guard our streets, protect us, our families, and our mr. president, i ask that my next remarks be placed at an appropriate place in the record. the presiding officer: without objection. mr. hatch: last week i came to talk about the news reports surrounding the proposed merger between pfizer and astrazeneca. and the proposals we're seeing in response to that merger. as you know, one of the key details is that when pfizer, a large american company, acquires astrazeneca, another large but smaller u.k. company, they plan to incorporate the new merged company in the united kingdom, not here in the u.s. and as i said last week, i was concerned to learn of these plans as were many of us here in congress. after all, pfizer is an iconic american company with over 100,000 employees.

it ranks in the top 200 of global companies by revenue, according to the fortune global 500 list. it would be a great loss to our country to see it incorporated offshore. still, it's difficult to blame them for this decision. according to sources, a desire to escape the high u.s. corporate tax is part of the motivation for this merger. this type of transaction where a u.s. corporation merges with a foreign entity and incorporates elsewhere to escape the u.s. tax net is sometimes referred to as an inversion. inversions are a growing problem here in the united states. indeed, large companies are leaving our country at an alarming rate. if you count the number of american corporations in the worldwide list of fortune 500 companies, you'll see that the number has declined dramatically over the past decade, which is very unfortunate. this decline means less capital

and less investment in the united states. it means a smaller u.s. tax baste base and most importantly, it means more jobs that could be created that should be created here in america are being created elsewhere. so make no mistake, mr. president. inversions are a big problem, and the problem seems to be growing every day. and as i mentioned here on the floor last week, there are, broadly speaking, two different ways congress could act to address this problem. the first way would be to make it more difficult for a u.s. corporation to invert. that's the approach my friend, the chairman of the senate finance committee, endorsed a few days ago in an op-ed in "the wall street journal." as the chairman noted in his opinion piece, current law requires companies moving overseas to have at least 20% new ownership to avoid some very bad tax sequences -- consequences.

his proposal, which he outlined in this article, would be to increase that benchmark to 50% for all inversions taking place after may 8 of this year. that means his proposal restriction would be retroactive for all inversions that happened between last thursday and the date his proposal may be signed into law. of course, this is hardly a new idea. president obama included a similar proposal in his budget. given the amount of hand wringing we've seen over just the pfizer-astrazeneca merger and the aroargs of the tax base from my friends on the other side, do you think a proposal like the chairman ploat floated would raise a significant amount of revenue. however, if you think that, you'd be wrong. all told, his proposal would raise roughly $17 billion over ten years. that's about $1.7 billion a year.

now, that's not really an insignificant sum, but it does demonstrate that the scope of the problem is hardly worth the draconian solutions some of my friends want to impose in order to solve it. let me be clear. i share my colleagues' concerns about the number of inversions that have taken place over the last few years. however, i do not believe that imposing confusing and arbitrary retroactive restrictions on u.s. companies is the answer. there is an altern approach which brings us to the second way congress could act to prevent more inversions. the second way to address the problem of inversions is to make the united states a more desirable location to headquarter businesses. while it would require a lot of work and compromise, this is by far the better approach. this approach, of course, means lowering the corporate tax rate. it also means replacing our antiquated worldwide tax system.

or taxation system. under current law, u.s. corporations are taxed on their worldwide income but foreign corporations are subject to tax only on income arising from the united states. in other words, we subject our corporations to a worldwide tax system while subjecting foreign corporations to a territorial tax system. on top of that, most of our major trading partners tax companies domiciled in their own companies on a territorial basis as well, unlike our country. long story short, our system of worldwide taxation places us at a competitive disadvantage and makes the u.s. a less than optimal place to -- for companies to locate their businesses. that being the case, as important as it is to get the corporate tax rate down, no matter how low we get that rate, we still need to scrap

and replace our outdated worldwide taxation system. that is why tax reform is so important. it's just one of the reasons, of course, but it's a really important reason. tax reform if it's done right will get at the root problem rather than simply dealing with symptoms. i should note that inversions are only one symptom of our dysfunctional international tax rules. other types of transactions further illustrate why the entire system that we have is problematic. for example, there are strong incentives currently for a u.s. parent company to sell its foreign subsidiaries to foreign corporations in order to escape the u.s. tax net. there are strong incentives to set up a start-up business as a foreign corporation. neither of these transactions are inversions, but they do show the point that it is for tax purposes often better not to

be a u.s. corporation or to be controlled by one. and while these other sorts of transactions don't grab grand bargain headlines like inversions do, they are nonetheless indicative of real problems in our tax code. that being the case, a proposal to restrict or eliminate inversions would really only go after one particular type of problem, leaving the rest of the fundamental flaws in our tax system firmly in place. proposals to restrict inversions or to impose some sort of management and control test are lying triek to plug the dike with your fingers to keep capital and jobs from flowing overseas. these proposals are not long-term solutions. they're not even good short-term fixes. another example of business activity flowing overseas that readily comes to mind is the problem we're facing with the medical device industry.

we are losing our innovate medical device -- innovative medical device companies because of our stupid tax system and the 2.3% tax on sales, on gross income, of our medical device companies. a lot of which haven't made a profit yet but would be taxed even though they're not making profits. but will make profits if they can keep going with their innovative and good ideas. we know that thanks to obamacare's medical device tax, some of america's most innovative companies in an stray that's vital to our health care system are moving jobs overseas. yet where is the call from the leadership on the other side to do something about this? in fact, there is nothing but stultification of legislation to

solve this problem which i think almost any intelligent person would want to do. it stands not to alarm nigh my friends on the other side when business flees the country as a result of a punitive tax under obamacare. if a company takes taxes into account when considering mergers and acquisitions, the alarm bells sound and legislation is put forward in no time. i'd say there's a bit of inconsistency on the part of some of my colleagues who claim they want to keep jobs and business in the united states. if they do, why aren't they doing something about this stupid tax on medical device companies? we had a vote on this earlier in the year on a bill that didn't go through both houses. and the leadership knew it wouldn't go through. we had 79 votes in favor of abolishing this tax.

so wide bipartisan support to get rid of it. what's wrong with the other side here that we have to continue to fight to try and get rid of something that 79 people in the senate voted to get rid of? and, by the way, i believe if we had had true blue and in and of itself it would pass here probably with 95 votes. if people give any consideration to american business, american ingenuity, solving the problems of health care, bringing health care costs down which medical devices can do, and saving lives. it's no small reason why some of these medical device companies are moving overseas. where they're treated far better than we treat them here. 79 people voted to get rid of that stupid tax. and yet the leadership of this body won't allow it to be brought up freestanding or on some bill that basically has a

chance of passage through both houses of congress. there is of course bipartisan legislation that would correct the problems we face with the medical device tax, a bill introduced by senator klobuchar and myself. and i commend her for it. she has had a lot of guts, plus a lot of ability to work on this bill. sadly, the senate democratic leadership has thus far refused to allow an up-or-down vote on the measure even though we nigh know it has broad bipartisan support as i've mentioned. my hope is this will change with the upcoming debate over tax extenders but i'm not holding my breath. given the ongoing experience with the medical device tax, i have to say i'm a little skeptical when my colleagues on the other side of the aisle say they are concerned about american companies moving addresses and operations out of the country. indeed, if they were really so

bothered by this, we would have revealed this medical device tax a long time ago. finally, madam president, i would just like to give a brief aside on the topic of retroactive changes to our tax laws. in my view, stability and predictability are bedrock principles of the law. when it comes to our tax code we've gotten away from that over the years. restoring these principles to our tax system should be one of our main goals of tax reform. put simply, retroactive changes to the law, the kind envisioned by my colleague's op-ed, are the an at this time sis of predictability and stability and will only make tax reform that much harder. no matter how well intentioned and how large the short-run revenue gains are to be had, believe the long-term effects are harmful and in my opinion such proposals should be viewed

with a healthy dose of skepticism. i know my colleague is sincere but i have to rebut those points and i believe i've done so effectively. once again, madam president, the effort to prevent tax motivated inversions can be boiled down and separated into two basic camps. one side would have us simply address the problem and impose arbitrary and perhaps costly restrictions on american businesses to prevent them from leaving the country. the other side would make the u.s. a better place to do business. preventing companies from wanting to leave in the first place and inviting new ones to form and prosper here. only one of these approaches will actually fix the problem. only one of these approaches will have help create jobs and grow the economy. and only one of these approaches will put our nation on a path to greater prosperity. that approach is, of course, comprehensive tax reform. that is what is needed, that is

where our focus should be. as i said last week, as the ranking member of the senate's tax writing committee, my focus when it comes to the problem of inversions is to fix the underlying problems, not to tinker on the edges focusing on the symptoms. i hope that eventually that is the approach we take. i want to thank you, madam president, and i yield the floor. a senator: madam president? the presiding officer: the senator from maryland. mr. cardin: madam president, first i want to thank senator hatch. i deeply respect his views. he's one of the most effective members of the united states senate. and he has deep views and reaches across party lines to try to get things done, which i think is very important and i respect him greatly. i want to agree with your conclusion. the problem with corporate inversion is best fixed if we do comprehensive tax reform. i believe you're right.

