sector, unlike the enterprise sector the federal government coerces its operating resources out of the american public and we cannot use one argument both ways. we cannot on the one hand, jiff federal employees are paid a much higher rate on average than the average american employee because they are inherently worthy of this and i'm not denying they're good work in any way nor am i denigrating it. and by same token say -- those who earn more in the private sector, you know, that's something that we can tap into because, of course, the federal government deserves it more than they do. if government were the engine of growth we would not have the unemployment rate we have today. we wouldn't have a mere 63.7% of the workforce participating at this point. we wouldn't have nearly 40 million americans, either unemployed or underedmployed.

and we'd have a far better fiscal situation. by endeavoring in any way to take dollars that would be put into the engine of growth and prosperity that pays for everything the federal government does which is private interprice we would be choking further, what we need to grow right now. right now the folks that pay our federal employees salaries net $50,000 in the hole in national debt. nearly over 100,000 per taxpayer. that's unconscionable and that's why we're asking our employees, unfortunately and with sorrow, to make a sacrifice. thank you, mr. chairman. >> thank you very much. the next item is president's proposal -- >> chairman, just a couple. two or three minutes left so i'll just make one point here. we're talking about the discretionary spending.

the budget control act, the debt control act, cut discretionary spending $2 trillion. that's half then and then half -- $2 trillion discretionary spending. we had already cut it $2 trillion. i supported a freeze on congressional pay. but this is extension, the proposal we're talking about here is the extension of the freeze that was in the act. and i don't know if it's wise, frankly, to go back and dig deeper into nondefense discretionary. it's already been cut so dramatically. there's a lot of other places find revenue. so remind us, we've already cut $2 trillion in discretionary spending which is something to be proud of but we shouldn't go so deep it doesn't -- it's hurting people where the revenue can be raised -- the offsets can be raised elsewhere.

>> i think the reason that this additional year is important is because the president's commission on fiscal responsibility, the simpson-bolles commission, said freeze federal pay, civilian, for three years. we did it for two. this would pick up the recommendations and. consistent with the recommendations of the national fiscal responsibility commission and i think that's why it's important to consider it around the table. we'll move to the next item on our agenda. the president's proposal to reduce medicare subsidies for wealthier seniors. the policy wants to ask the wealthiest 25% of seniors. >> i thought we were going to -- parts b and d and then we'll close -- >> that was not on my -- >> then we'll close with -- >> i had the wrong agenda. >> to pay a little bit more for

their part b and d of premiums. this is a president's proposal. it's a portion that generally covers doctor visits and prescription drugs. we'll have 45 minutes of debate on the issue and we'll begin with the senate. >> decreasing the medicare beneficiary is not fair, not balanced, doesn't make much sense to pay doctors more, take it out of the hydes of beneficiaries. it doesn't seem to make much sense to me. if we want to cut docs by the same percentage amount? that's fairness. that's balanced. but i don't know if the american

people would think it's fair. the right thing to do to erase to pay more for doctors. and take it out of hydes of seniors. i just don't think that's what we want to do. and i'll have more to say on the at a later time. by saying i think it's totally unfair and so much to the state. and that is, other places, to find more fair and more balanced offsets than this. we should not be beneficiaries while increasing doc pays and making other adjustments here.

>> anyone else? senate republican? >> thank you, mr. chairman.ay to do it. the only ways we hear are tax increases. i thought we all agreed that high inco beneficiaries that are eligible for medical programs paid for by the taxpayers could afford to make some sacrifice hceiving a littl way of benefit or paying a little bit more for what they receive. and we've all heard about warren buffett. i don't think taxpayers neede h. saying for very high-income people they don't need to receive the same medicare this is not a new idea. this is something the president this is something the white house proposed when we first began our discussions back in the days of the biden group and it was part of the discussions in the joint select committee.

