late entrant, some of you remember jerry brown in 1976, jimmy carter lost eight of the last 15 primaries in 1976 and a lot of people thought he was in trouble with his nomination so mayor daily after the illinois primary or after the end of the primaries said this guy won fair and square, it's over and he had the juice to make it stick. you could get a late entrant, which would be the first sort of caterer that there could end up being a contested convention. now all of that is fun and interesting to talk about, but it's very unlikely. >> great. >> help me say thank you to former governor haley. >> thank you all. >>

treasury secretary tim geithner is on capitol hill to explain the proposed budget for next year, he will be testifying before the senate finance committee, senators making their way into the room, senator grassly there, the administration is can asking for an increase of nearly 7%. senator hatch will be there. most of it goes to the irs, with additional resources to enforce

the tax code, it estimated it can get $5 for every dollar spent, the president's budget calls for a fee of $61 billion on the biggest banks and firms to compensate the government for their actions during the crisis, and a percentage going to help refinance mortgages. this is one of several hearings that we are recovering today, under way already is the armed services committee. and and the deputy director of the office of management and budget is going on, that has just gotten under way, we are covering that and it's live now on cspan.org, this hearing should get under way shortly.

here on cspan 3, waiting for timothy geithner to testify for the proposed budget. the washington said that another

measure in the proposal would seek to find $70 million in savings by changing the production of nickels and pennies, a -- the proposal says the roubled ass troubled asset program is likely to cost $68 billion in total, that is lower than the 341 billion dollars, secretary geithner will be getting under way here live on cspan three shortly.

>> come to order.

thomas jefferson said, and i quote, the value of an idea lies in the using of it. yesterday, president obama issued his budget proposals for the next ten years, treasury secretary, tip geithner is here to discuss them. we need to talk about it to help create economic growth the number one priority is job creation, we have made progress in our efforts. the jobs' picture is improving and the economy is showing positive signs. we have added $7 milli7 million the last three months but there's still far too many people out of work.

12.8 million americans are unemployed. we need to help businesses create jobs. the budget contains policies to could that starting with the payroll tax cut. extending this tax cut through the end of the your will save families, real money, an after of $1,000. the families will spend that money at local businesses. pumping it through the economy. and the budget also renews unemployment benefits for workers that lost their jobs through no fault of their own, these workers are sure to spend the benefits which will help to create more jobs. according to the congressional budget office. every $1 in unemployment benefits can create $2 in economic growth. failure of passing a budget will cost half a million jobs, we cannot let that happen to our american families.

continuing the smart aggressive trade policy to open the world to u.s. good is important for jobs here at home. agreements were passed and they will generate $12 billion in u.s. exports and creates 10s of thousands of new jobs here at home. we installed a critical training program to make sure that workers have the tools they need to take advantage of new trade opportunities. this your, i'm working with my colleagues administration to grant permanent normal trade relations on russia. once we do, the exports could double over the next five years. this will create new jobs in all sectors. this budget would extend tax provisions that expired in 2011.

these include college tuition and state and local sales taxes and it has a tax credit for research and development, and we should extend that tax credit now. we need to end the cycle of year to year extension, we should work together to net comprehensive tax reform, and make the tax code fairer and more predictable. this budget takes a step in the direction by making the 2001, wou 2003 tax cuts permanent. providing permanent state tax relief and solving the problem of the alternative minimum tax, we cannot stop there, uncertainty is not the only prap program, the tax code is as thick as a dozen bibles. we must ensure that it helps businesses compete in the global economy and create jobs.

i look forward to working with my colleagues to create a better tax system that creates our needs. the president makes much needed investment in america's infrastructure, which is needed at a time when the unemployment rate is hovering around 15%. it will provide nearly $110 billion to support interstate km commerce and jobs. the budget takes important steps to reduce the deficit and federal debt under control. we have reduced federal deficits significantly. earlier this year, we reduced spending by $900 billion and e health reform law provided the biggest reduction in more than a

decade, never the less, the budgets are still too large. this budget meets the test of reducing the budget over the next ten years. we need to continue to reduce the deficit and job creation over the next ten years another reason to focus on deficit reduction and job creation, a perfect fiscal storm is waiting at the end of this year. first, in 2001, 2000 and trskan and 2010 tax cuts expire and federal programs will take place the debt limit will need to be faced at the same time. this is what will happen if we do nothing in the coming year. any reduction we develop must be balanced and fair. everyone must contribute but no one should have to make undo sacrifices, one area of the

budget falls short not standard, the cut to rural assistance programs i believe are too deep. we all must work together to achieve meaningful deficit reduction. and we cannot do this at the expense of job production. deep cuts to agriculture program s will -- important economic development and housing resources. cut to these programs have a devastating effect on rural communities and stop economic recovery. we need to enact deficit reduction in a smart way. i look forward to working with my colleagues and administration to do so, let's work together to enact significant deficit reduction in a way that enhances our job creation effort, let us take these ideas and find the best ways to use them.

