>> mr. chairman, can i offer a suggestion? we have felt ourselves extremely confronted by the problem of the shortness of time for such a big job of reforming the tax code. some of us rearward bob packwood was the chairman and the senate and that effort to place. but two and half years or three years. what's going on in her testimony what i sent to you in a packet is retaken section 404 of the law that created you, which is a section we think intentionally gave you an extreme amount of authority and more flexibility and we been talking about. the flexibility we didn't permit you to set up the direction with specific things you ask the tax writing committee to do and they have to do it by date certain, which could be three minutes

from now, for months. >> i appreciate that. >> is not reconciliation. >> what tax reform in the worst way. all of us do. trying to figure out the best process and we do it. second i'd like to ask about defense spending. that's my understanding the commission had $800 billion in defense cuts. that compared that with sequestration coaches about 800 billion, a bit more. not much. the budget control act august at about 315 according to some accounting. does that mean you have suggested another $450 billion in tax cuts? >> we recommended about $1.7 trillion worth of discretionary cuts. and outlays as 2 trillion budget authority from the president of proposed discretionary budget. i think he proposed, senator baucus, $11.7 trillion.

and discretionary spending we propose to cut it to $9.7 trillion because of the way the budget authority plays out slower from at least it worked out to $1.7 trillion. we said that should be split proportionally between security and on security spending. we also recommended a firewall between security and on security spending over a period of time so that the future congress would come back and vote it on the nondefense side. >> in the same thing, the commission recommended a cap on what you call overseas contingent operations? >> yes, we did. >> are certain that a cap, right? isn't it true -- the appropriations committee transferred $9 billion to the overseas contingent operation to escape the limitations? >> i don't know about that.

>> that's going on. you therefore would suggest a cap to help minimize that? at intercampus $50 million. >> were trying to keep the oco from being a slush fund. >> thank you. that's what i'm getting at. >> may i say that whatever you do and that will be so appropriate, just to a plan. you don't have to worry about who is doing this are the timetable and so on because let me tell you why the rating agencies don't miss with germany or france or great britain. because each of those countries have a plan. all these people are waiting for is a plan. you can decide how many teeth you want to put in the jar, but just do a plan and you'll see dramatic effects around the world with the rating agency. >> i agree with you very much. one question on the support. but in a very much time here. the concern somehow does this come, that with the election, if they are to put it in rough

terms, it would be a death spiral. that is people currently -- insurance companies go packaged for sale policies to the most healthy. so the most healthy people like these new policies, leaving the less healthy and medicare. the more sicker people in medicare and they go out there not because the sickest repair. i think if somebody gave a lot of thought to. some have raised the question. >> some every state, but we don't think it's true of our plan. we think we have avoided that possibility by the rules that we put in, any plan on the exchange would have to accept anybody. and they would be compensated on a risk adjusted basis. they got more for people who are older and sicker. therefore they have no incentive to not serve those people.

>> again, 20 thank you all very much. you've offered tremendous contribution to this country, all of you. thank you. >> the time of the gentleman has expired. the cochair to recognize the gentleman from ohio, senator portman. >> thank you, mr. chairman. and thank you to the four patriots who are sitting before us, trying to avoid what erskine bowles talked about today in the budget committee testimony is the most predictable economic crisis our country has ever faced and i appreciate the discussion today. we talked about a lot of the same issues that this group of 12 has been grappling with. revenues of course, but also spending. i'd like to focus if they could on some of the issues that we have talked about, but maybe with a little different angle. if you wouldn't mind putting up

the bipartisan policy center chart again, whoever is in charge, the one that senator domenici asked to put up earlier that shows health care spending as a percent of the gdp is set to just about double in the next 25 years. so just take my word for it. now come you guys can put the charter. i'd appreciate it because it is the back drop to this question. erskine bowles says, and if it's encouraged over utilization. he talked about some of the things could be done, including higher co-pays, higher premiums. talked about part a and part b being combined, having a single deductible that's a little higher. he also said that in the simpson bull's proposal, that you all recommend it reducing -- there it is, reducing health care

spending over a ten-year period by $500 billion. masm to senator simpson and mr. bowles that that refers to the gdp plus one. that is what that would mean. $500 billion given this enormous growth or to use your words, unsustainable growth in health care expenses. let me ask you about a couple ways to get there that we haven't talked about yet. one is means testing. seems to me this is one where republicans and democrats alike ought to be able to come together. i give you interesting statistics. the couple retires he'll pay $1,900,000 in medicare taxes and receive about $357,000 in lifetime medicare benefits. that is 119 in taxes for 357 benefits, which goes to the advertisement you talked about. so that is about three bucks and

benefits for every dollar in taxes. a few multiplied this by 77 million retiring baby boomers, it's not hard to see what we have an unsustainable program. now we can talk about this in terms of being sure as dr. rivlin just said that those at the lower end of the income scale are taking care, but at the same time it is difficult to justify giving up income seniors benefits that far exceed the system. can you comment on that? how do you feel about means testing particularly on the part b and part d premiums? >> well, you have to follow the nomenclature. you never want to use the word mean in everything, especially you call it affluence testing and then you get juice. and that is what you should. you have to start affluence testing some of these benefits. there is no possibility of people, who sa say, literally if you know them in your own community, use the systems and

pay nothing. >> how about co-pays? >> copious have to go up and you have to affluence test in that. >> photographers love this. how many are for affluence testing? >> it would be when u.s. republicans for nine bucks with the spending and one bug where the revenue and all that have shadowed by a comment that i favor the affluence testing. i was talked about it. kerry and i talked about it. max remembers and bradley were all involved in that years ago when we were here. it will be called un-american, cruel, evil, breaking the contract. i can hear the music and violence in the back already and it won't work anymore. >> okay, let me go to a tougher one. >> can i chime in on that? we are ready to have in the part d premiums. >> and in part been out.

>> and we're certainly in favor of increasing now. >> okay. erskine, you talked a little bit about some other ideas and i'll push on the spot you're my friend because one was raising the age. how do you feel about raising the eligibility age giving statistics on longevity? eligibility age on medicare? >> we actually did not have that in our plan. as i have thought about it since that time, you know, under the affordable health care act, we provide subsidies for people who have really chronic illnesses and for people who have limited incomes to get so that taken afford health care insurance and private sector. but that didn't exist before the affordable health care act. that means that people 65, 66, 67 would still be a litigate

health care insurance. so if they think about it, i could support raising the eligibility age for medicare since we have other coverage available for the affordable health care act. >> let's go to tax reform for a second if i could. all of you are talking about broadening the base and chairman baucus and i'm sure cameron campell address this, too. something they're interested in simplifying the code, being able to do so by reducing marginal rates in getting rid of some of the underbrush. one thing we haven't talked about his corporate reform. as a know it the second highest corporate tax rate among our trading partners. japan is slightly higher and they are intending to take theirs down. the average of all the developed countries come the oecd countries is 26%. where 35%. in fact or not because you had state taxes an average of 6%, so you're talking about 41%.

we do not have a territorial system. the world by system that puts us at a disadvantage by other companies. can i see a show of hands? to support could incorporate on the competitive level defined as 25, 26% territoriality. does everybody agree with that? >> alice -- almost got it. >> if you're spending is down to a rate -- i mean, we did take the rate down to 28 and i are -- actually, we didn't do territoriality. and the reason was interesting. simpson/bowles have strong representation for big multinational corporation on it. they spoke eloquently for territoriality. our business representation was for small business. >> we did hear betook corporate rates in 26% and went to a territorial system.

>> i support our scum of the one we've been describing. we didn't come down as far as them. i think the problem we've got with the public are not as it is discussed in isolation by the commentators. they just be aware of lowering taxes on corporations. the one it's part of an overall plan -- >> i am talking about revenue neutral as though the enough reduction in the taxation. in fact, you get growth in that based on economic analysis we've seen, which would add more revenue that was not revenue from increasing taxes come about revenue from growth another feet out the facts. >> i don't disagree. i was just given you an i've heard. >> i appreciate it. with regard to balance because that has come appeared, the coach i talked about violence. you will talked about and balances.

what is the right talents? i think her skin come he talked about this earlier in terms of where you all were headed and where you ended up. could you or senator since then give us a sense of what she believes is the right balance here between revenue that is generated again through tax reform, that new revenue. and on the one hand reductions in spending. what is the right balance? >> we thought it was no less than two thirds. and we work towards three quarters coming from spending as opposed to one quarter or one third coming from revenue. if you look at projections for 2020, it has spending at about 25% of revenue and 18%. and we didn't want to see revenue growth of 21% and obviously wanted to see we could try spending down to her revenue was that we could balance the budget at some point in time.

>> well, that is interesting because we are now at about the historical average about 18.4% on revenue and we ago are now with the recession, but under cbo statistics showing tax cuts are continuing get up to 18% in the next several years. one final -- my time is expired. listen, i'm a detainee medical for for your help today and help you have given up to this point, all of you have made contributions to our efforts, both individually and part of your groups and we need to help going forward. thank you. >> the time has expired. the coach or not recognize the gentleman from south carolina, congressman clyburn. >> thank you, mr. chairman. let me add my voice. thank you 204 of our panelists. thank you for their service. i want to start with this

statement. i have vast and has been put up or is thought to be put up here, looking at what i expect a lot of us have seen in the last week or so. and we talked about when dr. elmendorf was before this committee. it shows the widening wealth gap that is existent in our country today. and it covers basically the last 30 years. now, we have 3143 counties in the united states. of those 3143 counties, 474 of them, 15% of those counties has

more than 24% of fair citizens have been living beneath the poverty level for the last 30 years. and it is kind of interesting because i didn't think about this to the weekend because about several months ago, i joined with the congresswoman amherst and i'm trying to direct resources. back when we did the american recovery and reinvestment act, the stimulus bill, and the rule development section of the bill, we were successful in getting

that bill to focus on the discounted by direct expenditure of 10% of those funds into those counties that were third of a percent or more beneath the poverty level for the last 30 years. so when this report came out from the cbo a couple weeks ago, it focused my attention once again to those communities. now when i first came on this panel, i said that i wanted to focus on the human side of this deficit. so what i would like to ask today is whether or not it is feasible to do 1.5 trillion reduction in deficit by cuts

only. what will that do to that on him 20% for the 18% growth in their income over the last 30 years and those communities, where 20% or more of the population have been under the poverty level for the last 30 years. will it do to those communities and people if we were to reduce its deficit only by cuts that have been proposed? >> i would like to give all four of you. >> i am delighted to go first on not. as you know, mr. clyburn, if you coat used but i named the -- and if you're in north carolina we have more counties fall into that category than any other place in the union.

if that part of north carolina was the state by itself, and the b. the poorest state in the union. so as you know, at many universities that operated and served the people in those communities. i think if you think about what you've heard it done, you look at the continuing resolution, you took about $400 billion cut through the continuing resolution. and then if you think about -- i always think what you all are working on now with the budget control act in two parts. the first part was $900 billion in cuts. they had another $900 billion in cuts that authority than done. you have done $1.3 billion worth of cuts already before you guys start on what you're doing. i've always thought it has got to some combination of revenue and cuts in order to get to the

