so many tax provisions expire at the end of this year that a dangerous fiscal cliff has formed. we are just stepping on the accelerator even as we are perilously close to the cliff. in action for the rest of the year only invites careless and hasty decisionsmaking which leads to bad policy. i urge the administration to work with congress on the mountainous to do list of expiring tax provisions and unsustainable promises in the interests of sound policymaking sir in the. ..

the groom some members here to see if they are accurate. there's some talk about -- excuse me? if you want to talk -- [laughter] >> i am so excited about your question. >> i understand i have a couple of minutes, a standard five minutes and the only witness today i will try to make it as quick as i possibly -- >> i apologize. >> chairman bachus --

>> i want to introduce you. [laughter] >> we have three distinguished guest. >> i will help you introduce him. >> commissioner of social security. we very much look forward to your testimony and we've known you for several years in different capacities and you do super work, very proud, a nearly impossible job when you performed admirably with dignity and conscientiousness and appreciate your work. so why don't you proceed. you have a few minutes you can take your time. your statement will be automatically in the record. >> chairman bachus, a ranking member hatch, members of the committee, think for the opportunity to discuss the resources we need to continue providing outstanding public service. as we do so, we must always remember that we must maintain

our responsibility to save taxpayers' dollars. in every fiscal year through 1994 to 2007, congress appropriated less money than the president requested. at the same time the work load increased because the nation's population was growing and the baby boom generation entered its disability years before filing in retirement. congress has also added dozens of new statutory responsibilities without simplifying the complexities of the social security act which has grown over 77 years. employees fortitude has allowed us to keep up to some extent, but we have started to lose ground. from 2001 to 2007 the agency responded to budget cuts buy dramatically reducing its program integrity work and extremely poor choice from the tax payers perspective. as you mentioned in your opening comment, continuing disability reviews save taxpayers substantial dollars for every administrative dollar spent.

the budget cuts by under investing in its hearings and appeals staff as the result of delays for disability hearings steadily worsening and become the national disgrace. not only with government failing its citizens, it was also spending more administrative money per claim to eventually handle these claims that were taking too long. wan started as commissioner, the first issue of the committee raised was the hearings backlog. at that time it took an average more than 500 days per person to get a hearing. we all agree that had to change. i made the case we need to move into new directions and you understood it would only be possible with your support. the investments that you made produce substantial dividends. despite a huge increase in disability at the caissons caused by the deepest recession since the great depression. we've weathered a storm that produced over 600,000 more applications each year projected

before the recession. we have nonetheless cut the average wait for the hearing decision from about 532 days to 2008 to a recent level of 350 days. and we did so while handling the oldest cases first. currently, every hearing office in the country has an average weight of less than 475 days. five days ago some offices had 900 days and 65,000 people had waited over 100 days for the decision. each day we challenge ourselves by tightening our definition of an old case to read this year we've already completed 90 present the case is over 725 days old and next year we will focus on cases 700 days or older while the total order hearings has increased due to a tsunami of supplications, the que is moving faster and faster. in fy 2007, the average age of

the case waiting in the queue was 324 days. today it is down to 209 days. we've made these improvements and maintain service also with the front end of the disability process. despite over 30% increase in initial disability of occasions since 2007 we have kept the average wait for an initial decision approximately in the level of pending cases is much lower than we originally projected. quality is up over the past five years for these decisions and we are now fast tracking 6% of the initial applications with our new compassion allowance and quick disability determination process. severely disabled applicants who often waited years for decisions to pass now get one of an average of ten to 14 days. five years ago you would probably get a busy signal when you called the field office. now the busy week is less than 10%. last year we had the lowest weight in busy rates ever on our

800 telephone number. we've also made progress in the policy. we've updated medical rules that had been out of date for decades and we started the long slow process of overhauling our maine vocational tool, the dictionary of occupational titles which the department of labor stopped dating in the late 1970's. early in my tenure i was stunned to learn the office responsible for notice had been disbanded. we not 350 million notices each year to the american public. many of these important communications were inaccurate and poorly written. we've been prewriting or notices systematically in plain language to make it easy for people to understand our actions and their responsibilities. program integrity work while still not funding at the level requested is up substantially. we are also taking advantage of the technology. we redesigned our online services which had been invaluable in helping us to keep

up with a recession related work. we have four of the five most highly rated electronics services in the federal government and we are the only federal agency widely offering on-line services in spanish. for the first time after we have a backup for our national computer center and last month we finally had the ground-breaking ceremony for the state-of-the-art replacement facility. the new building by the way will be constructed for about $75 million less than the original cost that we in the congress had projected. none of these accomplishments would be possible without our employees achieved an average productivity increase of 4% a year for the past five years and a higher rate this year. a remarkable achievement that very few organizations of public or private can match and we owe them our gratitude for their work on the front lines. i am concerned despite their hard work we are seeing signs we will soon begin moving backwards

for most of the service goals. in fiscal year 2011 to 2012, the difference between the president's budget and our appropriation was greater than any other year in the previous decades. also last year congress rescinded 275 million from hauer over i.t. carry over funding which will greatly damage our efforts to maintain our productivity increases through the i.t. innovation. we are starting to see the consequences of these decisions. our progress can address the hearings backlog for example is not happening as quickly as the public deserves. we need your support for the president's fy 2013 push request swell as a timely and adequate supply of well qualified judges from opm. if we are to achieve our goals in average processing time of 270 days by the end of next year. few people realize that the rapidly increasing percentage of work results from our

verification will for other federal, state and local entities. for civil the number of people visit the office to verify their benefits for a third party has increased by 46% since 2007. last year we conducted a 1.4 billion verifications for programs such as e-verify, voter registration, driver's licenses and health care programs. while most of the verification is occur cheaply and automatically, the small but increasing number result in the mullen matches that strain the resources of the rapidly shrinking field offices. many members of congress have written about the importance of the service and local communities. fortunately budget cuts to not allow us to employ the staff necessary to meet all of their expectations. by the end of this year we will have lost 6500 federal and state employees in the past two years. and as you well know, attrition by hiring freeze does not occur

evenly and many of our smaller rural offices have been hit harder than the average office. much of the progress we've made in the past five years could vanish if we keep losing staff at this rate and in this fashion. our accomplishments demonstrate a direct correlation between founding and surface. i appreciate this opportunity to explain the wonderful work the men and women of the social security administration perform under enormous and increasing stress. they need your continued support else reflected in the president's fiscal year 2013 budget request to continue to serve the american people in the way that you and i expect. i would be happy to answer any questions you may have. >> thank you, commissioner. i would like to just indicate what the director of montana thinks. and that is the direct reports

the disability claims by process is in the worst shape in its history and it now takes about 1500 claims waiting to be assigned and it takes about four to five days for someone to even look at a claim. the director of montana states and a quote we are the poster child for what happens in the hiring freeze, high attrition and increasing caseload. so, commissioner astrue i would like to ask what your thoughts or on that. we want to see disability hearings backlog which you are working on and clearly don't want to leave of their efforts off to the side. could you just comment on what happened here to see if we don't get the president's budget request and ordinary terms people understand.

>> mr. chairman, we are now getting very close to the level of employees that we had five years ago and expect to start dropping below that before terribly long. in their retirement and the attrition do not have been evenly around the organization, so not only do we have the problem that we have fewer people to do the work, we have the wrong people and the wrong places with all the restrictions of government it's not easy to move people and move work in the way that allows for the optimal result, so we expect that we will continue to be contacting the number of field offices that we have. we've already closed virtually all of the contact stations, we closed most of the remote hearing offices. we expect we will stop having

backlogs that we haven't had before the people will be waiting longer for services and field offices, and i think there is a question as to whether we are going to get the goal at the end of next year. we've been making great progress with that. congress wanted to check and ask to do a crystal ball analysis and we did well on that a couple years ago. it is clashing the well at this point the congress wants us to make that goal within your control to. i think you'd support us adequately. because now you lost most of the margin of error last year we could still hit with support from congress but if we don't get support for the president's budget, the chances it will hit the 270 on time are almost nonexistent. >> can you explain about how it takes awhile to train the people to do the work? do what in the office the first

de -- de mick of the supreme court complains about the complexity of the social security act and there is a memorable quote about that. we expect for most of the front line workers with a year in the ds of montana or the field offices the work is so complicated that they contribute relatively little in their first year. inductee can be a drain on productivity because somebody that knows how to do the work has to take the time to make sure that the person is learning and the work is proper so you start contributing in your second year and you are probably not in most cases reasonably productive from an operation point of view until after the second year. it's a particular problem with the ds because they are slow and the turnover is very high. the turnover and attrition rate tends to be 3% from the federal employees, tends to be nine to

10% in the state employees. we actually sometimes we did this in utah with senator hatch who's gotten support years ago the attrition rate i think was in the 30's and we worked with the state to classify the jobs that were a little bit more vignette if so we could hold on to the employees who were doing the front line work. >> both sites are being closed and it's my understanding we plan to offer a permanent site; is that correct? >> that's correct. we had been planning -- i think the issue had been working with the tsa to find an appropriate site and cost and i think we just had a letter from senator tester that we just responded to yesterday were the day before confirming that there would be coming. >> that is very significant otherwise people in the great

falls area or north of great falls had to go all the way to billings montana and that is many hours. it's a long way. >> i understand. >> so it makes a big difference. we deeply appreciate recognizing the remote nature of the state saw people on disability don't have to drive quite as far. it is a big burden to put on people. >> the would be a permanent video link and i think particularly for those of you in the rural states we need your support on video. we are not going to have the staff to do everything face-to-face the way that we could 30 years ago. the quality of the video is very high. you can actually see the water marker in the driver's license video now well enough to use that for verification purposes on the relocation. also for hearings, and i'm frustrated at not a lot of attorneys are not taking us up

on this yet, they can now do video hearings from the comfort of their own offices with their relatively small investment in equipment. it would make us much more efficient and allow us to spend less on bricks and mortar as if the attorneys representing what to gossip on the offer they can from the hearings by video from their own offices. >> is there any incentive you can provide? >> not under the current statute but it is a fine question mr. chairman. >> senator hatch? >> commissioner, there's been reports on the disability programs which he felt lined some relate to possibly careless or even could benefit grants made by the administrative law and some relief to the attorneys representing claimants in the seals process. it seems to me the states are pretty large. dr. martin currently a member of the social security oversight board recently presented

evidence that elj what floatplane denial rates to decide on many cases, "have a thick tendency of really denying claims and calculated that if the remedies are put on plays to shore up the claims process we could save tens of billions of dollars. of course the savings that could be used to provide benefits for the truly disabled and would help with the disability insurance trust fund. let me be clear the workers who are eligible for benefits and have facilities are fully entitled to what the program provides however they're seems to be evidence suggesting some of the decision making could be leaving greens in cases where there is no benefit to disability. in those cases the taxpayers' resources away from where they were intended in the trust fund of the resources going to the truly disabled. no american worker and no

disabled worker likes it when someone defrauds the system and takes resources intended for those in need and it's not fair in the tens of billions of dollars may be at stake. on you that you are working to address problems of the system, but i wonder if you could comment on where you believe the work needs to be done in addition to what you've said and what are you doing to enhance the integrity of the claims process? >> that is a very fine question. i speak with a lot of well motivated people that have a philosophical feeling we should be granting a lot our benefits are a lot fewer benefits. i don't view that as my goal. what i view as michael is to have our judges call it as squarely as possible on the basis of the statutes that you and the congress have written,

and i think that what gives me cause for concern are the judges who in my opinion out of arrogance or ideology have taken among themselves to ignore the law that you have written and that their pledge to uphold and make their own judgments either to be robin hood or to be a scrooge. if you look at the statistics on the all lawyers, we have improved significantly in the last five years. we've done that with better training of the new judges, we've done that with more counseling. we've also been more active in discipline and we haven't actively disciplined the judge for not adhering to the law but the same arrogance that leads a judge to engage in that kind of behavior also usually allows them to engage in other kinds of inappropriate behavior so we

have removed more judges for conduct on my watch than all the previous commissioners could combined. that started to have a beneficial effect by don't want to suggest to you, senator hatch, that we are where we should be and the number of judges who are basically some of their nose at you, the congress is still high year and should be zero. i fink that to find a authority in that area is gray and there was a hearing on the transcript to if joint between the ways and means and the judiciary i think if you are concerned about the issue i'm more than willing to take it on but i think you need to look at how to strengthen the agency's authority while still respecting the independence of the judiciary. >> the disability insurance program crossed $130 billion of payments since 2011 and as the fastest-growing of all of the entitlement programs.