we have two paths that we can take. one is to try to reform our current tax structure, which i think will not work and i'll give you my reasons why. or we could look for a competitive tax structure that's fairer to the american people and makes things like corporate invergdz something that would not be happening in our communities. let me tell you the underlying problem. pfizer and astrazeneca are looking for a merger. astrazeneca owns companies in maryland affecting thousands of workers. this is a british company. pfizer is an american company. you would think a merger between a british company and an american company for those who work for a british company would mean more jobs in america. but we know pfizer made certain commitments to the british government about maintaining and expanding jobs in great britain, which we worry is at the cost of

american jobs and jobs in my own state of maryland. we've heard that one of the reasons for the merger is corporate inversion. what do we mean by that? it means pfizer, an american company, will merge with a british company and then use to transferrists -- transfer revenues legitimately earned in america, many the result of intellectual property developed in america, that attribute that income to foreign source rather than to domestic source trying to avoid u.s. taxes. and our tax code should not encourage that action. and there are several members of the senate i'm working with that will try to work within our current tax code to make sure that that doesn't happen here in america. our tax code should not encourage companies to take their income offshore. they should pay their fair share of taxes here in the united

states. but as senator hatch pointed out, and i agree, we need a more competitive tax code. so we need a tax code that would allow for better competition for american companies, for our manufacturers, for our producers, for our farmers, that will allow easier capital formation so we can raise more of the capital that we need in america right here in america, less dependent upon foreign sourced investment although foreign sourced investment is helpful to our country and something that we encourage. we need a tax code that is fair, that people believe they are being treated fairly with their neighbor, which is not the current situation. most americans who cannot quite figure out the income tax code don't know whether they're being treated fairly with other taxpayers. we need a code that is much more efficient. one path we could pursue that senator hatch was alluding to is to try to reform our current income tax codes.

our corporate income tax code and our personal income tax code. we have an example of that. congressman camp has come up with a comprehensive proposal in the house of representatives. i must tell you, i don't think congressman camp's proposal adds up from the point of view of producing the revenue we produce today let alone the revenue we need in order to pay our bills and not be dependent on borrowing money from other countries. putting that aside, i think you see the difficulty in the camp proposal which causes major disruptions among different industries, and we're hearing from those industries today, that it would create major problems of competitiveness for the united states. but let me tell you what i think is the most fundamental flaw in trying to reform our current tax code, and that is we tried that once before in 1986, and it was comprehensive and it did spread the burden and it did reduce the rate, and it lasted for less than one year before congress

continued to change the tax code. today we have tens of thousands of changes since the 1986 tax reform and we have many temporary provisions. that's why we have the bill before us right now to deal with these expiring tax provisions. and i just don't think there's any way of getting around those types of problems moving forward under our current tax code. so let me point out a fact that i don't think most americans understood. and if you look at all the oecd countries. the oecd countries are the industrial countries of the world, the countries we like to compare ourselves to, countries we want to be competitive with. all the industrial nations of the world, the united states is near the bottom in regards to their reliance upon government services. europe, they have much stronger government services in health care and housing, in income support-type programs than we do

here in the united states. so if we rely less on governmental services, wouldn't that mean that we should have the lowest competitive tax rates among the industrial nations? as senator hatch pointed out, we are the highest marginal tax rates among the industrial nations. and the reason is quite simple. of all the industrial nations in the world, only the united states -- only the united states -- does not have a national consumption tax. we rely on income tax revenues. why? because we thought that was the right way to go. and we didn't have to worry about international competition. after all, we're america. well, guess what? we're in global competition today, and the tax rates of this country matter in regards to our manufacturers being able to sell products overseas. let me tell you one other thing about international competition. international competition rules,

the w.t.o., were developed based upon consumption taxes. if you manufacture an automobile in germany and you want to bring it into the united states, the taxes that you pay, the consumption taxes, are taken off of that product. basically their autos sell in america tax free whereas u.s. auto manufacturers who have to pay taxes, those taxes still apply to the cost of the product because it is not border adjusted. and then make matters worse, if you manufacture a car in the united states and try to sell it in germany, you not only have to pay the corporate taxes here, the income taxes, because they're not taken off at the border, when you go into germany, you've got to pay the value-added tax, the consumption tax. how do you compete under those circumstances? the answer is it's very difficult. and in global competition today we've got to be smarter. and that's why we should have

the lowest marginal tax rates in the world. and if we did, corporate inversion would not be an issue because you wouldn't find a pfizer trying to pay british taxes when the u.s. taxes are the lowest taxes among the industrial nations of the world. so i have a proposal. i have a proposal called the progressive consumption tax. progressive, what do i mean by that? it means that the taxes that you pay at the federal level will be more reflective of the person's ability to pay than our current income tax code is. we make it progressive so that it's fair that you pay according to your ability to pay. a progressive consumption tax. that consumption tax rate will be the lowest among the industrial nations of the world. now i'll give you some examples, and i would be the first to acknowledge we've got to get this scored and these numbers can change as we go along but

we're looking at a consumption tax rate of about 10%. that would put us near the bottom, at the bottom of the consumption taxes among industrial nations. those who earn under $25,000, individuals, families up to $50,000 would pay no consumption taxes. they would get a credit for the consumption taxes that they otherwise would pay. like under the current income tax code where they do not pay income taxes, they would not pay consumption taxes. it would be immediately rebated to them. if they worked, it would be rebated under pate roll tax payments -- under the payroll tax payments. if they don't work, they would get a debit card as people use debit cards and get instant rebates. we would make it progressive. we would start the income tax rates at $100,000 of taxable income. 90% of americans would pay no income taxes. it would start at 15%.

there would be an additional bracket of 25% starting at $400,000 of taxable income. a progressive income tax simplified only for deductions. not this complexity today as we figure out whether something is deductible or not, all the complications. we would have four deductions. state and local with respect to federalism, state and local taxes. the charitable deductions because our charities are critically important in carrying out the important work of our country. for real estate and then the needs for real estate to reflect, we don't want to see a disruption in the real estate market. we also allow deductions for employer-provided health benefits and retirement benefits. simplify. it rewards simplicity and allows for aggressiveness on fairness.

corporate tax rate, you can get 10% or 15%. that is what corporate america tells us you need to be competitive in the industrial world. this adds up. there are some who are saying gee, consumption tax rate is a lot of revenue. we put in our proposal an automatic adjustment of the rate to make sure it doesn't bring in more revenue than we say. so we're fair on the progressive side to make sure that it's fair from the point of view of ability to pay middle-income families, and it's fair from the point of view of those who are concerned about government growing in that you have a circuit break as to the rate based upon the revenue that you need. what have you accomplished by this? you've accomplished a much simpler tax code that people can really understand, a fairer tax code, one that rewards savings. saeufbgz are -- savings are not taxed. greater ability to raise capital in the united states. it is border adjusted which

means capital comes off of our exported products so we can compete globally in a much easier way. that's what we accomplish. when people talk about fundamental reform, to me, this is what we need to do. now, i don't know -- i'm going to move this proposal as quickly as i can, but obviously it's going to take some discussion and debate. we're hopeful that we'll be able to answer anyone's questions. we're very optimistic. but in the meantime, what do you do? you just can't stand by and allow pfizer to take american jobs overseas because of corporate inversion. so i hope that we will stand up for what is right in our tax code, that we have the capacity to improve our current tax code to avoid the loss of jobs and shipping jobs overseas as well as working to really reform our tax code, to provide the type of structure so that the country that relies the least on

government among the industrial nations has the lowest tax rate and has the fairest system for all americans. madam president, i have nine unanimous consent requests for committees to meet during today's session of the senate. they have the approval of the majority and minority leaders. i ask unanimous consent that these requests be agreed to and these requests be printed in the record. the presiding officer: without objection. mr. cardin: i ask the senate stand in recess until 2:15 p.m. the presiding officer: without objection. the senate stands in recess

the senate stands in recess live coverage when the senate returns at two 15 here on -- 2:fifth teen on c-span2. >> you know a lot of time you would say look, attribution. this is for background. you can attribute it to a white house source or something like, you can't do that with live cameras.

you can't say that is, i'm giving you this now for background, but this is not for publication. >> did you actually do that, did you brief from background from the podium at the white house. >> sure. not a whole briefing. let me give you something on background so you know that it is coming, something like that. >> quaint. >> quaint. >> the fatal mistake that i made, this was in the weeds for our audience but interesting to some of you, is i did not put the restriction had at the state department, which was not available for live broadcast. it was available for use as part of the stories you would produce because the briefing is not a news event. it is part of the way which people gather information, put their storyies together, test other stories get information,

put together a comprehensive report and deliver to your consumers of news. >> i had to deliver 56 questions on what is universal health care? would that be the 98%? what about 97%? what about 96 1/2%. what if i vaguely, 56 questions in one briefing and dave barry wrote a column, would be a person if you take her out for a beer get her to answer a question what does universal health care mean. >> the life of the white house press secretary, the ups and downs of the job and how it has changed over time and part of american history tv on c-span3.

