which i chair, three well-known hedge funds that claim to be based in the cayman islands admitted under questioning that they did not have a single employee in the cayman islands. closing the offshore loophole would make our effort to equitably tax carried interest all the more effective by shutting off a major avenue that hedge funds and other investment funds use to dodge taxes. democrats have rightly proposed addressing the carried interest loophole and offshore tax havens and other unfair tax loopholes as part of a balanced deficit reduction straits. we believe it is grossly unfair to cut programs that help young americans get a college education or help train working americans for new jobs in order to protect tax loopholes that benefit the wealthiest

americans. the republican response? to walk out of negotiations and say that they will not accept any deficit-reduction package if it includes revenue measures. mr. president, what is the time situation here? the presiding officer: the senator has 30 seconds remaining. mr. levin: is there any other senator waiting? i would ask unanimous consent that i be permitted to continue for three additional minutes. the presiding officer: without objection. mr. levin: i thank the presiding officer. now, what the republicans have done is walk out of negotiations and say that they will not accept any deficit-reduction package if it includes revenue measures. let's call this for what it is. if republicans refuse to consider compromise solution, they are threatening all of us, the whole country, with economic catastrophe. in order to protect the sky-high income of millionaire hedge fund

managers and offshore tax asroeurdz. those are -- avoiders. thoers two of the loopholes, two of many loopholes that we have identified that should be closed that the republicans refuse to consider closing. what they're doing, we should make no mistake about this, is holding the well-being of all americans hostage for the tax breaks of the wealthy few. mr. president, we all agree we must act to reduce the deficit. we've acknowledged as democrats the need for spending cuts, even painful cuts, the programs that we support. and that is why i am so troubled by the utter refusal of republicans to consider even modest compromises in the direction of new revenue. there is an overwhelming consensus among budget experts that we cannot achieve serious deficit reduction with spending cuts alone. there is an overwhelming consensus among economists that drastic cuts in federal outlays

will threaten our economic recovery just as cuts have throttled recovery in other nations. despite the fantasies of some in congress, it is abundantly clear that failure to raise the debt ceiling will do inin -- harm to recovery in the world. drawing lines in the sand as the republicans have done and refusing to compromise by walking out have no place in the situation that we face. i urge the republican leadership to abandon their uncompromising position, to embrace solutions to the deficit, to recognize that we all must sacrifice to address the deficit problem. the well-being of all of us, of all americans should not be held captive in the service of the most fortunate few. mr. president, i note the absence of a quorum. the presiding officer: the clerk will call the roll.

quorum call: mr. president?

the presiding officer: the senator from illinois. mr. durbin: i ask consent the quorum call be suspended. the presiding officer: without objection. mr. durbin: i ask unanimous consent to speak as if in morning business. the presiding officer: we are in morning business. mr. durbin: thank you, mr. president. mr. president, if people have been following the debate on the senate floor this afternoon, they understand that it's focused almost exclusively on the federal budget deficit and what we're going to do about it. it's a legitimate question and a timely question, because we are now in negotiations at the highest levels between the president and leaders in the house and senate to try to find some way through our impasse. the challenge is to find a way to reduce america's deficit and at the end of the day to extend our debt ceiling. the debt ceiling has a deadline of august 2. we have never in our history failed to extend our debt ceiling. to fail to do so would be the

equivalent of defaulting on a mortgage payment. and of course we know the consequences to any home or family if that occurs. you understand that your credit rating is not going to be the best after you've defaulted. the same thing would be true with america. you also may find the next time you need a mortgage, that particular bank may not want to lend to you again. the same thing is true with america. and it has a negative impact on your lifestyle. all of a sudden you're in a suspect class and it isn't as easy to borrow a money to buy a car or make some other purchase. that's the risk we are running at the highest possible level twhe comes to this -- when it comes to this debt ceiling vote on august 2. we have never -- underline the word "never" defaulted on a debt ceiling extension in the history of the united states of america. and that's the reason why the securities and bonds and stocks that are sold in this country enjoy a financial reputation better than most of the world. the united states is powerful,

big, and trustworthy. we're going to lose that last word, "trustworthy." if we default on the debt ceiling. that's what we face on august 2. there is a group called the bipartisan policy center and they have spelled out in specific terms what it would mean if we end up in default, and it's pretty grim. i have charts here that talk about what we would face if we defaulted on the debt ceiling extension on august 2. the revenues for the month of august if we default will be $12 billion in the united states, and the bills due on august 3 will be $32 billion. the first day we will be $20 billion in the red, which means choices will have to be made if we fail to extend the debt ceiling. and they're hard choices.

let's take a look at some of those choices that we'd have to face if we didn't have enough money to pay our bills. which of these don't get paid if congress doesn't raise the debt ceiling? social security? medicare? medicaid? veterans benefits? those firms that are supporting our war in iraq and afghanistan? i.r.s. refunds to individuals and businesses? all of these would have to be brought into question because we cannot pay them all if we fail to extend the debt ceiling. well, this group, this bipartisan policy center, said let's consider one of the options. let's protect the biggest programs. let's pay interest on america's debt so we don't have any further default. let's of course pay social security. many folks have no other source of income. we better pay medicare and medicaid because hospitals and doctors across america are taking care of sick people who

are elderly and poor. we better pay those defense firms because if they withdraw their services, it could endanger our troops, and we'd better pay unemployment compensation because for these families there's no other source of income. so if we just pay those, the ones i just listed, we would be unable to pay the salaries of those in active military service we'd be unable to pay veterans benefits. we'd be untable to keep the courts -- unable to pay the f.b.i. we couldn't pay for education and virtually everything else in government. what would that include? air traffic controllers. the guards at federal prisons. if you think that what i'm describing here is just a scare tactic, it's not. it's the reality of what happens when you default, and it's a reality that's being ignored by many on the other side of the aisle. in fact, a publication, a french

publication called the washington examiner, which is a very conservative republican publication today said don't worry about it, default on the debt ceiling, we can figure out a way through this. i'm sorry, but the reality of the choices facing us is that if we choose not to extend the debt ceiling, then we're going to have nothing but terrible choices. here is another scenario, incidentally, if you thought the first one was stark. let's assume that we want to protect the most vulnerable in america when in the month of august we have $170 billion in income and $300 billion in bills, so we pay interest on the debt, social security, medicare, medicaid, veterans, food like food stamps, housing for people who are poor, unemployment benefits and education for the kids. unpaid would be the defense firms again. those men and women serving in our military, even those in combat, the f.b.i., the courts

and everything else in government. the options are grim and real. i have heard my colleagues on the republican side come to the floor today and they are upset. they are upset at a speech given by the president yesterday. well, the president understands the gravity of the decision that's before us. the president has urged members of congress to get busy and help to solve the problem. i think he has a right to be upset to some extent and impatient. mr. president, it was two weeks ago that we had a negotiation under way with vice president biden, bipartisan negotiation. democrats and republicans from the house and the senate. it fell apart when congressman cantor, eric cantor, the house republican leader walked out and announced publicly i'm no longer part of this conversation, i think we have to stop this negotiation, this bipartisan negotiation. i'm handing it over to the speaker of the house, john boehner, he can talk to the president. now, that, to me, was the height

of irresponsibility. if you're given a responsibility to sit in those sessions, to try to spare the united states from this terrible outcome, picking up your marbles and going home is not a good option. even if you hand it over to your boss, the speaker of the house. what it did was to break down those bipartisan negotiations. what we thought might lead to a solution has fallen apart when the house republican leader walked out. now the president is trying to pick up the pieces and put it back together and move us toward a solution. if he was impatient about it yesterday, he has a right to be. one of the very serious problems we face is this. if we want to deal with this deficit in real terms, make a real impact on it, we have got to have more bipartisan cooperation. that's a cliche around here but it's a fact. i was on the president's deficit commission, the bowles-simpson commission. i sat there for almost ten months and i listened to

everything. i tried to learn as best i could what we're facing. at the end of the day, i voted for the commission report. 11 out of 18 of us did, a bipartisan vote. and it was tough and it wasn't easy and there were parts of it that i hated as a democrat, and yet i knew that if we were going to solve this problem, there was no other way to do it. we had to say on the republican side of the aisle you have to step up with us and find ways to bring revenue to our government. mr. president, today we are bringing in 14% of our gross domestic product in federal revenue, federal tax receipts. gross domestic product is the sum total of our economy, all the production of goods and services. 14% of it comes in in federal revenue, 24% goes out in federal payments. spending. that 10% difference equals the annual deficit. just ten years ago, we were in

balance. when president william jefferson clinton left office, the federal budget was balanced, just ten years ago. at that moment in time, ten years ago, the national debt, the net national debt of the united states of america from george washington through william jefferson clinton's eight years was $5 trillion. eight years later when president george w. bush left office, the national debt had grown from from $5 trillion to to $11 trillion. more than doubled in an eight-year period of time. you ask yourself how could that happen in eight years that we could fall so deeply into debt. there are three basic reasons it happened. we fought two wars and didn't pay for them so the spence of those wars was added directly to our national debt. the president's economic theory was the best way to move the economy was for us to give treks to the wealthiest people in america, and he did it in the

midst of a war, something no president had ever done, which went directly added to the debt. and he signed into law programs that weren't paid for, expensive programs. and so we ended up with an an $11 trillion debt facing the new president, then-president obama being sworn in. and a failed economic policy with hundreds of thousands of americans out of work and losing jobs by the day. that's what the president inherited. now he's tried to right the ship and move us forward and it's been hard and it's been slow and it's been frustrating. i think he's done his best and i think he's done a good job at it. first he put in a stimulus package of about $800 billion, and as the president knows, as the presiding officer here knows, 40% of that was tax cuts, tax cuts to families across america to help them out of the recession. another 25% of it went to building roads and bridges and highways and high-speed rail, infrastructure that will serve america for generations.

