larger than the crisis that was dealt with on the scene so from my perspective when you look expeditionary forces and talk about responding to today's crisis today what you really have with the naval force is what i was talking about, to turn out from dave to date shipping operations and engagement with our allies and sticker price of the same force you can respond to a crisis and sticker price the same force you can enable joint force to respond to something larger on the size of a contingency. ..something larger. >> you'll also 0 went off -- you also went on to say that director panetta ordered half the time to achieve readiness. is it not the underlying assumption that we all have that we know where we will be? thus there not also have to be some kind of analysis? if you will be ready to go within a couple of hours or whatever it is, we know where we would most likely be, that your

services will most likely be needed. i am for quality. i have kaneohe. if you're deployed to afghanistan, it will not be a couple of hours. these trees ise because we do not have money for everybody. so where is it we will put our resources? >> it is pretty clear to all of us and has been stated by the secretary of defense. before the foreseeable future, we will have security challenges in the united states central command related to pakistan. this is another area where we expect a significant presence. but if there is one thing we're not very good at is predicting the future. as sure as we talk about the

priority of the pacific and then the challenges that exist in the united states central command, someplace else will cause us to respond and we do not know where that will be. so when combatant commanders asked for deployed forces to be out there on a routine basis, each of them ask for that. they ask for that as a mitigation to the risk of the unknown. that is what i believe we provide. again, from a party perspective, certainly, we will see the proponents of our effort and commitment to be in the pacific command and the central command. but priority cannot be exclusivity. we still have to soot -- still have to satisfy the demands of the of the combatants. but it is a hedge against the risk of the unknown. >> i am curious as to what an expeditionary force would be comprised of. i am talking about ships, helicopters and vehicles.

if you can give me an idea for a things are no longer necessary, i will have an idea of whether or not we know what we're talking about. >> i will do that. the good news for use the there are expeditionary capabilities on the island of hawaii and available on the pacific in times of crisis. i would be happy to get back to you on the detailed expeditionary forces and rebel forces that are critical to our ability to do our job. >> thank you very much. >> i would be happy to do the same for the army. >> and the air force? >> and if you call it anything other then expeditionary force, i would appreciate knowing what that is. >> we have been 100% right in something and that is never getting it right. >> general dempsey said the same thing. >> that is true. we have to do is look at history. when we do not have a balanced force that can meet wherever u.s. national interests are threatened, for the central

curtises we must provide military force, that is when we get ourselves into trouble. i think that is important, to look at the history of how we have done. we are repeating a cycle that is something that has happened many times in our history. >> thank you very much. >> i want to thank you for your patience. we have just a few more questions. i will ask the gentleman from guam if she can ask a quick question of him. >> this is for you, general. what shortages in critical skill sets in your respective services are your already experiencing because of manpower reductions already taken? what impact would you anticipate from further reductions? how are these shortages affecting your war fighting capability? general, why do not go first

since we know that the air force has experienced shortages in more than a dozen enlisted nco and officers skill sets, especially in the maintenance area. >> general. >> thank you for the question. you're absolutely right. there are several skill sets that have come under pressure. i think it talks to capacity. in our air force, some portions of our air force have a good capacity to handle the first fight. and then we will be stretched a little bit on the second fight. but already come in a scenario where we have one fight or where we are engaged just like we are now in afghanistan and iraq, we are already stressed in some very key areas. you mentioned several of them.

we are growing so fast in the intelligence surveillance and reconnaissance that we're struggling to keep abreast of the requirements for those people who take the data that is coming into the system and break it down for use by our ground forces and others. our battlefield and men that were billed for a certain model during the cold war, we are catching up to their requirements for our battlefield chairman. all of the units on the ground are supported by those air combat control folks, see ct, our special tactics for fox -- special tactics folks. special operations, weather, and security forces, as we have picked up one more responsibility of the fence around bases. they're all under pressure. in our officer career field, some of the things that we never thought about, dissented because of the way that the services do differently, we have a lotus senior contracting nco's and

officers. they normally do this with civilians. our expeditionary officers in some of these critical field, like air of subcontracting and specific civil engineering sets are all under pressure and things that we need to move forward on. as we construct our forced across these budget battles, we will be keeping our eye on growing those so that the air force will come under pressure in other areas. but we will have to keep an eye on those very critical ones so that we can grow to a better and more acceptable level of risk. >> thank you very much. >> we will come back to that question as soon as the general has answered one more question. since the korean war, it is mine understanding that there has not been a single soldier or marine who lost his life in combat due to a threat from the air.

that is 58 years. i may be inaccurate, but that is a statement that was given to me. oftentimes, we call that their dominance. if we were to move to those cuts that sequestration could bring about, would that put into question our continued ability to have that kind of air dominance? >> mr. chairman, i would never beg to correct, but i would in one way. we have, since the korean war, suffered an air attack by scud and by some others who have taken the lives of our soldiers, sailors, airmen, and marines on the ground. i think that the point that you make is one that is often talked about. that is the fixed-wing air, to our opponents, airforce is, naval air forces, we have not lost or have been under attack since the latter part of the korean war. that is something that our air

force says centered on our air force. but our marine air and naval air and even the robbery arm of the army, we have put together what we have called their dominance over the years to give our ground forces the ability to react and fight under that protection. i give you one small example that my friend from the army will chuckle about. when i was in europe during the late 1980's, we would practice for the big war on the plains of northern germany. we would go out in our brigade formation. when we came under attack from supposedly soviet force air, we would do herringbone maneuvers and all kinds of things to react to so that they could set up and defend us and so forth. we have now come to an age where we are so used to and so enabled by the year dominance that the joint team brings to

the battlefield that i cannot remember even talking about a herringbone maneuver in the last few years. our situation on the ground and in the sea would change drastically if it were not for the joint air forces that bring this capability. certainly, we will all be in a pressure under the new budget regime and especially if we go to sequester. i would just say that, without starting a long conversation about areas of the world where we talk about the paradigm of area and a to raheem devaughn, anti access area denial event, so that our opponents build an area that is so constricted to our ability to enter the area or fight in the area due to their ability to cut air defenses, sea defenses, ship defenses that keep us at range that the future of the budget scenario that would severely constricted our ability to approach those

requirements, those weapons, those new aircraft or other weapons that would give us the a2ad accessn thisa2a environment, i think that is where the pressure will be paired in some portions of the world, if we are not able to break the environment, i believe that we will be in a position where we will not be able to guarantee that their dominance for air supremacy to our sea and land forces as we operate. >> thank you so much for being here. i know you have to go. we are accusing you from the hearing now. please know how proud we are of your service. thank you for being with us. >> mr. chairman, thank you very much for the opportunity. >> gentlemen, we will not will be much longer. just a couple of things that we want for the record.

>> getting back to current shortfalls and the impact of future reductions, and mentioned in my opening statement that our deployed marines have all they need in terms of equipment and leadership to accomplish the mission. that is their absolute number one priority. the cost of insuring that they have all they need has been felt by the units at home station. two-thirds of our units at home station are currently in a state of degraded readiness. that impacts our ability to deal with another contingency for the unexpected -- there is a cost when we come back out of afghanistan to reset the force, to address those equipment shortfalls and to refresh the command that will be coming out of afghanistan. we currently estimates that bill at $3 billion. in some ways, that is a good news story. a couple of years ago, that bill

was in excess of $15 billion. but in the last couple of years, we have been able to do some resetting and support operations both in iraq and afghanistan. as with to the future, i would be concerned about two things. one, that we do? we reset the force and address those deficiencies and replace the equipment that is worn out from operations in afghanistan as we move to the future. the second thing is our ability to continue to modernize and keep pace with modern threats. and over and above the recent cost that brings us back to the force we had before we went to afghanistan and replacing ned equipment, we need to keep pace and modernize our equipment. for the reductions would preclude our ability to modernize. over time, we would end up in the same state but we were in the 1970's where our equipment was antiquated and worn out. that is one of the key aspects of all of this. >> as we look at the manpower issues, the force is under

pressure. our average deployments, 50% of our ships are under way and stretching out to about seven months. our ships are doing water in order to meet operational commitments overseas. so they are under stress. within that area, we have a group of very critical specialists. i am thinking of our nuclear operators, linguists, proctology is, those involved in highly technical fields like acoustics and aviation maintenance and electronics where, because the outside economy is presently not hiring to the level where they could think about leaving, they are staying with us. i concern, as we go forward into this environment, which echoes my fellow vice chiefs is concerning this element of keeping faith with the force we have and ensuring we sustain their compensation in an area under high stress should the economy gets better and we lose

those individuals in the future. retention is something we watch very carefully. we are enjoying great recruiting right now with the highest quality force we have ever had. we are very appreciative of that. in the long term, manpower, critical specialties are what we are most concerned about for our future. >> recruiting retention has never been stronger. it is absolutely amazing. if you had told me this eight years ago, i would have said that there is no way we could pull this together for eight years and having as strong as it is today. it is absolutely amazing. but at the same time, as the guy who gets paid to worry about things, i also believe it is fragile. i worry about rotary wing aviators. that is an area that my folks are spending 12 months in theater, coming home for maybe 50 muster now and then right

back out. i have a beat -- for maybe 15 months right now and then right back out. we are increasing our uniformed contract in court. the exterior of the army has made a decision to add additional uniformed contacting specialists, officers and senior non-commissioned officers to the united states army, even as we downsize the force. we realize it is absolutely critical. electronic warfare is also an area where we are adding to our rules, even as we downsize. >> i would like to pylon to what the general said. what really concerns me is the modernization area. the ground combat vehicle, the infantry fighting vehicle is critical to the united states army. we're not talking about going into full reproduction. all we're trying to do is get

from milestone a to milestone be and see what industry can give us at a point where we can make a decision from two years from now whether to go to a new build that industry brings us while, at the same time, during that time, we will look at off-the- shelf solutions to an infantry fighting vehicle. there are many. and then when those two lines of effort converge to and a half years from now, we will make a cost-informed decision on what we can afford. but to cut that off now, to not provide us the ability to do that will only put us two years behind. a modernization program is critical to the army. i think we're doing the same thing with the jltv. we are looking at the possibility of recapping some of these and what that would cost. at this -- recapping humvees and what that would cost.

we want to buy this vehicle between two hundred dollars -- two hundred thousand dollars and two hundred $40,000 per vehicle. -- between $200,000 and $240,000 per vehicle. do we recap humvees or do we go with a new jltv? i think it is absolutely essential that we be allowed to continue that critical work or we will end up with a force that is not modernized and a force that is not modernize is an unbalanced force. in the end, it will cost us lives. >> thank you. that is very informative. >> one of the things that all of it -- all three of you talked about -- first of all, i want to

compliment you. all three of your services have done a great job in retaining your troops and recruiting. i have looked and seen the price in each of your eyes as you look at the products that you're able to train and turnout. but i also hear you saying a phrase -- keeping faith -- which is the compensation package. it is a holistic approach. it is more than just the dollars. it is everything. it is the commissaries that they go to, the schools that they use, the programs that they have as an overall package. when someone sits down and determines whether they will reach up or sign in the first place -- there wily will re-up r sing in the first place

we had a recent policy change with don't ask/don't tell. we did an in-depth study, surveys, focus groups that were done before we implemented that policy. i wonder if you could elaborate a little bit what the army did, the navy did, the marine corps did in terms of that policy. and then compare that to what we have done with the compensation packages. have we done any similar types of analysis? >> we have not. the proposals have been coming from every direction. you're so correct. this is a holistic review. it needs to include those benefits you have for medical care, retirement, educational benefits -- they'll have to be looked at in a holistic package and not looked at as individual programs because they are all

interrelated. we need to do those focus groups. we need to know what the educational benefits mean to a 19-year-old kid coming out of high school in coming into the united states army. what role does that play in making their decision during a time of war? the secretary of the army and the chief of staff went out and talked with soldiers. they were expecting to get questions. they got a from a 19-year-old kid who said, "mr. secretary, what are you doing to my retirement?" we know the numbers, less than 70% of those will never reach retirement. but it leads one to believe that that retirement package had a role in this individual making a decision to join us during a

time of war. if we go back to what we just talked about in recruiting and retention, these are huge in our ability to be able to maintain this forced overtime. i would only echo what you say, chairman. we really need to take the time to look at this. we nitpick we understand it needs to be looked at. but -- we understand it needs to be looked at. but let's look at it collectively, the entire package, and see where that will take us. >> how many years have you served in the army? >> just short of 40. i do not look it, do i? >> no, you do not [laughter] . would you say it would be foolish or unpredictable for us to begin launching on is compensation packages before we see what it will do to the force? >> yes. >> i would echo his comments and

say that, when i go out and travel through the force and i visit, it is the number one question that i get. part of the benefit of the review process that happened under the steady for the repeal of don't ask/don't tell, we allowed a very methodical review of the policy issues, and ability to socialize discussions with the force and allow people to work through and air the questions and things of the had about the policy development. it was a pretty thorough process. they're worth surveys and policy development and analysis and communication. in an issue as important as retirement to our force, and for their decision about the attention, is similar type review of that thoroughness in nature would be important, as well as the ability to have the force be communicated on the