$4 trillion number that we focused on. i think it is important for all of you to think about the fact that these deficits are just eating the budget alive. and they don't leave any money left over to do the kind of economic development work in these four counties that you want to see dynasties deficits continue to grow and interest on the deficits continue to occur. what we tried to do was to make sure and the analysis and the planning we put forward, that we didn't make any type and the income support programs like ssi and food stamps and workers compensation. in addition, we try to make sure that on things like social security that we actually upped the minimum payment to 125% of poverty to help those people who really needed it. but if you play 1% bump up per year between 81 and 86 because that is whenever a democrat and republican economists came to

see us. so we tried to be sensitive to those people that were most disadvantaged while we did make the kind of cuts we had to make an order to put our fiscal house in order. >> we have enjoyed our time with you during our work and you've been very cordial and listen to wes and i appreciate that deeply. >> thank you. the irony to me is if we don't get there and the strike comes, do tipping point -- dick durbin always asked for is the tv and point? i know it will come swiftly by the ratings and the market. it will come by anything that any charges ever disclosed the floor. and at that point in time, interest rates will go up and inflation will go up in the very people who will be hurt the very worst in that procedure at the very people you speak of with such passion. this is a tremendous irony to me

by doing little or nothing and the tipping point comes. the little guy is going to get hammered worse than ever she has her she is now. that is the irony, the strange, hideous irony. >> when you say that if you were to do it, let's do a $1.5 trillion deficit and do it on the backs of those same people. then what happens to that chart in the next 30 years, where you have the 275% increase in income for those people who are in the upper 1% in a few in the upper quintile, you saw an increase around 66% similar printout on an 18%. so much as say let's do it. let's cut the deficit to 1.5 trillion. let's do it by cutting medicare, medicaid, cutting pell grants, education, health care and they

will have saved the markets. but what we done to the 474 committees. that's my question. >> i think that is not a question that we should answer because you shouldn't do that. and there are two points. i think we are all making the same two points. one is we need to cut the deficits, but not by hurting vulnerable people. you should avoid doing that. and secondly, the importance of avoiding a double dip recession and they lost decade of growth is extreme and will hurt those people most of you don't avoid it. >> well, you have heard almost anything humankind can entrance. but i would suggest to you that

the answers we are given are really relevant and important. one of the reasons that our group did not get as big of reductions in appropriated accounts has other plans was because we came upon the idea that we were going to have to come up with some revenue and we have to have it just a misunderstanding in understanding in this area or i would quite properly be a tactic. with equal vigor to destroy it as we were trying to create a country that was strong again. and so we did take care of the problem you talk about. but every time you are my own experience as they leave the scene. one time i asked a very wise man, what do we do to help poverty? person said i can tell you in one word and i thought he must have direct ties with the holy spirit. and he said to educate. what he says his people must get

educated. that won't solve the bread on the table. but in a plan you have in mind should obviously look at whether the four people are getting educated or not. and secondly, the country has to grow or there is nothing to split. there is something to give to our people. so whatever programs you are talking not have to go to none. that is why overtaxed cancer growth tax plans. theirs is, ours is. we call it that enough aspects and they say you're taxing will cause far better growth in the plane we are under now. that is why we cut corporate taxes and people shouldn't immediately say what you cut that for? the army kinnison adjudicatory people in wages because they are going elsewhere because our taxes are too high. so it is not what people say. the reality of competition. we can't force them to say in america if taxes are too high. so i. so i think education and a fair tax for corporations on this

litany may not be first, but somewhere. >> time of the gentleman has expired. a cochair when i recognize the gentleman from michigan, congressman camp. before i do, just as she thanked him for arranging the joint select committee to use the ways and means committee room in your chair is very comfortable. thank you. >> thank you. well, i also want to thank our witnesses for being here and all of your hard work and testimony today. i do have a question, mr. bowles, and the simpson/bowles plan, you recommended the united states move to a territorial tax system and i agree with that recommendation because i think the current descendents one that really means that our companies and workers are competitive. you share that view? is that what you recommend moving to that system? >> yes, i have read -- i guess it is this committee put out the

ways and means committee put out. i was very much in favor of what you put out. >> do you believe that in our proposal or drive discussion we have out there, there are ways to move to a territorial system that does not create incentives for companies and employers to move jobs to other parts of the world for their investment or their r&d, but also i think it is possible to craft a plan that could get the policy wrong. and the commissions meetings, you are focused on moving to a territorial plan that did not make our companies less competitive. and he think that can be done in the context of a revenue neutral territorial plan? >> yeah, i do. and i think if you encourage -- if you stay on a worldwide system and you almost force companies to meet those dollars

overseas, then naturally if they are going to have to pay a big tax on those dollars to bring them back, i think the likelihood is more probable that they will create a job somewhere else rather than here. and that's one of the principal reasons i support a territorial system in addition to the fact that enormous though it has gone to it with the exception of us. >> you also really recommended a complete overhaul of our tax code and i appreciate the model you set it up or you try to lower rates in exchange for doing away with various provisions for exceptions in the code and i think that it shifted the debate on the tax reform a theme. your reform proposal would raise revenue compared to the current policy baseline, but you didn't by raising taxes. a lot of people get those two things confused. why did you choose that route is raising taxes -- raising revenue

to reform rather than imposing new taxes? >> because i felt way based on experience in the business world of the economists i talk to that it would create dynamic growth in this country and opportunities for people and i felt it just made sense to get the spending out of the tax code and to use that money more efficiently and more effectively, by lowering rates and reducing the deficit. ..

>> we examined other people's research on this. i don't mean the record as having much evidence at all as a connection between the exact proportion of the federal government's revenue and the economic growth. the reason ours went up was as i stated earlier in the hearing, we didn't see how, in this very new situation, of a much older population and the tsunami of

the baby boom, we didn't see how we could fulfill our obligations to those people and perform the other services of government without having the government in that range. it's been there before. it's not a disaster. this is not taking on new government responsibilities. it's just saying we've got a lot more older people, and we've got to take care of them, and that's going to mean slightly higher government spending than we had in the days when the population was a lot younger. >> uh-huh. senator? >> yes? >> let me just say i, too, in my past life have used a percentage like that. i have learned that on many of them, there's no reality attached to the number. nobody can tell you that 20%,

19% is better than 19.5% or 20.6%. if you have the rest of the policies right, things will, in our kind of economy, we'll get growth. the problem we have in this country is been expressed over and over here today, and that is that population is growing older. the population has less workers per retiree, and so you have a -- when we looked at the 19 or 18.5 that was used as the historically significant number, we didn't have this demographic. we didn't have this kind of problem. we solved it by trying our best to use the tax code, to use the tax code to generate some extra revenue in the matter we've suggested here, and at the same time, we have taken on the responsibility of some of the programs that are going to sink

us if we sit by and say we have to have 18.5%, and that's all on the revenue side, and what are we going to do about the exploding costs of the programs? i think we have solved it in a pretty reasonable matter. if you want to say let that one go out there, we'll fix it someday, we can't fix medicare to match the 21 much less the 18.5 that was historically right. that's my answer. i think there's no, absolutely no positive evidence that any of these numbers are absolutely right. they are night, in the range, but if you do the other policies correct, we'll survive with 21% i'm sure. >> you also had two new tax structures in your proposal. one was what you described as the debt reduction sales tax and what others consider to be the value added tax, and the other was the tax on sugar drink

beverages. did you do an analysis of the costs of the two new tax structures? the implementation to those tax structures on our economy and what that might mean? >> you're right we did have the debt reduction sales tax. we didn't call it that, but you're right, it's analogous to that. i think the senator and i and the members of the group all believe that it would be sensible for the united states to move part of its tax burden off the income tax and on to a broad-based consumption tax, but this is not the moment to do that, and we realize that, and eventually, took it out, but we still believe in it, and revamped our income tax proposals to make them part of the lost revenue. the sugar drinks is not going to

change the economy whether it at the margin discourages people from drinking too much soda, i don't know, but we had some sentiment for doing it. >> on the last one, sir, we didn't look at the economic significance of it. you've been chairman of a committee, and i understand you are, now, of a significant committee -- sometimes you're outvoted and you to do things that are not necessarily the greatest. >> i got that part. >> you get that. [laughter] >> thank you very much. i yield back. >> the co-chair recognizes the gentleman from massachusetts, senator kerry. >> thank you very much, mr. co-chair. first of all, i thank you all for your extraordinary service, not just in this effort that's important, but over the years, and we are particularly appreciative to this contribution to the dialogue, and i hope we get contribution

than more than a dialogue voted of this committee. i want to spend a few moments on the context that brings us here. administrator bowles, you opened up with a comment that caught my attention, two comments. one, you said this is the most predictable economic crisis in history that we're looking at coming out of. even as you pegged the minimum figure of $4 trillion, which is what you think we ought to do, but then you said you're worried you're going to fail. i want you to speak to that for a moment. >> you all have done a great job of stopping the leaks coming out of your committee for an extended period of time, but over recent days, i've been able to put together some of the

proposals that you all are considering. i've listened to the back and forth that's been in the press. we are settling for $4.2 trillion of deficit reduction, more talks at 1.2, doing it across the board which is never the smart way to make any kind of coaling budgets in any way, shape, form, or fashion, and i've even heard talk that if you end up doing 600 out of defense and 600 out of non-defense, that the day after you have a sequester, that you'll have people in the house and senate be working to get around the sequester. i think that would be

disastrous. i think people would look at this country and say you guys can't govern. i think people would look at it and say, you know what? they're really not going to stand up to the long term fiscal problems, and this is not going to be a powerful country in the future, and they would think that we would be on our way to becoming a second rate powerment i think it would be -- pourment i think it would be disaster. >> to build on that a little bit, we know the figure to hit in order to stabilize the debt, which is the mission and ought to be the mission of the congress is $4 trillion. what is the impact in the marketplace, what would the impact be on a discounting of our debt, a write down, if we hit 1.# or 1.5. won't we be back here immediately with the same issues sitting on the table? >> you could lose a 1.2 to 1.5

by an increase in interest rates back to the normal rate very quickly. you wouldn't be accomplishing very much if you did that, and plus, you know, the effect it would have on how people would look at this country would really be devastating. i can tell you, when we went through this whole debt default fiasco before august, i can tell you globally, countries lost a lot of respect for america, and they lost confidence in us that we would really stand up and address our long term problems. >> now, pete, i'm sorry that al had to leave, but you and i had the great pleasure of working together on a number of issues, and i trust your judgment, and while we're not wearing partisan hats here, hopefully -- you are republican, and i'd like you to share with us your perception as

a long time legislator, when in your memory, has a committee in congress ever had the right to put together a proposal that would be voted on by expedited procedure in both houses of congress with 51 vote majority without amendment? you need a mic. >> excuse me. the answer is never. i will tell you when we passed in the senate, the bill that created the budget committee, was a budget act to impound to deauthorize the authority of the president to impound and at the same time to create a budget committee. senator robert byrd, the extraordinary in the senate, speaked weeks on end trying to

figure out a way that you could assure the passage of bills that pertained to the budget and not destroy the filibuster rule, and in the end, he quietly gave in, and the budget act, if you look at it, it's a big thick bill, but nonetheless, if you read it and do what i did, i decided that it meant that i could take a reconciliation bill to the floor of the senate, and it could not be filibustered, and i defeated robert byrd because his own writing said he had found a way without changing the rule to the senate to give filibuster and give authority to a committee. we gave the senate the authority to act without filibuster, but nothing as powerful as this committee. >> what would be the implication? i want to ask all three. dr. rivlin, you headed up the cbo, you eded up the o --

headed up the omb as well. what would be the implications, in your mind, of the united states of america not meeting what everybody understands as the financial challenge facing us, sort of stabilizing the debt and getting in a long term fiscal path? how would the world view this particularly given europe now and their efforts on greece, italy, spain, ect.? >> i think it could be devastating. i agree with erskine bowles, and would be stronger. i think we could face a long period of stagnant growth, another recession than the growth we're slowly climbing out of. it is hard to predict what the course might be, but certainly in the last few monthings, we have --