>> coming up in about a half an hour or so florida republican senator marco rubio will be speaking at the national press club. he is expected to talk about retirement savings. the associated press say tag he is proposing an overhaul of federal programs to help younger workers save for their retirement. we will have his comments live at 1:00 p.m. eastern or when they get underway on c-span2 until then a discussion on the cost of higher education from today's "washington journal.". >> host: our conversation on the cost of higher education continues with michael stratford, a federal policy reportwer inside higher ed, here to talk about the price but also let's focus in on student aid because we had at love questions about that here when we started our conversation this morning. let's begin with student loans. that is in the headlines lately, the amount of debt. how big is the problem right

now? >> guest: the numbers are pretty staggering. the top line, headline grabbing number, americans are $1.2 trillion in in student loans. more students are borrowing money to finance their college education, about 70% of the students in more recent graduating classes are using loans. most of the loans now are federal loans compared to private loans. and they have some differences that are important for borrowers tos know about. but the headline, trillion dollar figure is pretty staggering. now are thes largest form of consumer debt. they have surpassed credit cards. surpassed auto loans. so the top line numbers are prettyes staggering. >> host: here are the numbers. college graduate student loan debt. 1.3 million graduates had

student loan debt. 66% from public colleges. 25% from private or and 88% from for-profit colleges. why are students taking on more debt? why is it the students? >> guest: for one, more students than ever are going to college and the price of college is, has soared over the past few decades. so it is more expensive. more students are going and that leads to that large aggregate number but when you look at the individual, you know, there are a lot of stories about students who have $100,000 in debt or these astronomical figures. when you lookin at the average debtload for a bachelors degree, of students who wore rowed, that is about $29,400. which doesn't compare with the larger six digit numbers we hear about sometimes. loan aggregate there is a lot of

student loan debt out there. the majority of students are borrowing, manageable amounts of debt that they can repay back and there were a lot of different efforts to, in washington and elsewhere to try to get them to pay that debt back quickly. >> host: where are the students borrowing from? get guest most students now borrow from the federal government. so taxpayers are financing the majority of our college loan system. of that $1.2 trillion, about a trillion of it is federal debt held by taxpayers. the restay is private, or privae loans. those are held by banks, credit unions, other financial institutions. >> host: why are students choosing federal government over private loans? >> guest: federal loans have a number of advantages typically over private loans of the repayment options are more flexible. you can roll in repayment plans that tie your income to, or tie your income to, cap your loan

payments at your income. they typically have a fixed interest rate as opposed to a variable interest rate on private student loans. and they're typically easier to get. >> host: what is the default rate is like? >> guest: the default rate is increasing in recent years as typically happens during recessions and economic downturns. the default nationally i think is around 14% on federal loans? host host so the senate is likely to take up this legislation dealing with student loans in early june sponsored by senator elizabeth warren and senator blumenthal. what would that legislation do and why are they pushing this issue? >> guest: they're pushing this issue because the topic of college affordability and the issue of student debt has captured mainstream attention and therefore, you know, representatives in congress want to capitalize on that.

so their legislation would allow existing student loan borrowers, people who have existing student debt to refinance that debt at lower interest rates. so for a number of years the interest rate on federal student loans for undergraduates was 6.8%. the current interest rate is closer to 3%. so borrowers who are eligible borrowers, for the free financing -- refinancing program would be able to lower their interest rate on existing loan debt. >> host: how does that compared to the overall federal interest rate number for credit? if you're just going to get credit how does the current interest rate compare to what other people can get? >> host: so the interest rate on federal student loans is tied to the 10-year treasury note. it was set by congress for a number of years and then if you remember two years ago there was a campaign, it was set to double

in statute and on the bipartisan basis congress kicked, 2012 was election year. they kicked that can down the road for a year. then last year came to a compromise in which the student interest, student loan interest rate is tied to the market. so it is based on the may, the last treasury auction before june which just happened last week. so student loan interest rates this year are going up. >> host: they will go up this fall? >> guest: they are. >> host: cnn money student loans will get pricier thanks to congress as you just explained. so how do you go about getting a student loan from the federal government? >> host: -- >> guest: the first thing you want to do is file the fasa -- fafsa. the free application for federal student aid.

that is a federal form that you can fill outonline. it asks you a number of questions about your family situation, your income, your asset ofs and through somewhat complicated federal formula the government calculates what your stilted family contribution ought to be and from there you qualify, you can qualify for a number of different federal student eight options. for low income borrowers or students, pell grant is an option which is money from the federal government to go to college. obviously it's a grant. you don't have to repay it. then for subsidized student loans, the government subsidizes the interest while you're still in school. those are, need-based so if you qualify for a subsidized loan you can get that but for all student borrowers they can borrow up to a certain amount for undergraduates and actually

an unlimited amount for graduate students. >> host: dividing lines a little bit differently for this conversation this morning. recent graduates, we want to hear from you. 20-585-3880. call all other call us at 202-585 of 3881. we look at student aid and the e cost of college in this country. look at average student loan debt from 2012. these numbers from the institute for college access and success, public colleges, this is the average student loan debt, for public colleges is about 25,000, a little over 25,000. for private non-profit, looking at 32,000 and for-profit colleges the average student debt, close to $40,000. that is 2012 numbers. so there's all these different programs for student loans from the federal government. there's one program started under the obama administration, i believe, for debt forgiveness.

can you explain what that is. >> guest: it actually started in the '90s, the first program that allowed you to tie your interest, or your loan payment to your income and have it forgiven after a certain period of making repayments. the obama administration expanded, made more generous that program and expedited the implementation of it. >> host: how do you qualify for it first? >> guest: so you have to demonstrate a financial hardship which is, statutory definition or regulatory definition but basically you submit an application to the federal government or your student loan servicer, the company that is managing your payments on behalf of the government. and, you submit an application, submit your taxes so they know what your income is. the, under the programs your monthly payment is capped as a percentage of your discretionary

income. i so it is 150% above the poverty line. that income sets the cap on your month my payment. for somer programs it's 15%. for others it's a 20% cap. excuse me, for some programs it is 10% cap, for others it's a 15% cap and depending on the program your loans are forgiven in full by the federal government after 20 or 25 years of continuous payments. >> host: if you continue to pay, that is 10 or 15% for 20, 25 years, whatever's left the federal government forgives? >> guest: that's right. >> host: so taxpayers are on the hook? >> guest: taxpayers are on the hook. that amount forgiven is considered taxable income. you get hit with a tax bill on that forgiven amount. but there actually is a debate happening in washington over how generous that program should be. we're a little too far out to,

sort of hard to know what the actual cost of that program are because they're relatively new and we haven't had a large number of borrowers hit that 20 and 25-year mark but there is disagreement whether these programs are properly structured sove that they're not providing disproportionate benefits to high debt, high-earning borrowers. for instance if you go to law school or medical school, and incur a large amount of debt, you are qualified for these programs but your earning potential on the back end is pretty significant and so you're able to pay these loans back. so there is debate about whether they're providing too generous benefit. to that point the obama administration, while it has been touting these programs and the education department is trying to get more students to enroll in these programs, actually proposed the administration, the administrationt proposed in its

budget to sort of trim around edges and put a cap on the amount that is forgiven for some of these programs. >> host: right. is the figure around 60,000, the cap -- >> guest: around 5, which is the undergraduate borrowing limit. >> host: the federal government would only forgive up to 57,000? >> guest: that's right. >> host: is this popular program? are they popular programs? >> guest: they're popular among consumer advocates and borrowers but up take on the program is somewhat slow. in the past few months, in the past maybe half year or so, enrollment has actually surged in the program and that's thanks to an administration effort to publicize the program. they sent out a bunch of. mails to student loan borrowers who have federal debt and i think the current rate is around 11% of federal student loan borrowers or participating in these programs.

>> host: get's -- let's get our viewers involved. judely in maryland. go ahead, judy. >> caller: i want to chime in on a couple of points. i'm really old. i'm past retirement and when i was a kid all the kids have different ways to of earning money. every boy had a paper route. every girl did some babysitting. some were mother's hello percent. this started from elementary schoolar onward. it is true i grew up in a community that had a lost academic institutions. there were two theological seminaries. a major university, big 10 university and a couple of other schools, you know, under a grad schools but everybody was saving for college. and for example, when you were five, in my family you got a penny for every year of age per

week. so if i was five i got a nickel. we saved this up and went to the bank to put in our money for our college fund. you didn't spend the money. you saved your money for college and that was an emphasis, you know through childhood. in high school, every parent, everybody had summer jobs not to mention jobs through the school year, for a few years a week that wouldn't interfere with getting high s.a.t. scores. when i'm saying high, i had threent friend who had double 800s over the time i was in high school not to mention kid in the top 40 of the talent search. >> host: judy, i think we got your point. michael, she was talking about how different it was back then than today. >> guest: demonstrably evidence shows that it is more difficult for people to pay for college. 70%, seven in 10 students in "the graduating" class of 2012 had to take out loans to finance

