deleveraging. and he projected -- i guess he has sold more bonds than anybody in the history of the world. he says that families have to take more money than they used to control their debt, pay down their debt. the governments absorb huge amounts of debt which have got to be reduced, leaving less money to be spending the economy for consumption. would you agree that the deleveraging process is going to take many years, and do you have an opinion? and will that deleveraging process mean whatever the growth rate would be, it would be somewhat lower? >> yes, senator. we think that the deleveraging process is holding down consumer spending now. and that is part of why the recovery is proceeding slowly. how long it will go on for is very difficult for us to know. we have a project under way trying to examine the causes of the slow economic recovery. we're doing that partly just to

inform you, but partly to inform ourselves so our future economic forecasts will benefit from a better understanding of just what has been going on in the past few years. it's different. to know. as i mentioned to senator ayotte, if you look at cross-countries that have experienced financial crises, they tend to have very slow recoveries. but they differ a lot in what happens. they differ partly because of government policies and partly because of underlying nick conditions. we're trying to extract lessons from that, but it's a challenge. >> well, i'm worried about it. the europeans seem to have decided and entered a compact recently that they were going to bring down their spending and their debt. and i'm afraid that's correct, because a solution to this unacceptable high debt that we've been given from the president is borrow more and spend more so the economy won't get weaker.

so, you know, just for common sense, i think that's a dangerous policy. the europeans i don't think are following that. on the defense situation, i missed yesterday, mr. chairman, because they had a defense department major briefing to the armed services committee of which i'm a member over their projections and their presuming to cut about $489 billion. and that savings is what they're working on. and the president sort of indicated in his state of the union indirectly that that may be all. that's all they're planning to cut. but if the sequester occurs, that's almost enough $500 billion. the way we calculate it, mr. elmendorf, if i'm off, or if you can give an opinion, i appreciate it. the way we calculate it in real over ten years in the defense department under the sequester

in nominal dollars would get 2% more money. but in an inflation-adjusted real dollars, it would amount to about a 20% cut. whereas the remaining 5, 6 of the government over that same period of time with inflation-adjusted dollars would achieve a 50% increase. does that sound correct to you? >> i don't know the precise numbers, senator. as you know, the budget control act exempted social security, medicaid from the sequester, some of the programs limited the sequesterer ability for medicare. our estimates are that defense spending would come in about 10 over the decade about 10% -- under the sequester, relative to what would have been our traditional baseline projection of spending growing with inflation, i think the gap between that traditional projection and the effects of

the sequester is about 10% in terms of defense spending over the coming decade. >> it's possible we were using the president's budget for defense, and you're using a baseline number. i don't know. >> that is a complication concerning these costs. we show this in table 35 in these reports. >> if you do that, you probably would show even greater growth. i don't know what you would show in the other programs. but i guess i'm -- medicare and social security today represent about 48% of the total budget. that right? >> i'm not sure. it's a very large share. that sounds about right. >> the reason we say that, mr. chairman, we've been saying 60%. and of course that share is growing. but there are other entitlements. there are pension plans. the largest growing entitlement and the fastest is food stamps,

which is an entitlement program that has gone from 20 to $80 billion in ten years. that's the fourth largest entitlement program. some of the pell grants are entitlement programs. so you put all the entitlements together, it's about -- close to 60%. and i guess from that, you would say, would you not, to get this country on a sound fiscal path, we would need to address the entitlement programs? >> i think the combination of past policies regarding entitlements and taxes are not sustainable in combination in the future, particularly because as i emphasized earlier the ageing of the population and the rising cost for health care are ballooning the costs of certain federal programs. >> not only are we having like medical costs going up for medicare, but more people are coming on the program, demanding their benefit. >> and that latter factor is actually especially important

over the coming decade there will be a 1/3 increase in the number of social security beneficiaries, medicare beneficiaries over the coming decade. >> that's not a projection? >> to be precise. but they're out there. >> they're alive. >> i guess i would conclude that the matter is i do think that the chairman and others who have said it are correct, we'll have to address entitlements and discretionary spending. defense is the only area that has taken substantial cuts at this point. and it cannot sustain in my opinion the full sequester. we're going to have to revisit that without giving up on the reductions in spending that the sequester called for. and i would say i do express disappointment that in the state of the union address, the president talked not at all about those huge issues facing our country. i went over. thank you.

>> thank you, director elmendorf. thanks to all of the colleagues for participating in an excellent hearing. we've got more hearing next week. i hope colleagues will come and participate. we've got a lot of discussion that needs to occur in this committee to see if we can't find a way to come together. again, i thank the director. the committee stands in adjournment. >> thank you, mr. chairman.

