>> host: what are the key items that the proposal will emrecognize. >> guest: some of the are deeper spending cuts than in the budget control act in august. he's also supposed to push back the mandated spending cuts for defense that were also part of that deal and one of the big things which democrats are expected to go after him on is the way that he's going to try to restructure medicare and mostly likely medicaid as well. >> host: now you talk about how the budget will be presented to congress in your article. what approach is mr. ryan expected to employ when his budget is rolled out? >> guest: well, this year he's really making sure to talk about it almost in moral terms and so he's been talking a lot for the past few weeks about how, you know, americans have a moral obligation to tackle this debt crisis whereas last year he was talking about it in terms of spending, much more out of control spending. this ti >> host: how much political risk is there in this budget? >> guest: well, there's a huge amount of political risk.

the democrats can't wait for this. they're thrilled they're lining up these ads that paul ryan is going to try to kill medicare, you know, seniors watch out and so this whole idea of him structuring medicare and to get republicans vote for it in a close election year could go very politically damaging for the republicans and will certainly come up in the election. >> host: have we heard from any of the presidential candidates from the ryan proposal? >> guest: we haven't yet just in part because it hasn't come out. they've all put out, you know, their own plans i would say in terms of who his plan is closest to, he and mitt romney do have some similarities in what they proposed for medicare, medicaid and some deep spending cuts. >> host: nancy cook of "national journal," thanks for joining us. >> guest: thanks so much for having me. >> maryland barbara mccullzy marked a milestone over the weekend. she became the longest-serving female member of congress elected in 1976.

senator -- >> in march 1979, c-span began televising the u.s. house of representatives and nonfiction books and american history is available on tv, radio, and online. >> we have even had advice that we do not do as i do today and come in with a plain old white shirt and a summer tie, heaven forbid. now, i don't know whether my colleagues feel that this would be a better decorum for the senate and i see the distinguished staffer are nodding no but the people of ohio would perhaps make a better judgment of what they would prefer me to be attired in with the united states senate. mr. president, these are just a few of our concerns here in the

senate and i'm sure that none of us will do a thing differently in the senate of the united states now that we are on television. thank you. >> c-span created by america's cable companies as a public servic service. >> former obama administration economic advisor larry summers says he's encouraged by the positive economic indicators over the last few months. the atlantic magazine recently hosted a economic summit in washington to hear from the number of economists here and abroad. the comments from mr. summers are about a half hour. >> first of all, rick kirkland is the senior managing energy at mckinsey and former editor of "fortune" magazine and a old friend. i guess it was a year, year and a half ago before dr. summers had left the administration mckinsey hosted an event at the

ritz-carlton and larry spoke at it and it was joint with the harvard business review and there was an article that was held up looking at trade and what -- what was different -- what did we learn, what had we learned that we hadn't thought about before, and i heard larry summers give one of the most -- he seemed to be thinking out loud without worry before the political repercussions of what he was saying and it was -- i'm surprised there wasn't huge press coverage after it because he was exploring questions about do we need to begin thinking about multiple national corporations and how national objectives -- it was very interesting. larry is like -- also he spoke recently at a conference sponsored by the institute for new economic thinking and martin wolf of the financial times interviewed him and it was again thinking out loud moment and i think when you spend time with larry summers you not only get something who thought about deeply about policy but who engages others in thinking out

loud in ways that often seem different than the larry summers we've often gotten to know in the media. so rick, the floor is yours. >> thank you, steve. >> thank you for that -- thank you for that introduction mostly. [laughter] >> there are others who say the reason people come to hear me talk is that it's a little bit like going to an auto race -- you never know what kind of crash will take place. [laughter] >> it's a rather mixed virtue. >> well, see, larry i was going to add -- just remind people in case they didn't know who you were that you're a former head of the nec, former treasury secretary, former president of harvard and future -- we don't know what. unless you want to comment on that i'll stop the introductions from here. so we spent not much time today talking about anything happening between now and election but we've been reminded by a number of speakers that the stakes get pretty high pretty fast for the

next president once he's elected. you got the end of the bush tax cuts, you've got the end of the payroll tax cut, you've got the sequestering kicking in and the debt ceiling sitting out there. your former colleague bob ruben has described it as an important moment for our country. ed rendell more colorfully said something if we don't do something in those five months we're cooked. how do you see it and what would you put it as your big priority? >> i'm not sure there's one priority and if i've learned anything over the years, it's that nine months is a long time and the world may look very different in mid-november than it does right now. but i would make these three points. first, the single most important determinant of almost every aspiration the country has, whether it is healthy government finances or rising wages for

middle class families, whether it is reducing poverty or whether it is maintaining leadership in the world is the rate of growth of our economy over the next decade. and so if we do not succeed in maintaining sustained economic growth at a rate that puts a rising fraction of our population back to work, we will not succeed in anything else, including, we will not succeed in repairing the government budget situation. and so maintaining a policy focus on assuring an adequate level of demand and growth in demand -- whether that means promoting exports, whether that means reforming and spending appropriately on infrastructure,

whether that means appropriately designing tax reform is a critical issue. but in our concern with posterity, let us not forget that we get to posterity through the next few years. and that if our economy stagn e stagnates as japan's did and as america's did in 1947, that is what will be the most serious threat the nation's fiscal health and much else. frankly, i'm encouraged of the statistics over the last few months. i'm more encouraged than i've been anytime in the last five years. about the situation of the american -- there are no certainties. but it is terribly important that we maintain the momentum of growth. that's number 1. >> does it look self-sustaining

to you? >> i don't think it's right to make an absolute declaration on that question. but i have much more confidence in the likelihood of it being self-sustaining right now than i did in either 2010 or i did in 2011 and it feels like the pieces are coming together but i would still say the risks are much more on the side of the economy being too cool than they are on the side of the economy being too hot. second thing i'd say is doug m elmel elmel elm elmendorf in a recent presentation gave something simple in a way i hadn't seen put together.

he basically said that, you know, there's things you can do with domestic discretionary and there's things you can do with defense but a lot of the toothpaste is out of those tubes. and so, in essence, what we have to do in 2022, to have the nation's finances in a sustainable place is we either have to cut entitlements by a quarter or raise revenues by a sixth or do some combination of those things. and as best i can tell, that analysis is about right. and it is the nature of the problem particularly in regards to entitlements but also as it regards revenues, it is very difficult to act suddenly. people need to know what's coming and in the case of health care, we're going to end up needing to experiment a fair amount because the truth is the

world doesn't completely know how to predict health care costs or how to control health care -- out of control health care costs. i was -- you know, there's been some recent encouraging development with respect to medicare costs on the one hand. the independent payment advisory board which was a huge controversial issue is being scored for 10 years at $3 billion right now. it would suggest that it's not an issue of quite the magnitude that people thought at the time. health care is an area where we're going to have to feel our way. social security, we can measure the things. it's a matter for political choice. health care is a matter of continued experimentation for analysis which brings me to the third thing, if you ask me, what is the issue that unite the broadest range of economic

concerns in the united states? it seems to me it is tax reform because it is tax reform that is central to revenue, that is central to the budgetary challenge. it is -- the tax code and the incentives that it provides, that are central to spending decisions which go to demand and growth and it's central to issues of equity and fairness in the society. i only have one thing to say touching on something for someone running president and, you know, i think you'll get the reference. [laughter] >> there'll be a quiz. >> i don't think anybody is under more obligation to pay more taxes than they owe. i really don't. the tax code is what it is.

i think people should be allowed to take advantage of it but they should be in favor of changing i it. but i think it's unconscionable that there's $50 million iras in america when there's a contribution limit of $200,000. and i cannot imagine that the law was broken. but if there is ever an example of mike kinsley adage that the scandal isn't what people do that's illegal, the scandal of things that are legal it's got to be that. and, you know, i'm somebody who's been around this territory a fair amount. it came with huge news to me that you could have a $50 million ira. [laughter] >> and that's the chance that's the last big abuse that no one's

notice. [laughter] >> is roughly zero. [laughter] >> so the third reform is why tax reform is fairness. and the fourth, frankly, is confidence in our political system. look, there's a reason why congress' approval ratings make banker' approval ratings look stratospheric. it's not that there's not good people in congress. and that there's not enormously good people who work with them. it's the set of pressures that come from the way we finance our campaigns, the way we are responsive to lobbyists and all that and i can't think of a better way to show that it's a new day than to clean up the tax code. so it seems to me for those four

reasons, the integrity of our politics, fairness, prosperity and the avoidance of debt -- all of those run through tax reform. now, i don't think it's likely possible to be comprehensive tax reform in a lame duck session. >> you don't think it's possible? it can't be done? >> it's not impossible. never say impossible. but i think it is unlikely. and so i think we're going to have to think about a political formula that is going to find a way of handling the trifecta of debt limits, sequester -- debt limit sequester -- >> and the tax cuts. >> and the bush tax cuts ending that you referred to, of handling and committing to a set of things and allowing some time

of doing a comprehensive tax reform proposal but i think whoever is president, tax reform should be at the top of the national agenda and i hope it will be. >> let me just drill on that. and you wrote an article in the ft recently that nothing would be more important than the next four years, in essence, and you're reaffirming it. and this also came up, some of our discussion today paul volcker talked about the need for tax reform and said he'd like to see us even be bolder than tackling expenditures and lowering rates which is kind of the grand bargain from '86 and it seems to be what you had in mind at least in your ftps, moving toward integrating personal taxes with corporate taxes or moving toward a consumption tax, larry lindsey mentioned a v.a.t. i don't necessarily want you to tell me your detailed plan but

directionally, you know, how ambitious would you be -- how would you look at the revenue raising versus the incentive tradeoffs, you know -- can you say a little bit more how the framework you would bring. >> i think we should be open to every possibility -- i first quipped in 1985 that america has never had a value-added tax because conservatives think it's a money machine for government and liberals think it's regressive. and liberals decided the money machine for government and conservatives decided it's okay because it's progressive. [laughter] >> that felt right in 1985. and, you know, the more things changed, the more -- the more they stay the same. [laughter] >> i think we should be open to those possibilities. i guess i would want us to keep a pretty clear awareness on the

four things that i -- four things that i said as tests. >> yeah. >> i worry -- i think we're going to need more revenue 'cause i don't think we're going to cut entitlements by -- >> the whole way with entitlements? >> i just don't think it's going to happen. i think the surprise with respect to national defense are more likely to be unfavorable and i think the domestic discretionary efforts are laudable but i think they're going to really bite and squeeze in ways people don't anticipate so i think the surprises are going to be adverse and i don't think we're going to get that much out of entitlements unless we're lucky in the way that health care adjusts itself, which is not what i would expect but is not something that i would -- that i would rule out. so we're going to need more revenue. and we're going to need more progressivity. look, in simple numbers, simple

numbers, the top 1% of the population used to get 10% of all the income. and now they get 20% of all the income. and that works out to about $8,000 per tax paying unit in the bottom 90% and it works out to about $800,000 for each tax paying unit in the top 1%. i would just suggest to you a simple criteria. while that's happening, the relative tax burden on the top 1% shouldn't be going down. you could argue about whether when you've got a lot more inequality you should have a lot more redistribution or not. it's a reasonable argument and people are more progressive will be more redistbig but it's hard for me to understand why we should have less. and the least honest advocacy in

a town where there's a lot of dishonest advocacy is the people who say top 1% are paying a higher taxes than they did before, therefore, the tax system has become more burdensome to the rich neglecting the overwhelming reason why they're paying more than they did before was just that they had twice as much income. >> so income inequality you've talked about that and you mentioned coming in here, in addition to -- and we talked a little bit about it today in addition to thinking about it today as we look at reforming taxes are there other things that policy can do that should be doing to deal with the various factors, globalization, policy change and other things that are causing it to get worse? >> there's a lot of this that is going to be very hard to change.

look, if you think about the evolution of publishing industry from -- >> i'd prefer not to. [laughter] >> publishers -- the book industry, not yours. publishers, wholesalers, little bookstores, walden books, barnes and borders, to amazon shipping books through the mail through amazon sending ebooks which there were more last month than there were book sales. if you think about the stages in that, at every stage it got better to be a reader. you had more variety at lower cost and it basically got better to be steven king. [laughter] >> to be an author -- because you had access to much better distribution. and what got worse was to be like a regular shrub carrying cartons around or being a store manager and that's basically what happened. you know, those kind of forces

are happening almost everywhere. and you can't change them. if you would be taking them back from the world cutting edge which is where we don't want to go. which is why a fair amount comes back to tax policy but there are other things to be looking at. much more transparency in compensation is clearly a helpful thing. where the government is in the business of conferring rents, more auctions and less give-away, less responsiveness to political pressures. that's something that is -- that is helpful. i do think we need to engage

the -- and this is a very difficult set of -- set of issues and it is easy to descend into populace no-nothing in the area as i'm about to mention but, you know, with the citizens united decision, we decided somehow in america that corporations have the free speech right of citizens. well, you know, it goes back to the framers that citizenship comes with privileges and comes with obligations and i think we have to think very hard what we ask american corporations who benefit very substantially from being american corporations to do in america. and as we think about the

orientation of our commercial policies we have to think about whether our obtain to focus -- this is a point that bob highlighted years ago and he was early on, whether the focus of our concern is productive activities that take place within the united states. and employ americans or whether the focus of our concern is corporations that are legally registered in the united states that may be producing anywhere and i think some greater focus back towards the interests of american workers in our commercial policies would be constructive. >> interesting. i'm going to ask one more question and i think we have one more seven or eight more minutes. i suspect some of you would like to ask larry a question, too, and you're welcome to go up to the mics.

larry was talking about energy policy when we came in would that be a big policy for you if you were being called in to give a piece of your mind to the next president? what would you be doing? >> look, i think if you think about the large systems of our economy, there's a health care system. we passed comprehensive reform. we'll see how it works. there's a lot of questions you can ask about it but we had a big consideration and we did something. there's a financial system. we had a big consideration. we have a big disaster and then we had a big disaster and then we did something and now we're in an implementation phase. there's an education system. we have worked that system. and our striving to reform that system. i think the areas that are less

touched by reform and it need to be touched are the energy system and the broad infrastructure system by broad infrastructure i embrace public infrastructure like highways and infrastructure that's primarily exploited by the private sector like spectrum. i think those two systems infrastructure and energy are both very much in need of attention. look, i think energy is classic area where it's it needs to be both ed. yes, we need a greater commitment to renewables, yes, we need a greater commitment to the substantial natural gas resources that we have discovered. yes, we need a substantial commitment to the energy -- to energy efficiency and so we need

more than we have traditionally in the energy area instead of doing what this town has a tendency to do which is the intersection of policies that nobody hates too much. [laughter] >> we need to do the union of policies that some set of people think will be terrific. and i think if we do that we can make -- we can make some real progress on energy and i think whoever is the next president that should be something on the agenda. >> i see people are standing up. let me start over here and then we'll go over here. yes, identify yourself. >> rob aic investments. secretary summers, you're there at a very key time at harvard during the incubation of facebook, i was just curious if you could just bring up a little bit sort of the hands-off lessons learned there that led to the success and what that could sort of translate to some of the thinking here to today's

program? >> since i get blamed for all sorts of things that i did at harvard which i had actually nothing to do with i'm sorely tempted to take credit. i'm sorely tempted to take credit for facebook even though i had nothing to do with it. i guess i could call having nothing to do with it creating and enabling environment. [laughter] >> it wouldn't be the most shameless claim -- a claim that was ever made. look, i think the fact that we have enormously talented young people, we bring them together in hot house environments and we encourage them to create and do innovative things is one of the great strengths of this country. and every year when i was at harvard, i gave some kind of advice speech to the graduating seniors and the one piece of

advice that was always in the speech was don't be fungible. don't make yourself fungible do something where you got uniqueness and that culture has why the united states produces -- if you say bill gates, larry page, sergi brin, mark zuckerberg and then you look for a non-united states name to add to that list, it feels plausible at all, steve jobs -- i mean, you could add larry ellison you could add five more american names -- if you tried to think of the most plausible non-american name to add to that list, it's not easy and that's really a great strength of the country. >> so if mark zuckerberg was in the room and you gave your don't

be fungible speech you could definitely take question. >> i have a question about our defense budget. i think the correct figure is about $1.2 trillion a year on a full cost basis. my question is, why is it so difficult politically and otherwise to discuss seriously reducing that. we spend more than all other nations combined. it's a huge piece of the total expenditures of the budget. why is it difficult -- why does it seem to be an area that is not discussed? >> it is discussed. and indeed the current plans call for significant reductions in defense spending. and if you ask about the longer trend, you know, today, we're running at 3.-something percent of gdp, in defense spending through the 1950s and '60s, we were -- in the '50s we were

running in the 9, 10% of gdp range. in the '60s, we were running in the 7 or 8% of gdp ratings. we have very substantially reduced our commitment to defense. should it be reduced further, you know, that's a judgment that i think should be made on national security grounds -- i may not be an expert on anything but i don't claim to be an expert on national security grounds even if i do claim to be an expert on some other things. and i guess i would ask you to think but that is quite obvious as you suggest -- when we send 200,000 soldiers abroad, 40% of what we allocated to the iraq -- first iraq war or to vietnam, we are stretched unsustainably thin. ..