elements that are under consideration. i think that is essential for the long-term viability of the force. >> thank you. >> thank you for that question. i would agree with the characterization that you laid out in terms of compensation. i would summarize the key point in that is this. there have been many proposals about compensation that are out there that talks about how much money we will save. i have not seen a single proposal that provides analysis of what the effect on the force would be. at the end of the day, what compensation is about is our ability to continue to recruit and retain the high quality force that we have had in harm's way over the last 10 years. if you played for, it is a conversation about a young sergeant will have with his spouse 10 years from now. the spouse will say that your four years are up and what will we do? you have been away from home 180 days out of every 365 days. this is really hard. you're missing the key milestones of your children's

lives. will we stay in or will we get out? at that point, the family will look holistic the at housing, education for their children, medical support, behavioral health support that exists and some of the intangibles like is their service a valued commodity have respect in their community, do their leaders treat them with trust? those are the tangible and intangible aspects the cause people to serve. when we talk about compensation, we need to talk about it in that light. it needs to be a holistic approach to ensure that, at the end of the day, when they have that conversation that the compensation for his service and the value placed in his service exceed the risks that we ask him to endure. >> general, i want to ask you the same question. despite your youthful, how many years have you served in the united states marine corps? >> i have served a mere 35 years in active duty. >> how detrimental do you think

it would be to your force if we launch on an changing these compensation packages before we do these reviews? >> i think it would be reckless to do changes in our compensation package right now without understanding the effect. i think each of the gentleman on this table will remember the quality of force that we had in the late-1970's. that is not what we want to go back to. as long as our nation has made a decision that we will have an all-volunteer force, the critical aspect is that we have to make sure that the compensation meets the requirements of the all- volunteer force. whether it is expensive or not is relative to what you get from it and how much it costs may not be expensive when you think about it in those terms. from my perspective, again, the chairman has said that we looked at compensation and we should study compensation. at the end of the day, we have to do that in a way that ensures

that we continue to recruit and retain that high-quality force. folks who lose sight of that are it heading down a path where they have no idea what is on the other end. >> i would like to shift gears a little bit. we hear a lot of discussions, both in congress and across the country. if we were to not be ford- deployed, if we were to pull our troops and assets from across -- not to be forward-deployed, if we were to uphold our troops and assets from across the globe, in general, can you tell us how that would impact the marines if that was done and whether or not you think that would be a good policy for us to undertake? >> first of all, as i mentioned , our forward-deployed and forward-based forces show our

commitment to various regions. being engaged this way helps us to shape the environment rather than reacting to the environment. we're allowed to respond to crises in an efficient manner. to give you an example, from a time and space perspective, from the impact and pulling back to the continental united states, at the 10th amendment -- the marine expeditionary force in okinawa and move it to the continental united states, in the event of a crisis, chairman, it would take months to move that forced the western pacific. it would take a miracle of planes, trains, and automobiles to move that force. >> we had a sea power symposium

in rhode island. nearly all were chiefs of their navies from countries around the world. the question that they raised repeatedly is will you be here with us? will you be forward and operate? they articulated the need for stability against piracy, to provide a shield for our allies in europe, a nuclear deterrent, to be able to operate with our partners, the marine corps, project power from a carrier air wing, from a submarine sgn, or from the amphibious forces. but the primary element is the stability and assured the to our allies to be forward and to respond quickly. the demand for naval forces has never been higher, both in central command and the western pacific, but also in other regions.

or to support special forces from international waters. we see the pulling back those forces would abdicate the nation's maritime neleadership n the world. >> thank you. general. >> we understand that adjustments will have to be made to forward-deployed army forces. at the same time, we think it is absolutely critical from engagements standpoint. the relationships that are made when a young captain meets another captain from another service and they grew up together in their own services and have that connection back and forth, they are absolutely critical, particularly in a strategy that will rely on the ability of allies to assist us. without that forward engagement, that living and working and training with those forces, we

lose so much. i would be very, very careful at taking a look at just what the green-eyeshade people would look at when they look at forward- deployed and station forces. i would look at some of the second and third order effects and the intangibles of the relationships that are built and how critical they are in a time of crisis. it is always good to have someone on the other side you can call. and many of these engagements provide that. >> we sometimes get caught in the nomenclature and the syntax. if we make all of these cuts, we will have to come back and redo our strategy so that we cannot do as many missions. the chairman was kind enough or smart enough to have the three former chairman testify before the committee a couple of weeks

ago. we had a former chairman -- we had former chairman hunter and skelton and warner from the senate. i ask them what warning you would like to give to our committee or to the congress from all of your years of experience. and congressman skelton said that, throughout his tenure in congress, there were 13 contingencies, 12 of which were not protected. -- or not predicted. -- were not predicted. do you know when you were asked to perform by the president of the united states and said you could not because it was not in your strategy? >> no. when i was a division commander, i spent a year in iraq. i came back and went into a recent days. i was back for three months when

katrina hit in the continental united states. i was told that i was at the lowest readiness level of any unit in the united states army. to pick up a brigade and send it to new orleans, to fort hood, texas within 24 hours. when i asked the question -- are you kidding me? we had just gone back from iraq. they said, you do not understand could you pick up your brigade and be in new orleans in 24 hours. we will never fail you. we will always do it. but if we are not trained, not equipped, do not have the proper force structure, the results will not be good. they will not be good. >> would it be fair to say that but that includes the number of men and women who come back -- >> that is exactly where those try to show in my historical examples. no one ever said no, we will not take task forces into korea.

they said roger, we will do it. they went in with incomplete infantry battalions and ill- equipped and they took 40% casualties. that is what happened. we will never say no. that, i think, we can all promise you. the key is the results when we do that mission. >> admiral ferguson? >> i would echo that. in the history of the nation, we have never said no and we will never say no in the future. our forces will be as ready as we can make them. we will operate forward and be ready and we will take risks at home rather than in any way keep the forces that we have able to achieve emission. >> would you agree that, if that risk is increased that the risk of the number of men and women may come back from that mission are at risk if they are unprepared? >> i think all of us in the

service except that risk as part of the business of wearing this uniform and serving the nation. we accept that as part of the calculus. our mission as leaders is to make them as ready, to give them the equipment and minimize that as much as possible. >> saying no to the commander- in-chief is not in our dna. we will never do that. we never have. i would agree with what they have said. we will never say. but if you go into harm's way without adequate equipment, without adequate leadership, the cost of going into harm's way without being ready, which is what we have articulated today, which is the requirement to keep our forces and a high rate of readiness, not to have them prepared for the unexpected. but the cost of going into harm's way without the benefit of feliz readiness is absolutely at the cost of young americans. >> one of the things that we asked the former chairman is that, if you could give us one

warning about the cuts, what with the warning be you would give to the full committee that we could give to congress? out of all of your years of experience, what concerns you most? with that, please feel free to tell us anything that we have left out that you feel you want to get on this record so we can give you that opportunity to do that. then i will wrap up by letting the chairman and missed the bill have any final comments that they would like to make. bidell.miss the bil >> my biggest fear is that -- we understand that we have to downsize the army. we know that we're going to 520,000 -- that is in the book. i am concerned about losing the entire temporary strength increase because i have such a high number of individuals who

are in the disability evaluation system. is taking me wait too long to get through that. i will not go into it in great detail. but i hope we will look at the disability evaluation system and design one for an all-volunteer force rather than a system that currently is built for a conscript force. i think that is a huge issue out there when it comes to readiness that we have to look at. but my fear is that we will might do this in a balanced way. whatever size force we have at the end has got to be modernized, well-trained, and maintained. that is absolutely critical. and besides shrinking our force, the real mistake we have made in the past is to take some kind of solace in the fact that, from the army standpoint, we maintain at hueneme.ucture tha

it was the modernization of that force and the training of that force that got them into trouble. that is what caused the 40% casualty. i just ask that, as we look at this, that we do so with that 3- assessed at the top about early on, force structure, modernization, and training and maintaining that forced and ensure that, whatever size the army is at the end of this thing, that it is a well- trained, modernize force that can do with the nation asks it to do. >> i firmly believe that america is a maritime nation, faced by two oceans and our prosperity and our standing in the world in many ways is insured by the no forces that we are able to deploy forward. around the globe, potential competitors are working to negate the advantage through

anti-access aerial the nile activities and we have to be able to pace that in the modernization of our forces as we go forward. our allies and our friends look to was to provide stability in the global common, that is the sea. we have assured them that we're committed to do so. i think that is an important point of our security as we go forward. and i think about the future, the element of balance within the naval portfolio is important. it is about ensuring the forces that we have, whatever level that we sat on those from a strategy and the fiscal environment are extraordinarily capable to meet that threat, able to move forward, ready with adequate weapons, people, training, such that it delivers to the president and the nation options that he can use forward away from our shores. as i leave you with thoughts were things that really affect

me, i had the occasion to attend the memorial service for the seals were killed in that crash in afghanistan. the strength of their families and the commitment of those individuals who are operating on a 700-day cycle and are gone for about 500 days -- have been doing this for 10 years of war. that core of people in the united states are willing to raise their right hand answer. to me, we can never lose that. that is the most essential element. thank you. >> what concerns me -- without an adequate appreciation of the implications of readiness or of breaking faith. what concerns me is that folks who think that, if we get it wrong that we can simply fix it in a year or two. that is not possible. if we break the trust of our

marines, sailors, soldiers today, it will be ticket before we get it back. some of the decisions we make, from an industrial base perspective, but also from a human factor perspective, we cannot possibly get it wrong. we will not get it exactly right, but we cannot exactly get it wrong. the last thing is that people would assume that the united states of america reduces in capability and someone else will be out there to pick up the slack. i do not know who that would be. who will pick up the slack for people who -- we assume extremist vetter critical to the united states if they are not there to deploy, not forward to engage and not providing our potential feliz. >> thank you, general. we have been joined again by our chairman. i would like to ask if he has any final questions or comments you'd like to offer. >> yes, thank you, mr. chairman.

not to drag this out, but i had a call several weeks ago from a young man that i watched grow up. his dad is a good friend of mine. he is an air force officer. he is a physician station data send a tailspin -- stationed out of senate failed -- stationed out of san mateo. he has been in the service for 12 years. he asked me what he can expect. he is enjoying the service, but he is very concerned. i could not tell them. i do not know what his future is. i do not know

>> can we look forward to a career? i have seen this movie before, when i was pretty new in the congress. i was going up to this at west point and i had a lieutenant colonel with me. he did not let us go anywhere alone. his dad had been the chief of the army. no, his grandpa had been the chief of the army. his dad had been the youngest brigadier in the army, and then he suffered a stroke, and that ended his career. this lieutenant-colonel, his whole life, that was all he ever want to do was serve in the military. .e was being rif'd

the drawdown under bush and clinton earlier in the 1990's, he did not want to leave, but he did not have a choice. when we got to west point, we were greeted by a lieutenant colonel there, and he was also being rif'd. to the first guy, it meant a lot. that does break faith as far as i am concerned. you start somebody out on a career, you send them to west point or annapolis or air force academy, and you make certain promises, and then you break those promises. that is basically what has happened. i think about these young men that are going outside the wire

over in afghanistan every day on patrol, and if they are having to think about what is happening about my future, instead of contra rate -- concentrating on ied's's or snipers are just not being able to be totally focused on their job, that puts them at risk today, needlessly. >> mr. chairman, we thank you for those comments and that passion and you have for our men and women who serve in our military. >> thank you very much, mr. chairman. i want to thank the general for his comments about the specific

area and how important it is that we continue to increase our force structure. this is a troubled area, and mr. chairman, i live there. that is my home. i want to know that we americans living in guam and other islands surrounding us are protected. and to all of you who gave us information this afternoon, i found it very valuable and how important is to keep up the strength of our military forces. >> we thank you for your service to our country and for the men and women who served under you. i think we can tell from listing to your testimony and the comments appear, this is not just about procurement, not just about aircraft carriers.

does all come down to individuals and those men and women who served under you. all of us have those stories that make this very, very real. mine was a young marine. only wanted to do from the time he was 11 was served in the marine corps. when he was 18, he became a marine. when he was 19, i was speaking at his funeral. he had a tattoo of an american flag, and another one of family. this is the absolute best that america has to give. one of the things we have to make certain of is that we do not break that fate. admiral ferguson, as you mentioned, and if if we lose those families, if we lose those people, this country has a tough road for us to travel down. i think he could tell from this subcommittee, we don't plan to go quietly in the night.

we plan to fight as much as we can to make sure you guys never have of their fight. we are keeping faith and making sure they are the best trained, best prepared, best equipped military in the world. thank you for your careers and helping to make that happen and thank you for giving us a record that we can share with other members of congress to help make that a reality. with that, we are adjourned. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] [inaudible conversations] [inaudible conversations] [inaudible conversations]

>> earlier this month the obama administration announced the cancellation of plans for long-term care insurance program for the elderly and disabled. it was called the community living assistance service and supports program, or c.l.a.s.s. the department of health and human services said premiums would be so high few healthy people would sign up for it. house subcommittees held a hearing earlier this week. this is just over an hour. >> the subcommittee will come to order. the chair recognizes himself for five minutes for an opening statement. on october 14, 2011, after 19 months of review and $15 million, hhs announced what most people, including many members of congress, independent analysts, and cms' own actuary, have known about the class program since before the health care bill became a law.ogram sie it is completely unsustainable.m after determining that the class t is program cannot meet the law'sted