months, we have seen dramatically in europe that sovereign debt of quite solid seeming countries can go down very fast, and that could happen to us, and we could just lose the confidence of our trading partners and ourselves. i think the citizens are facing up to problems and solving them, but we're in deep trouble. >> importantly, it's been put on the table clearly here today, and i'm trying to reiterate this because i think it's important. it's possible to put revenue on the table to the tune of a trillion dollars plus or whatever with tax reform, is it not? you do not have to raise tax rates and you could do it with specific instructions to the tax committees to hold the rates down, lower the rates, had a

lower range, broaden the base; correct? >> right. >> does that section 404 give the authority you just eluded to, to direct to the committees that they perform the following and report it back, and that bill would carry that in the senate the same prerogatives that the original bill carried when it was created. >> you and i met, and we talked about your concept with respect to health reform, and i appreciate the contribution of it, and i've been trying to work through how we might be able to do some of those things. there's issues, i think, about how you guarantee the coordination of the lowest health care plan and still get coverage in certain areas, but i don't want to get stuck on that

for the moment, but deal with the bigger issues here. i assume all of you would agree that you can do structural reform in medicare in the entitlements that's not necessarily just the premium support approach, is that accurate? >> that is accurate. >> director rivlin? >> oh, certainly. there's several approaches. we like that one. >> for instance, the age thing that snort portman asked about, that's structural reform, isn't it? >> i actually wouldn't think of raising the age of structural reform. >> what would you think of? give us thoughts about structural reform that you think would conceivably alter it whether it's dual eligible, part a, part b. are there other components? how about this? that you begin to move the entire system off of fee-for-service where possible, where it works, leave it, but move into a value based payment system. >> yes, and that's roughly what

we're proposing. >> senator kerry, i have a lot of opinions about health care. i think the current system doesn't make sense to pay twice as much for any other country for health care, and have our results rank somewhere between 25th and 50th to have, you know, we got 50 million roughly people who don't have health insurance. i just ran the public health care system in north carolina, reports to the president of the university, and if you don't think those 50 million people get health care, you're crazy. they get it, just at the emergency rooms at five to seven the costs it is at the doctor's office, and that cost doesn't disappear, but gets cost shifted to those of us who have health care insurance, and in the form of highest taxes. you know, we have got to have real structural reform in health care. i believe all people ought to have health care, but i don't

think anybody should get on the government's checkbook or the taxpayer's -- they shouldn't get alla cart coverage because people have to have skin in the game, and if you have everybody have coverage, then you got to have everybody have a medical home, and if everybody has a medical home, you have to ensure education and institutions are producing more primary care doctors and more nurse practitioners and more physician's assistants and not so many specialists. if you want everybody to have prescription drug, then i don't know why in the world you wouldn't have medicare negotiate with the drug companies for prescription drugs if the taxpayers are going to pay for them, and i don't know why anybody who was getting drugs from the taxpayers ought not to have generic drugs. if you don't think that hospitals and doctors practice

defensive medicine, you're absolutely crazy. they do. we got to have some real tort reform. you're absolutely right. we got to go to paying for quality, not quantity, and at the end of the day, you know, nobody likes this, but without talking about death panels and that crazy stuff, you have to do something about the end of life scenario. they have to be done to address health care. >> i thank you, all. >> time of the gentleman has expired. the co-chair now recognizes the gentleman from pennsylvania. >> thank you very much, mr. co-chair, and i also want to add my voice in thanks to the folks who have come here today, for the work you've done. it's been enormously helpful. let me touch on issues and develop a few further if i could. one, obviously, we all know it's a given that federal revenue is ultimately a function of our economy, but i think it's worth noting, and i think you'll all

agree that the growth in federal revenue is related to the growth of the economy, but, in fact, federal revenue will grow faster as long as the economy is growing than the growth of the economy, and since dr. rivlin is the professional economist on the panel, i wondered if you can confirm it's a general rule if we have strong economic growth, we have even faster federal revenue growth? >> that used to be true, senator, before we indexed the tax system. it's much less true now. federal -- if you have strong growth, federal revenue goes a little faster than the economy, not much. we gave that away in the indexing. >> all right. we could have a discussion about how much that magnitude is, but even now there's some additional growth father than gdp growth. one of the things that came out with cbo about is is one tenth of 1% of additional gdp growth

on average over ten years, they estimate results in about $300 billion of additional revenue to the government. now, this is not perfectly linnier, and i understand that, but very roughly if that were to be roughly true, less than half a percent of economic growth results in coi understand dentally -- coincidentally about $1 at any time 2 # trillion, -- $1.2 trillion here, the goal we have. whatever we do, we have to attempt to create an environment to maximize growth. my view from the beginning has been that the must constructive thing we can do to maximize economic growth is major reform of the both the corporate and individual tax codes. don't think there's dispute about that, but i wanted to drill down a little. for instance, if we -- there's many approaches one can take, look at individual side for a

moment, and for sake of argument, if we were to reduce the value of all the deductions that are currently available to individuals, and we had an e qif lend re-- equivalent reductions in rate for sake of argument, everybody agrees that's pro-growth; is that right? consensus on that? my understanding from both mr. bowles and senator simpson was that when you folks looked at this exercise of reduce deductions and celts -- credits and write offs and lowering rates, it was a one to ten ratio. there was a dollar dedicated to deficit. i think you suggested it's 92-to-8, so 10-to-1 is the ratio? >> yeah. >> do you recommend that approach like that, on the individual side, do that kind of simplifying? have a ratio similar to that?

>> i think you'll run into some of the problems that senator baucus brought up. that's why we presented two options. if you go with the zero plan and get rid of all tax expenditures, then you do create enough resource that is you can use only 8% of the resources and still generate a trillion dollars worth of additional revenue that goes to reduce the deficit. however, if you're going to go back and not get rid of all tax expenditures, but you're going to keep some of them, like some of the democrats want to keep the earned income tax credit, want to keep the child tax credit, they may, some of you may want to keep, go to a credit for mortgage insurance -- to help people with their mortgage debt, some people might want to go to a credit for charitable contributions, so anything you keep gives you a smaller pile to work with, so if you still come up with a trillion dollars of deficit reduction, that 1-to-10

ratio won't work anymore. >> okay. does everybody on the panel agree that if the -- any package were to include net tax revenue, it ought to come in the context of reform that lowers marginal rates? >> yes. >> yes. >> yes. >> okay. let me move over to health care for just a second, and i'm glad, i think, again there was a consensus, i think it was unanimous that it's our health care costs that's driving the deficit and debt crisis that we have. it's been my view, and i wonder if anyone disputes this, that, in fact, it's -- our medicare plan essentially drives the entire health care sector, and while there is an obviously significant private sector component, to a large degree, it is a reaction to, and it acts in the context of what medicare does, and so medicare is the real driver of the entire health care picture. do you agree with that? >> yes.

>> yes. there are instances in which medicare has actually done significant reforms, and the private sector has followed. >> i agree with part of it. you said -- i'm not sure, if you said only, but medicare is one of the drivers of the deaf zit problem, not the only driver. >> i think it's the number one problem -- >> the health care is -- and i meant to say is the primary driver. >> yeah. >> senator kerry talked structural reform. in my view, meaningful structural reform means getting away from fee-for-service. to me, that's the heart of medicare, the heart of the design, and because we use this terminology and assume everyone knows it, i'll take a crack at describing what i think fee-for-service, and tell me if that's characterized right. there's a committee in washington specifying what price it pays for every perceivable

medical procedure, the circumstances in which they pay it, the people permitted to perform it, where they can perform it, in which venue, and it is a completely, you know, government-controlled mechanism which also, by the way, doesn't account for whether the outkm come is successful or not and whether the procedure needs to be repeated. is that a care characterization of fee-for-service? >> yeah, i think what i said earlier in answer to senator kerry is i think we have to move from paying for quantity to paying for quality. and i think you're saying something similar. >> well, i am. i think at the heart of this this unnecessarily creates inefficiently, perverse incentives, misallocations, and the solution has to be to get away from this. i guess my last question for everybody is are all of you confident that -- >> before you proceed -- >> senator? >> i wanted to make an observation.

we recognize that medicare has very significant problems of the type you're e leaded to, and that's why we're here suggesting it be changed. >> right. >> at the same time, we explained why we said as we move -- >> right. >> we don't move so quickly with getting rid of one and establishing the other that we lose both or lose all reform. >> one of the things that concerns me is that as long as we leave a significant fee-for-service component in place, i worry about whether the reforms are capable of defeating the mechanism and the misallocations and sort of perverse effects for fee-for-service. i ask this -- do you think it's possible to devise a plan that would transition completely away from fee-for-service, some premium support model, that is defined to ensure that the most vulnerable people have the coverage that they need? >> well, i'll say for the time

being and for the foreseeable future, it seems to me, you cannot do that, you have to go with some transition. you wouldn't get the other dean. that was a question whether you can get it done. i'm not an expert. i didn't sign on for this job to be an expert on medicare, that's why i don't answer some of your questions, but i'm saying practically i don't think it could be done now under this circumstance. >> i'm not suggesting that so much, but i appreciate the response. dr. rivlin? >> well, i agree with the senator, i think that the idea, we believe, that actually competition between on a well designed exchange between comprehensive health plans particularly capped plans, they would win out in a fair competition. there are parts of the country, especially rural parts of the

country, where it probably isn't feasible right now to do that, and that's why we think there ought to be a transition, and that it is much less scarry for seniors to say if you like what you've got, you can stay with it, and -- but, you're going to be offered something, which is likely better. >> yeah, and i would say if you look at the pilot projects in the affordable health care act, they have some good examples in there of experiments going on today to do just what you're talking about. >> okay. thank you, all, very much. >> the gentleman yields back. the co-chair now recognizes the gentleman from maryland, congressman january hollen. >> thank you, chairman, and i thank you all for your service to the country in many different capacities. mr. bowles, thank you for recognizing that actions of the congress is already taken to

date including passage of the budget control act is already achieved projected savings of close to a trillion dollars in discretionary funds, not far from the targets you all set in your work, with the only difference being you had a higher coming from defense cuts, is that not the case? >> we actually divided ours between security and non-security. >> right. you're at $1.2 trillion in discretionary, half is $600 billion. i think the figures will show that your proposals took more than what's been taken to date from the defense side of the equation, but i want to, i think many of us view your approaches here as balanced approaches, balanced frame works, so i want to put the discretionary piece to the side for a minute because we've come close to achieving, in some cases, overachieving targets. in simpson-bowles, as mentioned,

you had about $500 billion gross cuts in medicare and medicaid, actually took savings out of that. net was around $400 billion, but on the revenue, i just want people to understand because what you have in both your plans of genuine, what us budget geeks call scoreble revenue, and as you mentioned, mr. bowles, your baseline assumed as part of your deficit projections that we would have about about $800 billion, which is equivalent to about the amount of money generated from allowing the rates for the folks at the top to lapse; correct? >> that's absolutely correct. >> that's right. on top of that you had proposals through tax reform and other things talked about to generate another $1.2 trillion; is that right? >> right. that's exactly right. >> okay. and so, again, on the budget

committee comparing that to the what we call the current policy's baseline, compared to cbo, that's about $2.1, $2.2 trillion tax cut compared to -- compute me, revenue increase compared to current law tax breaks, and looking at your testimonies, you come in about the same place, $2.2 trillion on a current law baseline; correct? all right. let me just ask a question with respect to tax reform. from looking at your reports, you want tax reform to be done in a way that maintains at least the current progressivity of the tax code; is that correct. >> yes. >> we work hard to do that in ours. >> thank you. >> ours is more progressive than the current. >> at least the current progressivity tack cut. now, you've both in your written testimonies suggested we want to do two-step processes, and down payment and then something else. dr. rivlin, senator, you

