without respect to their pocketbook. >> i'm for it. >> and you're just going through a comparison between if you had the money and how that would be different in the outcome? >> all i'm saying is that money goes to both parties. it's an equal opportunity funder. >> mr. edwards? i mean, you're suggesting that because the wealthy are more powerful and they can pull more -- >> i'm not trying to suggest -- i'm just asking if the situation exists that each person had a vote and those -- that one vote counted without respect to their pocketbook, how would that be different than what we're looking at today? >> i mean, it's sort of like a political science question. seems to me the main reason why members of congress make decisions is because of the voters in their districts. actually it's not money. it's what they think the voters want in their districts.

so i think we already have an equality between voters like that. >> then why do we need supreme court decisions that define corporations as individuals rather than individual people, human beings, having the power for that vote? >> i don't buy the line that -- i think someone mentioned earlier the idea that corporations have so much power in washington, more power than anyone else. i mean if that was true, why do we have the highest corporate tax rate in the world? if corporations were so powerful, they would have cut the corporate tax rate and they would have done all kinds of other things to benefit them. i think the problem is that corporations spend all their time pushing for these narrow benefits just for their company and often to get a competitive advantage against other businesses. so, you know, i want the government and the economy to be a referee to provide equal treatment. so i'm against any kind of

unequal treatment for businesses or individuals. >> mr. honda, chairman ryan talked about the special interests here in washington and how they will influence things to get their way. often at the expense of ordinary taxpayers. he's absolutely right. but we've now opened up the special interests to win elections by distortions. for example, there's a fantasy that's been circulated that epa wants to regulate farm dust and this was referred to a minute ago. that's just not true. they're not even proposing anything like that, but that example promoted by the special interests is being used to undermine a bill that governor bush's father signed which was the clean air act which called for regulation of arsenic and toxic pollutants from mine and power plants and other industrial facilities that poison kids.

kids get their minds destroyed often before they're even born because of exposures to these chemicals. so they take a little example that doesn't exist, blow it up, you don't even know who's paying for the ads, and then they get their way to try to repeal the -- the voice that i respected the most, president george h.w. bush's greatest accomplishment, only because i don't know governor jeb bush well enough, to regulate. you've got to have a regulations because the benefit from regulations so heavily outweigh the costs in terms of protecting people's health, saving lives, promoting a community that can work together and accomplish great things. so money speaks very loudly and that supreme court decision gave a big megaphone to people who have a lot of money. >> mr. stutzman. >> thank you, mr. chairman, and

i want to thank the panel for being here as well. and i've really enjoyed the conversation so far and i want to just pass on to governor bush i've had the chance to visit with your son, george, within the past year and we've exchanged some e-mails. he's a great guy. i'm really glad to get to know him, as well. i'm sure he reflects the values that you've taught him well. appreciate your family. also, i want to talk about state's rights, state's responsibilities and actually where the states are the solution to the problems that we have. i really do believe that the states are going to be the solution to the problems that the federal government has created and has been a major part of. i was in the indiana legislature in 2004 when -- 2005 when governor daniels was elected and we had a transportation hole to fill.

and we were talking about bonds, we were talking about gas taxes, and none of those were the good opposites. none of us felt that that was the right thing to do to either raise taxes or to borrow more money from the future. so indiana leased the toll road that we have in indiana for $3.8 billion from the private sector. now, washington is wanting to punish indiana because we were creative. we were trying to find other ways of funding transportation programs. governor bush, if you could talk a little bit about that, and also mr. edwards, if you could talk about that and congressman waxman, coming from the state of california that has a lot of fiscal issues as well, talk about where the states can -- why can't we allow states to be creative in finding solutions like that within the states and why it's important that washington shouldn't punish those states for being creative. >> well, thank you, congressman.

i personally i love that deal because they overpaid. so in this case, indiana leased out a road that effectively people from illinois and ohio pay disproportionate fares for to get to and from and the money was reinvested in infrastructure in places where disproportionately hoosiers got to benefit from the infrastructure. it was a very creative deal. interestingly around the world, this is commonplace. center right, center left, it doesn't really matter. the administrations it seems as though this idea of public private partnerships is very common. in the united states with huge infrastructure needs as we've discussed has lagged way behind other countries in this regard. so this is an example of well, we must do it the way we've been doing it because we're doing it the way we were doing it rather than pausing for a moment and saying are there best practices we could apply from other places

to maybe create more creative approaches. i think you're right to allow states to be the laboratories for this to work out would be a great idea. canada, to use the canadian example again of transformation, which has allowed them to weather these huge storms that our country is facing right now far better than we did, their reforms and their pension obligations and their spending and the things that they did to get their government back to a proper level were done under conservative and liberal administrations. this was not a -- as an ideological battle. it was simply a recognition that there are structural problems that exist, fix the structural problems. that seemed to be the duty of leaders in canada and now they're paying a huge dividend because of it. so i'll give you another example real quick. medicaid, we got under i guess the bush that you don't like as

