♪ host: good morning, it is thursday, july 9, 2009. the summit of the g-eight nations continues in italy. president obama look for more news from the leaders there. here in washington the senate will debate homeland security and the house of representatives will have discussions about spending over the food and drug administration. we will ask you about campaign contributions and their effect on the policy debate. was among the important pieces of legislation in washington now we want to talk about campaign contributions to lawmakers. whether the approach has been effective. whether you think the effect of contributions on policy is

good, that is our topic. we look forward to your calls and comments. we will talk about the intersection of money and politics and what you think there should be additional regulation or whether you think we have the right approach. we thought would be a good time to catch up with you for a number of reasons. here is an editorial. the right-wing candidate barack obama broke his promise to use public financing he left another promise in its wake -- to overhaul elections financing and a federal commission that regularly a undermines campaign law. president obama has yet to

deliver. no senators john mccain and wrestling gold have placed a hold on mr. obama's initial nominee to the federal election commission. before allowing a vote to move forward it they say they want to know who the president's nominees are for that two other seats. later on the bright that the sec is mired in enforcement for the. -- later on, they say that the sec is mired in enforcement. mr. obama was the first presidential candidate to walk away from general election public's winning the men's and acted after watergate. as a result, he enjoyed a fund- raising advantage over the republican nominee. having done his damage to a severely damaged system, mr. obama has a clear responsibility

to fix it. he can start by ensuring that all his nominees for the fec are truly committed to enforcement. he should press congress to increase public matching fund formulas that have fallen far behind. otherwise, every candidate will choose the far more lucrative private financing. with the fec crippled in the supreme court poised to review the laws, mr. obama has promises to keep. that is the take from "the new york times." what you believe is the appropriate approach? what best serves the public overall? let's take a telephone call from little rock on the republican line. caller: good morning, certainly, big money has employed politics.

i think that mr. obama, he is not my president, but i think that mr. obama is usually influenced by hollywood, movie stars, rich people. i do not think he really cares about the common, everyday work people. so, i think that money has a huge influence on politics. host: if that is the case, is there a better way? are you an advocate of more transparency so that you can see who is contributing, or believe there should be restrictions? caller: right. host: which one? caller: i totally agree with the mccain-fine gold bill --

feingold bill. i think there should be of some restrictions on campaign finance. host: the next caller is from athens, ga., on the independent line. caller: that was such an it all again question you posed, i must say. i have been watching msnbc and they had people like eliot spitzer and the wife of eack welch -- the new wife jack welch -- and i just cannot imagine that she second got anything except that she is married to him and he has lots of money and talks a lot. host: this is fred on the republican line. talking about campaign contributions and public policy. caller: good morning, it helps

to separate media and politics. because right now media is running everything because money is the issue. if a politician does not have money, so nobody will hear him. so, who deals with the media? in order to help you have to set the standard not to use money for media. the media should just give free time to politicians and that would stop all the problems. people give money and they expect back and then politicians will go a different way from the beginning. host: i do not understand. caller: media is making

billions. it has to give free time to the politicians. yes, just give the money. religion and politics have to be separate. you cannot get these things together. politicians have to be on the top. host: thank you, the next is from maryland on the democrats' line. caller: good morning, this is my first time:. every time this president does something -- this was my first time:. every time the president decided to do something he decided to go with public funds. everyone is complaining that the government is spending money,

but here's the case where the american public saves money. i did not see anything wrong with that. i think that this president has set the bar very high in all areas because he is doing something in every area. i just do not understand why [inaudible] host: the cell phone lost the transmission there. let's introduce you to donald who works for a campaign's group that monitors public spending in washington. guest: thank you for having me. host: we saw a headline yesterday written off reports you wrote today. the house finance committee took $62 million from industry interests. what did the report look like, and what time frame?

guest: it is interesting you mention that there is gridlock. it seems like reform is not moving forward. the only thing that seems to be flowing freely our campaign contributions and lobbying expenses in washington. there are three major issues on lawmakers' plates in addition to many others. the energy bill that came through the house, the health care legislation in both chambers, and it certainly the financial regulation issues now before the house financial- services committee. we looked at each of the 71 members of the house financial services committee, and their contribution from the financial insurance and real-estate interests that are concerned with the legislation -- we look at the contributions over their lifetime and found they had taken nearly $63 million in

campaign donations from those industries. the data covers all the way up through the first quarter of this year, through march. that is for each member. host: when you look at a more narrow timeframe, really since all of this financial situation broke in this country in the early fall of last year, and the tarp legislation, and subsequent purchase to financial regulation began to percolate, did you see an uptick in contribution? guest: there certainly has been over the years. money is exploding in american politics. the owners give more every year. there's more money given from the financial sector in this last election cycle van ever before. even in the first quarter of this year, these interests gave 2.2 $5 million just to this committee. that is in the first quarter --

they gave 2.25 dollars million. they are spending their time trying to review what it will get done and responding to what the voters have just told them to do. they are still skipping a more than $2 million, just the members of this committee. host: any difference between democrats and republicans? guest: not really. typically money flows to power. there has been a shift over time from republicans to democrats now receiving more money, but when you look get just the top members, their are 23 of the 71 members who have taken more than $1 million from these three industries -- the financial, real estate, and insurance companies. when you look at the top 23

members who have taken more than $1,000,000.12 are republicans and 11 are democrats. host: you are able to report all this because campaign finance reporting regulations. many argue that the best approach is sunshine. put it all out there for people to see. what is your method in tracking these? guest: we have very good disclosure at the federal level. something that could be done to improve it would be that a candidate would file their reports electronically so the information is available quickly, same for house of representatives. but with the senate they refuse to pass legislation to bring the records online immediately. those are five of the old- fashioned way with papers and it takes forever to figure out exactly who gave two senators

after they have filed the reports. it is a simple piece of legislation which is non- controversial that has been held up in many ways. it should pass. i can tell you a similar story for the senate banking committee. it is the other committee of jurisdiction over these types of financial regulation matters. the real problem is that candidates only have one source from one place for the good to get the money -- it is largely those who have the money. i do not have the additional disposable income to give to politicians, so i am left out. the voices who get hurt in the policy-making process for those who have a vested economic stake. -- those are the one to get heard, are those with a vested interest. there was good legislation

introduced by john larsen and senator dick durbin that would provide a set amount of public money for candidates running for office, very similar to laws that have worked in different states like arizona and connecticut. host: before we go, would you tell people how your organization, the public campaign actions fund has financed itself? guest: we receive contributions from a variety of individuals around the country. we also have an educational arm that receives money from 18-20 foundations, so our funding base is quite diverse and broad-base. the campaign website is up on the screen. host: if you are interested you can go to their website. "the huffington post" has the story on this. what is best for the public? let's return to your phone

calls. this is the independent line. caller: thank you, i do think that the public money set aside for congressional elections and a similar to the way you have it on the federal income tax form -- a box you can check to allocate some money for that, i do not think -- possibly term limits on congress similar to what the term limits are on the president might have some kind of de-incentivizing type of effect for these type of lobbyists. the american public sees that as than just being paid off. it is almost like pay-for-play. i think it is strange that all of a sudden now after president obama was elected with just

blowing out of the water, not using the public funds, and he said he was going to use the mccain reform, and then he went back and took all the private money -- i just think it is strange now that we have sarah palin in the news every day with her extreme ability to raise funds from all accounts. now we're looking at this one maybe the liberals think she is a threat. host: we getting a number of tweets. here is one. the next phone call is from atlanta. this is on the democrats' line. caller: i would like to make a comment. i think is great you are covering this issue this

morning. president obama, people do need to remember that the majority of his contributions were small donations. his campaign did an excellent job of raising funds, enormous money, that they raised privately through small donations. i would also say the obama administration really needs to look at this and so do members of congress. the democrats in congress have an opportunity to further the cause of campaign finance reform. thirdly, politicians are not going to change. there are enormous amounts of private initiative and take, not until the media market reform. if there will be public financing of all elections both

for congressional and presidential, then the media markets need to lower their prices on political campaign advertising. host: "the new york times" editorial referenced this on june 30. -- this is rather from "the washington post." the supreme court announced it will consider whether to uphold the ban on corporate spending. it will have a dramatic effect on the 2010 and 2012 elections. it will delay a decision concerning whether hillary clinton ran afoul, that accusation made by a conservative group. it concerns whether the law itself raises constitutional decisions and will reexamine and 1998 decision.

michael, former chairman of the federal elections committee says that this case has the potential to be a blockbuster. what is best for the public and the intersection of money in politics? this is from new hill, indiana on the republican line. caller: to me it is a slam-dunk. every one of these politicians is crooked. all of these donations who the new money, it is all bribes. it is obvious. the only solution is to set aside money for each party, the republicans and democrats, and the independentd, whatever party. once a possible nomination is accepted by their party they should be -- there should be a certain amount of money set aside in winter runs out, that is it, it is over. until we reform this.

-- know the old expression that you have to follow the money. you have all these special interest groups up there. it is obvious that is why there is a disconnect between the average american and the politicians. we know that they are all could. my daughter was watching political debates and ask me which one is lying and i answered her "which ever one is talking." host: this message from twitter -- any money from anyone should not be able to be donated back for five years, or tax this money as income. posting on the sunlight condition yesterday on related transparency issues -- success proposed force in the reports. the senate will post them on line for the public to view. yesterday senator tom coburn offered an amendment requiring the secretary to post office

manager reports on time. his amendment has elements that are both better and worse than the house's efforts. the better is a lot better. reports will be posted in searchable, itemized for met. the house plans only to post pdf's. we will not get to them until 2011. his amendment delays disclosure likely for the secretary of senate to build infrastructure for disclosure until the start of the 112 congress, or 2011. the house will begin to disclose later this year. next is in charlotte, n.c. on the independent line. with apologies, your transmission on the phone is not working. i will move on to frank in pennsylvania on the democrats' line. caller: good morning. one area where a lot of money gets lost is one campaigns hire

private advertising firms. if that was outlawed i do not think it would cost as much money to run a campaign. also, i cannot see where it hinders free speech for networks to be required to have a certain amount of hours allocated to providing free air time for the campaigns. that way everybody gets the same amount of hours. i cannot see where that is not fair. host: thank you for your call. this message from twitter. the next phone call in ed, from andover, n.y. on the republican line. caller: thanks for taking my call.