and the remainder of that went into helping state and local governments get through difficult times. we sent extra money to states because we knew a lot of people were out of work, they would need unemployment checks, they would need help to pay their hospital bills. we put that money into a stimulus package to stop what was a hemorrhaging in this economy, and i think it worked to slow down the decline. it did not turn it around as quickly as we had liked. then last december, the president said on a bipartisan basil agree with the republicans to extend all tax cuts for everybody, highest income to lowest income and extend unemployment benefit payments, and we passed that as well. the president has tried, and we are coming forward out of the recession ever so slowly. now we run the very risk of not extending the debt ceiling and plunging ourselves back into a recession even worse than where we started. so is the president impatient? you bet he is. impatient to the point where he

invited congress to maybe come to work next week. many of us had felt that we could spend a few days back home. i was going to spend the time after the fourth of july traveling around my state. it's a big state. but i guess it's clear now that my job is to be here, and i will be, along with other members. and the house will be in session. we're in the strange period of time here where the house of representatives comes and goes even when the senate is in session, so we kind of see each other in passing. well, we'll both be together next week, and i hope we will stay here and get this job done. the house is scheduled to go into another recess july 17-23. i certainly hope they don't do that. they better stay in town. let's get this done before august 2. mr. president, we have a serious problem facing us with job creation in this country. there is no question about it. and i think we can move forward on this as long as we understand some basics.

the key to creating jobs in america is an expanding, positive economy. it's a feeling by people in this country and around the world that we are moving forward. and sadly, people are not going to get that feeling unless we get our act together in washington. it means democrats and republicans working together. i have tried for about five or six months now with a group of -- bipartisan group of senators to come up with a way to do this, and unfortunately one of the republican senators of oklahoma walked away from that conversation as well. but we still have a job ahead of us, and it's one that we ought to face. i sincerely believe that the bowles-simpson commission is the right paradigm, the right direction for us in terms of where our nation, our budget should go. it calls for some changes many democrats will find painful and changes republicans will have to struggle to accept as well, but those are the changes that will be needed. if we fail to include revenue in

this discussion about reducing the debt, if it's just spending cuts, it can only go so far. if we include revenue, we can talk about a much bigger package of deficit reduction, much more credible, more positive impact. during the course of the last few days, we have tried to identify on the floor some parts of the tax code that can be changed to save money for our economy. each year, our tax code, that body of laws relating to taxes in america provides deductions and credits and exclusions and special treatment that spares individuals and companies from paying $1.1 trillion in taxes each year. it includes such things as the employers exclusion of health insurance premiums, mortgage interest deductions, charitable deductions, state and local tax payments, all of these things and many others are included in that tax code. it is rare that we open that tax

code and ask the question is this needed? in the last few days, we have come to the floor and talked about tax subsidies and tack breaks that aren't needed, that frankly have to be sacrificed in order to get this economy back on its feet. we talked about one that is incredible. in the first quarter of this year, exxonmobil declared profits of $10 billion, one of the most profitable quarters in the history of american business, and we as taxpayers continue to subsidize exxonmobil. why? they're doing quite well. and remember the last time you filled your tank with gas? it doesn't look like they are sparing us when it comes to raising the price of a gallon of gas. so i think that subsidy should go. subsidies to the oil and gas companies at this moment in history are really unacceptable. we have a thriving, profitable industry that does not need a federal tax crunch.

take a look at some of the other ones we have talked about as well. mr. president, you know we provide tax subsidies for american businesses that want to ship their jobs overseas? we call it the deferral of income. it says if you want to move your business overseas, and general right a profit, you can hang onto that money, you don't have to pay taxes on it. it's deferal of taxes. it's a tax break for a company that decided to pick up and move someplace else. why? why would we create a tax incentive to do that? if a company decides that's the way to make a profit, so be it. i'm sorry they are leaving america, but we shouldn't volunteer to subsidize that decision that cost good-paying jobs in our country. and there are a variety of other smaller tax subsidies, but those we ought to raise questions about, that's for sure. tax subsidies for people who are lucky enough to own a yacht. we want a give a tax subsidy for

people who are lucky enough to own a jet plane, people who are lucky enough to have thoroughbred horses. most of the folks, the owners that stand at the winner's circle at these races don't look like regular working stiffs. they look like folks that are doing pretty well in life. why is the tax code subsidizing that particular industry? i think it's a valuable and important question. why don't we put these things on the table? why don't we ask ourselves whether at a time of deficit when we really need to not only reduce spending but come up with revenue that there are some things we can no longer afford under our tax code. bowles-simpson went a step further and said if you start making substantial changes and reducing the tax expenditures, deductions and credits, you can actually reduce marginal income tax rates for individuals and businesses. i think that's a valuable thing to look at. we don't have to eliminate everything in the tax code, but making substantial changes could

result in a fairer, more comprehensible tax system. and, mr. president, let me say one other thing that i think is guiding me in this debate and i think you as well. i think about an america, a nation of values that has always said, you know, we have got to care for the most vulnerable people in our country. some of these people through no fault of their own were born with physical and mental shortcomes and limitations. some of them are dealing with illnesses that we wouldn't wish on anyone. many come from an impoverished background and are struggling to just make do with the basics in life. i feel at the end of the day we can make this economy move forward and we could do it in a sensible and humane way. we can protect the basic safety net. one of the elements in that safety net is medicaid. yesterday, i had a meeting with some people i respect very much.

they represented the heads of children's hospitals from all over the united states, even from your state who came in to see me. my family has relied on those children's hospitals in washington, d.c., and in chicago and other places, and thank goodness they're there. i don't know of more caring, competent professionals in america. and more than most hospitals, children's hospitals bring in patients on medicaid. these are patients that aren't from families that are wealthy. they aren't from families that have health insurance policies, private health insurance policies. no, by and large, they are families, the poorest families. one-third of the children in america are covered by medicaid, one-third. that's where they get their health care. and if we talk about cutting back on medicaid, this program for low-income and disabled people, those children will be

unfortunate victims if that budget discussion. also a large part of medicaid goes for elderly people who have spent their life savings and are living their last years in nursing homes and convalescent centers. medicaid pays that. cutbacks in medicaid run the real risk of pushing those people out of quality care into lower-quality care or the streets. is that what america's all about? would we preserve a tax break for a person who owns thoroug ar thoroughbread horses and then say that elderly lady needs to nursing home she's been in. would we preserve the tax break for someone who owns a yawt and say unfortunately we won't be able to cover the cost for a needed surgery for a poor child at a children's hospital in chicago? if that sounds like an exaggeration, it's not. that's what this debate comes

to. whether or not we want to defend tax breaks for the well-off people in america at the expense of the most vulnerable. we're better than that. and most well-off people that i know -- and i have friends who are doing very well in life -- would not be afraid to pay a little bit more in taxes to make sure america continues to move forward. they feel blessed to be a part of this country and blessed to be successful in this country, and they don't resent the suggestion that they need to pay a little bit more when times are difficult. they're certainly prepared to sacrifice. but some come to the floor here and think it is an outrage to ask oil companies not to take a subsidy in their most profitable year. they think it's an outrage to ask the wealthiest people in america to give up a tax break on a jet that they happen to own and use for personal purposes or business purposes. i don't think that's what america's about and i don't think that's what we should be about. let's come together in a bipartisan fashion, make the spending cuts which need to be made both on the defense said

and the non-defense side, then deal with revenue sources, either making certain that those in the highest income categories are paying their fair share of taxes or at least don't receive the current tax subsidies that are going their way and let's deal with the reality of this budget deficit. time's awasting. if we wait until august 1 to get this done, it may be too late. at some point if we're not careful, 30 bond dealers somewhere in the united states or some other country may start this ball rolling before we do, and if they do, questioning the credit reputation of the united states of america, interest rates will start moving up and we won't be able to move fast enough to stop it. that's why the president was impatient yesterday. that's why we should be in session this next week, and that's why we need to roll up our sleeves and stop walking out of meetings on budget negotiations and stay in the room until we get the job done. mr. president, i yield the floor and suggest the absence of a

quorum. the presiding officer: the clerk will call the roll. quorum call:

further calling of the roll be dispensed wit with. the presiding officer: without objection.