75-year solvency this provision of the law. this shouldn't be a surprise months before it became law, the warning was being sounded. on july 9th, 2000 - cms actuary richard foster wrote, quote, 36 years of actuarial experience lead me to believe that this program would collapse in short order and require significant federal subsidies to continue. also that month, the american academy of actuaries wrote to the senate help committee, quote, the proposed structure and premium requirements within the class act plan are not sustainable. ..

gimmick. since participants would have to pay into the program for five years before becoming eligible for any benefits, cbo estimated lass including the class act woulden reduce the 10 year cost of the legislation by $70 billion. by february 16 of this year, even secretary sebelius publicly admitted that the class act is quote totally unsustainable, end quote.it was a class act was doomed from thea start.y we have a very serious, long-term care problem in this g country.eople into costs are driving people into bankruptcy and weighing down and already overburdened medicaident

program. not only be shelfed; it should be repealed. i'd like to, at this time, yield to the gentleman from nebraska, mr. terry, the remainder of my time. >> thank you, mr. chairman, and the failure of the class act is of no surprise. most of the people in the room knew the class program was flawed from inception. there's no way the incoming premiums could cover the benefits to be paid out. the unhealthy and disabled would have rushed into the program in sitgreat numbers they would have immediately increased premiums immediately for everyone enrolled. they raised a red flag on class because they saw these flaws and understood the high likelihood that taxpayers later fansing a class -- financing a class bailout. so, the ultimate question is was that a purposeful ruse by hhs and the administration to make the accountable affordable care

act look better, therefore, passing or is this just plain old add min straitive income tent? hopefully, we'll have a clearer view on which one of those it is. i yield back to you, mr. chairman. >> chair thanks the gentleman and recognizes the ranking member on the subcommittee for five minutes 23-r an opening statement. >> thank you, mr. chairman. on march 23rd, 2010, our government knead a promise to the -- made a promise to the american people to improve health care in this country by enacting the affordable care act, landmark legislation that expanded coverage in the country. this promise included the class act giving hhs the authority to develop a voluntary long term care inurns option for working families. the goal is to provide americans with an affordable method of obtaining long term care benefits.

unfortunately, secretary announced hhs will not move forward with implementing class, but if we do not move forward with the implementation of the class act, we will be turning our backs on the millions of americans that are in need of a solution for finding long term care support. an estimated 15 million people are expected to need 1078 form of long term care support by 2020. today, more than 200 million lack long term care insurance and currently medicaid pays 50% of the costs of long term services, and that price tag is quickly rising every year. persons that develop functional impairment are force thed to quit their jobs and fail to qualify for the support they need. this is designed to take personal for their care and obtain support they need to potentially remain in their communities and remain active in their jobs. instead of allowing this

population an opportunity to remain self-sufficient, we're sentence k them to unnecessary policy to receive care they need. if we, as a country, do not invest in fixing long term care, people with functional impairments will return to costly settings for potentially preventable conditions. we cannot sit back and do nothing. hhs completed their work in implementing class. mr. abortion lee's dismiss sal last month, a signal they were abandoning the program, gave the department a path toward to implement class. the statement is, "the class benefit plan can be designed to be a value, proposition to the american workers as prescribed." mr. lee developed options with adverse selection. one of the options is what he calls phased enrollment in which large employers offer the plan

first before individuals can sign up. another option is temporary exclusion. no benefits for 15 # years of the need for help arises for a serious medical condition that already existed with someone enrolled. he is an optimist. he explains how hhs should move forward, so why does the department take such a negative approach and close the door of implementation when the work has not been completed 1234 the act requires that the class act implementation proposes be reviewed by the class counsel which hhs has yet to establish. this counsel should be convened immediately in order to better inform the efforts of the department and represent the interest of stake holders that have been up vested in class for overa decade. the department is not supposed to abandon class without convening the advisory county. the counsel may reveal other worken options for care the department has not considered. the class act is the first step

towards immoving the long term problem and has a structure to be implemented. this was an important part of health care reform. i refuse to give up on class just like i refuse to give up on health care reform. my colleagues want to give up on it all and repeal everything, the whole affordable care act, but i have to say, mr. chairman, i'm tired of the republican rhetoric that says congress and the government in general can't do anything. the last two speakers on the other side, and i wrote it done used terms like "gloom" "failure" "can't do," and "no way." you know, why can't we do things? part of what makes us america is we're can-do people. we can have affordable insurance and long term care insurance. i don't think the department should play into the same negative theme that i keep hearing every day from my opponents and that's disappointing to me is to see

the hhs play the same negative thing. we can't do this. we can't do that. you know, i look on the floor today, mr. chairman, what are we doing this week in congress? we're not doing anything? that's the attitude that's pervasive that we can't do anything. we can do things like have affordable health care, plan for long term care, and i just wish that we understand that the american part-time expect us to do -- people expect us to do something and not just say we're fail failures. let's do the class act. go back to the dprawing board. be optimistic and come up with a plan. thank you, mr. chairman. >> the chair thanks the gentleman and recognizes the chairman of the subcommittee on oversight and investigation for five minutes. >> thank you, mr. chairman, and i welcome this opportunity to have the joint hearing between your subcommittee and mine, and i address the gentleman from new jersey who refuses the give up, and, of course, this is something that all of his

democrat colleagues many, both in the house and senate all indicate they have grave concerns about this new entitlement program, too much stepping, and i suspect that he wishes to continue the program in light of the fact that it is going to be a budget-buster, and we are doing something here in congress. we're trying to balance the budget. we convene the hearing of the committee to address the energy and commerce committee's long standing inquiry into the circumstances under which the class act was passed. a program recently pronounced dead. the community living assisted service and support act or the class agent as we call it is a long term care program included in the president's health care law. it was moment to be self-funding. individuals paying premiums into the program would cover the cost of individuals receiving

benefits. however, my colleagues, even before the passage of obamacare, republicans recognizeed the class act had a critical design flaw. class would never be self-sustaining and would eventually go bankrupt. some senate democrats joined us saying they, quote, "had grave concerns that the real effect of the class act would be to create a new federal entitlement program with large, long term spending increases that far exceed the revenues." perhaps the most damning indictment was from senate budget chairman who characterized class act as a "ponzi scheme of the first order." and "the kind of thing that madoff would have been proud of." as with other provisions of obamacare, democrats didn't bother to fix the class act. they had every opportunity, and

they didn't work with republicans to find commonground too busy using tricks to cram through a law before even the public could realize what was in it. they didn't quietly sneak the act in. they had the audacity to claim that it would provide $70 billion in deficit savings. democrats braisingly stated that they knew better, and the act would have saved the american people money. they were ignoring the truth about the class act. democrats overstated the physical conditions of the program intentionally. the $70 billion was crucial, crucial to passing the health care law, and this administration promised the american people that the bill would result in $140 billion in savings, half of the savings from the class act, and the other half were from tax

increases and cuts to medicare. after 19 months of trying, secretary sebelius announced she does not, quote, "see a path viable to go forward to pass class." why did it take the administration so long to figure out what everybody else, even the cms chief actuary has known for many, many years? hhs and the administration seem to have gone to extraordinary length. to ignore the truth so they could continue to sell the false savings on this program to the american people. even staff at hhs knew long ago that the class act was a financial disaster. it would cost money and simply not save it. this committee conducted a comprehensive investigation with senator thune, congressman ryanberg and others from the

house and senate and discovered 150 pages of e-mails and documents from hhs questioning the stainability of the class act as early as may 2009. staff and officials within hhs called the program a recipe for disaster that would collapse in short order. this is going back to 2009. these are from 150 pages of detailed documents and e-mails. while voices of reason questioned the program privately, secretary and other administration officials publicly proclaim their support. we've seen it before first with the waiver, and now with the class act, the obama administration overpromises, underdelivers, and waits until implementation to admit policy failures. under cbo rules, the class failure will cost the american payers $86 billion, the most recent cbo projection of savings from the class act. if class was in effect, it would have increased the deficit by

the third decade. how much will the rest of obamacare cost us? what's the hidden long term costs? when will the administration tell us the truth about that? >> the chair thanks the gentleman and recognize the ranking member of the subcommittee in oversight and investigation, mrs. degette for five minutes. >> thank you, mr. chairman. i want to thank the colleagues, present and past here today, patrick kennedy, it's good to see you here today. i know we all feel that way. i hope this helps us to develop a blain -- plan to provide and pay for long term care. many individuals and families face this challenge today and tens of millions more face it in the future. the class agent was an effort to address these burdens. the program was added to the health care bill in this committee on a bipartisan voice vote designed as a voluntary insurance program to provide

beneficiaries with the cash benefit to help pay for institutional care or assistance to live independently in the community. now, as we've all been discussing, the administration announced last week that it would not move forward with the implementation of the class program because it was currently unable to do so in an actuarially sustainable fashion. i'm interested in hearing from the administration's representatives about how they came to this conclusion and what potential they have in moving forward. now, from this side of the aisle, the reaction is one of disappointment. we understood the scope of the nation's long term care problems and the impact that the problems had on seniors and the disabled and their families, and we were hopeful when we passed the affordable care act that the class program was the solution. now, as you heard from today's opening statements, some on the other side of the aisle seem positively gleeful that this class program has been set

aside, and that view, in my -- that view, in my opinion, is really short sided because we've got to keep looking for solutions to the long term care problem, and we've got to do it in a bipartisan way. we cannot and should not give up. 10 million americans need long term care now, and this number is expected to grow by 50% over the next decade. long term care, as we also know, is expensive. it witches out senior savings and forces many to go on medicaid costing stating and taxpayers billions of dollars. the present situation is both fiscally and morally wrong. mr. chairman, many opponents of the health care law are using the announcement as an opportunity to attack the entire law. in the context of those claims, i want to set the record straight on two important subjects. first, with or without class, the health care reform bill

continues to be a financially responsible law that will reduce the nation's debt. when we passed that bill, cbo told us it would save $200 billion over the next decade. class was responsible for about $70 billion of that savings. that means even without class, the numbers still add up. the health care law will save taxpayers over $120 billion over the next decade, and more in the decade after that. second, i want to address the myth that the administration announcement somehow hobbles the health care law. it does not. the class program was an important part of the law that provided a new and important long term benefit, but even though the administration has decided not to move guard with this program, the rest of the bill's benefits continue to pile up. millions of seniors are enjoying discounts on prescription drugs in the part d donut hole, young adults retain their health insurance through their parents'

plans, taxpayers are saving money because of the bill's initiatives to cut medicare and medicaid fraud, waste, and abuse. millions of americans are protected from the worst abuses of the insurance industry. small businesses are receiving valuable tax credits to provide health care coverage, and by the time the health care bill is fully implemented, over 30 million otherwise unensured americans will have access to good affordable health care law or health care coverage. now, i'm disappointed about the outcome of class, but even without this part, the health care law will continue to provide critical benefits for millions of americans. my hope was this would help solve our problems in providing and paying for long term care and still have hope it's part of the solution. it really has to be. i want to hear from the administration today exactly where we are, but more importantly, i want both of these subcommittees and the full committee to explore together how we move forward.

can the administration ultimately find a way to make class a workable solution? are there legislative solutions that can help make class a workable and sustainable program? the committee and the congress have a responsibility to help the elderly and disabled 234 our societies who need long term care. i hope 24 hearing will -- i hope this hearing will help us meet this responsibility. >> the chair thanks the gentle lady and now recognizes the gentleman from georgia for five minutes. >> thank you, and i'll admit to be gleeful this morning. it's hard not to be when we just rescued $80 billion from a democratic sink hole and now returned that money to the american taxpayer. yes, indeed, i'm gleeful, but to quote the president of the national coalition on health care and "politico" yesterday, i quote, "the best strategy is to keep class act on the books until health reform takes hold and hopes the program is tweaked

into shape." that, frankly, sounds like a recipe for disaster. plmp, when a pharmaceutical drug does not work like intended, it's not kept on the market to be tweaked one day. it's recalled, plain and simple. this is not unlike a defective drug, and it's a repeal towards successful long term care reform, and i agree with that. class does not work. the administration can want -- cannot fix it without massive bailouts, and as long as it survives on the books, it's a threat to the current entitlement program, and especially to medicare. additionally a congressional report released last month on class presents evidence that former staffers and administration officials ignored foster's repeated warnings on the solvency of the program and ignored studies by the american academy of actuaries and the

association of actuaries supporting foster's concerns. it was, "decide she does not think she needs additional work on the actuary side." and then allegedly told staffer she had a score from cbo on class that was actuarially sound, and, yes, it kept going. one month later, frank, deputy assistant secretary at hhs stated publicly that, "we in the department, modeled class extensive lier, and we're persuaded that financial solvency over the 75 year period can be maintained, yet to my knowledge, no model from cbo orb ored administration suggesting class is sol vent was introduced publicly even by repeated requestses. that is unacceptable. if the warnings were ignored, this committee in the american public need to know where they were ignored.

