>> you said you couldn't say it had a positive effect. the effect is without that kind of research, medicine in this country would fall behind. would be like sierra leone or bot swan a if we stop doing research. we say we're going to go forward in the next century by innovation. we are going to innovate. that means you have to do the things that innovate, that's nasa, that's nsf, that's all the places we invest money. if we stop investing money in the military, all these places where money is invested, republicans say no, we have to cut back we have to cut back, we have to cut back. if you cut this, you're cutting your own throat in my view economically. after the second world war we had the same debt as today we invested, gave free college education to every soldier who came back.

that's investment. >> the gentleman's time expired. mr. mcclintock recognized for five minutes. >> to pick up on that point when we were at the end of world war ii and exhausted all of our resources, carrying a debt proportion as great as it is today, didn't harry truman in 1945 abolish excess profits tax. in 1946, didn't he slash income taxes from 60% down to 20 or so percent? didn't he reduce the federal work force called war demoebization, didn't he take the federal budget from $85 billion down to $30 billion in a single year, and didn't they warn us at the time of a 25% unemployment rate and second great depression? >> i don't know my economic history like i ought to. >> please check it out.

i believe you'll find that's a fact. instead of a second great depression, had the post economic war. we are paying $230 billion a year just in interest costs to service that debt. that means if you're an average family paying average taxes $2,000 of what you sent to the government this year did nothing more than rent the money that we already spent. as you pointed out, end of world war ii when we carried this much debt there was doubt if we could continue to 1946. resources was exhausted credit was shot. we are at that point at this moment in history and i am very concerned what happens to our ability to respond to an international crisis if one is hoisted on us in the position we're currently in. the budget that congress just adopted sets a course back to

solvency. how important is it that we stay that course. >> i think it is important that we do something fairly quickly. and get a plan together quickly because the longer you wait, the more dramatic change you need. >> we have a plan that's the budget in place. we heard the ranking member echo what we heard from democratic senators and from the administration that if the congress doesn't agree to spend a lot more money they're going to shut down the government. how damaging would be that path being suggested, that we massively expand spending at this moment in our history? >> well, you know the economics of it is kind of interesting. spending in the short term is a stimulus, adds economic demand but adding to the debt over the long run time period is a drag.

>> it adds temporarily because when you take a dollar from peter and give it to paul, paul has an extra dollar to spend. doesn't peter have one less dollar to spend in that same economy? >> that's right. >> and isn't the net impact over the long run negative not positive? >> that's right, making the debt worse is a problem. >> my friend from new jersey rightly pointed with pride to the clinton administration surpluses and rightly criticized the bush administration deficits and impact that he had on the economy, but reminds me of churchill's description of clement at lee that carries on as if nothing that happened. isn't it true bill clinton's administration cut 4% of gdp, reduced entitlement spending, in his words, ending welfare as we know it, approved the biggest capital gains tuck in american history. george bush comes along,

increases federal spending two% of gdp, approves the biggest expansion of entitlement spending since the great society, started the entire era of stimulus spending. mr. obama came in increased it by another 2% of gdp. further expanded our entitlement obligations, drove stimulus spending through the roof. what do these experiences tell us? >> well, i don't know about those experiences in particular but let me say that right now the end result from 2007 to now, having the debt double, nearly double gdp is something of real concern and it handicaps us going forward. >> in the remaining 23 seconds, reagan recovery obama recovery, compare and contrast. >> i can tell you that the gdp growth from this recovery has been slow. i don't know if i want to attribute it to one president or

another, but gdp growth has been slow this recovery maybe the slowest we've had. >> gentleman's time expired. mr. mole ton recognized for five minutes. not here. mr. norcross new jersey. >> thank you, mr. chairman, appreciate it. good to have you here, dr. hall certainly appreciate sharing your views. want to follow-up with a comment you made in your statement to mr. van who willens. you talk about wage growth as stagnation on the revenue side of the ledger, and over the course of the last year this recovery has been stagnant, and i agree with that. i think we all agree with that. i am looking for a better

explanation. we look at 73 through i guess 2013, real wages increased by 9% productivity the thing you said drives wages was up by 74%. huge gap that has been discussed. how do you attribute the difference between back then and now and why that isn't changing based on your comments that with the growing economy, the growing wages. >> right. it has been noticed, it is a concern that productivity growth outstripped wage growth at times. >> massively. >> massively. one part of it is nonwage compensation, things like health care costs and other things. that's been a big part of it. if you take that into account, they get a little closer. but you're right -- >> factually. >> has been a bit of a separation of that and i think

that's an interesting thing. i still think it is fair to say that you still can't get solid wage growth without productivity growth. and i think lack of productivity growth is going to hold back wages going forward if that isn't somehow resolved. >> just following your logic we should have had a massive wage increase 74% productivity growth, only 9%, i am looking for how did that occur in your opinion following your suggestion that the increase in productivity would give you wages and that didn't happen. >> well, we would have to spend a little time looking at it. offhand, like i say, if you look at narrow wages, that's a bit of

it. we have had a bit more of a separation between productivity growth and total compensation growth. >> total compensation takes it up 17%. still massive difference. i am leading to trade agreements and '73 and nafta. looking at scoring and whether or not a trade agreement is good for this country, you take certain assumption into effect wouldn't you? in other words are they applying and following the rules that have been set up. when you score something, do you assume that the other countries will follow the rules? >> well, that's right. up to now the scoring of trade agreements has been looking at tariff revenue lost tariff revenue has been driving that. the effects would be different if we did a dynamic analysis of a trade agreement, but you're absolutely right it does rely

on the agreement being upheld on both sides. >> so when we're moving forward, any trade agreements we might enter into you would assume they're going to follow the rules as part of that scoring? >> we do our best to estimate that. if the indication is that enforcement may be a problem or some of those things may not be credibly enforced that could play into scoring. >> is that a maybe? i am saying it is a judgment i can't make because i don't know all of the details of a future trade agreement. >> we are going to run out of time. would you follow up with me it is not a maybe you're going to have to assume they're following the rules? i look at vietnam who never followed the rules on wage agreements, yet they're going to be included in this trade agreement. australia, different story. they tend to follow the rules.

when you start scoring these things, we want to make sure we are taking into account whether or not you're going to assume they found god and are going to follow all of the rules which we find very unlikely. again, appreciate you coming on board. looking forward to future meetings with you and your insight. >> the gentleman's time expired. the gentle lady. >> we are looking at critical things in the country. my colleagues spent time on the debt and the economy. i want to turn to another area related to this, that's impact of interest on our government spending and economy. this past january cbo estimated budget and economic outlook over the next decade that interest payments on federal debt will rise by more than 400%.

$827 billion a year by 2025. it is astounding. as one of my other colleagues said, trying to figure out how do you talk about billions and trillions to our constituents and even to myself. it is something that's really unimaginable. over these ten years, the federal government is expected to pay $5.6 trillion in interest payments. again, just astounding. what negative effects will these growing interest payments have on our economy? >> first they'll make the debt grow. that will have a significant effect on the federal debt. i think if you do a quick calculation, if interest rates go up by .75 percentage points,

a fairly small amount, debt to gdp ratio 25 years from now would go up 25%, higher than the long run average, just the debt alone from that is significant. when you raise interest rates you have all sorts of effects. you raise the cost of capital to workers. that can have impact on wages. by reducing return on capital, i'm sorry, raising interest rates, it effects investment as well. you have economic growth aspects to this. >> as the interest rate goes up that also means that more tax dollars paid into the federal coffers will be used to by services and help with those things we believe we need to get for those most needy. if the interest rates go up,

more money has to go pay on the debt, is that correct? >> that's right. >> so given that what is the effect of 1% increase in interest rates on the projections, how much worse does this problem become? >> it becomes significantly worse. you're talking about 30 plus percentage percent to debt in 25 years, it is really significant. i can give you more detail. will give you more in the long term budget outlook. one of the things we do is show you how varying interest rates effects the debt in the long run and do some discussion of that. >> i appreciate getting that information. all it will do is make me stay up later worrying how we are going and how we take care of this. my last point is my understanding from sitting on the budget committee and hearing previous testimony is that the longer we wait the harder it

is. figuring out how to take care of entitlement programs that's the greatest driver of our debt right now while we can, before interest rates do rise, will put us in better position and perhaps not put us in a crisis situation, is that not correct? >> thank you. thank you mr. chairman for the hearing. i yield back. >> mr. lieu is recognized. >> thank you mr. chair. thank you dr. hall for 25 years of public service. i am going to ask you questions on dynamic scoring. i believe it is a radical c change in how the cbo is going to score the federal budget and to me it is not radical because of the concept, like the concept as you know is easy basically people react to changes in governmental policy. >> right. >> earlier this year, the house majority passed a rule that said we're only going to apply