in order to get the government to operate for our benefit, let's have all political spending text 50% until the budget is balanced. then it would drop to 10%. -- let's have it taxed 50%. i think that would be ideal to keep the budget in line. host: wisconsin, on the independent line. caller: good morning. the last guy had an interesting proposal that might curtail spending, but i am all for public financing. but i do not paint all politicians with a broad brush. i think they're wrestling gold -- i think that russ feingold is a pretty straight shooter. the airwaves belong to the public and we have a right to demand that they provide us with information so that we can

make intelligent sources. i think that we should require that the media provide air time for political campaigns and that would also reduce the cost which means public financing would not be so expensive. but we have to give big money out of politics. the people were 100-1 against tarp, yet tarp went through. the people are one header% for single-payer, yet that does not even get a hearing. so you can see who is running things -- that is big business. host: let's look as headline. this is what the trial in alexandria, va. saw yesterday. the lead fbi agent and the investigation denied wednesday that he had instructed cooperating witness to play on

jefferson's emotions in getting him drunk and taking a bigger part of her company. the agent responded jefferson continued to escalate his demand even when not under the influence. there is more there if you are interested in the coverage of the tribe. that is the paper from new orleans that is covering it. -- from the trial. this next on call is from new hampshire on the line for democrats. caller: i'm a democrat -- but i am going back to what john mccain said during the 2000 election when he was talking about campaign finance reform. he indicated at one of the town meetings that the people who contributed these committees companies that contribute large amounts of money are using a

megaphone and we as the voting public are in the back row whispering when it comes to being heard by congress. and remember that statement. i do not think anything has been done to change it. aside from the sunshine rule and everyone being held accountable i think that there should be some law passed that would restrict companies, major companies -- and i would be interested to know how much a.i.g. or goldman sachs contributed since they went down the tubes, to the politicians' campaign funds. i'm a little nervous, but those are my feelings. we have to do something to change it because as john mccain said in 2000, if you are a large campaign contributor, then you are sitting in the front row with a megaphone, and if you're like the average voting public,

you are in the back row whispering when it comes to being heard by congress. host: oklahoma city on the republican line, what are your thoughts? caller: i enjoy your show, good morning. as far as campaign financing goes, that should always be handled by the states and communities because article one section 8 gives no authority to the federal government for making any rules about campaign finance. the fact that we can no where candidates get their money from, that can tell us -- that we cannot know -- that tells us whether they are beholden to special interests. for the government to tell a private individual that he or she cannot contribute an amount, that is not very american. host: thank you.

another twitter message. the last telephone call is from texas on the independent line. caller: i think one answer would be to put 25% tax on campaign contributions. host: what would happen as a result? caller: they could use it to reduce the deficit a little bit. many people do not like to pay taxes, so it might cut the contributions down. host: ultimately, how that plays out in the political arena? if there were fewer contributions going to politicians? caller: well, we would have less commercials. host: thanks for your participation in this discussion this morning. we will be back with a different topic in a few minutes. the debate is accelerating on

health care reform. if i can find it this morning, the headline in "the hill cc speaker pelosi makes aggressive push to finish health care reform this month. we will talk next to the head of american hospital association and about the announcement he made yesterday with other hospital chiefs supporting aspects of this and making a big announcement about $155 billion in savings to the medicare and medicaid system. let's watch a little of that. we will be back to talk with our guests. >> hospitals acknowledge the significant savings can be achieved by improving efficiencies, realigning incentives to emphasize quality care instead of quantity of procedures, and for the last several weeks they have been working with german baches and are coming forward with a

proposal that produces -- they have been working chairman baucus. there will be applied toward the president's firm goal of connecting healthcare reform that is deficit neutral -- deficit neutral. as part of this agreement, hospitals are commandincommittio contributing $155 billion in medicare and medicaid savings over the 10 years to cover reform. over the next 10 years. these reductions will be achieved through a combination of the delivery system reform, additional reductions, and additional reductions in the annual inflationary updates of hospitals. host: this is rich, president and ceo of the american hospital association, part of the group of chiefs yesterday with the vice president announcing this $155 billion in

savings as a way to support the debate. guest: good morning. what was announced was that we have agreed to $155 billion of savings that come in a few forms. one is a reduction in the annual update factor for medicare and medicaid. a second is a reduction and what is called "disproportionate share payments," those paid to hospitals who have a disproportionate share of medicare, medicaid, and uninsured patients. and a small projected savings from the examination and elimination of unnecessary readmission as.

-- readmissions. the goal is 95% coverage of everyone in this country. there are linkages between those cuts and that additional coverage, so that as coverage goes up and uncompensated care goes down these cuts will be connected. host: if i can interpret it in layman's terms, this announcement is to take less federal dollars in medicare and medicaid payments to hospitals if the money that is necessary for the health care provided comes from an insured patients? guest: right, newly injured patients. we take less medicare and medicaid funds we otherwise wind up as new coverage kicks in. host: what was the intention of the announcement yesterday? is it to give a boost to the reform process?

guest: yes, we have been committed to health care reform and expanding coverage to all for a long time. so, in any complicated process with thoughts of different congressional body is looking at this, and of course with the administration's leadership, we felt it was important to say directly for hospitals were willing to do. we believe firmly that everyone, every stickler group, frankly every individual, will have to understand the need for change. we wanted to step up and show that willingness. host: let me give up the telephone numbers for you to join in this discussion about health care reform debate. specifically, the role the hospitals are playing to advance the discussion. the speaker is committed to move this along here in july. much discussion on capitol hill here in washington.

regular watchers, you can also send us a message by twitter or in the e-mail and we will put those into the competition. would you explain to your member organizations are? guest: yes, the american hospital association represents the 5000 hospitals and health- care systems here in the country. host: there is an off-lead story here. this court on health care bills the luster of new packs, allies hour on effort as obama woos industry. there are lots of opinions about the different ways forward. they write that the obama administration hopes to boost its reform efforts with financial concessions from the hospital and pharmaceutical industries, but is instead confronting deep dissension on several fronts within democratic ranks in possible defections

among key constituencies. henry waxman said yesterday that the white house in committee and others are not bound by the agreements. the white house was involved, but we were not. what do you think? guest: this is one of many steps along this complicated path of health care reform. certainly, we are in discussions with the house committees of jurisdiction as well as with the senate and administration. this is an enormously complex issue which touches every group imaginable. everyone in congress has an opinion about health care. what we are discussing is not whether or not we need reform, but what the best ways ford are. we have tried to lay out things that are of immediate concern, but not the only concern of hospitals. host: with you further explain this? this gets into theweeds about

individual positions, but it the debate is interesting. the administration had expected a good news of yesterday from vice-president biden's event, but several state coalitions with for a value coalition -- the group argues for a different approach and says of the proposal was hotly discussed by leaders during a 5:00 p.m. conference call on tuesday. this new coalition plans to go public with its objections. guest: first of all, a correction to the article. the american hospital association members are hospitals and multi-hospital systems and other health care provider organizations. we have a terrific relationship with the 52 state level associations. 52 including the district and pr.

those in our regional offices. they are independent organizations with whom we have a very outstanding working relationship. always in dialogue, always a lot of give-and-take. as i think everyone can imagine in the program as complicated as medicare and as a place of differently in different regions because of its different features, there are always lots of different takes on it. that is why we welcome that kind of dialogue among the states. we help facilitate it. we were part of the call on tuesday. whether it was hotly debated would be someone's opinion. we think it is a coshocton of way to air out these complex issues. host: thus began with a call from virginia watching us on the democrats' line. caller: good morning. i am the first time caller. there are two issues i have.

let me preface that by saying that i am 53 and was born with their rare lung problem from a genetic problem. i have worked since i was 10 years old and the respiratory therapist for 23 years. many people in my field are scared to death of health-care reform. rightfully so. if we get into a national system we are worried about our incomes, our own benefits. i have had insurance for over 20 years because i work in the medical field. before that many times i was in hospital myself many years ago as a young person without insurance. i hated it. so, i do understand people need coverage. my problem is in the last five years as a traveling therapist i have seen many people who are illegals just using the emergency room like a doctor's office, and even poor people.

even though i feel for them, where we going to cover people who should not even be in the united states? i know that that sounds cold, but again i have been on both sides of this fence. in fact i have only one lung. but i have been a hard-working united states citizen. i do not want to give health care way to just anybody. guest: thank you very much, sir. let me be clear, the projections are that 95% of residence will be covered. the question of people who are here illegally has not been addressed and not part of that 95%. that gets us into other issues as to how that affects hospitals. you have noted the fact that people in need of care, whether covered or not, whether here legally or non do turn to america's emergency rooms.

that poses a significant challenge. it takes us back to sum payment issues i will not get into them. that is an unresolved issue in this debate at this time. host: here is a question from a viewer -- where does the hospital lose most of their money? guest: hospitals are paid by different sources. to do this on a high level, about 60% on average, maybe 55% -- in some cases as high as 80% in some hospitals -- 60% on national average comes from governmental sources, medicare and medicaid, basically. to date they pay hospitals less than $1 for the cost of care. the national average is about 89¢ for medicaid, 91 for medicare. that is according to our statistics.

in some states medicaid drops way below that, so does medicare. the shortfall immediately sets up the hospital to be behind on the financial equation. that is what leads to the cost shift over to the private sector which we would love seat ameliorate it. we know that the private sector cannot continue to sustain those added costs. -- which we would love to see the of private-sector ameliorate it. the just cannot produce the margin of profit -- burn centers, or emergency rooms which are so difficult to maintain. then you have to do the internal subsidy of a more profitable service to carry some of these better not. host: hear the from page of "usa today" gave a big coverage ever report from medicare.

that will fill your at the hospitals, debt and readmission rate is found lacking. -- it is a failure, a double failure at the hospitals. the majority operate the equivalent of revolving doors for their patience. -- patients. what does this report mean? guest: we are part of that effort. something called the hospital quality alliance, one of the founding organizations. as were the centers calledcms. we work closely together. we have virtually all hospitals in the country publicly reporting data. today's release refreshes some of that data already out there. it adds new data also. if you good to the website you

can access it. it is publicly available. -- if you go to the website. we look at heart failure, heart attack, and ammonia, the original three diagnoses with which we began several years ago. -- andpneumonia. last year we added mortality data. within 30 days of that. this year we are adding readmissions data from those same three diagnoses so that patients and hospitals have that information. so that hospitals can see if they're performing better, worse than, or as expected. this is an important public information tool and an important performance improvement to. we're getting a very well- grounded look at these three

frequent diagnoses. host: this is grove city on the republican line. caller: good morning, thanks for seize them. it is nice to see the host/anchors back on. the guest had said they are taking less from the government if they get more injured. i do not see how you are making a sacrifice. rightfully so you're taking less, but getting more injured people to use your services. the other thing i would like to explain -- it seems like the problem with hospitals and their billing system is you have so many bills that come in for just one type of service. you have professional bills, facility bills, and then you have your other bills. there are a lot of people billing. maybe you could do consolidated billing.