>> in a few moments, a house senate conference committee continues negotiations on extending a payroll tax cut and unemployment benefits. in a little less than two hours, the senate budget committee hears about how the financial crisis in europe may affect the u.s. >> c-span's road to the white

house political coverage takes you to the events. >> my leadership cut taxes 19 times and cast over 800 vetoes. we balanced the budget every single year, and we kept our schools first in the nation. my leadership will end the obama era and begin a new era of american prosperity. [ cheering ] >> there is a mess up in washington. they've created a mess. they have given us a lousy foreign policy. they've given us a lousy budget, and they've given us a lousy recession. but where the wonderful thing is happening is in the grassroots. people are beginning to realize that the problem is too much government. we need more personal liberty. [ cheering ] >> and if you are prepared to do what it takes to make sure that we change direction, not just the presidency, but the congress, the bureaucracy, the judges, the policies so that the entire system gets on the right track, so that america can give our children and grandchildren a

more prosperous, a safer and a better future, this is how big the gap is. >> and follow the candidates as they meet with voters. >> oh, wonderful. nice to see you. >> yeah. thank you. thank you so much. make sure that jose know house to find you. all right. thank you. >> take a picture of you, yeah, go ahead. >> use our website to view recent video from the campaign trail, and to read the latest potions from the candidates, political reporters and other viewers from social media sites at c-span.org/campaign2012. a house senate conference committee continued negotiations thursday on extending a payroll tax cut and unemployment benefits. part of the discussion included family aid and environmental regulations. this is a little less than two hours.

>> the meet willing come to order. good morning to everyone. and i want to start by saying thank you to everyone for a really good discussion yesterday. and hopefully we can continue to build on that this morning. for today's purposes, however, there are other issues that we have yet to discuss. and i do want to acknowledge that last night we did receive some proposals from senator bachus. and i know we'll get to those in a few minutes. but for today's purpose, i want to talk about the agenda we have, which includes reforms to the extension of the nation's primary welfare program, tanif, or assistance for needily families. regulatory relief, also known as boiler mack, a provision in the house bill that assures unfounded federal regulations are not harming our economy and costing families their jobs, and bonus deappreciation, another

jobs provision in the house bill that promotes investment and hiring. i believe there will be broad agreement on tanif. so we allotted about 30 minutes of time for discussion there. there will be 45 of discussion on boiler mact and 45 on bonus deappreciation. we'll follow the same orders yesterday. senate democrats followed by senate republicans followed by house democrats and house republicans. so with that i would like to open up our first topic, the difference on the senate and house bill on extending tanif benefits. this is a house policy i think we can come to fast agreement on. last night the house overwhelmingly passed legislation that would implement some of these reforms, with 395 house members voting yes, including all of the house conferees on this conference. so with that i will turn the floor to senator bachus for any comments, and to begin the discussion today.

>> thank you, chairman camp. i think you pretty much summarized it. senator hatch and have i been working on tanif authorization and to some changes that are to be made to the program. but that's for another day. here i think it makes sense to extendtanif for another year. we do not have tanif in our bill, and made a minor changes which i think are acceptable. and i urge just to accept that. accept the changing and extend for a year. it's deficit neutral. it doesn't cost taxpayers anything. and it's pretty much a no-brainer to me at this point.

i think the senator was going to say a few words, excuse me, senator casey. >> thank you, senator baucus, mr. chairman. mr. chairman, you started this morning by reading what the words say, which is important. it is temporary. it's assistance to needy families. and i think it's really about two issues, really. one is trying to achieve self-sufficient efficiency in the lives of people who have really struggled, and also getting back to work, which is vital. i think that's why we're getting the kind of consensus we are. in program is a lifeline for families that have be so devastated, especially in the aftermath of this recession. and i know there are a lot of reforms that the committees of jurisdiction can deal with and

should deal with. but i also believe that getting an agreement right now to extend this is very important. just this fall, the joint economic committee, the democratic staff put together a report entitled "assessing the impact of the great recession on income and poverty across the states." obviously it outline and highlighted the poverty increases for all americans. but i thought it was unfortunately emblematic to highlight just one or two of the points. one of the summaries in the report itself talked about children living in poverty. and here is the conclusion. the percentage of children living in poverty increased in 42 states. and that was measuring starting in 2007. so this is really about families that lead lives of struggle and

real pain. and i think it's important that we recognize that. i also think it's important that as we focus on the needs of this population of folks out there that are still struggling, that we come together in a bipartisan way to extend this. so i'm happy to be part of this effort on this conference committee to extend temporary assistance for needy families, especially as it relates to children who have suffered so terribly in this recession. thank you, mr. chairman. >> thank you, bob. you want to say anything? we may have a word to say later, mr. chairman. >> we have quite a bit of time left. i'll recognize now mr. levin. >> thank you. by the way, congressman van hollen is at a budget committee

hearing, so he decided to stay there for a bit. i told him i thought he was using wise judgment, because the importance of that, and he'll be here as soon as possible. we need to extend this program to pick up senator casey with your comments. the last year we have the data for, 2010, only one in five poor children were receiving tanf assistance. one in fife. and that's the lowest level since 1965. i think it also should be mentioned that despite the depth of the recession, and these are the figures that i have, that since the summer of 2008, the tanf caseload has increased only

rather lightly from 2008 july through 2011 june, the tanf caseload increased 15%, roughly 250,000 families. and this is at a time, as i said, of exceptionally high unemployment. and we're now trying to gather the figures. we don't have them. as to how many people have exhausted their unemployment insurance. but it's far larger a number than those who have become part of the tanf program. so this i think underlines the absolute importance of continuing the unemployment insurance program in this country.

