immensely helpful and also have the kind of bipartisanship we are seeking to augment today.

i want to also introduce my wife who is a professor at george washington medical center, and i say as a real job looking for cures for cancer. also, i want to thank the national press -- zero, and also rebecca, if you will raise your hand. that way the media will be able to also get the advantages of questions from the audience to another that is important to c-span also. i wanted thank the national press club executive directors and staff liaisons'. the photographer who does such a spectacular job and won the outstanding career award, and our audio people. we will need first with the senate, said rob portman. >> thank you.

bob is right. we worked together in the past. it is good to be with him. he has worked with republicans and democrats on the drug issue and has been an advocate for not the current approach to drug abuse and the date to -- addiction but rather one that focuses on education, treatment, and recovery. this is one of the issues of that although we will not talk about directly is an example of something on the discretionary part of the budget that is getting squeezed more and more as we do not deal with the larger problem on the mandatory spending seven the budget. maybe keep in mind, that is an example of a program like the second chance act that i offered some years ago. the discretionary side even though it actually is a program

that is not a top down washington program and saves money because it encourages states and localities to put in place prisoner reentry programs that keep people of the revolving door and encourages and is successful in getting people into productive lives where they're taxpayers and taking care of their families. it works better for our communities and the taxpayers. just an example of the kinds of things that will be under increasing pressure if we get do something about the bigger problem in our budget. this is a nice turn out. i would have come thursday. i tell you why. look at the website. the description for today is come here, talk about the intricacies of budget baselines. on thursday here is what this says. caught on camera smoking crack cocaine, led a controversial

career. he will be here on thursday. i don't know why you are here, what thank you for coming. [laughter] maybe the two of us could make this more interesting. >> we need to stick to buy stuff . >> i have worked with chris a lot over the years, the so-called super committee together which ended up being not so super, but a serious effort to try to find answers. we were not ultimately successful, in fact some of what we propose you could argue later happened for sequestration. will we really did not get at was the broader picture of how to deal with the biggest part of the budget and how to those of the budget, mandatory spending, with intent years of bipartisan congressional office skills that will be three-quarters of the budget. the fastest-growing in biggest part of the budget. we had her work that of france.

the yen, we have had their virginity towards either of four and will in the future to try to find common ground. the debt that we currently have and the deficit is very serious and threatening to our economy. the deficits are projected to top 1 trillion within the next decade, and yet it seems like it is of the headline, and i want to thank the national press club for having this. the shining a light on it today. this continues to be an important issue. some of us suggested that because the deficit is only about $500 this year that is okay. first of all, it does not seem okay to me. renown was at the office of

management and budget bob mentioned that the deficit was 1,601,000,000,000. that is why we proposed. i think 500 billion is not solving the problem but also way too high because we are looking at the trillion dollar deficits within one decade based upon the congressional budget office analysis. it is due entirely to the costs of a mandatory seven the budget. and it is a pretty rosy scenario when you consider a trillion dollars a year decades from now, assumes no worse got recession, terrorist acts and that interest rates will stay at relatively low rates. so there is lot of danger that deficits could, in fact, be far higher than that.

cbo projected $10 trillion increase in debt over the next decade. you go from roughly 17 trillion, 77 to 27,000,000,000,010 years from now. the ghetto or relatively scarce in area five. i hope we continue to keep this on the front burner and talk about how we solve this problem -- both sides of the aisle understands that. adelle think it's a big mystery. it's a matter of arithmetic. as the numbers are overwhelming. comprises just over half of the budget and are responsible for over 86 percent of the next decade. the entitlement spending is set to double over the next decade. it will consume almost woman

represented tax revenue with them at. the entire budgetary overbought, we talked about an infrastructure through the nation's credit card because any revenue coming in live to be used to pay for this expanding entitlements spending over or under% increase. we have to save these vital and unsustainable programs. if we don't we are not serving the very people who rely upon them. social security faces a $62 billion deficit. so the cash that -- cash deficit cut 62 billion yen it more toward deficit this year. the primary trust fund, audience just fun will go bankrupt in

just under 20 years which, when you think about that we are at a point where most people retiring today will be at a live the time that disability just want goes belly up. that means a 25 percent cut in benefits unless we change a lot, so this is happening now to vote sure currently moving from work into retirement. the medicare trust fund, just over one decade. some of the city's transit to modernize to reform, the longer we wait the more painful that will beat. it will take reaching across the aisle and both parties being involved and business was done in the 1980's, the last time it was somewhat or reagan and tip o'neill. each party will have to be

involved in my view. there are a lot of myths about spending and entitlement and deficit. let me attempt from my perspective to clear the air today. five more of the most persistent myths out there that help to keep us from doing this important work, finding common ground, and funding resolution. foghorn leghorn used to say in the cartoon, that's mathematics, son. and i think it is. you can argue with me, but you cannot argue with figures. since 1960 tax regulation has stayed around 68 percent of gdp. that is about to change. cbo projects revenues will see the historic average starting next year and over the next few decades the highest levels ever as a percent of the economy. of course highest levels in terms of nominal tax easily, but

talking about percent of economy . more specifically individual revenue as a percent of the economy was shattered all records in the next decade, so within one decade it will be higher than it has been previously. again, the congressional budget office, not me or some other partisan group. unfortunately, of course, spending source even more, so the entire revenues does not keep up with higher spending. spending has averaged about 20%. revenues $18 spending cut 20. the cbo projects that help spending net interest cost will drive spending to 25, 30, and eventually 35 percent of the economy in the coming decades. they used to have a baseline that i kind of liked. that did not authorize that this last year. you see that the tax sent some

to cut tax system simply cannot keep up with the spending. you could not have an ecosystem that collected texas high enough to keep up with the spending. so i guess one way to say it is that cbo projects entitlement cost and the dead are responsible for 100 percent of the rising long-term deficit. even the highest sustained tax revenue in history will not come close to paying for that. if entitlements spending is driving this, then shouldn't those strong majority of the reforms come from those programs, or should we just keep chasing records spending was higher tax levels? again, that is a race he will lose because we cannot keep up with it. >> myth number two, social security and medicare recipients receive only what they pay into the system. i hear this a lot. for social security, that is becoming more true. the typical person retiring into

medicaid today in will receive $3 in benefits for every dollar paid into the system. and specifically one couple retiring will have paid about $119,000 lifetime premiums and receive about $357,000 in lifetime medicare benefits. you multiply that by about 77 million baby boomers you can see why the medicare act as a make sense. >> the trust funds are an asset to social security but a liability to the treasury. so while a social security trust fund assures seniors will be funded, it does not provide any actual economic resources to do it. so the general fund sourced a, with trillions of dollars to fulfill that pledge. in that sense the existence of the trust fund does not save

current or future taxpayers a dime. all future benefits must be financed by future taxpayers. during the clinton administration the office of management and budget have a quotation about this the dollar was appropriate. they said, these balances are available to finance future benefit payments. it can be drawn down in the future. claims will have to be redeemed by taxes borrowing from the public gore reducing expenditures. it's pretty simple. as a lot of misunderstanding. we can tweet our way to fiscal sustainability making changes around the edges to close the gap which is just not possible. according to the trustees dollars of security and medicare face a combined $40 trillion unfunded liability. that is a gap that tweaks cannot

close. the recent escalation of the upper income tax cuts, which the president was committed to close raise to about $620 billion over the next decade. a lot of folks said that that would solve the problem. it is a large sum. it is about 3 percent of the projected social security and medicare and medicaid costs within that same time. 3 percent. on defense cuts to let's say we could permanently eliminate the department of defense it would merely delay the day of reckoning by about 15 years. there is no plausible set of tax hikes or other spending cuts that can pay for more than a fraction of these entitlement costs. the entitles -- entitlements themselves require fundamental reform. off a new entitlement was

started. some defend obamacare by saying that it is paid for, at least almost all paid for by new taxes and medicare cuts. my view on that is that that does not make it any more fiscally responsible cahuenga. i use the example of family that makes $100,000 figure out a way to find $10,000 in savings through hard work, scrounging, belt-tightening and take that and go to the mall and spend it. i do not think that there would say that the spending spree was justified because the $10,000 was paid for. i think we need to look at the center is a particularly what it does to medicare. i think with regard to medicare, we can debate whether the obamacare cuts are appropriate or not. the cbo has recently said that some of these cuts are unsustainable and will not be sustained by the congress or are unsustainable in their view under the health care system and our country.