dynamic scoring to some parts of the budget. my view is math is math. if you're going to apply additional math to some parts of the budget and not others, that will skew the budget and response earlier in this hearing, you said you would apply dynamic scoring where there's evidence of dynamic effect, but doesn't everything have dynamic effect whether you spend on education or spending on infrastructure r&d tax credit spending on nih for r&d, everything has an effect, isn't that true? >> not sure everything does, certainly many spending items have dynamic effects just like revenue items have dynamic effect. >> and will the cbo go beyond what the house rule is if you believe there's going to be significant evidence of dynamic effect and score it that way, regardless of the house rule? >> well, i believe the house rule asked to use dynamic analysis in both the spending and the revenue side where appropriate. >> it limits the spending side

though. so let me ask. you have no objection to having cbo score the entire budget with dynamic analysis? gl that's right. we actually have been doing that, you look at the analysis of the president's budget, we do a dynamic portion of that. you can see how we apply it on everything. we do it in the long term budget outlook, macro economic effect. we had a little experience doing that, and this change to us is just sort of a continuation of using a methodology we have already been using. >> thank you. that's reassuring. second question i have is how you do it. so let's say -- i get the extreme examples. say the state and federal government stop funding education, took that money and applied it to deficit reduction. so you would have a numbers effect. then over time you have a lot of uneducated people in america, and that has a drag on the gdp. do you factor that in, education

levels of the population, how strong infrastructure is, do you apply those to dynamic scoring? >> we do. that would have effect on productivity going forward drop in productivity going forward would be a dynamic effect that would not be good for economic growth. >> and it is possible that dynamic scoring will go negative reverse, right? possible there may be some cuts that actually have a worse effect over time because you're going to have a less productive work force or something else that effects gdp. >> that's right. >> then i have a question about your view of what happened in kansas and louisiana because they applied dynamic scoring in those states, governors of those states said we're doing massive tax cuts dynamic scoring shows we bring in more revenues than the tax cuts. didn't happen. both states are facing potential bankruptcy. my question is do you think they got the dynamic analysis wrong? do you think the theory if you

do massive tax cuts you bring in more revenues is incorrect or do you think it is random coincidence if you do a lot of tax cuts, you'll bankrupt your state. >> i don't know the specifics about the states and what they did, but the economic evidence is that there are dynamic effects but not that dynamic effects are so strong that tax cuts pay for themselves. that takes the economic evidence too far, it is just not there. >> thank you. i yield back. >> gentleman yields back. gentleman from georgia mr. woodall is recognized. >> thank you for being with us today. you were asked earlier you were a homeowner, you confessed to being a homeowner. i am not going to ask if you're a credit card holder, but i want to ask if your model reflects differently the kinds of investments that mr. lieu was talking about whether it be education, infrastructure consumption, consumers buying more imported goods.

does our model make distinction between government spending on investment and government spending on consumption? >> it does. that's an important distinction. obviously deficit spending on something that gives dynamic benefit is different from deficit spending on something that's not. >> when we talk about running up deficits annually, debts over time, the scoring i generally see says if we spend more today we're going to have a positive effect on gdp in years one two, three, drag on gdp in years seven eight and nine in rough terms. is there a way to avoid that impact as we try to balance gdp growth today versus tomorrow? is there a formula that gives gdp growth each and every year? >> it is not a formula but one of the thing that would help is not surprising people right? if you get a fix, you announce it now and you give it a little time so people can adjust to it.

then hopefully you can avoid that push against economic growth, you can avoid that and still get the benefits down the road. it is the idea of getting a plan together, maybe having effects phased in over time so you don't get a drag on the economy. >> let me be clear. i am 22 years from retirement. young people think they're more likely to see a ufo in their lifetime than social security check. you're saying whatever we are going to do to address that concern that the same solution phased in over time has less drag on gdp than if that was imposed at some drop off point? >> that's right in the near term you can have a drop off point as long as you give people time to adjust. it is an issue of timing. faster you fix it better off you are. if you take time and phase it in you can hopefully avoid drag in early years.

>> i am confused i have been on budget committee four years only been in congress four years. we do things one year at a time, we will decide in december to write tax policy for last year. get to a problem we know is coming with ten years but won't deal with it in years one to nine, we only deal with it when it is upon us in year ten. there's economic consequence to short term extensions to one year policies, to let's wait and see culture that exists on capitol hill? >> well, without commenting on culture, yes, there can be effect from doing that -- >> i feel guilty about the culture, i'll comment on culture if you comment on negative effects that the culture brings. i am thinking about the formulas and i have such great respect for the budget committee chairman and getting to the

first conference on balanced budget since 2001. we went after those consumption programs and certainly the sequester went after many of the investment programs. i supported the chairman's house passed and conference budget. have you seen alternatives that tried to reduce consumption spending in this country in order to enhance the investment spending in this country that haven't gotten the attention on capitol hill that they should have? have you seen any idea leaders other than the chairman pushing that idea that we are harming our country with consumption and harming our consumption with lack of investment so let's get the balance right? >> i can't say i have anything in mind. we thought through possible ways

of balancing the budget and ways of improving things. some options are things we thought of and sort of detail what we think the impact would be. >> i know you worked hard to give us the economic information, not try to drive congress on policy issues, but if i could encourage you at every opportunity to help to beat that drum about the degradation that occurs in the economic system with the uncertainty that absolutely no one in this committee, absolutely no one on capitol hill benefits from that seems like a place we could come together and make differences you talk about. mr. chairman, i yield back. >> gentleman's time expired. mr. brat is recognized. >> i want to take exception to couple of remarks previously given by the ranking member, get your confirmation it is true. he said in the short run the republican budget reduces gdp.

you said correctly yes, aggregate demand goes down that's the relationship. but i want to put it in context. equally true, if we go another trillion in debt as milton freedman taught us decades ago and you just create a jobs program, people dig a ditch with teaspoons and fill in the ditch, that would also create gdp growth. >> it would in the short term, that's right. >> that would also create growth in the short term. i am trying to show the context of smart economic growth versus anything that causes economic growth. the second remark the ranking member made was immigration increases would increase gdp growth, that's also a true statement. but what most economists use as a more helpful measure is gdp per capita. would you say that's accurate as a measure of our welfare, gdp per capita is more important to the average person than just growth and gdp? >> absolutely that's what's

behind household income. >> good. is it your understanding in terms of federal scoring immigration federal programs come into play, but if an average person with a 9th grade education i am grates into the country, makes $20,000, pays little in federal income tax, but if they have two kids in school, the cost of that is roughly $24,000 to the local and state, roughly speaking. and any other additional expenses. is that scored by cbo, the state and local cost? >> no. we don't do state and local. >> right. when he says immigration causes growth, i accept that premise it does increase gdp growth, but the average person would not be happy to find additional tax burden for paying for school and other programs that go with it. finally if we could redirect to the slide this is problem the

most important problem the country faces and provides the ultimate context and background for everything we have been speaking about the $18 trillion in debt and debt clock, and it is spinning out of control. this chart is from cbo shows by 2032, the four major programs plus interest take up all federal revenues by 2032. so i say this over and over to folks, our governor came up with the delegation from virginia the other day, sequester is having painful effects on the military in virginia, need transportation, education, health spending et cetera, but i just want your confirmation that what this graph is telling us is that under current law and at present, the budget committee can only deal roughly speaking with one-third of the budget. two third is auto pilot we can't touch without changing law. by 2032 under current law with

interest payments included 100% of the budget is auto pilot. there will be little if any money left for military and regular expenses of running the government, all else equal. >> certainly gets to be an unsustainable. at some point unsustainable level. it is hard to know where it is. but it is. >> in your view i know this is incredibly hard to answer, you've got debt at 18 trillion, these are the bottom of the debt clock, $127 trillion what breaks first? where is the -- this time is different, that book out of harvard had the red lights going off, you said debt to gdp ratio is already at historical highs. if you throw in this story with that, where do you see the first breaking point? >> i don't know. that's like any other kind of debt, when it just accumulates,

if it is a company or household at some point you know it is going to break them, you don't know where. >> i would like to go to the next slide. i think you're familiar at the bottom too small to read. seems like we could do more to provide numbers through cbo and through committee work to illustrate how dire the situation is that this chart presents. economics professor estimates the total fiscal gap, roughly the difference between all projected spending and revenue in current dollars is more than $200 trillion. i just gave the 127 trillion he does it out in infinite horizon calculations and for political purposes, he runs a purple institute. not blue or red. >> gentleman's time expired. >> thank you very much. >> the gentleman from indiana mr. stutzman recognized. >> thank you mr. chairman and thank you, dr. hall.