we simply cannot afford to let this administration hide behind any back room deals and secret handshakes any longer. mr. chairman, i believe that this committee must continue to seek the friewt from the am -- from the obama administration on the modeling used to sell us on the class act in obama care and, indeed, on the entire bill that was sol to the american people, and further, i once again call on this congress, pass hr1173, a bill that my good friend and fellow physician introduced to repeal the class act, and mr. chairman, with that, i yield the banse of my time to my colleague from tennessee. >> thank you, mr. chairman. i thank the gentleman from georgia. we appreciate having the hearing today, and in reviewing what is taking place with the class act. i think that it is apparent that despite the best efforts of the federal government, it is very clear to all of us that there's no way this federal government more effectively or efficiently

runs a health care program than the private sector. as we went through the entire debate, and former colleagues, i remind you, there's no example in the united states of where the federal government has run this effectively and saved money. when you look at care, you see costs overrun. there's no example where the near term expenses yield you a long term savings. it has not happened, not in tennessee, not in massachusetts, not in new jersey with guaranteed issue. it does bring up other problems that exist with the class act, and, indeed, the budget gimmick there throughout the entire obamacare bill, what else is in the bill that's gimmicks that is yielded as savings? this is something we need to look at as a committee, get to the bottom of. i think, also, the other thing that it highlights 1 the red flags that many of our colleagues have mentioned.

indeed, this being called a recipe for disaster, which now it is quite apparent that it is. then i think that another concern that we will want to address is the lack of transparency that existed in hhs as they moved forward with discrepancies in public and private statements. we want to get to the bottom of that. they spent 19 months implementing an unworkable program, and i appreciate we're having a hearing to get to the bottom of it. i yield back. >> the chair recognizes mr. waxman for five minutes. >> the republicans are gleeful, and happy to admit that. if they are gleeful, it's because they want to repeal the affordable care act and this particular provision which attempts to deal with the issues of long term care. a lot of people around the country do not realize if they

have health insurance, even medicare, it doesn't pay for their assistance when they need long term care, and if they repeal the class act, they will have the following status quo continued. right now over 10 million americans are in need of some form long term care, and this number of's expected to increase to 15 million by 2020. seven in ten people in the country will need help with basic daily living activities at some point in their lives because of a functional disability. the cost of long term care is astronomical. the average nursing home bill currently stands at excess of $70,000 a year. monthly charges for home health services averages out at $1800. private health insurance, which my republican colleague says is the way to solve the problem,

well, most insurance policies are too expensive or difficult to purchase. as a result, less than 10% of the pop pielation -- population holds these policies. by far and away, the largest spend r for long term care comes from the medicaid program. 234 miscall year -- in fiscal year 2010 alone, the price tag for these services was some $120 billion. that's a publicly financed program. the republicans would allow this program that's financed to be the only hope for seniors that cannot afford a policy to cover them for the long term care needs. they started off this year by saying we want to repeal the affordable care act, and then we'll replace it. we've never heard what their replacement is. they have no idea how to deal

with this problem, only to tear down the attempts to make the problem more managen for millions of americans who face the dilemma of how to pay for their long term care or the long term care costs of their family. well, it was for this problem that congressmen worked to establish an effort to meet the long term needs of the elderly and disabled citizens and their families as well as to provide fiscal relief to the medicaid program. the assisted living services and supports initiative, the class program, was made part of the affordable care act. this remitted the first real attempt at the national level to tackle the long term care puzzle and eluded us for decades

because the complexity and expensive price tag. we should not lose sight of this even as the program struggles to get off the ground. no doubt it's crafted perfectly. no piece of legislation is, especially not one so novel and unique of class. everybody acknowledges that, but regrettably, republicans called this hearing today to dwell on the problems that stifled implementation of class, not how to fix the problems to deliver the promising future that could lie ahead for the class program. ten days ago, secretary announced sthees putting class on -- she's putting class on hold because of unintended flaws in the statutory authority. she feels she could not, at this time, fully implement the law. i find that disappointing, but until she finds a path forward, the action taken is the

responsible thing to do, fiscally and otherwise. the calling for a timeout is not the equivalent of throwing in the towel as republicans would have the public believe. contrary to the republican title of this hearing, class has not been canceled. rather, it's in recess. the republicans complain ignoring the truth. well, they're ignoring the truth of the plight of millions of people to finance their long term care. they talk about the financial disaster. what about the financial disaster for those families facing this issue. recipe for disaster, doing nothing and repealing the class agent is a recipe for disaster. they talk about over promising and underdelivering. they promised to repeal and replace, and they've never told us what they would do. all they've done is pass a law that would make the medicare

program a -- not a guarantee, but something that may be straibl in the future -- available in the future, but for most people, it may not. i want to put it in perspective, and look forward to the hearing today. >> the chair thanks the gentleman age recognizes the vice chairman of the health subcommittee for five minutes. >> i thank the chairman for yielding. welcome to the panelists this morning, a great bipartisan group of members and former member, and i also welcome the second panel from the agencies, and we look forward to hearing your testimony this morning. i'm believer in long term health insurance, and this hear is more about the budgetary gimmicks used to force through the affordable care act, which really, 23 i can't remove the affordable care act, i'd like to remove the word "affordable" from the title, but nevertheless, this is a hearing about the classic question of who done it, what did you know and when did you know it? i'm a believer in long term care policy. i purchased one long before i

came to congress after i turned 50, and i encourage others to do the same. one says it's too expensive. my premium is less than $100 a month. i don't know what the premiums would have been in the class act, but they would not have been benefits as substantial as the ones that i've purchased in the private sector, and i'm not always dependent upon the federal government to end up doing the right thing. we heard it talked about a 15 year exclusion. well, i didn't have a 15 year exclues on the policy i bought. now, congress could do something to make it easier. let me pay for that with pretax dollars, full deductibility of long term health insurance. why don't we do that? let me pay for it out of my health savings act? these are simple things within our reach and grasp that i frankly do not understand why we won't tackle and mr. palloen talked about the words use. i was encouraged to hear the

word "premium support," and yeah, that's a good idea. he referred to us as opponents. i remember that night in july of 2009 when the class act first appeared in the hearing room. the class act appeared at the last minute as a place holder of language that mr. pallone brought to the mark up, never had a hearing on it, never called a witness on it. we were just presented with this information, and, oh, well, we'll fill in the details later. well, now it's later. we're filling in those details, and some of the details don't look too encouraging. it looks like the class act was a budgetary deception to mask the actual cost of the affordable care act, and people are rightly asking now, would we have passed the affordable care act had the true extent of the budgetary impact been known? again, what did they known, and when did they know did? in the spring of 2009, mai 19th to be precise, the chief actuary for medicaid services talked

about the financial structure of the program would be "a terminal problem for the program." he knew that in may of 2009. why not discuss that in july when doing the mark up on hr3200? that would have been a service to the committee and a service to the people if we couch had those hearings, but we didn't, so here we are. it's a fact of life. we all age, and at some time we have to rely only some form of long term care insurance. again, i can think of no more loving gift than parents to leave for their children than take care of their needs if that were to arise and relieve the children of that burden. we never got a chance to fully debate this. mr. waxman, i would say class dismissed, and then we need to work on canceling. i yield the balance of my time to mr. murphy of pennsylvania. >> thank you. you know, i've been concerned about the way this program doubles premiums as long term health insurance and the

so-called savings of health care law. as far as back in march, i said if any insurance company began collecting premiums and spend before paying a single penny in benefits, they would be prosecuted as a ponzi scheme. what's of concern here is the lack of forthrightness on behalf of hhs and the administration concerning the insolvency of the program. throughout the debate of the health care bill, i and republicans and even democrats questioned the long term solvency of the program, but the administration insisted solvency was not in question and the program would significantly reduce the deficit. in fact, the original cbo score of the class act projected savings of $70 billioning thing for half of the toe -- total deduction. secretary says now it's totally insustainable and the promised savings evaporated. the greatest concern as we uncovered evidence the committee knew it was not sustainable in

spring 2009 prior to passing of the health care law. we are left with serious questions about what the administration knew and when they knew it. certainly it appears the administration knowingly promoted it as a cost saver when they knew the savings would never be achieved. i yield back. >> the chair thanks the gentleman, and now recognizes the gentleman from texas for five minutes. >> thank you, mr. chairman, and thank my colleagues. i welcome the colleagues here, three of them we see all the time, still, but i want to particularly welcome patrick kennedy, and we worked together on lots of issues over the year, and i want to thank you for your service to the american people, and particularly to your district in riled, but also thank you for your service to your father. without your father's work in the senate, i don't have enough fingers and toes to list the issues that would not be in the law today including the class

act, and just the regimely thank you for the service of your family, and all of us thank you for that, and particularly knowing you and your service in the house. i think it's correct the class act was added by voice vote working on the affordable care act, but i don't want to use the class agent as a reason to oppose the affordable care act. there are thousands of people in our country who do not have the same opportunities that federal employees have or state employees or bar association or american medical association members to purchase a long term care plan, and that's what the class act was supposed to be about, to give a lot of people to do what dr. burr guess talked about, to give a gift to our children so we have that opportunity. it's difficult to fund it, and i know we've heard the quote about "ponzi scheme," and i thought that was only with the social

security, but, you know, insurance could be considered a ponzi scheme because you hope you pay the premiumings for all these years and you'll be able to collect it, but that's not what this is about. it was to give people an opportunity who may not have the same opportunities we do as federal employees or state employees in the state of texas i know have that opportunity, and a lot of businesses have that, but most people don't through their employer, and that's what the class act was about. is it perfect? nothing in the act is perfect. i continue to disagree by calling it obamacare because this committee drafted that bill. the president did not send us up a bill. now, i know it's popular to call it obamacare because it's a good message, but we drafted that bill in this committee after a lot of mark up, late night mark ups. it was not dissimilar to 2003 with the prescription drug plan that the majority now pushed that a lot of us didn't support because of problems in the bill,

but you have not seen us repealing that prescription drug plan. we want to perfect it, and i know we need to perfect the affordable care act, and so and that's what we need to look at. if we can perfect the affordable care act and make it better, let's sit down across the aisle, but for ten months in this congress, all we've seen is repeal. i guessed that happened after social security was passed in 1935. a lot of people said we needed to repeal social security. thank goodsness they didn't do that. i yield my time to my colleague. >> thank you, congressman, green. i welcome my colleagues, and good to see you, patrick. a lot of claims have been made about the class savings taxpayer dollars, but it's my understanding the cbo director reported that repealing class would have no impact on the federal budget so the claim otherwise is just not true, but it has a profound effect as

howard wrote, and i agree. "while class act is deeply flawed, as tennessee townt to transform long term care to an insurance based system." if repealed that opportunity is lost, and millions of americans find themselves with only a shrinking medicaid benefit to support them in their frail old age or if they are disabled adds a younger age. our seniors and disabled need us to mend it, and not end it. i yield my time. >> thank you, so much. we don't have a long term care policy in the united states of america. the only thing we have is finally medicaid when people run out of all of their money, and so the 10 million americans who are in need of long term care and services and support really need a program like this, and it is disturbing to me that when my

colleague says "class dismissed". no, if there are problems with this legislation, we're willing to sit down and figure out how to perhaps do it better, but the very idea that we're going to take away better choices for americans, you know, already, one out of six people who reach the age of 65 will spend more than $100,000 on long term care. in this country, that's a disgrace. you need a long term care policy, and class act is a good start. i yield back. >> the chair thanks the gentle lady. 245 concludes the opening statement. the chair has a unanimous concept request to enter into the record a statement by senator john thune. the ranking members looked at this without objection, so ordered. our first order of business today will be our members panel. i'd like to welcome our members

and former member and all the witnesses today, but our first panel includes congressman ray burke from montana. he's the chairman of the subcommittee on labor, health, and hunt services of related agencies at the house appropriations committee. next is congressman from louisiana. he's a doctor, so he'll have plenty of company here at the energy and commerce committee. also with us is congressman tad deutsche from the great state of florida, and then congressman from rhode island and then patrick kennedy. welcome. we are happy to have you here today, and we'll start with congressman ray burke. >> thank you for the invitation to testify here today. i want to thank the members of the class act working group, especially chairman stearns, chairman pitts, and i see

mr. upton is not here, probably has something else on his mind at this time. senator thune's leadership is also extrough ordinary. this -- extraordinary. if you think about the work, it's unfolded like an episode of "law and order," and those shows begin with a mystery. in 2010, the american public was handed a mystery when president obama signed into law the affordable care act weighing in more than 2500 pages calling for thousands of pages of more regulatory rule making, even the bill's authors did not read it. we'll told we have to pass the bill before we could find out what's in it. that's what the working group was all about. we followed clues, questioned witnesses, and used authority of the congress to track paper trails. as the chairman of the house of appropriations committee that oversees the department of health and human services, i requested internal hhs documents revealing the insol vent nature of the program.

when it passed. we were told that class is a true insurance program where the premiums cover the benefits paid out, but as we dug deeper, that cover story began to fall apart. new factings came to light. every actuary agreed that as currently written, class simply will not work or pay for itself. the government is exposed to tens of billions of dollars of cost according to the cbo, and then earlier this month, we got the equivalent of a full confession. the department of health and human services rightfully decided to cancel the program. thftion a profound -- this was a profound development. once we stripped away the spin, brushed off budget gimmicks and cut through the bureaucratic jungle, there was a president's health care law for what it really was, truly a ponzi scheme that apparently was included in the bill solely to help the bill appear deficit neutral.