let's take that aside and assume that it was the right thing to do. the savings from medicare providers into obamacare, if appropriate, should not have been used to deal with this problem of medicare? some say, well, you can double counted. it just does not make sense. it was used to fund obamacare and otherwise could have been available for medicaid. so facing these record spending and debt levels in obamacare, over one-half trillion in tax increases in medicare cuts, then spend the entire amount on a new entitlement program. this matters because the options from budget savings are pretty limited. washington can only raise taxes so high before it and dice the economy in a negative way. medicare providers can only be cut so much before they stop participating in a program. some have already come as you

know. the anti-poverty program, education program, as well as benefits of the already retired have mostly been taken off the table by republicans and democrats. the options are really pretty limited. is there are only so many programs that can be realistically scale back or eliminated. is there waste and fraud and abuse? of course. if washington keeps offsetting spending there will be nothing left to the so-called bargain. some kind of bargain to deal with entitlements and save them from bankruptcy in scale back debt. the president's budget, 1 trillion in new taxes was used primarily to pay for spending and. the senate democrats prefer tax increase, the buffett tax which is now pose as an offset to nearly a dozen proposed spending

hikes. this happened again last week. the buffer tax was proposed and to be used for other spending increase. it would close less than 1 percent of the budget deficit or is being used to offset new spending. it is a struggle frankly, as criswell acknowledged probably because we worked on this together to find savings. so, look, before i close let me just add one, i guess,. the need to have ideas out there. it is easy to criticize ideas that come out. paul ryans budget gets criticized regularly, but it does balance in ten years. there is no democratic alternative that does that. i often talk about means testing and medicare as an example where we could make a step in the

right direction. it does not solve the problem, as we talked about, but it does suggest that in the right direction and is in the president's budget. it does provide that folks who make over 170,000 per year have to pay more in premiums under part b and party of medicare. it saves about $60 billion in the first ten years according to the analysis that we have, over the next ten years which is why it is a kind of proposal we ought to be talking about. as this expanding benefit to the debt and deficit that we ought to be looking for because the long-term problem can only be solved by those types of reforms, and yet we cannot seem to even make progress there. my proposal today is, let's make a commitment, at least, to take what is within the president's own budget and put that out as a spending reform here even this

year because it seems to me that is one where we should be able to find bipartisan consensus. take a small step toward dealing with these larger problems. success begets success, and we cannot allow the current situation to continue without making some progress i raise this in the confirmation hearings recently with soap -- sylvia barrell when she was before our finance committee wanting to move from zero in the -- i don't blame her, to the health and human services job. and their response was, well, we can't move on that without a balanced approach. and when pushed, the balance approaches, of course, raising taxes and, of course raising taxes on middle-income americans, businesses. i understand balance sounds great, but think about this, think about the logic of this. we cannot ask wealthier seniors, by the way the roughly

equivalent to a two and a half to $3 million annuity. we're asking people who, i believe, can afford it given the situation we find ourselves in with medicare defined more to pave participants. our answer was raising taxes on as people in order to ask them to pay more premiums, which is also revenue. makes no sense. there is no logic. i am hopeful that we can make progress on these issues and job of a grand bargain. this year will be difficult to. settle in next year is an opportunity for us, particularly the first part of next year before we get into that 2015 cycle. but let's take this time together, take the president on his budget and the one thing in his budget that does deal with this entitlement that we certainly talked about today. thank you for being here. [applause]

>> we are honored by the president of the national press club who is here with us. anything you would like to say? >> here comes the mike. we are live on c-span. >> i know senator portman and is a fellow. >> very good. >> you know that the ohio state buckeyes are coming to maryland to play. thank you, senator, congressman. the national press club, has a motto, this is where news is made. thank you for helping make news this morning. i don't want to take more than a moment to thank you because i know everyone is here to ask questions. >> congressman van allen. >> just one second. there we go.

>> well, let me start by thinking about for a brain is together. it is great to be back here, and thank you for your lead. thank you for your stewardship of the national press club. it is great to be here with my friend and colleague, bob portman. as he indicated, we worked together on these budget is used they are tough, challenging, and i am hopeful that at some point down the line we are able to resolve them in a more comprehensive fashion and we have been able to today. we have had some piecemeal progress, but what we need is a more comprehensive progress. now, will for i talk about the budget issues, i served as co-chair of a bipartisan congressional soccer cart this command are want to congratulate team usa on a terrific victory in the world cup yesterday.

hopefully that is a sign of things to come. as everyone knows, they are in a tough bracket. also, bob indicated that my father had served in the united states foreign service. earlier in my career i was on the senate foreign relations committee. i want say a word about the iraqi situation. when we looked at that, obviously it is a time of great chaos and uncertainty. and we have learned over last week that when it comes to foreign policy pundits in washington, there seems to be no accountability. because while we are witnessing is the fallout of one of the biggest foreign policy blunders the united states has ever made, and yet when i turn on my television are looking to newspapers i continue to see and repentance architects of the

iraq war offering advice to day as to what we should do. and in my view that is a little bit like asking the arsonist how to prevent fires. i do of them as we go forward in this debate we will have a little bit more accountability with respect to some of the pond and star out there. and, of course, the iraqi war is directly related to budget issues. we lost, zero, close of 4,489 americans got over 32,000 wounded in terms of the budget cost, well over a trillion dollars on page four, all on the credit card, all adding to our debt. so now let me turn to the budget in the economy. look, the good news is the economy has been steadily improving. we have seen a growth in jobs month after month. still, i think that we all

recognize that we could be doing better and our focus right now should be on boosting job growth and boosting wages. that should be the priority in our budget process. and we have one challenge immediately before ross which is the transportation trust fund. the transportation trust fund is scheduled to have a big short for as early as august which means money coming into the fund is not enough to pay for current programs. you are already seeing slowdowns in projects around the country. states and not north they will be paid, so they're much more cautious about putting jobs out, and this is threatening thousands of construction jobs run rule. so priory number one when we deal with budget issues should be addressing issues like that. the president has a plan is budgets anomaly provide current funding for the transportation

trust fund but actually to boost investment in our infrastructure as a 302000000000.4-year plan that -- plan is paid for largely by closing some of these special interest tax breaks that encourage american companies to ship american jobs overseas. he would end those perverse and counterproductive tax breaks. unfortunately, the house republican budget has no solution when it comes to the transmutation trust fund. it essentially assumes no more revenue coming in and assumes the shortfall coming up. they're is a proposal of the house that is being put toward float pit -- look forward to in the coming months by ending saturday postal delivery on a permanent basis.