much as 41, i got a waiver, the state got a waiver to try a different approach on medicaid that now is based on independent analysis, has been proven to be more effective and at a lower cost. where we moved effectively to a defined contribution system away from a pay and chase system that the federal government pays enormous amounts for. we got better health care outcomes. we empowered people to make decisions for themselves. and it yielded a better result. now that pilot that exists, now the state law has changed, based on that, i think the law's even better than what we proposed. it was modified based on seeing what the pilot yielded and now they're in front of the president obama's administration to see if they can get an extension of the waiver, and it's possible that they will. >> mr. stutzman, you're absolutely right. letting states try things out on their own. in california, we adopted a medical malpractice law that has held down insurance rates for

doctors. so whether the republicans want to do when faced with the failure of 30 million, 50 million people without getting insurance? they said, oh, let's adopt a federal law, take the power away from the states and have one size fits all medical malpractice. that's their solution to health insurance inequities where people can't buy insurance because the insurance companies discriminate against them. let the states do things. let's don't preempt them. we're going to learn a lot from them. >> can i count on you to help me stop the punishment from senator bingaman to punish indiana for the leased toll road? would you help we with that? >> i certainly want to learn more about it. >> i'll let you two do a colloquy later. miss bass. >> thank you. mr. waxman, i have two questions. i want to get my questions out and then let you have the rest

of the time. after july 2010, the government ended subsidizing banks to make federally guaranteed student loans switching to a 100% government direct lending saved taxpayers $61 billion over ten years. i wanted to know if you thought reforming the student loan program was in the best interests of the taxpayer and put the students first? and then my second question involves a hearing that you had in '08 where you held a series of hearings with the ceos of lehman brothers, aig and others into the cause of the wall street collapse. i wanted to know if you could share what you learned from the testimony that was given in particular about the need of the government to regulate. >> i think there are a lot of people who look at the law and then try to figure out how to get around it or abuse it. we see that in the tax system all the time. they have to pay their taxes, but they look to see if they can expand loopholes to their benefit. and that means that sometimes we have to look at the laws and revise them. the student loans have been abused a lot by the private

colleges that get students federal loan money and then don't really deliver the education that they promised to these students. that's one abuse. the other is that we have a chance to lower the interest rates for students that are struggling under the cost of student loan higher interest that are going to come about if we don't change the law. and we try to figure out how to pay for that. so the republicans say let's take away preventive health care. that makes no sense. we have to prevent diseases rather than pay to treat them later. they've come up with a new proposal i read about in the paper today that they want to take away the ability of states to raise money for their medicaid costs through taxes on the providers. it's been used by many, i don't know about florida, but it's used in california. if states can't come up with their money, the states can't provide service for the very poor. so we're being told we've got to the cut the benefit for health for the very poor, usually

disabled people, in order to pay for student loans? that doesn't make sense to me. we had a lot of interesting hearings about what happened in 2008, and the most dramatic one to me was alan greenspan who had the powers as head of the federal reserve to regulate some of these loans that were being used for mortgages and diced and sliced and sold off that brought about the downfall. and he had the power to regulate, and he didn't. and i asked him whether his ideology kept him from recognizing the failure in the market. and he said he was absolutely shocked that he was blinded by his ideology. that he thought markets would correct themselves. now, what i am concerned about, chairman ryan, and others is that there's too much of a faith that markets are going to correct themselves. that businesses will do things right. well, they will if they have the rules of the road to regulate them to be sure they don't abuse

their powers because often they are very powerful and they want to squelch out competitors. it also means we've got to protect the public health and well-being. so, one of the biggest problems for the 2008 recession was whatever laws we had, they weren't being enforced. laws that could have been adopted were not adopted by the federal reserve, and the cops were not there to tell the banks, you just can't use other people's money and take these kinds of risks. that was something from both parties when we did away with the glass/steagall restrictions which came about during the great depression when we said banks, we're going to protect you with federal dollars but we're not going to let you take depositors' money and take risks with them. and that was repealed under president clinton with strong bipartisan support. i voted against it, and it allowed the banks to take all those risks and with those risks, the taxpayers ended up

having to pay the costs and a lot of people are still suffering because of unemployment. >> with the remainder of your time, if you would like to elaborate some on the document that mr. rokita had about regulations. >> he gave a bunch of examples. i couldn't agree more with. stupid regulations. we don't want stupid regulations. to say regulations are all stupid, we don't want that, but regulations are needed in order to protect the public interest. president george h.w. bush signed the law that put in place a cap and trade program that told private enterprise, you figure out how to reduce the sulfur emissions that are causing acid rain. they were killing the forests and the streams in the northeast and in canada. and he said, we can't allow that. and so we said, you've got all the market incentives.