just over a decade the aggregate payments in the program have risen by almost 135%. it doesn't take a rocket scientist to recognize this type of growth is unsustainable. according to the social security trust it will be exhausted by 2016 and beneficiaries will face benefit cuts of 21%. some look back to the greenspan commission and said just we solve the problem by simply pouring funds from the trust fund into the di trust fund and you have to have robbed peter to paul doesn't solve any of the structural problems but one cause of the rapid expansion of the cost and some researchers have pointed to stems from 1984 reforms to the screening that led to the rapid growth in the share of recent and suffering from back pain and mental illness. to researchers associated with the bureau of economic research have written that, quote, the

screening procedure put in place by congress to a significant extent on an applicant's employability not just personal health causing the program to function much like a long-term unemployment program for the unemployed, and of quote. of course anyone who is eligible and has a bonafide disability is entitled to the benefits but the benefits paid to anyone who's not truly disabled simply takes resources away from those who are truly disabled. now i think my time is up. i have two questions related to the program. first, sometimes difficult to diagnose conditions related to back pain and mental illness account for some of the most rabid expansion of the dia beneficiary population and second, to what extent to the opinions of those making the benefit decisions about local or national labor market conditions determine eligibility for the benefits?

that is has di become an unemployment benefit provider of last resort? >> let me say i think that speed is a rapidly growing program. i think that there's both been some analyses that we've seen recently that misunderstand the nature that most of that has been predictable and has been predicted by the actuaries for a long time and if you simply compare the growth in population you would think okay the program is growing faster than it should, but when you factor people like me at 25 are perfectly healthy not so much at 55 the the actuaries say almost all of the growth is consistent

with what they've predicting based on the baby boom going through its disability years. if you look on a more granular basis that some of the causes of growth with mental illness you are correct we as a society are diagnosing mental illness more frequently. we are prescribing treatments for mental illness much more frequently than in the past is certainly significant factor in the growth and less on the back pain and muscular damage is as much as a factor but we will go back and give you information on that for the record. in terms of being a backup employer, other nations quite consciously did that and regretted it and is pushing back the other direction. i think there's a fair amount of evidence from how the agency has

handled cases during this recession to indicate that that's not true. i think that we are calling cases squarely for the most part exactly as we have been in the level to the lowest in a very long period of time. it's a 50 per cent allowance rate we haven't seen that as i had my first job in the senate in 1978. the dds you have to go back to a think 1997 to see the allowance rate as well and i don't think it's because we've become tougher and change our standard but what happens during the recession is that economically desperate people apply and the vast majority get rejected because we had here to the statutory standard. we don't feel that we are supposed to turn into exactly what you're concerned about. when you have 650,000 more applications in a year are we

perfect, are there some people but slid through during the recession allowed for benefits to probably shouldn't have been? i think so but for the most part, we administered the program with integrity and trying to do exactly what the congress has told us to do and not take it upon ourselves to the standard move the needle in one direction or the other. >> thank you very much. >> mr. chairman first of all thank you for this hearing and it's a pleasure to have you before the committee. i want to acknowledge the improvements in the availability to recipients. we understand there is a secure web site information would be contained in the male version of

the annual earnings statement available. i would communicate with you the importance of this document for people living in objecting where their retirement income will be to look at the accuracy of the information, to look at their eligibility, and i also understand you do have the budget has proven the resources to the amount to individuals and hard copy and i would encourage you to make that information available was easily as possible. it's a very important for people to know where they are in the social security system. i want to talk about the issue that you have raised. i've had a chance to visit the work force in maryland. these are dedicated people working very hard to read deutsch pointed out their productivity is up 4% a year now consistently defeat deutsch had 6500 fewer workers and the

numbers are increasing every day. the interesting point you raise is the wheel is a person through retirement it takes a period of time to get a person trained to do that work and you said as much as a year could be lost in productivity as a result of losing people now. you've gone through two years of a pay freeze and we have a projected increase less than would be normally required. we have a tax on retirement which has to be an impact. your workers look at what we are considering here changing the retirement rules it seems to me it would encourage people would have the ability to retire to say why am i putting up with this? so, is this a real concern we are losing people love other place might be staying in public service and providing the services that the determinations can be done more timely because

of people saying what are we doing here? there is a tax coming all the time. >> and close to panic about holding on to people because they are the ones that do the work. we would be nothing without them and it is hard to find the right people and to train them properly. a lot of what we do you often need five for ten years of experience to do what well so we work hard to read another factor for so many of the front line even in the tight budget we have invested a lot more in the physical security and offices. i read every violence report that comes to the agency and that wasn't a big deal. there were 500 attacks or serious threats of assault to for the think it is 2500 this year and you can see with the

recession the intensity of the incidents got worse, and i think it is easy in a lot of the gough, agencies most of our people are out on the front line looking face-to-face with a severely disturbed people on a regular basis and that tension during the recession people have been more violent, people have been more anti-government, there's been a lot more threats of violence that is a factor in losing people, too taking a toll on people and that's why we've invested in the tight budgets or insecurity than we have in the past. >> rino we are going to have disagreements, legitimate disagreements on the budget priorities and how we need to proceed to balance the federal budget but i think we all want to make sure that our work force is safe and has the support it needs. i don't know of a number in the

senate that doesn't believe the benefits provided by the social security administration is vital to the country. i don't know if a member doesn't want to see the service is done in a more timely way and professional way and when you have an agency that has increased productivity at the level that you have been able to achieve that is being asked to do more with less the least we can do is make sure we provide the type of support you need in order to get the job done and i certainly would think our language here at times has been counterproductive keeping some of our best in public service. >> thank you mr. chairman. >> mr. grassley. >> thank you mr. chairman and mr. astrue for your work. following a little bit on the last conversation you had with senator hatch, but asking a little different direction, you

made some reference in your opening statement about the online application that's helped to, quote could deal with the additional economy durbin claims this raises a question of whether disability insurance programs become an alternative and employment benefits those receiving benefits were not disabled slowdown agency's response to those that are disabled and they're obviously to the trust fund insolvency program. to specific questions. why have a significant impact on the number of claims. in other words people shouldn't be silent claims because the economy is bad. what is the total number of applications from fiscal year

2011 and how many were not disapproved. >> there's the economic research over the years that shows that in times of recession with a bit of a lag because of the affect of unemployment compensation that disability applications rise. it doesn't mean that those are meritorious applications, but you get people who are on the margins who decide to take the chance and there is as much as we try to make this as black and white as possible making difficult calls those deciding to take the chance. typically what should happen and what does happen in most cases

is most of the claims are rejected but we don't stop people from applying. so, it's not just this recession if you go back historically looking at the early 80's and other periods of high recession the di workload goes up. i will give you the precise record numbers for the record, but 2011 we had between 3.2 to 3.3 million applications if i remember correctly at the initial level be a lot of 34% but let me just double check. let me also respond to what you and senator hatch are trying to get out in a way. if you're concerned about the system not being tight enough, there are some things i think

this committee should consider looking at. over time the court had the sympathy for claimants have expanded statutory language beyond your intent and in particular we have consistent rulings in the circuits on the treating physicians for a which is critical to a lot of our cases and in the ninth circuit for instance i believe it is particularly broad. they can't be right and it is potentially a way of blowing up in the system and allowing cases that shouldn't be allowed if not standard isn't consistent with what i believe the congress of original intent. that's an area that i think it's looking at. the area of what constitutes improvement on the continuing this of the reviews hold us to a higher standard than what congress originally intended and

the return to work area is important. i think that as admirably intended the work was i think it's been a disappointment in terms of its outcome. it's not according to the actuary cost-effective yet, and i think a part of the reason for that is congress has every five to ten years later on more work incentives. it is so complex that i think it overwhelms people who even do want to come back to work through the that is what until recently the congress has authorized what we call simply largely to explain to people how to return to work and that is a program that hasn't been real authorized and we think that we should. list simplify the program, and in general what i would say the budget trends are going we can't continue to do business as

usual. what i would plead with the committee to consider doing is can't provide more money let's look at ways to simplify the statute, simplify the responsibility i think sometimes trying to get equity in a lot of policy perfection we've introduced complexity that has had unintended negative consequences for the public so i think looking on the legislative simplification generally would be a positive way to go. >> i have one question and for an answer in writing. >> senator nelson. >> good morning. i want to follow-up on the question of publishing the names and social security numbers of deceased people that you and i have talked about. but mr. sherman let me set the table. what is happening is we have a

new kind of crime. it is not a crime with a gun or knife or crowbar, is the use of a laptop. once the social security numbers particularly of deceased people have been acquired, which is published by social security, they fly all in the name of the deceased or in the case of a deceased child most recently this morning's news out of memphis deceased child that lost a four year battle with cancer the name was published, the social security was published, the child social security number was used as a dependent on a false tax return asking for a refund coming and what is happening in communities like tampa and orlando, street crime

drugs, theft, burglaries are going down because it is so easy for the criminals to get all of this money from income tax refunds because they've gotten somebody's social security number, and one of those sources as pointed out by this morning's news from memphis is deceased social security being published by social security. so when i talk to mr. astrue about this, he says he has a lawsuit settlement that requires under foia, freedom of

information act, these have to be published and he says that we can only change this by statute. of course not filed by statute but in the meantime the criminals are having a field day now, i disagree with mr. astrue and i want to bring to his attention some change tax. in the first place, he's operating with legal counsel on the basis of a lawsuit that was settled in 1980 and of the lawsuit was settled under foia for the names and social security numbers and was to be published once a year. he publishes names, social security numbers and other information every day. that is a big difference and i would ask you to consider that. i publish the address, published the date of death, published