that is not a long-term solution to our transportation trust fund issues. we should bite the bullet and make progress. other things that we should do right now, deal with the huge burden on students at and loans. everyone here knows that student debt is now over a trillion dollars which means when students are graduating from college and universities that and not have the funds to help buy new apartment or get a mortgage. they have to a struggle simply to repay debt. the president has put forward a plan to relieve some of that. there was a plan that senator portman mentioned. we will not do that we should have an alternative. we should be boosting investment in science, innovation, early education. senator portman as a great

proposal dealing with energy efficiency. that is a deficit neutral proposal that we should adopt in the senate and house. those of a kind of investments and initiatives that i think makes sense. we should extend emergency unemployment insurance. more than 3 million americans out of work through no fault of their own, congressional budget office tells us that extending that unemployment insurance will also create jobs between now and the end of the year. we ask for a vote of that measure, and the speaker has denied is there opportunity have that. as he has also denied the opportunity have a vote on the issue of comprehensive immigration reform, and they're is a direct link. the congressional budget office tells us one of the things that

we can do is grow our economy and reduce long-term deficit, pass long term compass -- long-term comprehensive immigration reform. they analyzed and scored the bipartisan senate bill and said, it is good for reducing the deficit over the next ten and 20 years, which is why the president actually included the comprehensive immigration reform measure and his budget, as did the house democrats. so that is an issue directly related to the budget just as it is to other things. again, the speaker of the house has not allowed us to have a vote on a bipartisan senate bill on a house bill that has been proposed by many of us. those are some things we can do right now to help boost jobs and wages. another thing that we can do to boost wages, of course, is to pass an increase in the minimum wage which we should do now.

in the state of ohio they indexed of their minimum wage. we should do that the federal level so that it keeps up with inflation and have some catch-up provision because right now the purchasing power is lower than it was when president truman was in office. and we should pass it will pay for equal work legislation, to measures that we can take now that would also boost wages in the ad states. no back talk of a sequester. dealing with the long-term. between l and fiscal year 2015 that begins in october. we have also set the cab for

defense spending in non-defense spending. we should be able to avoid that dispute, at least going in the fiscal year 2015. therefore, to answer your sort of query i would say that the prospects are good that we will avoid another shameless and unnecessary government shut down this year because of that short-term agreement, but working below the surface is the sequester. in fiscal year 2016 it is going to rise up and hit the country again unless congress comes together to resolve that issue. i would like to see as a result the sooner than later, meaning before november, but i think the prospects of doing that are relatively remote, which means right after the midterm elections that should be a priority. it is important to provide some

certainty in having this sort of damocles in the form of sequester creating uncertainty in the country and congressional budget office which has indicated that because of the -- some of the provisions in the house republican budget you will see a driver of the economy. in terms of dealing with a long-term deficits and replacing the sequester, the president has advocated for what we call a balanced approach, the house democratic -- democratic budget that i advocated on behalf of my colleague which involves a reduction in spending, continued reduction in spending. we have seen significant reductions, but we also believe that there should be cuts in special interest tax breaks to help reduce our law and -- long-term deficit to our deficits. if you look at the president's budget proposal that has less

revenue over the coming years than simpson bowles provided in their balance plan. i want to say that again. the president's budget was submitted to congress and has less revenue than closing tax breaks than does the simpson bowles proposal because what some symbols recognized was that there are a lot of trillion dollars per year in a so-called tax expenditures, provisions of the tax code that provides for deductions and credits. some of them have good public paul -- good public policy purposes and should be capped, but some are simply there because of a strong political lobbyist has succeeded in giving it -- getting a special break for themselves. when they get a break it means everyone else pays more. and those should certainly be on the table in terms of a long-term deficit reduction plan combined with looking at other

things. and the unfortunate reality is, yes, paul ryan has a budget. house democrats have a budget, but in the house republican budget the refused to close one single tax break for the purposes of deficit reduction. what was revenue as a percent of gdp? it was over 19 percent. over 19%. yes, as senator poor and said, it's about 80%. bust of a balanced budget was 19 percent fat and happy -- the current eat window, revenue is the percentage gdp and will be

around 18%, not where it was the last time we balance our budget despite the fact we will have tens of millions. yet the current projection is that revenue as a percent of gdp will be lower than it was last time we balance our budget in that for your time from which does not make sense from a fiscal perspective and is are we called for a balanced approach going forward. now let me just close, you know, with a little reflection of where we are. because all those items i listed that we should be doing now are good. unfortunately we have not had a

chance to vote on as things in the house. we had votes on the budget alternatives would not things like comprehensive immigration reform, not on emergency extension, not on minimum wage, not on other measures. unfortunately, i do not see a high likelihood in the near term of bus getting to move four of those issues, and i fear of the situation in the house has grown even more difficult because the signal that was sent to the house republican caucus by congressman eric cantor urged defeat was, do not even whisper about compromise on these big, national issues. do that even whisper about it or you will be called a traitor. because for all our differences -- and i am not predicting that we would have made a lot of

progress on these issues before, but at least some things like comprehensive immigration express some openness to a conversation. unfortunately the signal that was sent in that election was, do not even talk about those issues or you will be punished by right-wing talk-radio. i hope that moderate, reasonable voices can hold this conversation. at least after the november alexian because that is what the country needs. we need to tackle these issues. once we get through the political season we will be able to do that. in the meantime, the american public will have to make a decision as to the best way going forward. so thank you. [applause] >> maybe you could build stand

up here for questions. we will be able to average better presentation. let's make some news here. let me just lead off with this. am i right to understand that you both believe that there will not be a shutdown even though nbc and others have reported that the debt ceiling is coming in august or september, in your expert views will we not have a shut down by the end of the year , and will we have a resolution that, it's getting this past election? yes or no. >> yes or no. i think because the right in our budget agreement was put in place for two years very likely we won't have any kind of a government shut down. i do think that this gives us an upper tennessee. this fiscal year ends in

september. that is the timeframe. i think early next calendar year we have to deal with these issues. the obvious way is to focus on the mandatories of the budget. brian murray did that. quite frankly they took all of the low-hanging fruit and did not take on the tough issues that deal with these important unsustainable programs and we also did not do the tax reform we should be doing. we talked a lot about revenue as a percent of the economy. chris and i have a difference of opinion. the nonpartisan orbiter here, i think our revenue as% of the economy gets to record levels over the next couple of decades and above that 18 percent. crestar to about the fact we have 19 percent back in 1999, 2000, 2001. we had about 18%. we had a deficit of

1,601,000,000,000. so we can get back there. instead of talking so much about how much taxes are a burden upon the economy, percent of the economy, we should start to bark growth and progress road tax reform by lowering rates, broadening the base. it could be revenue neutral, not have an impact from a static perspective, but from the macroeconomic perspective true growth and creating more jobs, the american people would resolve with more revenue to. that is what we ought to be doing next year. fifth something that takes that first baby step toward dealing with the mandatory spending program.