good to save a little money but it's really very dangerous to overeconomize. >> okay. >> i think that is worth keeping in mind. >> i think we're going to have to end on that note. larry, thank you for joining us and thinking out loud so interestingly. appreciate it. [applause] >> taking a look at the heritage crossing waterfront plaza. this is in dixon, illinois, where we'll be hearing soon from republican presidential

candidate rick santorum. he will be speaking in about 30 minutes, 1:00, eastern time. you can see there in the background a statue of a young ronald reagan. this was his childhood home. republican presidential candidate rick santorum said, which said that illinois, which holds its primary tomorrow, is essentially boiling down to a two-man race between himself and mitt romney. however mr. santorum is not eligible to win at least 10 of the state's 54 delegates because his campaign filed to file paperwork. and we will again be back at dixon, illinois this afternoon and we'll have live coverage, 1:00 eastern time. meanwhile mitt romney is going to be campaigning in chick go chicago. he whiffle hold an economic policy speech at the university of chicago this afternoon. c-span will have live coverage at 1:15. the former massachusetts governor won puerto rico's 20 delegates yesterday. his wife ann said it is time

for the other candidates to get behind mitt romney. as we mentioned illinois's primary tomorrow. the state has 54 and several polls show a close race in the illinois primary though a poll taken on saturday and sunday by public policy polling shows mr. romney ahead of rick santorum 45 to 30% among likely republican primary voters, with newt gingrich at 12% and ron paul at 10%. you can watch our live coverage on the c-span networks and on c-span.org. on c-span's facebook page today we want to know your thoughts about the republican party and women voters. you can take a look at comments so far which are actually veering toward gas prices and president obama's policies. log on, let us know what you think at facebook.com/c-span. >> the strong support we have, and our region of the country for where this movement originated gives us an excellent base to go

forward on the day of november the 5th with and we in my judgment will go forth in the beginning with at least 177 electoral vote that comprised the states of the south and border and when you couple that with just a few other states of the union, then you have the 270 odd electoral votes necessary to win the presidency. >> as candidates campaign for president this year we look back at 14 men who ran for the office and lost. go to our website, c-span.org/thecontenders, to see video of the contenders who had a lasting impact on american politics. >> this has been honest convention, spirited disagreement and i believe considerable argument. but don't let anybody be misled by that. you have given here in this call a moving and dramatic

proof of how americans who honestly differ close ranks and move forward for the nation's well-being, shoulder to shoulder. >> c-span.org/thecontenders. >> we're going to return now to the atlantic magazine's economic summit. though gather ad number of economists and business leaders to discuss the current economic situation and where it is going. next, fred hochberg, president of the u.s. export-import bank. he said the biggest threat to u.s. is china and other nations making their own trade rules. >> in our discussion with fred and own up the questions try to bring a bit more international dimension to the question what is happening in the real economy in the united states. fred is, has the responsibility of running one of the institutions in which the government institution but there is no real tax dollars at stake in it.

and you play a role in helping to broad the export base of the united states and i'd love to hear a little bit about that but president obama has made a fundamental pillar of his economic strategy doubling the exports of the united states in five years. so i would love to hear where that is and i love you to give a quick snapshot what the xm bank is supposed to be doing. >> steve, thanks for having me. not only do we have tax dollars, engaged we don't have the the state tax dollars in the export-import bank. quick history was started in 1934 by president roosevelt and it was started to help create jobs through exports. 77 years later we do that with no tax dollars because we are, by wto rules they have to be totally self-funding and self-sustaining. so we're self-sustaining. we generate fees from customers and pay from loan-loss reserves and our

operations and on top of that we generated the last five years just as a snapshot, $1.9 billion to the taxpayer that goes to further deficit reduction. but, $5 billion over the last 20 years. what we do is we help level the playing field for u.s. companies that are exporting overseas. and level it in one of two ways. sometimes, frequently there are about 80 other export credit agencies around the world. all the industrialized nations have them and when those companies and the united states are competing for foreign sales they are coming, they are, their foreign competitors are backed by government-supported loans frequently. so we provide a comparable backstop, financing so that we level the playing field. so the customer can make a decision whether it is a boeing plane or airbus plane or caterpillar tractor komatsu tractor or whether u.s.-made power turbine or u.s.-made small business goods. we level the playing field by providing buyer

financing. that is one thing we do. the second thing we do is provide working capital loans for businesses looking to export because it is hard when you go to a bank and you said, i'd like a working capital loan. they say, where are your receiveables? well, they're all in brazil and mexico and nigeria and south africa, and the bank says we're not really interested. we can't collateralize that. we do working capital loans. last thing we do, a lot of our small businesses do, we insure their receivables. we have a company, i talked to marlon steel, up the road in baltimore. a little steel company. $4.2 million a year. about 25% exports. exports to 36 countries. we guaranty his receiveables. he is selling to china, singapore, costa rica, $10,000 orders. we make sure that he is not going to be able to collect on that. if he can't collect we pay the claim. and so that is how we sort of move things forward. insurance, working capital

loans and the bulk of it though is buyer financing. >> so what happens, fred, if next week the bank just disappeared and didn't exist, you're out of a job? i know that that might be good for you but how is the world and how is america after expect if xm is not there. would something come up in its place? what would be the harm or opportunity? >> we're called lender of last resort throughout our history. i don't like that term because it makes us sound like we're the last gas room for 50 miles and with dirty rest rooms. >> and you jack up your prices. >> yeah. so people come to us because they can't find financing elsewhere or they can't find financing comparable elsewhere and, you know, recently we helped finance aircraft, for example, to bangladesh. the good thing about bangladesh it is not going to be a boeing fleet. the average age of the

aircraft was 30 years old. so, now we probably have the oldest aircraft in the world, no longer bangladesh. banks are not lining up four or five or six deep to lend lang la-airlines money to buy aircraft. if we're not there they would probably buy airbus. i think the question we're not there but the others are still there. airbus, airbus was in the competition. airbus said we'll provide financing. we'll provide financing for boeing. we let the airline or in that case which is owned by the government make a decision. do they prefer the airbus product or the boeing product? they can do it on the product attributes, not because they get like 0% financing from one place and no financing from somebody else. >> now the other day i was in california, northern california and driving along between san francisco and going down to santa clara and i looked over and all of sudden there is this big beautiful building, in fact a bunch of them. across the top it said

solyndra. i'm sure you were not involved in solaria? >> it was solyndra. >> it was solyndra. sorry, solaria. that is actually another company out there and i knoll them but they're not going to be too happy i mentioned them but sole sole. and it involved -- solyndra. involved loan guaranties in government. was a big, big mess in the media. there was a lot i would say public uncertainty about this role. has xm had similar cases about failure that doubts about the function of exim? >> our loan write-offs are 1 1/2 to 1.6% a year. we have reserves and reserves are paid by our customers. we reserve 2 1/2%. in reserving we have much more reserves than we actually have writeoffs each year. we're also can be patient. we can collect, we have loans made in venezuela.

you know, we can be more patient than a bank can be at this point. >> right. >> we have not had any really, large-scale, ex-imkind of loan issue. we're lending in 150 countries. so we're not really concentrated in the energy sector or the construction sector or, i think we have a constitution -- concentration in aircraft because aeronautics are the number one export of the united states. we obviously have some concentration there. but that is spread over 150 airlines in 50 different countries. >> when i think about trade and i listen to president obama when he made the statement about doubling imports or, exports, excuse me, doubling imports is easy. >> we did that already. >> the way to think about that is, doubling exports, do you do it by leing your

currency slide? do you do it by ernest work? in other words you just get more u.s. companies focused on markets abroad and you get involved in knocking down barriers which are fairly significant in a lot of other states? we've seen the discussions in the economist, a lot about the rise of state cap tallism. protection of markets abroad. or do you, you know, or do you move in some other way? do you move, and i as i look at the global economy right now, we've had a lot of discussion about the sluggishness of the european economy, the slowing down of the chinese economy, you need buyers out there. i would love to get a quick take before we open questions on the trade profile on the country and what is happening but as you look ahead, not just giving a kind of rah-rah thing that exporters are up but doesn't it look bleak out there? >> well, first of all, can i say exports are up. they're up about a third since the president announced that. >> i heard in the state of the union we're already ahead of schedule.

>> we're slightly ahead of schedule. exports are growing 15 1/2% on compounded basis. you remember high school algebra, 14.8 you need to double. we're actually slightly ahead of schedule. so exports are up. for 20 or 30 years the united states and the world for that matter relied on the u.s. consumer and all the debt we came lawsuited to -- accumulated to drive our economy but the global economy. what will really drive the global economy in the next decade or two, will be infrastructure investment which will then also lead to global consumerism. i mean the estimates are by the end of this decade there will be a billion people in the middle class globally. that will be from china to india to vietnam and so forth. that's a huge market and it's a huge market for things we sell. so i'm actually very bullish. what the world needs, it needs power 24 hours a day, seven days a week, something we sort of somewhat take for granted. it needs, we may spend too much money on health care, places like india are

spending one or 2%. they probably need to go to 7 or 8% of gdp on health care. china, my recollection, they're looking to add 25,000 beds in hospitals. the fact is all of these invests are things we sell. from medical to farm equipment to construction equipment, airplanes, aeronautics, services. we do a lot of service exports. so i'm very bullish partly because, you know, what we're not good at making and selling is, you know, clothing t-shirts, consumer electronics but we are good at selling these kind of large-scale infrastructure projects that are going to really be driving this economy for the next couple of decades. >> we have a question. we have a question right here. if you will identify yourself price. >> george with "the nation" magazine. i have a quick question, i'm sure you're aware many house republicans and hard right groups like club for growth are signaling they don't want to raise the loan limit for your organization. can you talk a little bit

about that, and talk about what some of the implications of that would be? >> sure. just to back up, every, most agencies are in sunset. our agency sunsets september 30th. it gets renewed for four or five-year periodally by congress. congress renewed it until november. renewed it again until december. now our authorization expires at the end of may. >> end of may this year? >> this year. 78 days. not that i'm counting. >> i didn't know that i didn't really act what if they exist but i didn't realize that actually happened. >> you're prescient. hopefully not prescient. congress sets terms and conditions how we operate. one of the things they said, what is the total amount of indebtedness at any one time. current seal something $100 billion. we're hovering at 90 billion. get a about dollars we pay every month. get loans we pay every month.

we'll quickly run out of headroom frankly if we don't get that increase. it is more likely we'll actually run out of headroom before we run out of time at this point. so, if we don't do it, to your question, if we don't do it, it does open a door for our foreign competitors. i mean, i said this the other day. we're sitting in washington wringing our hands, wondering should be 100 or 110 or 140, or 160. the house financial services committee actually voted 160, more than we asked for. and our competitors have simply look -- licking their chops. we'll come in. seal those deals and won't be bank to support the u.s. exporters. while we're worrying what the numbers with should be our competitors are happy watching the turmoil. >> yes. >> with our french treasury coming to of the end this year. was running program that is your competitor in france.

so i made sure that international airline companies get the best product at the best price, i.e., airbus. that is the reason for my question here. lots of complaints in europe by many companies across the continent about export credit competition coming from china. we, the u.s., germany, france, u.k., we are all part of the oscd export credit and so we play by the same rules. that is not the case for china which is not a member of the oscd. what do you do about that or what do you wish to do about that? >> interesting. china. >> i think this is one of the largest threats to our export agenda and a large threat to the united states because there is a lot of state-sponsored capitalism. it is opaque. it is not transparent. it doesn't play by the rules. china is certainly one but

they're not alone. brazil and india to a lesser extent but i'll give you one stat that currently brazil, india, and china provide greater support for their exporters then all the g7 countries combined. those three countries, brazil, india, china. most of it frankly is brazil and china. what we're trying to do to rebut that is a couple of things. one when vice president xi was here, there was agreement made to bring china into some kind of international framework by 2014. we already had teams of people in china to start working on this and in a specific way in terms of exchange of information, a more transparency so we can find what could be that international framework. but in the meantime we have made a decision at ex-imbank, working with the administration in pakistan we got information on the chinese financing offer. we looked at offer. we were able to offset it

and we're matching the offer, still at no cost to taxpayers. still without a subsidy but we were able to reduce the fee we charge, points, essentially like points on a mortgage, extend the term as the chinese had done so we were able to take financing off the table and pakistan while they're still deliberating they're looking at chinese locomotives or ge or emd locomotives but the financing terms are the same. but we did that as a one-off, partly to say to china we'll not sit back and wait for this to happen. in the meantime we will find everywhere way to offset if we can. ex-im. >> let me pose one question before we close out and you all go to well-deserved drinks. if you're interested i wrote a piece for the atlantic and google my name and the "bric"s and find this paper. there was. oecd paper and i forget the gentleman who wrote it and

future of middle class and middle class oriented development and there was a fascinating sober chart and looked at stages global middle class development and what the shares would be really by region. u.s. and china were broken out. europe, et cetera. what you saw in that chart was over time how very large globs of the european share of the global middle class and the american share of global middle class whittled down to very small, tiny bits. by 2050 and the middle class represented by india and china very substantial. that and latin america and africa remained minor and relatively insignificant. and what you just said about all of those coming middle class represent great opportunities but it also says something else. is that, the u.s. economy in that world probably isn't likely to be the one that

makes the weather. that creates the gravitational forces around economic, economic trend. and while it may be good for exporters in a certain way i would like to talk to fred hochberg, the smart thinker, not fred hochberg of ex-im bank. what kind of world is that the american middle class has become so small in comparison to the demand everywhere else? and how do you in that world envision the u.s. maintaining some leverage in the system? >> well, it is probably a world that has just less income disparity in some degree. there may still well be at the high end but there will be more people in the middle. not just the united states and elsewhere. to me that is probably a world, one thing about the middle class they become stakeholders in the society. the more stakeholders we have less likely we'll have as we just talked about, have 200,000 troops stationed in different places around the world because more people have stake what their country is

like and their political environment and their economy and that makes for greater stability. in some ways you get greater stability. >> but if you've got an achievement of such a large portion of the middle class and as you said those countries weren't playing by the fundamental rule the rest of the club has played by do you suppose that the rules basically change? that those abiding by the kind of rules-based system are undermined and that there are new basically rule seters? >> yes. i think the rules have to change. i don't think this will continue forever where we've got the second largest economy in the world, the largest exporter in the world, deciding to just go rogue and not play by the rules. that is not just tenable. also not tenable and i've been in china. it is not tenable that we're going to have a $250 billion trade deficit and then 275 and year after 3.25 and next year 370. i said this to the chinese. you really don't believe it will keep growing each year and no one will say anything and they will never stop?

no, i don't know exactly the form of that. having some agreement on export credits is a start. but it is only a start because a lot of times in china they will go into an african country and not only, even if they begin to have the terms of the export loan at par, even if we get there, there's a lot of other stuff that they get paid in kind. they get paid at iron ore at below market. there are a lot of other factors going in. so we're pushing for greater transparency so we don't have this unequalibrium. i agree with larry on a lot of things. one is, we still have great work for us. you know, i walk through factory floor after factory floor in the united states today, weill give you one example. siemens runs a, just built a new facility, power turbines in charlotte, north carolina. they construct, manufacturing them in charlotte, shanghai and berlin. the charlotte plant is the

most efficient plant. we pay more in the united states than shanghai but there is greater automation. so there is many ways that we're still very competitive. they do not have to add 400,000 square feet in charlotte. they could have done it in china. they could have done it in brazil. they didn't. they did it here. >> let me ask one question. michael lynn, i don't know if he is here now, i wrote a "new york times" a while back give us your braun and not your brains. to some degree, secret to success of the united states has been the brain drain problem for the rest of the world. because you had so many smart people came here and to some degree if they went back they took part of the dna here. if not they were innovative. do you think that, and i know you're a u.s. government official but take that hat off. do you think on immigration policies need to be rethought given the fact we do bring in so many smart, talented people, train, educate them and kick them into other countries that are picking the champions

that these folks are innovating? should we keep more of them here. that is crazy what we're doing. people ask me the name of your bank, export-import bank. what do you import. we import entrepreneurs. we start a business here and export their product. we know our immigration policy does not make sense. does not make sense to train people. this is still the best place to get an education in the world. we may have a lot of challenges in our education system. there is no better place for certainly higher education any place in the world and we can't keep exporting, leting that talent leave the country and leave it so willingly. they like to come here. people, you know what? no one is emigrating into china. they're not doing that. did a great quality, i'm going to move into china. they're moving out of china. people have some means they move to the united states. we have to make sure we find a way to accommodate that. we have a lot of politics. we know that is the right answer. we have the politics in the way. just like a lot of things happened last year from the debt ceiling.

we know what the right answer is. it is just getting there. >> you have a dinner night. have one quick drink with us? >> yes. >> before everybody gets up, fred, i want to say a few things closing. this has been a very long day. i'm grateful to all of you. my staff tells me we have more than 850 people cycle through here during the day. because of that i really owe an incredible debt of gratitude to the atlantic, my team a melody thomas, eliza murphy and eliza french. we have the bloomberg, cnbc and fantastic c-span staff here all day. thank viewers and teams of people that have done it and thank folks at the hilton for this. i want to in particular take our underwriters, td bank, certified financial planner board of standards and center for audit quality for their support of this program. i want to make just one special really important, this conference started as the idea of richard bay. we were drinking somewhere and richard is a friend. he has no, i put, he has a

private foundation called governor woods foundation up there. the governor woods foundation has no, they're not trying to sell anything. they don't want that up there. but richard and i thought about this and i just can't thank him enough for helping get the quality of speakers and committing this. in washington, d.c. and really anywhere in the country really hard to find a economic forum that isn't a stacked deck forum. we worked very hard. you should see the hate mail i got in my box given, i think i got hate mail just about every speaker we had. and so that meant it was a great success that we were able to bring together someone in every corner who have been to some other corner. but today if you look at composite what we did we had an incredibly, cordial, thoughtful, 360 degree discussion of the u.s. economy in directions that i hadn't fully expected. we had the macro types. we had the micro types. we had labor types. people were looking at

technology and innovation. those are concernssyians. those that are deficit hawks. those that love the fed and ex-im bank and those that love to see them put to rest real quickly. i want to thank you for joining us. leave this room and join in the congressional room. we're buying the drinks. come in and have a drink with fred and myself we would love to have you. so thank you all very much. [applause] . . introduced shortly

by state senator tim bivens. >> help your servants to fulfill their responsibility that they were elected to do and entrusted in their constituents to carry out. >> father, grant them your protection and anointing, look upon the assembly of our national and local leaders and fill them with the spirit of your wisdom and love. may they always act in accordance with your will. and may their actions and decisions reflect true justice in the well-being of all. almighty god, you know the longings are in our heart. protect our rights in your

goodness. watch over those in authority so that people everywhere enjoy freedom, security and peace. we consider it done in the name of jesus, amen. [applause] [applause] >> next we'd like to introduce to you mr. rich sanders, rich is the national president of viet now. heat a vietnam. he will lead us in the pledge of allegiance. rich? >> i pledge allegiance to the flag of the united states of america. and to the republic for which it stands, one nation, under god, indivisible, with liberty and

justice for all. [applause] >> thank you, rich. next we'd like to introduce you to senator brad brzezinski while senator brzezinski served in the illinois senate he was known as the singing senator. he will lead us in god bless america. ♪ while the storm clouds gather ♪ ♪ far across the sea ♪ let us pledge allegiance ♪ to a land that's free ♪ let us all be grateful ♪ for a land so fair ♪ as we lift our voices ♪ in a solemn prayer ♪ god bless america ♪ land that i love

