our job is to look into the future and to take a look at what the air force looks like 20 years from now, and then we try to cast back into the present and figure out what to do and how to save money and make the air force ready to operate that that future environment 20 # years from now. >> host: what's it look like 20 years from now? >> guest: more modernize. the equipment has got old. we hope to put more money into that to buy the next generation of systems, but focused on great american airmen out doing the job around the world, and we'll still rely on the skills they bring. >> host: what's the aircraft look like 20 years versus today in >> guest: we'll have added a new tanker, the ck46 to replace the 135 fleet. we'll have brought the f-35, the new joint strike fighter on to replace most of the ages

fighters, but still flying newer versions there. we'll deploy a long range strike bomber, modernize systems, and modernized our space constellation that provides a lot of the utilities, global positioning, weather, and communications for the joint force. >> host: if you look at 2012 budget for the u.s. air force, the total is $119 billion. in order to reach goals you outlined for your equipment, what does the budget need to be in the years -- from here on out for 20 years 1234 >> guest: we plan at different level, and we start by planning the force we think we need to have what we call a moderate risk or to be able to do all the things the country asks us to do at a moderate risk, but because of the fiscal realities we face, we know there's less money, that it would take to do that, and so then we plan what we think is available, and we'll continue to work to try to advocate for a

strategy based approach to get the most out of whatever dollars the country decides to spend on the air force. >> host: you talked about the f-35. there was a story in the paper yesterday about the defense secretary of state, leon panetta saying he's looking at potential reductions to major weapons systems. he said he was considering cutting the purchases of the f-35 joint striker fighter, a radar evading jet for the air force. what's that mean? >> guest: we're dependent on f-35 for the future, and the air force believes there's no alternative, but we understand the number we acquire depends on how much they cost and how well the contractor does at delivering them to us, so we'll plan for a certain number. we'll look at other options if we get less than that, and we'll find a way to use the joint strike fighters we acquire with the older systems we continue to do the job we're expected to do. >> host: how many do you currently have, and how many do

you want to have? >> guest: we received eight so far. the production variance, so we are in the early stages of the program. we hope to acquire over 1500 of the airplanes, and across the joint force between the air force version and the marine version and navy version, the goal is just under 2500 of the joint strike fighters, and international customers are expected to buy another 600, so the program is 3,000. >> host: have they seen combat? >> guest: not yet. it's still in the test and development stage, and we're training pilots to fly it, and not just test pilots. it's in the early stages. >> host: what's held it back from combat? >> guest: well, it takes a long time. they take longer than we like for them too, and they cost more than we would like them to because the technologies are new, and it's never been done before. the strike fighter introduces

several new things building on the stealth technology we've used before. it integrates aveonics in a way never done before so the way the different electronic systems on the airplane communicate directly with each other and with the other airplanes around it, and software costs and development times always take longer than you think in developing new things take longer than you think. >> host: how much does it cost? >> guest: if you average the cost across the program and you look at how much does each one cost coming off the line, it's somewhere around $85 million. >> host: each? >> guest: each. and if you add in research and development costs, it's more than that. >> host: many heard about the debate of an alternative engine. where does that stand? >> guest: it's a policy decision to be made in congress and by the department of defense. right now, the program's buying one engine. >> host: where's funding stand

in congress? >> guest: congress is marking up the present, the budget for fy12 now, and the senate's taken steps to delay the program a little bit. the department is looking at options to do that, and our goal is to buy airplanes that are meeting the requirements, and that are ready 20 go, and we'll buy them when they are producing and capable of doing the mission they are supposed to do. >> host: talking with major general james michael holmes, part of the military week. our focus this morning is on the u.s. air force, and we have a separate line assigned for active and retired air force. we want to hear from you. you talk about what the air force looks like 20 years from now. that's your job. drones, how do they fit into the picture? >> guest: well, they are remotely piloted aircraft, greta, because there's a pilot in the loop flying the aircraft, he's just not inside the aircraft, but he's on location.

they expanded the program over the last several years in order to provide what we call full motion video and intelligence surveillance and reconnaissance support to the joint force, particularly in the wars we're fighting. we built up quickly to fly in 58 caps, and a cap is 24-hour coverage over a spot, so it involves more than one aircraft trading out, and we provide 1200 hours a day of full motion video to commanders on the ground to be able to support their operations, and we're going to continue to build up to providing 65 of those caps, and then we'll see where the requirement takes us from there. flying 175 remotely piloted aircraft now with most of those in cam bat every day. >> host: where specifically? >> guest: in iraq, over iraq, over afghanistan, and over other places we're operating. >> host: there's a lot in the papers about these secret drone

attacks, than the crai is the one that is ordering them. do the orders come from the cia then down to the air force? how does it work? >> guest: well, the air force flies remotely piloted aircraft in support of the traditional military forces, and we're active in the places i talked about. i'm not really ready to comment on what other government organizations might be doing with remotely piloted aircraft. >> host: are these all run by the air force or do the crai have their own fleet of drones? >> guest: the air force has a fleet, you know, that flies with the conventional ground forces. according to the paper, the cia has a fleet of remotely piloted aircraft. >> host: is there a relationship then between the cia and air force on this? >> guest: the air force has developed aircraft, and there are other government users that use the aircraft. >> host: i want to go through some of the unmanned vehicles. the mq1 predator, there's about

165 of those. the mq9 reaper, there's 82. the rq-4 global hawk, there's 12 of them. the cost is about $20 million. the mq is $53.5 million in 2006 and 2009 dollars, and then the global hawk, the rq-4 cost is $37.6 million, and the rq-4b is $55 million. explain the costs. >> guest: it's the first generation aircraft, equipped with sensors to see in close detail what's happening on the ground around it, and then later they were armed with the hell fire missile. the reaper is the next generation. it's a bigger plane with a larger engine, can carry a heavier payload and can go

longer distances to do things for the ground commander. the rq-4 is a longer range, higher altitude system that doesn't provide the full motion video directly to ground commanders, but more the reconnaissance asset that does things like what the u-2 has done for us for many years. >> host: what's the future then? >> guest: the future is for those three planes continue to support ground commanders like we have been, and to move into future roles, we'll see what the demand and command is out there for unmanned aircraft. we're certainly looking at all the areas that they might be employed, and we'll go where the needs of the country take us. >> host: are these ever deployed in our country, over our country? >> guest: we have flown them for things like humanitarian relief after major storms. you can fly them out, they look and use censors to see what's happening on the ground where power or communications are out. there's issues to work through

with the faa on flying airplanes in u.s. air space with a pilot not in the aircraft and to be sure we do that safely, and we work with the faa they are happy and comfortable with any operation we do. >> host: first call is bill, retired air force from wisconsin. go ahead, bill. >> caller: yeah, it's fascinating what those remote control planes. i'm into that hobby, you know, but i'm just wondering about what kind of power plans they have? are they electric or are they jet turbine engines or what? >> guest: well, the mf-1, bill, has a reciprocating enjoin like you see on a small airplane or on a, you know, a pleasure craft like a jet ski or a snowmobile actually. the mq-9 has an engine running on jet fuel, and it's a more sophisticated engine, and then the rq-4 uses a jet engine.

we moved across technology and improved adding bigger systems as we have bigger airplanes. >> host:fection, arizona, chris independent caller, you're next. go ahead. >> caller: one of the things that is bothering me is the fact that we have a reduction in force structure in both squadrons flown, battle groups, and in the army manpower. is there going to be a corresponding reduction emissions assigned because if these are not in a balance, i think you can agree that we're going to go ahead and get people hurt if we have to have a conflict. >> guest: thanks, chris. you know, we think that with this first round of cuts that we've worked hard as a department and across joint services, worked hard to apply strategy to them to continue doing missions across the military that our country asked

us to do. we may not be able to do them in as many places at the same time as you said, and we'll strive to make sure we can do the best we can with the money the country give us us to provide defense. >> host: jim has a tweet for you general about money. how much money is wasted by having army, navy, marines, and air force flying similar, but different aircraft? >> guest: well, we have forces that operate in the air across the military, and in general, those air assets in the army and navy, and marine corp. fly in direct support of the mission of those services. the air force flies across the theater and has a theater perspective and is responsible for things like providing air superiority across the theater, reaching out, striking targets p around the world wherever they may be providing a global intelligence and surveillance and reconnaissance set up in providing the air leg of our nuclear deterrent operations, so while there is redundancy, we

use the airplanes for different purposes, but we work together to get the joint force commanders and objectives met. >> host: david, republican, from north carolina, you're on the air. go ahead. >> caller: yeah, i'd like to know about space. anything we'll going to get into with nasa and get that regenerated to boost the economy? there's a lot of things i could say, but i think that could help and integrate it into the military and production of materials up there with drones and stuff. what's the possibility of that? >> guest: well, thanks. that's a great question. the air force executes about 85% of the department of defense's budget in space, so we like to think we're responsible for superiority and exploiting that space realm and viemplet -- environment as well. we're focused on the future, but space systems are very expensive, and the list to get things in space is expensive.

we're focused on the things we buy to operate in space, and reduced bunts will continue -- budgets, we'll continue to think about things you can accomplish with space, but with the reduced budgets, we maintain the kates that we currently provide. >> host: secretary panetta, the reports yesterday that he's looking at different aspects to meet the $450 billion in cuts to the budget to the pentagon, and one is looking at the work force of the military, and he talked about cuts across the army, ect., marines. he did not mention the article, at least did not mention the air force, and yet this is the "miami he herald" will be cutting later. where's that come from? >> guest: the air force right now is 4,000 over the mim tear in strength and options and

that's because people stay in the air force. they have exceeded our retention goal, and people want to stay and continue to work in the air force. looking at budget cuts across the board, we have to look at the active duty force, cuts in the reserve and guard force and cuts in the civilian force. there's an ifort going ton to see -- effort going on to see where there's efficiencies and where to reduce the forces. >> host: what does that mean then? >> guest: well, the overall total, we have about 335 active duty airmen, 75,000 reservists, just over 100,000 guardsmen, and then 150,000 civilians. as the force gets smaller, fly fewer airplanes, we need fewer people to do maintenance done by civilians and the support operations that support the whole air force. if smaller, we need less of that support, and so we'll look for places to take the cuts there. >> host: what will the draw down in iraq and afghanistan mean for those numbers 1234 if

you look -- according to the u.s. air force, there's 9934 u.s. air force airmen in afghanistan, 1910 in iraq. those numbers changing on a daily basis, but this comes from the u.s. air force. what is the reduction in the work force mean when you play in draw downs in iraq and afghanistan? >> guest: well, thanks, greta. the united states went to war in the middle east when hussein invaded kuwait, and we've been there since then. when 500,000 troops invaded kuwait, and came home, the air force stayed and flew over iraq for years. when the second invasion occurred, the air force was there participating in the fight, and then we stayed. as the draw down of forces happens, we think the air force will get smaller, but not like the reduction in ground forces. we're the first guys in and the last guys out, and we expect that we'll maintain a presence

in the middle east region to continue to help provide stability and security there. our presence in afghanistan goes down as ground forces go down, but not as much, and then we'll be present around the world, particularly in the pacific to provide security and stability there. >> host: looking at the budgets and 20 years from now how the air force is different, you try to plan for the future. the defense secretary also said yesterday looking at retirement and health care benefits as well as ways to cut. how much does it cost the air force for retirement and health care benefits? what's that in your budget 20 years from now? >> guest: well, the personnel costs are a big part of the budget, and secretary panetta says it's important to take a balance approach in defense cuts meaning it's not all from personnel or readiness or all from infrastructure, and we can't take it all from modernization. we have to spread that bill across. there's several groups studies potential changes to our

compensation with retirement one part of that, but yorks #u -- but, you know, only 17% of military serves 20 years and earns that retirement. when they move their families when the country wanted them to and needed them to, and it's a unique service requiring unique compensation. >> host: only 20% reach that, but yet, it's a big cost. >> guest: it is because the retirement benefit, we think is appropriate, but if you're -- if you join the air force at 18 and serve for 20 years, you retire under 40 and go out into another career, officers for 20 years would be in their mid-40s moves across and expenses in providing that benefit for expanding lengthening live and the medical

benefits are also a great part of the personnel costs. >> host: robert's retired air force in massachusetts. you're on the air with general holmes. >> caller: good morning, general. my question to you is since we've got drones flying missions now, how far are we away from drones flying air to air? i think that will be tremendous cost savings developing aircrafts that can handle that because we eliminate the stuff that supports the pilot in the cockpit leaving the pilot on the ground. thank you for your comments. >> host: explain the difference there. >> guest: sure, and robert, thanks for the question. what robert said it true for combat deployment of the aircraft, it's an air to ground mode means it's aircraft dropping a weapon or shooting a rocket at a target on the ground, and air-to-air combat that's stayed a manned mission because for now the situation is so fluid and changes so fast