mr. lautenberg: mr. president, i want to be sure where we are. now, are we in morning business at this point in time? the presiding officer: i believe so, yes. mr. lautenberg: i ask that only so i have some recognition of what the time availability is. i don't plan to take too long. the presiding officer: there are ten-minute grants. mr. lautenberg: thank you, mr. president. i wonder what the american public thinks about when they see an empty chamber, hear talk, hear mutterings about class warfare. and what puzzles me is which class is making war against which class and where are the casualties?

well, as we look around, i ask the question: are we picking on the poor, rich folk, on those with wealth, abundant wealth, those who earn over a million dollars a year, those fortunate enough to have been able to bring their talent, their knowledge, their ability to the world's most important stage? are they immune from taking a bit part on the stage of human concerns once in awhile because they're being asked to make an extra contribution to the well-being of our country? i don't think so. mr. president, i'm one of those fortunate, lucky enough to have had a chance to succeed because of a government action. and few of us, certainly not me,

who served in the military achieved the status of a hero like our friend, dan inouye, who sacrificed so greatly for his country that he has the highest medal awarded for bravery that america can give. but bec imu because but, because did i my diewrkts i did my duty and was awarded with the g.i. bill paying my college education and even giving knee a little stipend -- giving me a little stipend with that. turned my life around. it enabled me to be one of three founders of a company called a.d.p., a company today employing 45,000 people -- 45,000 people. our parents were poor.

we worried about meals on the table. we couldn't afford the right kind of cleg clothing. we couldn't afford a bicycle that my mother bought me at a birthday. my father argued with her and had it taken back because it was $1 a week and we couldn't afford t45,000 people, mr. president. one of america's most successful companies. the longest record of any company -- and i don't want to dwell on this -- one of the companies with the longest growth records in profits, 10% each and every year for 42 years in a row. kid from the back of a candy store. so i look at our caned look at what it is that we're trying to do, and it's hard to figure out. what happened? why are we looking at these drastic cuts in programs that

can help people? why are we engaged -- not engaged in ways to help people, to it into provide help and assistance, to help them get along in life and be prepared to take over the main reins of leadership in the future? our friends on the republican side willing to end medicare as we know it, decimating one of the most successful programs in the history of our country? they are willing to unravel the very fabric of our nation and critical services that help families struggling to give their kids a decent education, good health, a future, a job opportunity. what is it that they want to take away with these cuts, mr. president? i can tell you, as a businessman

for a long time -- 30 years before i got here, and i'm accustomed to look the at balance sheets ant financial statements, and one doesn't have to be an accountant or an executive to understand that on a financial statement you have two parts, two significant parts. one is expenses, costs. the other, mr. president, are revenues -- revenues. that's the income that you have to get in order to be able to afford to pay the expenses. now, if all you want to do is just cut expenses, then you're cutting in the sinew and the flesh and there isn't much left. instead of saying, okay, here's -- here's what ought to happen: those who are the wealthiest and living with wealth is a pleasure, but that doesn't mean that you don't have to -- an obligation to the country and have to do something a little different. and making the wealthier -- the

most privileged more privileged than they've been. and that's true. you look at the big oil companies pocketing $4 billion a year in tax breaks, each and every year. i don't -- there are no ways -- no earnings that are unconscionable. but when you look at this, and, mr. president, i think about a period of time -- and i reflect, unfortunately, the age -- my experience and when which was growing up. and i look at a time during the war -- the war, world war ii, and we had a program called the excess profits tax. and we said that those companies that are making so much money have got to do their share and be helpful to the country at large and to make certain that

we -- that they pay some share of what the country is going through. mr. president, i just checked. i wanted to be sure. to date, we have lost 4,400 americans to the war in iraq. we've lost over 1,600 to the war in afghanistan. those are homes that are without a son, a daughter, a brother, a father, without homes. where is the sacrifice on the part of the others here? no, no, got to take care of the rich. got to make sure that they're more comfortable than they are, whether it is a bigger yacht for a bigger airplane or a bigger house. we have to protect those people. they don't need any protection. what they need to do is share in the pain that america is going through, and this is a reminder

for me. make no mistake, greed is the fuel that drives big oil, and it is time we end their free ride on the taxpayers' dime. the big five oil companies have made almost $1 trillion in profit in the past decade, and that's a -- that's quite a reward for these folks. b.p., $7.1 billion in the first three months of 2011, as they ground out the environment in the gulf of mexico. imagine, $7.1 billion -- in a quarter. exxon, $10 billion in a quarter. shell, $8 billion -- these are rounded numbers -- in a quarter. they don't need help, mr. president. what they need is to help, to

help their country work its way through the crisis that we're in now. so when we -- when we see what's being asked by those on the other side, have sympathy, have sensitivity toward the wealthiest among us because they -- they can't afford extra money, they can't afford it no, they can't afford it because the other people are doing the sack cricialal work and they don't want to -- sacrificial work and they don't want to help the other families to provide a future for their children. they don't want to be able to help the families who need help with health care or the job market. that's not what they're about. so why should we use some of the money to invest in a stronger america, pay down our debt, prepare our young people to carry on the responsibilities for leadership in the future?

big oil's greed is helping to inflate our deficit. and every day americans are footing the bill. pull up to the gas station, and when someone has to spend $40, $50 to fill up a tank of gas, very often it is at a sacrifice for other things in their lives. it's terrible and you see this all over. we have a republican governor in the state of nothe new jersey rt now who is doing major cutting, and the result is that a family that makes $24,000 a year now -- family income -- will have to spend over $1,000 a year more for their health services. $1,000 to a family making $24,000 gross, a family that earns $60,000 will have to spend over $3,000 to pay for their health care. and you think that the

colleagues on the other side, therthere are a lost intelligent people over there and i'm sure they're sympathetic people. why wouldn't they wnts to pu waa stop to this madness? we're grateful for the things that have happened to us instead of saying, no, you got to have more. if you make $10 million a year, you got to have more. if you make $20 million a year or whatever it is, you need more. it's an outrage. big oil is doing everything in its power to protect its subsidies and the republicans are doing everything in their power to help them. last month 45 republican senators voted against ending these wasteful subsidies and using the money to reduce the deficit. last week they chose to walk out on deficit-reduction negotiations, rather than even considering putting a stop to big oil giveaways.

making oil companies pay their fair share in taxes isn't going to hurt the industry. it just means big oil executives might have to do with a smaller swimming pool or wait a little while longer to buy a bigger yacht. mr. president, it's clearly offensive, and they're not helping. they're not helping lift the spirit in america. people are discouraged, worried about losing their homes, worried about their kids not being able to get an education, that they're emotionally, intellectual qualified for, because they don't have the money, because it's not available to them. and so when we look at what's happened here -- now, i've got to be fair, mr. president. and when this poor guy, c.e.o. of exxon, is earning only $29 million a year ... come on. give him a break. he has to have a chance to

preserve more of that income. why should he pay to help this country weather the storm, weather the wars, weather the recession? conocophillips, he is not doing as good as the first guy. he only made $18 unti million in 2010. and the third one, the chevron c.e.o., he got paid $16 million. and you know how the money gets to them? through nickles, dimes, quarters, and dollars at gasoline pump. that's how the money gets there. that's how -- how else can this be afforded? by those who pull up to the gas station and say, i got to buy 10 gallons of gas around here. around here, that's about $45. that's a lot of money. so instead of being fiscally responsible by ending the big oil -- big oil's big windfall, republicans have another idea. they want to cut the drft by

ending medicaid as -- they want to cut the deficit by ending medicare as we know it, the most successful program next to social security. seniors are struggling. the big oil companies certainly aren't. i don't think this -- these fellows are struggling. i don't think they're doing without anything. i wish the other side would listen a little more closely to what the american people want. almost 3/4 of the americans want us to stop giving millions in tax breaks to the big oil companies each year. the american people know that these subsidies are unnecessary, ineffective, and basically immoral. we should take the $4 billion we give away to big oil each year and use that money to pay down our deficit. that's a good idea. and if we can do that then it starts to make things a lot easier, to continue to provide the services that are critical, essential for the average family.