♪ stand beside her and guide her through the night with the light from above. from the mountains, to the prairies, to the oceans right with all. god bless a america, my home sweet home, god bless america, my home sweet home. [applause] >> a senator with a singing voice, isn't that great? we have some very special thanks

we want to give today. this beautiful plaza -- you've never been here before, it's just a work of many, many years. we want to thank larry reed, the chairman of the river front commission and voice chairman paul miller chuck studdad, major john burke, jim weitzel, and kay miller, john, shaun, chief, the dixon police department, sheriff barga, and the elks club for making today's event possible. let's give these people a round of applause. [applause] >> next i'd like to recognize our elected officials who are with us here today, congressman don manzullo. [applause] >> senator brad brzezinski and the mayor shaun conners, mayor bob logan, jeff -- yeah, give

them applause. [applause] >> we have david blackburn and jeff kuehn who are commissioners of the city of dixon and bobby schilling, congressman bobby schilling. [applause] >> today here to endorse senator santorum is ben roe the street attorney, mayor jim burke, dixon police chief, white side county sheriff, kelly, ogle county mike handwritten give these people a round of applause, thank you all for coming, gentlemen. [applause] >> just one reminder before we bring the forearm forward if you are here today and you would like to take a santorum sign home, their all at the lemonade stand here at the stop sign. pick up those. let's get those posted and get them out here today. and we will go out for victory on tuesday. we want to introduce now the mayor, the honorable mayor of

dixon mr. jim burke who will introduce senator tim bivens, mayor burke. [applause] >> thank you, jason. and welcome, everyone. you know, a few years ago, the reagan peace park at eureka college was being dedicated and it was -- the weather was what similar to this and raining and so forth and just as maureen reagan got up to speech, as she came up to speak the clouds came out and maureen said the sun always shined on ronald reagan, so senator santorum you're getting the same treatment today. we've had rain here all morning. [applause] >> senator, as you know, ronald reagan was exuded self-confidence. he was very optimistic. he really believed in himself. and, senator, he picked up all

these treats right here in this community. they were treats he had here when he left her as a young man and if you get around this community at all, you'll find that is the attitude that prevails throughout this community with all these fine people here. [applause] >> just one last county. as the senator mentioned it was mentioned the democratic party have their headquarters over here. but my good republican friends when they placed this statute is they've got reagan looking right straight at the democratic party trying to keep an eye on things. so anyway, on behalf of the city council and our citizens, senator, we're really honored to have you here today. we are pleased to have you here. we want to give you a big warm welcome to the i is it of dixon. at this time i'm going to

introduce tim bivens. anytime the city needed something, tim was right here for us. a big thanks for tim bivens. mraus mra[applause] >> thank you, good afternoon and thank you for coming out here. mayor, thank you, you're very gracious and senator santorum, i want to welcome you to my hometown. [applause] >> the last time we had a presidential candidate come to dixon, he won. [applause] >> this was his hometown, too. dixon knew him as dutch. the rest of the world knew him as ronald reagan, the 40th president of the united states. [applause] >> his path to the presidency started here. the statute wasn't here, of course, and the street in front

of us wasn't called reagan way but this was where his character was formed. two blocks here on reagan way is the church that helped form his deep faith and further down the street the school that ronald reagan attended that helped form his mind. three more blocks is the home that he lived in with a strong mother who helped build his character. it was that path and those attributes that eventually led him to the white house. attributes like sincerity, humility and a deep faith, that reflected throughout his life and his presidency. while we all agree there will never be another ronald reagan, we still look for those attributes in our candidates that is why i have chosen to endorse senator rick santorum because i see those reaganesque qualities in him. [applause] >> you know, back in december, i was talking to a store owner and she happens to be a democratic

and she likes giving me a good-natured ribbing when i come in and she said, well, who do you like on your side for president? i said, you know, i really like rick santorum and this was in december. i said i just hope he can get some momentum. well, senator, you got the big mo. [applause] >> and finally, senator, when you capture our party's nomination and you're looking around for a vice president you know dixon, illinois, is not a bad place to look. [laughter] >> just saying. [laughter] >> seriously, ladies and gentlemen, it is my great privilege to honor -- and honor to endorse and to introduce to you the man i believe it will be the next president of the united states, senator rick santorum. [applause] >> thank you. [applause]

>> we should that. wow, what a great crowd. thank you so much for coming out. tim says thank you very much, mayor. i appreciate you coming out and i welcome you here to the city and i thank to all the democrats coming out to the city as well. i appreciate that. and what an honor it is to be here just to stand in front of this statue in this town that did so much for this country because this town helped shape and mold ronald wilson reagan and ronald wilson reagan changed the world and he had a big role in changing the world as we know it. [applause] >> so i always say the great thing about america is that we just go on every day and we live our lives. we try our best to provide for ourselves and our family and ordinary people just doing ordinary things but what we realize in america those ordinary things just like the people who are raised with dutch

reagan here in dixon end up contributing to extraordinary things. and that's really the greatness of our country. is the idea that people can come from small town america, many cases like in my case a first generation america and have the opportunity because you were some who were taught the principles of hard work and honesty and integrity and doing what's right even when it's hard, doing what's right when no one is watching you. all of those things that you were taught here in dixon and in small town america and across america those are the things that make our country what it is. that's what makes america unique in the world. we're a country that from its very inception believed in the very basic principles that government should be limited and that we should have unlimited potential of the american people. that's a great combination. [applause]

>> i have been told by some local meteorologists that our time is short here. [laughter] >> that the weather has passed but it's coming back. so i'm not going to give a real long speech. i know you'll be very excited to hear that. but i do want to talk a little bit about what ronald reagan stands for and stood for and why it's so important that we have a candidate that does that in this election, that stands on the pillars of what ronald reagan built as the modern republican party. remember, when ronald reagan took the helm back in 1980 he had fought some battles. he had been fighting battles for a couple decades to try to revive conservatism in this country. and he fought it and served in campaigns, against no less a sitting incumbent republican. now, we don't have a sitting republican incumbent running for office this time but we have

someone that is certainly the choice of the establishment republican, someone's whose turn it was, we see that so often in republican politics for president. it's almost inevitable whoever is the next in line that's who the republicans tend to put forward. and ronald reagan said, no, we don't need the next in line. we need something very different. what's going on and what's going on in 1976 and even worse in 1980 was something that was corrosive of the american spirit. there was a time in the '60s and the '70s we stopped believing in what made america great. we started believing that government and control of aspects of our lives was what make america stronger. back in 19 -- late 1970s, the word "liberal" wasn't a dirty word. now liberals don't even like

being called liberals in america. [laughter] >> but there's one man who changed that. he changed it not going out and tearing down his opponents. he went out and painted a vision of who we are, where we came from and what we can be in the future. that was the greatness of reagan. it wasn't his rhetoric. it was always he was just a great -- he was someone who could coin a phrase. reagan would tell you it wasn't his rhetoric. he said it in his farewell address. it was his policies. his policies that were rooted in the greatness of our country. and, of course, what that means it will rooted in the american people. not a big and powerful government. [applause] >> and reagan ran that insurgent

campaign in 1976 and people were saying, why don't you get out of the race. you have no chance of winning. and he fought. he won 11 states in 1976. i might add just parenthetically, that if we happen to win illinois that will be the 11th state that i won in this election. [applause] >> but he fought the battle. he fought the battle in 1976 and laid the predicate of 1980 after four years of misery because, unfortunately, republicans did not universally accept his message. he was considered too conservative, someone who was unelectable because we needed to appeal to moderates. we needed to appeal to democrats because conservatives and republicans didn't have

confidence in our vision for america. they thought that we had to compromise that vision. we had to be something not true to ourselves, that being true to ourselves as reagan was, to the conservative principles that our country was founded upon, that that was not a winning formula. that we had to sell ourselves short in order to win the election. we found we didn't win the election and jimmy carter went about the process of weakening america on every possible front. well, now we have a similar election in some ways coming up in 1980. we have barack obama in four years of weakening america in an area that i know would disturb the president -- president reagan as much as any. we have a president who's talked about from leading from behind, talking about reducing our military and pulling back from

america's influence in the world. we have a president who doesn't believe that america is a source for good. ronald reagan quoting the shining city on a hill, to president obama, we are a source of policy that requires this president to go around and repeatedly apologize for america and what they do, what we've done in this world. ronald reagan would never apologize for the greatest country in the history of the world. [applause] >> we have in this election a very similar theme. we have a president who's made us weak, who's cut our defense. we have almost -- we're approaching a $4 trillion budget, over $1.2 trillion in

deficits. expanding, exploding the deficit by $5 trillion. in a matter of four years. and yet the only place the president can find a cut is defense spending. that's the only place that he's willing to take a pound of flesh and, of course, it is the only thing, the principal thing that the federal government has to do that the state and local communities and individuals can't do. it's the area that the president says is responsible for our budget deficits. yet, when i was born, defense spending was 60% of the federal budget. it is now not 60% or 50 or 40 or 30 or 20. it is 17%. and yet it's the one area that president obama says over and over that we have to cut some more. let me pledge to you just like ronald reagan pledged in 1980. we will build the strongest military on the face of the earth and i will not cut defense spending.

we will have a strong and powerful and forceful america. [applause] >> ladies and gentlemen, that was one of the legs of the three tools, three-legged stool of the president reagan, strong national security, peace through strength, and it worked against the foe that no one thought could ever be defeated. the red menace of the soviet union, that power that many on the left said we had to appease, we had to negotiate with instead of confront and force to its knees. ronald reagan had the courage to go out and do what our founders were willing to do. speak truth from our founding documents, our founders were not afraid to speak of the truth. and when ronald reagan got up

and called evil evil, and called the evil empire what it was, oh, the press was in a tizzy, they went crazy how could we be so inflammatory, the greatness of america ronald reagan knew was that we did say what was good and what was evil. and reagan also knew that we would no longer be great if we couldn't tell the difference between the two. [applause] >> oh, there's an evil in this world. it resides in the hearts of radical islamists who want to destroy freedom-loving institutions, oppress not just those who they disagree with around the world but in particular they're pressing

people with their own faith, subjecting them harsh shari'a law and torture and death particularly, of course, in the nation, of iran. and we have a president who got up and said recently he has israel's back who we all know he has turned his back on the nation of islam. [applause] >> we cannot allow -- we cannot allow iran to get a nuclear weapons. i've said that for eight years. we actually passed bills over the objectses of president obama, then a senate we passed bills to put sanctions on iran, on their nuclear program. i talked about engaging the persian people -- iran is a persian country, a country who is not at war with the jews

historically a country that is a proud and noble civilization is now being highjacked by a bunch of religious zealots who had the opportunity to engage them in 2009 in the green revolution. instead of doing what reagan would have done which is engage and fight as he did in poland and other places around the world, engage the freedom fighters, help them to overthrow their oppressors, know this president sided with the mullahs, sided who terrorize and kill freedom-loving female and particularly americans. we need a president who will stand up for the very principles that made this country great, engage the freedom-loving people in this world not to start a war, to prevent a war and prevent them from getting a nuclear weapon.

[applause] >> and, of course, one of the most daunted legs of the stool that president reagan talked is he talked about the importance of limited government and free people. [applause] >> how many jokes did ronald reagan tell about gig government? he understood that government was in the way of free people being able to live their dreams, to work and reap the fruits of their labor and take care of themselves and their family and their community because he saw it here. he saw it here in dixon, illinois, he saw a community. he saw how we built a great society from the bottom up, one neighborhood at a time. people taking care of each other. yes, if you were raised in a single home you had dads down the street who helped out. you had the football coach, the

baseball coach. you had the folks at the y. you had the folks in the civic and the community organization and the library, everybody looked out for each other. we were a community because we didn't have all these government programs to take care of people. it was our responsibility as brothers and sisters in the community to look out for each other. and in small town america as this man just said, it still is. [applause] >> that is the vision that reagan tried to remind us of. how important it was to allow the businessman, the entrepreneur to make a profit and not condemn them as being rich or greedy or the 1% -- 1% does a lot of hiring of the other 99%, and that's a good

thing. [applause] >> ronald reagan stood for free markets, for a free economy. he would be appalled what is happening today with the government takeover of health care. margaret thatcher looked back at what she accomplished back in england at the same time she served as reagan did. and she said she never was able to accomplish what reagan accomplished in america. and she said the reason the british national health care system. she said once government has their hooks into you, once government makes you dependent upon it for your very health and your lives and that of your children and your loved ones, they got you. [applause] >> they got you. [applause] >> and there is no amount of

tribute you will not pay to get what you need to preserve your health and more importantly, the health of those that you love. that's why obamacare is the number 1 issue in this race. it is a race -- it's an issue about fundamental freedom. it's about whether you will be a generation that will be the generation that reagan talked about. he said freedom is never more than one generation away from extinction. we didn't pass it to our children in the bloodstream. it must be fought for, protected and handed onto them to do the same or one day we will spend our sunset years telling our children and our children's children what it was like in the united states when men were free. [applause] >> do not be that generation

that reagan warned about. there's only one way to stop it from being that way. and that is to make sure that we nominate somebody who can take on barack obama on the issue of health care and on the issue of freedom, on the issue of liberty in this country. [applause] >> someone who has not been for government-mandated health care, someone who has not been for top-down government control of the health care sector at a state or a federal level but someone who understands how critical, how critical government control of health care is in our society and is able to go after barack obama, make this the central issue,

there's a poll out that four days -- excuse me, first in the country that showed that two-thirds of americans oppose obamacare and the individual mandate, two-thirds of american americans. [applause] >> why would the republican party put up a nominee who takes that issue off the table. who takes the health care issue and government mandates both at the state and federal level which he has supported. why would the republican party nominate someone on the most important issue of the day, freedom, reagan's freedom. why would we take that off the table? that's why you have to help me here in illinois and help me get elected here in the state of illinois. [applause]

>> and the third leg of the reagan stool was talking about what he understand, too. growing up here in dixon was important. you see our country was founded on a basic principle that the foundation, that real foundation of american society is not the individual. you build a society on individuals, it's like building a society or house on grains of sand. you have to build it on something on bond, something that's strong, that has cement and glue to hold together fast upon which you can put heavy structures on top and that is not the individual. none of us are out here in society living radically individual lives, not linked together in a way that's important for us to prosper and

survive. of course, reagan understood that foundational building block of society was the family. marriage and the family are at the core and foundation of our society. [applause] >> we also understood that in order to have limited government, you had to have people living good and decent and moral lives. if everybody goes out i'll do whatever i want to do, i'll be my own government, i'll live my life under my rules. well, after we leave here and drive down the left side of the highway and see how long that works out. [laughter] >> you can't live according to your own rules. we have to live according to rules that are good and decent and moral and fair that allow us all to pursue our dreams.

and when people break those moral bounds, then society becomes a very dangerous place. and government gets bigger. we have to hire more people in uniforms here in this country. and we're less free. these are the basic things that we understand. edmond burke said we will be constrained from the chains we put on ourselves but we'll be constrained by the chains that men put upon us if we don't do it ourselves. [applause] >> ronald reagan understood that faith plus family equals freedom in america. [applause] >> that it all works together. i know we're concerned right now about the economy in this

country. we've talked about economic liberty and limited government and balanced budgets and less spending and strong families and the faith commitments and all of those things work together to make america work. it fits. you can't have limited government unless you have free people living good and decent and moral lives and strong families to help each other out so you don't need government to come in and pick up the pieces when families and communities break down. you can't have a strong national defense unless you have a strong economy and people going out and prospering and living lives that allow us to grow and create the dynamism that our economy has created then you can afford to have a strong national security and defend our country. all of these things work together. reagan understood that these

things wove together in a great mosaic that was, in fact, the united states of america. he understood it and he brought people together on that concept, all based upon the founding principles of our country. reagan often quoted and relied heavily on our founders, people who charted the course for america. in the last few years, we've had a movement in this country that i thank god for because they have resurrected one of those founding documents that was in many cases was put in the dust bin of history, one of which is called the united states constitution. [applause] >> i carry it with me. it's an important and critical document in our country. it's a document that is the operators manual for america. it's how the american government

is to function and, of course, if you read it, very limited powers are given to the government. very extensive powers are given to the states and to the people. [applause] >> reagan revered this document. he understood its importance but he also understood the importance of another document that he quoted often. and another man from illinois would quote beautifully and frequently, abraham lincoln and that was the declaration of independence. [applause] >> these two men of illinois knew that the constitution without the declaration could, in fact, be a very dangerous document at the hands of men looking for power. but it was, in fact, the declaration that anchored the constitution, the constitution

is tethered to it. why, because the declaration tells us who we are. there are many on the left who would like to dismiss the declaration as a document that existed before the american government was established. and, therefore, has no legal binding in america. but it has a moral binding in america. and that binding comes from one phrase that we all know that i'm sure you're taught here in dixon, illinois. and that is we hold these truths to be self-evident, truths here's that word again. we hold these truths to be self-evident apparent to all, people of faith, people of no faith. that all men are created equal. [applause]

>> is that true in other civilizations in the world. is it true in the muslim world, is it true in the third world, of course no. understand where that concept comes from. it comes from western civilization. it comes from the roots of our country. which our founders went on -- and laid out in the next phrase. and that they are endowed by their -- >> certain unalienable rights. that the does not come from the government. the concept of truth does not come from the government. it comes from our creator. [applause] >> this is what made us different than any other country in the history of the world.

no other country in the rest of the world had ever said that people are equal and rights from come god, no, we came from societies and thousands of years of being ruled by kings who got the rights from god. and they distributed to those who they felt was worthy of their rights. and our founders said, no, we believe in the dignity of every human life, that all life is sacred. [applause] >> and we change the world because we had a constitution whose job it was to simply recognize the rights that are already written in the heart of every person. and they're there to protect those rights and allow you the american people to build a great and just society, to change the world by loosening the human

spirit, the unlimited potential that reagan, that optimistic man from dixon used to talk about all the time, that infectious optimism, why, because he saw it. he saw it in the eyes of the people out here in dixon and across this country. he saw the potential, the spark, that human spark that lincoln talked about. he understood the greatness of our country lie in each and every one of you, not someone who believes that smart people in washington should make decisions for people because you're incapable of governing yourself anymore. what a pathetic view. [applause] >> and we did change the world for 2000 years life expectancy had been 35 in the western world. we were an agrarian society for