that we rely on a person to be in the loop to decide before you pull the trigger whether you are shooting at the right target or not in that very complex air-to-air environment. we're always looking at new ways 20 improve efficiency and become better at what we do. i think that areas that require a whole lot of judgment and consideration like that air-to-air operations and like dropping bombs with troops in contact in intense situations will continue to require a person in the loop for quite a while. >> host: mark hall has this tweet for you, general. is there any prediction by the air force for future fighters like the f-22 and f-35 becoming fully remote operated? >> guest: right now we're building the planes as manned aircraft. you know, we have the capability to turn airplanes, and we have turned airplanes into drones that we use as targets and for other functions, but to be able to fully control the airplane and fully use the sensors on

board, right now, we need a person in the loop to be able to do that. >> host: and what is the biggest difference or advantage, if you will, between the manned aircraft, the f-35 and f-22, and these unmanned? >> guest: well, they have -- they have their own unique advantages and disadvantages. you know, the main advantage of our unmanned predator and reaper is they can stay out there for a long time beyond the endurance of a human pilot, stay out there and remain effective for a long period of time. for the manned aircraft instead of looking through a sensor and where a sensor is pointed on the ground, if i'm in the plane, i can turn, look left and right, look at the ground and other places, and where the sensor is looking, i can look and see what's happening a mile away by looking out the window, see the other aircrafts out there, and i can apply my judgment to that whole picture that i see instead of just the information provided to me by sensors. >> host: does that apply to

civilian casualties? >> guest: for that, it's important to have a person in the loom when dropping bombs, and the overwhelmingly majority of bombs dropped in current conflicts in afghanistan and iraq are dropped in coordination with a ground commander. they are dropped after what we call a nine line is direction, direction from a ground commander to an air crew either in the airplane or remotely piloting the aircraft. it tells where the target is, where the friendly forces are, gives us restrictions where there might be civilians, tells us if there's a certain run in heading we need to take to avoid the population on the ground, and the air crew provides judgment on top of that and provides feedback of having a person in the cockpit and working to the, we've been very successful at avoiding casualties from the air. we regret them when they happen, and we work hard to avoid them, but we have a team that's good at it. >> host: frank, retired air force from tulsa, oklahoma. good morning, frank. >> caller: good morning.

two quick questions. first has to do with trying to find out would the plan be changed in the future? the second question is do you know if the changes for the military congress exhibited changes for veterans who retired from the air force? >> guest: on the first question, frank, i know that in congress, there are bills to control tricare costs, and they are limiting the enrollment in prime which may be the program you're enrolled in which is the one that offers kind of the fewest co-pays and everything with that for retirees. there's talk about increasing the payment, the annual payment that retirees make to participate in the process, and that'll be up to congress to decide. secretary panetta and the air force leadership and the leadership of all the services said they think it's very important whatever we do with cuts and whatever we do to

maintain our force within the budget, we have to keep faith with those who served and those who are serving now, and so i think our leadership is very strongly oriented to protect your retirement benefits. >> host: james, a republican in pittsburgh, sent us this e-mail for you, general, son of an airmen in the 8th u.s. army air corp., 33-44 tour, he writes. are you happy about the state taking over u.s. drone and strategic intelligence assets as defined in their 2012 budget plans? he says, please don't let them do it. >> guest: i don't know if i'm sure exactly what we're talking about. it's under a command structure that reports to the secretary of defense. we're partnering more and more with state, and as we move forward in iraq and we hand off the mission at the end of this year, state takes the lead, and our mission in iraq hands off from the military, and we work very closely with state, the lead agency for international affairs and relations in the

united states government, but i think our systems will remain under the control in the department of defense. >> host: even after the handoff? >> guest: yes. >> host: okay. next, virginia, independent caller. help me with your name. >> guest: oh, yes -- [inaudible] i want to thank you very much for the great cooperation between the polish air force and u.s. air force. we had the f-16 and now some of the manufacturers, very advanced for a minutes, and so thank you very much for the cooperation for the future to come, but i want to mention because i come from a family, my family, one of the very pr -- competition, was in the second world war representing the polish military men in the battle of england, and i have one idea about recruitment in

america. there's a sport which was very famous in the 70s and 80s, modern -- ride horses, fencing, shooting, and running. it was a military sport which was sponsored before by the u.s. military, and they are great in texas and new mexico, and now the military does not sponsor this sport, and, you know, it would be great idea instead of spending money on the race cars trying to promote this sport in the future. >> host: general holmes? >> guest: well, thank you, and, you know, the polish military has a great tradition, and we are expanding with the polish air force as you mentioned, and we look forward to doing that. i work closely with the polish brigade deployed to afghanistan and i made many great friends and comrades there, and the united states and poland will continue to work together as our country's goals bring us

together. general george patton was a gold medal win e and while the military sponsors international competition programs, they sponsor world class athletes that compete in the olympic sports, and so far, we're meeting our retention goals certainly in the air force and across the military services, and we look at the recruiting budget, trying to spends enough to make sure we meet the retention goals, but not more than we need to spend to do that. thanks. that's a great idea, and i'll take it back and talk to my friends back in the pentagon about it. >> host: war is now fought against enemies that don't have air forces so why order 2500 of the most expensive fighters ever made? >> guest: well, that's a great question, and i think the current wars are fought against enemies that don't have air forces, and the reasons they don't is that the united states air force killed their air forces in the first invasion of

iraq. hussein had 800 fighter bombers that were destroyed in the air or the ground or most flew into iran during the course of the war, and the ten years 2002 -- ten years in between the wars, we prevented them from flying into places we didn't want them to, and in iraqi freedom, the rest was destroyed. in the early hours of the war of afghanistan, the afghan air force was destroyed, and so it's an air force mission to provide that air superiority for the joint force. the last time an american soldier on the ground was attacked from the air was in 1951 over korea, so we take that speedometer -- responsibility very seriously. as people adapt to the u.s., we see people spending money on ideas that we call anti-access and denial strategies. anti-access is designed to keep the u.s. from entering a region to project force there, and area

denial tactics are designed to keep u.s. forces from maneuvering once inside the area. to be able to operate in the high threat areas takes, we believe, the joint strike fighter and the f-22, and while the afghan and iraqi air forces are no longer functional, there's other air forces in the world that are growing and becoming more complex and capable. >> host: as you talked about the f-35 and fiscal challenges, i want to show what chairman martin dempsey said recently about that high-tech joint strike fighter. >> in support without caveat of the development of a 5th generation fighter, i'm concerned about the three variants in whether as we go forward in this fiscal environment whether we can afford all three, but i am eager to learn more about that.. .

dhaka conventional takeoff and landing version is designed to operate of fixed runaways and the way the air force operates the marine corps is pursuing a short takeoff and landing version that can operate off of their carriers, their small but carriers and the navy's% that can operate off of their large aircraft carriers. there is increased cost and by

being three different versions, each service evaluating what the right requirement is for them. i know the marine corps remains dedicated to the short takeoff and a version of the airplane and drawing this is working hard to make sure it gets built and the navy has a continued requirement to be able to the generation of the deck so they have to have a specialized version and the air force version is the furthest along in the test program and will be the least expensive and most efficient to operate at the three versions. >> host: i assume the air force state to that request? >> absolutely. what you think is going to happen if that represents the skulls of the edges? who doesn't give their aircraft? >> guest: i think each service and the department of defense will have to decide and we have to decide based on strategy and what the country wants us to do so within these current cuts i think all three services believe they can afford some member of the airplane the number will depend how much the costs end up

being a program and costs to operate. >> host: so it may be each branch gets its aircraft less of with the originally requested. >> guest: it may be. >> host: when will the decision be made? >> guest: they will have been based on the performance of the program and based on the cuts that we deal with the budget topline available for the services. we are talking about this year or next year? >> guest: probably not this year's process. there's a lot of turbulence in this year's process because we are still marking up the 12 budget and we don't know exactly yet what we will be able to spend. we will be on the continuing resolution for a while. the 13 budget we are doing a comprehensive review to look at our strategy before we commit to spending money and then the guys like me and all services are trying to plan for the 14 budget without a lot of resolution yet on 12 and 13 so i think we will let the 12th and 13th budget settle down a little bit and see what we are actually able to spend for defense and then we

will have to make some decisions after that. >> host: we will go next to adam to michigan. >> caller: yes, i would like to know if the drone pilots go through the traditional pilot routt where they can provide the -- yes? >> host: i think we got your point. do they go through traditional training? >> guest: i anderson and the question. we have a mix. the first pilots wanted a remotely piloted pilot training and the form of another aircraft and they came to join the program. then we did experiments of taking down a street out of the normal pilot training and putting them into the remote the pile that its aircraft programs and finally, we have done some experiments with a specialized program that trains people only to fly remotely piloted aircraft and that training program does include some time flying real

airplanes to make sure they understand and they are familiar with that environment that it's less expensive and focuses on the remotely piloted aircraft so we have experimented with all three. >> host: we hear the strict criteria there is for those that actually fly air force aircraft into the certain visions. do those things apply to those butterflying remotely? >> guest: the certainly still remain strict criteria for doing it, but you can relax on that if you are not putting a person in the airplane. the height and weight and size restrictions are to make sure you can fit in and big enough to see over the real to be about to fly the airplane and some of those are not as important when you are flying in their plan remotely from a consul. >> host: what about the intelligence criteria for flying remotely or unmanned? >> guest: we have been able to be very selective in the crew that we select. we have a lot of volunteers to fly the airplane and so we were able to be very selective on the

people we bring in. a large percentage come from the air force academy after a four year education, they come from the reserve officer training corps at the universities all across the country and then we use officer training school to bring people that have already completed college that make up the difference in numbers and we can fine-tune that every year to do what we need. >> host: is there one specific area in this country where the unmanned aircraft are being flown? are they all in one area of the country? >> guest: we are spreading them out a little bit. almost all of the operations are of the nevada desert, and we train the crews there and then we also have the remote flying operations but we are studying the mission not to other places. we now have training units in mexico and we are spreading them to the international guard both for flying the aircraft and learning how to fly the training debts and for what recover in the remote spot operations for the cruise using satellite communications to fly aircraft over iraq and afghanistan.

>> host: want to get your response to the recent headline of the computer virus hits the military drone program what happened here and what has been put in place to make sure it doesn't happen again? >> guest: i didn't get a whole lot about it, but house understand as they were moving data from one computer system to another, they were using a mobile drive, like we would use a thome drive, and somehow that got infected with a piece of software that shouldn't have been there and was loaded into the consulate and transferred to the consul. when understanding is a never threaten the operation system and never threatened the network because the systems are maintained separately, but it's a consequence of things we all deal with across america as we learn how to maintain the integrity of our data and work on the networks and control to keep them safe from both the international creditors that play on the works and from the commercial criminals that play on the networks it's something we all have to get better at.