the industries came in and said, oh, my god, we'll go bankrupt. well, they did it at less a fraction of the price that they said it would cost and it was successful. >> thank you, henry. >> ms. black. >> thank you, mr. chairman. this has been a very interesting conversation. mr. edwards, we've talked about tax deductions and subsidies a little bit. but one program that i have become aware of in my last 16 months since being in this office and visiting a number of the industries in my district, those that are in the food production area have made me aware of market allotments and something that i guess i really didn't know that much about until i had them educate me. but the fact that we in the sugar program have market allotments that to certain producers based on their history and their expected productions. and this has made it extremely difficult for new entrants to come into the market which they tell me really does cause an

unnatural high cost for sugar. and so, does the sugar program through these market allotments in your opinion provide a structural barrier to entry? >> yeah, actually the sugar program is something i've written about. it's an interesting example of corporate welfare that's basically off budget. it's a regulatory corporate welfare program. in my view, the united states has a soviet-style system for sugar production. we have import barriers. we have detailed quotas. we have loan programs that essentially guarantee the price. and i think, unfortunately, what it does is by blocking entry into the industry, it raises the domestic sugar price that usually the price varies, but it's usually about twice the world sugar price. and the effect of that is not only to hurt consumers and there's been department of commerce studies on this. it hurts consumers by the tune of $2 billion a year and hurts u.s. companies that produce food items with sugar.

so companies like kellogg and companies that make chocolate bars and confectionaries, that sort of stuff, have had to move their production out of the country to either canada or mexico to access the lower priced sugar. so the sugar program in my view is an example of -- it's corporate welfare and helps some sugar producers but it creates this broader damage to other businesses. >> well, and i do want to note that one of the pieces of information they gave me was an actual advertisement coming from the canadian companies to say produce your cake here in the united states. but send it to canada to get the sugar frosting because they can save so much money. this is truly happening. so we see now a market that is moving into canada taking jobs away from us and then also increasing the cost to the consumer at the other end. and so i appreciate your information on that. and are there other market allotments that you would raise up here besides the sugar? >> you know, i mean, the milk program. we have similar sort of program

with u.s. dairy production, milk and cheese and the like. essentially it acts the same way. it's sort of competition, it blocks competition in favor of existing producers and it pushes up the price of milk and dairy products which, you know, often hurts lower income americans for example. i think there's a lot the federal government does that helps certain businesses but it actually hurts consumers and particularly lower income consumers. >> thank you so much. governor bush, i want to go to, since i was in the state government and we had care in the state of tennessee the same time you were dealing with your medicaid issues. we were about looking at your state as the model for defined benefit. i know it was a very successful program. unfortunately i didn't have the support i needed to bring that same model to the state of tennessee. given what you're saying about the success there, would you agree that block granting medicaid may be a more effective way and affordable way for states to come up with their own

ingenuity on how they can best provide for those who need that safety net. >> i do. excuse me. i do. i think that there ought to be a careful review of the rules that go along with the block granting. if you have to apply -- you don't get a waiver from some of the requirements that would be a challenge. but it's a far better approach to be forced to innovate because state budgets -- i don't know if there's a single state that doesn't have a challenge with their medicaid budget. and they're forced then to either stop spending on other things because we have balanced budget requirements or reform how medicaid works. so being given the freedom to reform and innovate in return for some fixed amount of money

that would come, in our case, i believe we were probably one-half of the growth projected, that we gave up that half of the growth in return for that's a good tradeoff. >> well, thank you for that because i think too many times we just continue to think about taxing and bringing more revenue through taxing to help to subsidize these programs. and yet, there are some innovative ways to do it using market competition. so thank you. i yield back my time. >> thank you. miss caster. >> thank you, mr. chairman. welcome to our panel. if i have learned anything in my 45 years is that nothing is black and white. there are very few absolutes in this world. and that is one of the reasons that i think the extreme tea party ideology is so divorced from realty. free enterprise and government are not either or propositions. thank goodness we have both.

