion about demagoguery by the sponsor of the republican plan. but we make this clear under the affordable care act. there were no benefit cuts for medicare. let me repeat that.

the new affordable care act there were no benefits cuts to medicare, not one single provision in the affordable care act cut seniors benefits. ..

would not give seniors very high cost the availability of insurance. why do you think that's the case? now, not so much greed, but because it was not profitable to do so. most insurance companies on the basis of making money, people investing income and he said they would expect in return on their money. now, you know i'm going to be 72 in just a few days. so like you, i miss your period last mac what? or older. well, you know, there's a song about older women. last mac the fact of the matter is that we who are older require more health care. we're taking more prescription drugs, visiting the.or more,

more ailments and aches. so the insurance companies just did not believe it was caused as the date to ensure his years. so it wasn't available. so in 1865, we adopted a program, which made sure seniors could have an affordable health care guarantee, to give them that security. i want to tell you something, folks, that my republican friends perhaps don't understand. but social security combined with medicare has kept millions and millions and millions and millions of people are poverty. if you work for social security and work for medicare, billions of seniors who are now self-sufficient would be living in poverty. that is why it is so important to make sure that we maintain the guarantee of medicare.

the republican proposal, which the house represents almost every republican voted for in the united states senate that didn't pastoring subprogram over as i said, to private insurance can use and paste those companies a fixed amount for each senior. over time, that payment, which is kind of like a voucher, although they don't call it a voucher, will become less and less valuable. they call it a premium support. what do you call it a voucher for a premium support, what it means is there will be a set figure. now some people make the analogy too, just like the federal employee health advocates plan, that is not true and if you hear anybody say that, you know they are telling you a story, a fitted. even harsher words if you want to use it. they are not telling the truth. wisecracks because under the

federal post under the plan, we reimburse federal employees and retirees 72% of the average premiums so that is how cher cosco out, the amount that you receive goes out. here, they have cats so when health care costs go up, go up, go up, who pays the difference? under their program, you and i do. so increasing they come the seniors will pay more and more and more dollars out of their pocket to maintain their health care insurance. their plan will impact current and future beneficiaries. today's seniors, those of us over 65 or 66 will pay more for prescription drugs because they eliminate prescription drugs

meant on the affordable care act, which 50% and reduces 100% by the end of the decade. you'll pay more for preventive care. remember he told you under the affordable care act look at a free wellness visit and preventive care. you will pay a co-pay for it. well, they eliminate that. tamara seniors will see their costs increase genetically as well. a senior who signs up for medicare in 2022, everyone under 54 or younger saying we're not affecting anyone 55 or younger were 54 or younger. that is not true as i've told you on wellness and prescription drugs. but having said that, a senior who signs up for medicare in 2022, someone who is 54 today, will pay over $6000 per year more for health care. $6000 more for your health care

in 2022. that is more than twice as much of seniors pay today. despite individual seniors paint admitted killing more for their care, our nation's total health care spending still will not decrease. now, let me make a comment on that. our country is confronted with a very serious fiscal challenge. none of us ought to get ourselves. i have three children, three grandchildren and two great grandchildren. if we cannot get a handle -- before he do that, how many have grandchildren? how many of you have great-grandchildren? just a few of us. we care about them.

we love them. we want them to have a good life. can i correct? we therefore have a responsibility to get a handle on this deficit and the debt to confront their countries. we would be irresponsible not to do that. as a result, i have said all of our expenditures need to be on the page. we need to look at all of our expenses of the banana family, not just 12% of your expenses on one item, which is what we're doing in washington today, looking at a very small sliver in the budget process. you want to look at all expenditures. and that means we have to look at entitlement programs in which medicare and medicaid, social security, pell grants and other -- not telegrams, but other entitlement. what we don't want to do is undermine the security that they give to us.

can we make savings? we can. but we must not take away the guarantee that gives people the security that in their senior years, they are going to be self-sufficient and not put into poverty. i think we all agree on that. is that right? who want to make sure that her grandchildren and great-grandchildren i'm not poverty-stricken. we don't want to break their bank, correct? they may well have a terrorism threat, health threat, a natural disaster to and we need to make sure they have resources available to them to pay their bills as we pay our bills. total spending on each medicare advantage would increase by 40% under the republican plan. so the cost would go up for all of us. republican budget also cuts over $700 billion from the medicaid program. so not only is the medicare

program essentially affect it, but so was the medicaid program. now, i don't know whether any abuse here access medicaid. and you don't need to tell me, but i want you to know that almost two thirds of every medicaid dollar is spent on seniors and the disabled. furthermore, in our district alone, medicaid pays for the care of 64% of all nursing home residents so that almost two out of every three nursing home residents is on medicaid. why is that? have a nursing home care is very, very expensive. what happens? most of us don't have enough resources to pay for more than maybe one, two, three, four years of nursing home care. and then you run out of money.

now, we're not going to throw you in the street. so what happens to medicaid comes in. sites can be paid yourself down to the medicaid eligible. this would turn republican proposals would turn medicaid into not a guarantee program, said a so-called grant programs, where states would get a designated level of funding. not based upon what the rising cost is, that based upon what the designated sum is. the republican plan for medicaid faces both the availability and the quality of care at risk. finally, ladies and gentlemen and perhaps most egregiously, budget cuts are health care programs programs, gives trillions of dollars in new tax cut to the very wealthiest americans. now, i am for working hard and i

want to work with my republican colleagues to come up with a bipartisan plan that will bring our debt and deficit down. we must do that. my father's generation was called the greatest generation. we don't want to be called the most fiscally irresponsible program. we want to make sure kids inherit a soul that they should. that is our response to it. i am committed to that man. the very frankly, cutting through seniors to go to the wealthiest in america is not, i think, sound public policy. let me show you this chart over here. i'll speak up so you can hear me. and this chart, seniors are going to have to pay $6000 more. now, you would think wealth will