specifically say as part of the down payment, you'd include about $450 billion of what you call tax expenditure savings. i assume, therefore, that you see that as something you could do for deficit reduction purposes, not necessarily at the same time as tax reform, and i think if i look at the ones you've picked out, you think they can be what we call rightful shots; is that right? >> right, but it should be consistent -- our notion is you have a tax reform idea -- >> yes. >> you move some of it forward. >> that's right, but, and, again on net the ideas generate $2 #.2 on a current policy baseline? >> correct. >> okay. let me talk a minute about jobs in the economy because the congressional budget office has said about a little over one-third of the current deficit today is as a result of the fact we have a very weak economy, not operating at full potential, so i think all of us agree that we

need to get the economy moving again. dr. rivlin, you pointed out that your plan with senator, had about $680 billion in payroll tax relief, and i think you said the other day on a show you would "go bigger than the president's job plan." do you believe something like that is necessary at this time? >> yes. i think we're in danger of slipping into stagnation, and we should do something about it. >> mr. bowles, would you agree it would be a bad idea, this coming year, to have every working american see an increase in their payroll tax relative to last year? >> yeah, on the payroll tax, it was in the president's proposal, i think it was about $240 billion out of a $447 billion,

and it's hard for me as a fiscal conservative to say this, but i could support a continuation of the payroll tax deduction for, you know, for another year for employees. it's very hard for me to understand how an approximately $600 deduction for the employer on a temporary basis is going to be enough to get them to hire a full-time permanent $35,000 a year employee. >> okay. >> i don't think i would support the payroll tax reduction for the employer. i could see supporting it for the employee if we can pay for it. >> okay. thank you. just in the time -- >> on our end, i'm for what i told you we're for, but i wouldn't argue if you followed his suggestion as i see it's still alive and what he's talking about.

it is certainly better than nothing. >> got it. thank you. on health care, and dr. rivlin, you've testified many times in front of the budget committee, and stated that you thought that the affordable care act introduced a number of very important innovations. i agree with you that we need to do more in terms of modernizing the medicare system to focus more on the value of care and the quantity of care versus the quantity of care. i have a question with respect to your version of the premium support plan, the most recent one, and that is if you are confident in the market forces driving down the prices, and if your argument is that medicare is driving those market forces, then why would you need a fail safe mechanism? in other words, why would you need to say if you don't achieve the goal we want in savings, you have to have gdp plus one, and

if it's not keeping track with the market, isn't that just a cost transfer to medicare beneficiaries? >> well, i think -- i'm not absolutely certain that how the markets will work. we have seen even in the limited market that is medicare advantage, that in some places they work well, and they come in under the fee-for-service, and in other places, they don't. we think this is a much more robust plan than medicare advantage, but the reason you want the fail safe is so the congress will absolutely know what they're going to spend going forward on medicare. it's not going to be -- it's not going to grow faster than this. it's a defined contribution, and we think that's -- that's very useful, and as for the cost

shifting, if there were -- there might be some cost shifting, but then you could arrange it so it is not cost shifting under lower income people. it is means tested as we said before. it's cost shifting on to people who can better afford it. >> right. well, i think that, again, i mean, if we're confident that the market forces were going to work the way intended, then i don't think there's a need for a back up. i do know that members of congress and folks on the federal employees health benefit plan, for example, they bid, different plans bid, and there's a defined support mechanism that's set in law, 72%, 28%. i'm not sure we are for proposing something different for medicare beneficiaries. we asked them to look at the ideas including one where we just had competition among the

managed care plans, and another one where we through in the preach your support. it was not the second lowest bidder, but along the lines of what the other plan did, just marketplaces, and just having competition among the managed care plans they said had a score of $9 billion between 2014-2021, adding in the other mechanism achieved about, took you up to a total of about $that 25* billion, so -- $25 billion so it's clear by looking at the numbers, we have to do other things. 24 is not a -- this is not a panacea, according to cbo's numbers for dealing with the medicare challenge, that we have to look at other innovative ideas out there including some of the things that have been talked about today. thank you, mr. chairman. >> thank you, and the gentleman yields back. all time for member questions

concluded, however, i note prior to senator simpson's departure, he mentioned, mr. bowles, you had something you wanted to present? without objection, i'd certainly yield you a couple minutes if you have something to present the committee? >> yeah, i can do it very quickly. i tried to think if i were sitting in your shoes or i was the go between as i was in what became the simpson-bowles plan, if it was possible for you all to get to the 3.9 trillion deficit reduction given where why positions are today, and i think it is. i think you can get this done. i'll just go through briefly the math, and, again, you have to flush out the policies, but if you look at where i understand the two sides now stands, and this is just from listening which is what you do if you're

the guy in the middle. you know, the proposals for discretionary spending, and these are all above what the $900 billion and the $400 in the continuing resolution, this is in addition to the 1.3 trillion worth of spending cuts that's already been done, but you all are between 250 and $400 billion of additional cuts on discretionary, so i assumed that we could reach a compromise of an additional $# 00 billion -- $300 on discretionary spending cuts. on health care, you're somewhere between $500 billion and $750 billion of additional health care cuts. i assumed that we could get to $600 billion, and i got there by increases in the eligibility age for medicare that i discussed with senator kerry when he was talking to me.

that's about $100 billion taking you from the $500 where the democrats are to $600 billion, and it happens to come not on the provider side, which i think would kind of balance that out. on other mandatory cuts, you're somewhere between $250 billion and $400 billion, so i settled on $300 billion there, and we have enough cuts 234 our plan to settle on that. interest just falls out at approximately $400 billion, and you agreed on cpi of $200 billion, and the total is $1.8 billion leaving me a little short. that gets me to revenue, and on revenue, i took the number that the speaker of the house had read actually agreed to, and i was able to generate $800 billion through revenue from the speaker's recommendation, and if you did that without dynamic

storing, but you did it and, you know, on that, i'm kind of on the reagan plan of trust and verify that we talked about earlier. if it comes, great, use it to reduce rates or reduce the deficit, but if you add the $800 billion there and you do that slightly on a more -- make it so the code is slightly more progressive after you've done it than before, then i think you've really got something you might be able to work with the democrats on. that would give you an additional total of $2.6 trillion added to the $1.3 you've already done, and that's 3.9 trillion in deficit reduction, and i think that would create a lot of excitement with people in the country, and i think it would go a long ways in building up confidence that we really could stand up to our problems. >> thank you, mr. bowles, i

think you created excitement with the press, and i would say don't necessarily believe what you read and hear about the proceedings of the committee, and i want to thank every member on the committee, not just for your presence here today away from your businesses and your families, but frankly, more important, the entirety of what you have lent to the body of work to try to really address a very real crisis that we face. i do thank you for that. your testimony was certainly sobering and helpful, and not the least of which was timely. i do want to remind all members that they have three business days to submit questions for the record, and i would ask our witnesses to respond promptly to the questions. members should submit their questions by the close of business on thursday, november 3rd, with no other business before the committee, without

objection, the joint committee stands adjourned. [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations]

>> midnight tonight was the deadline for the committee to release a plan of at least $1.2 trillion from the budget deficit, but earlier today, the co-chairman of the committee announced there's no deal reached before tonight's deadline. because that's the case, the bill calls for automatic cuts split 50/50 in defense and nondefense spending to go into effect 2013. they say it's not possible to make the agreement available to the public though they believed that the country's fiscal crisis must be addressed. president obama spoke at about 5:45 eastern time, about half an hour ago saying he would veto any attempt to undo the automatic spending cuts that are supposed to go into effect. although no deal was reached, you can still visit our website at c-span.org/deficit to watch previous meetings, briefings, and events related to the

deficit reduction committee online any time. we'll hear more about the subject at 8 eastern on c-span as the brookings institution holds a hearing on what the consequences could be since they didn't reach a deal. you'll hear from co-chair alice rivlin and michael o'hanlan. >> our purpose and mission is to describe journalistically the events of the day. there's nothing that says we have to present the american foreign policy, but, i mean, that's a huge reason why we exist because people want to know what is the american position. they want it explained, and they want to know how it came about.

they want to know, is it unified? they want to know all those answers. they are not getting that from the local media. >> the communicators tonight at 8 eastern on c-span2. [inaudible conversations] >> it's been very good as you know going around the country. it's joe and gary and the chief editorial writer, and gary's taken on 6,000 new assignments in the last few weeks, and he'll be in the state house bureau for us when he's not here. we said, gary, come down here to do this one.

we got some good in-depth interviews with the candidates in the last few weeks, and right off the bat, i want to ask you about what is in the news overseas, which is the report that perhaps a dozen cia informants have been captured and maybe killed in both iran and lebanon. which leads me to ask you what's your reaction to that, and if you were president of the united states, what more would you need before you sanctioned or participated in or helped somebody take out the iran nuclear plants? >> well, i think that our goal should be to replace the regime. i think if you take out the plants, the dictatorship stays there, the plants come back. i would adopt the reagan, pope

john paul ii strategy by maximizing every pressure on the regime, ask congress to repeal most of the restrictions on the cia so we can go back to the real spying. i would have a fund set up to support anybody who was -- thank you -- but i would support any group in the country, as much as we did in poland, elsewhere, and in the cold war. i would be prepared at a point where if we get to a point where the military believes that they are truly on the verge, and i'd be prepared to use military force, but i'd try before that to do everything i could to disrupt and wake the regime, including, you know, maximizing covert operations inside the country, and i would also be

prepared to cut off their gasoline supply. they are unique about lots of crude oil. they only have one major refinery that makes 60% of their gas gasoline, and i would look at finding ways to impede their refineries, to basically wage economic warfare against them until the regime broke. >> you don't think we're doing that now? >> no, not very effectively. >> what about the internet warfare? >> my guess either we did or the israelis did, and that's good. i mean, i think the next thing you want to see is an israeli effort to break up the whole thing, not just the nuclear part, but for example, go into the bank system, a variety of other places, and break them up electronically to cause division, and we could wage real cyberwarfare against iran and be remarkably effective at closing it down. >> you would argue -- >> i would do everything we

could short of war to replace the regime, and if that failed, i'd sadly agree to military action to stop them from getting nuclear weapons. >> you also said, and you said it to me before, that you think we need to reassess our entire foreign policy military situation as it applies to afghanistan, and elsewhere, which sounds a little like hillary with a reset button. what exactly do you mean by reassess? specifically with regard to afghanistan? >> the strategy for afghanistan does include a strategy for pakistan, and we look at pakistan and realize they were sustaining for the last decade, at least six or seven years, he was in one of the major military cities. you have to assume large elements of pakistan are active, and i think you got to back up and say this is part of why i'm for an american energy strategy. you have to be able to take

risks in the region that the world's oil supply doesn't currently allow you to take because the disallocation would be so extraordinary. look at the iranians, the saw -- saudis. we tolerate it because we're afraid to make them mad at us because of energy. >> how do you go after that? first build up -- >> [inaudible] i would say we're going to keep them not gist to be independent, but have a surplus of energy to sell into the world market so you're not frightened so there's two problems. you got, you know, the iranians on one side, the saudis on the other. >> don't like each other? >> that makes it to our advantage, but the threat of the saudis is the spike in price and crippling the world economy, and