we can't restore fiscal sanity here until we start paying more attention to the revenue column in our ledger. as i said before, i was a c.e.o. for many years, 30 years before i got here, and i know you can't run a company or a country without a good, strong revenue flow. so i call on my colleagues, please listen to what your country needs, see what you can do to make the country stronger because if our middle class -- our modest income class starts to fail along the way, we will not be able to conduct business as usual. so it's for your own protection. get with it. make sure they understand that you can't just get more of what's coming out, that you got to give something back to this great country of ours. so, i call on my colleagues, get big oil off the federal welfare roll. let's invest in our country's future. and not further -- have larger

windfalls for oil industry lobbyists and lawyers. we got to make sure our children and grandchildren inherit a country that's fiscally sound, morally responsible, able to pri health care, able to provide an education, able to guarantee that a child can prepare to be a leader in the future, to make sure that everybody sees a chance for themselves to succeed, to not be dependent on government programs but at least be able to have those programs to get them started in life. mr. president, with that, i yield the floor, and i note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call: stphao*

quorum call:

mr. reid: mr. president? the presiding officer: the leader. mr. reid: i ask unanimous consent the call of the quorum be terminated. the presiding officer: without objection. mr. reid: i ask unanimous consent the senate proceed to executive session to consider the following nominations. calendar number 102, 120, 174, 175, 176, 177, 178, 179, 180, 181, 186, 187, 188, 189, 190, 1 -9d 1, 192, 193, 195, 198, 199, 200, 201, 202, 203, 204, 205, 206, 2707, 208, 213, 215, 217,

218, 219, 220, 221, 222, 223, 224, 225, 227, 228, 229, 233, 234, 235, 236, 237, 238, 239, 240, 241, 242, 243, 244, 245, 246, 247, and anonymouses placed on the secretary's desk in the air force, army, coast guard, foreign service and navy. the nominations be confirmed en bloc, the motion to reconsider be considered made and laid on the table with no intervening action or debate and no further motion be in order to any of the nominations, any statements in relation to any of the nominations be printed in the record and the president be immediately notified of the senate's action. the presiding officer: without objection. mr. reid: mr. president, i

express my appreciation to senator sanders, senator leahy, my longtime friend and former employee in the department of justice, ron white, and the attorney general and others for working to help us get through this stalemate that we were involved in. i ask unanimous consent that the "help" committee be discharged from the following nomination -- there's two are them, nominations -- 678, public health service nominations, beginning with presidential nomination 678, public health service nominations beginning with mary j.w w. w. which hoi, d ending with christopher p. morris, the nomination be placed on the executive calendar, the nominations be confirmed en bloc, the motion to rebe considered made and laid on the table there, be no intervening action or debate and that no further motions be in order to any of the nominations, any

statements relating to the nominations be printed in the record and the president be immediately notified of the senate's action. the presiding officer: without objection. mr. reid: i ask unanimous consent that the environment and public works committee be discharged from further consideration of the following nominations, presidential nomination 341, major general michael j. walsh, united states army, to be a member of the president's -- member and president of the mississippi river commission, presidential nomination number 342, rear admiral jonathan w. bailey to be a member of the mississippi river commission, the nomination be placed on the executive calendar, that the nominations be confirmed en bloc, the motion to reconsider be considered made and laid on the table with no intervening action or debate, d, that no further motions be in order to any of the nominations, that any statements related to the nominations be printed in the record, the president be immediately notified of the senate's action and the senate then resume legislative session. the presiding officer: without objection.

mr. reid: morning business be extended for another hour -- [inaudible] -- and that -- the presiding officer: without objection.

mr. reid: car calendar number 79, the nomination be confirmed, that any statements related be printed in the record, the president be immediately notified of the senate's arcs the senate then resume legislative session. the presiding officer: without objection. mr. reid: the chair approve my consent agreement about morning business extending for an hour, is that right? the presiding officer: yes. mr. reid: note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call: he

majority leader. mr. reid: i don't believe we're in a quorum call, we? are we? the presiding officer: we are. mr. reid: we are? the presiding officer: yes, sir. mr. reid: i guess, what's new? mr. president, i ask unanimous consent the quorum call be terminated. the presiding officer: it there any objection? hearing none, without objection. mr. reid: i ask consent the judiciary committee be discharged from further consideration of -- and the senate proceed to s. res. 165. the presiding officer: the clerk will report. the clerk: s. res. 165, designating july 23, 2011, as national day of the american cowboy. the presiding officer: without objection, the committee is discharged and the senate will proceed to immediate action. mr. reid: i ask unanimous consent the resolution be agreed to, the preamble be agreed to, the motion to reconsider be laid

on the table. the presiding officer: without objection. mr. reid: i ask unanimous consent the commerce committee be discharged from further consideration and the senate proceed to s. res. 170. the presiding officer: the clerk will report. the clerk: s. res. 170, honoring admiral thad allen of the united states coast guard, retired, for his lifetime of selfless commitment and exemplary service to the united states. the presiding officer: without objection, the committee is discharged and the senate will proceed to the measure. mr. reid: i ask unanimous consent the resolution be agreed to, the preamble be agreed to, the motion to reconsider be laid on the table. the presiding officer: without objection. mr. reid: i ask consent the senate now proceed to s. res. 224. the presiding officer: the clerk will report. the clerk:ess resthe clerk: s. , congratulating the soil science of america on its 75th anniversary. the presiding officer: without any further objection, the

senate will proceed to the matter. mr. reid: i ask unanimous consent the resolution be agreed to, the preamble be agreed to, the motion to reconsider be laid on the table. the presiding officer: without objection. mr. reid: i ask unanimous consent that the senate proceed to s. res. 225. the presiding officer: the clerk will report. the clerk: s. res. 225, congratulating the university of south carolina baseball team for its gritty and record-breaking pursuit of back-to-back national collegiate athletic association division i baseball national championships. the presiding officer: without objection, the senate will proceed to the measure. mr. reid: i ask unanimous consent the resolution be agreed to, the preamble be agreed to, the motion to reconsider be laid on the table. the presiding officer: without objection. mr. reid: note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

quorum call:

mr. reid: i ask the call of the quorum be terminated. the presiding officer: without objection. mr. reid: i ask unanimous consent the following bills which are at the desk be considered to have been read twice en bloc and placed on the calendar: s. 1317 from senator demint, s. 1323 from senator reid of neff. the presiding officer: without objection.

mr. reid: i note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call: i move to proceed o

calendar number 88, s.j. res. 20. the presiding officer: without objection, the clerk will report. mr. reid: i have a cloture motion at the desk following the report. the clerk: calendar number 88, s-pblgsz 20 authorizing the limited use of the united states armed forces in support of the nato mission in libya. mr. reid: the clerk will report my cloture motion, please. the presiding officer: the clerk will report the cloture motion. the clerk: cloture motion: we the undersigned senators in accordance with the provisions of rule 22 of the standing rules of the senate hereby move to bring to a close debate on the motion to proceed to calendar number 88, s.j. res. 20, a joint resolution authorizing limited use of the united states armed

forces in support of the nato mission in libya, signed by 17 senators as follows. mr. reid: mr. president, i'd ask consent the names not be read. the presiding officer: without objection. mr. reid: i ask unanimous consent that the vote on the motion to invoke cloture occur at 5:00 p.m. on tuesday, july 5 and the mandatory quorum under rule 22 be waived. the presiding officer: without objection. mr. reid: i ask unanimous consent that when the senate completes its business today it adjourn until 11:00 a.m. on friday, july 1 for pro forma session only with no business conducted. when the senate adjourns on friday, july 1 it stand adjourned until 2:00 p.m. on tuesday, july 5. following the prayer and pledge, the journal of proceedings be approved to date, the morning hour deemed expired, and the time for the two leaders be reserved for use later in the tkaeufplt following leader remarks -- day. following leader remarks, the

senate move to proceed to calendar number 88. the presiding officer: without objection. mr. reid: the first vote will occur next tuesday, july 5 at 5:00 p.m. on cloture on the motion to proceed to s.j. res. 20. we'll run longer than usual to accommodate senators returning after the independence day holiday. if there is no further business to come before the senate, i ask we adjourn under the previous order. the presiding officer: the senate stands adjourned until senate stands adjourned until

>> i have huge trust in the united states of america. i've read my post earlier over and over.

