nothing but a bunch of evil slave owners. the founding father, the vast majority of them were very much conflicted and -- convicted in their consciences about slavery, but at the same of the founding, slavery had already existed as the economic system of the south entrenched for 160 years. and the southern states were not going to join the union if the federal government was going to tell them how to run their economic >> mike, thanks for the call from virginia. and senator, welcome to constitution 101. >> yeah. i really don't have a comment on the issue about the views of the founding fathers on slavery, but i do -- i do think that the history of our country has been that as we've identified challenges that needed attention, we've tried to find solutions to those problems, and

ways to meet those challenges and the federal government has stepped in when we enacted social security, for example. the same arguments were being raised then, that, you know, this is a terrible overreachby . to require people to have a certain amount of funds taken out of their paycheck in ord that they'll have something once they get to old age to keep them from being destitute.'s bn a go. i think social security's been a good thing. i think this health care legislation will prove to have been a good thing as well. >> next is john from clayburn, new york. good morning. welcome to the program with senator jack bingaman of new mexico. >> caller: good morning. as you look at the founding father, the original document when they pledged their life, their liberty and their treasure to the constitution for the good of the people, it's the same thing with the health care.

it's just an extension of it. and why, you know -- like i paid income tax and health care for over 40 years. i've paid the health care for these senators and congressmen. now that i am retired on disability, and have lost my health care, what happened to all that money? i'd never used it. we've never gone to the doctors. i'm out here, i've got to go 30 miles to buy groceries. i don't go to the doctors on a wh whim. now that i'm going to need it some day. i'm 60 years old. i can't afford it. what happened to the president's promise ofis iridiculous. thank you. >> john, thanks for the call. let me take his comment and ask you to move the story forward. if the court does strike down all or part of the health care bill what does congress do? does it go back to square one? >> well, i don't know. frankly, the congress is very polarized today.

and it's difficult, frankly, to see how this congress, at least, here in 2012, would have the ability to get agreement on any kind of major health care legislation, if this bill were struck down. so you never know what the sentiments of a new congress might be, after the election, but it's not realistic to write that this congress wil a new bill. it's just not going to happen. >> you came to washington when tip o'neill was the speaker of the house. ronald reagan in thi1982. 30 years in the u.s. senate. has the institution changed? has washington changed? in these past three decades? >> all of the above. 9 institutional changed, washington's changed but the all of this polarization and inability to agree that people see in washington is a

reflection, frankly, oft see, n. there's great polarization in the general populous. the media is e's ry little effo the part of the media to try to present any kind of balanced view of the issues being debated. so i polarization, and congress reflects that, and it makes it very difficult for us to agree on what steps to take. >> let me turn issues. one of our virus working to get new nuclear power plants for no low carbon energy. is this something you would support? >> i certainly support more nuclear power generation, but i think the thing that's holding that back now is the economics of it. it is very expensive to bailed new nuclear power plant. it is very cleep heap to bailebd

a new gas power plant and gas, as cheap as it is, speaking natural gas here used for power generation, with that as cheap as it is, it's just not likely that you'll see utilities stepping up and saying, okay. instead of using that natural gas at a very chea $7 billion, billion, $10 billion nuclear plant, our guest, senator bingayman the chair of the natural resources committee. a hearing that gets under way later this morning. c-span will cover it and post it on our website at c-span.org from "usa today" on tuesday, airlines raise fares. blame fuel costs. what do you expect to learn and more weeor and months ahead? >> well, we have experts --

excuse me -- talking to us about the reasons for the increased price of gasoline, and aviation fuel, and i think that the main thrust of that testimony will be that geopolitical factors are driving these high higher costs, and that it is not a question of whether or not we're producing enough domestically. it is a question ofwhat people are concerned as to what might happen with iran and their supply of oil going into the world market and whether or not other producers could make up for shortfalls in that regard. so i think that's going to be the thrust of the testimony. >> our next call is chuck joining us from palm coast florida. good morning to you, independent line. >> caller: good morning, everybody. n there this morning. good morning, america. listen, senator bingaymman, i'm5