i enjoyed listening to your testimony and answers to different questions that have been asked. i want to talk about interest on our debt interest rates a little bit and also appreciate your comments earlier about $18 trillion of debt and what that does to our economy what it does to the future of our country. before talking about the interest, could you talk a little about the sequester and maybe how it relates to military readiness and spending. is that the greater problem or are entitlements the greater problem we need to fix because as he was saying earlier about the fact we had a balanced budget in the late '90s and when president bush came into office

9/11 did occur. we had some extreme situations we had to deal with. i don't think that's the only place you blame for the debt. it points to and the sequester has shown we have seen military and defense spending go down, haven't done anything about the other two-thirds as congressman brat was talking about. could you talk a little about that. >> sure. the most obvious thing that clearly is coming is effect of the aging population, that's just going to happen. it has significant budget impacts and rising health care costs which is also related somewhat to the aging population. so no matter what else happens, those things are going to push the debt higher and there are a lot of ways you can focus to try to work on that. we try to give you some options. those issues didn't exist until

now. >> cbo's report on health care costs, cbo recently reduced health insurance premiums for 2016, 25 period. is that something, can you talk about that? i talk to folks back home they're seeing rising cost of premiums, out of pocket expenses. could you touch on that a bit? >> let me put it in context. one of the challenges for cbo was because we didn't have experience for that. when we are trying to estimate the likely impact, to be honest, we are relying on theory putting together things relying on theory. now we are starting to get experience and real data. going forward, that's got to inform our estimates of the costs going forward. what we saw early on we saw drop in premiums we didn't

forecast. but what we are going to continue to do is monitor the premiums and looks like premiums are not following forecast in fact they wind up going more than forecast, we will adjust. >> my concern is that folks at home aren't seeing wage increases. some large companies are starting to increase minimum page for their companies, but as you mentioned earlier, needs to be a tightness in the labor market which in indiana we are seeing that, companies are having a hard time finding that. to go back to the debt and interest how do we -- the interest will surpass defense spending. is that still the projections from cbo? >> i don't remember. if that was a projection, i suspect it hasn't changed. >> what can we expect when interest rates do at some point go back up.

how are we as congress supposed to handle the debt service to $18 trillion of debt and debt that's only going to continue to rise? what happens? >> well if you want to avoid the debt getting out of hand getting to unsustainable level, you have to make cuts. you have to manage spending manage revenue, you have to do something. >> thank you for your candidness. really appreciate it appreciate the chance to ask you a couple of questions. look forward to working with you on this committee and welcome you to your new position as well. >> thank you. >> miss blackburn is recognized for five minutes. >> thank you, mr. chairman. dr. hall, we so appreciate your time and your willingness to work with us. i think we all realize that we have some spending issues and budget issues and it is --

constituents want us to get these addressed. i think they're tired the bureaucracy feeling is if they're immune and exempted from having to work within a budget. i just think they're encouraging us to be bold in the work we are doing. i want to ask you specifically about the inspector general reports. we have been doing some work on the council of inspector general integrity and efficiency reports. had looked at fiscal 2013. they quantified $56 billion of savings. we had a project going on in our office where our staff and interns were working and just the window from 2011 to 2014 they found $97 billion that

could be utilized that with the inspector general reports, they quantify waste, fraud, and abuse. as you all look at the budget, does cbo take these reports on waste, fraud and abuse into consideration and how does that play into cost estimating and budget process. >> we do take the ig reports into account when we can, and it is a matter of estimating the cost properly, so if it is clear there are issues like that that that's part of the cost estimate going forward. one of the tricky things is scoring efforts to bring waste and fraud under control. there are scoring rules with respect to that that make that tricky for us.

>> there was a report cbo issued in 2014 regarding the budget efforts and effects of reducing waste, fraud and abuse with the health care programs. so is cbo looking at or studying waste, fraud and abuse on a broader level and are there plans to release any future reports in this vain? >> at the moment we are not looking at that. we are happy to discuss the possibility of that work. >> could you capture savings by utilizing -- capture savings and use them for budgetary off sets by heightening efforts or changing the way you utilize these reports or integrate these into the budget process? >> that's actually a scoring rule that makes it a little

tricky. if it is a new proposal, and it is something that use of a new tool, then we can take that into account. if it is just simply increasing spending on finding fraud waste and abuse, then the rules don't let us count that. >> that's helpful. i appreciate that. i have a couple of other questions i am going to submit to you dealing with interest rates and deficit reduction because those are items that come up when we're talking with constituents and doing our town halls and the good thing is people are watching closely what is happening with the budget. they're very concerned about the fiscal health of the nation and they want us to begin to operate in a more forthright way, and

also a healthier way as we determine our budget process. i yield back. >> the gentleman from alabama mr. palmer, recognized for five minutes. >> thank you, mr. chairman, thank you for being here dr. hall. it was earlier discussed about the impact of regulations. i think regulatory environment cost the economy about $2 trillion last year, i think it will go over that, well over 50,000 per household. in your view should that be taken into account when the cbo looks at economic projections? i know that the president's office of information and regulatory affairs takes a look at that. i think it only captures the discretionary costs. is there any consideration at cbo taking into account regulatory costs? >> no, i don't think we've ever

really even done research or done work on the possible impact of regulation. and obviously a lot of what makes it tricky is you need regulation, and the issue is what becomes too much regulation, what becomes regulation that has a trade off with economic growth. that's a very difficult thing. >> you raise a good point there, you do need regulation, but what you need is certainty of regulation. and i think there's a number of studies out there that indicate when businesses know they're going to be regulated and know what the regulations are it doesn't have a negative impact. it is the uncertainty in regulation that has an impact. i think we are seeing that play out in the economy now. how would you respond to that? >> well i think i mentioned earlier there is some economic research about the effect of policy uncertainty on economic growth and the fact that that

can have an impact. i don't -- that's still kind of new research, i don't know how well accepted it is yet and to be honest, i don't know how much they focused on the regulations contribution to that. >> i think there's new work university of chicago or london school of economics about that aspect of it but i think it is something cbo ought to take into account. it was also discussed mentioned earlier by one of our distinguished colleagues about the states, couple of states louisiana being one of them, that use dynamic scoring. justification for tax cuts at the state level. i want to run this proposition by you. state taxes are considerably lower. is it possible benefits of a state tax cut would have less impact on discretionary spending and investment spending or would

be nullified, that impact would be nullified or muted because of higher energy costs, higher health care costs, higher federal taxes. >> well yeah that's right. that's actually one of the difficulties of doing any projection, but certainly one of the difficulties of dynamic projection is understanding fully what's the dynamic effect of things. it is not that easy to estimate. >> for instance, in alabama our state income tax rate highest level is 5%. that's little compared to the highest rate for federal income taxes when you consider that blue cross/blue shield just announced their premium rates will rise by 26%, that's significant. you take into account the increase in energy costs particularly for people on fixed income and lower income where it

is concerning for people earn less than $32,000, it is a quarter of their income. you take into account that state taxes are usually fairly insignificant, particular on the income tax side relative to the cost imposed by the federal government would it not be true that whatever tax cuts you have at state level would be pretty much wiped out by federal policy? >> sure that's possible. >> one last thing you were asked earlier if you own a home said you did, you were asked if you had a mortgage on that home. i would like to know if in ten years the interest on your mortgage will be the highest single household budget item. >> i have a fixed interest mortgage, so no. >> so the answer is no. well, that's good. that makes me feel better about you being director of the congressional budget office. mr. chairman, i yield the balance of my time.