>> host: we have a few minutes left with general holmes as we continue military week right here on washington journal. today we are focusing on the air force. chatting in your next. democratic collar in ohio. go ahead. >> caller: thank you for your service, general, and a question about the of 25 and of 22. were the differences in the two planes? i know the utilize different things the aircraft don't come up with is the difference on those two planes, and also, how they stack up against like the f-15 or at 16 in regards to maintaining the air superiority? >> guest: thanks for the question. the f-22 can a little bit earlier and was focused primarily on the combat environment. it also has the air to ground capability but it was designed to allow us to accomplish the superiority the way we think it should be done which is able to fly over the enemy airfield and fifer just the ability to take off, and enter the fight. the f-22 was designed to be stealthy enough to be able to

fly in the sophisticated air services and give it a first shot opportunity against the other airplanes. the f-22 can super cruce which means it can fly faster than the supersonic speed. the avionics are integrated in the airplane with a talk to each other and make the public stop and it has that reduced cross section that means it has an advantage over the surface to air france and air to air threats to the joint strike fighter is a more affordable version so it makes tradeoffs in that performance the big thing that it brings is the avionics are now integrated into the multiple airplanes a little bit better so that they can share information with each other and help the crew to be more effective. if you compare the f-22 to the of 15 -- and i am an f-15 pilot saw it pains me to say it but the f-18 is far superior and wins hands down over a large quantity of the f-15, but we found a few pair that advanced f-22 with the of 15 the together

using the strength it has it can make the of 15 more effective against the threats as well. thanks for the question. >> host: when and where did you fly the of 15? >> guest: beginning in 1981, and i flew the airplane in virginia at the langley year for space on okinawa air force base in japan where my oldest daughter was born. at the air force base in a mexico where my son was born and back at langley and then i flew the strike eagle version in the seymour johnson air force base in north carolina and bill blogger mer force base in afghanistan. >> host: we will to get one more call. hunter, independent. can you get quick? >> caller: yes, thank you, sir, for serving, and good morning, greta. we are in a that a family coming and my brother just retired. my brother and nephew, all military. three questions regarding the budget of the air force. >> host: we are going to have to stick to one question here. go ahead with the budget

question. >> caller: okay. i anderson and civilian jobs are going to be cut. is this going to be the u.s. only or world wide coming and how many more military are going to be on deutsch? >> caller: >> guest: as we get the smaller it was we will need a little bit less of that support. this is one of those areas we do get that support for our air force. we are going to have to get smaller across-the-board. it is a concern as we get smaller in the air force and small were in the military with budget cuts we will be asking all americans to remember the airmen, soldiers, sailors, marines, their sons and daughters, brothers and sisters, their spouses, they are going to need your support as they come home from the war and return to civilian life and they are going to need your support, both military and civilian as they move from the military career back into the civilian world. so, and you for saying thanks, and the best thing that you can do for the returning people is to listen to them and give them a chance to talk about what they

have done and where they have been and to help them in your own local community. thank you. >> host: general, thanks for talking to viewers of the air force. appreciate your time is running. >> guest: thank you come greta. a pleasure to be here today.

i want those of you to know who wanted me to run so badly and those that were terribly disappointed that i'm doing the right thing. i believe that 1984 finds the united states in the strongest position in years to establish a constructive and realistic

working relationship with the soviet union. utah senator orrin hatch was one of the panelists today at a forum on how to deal with federal spending and the deficit. several organizations including the center for american progress and third way hosted this discussion of recommendations for the joint deficit reduction committee. this is an hour and a half. >> many of you mean not heard of in the expanded before because the gentleman from the taxpayers against earmarks earlier this year. with your marks the end for the

foreseeable future ending spending has now broadened its focus to finding solutions to the nation's massive debt crisis. our founder who founded ameritrade believe strongly that people from across the in a logical spectrum can join together to solve problems if they are armed with the facts. case in point was the bipartisan battle against your marks which many of you in this room and at this table were involved with. so, with that in mind we decided to devotees experts together. they represent organizations that most would agree are not usually aligned. but we wanted to see if we couldn't find some common ground with regard to the super committee. the facts are clear -- decade and with the government

borrowing 42 cents out of every dollar it spends, we must do something now. when the super committee began its work, we were, in truth, a bit dubious that 12 people in a room could accomplish the lofty goal of cutting over $1 trillion in spending. but we were reminded of a scene from the great 1993 political movie dave starting kevin kline. perhaps some of you will remember the scene where the president in any attempt to impress the real first lady played by sigourney weaver works with his accountant friend to cut several hundred million dollars from the federal government. the movie was optimistically in my eve about the budget process that people sitting here before you today have done exactly what kevin kline's qtr did: if made a list of potential cuts, and they are here today to defend them

publicly. and so while there are many in this town who talk about the super committee and suggest that it should go big, it is these people sitting at this table who have actually put their pen to paper to show what the super committee can do. one final note before i introduce our panelists, senator orrin hatch will be joining in a little bit to make remarks about what he believes the super committee should do. we need to interrupt the discussion when he arrives. finally, we have asked each group in alphabetical order by a group named to briefly present their recommendations and then we can begin our discussion. i believe you all have copies of the proposals and for those of you watching on tv, you can find these proposals online at endingspending.com or the website of each of the organizations. our first panelist is phil kerpen at american prosperity and the new book democracy

denied, which ensure is also available online. >> [inaudible] [laughter] >> michael was the director for tax and budget policy at the center for american progress. michael has co-authored numerous reports on fiscal challenges including the important report a path to balance. and true is for the tax union where he lobbies on state and federal issues and assists in educational efforts. garrey kalman directs u.s. public research groups, federal affairs office in washington, d.c. and in 2009 mr. kalman was a founding member of americans for financial reform. steve ellis is the vice president of tax payers for common sense where he serves as a legislative liaison and media spokesperson. steve formerly served as an officer in the united states coast guard. finally, david kendall is a

fellow for fiscal policy at third away and among several interesting stops i know that mr. kendall served on president clinton's health care task force in 1993. thank you very much and with that i will turn this over to you. >> thank you very much, brian coming and i would like to begin by thanking and congratulating you and the chairman, joe rickett. the thing that is pretty remarkable to have a washington organization actually accomplish its goal as thoroughly as you did yours and gives a very important goal coming and i can only hope that the new name of your organization is also made out by success on this crucial effort to end excess of government spending here in washington, and i would suggest that based on pretty much any budgetary look the budget problem is a spending problem and is not a revenue problem. we are on track to reach

historical revenue levels without any legislative increase and i think that is crucial to guide the super committee for word. i believe they do include tax increases, revenue increases that are coercive that force people to pay more. they will cause themselves to feel i don't think the product will pass and i don't think it deserves to pass because it doesn't affect the problem. if we are trying to cut spending if we think the government spends too much, giving politicians more money to spend is that cross purposes with the goal of cutting spending. so that as i sort of practice to getting into some of the specifics we would like to see. if you look at the report which i believe is your packet and we kind of broken into two sections there are sort of the specific programmatic cuts we are recommending the it up immediately and then we have a preface above that where we recommend some big department closures and so forth, more to sort of put an ideological markdown and remind people there are some very big elements in the federal government that we can probably do without.

we are under no illusion that as a ron paul tide of budget is going to move anywhere in the current environment or in the super committee. so the of the first sanction, we go into much more politically attainable i guess is the term cuts that we think can and should be considered in the context of the super committee, and they are guided by three principles, and those principles are laid out on page three of the document. first of all, washington should tighten its belt and make do with less. for too long they've gone to the taxpayers for more and more money to continue their overspending ways. the country has been in tough economic times. families and businesses are tightening their belts and washington as well. that means the focus needs to be on the spending side. second, government shouldn't be picking winners and losers. it is not beneficial to the economy or to the individual americans for the government to have programs that intercede in the marketplace and benefit at the expense of others, doing so causes scandal and it causes dislocation and inefficient

allocation resources so that is one of the other principals by guided the cut and finally we want to empower individuals and states we fundamentally believe the best decision comes from individuals and we want to maximize the individual freedom and individual liberty. we believe the government, government is best when its closest to people in washington is often very distant and so we want to see programs return to the states or localities in the greatest extent possible. in each of these areas we have a recommendation to start with and it's critical to repeal the so-called protection and affordable care act. i don't think at this present time that score as much weight to the mandate. it's pretty close to zero as it strips these accounting gimmicks away and the class act being the most recent to all the claim it provided deficit reduction that largely evaporated as the gimmicks continue to give up. and disappear it will be clear this is a major contributor to the deficit's going forward just as every major federal entitlement program has been. it seems crazy when we are in such a big hole to keep digging that much deeper by adding a new

major entitlement program. a second as consolidation of programs and this comes to merkley after the report earlier this year that we shall be able to agree on and this would save at least $100 billion just eliminating unnecessary duplicative of overlapping programs. everyone on the panel should be able to agree on that this ought to be a starting point and i hope that will be included. up next is selling federal assets and i would draw a critical distinction between government revenue that make the government smaller and government revenues that we get bigger. a tax increase is just give the government more money to spend and they take money from people, but to the extent that we are short of the historical average of the revenue right now because the economy hasn't recovered there may be a role for some revenue but the need to be revenue that make the government smaller. selling federal assets is the way to do that including the disposition of the remaining t.a.r.p. assets there is no reason to remain on the balance sheet of the united states treasury. the t.a.r.p. assets alone,

privatization, selling those off, would raise about $166 billion. we recommend reforming and reducing the federal work force through attrition. there have been all kinds of examples in the news that federal bureaucrats now make approximately double in the celery and of its with private sector workers make rate they can have the people holding the wagon and making significantly less than all the people who are writing in the wagon in the economics don't work very well. we would like to see a significant reduction in the rate of growth and in the defense budget and i think that our left-wing colleague on the stage can probably agree with that, and i think it is critical but the super committee not fall into the trap of believing the trigger mechanism with respect to defense is some kind of a doomsday. defense continues to increase every single year under the sequester met. if we can't find a way to meet our national security priorities without even larger larger increases than that, then i think we need to increase those as a matter of economic reality.

in sort of the second area of the government picking winners and losers, we would like to see the wind, fannie mae and freddie mac at the center of the crisis of think republicans have been far too slow on this point. in the near term, the first thing the house can do is reject the increase in conforming loan limits. if we can't stop subsidizing $700,000 for homes, i don't know what hope there is of winding down feeney and freddie but this should be on the agenda and the are now part of the federal government that has a potentially unlimited line of credit of the united states treasury. we've listed this very conservative as a potential for 30 billion in savings but it could run into the hundreds of billions of dollars. we teach it got to take on agricultural subsidies. we should not have americans of all backgrounds and all taxpayers subsidizing farmers. i think it is unnecessary and wasteful and misallocates resources to rely always been amazed the extent to which otherwise conservative members who are conservative on everything else say they have to be for agricultural subsidies.

one very conservative member of congress once told me he's 99% hard-core conservative and 1% socialist when it comes to farm subsidies. but i don't believe we can afford but socialism anymore. if you run out of other people's money i think that we are there with respect to the agricultural subsidies which we would dramatically cut and urge the super committee to do so. energy subsidies and r&d which is a subsidy. most of the subsidies, the fossil fuel are in the research and development and most of the subsidies for renewable are in the renewable tax credits. we would eliminate all of those. i think the current scandal over solyndra and these others would be campaigned contributors and the potential for considerable savings from that. we would rescind the balances from the small-business lending fund the would generate $26 billion in savings. and we would empower individuals and states coming in like that block granting is a proven way to limit growth in federal spending while increasing the freedom of states and individuals and getting better

policy outcomes. this was overwhelmingly successful when we did it with aid to families of dependent children in '96. it should be the model for all federal welfare programs including medicaid. let's get a fixed, fight ploch program and turn it over to the state and eventually i would like to develop a taxing authority as well. capping the programs in the near term could generate significant savings while better serving those populations that are in those programs. and that is an overview. just to sum up if they cannot do it on the spending side, it would be better to have them feel and get the real savings of the sequester mechanism than to have some disastrous deal that raises taxes and puts them on the hook for politicians to continue over spending so that is our view. thank you very much. >> thank you. michael, i saw that you were nodding your head. as we are adjourned? >> please, go ahead. >> my name is michael and the

director for the tax and budget policy of the center for american progress. you know, not surprisingly phil and i may disagree on a couple of things. one or two minor things. let me start with a big one, which we hear a lot is that we have a spending problem and not a revenue problem, and that is just false unfortunately. it's true in the long run. in the very long run and say after the next ten years it is absolutely true that the major drivers of the federal deficit or an aging population which means higher cost for social security and medicare and medicaid and also rising health care costs generally for everybody not just federal government but of course the federal government is a major purchaser of health care through the medicare and medicaid programs and therefore that's going to have a big impact on those programs as well. so definitely in the long run we have to do something about those programs, about those entitlements. and i would agree we have to have some really serious questions about how to get those things under control.

actually the major problem is revenue. if you look at the congressional budget office baseline, the official projections of what's going to happen if we let everything fall in the current law that means what the bush tax cuts expire, all sorts of things but if you look at the official ka projections the about 1% of gdp by the end of the decade. that's smaller than the average deficit the country is run over the past 50 years. now, the reason nobody thinks that's true, or the reason we all get freaked out about these deficits is because nobody believes that is going to happen in the current policy projections, the projections of what happens to the deficit and debt if we continue doing what we have been doing our massive deficits and massive debt. what is the difference between the current law protection and the current revenue, the current policy projection. is it spending? no, it's not spending. >> [inaudible] >> sorry, did you want to jump in? >> [inaudible]