probably their date of birth. a whole set of information bill was not required by the original lawsuit in 1980. mr. chairman, i would also bring to the committee's attention that since 1980 there's been a lot of cases that have found the deceased has a privacy interest. let me give you 1i have familiarity with because as you know after we have returned to earth on the 24th flight of the space shuttle ten days later the challenger launch is, and of course true foia people were chongging to get all kinds of information about the astronauts come and that case ruled that the victims have a privacy interest that can be protected, so mr. astrue, i would ask with

this additional information, would you please consider until we can pass the statute, changeable all that you do not to publish all this information and do so on a daily basis which makes it so easy for the criminals to get their hands on it and do this new type of crime there is ripping off millions and millions of dollars of american taxpayers, and furthermore would you consider that you even under the current lawsuit settlement could publish the names and only the last four digits which would then prohibit the criminals from carrying out this new kind of effective crime. >> senator nelson, you and i

have talked about this personally and are in disagreement. with all due respect, it's something i've looked extremely carefully. i'm a former agency general counsel and white house foia the privacy act so this is an area of the law that i know something about. you and thought congress had set the statutory deadlines for disclosure under the privacy act and freedom of information act with some severe penalties for noncompliance of the privacy act to read so no, i can't just release them every year because you and the congress have decided that i can't do that. also as we have discussed before, i don't think that we have statutory authority to withhold that information. there's a strong presumption of release under the statutes. you need an exemption. i don't believe the challenger case is the only case on the

other side they don't believe the case has put applications. no court since the challenger case has applied or broadened that exception in this way, so i don't believe that is available to me but even if i were wrong on that as a practical matter you have to understand that the carter administration settled this case under the judicial decree in 1980. i can't just go back and from my nose at a federal court order to but i would have to get to the department of justice to challenge it which i don't believe they would because they have no basis for going back and reopening it which is why they support the legislation the administration has proposed that this somewhat similar to yours and then they would probably be a for your process to get a definitive decision even if the justice department were to do that so we don't think it is appropriate or practical and i think what has to happen is the

congress has to act, and i think that this is one of those rare opportunities where we can set aside a lot of the bipartisan problems in washington and work together in collaboration. the administration has a bill similar to the congressional bill to reform the house leader has been on the republican side. chairman johnson of the ways and means committee, you and the senator have introduced bills here. i would say to you i think that this committee and the senate ought to take it up as a personal challenge to get the bill passed this year. this is one of the relatively few areas where i don't think there's a big disagreement on the principle. so i would say this is the congress responsibility not the executive branch to fix and i would urge you to fix it as quickly as possible. >> in a normal year mr. chairman, this would be the kind of bill that would be

considered a motherhood bill, but the fact is subject touches on taxes and social security in this political context of the election year for the president it's going to be difficult in the meantime. there is a public interest to be protected and mr. astrue and i disagree on this and i would merely ask you why you just said if he would request of the justice to permit their interpretation so that if perhaps you might be wrong in your considered judgment as a former legal counsel we might get some relief until we can pass the statute mr. chairman,

thank you very much. >> thank you, senator. this is a problem and worth hour while to try to pick up this legislation. the administration has a version and a result of the same problem. my view is we've got to try. you never get anything accomplished if you don't try so let's see what we can do and work with the administration. thank you, senator. maybe have a hearing on the subject. people take advantage of the social security administration tax refunds. it's an outrage. let's see what we can do to stop it. >> we've had two hearings on the

senate subcommittee that i've had the privilege of chairing, so the record is complete. >> thank you. senator thune. >> thank you for calling during i want to thank commissioner astrue for being here to testify. social security is the single largest category of the federal budget and the social security trustees recently released the report on the status of the program to the report from social security can stand for benefit payments for only another 20 years, three years sooner than the last estimate and that means without reform, social security is going to exhaust the trust fund reserves by the year 2033 and the disability insurance fund would be bankrupt by 2016 at the latest. this happens benefits will be automatically cut for the current beneficiaries. the trustees' report underscores the need for the meaningful entitlement reform to protect the benefits for future generations which is why it's always troubling to find and

hear about and learn of the fraud in the program and in addition to the meaningful reform to ensure the long-term solvency of the social security we have to ensure the programs are operating sufficiently. i would like to go back to something senator hatch mentioned, and that is last december "the wall street journal" reported some potentially fraudulent practices on wall firms such as blinder and binder representing claimants for disability benefits before the social security administration particularly the appeals process for the of the ministry of laws at adjudicated claims. the report or would like to submit for the record found clement representatives withhold evidence the social security at fenestration that could prove their clients should not be eligible to receive disability benefits and senator coburn has done a lot of work in this area and i want to recognize his efforts in that regard shedding light on the issue.

the social security of fenestration has refused to take action on the allegations about law firm and the material representations to the social security administration. i believe that full medical disability reviews must be performed on binder and blinder claimants so we can be sure they are qualified for the benefits. ssa has a sufficient budget to do so and should be done on the new obligations and prior obligations as well. so my question is is it not within your authority to prioritize the social security of an attrition program integrity function in your existing budget to ensure there is a proper response to these claims? >> i'm going to have to disagree with a number of these assumptions on your question. first of all in familiar with

"the wall street journal" article which was we didn't take action we did refer to that to the office of inspector general. if you have questions of the progress of about we would encourage you to talk to the inspector but that article was relatively thin there was not in my opinion very much there is also based in part in this assumption is a requirement for all relative medical evidence to be provided to the judge did come and right now that isn't the law. the previous commissioners tried to make that into law and my understanding is that it received a lot of opposition and not much support in the congress so first of a wall street journal had it wrong, and second there wasn't much in the wake of allegations. third, it would be unprecedented

to go back and review all cases by the law firm on evidence anywhere near this fin. if you have a proof of fault i have no information from the inspector general would be totally unprecedented to do that. any court would look at the with her but immediately and be an enormous waste with the taxpayers' dollars for me to do that. >> do you have any indications yet, can you summarize any of the inspector general's funding squawks there's nothing they've reported on. >> there's nothing publicly reported on. i don't have much more than that but certainly my expectation -- again, senator reid on wall street journal very carefully when you realize there is not a legal obligation to present every bit of evidence that the agency because the rules are not written that way. there is a factual error underlining that whole article.

past that there is not very much specific in terms of evidence. there is unsupported here say. it may be true but in order for us to take action we have to have proof and evidence and "the wall street journal" didn't provide very much for the inspector general to go on to read >> we will revisit that issue. last month there was a that social security administration disability claims judge instructed no longer to seek information from social matteo website when site in the cases. as you know in the digital world with the internet including the social bto web sites, they've provided an important tool to gather evidence about ssdi and www.freedomcollection.org applicants using some of the medium's for investigative purposes. does the recent decision by the ssa work against program

integrity? >> to the contrary. first of all, you need to understand that to protect the public privacy and to protect hundreds of billions of dollars of the investment systems we have one of the toughest fire walls in the world. it's not just that we don't a lot of judges to use facebook. none of our employees. i can't get on to my computer and go to facebook unless i specifically go and use a complicated work around from the i.t. people. we do that to protect first of all the privacy of individuals and second, to avoid horribly damaging now we're getting into the system that could cost hundreds of millions of dollars to fix. member to come in my opinion i have to run a very tight and efficient operation to meet the

public and congress' expectations. you allow broad social media time on government time i think that becomes an enormous stock on productivity and if i were to allow it it would be very short period of time before i would be the before the committee saying try and answer the question how come your employees are spending all their time on facebook and other social media sites? the final thing is if a judge becomes aware of something that looks fraudulent from social media we've not told them to ignore it but we have done with a longstanding policy is told them to refer to the inspector general said that there can be a proper investigation and i want to assure you that social media sites are not exactly clear

reliable evidence. it takes some context to figure out is that really the person? facebook puts up phony web sites under my name all the time. i never signed up for facebook plan constantly asking them to take down things on facebook not purport to be mined and spouses, angry spouses do that to each other one has to be a little careful about these things, which is why you need professionally trained fraudulent investigators to take circumstantial evidence of fraud and see if it is real. so i think we are doing exactly the appropriate thing to do. i don't disagree there are abuses on the platform. we are aware of those sorts of things, but it seems to me that enrolling beneficiaries in the ssdi program if you don't meet

its requirements is simply inexcusable and i think any fraud prevention tool that is available out there that can be used, and like i said, law enforcement is using the mediums for their investigative purposes we should be doing everything we can with every tool available to us in this day and age particularly with a challenge we are facing fiscally to get in and root out fraud and abuse at every turn. >> that i agree with and what i would say is inspector general does use social media and other sites to start the fraud investigations they do observe claimants they suspect of fraud try to video than at home and that type of thing. they've been under the resources in many years only about a think one-third of the half of what they call the units that investigate that kind of fraud are funded so in addition to making the pitch from my budget on to the president's

recommendations when you look at the baiji budget, they've cut back a little that and that is the most effective front line units that we have on fraud and the congress hasn't been fully supportive of that so i would ask you to take a look at that. >> thank you mr. sherman. >> thank you, senator. mr. hatch? >> i have a number of other questions i will just submit but let me ask this one because it borders a little bit on senator nelson's concerns, and i just thought maybe i should ask -- and also a question risen from my utah constituent. ..

u usinger interest. it is when data on decreesed individuals are used in personal ways such as tax fraud in some of the ways senator nelson mentioned here. yet, here are -- i'd have to say, there are legitimate -- and ensure certain payments such as life insurance payments are properly made. i believe there are legitimate uses draft that by private interest for purposes of for instancic or personal research. which is something we in utah do

a lot of. in the legislative specifications however, the ssa presenting purposes and need for such public information. now such a stance is naturally of concern to me, and certainly to many of my utah utahs constituents. mr. commissioner, will you be promulgating new rules for so-called death master rule, or are you as i think you have indicated indicating a statutory change or a legislative change? in either case, ensure me that you work with members on this committee on any approvals. >> i think we're in agreement, senator hatch. i think i was trying to be clear with senator nelson, i don't view this as a problem i can solve administratively. i don't think i have the authority to do.