years old and was always taught that the federal government was a tool, simply a tool, for the autonomous and sovereign states to be able to work together, and the things that the federal government was given certain enumerated powers and all the other powers are left to the states, and it has become a situation where the federal government holds the state subservient to its powers, and so i'd like for you, one, to please explain to me how the federal government can disregard the rights of the states, when over 50% the states, a majority of the states, are against this you know, a senator is supposed to -- their job is to represent their state. their state governors and their

legislatures, the house of representatives represents the people's wishes, and so, you know, i believe that the senate is really, you're a democrat. so you represent the democratic party. you don't necessarily represent your state, unless your fac doe care law. so -- so how can you justify the federal government usurping the power of the state? the states, really, are the one people. >> chuck, thanks for the calint view, senator from james young on our facebook framers would h appalled there is no federal police p's the far left lack the intellectual honesty. they'd have to face the fact their policy dos not enjoy majority support. >> well, of course, my reading of the constitution, my understanding of the constitution is very different than that of the caller and, of

course, the person who did that e-mail that you just read as well. under our constitutional system, the federal government does have authority over the states where it choosing to act and where it has authority to act and under the constitution, it can act wherever there, in whatever way it determines is necessary in order to regulate interstate commerce. and that's been very broadly defined by the supreme court. t health care law, the federal government, the congress and the president have chosen to take action to deal with this 50 million people who have not coverage, to try to rein in the growth and cost of health care to try to impvehealth care. those the main three objectives on this bill, and i think they're well within their rights, the federal government

is well within itsng to do this. senators, as i've always understood it represent the people of their state. and 26% of the people in my state have no health care coverage. for me to not support this federal law would be, i think, very much contrary to the interests of my state and the people of my state. >> senator, back to the other issue, which is the oil and gas tax bill. in fle with senate democrats including yourself seem to be pushing for. number one, eliminate $24 billion in tax breaks for what you call major integrated oil companies, exxon, shell, chevron, conoco philips and bp and modify dual capacity rules to eliminate tax foreign credits. stop on that point. explain. >> well, that's one of the whi reduced for these major oil

companies that produce worldwide is this credit system that they currently enjoy. the main thrust of this bill, the bill that's going to be voted on in the senate today, or at least a petition for cloture closing off debate is going to be voted on today. the main thrust of it, try to provide some resources so that you can extend the tax incentives for other types of alternative energy sources, wind energy, for example. various efficiency provisions in the law today which have been allowed to expire, and we think it's important to try to keep those incentives in place so that we can continue to move in that direction, and the reduction in the taxes of the oil industry, the reduction in tax breaks for the oil industry is a way to find revenue to pay for that. >> and those incentives totaling about $11.7 billion extended

over the next year. one other point. repeal domestic manufacturing deduction. what is that deduction? >> a deduction put in place maybe ten years ago or so that was intended to encourage, encourage manufacturing in the united states. unfortunately, as congress was writing the bill, its traditional way started adding more and more things to the definition of what is manufacturing. so thatof the ground is manufacturing. under this bill, the way we wrote it, and we're trying to go back and correct that, and say, look, if you're manufacturing, you know if you're making widgets or you're manufacturing automobiles, then that is manufacturing, and we want to provide an incentive for that, because that creates jobs. if you're just producing natural

resources, that is not by any common sense desks of it. >> let me get your reaction your caller from alaska said yesterday on the senate floor. >> the first point i have heard is that american taxpayers or somehow or other subsidizes oil compan it's bornt important to put thi context. this labels basic tax deductions somehow or other as a subsidy. as though the federal government is allowing businesses to retain more of their earned dollars, because that's what's happening here with the situation of the oil companies. they have earned the dollars, and they are basically keeping more of the dollars that theyth other, that action is the

