europeans unlimbed access to dollar swap lines at a critical moment at european banks are under a lot of pressure. that's something only we could do. we did it early on a very powerful scale. the feds indicated they'll leave that framework in place as long as it makes sense for them to do that. now the imf is in a very good position. you're going to see people talk about this this week that although it has $400 billion in available resources. a substantial pool relative to any other time in its history, it has the ability to raise additional finance from other countries very, very quickly if it needs to do that. i think that's good. that will prove there's a substantial capacity that will re-enforce what europeans are going and help cushion effects. we were supportive of that process and will be very supportive of it this week.

now what we have been -- to be honest about be direct about it, what we did not want to see is people look to the imf as a way to substitute for a more forceful european response. we didn't think that would be tenable. not fair. not realistic or plausible rule to agree to do that. so where you see the united states and this is true for china and japan and other major emerging economies, a little reluctant to move ahead of europe is because that basic recognition that europe is a relatively rich continent. it absolutely has the financial resources to manage this problem. it's got to play the dominant financial role. we wanted to see them put a more forceful commitment before the imf came in and said okay, he'll do what's necessary to make sure

to supplement that role. that's the rational for our strategy. one last point, the economics of a swap line that the fed provides the european central bank and the national central banks and the economics of a country that lends money bilaterally that the imf are not very different. when you lend money to the inf you have a liquid bearing interest claim on the fund. it has the characteristics of a swap in some ways. we're the only ones doing it. what the imf does is get backed up by the united states in significant effects. we have been central to the broader effort by the world to help reens force what europe's

doing and we're doing it in ways that are most effective for what europe needs right now available early in a very substantial force and those swap lines have made a very important role in dampening and cushioning the effects of europe's crisis on the rest of the world. it diminishes the need for european banks to dramatically reduce their external assets very quickly which would have put more downward pressure on the global economy. >> ambassador. >> just to mention the point, as you knew very well, we had just announced $60 billion to the contribution of the imf as we have done in 2008 after wall street crash we were the first one to come to assistance to imf. thank you. >> i'm well aware of the

discussion of the deficit has been a force of its own on capitol hill and a lot of very shallow things have been announced about the deficit that shows very little understanding. i don't think the people have been given a good education of it either. what is the right size of the deficit or acceptable size is not going to clear public discussion at all. we're a reserve country. and we're happy to do have. we're providingity -- we're providing vag. that's valuable to park safely something for someone while they don't need it right now. in turn for that we're getting ridiculousity that we wouldn't otherwise have. it's an international trade issue in some sense. both sides benefit.

the proper size of the deficit is not zero. it's an extremely popular element of our economy. the press never seems to explain the fact it's an international trade concept. the question is what are the limits. that public debate doesn't take place on capitol hill. it does not take place in the press. with eneed this as a country and have a rational discussion about what is, what are the limbs up and down of the proper size of the deficit. >> you're lamenting the amount of talk in the united states about the economic policy, which you have a right to do. in terms of the deficit, the minimal acceptable anchor should be the following. you need to reduce the deficit to a level where the debt stops growing as a share of the economy and can start to come down. for a country like the united states we have to have a deficit

that's below 3% gdp. we have to do that on a time frame whereby the debt stabilizes the level that's acceptable and stops coming down. if you look at the path we've laid out for the country on cbos metric scoring the president's policies would reduce the deficit to below 3% of gdp to 2016 and held it there for the next decade. the debt held by the public would stabilize in the high 70s and gradually start to come down over time. if we were to do that and achieve that, that would be -- that would be a very cons kwernl step. we've made some significant steps in the affordable care act to bring down the rate of growth and cost.

obviously we'll have to do more over time. that's why i think the right way to think about the fiscal times ahead is first, put that in perspective. don't put it over everything else we have. recognize we have to deal with them. to do them sensibly you have to deal with them in a way that's balanced which has a mix of spending savings, tax reform and it preserves room for us to invest in things that are important for us to grow. it's worth reminding americans that before the crisis 20% of krids were born to families under the poverty line. 40% of american children before the crisis born to families that qualified for medicaid. so the case for balance and fiscal reform is, you know, it's not just an economic case or a political reality. but there's a very important

moral question and pragmatic economic question about how you preserve room to make investments to grow in the long run, like infrastructure and education. and how you make sure you're protecting critical aspects of the safety net not just for low income americans but for middle class retirees. that's why we think there needs to be a more balanced approach to fiscal reforms. >> gentleman in the first row. >> i'd like to ask you your thoughts about the tpp. the u.s. has now played a key role in tpp negotiation. when it was formed, how do you think it will impocket to the u.s. economy? >> i think the two promising things that's happened in the trade front over the last couple years which are important, are, one, we were able to negotiate and get congress to pass a series of trade agreements that have been pending for a long period of time.