the difficult balances you're pointing, which i agree with it completely help prove my point that classic legislative balances. that's not something that the congress has empowered me to make. we had a meeting over earlier in the week. i was hopeful we would have the specification converts to actual legislative language. we're not quite there. a part of that, i think, should be encouragerring to senator hatch since the specifications have become more public, it has raised some concerns, i think i give the administration broadly credit for listening those concerns. it means that the legislative language is being a little bit delayed. but i don't think they're approaching this from a rigid point of view. i think they're trying to figure out the best way to balance the things. i'll be candid, the reason we don't have the precise legittive

language. i don't know for sure on a couple of those things precisely how they'll come out at the end. whatever happens, there's enough overlap between senator nelson's bill, the administration's bill, congressman johnson's bill, and the house if 90% overlap. i think that everyone realize z that the most important thing is to get moving to make sure that the major abuses don't continue. a lot of these other things are details that we'll be able to work out through the course of the legislative process. i commit to working with the committee and the congress, generally to accomplish that. >> thank you. i want to complaint you for the work good that you do. so you my respect, for sure. hopefully we can work out the statutory language so that some of the problems that have been raised can be solved. you're one of the few people that might be able to work that out in a way that might work

well. we want to thank you for the hard effort you make. we appreciate your work. >> thank you. >> thank you, senators. thank you, commissioner, too. just curious to see how it started out during the one -- you wanted to serve the full six-year term. you wanted to be independent. your thoughts now as you near the end of the term. >> thank you, mr. chairman. it's been a very interesting experience to straddle administration. i think as the first time as a constitutional experiment. i want to give credit to the administration, i think, for trying to approach what i'm sure was not what they wish would happen in a good spirit, and i've tried to respond in kind. i think it's actually worked pretty well. i'm not sure it's a construct in the washington of today that we

count on to work well going forward. even though it's worked well, this time i think it's something you ought to keep in mind and think about for the future. it's been an extraordinary, i think in my sixth year now, it's been extraordinary rewarding, extraordinarily draining. i'm very grateful to president bush for having given me the opportunity. i'm grateful to the committee for having given me the opportunity. it's an incredible group of people to try to lead the dedication, commission is remarkable, most everybody comes right out of high school and college and spends the career with the agency. it's the kind of thing, it's

remarkingble -- i worked for a commissioners in the mid aye '80s. everybody thought abouts what they could do if they had the boss' job. i certainly did in the '80s. i never thought i'd have the chance to do it. it's a great blessing. i was thinking about you and i think this is my last experience actual arealy i don't think so. it's time for me to go home to massachusetts. but i started working with the committee as a very young person in 1985, and really did get to know senator doll quite weal in that period. some first-class staff people, the committee treated me extraordinary well when i was

confirmed in 1989, and it has been in the same spirit since and the two of you have been spectacular, senator grassily, was spectacularly helpful too when he was ranking. the staffs work more colleaguely than is common in the congress these days. i guess i feel blessed all the way around. >> of course, we're blessed to have you working for us especially american people are blessed to be working with the american people. and you set a very good tone of cooperation, in working together. you're a good role model. and it's something -- i'm going to keep in mind from years remembering you and all the good work you've done. >> thank you. >> thank you. meeting -- meeting adjourned.

[inaudible conversations] when people are saying to him don't take the vice presidency, right now you are the most -- you are a powerful majority

leader. don't take the vice presidency. you won't have any power. johnson says, power is where power goes. meaning, i can make power in any situation. his whole life, i said, nothing in his life previously makes that seem like he's most -- because that's exactly what he had done all his life. >> tonight the conclusion of our conversation with ron earth carr row on the passage of power. volume four in the years of lyndon johnson. his multivolume biography of the 36th president tonight. next british prime minister david cameron on the economy and the future of the eurozone. the prime minister defending his plan saying it's the right way to save the british economy. it's twenty minutes. [applause]

>> thank you, ladies and gentlemen and thank you ann for the introduction. first of all, thank the substitute of directsers you do supporting britain's wealth creatorring supporting a lot of people who are going to help us get out of the difficult economic situation we face today. because -- in pearlies economic times. turn on the tv, news, and you see the return of a crisis that never really went away. greece on the brink, the survival of the your your row in question. and faced with this, i have a clear task to keep britain safe. not to take the easy course, but to take the right course. not to -- responsibility for dealing with the debt crisis but to lead our country through it to better times. my message today is that this can be done, we are leading wait

in the journey. since we took office the two years, we have cut the last deficit by a quarter. yesterday we had -- the number of people in work up by 100,000 in the last quarter. and a number of new business start-ups last year was one of the highest in our history. so now more than ever, this is the time to stand firm. let me be clear, we are moving in the right direction. not rushing the task, but judging it carefully. and that is why we must resist dangerous voices call calling on us to retreat, yes, we are doing everything we can do turn this country to strong, able, economic growth but we will not do that by returning to the something for nothing economics that got us into the mess in the

first place. we can't bear the budget on the more spending and debt. the programs we made in the last two and a half years. it would actually mean tough decisions lasting even longer. it would risk our policy. in keeping britain and building the recovery we need, we face three challenges. first, the -- to recover from the long, deep recession that hurt. second, the turbulence coming from the your row your are zone. and whether the world is on the right economic path with debates rages about trade politician. we need to find the right answer to go forward with the challenges. there are offices that's been rooted in the reality of the global situation. this is not a conventional economic crisis that we had to deal with in the recent past.

this is a debt crisis. deficit reduction and growth, they are not alternatives. delivering the fair rest is absolutely vital in securing the second. in markets don't believe that you are serious with dealing with your debts, your interest rates will rocket and your economy will shrink. britain cannot cut itself off from what happens elsewhere. as our bigging trading partner, the problems with the your zone are affected too. as we prepare for the probably stores resolute and resolute because we will do to show the u.k. from the worst of the storms. outside the your row we have greater flexibility. we have our currency, we have ore central bank for responsibility. we have trade relationships with ports in world.

we investment more around the world per capita than america. and last month trading goods hit a new record of 13 billion pounds. we make the most of the flexibility to drive the deficit reduction program and secure the strong banks that will be necessary to keep our interest rates low. we should be confident because of our strength. just dead here in the northwest, was given brilt tan the work force a fantastic vote sf confidence by backing a -- the u.k. government gave it the full backing. the your row supported the necessary changes. work force responded mag stiffly. it is truffely a british success story. and they are not alone. look across the country. tie owe that toyota in dash by. the balance of trade in cars

turned positive in the first quarter for the first time since 1976 when jim went -- not just the car industry that is strong. pharmaceuticals, information technology, air row space, the industries. britain has a strong base for which to grow. we have a global language, we have a time zone where you can trade with asia in the morning and america in the afternoon. we have some of the best universities in the world and a government that is committed to making britain the best place in the world in which to start a business. with these strengthing i believe we can see britain through the rick santorum but to do so, we need to act at home and together with the european and global partners. first we must continue to get to groups with the deficit and build our recovery at home. let us be clear about what we inherited. the economy builds on the worst deficit since the second world

war. the most leverage banks, the most indebted households one of the biggest houses booms and unsustainable levelses of public spending and immigration. with a budget deficit of over 11% our gdp one -- last government spent was borrowed. britain spends over 20 million pounds every single day to pay the interest on the past borrowing. it continues to increase every day until we start to live within our means as a country. a central promise of the government, and one of the key tasks that brought the coalition together was to deal with the deficit. that is the only prosperity and that is exactly what we're doing. dispite from the you're row zone, it's a long-term project. it is pain staking work. but the tough decisions that we've taken on deficit reduction really are beginning to yield

real results. and they can make no deafuation from this. those who argue we should spend more want us to borrow more. drive up our deficit, not debt. and put our low interest rates at risk. higher interest rates would be higher mortgages, lower unemployment, and more actually being wasted paying interest on the national debt. we must not and we will not let this happen. getting our debt under control is necessary for growth. but it is not sufficient. our responsible fiscal policy is being matched by an active monetary policy. that is the best way to support the mind and rebalance the economy away from debt-fuel consumption and towards exports and investment. and the independent bank is able to do more to support the economy if necessary or inflation.

fiscal responsibility and military act rich i believe is the right economic mix for our over-indebted economy. the additional ingredient that the gloft deliver and needs to do even more is a radical program economic reform to make our economy more competitive incoming competitive tax rates, planning reform, deregulation, all of the things that business has rightly asked for and we're delivering. some things are absolutely essential in the short term. our companies need to invest more. so we're cutting corporation tax to the lowest level in the g7. banks need to lend to small and medium sizes business. that will provide 20 billion pounds of cheaper credit to small businesses. builders need to build more. we are scrapping almost 11,000 pages of planning rules. need the confident to get out there and enter the housing market so we're backing

mortgages and people to get new homes because it's absolutely clear to me, that there is a massive shortage of housing in a market and we knead to get that market moving again. there are other things that will take longer but will still make a vital difference. we need to rebalance our economy. we're supporting a new entrees that spread growth and jobs right across the country. with 24 entreeses and a 2.4 billion regional growth fund that will secure 28,000 jobs nationwide. we need to get behind the industries of the future so we're backing the skills by green technology, air row space, life sinces which britain has a real advantage. we need to make it easier to take on new workers so we're employment more including tribunals. we need to develop the kill ises of our work force. we delivered over 450,000 new

apreend tiesships a success today welcomed. we need to do more embedding high-quality vocational education which is why we're creating university technical colleges. completing part of our education system that should never been left out. there are the things for the long-term. this is the government about the long-term. we're absolutely focused on delivering them. we're investing in infrastructure. building high speed rail, finding new ways to finance roads apse secure the past supplies of tomorrow. it always pays to have a job, get a job, and we want to build a culture that can get everyone to work not a life on benefits. and of course, we're reforming our schools. so the next generation have the motives and ambition to match the best in the world. this is our plan for growth, short term, medium term, long-term. i believe there is still more we can do.

we can use the hard credibility of the government's balance sheet to help the economy grow without adding even further to our debt. let me tell you what this means. in my areas we're already uses the credibility we found to pass on the benefit of low interest rates to businesses and families. so we have the credit easing program for small businesses. we have the mortgage help for people who want new homes. and there are the guarantees for new infrastructure projects. i want us to go further to i have asked the treasury to exam what more we can do to boost housing within and help with infrastructure. we have taken the tough decisions to earn the low interest rates. let's make sure we're putting them to the best possible use. building recovery is hard work because when without reinflating we are building a new model of growth. some people ask why we didn't have more -- in the queen's speech. let me tell you, if you can

legislate your way to growth, we would. the truth is, you can't. you need to get in there. you need to pick the problems apart. you need to find the things that hold our economy back and serve them out step by step, hour by hour. a government that is -- committed to be on the side of enterprise, entrepreneurs, businesses large and small, wealth creation, and hard working people right across the country. that is what i'm committed to delivery. just as in britain, we need to deal with the deficit and restore competeness. of. the same is true in europe. this is a debt crisis. the deficit that caused the debts, they have to be dealt with. the growth in much of the eurozone has evaporated completely. without the german it would be in recession. i realize the countries inside the year row zone -- especially from countries such

as britain, that have debt and difficulties of their own. but this affects us too. as the government of the bank of england said yet, the biggest risk of recover where in the u.k. stem from a the difficulties facing the your row area. based on trade of nose alone. britain is more than six teems exposed to the eurozone than the united states. that's before you factor in the impact of confidence and the close reconnected financial systems. this coalition government was formed in the mit of a debt crisis in the eurozone. two years later, little has changed. so that is the backdrop which we have to work. so i believe it's only right we set out our views. we need to be clear about the long-term consequences of any single currency. in britain, and the u.k., we had one for centuries. when one part of our country, strug struggles, other parts

step forward to help. there is a remorse of logic to it. the system that looks -- monetary yet limits fiscal transfers between them. can only resolve the internal balances through painful and prolonged adjustment. so three things need to happen. if the single currency is to function properly. first, the high deficit local competitiveness countries in the outside of the your eurozone, they need to confront their problems head on. they need to continue taking difficult steps to cut the spending and increase the revenues and under go structure reform to become competitive. the idea of high deficit countries can borrow and spend their way to recovery is a dangerous deleashes. but it is becoming increasingly fair they're less likely to be able to us is stem that necessary adjustment

economically or politically. that's the core of the eurozone including through the european central bank. does more to support them and shairt burden of that adjustment. now, in britain, we're able to ease that adjustment through lose monetary policy and flexible exchange rate. -- with active interventions such as credit easing, and guarantees for new infrastructure projects. so i welcome the opportunity to explore the monetary activism at the european level. for example through the president ideas the project -- but to rebalance your economy and a currency union at the time of global weakness. you need more fundamental support. gernl my's fitness minister is right to recognize that rises wages in the country can play a parking lot in correcting the imbalances. monetary policy in the eurozone, must also do more.