equivalent to handing them a check. handing them a check from the government, whether it's what we se, for instance, the situation with solyndra. they got a check from the government. so i think it's important to put in context that when some say that we need to end subsidies for oil companies, i think what they really, what that really translates into is raising taxes on oil production. >> so on that point, senator, is there a correlatiocorrelation? are tax subsidies, reducing those a tax hike? >> clearly when you eliminate tax provisions -- we're going to break away from that program and take you live where federal reserve chairman ben bernanke is returning to his former profession as a teacher, returning to the george

washington university. oui we'll look aftermath of the 2008 financial crisis and bern chief to hold regular news conferences and town hall covag c-span3. hello again. so today in the final of our four lectures, as the professor said, we want to talk about the aftermath of the crisis. now, just to recap briefly, we talked last time about the most intense phase of the crisis, '08 and early '09, financial panic, both in the united states and in other countries, industrial countries, threatened stability of the entire global financial system. the federal reserve working as i'll describe with others served in its last resort role provided

short-term liquidity to help stabilize key institutions and markets. i think one of the points that we can now draw having looks at the history is that being some ad hoc and unprecedented set of actions, that the fed's response was very much in keeping with the historic role of central banks which is to provide letter of last restoort alm a panic, and different about this crisis was that the institutional structure was different. it wasn't banks and depositors. it was broker dealers and repo markets. it was money market funds and commercial paper, but idea providing short-term liquidity in order to stem a panic was very much what was envisioned when he lopbart speak 1873.

i've been focusing very much on the fed's actions. that's been the topic of the court, of course, but the fed obviously didn't work alone. we worked in close coordination and foreign authorities. for example, the treasury was activelyafter the congress approved the so-called t.a.r.p. legislation. the treasury was in charge of making sure that banks had sufficient capital, and u.s. government took an ownership position in many banks, that was especially temporary. most of those have now been reversed. the federal deposit insurance corporation, played ae limits, $250,000 deposit insurance limits raised to infinity for transactions accounts and the fdic also provided guarantees to banks who wanted to issue up to three years of debt, debt in the fee.

the fdic guaranteed those issuances so that banks could get longer term funding. so this was a collaborative effort between the fed and other u.s. agencies. we also worked closely with foreign agencies. i mentioned last time the currency swaps, which are still in existence, f gave dollars to foreign central banks in exchange for their own currencies and those foreign central ba toand on their own responsibili, under their own risk, lns to fi institutions that required dollar funding. we also, of course, continued to be in close touch with finance ministers and regulators around the world as we tried to coordinate to deal with the crisis. now, putting out the most

intense phase of the fire was not reallye continuing effort to strengthen the financial system. strengthen the banking system. for example, in a quite succesul think was very constructive, the fed working with the hegencies largest u.s. banks in the spring of 2009. so this was not far after the most intense phase of the crisis, and what we did in an unprecedented way was to disclose to the markets what the financial positions were of the major banks, and those stress tests which confirmed that our banks could survive even a tu return to worse economic nce investors and allowed banks to go out and raise private capital a great deal of private capital, and in many places replace the

government capital they received during the crisis. the process of stress testing a chaple weeks ago the fed led another round of weeks ago, round of stress tests very demanding set of stress tests our banks did quite well. they raised a great deal of capital even since 2009. they're in many ways in stronger position than they were even prior to the crisis in terms of capital. these are steps we've taken to l lending mode. it's still a process in progress, but restoring the integrity and the effectiveness of the financial system is obviously a part of getting us back to a more normal economic situation. now just saying a few words about the resort programs, i've already argued at some length, the programs did appear to be effective.