the u.s. essentially frozen in its capacity to negotiate export expanding treasury for the american economy. getting those agreements done is very important. without that, why would any country be willing to take seriously an american commitment to negotiate. that helps. the second is that we've seen a lot of support in asia for this transpacific partnership. it's obviously going to be for a long period of time with the most rapidly growing part of the global economy. we have a huge economic interest in part of that expansion. we can use that agreement to set higher standards in the trade area for a number of economies that we hope will provide an incentive and anchor for economic reforms in the region. so, you know, it's overwhelmingly good economic policy. and it's good tra teenagic policy too for the united states. and we're hopeful that by it be end of this year, we'll be able to put in place the basic foundation of that agreement. >> madam in the fourth row, yes,

please. >> hi, i'm nancy donaldson from the ilo. i want to go back to david's point about unemployment, but from a global perspective. president obama at the summit of the americas over the weekend talked about the importance of coming together and really tackling the issue of global unemployment issues. i know that this administration has brought those issues to the congress as well. we know that the g-20 finance ministers are meeting in the next couple of days. and just wanted to ask you if you anticipate on the agenda having some discussion about global recovery that promotes job creation and that kind of growth has an emphasis. >> of course. let me say from the u.s. perspective, the dominant

overwhelmingly imperative for the global economy now as it has been for the last three years or so has been to lay a strong foundation for growth across the world. there are other challenges, too. that has to be central to the agenda, of course. for that to happen and to turn into broad based gains and better employment outcomes, you need to see growth complimented by things that like better education opportunities. the world economy has gone through periods in history with dramatic changes in technology and where those translated in long periods of growth and incomes and broader economic opportunity it was because those

big changes in economic growth were companied by uniform access to public education. where things like the basic elements to provide health care security, things like that. one reason why this debate about the balance between growth and austerity and the debate about the shape of fiscal formalities is so important is to recognize you've got to make sure you're creating better conditions for economic growth for better outcomes in terms of opportunity. and better prospects for broad based income gains. that should dominate economic countries for a long time to come. that's why the debate in the united states is so important. >> i would like to ask the audience, when secretary

geithner finishes his answer, if you can remain seated while he leaves the aud tore um. >> thanks. >> thank you for your comments, sir. i wanted to follow up on your opening comment that you said that debt levels in the u.s. were down. i'd like to follow up on the question about mortgages. when you were talking about the treasury and mortgage debt, you talked about what you hoped would transpire going forward in the short-term, but you also said there were other things that your research department was looking at. the imf research department has looked at the issue of debt restructuring and your treasure department has looked at it. if you feel besides mortgage debt that credit card debt, personal debt, student loan debt needs to be addressed perhaps after the buffett rule is taken care of, after tax reform, but is there anything more precise you could say about beefing up

aggregate demand both in the u.s. will spillover effects in the global economy. thank you. >> on demand, let's start with demand. a good way to end your question. what we think the most useful thing that the congress do do right now for the american economy is pass a long-term infrastructure bill with substantial higher levels other time that would be good for aggregate demand in the short-term, good for employment generation, good for long-term growth potential. that's one example. if they authorize the bank for a certain time, you have continued assurance of pretty carefully designed support for american exports in a world where lots of countries subsidize exports. those are two good examples. helping americans refinance, take advantage of lower interest rates is another thing that's good. it acts as a tax cut. just under our programs, for example, on the mortgage side, the typical, the typical

modification is $500 a month in lower monthly payments. a million americans have current modifications that meet that test. that's a pretty substantial boost to income. if you can provide broader based refinancing opportunities for americans including those underwater you can have similar effects like that. those are things that are good for demand. on the mortgage side, as i said, there's a pretty good financial case, pretty good economic case for adding to the tool kit of what the gses are doing targeted forms of principal reduction. alongside modification programs. we're in favor of that. if you look at the other aspects of the broader consumer debt market in the united states, i think the right emphasis for reform on the united states is on things that improve the ability of individuals to borrow responsibly. so for example, in the private loan market, student loan market we'd like to see and the cfbp is