>> shut down, no shutdown. >> i think cal officers crossed, but more importantly the short-term bipartisan agreement. we can afford to shut down. whether or not we come together to work out separate appropriations bills is another question, but i believe that we will avoid a shutdown. >> one more, and then we will go to questions. maybe we can go until tent after okay. the situation, you addressed to the little bit. what is the impact of that on the budget? could iraq military action bust the budget? >> it certainly could. various to budget baselines and the one that people talk about defense spending.

the current law baselines it would not bust the budget. as a real matter if we have a commitment it will cost. regardless of the baseline it could be an impact. some of these could have been avoided. it is a dangerous world out there. clearly what is going on, and it is part of a bigger issue we have to deal with a country in terms of terrorism having ambitious well beyond iraq. not having an agreement to provide for continued trading and the response to terrorism,

the government. you know, people seeing it severely executed and so on. we will learn that as it relates to afghanistan and as we continue our withdrawal, we do put in place an agreement with the new government of afghanistan to insure that we not have these kinds of security problems that could have been avoided, and we had, again, some training in ability to respond quickly with the force from some special forces presence in iraq. >> let me just quickly respond to a couple of those points, first with the status of forces agreement with iraq. i think is everyone here knows,

the government rejected the proposal. we make sure that americans have , you know, are held harmless from any actions against them, legal or otherwise he said no, and i am not sure that we should have been to his wishes in that situation. second, i urge all of you to go back and look at a great quote from dick cheney back in 1991. i am happy to provide it to you later where he is explaining why at the end of the persian gulf war when the added states went in to reject some hussein forces , why they did not then go into baghdad? criticized by some who are not taking advantage of the

situation and marching into baghdad. posed a question what kind of government we will create. how long will the last among will happen when the united states leaves? and i think he said the president made the right decision by not going into baghdad. those who followed events in that region over decades recognized that we essentially opened up a pandora's box. the idea that the united states can micromanage events in these parts of the world in my view reflects a lot of the hubris, not that we should not engage, but i am not a serial a interventionist, and i think that is the issue. with respect to afghanistan we expect the status of forces agreement.

we should be careful in how we exit afghanistan. after all, last time that the united states left that region we left after the soviets left. in that vacuum you can have chaos and the taliban and government took over and allowed al qaeda to become part of the country and, of course lost tax. with respect to the budget issue we have something called the overseas contingency fund. that is expected to come down in fiscal year 2015. the president has not yet submitted his request for the overseas contingency fund. he has talked about setting aside 5 billion for certain other purposes as he saw with respect to nato commitments.

some of our objectives there, but certainly events could have an impact on what that ultimate number is with respect to the overseas contingency. the defense appropriations bill expected on the floor of the house this week. i am sure we will have lots of debate on these issues going forward. >> questions to back or are we going? >> thank you. a longtime member of the club. a very impressive personality. pakistan. feels very proud. >> requested, please. >> the fine things that you mentioned college you please

respond to the vesicle things? would you do that please? >> i think they were not mystical. there were unethical. >> well, i have to say, i did not write them all down. number one, which is, think, the biggest issue that has stymied negotiations, at least from my perspective, has been is disagreement over whether or not as part of reducing our long term deficit we have tab have additional contributions achieved by closing tax break, eliminating or reducing some of the tax expenditures. and robin mentioned the simpson bowles framework. want to underscore the fact and urge all of you to take a look. it called for more revenue as

part of its long-term deficit reduction plan. the president's budget before the congress today. i am glad they lot of our colleagues have embraced the framework and balance was sometimes leave out the fact that simpson bowles included additional revenue generated from tax reform. tax reform, but also a proposal that generated significant revenue. >> we talked about closing loopholes today. i believe tax reform is urgent, not just necessary. i say this because when you look at the democrats in the senate, what they mean when they say closed the polls has to do with the business tax cut and taking individual parts. our corporate tax code is so

uncompetitive and inefficient that we're losing jobs and investment as we sit here. some of you saw medtronic of the weekend talking about doing two weeks ago and have already happened with other companies. simply stopped becoming a u.s. company because of a tax cut is so onerous that they can become a foreign company, and in this case they're talking about merging with the smaller company in that jurisdiction, whether ireland or the u.k. that is happening. we have seen a couple of dances, but what is also happening is u.s. companies cannot compete. competition for acquisition or, again, based upon their fiduciaries possibility of looking at whether they can compete with another company from another country, we will start losing more and more.

this is frightening. for those of you are beer drinkers in the room try to find an american beer. sam adams with a 1% market share i am happy to talk about it because i sat down and will tell you, we have got to deal with it. this notion that democrats have is going to exacerbate the problem and result in more jobs overseas and more investment overseas ifs. these very loopholes we are talking about, let's get rid of them, but in the context of overall reform you're able to lower the rate and come up with a more competitive international system consistent with our trading partners. we unfortunately are sitting on the sidelines while other countries do this. the only country that has not

reform our tax code and are suffering the consequences. the budget office says 70 to 75 percent of the benefit of the reformed code goes to the blue-collar workers. we need to be careful as we talk about this loophole and that loophole. >> just allow me briefly to respond to that. if you look at the president's budget, most of the revenue is generated not by closing the business tax bracket. most of it is the reductions of higher-income individuals. right now if you are a millionaire, through every dollar deduction you get a

35 percent benefit. whereas if you're middle-income you get 28%. the president said that hiring come individuals to a millionaire shirt hit the 28-cent benefit. the president has proposed a lie and i support the idea of corporate tax reform will be lower rates and broaden the base robb is absolutely right that at 35% or corporate tax rate is not competitive, but our e effective corporate tax rate is actually kind of average. the problem is, that creates a huge winners and losers within the united states. so we need to find a way to deal with that. i did not support all of dave kim's proposal. but at least it was a professional proposal. the people who ran the fastest

from that were the republican leaders who have not made tax reform, h.r. one, the first priority and decided to run away . so let's do tax reform and simplify the code, but in the process we have to do what the bipartisan some symbols commission did, geminate chief of general revenue to reduce long-term deficit. >> we are running out of time. one, two, three. >> jonathan nicholson. the senate last week approved legislation to deal with the veterans affairs. about 50 billion per year on paid for. the house last week did tax breaks or tax extenders' that added on top of others 360 billion on page for.

these are all things that there seems three bars up to a bipartisan agreement for. my question to you is, why should joe schmo six-pack voter who expects the deficit reduction think that either of your party says that interest given those two pieces of legislation? >> great question. jonathan, it is beyond that because, again, we are not. [inaudible] which is the way to get that. we are, you know, not paying attention to existing deficit. i appreciate this opportunity to talk about it today because most people think $500 billion, somehow we should not worry about it. of course we should. over a trillion dollars over the next decade. on the veterans issued the

understanding was that we would conference with the house and the house version of it score by the congressional budget office is a lot less. there is emergency spending. we need to figure out a way to work with the house. the congressional budget office analysis was done about one hour before the vote, which i think is a huge mistake. you need time to go through this process and look at what the analysis is. some have challenged the cbo assumptions and make, well, let's have that debate rather than rushing about so quickly. i was discouraged by that. you know, it put us in a tough situation which was unnecessary. we need to take our time and

legislate correctly. >> chris. >> let me just address. i am agree that we will have to reconcile. we were dealing with an emergency situation. it is another example of the cost of the war in iraq and the fact that it continues to impact the country because you have a huge influx of new veterans i

was the veteran service group discussion the of the day. from now on with military force we should require the president to submit a calculation of the costs to the veterans administration. .. it's a tradition at the national press club to present to our distinguished speakers and visitors this traditional

national press club mug may you use it in those late-night sessions appropriately. thank you both for coming and contributing to the success of the event. >> i have a vote so i have to run. >> i will wrap up. i don't want to take advantage of the senate violates here. so, jonathan raised the point that in the house last week, we voted on a number of measures to permanently extend business tax preferences unpaid for. and if you look at all of the bills coming out of the ways and means committee that would add over $500 billion to the deficit. the house had to wave their own rules because it made the claim house republican budget out of balance which by the way included a trillion dollars in the affordable care act to claim the balance at the same time they said we were getting rid of the affordable care act.