>> mr. west continue recognized for five minutes. >> thank you, mr. chairman and thank you dr. hall. saw your bio you taught at the university of arkansas. i just wanted to point that out here for the committee. >> i did. >> appreciate you being here today. you made interesting comment about how delaying solutions to our problems compound the problems. and we know those solutions haven't been implemented in quite some time and our problems are getting worse with too much debt, too much continued deficit spending and we have seen the graphs that show what this is going to do to our interest on the debt. we have seen a graph shows the amount of mandatory spending and discretionary spending, when we look for solutions to the problems, start drilling down on some of these mandatory spending components, specifically if you look at the affordable care act,

i think of it in two components. the exchanges provide premium support in the poverty level bracket, then you have medicaid expansion which 29 states and d.c. participated in medicaid expansion. it pays insurance or health care costs up to 138% of those 138% of poverty level. unlike traditional medicaid for disabled beneficiaries for nursing home patients and children the aca medicaid expansion is for able bodied working adults. do you know the split on aca par par 'tis pants in the exchange and budget impact for each population? >> i don't offhand but i can follow up with you. >> i happen to have looked at some of that data, i believe

there are more people in the medicaid expansion population than those effected by the exchanges and we are anticipation a court ruling in king versus birdwell case that would effect those under the exchanges, but would do very little to effect the larger population of those in the medicaid expansion population. and since the don't know the number, don't know the answer to this question i will ask it anyhow, would you say it would be fair to say medicaid expansion under aca is costing more than the exchanges, if there are more people in the medicaid expansion and more money is being spent? >> i don't know offhand. >> all right. when we look at the medicaid expansion, there's also an incentive premium that was put in, the budget director stated in this committee that premium

was put there to entice states to expand medicaid. again, the medicaid expansion has only been done in 29 states and d.c. whereas the exchanges are in all 50 states. and under traditional medicaid the federal government only pays an average of 57% of the cost whereas under expansion, the federal government pays 100% of the cost for those in the expansion population that will be backing off around 90%, which is still a large premium, again for able bodied working age adults. our numbers show the premium alone is $300 billion over ten years. have you seen any other areas like this under the mandatory spending where there seems to be premiums or enhancements or things that would make our

mandatory spending continue to grow, which also makes deficit spending continue to grow which makes our debt problem even worse? >> yeah, i don't know, i'm sorry. >> the time allotted to answer questions has been short today. i appreciate your testimony. i appreciate it if you could go back and find some answers to those questions and get those to me, mr. chairman i yield back. >> have a from south carolina mr. sanford recognized for five minutes. >> thank you for your time as well. couple quick thoughts. one, i want to follow-up on my colleague from virginia's thoughts with regard to what our colleague from maryland suggested about the republican budget, in at the said the republican budget will slow economic growth. what my colleague attempted to get at from virginia is the why. i think used the analogy of you can hire people with tea spoons to fill in a ditch and dig it out again, it would add economic

growth, but ultimately not make us more prosperous. would another way to characterize this suggestion from my colleague from maryland be that of if you continue down this road, if you go on spending money that you don't have if you don't impose the financial con stranlt that the republican budget was ultimately about, yeah, there might be slow down short term, there will be much greater consequences down the road by not addressing the entitlement and spending issue that the country is confronting. would that be a fair characterization? >> that's right. that's part of our basic message with the long term budget outlook. >> i also want to go back to your words earlier. you said the deficit issue will have significant effect in growth at some point. >> not sure where.

>> i want to go where my colleague from virginia, mentioned a book written by the professor from hartsfield-jackson, university of maryland, questions about some of their about their data. there's been a lot of work done on generational accounting and debt load in this country and the impact on future generations and young person born in america today. simpson-bowles, bipartisan commission it was interesting their observation was that we're facing the most predictably economic crisis in the history of man if we continue to do nothing to address the debt deficit and spending issue that we have in this country. so, i think, again, i'm not trying to lay blame. it doubled under the bush administration and doubled again in the obama administration opinion it's not a partisan issue. it's a flat out economic and numerical issue that will have

consequences for the american people if nothing is done. could you explore more deeply when you think we might get to that tipping point from which there, again, would be these severe consequences? >> this is one of the things difficult in communicating about this because nobody has a tipping point. you know it's got to be there somewhere. but there's no real consensus as to what is a tipping point when it will happen. i would liken it to looking at any business that's losing money at some point, okay. >> but let me just because time is so limited might we say this. the effects of a tipping point if we go to that tipping point would be one in all probability substantial effect in the value of the dollar. when countries had a debt spiral severe consequences. there's been severe consequences

with regard to borrowing ain't rates, impacts a mortgage, a person's ability to buy a home and real impacts to way of life because generally there's been economic drag which is what we were trying to get at in our book. you would say there will be severe consequences if we go past that tipping point wherever it might be. >> that's right, yes. >> and coming back just for one second, if we're somewhere around 20, 25 30, 32 which is not way off, talking 10, maybe 15 years off at that point which we only have enough money for interest and entitlements and nothing else could that be a likely spot at which you indeed financial markets say wait a minute this is clearly unsustainable, we're not going to loan you more money if you're at this spot. i mean, could that in narrowing probability could we be getting

close to as little as maybe ten years out? >> you know, i don't know. >> conjecture. i understand that. would it be reason to say financial -- if you believe the financial markets, we get to a point in ten years where there's only enough money for interest and entitlements you believe the financial markets anticipate it could well be, you know, inside of ten years that we're looking at such a tipping point? would that be reasonable conjecture. >> part of it is they have to believe you're going to address it. it's one of the reasons why the ratio alone doesn't tell you anything. you have to have some sort of credibility that it's not going to continue. and it's worthwhile to continue to loan you money. >> gentleman's time has expired. gentleman from arkansas is recognized for five minutes. >> thank you, mr. chairman, and as my colleague from arkansas has already stated your bio includes a stint at the university of arkansas. go hogs. welcome to the hearing room.

mr. mcdermott from the acting ranking chair's position a moment ago opened his line of questioning about your house. if it's okay, i'm a fellow arkansasian, once upon a time you can trust me i'm not going to try to trick you if i get too personal let me know. nice home? >> sure. >> you already established you took out a mortgage. >> yes. >> was it the nicest home you looked at? >> no. >> so there were better homes? >> i dreamed when i looked at the other ones but realistically that's what i could afford. >> there were nicer homes, bigger homes >> yes. >> probably some in gated communities, a lot of amenities you would like have. you dreamed. why did you buy the house you got? >> it's what i could afford and it was a loan i could payback. >> so when you went to the

lender, they were interested in your ability to repay. >> that's right. >> how novel. were any of the considerations in what you were doing say maintenance and upkeep utility costs, taxes, those kinds of things? >> absolutely. that factored in our decision. >> you might have kids going college that might take a bite out of your disposable income all of those things. and your lender he was interested in that too, probably wasn't he? >> yes. >> but as mr. mcdermott said, the house is a great investment. so if it's a great investment, if it's something we ought to do as homeowners is buy a home and invest in thunderstorms, it stands to reason we probably ought to go for the best thing that we can without record to our ability to repay.

but what you basically stated and i know it's kind of a crudely simple comparison that i'm making here, is that the people that are lending you money for an investment like that are vitally inned in your capacity to repay that loan. and if you could not demonstrate a capacity to repay that loan you probably are not going benefit from that loan correct? >> that's right. >> so as mr. sandford stated a minute ago and others here on the diaz stated our creditors must be interested in our ability to repay? >> yes. >> do you think there's a point in time where they may ask of us to start doing some things like looking at our budgets as every day americans look at their budgets and start doing away with cable and expensive vacations and unnecessary costs that might be as mr. woodal would articulate on the

consumption side and not necessarily to the investment side don't you think our correctedors would be expecting us to do that? >> yes. >> don't you think they are kind of looking at that today? as a matter of fact, it's under this president's watch that we have taken the only downgrade in a rating agency at least in my lifetime, i don't know maybe ever, i suppose, and that downgrade was basically a reflection of congress' inability and leadership of the country's inability to come to terms on a long term program to keep us from getting to a point where we have to suffer extreme measures. is that correct? >> i don't want to speak to their decision. i don't know what their decision was based on. that certainly should be a consideration. nine remaining time i have, it's already been said a number of times, but one of the things that frustrates me as a member of congress is our inability to completely wrap our arms around

the solutions that are going to take the long term implications of all of these programs, whether they are investment grade or otherwise off the backs of the next generation. when i look at that slide a minute ago and i projected out to 2032, i have a 2-year-old grandson that will turn 2 this month. before that young man can vote the debt load and the amount of pressure that the mandatory programs are having on the discretionary budget will be more than we have to be able to even afford discretionary programs and that young man even before he has a chance to vote has not had one thing to do with creating that problem. and so, i'm like the rest of my colleagues up here, i'm in search of solutions and i think the time to do it is now and i yield back. >> gentleman from kentucky is recognized for five minutes. >> thank you, very much. mr. hall welcome. congratulations on your position

and i wish ewell. look forward to working with you. one of the things that i will say keeps me up at night because i have various times of going to sleep, what i think about a lot is how this body which moves at its optimum efficiency of about 10 miles per hour can make policy in a world that's moving at 100 miles per hour and this manifests itself in so many areas we deal with in the energy field and education field and medical field where things are changing so rapidly and those obviously all have repercussions for government and the taxpayers and our federal budget. i remember several years ago when secretary, treasury secretary geithner was here and we were discussing these long term projections about deficits and costs of medicare and medicaid and so forth, and i asked him at that time how reliable would you say projections going out 30, 40, 50