working on this, consumer financial protection bureau is working on this, we'd like to see better disclosure and better protections so that americans are trying to pay for education, borrow to do that are not more vulnerable to making bad decisions in that context. there's a huge opportunity for sensible reforms like that and improved disclosure across the broader individual credit markets. so we'll be working. we'll be working towards those things. nice to see you all. thanks for coming. >> thank you very much, mr. secretary. [ applause ] >> coming up in about 45 minutes here on c-span3, we're going to go live to house minority leader nancy pelosi, her weekly legislative briefing with reporters. we expect her to speak about the action on the floor of the house today.

members of the house working to a series of votes leading to a final passage vote on a small business tax measure that would provide a one time tax cut for businesses that employ less than 500 workers. coverage of the house on c-span, we'll have leader pelosi here at 2:00 on c-span3. politicsos's play book breakfast, the series featured majority leader representative eric cantor today. he discussed the number of topics including tax reform and the presidential elections. on reforming the tax code, the congressman say it's about increasing income mobility for those who are paid less. the 2012 presidential elections mr. cantor called the preumptive nominee mitt romney a true conservative with a prouchb track record on jobs and the economy. politico's white house chief correspondent mike allen moderates the conversation. >> thank you very much. now i'm pleased to welcome the house majority leader eric

cantor. congressman cantor. thank you so much for coming. i appreciate it. [ applause ] thank you for coming. i have been covering you since you were delegate cantor. >> yes, you have. >> good morning. >> good morning, to you. thank you very much for being here. what was the -- what was the first political office you held? >> first political office was being delegate in the 73rd district of virginia in the virginia house. >> and how is that similar to what you do now? >> obviously it's similar because the premise depends on confidence that voters give you and to be able to go and reflect their views in a policymaking role. and i'll tell you, i started my -- my political career based upon the experience i had as a small business person. and i was a real estate developer and a lawyer and ran a family business along with

brothers. and faced the challenges that most small businesses do every day. so i brought that experience with me to the table at the state level and the policymaking level interacting with regulators and the administration there in richmond trying to make it easier for entrepreneurs to succeed. >> we're hearing you run the house republican leadership. if there's not some sort of deficit deal. if we go up to the cliff again that that could cause a slow down on both the consumer side and the business side. how do you avoid that? >> i do think it is, there's a lesson to have been learned from what happened last year. i think that the public expects results from washington. i think a lot of us are very frustrated that we're unable to see the results that we would have liked. as you recall speaker boehner put a goal out there if we were

going to increase the debt ceiling we were going to make sure that we would find the reck kwi sit cuts for the increase. we've got to do everything we can to watch the spending. we need to be managing down this debt and deficit in a big way. i think over time people are beginning to appreciate that watching the spending and shaving off unnecessary spending and getting rid of waste, fraud and abuse is one thing. but get og the root of the problem, which are unfunded obligations in the entitlement programs is where the two sides just have a lot of difficulty coming together. >> now, what is the chance that there would be any sort of a deal in a lame duck session after the election? >> well, again, i think the country is in no mood as you indicate the economy is still very frail and for this country to begin to see yet another near

calamity, if you will on the debt ceiling issue is not a positive thing. so i believe that all of us have got to work towards trying to resolve differences and obviously in a lame duck session the country will have spoken and i believe that there will be some indication of a direction that the majority want to see us go that we can avoid some kind of calamity around the debt ceiling. >> let's say governor romney is elected. why would there be any inisn'tive for you to do something in the lame duck session, too. >> you can look at it that way. you can also say a month later the tides will totally have turned and the new sort of elected parties will be in place. and hopefully, though, the election will serve as the end t of this big discussion in divide and we can get on about trying to solve problems. and that's what my hope is because the lame duck then be

okay, voters had their opportunity to speak out. we are where we are. let's get together and try and solve problems. >> last question on this. you foresee a deal by december 31st to avoid the -- the cut off of the bush tax cuts or you think there will be an extension? >> i can tell you the house is going to do everything it can to make sure taxes don't go up on anybody. so we'll do and make some moves i think throughout the year to reflect that notion that we don't think washington -- >> the house is going to do everything it can. that's fine. but -- so it sounds like there's the possibility that we will have -- the tax cuts will expire. >> again, it depends who wins. it really does. i believe mitt romney will win. mitt romney wins i believe we'll be in a position to make sure that we can know taxes are not going up on anybody. and then we can also provide for a transition period so we can