and we celebrate capitalism and free markets in america. but i hope that we recognize that after living through the worst economic collapse in our lifetimes, that reasonable oversight of wall street excess is important. now, when you talk about government in america, i view government as a way to secure opportunity for all. in fact, thomas jefferson wrote in the declaration of independence that we are all endowed by our creator with certain inalienable rights, among these are life, liberty and the pursuit of happiness. but then remember jefferson went on and he said that to secure these rights, governments are instituted. people want good government. and thank goodness in this 230-year plus experiment that

has created the greatest nation in the world, we have successes to celebrate in government when other countries look at us, they see the premier government-funded medical research center second to none across the globe. we can build bridges, airports. that's something government does a pretty darn good job of. and our public schools and our colleges and universities are the envy of the world. and people want these institutions to succeed. that's why i just don't understand kind of this extreme tea party ideology that says government has no role to play and the free markets are the answer to all. because really, what i think drives citizens crazy are these

impediments to free enterprise and good government when special interests achieve an unfair advantage. whether that's in business or they -- these special interests use undue influence to gain advantage when it comes to public policy. i've seen it in the state of florida. we have a fundamental policy over education. governor, you are an unspoken advocate for school vouchers. i don't think that's a secret. i view vouchers as undermining their mission, giving money to private for-profit centers. oftentimes those vouchers come with no accountability for student success or fiscal responsibility or oversight of those profit centers.

i fear what's happening with your push to give tax dollars for the digital classroom as a substitute for a good teacher, a good classroom. as a supplement, fine. but to drain public resources and hurt our public schools by focusing on a digital classroom that have a poor record of student success i think is questionable. so here's the inconsistency. vouchers, digital schools without classroom, private for-profit tutoring companies, these are not free enterprise. free enterprise in education would be an independent private school, not dependent on government funds. but what we have here are government-backed, government-funded businesses. what do you call it when a private, for-profit businesses uses political context to get

the government to direct money to a private business rather than public schools? is that -- you said honey pot? is that crony capitalism? or just effective lobbying? so the national education policy center wrote in a recent report that these policy prescriptions are part of a corporate-driven agenda to access public education funds. these folks talk about the free market but they couldn't exist without taxpayer dollars. >> since you used up all your time for the preamble to the question, go ahead, governor bush, and take time to respond. >> so the voucher programs that exist are three in florida. you have a corporate tax scholarship program where companies voluntarily give a dollar for dollar credit to an organization that's not for

profit, that provides for low-income floridians a chance to go to a private school. we have a mckay scholarship program which says that if a parent is not satisfied with an individual plan under the i.d.e.a. law that they can take dollar for dollar the money that's not the government's money, it's their money, for their child, to go to a private option. best i recall, every one of those entities is a not for profit as well. so to use the thomas jefferson analogy, i don't think that president jefferson, if he knew that we were spending at the level we were spending, if he saw the size and scope of the federal government, he would be appalled. why not empower people that don't have choices to be able to be able to go to another option?

it's worked. public schools in the state of florida are better off based on the only measurement that matters, congressman caston, which are outcomes. based on the n.a.p.e. schools, public schools are better. we've gone to 29th out of 31 in the fourth grade reading to something like now i think we're 11th out of 50 states. >> those same accountability standards have not been applied to many of the -- >> the time has expired, the gentleman -- we're allowing him -- if we give you ten minutes and everybody else. the time has expired, he gets time to respond since you used up all your time to ask him a question. >> on digital learning, the great majority of the courses on digital learning will be done in the classroom, high-quality content brought in. using the internet and the abilities for adaptive software to enhance the learning experience seems to be a 21st century solution that ought to

be embraced by anybody. in fact, a great majority of people in the states, left and right, are supporting this. thank you. >> thank you. >> thank you, mr. chairman. and governor, i want to thank you for being here and i'm glad the gentle lady -- you brought up the mckay scholarship issue. and that's i think a tremendous model for providing options for special-needs children and their families, been a very successful program. i also applaud the state and your efforts on medicaid reform and actually presenting some option in this the state of kansas. we've tried to implement and emulate some of those. it's kind of interesting we've put some proposals before her as a state that she wanted to do when she was governor so i look forward to her approval of those. one thing i want to talk about this morning is the obama jobs deficit, though. based on the projections from the administration that with the stimulus package, that if

nothing had passed in the stimulus package, they projected the unemployment rate today, this month, would be 6%, if nothing has done. it's sitting at 8.2%. the obama jobs deficit is a $13 million -- 13 million job failure, that its impact has not worked. i'll ask chris and the governor as well, can you tell us why you think that stimulus plan failed? it's going to cost us about $1.1 trillion. i open up with that question. >> i think it is astounding. i think the governor mentioned it is the slowest recovery of any of the recessions since world war ii which is remarkable. i think what market economies do when left alone is they naturally adjust, prices and wages adjust, the economy starts growing again. we've seen that in every recession, that when the government leaves it alone, it naturally starts growing again. go back to 1921, there was a terrible recession, unemployment soared to 15%. but the government at the time, congress at the time, didn't do