they restored financial market functioning. the programs which are instituted primarily in the fall of 2008, were mostly by march of 2010. they were phased out in two different ways. first, some of the programs just came to an end. but moreft was that the fed would in making loans, to financial institutions the fed would charge an interest rate that was lower than the rate, t but higher than normal interest calmed down and rates came down back to more normal levels, it was no longer economically attract attribute v for financial institutions to keep borrowing from the fed. the program just sort of wound down quite naturally. so we didn't have to they basically disappeared on

their own. federal reserve took in lender of last resort programs were quite minimal. as i described lending was clateral in term. most cases. in december of 2010,e all the d involved in the fed made during the crisis. of the 20 2 1,000 loan defaulted. every single one was paid back. even though the objective of the program were stabilizing the system was not profit making, the taxpayers did come out ahead in those loans. so that was the lender of last resort activity. that was the tool, the fire hos financial crisis. but of course as i described last time, theven though the crisis was contained, the impact

on the u.s. and global was severe. and new -- new actions were needed to help the economy recover. remembering that the two basic tools of banks are lender of last resort policy and monetary policy, we turn to the second tool, monetary policy which was the primary tool used to try to bring the economy back after the trauma of the financial crisis. now, you're all familiar with conventional conventional monetary policies nvolve management of the rate called the federal funds rate. by raising and lowering the short-term interest rate, the fed can influence a broader range of interest rates that in turn affects consumer spending, purchases of homes, capital investment by firms and the like. andhat provides demand for --

for the output of the economy and can help stimulate a return to growth. just a few words on the - insti. monetary policy is conducted by a committee called the federal market committee. the fomc has it's called meets in washington eight times a year during the crisis its also held video conferences. when we have a meeting ofhe fomc there are 19 people sitting around the table. there are seven governors, seven members of the board of governors who have been appoi appointed by the president and confirmed by the senate. and then 12 presidents of the 12 reserve banks each of whom has been found or appointed by the board he dirtors at each reserve banks and confirmed by the board of governors in washington. there are 19 people around the table. we all participate in the

monetary policy discussion. when it comes time system's a little bit more complicated in any given meeting there are actually only 12o vot. the voters in any given meet rudy giuliani the seven members of the board of governors. currently five, we have two empty seat, we hope to get those filled soon. the seven governors have a permanent vote in every meeting. the president of the new york federal reserve bank also has a of course to the beginning of the system and the fact that new york remains the financial capital of the united states. of the other reserve bank presidents four of the 11 vote and at the end of the year they move on to another set. so again, there's a total of 12 otes in any begin meeting or

policy. but the entire group participates in the discussions. now here's the federal funds s interest rate that is the normal tool the fed uses for monetary policy. you can see that at the end of chairman greenspan's term and the we were in the process of raising the federal funds rate in an attempt to normalize monetary policy after having easier policy earlier in the decade in order to help the economy recover from the 2001 recession. but in 2007, as theroappear, pan the sub prime mortgage market, the fed began to cut interest rates. you can see the right side to have picture as interest rates were sharply reduced. and by december of 2008, the federal fund rate was reduced to

a range of between zero and 25 basis points. a basis point is 1/100 of onece. essentially by december 2008 the federal funds rate was reduced basically to zero. can't be cut anymore. so given that as of december 2008 conventional monetary policy was exhausted, we couldn't cut the federal funds rate any further and yet economy clearly needed additional support into 2009 act a rapid rate, we needed to do something else to support recove turndd to less conventional monetary policy. and the main tool that we've used is what we call within the bounds of the feds, the large scale asset purposes or more properly known many the press and elsewhere as

quantitative easing. i think lasps is a better descriptie 'v the common usage. but these large scale atpurcses more detail were an alternative way of policy again, to provide support to the economy. so how does this work? term rates the fed began to take -- undertake large scale purchases of treasury and gse mortgage related securities. so just to be clear here, the securities that the fed has been guaranteed securities either treasury the fannie and freddie securities u.s. government after they were taken into conservatorship. there have been two major round.

one as qe 1. another announced in november 2010 known as qe some additiona variatio a program to lengthen the maturity of our existing assets. those were the two biggest programs in terms of the size the balance sheet. to get taken together these fed balance sheet by more than $2 trillion. here's a picture of the asset si balance sheet to help us see the effects of the large scale asset purchases. the green the traditional securities holdings. absolutely clear even under all most normal circumstances thd of u.s. treasuries. we