2,000 years up until 1776. and in 230 years, because of america, because of you, free people, life expectancy has doubled. we've gone through an industrial revolution, a technology revolution. imagine, what the world would be like today if we were still having kings and emperors and dictators manage society for their benefit instead of having free people from the bottom up governing america, making sure by their actions, both by putting the uniform of our military as well as being citizens in this country of keeping america free. [applause] >> at the end of this

declaration the founders wrote this phrase of which they attached their names to. all of them men of wealth, property, stature, education. they signed this document knowing they were giving up a lot had they -- were they to lose. in fact, they were giving up their life because they were signing a treasonous document to the most army over the world. yet, they did so willingly. because they believed so much in that concept that it has proven to be that transformational concept in human history. here we are now -- we've taken that flame from previous generations who have paid the sacrifice for freedom. we are the descendents of reagan, reagan in that generation, held that torch high, told those tyrants to tear

down walls. [applause] >> they were no different. the people of the greatest generation, the people of reagan's generation were no different than the people here today. they did what they had to do. they stood up and they rose to the occasion, to preserve freedom. ladies and gentlemen, what is necessary now in america to preserve freedom is for each and every one of you to engage in that struggle in this election do not be those people that reagan talked about, who would have to tell their children and children's children what it was like to live in an america where men were free. you don't want to ever have that conversation. and unless we do the right thing in this election, we will be the

generation that allowed that torch to go out, that beacon of hope for the world. the best way to make that happen is to make this election like the election of 1980. don't make it who can best manage washington or be the ceo of the economy. we need someone who can talk and strike blows for big things like reagan did, for freedom and for america. [applause] >> let's just be brutally honest about it. there's one candidate who can never make this race about freedom because he simply abandoned freedom when he was governor of massachusetts and he abandoned it when he promoted obamacare in 2009. [applause] >> you listen to any of his speeches he never talked about

it. he can't talk about it. why when that is the most important pressing issue in our country right now. the big central issue, how can we nominate someone who can't summon the energy, summon the vision, summon the greatness of our country and elevate the debate to something that is big and important and lasting. you can do that here in illinois. you can put someone forward who while not the great communicator himself can try in our own way to try to communicate that message that is at the heart of what america is. you help us here in the next 24 hours. if you go out and you're willing to vote for me tomorrow and then --

[applause] >> i appreciate that. and that's great. but it's not enough. we're up against being outspent depending on the press reporter who talked to me 5-7 or 10-1. robo calls, radio ads, television ads all tearing down, tearing down, no vision. no hope. no promise of what america is to be. we must do better than that. [applause] >> so i'm asking you what our founders signed in that declaration to pledge to each other we mutually pledged together. our lives are our fortunes and our sacred honor. no one is asking for our lives in the next 24 hours. no one is asking for your fortune.

although if you go to rick santorum.com -- [laughter] >> you can pass a hat but your honor's at stake, the honor of dixon, the honor of the town that molded this man. what will dixon say? will they stand up and uphold freedom, uphold the legacy of this great man and what he did to this country, what a difference he made. will that have been in vain? will it be the generation reagan talked about in his farewell address, that forgot about what america was all about. i need your help. i need you not just to vote for me but i need you to go out and talk to your friends and neighbors all throughout the state of illinois. i need you to rise up and speak loudly from the place of freedom

here in dixon, illinois. let the voice of reagan be heard across this land. thank you very much and god bless you. [applause] >> ladies and gentlemen, rick santorum. let's give him a hometown welcome. [applause] >> let your yard signs, john is the illinois coordinator for rick santorum. john, you got a few words for us. 24 hours, people, if everybody here would call 100 people we could turn the outcome of this election. let's welcome john. [applause] >> hello, dixon. what a great day! there's only one ronald reagan, there's only one candidate for

the republican nomination with the republican views and values of ronald reagan. it's the only one who came here to see us and that's rick santorum. [applause] >> now we're in the 16th congressional district so i want to say the names of who our delegates are, who are pledged to represent rick santorum in tampa, florida. you've got to vote for each of these people in order for us to win the 16th district. one of them is over here to my left, mr. dennis of paw paw over here on the line there. dennis? [applause] >> some of our delegates in princeton, illinois, christine arnst. let's give her a round of applause. and from the great county of

ford, third delegate jan peterson. let's give her an applause. [applause] >> and her husband phil is serving as an alternate delegate. from the neighbors 17th district, christie schilling is here, the wife of bobby schilling. the great congressman from here in the 16th district is don manzullo. [applause] >> and i'm from henry county, i'll be on the 17th district ballot pledged to rick santorum as one of the delegates over there. i'm running with rich nordstrom, the mayor of galvo. i'm also with james rutle over here in the front row. he's an alternate delegate in the 17th district from erie, illinois. and from sterling, illinois, one of our delegates, kay farris. let's give her a round of

applause, kay farris. don't forget to vote for your delegates. thank you very much. ♪ >> again, yard signs are available back here at the lemonade stand. god bless you all. get out and vote and get your neighbor to vote. [applause] >> great interview. >> thank you very much. i appreciate the opportunity. ♪ ♪ [inaudible conversations]

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♪ [inaudible conversations] >> we're praying for you. >> thank you. >> keep working. >> all right. >> praying and working. >> there you go. >> rick, can you sign this? [laughter] >> thank you. >> good luck on the campaign, senator. >> thank you. >> i'll tell you what -- [inaudible conversations]

[inaudible conversations] >> all right, ready? >> yeah. >> thank you. >> thank you for the message. [inaudible conversations] >> can you sign this? >> yeah. >> yeah.

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[inaudible conversations] [inaudible conversations] [inaudible conversations] >> rick santorum here in dixon, illinois. we're going to have coverage of the primaries tomorrow. 54 delegates at stake and a close race in the polls. stay tuned to the c-span networks.

the u.s. senate is about to gavel in. senators will spend the first part of the afternoon on general speeches. at 4:30 eastern they're going to turn to a small business bill and how small businesses raise money when they go public. it's what's called the jobs bill in the house. the senate is calling it a small business capital bill. several amendments pending including one dealing with investor protections and another to continue the export/import bank as its federal charter comes to an end. the senate is planning votes early tomorrow afternoon. today, only debate. the presiding officer: the senate will come to order. the chaplain, dr. barry black, will lead the senate in prayer. the chaplain: let us pray. o god of love, give our

lawmakers wisdom to know what they ought to do. create in them a passion to seek the truth, the humility to accept advice, and the courage to act with integrity. deliver them from the lack of resistance which too easily yields to temptation and from the procrastination which puts things off until it's too late. may your wisdom motivate them to faithfully follow your commands. empower each of them with the grace to seek and to find; to

know and to love; to obey and to live the truth. we pray in your great name. amen. the presiding officer: please join me in reciting the pledge of allegiance to the flag. i pledge allegiance to the flag of the united states of america and to the republic for which it stands, one nation under god, indivisible, with liberty and justice for all. the presiding officer: the clerk will read a communication to the senate. the clerk: washington d.c., march 19, 2012. to the senate: under the provisions of rule 1, paragraph 3, of the standing rules of the senate, i hereby appoint the honorable jeff bingaman,

a senator from the state of new mexico, to perform the duties of the chair. signed: daniel k. inouye, president pro tempore. mr. reid: mr. president? the presiding officer: the majority leader is recognized. mr. reid: following leader remarks the senate will be in morning business until 4:30 this afternoon. the filing deadline for first-degree amendments to the substitute amendment to h.r. 3606 is 4:00 this afternoon. following morning business the senate will begin consideration of h.r. 3606, the capital formation bill. there will be no votes today. we'll have a couple of votes in the morning. mr. president, this week the senate resumes debate on a measure to improve innovator's access to capital. this bill passed the house on a bipartisan vote and has president obama's support. we can make this legislation even better by passing a modest consumer protections included in the substitute amendment we'll consider tomorrow. members of both parties agree we should pass it quickly to finish work on this legislation this

week. it's nice to see democrats and republicans standing on common ground for a change. while this i.p.o. proposal will be good for business, exports agree its -- experts agree its impact on jobs will be limited. it is a good bill but we recognize its job-creation impact will be fairly limited. so we want to do something in this legislation which we have done to increase the amount of jobs that will be forthcoming soon. it's important congress also as part of this i.p.o. bill reauthorizes the kp-pl bank and to -- the ex-im bank and do it now. it will help competition in the global economy. last year ex-im bank financed and helped 3,600 companies and

almost 300,000 jobs were added. that's why the ex-im bank enjoyed broad bipartisan support. the last time this measure came before the body it was offered by a republican senator and was passed by unanimous consent. the authorization legislation -- excuse me, mr. president. we'll vote on tomorrow is also bipartisan. it passed the banking committee unanimously. it has three republican cosponsors and strong banking of the u.s. chamber of commerce. i read some of my republican colleagues don't want to advance this bipartisan measure. remember, it does not increase the debt whatsoever. instead i've been told that some republicans want to start another drawn-out knock-down fight over a proposal that passed unanimously the last time the senate considered it. let's review what's at stake. unless congress acts the ex-im

bank will reach a lending limit this month. american exporters can no longer rely on an even playing field with global competitor. the ex-im lends money to businesses when private money is not available. its investments made $41 billion in united states exports possible last year. that's why the ex-im bank chairman said competitors abroad are -- quote -- "licking their chops at the idea that america would stop backing businesses that sell their products overseas." many businesses that are growing and hiring because of the ex-im bank financing are small businesses. but those men and women that run those large outfits like american express, johnson and johnson, cat piller, g.e. and motorola are on record spouting the ex-im -- supporting the ex-im bank. china already provides three to four times as much financing as

we do to help chinese exporters, so we must help american exporters. we must continue to give american businesses a fair shot to compete in a global market. since ex-im bank doesn't add a penny to the deficit, there's no excuse for republicans not to support it. a nonpartisan congressional budget office says they commonsense legislation would reduce the deficit by about $1 billion. it's critical we pass the i.p.o. bill to help businesses access to capital but it's even more important we authorize the job-creating export import bank which helps company compete abroad. the proposal will support hundreds of thousands of more jobs in the small business capital bill. together it will be a real knockout. it will be great for america. democrats brought this measure to the floor in an effort to find more common ground, and passing it would be another major accomplishment both parties could be proud of. mr. president, would the chair announce the business of the

day? the presiding officer: under the previous order, the leadership time is reserved. under the previous order, there will now be a period of morning business until 4:30 p.m. with senators permitted to speak therein for up to ten minutes each. mr. reed: mr. president? the presiding officer: the senator from rhode island is recognized. mr. reed: mr. president, i would ask unanimous consent that i be allowed to speak for up to 45 minutes in morning business, being prepared to yield back such time as i do not use. the presiding officer: is there objection? without objection, so ordered. mr. reed: thank you, mr. president. today i rise to discuss h.r. 3606, the so-called jobs act. as chairman of the subcommittee on securities insurance and investment of the senate banking committee, i want all of my colleagues to know that this legislation as it is currently drafted is not ready to become law. and if it does, it could have intended consequences that hurt investors, seniors, and average american families.

one of the supposed premises behind this legislation is that if we just deregulate the securities market, then more companies will choose to issue public stock. the only reason that they have been deterred from going to the public markets, according to this view, is the excessive regulatory burdens placed upon them. the banking committee has been holding a series of hearings on different provisions in this legislation, and the reason we have discovered that there have been fewer i.p.o.'s does not appear to be connected to regulatory burdens in any real way, but appears to be more connected to economic and geographic factors. that being said, many of us here on a daily basis, despite the recent financial crisis about how the phrerpbg tore system is make -- how the american regulatory system is making us less competitive especially in light of the dodd-frank protection act. in testimony before the senate banking committee, lynn turner,

former s.e.c. chief accountant, states that the data says otherwise. in his words: "the reason i.p.o.'s track the economy is that investors invest to earn a return. when the economy is growing, companies can grow. however, when the economy has stalled or is declining and companies are not growing, investors simply cannot achieve the types of return they need to justify making an investment. as a result of the downturns in the economy that occurred during much of the 1970's brought on in part by withdrawal from vietnam, recession brought on by inflation at the beginning of the 1980's, the dot-com bubble and corporate scandals and the most recent great recession, investors became concerned about returns that could be earned in the markets and i.p.o.'s decline. as the economy and employment have recovered after each of these downturns, so has the i.p.o. market.

mr. turner went on to state that when he served on a colorado commission that was exploring why so many small companies were failing in colorado, he said, "we found that access to capital was not the primary cause of failure. rather, it's lack of sufficient expertise and management within the company, including in such areas as marketing and operations. while access to sufficient capital for any company is important, i have found that those emerging companies with better management teams and proven products or products with great growth potential are able to obtain it. those are the types of companies v.c.'s and private equity companies seek out. v.c.'s are private venture company. professor bullock wrote to me in a letter dated march 15 of this year, the exemption for emerging growth companies would exempt so many companies from key investor

protection provisions that the world leading brand that is -- quote -- "the u.s. public company" would be substantially weakened. how do we find the balance here between facilitating capital formation while maintaining fair, orderly and efficient markets and protecting investors? as chair of the subcommittee on securities, insurance and investment, i want all my colleagues to know that this legislation as it is currently drafted does not have that right balance. we are getting inundated with letters and phone calls from securities experts from around the country saying please slow down. let this legislation be improved and amended. on friday, commissioner lewis ideyala of the securities and exchange commission stated it is clear to me that h.r. 3606 in its current form weakens or eliminates many regulations

designed to safeguard investors. i must voice my concerns because as an s.e.c. commissioner, i cannot sit idly by when i see potential legislation that could harm investors. this bill seems to impose tremendous costs and potential harm on investors with little or no corresponding benefit. the chairman of the securities and exchange commission, mary schapiro, wrote in a letter dated may 13, 2012, that while i recognize that h.r. 3606 is the product of a bipartisan effort designed to facilitate capital formation and include certain promising approaches, i believe that there are provisions that should be added or modified to improve investor protections that are worthy of the senate consideration. in a banking committee hearing that we held on march 6, 2012,

professor jay reiter of the university florida also testified that we should be careful because some of these bills could actually decrease capital formation and discourage job growth. he stated "it is possible that by making it easier to raise money privately, creating some liquidity without being public, restricting information that stockholders have access to, restricting the ability of public market shareholders to constrain managers after investors contribute capital and driving out independent research, the net effect of these bills might be to reduce capital formation and/or the number of small i.p.o.'s." in a hearing before the securities insurance and investment subcommittee in tkaoerbgs professor john coats of harvard law school told us some of the proposals in the house bill actually have the potential to harm job growth. he stated, "whether the

proposals will in fact increase job growth depends on how intensively they will lower offer cost, how extensively new offerings will take advantage of the new means of raising capital, how much more fraud can be expected to occur as a result of the changes, how serious the fraud will be, and how much the reduction in information verifiability will be as a result of these changes." thus, the proposals could not only generate front page scandals but reduce the very thing they are being promoted to increase -- job growth. in other words, if these bills don't protect investors enough, more fraud will occur and it will actually decrease access to capital for small companies. we have also heard from respected business commentators about the shortcomings of the

house bill. steve perlstein, the noted business columnist for "the washington post," wrote -- "what we know from painful experience from the mortgage and credit bubble, from enron, worldcom and the tech and telecom booms, from the savings and loan crisis and the junk bond scandal and generation of penny stocks scandals is that financial markets are incapable of self-regulation. in fact, they are prone to just about every type of market failure listed in economic textbooks. perlstein points out the characteristic of markets that can lead to failures. first, there is the prevailing problem of asymmetric information. merchandiser typically know or should know a lot about their company. if key information is withheld, investors are denied critical information to make informed judgments. the house bill would under the

guise of streamlining undercut necessary disclosures which are essential to protect investors. he further notes the misalignment of incentives between promoters of securities and investors. once the sale is complete, the promoter typically moves on to other targets. the investor depends on the performance of the company to validate the investment and that usually takes time. indeed, in many respects, it is the issue of the short run versus the long run that distinguishes sound investment from get rich quick schemes. the disclosures inherent in the securities laws have over 80 years attempted to strike a balance to provide investors with the information to make sound long-term investments and to thwart the fast buck promoters in for a quick kill. the house bill seriously undermines these disclosures.