[laughter] and i have huge they in the democratic process. >> next, one of the top cybersecurity officials at the homeland security department on federal efforts to safeguard computer networks from attack, speaking to corporate executives at "the wall street journal" form, mcconnell also talks about intellectual property laws and cyberattacks. this is just under an hour. [applause] well, we are here to welcome

bruce mcconnell from dhs and are going to talk about cybersecurity. before we do that, can i ask a group how many of you have the chief information officer report to you, to the cfo? may be a fourth to one third. how many of your companies report directly to the cbo? a little bit more. so definitely a third to a half. and so the rest -- there is another reporting structures. >> can ask a question related to that? in office cases, for those of you who have a chief information security officer, does that person report to the cio or to the chief risk officer? chief risk officer. >> that's a lot of companies that chief information security officers. this is kind of a new, very hot

area in chopper could in right now. >> brews, we have in your area. it used to be that a company without its front doors and maybe put a fence around the perimeter and there would be a cop on the beat making sure anyone recommend a friend who are would take it in. so not that we have this new sort of rattling of the front door and while these executives have been here no doubt, there've been hundreds of hits yesterday. maybe then passes it. the financial security area. who is the cop on the beat clicks do is watch and outcome mouthing these companies deal with the person rattling on the front door? >> yeah, it is a little bit of the wild west. the sheriff hasn't actually

showed up in cyberspace. so we are in an earlier part of the evolution of this industry in approaching this problem. cyberspace is part really owned and operated there are issues involving government getting my vote because it involves the transmission and handling of information, which is maybe proprietary or maybe personal information. part of why it's refocusing on the role of the government. if you think about department of homeland security, what is their mission? nobody's really sure, what those guys do except happy down to the airport. so it's our overall mission to create a secure and resilient place with the american way of

life ranges from stopping terrorist attacks to protecting the borders to making sure we can respond in a resilient way when there's natural disaster to safeguarding and securing cyberspace. so in particular, we had the job of protecting the federal civilian agencies that the treasury department in your culture department fall under our projection and we provide protection for them as a protective kind of shield for them and help them protect themselves. and with respect to the air, the current job is providing information and otherwise helping him and critical infrastructure companies in particular protect themselves. so we have things going now where we might have a little more active role with the government in these cases. we can talk about that, but they work in progress at this point. >> tell about the active role because it's a sensitive issue. there might be an attack in the fbi may have called the people

in those very sophisticated and state-sponsored. it's always a synonym for china. >> not just china. for proxy there is good and yet they don't want the government to come in and look at the dvd player. they have concerns about confidentiality. what can we do for this company is? >> couple things. which already provide information and if you go, for example to computer emergency readiness team, which of course is government agency has acronyms, search and your csi is know about this committee can find the latest alert also picked out by commercial companies, et cetera. so that's kind of in the information piece. there's a couple other things we're doing.

we are doing an experiment right now with some of the defense companies to provide them with the same kind of security we use on our military networks. so basically we have information about threats that is not publicly available and we are now providing information to some of the information -- internet service providers who serve these defense companies and they are using that to block known bad traffic. what he known bad traffic are known now as just one piece of the problem, of course. ..

looking at and addressing that is currently being considered by congress. >> were you responding positively they don't necessarily see that as standardizing that security, they don't see that as a risk of their confidentiality? >> so the private-sector response at the moment the legislative proposal is a mixed bag because on the one hand it does kind of set a level playing field but also adds an additional government intervention in the marketplace.

our view at this point is we've been trying to get the market to solve cybersecurity for years and we don't want to repeat the definition of insanity which is continuing to do the same thing over and over expecting a different outcome so we are taking a little bit more aggressive approach the way we will work out with all of you and other parts of the industry in the congress. there is interest also in the protective program we are doing with the defense industrial base assuming we can get the confidentiality and the civil liberties aspect of it. >> when you deal with the private sector do you see a sector of private industry that's doing it has best that can do or pretty close? >> the conventional wisdom is supported by our analysts financial-services sector has been at this for a long time. the understand risk and this particular risk better than most, so i would put them at the top of the list.

>> and the defense industry? >> it's more of i would say a mixed bag. the defense industry is a first said there are large companies and small companies and so -- >> this is an area of concern to the dhs because of intellectual property theft. >> that is what we are seeing as the main threat these days. there is economically based criminal activity involved in fraud, financial fraud and then the theft of intellectual property, industrial secrets and that kind of thing and defense secrets from defense companies also but as a general matter for endangering the overall long-term competitiveness in the country. >> so since it's just this group plus a few television cameras broadcasting to the rest of the world, and i was hinting that it's largely china and you noted correctly that its other sources as well. in the realm of the threat bet

intellectual property or otherwise, feels besides china is on that this? >> the dhs are our job is to attack and defend against the problem, not into attribution, and i have a -- my view on this actually is that it doesn't do a lot of good to call out, you know, these particular countries and kind of demonize them in a way for this because to china for a simple cybersecurity is a big issue in the china. they are experiencing significant hacking problems, financial fraud and that kind of thing so there is a win-win solution that involves us cooperating with them and working on common solutions still competitiveness and contests and things like that but my view is that it's actually more helpful to figure out how to protect ourselves and also how to work with others because this is a global thing and no one country can solve it

for themselves. the traffic and all of you are international matters. >> but it's fair to say there's multiple sources around the world. >> absolutely. >> in wired magazine you did a piece with a colleague from dhs discarding the public and private issues involved in this and what the government can help and where there are -- when it becomes tricky and you said everyone practices some level of cybersecurity but these measures must also get easier. the year simply too hard. what did you mean by that? >> one example of that is that we are with these defense company is providing this what is an enhanced firewall so we are putting starts in the fire wall around these companies, and which is what we do in the military and increasing extent with our federal civilian agency networks to stop the known middleware from coming in and

to, you know, send it back out. so, that is a good thing but as i mentioned, some of the more recent attacks are much more sophisticated and don't require just the sending of bad now where. so for example in this case, in those cases it's a technique known as spearfishing where the attacker sends a very legitimate looking e-mail to several of your employees and it doesn't take many. one of them opens it up and that clicks on the link and the a sample more recently was information about the 2011 personnel benefit program and all the other attributes of the e-mail look right and look like it was coming from the right place, so people open that and then opens up or down loads on

your machine a keystroke which allows the attacker to ultimately in personate you or establish a long-term presence and then they wait around and work their way into the controlled parts of your network and then they take the data. >> in the e-mail not clicking on it -- >> clicking on the length of the website. so anyway, that isn't protected by these protections against exterior attacks. similarly if you look at the problem that we had in the government that was an authorized user guarding it out because he put stuff on his thumb drive and walked out with it, so there are multiple aspects and having to deal with in these multiple ways means you need a whole program of that and we are used to that in different areas of security but we are not good at it yet and so the complexity and adds to our

inability to maintain a uniform level of protection. >> having developed expertise in the dhs and seeing the company is doing it right like those in the financial sector and a few others, what advice would you give to these executives how to assess the vulnerability and then address the floor above the? >> i was pleased as we were talking yesterday before this to be talking to people who understand about risk all the time so it seems to me this has to be put into the class, another class of risk you're dealing with and evaluated against other pieces, not just a rotational aspect but for the long-term competitiveness. at the moment any way the threat we are going to take down the company or deface your web sites seen on the one hand less prevalent and on the other less

consequential. so that is the first thing is to try to think about it in that way and that is why i ask the question whether the chief information security officer reports were the chief risk officer, and some -- it depends on the company cultures. obviously there is no one-size-fits-all in any of these cases but somebody described it's like having the defense coach report to the offense coach said their job is to make the systems work, get them done, cheap make sure they are all the time and the information security officer tends to be looked at as a cost center so there may be some advantages and not necessarily to change the reporting but thinking about it more on a risk-based framework i think that is a key factor. >> that's for the chief information security officer. who in the executive branch would do have the report to?