years would be. he said i don't think projections past five years are reliable. of course, that doesn't make your job any easier and nor does it make our job any easier. but in your statement talking about the transapparency of your modelling, that's the segue to that issue, and i am concerned about how somebody in like cbo would model forecasting in some of these areas when things are changing so rapidly. just look at the changes in the forecast of health care costs and the medicare viability have changed in just the last few years, and obviously you've had to go back cbo has had to go back and revise forecasts and projections and so forth. so, i guess my question s-we've talked about modelling and asked questions over the years about how cbo reached these various

conclusions and i don't think that any of us really understand how that process has come about and now that we're going to use dynamic scoring apparently both on the tax side and on the spending side, it seems to me that there needs to be a great deal of consultation with the congress about the modelling that is used. i know that that risks putting that question into a partisan dialogue, but i guess my question would be how do you plan to continually modernize your modelling system and what, if anything, should congress be able to -- what input should congress have in your modelling decisions? >> sure. to me one of the fundamental things that we need to do especially with something like

dynamic scoring is transparency. the thing we don't want to do, we don't want to produce an estimate, don't want to produce a dynamic estimate and give nothing else except a number so all you can do is criticize it's too big or too small. we want to be transparent about what model we're using, how we're characterizing the economy, and we want to interact really with experts. we've tried very hard to do that. we've been doing dynamic modelling for a few years. we talked about with it our panel of economic advisors. >> that would rule out talking with us. >> we're happy to talk to you. we've given presentations to staff many times. and we're happy to do that. you know, the whole goal -- we all have the same goal. the goal is from duce the best estimate possible. and i think the dynamic part of this helps us produce the best estimate. >> the only thing i would say before i yield is that the problem is your estimates while

done with the best of intentions and done as accurately as you can make them are still highly -- inherently flawed. most of them are going to turn out to be revisions. meantime we have to make investment decisions or taxing decisions and in the case of mr. mcdermott talked about earlier medical research we may miss some real opportunities to do something that will not only benefit millions of americans but also have an incredibly positive impact on the budget and looking at things like alzheimer's disease research all accounts indicate very close to yielding some real significant progress, curing that disease and reversion of the mental deficiencies, and we should be, in my opinion, roughly $250 million is spent on alzheimer.

good luck. >> gentleman's time expired. >> i thank the chair. >> i just came here from another hearing, financial services on xm bank, and that hearing made me think of something. let me ask. are you familiar with the writings of frederick -- at all? >> i know the name but i don't. >> wrote an essay, i was thinking about this in the other hearing and it applies here as well. seeing and the unseen. seeing is the immediate and it unfolds with causation, the unseen occurs over time and unfolds over a period of time. in thinking about that looking back over here, i don't know whether he got his writing from earlier writings but if you go back to earlier writings in

second corinthians we're focused on the here and now it's only transient we should be focused on the eternal. all of that comes into play when we talk about spending and our debt, what is transient and what is eternal. you have or rather the cbo's office has in january put out a budget in their economic outlook projection. looking into that what is seen and what is not seen public debt held will reach 79% of the economy by 2025 and this is a question i've asked before and answers are always no, so i assume you'll say the same thing when the cbo takes into account potential for other things do they take into account other things when they come off of those projections the answer is they work off of a baseline. do they take into account things for potential for a future war. potential for emergency military spending that we just can't

foresee. the answer is -- >> no. >> no. do you take into account or did they take into account with those projections future recessions that may come in the future and the answer is -- >> no. >> because you can't see them now. do you take into account future large expenditures for new government programs that we just haven't even thought up of yet. and the answer is -- >> no. >> the seen we get the report is only what we hear now and know but those other things are not considered in the actual report, is that correct? >> that's right. >> if any or all of those things occur the actual projections would be a lot different. >> different. >> if did you those expenditures on future war, future recessions not only different we would be worse off. >> right. >> worse than they are right now. one of the other ones do we take into account that tint rates are not as projected but they are because of these factors or other factors cube lot higher

than what we're projecting right now? >> actually on that one i'll tell you yes because long term budget outlook one of the things we do to worry about just exactly what you're talking about as we go through some scenarios what if interest rates are higher, what if interest rates are lower to give you and idea how our forecast changes. >> i thought your answer was going to be yes on that. if the cbo's forecast is correct in ten years wild be spending $827 billion on interest payments alone. >> yes. >> how much could we be spending or what could we be doing with that $827 billion if we were not spending it on interest payments to investors and banks? >> not my decision, but -- >> in other words, the answer i guess we could be spending a lot more on all the other things that we talk about spending on whether it's infrastructure, or health care costs or if you believe in educational costs, all those other things could be

funded by it but we can't because we'll be spending it on -- >> on the debt. >> on the debt and on interest. payment. >> right. >> also in this report cbo projects federal tax revenue will grow. that's the upside by 3.2 trillion dollars. that's an average of 4.5%. >> one caveat we assume there's no change in marginal tax rates from inflation. so we have the bracket creep in there. whether or not you think that bracket creep would be allowed. >> things could be a lot worse. >> that's right. >> but even if they stayed the same our projection on the spending side are what? worse than that. we'll be spending more than that increase on revenue and get into a worse situation than where we are now? >> yes. >> the scene on these things as far as what we know what we

spend. the unseen is what the eternal? the eternal is on our children and grandchildren and what we can foresee a future increasing debt and eternal debt for them of a less prosperous and growth of economy for children, our grand children is that correct? >> that's correct. >> the gentleman's time has expired. dr. hall i want to thank you for appearing before us today. please be advised members may submit written questions later to be submitted in writing. it will be made a part of the formal record. any members that wish to submit questions for the record you may do so within seven days. we look forward to working with you. this committee stands adjourned.

>> on the next washington journal congressman adam schiff ranking member of the house intelligence committee talks about the usa freedom act and what it means for security and privacy. then ryan zinke on the president's strategy for defeating isis in iraq. washington journal live at 7:00 a.m. eastern on c-span.

this sunday night at 8:00 eastern on first ladies influence and image we'll look into the personal lives of two first ladies from the 1850s, jane pierce and harriett lane. jane pierce loses her son in a tragic train accident grieving she does not attend her husband franklin pierce's inauguration and spends much of her time in the white house writing heartbreaking notes to her son. orphaned at a young age, harriett lane lived with her unocal james buchanan and later becomes hostess to the white house when he becomes president and the first to be called first lady in print. jane pierce and harriett lane this sunday night at 8:00 p.m. examining the public and private lives of the women who filled the possession of first lady. from martha washington to michele obama. that's on american history tv on

c-span 3. as a compliment to the series c-span's new book first ladies presidential historians on the lives of 45 iconic american women. it's available at a hard cover or an ebook through your favorite book store or online book seller. now the british house of commons holds its first question time of session following last month's election. prime minister cameron's conservative party claimed victory and now leads a majority conservative government in parliament. newly elected members and returning members ask questions primarily on the british economy, housing and jobs. this is 30 minutes. order. questions to the prime minister. >> thank you, mr. speaker. this morning i had meetings and in addition to my duties in this

house i shall have further such meetings later today. >> thank you, mr. speaker. during the general election by blue collar conservatism resonated very well with my constituents. they are very keen that the economic recovery carries on track. does my friend agree with me what we must achieve is lower taxation for working people to show we're truly one nation government? >> efficiency i congratulate my friend with a return to house to doubling his majority. there are a number of results in his part of yorkshire that i took an interest in. the heart of our plan is making work pay. the best way to help people get

out of poverty, creating jobs cutting taxes seeing increases in the minimum wage and legislating so people working 30 hours on minimum wage don't pay income tax. that's our plan for working people. >> we all agree about the importance of homeowner ownership. shins he became prime minister has the percentage of people owning their own home gone up or gone down. >> very challenging time for information buy their own homes but what we're responsible for is almost 100,000 people able to buy their own homes because of the right to buy and because of hope to buy. two schemes opposed by labor. >> since he became prime minister the percentage of

people owning their own home has fallen. he mentioned his plan about extending the the right buy to housing association tenants. he's promised under this new scheme the replacement of sold off properties on a one for one basis. he promised that on counsel homes in the last parliament. can he tell us whether he kept that promise. >> if she's complaining about homeowner ownership will she support the extension to the right to buy to housing association. will you support that approach? will you support. there we are. there we have it. a landmark manifesto commitmen. let's expand the right to buy to housing associations but as ever the enemies of aspiration in the labor party won't support it. >> we support more people owning their own home which is not what happened when under the last five years of him being prime