>> feith sgr -- yes, it's true the sgr a little bit. that is the sustainable growth rate formula for medicare, but the major difference between the two baselines' is revenue. and if we just follow the current law, congress did nothing -- i am not saying they are going to, well, actually they may do nothing. if we follow the current base line at the median deficit problem goes away. so, it is absolutely a revenue problem as well as a spending problem. we are in extremely low tax country. regardless of what phill might say. we are the fifth lowest -- we collect the fifth lowest amount as a share of gdp among the oecd countries, that's developed countries. the only ones that collect less or mexico, turkey, chile and korea. so we are the very low end. if we collected the same amount of revenue last can of the us, canada, not sweden, not france, canada, we would still be in the bottom third among the oecd countries and balance the budget.

so, we absolutely could do this all on revenue but we are not proposing that. there's a little bit of an imbalance here. we have groups like the americans for prosperity saying let's do this all on spending and they are all definitely influence of especially among one political party. but you don't hear anybody saying let's do it all on revenue. nobody is suggesting that. the center for american progress. we need to rebalance of spending cuts and revenue, and we think that the revenue is definitely doable. ..

and we saw what happened after that. that doesn't mean raising taxes going to cause an economic boom. but it does put the lie to the notion that higher taxes on the wealthy will give the economy. so i'll put aside, let's get to what the senator for american progress thinks we should do. we think it actually should hit its $1.5 trillion target. they think should be careful going much bigger than that because frankly at the major divisions that exist between the political parties right now. imagine if you try to implement the proposal has played out here commute basically alienate an entire segment of the population to such a degree the woodwork to manically of the next next two years to undo it. that doesn't really help us. we need to do a proposal and take positive steps forward. the last time we balanced the

budget in 1998, took us several legislative attempts. and that's though, some less so. we don't need to do it all in one bite. secondly, we think job creation is absolutely part of the mix. you never balanced a budget with 9% unemployment. again, the last time we balanced the budget, we did it with the help of a very significant economic growth. anything we can do now to help us get back to normal economic footing is going to help us produce the budget deficit as well. as i mentioned, we do think entitlements are a major driver of the long-term budget deficit, which means we need to get a handle on those. in the next 10 years we don't need them entirely alone, but fundamental changes to social security matter turning into a voucher would be unfair and politically unwise. that doesn't mean we can't get any savings, but we should probably try to focus the savings on ways that don't

simply shift the cost from the federal government onto families. the last thing i will mention is on the discretionary side. the budget control act or it implemented a trillion dollars in discretionary type. such a difficult blow with different symbols commission -- the simpson/bowles recommended. it's in-line with what they domenici rivlin recommended here at i think we've basically done now we can do in the discretionary site for the moment. there may be more defense cuts although interestingly tank i will be the least excited about more defense cuts. i think we predicate three and $50 billion. we could probably do a little more, but a lot more with probably be a little bit dicey. i didn't want to get into the specifics of the proposal because you can certainly look at that in your packet, but those are the broad contours of

the center thinks we should do. >> thank you very much, michael. next we have andrew trillion 10. your two groups got together and read the joint plan. so i will turn it to you and you can divide your time however you would like certainly talk about how you develop your plan because they think it is of interest to everybody. >> i will kick off. our grassroots taxpayer advocacy organization with really 60,000 members across the country. i kicked this off with a joke that are budget told us what we can afford, but doesn't keep us from buying it. that has been the mantra of the federal government for far too long. there's two things they want to point out on that front. and the president's recent budget estimate come the low single estimate of $607 billion,

which is a number higher in absolute terms that every annual deficit in our nation's first 220 years and is roughly equal -- to overspending immortalized 1944. that's the problem from our dead. a lot of people attribute to crisis response due to recession, financial crisis, the recent increase in spending from which i deficit and 45 of the last 50 years, which we think even diehard keynesian type to find problematic. so we came together at the u.s. public interest research group at sun we have many disagreements on policies. this first started when we put together on transparency issues, at the contours of this report started blasting the president's fiscal commission was meeting and we join together to make 30 recommendations for $600 billion we submitted to the fiscal commission paper are gratified to see 20 of the recommendations made it into the fiscal commission final report in the

illustrative cuts they put together. and the purpose of this proposal was to find out what kinds of spending reductions can make it a group that is locally on the right and another group on the left to agree upon. that is really the challenge with the super committee that's trying to figure out who can get somebody from the others died to agree to the proposal they are putting together. so we came together this year and put together a plan with over a trillion dollars for the specific spending reductions. look through the entire list and find links to all the information. we were really reinventing the wheel. we are aggregating things like cbo budget options, numbers from gao, other sources like that to figure out where we can find spending reductions that are going to dramatically undermine what we would like to see the federal government doing on a regular basis. a couple results of that. we outline $215 billion worth of

subsidy. what does that mean? agricultural subsidy, commodity crops that probably every group that appear with support getting rid of colleges corporate welfare, $2 billion. a program that helps to underpin our insane sugar subsidies in this country. $374 million. we also contributed $429 billion with a specific. can you believe in a strong national defense, but we also believe there's a tremendous amount of waste in our defense budget. we outline a couple specific $35 billion worth of excess spare parts orders, where in some place ordering 50% too many for the armed services. the b. 22 osprey could save us $50 billion be offset any other

capacities to prevent any operational ability. we also laid out $232 billion worth of improvements to government operation and that is eliminating unneeded programs connecting fake air service commotions a system necessity for rural airports. one of my favorite, the national drug intelligence centers in the heart of the american struggle for in johnstown, pennsylvania. we can thank john murtha for that one. another favorite is the spaceflight awareness program, were people involved in spaceflight put together lavish events that they give each other a warrant and spend $16 million for no apparent purpose. finally $132 billion worth of reform and these are mostly efficiency changes. these are not the big flashy raising eligibility ages or anything like that, you can save more than $47 billion by

reforming payment rates and high cost areas. we have in some cases even when you account for difference in cost of providing manhattan is suppose to some my kansas, when you account for those differences we have huge disparity in some cases and payment rates are moving overpayments in the ssi program. we are handcuffing ability to people. so those are the broad outlines of it. the reason we got into it is to show that from our goods cutting wasteful spending is not an issue of right or left. it is an issue of right or wrong, but these are things we don't believe are delivering for taxpayers. in our case in most of these who don't believe is the role of the federal government to be performing many things. it is incumbent upon us in any time, especially right now to go in tackle those things affirmatively to root out the ways. you know, we think this

demonstrates there is an ability to agree across ideological lines. it's ever trillion dollars, four out of every five the super committee meets in order to meet this $1.2 trillion target that we think that's a pretty significant leg up. it does so without giving in to see intentions veered about revenue. i would associate that the use position in problems right now are generated by overspending, not under taxing. the purpose of the report was to show where we can agree on things and how far we get when we do that. with that alternative theory and he will talk more about why it is that they ventured over to the dark side and put together this program and their motivation. >> grade. i'm very common, directed d.c. have some legislative policy

office. we were very pleased to renew our partnership with ntu and i worked with them on transparency, contracting issues, last year on 600 billion, which was the first run of common ground in the expanded this year. largely we do think that how government spends its money is probably the most critical decisions that legislators make in identifying public priorities and making sure we can afford those is something we obviously spend a lot of time when we are working on her higher ed program, whether it's poker hands, safety issues, et cetera, et cetera et cetera. so we saw the deficit is a real problem and we felt it was important to start having a voice, making our voice heard about what are they good cuts and the dangerous cuts we think are not helpful for society?

and so, we were happy to go after what we thought was some of the ways. the second thing which i think is important about the report is due here is a lot of folks today talking about when he took cut waste, fraud and abuse in the media has, and when we should not just talk generically about waste, fraud and abuse. let's name names, picked programs and site things we should get rid of rather than raising your hand because somebody -- we can all say we tried and abuse than some people think one thing and another they think another and they also does not. when they sit down to make the cuts, they don't have them. and so there's a few things -- a few principals who came to the table i'd like to share this because they are good exposes legislators go through and make decisions about targeted programs to cut. so why miss we want to post

subsidies to companies that do more harm that good and so people have talked about cultural subsidies being a big handout to corporate interests. we would argue that some of these actually are good. large-scale agricultural crops used for biomass compete with food production for prices globally. so there is actually more than a wasteful handout. there's actually harm being done at the subsidy we offer to the public. the second is a post-subsidy to mature profitable industries that don't need the incentive to do what they are doing. a small example, but one of my favorites is to include in this category some of the very management funding, which supports among other things extra cheesy pizza while we might take extra cheesy pizza and others have resources to develop their own progress to

meet a consumer case about taxpayer dollars. the third is the word make government more efficient dinners in a number of ways in which the card drafting process can be made more efficient. things like allowing the defense department and the va to buy prescription drugs jointly. that would save $6 billion over 10 years. so lots of savings to be found by reforms and some other folks have pointed out some other differences to be made. we venture into areas like defense purview. we don't claim to know the national security needs of the country, but we do oppose funding where there's authoritative confession to do so, that should have credible and reliable agreement across the political spectrum that something is wasteful. and that the agency that is supposed to be receiving the dollars we don't need it. but then the recommendations

coming include the expeditionary fighting vehicle as an example. they both agreed with the independent secretary's proposal. so those are the kinds of recommendations that we want to support. as a couple of quick things i would add. one is as you might imagine, we are nervous about across-the-board cuts that would equate viable programs with wasteful spending and saying we are going to cut everything. we are going to cut programs such as pell grants for education the same famously cut agricultural subsidies. we think legislators need to have courage. name names company programs and let's actually cut the things they wasteful. lastly, one thing not in the report to talk a little bit about revenues, one thing that we have been taking a closer look at in advocating, which we do think there might be some common ground with some folks on

both sides of the aisle is the notion of corporate tax loopholes, the issue has gotten a lot of attention on the issue of off shoring profits made in the united states. there's estimates that it could raise as much as $100 billion a year. we think funny accounting are shipping profits that are legal but doesn't make it right, so we encourage congress to take a look at that and there may be some efforts and ability to bring in some of that revenue will also make incorrect public policy. >> thank you are a match, entering gary. now we are joined by the senior senator from utah, senator hatch. it is an honor to have senator hatch. as you see we do this event in the hearing room. we wish the entire super committee was listening to this gentleman and i would like to hear from you. the senator has been a leader in the fight against spending.

i think we both agree the senate passed a balanced budget amendment years ago we wouldn't be in the shade. but with outcome we hope you will present us your ideas for the super committee should do. senator. >> sorry to interrupt you, but i'm very honored to be with you all today and i just thought i would bring a what i consider to be pretty important aspects. i want to thank you for coming today and which are trying to do. this event could not be more timely because in another two weeks to joint select committee will hopefully report its recommendations to the full congress. now at nearly $15 trillion that we are almost there, after a while mike mullen was called arts at the greatest threat to national security. i concur. spending more than they take in his ballet clear and present threat to economic growth and the families entrepreneurs and job creators that depend on it. the work of the joint committee

is a necessary but not sufficient means for addressing this threat. so glad to see so many groups and the concerned citizens who represent working to address their deficit and debt both now and in the long-term. now you all deserve special accommodation, but i would like to extend special thanks to andy spending and president brand baker for scheduling this event. you might know the taxpayers against earmarks. there was a mistake as an organization was in choosing a name that could be, or would become obsolete. they were against earmarks along with many of you manage to secure a earmark man. this is a real achievement but the morning after their victory they had to start taking about a name change. i think they settled on a good one. we need to reduce spending significantly, i don't think we will end up spending any time soon. the brand, i think it is safe to

print up your new business cards. at the beginning of this year, it was not a conclusion we would've had a great national debate about the impact of her national debt coming yet throughout the spring and summer culminated in the debate to increase statutory debt limit, congress and the president considered ways to address their dad. unfortunately, we have a ways to go. you would think from the editorial by missing that it has been cut to the bone. recently the congressional budget office or cbo concluded the federal governance budget deficit was $1.3 trillion. almost identical to the budget deficit of 2010. this was the the third-highest deficit as a share of gdp since 1945. at some point they've all occurred in this administration. at some point the accumulated deficits will accumulated debt

that is past the point of no return if we keep going this way that we are quickly approaching that point. at the end of the fiscal year 2008, as the bush administration was winding down, the debt held by the public reach 41% of gdp. currently federal debt at the public equals in modern record of around 69% of gdp. the cbo reports the current tax and spending the takes that figure to 76% over the next 10 years and according to cbo if we continue current tax policy, don't raise taxes, fix the amt, provide estate tax relief and provide a fix to the payment system from a policy supported by majorities of americans and representatives in congress by 2021, debt held by the public will reach 97% of gdp. even these extreme scenarios may be dramatically understanding the consequences of our spending

policy. if are historically low rates go up even slightly, we can see massive increase in federal debt, even without any policy changes. as the crisis in the euro zone demonstrates, it is critical we get our debt under control right now, waiting until a true moment of crisis will further undermine the economy and livelihoods of many american citizens. there now appears to be some bipartisan consensus to address the debt, but this agreement reins when it comes to discussing solutions. as a craft remedies to do with this crisis that's critical we get the diagnosis correct at the outset. to me it seems clear that we must begin by recognizing that we have a spending problem, not a revenue problem. our debt is large, growing larger, not primarily because of any tax cuts, but because it's been a well above historic

averages incurring higher. we have annual deficits are skyrocketing debt not because cover taxes is little, but our government spends too much. it would be a mistake to use this crisis as an opportunity to raise taxes. tax reform that addresses so-called tax expenditures is long past due, but we should not be using their death as an excuse to raise taxes on families by job creators. taxes are already high and the tax burden is heavily skewed for upper income brackets. in june 2011 budget, and economic outlook from 197-12-2010, taxes average 18% to gdp. if no changes in the law are made, revenues go up to 20.8% of gdp by 2021 and 20 points -- 23.2% by 2035. even if all the bush era tax

rates were apparently extended, and additional progressivity would be a challenge. according to the tax foundation for calendar year 2008, the top 1% of our population in terms of income already pay -- pay 30% of all federal income taxes. the top 5% paid approximately 50.7% of all income taxes. meanwhile the taxation estimates that 51% of households, which includes filers and non-filers had to zero or negative tax liability for tax year 2009. the 51% of all households. if someone limited government that you do on her neighbor, i think raising taxes beyond.