second, the your eurozone needs to put in place government arrangements that creates crched for the future. that means follow thing the lodge monetary union collective support and collective responsibility which one possible camp. example steps such as these need to put an end to the speculation. we need to address the overall low productivity. most states have becoming less competitive compared to the rest of the world. not more. december market is incomplete. competition throughout europe is too constrained. britain has arguing for a probusiness, pro-growth agenda in europe. that's why the head of the last european counsel we the 11 new leaders setting out an action

plan for jobs and growth in europe. plushing for the completion of the single market and services in energy and digital. these are sitting there waiting to be taken we can ensure the political leadership to get it done. the europe row zone, is at at cross roads. it either has to make up or it is looking at the probably breakup. only europe has committed, stable successful eurozone. where an effected -- well cap losed banking with and support monetary policy across the your row zone. we are in uncharted territory which carries huge risks for everyone. as i have consistently said, its in britain's interest for the the eurozone to sort out the problems. people should be in no doubt, which a path is chosen i'm prepared to do whatever is necessary to protect the country and secure our economy and financial system.

protect britain's economy, is not just about the measures we take at home or even the steps that our neighbors take in europe. in a world that is ever more connected and ever more competitive. it's also about the steps we take with the global partners to protect ourselves against global con they jen and global trade over the coming weeks, i'm l i'll flying to camp david and mexico to fight for what's right for britain. that means committing together to make the reforms we need to get the economy's growth in the global economy working again. incoming involving organizations like the imf. it needs consistenting those reforms to make sure the banks are safe, by implementing high politician global financial regulatory standards. it means recognizes the risk of recovery from the rising of energy prices and working together to ensure our energy security. but most of all, i believe it means getting together to give

the world economy, the world -- that can really make a difference and expansion of trade freedoms breaking down the barriers to world trade. the trade is going no why. that doesn't mean we have to give up on free trade. in fact, for a from it. there is good work we can salvage. like the measures to break down the bureaucracy of getting goods across borders. that are already in place. and most importantly, i want us to move forward what i call coalitions of the willing to countries who work to converge ahead with ambitious trade deals of their own. we all benefit from it the deals they can bring. that means getting eu agreements with canada, singapore, launching negotiations with japan and a bubble preparing to negotiate with the u.s. that could be the single biggest

dream that could benefit britain. why it is important? because the opportunities for britain abroad have never been so big. we need to work harder than ever been to see it. competitions has increased and the last ten years have seen the extraordinary rise on the path of the economy in latin america, asia, and america. the globalization supply met new competitives making projects and jobs going abroad. now the countries are not producers, they're consumers too. as nations get richer, they spend more money on products where britain can axel. everything from financial services insurance, pharmaceuticals, jet engines, music, computer games. globalization means new countries demanding our production and that can fuel new jobs here at home. if we make the most of it, there's a huge opportunity to

secure a great future for our country. and that is why as we get through this crisis, i believe we can look ahead with confidence. i can cannot predict how the crisis will end for others. and i cannot pretended that britain will be immune from the consequences either. i can promise that we know what needs to be done and we're doing it. getting the deficit under control, getting the foundations for recovery in place, defending the long-term interest of our country. and holding to our course as prime minister, i will do whatever it takes to keep britain safe from the storm. thank you very much for listen, ab i look forward to answering your questions. thank you. [applause] all day saturday on book tv, the book festival is live. it begins at 10:20 eastern and

runs throughout the day. notables include timothy on the have and have not in the great i didder have yens. radical terrorism, that's at 2:00 and 3:20 neuro scientist on why the good stuff feels so good and the compass of pleasure. jay on al for the nobel and the noble peace price. >> that he established it for peace out of guilt over his invention of dine mate. i think i say many my book, it's hard to know what's in the man's head and heart. it seems if he was proud of his achievements in the area of explosives. if build what we call today infrastructure, canal website troubles, railroads. peace they say sunday night 9:00 eastern. every weekend on c-span 2, book tv. [applause] now a discussion on u.s. fiscal challenges with senator rob

portman and representative -- is moderated by plit go editor in chief john harris. it is 40 minutes. >> good morning. we have 40 minutes to tackle a pretty big question. so i'll plunge right into it. the first thing i'd like the panel lists to do. is i propose we go down the line starting with senator portman here. the premise of the panel, i take it, substantively it might be challenging but not that difficult to solve the mathematics equation of the deficit that people could sit down with a calculator and a legal pad and get done. but that the really difficult dimension of this is the political one. and obviously, this does take place until the context of a europe failure in 2011. there was a hope that it

happened occasionally in the past in washington. you get mature reasonable people in a room, throw the reporters out. say don't come back until you have it solved as was done in 1997, with president clinton and speaker gingrich. was done in 1990 with the republicans and the first president bush was done in 1982 with social security. if you can replicate that process. get reasonable anemia a room, away from the glare of the lights there be a solution to this. 2011 that proved not to be true. simpson bowels didn't do anything to tackle. no substantiative action. the conversations extensive conversations between speaker boehner president obama and ended in failure. the supercommittee on which both of you sit didn't get the work done. so, anyway, let me ask the question. if you didn't have to worry

about the political blow back from your own parties, and from public opinion, how difficult twowld be for the two of you to sit down and solve, come up with a solution that would be, you think, in the public interest and not violate your aid lodge candle principals. how hard, substantiately. >> you could do did in twenty minutes. >> right. we just did it. [laughter] well, look, first of all, it is more difficult than it was in 1997. or in 1990, or 1983. the role that washington has done. and those say let's go back to what we did in 1997. we had a growing economy. we don't have that now. we have both weak economic growth, and increasing spending on the entitlement side particularly, it is at the for a higher level.

100% at the gdp. the -- then it was deference spending that could be curtailed proceed much immediately. we didn't have the long-term medicare and social security issues that we have now. in fact, medicare wasn't in existence. it's a different type of problem and and a larger scope. forgetting politics for a second, if we can, the changes we make are going to be have to be more fundamental, and more difficult, and my -- it has to be both spending restraintd, you can't continue to spend so much more than you take in. you have to have growth. back in 2007, when i was the budget director, i benefited from the fact we had growth in the economy. we were able to get a deficit down to 167 billion. that wasn't too long ago. it requires growth in addition to spending retrains. i think it's harder, to be

honest with you. it has to be done carefully to avoid having any impact on the economy. the weakest recovery since the great depression. >> substantiately hard in addition to politically hard. >> absolutely. >> congressman, what's your view? >> if you could chase all the reporters away could you get it done? >> if we could hang the special interests, and the at the door with the coat as we walk in and leave the egos behind as well. it is simple math. and we've got enough templates out there to guide us whether it's simpson, both plans buy partisan. both plans dealt with the good elements a of comprise. restraints on spending, changes increases to real revenue, tax revenue, and making sure that the policies both interplace, so

you have economy growth. and it's not rocket science. i think most of us have gone through it enough whether it was supercommittee, or biden group or gang of six that we've seen this. and you can only do the movie so many times in different ways. i honestly think the problem is that most of the folks who get to make the decision, aren't experiencing the pain that those americans who are on the cusp of losing their home or their job are suffering. it's like the situation in iraq and afghanistan where 1% of america's impacted by these two wars in iraq and afghanistan. we don't feel it. i guarantee you most of the folks on capitol hill don't feel the economic pain that some american family frighting through. if we did, i think it would be easier to get it down. but the reality is, most of us

who get elected don't have to worry about that. i don't think that i'd be willing to deal with some of the programs that are near and dear to me pause i have seem -- what i have seen for them do for both of parents i'm not willing to tell someone that i'm going to comprise and the only thing to comprise is cuts to discretionary programs for families and working people and children. kathleen, we have one view of the problem that is the egos in the room that makes a grand barn very impossible. i wonder if there's another view, it's not the egos in the room. but the divisions within the country that make this so hard. you have one election in 2008, that proints dramatically in one direction. to the benefit of democrats, you have another election in 2010, to the points to the exact

opposite direction to the benefit of the republicans. maybe what we need is not a backroom deal but decide which side is right and which side of wrong. >> maybe what we need is a campaign that aligns campaign to govern. one of the things that may reform possible candidates clinton campaignedded. csh can governor more responsibly. the question should be how does the media use the agenda-setting -- communicate the e lute consensus about what needs to be done. how do we -- storm followup questions and perhaps, these proposals that the county school floated a few years ago. sunday evenings devoting to candidates at length with good moderator and how do you -- >> in lou lou of in addition to the. >> in addition to the presidential gays. ic --

i think you can brick the public up to speed to accept the trade-off and the sacrifice and breakthrough the barriers of polarization. this is an elite con sun us is here. we are all going to sacrifice. can the public be raced to a level of understand that will make the sacrifices and we'll see the benefit thes of the future generation and elect someone result. we can campaign on ways to make it harder to governor. if we can do it that year we're going to be in trouble. >> do you buy that there's an elite consensus that gets muddy that enters the realm of politics or the fundamental ang tagnism. there isn't an elite consensus. simpson bowels would have been more successful. the supercommittee would have been more successful. the very intense, and i guess at certain times for a advanced talks between president obama

and speaker boehner would have reached consensus. what's your -- >> if you're decided elite of members of congress. there is know leet consensus. there's very clear. it if you define elite as the chairman of the joint chief, who has said that our debt deficit is the greatest threat to the national security, if you define elites as leaders around the whole communities who understand budgets understand how to balance the budget, and understand what's not happening, and i think the real consensus is among the american people. i think they are out ahead of the leaders on this. the leaders need follow the people. they need follow them. >> what is your evidence for that? >> i would say ante-dotely when i go to campaigns. when i talk to people, in cafes or starbucks and talk about conversations when i'm coffering the presidential elections. s. people are worried. >> so worried you should cut my

benefits want to pay more taxes. >> i don't think the american people know the difference between the gang of six and et. cetera i think it starts to cloud over. they understand that something has to change. they understand there's something deeply out of balance. they understand numbers. they understand the direction that the deficit is going and the peril that is the country is inspect i think they understand that. they understand that members of congress are not making sacrifices in their own sort of their with their own constituencies in order to get across to the finish line. it's the first time, i think, a lot of voters have seen tax decision to the morality. this there is something wrong with taxing people i think they see the classification and congress in their very, very frustrated. i think the con consensus not among the elite. i think it's among the people. i think there's why there's hope there could be movement on the issue because elected leaders,

they hear that when they go home to the districts. i know they do. the question is who are the winners and losers? i think if you look back to 1986 whether that was the tax reform 1966 tax reform. each side gave away a good bet. they felt they were winning for constituencies also. i think both sides are going to have to give. they have to feel like they're getting enough in return. you don't see that. happening. i don't think you see the leadership not even among the supercommands. i don't tho you see the leadership at the presidential level or congregation. -- when the president gave his oval office address about tax reform. democratic response and said within hare here to work with you. we haven't heard that. that's a long question. >> i'd like to agree with her. i know, that kathleen talked about the elite consensus.