there's a problem. class is not gone. not yet. the secretary can claim she has the authority to in effect rewrite it. there will be temptation for some in congress to slip additional authority into an unremitted bill to turn class into something it was never intended to be. that's why we're here today. the facts are out. now we have to decide what is to be done. i'm here because i don't think class should be rewritten or redesigned by the bureaucracy. at a time we're struggling to save the entitlement programs we have, good programs like social security and medicare, we simply can't afford massive new government programs like class. the potential cost to the government of the employers is so agreed great that any consideration of a program of this type needs to be fully considered in a transparent and open way by the public and by congress. in just as with the other entitlements, a new program of this type makes the task of savings existing entitlement

programs more difficult. in week, i introduced a bill to repeal class and other new entitlement programmings as well as co-sponsoring the class repeal bill. colleagues, the most important responsibility congress has today is to create an environment for the economy to thrive, to do what we must do to reduce government spending and regulations. out of control government stepping leads to higher taxes, lower government debt ratings, and uncertainty in erroneous regulations leading to higher cost of doing business and barriers to business growth. this is the final act of the episode. we've seen the crime, uncovered what happened, got the confession, and now it's time to pass sentence. congress has a chance to act decisively to practice the taxpayer from the consequences of an unsustainable new government program. thank you, mr. chairman. >> chair thanks the gentleman. we'll go in the order in which

you're seated, and the chair recognizes congressman deutsche for five minutes at this time. >> thank you, chairman pitts and stearns and for the opportunity to discuss the class act. i'm pleased to be joined by mr. kennedy and grateful for the commitment to making the late senator kennedy's dream of dignity and hope for elderly, disabled, and others a reality. they captured the failure of the long term care system in saying "too often they have to give up the american dream, the dignity of a job, a home, and a family so they can qualify for medicaid, the only program that will support them. " class brought so many americans hope because it was the first real path to delivering real affordable long term care. just 10% of americans over age 50 have long term care insurance, yet 70% of them need long term care at some point. the remaining 90% of americans rely on medicaid, and that's why

over a third of its dollars go towards long term care and cuts demand we make affordable cost effective long term care insurance available to the american people. the current system incentivizes poverty and forces seniors to blow through their life savings and spend down. this forces struggling families into unthinkable positions. take, for example, a 3457b in his 50s with early alzheimer's, and he's ineligible for medicaid. at $50,000 a year, her salary is too high for medicaid, but not enough to pay for the nursing home care that can cost up to $90,000 annually in florida. she can leave her job to fall into poverty, divorce her sick husband leaving him destitute, but eligible for long term care through medicaid. the choices are not unique, but the current systems'

insenttives. save nothing, pass what you have to your children before you get sick, own little property, do not purchase long term care insurance policy, follow this plan, and you'll be ill gibel for expensive long term care through medicaid. the suspension of class do nothing for the grandmother in my direct choosing between her grandson paying for college or her tuition at a nursing home. cheering this does nothing for working familying i represent with no way of paying for the long term care their elderly loved ones need. i visit homes in florida and pained to here con stitch wenting saying they miss their homes. sadly, medicaid steers them into constitutional care despite their preference for less costly in-home care and other community based options. i heard from seniors faces

disclosure because of nursing home billings and young families can want afford quality care for the parents they love, and yet long term care insurance is out of reach for most americans. no one is immune from the frailty of old age. anyone can fall ill or become disabled. take, for example, the case of allen brown, a 20-year-old in 1988 when he was struck by a strong ocean wave that damaged his spinal cord lf -- leaving him paralyzed. from the care, his costs are as no , ma'am call, and with two jobs, a struggles to get back. those who are young and healthy, may not always be. any one of us can become disabled, and the inevidentability of age. class focuses on stainability. if that is a concern, let's fix it. hhs was given statutory latitude, and i join the class

actuary and class advocates in believing that the secretary has enough authority to make the program work. others disagree. they imply a legislative fix is needed. let's fix it. just as social security succeeded as a wage insurance, reducing elderly poverty from 50% to 10%, americans should have an affordable way to finance long term care. for the 200,000 seniors represent, the jovial reaction to the suspension of class was disheartening and predictable. mr. chairman, my constituents, our constituents deserve more. we must seize this opportunity to get long term care right in america, and together i believe we can improve upon a promising idea, reduce entitlement spending and ensure americans greater financial security. i thank, mr. chairman, and i

yield back. >> the chair thanks the gentleman and pleased to welcome our former colleague for five minutes. >> thank you, chairman pitts, stearns, and all those welcoming me back today. it's an opportunity to testify. let's just think for a moment, step back, and use our common sense. all of our family members are going to need supportive living services, and the question is not how and what program we're going to put those costs on. is it going to be at the state lev, the local level or the federal level. the notion is you can't turn away from this problem and think that the problem's going to go away. someone's going to have to be there for our people and our families who are going to need sportive living services, so the question for congress is really

how are they going to address this problem? you can say that actuary say, oh, class agent costs money, but the whole point of health care reform is we take a broader look at all of the cost associated with health care, and really see the forest from the trees, so we're well aware the health care system is about cost shifting. you take the uncompensated care, and you put it on the private pay, and you hope that someone pays for the bills of those who cannot afford to pay. when are we going to start to be realistic about this? because just turning away from the problem is not going to make the problem go away, so people will say, oh, this is a program that costs money. you know, many my father's case who needed supportive living services, and my uncle's case

who needed it with dementia, it was non-medical supportive living services that helped them in their lives. it was the guy that helped my u.n. -- uncle sarming up from the living room into the dining room and who helped him, you know, get transported around. this was someone who didn't have a medical degree, doesn't have big student loans because they went to get a doctor's degree or nursing degree, but they were the most essential person in my uncle sarge's life in giving him dignity and giving him a life, and guess what? it's the least expensive. i should be getting all the support from my republican friends. if you want to reduce medical costs, try using nonmedical support services, so you'll hear a lot about, oh, well, you know, this is going to

cost money. let's just step back and understand it's going to -- someone's going to pay. someone's going to pay, and so let's be realistic here. let's also do the right thing by our family members and give them the kind of lives of dignity that they deserve that we would want for any one of our family members, and i hope that we get away from this notion that let's place the blame game because we're, you know, washington's good at that, but at the end of the day, our country is facing a demographic tsunami. it's going to bury this country in red ink, and the question is do you want to take all of your tools out of your tool box now because class act can be would be of the tools that you use to help address the overall costs of trying to take care of long term care, and in my mind, you can either pay high price, acute

care, institutionalized care costs, or you can pay for non-medical sportive living service costs to keep people out of acute care settings. the whole notion of health care reform was to move us from a sick care system to a health care system because it's less expensive at the end of the day to keep people independent and not dependent, if you will, on our medical system which is costly. class act is a tool, and let's make it work for all of your constituents who are going it need the sportive services that give them the human dignity that each of us want for our own family members. thank you, mr. chairman. >> the chair thanks the gentleman. >> thank you, chairman pitts, ranking member, members of the energy and commerce committee

for allowing me to testify today. chairman pitt, i ask unanimous concept my full statement is made part of the full record. >> without objection, so ordered. >> i appreciate you allowing me to testify in support of hr1173. the bill is really simple. it repeals the class act as the program has been shown to be fatally flawed, fiscally inresponsible, and irreparable. i worked to hying like the problems and flaws of the program, and i can tell you as chairman of the oversight subcommittee on house ways and means committee, the bicameral congressional oversight efforts were vigorous, extensive, committed, and necessary to expose the truth about this program. in fact, mr. chairman, this is a victory, a congressional oversight victory on behalf of the american taxpayer. leaving the statute on the books is irresponsible and must be removed.

keeping the law on the books gives bureaucrats a creative license to try to keep -- to keep trying to implement it, and it's an opening for congress to keep trying to tweak a failed program. class is unsustainable. a new unfunded entitlement that we cannot afford. i agree with employer groups and taxpayer add vo calculates -- advocates who have no doubt class will return if congress fails 20 strike it from the books. they insist hhs has the broad legal authority to fix the program by excluding eligible americans from the program. mr. chairman, i have to say i'm deeply disappointed that secretary sebelius refused to testify today. she should come here and explain why she ignored warnings of the insolvency of the program and falsely claimed she had the authority to change the program. law make #ers -- lawmakers consistently ignored warnings by the congressional

budget office, the chief medicare actuary, and the american academy of actuaries when they inserted this budget gimmick in the affordable care act. after months of refusing to answer questions, hhs finally, finally conceded it lacks the legal authority to make class sustainable. congress should repeal it rather than waiting for bureaucrats to change their mind. mr. chairman, cbo's credibility should also be called into question for scoring the program as a saver with a new -- it would need a bailout. in fact, i want to quote from former cbo official, jim capretta. he wrote, i quote, "what remains so perplexing in this episode is why cbo played along with the class charade. they had access to all the same actuary data as everyone else. their own numbers showed the program was unstable beyond ten

years. the agree amendment gave them the perfect excuse to conclude that class would never be launched because it could never be viable without massive taxpayer sub subsidies, and yet they kept showing the $70 billion ten year surplus in their estimate. among the many questions about the sorry episode that are worth pursuing is the role are cbo surely won." mr. chairman, as a physician who has dealt with many, many patients, i was a cardiac surgeon, and i saw a lot of these complex conditions, and i saw the entire spectrum of care and the needs that are out there. i can assurely tell you as a physician, there's many, many other options that are much more responsible, fiscally responsible, and more sustainable than this program was. there's a number of options never entertained as we went

through this process, so beyond class, we must continue to encourage middle class americans to plan. that's fundamental issue here is planning ahead, starting at an early age and planning for the kinds of things. you can't do this at a late stage. planning for retirement security, purchasing long term care insurance policies. we can do a number of things to make that even better if we look at the options very carefully. timely, on a personal note, i tell you from dealing with my own tower and my -- fawsh and my wife's stepfather, there's viable ways to deal with this, and what we need to do now is be responsible, let's repeal this failed program, move forward, and come up with responsible policies that will move the ball forward in health care. mr. chairman, i thank you for the opportunity to testify. >> the chair thanks the gentleman and each witness for your testimony.

at this time, we'll dismiss the first panel, and we'll call the second panel to the witness table and the chair will turn over the chair [inaudible conversations] >> coming up on c-span at 1 p.m. eastern, libya's ambassador to the u.s. on the way forward with his country. he'll also be joined by saudi princal nical, that's at 1 p.m. eastern. and at noon on c-span2 here on c-span2 also live, a conversation on possible budget cuts and the effect on children. more about that in just a few moments. and over on c-span3 at 1:10 this afternoon, google chairman eric

schmidt testifies before the senate judiciary subcommittee on antitrust issues. >> i don't want every story to be 1800 words. >> last month jill abramson became the first woman to hold the post of executive editor at "the new york times." she believes the times is more irreplaceable than ever but also expects changes. >> there is a lack of discipline, sometimes a point is repeated too many times in a story, or there are three quotes making the same point where one would do, and i'd like to see a variety of storylines. >> she'll discuss her career, her new book and the future of the times sunday night on c-span's "q&a." >> tonight here on c-span2 road to the white house coverage with vice president joe biden. he'll be speaking at the florida democratic party convention in orlando.