if the speaker could be honest about how hospitals are funded and how much the government actually does subsidize for those who do not have health care guest: insurance thank you, sir. i am happy to enter all 3 and quickly. first of all, what hospitals do as part of yesterday's agreement, on the largest portion of these cuts -- the cuts to the annual medicare and medicaid of eight factors is that those cuts kick in next year. this is part of the final legislation. the cuts kick in next year. those dollars can be used to help fund the coverage that will then come back in the form of those new dollars i referenced in that you picked up on. but they will not come back for several years. it will take time for the regulatory process to make its way through, to go through

different elements. the projection is that the coverage will not start to come until 2013. not in 2010. hospitals are very definitely helping to fund it that extended care rich. yes, more coverage comes back, but in very broad terms, if everything works as planned, hospitals will still have a significant level of uncompensated care. this new arrangement may cover about half of that. to the number of bills -- think of the number of bills as a good example, it is an unfortunate circumstance -- but a good example, of the number of separate entities and health care equation. each handles its own billing. we want to get to a much more integrated and connected system, not only from the point of view of better care connection and

coordination, but also some of this administrative connection that i know is the paperwork burden and a maze. we're very grateful that the medicaid program takes care of so many of the nation's citizens who are in the lower economic strata. there is no question that without the medicaid program hospitals would be an even more financial distress as those individuals probably would not be able to pay their bills. on the other hand, and you operate any financial enterprise and you get paid less than the cost of providing that care, it makes for a very difficult financial balancing. that is the reason for the cost shift over to the private- sector, people with commercial insurance provided by their employer, purchase directly from an insurer buy you out of pocket -- that also is subsidizing the

care of those who cannot afford to pay the whole bill. in the case of medicare, it is not targeted to an income level. it is targeted to people 65 and over. that also under pays hospitals on their cost. the american hospital association continues to advocate for more preventing from these government sources to decrease that cost shift to the private sector. host: the next question comes from a viewer in carlsbad caverns, california. caller: i am wondering if it is possible for the country to prevent and respond to the overcharging and expensive health care when the media takes so much advertising from some of his member organizations. the hospital's vice a much advertising in newspapers and influence. you will never see a medical

malpractice trial covered in the newspaper. you hear about them. your is your about the trials from the standpoint that there were overleaf litigious. in fact, harvard studies have proven that most injured in hospitals never even discovered it. it is only about one from 70 people who gets to the point of seven. -- to the point suing. there is more money made. they do not lay on the extra surgery's for free. there is an incentive to our people. furthermore, when you see the media talk about extra tests -- they portrayed these unnecessary tests as if they are free. they're not. this is a money-making operation and the hospital.

guest: let me address a couple of the point. first, on your point about advertising. yes, hospitals to advertise and do it for a couple of reasons. certainly to inform the public as to what services are available and how to access them. they also advertised for educational purposes, for public service purposes. whether or not the media sources with whom they placed their advertisements are swayed i think it's frankly a media hospital, not a -- a media question, not a hospital one. but hospitals use all kinds of avenues to get their message out. suddenly, about liability reform, the american hospital association believes firmly we do need reforms. both in the tort system as well as on an administrative basis.

the threat of legal action is very real. the issue of defensive medicine is out there and the public. it does drive additional utilization. we would like to see decker to. -- we like to see that address. we would like to seek administrative system where the patient and hospital can sort through with the issue is if there is the need for some sort of adjustment for payment. have it done without all the expense of the legal system. on the other hand, if the parties cannot agree, then there is the legal system to settle it. but we think a lot of this can be dealt with up from between the hospital and patient and family. we are definitely in favor of that reform.

it was not part of this agreement is today, but also needs to be addressed. on the issue of complications, your right. the system does pay off on a fee-for-service basis. we have advocated moving that to a fixed payment system. part of our agreement announced yesterday is to experiment with those new systems. some are called bundling, paying a bundle to the hospital, and may beat in post-acute physicians, to bundle them so that there is a fixed amount. it would give the incentive to do it and do right. whatever the most effective treatment would be, it and the least costly one. but no one has done the rigid to the prime caller's point on separate bills -- no one has done that on an integrated

system. some closed systems like the one in which it sound do take a fixed amount of money, but most communities are not organized that way. we like this pilot program so we can learn how to get there. host: when you listen to the debate on capitol hill there is much discussion about changing the emphasis to preventive care. rudest the leave hospitals? -- where does that leave hospitals? guest: if you only get paid for treating people, then the incentive is to tree. you would until there is a condition that needs to be treated. we want to see a change in the incentive so that there really is, maybe a bad term -- a business case for prevention. right now for most parties and

help your system the incentives are to do things. what we want to do are the right things to prevent care in the first place, but have to figure out how to have the hospital still there and ready for those issues that are not prevention and lifestyle or ended. they might be trauma oriented. the nose? we have to figure out how to make that work. -- who knows? to go to our own framework if people want to look at the website look get help for life where there are five pillars -- one of which is on this and prevention. we must get there. host: going back to the announcement from yesterday with the vice president, when you're says that on june 13 teargassed said payment cuts are not reform. -- pimm and cuts are not reform is what he said. guest: that original, and was in

response to an announcement that only contained payment cuts. payment cuts by themselves will not reform the system. changing the economics along with other important policy changes does get is to reform. i did not mean to imply that in some way shape or form money was not part of this issue. incentives are critical. but so are other changes in the system that must occur. that is why back to our framework. the five elements -- we do need coverage for all, but we have to be honest. we are all paying for care today know whether we see it directly or not. we need to pay for it in a more efficient and equitable manner. the second thing, we do have to address the cost issue. the rate of cost escalation in

health care is unsustainable. it is already pressing people out of the market. we have to address quality. we need the right incentives to focus on the right care in the right place at the right time. and it to use the best knowledge we have -- evidence-based medicine. we are developing that now. we did not have that in the past but have it now. bonus and prevention are the fourth. information is the fifth. how to remove it ensured so that all of the records are in one place for a pigeon. the call i for.t. investments which were part of this in this bill. -- a calls for i.t. investments. host: the president came to this decision from the industry. he served as president and ceo

of the former providence services and also in another position there. he has served also as an independent consultant for hospital boards. about five minutes left for him. at the next phone call is from phoenix, ariz. on the line for democrats. caller: yes, i have a question. in 2006 my wife had a procedure, $570,000. the insurance paid. now i am working and i have a 20% cut back on my pay and want to move around to get another job, but am afraid my insurance company will not pay for the $2,300 per month that i pay to keep her going. what is the health care going to do to relieve that so that i can

go forward to find work that will keep me going without having to worry about her health? guest: i certainly hope she is doing well as a result of her care. that is obviously a very serious situation. to your question, we want to see the insurance system reformed so that people are not locked into their jobs because of their health coverage. that is why we call for universal coverage. everyone would be covered no matter where they are employed. if they are not employed, then you need to purchase the coverage individually, or if cannot afford it would have assistance from the government. so, we have called for those changes. those changes are being debated as part of the reform process. but to be sure that you can do that you have to be sure that

everyone is in the system. that we deep in the insurance pool, the pool of covered people, and the pool of health care needs and get every onein so that we spread the risk as broadly across the population as possible. that is a fundamental principle in insurance. some things will happen to some of those beneficiaries, not all. spread the risk of cost, that cost across the entire pool. but you have to have every onein to do that. today we do not. some get their insurance through their employer, some employers cannot afford. some individuals cannot afford it. all of a sudden the incentive in the insurance system is to only go after those you want to cover who need the services the least. we want to build the system where you are not in or out of

it because either your economic or health status. that is what we mean by reform and that is what we favor. host: this viewer obviously supports public of care. -- public health care. guest: there are many aspects. hospitals are one. about 60% or so of our private, non-profit and about 20% are publicly sponsored by some level or form of government, and about 2% are investor-owned. you also have private physicians who are individual professionals in business so to speak for themselves. you have pharmaceutical companies that are private. you have and device

manufacturers that are private. you have insurance which can be either. it is not one single entity the we think of a health care system. there are different forms of ownership and financial incentives. . . you have to make more than you spend or else you will not be there for the next person who needs it. again, the more we can align the ba'ath -- incentives towards what is best for the patient when with a clinical and financial basis, the more we will have reformed the system.

host: chattanooga, tenn. -- tennessee. caller: how would your agreement affects hospital -- with their pay go up, down, stay the same? guest: there are no cutbacks to graduate medical education under this agreement. in fact, we are calling for more graduate medical education positions, more residents in training so more physicians come through in that pipeline and are available to treat patients. host: obviously will be a great deal of discussion as to the health care policy debate intensifies. we want to thank our guests for further explaining the announcement by the hospitals yesterday and tell us about a hospital position on how they would like to see discussion go. thank you. our next topic is really going to be a view on the state of the

economy from the perspective of american manufacturers. our guest, former michigan governor, now president of the national association of manufacturers. but first, more about today's headlines from c-span radio. [no audio] as rainy weather and escalating job worries kept consumers from buying. the sales weakness appears to cut across all sectors, particularly apparel merchants. the department of housing and urban development releases -- releases a report today on homelessness. it says in part that the face of homelessness is changing to include more families and more people who live in the suburbs and rural communities. cyber attacks on the u.s. and south korea that began on the fourth of july are evidently not over. a state official says seven south korean websites are under renewed attack. the state run grant communications commission says

the latest assault began about two and a half hours ago. the first state to legalize gay marriage sued the united states government yesterday over the defense of marriage act. massachusetts challenged the federal law that defines marriage as a union between a man and a woman, calling it discriminatory and overreaching. supporters say other states could follow suit. those are some of the latest headlines on c-span radio. >> q&a sunday. ronald and allis radosh on president harry truman and his decision to recognize the state of israel. >> no one knew what he would do. there was a press conference, what will you do if the jews declare a state? truman said, i don't know. we will have to see. but he already decided and he told only one person -- i will support a jewish state when they announce it. >> sunday at 8:00 p.m. eastern

and pacific on q&a and also on c-span radio, ax and satellite radio and on line as a podcast -- xm satellite. >> how is c-span funded? >> u.s. government. >> private benefactors. >> i think some is government raised. >> it's not public funding. >> probably donations. >> i want to say from me, my tax dollars. >> how is c-span funded? 30 years ago, america's cable companies created c-span as a public service -- private initiative, no government mandate, no government money. >> "washington journal" continues. host: on your screen, a very familiar face to viewers, former michigan gov. john engler, now head of the american association of manufacturers. who are your members? >> 10,000 companies -- small, medium, large, and some of the