i think it is counterproductive. first it is not clear that the anticipated revenue from tax increases would actually emerge. this is how the nonpartisan joint committee on taxation put it. we anticipate the taxpayers would respond to the increased marginal rate by utilizing tax planning and tax avoidance strategies that would decrease the amount of income subject to taxation. furthermore, 34% of float through income would be subject to the surtax. this is especially harmful to small businesses. the vast majority of which are organized as flow-through entities. family is a method of debt reduction, and misses the mark. an article from attacks on her shows the debt problem cannot realistically be solved on the revenue side. in an article titled desperately

seeking revenue, and the actors detailed what would be necessary, absent pending changes. to reduce federal deficit to 2% of gdp for the 2016. it's not there is concluded that tax increase is consistent with the president's campaign pledge not to raise taxes on individuals making less than $200,000 or families making less than $250,000 would require that sob to series to go from 33% to 85.7% and 35% to 90.9%. eliminating our deficits in bringing down the tad to manageable levels by looking primarily revenues would require significant increases in taxes, not just on the so-called rich,

but the middle class and probably the working forest well. a true solution to a debt crisis is going to require progrowth tax policy and a serious spending reforms. to that end, most of the republicans on the senate finance committee agreed to recommendations that we provided to the joint committee. tax reform is critical. our current tax code -- i think everyone basically agrees is unfair to inefficient. 6 billion hours are spent each year complying with the tax code of the cost of $160 billion. a tax reform that is revenue neutral against the current policy baseline would encourage fairness, simplicity and economic growth. by reducing or eliminating tax expenditures, we could broaden the base similar rates. we got also minimize the current

preferences in the tax code for spending over saving and investment. under our proposal, the top individual and corporate rates would be 25%. as for the spending sank in the recent levels of spending are simply unsustainable. according to a report by the congressional budget office, which was released yesterday, federal spending was 24.1% of gdp in 2011. that is slightly lower than the 25.2% recorded in 2009 and about the same share as the 2010, but well above the 40 year after each of 20.8%. the federal government spends about one quarter of our entire here's worth of of output in the tyre national economy and that is far too high. in addition we need to come to grips with the fact that our debt crisis is in large part a health care spending crisis, one significantly infected by a

demographic problem. when medicare was created in 1965, life expectancy was 70. today it is 79. we need to address the eligibility age for medicare. our problems are not only demographic however. at some level the structure and design of health care programs must be reformed, creating choices for seniors and encouraging plant edition much like the federal employee benefit program would have a positive impact on access to care for seniors and on the cost of medicare for taxpayers. as for medicaid which currently consumes 22% of state budget and will consume $4.6 trillion in federal spending over the next 10 years, congress should consider giving each state a defined benefits to provide

health care services to their vulnerable populations. as for the president's health care law, and must be repealed. there's no getting around the fact that it is expansion in medicaid and new entitlements to premium subsidies are a ticking time bombs for both federal and state budgets. according to the house budget committee, the true cost of ppaca where the affordable care act stands at $2.6 trillion over 10 years. that's it for the key when fully implemented. the same analysis reveals that it will increase the deficit by $701 billion continue to add to her nation's growing debt. in addition there is little doubt the health care law is hindering economic recovery in the robust economic growth would be necessary if we are to dig ourselves out of debt. it boasts over $1 trillion in new taxes and penalties on

individuals and employers. the director of the congressional budget office testified before the house budget committee this year and confirmed that the log would that be a hundred thousand new jobs in the future due to the increase in marginal tax rates. in my view, there should be greater consensus on this spending reforms. liberals than conservatives, republicans and democrats have a shared interest in successfully bringing our debt to heal. cbo projects that the cost of simply paying the interest that all of this double rise to $792 billion for 3.3% of gdp in 2021. when you are nearing $1 trillion in interest payments alone, the day comes when the national government will not have resources to accomplish limited object is. i am confident the joint committee will succeed in taking another step towards restoring our nation's fiscal integrity.

a long-term fix is going to require additional actions. we are going to need you to continue to keep the pressure on with respect to spending and progrowth tax policy. ultimately, we are going to need to send a balanced budget constitutional amendment for ratification. after 35 years in this body, i have to say i think that's what we just simply have to do. it is possible to get our economy back on track. as a ranking member of the finance committee, i'm working hard to put the nation back at me for sound fiscal footing and with individuals like you working on these issues, i know we can get there. lachaise understand this is still the greatest country in the world. i know a lot of young people here. your future really is at stake here and we can no longer

continue to act like there's an unlimited supply of money coming in here that we can spend in an unlimited way. we have to give rio and that is why i love this organization and what it's trying to do and i want to commend all of you for being part of it. god bless all of you. thanks so much. [applause] >> senator, we appreciate your time. we will continue with the panel as we are a bipartisan panel that we invited several of the senator's colleagues or the other side of ohio, that senator hatch was kind enough to join us today. our next presenter is steve ellis and i think your organization wins the award for best title for your recommendations. so what you pick it up with supercuts. >> and steve ellis, vice president of taxpayers, a national nonpartisan watchdog

and we did come up with supercuts for the super committee. you can follow along in your packet here to do an extra copy by bright sun as well and for you watching on c-span it's available at www.taxpayer.net. i am really glad to be here and show the table with these folks. whether you like the plants are not the least everybody hears, but they planned and i guess that since spending brought us all together you come up with five plants, so congratulations to you as well. for 16 years, tcs has highlighted wasteful spending, whether exposing company may join a bridge to nowhere earmark and actually going after earmarks as a whole or after wasteful spending and tax code like to duplicate it at the excise tax credit, we have been doing this for a long time and building on earlier work, which was a submission to the

simpson/bowles committee. supercuts really represent the latest compilation that we have been able to dig out from both what we have done another independent entity as to whether it's government accountability office, national budget office or others and put it all together here. that is by no means exhaust is, although we have and continue to support reforms that overhauls and social security and medicare. the savings that we supported are not reflected here. we do support dvi, incremental increase in retirement age another provision. we also didn't have the overall tax reform. we talk about tax expenditures going after breaks and subsidies, but we do not talk about overall reduction in the rate then expanding the base. and then to our favor, we didn't include things like jimmy's, such as saving a couple hundred

billion dollars in reduced and interest from our date that will happen if we do the other cars. so we put in a couple hundred alien as what you mostly see. we thought it would skew the numbers are served to inflate it. and lastly, this is a gimmick that we are critical of. i am not critical of interest as true savings, but a lot of people talk about reduce troop levels in afghanistan and iraq, eight or nine years now. and those are really just an accounting gimmick. the fact is we plan on reducing the troop levels in extending the baseline, saying we will maintain levels by 2010 or 2011 levels is really just a way to try to gain savings on the books without really gaining savings in reality really helping our debt. so, now you know what we didn't do. that's all well and good. so what did we do?

we have more than $1.5 trillion worth of cuts. i think that is a lie. in instances we try -- what we try to do this captures corbel savings. so rather than looking at things that we are going to expire. for instance, the ethanol tax credit is scheduled to expire december 31st. of course it was scheduled to expire last september 31st, so it could expand, but considering that they sign up for 10 years was a reasonable accounting and we did not include that in the 1.5 trillion. there is a faction that document called called other common sense can't, we try to capture other things we think congress can do, whether it is found in like this are the super committee whether something might the excise tax credit or in some cases authorization for projects is subject to future appropriations. we are not going to count those further savings. what we do is record everyone's

thoughts. we think achieving budget savings is not and cannot be a popularity context. we go after agricultural subsidies, discretionary spending on infrastructure and energy and yes, national security. we go after tax expenditures and tax credits to date reforming tax breaks. celeste again. agriculture. there's been a lot of talk about that already in the panel. i won't go into too much detail. certainly things i dread a medicare payments to producers that emanated from the 1996 farm bill that was supposed to be transitioned from couple of payment basically paying people not to grow. like many things in congress, president reagan observed there's no better example of eternal life on earth in federal program. in 2002, they dared back in many of the same sort of countercyclical programs to go

along with drug payments. it indispensable and most people and that is the case. agriculture is kind of interesting because the next thing we talk about his reforms to crop insurance. it's not really crop insurance is revenue guarantees would basically pay 60% of the premiums from agricultural producers to get insurance. i think i would be a sweet deal if i had car insurance that the federal government with a good 60% of the tab. but what vc is agricultural committees are trying to actually expand their subsidies in the super committee process in several groups here in the table with us have signed a letter and worked with the broad bipartisan coalition to look at trying to stop the agricultural committees from putting a five-year farm bill with hundreds of patient legislation on the super committee project. so it is not only getting

savings. it is also preventing future subsidies and so we are about revenue guarantees which is up to 90% of annual revenue guaranteed by the federal tax payer, some paint that a lot of americans would've liked the last two years. i don't think it's reasonable. at first mark access program mentioned earlier, certainly supportive of eliminating. and energy we target old and new subsidies enjoyed with americans for prosperity and national taxpayers union opposing new energy subsidies and rolling back old energy subsidies in a letter this are signed by about 30 groups. also kerry mentioned industries. i feel this energy tax rate on the books are nearly a century old and help the industry get started. i kind of think that happened in

there pretty well rooted in there and so we should be looking at things like the intangible drilling cost and percentage depletion allowance. these are things we should target of individual tax expenditures on defense. everybody talks about how a three to $50 billion in savings in data by the budget control act. if you start peeling back the onion commode had a dramatic increase in defense spending in the last decade, even if you exclude emergency war funding. we spent $1.5 trillion in service contract errs over the last -- since 2001. we worked with project and government oversight to come up with broader reforms on defense. some are reflected in here. if you just reduced our service contract expenditures by 15% coming to save hundreds of billions of dollars. those have been increasing every year.

so it's not even that linear. it's a magnifying increase. try to reforms has been called the third rail defense spending. well, as brian indicated, i served in the coast guard. my father his career navy, retired after 21st of service, with back-to-school, got a masters, went to work for a fortune 500-pound any. what we find is secretary gates talked about this. very many working age retirees from the military. i obviously have great respect for my father in everybody who served. scarily enough my classmates are eligible to retire this year, which is really kind of odd to me. i feel really down. the tri-care premiums have gone up since the 80s. so you have people who could get -- my father could have gotten help kerry threw his fortune 500 company or pay a

higher premium because he was making a very good rate at the time. and yet, we allow this bifurcation. these are retirees and the workings. there's areas where we could be responsible changes here and i read in this baghdad and he was fine with that, and i will miss by my dad and he was fine with that, a lot of our men and dad and he was fine with that, a lot of our men and women in uniform were in the category of working could be an increase to make it more in line with what the factor has. not taking away privileges and the reforms we have to look at in the personal side of things. one of the things secretary gates told secretary panetta when he took over coming from cia, the health care budget for dod is larger than the entire cia budget. so this is where we have to look at these areas porosity is going to consume military spending operation. we also look at the trying

troops from europe. we have someone of a cold war posture in these areas. we could draw down troops and remove things. at this base, weapon system, nuclear weapons infrastructure. and if running towards the end, tax expenditures. these are breaks and loopholes and special interest provisions inserted into the code over years. it seems like i like to touch the third rail. modifying the mortgage interest reduction is a perfect example is not a bad intention, which was to make homeownership more affordable and it hasn't done that. yet canada in the u.k. which have similar homeownership rates. the united states not actually have such a subsidy. but it's really done is increase the price of a home so savings are basically baked into the price of the home. good for home builders and realtors, not so good for the average homeowner.