we all agreed to it. and so, i don't know why all of the sudden now people who want to put a is your tax on have their medicare benefits cut at the medicare benefits. i'm ime financial stability of the medicare program by reducing the federal subsidy of medicare costs to those beneficiary who is can most afford them, end of given the 27% of medicare beneficiaries who are eligible for medicare part d low-income premium subsidies, which provide and 17% of the beneficiaries receive part b low income

subsidieses which we provide to them, it ses ly fair that we ask some of the people at the very high end to be willing to pay a little cirmany times. discretionary part of the budget we need to look at the entitlement side. this is the entitlement side. i just think it's a no-brainer to say -- we believe that taxpt be sualthiz retired americans w those people can't afford the medical benefits on their own. >> i might just add on there, the fact is, a big difference between so-called millionaires surcharge and to what's proposed here. millionaires make above a million. >> i'll stipulate.

>> these people here don't make above a million. some may but most don't. i don't think it's fair to compare the two. let me just, current law of brackets. the current law as you know, it's ramped up so i'll take a middle position. those incomes of $100,000, they're medicare premium is 50% that they have. and if you're income is $160,000, it's 55%. that's a pretty good hit, frankly, for somebody making that income. and the proposal for us is to raise that significantly more. that is, in effect, the premium that those folks would have to pay. you know, we're not talking about millionaires here. we're talking about folks that don't come close to a million.

and that's why -- another reason why it doesn't make sense and add to that the house medicare beneficiaries to pay for the payroll tax cut and that's health offsets for payroll. and we've generally general generally tried to confine the health cost to health care items and maybe to help pay for the sgrs so the seniors can see their doctors. i don't know if we want to use health offsets to pay for nonhealth provisions. that's another reason why i don't know if this makes a lot of sense. >> i would just say, listening to the -- before i go to mr. levin, listening to the discussion of discretionary spending is off the table then we have mandatory spending. this is mandatory spending and i think we need to keep many mind we're talking about retireee

income and right now at $80,000, that only hits 5% of the seniors with income. so i think while we're throwing around these salary levels it's important to keep in mind these are retireee income legals and that means there's a significant amount of assets behind that income level, mr. levin? >> mr. chairman, i think it's useful that we're having this discussion and i think all of us want to try to really exchange views nessentially say there isn't any give on anything so let's have a good discussion on what this is really about. all due respect, john, this isn't about millionaires and

billionaires. i mean, there may be some people who are millionaires. they're not having income over a million in all by a teeny, tiny percentage of cases. we're talking about medicare beneficiaries who have income much, much less than a million dollars a year. much less than $500,000. much less than$200,000. and i think we should understand what the potential impact is. people in the high middle-income brackets of paid more in medicare taxes in many cases than those in lower damage income brackets and that's the way the medicare system works.

so to start off with these are people who have contributed substantially and most likely, they worked in most cases. so essentially, what the house bill does is over time, because there isn't an inflation factor, is going to increase the impact on middle-income seniors. and they may be higher middle-income seniors but they are in most cases, not the very wealthy, wealthy seniors. and so, so -- look, the president proposed this as part of a very dramatic multi-trillion dollar approach. what's being proposed here is part of the effort for us to

extend these three major, major programs for the rest of the year. and what's being proposed here is a change that will ripple through for many, many, many years and have an increasing impact on taxpayers who, i think in the vast majority of cases would consider themselves middle income -- and who in the majority and i think the clear majority of cases -- are people who are middle income. let's have a discussion of what this is all about. this is mandatory. i don't think we should be impacting discretionary. but when we impact the mandatory, as senator baucus has said, we need to do it in the

right way and i think the question is, is this the right way when we look at all of the factors involved with these people under medicare? these are, again, not millionaires in most case. they surely aren't billionaires in most cases. these are not going to be people who have income of $100,000 a year when the position is that we can't touch the taxation of people whose income is over a million dollars a year. >> mr. brady? >> clearly, with the deficits the country is wracking up again this year, more than a trillion dollars, we don't have the money to extend more provisions without finding savings to pay for them.