-- all part of the manufacturing economy that had something like $1.60 trillion to the u.s. economy. employs more than 10 million american workers and more than 10 million spin-off jobs. host: our focus on a high level is the state of the u.s. economy, but from the perspective of manufacturing and government policies that can stimulate and support that. i want to start with a piece in "the financial times" written by jeffrey immelt from g e. innovation can get america back its greatness. he writes -- an american renewal must be built on technology. we must make a serious national commitment to improve our manufacturing infrastructure and increase exports. we need to dispel the myth that american consumer spending can lead our it recovery. instead, we need to draw on 230

years of ingenuity to renew the country's dedication to innovation, new technology, and productivity. later on he writes -- to do this, the u.s. garment -- u.s. government can play a catalytic role. it has a long history of spending to prepare new industries to some of the -- survive. we need an industrial strategy built on helping companies to succeed with investment that would drive innovation and support high-tech manufacturing and exports, and it needs a robust trade policy that seeks to open markets abroad for u.s. companies while being fair to international competition. guest: completely agree, word for word. that is exactly what the national association of manufacturers considers among one of its highest priorities. mr. immelt is brought on when he talks about the fact that u.s. innovation has driven our manufacturing sector. we are the no. 1 manufacturing

economy in the world. far ahead of number two, japan, and china is no. 3. we have been able to compete even though the cost basis for operating in the united states is certainly higher than other parts of the world because of events technology, many of which led to engineering and design the world's best products. others of which allowed us to produce products had a superior cost and value. so the innovation has to continue. we have a lousy climate for that right now. i think mr. in melt -- immelt's challenge is something congress should listen to carefully. asking for the r&d tax credit permanent -- mish the bush asked for it for years. the only help the president actually gives hi-tech companies directly. governments are run the world have extensive strategies to help. we have one, a credit which is

only 14th best among those are around the world. so it is inadequate and temporary, so you can't even plan on it. make that permit, to start. and what mr. immelt refers to, we have a tremendous history -- much of the defense sector -- but certainly silicon valley. manufacturing sector accounts for 60% to 65 percent of the patents. so we are hotbed of in it -- ingenuity and innovation. host cut last week we got new numbers on u.s. manufacturing activity. the report showed 17th month of contraction. albeit at a slower rate. what are the economists telling you about the state of the economy as viewed through the lens of manufacturing? guest: it is tough right now. we are still in a recession and people need to be reminded. we have about 65% plan capacity utilization. in other words, we can increase

about 50% what we are reducing today without adding any new capacity. and so, it does seem to me that we better be very, very mindful of that fact. and i think one of the great risks we've got is a completely jobless recovery when it comes, because many of the companies, and general electric is an example, we have massive markets overseas. some of the fast-growing markets are and other parts of the world. and we have an administrative proposal that many in congress think makes sense and we think it could not be more destructive in terms of encouraging job creation and doing r&d in america for products that we sell to the entire world. instead, the united states by itself is trying to have a tax structure that is completely different and more expensive. the way around that is to simply change your headquarters from the united states to some other country. host: do you think it will drive

jobs out? guest: i know it will because it will chill in assessment. and we actually have a number of changes in the tax law that will put in place to allow us to try to compete, because we recognized that our corporate tax structure was out of balance. what the administration proposal would seek to do is remove all of those preferences, if you will. for example, recognizing all of your foreign earnings immediately and taxing it in the united states. currently it is allowed to be deferred until such time you bring the money into the united states. i think it is a rational policy to say let us encourage people to earn money by selling products overseas and bring it back home to be put to use over here. let us not encourage people to be creative and find ways to spend it in other parts of the world. host: increasingly we have been seen china pushing on an international scale for a new reserve currency, no longer

based on the u.s. dollar. what would be a fact of changing the dollar as the global changes -- trading currency be on american industry? guest: probably in our lifetime, nothing, because it would probably take a long time for an alternative to develop. but one ought to look at what underlies that kind of public commentary. it is clearly a questioning of the willingness of the united states to have a strong currency. we have always argued that currencies really need to be determined by market values. we did not say that we have a strong or weak dollar currency. on the other hand, i think china has issues with their currency because we think there is government intervention in terms of that valuation of the currency. when they allow some appreciation, that was getting more to the true value. i think it is very hard to think of a new currency being created.

but i think the united states does has -- have to manage fiscal affairs more effectively. we have to have a growth strategy again. it is interesting that in all the talk about the massive deficits that loan and how much those would go up some of the new spending was authorized common that we are really not talking about what economic growth is. that is what jeff immelt's, goes to the heart, because it has been manufacturing jobs that has created both growth and wealth that has the spin-off benefits. we still think america has to be a country that makes things. we believe that the national association of manufacturers that manufacturing is essential to national security. not just economic, but national security. if we can't make the chips or the sophisticated technologies that are part of our defense systems, who does the that and who do we depend on and who can we rely on if we get into a

challenging period in the years ahead? host: you can reach us by phone, e-mail, or twitter. we will put all of those phone numbers and addresses on the screen. last question from me. you said the country needs a growth strategy. the administration has taken the position that a key to growth strategy is reforming the health-care system. do manufacturers agree? guest: not really. we think it is important to hold down health-care costs. and as we have gone further -- and we have been actively participating in the health-care debate -- i think taxes have more to do with growth. i think protecting intellectual property. i think investing in our universities and our national laboratories has a lot to do. i think having a rational trade policy again where we can sell our products when we are seeing

but congress stock on colombia and panama, you have to shake our heads. panamanian imports to the united states are of the equivalent of three hours of chinese imports annually. it makes no sense. when you say health care, it is a cost, it is a part of labor, but i would argue that energy policy has a lot more to do with our ability to compete because for many companies the energy costs, those are imbedded in products, result in far more impact on final cost than health care. post cut is the association a component of tapppan trade -- host: is the association of component of cost -- have been tried? guest: i think the political allocations made in the house bill and the complexity of that bill will give every business in government partner. we will have to be smart about running our business depending on how successful we are -- regulatory agencies to give us

permission to operate. manufacturing also speaks from a position i think of success in reducing carbon and emissions. we more than doubled output per be beeped -- btu. because manufacturing uses one- third of all the kilowatts, we long had energy efficiency as a goal. that is today still the most effected way to reduce emissions and reduce carbon. but think we have a pretty good record of that. host: let us give to your phone calls. then salem -- massachusetts? caller? are you calling from massachusetts? carol, democrats line. caller: of i agree -- i agree with much of what your guest speaker has put forward. my biggest disappointment with this country -- and it should have been seen years ago, that

big business here, the big manufacturers, with their greed, put most of their manufacturing over basically in china, taken jobs away from the american people. and it is a great concern. and obama, my issue with him -- i applaud what he is trying to do. i don't applaud the match -- the method in which he is trying to do it. when the government starts becoming the comptroller of free enterprise, than our american way of life decreases to the point where we will be living under socialism. guest: well -- and i want to turn my volume of a little bit

so we can hear these callers a little better. one thing i understood you to be saying in terms of the methods -- and i suspect you are refering to the auto industry and some of the domestic challenges we are facing in the short term -- i think a lot of people have sort of have their eyebrows raised saying, boy, this is a real departure from the weight bankruptcy laws have worked. this is a real change in terms of the way in which we have really seen in government relate to companies, especially companies in financial trouble. i think you might argue that we are spending a lot of time on some of the companies in the most challenging positions while other nations are looking and saying, who are the national champions and how we help them become even stronger. i would just say that we sort of believe that it is very hard for the government to correctly decide which companies are on

the accent and which ones are in a challenge to situation, that is why you create the broadest possible policies to give everyone a chance to be a champion, a winner, recognizing that over time some will succeed and some will not. there are in -- unfortunately in our past companies who were powerhouses that in some cases no longer even exist. the remark about china -- the other thing we are strong on is, yes, there should be liberalized global trading system, but at the same time it should be enforced. i think we have seen in the early days of the obama administration efforts to make it clear it should be enforced. one of the big concerns we have about the cap and tax approach on carbon is it would be our regulations on our countries and manufacturers, but it is a global problem and there is no guarantee -- in fact, there is opposition and places like china

and india to do anything at the time. it would be a competitive disadvantage that would be far bigger than the previous trade agreements. host: the next call is from charleston, south carolina. karen on the republican line. caller: thank you for taking my call. i am an inventor for a small household product, a small firing service that goes on top of your dreyer, but although it is not a high-tech item, i was determined even though -- center at the patent to manufacture it in charleston initially. my costs were so high that i was forced to license it out to a company that manufactures it overseas, in china. it was disturbing to me to do that. but one of the costs that really broke my back on this item were my shipping and handling cost in america. our costs to take an item and ship out to someone who orders

it is prohibitive. the magnets that i needed to manufacture of this raised the price of the magnets threefold. it was ridiculous. i cannot understand how this product is manufactured overseas much more cheaply. i understand that their labor is cheaper, but they are also importing it. but i think that it is discouraging. and i also think that people think that when these little products are manufactured in china, that there is a standard, which in my case, it isn't. it is true. i did testing on it, and it is just as good. and thinking about it, i realize as well that it is a lot of jobs that depend on the importation of these products as well. here in charleston we have great ports. all the importing people, the truckers, marketing people and people like myself all still benefit and maintain their

income from these products. but i have to say, i think the u.s. postal service is also in part to blame about this. i was absolutely appalled at the costs i had to incur it just to ship my product. host: how is a business doing? caller: it is great. it is in a big marketing company, it is and catalogs and going on the air, so it should do fine. but it will have a tag on it that says made in china. i want everyone to understand that it isn't that you want to do it, but you are almost hands down forced to do it as a little person. guest: this is a great call. thank you so much for calling, because you have a lot of issues wrapped into that case study. we would argue as part of the hole -- how you come out of recession -- one thing we ought to be spending money on infrastructure.

she is talking about high transportation. the cost of delay and congestion are massive. that could be addressed in part through the stimulus package. you talk about costs. we lost a lot of the chemical industry in plant and investment when energy prices got so high here, you are competing on a global basis, but your main input, in this case manager, was more than half the cost. companies were simply forced it they were to stay in business, to go to the middle east where they can get cheaper gas. we have not had a domestic energy policy which has been added -- adequate when it comes to exploration and production of our on resources. carbon -- one of the issues in carbon emissions, but if you look at france, they don't have the same issues. why? it% of the power is from nuclear power industry, all built on u.s. technology -- 80%. north carolina happened to be

the state in the nation the highest proportion of power from nuclear power. but energy costs matter when it comes to manufacturing. i would guess also there are labor preparedness issues you come into. if we are going to have much more expensive labor, it has to be highly skilled and highly productive. and one of the challenges -- i know c-span has been focusing on education for a couple of days -- that is an urgent need. we don't need dropouts and dummies in manufacturing. we are high-tech industries, so we need skills. host: when the government -- gov. talked-about education focus, next week we will welcome about 50 teachers, high school teachers to teach civics will come to learn how to teach their students how washington operates and using c-span video to do that. i did want to show an article in "the new york times" qazi reference congestion and cities.

cities lose out on road funds from stimulus. much of the money flows to rural areas. the 100 largest metropolitan areas are getting less than half of the money from the biggest pot of transportation stimulus money. in many cases, they have lost a tug-of-war with state lawmakers that urban advocates say could hurt the nation's economic engines. more detail -- with 50 states meeting a june deadline for winning approval for projects that would -- were $16.4 billion, it is clear that the stimulus program will continue that pattern of spending disproportionately on rural areas. guest: last time i checked, the united tates' senate, i think there are it's mounted senators from each state -- whether large or small, congested or not congested. when they write formulas, everybody is going to be winner, or hopes. so it doesn't always work.

i think one of the things we would say is that there ought to be, at least on the national infrastructure level, some ability to look at what are the nation's top priorities. on rail traffic, we know going around chicago, an extra day just getting trains through the congestion. clearly one of the big bottlenecks, and i would argue the first bottleneck we ought to deal with because it means so much. and that is true for highways as well. i think there is a point in the article. the other point is simply that these are political processes to, and formulas are also earmarks, if you will, they determine how money is being spent. being from michigan we used to complain quite loudly about such things as the fact we had a winter construction season that allowed for no construction. in the south you could build year round, so that would give you more value, if you will, for

your money and made our projects more expensive. we paid more than we got back. if you were an idaho you would say, that is just fine. we would not have only roads if only on our revenue. this is all part of the political process. but i think what the national leadership -- and jeffrey immelt hit a lot of the points. there should be a strategy, and that, what do i need to do in my areas? if i am a governor trying to get it plans, the one thing i would do is promise to build the road to get out of the expressway to make it easier for the plant or connect a rail spur to the site. that is one planned at the time but did not good enough for the nation. host: the next question is from willoughby hills, ohio. dale on the independent mind. -- line.