the editors of "bloomberg" have also weighed in. they point out supporters of the house bill support the falloff of initial public offerings as evidence that regulatory costs are dissuading entrepreneurs from creating businesses or taking them public, and they say rescinding the analysts' research restrictions would benefit small companies, which wall street otherwise ignores. that sounds great in theory, but the reality offers a different picture. it's true the number of initial offerings have declined, but evidence suggests that that has less to do with regulation and more to do with global economic trends, and that is according to the "bloomberg" editors. they go on to point out the conclusions of professor j. ritter which i have already cited. again, according to "bloomberg," professor ritter -- quote -- "has documented the decline of i.p.o.'s as related to declining profitability of small

businesses. many are opting to merge with larger companies to quickly get bigger and more profitable rather than go public. and the editors further point out that -- quote -- "many of the rules the house bill seeks to upend have helped companies, including the internal control rule. an s.e.c. study, for example, found that such audits helped companies avoid financial restatements which are costly exercises that often drive down share prices. they conclude -- "it shouldn't be necessary to gut investor safeguards to promote job creation. if investors lose confidence because of worrying about fraud, they will demand a higher return on their money, raising the cost of capital to all." floyd norris, the respected financial writer for "the new york times," struck similar themes and criticisms in an article last week. he asked -- quote -- "do you remember the scandals of the

dot-com era? then wall street firms cut business by promising companies they would write positive research reports if the company would only hire them to underwrite an initial public offering of stock. companies went public at a fervorous pitch. authorizing to amazing heights without much in the way of sales, let alone profits. then it all came crashing down. in the aftermath, the brokers were forced by the securities and exchange commission as well as new york attorney general to mend their ways. no longer would analysts be allowed to go on such i.p.o. sales calls. as norris goes on, "this bill would end that rule for all but the biggest new offerings, those that involve companies with sales over $1 billion. and we go much further. as the law stands now, to keep underwriters from making sales

pitches that go beyond what companies will allow it to say, the underwriters are prohibited from publishing research on a company while its initial public offering is under way. this bill would allow such research and would say that the company bore no responsibility for what was said in it. effectively, there would be a second prospectus, one largely immune to securities laws and free to hype the offering by making forecasts not otherwise allowed. and then he goes on -- why is this needed? advocates point to the fact that there are fewer initial public offerings now than there were during the internet bubble. that most of those offerings were horrible investments is conveniently ignored. nor is any consideration given to the idea that once spurned investors might be more wary. the information must be excessive and unreasonably expensive regulation. norris went on further to

reminded his leaders of the relentless ingenuity of promoters trying to circumvent the disclosures laws under the securities act. he recalled the recent activities of chinese companies to gain access to american investors without full disclosure with the process of reversed mergers. as he pointed out -- quote -- "last year the s.e.c. worried about a spate of frauds, required chinese companies to follow the same rules that american ones do. with prospectuses made public as soon as they were filed. since last summer, there have been no new chinese initial public offerings in the united states. that type of regulation would be reversed by this bill." he went on to quote paul gillis, a former ud for for pricewaterhouse coopers in china who is now visiting professor of accounting at pay king university. in his words, "if you like those emails from nigerian scammers,

wait until you see the new round from shady chinese companies looking for investment, and they will be legal." in an interview, mr. gillis praised section 404, a part of the sarbanes-oxley act of 2002 that requires companies going public to have effective internal controls and for auditors to certify them. when companies list, they hire consultants to help them provide internal control systems to provide integrity in the reports. these control systems are new to these countries. they have helped significantly. now, the second premise behind this legislation is that access to capital whether through crowd-funded or advertising private offerings or more i.p.o.'s will lead to more jobs. in actuality, in this case, it's unclear whether more access to capital will temporarily create jobs and destroy them or have a minimal effect. most of the experts that we have

talked to suggest the effects will be minimal. in effect, it would create a bubble like the ones we have seen with mortgages, the ones we have seen with dot-coms. if this legislation remains unbalanced, then it is likely to result in more unsuccessful investments for investors. recent history has shown this result in investors ultimately pulling out of the market, reducing business access to capital and costing families and others munch needed for education and retirement. like many of my colleagues on both sides of the aisle, i do believe that there is some innovative proposals in the house bill and i believe that the amendment that i will propose along with senator landrieu and senator levin, the substitute amendment, includes many of these ideas in a way that better balances market transparency and investor protection with improving small businesses' access to capital. one of these ideas with merit is

the creation of a financial framework that allows entrepreneurs and small businesses to raise capital through crowd funding. relatively, speaking, investors put many individuals through online platforms. there is a lot of energy around this concept of crowd funding. however, this proposal needs to be done very carefully. it is critically important to ensure appropriate regulatory oversight for crowd funding and make sure there is a strong balance between investor protection and improving small businesses' access to capital. in our bill, this is the place where we envision the smallest entrepreneurs to obtain much-needed seed capital for their good ideas. i recently visited a company in rhode island called beta spring. instead of being an incubator for small businesses, beta spring considers itself to be a boot camp for entrepreneurs. beta spring is constantly trying to help entrepreneurs to access

capital, but sometimes it is difficult to find enough friends and family who can help out, but my colleagues, senators merkley and michael bennet and scott brown have worked long and hard on structuring a bill in this area which we have included in the reed-landrieu-levin substitute amendment. i will let them talk to you about this part of our amendment in more detail. however, i believe their crowd- burning language is a vast improvement over the house bill which would permit investors to invest up to the greater of $10,000 or 10% of their annual income without having to meet any minimum wealth of sophistication standards. not only is our issue exempt from registration of securities offerings for up to $2 million, it would also exempt the intermediaries to seek to profit from the operation of crowd funding markets, and these house provisions i think are corrected by the approach taken by my

colleagues, senator merkley, senator brown and senator bennet. and i believe that the senate bill that they have proposed addresses many of the concerns expressed by professor john coffee of the columbia school of law. he called the house proposal in this regard the boiler room legalization act, a reference to the bad old days when people gathered in what was called boiler rooms and made cold calls to try to enlist investors into dubious schemes. there is another section of our bill that will help small and medium sized companies access large amounts of money, up to $50 million to infuse businesses with much-needed capital. we have proposed a few but very important improvements to the work of senators tester and toomey in their legislation and similar language in the house bill. let me talk about the improvements to the so-called regulation a or mini offering

section of the bill to achieve a better balance between investor protections and access to capital. like the house bill, our bill raises the amount of money that can be raised in a mini offering process. however, four improvements are made in the reed-landrieu-levin amendment. we require audited financial statements be filed with the mini offering statement so that investors truly know what the financial situation of the company is before they invest. let me make a point here. the house proposal would allow statements, accounting statements that are unaudited to be used to solicit up to $2 million from the general public. i would think as a basic premise that if you're using accounting statements for an offering of this nature, that they would at least be audited. our legislation requires that. we require periodic disclosures of material information to investors. for example, perhaps the

inventor of a certain high-tech product that a company is making leaves the company or passes away or something else happens. investors deserve to know about that type of information. we limit the amount that can be raised through the mini offering process to $50 million every three years. the house bill would allow investors to raise $50 million every 12 months, potentially allowing many companies to avoid fully going public and evading more rigorous public reporting requirements. finally, we require a study and report on the new mini offering exemption from securities act registration. this study is to be conducted by the s.e.c. in consultation with the state securities administrators and submitted to congress no later than five years after the date of enactment, so that we consider whether any changes are needed to be made to the mini offering concept created in this legislation. although this is still an experiment to allow general

solistation, i believe that the protections we have built in will make it a safer experiment. we also work to make improvements to the initial public offering or i.p.o. onramp to the bill. the essence of the proposal in the house is to phase in certain securities laws and regulations for in their terms, emerging growth companies. so that they can grow more slowly and to becoming a public company with all of its benefits and responsibilities. there are companies that have either outgrown the private placement method of raising company or the new reggea method of raising capital. the key difference is what we think the definition of an emerging growth company should be. the way the house bill is written, it would exempt virtually all new public companies from nonbinding

shareholder votes on say or pay and executive compensation pay in connection with an a merger or acquisition. the requirements under sections sections -- 7 that two years of audit financial statements are provided for an i.p.o. and a requirement companies audit or test the effectiveness of the company's financial systems or internal controls under section 403-b. after discussions with many, many experts it is clear that a company with $1 billion in annual revenue is not what most of them consider to be emerging growth companies, but that is the level the house has choans --, chosen, $1 billion in annual sales. in fact, under this definition the house bill would have exempted more than 80% of current i.p.o.'s from registration requirements which as i mentioned earlier,

requirements that only lient appeared -- recently appeared to be difficult to manage. as a result senators landrieu, levin and i decided this definition needed to be much more targeted towards smaller i.p.o. companies with less than 350 plldz in annual revenues -- $350 million in annual revenues. even the house bill would have allowedden ron and -- allowed enron and worldcom to be phased in in terms of auditing requirements. in addition to focusing this provision on smaller firms, we also are looking at the provisions that are eliminating corporate governance improvements made in the dodd-frank bill such as the say on pay and the connection between executive performance and company performance. we need to give these provisions more than year to see how well they're doing. the reed-ran drew-levin amendment eliminates a provision in the house bill that interferes with independent

accounting standards and would have set up two different sets of rules, one more emerging growth companies and one more other public companies. we agreed with the chamber of commerce that these provisions should be taken out. the chamber stated in the later dated february 15, 2012, that the optout for new accounting would create a bifurcated financial reporting system with less certainty, and creating increased liability risks for boards of directors, audit committees, and chief financial officers. we also dramatically narrow provisions in the house bill would that would have aadvice rated -- eviscerated the settlements regarding the undue influence of the investment banking interest if a firm on the securities research provided by the same brokerage firm, that is, the connection between annualists and the investment banking arm.

we learned at a significant cost in the 1970's and 1980's the value of independentable * analysis in securities. jeff magnificent rick discussed this in his book. in his words, a measure of this practice was the increase in the number of buy recommendations. at the end of the 1980's after a long runup in stocks, buy recommendations exceeded sell recommendations by a large and suspect margin of 4-1. by the early 1990's, buy recommendations exceeded sells by 8-1. by the late 19 90's, only 1% of recommendations urged an outright sale. it remained unchanged even when stock prices were falling and the investment community was pessimistic. after the stock market collapsed in the two's, -- 2000's, ronald glance, a respected

analyst testified before congress in 2001 as follows. now the job of the analyst is to bring in investment banking clients, not provide good investment advice. this began in the 1980's. the prostitution of security analysts was completed in the high tech mania of the last few years. for example, in 1997 a major investment banking firm offered to triple my pay. they had no interest in the quality of my recommendations. i was shown a list with 15 names and asked how quickly can you issue buy recommendations on these potential clients? we believe that the wall between a financial institution's research and brokerage units needs to be maintained. our substitute amendment would allow a research report to be provided by a firm subject to s.e.c. restrictions, disclosure, and filing requirements. in particular, the research

cannot contain any recommendations to purchase or sell such securities. in addition, in a written communication provided to potential investors must be filed with the s.e.c. 124e sew they can take a look at it. these written communications will become part of the prospectus which should give investors some added communications. this too is a bit of an experiment, given the massive fraud committed on investors that led to the global research analyst settlement in 2003, but we have dramatically narrowed the scope of the sperm from the one in the house version. finally, we allow companies to opt out of the emerging growth company designation and fully comply with all public company requirements which very well may improve the price of their stock. since investors will have more information regarding the company. as i said earlier, if these changes and exemptions go too far, some believe we are doing more harm than good-bye weak --

good by weakening, and harming our competitiveness in world markets. that is why we have tried to narrow, appropriately, the proposals in the house legislation. next i want to talk about the most important changes in our bill from the house bill. the house bill effectively eliminated s.e.c. prohibitions against soliciting or advertising to investors about private offerings of securities. most private placements are offered under s.e.c. rule known as regulation d. these securities are sold without an i.p.o. or a registration statement filed with the s.e.c., usually to a small number of chosen accredited investors. in the united states for an individual to be considered an accredited investor, he or she must have a net worth of at least $1 million, not including the value of the person's primary residence, or have made at least $200,000 thrast three

years or $300,000 working together 0 togget with are his her or spouse if married and have the same expectation to make the same amount in the current year. the triggers were adopted 30 years ago. they have never been changed. the share of us u.s. households that met the test in 1982 was 1.6%. it is now at least four times that share. the largest share of accredited investor households are retirees, many who struggled for decades to save their nest eggs. because accredited investors are eligible for private plaissments, they -- placements, they can be targeted with without any s.e.c. review or mandatory disclosure. the house bill removes current prohibitions against general solicitation or advertising for these private offerings, which most securities experts believe will have serious consequences. the current regulatory framework

if the s.e.c. sees unregistered offerings being advertised they can immediately close down the scheuer, since -- issueer since they are broking the law by soliciting. under the house bill there will be a lot more solicitation of all investors, perhaps on late-night cable or the internet, with ton protection being after the fact under ex post inspection of sales records to see the if the issue is sold only to accredited investors. commissioner aguilar stated that this provision may be a -- quote -- "boon to boiler room operators, ponzi schemers, bucket shops and garden varietiy hucksters by making securities enforcement more difficult. realizing that even private

communications can be broadly sis accept natured our bill takes a much more targeted approach to this issue. in our amendment we allow for limited public solicitation and advertising that is done only in ways and through methods approved by the s.e.c. we are sympathetic to the fact that in a world of new media it is increasingly difficult for issuers to control outreach to accredited investors. we believe this amendment, our amendment gives the s.e.c. the tools it needs to formulate a limited exemption to the general solicitation and advertising rules allowing private offering to still be private. none of us wants this legislation to be a boon to boiler room operators and ponzi schemers targeting our nation's retirees or anyone else. finally, i want to talk about the shareholder cap issue. what has become clear to me as a

result of the capital formation hearings in the banking committee is this issue of the appropriate number of shareholders to trigger routine reporting through the s.e.c. is something that requires very careful consideration. the present 500 record holder threshold was introduced to address fraudulent activity in the over-the-market activity for securities. since firms with fewer investors were not required to routinely disclose their financial information, outside buyers were not able to make fully informed decisions regarding their investments. the exchange act mandates that investors and in over-the-counter securities be provided with equivalent information as those prayed-trading stocks on the major exchanges if they have 500 holders of record and at least $10 million in assets. many believe this threshold kneeled to be updated, -- needs to be updated but the

household dramatically increased it from 500 to 2 knew. others believe raising the threshold to 2,000 would impair capital allocation, reducing public information about widely traded companies and denying investors appropriate information about companies. first, we believe the house bill risks allowing large companies with less than 2,000 record holders -- and listen to some of these companies. hyatt, hertz, adobe systems, h. cramplet holdings, hospital corporation of america, kaiser aluminum, towers watson, rawfl lauren and accenture. these are just some to delist and go dark without regulatory oversight, literally oversight they cook -- overnight they become private companies. that would frustrate the expectations of many their

investors. as a result we decided to take a more prudent approach in our amendment and raise the level from 500 to 750. statement we believe the holder of record actually needs to be the beneficial owner of the security. this means he or she has power to vote the share or to dispose of the share. through our hearings on this matter it is clear that many big forums are being around this requirement by pooling shares in a name such as an investment company like j.p. morgan. they have many, many thousands or hundreds of beneficial owners that can sell and dispose of shares and have the right to the dividends, but on the books of the company, it's just one record holder. this eliminates this work-around and requires the holder of record actually be the beneficial owner. we also sympathetic to the fact many more companies are starting to give their employees stock as part of the compensation plan, and we are sympathetic to this

desire not to have this prematurely trigger the exchange act. companies like wawa and weigman's testified before the banking committee they would like to give their employees shares without forcing their company to have to go public. as a result, our amendment exempts employees for the record holder account, which should allow firms to give as many shares as they want to their employees without forcing them to go public before they are ready. we think our provision achieves a better balance between market transparency through disclosures and investor protections and the needs of some of our most successful privately held firms to reward their employees and maintain their private status. now, as we debate h.r. 3606 which could dramatically weaken the world leading brand that is the american public company, we should realize that we are undertaking a dramatic and perhaps unfounded experiment. we should also understand that

deregulating our securities markets may have no effect whatsoever on the number of i.p.o.'s. companies are desperate for funding since we just went through the biggest financial crisis since the depression, and lending is down. redegreeing our capital markets could temporarily infuse our markets with more cash but at what cost? the cost could be quite great. as jesse isiner stated on march 14, it's been a year now about a year now, since chinese reverse merger companies collapsed and that scandal dozens of those small chinese companies went public in the united states without having to run the gantlet of the securities and exchange commission's registration rules. after they blew up by the boatload, the f.e.c. tightened rules. since then, shot sellers pickings have been slim. by allowing new companies to not

disclose financial information for years, the bill will provide new targets for short-selling hedge funds. like mr. isinger, i believely the house bill, as currently drafted, basically makes markets less transparent and more subject to manipulation. and what the house bill clearly doesn't do is address the needs that i hear about from employers in my state. the economy consists of a lot of moving pieces. economic recovery on its own will do more to reverse the decline in business activity than any provision of the house bill. moreover, the house bill doesn't include provisions that i'm hearing from rhode island employers that would actually be helpful to create jobs, such as the small business administration loans and export assistance. as a result, our amendment actually includes a number of already tried-and-true, tested job-creating measures. it is estimated, for example, by reauthorizing the export-import bank, our amendment would support an estimated 288,000

american jobs and mor at more t0 u.s. companies in more than 2,000 communities. other provisions in our amendment would expand the sbic program, supporting more small business start-ups in communities across the united states. finally, we continue a modification of the s.b.a.504 loan program for allow -- or to allow the refinancing for short-term commercial real estate debt. this provision has proved essential for many small businesses with short-term debt. as we have more closely been looking at the house bill, i think we have all been learning that it is not doing what it was advertised as doing, which is creating more jobs. we need to slow down and go through an appropriate amendment process here in the senate. as barbara roper, director of investor protection for the consumer federation of america

recently stated in a san francisc"sanfrancisco chronicle, the house bill as currently drafted is -- quote -- "completely bipolar." on one hand, we're trying to make it easier and less expensive for companies to go public. on the other hand, by increasing the shareholder threshold in legislation, the house is actually encouraging and letting companies stay private, go private and avoid i.p.o.'s. i urge all of my colleagues on both sides of the aisle to take up the reed-landrieu-levin amendment as the base text of the legislation and engage in both a robust debate and amendment process. our securities markets deserve just as much attention as our nation's transportation system and we spent several days -- weeks, indeed -- dealing with the transportation bill. the reed-landrieu-levin amendment is a much better place to start this debate of how to improve our capital markets without opening up -- it up to unnecessary fraud and manipulation. and with that, mr. president, i would yield the balance of my

time. mr. president, i note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

quorum call:

a senator: mr. president, i ask unanimous consent to into a colloquy with my republican colleagues -- the presiding officer: we're in a quorum call, senator. a senator: i ask that the

quorum call call be suspended. the presiding officer: without objection. noriega i ask to enter into a colloquy with my republican colleagues for up to 45 minutes. the presiding officer: without objection. a senator: mr. president, i wasn't here when they passed the patient protection affordable care act and now this week has been marked the second anniversary of that what i would calling a very orwellian-named piece of legislation, because i personally do not believe that it is either going to protect the patients, and i do not believe that it is going to improve the affordability of our health care system. mr. johnson: the reason i ran for the united states senate was primarily because of this law. i certainly recognized how it was going to result in a lower quality of health care, how it's going to lead to rationing, and how it's going to severely limit of amount of medical innovation

that we enjoy in this country. in particular, i was offended by the political process demonizing doctors and health care providers, demonizing a health care system in order to pass this health care law. the reason that offended me is a very personal story, and it has to do with my daughter who was born with a very serious congenital heart defect. her aorta and pulmonary artery were reversed. the first day of life, the doctors that president obama said would cut out -- or take out a set of tonsils for a few extra dollars, doctors saved her life within the very first few hours of life. eight months later when her heart was only the size of a small plum, another dedicated and skilled team of medical professionals totally reconstructed the upper chamber of her heart. her heart operates backwards

now. she's 28 years old and is now a nurse herself in a neonatal intensive care unit. when they passed the patient protection affordable care act, i knew that that health care system that saved my daughter was at risk. i also knew that this health care law it was in no way, shape, or form going to reduce our federal deficit. it is just not possible. how can you expect to add 25 million people to government-run health care and reduce the deficit at the same time? the reason they were able to put forward that fiction is they proposed a piece of legislation that would have revenue, fees, and taxes and penalties for ten years while at the same time only providing benefits for the last six years of that time period. so basically what they did is

they said, we'll raise revenue for ten years of about $1.1 trillion. we'll have six years of cost of under $1 trillion. that was the fiction. now, half of that revenue generated is going to be in taxes, in fees, and penalties. personally, i don't understand how by increasing taxes, increasing fees on things like medical insurance, on medical devices, an pharmaceuticals, i don't see how that bends the cost curve down. it won't bend the cost curve down. they's the same lodge -- that's the same logic that president has used when talking about high gasoline prices. increasing fees on providers, reducing reimbursement rates to providers is not going to bend the cost curve down. it's basically not going to

happen. the other half of the payfors, the other half of that $1.1 trillion, was proposed reductions basically in payments to medicare providers. now, congress, i would say wisely, has not enacted the sustainable growth rate cuts to providers because they realize if they do that, access for seniors to medical care will be reduced. i don't see how if we reduce medicare by $529 million, how that same access also woul won'o be reduced? i think it is highly unlikely that congress will enact that $529 million worth of reductions to medicare. when they don't do that the $143 billion reduction in our deficit, that fiction, will totally go away. another reason that fiction is being exposed is because, you

know, fortunately, congress realized that the class act portion of the obamacare simply wasn't going to save the money that he said it was going to save. it simply wasn't sustainable. budget committee chairman kent conrad actually called the class act a ponzi scheme. so this administration has decided not to move forward with its implementation. this doing so, that is removing $0eu$70 billion worth of revenue from that budgetary fiction. i know senator kyl has been following this very carefully in terms of what is going to happen to our federal budget. i'm just wondering, senator kyl, if maybe you'd want to comment on how you see the real effect of the health care law on the federal budget and why that's not going to save us $143 billion in the first year and probably result in far greater

cost to the federal government if this thing is actually implemented. mr. kyl: mr. president, i had -d sosay to my colleague from wisconsin, you're absolutely right. millions of citizens have gotten involved for the same reason you did. as a normal citizen you saw what was happening here and decided to get involved. not everybody can run for the united states senate successfully and come back from washington to tabla message right here -- to bring that message right here to the senate. but you're right. it turns out that your predictions and house of us who were on the floor, we said it is going 0 cost a lot more than our democratic prendfriends say it . and gnaw the numbers are in. the nonpartisan congressional budget office last week released its updaylighted figures.