minister only supporting more people having an affordable home as well and that didn't happen under the last five years of him being prime minister either. he promised for every counsel home sold another one would be built. that did not happen. for every ten sold there's only been one built. and less affordable housing means people have to be in more expensive private rented accommodations which means a higher housing benefit bill. can he confirm that for every affordable home sold and not replaced the housing benefit bill goes up? >> first of all, we built more council homes in the last five years than were built under 13 years under the last government. i say to the lady, she can't ask these questions about supporting home ownership unless she answers the simple question will

you back housing association tenants being able to buy their homes? yes or no? >> he broke his promise on replacement one for one of affordable council homes. he broke that promise. and as a result housing benefit has gone up. and at the same time he says he wants to take 12 billion pounds out of welfare. so where is it coming from? earlier this week his spokesperson confirmed the government would not make any changes to child benefit and that's a commitment for the whole of his parliament. can he confirm that now? >> prime minister? >> we made very clear on child benefit in the election i confirmed that again at the dispatch box but let's be clear, we're absolutely no answer from the labor party about housing association tenants. we're clear. they should have the right to buy. so we can now see the new labor

backing of aspiration after election has lasted three weeks. that's how long they've given aspiration. let me give her another chance. we say housing association tenants get the right to rally. what does she say >> her commitment not to cut child benefit during the course of this parliament has not even lasted a few days, that's what his spokesperson said and he's not been committed to it. can he tell us about another issue of importance to families which is whether he's going to rule out further cuts to working families tax credits? >> well again we've said freezing tax credits in the next two years because we need to get the deficit down and we want to keep people's taxes down. isn't i want interesting the whole of the last parliament labor came here and opposed every single spending reduction, every single welfare saving and

they learned absolutely nothing. they are still the party of more spending, more welfare, more debt. it's extraordinary. the two people responsible for this great policy of theirs one lost the election the other one lost his seat. the messengers have gone but the message is still the same. >> he promised, he promised 12 billion pounds of welfare cut, and i am asking where those welfare cuts are coming from. mr. speaker, before an election it's about the promises. now they're in downing street. it's about the delivery. the prime minister spent the last five years thing everything that was wrong was because of the previous prime minister. well, he can't do that for the next five years because of the last prime minister was him. i hope you will bear in mind

when things go wrong over the next five years, there is no one responsible but him. >> first of all we are still clearing up the mess our government left behind. [shouting] the honorable lady asked for an example of a welfare cut. let me give her one. we think we should cut the welfare cap from 26,000 pounds per household to 23,000 pounds per household. in her speech in reply to the gracious speech, it sounded like she was going to come out and support that. so why not, that's the labour goes to approach this. we support a cut in welfare cap? >> the right honorable learned lady has had her six questions. [shouting] >> everyone should be clear

about that. mr. andrew mitchell. >> my right honorable friend will be well aware that there is considerable concern on both sides of the house at the proposition that britain might withdraw from the european convention on human rights. will he take the opportunity today to make clear that he is no plan for us to do so? >> we will make clear what we want which is british judges making decisions in british courts. and also the british parliament being accountable to the british people. now, our plans set out in our manifesto don't involve us leaving the european convention on human rights but let's be absolutely clear. if we can't achieve what we need, and i'm very clear about that, where we've got these foreign criminals and we can't send home because of their rights to a family life, that needs to change, and i will

rule out absolutely nothing and >> i know we're making tributes a little bit later. it's a stain on the conscience of europe the thousands and thousands of refugees have been dying in the mediterranean when many lives could have been saved. does the prime minister agree that the role of the navy of the italian coast guard and the navies of other european countries making a profound difference, however much more needs to be done including offering refuge and asylum to those who need it? >> first of all hhe is right to mention charles kennedy and we will have those tributes right after prime minister's questions. he's right to praise the role of of the royal navy in dealing with the tragedy of the mediterranean. the flagship of the royal navy has been playing it so the a key role in saving lives. but i would part company with

him on his next suggestion. what we need to do in order to solve this crisis is two things. one, we need a government in libya that we can work with so it's possible to return people to africa and stop this criminal trade taking place and second we need to break the link between getting on a boat and achieving residents i europe. that's what needs to be done. in the meantime everything britain can do as a moral and upstanding nation to save lives we will do and we should be proud that we are doing it. >> fifty years ago that's what united kingdom did when offered refuge and asylum to those who are being pursued by the nazis and we all know about the transport and the children that were accepted and given refuge in the uk. now in contrast, however, the uk has an appalling record on the resettlement of syrian refugees it is not prepared to cooperate with other european nations

on accepting refugees had been rescued in the mediterranean. why does the prime minister think it is fair for sweden and for germany and other countries to accept these refugees while the uk turns its back on them? >> first of all i would take issue with the honorable gentleman that we have an asylum system and record of the giving people asylum in this country that we should be proud of when people are fleeing torture and persecution they can find a home here in britain. but let's be clear. the vast majority of people who were setting off into the mediterranean are not asylum seekers but are people seeking a better life. they've been tricked and fooled by criminal gangs, and our role should be going after those criminal gangs, sorting out the situation in libya, turning back those boats were we can and making sure with our generous aid budget that this government achieve 7.8% that we use that money demanded the countries from which these people are coming. that is our responsibility of

>> thank you, mr. speaker. thanks to the careful financial stewardship of its government, yorkshire economy continues to grow with unemployment a fraction of what it was five years ago. can the prime minister assure me that you that it will percolate right the way through the great county of yorkshire? deliver a yorkshire powerhouse. that rivals man chest and london. >> i can certainly give my honorable friend that assurance. i mean he talks about the strength of yorkshire economy, the claimant count in his own constituency, the people claiming unemployment benefit come down by 74% since 2010. in terms of the northern powerhouse what we see is the linking up of the great northern cities as a counterpoint as a counterpoint to the strength of london. we are making good progress but certainly we want to see more money, more resources and more powers devolved to the city to

if we take the york north yorkshire and growth feel that is creating at least 3000 jobs allowing 4000 homes to be built. we make good progress but there's more to be done in this parliament. >> mr. speaker, the prime minister rightly apologized for governments which failed to address properly those claims and those -- of the families lives that were torn apart and those who lost their lives in the contaminated scandal. he also said in response to the question that he would deal with this as a matter of priority, if has this been dealt with for those people who lost their lives and those who live with the damage caused by this scandal? >> i'm grateful to the honorable gentleman for raising this issue. all of us have come

across people who through no fault of their own were infected with blood, with hiv or hepatitis c end effector is his consequences for them. in terms of what we're going to do about it, what i said there were before the election we made available 25 million pounds to help those families and there will be a full statement by the government before the summer recess to make sure we deal with us and the best way we possibly can. >> mr. speaker, a national health -- [shouting] mr. speaker, and national health service was the point of use was at the heart of the conservative general election campaign. will the prime minister confirm that he will continue to deliver better and is response time, better access to cancer drugs and more funding? these make the nhs not only in the of the world but to my

constituents. >> i'm grateful for what he says. i can say to them under this government the nhs will remain free at the point of use and more to the point we are backing that simon stevens plan with an extra 8 billion pounds of spending, commitment that the labour party still refused to me. it's not surprising when you look at the labour record in wales where they have cut the nhs in stark contrast to the decision we made to increase investment in the nhs. that's why you see in the welsh nhs performance worst figures on a unique him on waiting times, on cancer. and i would urge the labour party in wales even at this late stage, change your approach. do a u-turn, but the money into the nhs like we are doing in england. >> thank you, mr. speaker. the fragility of our economic recovery in my constituency is demonstrated by the impending closure of dixon with a loss of 500 jobs, and 8 million to the

local economy. will the prime minister intervene being to keep it working to save these jobs, or at the very least ensure that the company provides appropriate compensation and support for employees to secure alternative employment? >> i will look very closely at the case that he mentions. obviously everything the job center plus can do define employment for those people should be done. he talked about the fragility of the economy in his own constituency, the claimant count has actually fallen by a third over the last year. so there are jobs being made available but as i said where jobcenter plus network funny people work we will certainly make sure they do. >> the u.n. secretary-general has described the refugee situation in jordan and lebanon as the worst humanitarian crisis of our time. what more can britain do in tandem with other countries to

help relieve suffering? and to learn from the lessons of history to ensure that poorly resourced refugee camps doesn't become breeding grounds for extremism. >> i think the first thing we can do is to continue our investment using our aid budget that i think the second largest bilateral donor in terms of providing refugee support, refugee camps, whether in jordan or elsewhere in the region. we should continue with that, but cleared the answer is to allow those people to go back home, whether to iraq or to street. what we need is a government in both those countries that can represent and work with all other people. there's some progress in iraq with the a body government and we need to make sure they can represent sunnis.