i turn to my good friend, senator hatch. >> thank you, senator bachus. i want to thank you for holding today's hearing, and welcome you, secretary geithner, to the committee. let's begin by noting the total public debt is over $15.3 trillion, larger than the size of our gdp, the debt to gdp ratio over 100% puts us in the ranks of the european ranks currently in a debt crisis, we need a budget that addresses this debt crisis, yet last year the president delivered a budget that was rejected on the senate floor. it did not receive a single yes vote, even from senate democrats and i'll be interested to see if my colleagues will vote for this

one. the president laid out the most recent plan, and it will never be brought to a vote, because it does not address the crisis, we have not seen a budget resolution from the senate budget committee in years despite it being legally required. last year the president's budget s did eventually get a vote, but the senator majority leader has no inclination to debate a budget on the the senate floor saying that they do not have to debate spending totals since they have been determined already. which means we should not have to discuss the president's budget, but we have to do our due diligence, in reviewing the budget released by president, it's clear that his plan will make the fiscal situation worse

and harm the economy by putting in place tax hikes. the prayer offered that these tax hikes are divinely inspired, that is an interesting interpretation of the bible, just give it all to cesar, who knew that c ocosmic justice wou be performed by the hud administration. perhaps church going citizens should just cut to the president's chase and instead of tithing send your money to the ordained treasury, this had budget is politically not divinely inspired, it's a plan for a permanently larger

european style government. it does not go down a fiscal path and change the tax and spend policies and failed stimulus schemes that have and whether generate debt. it does nothing to wind down the mortgage giants to restore private flows of capitol into our finance system or remove the government's effective take over of our housing markets or address our entitlement spending crisis, whistling past the grave yard. the president presents the budget as one of fairness approximate and is compassoin, is it fair to ignore the mortgage giants fanny and freddie who drain the wal lther

wallets. is it fair to look at social security and turn the other way in the interest of avoiding large choices that might make a re-election campaign uncomfortable? secretary geithner i look forward to your testimony today, i have on say, i wish you would be careful in your public economic announcements. it's disturbing unwarranted when you claim that the republicans resistance to the president's proposals means that republican ca s do not want to do anything to the economy. these claims are simply not true and they are certainly not productive. putting aside these political statements, perhaps we could be given an explanation of why the

administration appears to believe that the economic recovery is viberant enough to be hit with more taxes. despite clear warning s of significant negative effects on growth. it's not strong enough to stop the run away spending. it seems for the president's plans, it is more taxes to fund the plan. the budget ignores the source of our fiscal challenges. a spending challenge that is getting worse and no matter what budget baseline you choose to consider, the cbo projects that federal revenues, as a share of gdp will rise above the long run average as the economy of recovers even with a continuation of current tax rates, but spending as a share of gdp is expected to say above the historic norms and pushing our country further down the

path that the other countries center followed fiscal ruin. cbo tells us that if interest rates run just 1% higher than assumed in their base-line budget projection, interest outlays will increase by over $1 trillion, that is for just a 1% increase. if the rates spike up once the confidence is lost in our ability to lay a course, we could be experiencing those adjustments that that are being experienced in europe. on the other hand, if inflation is 1% point higher each year then the deficit would fall over the next ten years. while the economy would suffer, the government would benefit from higher inflation, and it would be up to the fed to avoid

the temptation to inflate for budgetary gain, i am hoping that the mixing of policies comes to an end and we do not have to worry about the temptation to inflate our way out of our debt. our fiscal path poses great risk to our economy and the president as plan does nothing to avoid the risks. given the temptation to inflate away our debt, warren buffett who the administration seeps to turn to for the formulation of the tax policies advised people to steer clear of u.s. treasury securities invests. as mr. buffett said, in god we trust maybe on our occcurrency. but the hand that prints our money is all too human.