i haven't seen it yet. i think you're talking about is more on the solution simpson bolls. >> yes, we can't grow our way out of. we have to be responsible about ensuring we don't tank the economy. >> yeah. i think the vast majority of my constituents who are not part of the washington elite would agree with what you said. i think they are ahead of where what washington. you can't spend more than you take in, people go like this. they have family budgets and lot run small businesses they understand it doesn't work. there's a sense throughout that washington is koreaning down a path toward a fiscal catastrophe. what pat is saying the lack of leadership. it requires leadership, and tell you, not to be partisan here, god forbid. [laughter] i think mat pat makes a good point. it's not about ronald ronald

reagan it's about bill clinton and welfare reform. that kathleen raced. it's about presidential leadership. it's providing cover to your own party. i'm not going speak for him. i wouldn't do that. i will say that democrats need a little help. in terms of the super committee. we didn't have that. in fact what we had the veto threat if it it wasn't done the way president obama wanted it done. that's not leadership. so i think it requires a couple of things. one is, taking that i think what is a consensus, among folk website not just the elite. serious fiscal crisis now, any crisis is not too strong a word to use. second, is okay, leadership what are the solutions in people are concerned about raises taxes and cut to particular medicare programs. if there is a sense of greater good and sense of solution and the way to, again, spending restraint and economic growth, i

think people ultimately flected among elected representst here can move it forward. it requires leadership in terms of the solution. >> go ahead. >> john, you got to jump in. >> two years before president region tax reform in '86, he worked with congress pass a deficit reduction plan. 80% that have plan relied on tax revenue to work. we can't get unstuck here in washington, d.c., because the word taxes. and there is no way you resolve the depth of the deficit problem without dealing with taxes. that's where i think the difficulty occurs with well-intentioned republicans and well-intentioned democrats. rob said it well. he talked about debt get our spending under control and economic growth. i mentioned that the spending

controls, economic growth, and i'll willing to say, you have to deal with the tax side of things. there's no you can't. when the largest contributor to the deficits over the last ten years have been the bush tax cuts, because they were unpaid for, you've got to deal with it. and if you're going deal with the spending component, the budgetary side, the appropriations side, of what congress does, the discretionary aspect of what allocate to service and programs, you don't recognize that two-thirds of all the new spending since 2001 has come in one department. the department of defense, and yet, you got a crew in the house who wants to spare the department of the feds of any savings whatsoever. in fact, is willing to increase department of defense. that means you're going have to load all the culls to services to american taxpayers, education, health, clean air,

clean water, food safety. you can't do it. so if you're not willing to tax talks. if '02 trying to load it on domestic discretionary services if it won't work. i think you do, john, have to put people in the back room, tell them to hang their' goes and special interest pledges at the door and don't come out until you come out with a plan. there's no way, realistly we're going to deal with it none of the plans we have out there dealt with the plan without incorporates taxes in some fashion. >> i have two people who are partisans and two peoples who approach from the more neutral point of view. kathleen your organization runs. -- >> attempt the young to come up to speed. >> good for you. >> is there an answer. is a pox on the houses or one component of this more responsible for the 2011 fail areas to get a grand barred and

democratic over spending or republican entrance agained over taxation. they're both equally to blame or in the current political dynamic one of those is more? >> i don't think it's productive to spend time asking who's to blame. i think there's plenty of blame to go around. i think the question is, how do we get to where we need to go and bringing it along with us. when people campaign for the i sei they act on the promises. most of the time, president clin to is right a that. getting that laid out is very important. when they campaign, saying we read my lips no taxes. and they have to raise them. when they campaign promises middle tax cut and saying i won't raise taxes to pay for the new programs. it's harder for them to say it to congress we need to smear that we made a possible to governor from the campaign. and i think that should be focus not looking back what's done is done. >> it's been second that second

are marriage is triumph of hope over experience. we heard from clinton hear, say you know what? i think the -- paraphrasing here, i think fairly the stars pight be aligned after the election. perhaps in a lame duck session after the or early 2013. you hear the line a lot. we are going to be enough factors factors are con jernlging the debt limit runs out. the tax cuts expire. the sequestration measures go into effect and particularly the department of defense in a big way. what's your guess? is there a grabbed bar to be have 2012 or 2015. >> i think there is a gar ever bargain to be ha that will come in the lame duck. there are pieces of obviously, the bush tax cuts and the sequestration. and the unknown effect all of

those expiring could have on the economy. i think it's going to matter a lot what happens in the election. which side gets the leverage. which side can go into the room and say guess what we won. and now we're in charge. you can take the medicine now or later. i think it's going to matter. there is no appetite for progress before the elections. it's very clear. i've asked lots of leaders. and they said, sorry, you know, blame the other guys. which is frustrating to hear. thing were certainly be movement. there will be a bargain because each side has so much to lose. they have a lot to gain by being able to come out with a room with a deal. the only time people focusing is during the lame duck session. there's the day these things expire. there are now rating they are watching carefully. the stake to high to do nothing. after the election, i think there will be a time for a grand bargain.

i think that will be incumbent either upon the new president or the current president to solve the problem. thing is really, this is a task of the generation. we have kids coming out of college, you're scared for them. you're scared for the amount of debt. you're scared for the economy they're inherenting. i think there is a more component to solving the problem that the president -- when gallop asked a month ago, what is most important you in the election. the debt was the number one issue. and jobs were just a little bit blind that. it'sst it debt people are focused on. it's never used to be there. way i used to be a whole staffer, 0 in a budget used to be a road sign. we be u.s.ed the budget. sorry. it's just that's the way it was. people literally didn't care about the budget. and now they do. and i think it has a lot to do with the tea party giving a ear

to feel the republicans, the tea party kicking people out who people thought they would be safe. they weren't responding to the constituents in a lot of cases. i hear democrats talking about spending cuts in a way that you've never heard before. thing is change, failure isn't going to be fatal on this. i do think kind of the six months to the year after the election is going to be the only time that the next president our the current president has to change it and they get back into election mode. yes know what happens then. >> what's your sense of timing? take another swing? >> we should take the swing right now. because as pat indicates. it's difficult during an election year. we have to move forward year end. i would say patricia made a comment we are not sure subpoena we know enough it will be devastating to the economy if you don't deal with the issues. some say that's kicking the can

down the road for the new congress and president to deal with. it should be under a strict deadline provide procedures in the senate when we have issues with getting 60 votes pane, you know, look if we don't do that the the federal reserve said we look agent 3 point drop in the gdp. we were 2.2 in the first quarter this year. we're talking about another recession. they said the same thing. it will be devastating. it's a combination of the huge tax increase and combination of sequestration and how it works. this is across the board cuts. we have a debt limit coming up which for many of us is in the republican side is going to require more focus on the spend agz many of us who voted for the debt limit increase last year. said there be real spending restraint. that's how we got the super committee and have sequestration. it's a time, john, when we have an opportunity as a country to make some of these stuff additions. i have no choice to do.

i hope she's right that both parties see it that way and see in the interest and move forward. xavier talked aboutier about the differences. particularly the impact of bush tax republicans and republicans on taxes and so for a. look, we have the debates. we need to stick to the facts. and i think the fact is, 4% of gdp and spending right? historically high. we're heading to the, by the way, 30% under the likely scenario by 2030. this is unsustainable. we have to deal with the problem. that is a fact, that is where we are upon the revenue side. it's relatively low. once the economy -- my view is we shouldn't be arguing about the bush tax cut wees should be arguing about tax reform. this is an opportunity for us to not to keep the current code and add for taxes on top of the reform the code in a way that economists across the board pretty much agree would result

in a better economic -- romney in iowa today is going to give a big speech on the issue. want deficits he released part of the text already. one of the thing he's says in there this is a prayer used in iowa. a prayery wonderful. it doesn't care if it's a public house or a democratic house. it's going to burn. both parties are do blame for the mess we have. for the spirit of doing painful things. i'm going to ask each of you to say how is your party to blame for the current predicament. congressman, you first. [laughter] kathleen, i think you mentioned -- [laughter] to the degree that democrats have had long standing concern that our colleagues on the republican side were intent on e limb neating what privatetizing

important programs that whether seniors who live in dignity for children to move into a buckettive life. maybe democrats have worked too hard to try to protect those programs from the devastating cuts. and in doing so, perhaps that has kept us from trying to come up with a smart budget. so i think pat trish is a said democrats are talking about making some spending redestructions and in fact, having agree to the sequestration process indeed did so. all the discretionary side. actual, terrorist cuts there to the some of the mandatory programs as well. mostly all on the program that we find near and deer to most of american families education and so forth. and so i think, i think you do find democrats are to come half way. the difficulty is when, by the way, i'm using cbo numbers. when it comes to the size of the

bush tax cuts. they cost us none of the paid for. we had to borrow money to do that. to do those bush tax cuts. they were the most important expensive element of the last ten or so years in terms of what we have spent and what has driven some of these deficits. .. the tax loopholes.

the 1 trillion we spend every year, every year. if we were to get rid of the tax loopholes that are in the books we would not only do twice as much as bowles-simpson but we would deal with a lot of the imbalance we had in the tax code. a lot of those tax breaks, people have become accustomed to, so we have to figure out a way to do things so that we don't disorient the american family, but you can do a number of things without having to the do violence to the american family instability. do what my parents did to me, become the first and my family to get a college degree. >> deep agree with the view that many republicans have that the lack of spending in recent years had its origins in the bush administration? there just was an insufficient concern with the long-term cost of things like medicare and prescription drug benefits? >> yet. that's accurate. if you look back at the time,