pay $6000 more and will bring down the deficit, right? well, it would mean that if that's all that happens because we would be paying more, government would he pay them less. let me show you what they do. they take the three seniors paying $6000 more and get the average millionaire and $200,000 tax cut. now you've got to -- i've got to you. 33 seniors pays $6000 more. you'd think therefore we could bring costs down by $6000 to either pay off the debt or some other cause that would incur bartering. but, if he then cut the taxes on the wealthiest in america are making over a million dollars on average, by $200,000, all you

had done is take it from seniors pocket and give it to the wealthiest americans pockets. let me say this. i am here for people working hard and making a lot of money. god bless them. we all want to make as much as we can. i don't begrudge them that. but we all need to pay our fair share and we don't need to take $6000 out of the pockets of seniors. now, if they are millionaires, find will take it. are you a millionaire? are you a millionaire? who are the millionaires in the room? last night apparently in this crowd you're going to pay $6000 more, but you're not getting the $200,000 tax cut. now, you can demagogue on that.

i don't want to. i don't begrudge people doing well. i want them to do well. i want them to create businesses, jobs, wealth and do well. god bless them. but i then want them to pay their fair share for what they can and this wonderful country's affairs. i've talked to a lot of people who have done very well and they don't encourage doing that at all. they understand. they get a lot. rose, national defense, police, education so that they hire workers they need good education. but it doesn't make sense for you to simply shift and put a burden on the 33 people so we can give one person a $200,000 deficit. finally, let me say, as i said

before, that we believe we have to get this debt under control. but the solution to our debt and deficit problem must be balance. there must be sensitive to the folks who have done so much to make our country great and it must be sensitive to the people who have a need for health care to make sure that they get caught care. how many of you think that not having health care is an option? racier hand. all of us understand health care is not an option. if you don't get health care, the probability is you die a lot earlier then you ought to die for your disabled and you can't work and you become a burden,

not a benefit to our society to yourself. and so, health care is absolutely essential. let's reform the tax code to make it simpler and fairer. we need to do that. with illinois that reduces the death. now, when i ask you, not one of you disagrees with that objective. but let's look at ways we can save on every part of our budget. and by the way, that means defenses well. i am for a strong national defense. i am for making sure that american response to every challenge that confronts. i'm also for making sure that we spend that money as effectively and efficiently as we expect to spend money in any other way, any other object to. that we should not and medicare

guarantee. why? because it will undermine the health and well-being of our seniors. i am a senior, but very frankly, let me tell you. i'm lucky i'm pretty health e. and i've got good health insurance program. thank you very much. and by the way, i want to make it clear. by the same health care program every federal employee has. the federal employee health benefit plan. i pay into that. how many people were here are federal employees? you get the federal employee health and if the plan? you and i have the same plan. it's a good plan and i'm pleased to have it. but it no special planned for me. but there are some people who don't have that and there are some people who need to supplement whatever they have with their medicare benefits. what that does for my kids --

it's got three daughters. develop at their own families. they're paying their mortgage, trying to get their kids to school, on their car, groceries. they make alone every weekend so they can pay for their gasoline. last night i tell you, it's terrible. let me tell you what is driving these oil prices. i don't know whether you read in the paper the other day, opec nation just said there is plenty of oil. there is not a shortage of oil and demand is down. price keeps going a because speculators are driving up the price of oil. they are bidding on oil. they never expect to give a drop of oil delivery. they are just trading. and frankly opec says, your

point, speculators driving up the cost. ladies and gentlemen, i am here to tell you that i want to make sure that we address the deficit, bring the debt down, but at the same time, strengthen social security and medicare to make sure it is fair and is sustainable, from a cost standpoint sustainable over the years, over the decades, during the next coming century, but without undermining your children's reliance on its availability. but i stopped there and then we thank all of you for what you attempt to make our country what it is. i don't know how many of you grew up in this county? prince george county. 60 years or more. that'll do it.

i've been here 60 years. now, i've been here 57 years. 80 years. so you've been here all your life. 75 years. wonderful. how much? 71. alright, i have been here since i'm 15 and i'm going to be 72 on the 14th of june. 57 years for me. all right, anybody -- yes, ma'am, question. the figures count? absolutely accounts. you've got. i understand what you are saying and i appreciate you coming here to talk to us and them but i'm still a little mertes because i am a point where i am not medicare eligible at this point.

i am saying covert, which is a monthly fee. and i am hearing a lot of political talks. i am hearing a lot of political debate about medical social security. and you've addressed some of that, but i do believe -- you said there is demagoguery going on. and some of it is. but i am asking to have my mind that he's because how do i look to next year in october, when i will be medicare eligible and feel comfortable -- just feel comfortable? >> that is a very, very good question and i'm glad i hear to give you the assurance that you need. first of all, there was an

election just a few weeks ago and 26 district of new york when the republican plan to slash medicare guarantee was discussed. when i say/, what i mean was eliminated. but wouldn't eliminate it for you. it would eliminate some of the things i talk about because you'll be eligible in just a short period of time. i want to guarantee everybody that the president of the united states, nor directly the united states senate we can't control. i vote against it. but i can guarantee you that you were going to become eligible and it will be there for you because president obama will not sign a bill that will eliminate it. i don't think the united states senate to pass anything that will eliminate it. and the house so far has not done that. although they have reduced your

benefits as a senior on prescription drugs, wellness care that i talk to you about earlier. but medicare will be there for you. what we liked and make sure his medicare is there for everybody forever so that our country can have the kind of security and stability that medicare and social security gives us. again, let's make it clear. i do want you to go away from here in any way misled. we need to do with our debt and deficit. medicare and social security are an issue. social security is really not part of the deficit problem at all, but it does need to be made sustainable so that our kids will have it there. that is the responsibility. but we don't need, as has been suggested to eliminate guarantee of availability of those two critically important security

for our country and for my kid -- and from a case. you know, we think this is a senior issue. this is not a senior issue. this is an issue for our country. my kids know that that is going to be self-sufficient for health care and social security. they think i'm going to be okay anyway, but the fact of the matter is they don't have to worry about being able to pay for me as well as their kids. so social security and medicare are not just a senior issue. it's a family issue. >> i'm going to be 71 in july. >> i'm an old man. your young woman. i got you. >> social security for seniors and i don't understand a lot of the seniors retiring.