we need to get rid of assad who is one of the biggest drivers of terror in the region for what he's done to his people. >> can the prime minister inform the house when expects the uk to retain its aaa credit rating? the honorable lady to her place, and congratulate her on her election success. and if i might say, i think the first question she asks which is about fiscal responsibility and sustainability, i take that as a sign of progress. [shouting] there's a leadership election. throw your hat in the ring. in that one question she's made more sense than all the rest of go for it. [laughter] [shouting] go for it. [laughter]

[shouting] >> diversity in employment is a key part of my plan. can the prime minister to my constituents -- can be concerned into court because he looked to welcoming another high-tech company to the city. >> first let me congratulate my friend for her election success and all the work she did as a candidates and what she will do as a member of parliament. we're committed to deliver capability to create jobs and to boost growth in the region. i have to say, i think the development in portsmouth are exciting whether ship servicing welcoming carriers when they

come to portsmouth or the center. how good portsmouth will be represented in this place by strong conservative women. >> mr. speaker, in the gracious speech by her majesty last week, the government committed to legislating the agreement. that agreement has our support. it is an agreement that was signed up to by all the five parties in northern ireland. neither has it been reneged on certainly the reform -- [inaudible] does he agree with the secretary of state following the talks yesterday that all the parties that signed up to that agreement should not implement

it? if they fail to do so will he take steps to preserve the integrity of that agreement? >> first of all let me agree with the right honorable gentleman that everyone who was a party to those talks, and they were exhausted and lengthy talks ending in an agreement, everyone should implement that agreement in full and that agreement did include welfare reform. that is the first point and he's right. but whatever happens we need to make sure that northern ireland and the assembly has a sustainable and deliverable budget. so i hope even at this late stage people can look at what they can do to make sure that happens. >> thank you, mr. speaker. last year saw record numbers of adoptions and prospective adoption but they're still over 3000 children in care waiting to be adopted.

half of them having waited for over 18 months. what plans does my right honorable friend have to enable more children to be placed in a loving, stable family home sooner rather than later? >> i think my audible friend is absolutely to raise is that i think speeding up the rate at which adoptions a place, making sure more adoption can take place is key to getting more children a better start in life it over the last three years we've seen 63% increase in adoptions we have made progress but in the gracious speech and into building published today that are the plans to quit regional -- regional adoption agency bring together the many agencies that are in this country i think that's right because it matters far more than a talk at a loving home than whether that home is actually in a particular county council area. get on, create these agencies to make sure more adoptions take place. >> the uk steel industry is a key foundation industry for britain, but it's in crisis. will the prime minister join me leadership in mumbai to correctly intervened on the situation and get the colleagues to get back around the table and avoid the worst crisis in the steel industry which we do

potentially see in 35 your? >> i agree it's important that government talks intensively to the leaders of the steel industry about what we can do to make sure safeguard the growth and jobs that growth and jobs that there had been in a stupendous over previous years which started those discussions and have discussions about the steps we're taking for our high-energy intensity energy industries and to help we can give. but at the heart of a successful steel industry is always going to be a successful economy and a successful construction industry which is why we should stick to long-term economic plan. >> mr. speaker, today -- [inaudible] there will be a high content in the uk in the supply chain and a commitment to pursue higher

projects together in asia. this confirms our ability to attract chinese investment and great new export opportunity. does my right honorable friend share my hope that the energy secretary will soon agree the development consent order needed and also agree soon on the pricing of power from this exciting example of british innovation and engineering? >> my honorable friend is right to raise the specific case but also the general case of wanting to attract chinese investment into britain and we've seen something like this 73% increase between 2010-2013 and that is partly because this government has pursued chinese investment and attracted chinese investment into britain. on the specific case of the title lagoon it's subject to a planning decision but i think it does have significant potential but i have seen some of the plans for myself and hope this is something we can make progress on and attract investment into the country to help make it happen is a win-win

for both countries. >> devolution of powers to our nations, our regions and great cities will be one of the themes of this part but that does the prime minister accept that londoners will accept tallies at the same powers that are being devolved to the northern powerhouse? >> i think it's a very powerful point the honorable lady makes and there's been an ongoing discussion with the mayor of london about what more powers can be -- he's running london. that's where he is and is doing a very, very good job of it. [shouting] he's doing an excellent job. very good. i think the honorable lady as right. and we have devolved powers to london we are very happy to go on having discussions about transport and about other economic powers to make sure

londoners created half a million more jobs over the last five years. it's a staggering performance and we want that to continue. >> thank you, mr. speaker. does the prime minister agree that any onshore wind farm propoasal not already granted should not r expect to receive any public subsidy? >> i'm very glad to see my honorable friend back in his place. he campaigned very hard on this in the last parliament and in our manifesto we are very, very clear there should be no more subsidies for the onshore wind farm. it is time to give local people and a decisive say. that is what will happen in england come in wales, the subsidy regime will be changed because it is a reserve issue. i think his desire has been met. the prime minister might be aware of the ongoing case of my

constituent, doctor steve foreman despite his immense contradiction to the music scene around the world, the home office lasting effect to try to -- [inaudible] can the prime minister to the house by people like doctor foreman don't seem to be welcomed in this country because of if the prime minister can't run an immigration policy that works is gone and i know it opened up the road that would be very happy to do so. >> i congratulate the honorable gentleman on his election. i'm not aware of the specific case evasive but i will look at it urgently after prime ministers questions and see what i can do. >> peter bone. >> mr. speaker, with the prime minister agreed that one of the ways forward in the european union is to have two pillars for the first, countries that want a single currency, a common fiscal policy and ever closer political union? the second building countries

that want none of those but instead want a free trade area, a common market? >> i think my honorable friend makes a good point. one of the arguments they held in europe at the moment is to try to get them to accept what is already the case, which is that our countries like britain at the heart of the single market but not involved in the agreement are more likely to join it. not involved in the single currency and in my view, should never join it. we should accept this sort of flexibility is here to stay and i think the challenge for europe is to build a european community that is flexible enough for the single currency country to be happy that their problems and issues can be sorted out but flexible enough for countries like britain at the heart of the single market but not wanting to be part of the ever closer union can also be comfortable with their membership. that is the aim of my renegotiation and it will be followed by a referendum. >> i welcome the prime minister's confirmation there will be no cuts in rates or conditions for child benefits. will also confirm the commitment

he made during the election so that'll be no cuts in the benefits paid for disabled people? >> at what we've actually done is increase the benefits paid to disabled people by bringing in the personal independence payment which is actually more generous to those who are most disabled. can i say how much i enjoyed meeting with him during to generate election were we both addressed the festival of life in the center in his constituency? i don't know about him but it is certainly the only time in my life i've talked to 45,000 people in my life and i suspect the same thing goes for him. >> the prime minister preferred to libya earlier on. we have exchanged views and had many debates on libya since our military involvement in that country in 2011. and yet the situation is getting worse and worse. what new steps and initiatives easy going to bring in conjunction with allies egypt and italy to ensure that this situation is resolved? >> i think my honorable friend

is right to raise this. there will be discussions at the g7 in germany this weekend. we've got to position where special representative from the united nations has been bringing everybody together to try and form a national unity government. we need to give everything we can to support that process because then there is some prospect of libya having a government from a government and then flow some security and from security can flow the ability to start a deal with his migrant crisis in the way i was discussing earlier. >> three social houses need to be sold to generate enough revenue to build one new one. leaving one and half a thousand families without a home for well over two years but isn't this what the prime minister means by aspiration? >> first of all let me welcome the honorable lady to the house and congratulate her on her

election victory. there are two things we're doing to provide these replacement houses. one is for every housing association sells a home, it has been received and is able to build a new house. but also we are making sure that councils so often the most expensive council houses they have when they become vacant in parts of london are council houses with over 1 million pounds and you can build many, many more houses. what's clear, what's clear from this question time is on this side of the house we understand home ownership aspiration, people wanting to get on. the party opposite after the most catastrophic election defeat in years can't even spell aspiration. >> order. our road to the white house coverage continues thursday with another entry for the republican presidential nomination former texas governor rick perry will officially declare his candidacy in dallas. see that event live at 12:30