2001 on, after september 11th there was a sense that more needed to be spent on homeland security and defense. democrats were able to spend more on social programs. it was almost an unwritten agreement that we would allow the spending to increase after having a couple of years of surplus. i think i said this before. president bush should have vetoed appropriations bills prior to 2006. at that point spending did start to be restrained and we had growth in the economy. this is prior to the financial crisis. we get close to balance. we were on track not just to get close to balance, but we prepared and i proposed a five year balanced budget at that point. it's all public record. there was a sense that we were getting the spending back under

control. there was no increase in domestic spending. there was some change in the budget on medicare that was new. so i do think that was the issue , both democrats and republicans. again, some was understandable, but it does not mean that it was the right thing to do. so that is where i would be critical. second is on the entitlement programs. incredibly important programs. it needs to be strong, but it's frayed and cannot continue as it is. mandatory spending, 64 percent this year. in ten years he takes it to 78%. by far the biggest part of the budget in republicans and democrats alike have been unwilling to touch that third real. that has been, going back to 1983 really is the last time there was significant change in the entitlement program. that is the challenge. i appreciate his words. we came closer than folks in the

media with a knowledge. in the end we were rebuffed by a lot of different factors, but it has to be a combination. we need more revenue. this super committee, the republican side, steady increases with growth, pro-growth tax reform and the entitlement side we have to deal with this issue otherwise a bankrupt -- bankrupt country. >> polls reflect this, you have a radicalized center, independent moderates are just as anxious, just as frustrated with the status quo as we see on the left and right where we are accustomed to people being more extreme in their views. the last time we had that on this issue in 1992, ross perot, the third-party candidacy really put it front and center. it seems like the conditions are right, but where is the ross

perot this time? is seen to be nowhere around. >> i think a lot of independents are wondering where is, maybe not ross perot, but where is the person speaking for us? where is the person speaking or language? where is the man or woman who knows what we are going through and is willing to take a step outside of politics to try and solve the problem. i think going in to this election cycle people were thinking that there could be a third-party candidate, although the thinking was that if the republican nominee was romney there might actually be a third-party candidate to the right of romney. it's difficult to say. at things that the parties are so strong, so much money to run. there just aren't the people stepping up. the center of raging moderation, fleming independence, but there aren't a lot of good choices for independence to pick from. at think there are fewer and

fewer independence and congress. i think people from the center are leaving. getting beaten in their own elections. they're leaving of their own accord. it's so hard to be moderate. >> let me pick up on that. we have eight minutes left. before we get there of like to inject a note of pessimism. you know, a lot of the aisle or evidence, the problem isn't getting easier. it's getting worse. you have moderate senators who are leaving the institution because they don't feel that their is a workable center. senator, i believe your pact supported senator robert. he was defeated in part because he was too willing to compromise

. the parties are getting more divided. there is pure conservative democrats, fiord liberal republicans. getting harder rather than easier? >> i think where it gets easier is where the american people begin to realize that this is a crisis. we have to deal with it. if we don't we're likely to be back in a recession. it forces us to deal with fundamental changes. >> what did you make of the result? what did that say about our politics? >> it probably says a lot of things. a lot of it had to do you didn't have a residency in his own state. the media picked up some of the other aspects but missed the fact that there was a legitimate concern when he couldn't vote in his own election. a lot of republicans were in the middle, one side or the other

all shared a concern. that was part of the dynamic. it began to shift. when those issues came out obviously the republican primary , the more conservative candidate who can articulate the issues as the advantage and that was the case there. i think -- maybe i'm naive, but it is not so much about your ideologies as it is about your willingness to find a resolve. i think we are hired to seek solutions and move the country forward and help our constituents. whether you are more on the left or more on the right, if you go at it with that objective i think it's inescapable. we have to solve these problems. if we don't we won't have the economic growth we all care about. maybe it's more about the fact that it's not just about the charts and the numbers. it's about hope and opportunity. if we do not solve this problem,

the uncertainty and unpredictability will not change and we will have the recovery we all hope for the help those young kids to have opportunity because you get 15 percent unemployment coming out of college these days. if you look at the participation rate the way it was, a 11 percent unemployment. this won't change until we deal with these problems. we have to link the fiscal problems to the economic opportunity and that will enable us to get more disport -- support. >> there is an argument. paul krugman in the new york times, look, the excessive concern about deficits that is retarding what should be the top priority which is growth. >> a don't think it's so much what paul krugman says. it's what the public has been saying. under fits a poll today or over the last three or four

years. more often are not the public is way ahead of the politicians. >> this would of castor oil to do something on the deficit . >> and the public would tell you. we want to decrease the deficit, but we don't want to do it if it will cost us jobs. we don't want to see a deficit reduction plan that says don't build highways, don't repair bridges. the transportation authorization bill will provide. the public is very much in tune with what we need to do. i bet that there would say the biggest deficit we face today is the jobs deficit. if you get people back to work they're paying taxes. the treasury has more money. lower deficit. so if we could all agree, and there are enough votes on both sides of the aisle who want to get something done . i put myself in there. we could get something done. even though were losing, always been part of the bipartisan

solution. on the republican side to loser is very telling. at the end of the day we have to take a look the numbers. my biggest concern is that we will do more harm by acting than by not. we have a fail-safe mechanism, something in place that can give us some $7 trillion in deficit reduction without congress having to metal politically. the expectation of all these programs. whether it than to weaken increase the deficit, right now we can save over $7 trillion in the deficit if we allow it to take effect. we can take advantage of the fact that we can tweet some of what would take place and still have deficit-reduction as big as if not bigger than bowles-simpson. we can do a number of things. >> i want to make sure i hear

you right. maybe we should just -- we can take a few months off. >> see coming to me -- >> you're better off not working and working. >> i guarantee almost everyone in this room right now is not suffering economically. there are millions of americans who are. i guarantee and january 1st when we have this armageddon that we keep talking about, the expiration of all these tax provisions, the sequestration, most of those americans will be hit as hard as if, for example, we don't see -- do something about the interest rates of student loans. that interest-rate hike will cost most students about a thousand dollars. so the reality is, we're not talking about middle america. if we were, we would be willing to do the tough stuff the way we -- >> you may have concern, some of my questions have another of

pessimism with skepticism, but i want to finish an upbeat note. with the remaining time would go down, answer this question as concisely as possible. i'm optimistic this problem will be solved and the political will will be found because what? >> because i think that with the election behind us will have a little breathing room and people come here for the right reasons. almost all people have could well. leaders have to step forward. a lot of significant problems and we always solve them. i don't have any specific reason to be optimistic other than i think that the leaders will rise to the level of the people that they're trying to lead.

>> so cheerful. >> ross perot, the deficit, the national agenda, made it easier for president clinton tech responsibly. we have the equivalent of a ross perot stewardess. if we can find a way to center that discussion i think the media can do that, responsible candid it's. we can have a campaign and make it easier to address these very serious problems. >> to think the middle class is going to wake up and speak very loudly whether it's the selection or future elections. with democracy bishop turns slowly, but the middle-class, the heart of america that has kept us going and make us do things that we ourselves can't come i think this answers are there. it's simple math and we can do it without. >> senator.

[laughter] >> you mentioned that governor romney is giving a speech, which i didn't realize, on tax reform. at the risk of being partisan, i love the fact that he is talking about pro-growth tax reform, not tax cuts. generate more revenue and he's willing to talk about the politically sensitive issue of entitlement reform. he has been talking about it through the primaries. it's out there. i think that will force a debate it's hard to see us coming together. without a presidential campaign that focuses on these issues. folks are going to year two different approaches i think most people are going to say we have to address these issues. we can't continue to allow congress to kick the can down the road. a think it's directly related to the economy. that's one of the reasons i'm optimistic. the connection.

he's right. jobs is the issue. that's also important. jobs is the issue. an extra reconnected. the recession will hurt every middle-income family in america. >> all right. i think that deserve the nobel prize for bringing clarity and consensus. in less than an hour. thank you all very much. our panel. [applause] >> vice president joe biden criticized mitt romney today for taking credit for the recent improvements in the auto industry in the economy. this campaign event was part of the vice-president sits today visit to eastern ohio. this is about 45 minutes.

[applause] >> thank you very much. hey, folks. how are you? good to see all. [applause] what a beautiful day. hey, as they say in the military, if you have seats, take them. you don't have to stand. thank you so very much. it's a delight to be here. where are you, lou? i thought he was here. there you go. how are you? mr. mayer, where you? thank you. and david foster, thank you very much. rich, thank you. the family, i want to particularly thank. joe, it's great to be here. thank you for the opportunity.

you know, i have to admit to you , coming to the shop and walking through the doors and coming up the side lot here, it brings me back home. it brings me back to my youth. i am the son of an automobile men. my dad was the general manager. he moved down so wilmington, delaware. he eventually got a job. he ended up being an automobile manager for the better part of 35 years. as dave said, he was a proud man my dad used to say @booktv and not making this up -- a paycheck -- a job is about a lot more than a paycheck. it's about your dignity. it's about your self-respect. it's about your sense of who you are. it's a better place in the community.

it's a lot more than just a paycheck. an awful lot of people in the valley have had fessed their dignity stripped. somehow i don't think these other guys aren't bad, but i don't think they get that part of it. i don't think they get that part of it about what a job means. it also reminds me of gone down to my dad's. one of the great things about having a dead, you always got a new car for the prompt. the got a new car for the prom. i don't know how many times i drove my 51 plymouth and say where is bad i go off with a nicer looking

car. usually folks that simonized. most of all, it's great to be standing here with a chevy crews behind me. let me say, there's a lot more than a great car there. this card that behind me represents pride. it represents bride, the pride that men and women feel, pride they feel making a vehicle , making a vehicle. they not only, but making a vehicle they know is the best quality vehicle in the world. the other thing they don't understand about us, folks on the line, folks in the dealership, folks and the parts plant, it's not just about the line , it's not about the job you

have. it's about whether or not you can have pride in what you're doing, pride know when you're making something that the world wants. many of the uaw does, the gm plan, back before the plant shut down about eight years ago. they got to get shut the line down. how much pride they had. they need that line moving. there want things that they made the go out there that were stamped made in delaware, they took pride in it. and let me tell you something, folks, these vehicles are pure pride. talking last night about how my dad felt about product.

my dad would be really happy. he's been gone about nine years, really proud of bringing back the automobile industry, but he would be smiling down, they finally said the product. they sent me the best vehicle in the world. the most qualified vehicle in its class. [applause] i remember reading j.d. power's ten or 12 months ago. for the first time in 23 or 25 years american consumers of american automobiles with the best made automobiles. i could see the grin on my father's face. folks, once again making the best products in the world. the fact of the matter is that, you know, when times a tough, up and down, we did last night when we were having dinner. i said, my dad used to have an

expression. the first kid in the neighborhood to lend the definition of the word recession was the son of an automobile man the last kid and then never had to learn the definition of the word recovery was the son of an automobile man. well, i tell you what, you know, if you are getting send some of the best product in the world. i say hello. take a look. take a look. [applause] take a look. in the compact feel the best selling automobile now for the first time and a long time. and that is because of the quality of the product. they just added a second and third shift, 2300 new jobs. 2300 new jobs. [applause]

232,000 units sold. ladies and gentleman, you know, this story kind of represents the best example of a different philosophy that voters are going to have to choose from this election. the economic philosophy that has of fundamental underlying principle, and i mean this sincerely, a fundamental underlying principle is that we think, we believe in people. we believe an ordinary american people. if you give them a fair shot, an even chance, they have never, never, never in american history that the country down or let themselves down. the underlying principle -- [applause] , we don't think the guys at the top where the smart guys and if they get it right everything else will work. this works the other way around.

that is the history. [applause] we understand. we understand the value of the world of workers in the success of business. it's not just business geniuses. it is the workers as well. they are there reasons why businesses succeed. and the values we believe middle-class is how you define the success of an economy. we value engineers and workers, the sales force. we have faith in you. we have pride in you. governor romney, that doesn't mean he doesn't love you. he loves help. i don't doubt that a bit. he's a good, decent man. in my experience he is up patriotic guy, religious man. he raised five beautiful kids. he has a fundamentally different you how to make this country good.