their education. so they weren't able to take advantage of their savings and, work their way through college or needed extra money and in excess of that. >> host: on twitter, how much student aid goes to for profit colleges and what is their success rate? >> guest: that's a controversial topic in washington. i'm not sure what the percentage of aid going to, i think, it is around $40 billion in aid going to forn. profit colleges every year that is grants and loans but there is a debate -- >> host: grants and loans to the universities, the for-profit universities, from where? >> guest: not to the university but l money that -- >> host: for students to go there, okay. >> guest: for students to go there. many of those institutions their revenues, the vast majority of revenues come from federal grants and loans students are using from the federal government to finance their education and there's a very

active debate about the proper role of for-profit education in higher education. the obama administration has proposed new rules called gainful employment rules that set out to try to hold the for-profit vocational programs, many at for-profit colleges, more accountable on a debt-to-income ratios and -- default rates for individual programs. >> host: a file clerk says, college was worth it when you could get a decent education. these days it is all job training. another tweet here says why has the price of college soar? how do colleges spend their budgets? >> guest: so that's another controversial topic in higher education. a lot of people have criticized spending by colleges and universities as perhaps one of

the factors that's driving up costs, whether that's administrative costs or facilities and the sort of advent in the past decade or more of, more lavish living facilities. the climbing wall in the student union gym. so that's certainly an area where many people have criticized colleges, the universities for not doing enough to hold down their costs. >> host: this is the opinion page of the "usa today" and dana hurley, the associate vice president for government relations and state policy at the american association of state colleges and universities says that the price has gone up for students because states have gradually been disinvesting from their public higher education systems. >> guest: that's certainly true. what we've seen, over the past, at least five years and for

longer, states continually and in some cases very steeply cut back and disinvest from public higher education in their states.nu and that is, prompted most public colleges and universities to have to increase tuition to compensate for those cuts. >> host: laurel, maryland, jimmy, where did you graduate from and what degree did you get? >> caller: [inaudible] >> host: okay. do you have student loan debt? >> caller: yeah, sure. >> host: do you mind telling us how much? >> caller: $30,000. >> host: 5000? >> caller: 30,000. what are your thoughts, jimmy. >> caller: loan program is kind of faulty because most of the loans are fashioned after commercial loans which with credit percentage if you're

increasing market forces. meanwhile education is supposed to be a social service, not a commercial venture. i think maybe congress could fix, copy interest rates so that in the last time of the loans, students would know how much i they're going to pay exactly. like a law student graduate are able to get jobs of the at end of day they end up paying, paying until they die. i think there is something -- about the old program they should fix so that they know what they're going to pay the at end of the day -- that's my opinion. >> host: okay. michael stratford, what did you hear there from jimmy? >> guest: he was referring to some of the differences we were talking about between federal and private loans. the interest rate set every year tied to treasury, 10-year treasury notes is actually fixed on the loan for the entire life of the loan. so students taking out undergraduate loans in the current year will pay 4.66%. that was the rate that was set

last week. private student loans tend to have more variable rates to the amount you're paying in interest can fluctuate. and as we were talking about, for both student loans it is extremely difficult to if not impossible to discharge them in bankruptcy. but as we were saying federal loans tend to have more flexible repayment options. >> host: robert says states are no longer funding colleges referring to our earlier conversation here about the cost of college. and then another tweet here from jim who says, remind me how much senator warren was paid to teach one class. warren, former professor. then explain why college is expensive. >> guest: i don't have senator warren's harvard salary at top of my head but, you know, she is someone who came from academia. >> host: what about the cost of professors and presidents college, college presidents?

>> guest: that's certainly been on the rise and been an area where a lot of people have criticized higher education for, for the rising salaries of their, for their presidents, for their sports coaches, their football coaches as well as the number and, amount of, salaries for administrators. >> host: file clerk says ask bill gates or richard branson if college is worth it. malik in georgia, recent grad. where did you graduate from and with what degree? >> caller: i graduated from east georgia state college and i graduated with two degrees. >> host: okay. >> caller: and i plan on continuing midcation at a four-year institution and my question is, how, labeled as dependent under my parents and i plan not to be any longer by the time i attend my four-year

institution. what role does not being the a dependent play in receiving the subsidized and unsubsidized loans? >> host: malik, were you able to get subsidized loans, did you go to community college? >> caller: i did. >> host: were you able to get loans for that? >> caller: i did. >> host: michael stratford, how does it work? >> guest: so the way the government calculates need for dependent students, students living, who are dependent on their parents or on their parents is different from the way that the government calculates need for independent students. so the formula will be different and the access that he has to different loans will be different. >> host: there is a question, an email from a viewer greg, who is in sioux falls. i was in the national guard when i went to school but i don't know if it was an advantage or

not but i was an officer an an aviator on active duty which carried over to my guard time. what role of the programs offered by military play in education costs? >> guest: so the veterans, the va has the post-9/11 g.i. bill. administers that program that provides educational benefits to veterans coming home from war to pursue their higher education and the pentagon also has tuition assistance program that helps active duty servicemembers take advantage of educational opportunities. >> host: go to danny next in birmingham, alabama. hi, danny. >> caller: yes. i was calling, my wife, she went to community college for nursing and of course she was working in the reason for her going back to school so that, you know, she had lost approximately 55 to 60%

of her income. so she went back to community college to go into the health field. in doing so she entered this here college and she failed because she was having to work, it was so hard for her and everything. but anyway, the, what ended up happening was later as she is already enrolled, she found out that the school was not offering student loans. and i tried to find out why and stuff like that. and it was kind of brushed to the side. and i called and there was no way for her to get a student loan without the school participation. so i thought, i might ask you what other resources, because she will end up going back to school again. she just recently graduated from the lpn. and she is going, wants nursing and of course the new structure in hospitals and medical field now, you know, they're wanting,

you know, people to get higher educations to help out with the doctor shortage. >> host: okay. all right, sandy. michael stratford. >> guest: federal student aid is only available to colleges that participate in the federal student aid program under title four of the higher education act and in order to be a, an institution that, where you can take your federal grants and loans and attend, the institution has to do a number of things to get in the program and stay in the program. they have to be accredited. they have to have state approval and they have to meet a number of eligibility requirements set out by the education department and they're also subject to regulation. >> host: ron, also a recent graduate, in minneapolis, minnesota. ron, where did you go, what degree did you get? >> caller: went to oxford college and degree in accounting with added concentration in

public accounting. >> host: okay. when you graduated did you have student loan debt? do you still have it? >> caller: yeah. i had 55,000. 40,000 was government, excuse me and 15,000 was private. >> host: okay. ron, go ahead. >> caller: okay. on the program where you paid off in 30 years and i will be 80 something by the time i pay it and, i'm getting laid off my job in about three weeks and trying to look for better, you know, higher paying job and i'm barely make it right now. i wonder if they have any programs at all for the older people that went to college and, and it's not paying back? and i'm also a u.s. veteran. towards the, they paid $150 per course. >> host: ron, did you go back to school recently? >> caller: i went back, it was in 2006. so 2006, graduated in 2011.

>> host: okay. with an accounting degree? >> caller: correct. >> host: okay. michael stratford, any programs for ron that you know of? >> guest: most likely eligible for income based repayment program for the federal debt but his situation is actually the norm now, being non-traditional aged student in higher education. those are now the majority of students who are getting degrees. >> host: story in "the christian science monitor," a better path to a bachelors. programs help community colleges transfers move up. what's happening with commune colleges and students going to community colleges first and trying to transfer to a four-year school? >> guest: that is certainly a path a lot of students take. community colleges tend to be far cheaper than other

institutions of higher education. most students at those colleges don't have to borrow take at that out, don't have to borrow loans to finance their education. typically a pell grant often covers most of the tuition at those institutions. it probably doesn't get you all the way for living expenses but those community colleges certainly are cheaper, cheaper options. >> host: "christian science monitor" article says students, especially minorities are taking advantage of good quality and lower cost of community college but they face high hurdles when they try to transfer to a four-year school. why is that? . .