eastern on c-span. then on sunday, our interview with potential democratic candidate for president former virginia senator jim webb. he talks about his military and political career as well as his life story. we'll have that interview four at 6:35 p.m. and 9:35 p.m. eastern, also on c-span. here are some of our featured programs this weekend on the c-span networks. on c-span 2 book tv is live at the "chicago tribune" printers row lit fest. coverage begins at 11:00 a.m. saturday and on sunday at noon. saturday's speakers include senior adviser to obama david axelrod. our festival coverage is followed by a tour of the "new york times" book review at 7:30. on sunday at noon we continue

our live coverage of the book festival with our three hour in depth program with pulitzer prize winner lawrence wright. he'll be taking your phone calls and questions from the audit yaens. following in depth, festival speakers include scott simon on his book unforgettable kevin schultz on william f. buckley and mailer and the war on drugs in disadvantaged neighborhoods. on american history tv on c-span 3 join us for several featured programs on sun beginning at 4:00 p.m. eastern on real america the nasa film the four days of gemini iv the 1965 manned space flight and first american to walk in place. at 4:30, world war ii photographer on his pictures capturing the war experience and stories behind those images. at 6:00 on american artifacts we visit with senator lamar alexander as he shares stories

in his washington, d.c. office. at 6:30 bob schieffer peter arnette and david hume discuss their vietnam experience. get our complete schedule at c-span.org. we'll return to london now for more from the british house of commons. following question time members reflected on the life and career of former liberal democratic leader charles ken die who died earlier this week. he was elected to parliament in 1993. this one hour portion begins with remarks from the speaker of the house of commons. i informed the house yesterday that there would be an

opportunity today for members to pay tribute to the right honorable charles kennedy. i shall i hope with the house's understanding deploy the chair's prerogative to begin that process. charles kennedy spent almost his entire adult life as a member of parliament. he was assuredly at home in this place, yet perhaps happiest beyond it. he was a man of deep progressive principle but a man also blessed with the popular touch. he was a good talker, but an even better listener. above all and perhaps most strikingly charles had the rare

ability to reach out to millions of people of all political persuasions and of none across the country who were untouched by and in many cases actively hostile to politics. in this seminal sense therefore, charles was the boy next door of british public life. we salute him. we honor his memory. and we send today our sincere heart felt and deepest condolences to his family and his friends. the prime minister. >> thank you, mr. speaker. the whole house was in choke and deeply saddened by the sudden

news yesterday morning of the death of charles kennedy. as you said it's a tragic loss for his family not the least his son who is just prayers are with his family and friends at this time. mr. speaker, it's right the house come together to pay tribute to a man whose character and courage inspired us all and served constituents well for 32 years. there was something special about charles. he spoke fluent human because he had humanity in every vain and every cell. mr. speaker, charles kennedy will be remembered for his success, principle and intellect and incredible warmth and good humor. i'll say a word about each. elected as the youngest member of parol limit at 23 years old, a remarkable victory, standing for a new party, studying at america at the time, went to

fourth place to first beating a conservative who had been in the house for 13 years. from there his political career took off. a year earlier he was asked by the career adviser what to do in life. he replied he could be a teacher or journalist, but if all else failed, there was politics. [ laughter ] they wrote to congratulate him saying i can only presume that all else failed. [ laughter ] the new member he then was faced a number of challenges at the beginning of his career. his arrival was only the third time he had been to london in his life. arranging to stay at a friend's spare room, he remarked he didn't know how tow got to westminister, and, in fact, didn't know how to get to heathrow. he played a pivotal role in bringing together the stp and liberals becoming part of the democrats in 1990 and party leader from 1999 to 2006.

as leader, he took the liberal democrats to the third party for nearly a hundred years and told back in 2003 that his ambition for his party was to find themselves part of the government of the country. his achievement laid foundations for that to happen. while he was never the greatest fan of the coalition and, indeed voted against his formation, he never spoke out against the participation in it for as much as he was a man of strong views he was also a man of great loyalty. he equally resisted any overtures from the labor party, dismissing rumors to rejoin them i'll go out of this world feet first with my membership card in my pocket. charles kennedy was a man of his word. mr. speaker, charles kennedy was a man of great principle and intellect. at the heart of his political views was a deep commitment to social justice believed in europe as a way of bringing

people together, but the most outspoken contribution in recent years was the principled stand he took against the iraq war. looking back, it is easy to forget what a stand that was, taking abuse from the major parties on both sides of the house, and adopting a position that was not even supported by the previous leerpd of his own party. there was something about the deeply respectful way in which to conduct an argument. he did not believe in making enemies out of opponents, and he didn't as he put it, waste time rubbishing everybody else. he made friends with nose who disagreed with him, and that was one of the reasons why he was liked and widely supported in taking on the personal challenges he faced. i had the privilege of getting to know him a little bit when i was a new mp back in 2001. we both frequented the smoking room, and while we disagreed many things, we mourned his passing. i find myself today thinking what an extraordinary talent he

was. battling demons, he made amazing speeches, inspire followers, take down opponents with brilliance in debate, and crack jokes at the same time. above all, mr. speaker it is warmth and humor for which he's remembered fondly. he had a way of connecting with people, even those who did not know well or even at all. in the tributes to nelson mandela in this house 18 months ago, he told us the story of the first meeting. he was introduced by his friend, who introduced him to nelson mandela as a colleague from the house of commons called nigel kennedy. as charles remarked at the time, his firm handshake and jovial welcome confirmed two things there and then. first of all, he never heard of nigel kennedy, but sure as hell, he never heard of me either. [ laughter ] he was the most human of politicians, and in the words of charles kennedy himself the vast majority of people think

there's a hell of a lot more to life than just politics and bear in mind while you represent them. at his best, he was the best that politics can be. that is how we should remember him. >> we all felt so saddened waking up to the news yesterday of the death of charles kennedy and the prime minister expressed feelings of the whole house in his generous tribute as did you in your comments mr. speaker. as we come together to mourn death and pay tribute to extraordinary qualities i think there is much that all of us in i political life can learn from charles kennedy. he was an extraordinary politician, and dedicated life to politics, and that was a reminder to us, dedicating life to politics, being a career politician can be an honorable and noble thing. he took a fill so far call

approach to the ups and downs of political life. despite the adversity that he faced, he never became bitter because he cared more about his political cause than he did about his personal kpreer.career. he had a deep sense of purpose and great intellect wearing it lightly. he could be the most intelligent person in the room, but still be warm funny, and generous, which made him convincing and engaging in equal measure. he showed you could be -- you could be in profound disagreement on matters of serious political judgment while still accepting the good faith of those who take a different view. he disagreed with the decision to go to war in iraq and he was right, but he never felt the need to denigrate those of us who got it wrong. despite the fact that he was strongly committed to his own party, that did not stop him

having friendships across party lines, he was partisan, but generous enough to admire people in other parties. mr. speaker, history will show that he was one of a great generation of scottish mps at a time when scotland gave this house some of the finest politicians of the era. exceptional politicians like john smith, donald jure, gordon brown, and robin curt he stands tall in the scottish generation who were head and shoulders above their peers. i remember when they came to the house, aged only 23 the golden boy from the highlands, he shown in this chamber. he was elected so young and it's a tragedy that he's died so young. all our thoughts are with his family. >> mr. speaker, a few days ago,

i got in touch with charles because i was looking for a telephone number of someone we both knew. his friends will not be surprised to learn we were texting each other. he was notoriously bad at answering the phone, but fluent in sms. he said he did not have the number on him, but he would get back to me this week, and he was spending time with his beloved son, donald, during his half term break. while we all remember charles as a formidable parliament arian and politician it is important to remember his greatest pride and devotion were his family. living next door to his family, laterally his brother in his father's house in forth william and cared for them through sickness and old age. much, though, he was wedded to politics all his life, and i think charles would have wanted to be remembered as a kind and

loving father brother, and son first, and an accomplished politician second. my thoughts and prayers are with all his families especially donald and friends today. maybe mr. speaker it was that enduring humanity, people always came before politics for charles, which is reflected in the heart felt tributes of the last 24 hours from so many outside the world of politics, who did not know him directly, but somehow still felt they did know him and could relate to him. he had and still has that rare gift for someone in public life that when people think of him, they smile. he saw good in people, even his staunchest political foes, and that always brought out the best in people in return. he was the polar opposite, mr. speaker, of a card board cutout

point scoring, party politician. brave, yet, brilliant yet flaunt. as he said about people, he admired most he was a fully signed up member of the human race. mr. speaker, he was funny. he was very funny. his good humor must not obscure the fact that there was a courage about him, most memorably on display taking the principled decision to oppose the iraq war. just because that might seem an obvious thing to have done now, it most certainly wasn't at the time. charles, a lone voice in the house, standing up against the consensus in favor of war on all sides. the fact that he was proved to spectacularly right is a tribute to his judgment and his