the view that says as long as you look out for the guy at the top, as long as you give them the most significant tax breaks you can, as long as you have blacks wall street oversight and don't try to regulate, as long as you do those things everything will be okay. workers, small businesses, communities, everything's going to be it will come down from the top. it will work. no regulation basically. give us more tax breaks. we will be the job creators. look, here is the crux of governor romney's argument, why he is suited to be president of the united states. he doesn't argue so far at least that he has foreign-policy expertise. he doesn't argue he is an expert in national security. he is saying he is best suited

to be president of the united states because his experience and expertise as a businessman. the most qualified guy to run the country because of his business experience. he raised it, not us. let's take a look at that. how does that experience, and he's been very successful, how does that experience sued him to be president of the united states of america? i'm going to give you an example over the course of this campaign al be giving you multiple examples. i'm going to give you a number of ideas. today i just want to give you one thing. in the 1990's there was a steel mill in kansas city missouri. has it been in business since 1888. romney's partners came and. fellow investors. eight years later the company

was bankrupt. romney and his partners added to that company. $13 million in debt when he took the company over. he added on top of that another $520 million of debt. eight years later it was in debt over a half a billion dollars. 750 workers lost their jobs, health insurance, life insurance, and much of their pensions. of course that happens. we know that. i've seen it in wilmington in steel mills, in the valley. but let's look at this. what is troubling about this story is that the 30 executives they put in place to run the company, they walked away with $9 million, the 30 executives. romney and his investing partners walked away with $12 million.

that's romney economics. two sets of rules. one for is wealthy investors and the other for everybody else. look, folks, some of his defenders say it's not fair to criticize him for this and go on to point out that it's not the job of investors. it's not their job to create jobs. it's their job to create wealth for the investors. that's true. it is their job to create wealth for the investors in. if it creates jobs in the process, good. if it costs all the jobs in the process, okay. it is to make sure the investors get a return on their investments. that is not the job of the president of the united states of america. the job is much bigger than that. [applause] the job of the president of the united states is help businessmen in the apparel,

business men and women, small and large who have to worry about everything from internal controls, whether this tree is paved, all the things that affect their ability to do business. and the job step not run their business, but help them have an opportunity to have the best infrastructure so that they can drive up to by the automobile. imagine if our republican friends had not stopped us from our infrastructure bill. imagine if rebuilding the roads and bridges in the valley that needed to be built, how many thousands of jobs would be created and how much that would increase the productivity of every business in the valley. [applause] it's to help people looking for jobs, to look out for the entire

nation, not just one segment. that is the president's job. that is what -- the republican presidents and good democratic presidents have done. ladies and gentleman, we are not anti capitalist. for god's sake, it's the system that built the country. we hope investors to well, but you can't build an economy with the only people who do well are the investors and everybody else pays the price. you can't do that. [applause] workers get laid off. that's true. companies get shut down. communities suffer from the effects. that is no way to build an economy. that is no way to create job creators. there are consequences.

given that we're talking about when i moved on to delaware, communities like this, the heart and soul, a steel company. 5,000 employees. when it got bought by the chinese and is being rebuilt, the whole community, the whole community collapsed and suffered. and we've been rebuilding cents. you're tough year. your tests here in the valley. we are not stopping. [applause] and most times -- and by the way , if the job is to make sure investors do well at the expense of a company that employs everybody else you all end up paying for it. let me tell you how, not just if you work there. people who have nothing to do with that, not associated, never

worked at the steel mill they talked about. but businesses, successful businesses, businesses here in the valley, taxpayers, they pay for it. why? why? did pay for the so-called success of the investors. here's why. we don't let people just go out there and back in the streets. you have unemployment insurance. taxpayers pay for that. we doubt let those guys who lost their jobs, let their kids go without health care. we provide. everybody pays for it. everybody pays for it. the taxpayers pay for it. and by the way, the reason they've said that those folks left the -- lost most of their pension, to have anything to do with taking care of the

pensions. it was an outfit. when the company went under only the house of cards fell. romney's investors walked away with 12 million. cost rippled through the economy. companies didn't go under? why? as i told you, because. also, one other thing. years ago congress set up a thing called the pension benefit guaranty corporation and thank god it did. companies going under test because they couldn't make it anymore. people lost their pensions. people said, you can't do that. working 30, 40, 50 years. we set up -- congress set up this corporation, independent corporation. here's what it does. all companies pay pennies on the hundred dollars into that pension, that fund, that independent find so when one company goes under that

independent federal agency is able to help make up for lost. okay. you lost your pension. this outfit will come in and make up for that lost pension. so it costs every company in the country when he had a company loaded with debt and walk out with money and lose pensions. because everybody, every good, decent company pays into this fund. so i love these guys. government had nothing to do with anything. dice, there's a price. there's a price, a hidden price. the whole thing, a hidden price. a hidden price. they make 12 million. taxpayers and other healthy companies paid for the loss of all those jobs and the loss of

those. folks, we look at this a different way. as i said before, let me give you an example of how we looked at the circumstances, companies are really in trouble. a whole company is impacted. tens of thousands of jobs. indirectly in the case of the automobile industry a million jobs. by the way, ford motor company didn't get bailed out, the ceo of ford motor company said if we hadn't rescued general motors and chrysler ford would have been badly hurt. the supply chain would have dried up. folks, we not only saved the jobs online, but here is the deal. you know what we inherited. you remember. chrysler and gm were on the verge of not just bankrupt

liquidation. good paying jobs. the industry already lost 400,000 jobs the month before we took office. and it wasn't just jobs on the line. it was the dealerships, the part factories. the lost jobs of the diner across the street that closes down when the assembly line closes down, the barber shop, the movie theater, the stores that it boarded up in small towns like yours and when i lived in. all over the heartland, all over the hump and to my communities are trying out. the president stepped up. even some of our own allies, folks were not sure that it was worth rescuing the industry, this iconic industry that built the middle-class, helped build the middle class.

governor romney also stepped up. he made it clear what he would do if he were president. he wrote an op-ed in the new york times under that title let detroit go bankrupt. he said general motors and chrysler get the bailout that the chief executive ask for yesterday you can kiss the automobile industry goodbye. it won't happen overnight, but its demise will be virtually guaranteed. the underlying premise romney now argues that he had was the government did not have to do this. private equity would comment. they would lend them the money to restructure. they would lend them. the market would help them. help lift them out. ladies and gentleman, i don't know any serious person at the time he thought that was going to happen. did you see wall street beating the door to chrysler or general

motors? did you see governor romney's own company say we want to invest? the president did not take a run his advice. [applause] unfortunately the president bet on american ingenuity and american productivity. a recent report by the boston consulting group points out american workers are three times productive as chinese workers and the most productive workers in the world. that's a fact. that is a fact. [applause] so the president made a bet on management willing to reorganize because he had faith in what the workers would do with reorganization. the president was clear minded about this.

he doesn't fudge things up. he knew in order to turn this around a lot of people were going to have to take some tough medicine. so and he let those decisions made by management. what happened? workers, management, bondholders, everybody got hit. he said, if you set it up right we will step in and help. and we did. by the way, in the process, and the process the second highest per capita in america. we had no automobile industry left. we had no industry left. the chrysler plant at one point over 5,000 people, general motors close to 6,000, all gone, the guys i grew up with, all gone. guess what? i don't know anybody that has serious doubts about the fact that these companies would not be around today if it weren't

for the president's lead. everybody. a distressed company, everybody is in on the deal. gm and chrysler had to make some tough decisions. they shed some dealerships. they closed plants, to in my own state. autoworkers' lost their jobs, a heck of a lot of them. bondholders, so-called big guys, they lost money. but everybody was in on the deal. everybody played by the same rules. rich guys did not get treated differently than the poor guys. everybody. and in the process, as uncomfortable as it was, we staunched the bleeding. instead of shedding 400,000 jobs and losing another million we have added 200,000 new jobs and counting, and counting. [applause]

chrysler, chrysler is the fastest-growing automobile maker in the nation and is adding dealerships as we speak, not closing dealerships. [applause] when we talk about restructuring , everyone has a fighting chance, giving everyone a fair deal, giving everyone on the same page. governor romney talks about restructuring. we know this isn't painless. we are not out there saying we can rescue the economy with no pain. we inherited a god awful situation. the worst recession in the history of america short of a depression. [applause] nobody is sugarcoating this. but look, a fundamental difference. when rodney talks about restructuring the economy is fundamentally about making money

for investors, workers and the middle class get wiped out. sometimes it works. the delicate white dove, but that is coincidental when that happens first and foremost it is about making investors' money, a return on their investment and usually a very large return. so there are two different philosophies. governor romney seems to what. in cleveland ohio a couple of weeks ago. i'm going to quote him. if i didn't you think of was making this up. i'm going to quote him. he said, i'll take a lot of credit for the fact that the industry has come back. [laughter] and by the way, i will take a lot of credit for a man having landed on the moon.

[laughter] i was in school. average for it. that is what he said. look, folks, the president is completely confident, completely confident letting you judge who brought the automobile industry back. how the president used restoring the economy and the example of the automobile industry and how romney views restoring the economy and the example of how he worked as an investor are to cautionary tales. let you judge which economic philosophy is going to bring back the valley, which economic philosophy is going to bring back america, which economic philosophy is going to rebuild the middle class. and i might add, when the middle class does well the poor have a chance and the rich do very, very well, as they should. no problem.

no problem. [applause] look, i said it yesterday, and i'll say it more, today. [laughter] i don't think these guys understand us, and i'm including us because we come from the same kind of background. but i wasn't joe biden coming out of the mines with a lunch bucket in my hand, just a normal middle-class kid with a father and as cool education. a work like hell. the thing that i resent, i have to tell you, is a lot of romney supporters say we are engaging in wealth in the. like my mom and dad did not dream their kids could be a millionaire. my mom did not dream that one

effort is to be president. my mom and dad did not dream one of their kids could invent the new new thing. what did they think we think in our houses? what do they think makes us tick? do you know anybody you grew up with, do you know anybody in your neighborhood that doesn't dream the biggest drains in the world for their kids? de know anybody who says, you know, i'll be satisfied if my kid gets the same house i had, i'll be satisfied. like everybody else. we like the rich guys. we dream. we have aspirations that go well beyond the minimum we have a right to expect. the right to expect we can live in a safe neighborhood, that we

can own a home and not rent a home, the right to expect we can send their kids to a good school where they can learn enough that if they wanted a qualified to go to college and if they qualify will be able to help send them to college. and, if our parents are in trouble weekend maybe help our parents and hope that someday we won't have to ask our kids to help us. that's not our ceiling. that is our floor. that's not an aspiration. [applause] i get tired of being called a middle class joe, like that is somehow find just good old joe and i don't dream. c'mon, man. look, you are the ones that built this country. this valley built this country. folks like my folks and your folks built this country. [applause] and you're going to be the ones

that keep building it. you will be the ones that make it strong. it's your community, a community built one at a time because we know we give you a fighting chance. as i said before, you have never, never let the country down, never let your family's down, never let your community down. we are going to insist that everyone get a fair shot, of fair shake, and everyone will play by the same rules because that is the way this country is built, and that is how we're going to build it again. [applause] god bless you all, and may god protect our troops. thank you. [applause] thank you. ♪

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