it shows that the real cost of the obamacare subsidy spending is going to almost double. last year -- or rather when obamacare was passed, they estimated that the cost would be $938 billion. that's on the medicaid part as well as the taxpayer-funded health insurance subsidies. and as you said, that's a ten-year cost. and of course part of the games here were that they're collected money over ten years, only paying benefits over six. can make it look pretty good, like you say. but it turns out that when c.b.o. had to reexamine now with two years of experience, what they found out, looking at the entire ten-year budget window, that the true size of this cost was masked and now that we have a clearer picture, voila, now c.b.o. says the projected amount is $1.7 trillion over ten years.

obamacare is going to cost more than $700 billion more than c.b.o. estimated at the time that the law was passed. now, how can you miscalculate by almost double from $938 billion to now $1.7 trillion? wlgwell, it's not c.b.o.'s faul. they are a bunch of accountants. they take what you give them and do their figuring. and as you senator from wisconsin said, what the senate democrats and the president gave them was just part of the picture. they said, well, we're going to give youton years' worth -- we're going to give you ten years' worth of revenues but only six years of suspensions. see thousand that works -- see thousand that works out. here's another way to look at it. we've all heard of a mortgage with a bubble payment at the end. and that's in effect what this was. they basically said, look, we

know that c.b.o. has to estimate ten-year budgets. so we have a great idea on thousand make this cost less. we'll put some of the big expenditures in years 11 and 12. voila! ten years of expenditures, not too bad. but now that two years has passed and we're now looking at a tenge-year budget -- a ten-year budget that goes out ten more years from now, 12 years from when obamacare was first calculated, turns out that when you add in years to number1 and 12, it adds hugely to the cost. $700 billion worth. we all said this at this time it was tricks, it was smoke and mirrors. they were pulling a fast one on the american people. we said that. oh no, you can trust c.b.o. sure you can trust c.b.o. as far as they could calculate. but if you said how about years 11 and 12, they would have had to say that's another story, but

we weren't asked about that. i just say to my friend from wisconsin you're exactly right. now the chickens have come home to roost. now we know what the real cost of this is going to be. oh, by the way, if you want to go out over the entire period once the law is fully implemented -- remember, obamacare has not been fully implemented yet. what happens when you calculate its full cost when truly implemented? the budget committee on which senator sessions sits says total spending under obamacare will reach $2.6 trillion. so these are the real costs that we have to pay attention to, not just the estimates that were made at the time they were trying to get the law passed. i might either ask the senator from wisconsin or our ranking member on the budget committee what about this? if we use real numbers and real costs, are the american taxpayers going to be on the hook for something like $2.6

trillion according to the budget committee? that's a lot of money. mr. johnson: senator kyl, i want to quick point out that the numbers you're talking about really are c.b.o. projections just suing a different time frame. that isn't even taking into account than what i guess i've been talking about, is a more significant risk to the deficit. that's one estimate that says on net only one million americans will lose their employer-sponsored care. to me, there are 154 million americans that get their employer-sponsored care from employer-sponsored plans. assume that only one million people will lose that coverage and get forced in the exchanges i think is absurd, particularly when you have a study by a very reputable firm, mackenzie and company, that surveyed over 1,300 employers. the results of that study said 30% to 50% of employers plan on dropping coverage and having

their employees go into the exchanges. it's actually pretty easy to understand why that might happen. right now the health care law was 2,700 pages. there's been another 12,000 pages of rules and regulations. employers looking at the health care law are looking at do i try and comply with, do i try and understand 15,000 pages of regulations and then pay $20,000 for a family plan, which is the new c.b.o. estimate for a family plan in the year 2016. do i do that or do i pay the $2,000 penalty? with obamacare you're not exposing your employees to financial risk. you're making them eligible for huge subsidies. my concern -- and i'll throw it over to senator sessions on the budget committee. my concern is that we're not even beginning to contemplate what the effects of that might

be. what do you think of that? mr. sessions: i couldn't agree more about the concerns you raise. senator johnson, you were a successful businessman. you provided health insurance for your employees. you had to purchase it. i would just ask you one quick question. based on your experience, just a few years ago, a year and a half ago you were doing this business, what are the incentives that a business that's already in existence, providing health care, why might they not continue to provide it? and why might a new company, a start-up company, a small business who hopes to grow and have hundreds of employees, why might they never start with employer-based health care? mr. johnson: it's becoming so complex, it's becoming so expensive -- and again, the big

difference that obamacare throws into the equation is that in the past responsible employers and most employers care about the people that work with them. they wouldn't dream of exposing their employees to financial risk that would be obvious if you didn't provide health care insurance. but with obamacare, that's not what's happening. now these exchanges will be available as well as huge subsidies. and, senator sessions, i'm not aware of too many large federal subsidies that go unused. and that's my concern. the equation is totally different now. it's going to be totally different under obamacare. my question for c.b.o. -- i know they just conducted a study and did some sensitivity analysis, but they didn't go anywhere near far enough from my standpoint. epbgt -- i think the largest number of employees they looked at might be 20 million. when you've got 154 employers

getting care and more than half of those, 75 million, i think we need to take a serious look at what effect on our budget that would have. mr. sessions: i think all of us need to be listening to this because it's something that was not sufficientlily considered during the debate. and that is that dramatically nor employers may quit providing insurance. new companies that get started won't provide it. people will be on the exchanges and it will cost far more than what was expected. that's an entirely new issue, assuming the low number that the c.b.o. said will go into the exchanges, just taking the numbers as they assume, let me point out what senator kyl said. president obama, an exact quote, to the joint session of congress when he was promoting this legislation, not some

off-the-cuff figure, said this: "now add it all up, and the plan that i'm proposing will cost around $900 billion over ten years." now this was a delivered attempt, as has been suggested, to manipulate the figures because the taxes started right away, but the spending was four years delayed essentially. so you only have six years of really spending under the plan. and it also excluded many other provisions. for example, the bureaucratic implementation costs were not counted. the amount of effort, even i.r.s. people that have to be involved was not counted. new spending to close the medicare doughnut hole, we didn't have the money in the two or 2003 when we passed the -- the money in 2002 or 2003 to fund that money. now we've never been in worse shape. we're borrowing 40 cents of

every dollar we spend, far worse than we were. next year will be the fifth consecutive $1 trillion deficit. we don't have the money. now we're spending more on that program that we didn't have. a new earlier retiree program. once you add up all the different provisions in the health care law, the total gross spending over the original ten years, not when only six years is being paid for, over ten years is actually $1.4 trillion. that's the numbers we have. so this was a misrepresentation. this is through, from 2009 through 2019, $1.4 trillion. when you add up all the costs over the first full ten years of this health care bill, it will be $2.6 trillion. the point is that the bill is not good health policy. the american people oppose it overwhelmingly, and absolutely

we do not have the money. we've never had a more systemic debt threat to america, and it's just so painful to see this happen. so, senator johnson, thank you for your energy, for the commitment you brought to this issue. you've seen it from the other side, the real-world side, and you're helping to motivate us all to explain to the american people the dangers of the bill. mr. johnson: senator sessions, i want to ask you questions. we've talked about this in the past. part of my getting here, i know a lot of people talked about the medicare cuts being double counted. i never understood exactly what that was. can you explain to the american people what that means. mr. sessions: yes. as a part of the funding for the obamacare legislation, there was an increase in medicare taxes and a cut in medicare benefits

totaling $400 billion. that money was used to fund the new health care bill by the u.s. treasury, an entirely new program. but it's medicare money. it's not the treasury's money. medicare has trustees. medicare loaned the money to the u.s. treasury. it was borrowed money that's used to fund this bill, not money that came in new and free of charge. and since medicare is going in to default and going to claim its debt in a few years, the federal government is simply going to have to either raise taxes, cut spending somewhere else or more likely convert the borrowing from medicare, borrow money on the open market from china and other places and then pay medicare back. so it's really, as the c.b.o. director told me in a letter,

december 23, the night before we voted, you're double counting the money. no wonder this country is going broke. this is, this isn't extra money. half of the original estimate of the bill, $900 billion, was funded by borrowed money from medicare. and this is how this country is surging in its debt and why we were in danger of the entire economy entering into collapse. mr. johnson: do you believe that those medicare savings will actually be realizeed? do you believe congress will enact those savings? mr. sessions: in the past we attempted and claimed we were going to make savings in medicare, and they never occur. what i'm saying is if these savings were to occur and if the new taxes on medicare go into effect, as they are, that money is what's being used to fund an entirely new health care

program. and there is real doubt we'll ever achieve those savings in medicare because if you keep cutting doctors and you keep cutting hospitals, they can't keep doing work. they will just start refusing medicare, medicaid work. and we're in that position already on some of the cuts that we rescind every year because we know that the health care system would collapse if those cuts were to go into effect. mr. johnson: senator sessions it, that's one of my concerns. let's say we actually do enact those cuts to medicare and we don't reimburse providers and doctors, in some cases to even cover their costs. i know this is a hard figure to get to, but i've read where only 60% of providers are willing to see and treat medicaid patients. so now what we're going to be doing is we're going to be adding 25 million new individuals on to medicaid rolls where only 06% of providers are

seeing -- only 60% of providers are seeing those. i guess i'd like to ask senator boozman because you're not only a new senator, you're a doctor. can you comment on that as well? i think you've got comments on how this will be affecting jobs. mr. boozman: thank you. i appreciate the fact that you jumped out and ran for the office and were elected because we need people like yourself, people that were successful businessmen that understand the unintended consequences of much of what we do up here. i like you also have firsthand understanding of the issue from an employer's perspective and maybe a little bit unique perspective. before i came to congress, i practiced optometry and helped run an eye care clinic with my partners, nine other partners, for 24 years. so when president obama's health care bill came before us when i was in the house, i fully

skwrupbd stood from both the -- understood from both the medical provider and from the business aspect that from both accounts it was the wrong approach to the problem of rising health care kofpts and with -- costs and wie doctor's caucus in the house worked very hard to highlight the problems and also to highlight the alternative options working through the free-market approach. there's no doubt about it, we're facing a serious crisis. health care costs are crippling americans. many americans lack access to quality health care. it's stifling our nation's overall economic development. there are real difficulties with physicians and hospitals that they face when it comes to accessibility and affordability of health care services. but despite all that, there's a right way and a wrong way to address the problem. the president's health care law simply the wrong approach and the wrong answer. coming with a price tag of $1.75

trillion, the law causes many more problems than it solves. it's not lowering health care costs as we're seeing. in fact, it's driving them up. it's not deficit-neutral. it's a budget buster. medicare, because of the cuts, because of the way that it's set up, it's going to lead to rationing and decreased quality of care. it will not help the economy. in fact, it's further stalling the recovery. on that note specifically, the president's health care law makes it difficult for small business owners to hire more employees. at a time when our economic recovery continues to lag, the concerns over new mandates, confusing rules and additional taxes in the law have small business owners rightfully concerned. and again, i can pressure this -- appreciate this in the sense of not only being an eye care provider, a health care provider, but somebody that had 85 employees.

far from creating jobs as the president promised, it's estimated the law will actually result in 800,000 fewer jobs over the next decade. it's almost as if the law was written with no input from america's small business owners and the health care providers that will run it. in the 24 years that i was at our clinic in northwest arkansas, we grew our staff from five employees to 85. my colleague from wisconsin can attest to the fact that guiding your business to the point where you can add personnel is not an easy task. it takes strategic planning and management, but it also takes an economic environment that allows small businesses to expand, invest and hire. instead of doing that, the health care law furthers the climate of uncertainty that our job creators already face. small business owners are certainly hurting in this economy, they worry about tax hikes that washington keeps threatening to force upon them. they see an enormous flood of

regulations coming their way. gas prices keep skyrocketing, profits are way down as a result of the sluggish economy. there is so much uncertainty, what mandates will evolve from this health care law and ultimately what these costs will be for small business owners only adds to that unease. when interviewed, business owners say the major concern that keeps them from hiring -- and i have been out and about as much as anybody in the last two years, and this is exactly what i am hearing is the major cause that keeps them from hiring people is the uncertainty caused by the cost that they feel they would incur by the new health care law. we need to repeal and replace it with health care reform based on a free market system. mr. johnson: well, thank you, senator boozman. i think it's extremely important for us in the next, you know, coming weeks and months to paint a very accurate picture of the american people -- for the

american people about what our health care system is going to look like, what our federal budget is going to look like, the effect on american jobs and our economy, and really the effect on our freedoms. we are going to witness if this health care law is fully implemented, i think it is just critical that we provide the american people that type of information. and, of course, i know senator roberts is -- has got some thoughts in terms of how this health care law will affect jobs and our economy. i know he has been very good at describing some of the nonsense regulations that are being undertaken by this administration. senator roberts, i would just kind of like you to share your thoughts of what you think. you know, paint us a picture of what is america going to look like under this health care law. mr. roberts: well, senator, number one, i just want to give you a lot of credit for leading this colloquy in regards to where we are two years from the passage of -- it's hard to say what it is. now it's a.c.a., the affordable

care act. it used to be ppaca. that was the acronym that i thought was very important. if you politicize it, it's called obamacare. i don't mean to do that in this debate. but i do want to thank you for really focusing on jobs and costs. i do have some prepared remarks i will get to pretty quick, but i want to this thank senator kyl for a c.b.o. truth. i think he ought to start a new program called truth and consequences, and you have pointed out the consequences that if you ask the c.b.o. for a score when you're going to try to pass a bill, they will give you exactly what you want, but then the truth is down the road it costs an awful lot more. there is one person you left out in terms of the c.b.o. telling the truth. that's richard foster who is the actuary down at the department of health and human services. that man ought to get a purple heart, a medal of honor and maybe -- not a medal of honor.

we'll just give him a purple heart, maybe a bronze star for action during the war zone and then maybe a medal of freedom later. senator sessions who is our resident bulldog on the budget really hit it on the second counting, and thank you for that. that's a half a trillion dollars. the other half of that is it's a half a trillion dollars that goes to all these exchanges and the rules and the regulations and setting up the affordable health care act, and basically it denies medicare reimbursement to all sorts of folks -- doctors, nurses, hospice, pharmacists, ambulance drivers, hospital administrators, and on and on and on. we had a health care summit in topeka, kansas. 34 different regulations popped out of the woodwork. they could have had 164 but we sent the 34 in to the secretary of h.s.s.

we went to the secretary of rural kansas. that's out there in the health care delivery system. we had seven different regulations. i hope later when we have a colloquy on regulations, we can certainly insert those into the record. certainly boozman who is a physicians gave the standpoint in regard to what happens with rationing. senator boozman, do you know who enforces this thing? at the end of the year, if you don't sign up, if you don't put on your tax return which i assume it will be in terms of what kind of coverage you have, it's the i.r.s. the i.r.s. is going to be the enforcement entity in regards to whether or not you have a provider, and if you don't, you get fined. stop and think a minute about what's going on and all the waivers that have been going on in terms of who is enforcing this. your friendly internal revenue service i.r.s. reinforcer. so yeah, i have a lot of feeling

about this. i took the floor today to discuss something called promises made and promises not kept, and i would tell the distinguished senator from wisconsin all the words that come back to bite you, and this one really has. that's the famous statement prior to passage of the health care reform law by the president. if you like your health care plan, you can keep it. well, i will give him credit. he may have believed it then, but as we have pointed out with senator kyl, senator sessions, senator boozman, senator johnson, that's just not the case. i didn't believe it then and i said so. neither did senator sessions, neither did senator kyl. you two are here now taking a good look at it. you don't believe it either. why? it's pretty simple. employers and health care providers told me that when the majority of the provisions of the health care reform law would take effect, it would be more affordable for an employer to simply stop offering their employee coverage and pay a penalty rather than face the

predictable increase in premiums and to continue to offer any coverage. now these predictions have turned into facts. a new study just releaseed by mckenzie and company, a consulting company, predicts large numbers of workers will be shifted into the health exchanges in 2014, and that's a shift that folks should be worried about. exactly what you're talking about, senator johnson. literally thousands of regulations and waivers are pouring out of the department of health and human services. in fact, to date, 12,307 pages of additional regs to restrict personal freedom and micromanage the private market. and to make matters worse, there is the predictable worry that the changes would be better described as something similar to medicaid h.m.o.'s. that's the kind of service we could get. that threatens access, choice of doctors, not to mention the rationing regime that will be the marching order of the day, and i will have a lot more to say about that in a colloquy in

the next several days. at the time the president made his promise, the c.b.o. estimated, as senator kyl pointed out, that only about 7% of employees covered by employee-sponsored insurance would make the switch or be forced to switch to taxpayer-subsidized exchanges. now i would tell the senator study after study is releasing facts and figures that mind the health care reform law will cause many or most employers to quit offering their current health insurance. and in a survey by benefits consultants at lockton, when asked about the costs of notifying employees or changes required by or resulting from health care reform law, they said each notification will cost $1 to $3 per employee. you can talk about cost. this would raise costs by tens of thousands of dollars or more for some firms and nearly one in five firms is considering terminating coverage outright

thanks to the law. each study, the numbers go up. the mckenzie survey found that 45% to 50% of employers say they will definitely or probably pursue alternatives to their existing health care plans. 30% of employees will simply stop offering coverage, so those are the facts, and there are more to come. i would just simply say i'm going on too long here, and i understand that, but i would simply say again i want to thank my colleagues, contrary to this administration's belief, there is no such thing as free health care. somebody does pay. and in this case, the american taxpayers will be forced to foot the bill for workers who employer-sponsored coverage has been dropped due to the health care reform. and there was another quote i'd like to mention and that it should be the subject of another colloquy. there is absolutely no rationing in this bill. it's just scare talk.