but even on their own terms this would have put the house republican budget way out of balance in terms of the passage of these tax breaks that were not offset as you point out and we've made the argument on the floor that this is a violation of the house rules and the house budget but to no avail. but hopefully people will come to their senses over the next couple of months. >> we are close to concluding two when we wanted. the senate increased our lifetime but thank you everybody for coming. this was an example of the kind of bipartisanship that we all hope as americans to see in the congress. so chris and sarah -- senator portman, we are adjourned.

[inaudible conversations] there's a whole swath of america that is being ignored, left behind, not included in the discussion for either party. that's called the conservative folks that are working people most of whom don't have college degrees and folks that really still understand the value of work and the importance of work and the responsibility of people that understand the importance

of family and faith and belief in freedom and limited government. so you say those are conservative republican voters and in many cases they are not and in fact a lot of them haven't voted all because they don't really see either party talking to them about the concerns they have been trying to create a opportunity for them to live the american dream. >> former pennsylvania senator and candidate rick santorum argues that working americans have been abandoned by both political parties and offers conservative answers to their problems. on transparency and the freedom of information i think my colleagues and journalism

would give a similar grade whether they are liberal or conservative. the freedom of information process has become a joke. it was already well on its way to the obama administration because obama administration perfected the stall, delay, the reduction and excuses and it's shocking because i feel very strongly that the information that they would hold and protect many times but there is no sense of that when you ask for that. they come after this as if they are a private corporation defending their trade secrets rather than understanding that what they hold is information that is gathered on our behalf. next hearing on the epa proposed carbon dioxide regulations for existing power plants. the clean power plant which puts carbon pollution from existing power plants through the state federal partnership and requires

power plants that burn fossil fuels to identify the best and cheapest way to reduce the pollution. this week the house committee heard from janet committee pa acting administrator for the air and radiation. the hearing is three hours. >> [inaudible conversations] >> i'd like to call the hearing to order this morning and today we will be discussing the proposed regulations targeting the carbon dioxide emissions

from existing power plants which has proposed on june 2. before i introduce -- before i recognize myself for an opening statement, i would like to welcome ms. mccabe. we have quite a few here from the pa. so, we welcome the interns as well as the interns from capitol hill. with that i will recognize myself for a five-minute opening statement. ms. mccabe we are delighted that you are here today. all of us view this as a significant and unprecedented regulation.

i can assure you that the congress is going to do its role and look very closely at this over 600 page regulation that would dramatically change the way that electricity is produced in america. whether it be a manufacturing plant on electric generator, consumer of electricity, whatever it might be. so we end this might be the first of many hearings on this regulation. now this proposal looks similar to the cabin trade legislation that the obama administration advocated for a long time. they attempted to pass it in 2009 and they passed the house but it wasn't successful in passing the senate. now the president as he has said

is going to act unilaterally and he's addicted to the epa to set rules and regulations that are essentially and many of us believe i in the majority belief on the committee at least they are unworkable and will not even have an impact on our future missions of greenhouse gases that are a fact of global senators. former epa administrator lisa jackson confirmed this when she testified before this committee we will not ultimately be able to change the amount of co2 that is accumulating in the atmosphere alone. and then the epa administrator gina mccarthy sent to the views of the administration when she testified before the subcommittee saying that the epa does not measure whether it's regulations and the tens of billions of dollars sent by the administration will actually affect future climate change. it is simply part of him overall

strategy to demonstrate the global leadership. these actions appear to be removing coal as an energy source in america and promoting president obama's leadership perception of the international community. this proposal raises serious policy and legal questions. over 111 before. instead of the states establishing a performance standards for the units within the source categories that epa is now dictating to the states the level of the mission reductions each state must make statewide rather than individual units. in essence they are requiring

the states all through the way in which electricity utility systems make our. and in our experience with oversight of this agency, the proposed rule rarely changes significantly before it is finalized. so, we are talking about a proposed rule that was just introduced a few several weeks ago. but our experience is that even after the comment period dot cool really becomes final. now the original clean air act respected the appropriate role for the state and local governments. in fact the statute begins with the finding that air pollution prevention is the primary response ability of state and local governments. this policy is also reflected in the language of section 111 d. which has been used previously by the epa in a very limited in a very deferential manner. but with this proposed rule as i said earlier, the epa appears to

be testing aside all inexpensively interpreting its authority under this section as a justification to force the states to redesign their electricity generating systems even though two previous epa administrators have said that it will not have any impact on global warming. so is this a power grab? it seems to demonstrate once again that this administration is getting the reputation that we hear repeatedly of being a unilateralist but the president will decide what is best for america. as he did when they went to the copenhagen conference in 2009 and unilaterally committed america t to certain emissions without discussing with congress about discussing it with job creators. so we welcome this opportunity

to talk to you in depth about the proposal and thank you aga again. >> thank you mr. chairman. june 2 the administrator released the central piece of the climate action plan carbon pollution limits on power plants. in the time historians identify this as the moment america got serious about tackling climate change. we know that carbon pollution for fossil fuels is accumulating in the atmosphere trapping more heat and warming the climate that. we are experiencing the result all around us in every part of the country. we also know that power plants are the largest source of carbon pollution. yet today, there are no limits

at all in the amount of carbon pollution that they can emit. the good news is that there are many cost-effective ways of reducing the pollution as the proposed rule demonstrates the power plants can operate more efficiently. production can shift from the oldest coal-fired plants to the modern natural gas plants. retirements of nuclear power plants can be postponed. investments can be made in clean and renewable energy and we can all contribute by becoming more energy efficient. the path outlined in the proposal is the path to clean air, better health it for climate over economy. if we make these investments in cleaner energy the united states can be the world leader in the industry of the future.

that's not just a perception. that could be a reality. you will never know that from the house republicans. they are using the same scare tactics that the opponents of clean air have always used. the industry and house republicans have a credibility problem. we talk about the economics of the clean air act. i've been in congress for almost 40 years and for 40 years the industry has made doomsday claims. they drive the prices skyward and triple the economic growth and they have been wrong every time. this morning i released a fact sheet that documents some of these inaccurate claims. i ask that this be made a part of the record.

the electric utilities offer the cost of the acid rain controls for the cap and trade program that we adopted. they have a thousand to $1,500 per ton. actual prices were less than $150. ford motor company testified that, quote, we just do not have the technology to comply. not even with technology on the horizon. they met the vehicles that meet the new standards in just three years. dupont testified provisions detect the ozone layer would cause severe economic and social disruption.