also speaking, senator bill nelson and florida congresswoman debbie wasserman-schultz who also chairs the democratic national committee. the florida democratic party convention this evening at 7:30 here on c-span2. and coming up in just over an hour, noon eastern here on c-span2, a look at how potential budget cuts from the joint deficit reduction committee might affect children. the urban institute hosting a discussion this amp, and that'll be live here -- this afternoon, and that'll be live here on c-span2. next up, though a conversation with the chairman of the house transportation committee on efforts to save money in the nation's transportation budget. >> and now on your screen is chairman john mica of the house transportation and infrastructure committee. chairman mica, each of the major committees was asked to give their recommendations to the superdeficit committee about whether they would cut or what they would like to see done in their areas of jurisdiction. one of the things that in your letter to the committee you recommended was no increase in

user fees. why? >> guest: well, we're opposed to increases in taxes. there are certain user fees that might be suitable. nothing fairer than user pay. right now our primary source of funding in transportation is the gas tax, and that's 18.4 cents per gallon. everybody pays that per gallon, that comes to the trust fund in the washington. um, we've had problems with, well, some good problems. cars travel further, but that means they're paying less. um, and even if you increased it, we'll say to $5 a gallon which we wouldn't do, and no one's using gasoline anymore, you're funding -- your funding system has collapsed. so we're, we're looking, scrambling right now to find other ways to find

transportationment -- transportation. our leadership is committed to funding at at least current levels. we had considered, you know, initially at just spending within the trust fund, trying to live within about $35 billion that comes in a year. but that would really take you down about 25%, and it didn't have a very good reception. even if you could take that money and leverage it and get more for less. but we're hoping probably to have the transportation bill as one of our centerpieces of job creation, and we think the proper investment of money can put people to work quickly, and our bridges, roads and other parts of our transportation system need that. >> host: what user fees would you consider having increased? first of all, what are user fees, and which ones would you consider having increased? >> guest: well, one of my recommendations that i made is looking at some of the tsa

charges. and i made a specific recommendation. you know, i helped create tsa, wrote some of the legislation, and back then it was anticipated ten years ago to be a much smaller agency. we had user fee which is $5 maximum on a ticket. it was $2.50 each way up to a maximum of $5. and the airlines are supposed to pay about a billion dollars a year which was the costs they had expended to conduct that. i've recommended the committee to look at adjusting that. the taxpayer's now picking up 65% of the cost. the fee is paying about 30% of the cost, and then the airlines are paying about 5% of the cost. but that's one area. now we're up to $8 billion and, of course, i'm a strong advocate, too, of right-sizing and redirecting the mission of

tsa. but that's one example of a user fee that could be, could be adjusted and some revenue. >> host: um, now what about gas taxes? could you see an increase in gas taxes? >> guest: i think that's off the table. you know, president obama closed down the transportation bill. mr. o bear star and i, while we disagreed on the increase in gas taxes, i wasn't for it, my predecessor had advocated that, and many around the country -- some associations in industry -- did. but we had, we had a pretty good agreement to do a very substantial bill and obama came in and said even he wouldn't support that. so that's off the table with the president, it appears. it's off the table with congress, the house and the senate. speaker boehner and leader cantor are working to try to find additional revenues maybe

from some oil revenue sources where it can be a little bit more predictable and adjustable so it isn't always diminishing. you know, you drive further, and you pay less. that doesn't exactly work. it has to be equitable. so we're looking at a way to fund this because, again, of all the schemes and things they come up with, probably nothing between now and election or next year will put more people to work than a sound transportation bill. and we could do that on a bipartisan basis, i believe. >> host: but, chairman mica, if deficit reduction committee does not come to an agreement, automatic cuts will go into effect. >> guest: yeah. >> host: would that hurt transportation projects? >> >> guest: i don't think it will. again, we operate pretty much from a trust fund. i've got the 18.4 cents coming in, $35 billion a year in that. i have some ore revenues -- other revenues. it's not just the 18.4 cents,

the trucks pay us a higher rate. so i have, i have a -- we work from a trust fund, and we're an authorizing committee. so we authorize how that money can be spent. the problem is the spending levels have been higher, and we've, we actually proposed a whole bunch of ways where we can get for less, leveraging our money, making some programs that don't work work. and then another important thing is the process. but we did send, you know, our recommendations. these are our recommendations, to the committee. a lot of them are based on this report which actually we did when we were in the minority about a year ago, and it's an interesting title. it says the federal government must stop sitting on our assets. we take each of the activities that we oversee -- public buildings, highways, rail -- and

we recommend ways we can do better -- >> host: and here are the republican proposals to the deficit reduction panel from the transportation committee which is the majority in the house. oppose transportation user fees for deficit reduction, oppose 15% per-gallon gas tax increase. ..

a bill that i helped author in 2003. it expired in 2007. they had complete control of the place and they couldn't pass a bill. we did 17 bill extensions. when i became chairman about nine months ago i agreed to two more. then i said, whoa! we've got to stop this. i picked on air fare because example of a government fram that got a little wrong. they got sensitive in nevada. one passenger airline ticket $3720 per ticket. and i stopped in my extension all subsy todayizations of tickets of

excess of $1,000. affected three states. i believe new mexico, montana and nevada. but i hit a nerve. they didn't pass my extension. they blamed plea. they had plenty of time to pass it until two weeks later they meekly went to the senate floor and passed it. but i think that, it wasn't, maybe the best way to do things but i do the same thing again because, we've got to, we've got to get some of these programs working. aviation industry accounts for about seven or 8% of our gdp and we haven't passed a bill in 4 1/2 years that sets again the policy, the funding and the project priorities. so that's what i did. >> host: one more issue before we go to calls. ed rendell, former mayor and governor of pennsylvania. former mayor of philadelphia was on this program talking about something called a

infrastructure bank. want to play just a little bit of what he had to say and get your response. >> if we did infrastructure right, it is not hundreds of thousands of jobs it is millions of jobs. the infrastructure bank is important. number one, because it would make decisions on projects of regional and national significance. it would make those decisions based on merit, not the old political system of who has got most powerful congressman and or senator. that is important to get public confidence back in. number two as the president said, access private sector dollars. they want to come in, they want to invest in american infrastructure projects where there is a rate of return and the infrastructure bank would be the vehicle to do it. number three, the president talks about capitalizing it at five billion a year for the next five years. and that's important. there has to be federal participation to act as the leverage for bringing those private fund in. it is absolutely needed and necessary and the president should do it quickly.

>> host: national infrastructure bank. >> guest: well, i agree with a --, wll, infrastructure banking, we've looked at the proposal senator kerry and hutchison offered a proposal. the president mirrored some of that in his recent recommendations. we've taken a hard look at it and, what i think that we need to do, well, first of all the purpose of that is to get projects moving quickly and people working. there are a lot of people hurting in this country. to create a national infrastructure bank, look at the legislation. i went over it with senator kerry this week. even his staff and others who have looked at it say will probably take a year to set it up. it requires presidential appointments and senate confirmation. then you've got to set the staff up, the rules of the game so to speak, hire 100 people and cost to run it estimated $270 million.

we looked how we could do this better and faster. 33 states already have infrastructure banks. we held a hearing on the president's proposal and they said give us the money. we have the structure in place. but what we don't have is the money. so that's the very first thing is we can do that. then, what federal programs already give loans and loan garp tease? we have tfia, transportation infrastructure financing. that is already set up. it does have some problems. the level of federal participation is limited to the 33% of the cost of the project. we can increase that. we have a cap now on the size of the project and also a minimum cap. so we can adjust those. so very in place a loan and loan guarantee program with minor modifications. i can get this thing passed, we can get, we can get projects going as soon as we pass that bill, not waiting.

it would be a year, probably a year and a half with a national infrastructure bank where they have to come on sort of bended knees here in washington and ask some new agency for that money. people want jobs now. >> host: john mica is our guest. he is the chair of the house transportation and infrastructure committee. republican from florida. currently serving in his 10th term. john is a democrat in youngstown, ohio. you're on see span, john. >> caller: i have a question how did mitch mcconnell so much power. i hear mitch mcconnell wants the president to be a one-term president. why are democrats afraid of a one senator. i don't understand that. >> host: start off with a political question, mr. mica. >> guest: everybody says sometimes, they wish they take them back. i'm sure he heard that many times but, mitch mcconnell is a powerful because of the

senate rules. the senate, you know, has rules that require basically 60 to proceed for, unanimous consent and to move things forward. so, when you have less than that he has power and he exercises it as any, anyone with the number of votes he has. >> host: next call for john mica comes from riverside, california, david on your republican. >> guest: they're up this early from riverside? >> host: absolutely. >> caller: john, this is david from riverside. how are you? >> guest: good. >> caller: my question for you i'm sure you know about the transportation problems we have in california. >> guest: oh, yes. >> caller: the caltrans budget, let's talk about the caltrans budget. $8.5 billion a year to do what? i have no idea. i have, went to some of the yards for caltrans. they have new vans, new tires on the vans that are a year old. i'm disgraced actually. i see caltrans drivers

parked on the side of the road doing nothing. trash everywhere. why don't we cut the budget of caltrans in california? we'll save billions of dollars. that is all my comments. thanks, john. >> guest: a good point. we don't have a whole lot of say over caltrans. they may get some federal grants but it is pretty much a california operation. i oversee or our committee does, amtrak and that's one of my targets for a vast improvement. we could do a lot better there. they have made some reforms. we passed some legislation to reform it. but, you know what we can do, and i'll ask my committee staff to look at caltrans's operations. if there are, if there is federal money involved, we could get involved but usually operational it will come from a state budget. you know, california has plenty of money so they don't have a problem funding waste and inefficiency. >> host: just just a joke.

just a joke. >> host: quince by tweets into you. why are jobs created by stimulus money allowed to be outsourced to chinese company a real slap in the face. have you found evidence of that? >> guest: i don't know about that one. i would love to hear more. i try to monitor the stimulus dollars. mr. oberstar and i pledge to do that in bipartisan manner. i'm not happy about the way some of the money has been spent. actually some agencies have done a good job. i think faa has done a great job in getting the money out and also responsibly. i don't know of any instances. i would love to hear because we will investigate that and it will be pursued but, and i will make a note of it for our staff to check out. >> host: robert, new york city, you're on with house transportation committee chair john michael. >> caller: yes, good morning, mr. mica. >> guest: good morning. >> caller: regarding the actual title that is on the

screen about deficits and transportation, i'm wondering what, why is there such an emphasis in this day and age on the development of high-speed rail? obviously high-speed rail is a phenomenon that applies as the occupy wall street people would say, to the 1%. and a lot of the use of high-speed rail is for things that in this day and age could much, could be much more easily handled by simply by teleconferencing, saving fuel and saving large outlays of money. i don't, i'm not quite sure what the purpose of the president's emphasis on high-speed rail to catch up with japan is? in japan --. >> host: robert, we got the point. let's get an answer from mr. mica. >> guest: okay, good question. i, i'm an advocate of high-speed rail.

some may find this strange, republican advocate of mass transit but the projects have to make sense. you can't build high-speed rail to know where. you can't build systems whether it's a surface highway that people won't use. now some are excited when i heard obama was supportive of high-speed rail. however he took $8 billion and put it into the program -- it wouldn't be there if it wasn't for him. congress added another 2.5 billion. the problem is they picked a, what hapned, amtrak, which is our soviet style train operators, they hijacked about 76 of the 78 projects and most of them, while 99% of them were not high speed. they were slow-speed trains i said to nowhere. some of the governors looked at them. they couldn't finance them. kasich sent the money back.

wisconsin sent the money back. my state sent the money back. you need to build high-speed rail where it makes sense and where it has improvement. i advocate the northeast corridor which is only corridor that amtrak and the government owns. it has all the connections. we have the fixed transit system. we have the most dense population. we have the biggest benefit for the country because 75% of our air traffic delays are out of the new york airspace. if i can get people on another mode i can free up some of our airspace. we own the property. the problem is congress will never give amtrak 117 billion they asked for. 30 years to build it. i think we can build it in a third of the time, bring the private sector in as a operator. it could have a great cash flow. wouldn't be a burden on taxpayers. that makes sense. building a systems to know where, you know, any system to nowhere transportation does not make sense. that's my take. >> host: next call, carl is

a republican in berkeley springs, west virginia. please go ahead with your question for john mica. >> caller: yeah i'm all for spending money on infrastructure but the problem i see, anytime the government gets involved in handing out contracts they force the, the companies to pay according to davis-bacon. now, in this day and age if you can hire two people for $15 an hour instead of hiring one person for $30 an hour, and get twice the work done at a lot cheaper rate, you know, looks to me like you could repeal this davis-bacon act just until we get back on our feet. >> guest: well, repealing davis-bacon is almost impossible given the votes in the house and the senate. and you know, you do want to,

in some places, some standards, for wage payments. the gentleman came from berkeley. >> host: berkeley springs, west virgina. >> guest: there's a great example where some of the federal standards may not make sense in the smaller or rural communities. i emphasize -- empathize with him. i would like to change it. i went to the university of florida, i'm not a mit or harvard graduate and i can do the math and i don't have the votes, it takes 50% plus one to change that. i it would be fair and more equitable to give some relief to some communities that where that standard doesn't make sense. you still, you know, want to have wage protection but the gentleman points out a problem. >> host: mr. mica, this session of the congress is coming to some kind of a conclusion. a lot of the deficit reduction committee is going to take a lot of the oxygen out, in the legislative session in the next month or

two. what kind of legislation do you foresee being able to get passed transportation? >> guest: well, first of all i am committed and i already stirred things up a bit when on the last, well next to the last extension of faa i will not sit idly buy and not see us put in place a four-year bill for faa. the other folks had watch for four years. they didn't pass a bill. they did little tiny extensions that left this whole, the whole agency in disarray. it left safety programs for aviation on the floor basically just languishing. so i'm going to get an faa bill out one way or the other and that will also add to jobs and employment. we're pretty well with mr. rahal from west virgina, my and other democrats on

the committee and republicans, but we got obligation to the american people to get that done. that is under our purview. 4 1/2 years, that's crazy. then the next one is tackle, what i think will be the centerpiece of jobs, the second centerpiece of jobs for republicans. that's a responsible transportation bill. here the bill expired two years ago. i inherited it nine months ago. we did an extension to march. i don't want to go beyond march. we need people working in march and i need programs that work to get people to work. people have lost their homes. and i did a call-in, one of my call-in tele town halls. lady was foreclosed on the same day i did the call. i mean just had about everybody listening in tears. that's got to stop and we've got to get people working. in my state construction is doubled whatever, i mean we're looking at over 10% unemployment.