caller: i agree with most of what i am hearing. my question is how we get these issues in front of the american people. because, if we took the housing starts and the related financing out of the economic table over the last few years we would not have much left because everybody who used to make a good living in manufacturing, it is gone now. it is all related. and the middle class, which was the strength of our economy. so these issues, when the president goes to china and talks about global warming rather than at revaluing that you want or protection of our technologies of the crazy trade imbalance, we are getting into the position where the nation is so poor people can only afford to buy chinese goods at wal- mart. how do we get these issues more in front of the politicians where we can protect our technologies? guest: insists -- i believe

international means just fine, but at the end of the day we have to look in the mirror and say what is it that worked in the past, how does it have to be changed to reflect the conditions we confront in the 20th century -- 21st century. we are in charge of our own competitiveness. we can decide not to invest in our infrastructure, we can decide or not to do the training. education is an area where we fund it, we spend $550 billion annually and yet we have appallingly high dropout rates and some school systems. we have others who are not college bound, so the education system says, they are not going to college, they are on their own. they can be on their own. we need to have them with skills that allow them to come in and be productive and give them the confidence they need. i think it isn't so much what we are going to get in the way of

agreement with any international leaders. i would argue, as you have made the point, if it is china or if it is the eu, or frankly, india and brazil, we ought to be saying, we want to trade with you but the rules have to be fair. we have to have access and you've got to play by the agreement you make. and that is an important -- but there is some much more. look at our energy policy in the united states, or the lack of it. for some many years, both parties, we just have not been able to get agreement. while we've been there, other countries are moving ahead. -- while we dither. china is spending billions on railroads, on highways, and airports. and they are creating the kind of infrastructure that we once enjoyed. we better fix hours. no one is going to do it for us. host: youngstown, ohio, this is

ronald on the democrats' line. caller: good morning, john and susan. thank you for taking my call. i agree with a lot of what john is saying. as long as the right answers are kept off the table, we will continue to have economic problems. the right answer was to shut down the free trade. if you want to put americans back to work. but i live in youngstown, ohio, ok? steel mills to generations to develop. many of the innovations came from the people who worked on the line. and over the years, families passed down from father to son the trade. once the process was a refined, one generation's put blood and sweat and tears, not to mention their health and the use of their arms to make the products, it just took the whole product and put it overseas. i guess what i'm saying is, if i

had a company, and i developed a product, there would be many years to make the products to compensate for the cost incurred and development. so a company may be compensated by other companies infringing on the patents. why can't we claim that, the steelmaking process, a multigenerational process, as an intellectual property for the workers. that used to be what tariffs were for, to protect the american workers from companies just taking already developed products, multigenerational, and taking it overseas and cutting out those workers that helped develop it. host: why don't we get an answer there, ronald. thank you. guest: i don't know. that is more of a legal question. that kind of process, i am not

sure, qualifies. maybe you could think what you could do with international -- intellectual property laws. but i don't think that is the path. but what about this. one of the biggest users of steel is oil and gas industry, they use more than the automotive industry. why don't we have a commitment on exploration and domestic production? another big user of steel obviously is an infrastructure. why don't we get busy rebuilding? why don't we work on the demand side. steel is still having to ship. we see u.s. steel, nucor, companies that emerge with the new processes, be highly competitive. they still will -- and i think rightfully. if somebody is dumping steel -- we had a case where the last coat hanger manufacturer in the united states, wire coat hanger, they were making " hangars in this country. they were arriving in this

country at a price that was below the cost of the raw material for the coat hanger here. that is just night on the world price something that is rational. that is dumping. that has to be looked at. so, fairness in trade matters because i think we are only 4% to 5% of the world's population. china is the largest car market in the world today. we want to be in that market. we want to compete there. i don't think we want to start build fences and a trade isn't the answer. as jeff immlet argued, it is a key part of the answer but it has to be done in an equitable basis. host: belgrade, maine. the republican line. caller: i remember you when you were governor, thought you did a fine job.

economist and former assistant secretary of treasury paul creag roberts, who has ever petition of being pretty much a free marketer, said free-trade ideology is a myth. that all of the modern free trade agreements have done nothing in the united states except lead to outsourcing, and taking the jobs and technology. he said something called a border adjust the tax -- which i think other countries, canada, europeans, and japanese do. i want to know your opinion, how it would work and would it help us keep manufacturing here and have more fair trade imbalance? hostguest: susan could have on r an hour and i'm not sure i could

do justice to that. and most every country in the world has a value added tax. the impact is the following when you are exporting or importing. if i am making something in germany and send it to the u.s., i take the value added tax off for the exporting goods, so i in effect reduce the cost of that. on the other hand, something from the united states shipped to germany, they applied the vat to that product, so they raise the cost, thus making it easier for that company to ship pier and harder for us to ship their. and that tax structure is protected under these trade agreements. so, you end up with just a locked in disadvantage. but guess what? the united states controls its tax structure. we could change to that in the near future. the one thing i was encouraged by president obama's comments on

corporate taxes, he does favor taking a top to bottom look and a review of the corporate tax structure. there was a bipartisan commission that i am sure c-span covered extensively, shared by former senators, and they had excellent recommendations. we would look, i think, very openly about the whole debate and one to be part of it, because i think that is the big part of the problem. the other thing is also simply high corporate tax rates in this country and our effort to have a worldwide tax system. again, germany would say, well, if you have a u.s. subsidiary, it is not subject to german taxes, it pays the taxes and the u.s., and that's it. we say on the other hand if a u.s. company had a german subsidiary, and has to pay taxes in germany and then in the united states. we tried to take a second bite out of the apple and that raises the cost, and income of that company which could be exporting more.

host: related that -- someone writes -- many corporations pay higher taxes and they feel and loyalty to their nation. where is corporate loyalty? guest: i would say where is consumer loyalty, being from michigan and people buying cars mother parts of the world. i think that is kind of a silly comment in a sense that i don't think if you look around the world, other countries are very actively engaged in trade. some countries actually have a higher proportion. we need to do a better job of selling our products overseas, and in some cases, that means taking down non-tariff trade barriers to get our access in short, to enforce agreements. i am not sure it is a loyalty on anybody's part. we want to compete because we make the best products in the world and i think many of our products are exactly that. where we have gotten into

trouble, is quality has slipped, that certainly happened in the automotive industry. i saw it firsthand. the gentleman made a comment earlier about the steel industry and the expertise one of the other points i was torn to make, and this order relates to this question, we would have thought it was impossible 25 years ago there would be automotive industry in alabama. today nearly 100,000 automotive jobs. most citizens down there, than ever built cars, what did they know? they don't build them for the domestic companies, but the new domestic companies -- mercedes, hyundai, toyota. it just is a fact that everybody has to compete. a lot of people say, i don't want to do that. i'm uncomfortable. well, i think that is the fact of life. and we better look and a mirror and say, what we have to do to compete? we used to say, bring them on.

today we are kind of shying from that. most cut the governor is in town because he is testifying before congress on trade policy. guest: thank you, sir. we will be talking about export controls, and that is another opportunity summit at the comeback of talk about that. " host: washington journal" will be here until 10:00 eastern time. next, we'll go to your phones. first, let us catch up with what is happening in italy with the g-88 summit. we have jeff mason from reuters, white house correspondent from the news agency. we have been seeing the reporting in the morning papers about yesterday's events. what has been happening today? >> a good question. the climate story continues. there is a meeting in the afternoon for the major economies form, 17 of the world's largest emitter's.

70% of global greenhouse gas emissions. president obama is trying to show leadership there in the run-up to the copenhagen u.n. talks at the end of this year. yesterday the g-8 agreed to targets for emission cuts. the forum is likely not to go as far. it may be painted as not as big of a success but something where obama once to try to show leadership, and as i said, pave the way for a greater deal. host: on the economy, with the complexity of each nation really being represented by the leaders around the table, are they finding common ground on thoughts such as additional stimulus package or trade policies? >> yes, there is some common ground there. in the run-up to the g-20 in april, there seemed to be more of a divide between some of the

european nations and the u.s. on what to do on the economy. the u.s. is pushing for more stimulus. some of the european nations, germany and france, pushing on greater emphasis on regulatory reform. what they are saying at the g-20 is those kinds of debates are over. there is still a commitment to finishing the stimulus that has been started and discussing what angela merkel in germany calls an exit strategy for getting out of that stimulus activity. but the white house told of yesterday and briefings, which was also backed up by the g-8 statement, that the leaders agree it is too early to start implementing those exit strategies. but it is time to talk about it. host: 1 all is said and done, what will the history books say -- when all is said and done. >> a good question.

i think it would say certainly the united states, a new president, showed there was a change of policy in climate. the fact that obama's administration agreed to the g a to bowl, or 88 goal of keeping global warming -- not allowing, shall we say, exceed 2 degrees celsius over industrial levels is a huge shift. and i think the history books will probably know that environmentalists say that as a major change and something that will help -- deal at copenhagen later this year. i think that will certainly go down. on the economy, to be honest, i think the g-8 is becoming less and less of a player on that economic question because the g- 20 has more say. certainly it is an important form, but it is basically something sandwiched between the april g-20 meeting and the g-8

meeting this fall in pittsburgh. exactly. i think it is an important issue but the g-20 is more of a decider. host: jeff mason, talking from italy. have you been able to see the earthquake damage yourself? guest: the president did to or the damage yesterday. i was not in the pool that day so i myself did not see it. but we have not felt any tremors. and there were tremors last week. we were all kind of wondering if that would punctuate the g-8 meeting this week, but so far has not. host: when does the president returned to washington? he heads to dawna. first he goes back to roll with a meeting with the pope and that the vatican. then he flies to ghana, he will be there friday night and all day saturday and heads back to washington late saturday night. host: sonntag more trips with a

great deal to talk about. -- two more trips. jeff mason from reuters on the phone from italy. with the press pool covering the travels of the president. let me show you some headlines and then we will get to your telephone calls. we are an open phones, so it is your choice. "the financial times" says unity on economy proved elusive. they can only take over cracks. germany and you can split on strategy. "the washington times" or rather "the wall street journal" put emissions on its front page. it has a photograph of the present of the united states with silvio burlesque only -- berlusconi -- sang, falling short. and another photograph -- polluters not on board with g-8. largest economies agree to cut

greenhouse gases. let us get your phone calls. houston, terry, democrats line. caller: i was listening to an interview -- i kind of concur. obama is kind of like bush, and bush ii. the average temperature in the last year, planned at has gone down, dropped by an average of 0.75 degrees. the last guest calls american consumers. and i really find that strange because we really are the producers. if everybody gets their local bread from us -- i hope you will correct your guests. we are the ones to grow food and make the things.