>> i'd like to welcome our speaker and those of you aending today's event. our head table includes guests of our speaker as well as working journalists who are club members. i note that members of the general public are attending, so it's not necessarily evidence of a lack of journalistic objectivity. i'd also like to welcome our c-span and public radio audiences. you can follow the action on twitter using the hashtag nbc lunch. after our guest's speech concludes, we'll have a question and answer period, and we'll ask as many as time permits. now it's time to introduce our head table. i'd ask each of you to stand briefly as your name is

announced. from your right, jonathan salant, political reporter for bloomberg news. pablo sanchez, washington producer, correspondent for univision. robert schlesinger, managing editor, opinion, "u.s. news & world report". andrew biggs, resident scholar, american enterprise institute and a guest of our speaker. marilyn thompson, washington bureau chief for thom son reuters. ignacio sanchez, dla piper and a guest of our speaker. donna -- [inaudible] vice chair of the npc speakers' committee, correspondent for "usa today" and a past president of national press club.

speaking over our speaker for a moment, matt -- [inaudible] of the speakers' committee member who organized today's loan champion. thank you -- luncheon, thank you very much, matt. charles blue usa, dan balz, chief correspondent, "the washington post." betsy fisher martin, senior executive producer and managing editor of political programming for npc news. susan page, washington bureau chief, "usa today." and larry litman, executive editor for state news at the aarp bulletin and a past npc president. [applause] marco rubio has served as florida's junior senator since january 2011. a native of miami, he previously

served in the florida house of representatives from 2000 until 2008 during which time he served as majority whip, majority leader and speaker of the house. first-term florida senator marco rubio is one of the many republicans positioning themselves for the presidential primary. indeed, this past sunday on abc's "this week" when asked whether he thought he was ready for the presidency, he said, i do. but i think that's true for multiple other people who would want to run. analysts point out an obvious advantage for rubio. his potential as a son of cuban immigrants to appeal to hispanic voters who broke for president obama nearly three to one in 2012. and he was involved in passing comprehensive immigration legislation in the senate. the immigration bill did not endear rubio to the tea party wig of the republican party --

wing of the republican party, but he has been outspoken in issues that are important to conservatives. for instance, rubio declared the war on poverty a failure. he would subsidize private businesses to pay higher wages and do away with the earned income tax credit. internationally, he supports an activist u.s. role, a stark contrast to the isolationist viewpoint of another potential gop presidential contender, senator rand paul. at a speech to conservatives in march, rubio said the united states should be more involved in china, north korea, venezuela and cuba, more involved than the obama administration is. and he said the united states should punish russia for its actions in ukraine. today he will discuss retirement security, including hiss about changing -- his suggestions about changing social security and medicare and how to make it easier for young americans to

save for retirement. please join me in welcoming to the national press club senator marco rubio. [applause] >> thank you, i appreciate it. thank you to the national press club for having me. it is my first time here, and fending on how it goes -- depending on how it goes, it may or may not be my last. [laughter] i'm honored all of you would be here to talk about an issue that's important to me. let me begin by speaking the night i was elected. my mother turned 80 the day i was elected, so for me that night was the culmination of a year and a half in what was a difficult campaign including one that many people -- including myself on occasion -- had doubts i could win. but that night wasn't just an election, it was a living affirmation of the promise of the country she had come to

love. when she and my father came to america in 1956, they came with little more than their dreams of a better life. but even with the constraints of their old lives removed, they struggled off and on throughout the years. the service jobs they took were not glamorous, but their hard work was dignified because it allowed my parents to earn what they wanted most; a life of security in the great american middle class. so that a night as she stood on the stage with me, what she saw was the promise of america. because just a few decades removed from her poverty and struggle her son had been elected to the senate of the most important nation in the history of the world. that night would have never been possible without america, and it would have never been possible without the years of sacrifices my parents made for me. sacrifice that allowed me to pursue my dreams. because they sacrificed so much that i could pursue my dreams, they both worked well past their

retirement age. my father still looked late nights until i graduated from law school and got my first job as an attorney and was finally able to help them with the monthly bills. and even then he still wanted to work. so he worked as a crossing guard at a grade school. now, they never earned enough to have significant savingses or a pension. savings or a pension. it was social security and medicare that allowed them to retire with comfort and security. my father passed away a few weeks before my election. in the last months of his life, medicare allowed him to receive the palliative care he needed to die with dignity and surrounded by the people who loved him. my mother, fortunately, is still with me. but in recent years her health has declined as well. it's medicare that pays for the care she now receives. that's not only extended her life, but also preserved its quality. and social security continues to

provide for her financial needs as she now lives with my sister and her husband in the very house my parents moved us to almost three decades ago. my mother was blessed to have come to a country where a life of hard work could be rewarded with a dignified retirement. now almost four years into my service in the senate, there's a question that enters my mind from time to time; what would life have been like for me and for my mother if she had arrived in america as a young woman in 2006 rather than 1956? could my parents still have found good-paying work and made it to the middle class? and would social security and medicare still be solvent by the time they were ready to retire? i believe the american dream my parentslied is still -- lived is still possible, but among too many of our people there is now this nagging sense that achieving it has become more

difficult than ever. financial security has faded for millions of americans, and with it, the hope of a stable and secure retirement. the troubles of the last few years have forced millions to put retirement on hold indefinitely. it's even forced some to cut their retirement short and reenter the work force. each of the three legs of our traditional retirement stool -- personal savings, pensions and social security -- is wobbling. and if we do nothing, each of the three will likely cease to exist as we know them well before my generation retires. the instability of each is caused by a variety of factors, and yet they all share one common cause of decay, the lack of sustained economic growth. this stagnation prevents wages from keeping pace with costs, affecting the ability of our middle class to save. it also affects the ability of states and companies to fulfill

their pension promises. and as earnings stall and unemployment and underemployment spread, it contributes to the erosion of the tax revenue needed to finance social security and medicare. economic stagnation has dealt an especially staggering blow to the retirement prospects of those middle-aged and younger. americans born after 1955 have a good deal more debt than the generations before them. and late bloomers and generation xers who already had low levels of assets suffered significant losses during the great recession. now, we hear financial experts talk all the time about how we should save for retirement. i remember not so long ago i would read about people my age who were, quote, maxing out their 401(k)s and saving for the future. and back then i used to wonder how they could afford to do it. between my student loans, my car and mortgage payments, plus the

groceries and the kids' school tuition, at that time we were living paycheck to paycheck. i took comfort knowing that at least my home was rising in value and that we could one day sell it and use the profits to provide for us in our later years. but now we have homes that have lost much of their value. in fact, 9.3 million americans now owe more than their homes are worth. and even for those able to put some money aside for retirement, persistently low interest rates have made savings accounts about as useful as piggybanks. for in their only hope is that social security will give them enough to get by. but the startling truth is that with an aging population, a sluggish economy and chronic fiscal irresponsibility in washington, the social security trust fund is drying up. it will be insolvent by the year 2033. for medicare, the moment of truth will arrive even sooner.

these factors have created a real and a looming crisis. now fortunately, it will spare current retirees like my mother. but for my generation and especially for my children's generation, the future of retirement in america is very much in doubt. now, i turn 43 years old later this month, although i feel 44 -- [laughter] if nothing changes by the time i reach full retirement age at 67, social security and medicare will be insol vebt for years. this is not a scare tactic, it is not a doom's day scenario, it is a mathematical certainty if things remain unchanged. and the longer we wait to address this, the harder it will be to fix, and the more disruptive those fixes will be. yet there appears to be no

urgency about any of this. instead, politicians lie in wait for their opponents to raise this truth so they can pounce, so they can accuse them of wanting to take away medicare or social security. i have no doubt that my suggestions here today will be used against me to try and convince seniors that i would change the benefits they worked so hard for and paid into all those years. it wouldn't be the first time that such attacks have been hurled in my direction. so let me take a moment to address those here and now. first, my mother depends on medicare and social security. i would never and will never support anything that will hurt my mother or retirees like her. and second, anyone who is in fave of doing nothing about social security and medicare is in favor of bankrupting social security and medicare. and with these two things in mind, i've come here to share a few ideas on what can be done to avert our retirement crisis. at the outset, i would mention

that an agenda that cuts government spending and spurs economic growth is the singlemost important step towards stabilizing the three legs of the retirement stool. and all of the reforms i've proposed so far in this year aim to create dynamic economic growth. and as such, they combine to form step one of my plan to insure secure retirement for 21st century seniors. what these reforms have done is they've targeted our federal antipoverty programs, our higher educational system, the factors inhibiting a secure retirement and the policies keeping us from innovating modern jobs. all will learn to growth which will help americans earn and save more. no plan to avert a retirement crisis will work without robust and sustained economic growth in the years to come. but while growth is essential, growth alone will not be enough. for the retirement system we have in place simply does not line up with the needs and

realities of our modern postindustrial economy. in this new century, most people work longer. and many people will change jobs countless times, often in business for themselves or working for companies that do not offer retirement savings plans or pensionings. therefore, our retirement programs must be modernized and restructured to address the new economy that is here to stay. and today i am proposing that we do so by pursuing three broad reform goals. the first is to make it easier for people to save more and to work longer. the best way for americans to guarantee security in retirement is to gradually build a nest egg of savings. if planned carefully and started far enough in advance, there's simply no substitute for this method in insuring a comfortable retirement. social security was never designed to be the sole source of retirement income. it was designed to serve as a

supplement. an important supplement for people in my generation and younger, this will not simply be the design of social security, it will be its reality. so calculating how much we need to save for retirement, that can be tricky. and with wages stagnant across many industries, finding the financial latitude to start putting away that money could be even trickier. as growth has slowed and millions have been left to languish in a failing job market, saving has started to look like a luxury. rather than a standard practice. in fact, 36% of americans have less than a thousand dollars saved up for retirement. many of them with nothing saved at all. and this problem, by the way, is especially prevalent among african-americans and hispanics. and even those who have maintained steady employment often do not pay enough or often do not make enough to allow for savings. one study last year found that 76% of americans are living paycheck to paycheck.

making matters worse, the nature of work in america is rapidly changing. and yet our retirement programs and savings plans have failed to adjust accordingly. throughout most of the last century, you could leave school or go work at a local company or factory. you'd stay there for 50 years, and then you'd retire with a pension. and our retirement programs were originally built with this sort of reality in mind. but times have changed. today there are 75 million americans working for employers that do not offer a retirement plan. and those who do have access to an employer plan probably won't for their full career. that is because the average worker today stays at each job for only about four and a half years. and that's only the average worker. 91% of the millennial generation says that they only expect to stick around each job for two to three years. this means that they could have 15-20 different jobs over the course of a career.