want to bet? there is nothing that hurts the truth than stretching it, and with ppaca or a.c.a. or obamacare, jobs and costs will be stressed beyond the limit. and i truly thank the senator for sponsoring this colloquy. mr. johnson: senator roberts, i appreciate your comments. you mentioned rationing. i guess what else is the independent payment advisory board for? do you have a clue? to me, that would somewhat lead potentially to rationing. i would be somewhat suspicious of that. senator kyl, you stood up here. you may have some additional comments. mr. kyl: well, yes, thank you. i would just say when my colleague from kansas talked about the free care, it remindedded me of the old saw, you think insurance is expensive now, just wait until it's free. and of course, that's the point. somebody has to pay for it at the end of the day, and we just happen to have some new

statistics as to how this is working out. now that c.b.o. has had a chance to examine how obamacare really plays out, here's their new estimate. we're talking about real costs to real families. c.b.o. now estimates that obamacare will increase premiums by 10% to 13%, and to make that number real, that's a $2,100 annual increase in the cost for the average family of just purchasing their own insurance company -- coverage. six separate private actuarial analyses have all indicated that this obamacare will increase premiums, with projected increases ranging as high as 60%. and why is that so? it's like a balloon. you push in on one side, it pops out the other. the health care is still going to cost. doctors still have to treat people. hospitals still have to take care, pay the people that work in the hospitals and so on, so it isn't free as our colleague

from kansas is pointing out. somebody has to pay for it. well, if the government can't afford it, then what the insurance companies have to do is charge the extra expense on to the people in the private insurance market. so when the president complains about why insurance costs are going so high, he only has himself to blame. if the government isn't going to reimburse the providers adequately, they have got to get the money from the private sector. and that's why a 2,100-dollar annual increase in the cost of insurance for the average family because of the cost shifting that's going on. it's a result of the way that the government designs the insurance that it is provided for in obamacare. it hits the young people especially hard because they are the ones that end up having to buy insurance that they don't really need, according to the america's health insurance plans, premiums increase 48% for people between 18-29 years old. that's in only 42 of the 50

states, premium increases of 48%. and then of course they also tax health insurance which we end up paying for because that cost is passed on to us in the form of higher insurance premiums. that's a $60 billion tax on health insurance added on top of the new taxes on innovation, on new pharmaceutical products, on new medical devices, the taxes that are included in obamacare on those are all passed on to consumers in the form of higher prices. the bottom line is that we're paying for all of this one way or the other, either through new taxes, through what we pay to the government or through what we pay in our private insurance because the physicians and hospitals have to make up the money one way or the other. the bottom line is that obamacare which was supposed to have reduced costs ends up increasing them, and by the way, it was supposed to expand the people that are covered but now

we find that -- according to milliman, which is a private association, estimating the costs there, actuaries there have estimated that the cost shift from government programs, medicare and medicaid, totals $88.8 billion a year, adding $1,788 to a family's insurance policy. that's on top of what i spoke of before. this cost ship obviously will greatly increase with obamacare's medicare cut further on down the road and that will cause premiums to skyrocket even more. the bottom line is, we were right when we said it. the law is going to drive up insurance premiums for families, going to drive up taxes, going to reduce innovation and at the end of the day it doesn't really cover more people. all in all, a really great success, i'd say. mr. johnson senator kyl, i

remember back mr. johnson: senator kyl, i remember president obama famously promising if you passed this health care law, the average cost for family will decline by $2,500 per year. not exactly -- that's one of those broken promises that senator roberts was mentioning earlier. senator roberts, you had an additional comment? mr. roberts: ipab, not an ipad or iphone, i'm sure apple doesn't have a thing to do with it. the administration in response to a lot of concerns about rationing yo wro an op ed and said the claims that the board, all of these boards, these rationing boards will ration care i simply -- are simply false. at the time i repeated my concerns over and over and over again, senator kyl, remember those days in the finance committee. i think everybody left when i started in on my rant.

and the health care reform law's potential to ration care, i made speech after speech. it isn't only ipab i would say to the senator from wisconsin. that's the cms innovation center, the new authorities granted to the u.s. pretentative services task force, the patient centers outcome and finally ipab -- that is not a toothpaste. at the time the american public was told over and over these provisions of the health care reform law would not result in the rationing of care, loss of access, or reduced quality, but once again, the medicare actuary, richard foster, bravest man in the government, and many others have noted the kind of pavement reductions come testimony plated amount to a de facto rationing by reducing access to care. the actuary has stated that the payment reductions in the law -- quote -- "could jeopardize access for care for beneficiaries. senior beneficiaries. he also predicted the ipab

reductions in particular would be difficult to achieve in practice because of the access related harm to seniors that would result. that's ipab for you. mr. johnson: you mentioned u.s. pretentative service it task fo. wasn't that the agency that proposed denying women mammograms until the age of 50? mr. roberts: that is correct. for every proposal like that, thank goodness there has been a reaction by the public and the medical profession and everybody else to say whoa, wait a minute, this doesn't make any sense. and again, it's an gend-oriented board or commission that comes under the banner of rationing. i have a wonderful chart i will show to you in the next colloquy in regards to the four rationers of which you just mentioned one, and then asked me about ipab. they're a little benign, i'm going to have to change the

caricatures but they're like the four horsemen. apockapocalypse with regard to e health care system of the united states. as you look at each one and what they're doing, they're rationing care. they are rationing care. mr. johnson: just beginning to see the tip of the iceberg of the assault on our freedom that this law, if it's implemented, is going to represent. senator boozman, you had a couple comments. mr. boozman: this rationing is an important situation. we're already seeing rationing right now. as an optometrist, more than being a senator, i get called from people who have moved into town and can't provide a health care provider for their aunt or uncle in the medicare age group. physicians are definitely cutting back because of the payment plan. seniors are smart enough to figure out that you can't add 30% more patients under this plan and then along with that no increase in physician fees, no

increase in the infrastructure required to take care of them. something's got to give. and that's going to be two things: quality of care and rationing. the same thing

mr. sessions: the essence of the president's proposal, it went to the core of the proposal financially, was by federal government expansion of our authority, we would bend the cost corvee and make health care cheaper for all americans. that was a fundamental principle that was sold to business people and some business people thought it was great idea. but it hasn't happened. per-person government debt --

senator johnson is on the budget committee and he knows this -- is worse than any other western world nation. per capita we have more debt than greece, spain, italy, ireland, $44,000 per person we all owe, man, woman, and child. and the president 134eu9e submitted a budget. if it were to be enacted -- and certainly it will not be -- that will go to $75,000 in ten years. every expert we've had at the budget committee has told us we are on an us sustai sustainablea spending debt path that will lead to financial collapse, mr mr. erskine bowles and alan simpson, who chaired president obama's debt commission, both together issued a written statement that america has never

faced a more predictable financial crisis. and what they told us was, spending as we are today, running up debt as we are today guarantees a financial collapse that could impact every person in america and deeply impact our ability to have health care in this country. so i think we have to recognize that the house of representatives, the republican-controlled house, tomorrow will unveil a budget plan. the senate on wednesday, they'll -- the senate is not going to bring up a budget. the democratic leader has said it's foolish to have a budget. so we'll go for the third consecutive year without even attempting to pass a budget. it's supposed toking out of the committee by april 1, supposed to be passed by april 15.

the house is going to do it. they're going to step up to the plate and they're going to lay out like they did last year, a plan that would change the debt course of america. a plan that would put us on a sustainable path so that we don't have to fear financial collapse. and they're going to look at this legislation. and it can't be imposed. we do not have the money. it's going to make health care worse, as we've heard, but more than that, we simply even if it were a good idea, a nice thing to have, we do not have the money. we're borrowing 40 cents of every dollar we spend. and they misrepresented the cost. it's far higher than anyone has expected, and it's going to continue. for example, our people have looked at the c.b.o.'s score on the budget committee, and they've analyzed it fairly and i'm prepared to defend these numbers based on c.b.o. scores

from 2014, the first year the law is in effect until 2023, it will cost $24.66 trillion. how much money is that? over the same ten-year period on federal highways we'd spend $626 billion. we've been fighting over highways, finally passed a highway bill. the whole highway system, federal money would be 626 while we're adding a new program improperly funded for 2,600 billion dollars. education. the education we expected to spend over the next billions is 1,000 billion dollars. and this health care cost is going to be 2,600 billion dollars. disaster aids. it's expected we'll spend $111 billion on disasters, whereas

we'll spend 26,000 trillion dollars, $2.6 trillion on the health care bill. this is the kind of thing that the american people are asking us, are you created? how can you borrow 40 cents of every dollar you spend as we're doing today? how can you do that to america? what's the matter with you people? they say people back home, they're not smart, they're just angry. well, aren't they right to be angry? we're adding a program that's financially unsound that's going to make health care worse, and we don't have the money. this money needs to be used to save medicare and social security, programs that are already in great jeopardy. if we had money, we have to use it to save them, not start a new program, a mass -- of massive proportions that over 60, 75 years will cost far more than anyone imagines. senator johnson, thank you for raising this, and i'm concerned

about the cost and i know senator boozman and others have talked about the rationing and there's a lot of reasons why we simply cannot go forward with this health care bill. it must be eliminated as we know it, and we can make reforms, but this legislation cannot go into effect. mr. johnson: senator sessions, i appreciate your comments and those of senators roberts and kyl and senator boozman. just in conclusion i guess the two points i'd like to make, we talked about estimates. i ask unanimous consent for two more minutes. the presiding officer: is there objection? without objection. mr. johnson: thank you, mr. president. it's important to understand all these numbers we're talking about are estimates. and the -- and the federal government is not particularly good at making those estimates. you think back to 1965 when they first passed medicare they projected out 25 years and said in 1990, it would cost $12

billion. in fact, it ended up costing $110 billion. nine times the original cost estimate. the other point you were making is does it make sense for the federal government to take over one sith of our economy? i've asked that question of thousands of individuals. do you believe the federal government can take over 1/6 of our economy, the health care sector and do it efficiently? i've asked thousands of people. i've had two brave souls raise their hand. the fact is the american people do not believe the federal government is capable of doing that. in closing i'd like to remind everybody that speaker pelosi very famously said fe have to pass this bill so you can find out what's in it. senator sessions, senator boos boozman, i know we're dedicated to make sure we don't have to sul fully implement the health care law before we figure out what it is going to cost because it could bankrupt this nation. with that, mr. president, i yield the floor.

a senator: mr. president. the presiding officer: the senator from connecticut. mr. blumenthal: thank you, mr. president. yesterday the average price of gasoline in connecticut topped $4 a gallon, the fifth highest average price in the country. across the nation, prices are fast approaching that amount for every american. the rising cost of gasoline is a real harsh and unacceptable fact of life for ordinary americans. it is crushing to the average consumer, it is stifling economic growth, it is hurting our businesses for people the country, ordinary americans, our middle class, these dramatic increases are not a luxury. they are more than an

inconvenience, they threaten their ability to go to work, to do their work, and it drives up the prices of goods for all kinds of commodities, not just gasoline. it threatens to derail our economic recovery.many factors e price of a gallon of gasoline. no question. it is complex. there is a growing consensus among energy analysts that part of the reason -- a large part of the reason has to do with speculation. now, i'm mindful of the fact that there are a lot of experts and a lot of debate on different sides of this issue, but there is a powerful and growing consensus that speculation is a major cause of the rising cost of gasoline. in fact, there's a list of businesses, government organizations, and trade

associations who have undertaken their own studies and investigations of the oil futures market. let me list them for you. exxonmobil, the petroleum marketers association of america, goldman sachs, the american trucking association, the consumer federation of america, delta aicialtion the international monetary fund, the st. louis federal reserve -- what do they all have in common? they have all indicated that excessive oil speculation significantly increases oil and gasoline prices. in fact, according to a recent article in "forbes" that's based on a report from goldman sachs, excessive oil speculation "translates out into a freedom for gasoline at the pump of 56 cents a gallon." the chairman of the commodities futures trading corporation has stated publicly that wall street

speculators now control more than 80% -- in fact as much as 85% -- of the energy futures market, a figure that has more than doubled over the last decade. in short, people are buying contracts for future delivery of oil or gasoline that have no intention of ever taking delivery. something is not working in the markets. demand has dropped. consumption has been reduced. supply is at least at the level it was last year, and yet prices are rising. the excessive oil and gasoline speculation is clearly causing market disturbances that prevent the market from accurately reflecting the forces of supply and demand.

and it is vital that government use every available resource to protect americans from markets that are not working, from price gouging or price-fixing or illegal manipulation. the causes of the market disruption must be confronted. last april the attorney general announced the formation of a financial fraud enforcement task force working group. i'll repeat that. financial fraud enforcement task force working group that was specifically empowered to combat illegality in these markets. i wrote to the attorney general last may in the wake of the appointment of that task force, telling him respectfully that --

quote -- "announcing investigations and beginning to issue subpoenas could curb some of the worst speculated activity that may well be under way at this very moment." i believe now that this task force has the authority, it has the mandate, it has the responsibility and the obligation to be effective. we've heard virtually nothing about it over this last year. we have heard of no investigation, no action, certainly no prosecution. and now is the time that it should be active, and that is the reason that i have written to the attorney general, and i ask that the letter be made part of the record.

seeking from him that this task force be proactive and effective by beginning investigations and taking whatever action is necessary to combat illegality in these markets. i believe that the attorney general of the united states, if he makes vigorous and effective use of his task force, broad regulatory authorities cancy send a significant mall -- can send a significan signal to auts that manipulation in the future oils market will not be tolerated. these gasoline prices are on the minds of americans across the country. they have economic effects, but they also have affected consumer confidence on the lifeblood of economic recovery, even more

than the share of dollars that go to pay for gasoline at the pump. there is an effect on consumer confidence. this obligation on the part of our law enforcement is one that goes to the core of their crecialght-- to thecore of thei. it demands that the attorney general of the united states take this action to reenergize and revive the task force, and i am hopeful, knowing of his reputation, that he will act accordingly to assure all of us that illegality, whether it's price-fixing or price gouging or cornering the market will not be tolerate and that effective action will be taken against it.

thank you, mr. president. i yield the floor. i note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

the presiding officer: the senator from maine. ms. collins: thank you, mr. president. i ask unanimous consent that proceedings under the call be dispensed with. the presiding officer: without objection. ms. collins: mr. president, i ask unanimous consent that i be permitted to proceed for up to 20 minutes. the presiding officer: without objection. ms. collins: thank you,

mr. president. mr. president, the majority leader has indicated that the senate may soon turn to legislation to reform a much-needed, much-beloved american institution: the united states postal service. mr. president, the postal service is nearly as old as our nation itself. our founding fathers recognized the importance of having a postal service. article 1, section 8, of the constitution gives congress the power to establish post offices. this is the same section that allows congress to declare war, to coin money, to borrow money on the credit of the united states, to collect taxes, et

cetera. so, clearly, the post office was viewed from the very beginning of our nation as being essential to our economic well-being and to bringing together our country. the postal service is also required by law to provide as nearly as practicable the entire population of the united states with adequate and efficient postal services at fair and reasonable rates. mr. president, this is what is known as the universal mandate, and it ensures that the postal service cannot leave behind our rural states or our small towns. yet the postal service, which has delivered mail to generation

after generation of americans, will not be able to meet its expenses sometime this fall, according to the postmaster general. in the past two years alone, the postal service has lost an astonishing $13.6 billion. firse has dropped 26% since 2006, and the trends are not encouraging. since no one wants the mail to stop being delivered later this year, that means that we must pass a postal reform bill, and we must do so soon. the economic impact of the postal service is enormous. it is the linchpin of a mailing

industry that employs more than 8.5 million people and generates almost $1 trillion of economic activity every year. virtually everyone from big retailers to small businesses to online shops relies on the postal service to deliver packages, advertise services and send out bills. the jobs of americans in fields as diverse as direct mail, printing, catalog companies and paper manufacturing are all linked to a viable postal service. nearly 38,000 mainers work in jobs related to the mailing industry, including thousands at our pulp and paper mills like

the one in boxport, maine, which manufactures the paper that is used for "time" magazine. my point, mr. president, is many of us think in terms of the post office by way of the small post office that may be in our community or the friendly letter carrier who comes to our door. and certainly that is an important part of the service provided by the postal service. but the economic impact of the postal service is enormous. the crisis facing the postal service is dire. you can't lose billions of dollars year after year after year and hope to stay in business. the crisis is not, however,

hopeless. with the right tools and actions from congress, the administration, and the postal service leadership, the postal service can reform, right size, modernize and continue to serve our country for generations to come. my colleagues, senator lieberman, senator carper, senator brown, and i have worked extremely hard during the past several months to craft bipartisan legislation to update the postal service's business model and give to the tools it needs to survive and succeed. we've introduced a bill that will help the postal service reduce its operating costs, modernize its business model and

innovate to generate new revenue. however, mr. president, the postmaster general and i fundamentally disagree on how to save the u.s. postal service. and i am concerned, indeed deeply worried, that he continues to make decisions that will severely did he go grade the service and drive -- severely degrade the service and drive wa*e away customers -- drive away customers. it is clear that we have two very different visions on how best to help the postal service. while each of us wants to ensure that the postal service is set on a sustainable path, i fear

that the postmaster general's approach would shrink the postal service to a level that will ultimately hasten its insolvency. mr. president, i cannot think of another business that would respond to a loss of customers by further shrinking its service to its existing customers. most businesses, whether they're large or small, would redo you-- redouble their efforts to better serve their customers in hopes of retaining them and attracting new businesses. and yet, the current plan by the postal service would slow the delivery of first-class mail,

close facilities and ignores congress. it flies in the face of the good faith that i and the other negotiators have extended to the postal service during the many months that we have worked on the reform bill. we've worked hand in hand over a number of months with the postmaster general to craft a bill that would save the postal service money in a way that prioritizes the lifeblood of the mail. the mailers and the service around which commercial mailers have built their business models and around which individual customers have developed their mailing habits. despite these negotiations, the postmaster general has pushed