he promised during his campaign he would stop hiv program and stop the war and stop the outsourcing jobs. you know what? if he would just keep his promises, this economy would be a lot better. host: mike, independent line. grand haven, michigan. caller: you know, i just want to comment -- i and wondering how you could have someone as useless as john angler on your show -- engler. he did nothing for the state. he says of the united states produces the best products. but he did absolutely nothing for the state of michigan or for the united states when he was in

office. thank you. host: from the wire services. this morning we learned there were no bombings in baghdad, killing at least 41 and leaving more than 100 injured. they struck near a judge's house in northern iraq, killing 34 people, and andrew 70. officials say the attack happened around 6:30 a.m. this morning. about an hour later in baghdad, two bombs exploded just a minute with and one another, killing six people and injuring more than two dozen. also in central baghdad, roadside bomb exploded, killing a civilian. afghanistan -- nato says a roadside blast and seven afghanistan killed two soldiers. the military alliance gave no further details on the attack on the nationality of the victims. the next call is from texas. joyce on the democrats' line. good morning.

are you there? caller: i am here. host: you are on the air. caller: i tried to get in under the other speaker, mr. john engler on manufacturing. i would like to tell the people of america, the globalizing mass that is causing so much disturbance and so much unemployment -- if they would go and get the information from of a 1987 information please, almanac, and the article is by peter drucker. to change the world economy. that is one article you should read, and on pages 49 and 50 of that same book, or that same

printing, look at business and economy on page 49 and 50. it will give you the whole details of all of this mess we are in. plus, a book to read it would be the best democracies that money could buy. also another book you need to read is what every american should know about who is really running the world. by melissa rossi, a book you won't forget. host: somerset, pa., republican line. good morning, paul. last try for paul. caller: hello, i'm here. thank you, c-span. the program is absolutely fantastic. my thing i would like to speak about is the capt. trade policy and the g-8's recent statement

-- the capt. trade -- capt trade -- and an g-8 statement that is so ludicrous. if you want to see what the cap and trade system will do is really cripple the economy. manufacturing is the key to freedom and prosperity. and to do so will cripple this country. the thing i want to talk about his nuclear power. you know, from the world nuclear association, we are so far behind with regard to our understanding of nuclear. i am just astounded that the people who advise president obama had not really pointed out to him the benefits of nuclear and why we needed. as we know, france has 70% -- and even bulgaria, hungary,

switzerland, have significant nuclear power plants but i want to review a quote from president obama that really exemplifies the ignorance of this situation. he made a quote in 2007 -- i start off with a promise that nuclear energy is not optimal so i am not a nuclear energy proponents. he told his questioners -- it is true that illinois has the most nuclear power plants of any state in the country. that makes me that much more concerned about safety issues cents i have a nine year old and a six year-old daughter who live in that state. i don't think that's the best option. i am much more into it and solar, wind, biodiesel and strategies for alternative fuels. if people are interested, there is an organization called non- governmental international panel on climate change which are the true sciences and the world -- 36,000 scientists to sign petitions refuting the ipcc's

contention that we have a co2 produced climate change which is totally erroneous. host: we got to wrap up here. caller: people ought to look at it carefully and a real science and ipcc is based on junk science. host: he references candidate obama's discussion of his two daughters as they accompanied him. " " the mail" -- "the mail" newspaper, you see malea -- her father just won agreement from the russians to cut back on nuclear weapons and barack obama's all this daughter was obviously keen to make our own statement even if it wasn't merely a fashion statement. 48 hours at the the president signed agreements with medvedev

to reduce russia's stores, 11- year-old malea obama was wearing a two shirts with anti- nuclear messages, a famous logo as a father prepared for three days of g-8 talks. the next caller is from palm beach gardens, fla. beard marshall on the independent line. caller: good morning. thank you very much for taking my call. what i really wanted to talk about was c-span itself. i watch you every morning. you do a wonderful job. however, i wanted to ask you a few questions. i wanted to make it brief. i wanted to comment about your listeners. they are so smart. they educate themselves, and i find that i lot of a very independent and free thinkers listen to c-span. however, i am the only person i know that watches c-span. it is not a real popular show.

i think it is because it is not as sexy as what we have seen on the coverage of michael jackson and some of the other salacious issues. to watch it during the day -- the chamber of the house of representatives and the senate -- sometimes it is so boring it is like watching paint dry. but there are times that are so incredibly exciting. during the testimony of alberto gonzales, waxman and senator leahy seemed to asking questions that led the viewer to believe that they knew what the answer was. alberto gonzales promised he would get back to them, that he didn't have the information. but look like he was just

pleading the fifth to me. but of one to ask you, number one, did you happen to see the "saturday night live" recently where they were doing it. being -- where they were doing a parody on barney frank and nancy pelosi and kept repeating that nobody watches cnn, we can do everything we want. host: we have been a favorite of "saturday night live" paredes for quite some time. caller: but the next question i want to ask -- who decides what we see and what we don't see? is it the powers in washington or is it c-span or is it both that the site, for example, we don't get to see this karl rove testimony, or. myers testimony. see, these are the things that i would be glued to the tv watching. host: we are an independent non- profit organization and we get no taxpayer money, we are funded

by 5 cents a month from its cable -- from a cable bill. a group of people in the editorial department are responsible for gathering what to cover and make decisions as to how to allocate our cameras to cover the events. we use the cover between four to six events with the camera crews. the next layer of decision as to what did on at what time, and increasingly we have options to allow people to see things for themselves on their own schedule because everything we cover is archived on our website at c- span.org. so, the decision is not even more on your own hands to watch what you want through our web site. not sure that gives you enough details. more questions? caller: i agree that there is an open forum and that it tries not to be biased, but i was flabbergasted the other day when they pulled the plug on the guy who mentioned ron paul.

i am not necessarily a ron paul supporter or not, although i called on the independent mind, i do -- if their beliefs as an american citizen is what i believe in, although i am registered democrat and split my ticket. but i am surprised that as soon as ron paul was mentioned they hung up on that guy and they cut to a completely different question that was totally unrelated. i don't know if that was an accident. there were quite a few callers that morning that were reeling -- really strong right-wing republicans, and it seems to be done drudge report calling at once, bashing the poor girl, the host. host: the woman who was hosting that warning is brand-new. she is substituting for a regular colleague of ours by the name of greta, who just had a baby.

i can tell you, it is not a sit down and do this automatically. you have lots of input from callers, guests, increasingly twitter, and she did get a lot of criticism for that call. i heard some of the follow-up calls. but the intent is to let people voice their opinion and not caught -- cut off debate. if that happens, it was not any kind of editorial policy that was driving and not to hear more from ron paul. we have certainly given ron paul a lot of coverage and his supporters. caller: i'm sure it was told by accident. she was holding her pen and shaking. i felt sorry because people were unfairly calling in and bashing her and it was not really fair. but that is not what c-span is for. you all do a great job at least trying to be unbiased, presenting the real news and not the entertainment. i want to say thank you so much. and it was nice to talk to you.

host: thank you for asking questions. we would rather explain ourselves. if you disagree, at least you have an opportunity to understand where we were coming from. laura in baltimore is calling hopefully about a topic you are falling on the news. good morning. caller: about something i saw on c-span yesterday. but you are my favorite. i have never been able to get through because you let people actually really speak, and you are my favorite. the former caller, if i could address the karl rove hearings are private because they are confidential. that is why you can't cover them. .

caller: if you do not believe in global warming, that is fine. do not let congress do anything and the epa regulated than and it will hurt us more. concerning the senator -- he ran, basically the one resigned. mind never ran against former lieutenant governor -- i cannot remember his name. someone was allocating fraud. also, someone said something about in maryland you do not have to prove that you are a legal resident to get a driver's license. actually, you do have to have a certified for certificate to get a state i.d. or driver's license and that is because of our

governor, not senator. when you said that the constitution is a living document, yes, that is out democrats look at it and that is why it has been amended. thomas jefferson was in favor of having generational constitutional amendments -- he did not think it was carved in stone and neither did benjamin franklin. benjamin franklin did not even want to sign it in his arms twisted. i was surprised by all the carping about the senator. i voted for the former head of the naacp. but i am proud of senator cardin and think he is doing a great job. host: next is pennsylvania on the republican line. caller: fine, i was hoping to get on during the last segment

because we have a private business and employ over 200 people. i have heard about the tarp. i do not see anything going from the tarp except into construction. construction means unions. we have given, bailed out others and i think we need to give out some of the tarp money into business and private business. and into manufacturing. without manufacturing this country cannot live. host: what kind of business are you in? caller: we had seven pharmacies in the area. are you host: still operating? caller: no, we sold several years ago to our partner. private pharmacies do not play on the private -- same field as

when you talk about being on a private field of buying. private pharmacies cannot buy the same as hospitals and the chain pharmacies. we pay more for our drugs than they do. host: next is from michigan on the independent line. caller: first of all, i would like to talk a little about the climate change. having lived in michigan most of my life, that is in the 1970's the we were told we're going into and ice age. instead it has not happened, but the temperature has dropped. i was watching john on manufacturing and my husband works for a manufacturing company. they are doing a lot of job for china's and developing countries

because there is no manufacturing base here anymore. i really appreciate this segment. i like to see it as a man on what the cap and trade will do to jobless here in the u.s. and what it will cost the consumers. i watched henry maximiwaxman onr show the other day. a caller test for whether we would have to have our hoses inspected before we could sell them. he said no. i watched the debate during the bill and i heard it read that we were going to. i would like that explained. host: thank you, we will work on that and make sure you get more detail about that cap and trade policy. this is getting a lot of discussion on other news

networks. you can find more details on the internet. "the new york times" says democrats say the cia deceive congress for years. the cia has told the house intelligence committee that the cia can still significant actions from congress from 2001 until late last month. in a june 26 letter to mr. panetta, democrats said that the agency had misled members of congress for eight years about classified matters, and "this is similar to other the sections of which we are where from other recent periods." the letter was made public yesterday by one of the signers. more details yesterday about the meeting which the paper suggests, and the chairman of the house intelligence committee -- refers to the disclosure. the congressional quarterly

reported on wednesday that he had not provided full and complete notification and had at least once been fully lied to. it is a hotly disputed issue cents nancy pelosi accused the agency of failing to disclose in a 2002 briefing that it used waterboarding against a terrorism suspect. ohio, on our line for democrats. caller: i want to talk about the iraqi war. it seems that the bush administration people keep saying there were no inspectors on the ground and a way to know about wmd's. that is a lie. john kane interviewed dick cheney and he said it. all of these little guys who keep talking about giving to the truth challenged the statement

when it was an obvious lie. the inspectors were allowed to go when they wanted unimpeded and unannounced. one senator was on c-span being interviewed by greta and he raised that lie at least three or four times on the air and she did not challenge him. during the 2004 presidential debate and vice presidential debate nobody even brought it up. the administration past kept saying there were no inspectors. the inspectors were on the ground. they found there were no wmd's and there was no reason to go to war. there is a memo i read about recently released where the bush administration said "looks like we're not finding wmd's and will not have an excuse to go to war in iraq." i do not know what the news media does not tell us these people. i am sure john can while interviewing dick cheney new that the inspectors were on the

ground. i'm sure that chris matthews when interviewing ari fletcher that there were no inspectors on the ground, yet they never challenged it and let the big lie continue and continue. host: next is linda and she is in georgia on the republican line. we lost linda. here is a message from twitter, do you dare talk about bohemian -- for people to see? next up, a telephone call from granbury, texas on the in a pennant run. caller: hello, susan, i have not talked to you for a year in helping of the last time that i talk to you had senator white house on.