but i feel that the taxes and as much rent and stuff but they have to pay, i don't understand how this can give up a little bit of money. you talk about if it increased action is not going to increase too much because when social security goes up and our rent is going to go up and we'll have more to pay, insurance is going to go out. i don't understand is that to me -- i'm going to be honest with you. i pay $500 a month. >> furry thing? >> now, just a rant. [laughter] >> that's only the rent because i feel that they put in all that they had. even some of them come from slavery just to get where they are today.

so the rich man has got it off. this is like they got 33 cents under $6000, which that is not to us as far as i'm learned. it's $200,000 for the rich man. i know it's a robbery. is the game. and it's not fair for them to lead the way they are living. >> well, i don't know that i can agree with your $500 cat. had it been nice. [laughter] that's just you. i understand. but the 500-dollar cap there may be nobody supplying housing. you may have a $500 cap cap and no housing available. [inaudible] >> i hear you. times are tough right now. we've got too many people out of

work. we've got too many people who are making enough money working one, two, three jobs. insert after. we need to i have an agenda i call macon in america america. miniview high-five when you make it and to win the game you'll ace the test. you're going to get the job, you're going to make it. but it also means base. we need to make it. we need to manufactured in america. we need to create good manufacturing jobs in america so we have a lot of people paying into social security, you know, that we have people enrolled, so we have a cash flow -- you know, social security is a pay-as-you-go program. adapted and 35 and shortly thereafter was a pay-as-you-go

program. with 15 people, 16 people supporting one person. now we have three people supporting 1%. that's why we have the financial problems social security, which we've got to solve. and solving it, we have to make sure it's available, even if it is not as much as we would like. we've got to do what is fiscally responsible for her children, grandchildren and great grandchildren at the same time, make sure we have the guarantee for seniors so they can live. yes, ma'am. [inaudible] >> three cards because none of them would accept it. i came home and called the lady that gave me the insurance. i said -- she said you're in a. i said okay, i am going to meet my down that column and then my shockers cannot go up.

[laughter] the mac you're in a 2800. what you want snows under under the affordable care, currently we have reduced your cost 50%. but there is still a cost. what we are doing is phasing it out. but you heard me say what the republicans would have done is eliminate the reduction. in other words, you would have paid the full load and you're having trouble doing that. you know, when i originally started talking about this, you know, i was taking lipitor. i still take lipitor. i tell people there's no way they can fix cholesterol, but i don't like it. so my doctor said it didn't work at all. my cholesterol went down one point. he said you're not going to stay on my diet are you, or your?

so that's good. >> i think we may be telling c-span more than you want to know. >> the fact of the matter is, where health care costs up? hair up in some respects for very good reasons. let me give you three very good reasons that health care costs are at. hey, we're all living longer. not always, but average rather than longer. and we are healthier. why are we healthier? because we have two things that in 1965, when they adopted medicare we didn't have. a come a very wide use of prescription drugs. what are we using prescription drugs were? keep your sugar okay.

and keep cholesterol ok. and because your sugar and cholesterol are okay, you're taking a pill every day come your healthier longer. but it also costs a lot of money because those are expensive. thirdly, we have extraordinary diagnostic tools available to us to find out what's wrong with this. you go and can have an ache or pain, and they each can take an x-ray and find out 10 or 15% of what the doc wants to know. you do an mri or cat scan, they'll find that 95% was from. if you go on a doctor and the doctor says hey, you've got something up. i'm not sure what it does, but we can do an x-ray or you can do a cat scan or an mri and will do 95%. what are you going to choose? sure, you are going to choose what gives the.are the most question. but guess what? it's 10 times more expensive

because it's going up. good diagnosis, prescription drugs and we're living longer. but we've got to make sure we bring health care costs under control. and i will not be easy. i went to a family feud. i've got to go soon. you probably have to too. regrettably missed it down, bring this deficit down because we go to her children and grandchildren to do that. yes sir. >> and city council bob turner. in that wonderful member of the city council. >> thank you for being here, particularly in the district. although i'm not a scene as you can tell, i will be one day as you can tell. i'm only celebrating 10 years. but i did want to personally -- >> 40 or 50 years before your senior. >> i did want to personally thank you for reference. i came to the senior center a year ago while you were debating

the affordable health care plan and i want to congratulate you, your democratic colleagues in both the house and senate and that if a president obama for getting it done. i know senator cardin said last night it's taken over 40 years for us to do something to raise warned our health care system. i also appreciate your comments about the deficit, having bounced edges. the city council ventura budget last month. it's difficult to make those choices. not everybody can get all what they want. i know you'll do what is my best interest of the residents, not only in your district of maryland, so i appreciate that i want to publicly thank you for that. cnet todd turner, ladies and gentlemen, this is your district? does a wonderful, wonderful job on the city council. you know, all of us grew up. the way you get instead is to work together. i want to work together with the

city government, county governments, state governments, federal government. none of us do it alone. we'll have to work together. and very frankly, i went to work with my republican colleagues because dealing with this deficit and the stat are not going to be easy and we're all going to have to be in this together. organizations that represent seniors will have to figure out how we can represent national security can watch all of about. organizations that represent education, the president obama is right. as we do that, we need to make sure we are continuing to invest in growing our economy and competing globally. investigating investigated and education advocates because if we don't invest in our kids, we're not going to be competitive in global markets. we need to invest in our infrastructure. if we don't invest in our infrastructure, we're not going to be the kind of competitive economy that we need to be.