we also know medicare doesn't have the money. we know it goes insolvent in 12 years, without some action by congress. today, we start some of the reforms that, frankly, all the republicans and every democrat around this table has voted for. this is the president's proposal. he pounds his desk and says -- i'm sending you a bill. send it to me, this is what we're doing. this is his provision that he recommended to the super committee. by press reports, it's the provision he includes in his budget beginning this year. he pitched this policy as senator kyl has said, to strengthen and make medicare more solvent. like the other two provisions today, you though, these are bipartisan provisions that members, republicans, democrats together, have supported. and i know senator casey is sincere in looking at the higher

taxes. i understand that. but that approach has failed five times in the senate. just this session. six if you count unanimously rejecting the president's budget. we can run that a seventh time, but with the clock ticking i don't know how fruitfuls that. so why don't we focus on provisions, republicans and democrats and the president have supported. and this one, making sure that seniors who, after they retire and are still making $160,000 a family or more, pay a little more of their medicare premium is what we've done in part d already. and it is working well. this clearly is a bipartisan common-sense and minor step forward. it seems to me because we don't have this. and we're looking at bipartisan proposals that can keep us from borrowing more money from

lenders this year, this is a common-sense provision we ought to pass and at the end of the day it seems like today we're hearing "no" for the sake of hearing "no." we've all voted "yes" on these proposals so why don't we agree and accept them as bipartisan proposals and get on to the other hard issues that we have in this conpresence. i yield back. >> senator baucus, senator carden? >> thank you, mr. chairman. first, let me concur with senator baucus in that, to me, it's the illogical to say that we're going to ask medicare beneficiaries, most of whom do not work, to pay for the temporary tax relief giving to working families under the payroll tax holiday. i just think that's not a logical way for us to be going over our business here. so, first i concur with senator baucus's observations that we shouldn't be looking at this

type of a source to offset that type of a cost. secondly, let me agree with senator levin. i think the point he raises is worth repeating. the intent here is to freeze the bracket at $80,000 to start. to freeze it, permanently, until we reach 25%. one out of every four seniors who would be subject to this higher part b premium. not 5%. we're talking about getting to as much as 25% of our seniors who would be subject to the surtax. let me also point ought we already have a progressive. that is, a financing mechanism in for medicare that those that make more money pay more for benefits. medicare benefits are comparable for all seniors but we ask those who are more well off, with higher income, to contribute more currently. i think we need to emphasize that. and underscore that. as i'm sure everyone here is aware, the payroll taxes that

people pay for social security is capped at the amount that i contributed by the -- by the fica taxes for those for medicare is not capped. so if someone makes $500,000 that person is paying every year into the medicare trust fund. someone making the maximum on the social security withholding, $106,000 is paying less than $1600 into the medicare trust fund. we already have a progressive way for those more well-off paying for their benefits when they retire. secondly, we change the law on medicare part b in 2007 that's already been pointed out by chairman baucus. so we already have a part b premium increase for those who make over $85,000 starting at a

35% and going up to 80%. that's already in law, so we already are asking those who are retired who have more income to pay more. and then lastly in the affordable care act we put an additional surtax into effect for higher income payers starting in 2013. we went to the source three times and in response to senator kyl there's a big difference between someone currently earning taxable income over $1 million and one who is retired who has an $80,000 income. there's a big difference here. i would think we would acknowledge that difference. last point i would make is this, medicare part b is voluntary. the more that we put these types of payment structures in place, the more people who are well-off

will choose not to enter into the medicare system. medicare part b system. it's their choice. if he they start to have to be paying close to 100% of the cost, why would they opt into the system? i think this is a slippery slope to changing a program where all seniors are eligible to participate to one that is means tested and basically become a safety net program rather than aa social insurance program. i think that's a dangerous path for us to be down. we've already taken, i think, responsible steps here to make sure that those who are the -- who are well-off contribute more. i think this would take it too far in that direction. i would urge us to either modify or eject this. >> i would just say that every democrat on this panel voted to freeze the income thresholds for