>> any other thoughts on advice for them besides that important organization? >> i don't know. i'm interested in me your her views on this. i think it is something that on the awareness level, those working for a long time. when is attention going to be paid? so now is when that is starting to be done, so i think the other thing to do is to try to work with your peers on this. there's a number of ways we interact with private-sector kind of bye industry sector and we look with the critical infrastructure companies so that's an area where more interaction would be helpful to

understand what you're seeing and we can tell you some of the things so there's a number of forums we had to do. that and then they are pretty well known practice is to follow on the technical side and the user training and awareness as well as some of the more technical things having the passwords and changing frequently. >> the businesses you consider critical infrastructure follows the purview of the dhs utilities. >> you have these chemical companies, transportation, things like that. >> do you go to those companies with a briefcase you kind of sit down at the meeting and say look, here's our recommendations, 15 or 20 recommendations and here's kind of a box you can begin to

deploy. i know that is way oversimplifying. >> it's more likely that a design that says on the web here's some things you should do and if you happen to come see as on the web you will see that and the post said investigations for the fbi and others in large incidents, so that's -- we're talking more about prevention and response. so we are moving in that direction to, as i suggest, a lay out set of risks people need to be looking at and dealing with and potentially creating a situation where people are required for the critical infrastructure to do that. but we are not there yet. >> let me ask one last question before him over 2 gallons of the audience can ask questions as

well. what is the secure internet like him? is that a dual pole sing? five for ten years down the road, what is this going to be? how are we going to corral this? >> the internet was built to be open and it is but it wasn't built to be secure so we are now paying the price of that and we've recently published a paper called enabling distributed to security in cyberspace, and with that it lays out a vision of the future internet or cyberspace in which machines are working with each other to protect themselves and all of last come and it gets into the kind of technical realm, but the point is that that is important is you can look at this in a couple of different ways, and one is can you have somebody come and

protect the and maybe we can have the government come and protect it and there is this vision we put out that rejects that and say one of the strengths of the internet is it's distributed nature that allows a lot of things to happen in a lot of places and there's a lot of ability for people to do things and so security has to build on that and be a shared responsibility. that's a lot harder to coordinate and become and become comprehensive because there's more actors and players but we are really going into a kind of a multi actor multi stakeholder world in a lot of areas in society and in our view of the future internet is then when we take advantage of that distribute it architecture to have a lot of crowd sourcing if you will protecting us rather than a single kind of overarching regime we might have in the more traditional areas and more traditional times. >> that's going to leave a lot up to the executives to be

hispanic it leaves a lot to them and other service providers. >> before opening up i want to go back to the china question or not just the china question. i take it that the dhs is not in the business of assigning blame and that hacking is a problem for the chinese as well as for us so there may be some solutions that are win win, but i persistently hear from senior corporate executives and government officials what they seem to believe for some reason is attacks by people who are agents of the chinese government or would be paid by the chinese government to either gather information or infiltrate critical infrastructure. is that supposition on their part? what do we know about that? >> a lot of this gets into areas

i'm not in able to talk about in this room -- >> we will allow you to talk about anything in this room. >> you're very kind, thank you so much. [laughter] >> i would say there's a lot of public reporting that talks about the intentions of countries not just chinese, to do things that involve the use of cyberspace or for their own purposes, and so if people have plans and intentions it's possible that they are implementing those, and i think -- i'm not trying to be -- go ahead. >> so you can't tell us what you know, but can you give us some sense of what you know? in other words, do we know where the attacks come from? do we have ways -- of the chinese government is systematically attacking our infrastructure to garner information would we know?

>> kind of yes and no because -- attribution is difficult in cyberspace. it was 18 years ago the new yorker cartoon the two dogs are sitting in front of the computer terminal and the one turns to the other and says a great thing about the internet is nobody knows you are a doll. [laughter] so, nobody knows where you're coming from either. so it's hard sometimes to pin down exactly but the ip addresses, internet protocol, those for -- the ones with of the three per coburn the battle are assigned by country blocks so you can tell where things are coming from. yes, that is the basic idea. who owns that and is behind it, who's sponsoring it is paying for it whether this is somebody acting efficiently or just happens to be doing it on the side to make some money, those things are harder to tell at least from looking at it just

using cyberspace. >> let's open up for questions. this is something all of you have to deal with on some level. yes, sir? >> chuck mcclain. another way to state your question is our level of sophistication on the defensive side as high as a level of sophistication on the offensive side in your opinion. >> the short answer to that in general is no because in cyberspace offensive wins right now so it's much harder to defend than it is to attack and the barriers to entry for the attack are low and barriers for the defense complicate an extensive for higher so the short answer is in general, no, we are not. in the best case, the most highly protected areas, i would say it's a pretty good parity, but even then we find issues.

>> well that ever change? is there a way to change the balance? >> i think that's right we need to build a system that is more inherently secure and that limits the risk more so it's kind of the vision i was talking about in enabling the security, and in addition, we have to do the other things in the infrastructure like train people to act better and then established norms in cyberspace, norms of behavior, so that we can apply international diplomatic pressure and things like that and say listen, this is not the way that we behavior. >> chaka from bank of america. if you can answer this, what do you worry about the most? >> does a lot of doomsday scenarios, such as people are going to take down the power system and stuff like that, and i actually don't worry about

those very much right now because i don't -- because the capability is fairly limited, and also because you what kind of get the sense that is going to be a part of another attack that might be coming in which case you would have a warning because the geopolitical situation would be worse. so, what i worry about is this continued theft of american companies and intellectual property. that's what bothers me the most right now because it's hard to see the cost in the short term yet in the long term, you know, we will see products coming over to us just like the stuff we had -- if you look at the weapons system side it's like okay, if you have designs of the weapons systems and makes it easier -- >> it is a what do we know question. do we know when the intellectual property theft, cyber theft occurs? >> we do when it's told so we do

have a reporting and companies tend to not report this publicly. >> do they generally know? >> not all the time. >> are there signs when that occurs? >> at first they may know when the fbi secret service calls them and says by the way, did you know you've been the subject of this? so that kind of detection that's known as data.gov loss prevention so it's like knowing what's coming out of your network as opposed to what's going in and also using anomalies, and all the analysis so what is a normal pattern why is he all of a sudden sending information over there? he never does that, so that requires analysis of your network and not homogeneity in the places you're doing that to be able to make the call that this is anomalous behavior. >> other questions? >> so we are all scared to death

now. judi brown. obviously this is an area the government spends a lot of time and energy on and it seems like it could become a black hole you could spend billions and hire thousands of experts and 2 tons of analysis yet how do you make the judgment of the right balance out its resources appropriately and would be the suggestion how we do the same. it's complicated, it's technical, it's scary and someone else will have to deal with that and to try to place resource it will become challenging pitch to the rest of the organization of why this is a priority. maybe some learning you have that in large organization dealing with that. >> as all of us in the room are somewhat constrained how much we can spend on anything these days but that makes it worse this is your sum game.

there is a lot of low hanging fruit following the basic practices and those kind of thing i would definitely start their presumably most of you have that already in place, but at that point it's really about using some of these more sophisticated things like, tools like lost prevention of an anomaly loss prevention are things i would be looking at and we are starting to do but are not leaders in this area across different partners and agencies at this time. >> can we bring a microphone right here? >> as technology changes as we go from the environment where we all own our data centers to the cloud, are we taking false

security deleting if we have our updated senator as we are better off how would you respond? >> depends. if the guy running your cloud services has a good security program, that's great. how do you evaluate that as a customer or their standards. can you make assertions about that? probably but how are you going to know that and where are the servers any way? there are at the end of the day if they are doing it wholesale it should cost less protecting it in your data centers but there's no underwriting labs for that. >> thank you very much. >> now we discussed on the research and treatment for juvenile diabetes. from today's washington journal, this is 40 minutes.

>> dr. richard as the chiefconte scientific officer with the juvenile diabetes research foundation and is here in insel washington this week with of the 2011 by the international convention we will get to that a little bit later in the segments but first, for the purpose of this discussion defineabetes an. guest: type 1 diabetes is a disorder or the insulin- producing beta cells of the pancreas had been destroyed by an autoimmune response. individuals with type 1 diabetes must take insulin at the rest of their lives. they don't, and they will die. type 2 diabetes, and contrast, the beta cells are there at the onset, and reflects a metabolic disorder in which insulin is present but the body cannot respond as well because of resistance. it is quite different. host: for type 1 diabetes, the

person who is afflicted with this disease would be -- would have to go through a lifetime of insulin therapy? guest: that is correct, and with tied to, many individuals go on insulin, but what type one, you are relegated to a lifetime of insulin. guest why that sometimes diagnose -- host: why is that sometimes it digest in people or nine juveniles? -- why is that sometimes diagnosed in people who are not juvenile? guest: you are right, it is a misnomer. host: scott whitaker is with the biotechnology industry organization. what is being discussed with regard to piped 1 diabetes? -- type 1 diabetes? guest: we bring leaders from all over the will to this event in

washington, d.c., to talk about all the research going on in the area of technology. specifically this year we decided to have a special focus on diabetes. we partnered with jdrf for panels and a chance to talk about the progress that is being made. we at scientists and businessmen and women here to talk about how they collaborate to find new ways to treat and hopefully cure type 1 and tietype 2 diabetes. host: what is the role by a medicine in the treatment of type 1 diabetes? guest: dr. insel can talk about that better than i can, but our companies doing research at the research they at do it eventually becomes a product that can treat people. insulin is a great example of a product that is a biotechnology

product that our companies helped create, and it is used for type one kids and adults who have diabetes. it is that type of thing and that type of research being done. eventually, more research will be done to treat this dreadful disease. host: can you give an example of research being done in by a medicine that will eventually help diabetics? guest: there is a lot of it. dr. insel will give you a better bet sample -- better example because jdrf is doing a lot of research on this. guest: imagine insolent in the body released on a -- insulin in the body released on glucose levels. that particular effort has been picked up by format, which illustrates that -- by pharma, which illustrates that we often work with biotechnology companies so that they can to