we talk about reducing from a million dollars in mortgage to $500,000 in mortgage at the available. we obviously don't want to shock the home market because of issues that are very eminently clear about home sales. looking at things like last and first at accounting, we are the one of the only where you can actually assume that there'll of oil you have been your oil industry is the biggest beneficiary. what you put in decades ago is still in your inventory and so when you're accounting mechanisms you take out the marks than the, the more recent barrel of oil. it is something the international accounting standards is not allowed. it could have a significant impact phased-in. the last thing on taxes, couple years ago we allowed state and local sales tax to be dug to vote. this is actually some dated 1986

we got rid of than we brought it back as another tax expenditure. obviously benefits florida, texas from other states where there is no income tax. but this is something with a new set of gm came about that isn't necessarily fair or justified in the kind of the case in the buildup of lake and forest or rebuild at and the tax code and we need and we need a fire tax many end expand the base. lastly, i would just mention infrastructure. we have tapped about in here including things that the trust fund, for instance, we knew when we passed the 2005 highway bill, that we had -- we were not going to get trust fund revenues to pay for everything we promised to pay for. and yet, we went ahead with the bill. congress voted. it was clear in 2005. we were not going how revenue at

the end. we buried $34 billion from the general treasury to put into the trust fund and pay for highway spending. that is money we need to call back. beyond that, if we continue the peace we do and we certainly see that. friday the public works committee released a highway bill that didn't explain how they're going to pay for it. it would explain the difference here. that is $72 billion that would also be an cost of the next 10 years if we don't fix that. so in this case we have to match our revenues with expenditures. i'll leave it at that. there's lots more in the hope you take a look at what we propose. >> thank you very much, steve. and they specifically not last is david kendall from third way. i think before introduce you, i want to say some eroding your letter to the super committee. your plan demonstrates significant savings can be achieved following democrats and republicans to what their basic

promises and principles. but that is a tall order, but please share that with us and we'll have a discussion amongst you on the panel. >> thanks, brian. i like your supercuts. i just wish i could do that for my hair, too. i'm very happy to be here. but i want to focus on is 12,000 criminals who will -- you won't go to jail. 50,000 new cases of food poisoning. 225,000 pounds of luggage on screened for bombs. that is what would have been a secret station would take affect. it is one of these abstract ideas on the washington d.c. could come up with. but it means is that the super committee fails, other cuts will take place and the fact primarily the part that affects

most americans. even the tea party folks would understand when they saw that there were gunshots were going more slowly. if even the kind of cuts that americans who don't see the benefits of government every day, but couldn't get weather reports that are accurate. they would get weather reports that are half as accurate as today because we couldn't afford to put another satellite to replace the one that meets the replacement in several years. down to the kinds of things that i think would motivate most members of congress here in washington d.c. to get this done. and it is doing that. so i want to do describing our proposal is three things. one is describing our plan, why it might work to avoid secret station and why we think it would be a success. the third strongest support is

going day. in other words, a grand bargain between sort of democrat who would go forward some sort of economy reform and agree to increase tax reform. but if we can't get that done, and that is a tall order, we need to get something done. that's why we need something we could do just in case we need to break the glass and actually get something meant to meet the minimum threshold for preventing the secret station from taking effect. so we propose a plan that includes $1.65 trillion in spending cuts over 10 years and revenue increases and allows $450 billion for two jobs package. it is $2 spending cuts for every dollar in revenue. we don't think it's a revenue problem. we think it's a combination in the peanut here today is to make

the job of backing the idea back and forth. at the end of the day, we have to look at those things. we had our own little market and we decided to see what we could do amongst our group to facilitate a discussion. one of the things we found this when i was going hard on the defense group to continue to cough up more money, some folks on the energy teams that we can put a little more here and that kind of give-and-take is what we can hopefully see in the super committee is to get down to brass tacks in the next couple weeks. we propose revenue increases to rethink their wasteful tax subsidies that could be cut back. for instance, we could eliminate detection for second homes doesn't seem to be necessary to promote homeownership, even if he think it is a good deal to do that. so, why might our plan work in achieving a secret station?

primarily because it pulls from bipartisan plans that we have seen coming from the simpson/bowles, fiscal commission, domenici rivlin, even the president and senator coburn's plans. 70% of the revenue we propose comes from senator coburn's proposals. nearly two thirds of the mandatory savings come from items in the proposal. an agreement that is breaking out. if you remember last week with a major development, where bipartisan group of members in the house kind of dance in both directions. they said we've got to do a deal to take something from each of us. you give, i give situation. batman people who had plans to grover nourse quiz that they would not raise taxes for blending to accommodate the national necessity. and for democrats they were going to do some cuts that were the first thing they would choose to do if they were the

only ones in charge. so with that, i think the question is, why would this be a success quakes all we did was a so-called minimum, $1.2 trillion. first of all, is going to let us fight another day to keep our bond rating. but the other two agencies, moodysaid that she didn't downgrade us as a result of the debt ceiling to bathe. it is going to show we can do something bipartisan in health care. some savings will come from reducing excess spending in medicare and medicaid. if we can get bipartisan agreement on health care, that's a major step forward here finally, shows congress can get something done. when we put at her memo, we predict that a 10% approval rating for congress should a super committee fail. we were wrong for two reasons. first, it didn't take super committee failure to strike levels because four days later,

"the new york times" and cbs poll showed it had fallen to a new historic low, just after achieving its last a month before. second go-round because the new approval rating was 9%, not 10%. avoiding secret station may not seem like the be-all and all for people here in washington. for people back home were looking at -- a very low expert patients for what congress can do, this would be a tremendous victory. sometimes americans are left to vote for president obama, sometimes they veer right when they vote for the house republicans, but mostly what they want to do is move forward. it is our obligation as leaders here in washington to help them do that. >> thank you very much, david. a show of hands if i could and you don't have to speak on

behalf of organizations, so what do you think? on the super committee reached their goal of the trillion plus and deficit reduction by november 23rd? is your hindu castes. fatah won? 1.5? >> thank you, phil. my first question is to you. we have heard a lot today about the percentage of federal spending and how it is way above its normal or average level. is that right or wrong in interview, is there a spending problem the government's >> is right. the historical average for federal spending has been around 20% of gdp. does everyone agree with that? it is lower than it is now. the question is, why has it gone up and is it really just a

spending problem? thursdays have much historical average. average is great, but it is not true. the last time he balanced the budget in 2000 come when the budget is often 2000, the revenue is almost 21% of gdp. we were younger country over this past 40 years. health care cost leicester those past 40 years. so those are fundamental changes to the economies of the reasons why we spend more over time unless they want to fundamentally change the social contract, which i think phil would say we should do that. we should transfer authority to states and states can decide whether they want to give poor people and old people health care. if they don't, that's up to the states. fundamentally i don't think that's what the american people want to do. but it is important to recognize that historical averages one thing, things have changed a lot in the past 40 years.

imagine if in 1940 or 1930s somebody inside, listen, we cannot spend more than 3% of gdp. that has been the historical average for revenue and spending. well, that was true, but of course the country change. we're on the cusp of that right now as well. so spending is higher than it was in 1960, no question about it. but to say it's entirely a spending problem ignores the fact the country has changed. >> fell, are you trying to change the social contract? is it solely a spending problem >> we are trying to stop the germanic change in the historical relationship between the government and individual in this country. if we say we are going to allocate revenues after this the plateau, 25% of gdp at the federal level -- >> nobody is proposing 25%. just nobody, just to be clear.

>> they don't openly say that. >> if we were touring revenues up to the level spending has been, i think we would absolutely have a fundamentally different relationship between governments and individuals in which government has far more power because they are vastly more bureaucracy's programs, regulators whose job is to take choice and freedom away and exercise essential economic planning. this is the basic packet is your cat in terms of a complete meltdown mode. i think would be a poor choice for us to go down that path. and my view, we have to get outside of this washington mentality because in my view, one year ago the american people made it extremely care they rejected the move towards larger government to miss that one of the biggest landslides in history driven by an anti-washington, anti-regulation and pulse and the american people and we have the knowledge

that people aren't able to make their own choices, which is they want these messieurs place on may continue on the path they are on. the deal where we do something like go to chained cpi, that means we are going to worsen the bracket problem and that's why you can look at these as a revenue will be so much higher can balance the budget if we just allow the tax cuts to expire because it's a real income bracket inflation bracket because we under measure inflation. it would be a tax hike at the same time would hit people with benefit reductions on what we need to do is change the structure of these programs so workers are better off, not worse off. so i think secret station compared to some of the other things would be a huge coming huge victory. federal spending would increase every year and the american people would be disappointed if not, but at least their actual savings compared to the

baseline, which these other kinds of deals do not really reduce the project tree of government spending and they largely disregard the mood of the american people. >> a brief rebuttal because some have a question for andrew, gary and steve. >> up, so basically described that no one suggests we go to 25% of gdp for revenue. of course spending the koepp year-to-year in nominal terms. with more people year-to-year. inflation does that appeared here. we need to literally have sprang from what we are spending now in nominal dollars down to something lower than that of the next 10 years is purely, purely fantasy. i'm sorry, but it just isn't realistic. there are six plants appear. fundamentally, everybody from here over basically thinks that we need to have spending cuts and revenue.

many of the revenues have been described which is totally fair because spending cuts through the tax codes is economically equivalent to direct spending and i'm totally in agreement on that. if you cut the mortgage interest reduction, which we do need to reform, that will result in increased revenue. so there is this imbalance. this imbalance in the national debate about revenue versus spending, where one side says it's got to be on spending and the other side of payment as socialist as we've got to do spending and revenue. that is an unbalanced debate and part of the reason why we have this weird situation, where people are in the middle are being painted as far less. >> if interest income is taxable, should be deductible for tetralogy reasons.

.. 10% more in revenue than our historical record 22, 23% of gdp in that range.

the other thing that i would make that everybody keeps to forget is that we have a tax trigger that exists as well we have the expiration of the bush tax cuts that's happening at the end of next year so from a tactical perspective there is a push to have a so-called balanced plan come out of the super committee that includes revenue increases as a way to make everybody happy which seems to make nobody happy but we have a tax on the trigger that we couldn't include spending cuts if we wanted to serve from a purely practical perspective of the parallel triggers we have won this tax base and, you know, i think that the challenge in the first question you asked for their one of the super committee but actually come together and do this i don't know the answer to that, but i do know that we have a great fear that if the super committee isn't successful we are going to have some sort of a joint effort the bad bipartisan kind of effort to do

away with the trigger to undo the automatic spending reductions that are supposed to happen to undo the deficit reduction and threaten future downgrades and the sort of things we were concerned about in the first place. >> i would like you to address this if you could the organization have very specific programmatic we have the kutz listed and two groups of revenue but you guys really journal and to some specific votes. how have your members and members of the congress and the public responded, do you have anything you can enlighten us on about your specific cuts in the response by the people? >> sure, i will go first. a positive response when you show people some of these programs, certainly just about every program or benefit has a constituency but there is some nodding of the head that you talk generally about national security but then you go into

the specifics about some of the, you know, we are talking about going from ten aircraft carriers, 11 carrier air group's to nine and ten people recognize these are not a draconian cuts we're talking about in the similarly when you explain to be about profit sharing or other programs you kind of recognize that these are our reasonable issues that's part of what we try to do is bring together a lot of different things and recognize you have to spread the pain that if you try to pick a winner or a loser and to try to make a pretty little bit of a loser and it's the same thing even on the revenue stuff we came into the were very specific proposals, these are abnormalities or changes in the code we are saying let's get rid of them and we've always been and we have said that we are for a flat, fairer, simpler tax code these are part of the things that have to be part of that to

get there so it's not simply about raising revenue it's about going to a better coach and the last thing i would add to your question, part of my hesitation on raising my hand is that i think they will come up with something. you asked if a was a trillion dollars plus or 1.2. the way it's structured they can come up with 600 billion the rest me that in sequestration they can come up with, you know, any number and would be tied to that. also, i think that there's going to be, because this is what congress likes to do, if hon. they like to punch, pass and kick said they will do this from the road and say okay maybe we will do tax reform in the future and these are the savings come senator baucus, the chairman of the finance, they are going to get together and deal with entitlements and taxes so there's ways to do this in a reconciliation manner there will be a hybrid along those lines. >> how are the members of your organization regarding to your specific cuts?