and that's why we very much voted against and criticized the house republican bill on ui which would eliminate 40 weeks of unemployment insurance and would lead to almost three million people losing benefits compared to the extension of the present program, almost three million. so tanf is an important program. it hasn't been the safety net or the subsist assistance base for hundreds and hundreds of thousands of people who have been laid off through no fault of their own, who are looking for work and can't find it. and so as we extend the tanf

program, we need to realize that it is not the program accessible to the vast, vast majority of the unemployed. they're not eligible. and they need to look elsewhere. and the only place as they look for jobs that they can look to is the unemployment insurance program of this country. i think that's a sobering fact. so let me mention a second point. and it relates to the supplemental grant program. in '96 during the welfare reform debate, congress decided and i think wisely to establish what was called a supplemental program, to provide some additional funding to states in

two categories. one was those states with very low benefits. and so some additional assistance was provided. and secondly, to states which had a very high rate of growth between 90 and 94. it was one of the only conference committees i've been on. none of us here have been on very many. there haven't been very many. i remember it somewhat. we had by the way subgroups that work through these issues with some effectiveness. there were some issues that were left unresolved, which some of us were unhappy about. but part of the discussion related to this supplemental program. and that program has been continued. and it provides assistance to 17

states. and let me just read them off. alabama, alaska, arizona, arkansas, colorado, florida, georgia, idaho, louisiana, mississippi, montana, nevada, new mexico, north carolina, tennessee, texas, and utah. essentially, what those of us from states which had higher tanf benefits said to ourselves was that poor kids are a matter of concern no matter what state you represent. and that there had to be some provision for states with very, very low levels of assistance, that the kids did not go hungry.

that program has been continued until july -- mid 2011. and so as we look at this tanf program and the extension, i think it would be wise to discuss whether the supplemental program should be continued that assists kids in these states who would receive i think a very inadequate assistance through the tanf program. thank you, mr. chairman. >> thank you. i'll just take a few minutes and say that i appreciate the consensus i've heard around the table this morning about extending the tanf program. i think we're finding an area of common agreement here. i do want to point out that i

believe that the supplemental grants that my friend from michigan mention ready outside of the scope of the conference. they were in neither the house or the senate bill. and i do want to point out that those programs democratic majorities passed, and president obama signed legislation in december to terminate the supplemental grants. to bring those into this conference, which would include additional spending given that we have yet to address the funding of the issues that are before the conference i think would be ill advised. but again, i think we have brought agreement on the concept of extending tanf. obviously the data standardization has been -- it's identical to other legislation that has moved through the congress. this is something that bipartisan support has existed

for making sure that we get accurate information as it affects children and families. this legislation will do that. this will extend that safety net, that important safety net that was created in the 1996 welfare reform legislation. so with that, senator baucus, the time is yours. >> thank you, mr. chairman. these are interesting microphones. it's true they're light to touch. it's also true the red light is the dimmest red light i've ever seen in my life. you have to really look at it. i appreciate the comments congressman levin, mr. chairman. i think we should look at supplemental grants. it's true seccally outside the scope of the conference. but, you know, we're probably going to need 60 votes in the senate anyway. and a house rules can do what it

wants if we agree here to the provision such as this. i have a hunch that it will prevail. second, it's not a lot of money here. it's in the neighborhood of like a couple hundred, million. and it is also true as congressman levin pointed out without it some states, some kids in some states are in much worse condition than kids in other states. so i would hope that we can work our way through that and find a way to include it. i believe now according to the program we're going to a different subject. >> in agreement. there wasn't a vote to terminate. what we did is to extend it through a certain period. that's number one. number two, in terms of scope, the tanf program is before us.

the entire program is before us. and i think that it's unwise to say that we can't consider it. look. i just want to close with this. those of us who were here in the year that we continued and reformed and changed the program, changed it. remember the debate very, very well. and i don't think we want to go back over all of the details. there were some major issues that were resolved, and some major issues that were not resolved. and there were some later changes to improve the program. and some of us who supported welfare reform were emphatic

about the need to address those additional changes. for example, benefits for people who were here legally who weren't citizens. the supplemental program was an effort to look at the tanf program in a national way. to acknowledge that there were some states that had very, very low benefit levels. there were other states like where mr. camp, the chairman and i come from, where the levels were higher, were better. and so we made a decision not to simply say that those states that had an adequate benefits, clearly inadequate, that the kids would suffer. so if you want to put it this way, taxpayers in some states,

if you want to talk about it that way, were decided -- we decided that there was a national need here. and as senator baucus has said, there wasn't -- it didn't involve a huge amount of money nationally, but in terms of the needs of particular children, it was a substantial need. and so in the effort to find some balance, there were lots of problems in the final legislation. one had to judge whether on balance we should move forward or not. there was this decision to try to have some balance for the kids of america. and so i don't think it's an issue of scope. it's an issue of