many americans figure the unpredictability of modern careers has made employer-sponsored plans a thing of the past. even with these plans -- even when these plans are offered, many employees are not made aware or choose not to go to the tub of enrolling. it is no surprise that 80% of people ages 30-54 believe they won't have enough in the bank when it comes time to retire. but ironically -- and i believe, unfairly -- there's one group that does not have to worry about this problem. members of congress and other federal employees have a retirement savings and investment plan called tsp. the tsp, which is similar similar to a traditional employer-sponsored 401(k) allows federal employees to save pretax money for retirement, and it is one of the most efficient saving plans in america. it charges fees which are a fraction of those in most private defined contribution

plans. that allows beneficiaries to save more. so here's the twisted irony. members of congress who are employees of citizens of the united states have access to a superior savings plan than many of the american people who are often left with access to no plan at all. and that's why i propose we give americans who do not have access to an employer-sponsored plan the option of enrolling in the federal thrift savings plan. and opening congress' retirement plan to the american people will allow us to bring the prospect of a secure, comfortable and independent retirement into the reach of millions of people. now, after dealing with the savings crisis, we need to insure that older workers have the ability to work as long as they need or want without being punished for it. as the tax code currently is written, those who keep working past retirement age continue to pay social security taxes while receiving almost no extra

benefit in return. this encourages some seniors to quit the work force before they would otherwise. in order to remove this disincentive to work, we should eliminate the 12.4% social security payroll tax for all individuals who have reached retirement age. these seniors have already paid their fair share, and we shouldn't punish them for choosing to keep working rather than immediately cashing in. eliminating this tax will also help seniors accelerate their savings by letting them keep more of their own money, and it could also make older workers more attractive to employers, since the employers' half of the payroll tax would also be eliminated. eliminating the social security payroll tax for seniors will likely result in older americans choosing to work longer which in turn will lead to an increase in federal income tax revenue. and seniors who choose to keep working will improve their personal retirement security and will decrease their dependency

on federal assistance programs. this payroll tax on older employees isn't the old way we discourage seniors from voluntarily continuing to work. those who choose to claim their benefits early while they keep working are subject to what's called the retirement earnings test. under this test benefits are reduced approximately 50 cents for every dollar a person between the ages of 62-65 earns in excess of $15,000 a year. so this, essentially, equates to a 50% tax on benefits on top of all other taxes being paid such as the payroll tax i just discussed. the result is that americans work right up until the age of 62, and then they enter retirement before they start incurring this penalty. and here's what's even more puzzling about this policy. it doesn't save us any money. because when a senior hit by this tax finally retires, their

benefits are hiked way up to make up for any loss caused by the retirement earnings test. in the end, the benefits end up being mostly the same over the course of a retirement with or without the retirement earnings test. but many people aren't aware of this. so many leave the labor force when they turn 62 to avoid paying the 50% tax on their social security benefits. we should eliminate this test altogether. one economist estimates that abolishing the retirement earnings test would raise employment among early retirees by 5.3%, a significant increase for a reform that has no long-term budgetary cost. now, i've heard some suggest that with unemployment so high and jobs so scarce why should we be pumping the labor force with more workers? they reason that if seniors stop working, we won't have enough jobs for younger workers. it's an interesting theory, but it's not how it works out in practice. studies have shown that an increase in older workers

actually boosts the number of jobs for younger workers. for every percentage point that the unemployment rate for older workers rises, that the employment rate for older workers rises, youth employment rises by 1.2 percentage points. so taken together, these reforms will help more people save for retirement and allow more seniors to choose to work longer. and this will foster a balanced retirement and leave fewer americans solely dependent op social security. on social security. but while social security should not be our only source of retirement income, it must remain a significant sup mr. president to our postretirement income if we are to prevent a retirement crisis in america. and that's why our second reform goal for guaranteeing a secure retirement for 21st century seniors is to enact reforms that save social security for future generations. now, this country has changed e enormously since the passage of social security.

yet the basic rules have failed to adjust accordingly. rather than pass reforms, many in washington think the answer is to double down on the current program and simply infuse it, and simply infuse more money into it. but failing to modernize will eventually lead to an outcome that we cannot buy our way out of. my answer is to build this outdated system into something that's worthy of the 2 is 1st sent -- 21 isst century and that's designed to last for generations. and this requires taking into account modern realities. take, for instance, the retirement age. many now choose to work well past the age of retirement. if you have any doubts about that, i encourage you to come see the united states senate at work. [laughter] that's not going to go over well. [laughter] people are working longer because people are living longer. if you turned 21 in 1940, your

chances of living up to the retirement age were only about 55 percent. but if you turn 21 today, your chances are around 80 percent. this is good news, but what this means in practical terms is that we now have a record number of beneficiaries, and these beneficiaries on average are living another five to ten years longer than social security's earliest recipients. but in the past 80 years, congress has only increased the retirement age by two years from 65 to 67. in the long run, this simply won't work. the answer is to gradually increase the retirement age for future retirees to account for the rise in life expectancy. and if we act soon, we can do this without changing the retirement age for people who are currently over the age of 55. we also, by the way, need to look at how we with calculate initial benefits. social security needs to provide a stronger safety net for those at the bottom of the income

scale. when my parents retired, they didn't have a nest egg of savings to rely upon. they leaned heavily on social security to help them through. in fact, my mother still does. but we need to make sure that seniors like my parents who worked low-wage jobs their whole lives aren't consigned to poverty in old age. on the other end of the spectrum, our retirees with high incomes. for wealthy retirees, their monthly social security benefit is a less significant part of their monthly finances. the answer is to reduce the growth of those benefits for upper income seniors while making the program stronger for low income seniors. this isn't a cut, it is simply a reduction in how fast the benefit will increase for wealthier retirees. doing this is going to add years to social security's solvency. it is one of the best ways to save the program for high income and low income beneficiaries alike. our third and final goal is

perhaps also our most difficult, and that is saving medicare. as i stated earlier, medicare is deeply personal to me. when my father got sick, medicare paid for his numerous hospital stays. and as he reached the end of his life, it allowed him to end his life in comfort and dignity by paying for his hospice care. and like most 83-year-olds, my mother has several age-related ailments. but without the quality health care that medicare pays for, i simply cannot imagine what her life would be like. so when i'm talking about medicare, two facts need to be made clear from the outset. one, the program is absolutely essential to maintaining a secure, healthy and comfortable retirement for seniors. and, two, if we do nothing to reform it, medicare hospital insurance will go bankrupt in about 12 years and simply cease to exist.

again, this is not a scare tactic. it's simple math. in 2012 medicare spending grew by 4.6% to about $580 billion. and between now and the year 2022 this growth rate is expected to accelerate to around 7.4% per year. by 2026 the medicare trust fund will run dry. there was once a time when talking about medicare reform was a third rail of american politics. but as we get closer to this impending doom, it seems more people are at least willing to discuss serious ideas about how to save medicare. any serious effort to save medicare needs to, first, take a hard look at what recent reforms tell us about what works and what does not. obamacare turned four last month, and it raises the iconic question, are you better off than you were four years ago? the answer for, the rising

answer for our nation is an unequivocal no. jobs have been lost, hours have been cut, employers have been forced to drop coverage their employees were happy with, premiums have skyrocketed. obamacare's even hurt medicare recipients by cutting about $156 billion out of medicare advantage. this cut was a grave miscalculation. medicare advantage is a shining success story that millions of seniors, like my mother, rely upon. in short, it's a program that allows you to receive your coverage from a private provider using funding from medicare. this has encouraged providers to compete for business by tacking on all sorts of value-added services for seniors. for example, one of the reasons my mother picked her current provider is because in addition to good doctors, they pick her up, and they drive her to her appointments. this sort of competition in the marketplace invariably leads to two very good things; a decrease in prices and an increase in choices.