the iranians close the straits and block the persian gulf. that's why the people surround us. when you face the people who are clearly actively hostile to your civilization, you have to think seriously about how much pressure you're prepared to bear, and the saudi regime is not a strong regime. i will be clear to the saudis that they have to get control over the money spent on this. they have to change the nature of what they are doing. they are exporting which is thee most extreme form all across the world, and we, in effect, are paying for saudi wealth to be used to undermind our own civilization. >> they export it elsewhere hoping to keep the lid on it at home; right? >> right. >> and if you disrupt the saudi kingdom as it now stands, aren't you going to have a huge arab

revolt? >> you see the tunisians now talking about becoming more islamist. you see the libyans now probably being led by people from ben gay cy who are -- ben ghazi, and even a place where we supposedly won, it should disturb every american in iraq after the american victory, quote, unquote, why do 700,000 christians leave a country we win? i think that's why we have to reassess the whole thing. i don't see any great result out of the last decade to lead us to believe we're winning. >> drew, any thoughts on that? do you want to jump into domestic? >> domestic's good. >> domestic's good? okay. in with domestic, harry. >> well, this morning, we're

hearing there's not any agreement at all, the supercommittee. number one, did you think that was a good idea in the first place, and number two, what can be done at this point? >> well, first of all, i said early on, it was the dumbest idea i'd heard of. i mean, to take 535 people who are supposed to represent us declined to 12 so over 90% have no representation, and have them hand picked by political leaders and think they are going to accomplish something? i'm this was an act of desperation by people who couldn't fix anything. i said it up front. i mean, if i were in boehner's shoes, i don't know if i would do any better than boehner because the difference is obama. bill clinton was from arkansas, tried to build a moderate wiping in the democratic party and leadership counsel, spent 12 years negotiating with the

conservative legislature, and we could talk, and we understood you got to get something done meaning i got to schedule it, and he's got to sign it. if i won't scheduling it, he's not signing it, and if he's not signing, we're not getting it. there's not a lot done in the three year period. i don't see any of that happening here. part of it is frankly, being clever. i tried for two or three months now to convince the house republicans to pass the web warner bill to allow for development of oil and gas off virginia. these are two democratic senators, it fits the bill that republicans say they believe in. it provides for 50% of the feds, 37% to the common wealth of virginia, 12.5% to land conservation infrastructure. if they passed with no amendment, send it to the senate, and reid has to decide whether to bottle up two former

democrats, and one running for the senate is for the bill. or do we pass it? if they pass it, goes to the white house, and in this economy, does the president veto a bill that creates american jobs and american energy and revenue for the federal government? that would be an act of suicide. he might, but it would be pretty amazing. >> what's wrong with the sequester that now looms as a result of the super committee? >> well, the idea of cutting $500 billion out of defense is a political exercise. strikes me as crazy. i mean, you ought to design the national security policy around simple things -- what threatens you, what are the goals, and what do you do to achieve the goals, okay? i'm for reforming the pentagon. i mean, i'd apply that, find the military caucus in 1981. i think there is waste in the

pentagon, but you don't start with a politically defined, this is what the british did in the 1920s, and it came back to haunt them because, you know, you start politically defining it, and you say to the military, well, tough break, you know, start taking risks. fine, what risks do the president and the congress want us to take? >> phil gramm wrote last week about sequestering, that most of this from the domestic side, all of it is just cutting back on the increases that we've had in the past few years, and that before 2013 rolls around, a republican congress would repeal the defense cutting, is that not something to campaign on? >> well, i would campaign on the approval of the defense cutting, but i also say what strikes me is there's three paths. there is the fantasy path that obama's on that leads to greece, and he's been wandering around the country like a 16-year-old

with his first credit card. i'm sure he'll bring money in some form, okay. he says to students, you don't have to pay back the loans, here's an extra billion, and it's all fantasy. the second pats that washington -- path that washington loaves is painting prosperity. i think there's the third path which is innovation and growth. it's the path that reagan was on, the path we did in the 1990s. strong america now believes if you apply modern management to the federal government, you'd save $500 billion a year. ..

between 70 to $120 billion a year and the americans master cards ibm all of whom believe they would save 95% of that money. that's as much as the super committee is trying to find. case by case the social security plan announced is designed to change trillions of dollars of spending and martin feldstein has argued that, you know, if you had a capital base galt custom system growth is very substantially increased growth. >> what our global what points

reviewed today? >> anybody who wants to could choose a personal system in the savings account. you would build it up over your working lifetime for 14 or 16 and basically the easiest model is you are allowed to put your half of the social security tax and to your own savings account the over half goes to sustain the current system. you look at that and it turns out half the amount of the social security built up over your lifetime comes to to three times. the record of broken galveston and chile. there's no question historic we that over time you do that. we would also keep the guarantee because we would never fall below the social security minimum level. so if you had terrible

investment you would still get the tax paid karen t. in 40 years they never paid a penny. >> the part time hours would start with cleaning the schools. >> explain this. >> i actually do believe those places we are endowed by our creator in the pursuit of happiness in the generation bringing it to the very poor so you are in a very poor neighborhood and you have no money and no work habit. so, you're trapped.

the first simple thing you can do is redesign the school system so kids can in fact take care of the school. part of the place the got this from as college of the ozarks which is a terrific work study program and college of the ozarks says you cannot apply unless you need financial aid. they are the fifth most selected right after colombia. the total number they get the account for a very small number. they have no student aid. you work 15 hours a week to 40-hour weeks during the school year and that pays tuition and books. 40 hours a week in the summer but that pays room and board. 92% of the courage of its own. there's an alternative. 8% on average $05,000 because they bought a car the same year and i went around the campus in

the brand new library they have a general contractor. all of his workers were students everywhere you went in the school you had people working most of the clerical work was the students. you now public universities which cost more than private universities and you wonder why the price goes up. what if 80% more students per student loans and student work? my life as a part of her financial package in college topped out she had 20 students a week she taught and went to part of her tuition. we have to rethink the roundup. the poorest neighborhoods in america and that means the most important because we think the work ethic.

when i talk to the first generation successful people all of them started working they got to have their work, have their money come have savings. a much longer time horizon to be successful because they started much earlier. we see people in poor neighborhoods don't work, drop out of school, have no habit of showing up or staying all day. it's not really your money. it's tragic what we've done to the poorest people. >> you mentioned the center on health studies there was a report out on a lot of money that the senator has made over the years or a lot of it dealing with is not the government then big business and pharmaceuticals which are dealing with the government and last week i think on one of the six brazillian the dates you were asked about your

fee for helping if kody and your initial response was i may historian and it was 300,000 bucks and then eight got up to one point -- >> how much was it in total? >> i think it was 1.6 million. it wasn't paid to me personally the adoptions in three cities and did a lot of different things. i think we had over the course of the years involved to think they had 300 pounds of the various places. >> what i am getting it isn't going to be viewed especially if he were to get the nomination as same old same old washington insider gets the money based on his name. you went before the house republican group to argue in favor of, which amazed me, the

medicare part b which was the death knell for a lot of republicans winning again. and you said that was because you wanted to bring them up into the modern age, but there were no cutbacks with that bill, right? there was more spending. >> created medicare advantage. >> get paid for rich people to have their drugs paid for. >> at a time when didn't have the money. >> first of all i think to have a medicare program that says we will give you open heart surgery but not lipitor is very destructive. >> understood. i think you have to modernize the system. i offered you but not paying the crux, okay? i'm a cheerful of the dating and

the only one has done that for four straight years so i would be happy to walk you through how to balance the budget, but in the case of health care to take the example, i've been a very clear in my positions. i wrote a book called saving lives and saving money as a moral issue. first you save the life than you save the money. if you can take 40% of the cost of health care. we did a study with the gallup poll and jackson health two years ago and they went out and asked doctors if we came back with this $800 billion a year defensive medicine see you want to talk about saving money in the health care you talk about payment reforms you talk about tom pryce bill to successful people to contract out i would take part of paul ryan's bill and i would do it next year. i would say we are going to have a premium support model has an option you want it you can take

it and if you combine that with tom pryce, some people can come along with really good insurance packages and they are going to opt out so you can create a medicare plan that has a variety of traces which begins to be i think expensive. >> when you get to the site of paul rollin and's plan that it was too radical. >> i was asked should we impose on the country something the country thinks this deeply unpopular. and didn't reference ryan. >> we are talking about the rye in plan? >> the question i asked i said there's a lot of pieces i don't like. the fundamental principle which is when you do something which large, what we are doomed to do with social security, you have to have a conversation with the

country where the country decides that in fact they will accept the change. i am against imposing radical change in the country and i think they've fired you when you do that and they should. europeans don't want to have any popular vote on any of these reforms because the eletes in node they will be repudiated. paul, i like going into a country can be repeated so when we did welfare reform, 92% of the country favored it and we carried have the democrats. one of the reasons obamacare is repealed laws because they get no republican support that matter, they were not capable of getting get back to the senate and they ran it through any way. >> does it make any difference whether the supreme court opposed or rejects obamacare? >> my contract for repealing obamacare line for repealing obamacare no matter what the supreme court does. >> pretty analytical prolifically does it help or

hurt the republican nominee, say you -- >> helps repealed, repudiated. it's one more blow at how unconstitutional obama is. >> on the obamacare mandate, the heritage foundation he said responsibility as mitt romney and you reform that. you see since then you come to different conclusions. i'm curious between then and now at what point do you realize an individual mandate at that level wasn't constitutional? >> i never focused on the federal level. i talked about it at the center of the state level and what we are trying to solve, and i finally come would you couldn't do it, it is too hard because what it does is it politicizes what do you mean by health care. once you run into mandates you start getting is this an or is

that in and what is required you rapidly politicize the system from being the doctor patient relationship. what we are trying to get there is the challenge of the fact that in the very significant number of people who are over $75,000 a year in coming and they are basically taking the position that they are prepared to be a free rider on their neighbors if something happens to them and we have had a psychology of health care frequently people won't pay their hospital bills. so, as we work with hospitals and the challenge of collecting, people who show up through any other business because they bought a car or bought a house they went on vacation they would just expect to pay it and if for some reason you create this mind set in health care it's a very real problem for hospitals and that is what we are trying to get at is how do you encourage responsibility for people who otherwise -- john goodman has

had a model of that under the inpatient power you get a tax credit if you don't want to take it you don't have to buy insurance you share the tax credit then sent to the high-risk pool. and if something does happen you are taking care of by the high-risk pool and that means you have to have a double room you don't get a single room and it means a variety of steps. it's a half step towards saying if you don't take care of yourself we will get you basic services but you don't have the right to demand what everybody else has erred because they have been responsible and they have done the right thing. >> a mandate that the federal level in your view is unconstitutional. why? >> this is something again where the heritage found themselves as you work through it at the time it was designed the more you thought about it the more you realized the congress which can compel you to do something like

that can compel you to do anything. what is the limit to the congress power to dictate your life and there will be a hard argument about the supreme court. >> the known mandate [inaudible] the problem you were raising before is the social security also the program and health care, obamacare and medicare and medicaid [inaudible] >> there are two pieces. part of - education as we went through this. in 85 the federal means tested programs the amount spent on

them is enough if we spent directly on the poor there would be no poor left. what he's calling them now the empire in the welfare state which is all the bureaucrats are living, managing all the regulations and all the structures for 185 federal programs. so when you start block granting that the savings are extraordinary. second, there is no evidence washington knows how to solve any of these problems. when we do health care reform we are driving and the only speaker who's actually brought in state governors and state technical people and put them in the draft room so the federal drafters actually involves the people who actually implement the bill. the whole federal attitude of why are these guys here. >> you mentioned before clinton