while the mobil corp. predicted that the requirements for the reformulated gasoline would cause major supply disruptions. while these predictions never happened. today house republicans claim that the clean power plants will cause a surge of electricity bills and end call use in america. this is just the same old scare tactic. we heard that it's not enough to deal with the climate change problem. it's not in and of itself. but you don't take a step in that direction because you have to take oversteps yet. we have the air pollution reduction in the state and local level three that's the way the clean air act has always worked. under the epa rules. the clean power plan is an eminently reasonable and

achievable. it gives the states the flexibility to choose how to reduce the reductions. the goals are state specific and cost effective. the polls show the public supports proposal by large majorities. it's time for the committee to stop its partisan obstruction. if my republican colleagues have a better idea for protecting our planet for our children and grandchildren, they should speak up. that's just saying no, shortchanging american ingenuity and condemning the next generation to a world record by heat waves, droughts, wildfires and extreme storms is not an option. if you have another idea, let's hear it. while what we hear from republicans is there's no problem, not enough to solve it, we shouldn't do anything at all and that's why i'm supporting the president's plan. >> the time is expired and i might respectfully say to the gentleman we did present what we

viewed as a better plan. they passed the house of representatives with a large margin of 501(c)4 at mr. tran could use to be that claim simply set the epa may not act. >> they said they could set the standard of existing plans that the congress would set the effective date and also set a standard for the new coal-fired plants. but anyway, we did submit a proposal that is awaiting in the u.s. senate for action now. >> did you think that will solve the problem of the greenhouse gases? >> you said we are not submitting a proposal. that was one of the proposals. by the way about our energy emissions are the lowest today that they have been in 20 years. i'm going to recognize mr. bartlett of texas and if he

doesn't utilize all of his time and he wants to deal to someone else, that would be very 501(c)4 it is the chairman noted there are other members on this side that would like time? do you want anytime, mr. shimkus? i recognize mr. barton for five minutes. >> thank you. mr. chairman, members of the committee, witness and folks of the audience. one could argue that the audacity of the proposal was so breathtaking that in and of itself is a whole hazard because it literally takes my breath away that's what they've proposed. in the case of my state of texas, texas were to implement this in its entirety between 2012 to 2030, we would have to reduce the co2 emissions by 41%. 41%. we would also, in terms of the

national total have to reduce the co2 emissions -- co2 emissions would be 25% of the national total. >> in one state. >> i understand it is unique because we are still creating jobs in our state. we still have a conflict with growing. in fact i'm over half of the new jobs created in the country in the last ten years have been created in texas. most people think that is a good thing. but apparently the obama administration thinks that is a bad way. so, it is punitive in its nature. as the chairman whitfield has pointed out, there are no health claims. this is the number one goal of the clean air act. there is no net environmental benefit if we were to be a global warming believer, which i am not this doesn't allege that there are any net benefit to

changing global warming. what it is is an exercise in political arrogance that the epa has the power. i believe that is a datable under the clean air act. all of these power plants that are currently in operation and regulated under section 112 of the clean air act. this claims that we cannot regulated the same power plants that are already regulated under section 111 d.. that is a questionable legal standing. and i believe that the courts will overturn this proposed regulation if it comes to ba tht on that basis alone. my good friend from california in his opening statement referred to carbon pollution. well actually what we are regulating his co2 carbon dioxide which i am creating as i

speak and which every person in this room is creating as you breathe in and out. i don't believe everybody that is alive and breathing is a mobile source polluter. that may be the chance of the obama administration but it's not my stance. the calling is to be pollution doesn't make it so i could call him a conservative but that wouldn't make me a liberal. we need to seriously review this proposal. and i guess the subcommittee does and if necessary the full committee does, we will come to the conclusion that this is more of a political proposal then it is an environmental proposal. and again, i pointed out that texas has to reduce its

emissions by the baseline of 2012 by 41%. louisiana, 50 50%, florida, 28%, arizona, 45% in oklahoma 40% of illinois 20%, new york, 49%. alabama, 24%, arkansas 46%. what is glaring about this list and that is the top ten states the state with the greatest population date with the largest environmental problems at least in the los angeles basin the golden gate state of california is not even on the top ten list and they are the number one state in terms of population. i could go on and on but i've only got seconds. i voted for the clean air act

amendments in the early '90s. this proposal does not comport with my understanding of what the clean air act amendments were when we passed them in this committee over 20 years ago. and with that i would yield back to the chair. i want to thank you mr. chairman for this important hearing on the epa clean power rule. as a part of the climate action plan to cut carbon pollution and help mitigate the investment and the effect of climate change this would allow them to use the existing authority under the clean air act to control from the existing fossil fuel fired power plants. now i'm going to say this rule

could not be more timely. as these power plants account for the largest source of greenhouse gases from the stationary sources in this country in the greenhouse gas is emission with no current federal amendment when their emissions of the carbon pollution. this new proposal seeks to cut emissions by 30% compared with an 2005 levels not 2030 and the flexibility when implementing new rules based on their existing infrastructure polici policies. why do we hear from some industry groups and opponents of any type of regulation the rules

are being costly and overburdened some into the office of management contradicts that claim from the annual reports to the congress we know that's more than 34 major epa rules issued between 2003 to 2013 the benefits of greatly exceeded the cost. in fact mr. chairman, there were two rooms issued under the george w. bush administration. the clean air act interstate rule of 2005 coming up in the partial rule issued in 2007. that goes about the highest estimated benefits.

it's the american livelihood of the people. in the wildfire in the west to calling the costly. the epa administrators have served under president nixon and ronald reagan and george h. w. all claim that the agency's climate change rules in the senate hearing. as russia will you push's first

christine todd whitman told the subcommittee the issue has been settled. the epa does have the authority. the law says so. the supreme court has said so twice. that should be put to rest mr. chairman. the american people extend their leadership to address this serious threat not only to our environment, but to our national security. the science settles on this matter telling the same panel

just on yesterday we know the job site. we know that i'm contributing to more than 1.5 degrees there might end its editors cut end of quote. the congressman refuses to address listening to the american people's demand to come and then at the very least we should allow them to instigate to the lewis rule and to the j job. until this issue i look forward to hearing from our witness and i yield back. >> the time is expired at this time i'm going to recognize ms. mccabe to give her five minutes to get her views on this issue. and as i said in the beginning,

we do look forward to the opportunity to ask your questions. so you are recognized for five minutes. >> thank you chairman, ranging member of the subcommittee, thank you for the opportunity to testify today on the eta recently issued clean power plant proposal. climate change is one of the greatest challenges of our time. already threatens human wealth and welfare and economic well-being. and if left unchecked it will have to does dating impacts on the night of the state and on the planet. the risks are clear and the high cost of inaction are clear. we must act. that's why president obama laid out a climate action plan and body on june 2 the administrators find the proposed clean power plant to cut the carbon pollution and building more resilient nation and lead

the world in our global climate site. they are the largest source of the carbon dioxide emissions in the united states accounting for roughly one third of all of the domestic greenhouse gas emission. while the united states has limits in place for the level of arsenic, mercury, sulfur dioxide, nitrogen oxide and particle pollution that power plants can emit committee are currently no national limits on the carbon pollution levels. the epa's proposed clean up our plan will cut hundreds of millions of tons of carbon pollution on the hundreds of tons of air pollutants from existing power plants. these have the most vulnerable citizens. there are thousands of people about the actions they are already taken to reduce the carbon emissions.