choice and competition are also at the heart of another med is the story, medicare part d.chcdñ through this market-based program, seniors have at least 28 different prescription drug coverage plans to choose from. and as competition has worked as a powerful cost control mechanism. this has made part d a booming success by every conceivable measure. the congressional budget office found that the total program costs are on track to be 45% or $348 billion less than the initial ten-year projections. average monthly premiums are expected to be $31 in 2014 which is less than half of the $64 originally predicted. and not only does it save money, seniors love it. 95% of seniors enrolled in part d find it convenient to their needs. so when it comes to a broad and comprehensive medicare reform plan, let's learn from the mistakes of obamacare and the

successes of programs such as medicare advantage and medicare part d. let's dramatically expand health care choices for seniors, spur competition in the marketplace and extend the solvency of the medicare trust fund all while making sure traditional medicare still remains an option. so to do so, i propose we transition to a premium support system which would give seniors a generous but fixed amount of money with which they can either purchase health insurance from either medicare or from a private provider. the choice would be theirs to make. my friend paul ryan is a leader when it comes to medicare reform. i supported a couple of key proposals to fix the program that were detailed in his road map during my 2010 race. since then he has teamed up with senator wyden to present a bold, bipartisan plan to institute the premium support model. under plans such as these, the government contribution would be fastened to east traditional medicare or the average bid,

whichever is cheapest. this way if seniors choose plans that more than the benchmark, they would have to pay the difference. but if they choose cheaper plans, they would get to keep the savings. by driving competition between private plans and traditional fee-for-service medicare, we could spur choice while controlling costs. and it would also lead to innovations that are specifically focused around the needs of beneficiaries. the increased efficiency brought about by free market competition will allow providers to offer the same health care benefits as traditional medicare, but for less money. the cbo predicts that by 2030 medicare spending under a premium support plan would be 14% less per person than under the current system. importantly, this new system insures that medicare continues to extend an impartial hand to all seniors for generations to come. let me just conclude by mentioning, as i did earlier,

that my birthday's later this month. thank you for the cupcakes. [laughter] but it seems just like a few years ago that -- a few days ago that i was graduating from high school or that i was standing at the altar or welcoming our first child home. as these years go by and the older i get, the more i'm reminded of how quickly things move and how it's never too too late to start planning ahead for the next phase of life. as a citizen and a husband, this means saving for retirement. it means seeing what it will take to be ready when the time comes. but as a member of the united states senate, i also share another responsibility; the responsibility to save the time-honored institutions that have long been at the service of the time honored among us. that allowed my mother and my father and so many millions like them to retire with dignity and live out the final years of their american dream with comfort and peace of mind. the responsibility to save these programs belong to all who are

elected to serve. yet many seem to have fort gotten that we are -- forgotten that issues such as these are the why of politics. not merely optional dirty work. partisan politics in america has always been contentious, but throughout our history on issues of generational importance our leaders have agreed to put aside politics for the sake of our people. if ever there was an issue worthy of this sort of solidarity, preserving a secure retirement for 21st century seniors is that issue. and should we fail to address it, history will point its finger at all who stood aside or stood in the way. today i have presented an agenda for addressing this crisis head on, and i am eager to work with anyone, republican or democrat, who will work in good faith on these reforms. ultimately, i believe we will

solve the retirement challenge before it's too late. we will solve it because rising to the challenge is what we have always done. we will solve it because we midwest for the sake of our children and our children's children. and we will solve it because once we to, the american dream will be brought within reach in this new century. and the greatest nation in history will continue to shine for many generations to come. thank you very much for the opportunity. [applause] >> thank you, senator rubio. what do you believe would be the consequences of a failure to take legislative action to shore up social security and medicare finances? >> well, the consequences are as i have outlined in the speech. the programs will cease to exist

certainly as we know them. the longer we wait to address it, by the way, the more disruptive those changes will be. and that's what i want us to avoid. the moment of truth will arrive at one moment or another. at some point, you simply don't have enough money, and we never want to reach that point. the closer you get to that moment in time, the more disruptive and chaotic the reforms are going to be. so one of the reasons why i've advocated acting early and acting now, the more incremental the changes can be, the less we'll have to impact anyone currently benefiting these systems, in fact, i think you can avoid impacting those. the longer we wait, the more disruptive this will be, the more significant the reforms will have to be. if you do with some foresight, you can gradually do these things in a way that will not impact current beneficiaries and won't be traumatic to future beneficiaries. >> do you believe that social security finances and personal

savings expansion need to be enacted together, or is it sufficient to take these objectives one at a time? >> well, i don't know that this process today is conducive for doing anything big all at one time, but they certainly both need to get done. as i pointed out, solutions will be more disruptive, potentially more painful. and as far as the personal savings are concerned, that's actually something you need to do ahead of time, because it takes a number of years to build up that retirement axis. for me the real concern is the millions of americans who work somewhere that doesn't offer a retirement savings vehicle. now, theoretically, they could go into a financial institution -- not theoretically, they could go into a financial institution and apply for it, but, you know, if you're the forklift operator at a family-owned warehouse operation, you probably neither have the time, nor the inclination to go into your local financial institution and apply for this if you even make enough money to be able to save. so what i'm trying to do is create an additional vehicle that's easy to access, that

allows people to put pretax money aside in a way that will come pound over the years -- compound over the years. and they could always roll that into a new employer's plan. but i think it's critical we create more awareness and more access for people to be able to put money aside in a pretax way for their retirement. >> following on, how would you propose making up the lost revenue by millions more putting pretax dollars into tsps? >> well, a couple points. many of the people that would take advantage of this program probably their incomes are at a level where they're not a significant part of our income tax system. they certainly are paying fica and the payroll tacks, be -- taxes, but many people are not making that much money right now which is one of the challenges they have to savings. and the other i think long term, this is a cost the government will absorb one way or the other, because if people don't have significant retirement, they're still going to have needs.

and we're a nation of compassion, so we're going to address it one way or the other. i think it's better to allow people to address it for themselves. but i don't think that the costs, whatever they may calculate to be, will be significant enough for us not to pursue creating yet another option for people to put this money aside. the last point i would make is in the question think about what it's implying, and i don't mean to question the questioner's' motivations, but think about what it implies. wood basically be saying we need your tax money so much that just because you work somewhere, we're not going to make it easier for you to access one even though you have the legal right to access one. i think it's important for all americans to have the ability to not just know about pretax savings for their retirement, but the ability to actually do it. it's good for our country, for our long-term finances. >> addressing declining labor force participation by younger seniors would seem to be a pretty create attractive --

politically attractive as well as a substantially important issue. why do you think there's been so little legislative attention to improving seniors' work incentives? >> partially because there's been such little legislative attention to anything -- [laughter] on any issue. but i think part of it is the need for more people on both sides of the aisle to say this is a priority for our cup. part of it is, i think, this adjustment we're city still trying to make from the last century to a new century where, quite frankly, people will work longer because they feel productive in their work, and they're making a difference. i joked about the senate as an example, but certainly the senate has many people who continue to work well past retirement because they enjoy their work, not for the paycheck. >> i think that's also true among our citizens. so i think this is an issue we're really beginning to confront over the last decade. we have so many people over the age of 62 who want to continue to work, who are still extremely productive, who work not only

because they want to, but in many cases because they want to. and this is something we've only begun to confront over the last decade and a half. >> burr bearing in mind -- berries in mind the points you made in your remarks, do you think social security and medicare benefits will still be offered when you reach retirement age? >> well, that's actually a choice that we'll have to make. if we want them to continue to be offered, then we're going to have to make some changing total way the program works for my generation. i think that's important to point out again. what i'm discussing are changes that will be there for my generation. and people younger than me are going to have the accept our social security and medicare will still be the best in the world compared to other countries, but it will look different from our parents' pause we're going to live longer and work longer than our parents' generation. and i think my generation's prepared to accept that.

but that's a choice we're going to make. if we don't make these choices now, then all i can tell you is from the budget tear figures that are available to us, these programs will not exist at least as we know them. the question is not if social security and medicare will be reformed, because they will be reformed one way or the other, unfortunately. the question is whether they are reformed in a way that's less disruptive and more productive, or are they reformed in a chaotic, emergency way as we near that moment of truth for both of these programs. >> as you could expect and i think you indicated, you except that your remarks and your presence have generated questions on many other topics which i would like to turn to. earlier this week you rejected the assertions that how many activity is causing climate change and actions taken to curtail such activity will destroy our economy. how would you propose we

mitigate the impacts such shifts could have on quality of life? >> headlines notwithstanding, i -- of course the climate is changing because the climate is always changing, and that's a measure bl that -- measurable that you can see. the issue is not whether the climate is changing as it always is changing, the issue is whether there are legislative proposals before us that could do anything about i. and what i have said and what i disagree with is the notion that if we pass cap and trade, for example, this will stop this from happening when, in fact, half of the new emissions on the planet are coming from developing country is the and half of that is one country, china, that isn't going to follow the laws we pass. number one, i'm all in favor of advances in technology and innovation that makes us cleaner and more efficient but in a way that through a cost benefit analysis determines is also good for our economy, and i don't think those two things are necessarily incompatible. and the other thing that i would point out is that i agree we need to spend time and energy on

mitigation as well. because there are mitigation actions that need to be taking place whether it's how we store water in the west or how we prepare to harden and address storm occurrences in the southeast where i live, where we've built very expensive structures near the coastline that are susceptible to naturalwet occurrences and all sorts of weather events of this nature. i have no problem with them, and quite frankly, i have no problem with advances in technology. but i by no means audiotape going to go out and tell people in. it's not accurate to say that. >> what information, reports, studies or otherwise are you relying on to inform and reach your conclusion that human activity is not to blame for climate change? >> well, again, headlines

notwithstanding, i've never disputed that the climate is changing, and i've pointed out that climate to some extent is static. that's not the question before me as a policymaker. if we ban all coal in the u.s., if we ban all carbon emissions in the united states, will it change the dramatic changes in climate and these dramatic weather impacts that we're now reading about? and anyone who says that we will is not being truthful. the truth of the matter is the united states is a country. it is not a planet. and so there are things that we can do to become more efficient in our use of energies, there are things we can do to develop alternative sources of energy, there are things we can do to be better stewards of the energy resources that we have like natural oil and gas. but for people to go out and say if you passed this bill that i am proposing, this will somehow lead us to have less tornadoes and hurricanes. and that's what i take issue with. >> the u.s. geological survey has warped that sea level --

warned that sea levels could rise by two feet by 260, imperilling florida's coastline. how should the united states prepare itself and its citizens to deal with rising sea levels and the catastrophic flood aing that is likely to follow? >> well, again, as i pointed out earlier, i have no problem with taking mitigation action as we did in my time as speaker of the house after we were hit by five hurricanes in 2004-2005. and we took steps to encourage people by finding savings in their insurance programs to harden their homes against to car insurances of these storms. like wise, we've expended an enormous amount of money to drainage programs in florida. much of south florida was built on a former swamp called the everglades. the natural everglades has been developed. so i this no problem with us taking steps towards mitigation.