bonds though so many with a warning label. mr. buffett is advising investors to shy away investments such as treasury securities. it's interesting to know if you agree. i hope it's not a new buffett rule for investors to not buy treasuries. if investors see thoat advice ad then shies away from that investment and that will be a problem for the country. we need to -- the federal government's massive purchases of securities to help push rates down, unfortunately the administration remains luled in by the siren song and uses the low rates to finance for debt to advance a bloated european government.

i look forward to your opinion to budget, i received it late last year after the deadline that was supposed to be honored submission, but i'm really concerned and ai do not see a resolution to the problems that the country is facing. >> i'm pleased to welcome our witness, secretary tim geithner, as you know, mr. secretary, your statement will be automatically stated in the record, summarize and take your time. >> our economy today is getting stronger gradually but we have a lot of tough work ahead of us. over the last two and a half years, despite the severe cut backs of take over governments, despite the increase in oil prices we saw last spring, despite the fragile in japan,

despite all the shocks and head winds, the economy grown at an average rate of 2.5%. employers have added 7.3 million jobs and investment in software is up more than 30%, productive has improved. of course po exports are expanding rapidly, americans are saving more and bringing down debt levels and the growing demand for need and credit are improving. these are signs of resourcefulness of american workers and companies and the importance of the swift and forceful actions that we took to stabilize the financial system and to put the economy out of the worst economic crisis since the great depression, we still very significant economic

challenges for households and families across the country. americans are still living with the damage caused by the crisis, unemployment rates are high and and many are still suffering and we face, as you both said, unsustainable f ablable fiscal the president calls for substantial additional support for economic growth and job creation along side longer term reforms to improve economic opportunity to restore fiscal responsibility. most urgently, congress must extend the payroll tax cut and emergency unemployment insurance by the end of this month, if congress fails to act, 160 million moamericans will immediately pay more in payroll

taxes and others will be denied unemployment benefits over the thex year. we will encourage congress to support to preserve the jobs of teachers and first responders, to put construction workers back to work and help more americans to refinance their mortgages to take advantage of lower interest rates. the president's budget outlines a strategy to strengthen economic growth and economic opportunity whiles reducing fiscal deficits to more sustainable levels. this debate, we begin today, does not matter because congress is too divided to legislate in the election year, but this debate is very important, it matters because it's a fundamental debate about economic priorities and how to increase growth and opportunity and how to reform the tax system and live within our means.

it's important also because of the stark array of choices we face with the expiring of the bush tax cuts and the sequester. we governor with limited resources and we have to make choices of how to use the resources more wisely. any strategy to address these economic challenges has to answer a few key questions, how few do we have to can cut, which programs should be cut, expanded or protected, how should we share the burdens of deficit reduction. the president has projected the reduction of the deficit by $4 trillion, $3 trillion on top of the caps and cuts in the budget roll act. overall the president's plan would lower the deficit from just under 9% of gdp in 2011 to around 2% of gdp in 2018, that

will stabilize the ratio in the second part of the decade and put us in a better position to face the challenges that we will still face that come from the rise in medicare, medicaid and social security costs as more americans retire. >> under the president's budget, nondefense expensing is equity and -- is expected to fall to the lowest level and the president's plan would slow the rate of growth in spending in medicare and medicaid, through the affordability act and the reforms proposed in the budget, as we reduce spending we have to protect investments that are critical to expanding economic growth and and opportunity, that is why the budget pro poses a serious of investments in

manufacturing and infrastructure. now, in order to a chief this balance, significant savings but some important investments, we are proposing to raise a modest amount of revenue through tax reform. we propose tax reforms through revenues because we do not believe it's possible to preserve a basic level of health care and requirement and security or compete effectively in the global economy without some increase in revenues as part of a balanced deficit reduction plan, the president's plan includes $2.5 for every dollar of revenue increase. these are focused on the top 2% of the american tax papayers no the rest of the 98%. we think the best approach to

get there is through comprehensive tax reform. we have outlined a broad set of principals for the tax reform to make the system more fair and do a better job of encouraging investment in the united states, the increases in revenue we propose which are roughly 1%, i say 1% of gcdp, if structured a we propose it would not have an adverse impact on economic growth especially compared to expending on infrastructure or medicare benefits. i know there are members of congress that are critical of these proposals and would prefer a different strategy and the president's plan should be judged against those alternatives, there are some that say we should cut deeper and faster with more austerity now, it would