>> one is some of the highest response we have ever had on an issue from our members and sending out e-mails and such has been to the common ground report, so from our perspective that makes sense here in washington you have one side going there's tons of polling available and on the other side of the americans don't want to cut programs and so here in washington we say everybody wants a case of -- they are just hypocritical. in fact what we found with our members across the country for the last 30 or 40 years they've been hearing from both sides washington as broken and special-interest from the show and there is waste, fraud and abuse in the system and so when the city want to use cut government cut the waste, fraud and abuse so we come up with a number of programs with today is the other cities or what have you that's not one was talking about and when you talk about education and health care and of

their mental protection a food safety as we've mentioned or screening to be protected that's what i want my tax dollars to be paying for so they are in favor of programs d.c. beneficial and that they think are special-interest giveaways said that as with the bill you think is reported and that's why we came together. >> well, david, i'm an optimist and i think everybody watching here probably optimistic as well so why were you the only member of the panel that foley raised your hand? stelle liquigas we were counter senate. here we get to pay the big bucks in this town. because of the noise and the rhetorical back-and-forth and does it mind-numbing and i understand why most people want to turn off politics and go back to their sports channel and that's fine, but at the end of the day i think our members of

congress do want to do the right thing. they want to make progress, they may not do it in a way that we want them to do. that's the democracy. no one gets the final say in anything in this town but the bottom line is if we don't do this the congress is going to look like more of a failure than it already does. 9% approval rating, that is lower than pretty much every other industry or any other professional or any other thing that we see in this country. that's really low. the need to do something to improve their image. that's why i'm optimistic. >> i know you all will join me in thanking ifill and michael landrieu, garrey come steve and david and their organizations have, because you all have done the hard work on behalf of the members of ending spending i want to thank each of you and your organizations and all of you for joining tonight's debate. you can read more about these reports on each of the websites or at endspending.com.

thank you. have a good day. [applause] [inaudible conversations] [inaudible conversations]

to get trained as fast as possible to go out and get a full-time job to begin to pull back into the tracks and then you wouldn't worry about how many weeks because they would have to do something every single day in order to get a penny.

public-school teachers testified before the senate education committee today on that no child left behind act. the senate is expected to vote on the authorizing the bill by the end of the year. this is two and a half hours. >> [inaudible conversations] >> today's roundtable will focus on moving beyond nclb, no child left behind for the the law and the 21st century. the last two years this committee is held ten hearings on the full range of issuesu covering a wall.

i've also held numerous sigler meetings and participate in lengthy negotiations with mye republican colleagues which resulted in the bill voted out of the committee little over two weeks ago. i believe the committee's bill f takes several important stepso. forward. the bi one, resetting the national steprward.students attending proficiency to ensure that students graduate from highal school prepared for college and a career.t second, by closing from accountability little andig ensuring the title the schools get their fair share of the federal resources. number three, incentivizing states and districts to developf rigorous teacher and principalit evaluation support systems. with the goal of continuous instructional improvement. and fourth, to have providing paleozoic focus on turning around the bottom 5% of schools and the nation's fourth, focusing on turning around the bottom 5% of the schools. schools that graduate less than 60% of their schools. so that real change occurs in

these schools. today, we'll hear from key stake hold ners this debate. i'm eager to hear each of their perspectives on how we provide states, districts and schools with the tools they need to help all students succeed. i think we have provided some of those tools in our bills, others think probably more can be done. one thing for certain the current law is not bringing about the significant improvement in student achievement that our country needs and our students deserve. we might reauthorize to get out from under the no child left behind reauthorization bill. the goal today is to have an open discussion that information the oncoming debate on the

reauthorization. and i thank all of our participants to be here. i turn to senator enzi who has been a ranking member on this committee. >> last month's markup of the act was a major step forward in the reauthorization process. i expect that there will be many more changes to the bill that we reported from the health committee in order to gain broader support from both sides of the aisle. marking up the bill was the first step in the reauthorization process. not to say that there wasn't a lot of work that occurred behind. contrary, we received testimony from over 70 witnesses including the secretary of education. elementary only case experts,

teachers. the committee hosted a website from people all across the united states can express solutions. concerns, fixes in order to improve the no child left behind. we're holding this roundtable to get input on the bill. we want to know to hear what else we need to do to improve the bill as we move foward. i want to thank today's panel t panelists each of whom come from different backgrounds. today, we'll continue the conversation of identifying problems on the ground with the current legislation. and how we can create policy that provides fleblgt for innovative approaches in the

state. although there are many criticisms of no child left behind, there are positives that we can put to as well, it moved the conversation around education in this country, it invited parents to take a more active in their child's education. i think that has been retained to making sure that no child is left out. by making sure that data were broadly available, can have all of the access to information they needed to make decisions about children not just about schools. that's a profound development and one that i'm committed to retaining and building upon. while no child left behind pushed us to learn about and address the shortcomings in our schools, it put strict rules on how schools addressed

deficiencies within schools. we asked states to intervene only in their bottom 5% of those schools and those schools with the largest achievement gap. however, parents and teachers will know how their students are doing because of the information reported for every child. we want the results to follow the child so subsequent teachers can make a difference. accountability that expects students to be college and career-ready to determine what makes the most sense for their students. i hear the concerns of many that this bill doesn't include performance target and other annual objectives. having the goals of students entering careers in college is a goal that requires intensive, grade by grade planning. not some marker as to whether the student is prepared on the way they graduate.

they don't need unnecessary federal micromanagement that says how and when they should reach each progressive milestone. no child left behind didn't handle this very responsibly. the bill we reported out of committee attempts to remove no child left behind oversized federal footprint and returns it to the state where it belongs. as i stated during the markup, i don't support 100% of the bill, i would supported a smaller federal government role. that's the essence of getting something done, it will include the broader congress, stake holders, moving forward so action can be taken instead of just wasted debate.

again, this is another step in that process, we'll be further informed as more voices are involved with that said, i'll continue to support a federal lesser role in schools. we need to place more imfa sis in seeing that each child is getting the education they deserve. i encourage my colleagues to work to getting this bill pass. thank you very much, senator enzi. let me a moment to introduce our participants. some senators like to weigh in with their introductions. i'll go down, i'll start on my right, first rick hess, mr. hess

is the author of the education comme comment, the director of education next, research associate on next is john schnorr president of the board of directors. he has developed education policies on teacher and principal qualities. after school programs. chartered schools and preschools. and i would now invite senator paul to introduce the next person. >> i'm pleased today to have pam gisselhart, she's gifted and talented teachers and one of the great successes of our kentucky public education. and i really glad that we able

to have this hearing to talk about the bill before it's final, to get your input and your understanding and your input as to how we can change and make no child left behind less of a federal burden on teachers and prince pals and all of our educators. i thank you for coming. >> thank you, senator paul. >> next, we have tom luna. mr. luna, he'll serve as president beginning in 2012. next is katie, senior vice president for government relations with easter seals. she does incredible work with easter seals, i can attest to that over the years. she's responsible for easter seals federal and state public policy activities. co-chair of the consortium.

has expertise in both disability education and early childhood education. next, i would ask senator alexander. >> mr. chairman, we welcome charles seaton from memphis. he's after a career or 15 years in nonprofit juvenile prevention program, he decided that he wanted to work with children in memphis and he works in the eighth grade with exceptional children, special education children and i understand that he's involved as tennessee teacher and principal is right now in the teacher/principal evaluation process. welcome. >> thank you very much, senator alexander. next is -- i would invite senator hagan for the next. >> thank you, mr. chairman. i'm proud to have an opportunity

to introduce an old friend of mine, a proud north carolinian, one of this country's foremost education leaders, dr. terry greer. she has -- he has experienced the public education system from all levels. a graduate of east carolina university and vanderbilt and as a teacher, coach and a high school principal. i first met dr. gear in 2000 when he became the superintendent of my hometown. during his eighth years in the county, dr. greer led the district as it cut its dropout rate in half. to less than 3%. increased the high school graduation rate from 63% to nearly 80%. received one of the largest

investments from the center of creative leadership to help schools leaders. today, early college institutes across the country are wildly seen as one of the most effective ways to steer our low-income students on a path of success. >> then dr. greer continued his track record in san diego, he helped reduce the dropout rate by 60%. in 2009, dr. greer became superintendent of the houston independent school district, the seventh largest school district in the nation with more than 200,000. houston, his initiatives continued to produce results for schools and students. and last month it was announced that the houston independent school district landed 87 schools on the 2011 of the state's high-performing schools,

by far the leader in urban school districts in the state. so, i'm pleased and honored to welcome my old friend, dr. terry greer to this committee. thank you. >> thank you very much, senator hagan. next is -- sorry mcmikulski couldn't be here today. she is teaches public education, current currently teaches at a school for students are medical fragiled. in addition, she also serves as a resident advisor for new special education teachers. and works with students of autism. next to amanda, mr. henderson, the president and ceo of the leadership conference, he also

heads up the leadership conference education fund. prior to these roles, mr. henderson was the washington buerau director of the naacp. >> i would like to welcome today, allen thomas, president of madison high school in richmond, kentucky, vice president of the kentucky association of secondary school principals. this year, he was the kentucky principal of the year. and he has spent time working in his school on focus and finish program. which identifies struggling seniors. we're very happy to have principal thomas here with us today. >> thank you very much. thank you all for being here for this very important discussion. >> mr. hess and mr. shur i'm

told you might have to leave early. thank you. before we start, let me explain the format of the roundtable. i'll ask a question of one of panelists. that person will answer. if one of the panelists wants to respond, take your name tent and put it on its head like that. so, i know to call on you. if a committee member wants to ask a question or a follow-up or an intervention, i ask them to do the same. so, we usually have a lot of fol whox want to talk. i'll recognize someone and we'll continue the conversation. it won't be like a formal hearing, although it's being recorded. we'll try to keep the discussion flowing. hope the result will be a good

in depth conversation regarding the bill. i just also ask that everyone to refrain from giving speeches. if they're a couple minutes long, that's okay. but long speeches. so, given that we may lose you early, i'll start with mr. schnur. can you tell us what the strengths on of the bill or how you think it could be improved? >> thank you so much. it's an honor to be with you. you're tackling one of the most pressing priorities for country and the blend of addressing education as both a national priority and a state and local responsibility is delicate one. i understand there are issues at play on this bill. i have been in dozens and dozens of schools around the country working to improve low-achieving

schools, urban schools and rural schools, i think we have some lessons emerged from those. when we looked at the schools, we analyzed, we have schools that are making dramatic progress. kids who many people in the society don't think achieve, we have actual examples. we're getting dramatic progress. we have leaders from schools -- we have nalszed the difference. one, in all of the schools that have been progress, there are high expectations what the kids can achieve. specific expectations. for success in college and career. secondly, there's a focus on the

school on a constant improvement on teacher and feedback to improve the quality of teaching regularly in the cool. because teachers aren't just born. you have some great teachers. teachers who are working at it can make dramatic improvement when there's the proper feedback. third, we see cultures of intense cultures of high expectation and personal responsibility. for all kids. you can't legislation late that from the federal level. the kind of culture that can drive high expectations and fourth, we see adequate funding for the teacher program. it makes an enormous difference to help principals make improvements. schools are struggling for that little bit of extra money to make improvement. fifth and finally there's

leadership. leadership at the local level, which is inhibited from too many regulations. i think it's a big issue that you are rightly addressing. what i think can improve the bill, the requirement to college and career-ready standards are so important. having somethinging is, most of these schools don't have these expectations. the second, the competitive grant programs focused on talent. on principals and teachers. the pathways program, trying to train principals and teachers for their institutions. third is the prioritization of low-achieving schools. if you got flexibility, that's a priority in this bill. finally it's important that you got to fix some of the prescription and the mindset of

no child left behind. to address leadership at the local level. two issues, two significant concerns about the bill that i would pay a lot of attention to if i were in your shoes in the senate, working on improving this bill, first, lot of discussion about teacher and principal evaluation, i realize some say that should be mandated. i think i would recommend improving on the current bill, by putting in place a very substantial incentive. not a requirement. a very substantial incentive. perhaps taking as much as 50% of the title ii program to support competitive grants. design and use these systems. someone is building on senator alexander bill. the incentive is there but could be large. you could put up enough funding that every state would be able to get funds. only 42% of title ii right now

is used for teacher professional development. i think you could get more funds through this approach to get professional development. right now, title ii isn't working very well. state-driven systems on a competitive basis you get a lot more bang for your buck. i think there needs to more press on the performance targets. thank you. >> thank you very much. >> you gave me five things, high ek peck takes, cultural responsibility. accurate funding and leadership. what i understand, under cultural and personal responsibility comes the subset of families. in other words, we always focus on schools. we know what influences a kid's ability to learn a desire to

learn is what happens outside the school. so, what role does the family play in that list of yours? in those successful schools. >> it's huge. as a dad of a 6-year-old and 4-year-old and 2-year-old, i walk my kid to school every day. the schools that we have seen, driven big results do find ways to really engage parents in taking responsibility to drive improvement for kids. most parents want the best for their kids and a lot of them don't have the support they need. i think especially are driven by the leader of the school and the teachers they enlist. >> senator alexander? >> thanks, mr. chairman. i would like to thank all of you coming. for making this hearing happen. let me take what mr. schnur said and go to seton from memphis.