-- this is on the independent line. caller: i am fine. did you see what i sent the senator? he has a in his office. -- i sent it to peter. we got to be good friends of the last year and half because my name in his have one letter host: difference what is on your mind today? caller: i just called to talk to you and my wife and i were commenting on your beautiful red suit and i told her i would buy that for her right there. host: so, you had to tell me about it? caller: yes, she said to call her and tell her high and tell her to tell peter good morning. take a look that that i center. what did greata have? host: she had a baby. it was a girl.

we will send her your best wishes and thanks for watching and being such loyal supporters. the next phone call is from tacoma, georgia. this is on the line for caller: democrats good morning, i'm calling to join my voice with the gentleman talking earlier about president obama and all the promises he has not kept. i am embarrassed to say that i worked hard for president obama's election. the first time i was 50 years old, first time i have ever worked in the election because he inspired me. barack obama we saw on the campaign draws is not the one we see in the white house. he has not kept any of his meaningful promises and has forgotten about the least of these. he has not rolled back the tax cut on the wealthiest. i am heartened to hear more and more people rise up and seek the

same thing that i am saying, that he is not fulfilling his promises. he is a huge disappointment. at this time he even seems to be a fraud to me. all of this lends credence to the rumors that you are hearing about blowhole point is to keep everything the same in -- about the whole point is to keep everything the same in washington. it's about change and transparency have been totally meaningless. his promise to not ship any more jobs overseas has been meaningless. i would really like to know what has happened with him. was he truly lying to us that that is what it seems like. host: the white house is beginning the debate over whether not to reappoint ben

bernanke whose term is up this year. this is the "wall street journal" that says when the term expires in january there is a debate. right now there are attacks on him coming from the congress. secretary geithner is expected to play a key role in advising mr. obama about whether to reappoint mr. bernanke. the proposal from the white house is to increase the powers of the fed. that will be part of the debate also. the next phone call is from indianapolis. it is on the republican line. caller: thank you, i cannot believe i'm getting a chance to talk after the lady who just called in, the democrat. bad-mouthing the president. i think that everybody up there in the united states needs to take a chill pill. his only one person.

congress, our congress -- the people you keep putting back into office are the ones running it, not him. he has to beg everybody for everything. the powers to be are the lobbyists. you will not get rid of them. pretty soon you will not have anything left. then will be too late. that is about all i have to thank you, susan, you are my favorite and a great reader. next up, new orleans. caller: yes, to the extent that people are being misled in the standard, yes, indeed, look up [unintelligible] and google it and find out that the leaders of this country and of the world are addressing in robes to perform satanic

rituals. look up false flags when we get into dangerous times like we are in now -- look at 9/11, oh, the cia lies to us -- i am so, so shocked that. we have a shadow government, faults. everything else we're talking about is just show and tell. the real fact of the matter is when you have thousands calling in against the bill and they still pass it, we have people against a war -- a majority of people against the war and they still continue to expand wars against the people's will, when they like to was continually and pushout bills that take money away from us and put it overseas with our jobs, this is not representative government, folks, not for us. this is not our government. it is time for revolution. revolutions can be either

violent or peaceful. but if we stand up now a can be peaceful. but it will take all, takes some courage for us to start doing the right thing. stand up to these people. we have the power, we have the numbers. we need to get rid of both democrats and republicans. it is not about the parties, folks, need to get out of their right-left wing paradigm. it is about the system being corrupt. the entire system. host: next telephone call, and last for open phones is from illinois on the democrats' line. caller: hi, i love the show. you bet, i watch it every day. i was watching charlie rose and he had a guy talking about the deficit, a how it is so huge. i was thinking two ideas. one was, why doesn't the

government have a patriotic kind of thing? everyone wants to bring down the deficit. what do we just have a transaction tax -- a one penny transaction tax. anytime you buy something you pay 1¢ extra to pay down the deficit. weather thought was, maybe a little tin dollar stop the deficit bond you could buy the pace low interest at a local bank or wrote local lottery agent or something. people could buy it as a patriotic thing to help pay down the deficit. if all of america paid one penny for every transaction because there are a gazillion going on every day -- poof, it will be a ton of money. that would solve the deficit and we can get our money back from china and other places. host: we had a caller earlier asking questions about his.

here is a twitter. it was not very long ago that we began to call callers by first names. giving your first name is not mandatory, but we prefer to talk to someone by name rather than just preferrin-- rather than jut referring to them by the time they're calling from and it still maintains your privacy by not using your last name. we will be back in a few minutes with our final guest, talking about financial regulation reform. let's hear from c-span is radio station in the interim. >> it is 9:18 a.m. eastern. the unemployment numbers are just in. the number of first-time jobless claims fell by 52,000. that is the lowest level since early january. it is below analysts' expectations of 605,000 jobs lost. continuing jobless claims jumped to nearly 7 million.

that is a new record high. meanwhile, on wall street stock futures are up. the nasdaq is up nearly nine. a. usa today" says government disclosures and accounting records shows that come to supporting president obama in last year's the election have received twice as much money per person from the $787 billion economic stimulus package as those who voted for republican senator john mccain. more on the letters by the chairman of the house intelligence committee on cia director leon panetta saying that cia officials misled lawmakers, responding earlier on cbs, the leading republican on the committee holds the democratic accusations that the cia lie to congress of. bizarre." politico on next week's

nomination hearings for sonia sotomayor said that every state democratic rebellion based on gun rights may be the republicans' best shot they wanted the real that nomination. so far even the national rifle association has yet to begin a lobbying effort to oppose the judge. the nomination hearings begin next monday at 10:00 a.m. eastern, live on c-span rita. finally, more on senator snsi gn -- senator and siensighn's ar -- the husband, ex-husbands of the sun new and urged him to end the affair and his substantial sum of money. "washington journal" continues. host: let me introduce you to the fellow at american prospect and one of the things he has been looking at is the debate over financial-services

regulation. specifically, the proposal to create a consumer financial protection agency. you asked the question -- are democrats ready to fight? what is your guest: answer it seems like yes, in the past couple of months the bank rescue has been good to congress and it has been hard to pass any legislation or executive rules to limit the action. many people on the left and many consumer advocate groups have been disappointed with the effort so far. but with a new plan to regulate the financial system coming to congress, that seems like democrats in congress and more importantly the executives and the administration will fight the bank lobby to pass the bill. host: callerin the beginning ofe program we should new numbers up by watchdog group that look set campaign contributions to those

who serve on the financial services committee. there are many millions of dollars going their way. both to democrats and republicans equally. here are some of those numbers. this is over a multi-year time. money is flowing to people who are making decisions about how the financial structure will be regulated. what are you learning when you look at whether there is an influence on the outcome? guest: there definitely is an influence. it is part of the strategy by the lobby to gain influence over the rules. you saw that when you saw

people lobbying to allow people to keep their homes for bankruptcy but it failed in the senate and at the time senator durbin said that the banks and those homes. it is why everyone is worried about the consumer finance regulation going forward. using a different tune from the administration because people are sick and tired of seeing the banks get their way especially after having contributed to the current recession. host: we will open the phone lines and talk about financial markets reform, whether you think it is necessary. when you think about the debate that has been happening. if you would like to call up on the threat of money politics you can put that on the table also. our guest is tim fernhold. tell people about your group. guest: it is of monthly political magazine. it is a liberal magazine.

we write about all kinds of policy issues. you should check out our blog. host: i held up an article about the administration beginning the discussion about whether to reappoint ben bernanke. along with that comes the debate as part of the proposals to increase the oversight powers of the fed. when you ask and learn about the effect of the proposal, what have you found out? guest: it is a pretty divided camp on whether or not the fed will get new powers to be what is called the systemic risk regulator. generally, what experts think is that the fed is not necessarily the best place to put these new powers but maybe the only appropriate place. from congress there will be many questions about the transparency and accountability of the fed which as been traditionally more independent.

host: why is it the only place? guest: because of its broad jurisdiction over the banking and financial systems is considered to have the broadest view out of the entire system. when they are concerned about macro issues the fed is the place that sets interest rates. hopefully, they can control acid bubbles like the housing one that led to the current recession. host: into the skeptics who will say that we got here anyway when there was a fad. how will giving them additional powers prevent a future catastrophe? guest: they would say that is part of the shake of. there will take some powers away and give some of them to the consumer regulatory agency. they will do different things to centralize it. it is really only looking at its central bank role as a systemic risk good. more honestly, the fed has

powers it could have used to stop this. it had power to regulate mortgages and did not. while the structural changes are important, it is martin to appoint people to the fed and other agencies who will be watchdogs and to go after banks. keep a close eye and not be afraid to challenge when they see excesses'. host: let's get some calls. there are so many aspects of washington's response to the financial crisis. let's see what the callers want to hear about. houston, texas is up first on the republican line. caller: yes, i would like to ask you a question first, susan. about three years ago c-span ran a thing where they showed it live, about 60 to seven people were protesting the war, a bunch

of left-winger loons. you repeated it and repeated it. but we have had three major two parties this year and to spend has not given them even one second. why? host: we did have -- we have not gotten the ability to send camera crews all over the place for the two parties. caller: they had the right there in washington, d.c. host: we had cameras for those and offered for people to send in videos on others. as for showing things repeatedly, everything gets aired between four and six times over the course of three channels. it is not intentional. it is not that we show one thing repeatedly. caller: i believe in free speech and i believe that the time that your show that, but the same thing should apply to the mothers and fathers who are out there protesting this spending. host: do you have a question for the guest?