this does two things. first it uses the national framework to set achievable state specific goals to cut carbon pollution per hour generated. second and covers the states to chart their own customized path to meet their goals. we know that coal and natural gas play a significant role in the diverse natural energy mix. this plan doesn't change that. it's built on action already underway to modernize the aging plants can increase efficiency and lower the pollution. and to pave the more certain path for the conventional fuel in the clean energy economy. the epa's the clutter outreach and public engagement in preparation for this rule was unprecedented. starting last summer, we held it wasn't public listening sessions around the country. we participated in hundreds of meetings with a broad range of stakeholders across the country. and we talked with every single state. now, the second phase of our public engagement has begun. you've already had dozens of

calls through the states and other stakeholders and the more for all public process to move to the public comment period and the public hearings will provide further opportunities for the stakeholders and the general public to provide input. these are not mere words. this is a proposal and we want and need input from the public. that is how they get their feedback. it is the sensible opportunity for the states and the businesses that are taking advantage of right now. they consider the jobs in the communities and conditioning energy world. when the move is final until the compliance with the final target to consider and make the right investments and the reliability

and ensure the assets. our plan doesn't just give more options, it gives entrepreneurs and investors more options by unleashing the market forces that drive innovation and investment in cleaner power and low carbon technologies. all told in 2030. 730 metric tons of carbon dioxide out of the air cuts the conditiocutcondition that causel by 25%. the first year the standards go into effect we will avoid up to 100,000 asthma attacks and 2100 heart attacks in the numbers go up from there. in the small productions are limiting for every dollar that we invested will save $7 health benefits. because energy efficiency is such a smart and cost effective

strategy, we predict that in 2030 the average electricity bills for american families will be 8% cheaper. president obama's climate action plan provides a roadmap for the federal action meet the pressing challenge for the climate they capitalize on american innovation and drive economic growth and providing the role for the range of fuel including the coal and natural gas. the proposals at targets in a reasonable schedule that can be achieved by every state using measures they choose themselves to suit their own needs. the epa looks forward to the discussion of the proposal over the next several months, and i look forward to your questions. thank you. >> ms. mccabe, thank you so much and i neglected to mention that she is the acting assistant administrator for the epa. and so, we do appreciate you being here. at this time i would like to recognize myself for five minute of questions and i've noticed

that sometimes when we have our questions here we sometimes make statements. statements. succumb i probably do a little bit of both. first thing i want to do, i want to read a statement by a former ip cc coordinating lead article coordinator. his name is doctor steven snyder. of course that's the international climate on plan -- international panel on climate change. doctor snyder made this statement. he said on the one hand as scientists, we are ethically bound to the scientific method. and in effect promising to tell the truth. which means we must include all the doubts and caveats, if sandbox. on the other hand, we are human beings, and we want a better world. and to do that, we must have media support.

do not stop the scientific. then he said we decide what must be done to be most effective in getting our message out. it's our response ability to raise doubts about these kind of regulations. others have said we have to make some dramatic to put political pressure on the political leaders others have said we use the worst-case model scenario as i said in the beginning our response ability is to try to focus and see what is going on here. and so, the first question i would like to ask you this morning and i touched on i it in

my opening statement. the epa carbon dioxide power plants are being pursued under section 111 d., and it's my understanding that the wall issued regulations under that section on five occasions. now, section 111 has traditionally focused and in fact in those five times its always focus on the mission standards for specific sources. specific units. and it has never been attempted to do it in a statewide way. and that's what your recent proposal does it sets a standard that can be achieved only statewide. what precedent under section 111 is there for this type of standard setting which has never been done before. the first one is the clean air

mercury in 2005 which addresses this sector. and that took an approach that allowed the utilities to trade among themselves, to reduce the emissions. but the fact is that what we have done in this rule is we have completely within the four corners of 111 d. which directs us to identify the best system of the emission reduction that has been adequately demonstrated for the particular sector that we are looking at. and in the case of the power sector, it was a fully integrated system that encompasses the kinds of technologies that we included in the rule, and we know that because that is what we have heard from the states and utilities. these are the things that are already doing in the carbon from the fossil power plant. for the first time you basically are directing the states on setting up the renewable

mandates. you are setting up the efficiency of the coal plant and you are determining the natural gas capacity. what percentage of the capacity must be run. you are setting up consumer demand. you are going further than you have ever done before. in my opinion. >> we are not actually setting up any mandates -- >> that you said this in the regulation. >> that they are not mandates. the states have flexibility -- spinnaker don't they have to meet those for standards? >> they don't have to meet those for standard -- >> they have to meet your target though. >> they have to meet the overall target intensity target. they get there however they choose -- >> we will explore more of you may have 15 seconds left and i want to ask one other question. one of the concerns we have -- this relates to the new powerplant rule -- we can't build a new plan in america if the technology isn't fair that commercially makes it feasible. the kemper plant in mississippi

has 55 billion-dollar cost overrun. in europe they are closing down natural gas plants. they are mothballing them because the natural gas prices are so high coming out of russia. so they are building the new plants and last year they imported 54% of the coal exports. succumb to have the flexibility of the gas prices go up to build the new plant. we don't have that flexibility. do you think that that is fair to the american people? >> i actually disagree respectfully, mr. attorney in. we think that the new plants can be built under the new rule, and they are going forward. >> at this time i would like to recognize the gentleman from illinois for his five-minute opening statement. >> thank you mr. chairman. i want to commend you, ms. mccabe, i want to commend the epa and your colleagues for the way that you have approached this proposal.

i think that you have been exceedingly open during this process of creating this proposal, and from what i hear today this process has not concluded that there would be more and more opportunities for the states and the stakeholders to add their voices and look at this proposal. in the commentary on this proposal and you've already reached out as was suggested in that matter and in a feedback. i am from the midwest. and we get a lot of our electricity from coal. we have our higher climate and

starting out of the gate but that also means that we have more opportunities for the cost-effective reductions. and i want you if you explain to me and to others in more detail how you develop the state goals particularly for the midwest and have a different situations in different states are reflected in the individual's stage roles. >> that is a very good question, congressman rush and one that we have been getting from a lot of people and it really goes back to the fundamental approach that we took in this rule which is to take every state from where it started. one of the loudest things that we heard from the states was pleased to don't do a one-size-fits-all every plants across the country has to meet a certain emission limits. give us flexibility and recognize that states are in different places in terms of their energy mix into the age of

the plants and all that sort of thing. so, that is the approach that we took. we looked across the whole country at the power sector and we looked at the things that people were already doing. and there are many things that can be done to reduce the carbon from the existing fleet, but we found for that were the most prominent and promising we thought to satisfy the standard of the best system of emission reduction. let's have the coal and gas plants he is absolutely efficient as they can be so that we get every electron as many electron is possible for every ton of coal that is burned. we found that a lot of efficiency improvement are being made across the country. we then looked at both the states anstateand utilities areo reduce their carbon intensity. they are using the gas plants more than the coal plant.

the states all across the country are looking at increasing the amount of energy to get from renewable sources from zero carbon emitting sources and that is a very positive trend being pursued by a lot of people so that was the third element and forth was the great interest across the country in almost every state to intervene energy efficiency. we know that there's many ways to waste less energy. in all of these things are important in order to bring the carbon down as well as other pollutants. succumb and we came up with a national framework that sent the reasonable and moderate expectation for each of those four, recognizing that those were not the only things that the states could do. and we then looked at every state and we took the most recent information that we had from the power sector which was 2012. and we apply to those for

building blocks that we call them to each state. these are things that we think are very reasonable to achieve. >> in this rule the thing that was the most important on their mind is that electricity. my friends on the other side here have been engaging in a lot of peer mongering about the cost of electricity increasing the constituents come and my question to you is how is the clean power plant affect the electricity bills.