and we need to invest in innovation. we are now the innovation, invention, development capital of the world. i mentioned that make it it in america agenda by making it manufacturing in this country. what is happening, ladies and gentlemen, as we are still the innovative development of the world. guess what's happening? we are inventing it, innovating the development and then we are taking it to skip it manufacturing it overseas. and if we continue to do that, we will have inventors, innovators and developers go where? oversees and america will not be the kind of country that all of you helped maintain, defend, create. yes, sir, you have a question. [inaudible]

[inaudible] >> -- that is something that is bothering me. gas prices are still going up. we've got to beat those prices. how long do you think it will take? >> i think it'll come back. here's the problem -- not the problem, but the law is -- there is a judged by the social security senate that there is not an increase in the cost of living, then there is not a cost-of-living adjustment made. as you may know, prior to 1983 i think is when we did it, there was not an automatic cost of the

adjustment. congress passed it every year and sometimes passed it, sometimes didn't. so that they did was we put in a statutory provision that if there were a cost-of-living increase, the social security would get a cost with the adjustment. the last two years the economy has been in the mad. you're absolutely right, notwithstanding that, prescription drug costs are going up, gasoline prices certainly going up and that is of concern. i think the answer is that it will come back. did you have a second question? and i've got to go. your last and then out -- [inaudible] >> okay great. [inaudible] >> terrific. thank you very much. >> all right, good.

thanks, alex. one, too. then we're going to end. but she'll have the last question. >> my problem is i've been working with rent control, trying to get rent control in the state of maryland. every time i go to somebody, they sent me to someone else. why is it so difficult to get rent control in the state of maryland? >> number one, when this lady said $500 -- a member when she said it? you remember what my answer was? rent-controlled, in my view, sounds good and is good for people who have their rent-controlled. the problem is you have the jurisdiction as rent control, people tend not to want to build additional housing. rental housing, in particular because obviously you don't have rent-controlled for public rent.

so what happened is he deflate the housing markets. so what happens when supply goes down? and demand remains constant, prices go up and there becomes a differential. but there is no doubt the housing crisis by real premium. another problem with rent is that people have lost their homes, as the sale of homes, construction of new homes in the sale of homes has gone down, people still need someplace to live, so there has been increased demand on rental housing. i am not one that believes necessarily that rent control will solve the problem because i think it will have the perverse effect of decreasing housing stock in the jurisdiction that adapts rent-controlled and they will build rental unit someplace else and you'll find housing

less available. >> -- some way of building homes that are worth it. >> i think your absolute right on that. we need more affordable housing for you, absolutely. >> some of them are going down. >> one of the things that ought to happen isn't happening, there's a lot of quality housing built, but you're right. you know, some of it is not the quality that to be. what are the things we need to do in terms of cost housing because cost is not just rent, you know, or owning a house. it is maintaining that house. and to the extent we can make homes more energy efficient, save on heating, electricity costs, will be ahead of the game

and make requirements for that because part of the problem is not just having a house, but european electricity bill and heating bill, that's a big part of your cost as well you're okay, you get the last question. >> what about controlled zones on gasoline? by the way -- [inaudible] >> we answer that question for me? >> the generic problem -- [inaudible] >> could you ask your dr. about it? >> i talked to my insurance company, is that now the prices gone up twice again this year and they don't understand that, so they represented to.

so my question for you is, what about the other controls? >> all right, again, price controls and specifically asked about energy in and talked about drug prices. drug prices again we've tried to do it in terms of, particularly for seniors, bringing the cost down so that there is the ability to to make sure that that doughnut hole, which you have fallen into, is substantially reduced. i don't know whether you're in the doughnut hole and got to get to 2800 before you get to the doughnut hole, which is about -- yeah, about 200 a month would be 2400. now, on oil prices -- gasoline prices, one of the ways we can

bring prices down, in my view if we need to is first of all to expand our energy availability and the united states of america. now, understand oil, even if we have more supply of oil, oil is a world price market. so, just having more oil in the united states would not necessarily bring the price down. it makes us more energy independent from what is important, help our national security. drilling more oil in the united states would not necessarily bring the price down. let me go over this. first of all, you heard opec say last week there is a sufficient supply of oil. the prices gone up not because of oil supply or demand. now, demand is clearly on the upswing. not in the united states.

we as 25% of the world's oil. demand for oil is going to particularly in china and india. again, this is a worldwide commodity. what i am saying is what we really need to have his alternative energy sources available to us. natural gas is one of those. energy is another, we need is another. geothermal is another. now, i know it is controversial, but i'm a very big supporter of nuclear power. nuclear power is clean energy. it is not damaging to the environment. and i believe we rely on about 22 mike 20% of our electricity in america today is the result of new nuclear power. but i think the way we can get away from oil prices, not just

buy more oil. because again, if i tell you is got a product in the united states, you make that. let's say it's a worldwide price. you can sell the cane for $10 in france were in london or in germany, but you can only sell it for $5 a year. where are you going to sell that? you are going to sell it for you can get $10. so my point is, even if they produce oil here, they can tell at someplace for more, they're going to do it. speculators are driving the price. we've got to do with that. but, if we have the ability to rely on alternative sources of energy, then we don't have to use as much oil. so jacking the price up en masse won't give them the dollars they want and we can bring to demand