get the full weight. -- take it the full weight. there are lots of advances on the device site. host: we are talking about bio medicine and a juvenile diabetes with dr. richard insel and scott whitaker. if you would like to get involved in the conversation, by all means, give us a call. dixperienc fifth we're talkinabg about peoe who are our actually afflicted with diabetes. if you are a health cares, w provider for someone like that,

if there's someone in your famly to has type i diabetes we would like to get you you invold in conversation as involved in matter of fact, ourt call comes from someone who has experience with diabetes. from kansas, on our line of the folks dealing with diabetes. hello? caller: yes. i have had diabetes for 43 years. my comments it might sound a bit cynical, but they said wait until your previous gues -- segue onto your previous guest and lobbyists. i don't think there is strong enough effort to find a cure for diabetes, because the pharmacy lobby is way too strong in this country. i think about it -- stop and think about it -- if there were secure prevention created, think of the money they would lose. diabetes, we kind of joke about,

is not just a disease, it is an occupation for us if you are taking care of yourself. the extent of it is enormous, particularly when it comes to blood testing. i am lucky because my insurance company pays for my test strips. i have a lot of friends to a diabetic. they have to buy their test strips, sometimes as high as a dollar apiece. their insurance does not cover it. i want to check on my to see what the cost of producing -- i want jack online to see what the cost of producing the -- i once checked online to see what the cost of producing the test strips is, and it is pennies. it is a growth industry right now. look at the statistics of people who are getting type 1 and tied ype 2. why should they do anything about it? guest: i understand the collar's

perspective, and it is frustrating when you are dealing with the disease yourself. i have a 9-year-old daughter who suffers from type 1 diabetes. i work in the biotechnology industry, and i am interested in making sure that we someday find a cure to this disease. it is a dreadful disease we need to do more about it. i understand caller's perspective, but they are working day and night to find treatment for this. it is not just expensive for the individual, it is expensive for the health care system more broadly. $200 billion a year is spent on diabetes. want way we can reduce that is investing in science-based research. science-based research will eventually -- it is a long and difficult process, but it will hopefully lead to better therapies and a cure some de. i see the people in the industry, i work with them every day. i know their passion for this, i know the passion of the folks at jdrf, and they are dedicated and

committed to making sure we some may find a cure, and it's not a cure, a way to treat this for -- and if not a cure, a way to treat this to make it easier for people to live with. host: we want to show numbers we got from the american diabetes association at circa 2007. the total cost was $174 billion. $116 billion for direct medical costs. $58 billion for indirect costs. our next call comes from connecticut on our line for republicans. you are on "washington journal." caller: thank you. i happen to be a diabetic. i find that whereas one time my insulin came to me no cost, i am now having to pay copays for everything.

it is beginning to get terribly expensive. so what are you going to do about it? host: dr. richard insel. guest: jdrf and many of us in the field are committed to making sure that drugs sitting individuals with diabetes are affordable. -- saving individuals with diabetes are affordable. we have to make it available for people regardless of the socio- economic background. to make sure that these drugs and devices, which, as i mentioned, are truly blessed in and making it depends -- truly lifesaving and making a difference in people's lives, are affordable. host: marcie from denver, colorado, also experiencing type

1 diabetes. caller: my grandson was diagnosed with type 1 diabetes in fifth grade, i believe, and it is a hideous disease, especially as a child and a teenager. one of the things that his mother and i often discuss is nobody seems to really designate the difference between type one and type 2. they just say "diabetes." diabetes has the connotation of people who are overweight, that he too much, don't exercise. i'd -- eat too much, don't exercise. i think it is too bad that there is not a bigger purse to separate -- call it a " diabetes." second, i am concerned with the cuts in medicare, medicaid. his father is dead, so the insurance is gone, but his

stepfather was a successful builder and now he is not. she finally got him on medicaid, but if that gets cut, he dies. and this is a smart kid, a kid who has been in advanced placement classes and things like that in high school. he is fit. you cannot teach an inch on that. he just doesn't stand for what our politicians think it is or what the public thinks diabetes is. host: dr. insel, address again -- we started it decide when talking about the differences, but go through the differences and addressed her concern about the perception between the folks with type 1 diabetes and folks with type 2 diabetes. guest: type 1 diabetes is an autoimmune disorder with the beta cells in the pancreas are destroyed. by contrast, type 2 diabetes,

which occurs in adults and predominantly adolescence -- we are seeing more in adolescen ts. we do need to make this distinction, and we are doing our best. whether it is tied one or -- type one or type 2, these art societal issues. as we saw from the health care costs, representing about 1/5 of the medical care costs in the unites states, this is a tremendous societal burden. we as society must address a and make sure that the paryers todo pay for the care of these individuals. host: scott whitaker, the industry response to marci's concerned about diabetes. guest: as i said, my daughter suffers from the disease and i know how expensive it is.

it is also expensive to produce products to treat the disease. it is a systematic health care issue we have to deal with. it is not just about the cost of the product, but creating a system throughout the country where everyone can access to some type of all the entrance program so it can offset the costs. it is expensive and it gets difficult, but it takes a long time to create products, it takes a long time to go through the fda review cycle, and it is a very expensive proposition to bring these to market. at the end of the day, the companies said they indicated -- the companies are dedicated to continuing that research. host: in your opinion, is the federal government a help or hindrance to advancing by technological research in dealing with type 1 diabetes? guest: they are a help, and they can be more help. it is challenging right now. i've been in government myself, and i know the people who have worked at nih and fda at how

hard they labor to approve drugs and that science with the basic companies doing the research. we have to work very closely together. we need an fda that moves quickly when a they can, where it is a clear and transparent process of communication with our company's. as the product is going through the approval process, we know what we need to do to make sure that gets approved. at the end of the day, it is in everyone's interest that we have a safe and effective product for everyone suffering from this disease. it requires companies and the nih to work closely together. we're doing a good job, but we can do better, i think. host: you are one with -- one with dr. richard insel and scott whitaker. guest: my husband has type 1 diabetes, and it is a strain on us.

my question basically is, with health care reform and have a thing like that -- and everything like that, i don't understand why more people are not going for us to have universal health care. the costs with diabetes, the cost -- i have a child with a disability, the middle of medications -- mental health meditations. all that is totally outrageous. i know your basic subject today is diabetes. i have a medical question. i know they have been haile -- they have inhaled insulin. how is that research going and is it on the market now? guest: it is not on the market at this moment is still in research, and we have to use insulin installed medically.

host: next call. caller: about 15 years ago i cannot my daughter had type 1 diabetes for -- got -- i found out my daughter has type 1 diabetes. when the bank is shut down, that is the reason you get -- when the pancreas and shuts down, that is the reason you get tied one. how is the research going to make sure that the medication and they take for diabetes has less of an impact on the breakdown of certain organs. you find out that more and more people are dying each day from tight won because of the actor effect -- of type one because of the after effect. they follow the rules and red ink in terms of -- the rules and everything in terms of what they eat but they still, but a lot of different problems. guest: you are correct.

it the morbidity from this disease is on the complications of type 1 diabetes. kidney disease, blindness, heart disease and som on. the better one has good glucose control, the last obligations. -- less complications. it is to help people manage diabetes effectively, especially with the use of devices to help people monitor blood trigger more effectively throughout the day and during given my time -- different lifetime and daily needs. that innovation does continue. at the same time, we are developing drugs to prevent complications to protect those organs. there is ongoing research for that. host: last week the senate homeland security and governmental affairs committee at a hearing dealing with type 1 diabetes. during that hearing, a rep from the fda and a diabetes patient

talked about the pancreas technology in the works. >> while great strides have been made in management, it pervades all aspects of a person's life, presenting 8 particularly itunes burden for children and their parents. -- this is that -- particularly arduous burden for children and their parents. this life changing technology will positively impact diabetic health and quality of life. i am acutely aware of the benefits this system will provide. i say "will" because i am optimistic that researchers and the fda will bring this device to market. the artificial pancreas system will allow people with diabetes, especially children, to live

active needs without the -- to live active lives without the constant need to adjust glucose levels. host: tell us a little bit more about the research going on in the artificial pancreas. guest: it is interesting you ask that question, because later this morning at our event we will have us session focused on this exact issue. there is a great deal of promise, and dr. insel can talk about it from his perspective. the thing that is so important is that there is good cooperation from the government and fba, who is eventually going to approve the product, and the company's working on it. it is going to get to patients a lot quicker and more effectively, and it is going to help people could hold a glucose levels, which is a long-term benefit for those suffering type 1. host: how long did you think it will be before an artificial pancreas gets through the

vetting process and gets on the market? guest: difficult to predict. i want to be optimistic about it, but i hesitate to give you a date. it is a long and difficult process. but we are making progress. jdrf is investing a lot of time and resources in this specific project, and i think dr. insel might have a better sense of what this will come to fruition. guest: we will see different generations of products. the first one we would like to see is a device that turns off the insulin pump as glucose is low. ironically, we had this was available in canada, the u.k., australia, over 50 countries since 2008. we do not have the device in the united states. what we are hoping is that the regulatory agencies, in this case the fda, will make timely decisions in allowing that device which we think is safe, available to individuals with type 1 diabetes.