it would be in charge of designing its own plan. the epa at this moment can't predict exactly what every state is going to do. we did do some illustrative examples of what the states might do, and so in our regulatory impact assessment, we do include those numbers and we do show that with a significant increase in energy efficiency that would be implemented as a result of the re that electricity bills in 2030 we predict will go down because electricity bills because people will be using less energy. we also show that the price of electricity will go up a little bit come of that overall the bills will come down. i also just want to know that low income families are most at

risk in the adverse effects of carbon pollution and climate change and can greatly and will greatly benefit fro from the old benefits that will be achieved by this bill. >> the gentleman's time is expired. this time i recognize the chairman of the full committee mr. upton of michigan for five minutes. >> thank you mr. chairman. >> a number of us are concerned with this proposed rule. the epa agency with no energy policy authority or expertise under the questionable statute is now placed itself under the state government and public utility commissions on the electric generation issues not to mention the doe or other related agencies. the dc circuit ruled absent and i quote to the grant of jurisdiction "-end-double-quote. the federal government cannot regulate areas of electricity (-left-paren federal power act to the states.

what the epa calls flexibility of the proposed changing dispatch rules mandating efficiencies. the distribution matters explicitly reserved by the federal power act for the states. so, where do you see specifically the specific grand jurisdictions on the interstate electricity matters where is the site you can refer to. >> this isn't an energy plan thithis as a rule that within te four corners of 111 d. that looks to the mission reduction to reduce emissions and no state is required to enter into any particular agreement or take interstate efforts.

neither the doe nor ferc can determine how they operate their energy systems. succumb if they can't do it, what authority does the epa have to mandate that the states actually restructure their electric systems to the federal oversight and control? >> that isn't what the rule does. the rule is that falluja and control as the epa has traditionally done under section 111. >> we have been talking to many agencies, state and federal level that it is state government as they always are and with respect to 111 d. plans that will be responsible for

putting these plans together. >> succumb is the look of the epa budget and this year yet epa took a reduction in their appropriation level integrated on the amount in a bipartisan way firm the cr does past 6-1 last january. the identified more funding or personnel that is good to be required at the federal level to conduct this review and oversight? were just in the plants? >> these are state plans. the states will put them together. and the epa will act in a traditional role with respect to state air quality planning. >> but you've still got the hammer to go after them. so this is going to be a new focus engaged in that? we think that folks want to take a leadership role on this. >> but what if they don't. i heard the west virginia

governor saying that every utility in his state would be closed. every coal-fired facility in his state was going to be closed. >> again, i think that the states are going to want to be in the lead. spec i think i know where they want to be. [laughter] >> i also would suggest that our plan certainly does not require that all coal plants be closed in that state or any state. >> well, i will leave that for mr. mckinley to ask. i yield back. >> the gentleman yield. at this time, i would like to recognize the gentleman from california mr. waxman for five minutes. >> doesn't epa come under the clean air act standards that states have to meet, which affect their energy resources within that state? >> to the extent that it addresses pollution emissions, yes.

>> so this is not unprecedented? >> it is not. >> i understand the epa asking the stakeholders for input. did the states ask for greater flexibility, or did they argue that the epa should just tell them what to do? >> they were very strenuously arguing for a greater flexibility, and infected the ability to use some of the very tools that we have outlined in our proposal. >> you indicated that there are a number of ways that the states can meet the objective of reducing the carbon pollution coming from the power plants. and it's up to the states to define how to do it, that they have to achieve that goal. this isn't mandated from washington how to compost the goal. it sounds to me like a mandate from washington to achieve the goal. >> that's correct.

>> is about the way the clean air act has always worked since 1970? >> with respect to 111 d. and some elements of the act, that is exactly right. >> the arguments i hear from the other side is one that i don't believe the science that has anything to do with the three, this isn't good enough because it doesn't achieve the goal. number four, it tells the states what to do. it seems like every one of those points is incorrect. and then they come up with an argument that and how this will have a bad impact on the economy. did you look at whether this would have a negative impact on the economy were do you have people that make the claim it's going to help the economy? >> we looked at the expected impacts on the power sector, and we also looked at and heard from a lot of states that are moving forward aggressively with some

of the measures that we outlined in the proposal. and indeed, those states are enjoying job growth and additional investments in innovative strategies and in the creation of jobs and in person and have things like energy efficiency. >> i would ask that we put in the record a paper that we draft of all of the quotes over the last 40 years of the industries who said they couldn't achieve what the epa was asking them to achieve under the law passed by congress on a bipartisan basis. they said they couldn't achieve it without closing down their businesses or suffering dire economic consequences. we hear exaggerated claims about the cost and job losses coming in even the inherited electric reliability. these are doomsday claims. we've heard them before. and in the paper we put out, we showed how these claims were

made and how interactive they were. let us look at the history of the advances made under the clean air act to give us some guidance as to whether we have to choose between clean air or a strong economy. >> we don't have to make that case between the clean air and a strong economy. i think as you've illustrated history of the clean air act shows that we do not. the air has gotten cleaner into the economy has grown and the united states has been a global leader in pollution control technology and the energy efficiency investments. and we expect that continuing with this program as well. >> we heard a claim on the other side of the aisle that the cpa proposed rule would have no impact on tougher accounts. can you give us your view of that? >> we disagree with that. in fact, as i noted, the rule will result in a 25% reduction.

and smog pollutants as well as 31% reduction in carbon pollutants. all of these issues affect public health and reducing those emissions and taking them out of the air will improve public health. >> so this isn't just to deal with the global problem of the a warming planet at least in the climate change it would have an impact on the health of people near some of these power plants? >> that's right, those are important co. benefits of the rule. >> i complement you on the rule. i think it makes a lot of sense and it gives a lot of flexibility and achieve the goals and it encourages entrepreneurship to develop the industry technology that will make us the leader in the world to accomplish these goals. at this time i recognize the gentleman from illinois for five minutes.

>> i'm sorry. he was actually on the list first. >> mr. shimkus is recognized for -- it's. >> i'm glad mr. waxman is here because he and many of our friends on the other side have seen this poster before. these are the real live job losses in a unique last clean air act. kincaid illinois i invite you all to come back. 1200 miners lost their job and a flexible system controlled by the state. states made the decision. the mine closed, 1200 miners. so those of us talk about the debate, we are trying to save the coal miner jobs in this country. and the president promised to make electricity generation by coal so expensive that he would drive that out of our market. the sentences go comical was well documented.

he's just following up on his promise. so, those of us in coal regions of this country are under attack coming and we have to deal with this. with our constituency into this debate. so that's wha where there's a lf emotion as you can imagine. also part of my portfolio here is the nuclear portfolio, the nuclear side. side. and so, there are some curious things about this rule that begs and that creates a problem based upon state that have cleanburning nuclear power or generators that have shut down but still have a standard by which now they cannot meet because we are incentivizing the closing of the nuclear power, which we are in the clean air climate change, we should be incentivized. what wwe give you an example. 2013, premature reactors to close. one