down. i also am a strong believer that local warming is a substantial threat to this generation, but certainly to my children, grandchildren and great-grandchildren. global warming. we create too much co2 gas, which is creating an effective blanket, which keeps the heat and. it is magnifying the heat, which is 102 yesterday. the hottest day -- i forgetting how long -- since they've been keeping records i guess. now that doesn't mean necessarily we have cycles. but almost every scientist believes that the problem. so we need to look at alternative prices -- alternative energy sources. we need to be more efficient in their use. we need to conserve energy. we need to do all those things. ladies and gentlemen, i have been so pleased to have this

opportunity to visit with you. this is what america is about. i want you to be focused on and talk to your friends and neighbors about what is happening with health care, medicare, medicaid. know the facts, make your own decision -- make your own judgment and tact to your friends and neighbors. together we can solve this problem. together we can bring this debt down, get the deficit under control, but we can also make sure that our people have the kind of guarantee for health care and social security that they need and want and i worked hard for. thank you are very, very much. [applause] >> thank you are a match.

[inaudible conversations] [inaudible conversations] >> tonight on c-span 2, you look at the plane and politics behind presidential debates. a discussion about the pulse of the seafood interest rate >> on this nomination, the ayes are 16 and the nomination is confirmed. >> former white house press

secretary, mike mccurry is cochair of the commission on presidential debate is joined by the commission's executive dirt. they discuss the planning and negotiations that go into the presidential debate. this is an hour. >> and also served as a press secretary and other responsibilities. here's what we're trying to do with the seminar at the washington senators put together. it's called what the white house. these are all professionals in the stream they teach about residency and about elections and plus other elections. what we are trying to do is get as much inside information as we possibly can bring it back to her students and am interested in politics, studying anything participating in it. mr. mccurry, before you come back to you, let me have participants introduce themselves and the institution you are from. michael, please.

>> good morning, greg gifford at university of florida. >> can you not of political science at university of pennsylvania. >> i'm john smith, to medication studies and political communication at the state university of new york. >> good morning, political science in nigeria. >> joe foster, political science at the united states air force academy. >> thank you for coming. i teach political science in southern california. >> could you start and help us understand what we might be able to teach students about what is coming up in 2012, please? >> we are well underway with plans for 2012. we just finished doing surveys of the potential debate site and are working on selecting dates and developing voter education

programs i hope will have particular interest for your constituents. the commission has tried very hard since our establishment in 1997 to make every cycle move forward in terms of enhancing the educational value of the discussion that goes on in the debate. we try to do that by format, voter education programs, by using other technology and multipliers in terms of partners we can work with to try to make these conversations reach the largest number of people in a way that is interesting and informative and stimulate them to want to know more. so one of the reasons mike and i are really delighted to be here today is to hear from you come to hear your questions and your comments about things you think would be of interest to your students in your communities in the educational institutions in which you work because needless to say, these are just four

nights that tape place and then go away and are not part of a continuum of conversation and learning, they really had it so their potential. so this is what we are looking at as we do every four years to understand how to improve? had we may forward? had we use technology to make sure these are events that have the greatest educational value, interest and stimulate further discussion and further learning. >> maybe, i will add to that, one of the things that the commission on presidential debates has done, they have successfully institutionalized the general election debate between major candidates for president. that is not an insignificant achievement because you will remember there've been presidential campaign cycles are the candidates bicker between themselves about whether they would debate or how many times they would debate or if they were debate. we went for a long period, from

the first televised for this dental debate between john f. kennedy and richard nixon before we even had another debate. so the commission has done something truly important, which is they've institutionalized to. it also created kind of the state of the union for a national political convention before the inauguration. they have created an event that people have familiarity with. you know what to except. they will see people standing, sitting, engaging in some fashion. but that said, you cannot have a format and you can't have a dialogue for something that remained static. the big challenges have you do you keep invigorating that format and the dialects it is truly meaningful for voters. i think this is particularly important for you as teachers into your students because your students are not creatures of the internet age and they expect some kind of interactive dialogue.

in fact, in some senses they expect to be able to participate in these debates. so how do you do that with social media, with resources available on the internet, you could actually create ways in which you can have an interactive dialogue if you treat it as some timor than just the four times for president and vice president get together and face each other in a debate. so we are working with that. we've been talking to a number of people who successfully engage in particularly young people in social media and i think those conversations will help us lead to interesting ways in which we innovate around a platform that is also very traditional. so we are still at that kind of planning stage. if you have any ideas or thoughts or things you've seen you think are particularly good, we'd like to hear that. what motivates the kids that you teach? i would be an important thing. i make one other point in the local around because of that year from everybody else. really, this is a passionate man

because i'm i'm very much interested in engaging and people in getting them interested in politics. it is one of the most entrepreneurial things about our political system is the way in which a talented, great young person can walk into any campaign headquarters and make themselves incredibly useful and end up racing up and taking major roles in campaigns. i mean, it is a place in which talent really does rise quickly to the top. if you can't communicate that to students as they look, there is no secret in how you succeed as a young person in politics. you just give in and start working. i'll tell a quick story and you can feel free to buy the story. in 1976, when i was a senior in college at princeton, i went down and jerry brown was first time around governor of california at that point and was running for president lake in the primaries.