second generation and third generations of devices with increased capabilities will allow people to manage glucose more effectively. host: not that you are a spokesman for the fda, but what is the fda telling you and other doctors in the biotechnology industry as to why they had not approved this artificial pancreas is being used in other parts of the world? guest: we just received input from the fda in the last two weeks. we have been working for that input at an earlier time period. they want to see further clinical testing, they want to be reassured. ironically, we get individuals, as i mentioned, and other countries using this as a good safety record, and is saving lives. we want to see in a timely manner some decisions made by the fda. host: back to our discussion regarding biomedicine and type 1 diabetes. maryland, chilly and on our line for democrats. -- gillian on our line for

democrats. caller: having been diagnosed as glycine max low blood glucose, i am having to past two-three times a day. how does that relate to a full- fledged 1 or 2 diabetic, and where is this going and what is happening to me? i am asking doctors but i am not getting the kinds of answers i liked. guest: well, i cannot provide diagnosis on tv here, but let me point out that it is a very different entity. having said that, individuals with diabetes, especially if they are taking insulin, are very prone to low blitzer levels. 5-10% of individuals with diabetes don't even know their blood sugar is going low, and they can have car accidents, etc., which attests to the seriousness of this kind of condition. host: dr. richard insel is the

chief scientific officer for the juvenile diabetes research foundation. he joined jdrf in 2003. scott whitaker is the chief operating officer of the biotechnology industry organization. joined them in february 2005. bio, as the acronym goes, represents more than 1200 biotechnology companies and centers and related organizations across the u.s. and in more than 30 nations. back to the phones. washington on our line for republicans. caller: hi. can you hear me? host: i can. go ahead. caller: my mother-in-law has tied to diabetes, and about four years ago, she was getting constantly worse as she was taking medication. we got her on -- [unintelligible]

do you know that is, doctors? guest: i don't. caller: they derive from a plant stores, 64 minerals in it, all the minerals you are supposed to have. we understood that she was suffering from diabetes because she was lacking in chromium and vitamins,and thae b and you can buy this stuff in grocery stores and health food stores or by at online. four years ago, we got her on this stuff because we understood it would help her, and she was about to go on insulin. gradually, over the last four years, she has weaned off her medication and now she takes absolutely no medication any more. what do you think of that? guest: well, thanks for sharing, but i don't know of any scientific literature on that subject. but thank you for sharing that

observation. host: we want to break this discussion just a second to let our viewers know that a senior democratic aide tells nbc news that at 9:30 this morning, senator reid is scheduled to go to the floor to announce that the senate will forgo its scheduled recess for the weekend of july 4 and to stay in session to forge a deal on the deficit and to create jobs. you can find out details on our website, c-span.org. san burnie do you know, california, on the line at for those dealing with -- san bernadino, california, on the line for those dealing with the type 1 diabetes. caller: dr. insel, i am just curious about your research -- after reading the literature, i found out that people who refrain from eating all this processed food ridden with all

types of heavy shutters -- heavy sugars, they found out that your pancreas is over- secreting insulin. have you performed any type of research where when a person goes to a full plate of raw food, the pancreas is not secreting -- overloading the body with insulin. has there been any research performed on that? basically, the only research that you have been performing is just trying to find a cure. guest: to question is not relevant for type 1 diabetes, because in that situation, there is no insulin being made by the pancreas. but your question is relevant for individuals who don't have babies as well as individuals with type 2 diabetes. -- who don't have that diabetes as well as individuals with type 2 diabetes. it is critical that we begin to address issues about obesity in

this country, because obesity is predisposing individuals to type 2 diabetes. there is no question that an improper diet does cause increased insulin secretion from the pancreas. host: harry, you are on "washington journal." caller: dr. insel, you mentioned as marcel's as an exciting new drug. i am a member of an investment group that invested in smart cells. naturally, we were pleased by the investment by merck last year. i am interested in your thoughts on the prospects of the drug. merck has the resources to take it all the way. what will it take to commercialize the drug, and your assessment for the potential of the dark as to where it fits in new treatments for diabetes --

for the drug as to where if it's in new treatments for diabetes? guest: i cannot comment on products per se, but if we in the field develop the source of insulin, it would be disruptive technology that would change the lives of individuals today, whether it they have type one or type 2 diabetes. we act jdr -- we at jdrf d want competition in the space, multiple companies try to develop this technology. host: there was an article earlier this week in "the wall street journal." "it appeared to halt the process that causes the disease, in which the immune system mounts an attack on the pancreas, destroying its ability to produce insulin required to regulate blood sugar."

guest: it has been around for decades and is used in many parts of the world to prevent tuberculosis. in this case, an investigator tested the use of this vaccine in three individuals with type 1 diabetes, who had a very low levels of insulin secretion. and in two individuals, they had transient, small increases in insulin levels that reverted back. the clinical significance is unknown, and it is difficult to make conclusions based on at two individuals. host: scott whitaker, is this the kind of crossover research that folks in your industry are doing to try and take a look at something -- in this case, something that uses a vaccine against tuberculosis -- that may have a positive affect on people suffering from diabetes? guest: there is a lot of crossover research being done. we have a business forum, a partner in session we do.

over 21,000 individual one-on- one meetings at this conference. diabetes is part of that. there are 47 companies in the biopharma space doing work on diabetes. as state and collaborate with one another and work on government institutions -- as they collaborate with one another and work with government institutions, the more likely it is we will find better treatments for this disease. host: florida, stanley on our line for democrats. caller: since 1958 -- host: stanley, if you turn down your television, this process will work out a lot easier. caller: all right, hold on. [dogs barking] host: stanley, you there? we will put him on hold. stephanie on the line for folks dealing with diabetes. caller: yes, i am actually

calling about my father. he is almost 80 years old. he has had several problems. he started out with type 2 diabetes, and out they are telling him he is on the verge of type 1 diabetes and needs to take insulin. he has refused. he does not want to take the insulin shots. and he does not test it regularly, because the test strips, as somebody else said earlier, is costing too much. all he is on is, you know -- he has over 65, he is 80 years old, and, you know, all the medication and everything is too much. is congress or anybody trying to do anything to lower the cost to help him?

he has had triple bypass surgery twice. he has one kidney and. several other things. i want to know why is trying to be done to help the older generation. host: stephanie in atlanta, georgia. scott whitaker, address her concern or question about the cost of treating diabetes and what, if any cooperation you are getting from congress. guest: obviously, a person was older has access to the medicare program. medicare does cover most of what is needed at fairly good rate for folks who are suffering from diabetes. the medicine at they use, the insulin they might use, the test strips that are needed. a person that age suffering from this disease, i hope he is accessing medicare as best he can and using the drug benefit passed a few years ago to the

best of his ability. it goes a long way in helping people suffering at that age. i was directo -- director of the medicare program at hhs, talk to him about that. host: she mentioned it tied to sliding into pipeline -- eat type to sliding into type one -- you are shaking your head. type two cannot develop into a tight one? guest: the genes are different for both diseases. they art distinct diseases. host: a tweet -- dr. insel? guest: absolutely. the rate is increasing tremendously. we're estimating about the end

of the ticket, and never will be abou 40 -- by the end of the decade, the number will be about 45 million. the numbers continue to increase. this is a major problem. host: fargo, north dakota, on the line for republicans. mike, you are on "washington journal." caller: good morning, gentlemen. i and a type 1 diabetics since 1974. i eventually got myself to insulin pump. the insulin pump seems to be the best thing we have in this country as to an artificial pancreas that you talked about in canada and the u.k. and europe. one of the interesting things about the pump, it is a fantastic piece of equipment. the previous caller who has the father on medicare, you can qualify for an insulin pump.

medicare doesn't cover insulin -- does cover insulin pumps. i am sure that doctors can remark to the facts of that. that was my case. the interesting thing about the insulin pumps out there, and i will not name the company that manufactured mine, but there is a device that can test your blood sugar 24/7, 365, every minute. my curiosity is why the insurance companies will not cover this device instead of test strips. host: we will leave it there. guest: in fact, and they are covering the device now. the continuous glucose monitor or sensor. since jdrf