effect real tax reform the way most of us have been talking. >> yesterday house republican leaders sent a memo about ways to avoid the automatic spending cuts that are scheduled to kick in. the pentagon is very concerned about these. as i look through the ways that you suggest to cut, they sound very much like the ones you were dismissing a moment ago, stopping fraud, elimit nails government slush funds, reducing waste, due politicstive programs. >> i didn't diminish the importance of doing that. i think you're going to see us bring forward to the floor a week of may 7th a reconciliation package which will be over $200 billion in savings. that's a significant savings it

will allow us to stay in position of the sequester for at least a year so that we don't see the pentagon hit with the squeser after it's already been hit by the president's budget and the reductions required there. so these are not inconscious kweshl savings. we all know even $200 billion in a year doesn't come close to the kind of deficits we're racking up, which makes my point that it really is the entitlement questions and the unfunded liabilities within those programs that we've got to address. >> if i'm working at the pentagon or i'm a defense contractor i should be worried or not worried? >> i think there's no question that we've got to support the pentagon in its efforts to try and do more with less. >> just trying to diagram that sentence. you want to support the pentagon and its efforts to do more with less. what do you mean by that? >> they are being faced by the

proposals by the president under his budget. i believe that the figure is $450 billion of cuts over ten years and are really going through the motions now of looking at where there can be savings. not unlike the private sector's been going through the last three or four years in this country is finding out more efficient ways of doing things. bringing innovation to bear. management techniques so we can preserve the investments that we have in our defense community and shave off the inefficiency and the waste and get on about the mission that the pentagon lives under which is the defense of our country. >> your 20% business tax cut is on the floor today. there's -- the conversation with jake sherman where he talked about there's going to be a number of messages on taxes this year. but that doesn't actually help people. >> this is -- the 20% small

business tax cut was never proposed to be the panacea. we know what we have got to do in this country which is broad tax reform because it lends itself to the competitiveness of our country worldwide. it will help the efficient flow of capital and make sure that investment flourishes in this country and gets washington out of the way of picking where capital should go. that's to me what tax reform does in addition to benefitting all tax payers by reducing rates, right? but the 20% small business tax cut is something that we felt was the very least that we could do to help the job generators right now that are having so much difficulty. we all know jobs in the economy are the number one issue facing the electorate. what do you do about it? you go to the where the jobs are. >> how many democratic votes will you get today?

>> i never pretended to be a good counter on the other side to have aisle. i think the president signalled that he wants to help small business. so that's why i sort of question the -- the signal that he will veto a small business tax cut. so we'll have to see. >> you mentioned tax reform. politico had an interesting story saying the ways and means chairman is going to work this year to get or at least a push to get them to work this year to get tax reform teed up so assuming the majority you could pick that up in 2013. how far do you think that tax reform will go this year and how much will it be worked out? >> both chairman camp and the whip are engaging in tax strategy sessions about what to do with our tax code. and i think -- >> that doesn't sound very specific. i think we all know the goal is

to bring down rates. the goal is to get washington out of the business of crony capitalism awarding those with influence the ability to seek an advantage to the tax code, which means get rid of the preferences and loopholes and make the system flatter and fairer. we also know that over 45% of the people in this country don't pay income taxes at all. and we have to question whether that's fair. should we broaden the base that we can lower rates for everybody that pays taxes. >> again, how are you talking about doing that? >> again, if you've got over 45% of the people that don't pay income taxes in this country, the question is should they have something in the game? should they have a dollar, which is the notion of broadening the base. again, the purpose should be to bring down rates for everybody. if you look at the corporate rate, we all know, we have the first of the highest corporate tax rate in the industrialized

word. that doesn't speak well for america. >> on the people that don't pay taxes now, how might that be re-addressed? >> we have to look at where the burden is and help those that are in the bottom sector of the income scales, how do we help them with their income mobility? that's at the end of the day what we want to do. how do you help people who want to have a better life and higher wages. >> you're talking about taxes. that wouldn't help them. >> you create growth in the economy. how do you create growth in the economy, you straighten out the tax code and lower the rates. again, we have to take a look at this. this is a real fundamental question. you look at what's paying taxes. what is supporting this government and then you look at the reality of the income disparity in this country. how do you fix it. fi