i've got one county with 15, 16% unemployment. it is even greater than that. a lot of it is construction. for every billion dollars, if you properly expend it you can hire between 25 and 35 thousand people. think of that. $30 billion in that range you could hire, it is nearly a million people working. instead of paying people not to work, all these programs to subsidize cockamamie programs that don't work or when the money runs out or the jobs runs out or short-term transportation bill, they're doing little piddly jobs, sidewalks, repaving. nothing wrong with them but the job runs out when the money runs out. we can build this country and our infrastructure. we've got to make the right investments, pick the right projects. like the sfwi said, what are they building high-speed rail in the middle of

nowhere for. you build where it has success and projects cooperatively. the federal government doesn't build anything. we have to be a reliable partner and got to be in new york next week looking at some projects. they're a billion dollar, $8 billion range and they take years. if you have, if we pass a two-year bill it is like closing down those projects because the money isn't there on a dependable basis. we're just taking that money from folks and sending it back but they can't even depend on us sending it back on a regular basis. >> host: savannah, georgia, thanks for holding. john, democrat, you're on with congressman mica. >> caller: good morning. >> host: go ahead, john. >> caller: good morning. i would like to foe first of all with republicans i want to know why mr. mica -- president he refered to president as obama. when he talks about mr. mcconnell, he said leader mcconnell or speaker cantor. and, you know, you need to give the president some respect and refer to him as

president obama. that is my first comment. then my other point is, why is it that republicans bills come up they all vote in lockstep with the republicans to defeat the president's bills? >> guest: no disrespect but to president obama, we often say obama or the obama administration. just like we said the bush. and, no matter who the president is we have to, both parties have to respect him. and then, in lockstep, i wouldn't exactly say that that. i think there is some differences of opinion, on both sides of the aisle. this year i'm going to be married 40 years, same woman. every day practically we have a slight disagreement. here we have 435 coming from all over, all stripes. i think well-intended people

but differences of opinion. you work it out. it is not, you know, it is not as neat as dictatorship and someone makes an edict and everybody run lockstep. sometimes they all rely on prince manage ship which -- brinkmanship which drives everybody nuts. we can do it. my committee we're fairly fortunate it is a bipartisan committee but here we have disagreements. >> a double question in this tweet. why is congress meeting only 109 days next year and why is the jobs bill being stalled? >> guest: well, i don't set the schedule but, i think the time you spend here should be quality time. they have tried to give more time for people to be back in their districts with their constituents. think i that is helpful. it helps the members of congress. they stay in tune on the ground. you can't go home and not

get input from your constituents. i think people have spoken very loudly and their voice resonates when they have the most contact with their representatives. so, that's, that is it. most of our district work periods as they call it, it's work on both ends and of the job. i don't think we -- in my committee, for example, the infrastructure bank we've done a hearing. we sat with democrats and others. you try to see what they propose and then if you have a better idea you try to get the votes for it. so i have a certain amount of time by the end of march to get aness tra pourtation bill out. that should be a cornerstone of at least our side of the aisle. and everywhere i go democrats on republicans want a transportation bill. we all want the same thing to get people working to get projects moving.

so we have to have the policy in place and work with folks, finish the hearings and as soon as i get to the floor and we've got this little piece of getting the rest of money in a time, we're talking about trying to get some more money that isn't there now. it is very difficult when we've got the super-committee looking for cutting and everybody else. it requires you know cooperative effort and also, somewhat above my pay grade. i've got to get the leadership involved on both sides of the aisle. >> host: mr. mica this article in "the new york times." congressman will run in florida. representative connie mack, republican of florida and son of a former senator has decided to challenge senator bill nelson, a democrat in the 2012 race. >> guest: i think economy mark will be a formidable candidate. he will probably leap right to the top of the pack. just by his name and his

dad's name recognition. a very well-respected family. a great name in politics. so, it's, it moves him to, i think the front of the race pretty quickly. we'll have to see how he does financially but the others are not as well-known and he has an advantage. >> host: have you endorsed for president yet? >> guest: no, i haven't. >> host: do you plan on it? >> guest: i don't know. you know, got a couple of leaders in the party. i heard governor romney the other night and he did a great job. speaker gingrich, he is probably one of the sharpest people on issues in the nation. i also had support in the past from governor perry when i ran for the ranking

republican which led to my chairmanship of this committee. i don't know cain. michele bachmann has had a few problems in launching. who else have we got there? >> host: who are we forgetting? >> guest: i don't know. johnson? >> host: mr. santorum. >> guest: rick santorum. we've got some good candidates. i love to listen to them. i never heard so many debates but, i think there's a good way to choose from. >> host: this picture in the "wall street journal" this morning of one of your colleagues in florida, marco rubio, being touted for potentially vice president. >> guest: well, you never know who the nominee is going to get. mark cohas -- marco has probably one of the best careers for anyone his age. he did a great job in the state legislature.

he of course blew everybody away in the senate race and very well-respected. if you ever get a chance to hear him speak, he is one of the premier orators of our time. >> host: this tweet for you, mr. mica. if republicans had their way, would you privatize all public assets in the federal government? such as roads, et cetera. >> guest: as many as i could. the longer i'm in government the more i'm advocate of the private sector. let me reverse that. if you own some property, maybe office building or rental property, would you turn it over to the federal government to manage it or the government to manage? almost everybody would say no. and we've got instances, i took over the committee. we oversee all public buildings. we have buildings that have been empty for decades. i've got one down here the street in washington.

it is costing the taxpayers $10 million a year. it is 400,000 square feet. half of it has been empty. behind it is an annex, 60,000 square feet that has been empty since a decade and a half. in a couple of weeks here, we will open bids to have the private sector take over that put. put in hotels. put in retail space. put 1,000 people to work and pay into the federal government 10 million plus a year. and we can repeat that 1,000 times across the country. i mean this city is full of vacant buildings. the federal trade commission building they want to give to the national gallery of art, they pay 150 to 200 million to renovate it with private funds, i can't get the idiots, excuse that phrase, to look at that and consolidating an agency that has a building here, one, two behind us and wants a third one and we could save

another 200 million there. that is half a billion dollars with one deal. the private sector i would have this done in an hour. this kind of stuff that drives me nuts. got a great chairman, jeff denham from california. he stepped in. we held a hearing in that empty building in february. it was 35 degrees out. we hauled all the bureaucrats in. but we're getting something done and moving these idle projects. this sitting on your assets. great piece online. people can look at it. there are a few ideas. we welcome as people see waste we'll go after it. >> host: this would be available on your website? >> guest: yeah. that is transportation committee, house transportation committee. look it up. if you see other ideas, the best ideas we get are not from here in washington, people telling us what is going on and abuses like the guy, look at caltrans. i have the china stimulus dollars. we'll see if those things

materialize and go after them. that's our job. >> host: edwin republican in massachusetts. you're on with congressman john mica. >> guest: i didn't know there were any republicans in lowell, massachusetts. >> caller: there is one. congressman i think you're doing a great job. i want to comment on stimulus. i don't believe one-shot stimulus works. i encouraged your tenor that wants uniformed spending consistently. one-shot spending doesn't work i truly believe, as soon as stimulus goes away, the jobs went away. it doesn't really create, produce anything that the consumer will buy now. so it doesn't, because i don't know anyone who would want to go out and buy part of a bridge next year with their money. so this one-shot stimulus stuff to me is wasted money. as far as addressing our real, right now problems.

>> guest: absolutely. it just, and you see the, you know, the president obama, his latest proposal is sort of like a mini-stimulus, the same thing. paying people not to work. subsidizing positions. he did go up some, only $63 billion out of 787 was for infrastructure. he has gone up i think 60 billion out of 447 which is 12 percent for stimulus. the big problem you have though, if you do the same thing and it doesn't work, i don't know if you know this, peter, but there is 35% of the money from 2 1/2 years ago for the 63 billion, we had 63 billion for infrastructure. 35% is still here in washington in the treasury. they can't even spend it because the process, this is, the process takes 7 or 8

years to approve a federal project. and they just woke up a couple weeks ago and said, well, maybe we should speed up some of these projects if we want to get the money out and they approved 14 pro jegs to expedite. you have you have 14,000 projects, all projects should be expedited. if we're doing a new road through a wilderness and environmental issues you want that properly handled. but most of this stuff is an existing right-of-way. most of it when we put in improvements we're actually improving mitigation for runnoff and for the environment. we proposed cutting this time for approving these projects in half or less, not doing away with any approvals or regs. you can shorten approval time, when you look at this, we propose here, this can be done consecutively here. this is our proposal. >> host: streamlined protelephones -- proposals. >> guest: currently takes

seven or eight years. that is why shovel-ready, even president obama chuck kels when people say shovel-ready. they found it doesn't work. freeing up 14 projects as you they did a couple weeks ago for the entire country is almost a joke. you have to speed up the process. it is not how much money you throw at it. if the gentleman is right, we made mistakes on stimulus and, on stimulus one. shame on us if we repeat that again. people want jobs now, not, while you sort through some federal red tape. go through another approval. march to washington a year and a half from now when we set up a new bureaucracy for a infrastructure bank. let's use a little common sense. >> host: st. louis, robert is a democrat there. go ahead, st. louis. >> caller: hello, hello c-span. hello, representative john michael. i have a question, you stated that infrastructure bank money should be sent back to the states, correct?

>> guest: well as, as much as possible as opposed to creating a new entity at great cost and then waiting a year, year-and-a-half to actually have even the application process ready. >> caller: i don't understand why would you want money sent back to the states when the stimulus money was passed, just stimulus was passed and that money got sent back to the states, half the states didn't spend the money as intended, and like, presidential candidate rick perry. he spent the money to pay down his deficit. so why would that be a great idea? >> guest: well, i really don't know exactly what you're talking about in texas we can check that but i get the list how those stimulus money was spent and the projects that were approved. the problem, that i pointed out and again we have this little chart that is, a lot

of the money still stayed in washington. very little money of the total money spent, 63 billion out of 787 billion, even went for infrastructure. so, i don't have a problem, the other thing too, the states, the federal government doesn't build anything. we don't build anything. it is all done by state or local government. we send that money back there. now we do, we're supposed to conduct oversight to see that it's properly expended. that's one of our responsiblities because it is federal mon by -- money. but the federal government does not build anything. we just handle paper. and i want to speed some of that up. >> host: john mica, do you have an agenda yet for next year for the house transportation infrastructure committee? >> guest: oh yeah. >> host: what are --. >> guest: by december 31st i want on president obama's desk a four-year faa bill. that's a big part of our economy, getting people to

work. getting safer systems. >> host: december 31st of this year? >> guest: of this year. by march 31st i want to have a six-year, not a two-year, not when obama came to me and oberstar, he actually underminded democrat chairman said i'm only doing 18 months. i would only support 18 months that was killer. that probably cost them the election. if they had passed vote and had votes in house and senate i would be their minority leader of the committee because you could have actually put people to work. all these other things, you know, let's make up a bill. let's make up a program, a new bureaucracy will take a long time. we've got, we've got a foundation in place but we don't have is the commitment, the funding and the long-term commitment. again, i will be in new york next week looking at some of the projects. those are $8 billion, $6 billion. $13 billion projects. they aren't done in a day or a week. you can't, it is not like a

sidewalk, we'll put it in and you spend the money on the jobs and that's what a lot of what we did in the last two years. people want a repeat of that. they want long-term jobs. we need a long-term commitment. it is their money paid into that trust fund or paid into washington and getting it back out there so that, and again, the states are the ones that are going to take this on or local governments. >> host: just a few minutes left, lake butler, florida. bill on independent line. >> guest: that is where a prison is. no, close to maybe i have constituant went there the. >> host: go ahead. >> caller: good morning. actually the last caller, the answer you gave him is sort of what i was wanting to ask however i would like to ask this question a little bit different. there are a lot of interstates in this country that need work. i just got back from a trip and my question has to do with, every time we buy gas we pay federal sales tax on

that gas. >> guest: gas tax on it, 18.4 cents per gallon. >> caller: where does that money go? >> guest: it goes into the trust fund. that's what i do. i don't raise taxes. another committee does that. but my say is the chairman of the transportation is, we set the policy, the funding formula policy so it is returned to the states. we approved the projects or type of projects that the federal money is eligible for. setting basically the priorities, transportation priorities for the country. and interstates are a big one. i'm hoping to free up some of the interstates so that, right now, the right-of-way on the interstates, sometimes it was built in the '50s or '60s when they had wide swaths of right-of-way. we can expand some of that because there is another asset that we're sitting on but we don't have federal policy to approve

public/private partnerships. i favor keeping all the interstate roads toll-free but the rest of the right-of-way, we could actually be building lanes and extra capacity when we have done it on experimental basis. some will be toll-based. some will be cooperative with states but we could 12 have revenue streams that would help support that and utilize that. and then speed up the process. again i always go back to this chart. if it takes seven or eight years to do an improvement on the interstate, my god, we're dealing in paperwork. we should have, we should be able to move forward and make a decision. we've made a decision. and then let the states go forward with expanding that capacity. that's what we hope to do. a lot of people are counting on us. >> host: finally, chairman mica, have you seen "the washington post" article about the comptroller, air traffic controller involved in both close call for

michelle obama and sensenbrenner, yeah, james sensenbrenner. >> guest: yeah. there are poor-performing air traffic controllers and just like poor performing members of congress and people in other professions. we've got to do a better job on recurring training. i think, there are a lot of good air traffic controllers. i want them though to have the best technology. i just got back from canada last friday and saw their air traffic control system. in four or five years they changed out all their consoles. we have a lot of paper strips that those air traffic controllers use at most of their consoles. they don't have a single unone in canada. we need to move forward. here is our faa bill, stuck 4 1/2 years. we're dealing with paper strips and they have automated their whole system. you should see the consoles, the working conditions for