dealt with the legislature. you were also a historian whether you like it or not and history tells me the people who get to be president are destined for most governors senator very rarely if ever a member of the house of representatives, so what is it in your background that is going to convince the american people that on like all of these governors who got caught there with real experience dealing with these problems that you can do it? >> you can probably argue james capel is the only speaker of the house to get there. and he had actually been the governor of tennessee. i think if you look at the scale of what we did in the 90's, you look at the size of the contract

with america campaign in the 360 districts you look at actually getting the balanced budgets and will form enacted. i have a fair amount of management experience when i step down i had to enforce my companies and some business experience much smaller nonetheless the business experience and frankly people who felt i was did in june and july would have to confess we are voting in the previous campaign and we now have the five offices in new hampshire and five to seven in south carolina and so in terms of management skills i have a reasonable track record of having done that. i also think that if you want to change washington what you need is a leader who can attract managers. it's different from being a manager. the job of a president is to the

head of the american government in that order. and the biggest job actually is to communicate with and educate and set standards for the american people. >> whether that means herman can deal with the complexity of congress and federal budget i was very fortunate to step down first because clinton appointed me to the commission she and i had created together so i spent three years of the national security act of 2005 and then when bush became a in with friends like tommy thompson and human services, rumsfeld, georgia the cia got me deeply involved in the executive branch so i actually spent six years on a pro bono basis inside the executive branch and the strategy and rethinking the system so i have had more insight experience trying to

understand how problems are solved and what works and what doesn't work and any one of the legislative branch of the same time 20 years in the legislative branch saw a pretty good understanding of that branch and the question we have to ask is look at the available candidates. who has anything like this in the national experience and second, the background of the national security to work with 79 and work for the defense department in general since the early 80's and the foreign policies. >> when the third countries looking you mentioned insider, the inside experience the involvement of these government agencies and people are fed up with anything from washington and looking for something else. >> the reason is they are mature

enough to say okay i want somebody whose values are a outside washington who actually knows about washington to be effective and the just tried three years of amateurs and i think you can make a pretty good case that hiring somebody that doesn't know what he's doing this hasn't been a big win. >> the editorial for welcoming the president. >> so to make a good case on the one hand i had the experience, on the other hand quickly my values, my positions, if you look at the contract with america.org it is clearly an outsider document it is an outsider attitude >> it's rather unusual it seems and that you have become your own worst critic on your web site by bringing out charges of

both personal and professional attempting to answer them. were they going to come out anyways? >> we are having a national conversation which i think is the biggest waste since 1860. i think this is an extraordinary moment in american history. and you either believe in the american people which i did, or you don't. you believe in the american people then you have to say anybody can ask anything they want because i am asking them to lend me the power to be president of the united states and therefore they have every right to say tell me about this, tell me about that. rather than half msnbc distort something with no answer i would say if you have any questions, right here on move toward and here are the answers and make of lowercase this, you know because you guys reported a job in number of them are just plain

false. here are the facts. i have tremendous faith from the american people sorting through this coming up with a reasonable conclusion. >> the facts are too short changed positions. drew mentioned the health care option making people buy the insurance even though we was at the state level and you were famously on the couch with somebody talking about climate change and there have been others over a long career. the big charge against mitt romney is he is a flip-flopper. if he is, isn't new gingrich a flip-flopper? >> i don't think so. my career rating is 90%.

>> i think that is relatively high. my record of balancing the budget is the only person to have done it in your lifetime, my position on the national security back in 1979 my record of wanting to cut taxes and working goes back to the mid 70's. now i would say two things. one is sometimes things change. i voted for the department of education in 1979. i wouldn't vote for it today. gist i've looked at how it's evolved. life looked at the national education establishment, and my conclusion is you need a very, very dramatic changes. plus the 32 years ago. on other things i've been relatively stable and a couple things i just made a mistake. it is truly the dumbest thing i've done in the four or five

years because she is so radioactive just literally you can't explain that. second, i'm probably not going to meet your standards but i don't know about the climate change. there are a lot of grit to double standards, there are a number of standards to say that it's not real speech tuesday night to the truth is the climate change the fact is 1978 indicating become an ice age i was recently at the field museum in chicago looking at dinosaurs in the antarctic. if there are dinosaurs in the antarctic there is no -- >> they wouldn't call you a dinosaur though. >> the campaign of newt and

proud to be here. >> [inaudible] >> how was your help? >> i work seven days a week working for president i probably put in 100 hours -- >> how was your blood pressure, how is everything? okay this is the strangest thing you not only decided to be a catholic but a golfer, but are you, nuts? >> i've tertian to catholicism with my golfing. no, my wife's golf since she was lying and the only person i gulf with and if there was a way to go out and be away from telephones it is a nice walk in the woods and i may truly bad golfer. i have no investment in my golf

psychologically committed >> good otherwise it will eat you up. who is the president who golfed the most? >> by reputation, eisenhower. >> willson. he did the game and his dr. mix prescribed it after his first initial mild stroke and he played every morning, naim holes, he did it. >> eisenhower was one of the better ones but the best one was kennedy. i never thought of kennedy as a golfer. >> nobody confused my game for serious golf. >> the mengin your answers on

the website one of the points you bring out in the ethanol mandate it's for all of the above energy policy that's part of it and you would rather have energy from on the above than from the persian gulf, but then why does it follow that the federal government has to subsidize it? can the government just get out of the way -- >> the government retains saying most people in the business now don't think the tax subsidy is going to survive. there are two questions. everybody get a big oil will give you this. if obama comes and says let's get rid of the ten to 14 billion in the oil exemptions would you let anybody jump up in the

business? annuity that has tried to kill ethanol on behalf of the world probably jumped up and said -- and half right by the way and i am against in fact apply overwhelmingly to the small independents who knew all the exploration in the field. on the one hand they understand exactly why they want the subsidy for oil so this isn't a purity this is a practicality. you have two sources of energy fighting each other to keep the small independents to find oil and gas in fact i want to open federal land to be able to find oil and gas. north dakota all of the development on private land and the reason north dakota has 92 per cent unemployment is the bolten field formation has tried 25 times bigger, 2500 per cent figure in the u.s. geological survey thought it was.

>> [inaudible] >> i voted for ethanol and gas in 1984 when ronald reagan signed it and in 86 when he signed it and in 1998 and helped it survive. my record on this the position let me be very clear about this i had a very successful speech business. i had a very successful general business. there isn't a single position taken that involves bnp i'm happy if people who like my positions and no cases on know of where i say please, don't pay me, but in fact these are all positions i have had over a long public career.

so in that sense they said we are concerned would you give us advice and i said sure. >> what exactly where your company speed for to do by freddie mac? >> largely strategic advice and i think in one article 1 of them says that. the lobby for the strategic advice. i read a book called the art of transformation which is a pretty good introduction to how you get very large scale change, and our specialty was talking to people, listening to people tell what their problems were and then trying to help them think through how they could solve what they are up against. in the case of housing tenth and starting in the mid 80's on how do you help your people get into housing and there is a conservative way to do with which is to teach them budgeting

and how to take care of their house, there is a kind which allows relatively poor people to own homes and be successful at it. you don't just hand them money to buy a house that they don't understand, etc. triet support if it is how would you think seriously about meeting these goals, how would you try to do it? >> one of the directors quote to the story recently saying we were hoping he would write something in support of the model and get conservatives and republicans on board but i don't think that ever happened. was that communicated to you? >> again, the government sponsored enterprise goes all the way back to the founding of america. they have not necessarily -- they can be useful. noeth rational person is going to advocate creating a bubble. that is to teach economic history i know the book miniet

crashes pretty well and the fact something is good if you do that after this point but in sing and if you commit to this point doesn't mean suggesting you do that to this point puts you over here. dividing we ought to try to find ways to halt the relatively poor people in the united states? of course. does that mean we ought to create a bubble and have people trapped in poverty? no. so i think that there is a big difference. >> were you in a position to see the bubble coming? did you write about it? >> i think if you go back and look at my speeches it wasn't obvious at the starting and initially it wasn't fannie mae and freddie mac. it was things like countrywide but the minute he started getting people with no credit, no money down, these things are in same. i would say that consistently

because again, people would come to say -- first of all i had no access to the internal information. i wasn't on the board of directors, i wasn't brought in with the general votes. anybody who had said to me do you think we should be giving the following five things i would say no. these are all the things in fact dodd and frank wanted done and the other difference which doesn't seem as i wasn't in congress. i was a private citizen. private citizens are allowed to be in business, a totally different operation. i checked with for a sample rosio and the reform bill passed against the opposition levels and said they always supported these reform efforts and never mentioned fanny or freddie to him and so in my public role i

think i was very clear about where i was going and what i was doing and it's very important to understand that. as a private adviser, had they come to me and, again, every time somebody says to me here's what's happening which will be occurring pretty late i would have said this is unsustainable because if you state economic history is just clearly not possible to do this. so, to examples a good friend of mine who's a very successful investor in the early 1989 we worked on all and the ground of the japanese had approximately the same value as the state of florida and said in a passing that is a bubble. he sold everything that he had

in japan just before the u.k. crash and its a random conversation. it doesn't take much to figure out they are not going to be sustainable. >> they are going to be getting out of whack on the education part which you mentioned. you have sort of a long list of education ideas, reform ideas, one of the pell grants for the k-12 and the charter ideas and then on your web site at the end you say that you are going to shrink the education department to as small as you can get to read the pell grant for k-12 doesn't that further the federal government? all of those are -- >> i want to draw a distinction on the president's role as the leader of the american people and say here are 12 things i hope the state government does and the leader of the president's manager of the federal government and different

rules ronald reagan understood this thoroughly as the leader of the country i can advocate a series of things for it satellite think every state should adopt a law that says states will encounter the declaration of independence every year that they are in school. i don't think the federal government should but i would actively advocate that in every single state because the declaration of independence is central to who we are as a people. speaking would be data collecting analysis and -- spec all of the federal dollars, you've got lunch programs and subsidies. >> school lunches and used part but if agriculture. you would have to make a separate distinction about whether in fact -- remember we went to school with a world war ii because of the malnutrition. originally sponsored by richard

russell who was pretty conservative because so many young men were incapable of serving in world war ii because of basic health problems and the was the original theory behind date and i haven't taken the position on school lunch and something i don't think about but i think you'd be cautious before you automatically jump off the cliff and sage we are going to disband its. is that a problem do we need to take a look at? >> a small percentage is growing but i would argue that if you're to go to the average school if you would take from new hampshire how much the federal regulation costs you how much time do you spend filling out forms it's like when you talk to doctors about the number they now hire to fill out the forms federal aid also meant federal regulations you might find it

was more of a break even than you think. >> in manchester we can't -- some 70 languages almost a spoken in the school system that want to take the state's and not test them for federal testing for a year or two but we can't. >> that is inaccessible something that is just crazy. if you have someone that shows up from ethiopia or somalia or cambodia and say i'm glad you've been here six months let's test you and they get average into the schools -- the second part of that is i'm adamantly in favor of english being the official language of the government and in favor of all people 60 or 70 languages. i think in nursing in english is the first step towards prosperity. >> in the gingrich

administration we have now currently every now and then they will pop up because there's some government documents in miami and some printed in spanish or california and texas. >> you have the department to print the voting documents in every language in the country. theoretically in california i forget the total number of languages to print the voting ballot in but it is an absurd. >> what we have the evan patrician -- >> english. >> mr. speaker, in that cabinet of yours you've been talking about good when and the rivals so where would you put their rival mitt romney in the team? >> governor mitt romney is an extraordinarily competent manager with an immense amount about business and finance and has a wide range of possibilities.