not simply because of weather occurrences, but payoff the fact that we have developed population centers near areas that are vulnerable to natural disaster whether it's earthquakeses in the west or hurricanes in the society or tsunamis in the asian-pacific region. natural catastrophes have always existed, and as we build out population centers with expensive structures in vulnerable areas, we will have to make mitigation action to account for that. >> turning to another subject, a year ago you were a key figure in shaping a bipartisan immigration bill that passed the senate but then stalled in the house. what are the chances that immigration will move in the house this year? >> well, i'm not in the prognostication business in terms of what things may or may not happen in the house. i think that's a question that's more appropriately posed to someone who serves in that body. this is a critical issue for

multiple reasons. first, we do not have a 21st century immigration system. we have a legal imgreat lakes system that doesn't work and is not responsive to the economic realities of today. and that needs to be reformed. we need to have an immigration system that takes our economy and merit and skills into mind. quite frankly, the proposal we proposed in the senate would do that. it shifted our immigration system from one based on family reunification towards one built on merit and skill. the united states has a right to enforce its immigration laws, but our existing forces don't work. we still have no effective way for employers to verify that the people they're hiring are legally here, and we have no effective way of tracking visitors to our country so that we can insure that someone exits before their visa's expired. and then you have the reality of

12 million human beings live anything this country that are here illegal he, but they are here. and while we debated this issue and there was a lot of opposition to it, not a single member filed an amendment that would call for the mound rounding up and deportation of 12 million people. we're not going to do that. but we're also not going to address -- we have to insure that that never happens again with, but we have to deal with that reality in a responsible if reasonable way. and that's what we've endeavored to do. and if there's a better way to do it, i'm obviously open to those suggestions. but that has to happen as well as part of any certain reform. i think the impediment is that people are concerned we'll only do with the aspect of those here illegally. as happened after the '8 of reform. -- '86 reform.

so i think critical to the success of this reform is achieving measurable reforms on the front end to not just legalize our immigration system, but to put in place enforcement mechanisms so americans have confidence that we are dealing with the problem we have now, but we're not going to have to recreate it once again in the future. and i truly believe it's the single biggest impediment we're facing right now. >> your participation in those immigration negotiations cost you among some tea party supporters and conservative republicans. do you have any regrets? >> i mean, i regret we didn't get more support for it because it's an important issue that we have to tackle. look, i mean, i ran for office to make a difference. i mean, i understand politically i could have simply -- first of all, i knew about the perils of this issue going in. i'm familiar with its his and i the reason why it hasn't pass z.

passed. quite frankly, much of the opposition that we faced to the will was legitimate objections -- the bill was legitimate okayses. i understand that politically the easier thing for me to have done is sit back, let someone else propose a bill, file a bunch of amendments on how i would do it and then just stand back and say, look, this is what i would have done, but since they won't do it my way, we just shouldn't do anything. i actually want to solve this issue. i actually came here to make a difference. i didn't come here to just sign on to a bunch of letters and give speeches. when i have the opportunity, i came to propose ideas and move them forward. and this is not just some theoretical issue. i've seen every aspect of this issue, the good, the bad and the ugly, and i believe we need to solve this. it needs to have a legal immigration system that allows

us to win the global competition for talent. as a sovereign country and for our national security, we need to have inflation laws we can enforce. and we need to address the fact that we have 12 million people living in this country illegally. i think those are majority positions in this country. they come with some political peril. i made a decision that i would get involved in public service to make a difference. sometimes that makes you well liked, sometimes it makes you controversial, but it's the only thing that makes it worth it. >> we do have a few questions in the area of politics. [laughter] would you run for both re-election to the senate and for the republican presidential nomination, or would you choose one or the other? >> well, i've addressed that on multiple occasions, but i would just say a couple points. i think if someone decides to run for president of the united states, you run for president of the united states. i don't believe you can run

effectively for an office of that magnitude while having some exit strategy in mind. others may disagree, but these my feelings on if decides to run for an office of that importance, you do so because that's what you want to be. and you're not simply trying to find some or the of eject butt torn. that's my personal opinion, others may have decides for yourself. >> would you still run for the presidential nomination if former florida golf jeb bush -- governor jeb bush does? >> i hadn't heard he was interested. [laughter] i know he's going through his own decision making process about what he wants to do. all i would say is when i think someone con policemen candidated running -- contemplates running for president of united states, i don't think those are decisions you make with someone else's decision in mind. and i would bet you if he was

here today, he'd give you the contact -- the exact same answer. based on your own criteria, not on what someone else might or might not do. >> who, in your estimation, is the strongest democratic candidate for 2016 and why? [laughter] >> probably harry reid, that's who i hope they'll nominate. [laughter] i'm not really an expert on democratic primaries, so i don't know the answer to that question other than to say that, you know, certainly they'll have their own process for deciding a candidate. look, i mean, i think any presidential campaign will be highly competitive, and both parties will field competitive, well-funded candidates and, ultimately, the people will decide about what direction they want to take our country, so we'll find out, i guess.

>> we are almost out of time, but before asking the last question, we have a couple of housekeeping matters to take care of. first of all, i'd like to remind you about our upcoming events and speakers. may 27th, donald trump, chairman and president of the trump organization. may 28th, dr. ben carson, neurosurgeon and author. next, i'd like to present our guest with the traditional national press club mug. [applause] senator, you mentioned this was the first time you were at the national press club. i'd like to assure you no speakers who return for further engagements, they get multiples of the cup. so we hope you'll be back. [applause]

and one last question. if you do become president, which democrat will you invite to your first beer summit? [laughter] >> oh, that's a good -- to my first what now? beer summit? >> yes. yeah, the current president has had a -- >> probably joe biden. he always tells good jokes. [laughter] >> very good. how about a round of applause. [applause] thank you for coming today. i'd also like to thank national press club staff including its journalism institute and broadcast center for organizing today's event. and if you'd like a copy of today's program or to get more information about the national press club, please check our web site at press.org. thank you, we are adjourned.

[applause] [inaudible conversations] >> riding on some of senator rubio talked about today, a proposed overhaul of federal programs to help younger workers save for retirement as well as protect programs for older voters who would assume those programs would be there after they endedthey ended their care. you can watch all of today's speech at the national press club online at c-span.org. and to let you know about our live coverage coming up in about a half an hour, a senate judiciary subcommittee holds a hearing on whether there are sufficient laws to punish violaters. we'll hear testimony from randall coleman, fbi assistant director of counterintelligence, and several company executives, and that's at 2:30 eastern on c-span3. also this afternoon president

obama pent presents -- presents the medal of honor to kyle white, a former active duty army sergeant, for his actions in afghanistan. he is the seventh living recipient to be awarded the medal of honor for actions in afghanistan and iraq. you can see thatter is ceremonye at three earn on c-span. and in about 15 minutes, the senate returns from hits party lunch break -- its party lunch break. a cloture vote this morning of 96-3 extending certain tax breaks that expired at the end of 2013. earlier today finance committee chairman ron wyden spoke about the legislation right before the senate voted to advance the bill, and we will show you as much of this as we can until the senate gavels back in at 2:15 eastern. >> mr. president, this morning the senate begins consideration of a tax cut bill. the finance committee agreed to call it the expire act, and i'm going to take just a few minutes

to talk about why it is sont important that this bill bend passed and passed now.ere and here are a few of the key reasons. first, if the senate doesn't act, veterans who are now packing job fairs across thistr country are goingy to face an even tougher struggle to getet good jobs. the good-paying jobs needed, they'll be harder to create. and, third, because just when underwater homeowners get hold of a life raft that keeps them in their homes, a big tax hike could yank it away. and fourth, because millions of students are already up to their eyeballs in debt, without this

they'll go each deeper. and finish even deeper.19k,,,,8u and in addition, producing clean energy will grow more expensive, risking the high-tech jobs that every member of congress wants to protect. the expire act addresses all of these issues and more. and the second question that i think is going to be relevant to this debate is what are the implications for the cycle of stop-and-go policies that have made the tax code in this country so unnecessarily complicated and uncertain? the expire act ends that. and builds a bridge to comprehensive tax reform. now, many of these stop and go incentives are good policy, and they ought to be extended permanently. the expire act