i would find him very attractive. i was from california, so i went into the headquarters for what was supposed to be the jerry brown campaign in new jersey and joe showed up as a volunteer. and i've done some work in student journalism and worked as a reporter on the princeton campus. so the guy who is running the campaign kimmitt said is that big endorsements from hudson county, new jersey politics, the hudson county machine basic needs was endorsing jerry brown. they said, can anyone write a press release? so i did and handed it in. and the guy chomping on a big cigars that he wrote this? who wrote this? i've only been here an hour and a merit in trouble. and he said, kid, you're a press secretary. [laughter] of course i didn't hesitate to turn to someone i've been talking to inside what exactly

is a press secretary? that literally was my start and presidential candidate politics, right off the street. so that is the kind of opportunity available to the young person who is interested, motivated enough to jump in, be a volunteer, take a chance. if you can't communicate any of that opportunity, that would be a really great. >> what would help your students join the presidential debates and learning about politics? >> one of the challenges for educators is to capture the imagination of student. and certainly the interactivity with technology, video libraries, it all helps to get the more engaged. we have to balance that with substance of over teaching. i think one of the concerns going into the political debate is there going to be a lot of interactivity.

i hope it's not a moment is merely reaffirming or reinforcing political productivity for people to watch it, but that has a real substantive, educational value is value added. and i'm sure you have thought about that, the approach of structuring the debate. we can certainly do a lot on campus to have the interactive dimension be very, very strong. is there enough going into the structure of the debates can either add value. how is the commission struggling with interactivity with the educational value of the substantive debate itself? >> well, let me take a shot at it and then she and i can jump in, too. [inaudible] >> hill tiger. what the commission does is to

create and establish the platform through which candidates can engage each other. and it goes without saying that the more interaction and dialogue between candidates, the more opportunities for them to really get substantively into the issues, et the better it isr the voter. there has been an evolution in time over the various campaign cycles to try to move towards where there is true engagement between the candidates because any format in which people are basically reading press releases to each other is less conducive to the church talking about. so our role as touche try to create a format in which there is a maximum potential for engagement and really getting into the issues. now, around that there has to be dialogue, there has to be a conversation. there has to be educational materials. there has to be fact checks.

this candidate just said, is that true? that is not the responsibility of the commission. if we ever got into creating content, we would instantly run a file is both campaigns -- any campaign running, however many there are because they would have some objection to whatever content were providing. but we do is rely on the great universe of organizations. some journalistic organization, fair party groups, and others to create tools and resources people can use and i think maximizing potential for that to be available to view for your students is what we have encouraged the content providing community to do because they are the ones that need to be putting a lot of content out that helps put the debate in some kind of context. i think that is where we are most interested in ideas like what is the most useful thing to

have? is the sort of resource material you can use in the classroom? is a crude and websites in which people can actually have dialogue with each other, you know, get in a blog, creating things where there is a real-time discussion? you know how kids multitask now. he will not be sitting there watching a television screen when the debates are on. they will be texting, twittering, having a conversation as the debate is happening. how could he make that really rich and full of substance and full of the kind of educational valley that would be useful to you? that is the kind of thing we have been discussing with various outside groups and that is where the greatest potential is. ..

and we've tried to loosen the time limit so that the moderator in effect has castles of time that they can devote given to a given subject but then it's not an egg timer going from one candidate to the next. it's a conversation that can take place in a certain amount of time, and then you move on and it's a single moderator has a way of making that graceful and sequential in a way that's quite effective. taking a time when it's off is something that we would continuously like to do, but it won't surprise anyone in this room that candidates resist because in fact the time limits are a safety net and predictable

and known, so you can try to do it, but it depends on candidates being willing to participate in that kind of format. that said, if you push format command we are going to continue to listen the time limits so the moderator has leeway to focus on a small number of topics in depth and to develop them from one debate to the next, my own feeling is the more we learn about the capability of technology, the more it almost turns the tables on the argument about who should be expecting what. i think technology makes it much easier to say citizens come there's a great deal of responsibility that resides with you whether you are first-time voters or have been at it for a long time, because now there is little excuse to say that you can't get access to information, to past debates come to past speeches, transcripts, fact

checking or interactivity with people that you want to discuss this with. one of the things we see in the commission a lot and you certainly see is the downside to technology is it allows for people to reaffirm previously held views and candidly release them in ways that are sometimes fairly ruda because of the anonymity pieces of the internet afford. one of our most successful programs since '92 when we first tried it is a program called debate watch which rests on the temple because of the lamentable is you watch the debate with other people you don't necessarily agree with politically and the end of the debate priest in you turn it off and talk about what you just saw and heard with other people following the perspective of simply what was said, not whether it was your guy who said it so you can have a more objective conversation about what just went on. students aren't the perfect

ambassadors to try to create and lead these forums not just on the campus but in the community where the campus is it different ages, different backgrounds together and say we are going to watch this and have a little town meeting of our own at the end of it, and needless to say, anyone at their immediate availability is going to have access to the fact checking if somebody says the candidate said this and i don't think that's true. it is in fact gives citizens the tools to make these conversations degree much more helpful and take back the responsibility for making up their mind about what they want to hear discussed, and then on deily to make it clear to debate well, it was copay insofar as it went but we believe the following topic should be further explored. and these topics were not addressed at all so this becomes a complete engagement between the candidates and the public.