>> when i suggested that to him -- the part about him serving in the team of rifles. >> that might have just about the serving his team of rifles. none of us want to. we got into this because somebody said the other day what do unequivocally say no to the vice president and following ronald reagan in 1976 he said he was really glad that ford didn't offer it because he wasn't sure how you would turn on the president. i said to clarify gingrich must think that -- this is back when i was like eight per cent he must think he's not going to get the nomination. so, he is the front runner or should we think anything less than winning the nomination. >> i guess no good reason have you got a campaign now you said you have eight staffers here and

eight in iowa. he's got a great future in this business. he's a very good natural political leader. >> so you don't have to pay him. to complement him nicely. do you have a campaign to sustain yourself with? that historians have to finish in new hampshire to go on with any hope of winning the nomination. >> we got to be the top three in iowa and new hampshire. i would like to be first in online and in new hampshire and we will see, but i think if we go south and i'm a viable candidate i would win the south carolina, and i think that

changes for florida. so, to me these are important building blocks. what we don't know yet is whether one of us can run the table, you know, in which case it gets over early or better because of proportional representation of what happened to hillary and obama and still struggling with that in may and june and i think you have to prepare for both u.s. to say it's true i like to be the best i can in all the early primaries but i have to have the ability to assist in the campaign all the way. >> when you say top three in this team states and my lai and new hampshire ron paul seems like of a wild card in this film. is wrong paul -- should he be viewed as one of the regular republicans? i mean he has his followings in his positions.

>> he may do surprisingly well. >> certainly as we learn more about how bad the federal reserve is and how much money if it is thrown around the plan that he has a better case in the foreign policy it's a little bit harder for people to accept but i think that ron paul is going to depending on the turnout and i applaud it could be significant the bigger the primary. i think that he will be reported as a factor. >> he's also said he won't rule out the third party. >> i saw him on tvd of the morning he said flat he would not run. he said he wouldn't automatically guarantee the republicans so he might be passing that he said what he wouldn't run as a candidate. >> you caught up with this on the internet where the former bush campaign official claims to

have $24 million to get on the ballot in 50 states and the you're going to have the process of the six most likely candidates with internet voting and then put one on the? >> if we nominate somebody that is reasonably articulate and clearly conservative no third-party ticket will because people will walk in and say let me get this straight i can beat obama or vote to re-elect obama and if i don't vote for the only major candidate against obama i just voted to re-elect him and will be the tendency this year in a modern times because the desperate desire to beat obama is great. that is the biggest that i have because if you say to people who would you like to see beat obama overwhelmingly they would say

the. i was leaving des moines in the other day and of a woman that was checking said we are so excited about your idea. my husband and i are already planning the debate parties. i thought that was an encouraging sign. >> do you have any follow-up or are we all set? then it is who had the best third party and it didn't do the republicans any good. >> he was a unique figure. >> woodrow wilson to the system again this year give us obama. >> i found out with a son-in-law was. i didn't know that. the provision series which was great. thank you for coming. we will no doubt be covered in your social security.

come back when you get a chance. >> thank you. will that make c-span happy. one of my major goals in life [inaudible] in alba conversations [inaudible conversations] [inaudible conversations] >> this event took place earlier today in new hampshire but last friday mr. gingrich's wife took part in a discussion focused on

how to mobilize and empowered republican female candidates across the country to seek opposite the federal, state and local levels. she spoke to a conference hosted by the group for about 15 minutes. >> thank you for that kind introduction and a warm welcome. i would like to death project for the opportunity to be with you this morning. i appreciate the contributions that each of you make to mobilize come support and elect republican women across the country. you're continued support for conservative policies and strategies are necessary to ensure the nation remains a beacon of freedom for future generations. as you probably know, my husband is a republican candidate for president of the united states. [applause] the last few weeks have been very exciting for our campaign.

one of the best things about a presidential campaign is the chance to meet so many wonderful people across america and to learn about their concerns and hope for the future. newt and i are determined to run a positive issue oriented and a solution based campaign. we know and think of the other republican candidates as friends. many of us have bonded along the campaign trail as we go through similar life changing experiences. we are all in this together and believe that what we are doing is in the best interest of our country. our only opponent is barack obama and we are committed to removing him from the white house. [applause] over the last few months the polls have been wild. in june and july newt and i were told that our campaign was dead. it was hard.

recent polls reflect newt is surging ahead. candidly this is better than being dead. [laughter] newt and i are engaged in this race because we believe america is at a crossroads and we care deeply about the future of our country. we believe that america is an exceptional nation and must remain so. today i would like to share with you why i believe that our understanding of american exceptional the sum and american history will be a pivotal factor in determining the direction and ultimately the survival of our nation as we know it. over the past several years newt and i had the privilege of working on several dhaka entry films and books exploring various events and individuals in american history that have helped make america an exceptional nation. throughout the course of our work it has become increasingly obvious to me that america is

facing an identity crisis unlike anything we've ever faced before. this crisis is most evident among our youth who are being taught pride in the national heritage is inappropriate and that there is nothing uniquely special about being an american or about the values and principles on which the country has been built. we are currently in a great debate over whether america is an exceptional nation or whether we are just another country. it is up to us to decide which version of america our children will learn about and believe in. over 20 years ago in his farewell address, president ronald reagan called upon america to return to what he called and informed patriotism warning that those who, "on not sure that an appreciation of america is the right thing to

teach modern children come end of quote. president ronald reagan understood what is at stake and that it isn't simply an academic or abstract debate. our understanding and appreciation of what we are machination determines our policies, our values and whether or not we teach our children that we are a special mention. as for me, everything i know about the history of our country and our core value has led me to believe that we are an exceptional nation and people. growing up in wisconsin, an all-american midwestern town, it was an impossible not to be instilled with a sense of patriotism. at sunset a luxury we said the pledge of allegiance each morning and then we sang a patriotic song. in junior high and high school my band and collier celebrated

national holidays pricing anyhow and playing patriotic music. as a girl scout i truly believed in the pledge to serve god and country. in fact, today i find myself living out that pledge in ways never imagined it sunset elementary. as a young person i was surrounded by people who believed in the greatness of america and were unapologetic about those beliefs. contrast this to today. when a majority of eighth graders can't explain the meaning of the declaration of independence and 95% of high school seniors cannot explain how the three branches of government are meant to interact it goes without saying most high school students graduate without ever coming to appreciate what makes america unique. the united states was the first nation to be founded in an act

of rebellion against the colonial power. it was the first nation to be established on the premise that the rights of man are inherent in the that government derives its power from the consent of the people. it was the first nation to be based on a separation of powers and to recognize that the assistance of the state is solely to secure the rights of the people. finally, it was the first nation to affirm all of the senate publicly debated democratically accepted constitution. all of these things make american unique. but in fact as i have become more involved in studying our history, i realized that american exceptional as some is rooted in something and even more fundamental. five years ago newt and i made a documentary film entitled rediscovering got in america. the film introduces the concept of american exceptional was some

truth a tour of washington for the national archives to arlington national cemetery. the source of american exceptional was some is displayed in a single document, the declaration of independence. the key in the document is the founding fathers assertion that we hold these truths to be self-evident that all men are created equal and we are endowed by a work creator with unalienable rights on which our life, liberty and the pursuit of happiness. it is this assertion that our rights come from god that makes america truly exceptional. we are the only country in history to assert each of us personally receives rights from god, not from bureaucrats, politicians were judges, but from god. this means that each of us is

personally sovereign. this is why our constitution begins we the people. we loaned power to the government. government never loans power to us. [applause] >> this unique endowment by our creator is why americans are citizens while other government often treat their people as subjects. in many countries the government and political bosses rain here in america the people frame. because our founders understood that their freedom was based on faith and that no government could come between god and man our government was grounded in the rule of law structured to recognize and protect the dignity intelligence and value of every individual.

these projections of about patriotism, individualism and entrepreneurship to thrive here in america as they have nowhere else on earth. because they rejected the notion that the government had unlimited power over and fungibles, property rights were protected in the constitution to a degree they had never been protected before. the founding fathers even wrote a patent office into the constitution to protect the intellectual property of inventors giving americans the ability and the incentive to create, in the event and realize a better future. there are a number of american inventors who personify the spirit of innovation and belief in progress. benjamin franklin invented the lightning rod and bifocal glasses. a few years later robert fulton invented the steamboat. samuel morris, the telegraph, thomas edison gave the electric

light and photographs. henry ford invented mass produced affordable automobiles and the wright brothers discovered how to fly to read all of these inventors of the street the very best of the american experience of hope, opportunity and entrepreneurship. they chose to be courageous, to take risk and to follow their dreams without bothering to ask the government for money, permission or approval. in doing so they changed the life of every person in this room who has ever turn on a light, a botched a movie or flown in an airplane. they've demonstrated that success is truly possible when a nation on leashes it's a god-given creativity. modern inventors like bill gates of microsoft and the late steve jobs of apple or in part of this

tradition of creativity and innovation. our lives have been changed again and again by pioneers and inventors. now, for a moment forget about history, forget about the existence of the declaration and the constitution. forget heroes like jefferson, franklin, martin luther king jr. and john f. kennedy who testified to america's uniqueness. forget the fact that we are all children of immigrants. along academic elites, the claim that america is an exceptional nation is viewed with skepticism and scorn the players for the ways in which america does not look like other nations. for such eletes the word exceptional was and is criticism, not praise.

and it's the form of self righteous arrogance that has no place in a globalized multicultural society. nothing pinpoints you as a conservative war than promoting into believing in american exceptional was some. as i became more concerned about the danger of losing sight of what makes america truly exceptional i decided to write a book for four to 8-year-olds entitled sweet land of liberty. mauney goal was to highlight a wonderful achievement of our country, to arouse a love for america and to communicate why america is a special nation. ..