ahead with plans to abandon. current mail service standards in favor of reduced access, slower delivery times, and higher prices. that will simply force many customers to pursue delivery alternatives. it's those adjustments involve shifting to nonpostal alternatives, even in a minority of case, i say, 10% or 20%, the postal service would face an irreversible catastrophe. for once cuts -- customers turn to other communications options and leave the mail system, they won't be coming back. and the result will be that the postal service will be sucked into a death spiral from which

it will be unable to recover. we simply cannot allow that to happen. now, what do i mean when i say that businesses will adjust their business model? companies large and small that rely on the mail tell me that if service continues to deteriorate, if the postmaster general engages in these wide-ranging closures of essential processing plants, the postal service's customers will conduct more business online and encourage their customers to switch to online service for bill paying and other transactions. other companies, such as small weekly newspapers or pharmaceutical suppliers, have

told me that they would seek nonpostal delivery options such as for local delivery and transport services. again, let's assume that only a small fraction of businesses change their operations by shifting away from the postal service. it still could spell the end for the u.s. mail system. listen to this statistic, mr. president. for every 5% drop in first-class mail volume, the postal service loses $1.6 billion in revenue. that's why the downsizing of the labor force and excess capacity that the postmaster general states is so critical, to saving

the postal service must be carried out in a way that preserves service and does not inflict avoidable harm on dedicated postal workers. now, too many in the postal service leadership have assumed that this simply cannot be done, that it's impossible. but the fact is there are many options to cut costs and expand revenue while preserving service. and let me just mention some of them. several of them are in the bipartisan bill. first, you could reduce the size of processing plants without closing them. i've suggested this for the processing plant in hamdan, maine, that's on the chopping block. it shouldn't be because it means that mail from northern maine would have to make a 622-mile

round trip for some northern maine communities in order to be processed. but if the processing plant is too big, reduce its footprint. rent out part of the plan. that would generate revenue and right size the processing plant without hurting delivery times. we could move tiny post offices into local grocery stores. we could and should and must reform an expensive and unfair workers compensation program that costs the postal service more than $1 billion a year. we could allow the postal service to ship wine and beer the way its competitors can. we can refund and should refund an overpayment into the federal retirement system that amounts to between $10 billion and $11

billion. the postmaster general says that he can develop a new health care plan that would greatly decrease the need to prefund future retiree benefits. we could use buyouts authorized by our bill to encourage employees to retire, and many postal workers are eligible for retirement. but sadly, mr. president, the postmaster general is instead proceeding with a disastrously flawed plan, as is evidenced by the recent announcement of draconian processing plant closures. this coupled with the still-pending closures of nearly 4,000 mostly rural post offices and the postmaster general's push to eliminate overnight and

saturday delivery, tell me that the current postal leadership is gravely underestimating the consequences of lesser service on revenue from customers who depend on the service as it is provided today. that's not to say there isn't excess capacity. that's not to say that the workforce should be reduced, but it can be done in a smart way and a compassionate way. it also suggests that the postmaster general is prepared to have rural america bare the brunt of severe reductions in service that violate the universal service mandate. the postal regulatory commission

concluded just that in its analysis of the impact of the proposal to end saturday delivery. it found that the savings were far less than the postmaster general had estimated. the postal service will not be saved by a bare-bones approach that will require massive adjustments by its customers and that will drive more of them out of the postal service. now perhaps that might have worked in a time when customers had no alternatives such as would have been the case decades ago. but today the massive shift to online commerce provides many businesses and individuals and consumers with alternatives to using the mail. and a good portion of them may

well explore and settle on those alternatives if the postal service makes it harder for them to serve their customers. and for customers who simply cannot adjust their business model, they could be forced out of business, taking much-needed jobs with them. mr. president, the approach taken by our postal reform bill, the 21st century postal service act, would be to reduce excess capacity while still preserving service for the customers of the postal service. our bill would not ban the closure of every single postal facility, but it would establish service standards and allow for meaningful public comment procedures that would ensure that delivery delays and the

impact on customers are considered. the result would be that most facilities would remain open so as to preserve overnight delivery, saturday delivery and easy access to bulk processing for commercial mailers. our bill would still allow the postal service to reduce the work force using buyouts, and it would still allow processing capacity to be reduced to match the declineing volume. for example, rather than closing a plant that has excess capacity, our plant would allow the plant to downsize its labor and volume capacity. this could mean running one shift instead of two or half a shift instead of a whole shift or using one sorting machine rather than two or using half

the space and renting out the rest and so forth. that way, the plant still could process the mail in the region in a timely fashion while saving money, and indeed in some cases generating more revenue. under the postmaster general's plan, however, that plant would close and its volume would be processed much further away, thus degrading service. the loss in revenue due to dramatically reduced service under the postmaster general's plan would not take place under our plan, and the negative ripple effects on customers, jobs and the broader economy would be avoided. with our bill set to come to the floor very soon, the postmaster general has nonetheless moved

forward with preparations for sweeping closures and service reductions. that means that even if our bill were to pass quickly, get the conference, be sent to the president's desk and start to be implemented over a matter of just a few months, the postal service's ill-conceived actions would already have done damage to its customer base. after all, customers have to plan now for what they fear may be coming. customers are already making contingency plans and exploring alternatives. in this way, the postal service has already triggered the potential hemorrhaging of customers that our bill would prevent should it become law. but on top of the damage already incurred, what this reckless

move demonstrates is an attitude that is dead set on letting the service deteriorate and ignoring what customers want. that attitude seems to be so stubbornly entrenched among the senior leaders of the postal service that i worry that even if our bill were to become law next week, the current postal service leadership would not enact it properly. without an attitude of service first, i'm concerned that all the important processes and considerations we put in the bill could just become box-checking exercises for the postal service that is looking to just maintain the appearance of compliance rather than

embarking on a new path. mr. president, i would ask for two additional minutes. the presiding officer: without objection. ms. collins: thank you. this approach by the postal service is all the more inexcusable given its unfortunate reputation for fuzzy math. by cutting service and raising prices and not fully calculating the resulting disastrous revenue losses, the postal service has put forth numbers that we simply cannot rely upon. and unfortunately, this isn't new. the postal service's assumptions about the projected losses and savings from service cuts have been proven unreliable in the past as the postal regulatory commission has found. furthermore, we're relying on

the postal service's data and projections without giving the postal regulatory commission the opportunity to provide its advisory opinion which is expected this summer. now, mr. president, let me close by just saying i hope that my concerns can be addressed, but it raises real questions about whether or not proceeding with the postal reform bill is futile. if the postmaster general is eroding the customer base and implementing service cuts before we can enact legislation, are we just wasting time trying to pass a bill? can we still save the postal service? so i find myself in a quandary, one created by the postal -- the postmaster general himself as he

shifts from plan to plan, from negotiation to negotiation, and this makes it extraordinarily difficult for those of us who are so committed to saving the historic postal service so it can continue to be a vital american institution for generations to come. thank you, mr. president. the presiding officer: morning business is closed. under the previous order, the senate will resume consideration of h.r. 3606, which the clerk will report. the clerk: calendar numbered 334, h.r. 3606, an act to increase american job creation and economic growth by improving access to the public capital markets for emergency growth companies.

mr. johnson: mr. president. the presiding officer: the gentleman from south dakota. mr. johnson: i ask unanimous consent that an intern for the banking committee be granted floor privileges for the remainder of today's session. the presiding officer: without objection. mr. johnson: mr. president, thank you. i rise today to speak about an amendment i am cosponsoring with senator cantwell as well as senator graham and senator shelby to reauthorize the export-import bank. this amendment is important to thousands of workers in senator cantwell's home state of washington, and i want to thank her for offering it with me.

but this amendment is not just important to the state of washington. it is important to our national economy. it will create and support more jobs than any other provision in the underlying bill before us today. i believe this is why there was unanimous bipartisan support last year when senator shelby and i passed this bill out of the banking committee, and it is why we should pass it this week. this legislation will ensure that the bank is able to continue to provide support for u.s. exporters and workers. the amendment extends the authorization of the bank for four years and will increase the bank's lending authority to $140 billion by 2015. it also talentens transparency and accountability at the bank,

strengthens restrictions with companies doing business with iran and provides for government oversight of the bank's financing and any risks it might have to taxpayers. the export-import bank is the official export credit agency of the u.s. it assists in financing in the export of u.s. goods and services to international markets. following the financial crisis, the bank experienced a dramatic increase in its activities as many companies struggled to find financing in the private market. in fiscal year 2010, the bank saw a 70% increase in authorizations from 2008. and last year, the bank committed almost $33 billion in support of u.s. exports and new

workers. the bank has been self-funding since 2008 and returning nearly $2 billion to the treasury. in fiscal year 2011 alone, the bank generated $400 million to offset federal spending and bring down the budget deficit. it's not often that we discuss government programs that reduce the deficit. so let me repeat that. the export-import bank returned $400 million to american taxpayers last year. we cannot take future success for granted, however. i am pleased this legislation will eliminate reforms to help ensure that the bank is working as efficiently and effectively as possible to protect the taxpayers. and we must not forget that american companies are compete

ing in a truly global marketplace. the export-import bank plays a vital role in ensuring that the global marketplace is also a fair one. when other countries are helping their own companies with export financing, we cannot afford to unilaterally disarm in the face of this global competition. let me be clear, this is a jobs bill. the export-import bank charter directs it to use exports to create and maintain jobs here at home, and last year, the export-import bank supported almost 290,000 american jobs. these are jobs in cities and towns across the nation, with large companies as well as small businesses. in fact, last year the export-import bank financed more

than $6 billion in exports by small businesses, the engines of economic growth. in my home state of south dakota, ex-im has worked with large and small businesses to help export goods all over the world. in the last five years alone, it has helped support over $20 million worth of export sales. this support has been critical to many companies in my state as they want to expand their customer base. more importantly, ex-im financing has helped support good-paying american jobs in south dakota, something that we need to make sure there are more of. i believe that while the bank is doing a good job, it can and must do more. i believe this legislation will help the bank reach that goal. this measure was a bipartisan effort by the senate banking

committee, and i thank senator shelby for his support. in addition, i thank senator warner, senator bennet and senator hagan for their important input into this legislation. the bank's current authorization expires on may 30, 2012, in just two months, so it is important that we pass this amendment today. i hope my colleagues will support the cantwell-johnson-graham-shelby amendment to ensure that the bank continues to carry out its mission of supporting american jobs and exports. mr. president, i would also like to briefly address a filed amendment that majority leader reid and senator udall have spoken on, the credit union member business lending amendment. as chairman of the banking committee, i held a hearing on

this issue last june, and my staff and i have told the staff since then this is a very controversial matter. from the testimony of the credit union and banking industry witnesses at that hearing and the ongoing conversations over the past months, it is clear there is no consensus. if the senate chooses to move forward on this issue, i urge the senate to move forward carefully. mr. president, finally, with respect to the underlying house bill, i would like to make a few comments. this is not the bill i would have drafted. over the last several months, i have worked to enhance the investor protection contained in the capital formation proposals passed by the house in a thoughtful manner while helping to support entrepreneurs, grow

small businesses and put americans back to work. i will enter a separate statement into the record laying out my views in more detail, but i'm pleased to have assisted my colleagues in crafting the senate's substitute amendment that addresses investor protection concerns. i urge my colleagues to support the senate substitute. if this body chooses to reject enhanced protester protections in the substitute amendment, we must remember all members of congress have a duty to keep an eye on the effects of these changes. we are plowing new ground here and we have a shared responsibility to ensure that going forward the new changes we enact into law will truly benefit and not undermine both startups and investors alike. mr. president, i yield the floor.

the presiding officer: the senator from louisiana. ms. landrieu: mr. president, i'd like to support the chairman of the banking committee and his call for us to come together this week to support the expansion of the export-import bank, the import-export bank. it has been as the chairman said, an extremely successful tool to help small, medium, and large businesses to be able to compete with their competition overseas and to give an opportunity for small businesses, particularly main street businesses, to the help that they need to succeed in overseas markets which can be very daunting. so i want to thank the chairman for his strong support and the way that he's worked in a bipartisan manner, and i plan

to vote for that amendment tomorrow. but, mr. president, the biggest vote that we're going to take tomorrow is not on the export-import bank. that's something that i think there is generally broad support, general understanding, general level of comfort, although there will be some that do not vote for the expansion of the bank because they just are philosophically opposed to a muscular role of government. but for those who believe that both the private sector and the government and nonprofits all need to have muscle working together on behalf of the people that we seek to serve, will most certainly not allow ideology to get in the way of voting for a good idea like the ex-im bank. that's not our problem. our problem is the i.p.o., i.p.o., the ill advised political opportunity. the jump-start bill, the jobs

bill, it has several names but what it does is deregulate financial markets under the guise of job creation. over the weekend, there were literally dozens and dozens of editorials against the house bill that we're going to vote on tomorrow. so i know that we're not coming really fully into session in the morning, not all the senators are back in washington at this hour on monday, but i know that their staffs that are watching the goings on here on the floor here and i just want to call everybody's attention to this i.p.o. bill flying over here from the house of representatives. it's not what you think it is. it is not what you have been told it is.

it is flying under the guise of job creation. it's flying under the guise of, you know, democratizing the credit markets. it's flying under the guise of we've got to do something to get the -- money into the hands of mom and pop operators. mr. president, i've said this last week, i don't think anyone has spent as much time on the floor of this senate arguing to get more credit into the hands of small business. so i hope that my credibility on that issue raises some questions , at least if i'm on the floor saying vote against the house bill. do not vote for cloture on the house bill. if you don't think you can support the substitute which i have offered in good faith with senator levin and senator reed who is the second ranking member

on the banking committee, and senator levin, who chairs the investigative committee for the entire united states senate, the committee that has looked into financial scandal after financial scandal and i am the chair of the small business committee. we have come together, the three of us, to say wait a minute, slow down. this bill coming from the house that had broad support, no doubt, is not what it looks like on its face. and it needs more work. it needs some investor protections. it is a major change in the way that people can raise money, which is illegal now to raise money for private companies on the internet. if you want to start a company in america, you can go ask your friends, you can ask your parents, you can ask your

children, you can ask your neighbors, you can do a small circle of investors. but once you sort of make that ask publicly, in a public way, like in a radio announcement or on a billboard or, you know, in a public way like on the internet, there are rules and regulations that you have to follow to make sure you're telling the truth. those regulations in large measure have been taken out of the house bill, generally. now, let me tell you or share with you besides this name, ill advised political opportunity and look, there are some good people that voted for the house bill. people of good will. but i kind of think this bill got cobbled together and of course because the -- the majority on the house side can just sort of put sogget in the rules committee and it is a --

and that's the way it's going to be and thank you, if you have any opposition, the minority voice is quelled over there, that's the nature of the house, but the minority should not be silent over here and our rules allow for more full debate, this is a time for the senate to act like the senate, to slow this thing down, cool it off. let's get the right safeguards and maybe it can be an excellent opportunity for changes to our financial markets. but it has to go through the process. this bill didn't even go through the banking committee. it was going to go through the banking committee, and then the decision was made to just step on the gas, let's just go for it before it even really went through a markup in the banking committee. part of it came through our committee. we didn't even have a markup, but the two pieces from the s.b.a. are really not controversial and, you know, we would be happy to mark up the bill if given a chance.

we could do it later this week. but let me share with you what's just some of the headlines were. "the new york times" which if there was any newspaper in america that understands wall street, both its great strengths, its weaknesses, if there was any newspaper that understands the financial markets, "the new york times" would be one of them. they said this bill -- they're talking about the house bill -- call the jobs act is paving a path to fraud on wall street. we don't need to go back. we're just leaving the path to fraud. we're moving away from fraud. now what are we going to do, turn and go back to it? "the washington post" said wall street credo, ripping out their

eyeballs, they're talking negatively about the bill and some other things this weekend in "the washington post." the p.c. world, jobs act would revive dot com abuses, officials claim. "investment news" job act merits greater scrutiny. and most shocking to me was the bloomberg news. small biz jobs act is a bipartisan bridge too far. they wrote an excellent piece on this, and i'm going to read some of it into the record. i think that jack reed spoke about this, but i'm saying members, whatever you've been told about this bill, please read the details and please, please read some of the very credible articles that are being written about the house bill. there are good parts to it. i'm a general supporter of crowd funding, which is what i

described, to make it legal for the first time really in history for people to go on the internet and raise money for private entities. it might be -- i think the idea is a very good one with the right safeguards in place, it could be a boon to small businesses and growing businesses that sometimes are shut out of those very fancy board rooms where decisions are made behind closed doors and very secretive meetings. i've been an advocate my whole life for opening this up so that people, ordinary people, middle-class people, can get involved in creating wealth through investing instead of it being a small club of people that come from the same schools and they go to the same social events and they have the same social network. we want to move beyond that. america is a great experiment in how to create a middle class and give ordinary people an

opportunity to create great wealth. we do that very well. but america has also been a place, mr. president, where we almost took the whole world financial community down with us. that's how big we are. that's how strong we are. and that's how careful we must be. and we're not being careful. we're being too political with this house bill. we're not being careful. so what does bloomberg say? bloomberg says a spirit of bipartisanship is sweeping capitol hill with lawmakers poised to approve a package of bills aimed at reducing regulatory burdens on small businesses. we wish we could raise a glass. this moment has been too long in coming. but the legislation it has spawned would be dangerous for investors and could harm already-fragile financial

markets. this is bloomberg. please listen. now, bloomberg is not right on everything. no no -- no one is, no publication is, no senator is. but this is bloomberg. this is "the new york times." this is "the washington post." this is the head of the securities and exchange commission saying the bill is good, but it lacks investor protections that are essential for its proper implementation. they go on to say, we agree that red tape can needlessly tie up small companies. we also agree that security laws that bar startups from harnessing the power of the internet to raise funds could use updating. and it makes sense to allow, as the bill does, an initial public offering onramp by wii could give startups a chance to grow. but the jobs act goes too far.

it would gut many of the investor protections established just a decade ago in sarbanes-oxley. a series of scandals had upended investor confidence in wall street. mr. president, we have got to be careful. that's why the aarp sent out a strongly worded letter -- now, this is one of the most powerful organizations in the country. some of their members were the ones that were so grossly hurt by the greed of wall street and insatiable appetite by some of these large investment banks to make more money because people need to make m