>> consistent with store inside look at these things i would tell you a great story about 1996 when i was working for president clinton, and my job during the preparation for the presidential debates and 96 was to incarcerate jim lehrer, the moderator of the debate. so i took the assignment very seriously and did dhaka real after real of shows of the news hour and watched and jim lehrer and tried to figure out how to mimic him a little bit and what i discovered in doing that is the duty of the questions were very simple, very straightforward, there wasn't a lot of gotcha and when a candidate would turn to because it's something he would turn to the other and say what do you think of that, president clinton, and i thought it was pretty easy to prepare because he wasn't trying to put his own personality in between the two candidates. he wanted his questioning to bring out what the candidates themselves would be saying.

so, i think that the role of the moderator and how devotee date is structured by the moderator since the commission has, cannot have any editorial responsibility turning to who is the surrogate for the entire press corps and chosen to be the moderator because they are the ones that than on behalf of the pool of networks that get the production in front of the american people their the ones who basically have to shape and define the content of the question will be. >> a simulated focus group meaning i'm going to go around to all and then we will respond to what would help our campuses to help young people learn through the debate so go ahead and i will come right around to

and brian. >> the debate almost seems -- it almost seems so dry and there is no substance. you talked earlier about the sound bite media is shortening the answer with context to the one minute sound bite or two-minute sound bite at the most so that's an issue that sounds like conservative education and i think it reinforces the institutions at the lifetime to answer is becoming an institution and may be detrimental. >> we've had some debate watches but generally speaking they've been republicans and democrats and their groups so i guess one challenges to try to have citizens get outside of their comfort zone and then along with that also picking up on the last point, how to avoid the dueling press conference, obviously candidates want and will get

their key phrases and programs repeated and how much as the format and the time limit if they are shorter is that going to push the candidates to get out of their comfort zone in terms of the statements and sound bites >> on your campus center classis. storm ike if leading to the debate somebody was to do they have quick 15 minutes introductory teaching that was sufficiently balanced so that each candidate would accept it, my students are relatively apolitical, and and no matter how you do if you're going to be more influenced by what comes after, what other people told them it meant because they don't have confidence in their own

ability to determine the meaning and the accuracy and the effectiveness. >> i think what might happen on the campus early with of of the date season is to have a multiplicity of phyllis leases. for rick symbol, sometimes by the time i see the debates, i heard everything that obama was going to say, and i heard everything that these people were going to see. i wish we had more possibility of a third-party candidate that this world is not just democrat or republican, and it certainly shows that if you are wealthy like ross perot you can get into the debate. those are the most interesting debates. was he going to win? did i want him to win? did i want him to raise certain issues that may be made both candidates uncomfortable?

i fink making the republican and the democrats uncomfortable like i'm sure ralph nader would have done would have been of real value to show there are more releases than just two. >> i would expect to find a measure of fairness and justice in the way it is managed so that businesses who have the understanding that everyone has been given in the participation in the wide spectrum of the political forces because what happens ultimately implications with american society is implications on the committee because the global committee takes cues from the [inaudible] around the world. >> those are my students who would be likely to turn into a debate. i teach at a military academy where students have a lot of

activities and responsibilities outside of the class has to students of the institutions working. so my ability for them to not only see what they've missed but also continuing conversation on line with whomever based on what the best could be very valuable whether they will do that i'm not so sure but that opportunity would be good. >> every semester i ask my students this very thing about the debate and the study it a little bit and have somebody to represent them a little bit to sort of pass this onto you all, but one of the things that may be the most critical was the critical debates and one of the changes they don't want to make in the united states is that, and i'm going to do my best to represent their view but they feel that asking uninformed ignorant voters or voters ignorant of the debate, who

you're going to vote for and using that as a method for who gets included they feel this sort of like hiding behind your responsibility in terms of 15% in the national polls who you're going to vote for before anyone seen the debate and maybe the more voluble question is like opendebates.org has proposed which is who would you like to see included in the debate and so universally they've come up with even if i'm not going to vote for the guy i want to hear from other people potentially because they will bring up issues. if this is supposed to become formative and maybe not even a scripted infomercial i would pay attention more if there were other people. >> you think the major candidates from the parties or third-party were those that pass the 15% threshold would participate in a debate like that? >> i don't want to undermine the dilemma that you face. >> if you did that he would run

the risk of not having any debate. >> and i see that problem. the sad thing there was to be in a democracy where the two leading candidates get to dictate who gets to speak about an election how do we as a society trouble with that but we aren't we allowed a candidates -- >> how can we make sure the diverse viewpoints in the academy get more attention and students not fall into the bifurcated model of politics and exposed to more things. >> and i think to the best of our ability we are trying to do that with as much as we can. for a simple, the language such as i hear the thing like we make sure both campaigns all campaigns, so we have to be careful with language and if viabilities the only measure that will continually be the

same sorts of candidates always make it and writing one of the things is educating students about the ways they can challenge the sort of subjects and look into that, but incredibly difficult position you are in i recognize that. >> what we have to do, we have one fundamental mission which is to provide opportunities for the voters to really help make their choice and to get content that allows them to make the choice. now, it's a practical matter if you don't have a threshold like 15%, 15% is low. it doesn't mean that it has to be a likely winner. someone that represents a substantial minority point of view, but that is a pretty good test. if you went much below that or did not have any threshold like that, i'm telling you --

>> you're major nominees wouldn't participate. >> but that means you're asking people for 15% before the debate which is part of the problem. but in the second part of that is people get included in the debates not just because -- you have a moderator because they help elicit questions. but including another candidate, if they help elicit and help people become informed, that is a valuable thing. >> there's something to take into account also and what might just said is a key. you won't get some candidates if you open the door to a form that is much larger. i'm sure given this table you know the number of people that file every year as candidates for president or vice president, yes? may i have a hand pleased with the answer? yes.