the bill would be improved with a larger incentive for teacher and principal evaluation. memphis is currently going through a teacher/principal evaluation. almost every teacher is involved in it. and, that's the result of a program that raced to the top that had an incentive for states that wanted to do to teacher and principal evaluation. what's going on? what's your experience there? how are teachers and principals are responding to it? wh what's role should the federal government have in regulating it? >> good morning. thank you to the chairman for having me here. we in tennessee are actually, i believe, setting the standard

nationally, and hopefully, people will start paying attention to what we're doing with regards to evaluations. we know that if you want something you have to inspect it or evaluate it. so, we took the lead with accepting the race to the top, we decided that we were going to look at putting a good teacher, an effective teacher in front of every young person that we have in the state of tennessee. memphis went a state further and we started looking at a number of evaluation models nationally that were being used and memphis city schools developed or redeveloped, retooled a model and we're using it now. every teacher, every principal, whether they're teaching a student, so that means, administrative personnel, also, are being evaluated. they're looking at a number of

issues. they put a rubic together that looks at the actual art of teaching and measures those skills that we believe are effective skills to teach. and it also looks at culture or the teaching domain, where you're at. and i think that we have -- we have seen that, it's caused us as teachers, myself included, to re-evaluate exactly how i'm doing and try to put those high-yield strategies in front of myself. >> you're a special education teacher, is that right? >> that is correct. i teach special education. it's caused in no child left behind has done a good job of focusing on attention on those areas of special needs children. but, i think -- we see in tennessee, that with have created a culture that is data-driven as well as

personnel-driven. we're able to look forward. >> thank you. before i call on the next senator, i think what senator bennett -- let's go to mr. greer. you wanted to have an intervention on this point? >> yes, sir. hit that button. >> thank you so much. good to see you. in houston, we believe that teacher and principal evaluation is just too important to leave to chance. it has to be fixed in this country. as a school superintendent, i have been leading tri ing distrr district. student performance is not very high. but evaluation writings on almost everyone is off the scale. it has to be fixed. we have to have a teacher and principal evaluation system in this country and in our school systems that give our employees a real, honest picture of what

they're doing. last year many houston, we implemented two new evaluation systems. our teacher evaluation system will contain a weight of 15%. as well as will our principal evaluation as we finish it up this year. this past year, as a result of our efforts, we retained 92% of our highest per fforming teache in houston. >> one thing that -- yes, sir, senator alexander has gotten in my head about, how tough it is to do evaluations. we don't really have the metrics, if that's the proper word i can use. are there a lot of different things out there? you said that 50% in houston

were based on student performance. whatever you're doing in houston, you said is working. is there a template there for the rest of the country? i think i have been reading articles about tennessee and they're trying to adopt some kind of evaluation. it's very difficult. >> it's difficult work. as we proved in houston it's not impossible work. when you retain 92% of your best students and relace 50% of your lowest performing teachers in the year that's proof that it's not impossible. we had over 2500 teachers involved with us in twopg our teacher evaluation systems. >> they were involved in developing this. >> yes, they must be. it's critical that they must be. >> if you had it on that paper, i would like to see what you use for other metrics. >> a lot of it is pedagogy,

classroom observations. >> do you ask students? are students involved? >> students aren't involved -- >> do you think this's important. one of the best people to evaluate teachers is students. >> it's fascinating. we know several things about teacher evaluation. teachers know who the good teachers and parents know who the good teachers are. we required all of our principals in houston to go through 35 to 40 hours of teacher evaluation documentation appraisal training. >> mrshgs luna had his hand up next. >> thank you, mr. chairman. in response to senator alexander question about evaluations and

incentives, and at some point i would hope to be able to have a discussion also about idaho's state chiefs view about the lot, the good parts and the other parts. but when it comes to evaluations and incentives, we know that the most important factor, once a school -- once a child enters a school, by far the most important factor is the quality of a teacher in the class room, than the money spent or the technology, the most important factor is the teacher in the classroom.

as some people would refer to it or teachers and idaho can now run bonuses based on taking on leadership roles or if they teach in the position but also if they teach in a school that shows high academic growth and so the point i would like to make and it's to answered your question, senator alexander, you asked about evaluation and incentive should the government require it and define and regulate it. we did all of this without any incentive for mandate from the federal government. and if you want to find a balance, i don't see necessarily a problem with the federal government requiring it, but i think it goes too far of the federal government tries to define it or regulate it. i think idaho and other states can demonstrate that we are ahead of the curve when it comes to robust devaluations and incentives so that we don't leave it to chance as to whether

every child has a highly effective teacher every year they are in school. >> senator bennett, ms. geisselhardt and then a senator paul. >> thank you, mr. term and really would like to thank everybody for being here especially mr. seaton and ms. danks. i spent some time on the phone with you to the car you're very excellent commissioner in tennessee hearing from him about the evaluations and he sends his regards to do. >> what if he's a? [laughter] >> i will tell you later. he said you have the best system in the world. [laughter] since i support both of the center's amendments to the bill, i wonder if you could talk a little about the premier perspective, because no one another this table has been to as many schools as you probably have. from your perspective, what is the importance of the performance targets and what

should that look like in this bill i believe we are able to find a path that would allow us to include it? >> well, you have a lot more expertise on the legislative issues. from the school perspective, moe from a principal, teachers come a kid sitting in schools, in think it is of vital the importance and the don't necessarily care who, where this comes from but kids across the country need a press supported from outside of the school for higher performance. performance. too many things conspireing to bring low expectations. from a school perspective, all of these things conspire to have in many ways low expectations. they benefit from the public in some way, saying you can do better in specific ways.

you need to hit bigger goals. and the best leaders they want to do it. but there a are a lot of people who are nay sayers. in my view, i'm sure in this room, i do think that requiring having performance targets is really important. as long as states are making big progress to getting students succeed. the transparency against that, one thing that i would mention, some of the senators we're launching a new organization america achieves, we're going to convene a panel, great teachers to put recommendations together for what goals and targets

should be. a private panel, i think that can help inform the debate. somewhere at the government level, there needs to be a drive to ensure their targets in my view. >> thank you very much. now, i got senator paul, mr. seaton and senator isakson. we can probably sit here for the next two hours to discuss performance targets and evaluations. there are other aspects of the bill that we would like to get to, perhaps you'll bring up other things, i don't know. perhaps we can have each of them quickly mention what they like and don't like in the bill. >> let's go to ms. dansk. >> good morning. >> i wanted to respond to your question about how it was created. in baltimore city, we passed a

contract where the teachers are paid for performance. we went through that process of creating a rubic, it took about a year. we had some family members working together through many drafts to create a program that showed what highly effective teaching looked like. senator alexander question, about whether or not the federal government should have a hand in it. the autonomy our school had in creating it rubic was fantastic. i do teach at a school for students who are severely disabled and medically fragiled. we're looking at creating our own rubic. it was so specific. it had footnotes and explained every detail. but for a lot of students, those details aren't going to apply.

having that autonomy to go through that process on its own for our student pourp lapulatioo ensure we have highly effective teachers in the class room. >> i was wanting to speak to the teacher evaluation incentive. i just wanted to say that, there are already is an incentive as far as national boarder certification in most states. there's incentive pay for that. as far as the evaluation, i think the evaluation definitely needs to be done on the local, state level, because, it's so different and for instance, in memphis and in rural kentucky, and i think that's one of the great things about your bill is that it does put more emphasis

on local and state decisionmaking in all areas. but as far as teacher quality, teachers are -- well, i shouldn't use that term, because that's different in this bill, as far as evaluation, teachers wants to be value waited, because teachers want to improve and that should be the purpose of evaluation is to improve teaching. rather than to find fault with teachers and things like that. that is the purpose. and if we can have this where our rubic and things like that, give us the needs that we have as teachers to help us improve that's what we're looking for. we want to avoid incentives and things like that, that cause competition between teachers. and that's a real concern for us as far as teacher evaluation and incentive. because in order for schools to be successful, and in order for our students to learn, all

teachers and all school personnel must work together for the education of the whole child. we don't want to start -- i think i'm speaking for all teachers in that regard. we don't want to start anything that causes a competition between teachers. because we do want to be able to collaborate and work together and be the best that we can be. >> thank you very much. i think senator enzi made a great suggestion. i would like to start with mr. hess and go down right now, since we finished with senator paul, mr. seaton. >> mr. enzi made a good suggestion. let's start with mr. his. mr. schnur, you had your shot, we'll skip you. mr. his, what are two, three things that you like about the bill and what you don't like about the bill.

>> sure. i appreciate the opportunity to be here, mr. chairman. senator enzi and members. for me, actually, unlike mr. schnur, i don't are have much time spending on the ground. i think if we look back a half century of federal effort to improve schooling, some stark lessons stand out that are rarely kind of taken into account. we often spent time talking about whether the federal government should or should not be involved in education. when we go back to national defense education act, we had the federal government involved in some way. for me the most useful question here, what is the federal government equipped to do well when it comes to american education? i think the federal government is horribly situated to improve schools and teaching. schools are enormously complex

organizations. what we have hard today from several of the folks on the ground from mr. luna and mr. grier, how much improving teach accountability, improving teacher evaluation is how you do it. given this design of the american federal system and the complexity of state education agency and local education agencies, is no matter how well intended our efforts trying to spell out improvement models, trying to stipulate programs. efforts to specify evaluation models. we're going to wind up with more regulation and case law and compliance than we are with fulfillment of the intent of law. i would encourage us to be as cautious as possible in trying to spell out remedies for teachers. there are some particularly

useful elements of the law. coherent vision of the federal role, there are public goods that the federal government is uniquely equipped to provide an education. one, robust and reliable transparency, both around student performance, around outlays and expenditures and around dising a rating this how kids from everywhere are doing. the federal fwoft i think has a charge to provide constitutional protections for vulnerable populations. i think title i is an effort to do this. to my mind the 5% target that's spelled out in the committee bill is reasonable. jack walsh, when he ran general electric, used to have a mindset, they were going to try to fire the worst 10% of the employees.

he thought that 10% was a reasonable target. it encourages that it's not unreasonable so long again, as we keep that focus on encouraging states to address it not trying to stipulate models. third, there's a role in the kind of mr. schnur eluded to for state, union and local leaders. often, even when you have superintendents like mr. grier or farsighted union leaders, they get pulled back by their kons studeconstituent constituents. they the answer to what's in it for us? we can go out, bring a spotlight and bring home dollars? a chance to leapfrog into the 21st century. fourth there's a crucial federal role when it comes to basic research. i think senator bennett's

forthcoming amendment is useful on this front. we must keep in mind the federal role, is to really figured out how do we leverage technologies and not getting the federal government involved to require models. >> as far as -- i'm sorry, in regard to what's positive, first of all n your statement that senator enzi made, was that no child left behind was ineffective. i have to agree with that. not the reauthorization of the no child left behind. as a educator, just the connotation of the term, no child left behind, it really is demoralizing to us at this

point. because there is so much focus on teaching -- i mean, testing, testing, testing, that we have no time to it really has become that way within the schools. working with gifted education, i run into this all the time because things i want to do with my students, the teachers don't want me to take them out of the classroom because they're addressing particular standards that's going to be tested. for instance, i was [ inaudible ] going to view an open heart surgery, live open heart surgery, and one of my teachers was taking a -- giving a practice test to practice for the practice test to test for the -- practice for the test. i mean that's the way that it goes. these students are testing all year-round. and it takes so much time from instruction and as long as we keep our standards and our groups set up like they are -- i think the gap groups a