a decade. president obama is suggesting to continue that for a bit longer until the top 25% of seniors are income threshold tested. we are suggesting this as something every democrat has voted for, the president is suggesting, he afforded it to the supercommittee. we are trying to find a way to pay for the policies we're doing, and this, to me, is a bipartisan suggestion from the president that we're trying to get his -- >> mr. chairman, i think you're -- >> our colleagues to september. >> i think you were the one that raised the 5%. someone on the republican side. >> currently now 80,000 is 5%. the president suggested -- >> i want to make it clear if this program goes forward, it's well over 25% of power seniors subject to this fee. that's misleading to say 5%, because it's a much larger numbers and ultimately it's

going to affect a significant number of seniors. >> no, current law is 5%. current law is 5%. the president forwarded to the supercommittee suggesting that income thresholds and in the health care law they were frozen for ten years. >> i'm trying to understand the house proposal on this agenda today. as i understand it -- it, first of all, reduces the 85,000 threshold to 80,000. secondly, it freezes the increase, which was normal on brackets, and it's my understanding that will lead us to the point congressman levin mentioned,significant percentage of our seniors fall within these brackets. that's the only point i was raising. it's not just 5% of seniors. it's a larger percentage in the program. that's the proposal we had, i thought, coming from the house. >> which is the president's proposal. >> the president also proposes a surtax on high income?

i think a lot of us are prepared to bring the president's proposal here. >> the senate rejected that. however, had the senate included that in their bill, that would be in the scope of conference, but the senate rejected it. >> again, if we're going to get into the scope of conference issues, i hear what you're saying. we have to listen to my republican colleagues talk about how we have to come together. >> which i agree with. that means we have to compromise, as we should. we want to make sure that we're fiscally responsible, and we have proposals that we believe can get the majority of democrats and republicans together on offsets. so the sooner we can get to those discussions, i think the better off we are. to go through this list of issues that you are isolating, i'm not so sure it's helpful to reaching an agreement on a set of offsets that i think we should get to.

let's not -- if you're going to use the fact that it's not in the house bill, then it's going to be a very tough month. >> two things. you're asking us to consider something that has failed the senate repeatedly and -- >> you say failed the senate. of course, as you know, it received 50 votes in the senate, and we understand that it was in a context of a proposal that did not have the republicans engaged in getting it accomplished. we now know that both the democrats and republicans want to make sure that we extend the payroll tax holiday by the end of this month. so we had the focus of both democrats and republicans on getting the job done for the american people and for middle class families. i think we're all going to have to compromise. i expect there will be things in this conference report that i prefer not in there. that's what a compromise is about. the republicans also have to

understand there are going to be things in here that you may not particularly want to see in the conference. we can argue each of these points. my reason for raising this is i think there's serious policy problems with this proposal. policy problems. >> i understand. >> that is the preservation of medicare as a social insurance program. that's my point. >> my most important point on who should run, we can't tell them. i think it's berpt a month before the election we announce who is running for president. the media's obsessive desire to know who's your leader? is it michael steele? rush limbaugh? glenn beck? sarah palin? they want to tell us who our leader is so they can ferociously fixate on that person and destroy him or her. >> in years conservative political action conference begins thursday, and c-span will cover the events through the

weekend. watch past speakers online at the c-span video library, all archived and searchable at cspan.org/videolibrary. >> i mean my friends a new america where freedom is made real for all without regard to race or belief or economic condition. i mean a new america which ever-lasting attacks the ancient idea that men can solve their differences by killing each other. >> as candidates campaign for presidents this year, we look back at 14 men that ran for the office and lost. go to our website, cspan.org/contenders to see videos of the contenders who had

a lasting impact on american politics. >> the profits of the liberal left continue to offer only one solution to the problems which confront us. they tell us again and again and again we should spend our way out of trouble and spend our way into a better tomorrow. >> c-span.org/thecontenders. today colorado and minnesota hold republican presidential caucuses, and missouri has a presidential primary. as the results come in tonight, you can see speeches from the candidates on our campaign network, or companion network c-span. the campaign moves to arizona and michigan for primaries on february 2 8th, and then washington state's caucuses on mard 3rd. super tuesday is march 6th with primaries and caucuses in 11 states. yo