>> 125. >> over 160. if they were included in debate in the bud get support, which in fact would launch the campaign, even though remember we are talking about basically the last six weeks of a general election that already goes on for quite a long time. >> what about the ballot access in multiple states? there's only a couple parties beyond the democrats and republicans that have held access. >> still talking five to six, plus. so now you're talking about something that looks like the primary debate and you know how much criticism there is of how difficult it is to understand the conversation when you have that many people, and a very small amount of time each individual gets when you're talking about a 90 minute debate plus a moderator. this american the other thing important as i think a form in the logic of the great thing about the technology and social

media if you provide a small deed democratizing influence in the politics of because it gives instant access to a large quantity of the electorate for anyone who's got a good position, good idea, contrary point of view that they want to present to the public. so, you could build the idea that you could only get, you know, an audience to reach 15% through the debate format is not accurate. you can get that through the technology we have available now and if someone builds that kind of grass-roots campaign in the course of a general election they could pass the threshold. by the way the criteria gets applied before each and every debate so in the course of the general election if someone actually began the search and you begin to see an interest and this is not -- this just happened in the u.k. obviously, that person could be included in the debate giving it so they might get access. estimate you had something, please.

>> to pick up on the fact we understand that president carter, john anderson, ronald reagan in 1980 before the commission, and that's, you know, there is major party candidates that galt purchase of it. on the other hand there could be a happy medium also why no public financing isn't doing so hot these days, but the 5% threshold for the matching federal funds may be considering that as a compromise between, you know, having five come six, eight, ten candidates, and it's -- it seems in recent history it's not that likely you would have that many national candidates that would be beyond 5% in the national polls were going by the previous election. your thoughts on that? a happy medium so you don't have the fear of five to eight candidates and that's diluting the process and being a sound bite press conference, but also then using some criteria based on the federal law of matching

funds. >> for several cycles when we first got going we tried to figure out the happy medium, to see whether there were a defense in the summer of the election because one of the problems with the logic of students that say but i want to see more people who might contribute something, i want this to be entertaining is that it implies it's been handed to them as opposed to them learned about the people before you get into the last six to eight weeks of the campaign, which i think is now more possible, more convenient than ever because of technology. what we try to figure out is is there a way which we can't do under our current constitution meaningful way we are constituted if a sponsor cannot in the summer and used these different measurements and put on some conversations, and i

think the professor was at a seminar where we hold this out to a lot of media print to electronic where they cover it. you've never seen so many people die for their coffee cup and a spare pen and whatever, and the short answer was there is no law that requires anyone to debate. there is no authority placed in the commission by either the law or congressional charter or anything else. what i find interesting is if there were a groundswell for this kind of event, there is every reason groups could come forward and sponsor that sort of forum using different criteria, in fighting that larger group of people saying we are going to have a conversation and it is going to try be based on a

different way of measuring the value of input and this standard has something to contribute which has lots of merit that's a lot of candidates, and a lot of perspective you could say should be a table so the question is are you going to use a combination of access minority support, federal funding telling you know, whatever, and try to piece together. no one has done that which i find interesting. we get criticized for the fact we stick to one mission which is all we are allowed to do the way we are incorporated. it doesn't preclude somebody else from coming saying no, we believe the market and need and interesting and different set of forms. i couldn't agree more with the professor from one of our

longest time international constituents. we've been working with nigeria now for 12 years and one of the great honors is that our international work has been going for 20 plus years and has taken off for precisely the reason you eloquently articulated which is the dates are seen by people that watch them in a real time all over the world as interpol to the space process, and we are the envy of many other countries that believe it is astonishing that our citizens to assume the of the right to see candidates, discuss issues in a neutral forum, and a setting that does not inherently favors one person, one party, won anything. they think it's amazing. and with his been approached now by dozens of countries that have said we would like to start a hours based on yours. we don't know where to start. we would like your help.

that is something the country should be very proud of. >> just on the elections, i want to frame the debate not as an easement but as moments in the process, the process of deliberation of scrutiny and engagement beyond the campus, and also raising the kind of questions and concerns ryan raised because it is an event they are actually being a part of that and participation in the activities is also bringing a level of scrutiny to the process itself. that is the educational value so the challenge for me and responsibility for me is a process that has the concern, the scrutiny, the opportunity for, the deliberation and engagement at various levels, and not to overstate the debate

in a singular set of events to demystify and a little bit and be part of the platform for real analysis or discussion or criticism or scrutiny, and i think that is going to be the benefit of having those defense before the debates be central to doing that. >> that is the right approach. they are important as moments during the process, because i do think you get sometimes those moments you get a true blimps of what the character candidate or or the weakness in the argument that they are making more of their capacity for leadership is or for understanding what the american people are looking for in a person who is going to guide us in the future so they

are in part because they are the unvarnished moments in which something can happen that isn't preplanned, precooked and peace plan. and i think that -- but it has to then kind of contribute to an ongoing evaluation and the kind of scrutiny that you are talking about and that is what we want to encourage. >> [inaudible] >> right, right. i mean, and the good thing is that does happen. there are multiple voices and critiques and from different perspectives they are available real time. >> two-part question. has anybody ever considered the prospect of changing the format of one of the national debates to a more lincoln douglas time where the candidate gets 20 minutes from the candidate tickets 20 minutes and 20

minutes than five minutes to some and part number two, would come in the 21st century, candidates nominated agreed to participate in any debate of that format because it might be so difficult to script? >> the answer to the second question is it is less likely without some structure then you wouldn't see a willingness for participation by candidates and particularly candidate staff because they are trying to minimize the risk of something happening that is going to be problematic for the campaign. that's just the reality. now, i happen to -- when i worked for the governor from arizona in 1988, we did the kind of debate that you are describing. we called up the governor pete

dupont from delaware running for the republican nomination and said let's go higher -- let's rent a hall in des moines and conduct an oxford style debate which is on the lines of what he said. we had cambodia from nbc as the moderator and his job was to put a topic in play and the governor then debated back and forth to in that oxford style and there was a wonderful per to format and served the candidates trying to get attention during the primary season and there was a fair amount of commentary afterwards saying that is a great format where you get people to seriously engage. short of that exact question when you hear us saying is the commission recognizes and has tried to involve the format in the direction and continue to do everything we