the air traffic controllers. they have nap rooms. they have rest rooms. they have exercise rooms. facilities to for the air traffic controllers. most of the complaints i get, the work is leaking in the air traffic control facility or mold or some other problem. that's not the way it should be. we can and we must do better for our air traffic controllers. both their training and also their working conditions. and i think we can. we'll steal other people's good ideas and do a better job. that is great part of our country. we're innovative. just get the government shackles semiremoved. >> host: joan mica is the chairman of the house transportation and infrastructure committee. >> here is some of what we have coming up for you on the c-span networks. live at 1:00 p.m. eastern, we'll have coverage of libya's ambassador to the u.s. on the way forward for

his country. that he will be joined by saudi prince al-faisal. at that that will be live on c-span at 1:00 p.m. eastern. right here on c-span2 in just a few moments we'll go live to the urban institute for discussion on possible federal budgets cuts and their affect on children that is at noon eastern. about 20 minutes or so from now. and coming up on c-span3 at 1:10 eastern, google chairman, eric schmidt testifies before the senate judiciary subcommittee on antitrust issues. we'll go live noon eastern to look at effect of budget cuts on children. until then your phone calls from today's "washington journal.". >> host: here is "usa today"'s article this morning on the economy. paul davidson writes, economic growth rate rises by 2.5% consumers open their pocketbooks wider in the third quarter even as their confidence in a shaky recovery fell, a disparity that spelled good news for the economy. the economy grew at a 2.5%

annual rate in the third quarter. the commerce department said thursday, in line with analyst estimates and helped a drive a roaring stock market. investors were particularly heartenedded by stronger than expected consumer spending and business investment. on down a little further in this article. consumer spending jumped 2.4%, up from .7% in the second quarter. that accounted for 1.7%age points of the total 2.5% expansion in the third quarter. the results exceeded estimates as americans spent more on services such as health care, restaurants and finance. quote, because the strength was led by consumers, the economy's outlook has improved says economist chris rupkey of bank of tokyo mitsubishi. consumer spending makes up about 2/3 of the economy. the spending data seemed to defy low consumer confidence reading in the july, august and september monthly

surveys by the conference board. mark ehrlich, who coaches small businesses, bought a jeep cherokee, two suits and two printers in recent months. he said last summer's economic uncertainty created new business opportunities. i choose to look on the bright side, ehrlich, 64 years old of palm desert, california. yet chief u.s. economist, nigel gault of ihs global insight noted americans real disposable income after figuring inflation fell 1.7%, the biggest drop in two years. that means consumers dipped into savings to finance their higher spending. the savings rate fell from 4.1% to 5.1%. that's a little bit from "usa today" this morning. we want to talk to you about the economy and your confidence in the economy. "wall street journal" editorial, the he resilient economy left on its own to grow an innovate, the u.s. private economy is a remarkable engine of prosperity.

that truth was underscored again with yesterday's report that third quarter gdp expanded by 2.5% at an annual rate. considering all of the government and other headwinds this year, that's almost cause for cheering. the report very much cents a modest bounce from the miserable .4% and 1.3% growth in the year's first two quarters and should allay fears of any immediate recession. with some $2 trillion in capital sitting on the sidelines "the wall street journal" writes, the waiting for a better outlook the right set of policies could lead to faster growth without too much delay. mr. obama's promises of higher taxes in 2013 only encourage that capital to sit and wait. the gdp report should also tell the federal reserve that more monetary machinations could do little good and might do more harm. the end of the fed's second round of quantitative easing has coincided with the

decline in commodity prices which has helped consumers and businesses. there are no signs of deflation in the gdp report to justify another such monetary dice roll. again that was "the wall street journal" writing about the economy. we'll begin with a democrat in blame ming ton, indiana, george, what is your confidence level on economy right now? >> caller: well unless, here's the problem, peter. what we had over last several years, actually last few decades we had falling wages in the face of rising worker productivity at all levels. we're producing more, working harder, receiving less pay what we have is productivity wage gap. so you have to prop up the economy with artificial demand. meaning, more, either more debt or whatever the propped up the area where wages should be. if we don't have an environment where employers are competing for workers,

trying to be employer of choice as opposed to hate to say this, employer of last resort you will not have a healthy economy. i will close on this note. this is all important. skill level and hecation isn't going to be panacea if everybody went out there became a ph.d it wouldn't raise the median income one penny. but, that is what we need. we need an environment, we don't need the same amount of businesses hiring more people. we need more business startups so we can have businesses competing for workers. i will close on this note, peter. >> host: you know what, george, we let you close on that last note. thanks for calling in. robert tweets in. very low confidence. too many newly minted regulations that increase cost of hiring a new employee. i'm saving dollars, not spending. we have gotten several facebook comments already. very quickly, the question, what is your confidence level in the economy or are

you confident in the economy? david says, why should i be? donna says, only going down. peter says, no, the economy will never come back. we have let the politicians and big business run amok. there is no hope. we are doomed. sebastion make this is comment on facebook. are you out of your mind? and bonnie says, i am confident in the people that are waking up. next call comes from texas. hi, mr. peterson how are you. >> caller: peter slen i'm fine trying to get through to you for a month. really glad to get through to you, peter. >> host: how is mrs. peterson? >> caller: up early, making coffee. i'm in texas peter after that long hot summer. >> host: i was down there this weekend in austin. >> caller: i tried to get a hold of you, peter. it was hot. >> host: it was 90 degrees down there so. >> caller: we're about 48 this morning. going to be in the 70s. hey, we're looking good. >> host: there you go.

sounds like a nice day. so what is the economy like in granber are. y and what is your confidence in the economy? >> caller: the economy peter here is pretty good. >> caller: we're growing. used to be a small city. >> caller: they're building a lot around here. >> host: why do you think that is? >> caller: i don't really know the answer to that, peter. >> host: what do you think of your governor running for president? >> caller: wrong, bad move. >> caller: we don't want him to win. he has done too much for texas. >> caller: he done this job in texas i don't want him to be president. stay right down here in the as governor. >> mr. and mrs. peter good to talk to you. we'll talk to you in a month. anthony is republican in minot, north dakota. >> caller: hello. i guess i would just like to say it seems like everything just keeps getting worse due to the fact that the

government keeps butting into the economy. >> host: all right. we'll leave it there. madison, wisconsin, jean on our democrats line. jean, what is your confidence level in the economy? >> caller: i'm just, i almost am losing my mind. i, getting -- [inaudible] stop the cost of living increase for social security. i'm getting ready to sign my third lease on the 15th of november. and each year it is going up. up. my rent is going up, up. everything is going up, up. and everybody's talking about cutting social, discontinuing social security. we already paid for two years of decrease. nobody is saying, what are

the benefits of not getting a cost of living decrease but two years. where is that money going? >> host: all right, jean, thanks for calling in this morning. president obama has an op-ed this morning in "the financial times". now for a firewall to stop europe's crisis spreading. when leaders of the largest economies meet next week in france our citizens will be watching for the same sense of common purpose that allowed us to rescue the global economy two years ago from a financial crisis that was sparked by years of irresponsibility. because of the coordinated action, the g20 took then, the global economy began to grow again. emerging economies rebounded in the u.s. we've had 19 straight months of private sector job growth and added more than 2.5 million private sector jobs. still, progress is not come fast enough and today the global recovery remains fragile. of around the world,

hundreds of millions of people are unemployed, disruptions in oil supplies, tragic earthquake in japan and europe's financial crisis have contributed to the slowdown. emerging economies have begun to slow. global demand is weakening. our challenge is clear. we must remain focused on strong, sustainable and balanced growth that boosts global demand and jobs and opportunity for our people. this requires action in several areas the president writes. first as the world's largest economy the u.s. will continue to lead. the single most effective thing we can do to get the global economy growing faster is get the american economy growing faster. at the same time we're building on the nearly $1 trillion in spending cuts agreed to this summer. i have put forward the president writes, a comprehensive and balanced plan to substantially reduce our deficit over the next few years in a way that does not hamper the current recovery and that lays the foundation for future growth.

second, the crisis in europe must be resolved as quickly as possible. this week our european allies made important progress on a strategy to restore confidence in european financial markets, laying a critical foundation on which to build. third, the president says, each nation must do its part to insure that global growth is balanced and sustainable so we avoid slipping into old imbalances. for some countries this means confronting our own fiscal challenges. for countries with large surpluses it means taking additional steps so support growth. for exhort-oriented economies, it means working to boost domestic demand. this is the president writing in "the financial times" this morning in case you want to read that for yourself. buffalo, missouri, dean is a democrat. what is your confidence level in the economy. >> caller: hi, peter, good morning. i live in a little town, excuse me, a little town north of springfield, missouri, about 30 miles.

you know springfield and missouri itself is doing pretty well. springfield, southwest missouri just seems to, like, you know, it doesn't even board them. they just keep growing. but, peter, before i get off, yesterday i had, i think susan had black from tennessee, representative black. >> host: right. >> caller: and she was talking about, when you turn 65 you got to go on medicare. you do not. i turned 65. the 5th of this month. >> host: congratulations. >> caller: i use the va system. i chose, got two different letters from social security asking me do you or do you not want medicare? and i checked, i do not. and, so, i'm not heard anymore about it. you don't have to take it. but he said as a law you had to take medicare. she needs to get her facts straight. i'm out. >> host: you remained in the

va system, correct? >> caller: yes. i've been in the va system since mid '70s. i'm a 65, vietnam vet. >> host: and so, dean, that will keep you throughout our life? you just stay in the va system at this point, correct? >> caller: that's right. that's right. they kept me alive since the mid '70s. i mean actually kept me alive. >> host: okay. we sure appreciate you're calling in. congratulations turning 65. and thanks for watching. jersey city, new jersey, jacob is independent. hi, jacob. >> caller: good morning. [inaudible] first of all, takes money, so savings, savings takes strong flow as adam smith said. since people putting money out there, that can be that increase. i see the fourth quarter, usually business pumps up

the economy and also people spend, you know, consumer spend on christmas gifts. there may be another rise. but our whole problem i would say in this economy right now is the politics. the politics. once the politicians get together and start working as patriarches for this country right here, everything will go up. as long as they are bickering, that includes the administration and especially congress, that is what holding the whole economy at bay right there. that is point of uncertainty. >> host: rick is republican in ohio. did i say that right, rick? rick? >> caller: hello. who is this? >> host: rick, hi rick. stem galipolus. >> caller: right. >> host: go ahead, please. >> caller: i don't think the economy is doing so well. i can't find incentive to save.

that is probably why everybody is spending so much because you can't make interest in the banks or anything. the stock market, you know, from, from day to day what it is going to do. that was mainly my comment. >> host: thanks for calling in this morning. in "the hill" newspaper, house schedule too light says democrats. the house will retain its pattern of working two weeks in washington, followed by a week of district work under its 2012 legislative calendar released thursday by house majority leader eric cantor. the schedule calls for more weeks in session in the first half of the year. culminating in a busy july and work the first week of august. lawmaker time in washington then falls off with the house out until september 10th so lawmakers can spend august in their districts and attend their party's political conventions. the last week in august is both designated a constituent work week and set aside for the republican national convention. the first week in september is similar in that it allows for constituent work and the democratic national

convention. democrats quickly lambasted the schedule as inadequate. that is in "the hill" newspaper as is this article. boehner rejects dem proposal. says it is time to get serious. house speaker john boehner thursday rejected proposal by the democratic members of the super-committee on deficit reduction, that 1.3 trillion increases unacceptable. majority of the six democrats privately proposed a package that could cut the deficit 3 trillion over 10 years including more than one trillion in tax increases. one more article before we go back to calls. this is in "politico". they're looking at the top 10 senate races. they say virginia is the top race, followed by massachusetts, montana is number three and missouri is number four. john bruner and claire mccast kel there. in nevada, the race there is

rated at number five. hawaii is now number six with former governor, linda lingle, as the republican in that race. that is from "politico" this morning. next call on the economy comes from gary, indiana. art you are this, independent line. hi, arthur. >> caller: morning. appreciate you allowing me to take this time to express my opinion. first of all, i don't have much confidence in the economy because we don't really have any leaders. i look at the leaders and they don't have much confidence in it because they continue to get increases in their pay, they are continuing to get money from other sources and stacking the deck in such a way where they benefit and, so when we get some leaders that will lead and you lead by example. if you feel this thing is going well, then you, cut your pay some. and, quit telling the people to cut theirs.

tighten their belts and you're not tightening yours. okay. i appreciate you allowing me to call. thank you. >> host: thank you, arthur. michelle is in palm desthe, california, on the republican line. >> caller: good morning. >> host: hi. >> caller: basically i live in the state of california. we have -- from programs -- giving money to illegal immigrants being through school funds and the cap program and all sorts of other things and unfortunately there is no money left here for the people that were born here and raised here. so i really don't have any faith in our economy because of the caller before me said, we don't have any leaders or anybody in office that can actually stand up for what we need and what we want. >> host: thanks, michelle. a couple of tweets that have come in. freelancer tweets in, gop deficit, eight-year spending spree with bush got us here. 11.5 trillion.