>> therefore, i thought ellis the elephant was perfect, both as a phrase for children, and symbolically as we are a children of imgrants. in sweet land of liberty, we need ellis at the library, an avid reader, like my husband, ellis reads about the history and shares with others. ellis introduces children to the april gym's first thanksgiving, the boston tea party, george washington crossing the delaware, and many other historic moments. it is my hope that these stories

will help young people feel proud of our country and enable them to begin to appreciate the courage, service, and sacrifice that has made this country an exceptional nation. today, america stands at a pivotal moment, not only economically, but socially, culturally, and politically. it is important that each of us do our part now to advance and defend the pillars of freedom. our civilization is a learned civilization which means 245 anyone can -- that anyone can learn to be an american. it also means that each generation is capable of forgotting or failing to learn and recall what it is that makes america a special nation. pulitzer prize winning author

said a civilization ceases to be civilized, and without history, they cease to have identity. without identity, there's no purpose. without purpose, civilization will wither. when we know who we are as americans, the way forward to defending and advancing the cause of freedom becomes increasingly clear. it is my prayer that together we may work to ensure that liberty and freedom prevail, and that america remains an exceptional nation. thank you and god bless. [applause] [applause] >> thank you so much. [applause] >> anita perry, wife of republican presidential

candidate rick perry, also spoke at this event hosted by gopink. this is five minutes. >> the women working for change conference. you know, when conservative women gather together for a common cause, it doesn't threaten men the most. it threatens the liberals the most, but because when it comes to ending politics as usual, conservative women are the real change. from haley in south carolina to martinez in new mexico, to mary fallon in oklahoma, conservative women won office all across the country in 2010. you know, i think sometimes it's worth asking the question why voters have gravitated to conservative women in the recent years and affirm their judgment in various life decisions that women make from running the board room to running for office to running the household. we are all about empowering

women of all backgrounds rather than just putting us all in one little box. we remain sympathetic to the plight of middle class families, of women who wear the mother hat -- wear the many hats of mother, wife, employee, boss. we know the women who toil to provide the best environment possible for raising our children. we get our children ready for school, we put in long hours at the office, and then we make the pta meetings, soccer games, baseball games, and who, at the end of the day, are too tired to take their shoes off. we know those women because we are those women. many of us have done double duty without twice the pay, but we do it out of love and devotion, to our families. as a texas woman said, liz

carpet -- carpenter, roosters crow, but hens deliver. the issue facing the country today is not gender based, but jobs based. it's about giving our children a better country than the one we inherited. there's a lot of great candidates out there running for president. i happen to be partial towards one, just a little bit. here's why. no one is more committed to the merit system than rick perry. he truly believes in america's blind side to one's background, gender, or creed. an america that provides opportunity to any and all who work hard, play by the rules, and never stop dreaming. he is provided a blueprint to a

pathway of a more prosperous america in our state of texas where he has cut taxes 67 times, signed the first state budget to cut state spending since world war ii, signed the most sweeping lawsuit reforms in the nation including just this past spring, a new losers pay law. rick perry believes the best welfare program is a job. he believes the best economic stimulus occurs in the private sector, and he believes the best hope for the world is a strong america. he served his country because he loves his country, and during his tour of duty in the united states air force, he developed a deep and abiding love for our nation's freedoms. rerecognizes what is wrong in america is not that americans

are lazy or soft or they lack imagination. it's washington that's broken. he's put forward a bold plan to overhaul washington ending business as usual in ensuring the federal government puts the american people first. he will fight to end lifetime appointees for future appointees in the federal bench because he doesn't believe those who legislate from the bench should be rewarded with a black robe for life. he wants to transform washington by creating a part time congress, cutting their pay in half, their budgets in half, and their time in washington in half. he believes the concept of the citizen legislature works best and keeps lawmakers better connected to the people. finally, he wants to overhaul the permanent bureaucracy,

eliminating the departments of energy, education, and commerce, reducing and rebuilding the epa so that it no longer torments job creators, and ending the passenger harassment of the tsa by returning transportation security to the private sector. his bold plans for washington coupled with his 20% flat tax represent the most comprehensive change of any candidate, and that makes sense because he is the only candidate not part of the establishment. he's the true outsider who brings a fresh air to the bureaucracy. you don't have to wonder if he's similar to the candidates you see because he knows who he is, and he knows what he believes. i promise you this -- if you help elect him president, he will make you proud.

we will have the america again that you and i know for our children and our grandchildren. thank you for having me today. may god bless you all. thank you so much. [applause] >> midnight tonight was the

deadline for the joint deficit reduction committee to release a plan of culting at least $1.2 trillion, but the co-chairman of the committee announced there was no deal, not by tonight's deadline. without a deal, it calls for automatic across the board cuts split 50/50 between defense and nondefense spending to take effect in to 20* 13. boehner wrote he was disappointed and the house would forge ahead to reduce government spending and create jobs. >> our purpose and mission is to describe journalistically the events of the day. there's nothing that says we have to present the american foreign policy, but, i mean, that's the huge reason why we

exist because people want to know what is the american position, they want it explained, and they want to know how it came about. they want to know, is it unified and all of those answers that they don't get from local media. >> the communicators tonight on 8 eastern on c-span2.

>> today, president obama signed a new law to get america's veterans back to work, and businesses would be given tax credits to hire veterans. joining him is the first lady and vice president, joe biden. this is 20 minutes. >> ladies and gentlemen, the president and vice president of the united states and mrs. michelle obama and mrs. biden. [applause] [applause] [applause] >> thank you, all. thanks so much. well, good morning, everyone,

please, rest, rest. i am thrilled to be here today alongside the vice president and my favorite person here, jill biden. [laughter] oh, yes -- [laughter] you too, honey. secretary, members of congress, representatives of veteran service organizations, and some of our veterans. as our nation reaffirms its commitment to the men and women who served this country so bravely, over the past few years, i have had the privilege of meeting with so many of our troops, veterans, and military families, and every time i visit with them at a base, every time i sit with them at a hospital bed, every time i talk to their kids at a barbecue or baseball game, i walk away inspired. their strength, resilience, and

commitment to this country is simply unmatched. they leave home for months at a time, go to some of the most dangerous places on earth, and risk it all for the country they love, that courage, that unwaiverring dedication to our higher calling really sticks with me. it stays in my heart, and more importantly, moves me to act, and that's why jill and i started our joining forces campaign because jill and i. ed to give -- jill and i wanted to give something back. we've been traveling talking with business executives, non-profit leaders, school administrators, anybody who will listen, asking them to find new ways to honor and support our veterans and their families, and

the really wonderful thing we found is that people are actually listening. americans are standing up to show their appreciation. businesses have already hired more than 18,000 veterans and military families, and they made commitments to hire at least 135,000 more. schools are working with non-profits and tech companies to improve the experience of our military children. entertainment executives are making public service announcements, community groups are gathering donations and putting together thousands of care packages. truly, the list goes on and on and on. what i've been most struck by is how excited people are to get involved. that's what we want our military members and their families to know. people want to do something. this is something that americans want to do. we want to give something back. we want our veterans to know

that we are humbled by their sacrifice, and we're awed by their service, but sometimes we just have to be asked, and sometimes we need a little nudge, and i am about to introduce my favorite man -- [laughter] who is someone who's not afraid to ask for the support of our veterans. he's been sending up for veterans since before he was president, and since he took office, he's been working hard to strengthen our nation's sacred trust with our veterans, not just with words, but with actions. he's helped send more than half a million veterans and military family members to college through the post-9/11 gi bill. he's building a 21st century va to fully support our veterans throughout their lives. he's taken unprecedented steps to improve mental health care and expand care for women veterans and wounded warriers,

and he's working to put an end, once and for all, to the outrage of veteran homelessness. today, with this bill, that story continues. i am truly proud to introduce you to the man who is the favorite man in my life -- [laughter] our president,barack obama. >> thank you. [applause] it is wonderful to see all of you, thank you for willing here. thank you, mish, who is a plight good speaker, so i try not to follow her, but begin the incredible work that she and joe biden have done in advocating for our veterans, i could not be more honored to be with him, and i know joe shares my feeling. we could not be prouder of their efforts on this front. over the past three years, they

have visited so many of our troops. they have thanked them for their service, comforted their spouses. they have given voice to their struggles, and they've challenged all of us, national, state, and local levels to do more for our veterans. joe biden has been a champion for veterans for decades now. it is his birthday, so we speak in terms of decades. [laughter] exactly -- [laughter] yesterday was his birthday. i won't say the number. ask jill if you want. [laughter] but for a man who cares as deeply about our troops as joe does, this bill, i imagine, is a pretty good birthday gift. secretary is here, where is rick? there he is. rick's been doing an outstanding job leading our department of

veterans' affairs, and we're joined by the nation's leading veteran service organizations and members of congress who helped make this bill possible. i have often said that the most humbling part of the job is serving as commander in chief to the world's finest military. not a day goes by when i'm not awed by our troops, strength of their character, and by the depth of their commitment, and the incredible sacrifices they and their families make on behalf of the nation's freedom and security. the men and women of the military don't just fight for each other. they just don't fight for their units or for their commanders. they fight for every single american, for the millions of fellow citizens who they have never met, and who they will likely never know, and just as they fight for us on the battlefield, it's up for us to fight for our troops and their families when they come home,

and that's why today is such a wonderful day because today deeply grateful nation is doing right by our military and paying back just a little bit of what we owe to our veterans. today, the message is simple. for businesses out there, if you are hiring, hire veterans. it's the right thing to do for you. it's the right thing to do for them. it's the right thing to do for our economy. while we've added more than 350,000 private sector jobs in the last three months, we have 850,000 veterans who can't find work. even though the overall unemployment rate came down just a little bit last month, unemployment for veterans of iraq and afghanistan continue to rise. that's not right. these men and women are the best that america has to offer. they are some of the most highly trained, highly educated, highly

skilled workers that we have. if they can save lives op -- on the battlefield, than they can save a life in an ambulance. if they can move convoys over terrain, they can manage a company supply chain. if they can track millions of dollars of assets in iraq, they can balance the books of any company here in the united states. our nation benefited enormously from our veterans' services overseas, and we'll benefit the same with their service here at home. that's why under my direction, the federal government already hired more than 120,000 veterans thanks to the work that jill and michelle mentioned, some of the most patriotic businesses pledged to hire 135,000 more veterans and military spouses, and, today, we're giving those businesses just one more reason to give veterans a job.

back in september, i sent congress a jobs bilks and in it, i proposed a tax credit for any business that hires a veteran who has been unemployed for at least four weeks and proposes a bigger break for businesses who hires a veteran unemployed for six months, and if they hired an unemployed veteran with a disability related to their service, i proposed doubling the tax break already in place. today, because democrats and republicans came together, i'm proud to sign those proposals into law, and i urge every business owner out there who is iring to hire a vet right away. nearly 3,000 members have transitioned back to civilian life including those who served throughout the decades. as we end the war in iraq and wind down in afghanistan, over a million more will join them over the next five years. this bill is an important step

in helping those veterans transition into the work force, and beyond the tax break that i mentioned, it also contains a number of other reforms from education and training to career counseling to job search assistance. we still have to do more, and that's why i announced a series of executive actions to help the veterans get back to work. we've set up a veteran gold card, and there's a card that post-9/11 veterans can down load today giving you access to a sweep of career services including counseling at the nearly 3,000 one-stop career centers located around the country. there's an online tool called my next move, allowing veterans to enter information about skills they acquired in their service and matches that information with the civilian careers that will best put that unique experience to use. we created an online service

called veterans job bank, with leading search engines directly connecting unemployed veterans to job openings. all of these initiatives are up and running right now, and you can find them at whitehouse.gov/vets. that's whitehouse.gov/vets. to the veterans, know we'll stand with you as long as it takes for you to find a job, and to the businesses, again, if you're hiring, hire a veteran today. they will make you proud. just as they made the nation proud. i'm pleased that both parties came together to make this happen. again, i want to thank all the members of congress who are involved. it is important to note that in addition to our veterans, there are millions of other americans who are still looking for work now, and they deserve the bold

bipartisan action we have here today. that's why they sent us here. my message to congress is keep going, keep working, keep finding more ways to put partisanship aside and put more americans back to work. tomorrow, i'm heading to new hampshire to talk about another proposal in the american jobs act, a tax cut for earl every worker and small business owner in america. democrats and republicans have traditionally supported these tax cuts. independent economists from across the political spectrum says this proposal is one of the best ways to boost the economy and spur hiring. it will be easier to hire vets if the overall economy is going strong, so there's no reason not to vote for these tax cuts, and if congress doesn't act by the end of the year, then the typical family's taxes goes up by roughly $1,000. that's the last thing our middle class and our economy needs right now. it is the last thing that our veterans need right now, so let's keep at it. no politics, no delays, no

excuses, and now, let's keep doing everything we can to get america back to work, and on that note, it is my great pleasure to do my job and sign this bill into law. thank you. [applause] [applause] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations]

>> this will take awhile. [laughter] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] >> there you go. [applause]

[applause] [applause] [inaudible conversations] [inaudible conversations] >> vice president -- [laughter] [inaudible conversations] >> thank you, guys. [applause]