caller: what is his true opinion of what will happen to the coming once that cap and trade is passed? guest: for starters, it may not pass. one senator yesterday publicly worried it would not make it through the senate. there's the question whether they can get enough votes from both parties to get it signed into law. but if you look at the analysis from the congressional budget analysis and independent analysts it will not have a huge negative effect on the economy. the cost per household is relatively low over the long term. but in weighing the trade-offs you have to think one, will help us to become more independent from oil in the middle east? two, will it address the issues of global climate change which is very serious and real. i think it does both, not as much as progressives might like,

but as it came out of the house it is a solid bill. it will be interesting to watch the wrestling over in the senate. no, i do not think it will have a huge negative impact on the economy. host: erie, pa., on the democrats' line. caller: thank you. i had a comment on the banking. i do not trust any american bank. i think they are all a bunch of crooks. i just got off the phone with one of my credit cards and was telling a woman from india -- i asked her why she worked for such a disgusting company. i told her that if any indian comes over here to start a bank i would be their first customer. right from the get go i trust them more than any american

bank. they are threatening me with old credit rating staff saying that i will not be able to buy a house. i do not want the opportunity to get shafted by banks like 3 million other people did. give them all the money they won. i don't care. i think they are a bunch of crooks. american banks are creeks. -- american banks are crooks. i have no faith in this economy, yikes. host: thanks, gregory. let me add a policy debate. he was talking about banks. let me show you and the audience a story in "the financial times " where it says that the fdic is looking for public fund aid on failed banks. though fdic, the body that

attempts to keep depositors money to safe, once the cooperation of large public pension funds as a six capital to buy failed banks or their assets for which there are very few buyers. the state of new jersey and the teachers' retirement fund of texas were invited to a round table among others, hosted by sheila bair. the presence of pension funds at the meeting on monday with a number of private equity groups is testimony to the widening effort to raise capital to invest in failed banks. guest: this is related to the treasury's public-private investment program, designed to take toxic assets off the balance sheets of banks. what sheila bair is trying to do is getting public pension funds, big collections of steady, long- term investors to buy these assets and take them off balance

sheets so that banks can lend more. hopefully, they would gain value over time. this is a pilot program getting off the ground after the original attempt to start it failed about one month ago. they were unable to get many interested. yesterday the treasury released another part of this program to do the same. in both cases participation is down. it is not what the major solution promised several months ago when the administration first unveiled it. host: the treasury dials that plan to aid banks -- this is the second half. let me understand. let's say a pension fund agrees to be a part owner. the way the plan is unfolding with the federal government into the against the risk of failure? guest: to a certain extent. the treasury wants to give incentive so that will provide a certain amount of funding and a lot of leverage.

a lot of borrowing from the tarp funding. the funds will have to put up some stakes in do stand to lose that. but the government is putting up much more. even though there is more risk on the government side because if they are eventually going to have profits it will be split 50/50. it can be a great deal. the nice thing about involving pension funds is that is really people's retirement. it is a handout if they are involved. it is a subsidy to these retirement funds that need all the help they can get right now and the recession. hopefully, that is less controversial going host: forward for the state of new jersey workers or for that teachers if the fund managers decide to bridges baby will be mitigated by some level of insurance from the federal government? guest: yes, anyone who participates will have a lot of production from the government. host: good morning, george.

caller: thank you for c-span. my question is, with everything going on now in the economy, being on a down slope, it is hard to trust people with your money. people tend to be greedy, especially major company owners. it seems like the banks are failing. there are too many issues to deal with. i have nothing else i can say. host: the next telephone call is from maryland on the republican line. caller: yes, i have a couple of commons. i have an accounting background and want to know why the fed reserve has never been audited. i would also like to know why the accounting system is allowed

assets and trading and the end market -- blackmarket entities. this is basically a shell game with pension money. guest: to the first part, those questions about transparency are serious ones. members of congress will be asking them as a look at changing the way the fed interest with the rest of the system. on the financial shell game, a dealer with taxpayer money -- it is definitely controversial. the overwhelming necessity of getting our system going and mitigating effects of this recession again necessary. hopefully, the headmistress will be accountable. you cannot come on that so i hope that journalists will ask hard questions and major public funds are used appropriately. host: new iberia, louisiana. caller: good morning, i have been looking at this entire

situation involving the health care plan. basically everything the american people have wanted big money has shut down. this, when the news reports that the people wanted it, but the industry is lobbying against it -- that is clear cut quid pro quo, bribery. in any court anyone would get convicted. what we do about the supreme court rulings by republican supreme court's would say that corporations have the same right as human beings, and most recently, money equals the free- speech that's these are absurd. it is legalized selling of government. if anyone will have a two-party should not be against a particular party, but against the situation we face now. give america back to americans. taken away from the corporations. it seems like there should be something we can do.

this is clearly illegal activity. at minimum and moral behavior. guest: i would say it is definitely a concern. we look at the numbers earlier about how much money members of congress have received from these and into firms. in the late 1990's and early 2000's there is much more interest in campaign finance reform then looking at the effects of money in our political system. it will be interesting to see in coming years if that becomes a hot issue again. if people look at ways to get money out of politics. however people want her perched up. host: here is another thing, the other half of the question. how with something like this possibly change publicly funded campaigns? these places often get a larger share. white house says the politics of work.

it's as billions of dollars in federal aid was delivered directly to the local level to help revive the economy and has gone overwhelmingly to prices that supported obama in last year's presidential election. the first piece to return quickly. much of it has followed a well- born path to places that regularly collect a bigger share of federal grants and contracts. there is no politics of merc said the white house yesterday. countries that supported obama last year have twice as much money per person from the economic package as those who voted for the rival john mccain. guest: yes, that is an interesting story. i do not know whether to take the white house at their word. i imagine there may be some correlation between democratic states who voted and those who are spending, used to spending a

lot on progress. but yes, you'll see politicians rewarding constituents just as you see members of congress making remarks in protecting industries in their district. not very savory. they are trying to do things to reform it. one of the things with the senate's plan is to be transparent and make sure things all the formulas for federal funding, but there will be questions like this coming up fairly often. host: the 25,000 ft question looking down on washington -- if politics is about getting and attracting votes, rewarding supporters, many of the examples we have talked about are evidence of that. it has probably been away much of our history. what is the political process that you see as ideal in working in the best way possible for the public? guest: there are two ways to look at it. even under a publicly-funded campaign system -- host: money must flow.

guest: people will not like it but you find bureaucrats who will make this decision and of technocratic with a will not be beholden to people with votes. host: do you see that as optimal? guest: no, that removes them from accountability. you cannot vote a bureaucrat from office. people want a government that does not favor others, but they also want to be with to say i want this and do what politicians promise. host: for does that leave us? guest: believes just to the current system we have which is hard to run, so that-optimal, but maybe the best of all possible worlds. i do not know. in the future there might be more focus on campaigns as in arizona and maine that a publicly funded. the supreme court just issued a ruling that will call into

question whether these sec will be able to continue regulating if something will change when you to see a resurgence in third party groups. they put pressure on politicians to change. it will be ultimately voters who decide they do not want the system anymore and pressure politicians for change. host: let's take the next phone call on the end of nine from virginia. caller: good morning. and the third caller was really concerned about the conflict of interest and members of the house and senate who are taking huge amounts of money from corporations. they are ignoring the majority of us. [inaudible] host: i will have to interrupt

you because the transmission is very bad. he is the third caller in a role rid of the conflict of interest between politicians who take money from corporations. guest: it is something we should all be concerned about. you should let your congressman know where you think. get out there and join these advocacy groups and contact their offices. one thing people think may help is the rise of small donor groups, thanks to the internet. if you can appeal to 20,000 people who each give you $5 online in find the majority may not have to go to a corporate pac to get the $5,000 check. that is somewhat of what obama promised in his campaign, but it all comes back to the effect of people have to buy votes in a modern campaign, whether through tv or anything else. that is the root of the problem. host: week ask our guest to talk

about his views of the administration's proposal in response to the financial markets problem to create a new oversight organization called the consumer financial protection agency. since then our conversation has gone many ways. let's return to it for a moment. here is a piece of video. scotts talbott talks about his group's opposition to this watchdog group proposal. guest: this a proposal of unparalleled expansion of government power. the agency would strip all existing federal regulators of their powers to review consumer products. it would put it into one independent agency with five board of directors appointed by the president, approved by the senate. its sole purpose would be to review rules and enforced violations. the industry is opposed.

the sources has highlighted a number of problems with the regulatory structure. we are in favor of reforming and modernizing to close gaps. we are for consumer protection. the question on the table is the most effective way. we believe that this proposal is not. it could actually end up harming consumers. it could reduce innovation and competition. it would increase the price and availability of products and services. host: reaction? guest: i think that is a lot of nonsense. the idea that consumers were adequately protected during the last couple of years is ridiculous. this comes down to what people have said about corporate influence. the main purpose of creating this consumer protection agency is to make sure there is a voice at the table whose only agenda is everyday people. it will not work just to think about things. it is entirely consumer

perspective. the idea that it will reduce innovation? maybe a little, but the innovation of a mortgage loan for you do not have to prove that you have it in come or job is not a good one. this agency will protect people from high overdraft fees and pay loans, subprime mortgages that will take their finances. the great analogy about the consumer protection agency is that you cannot buy a toaster in the store that has a 1in 10 chance of blowing of -- we have consumer protections to protect you from dangerous appliances. so, why should you not have the same for a mortgage? after the financial industry has helped to follow these excesse'' and really dangerous risk-taking practices that led to the current financial crisis -- here is them saying we do not need to do anything to protect borrowers -- well i do not

believe that for second. host: good morning on the democrat line to memphis. caller: i want to know what your talking about transparency and financial things, i have long term disability insurance which ago approved for. they tell me immediately i had to go ahead and get social security benefits. i do get approved for them. the thing is, once i did that -- no i understood that my insurance would be cut based on how much i get from social security. but now i'm forced to pay them back 75% of what they paid out to me. host: because it is very

difficult to deal with individual situations, what is your question? caller: the news to be more transparency to people who have this type of thing. -- there needs to be more transparent. it does affect people financially. the simple fact is that with these clauses in. you do not know about them and do not understand. since we're looking at financial institutions, that is a big part of that. host: thank you. the guest: that is a great pint. the administration wants to enforce rules that would mean any document you got about mortgage or homerun, or credit- card would be very clear and simple to understand and completely state the terms so

you would know what you're getting into. the one to make sure every bank has on its menu things it sells. plan vanilla, -- aplain the no option juneau will be safe for your money. these will not apply to insurance agreements, but as you look to health care they will focus on making things more transparent. -- these plain vanilla options fortunately will be safe for your money. host: what kind of a bill these would it this agency have? guest: rule-making and subpoena power and would be cast to work with the department of justice if they do any civil suits against banks. it would be unclear if they have in a pennant action. they may be able to levy fines. -- unclear if they have independent action.

an usher of the mechanics because legislation is still moving. host: muskegon, mich. on the republican line. caller: i have been listening and when the guy said he mistrusts banks in the question of sheila bair and asking people to invest in these toxic assets, when the banks were given the loans from the government it was my understanding that money was to purchase toxic assets and get them off books. that has not been done. not only did the banks not take those off the books, but there are foreclosing on people and reselling those foreclosures and making more money yet. you cannot blame the american people or the investment, our investments, pension funds and everything -- to not invest and

what they're asking them to because you cannot trust banks and more. they have their own with bookkeeping and do not look out for customers. as far as i'm concerned, obama should have let those banks fail. it would have been no worse than it is right now. guest: you raised many good points. i will start with the toxic assets. you are right. last fall the government when trying to do something about the crisis, the initial plan was the tarp. but after that legislation was made into law the treasury secretary hank paulson at the time -- and also the current treasuries secretary, decided it would be more effective to give them those loans. definitely the government should not have let the banks fail.

as we saw with lehman brothers it would have been catastrophic to the entire system. the government should have more aggressively seized the banks and put them into bankruptcy to distribute their assets and cut them off and prevent their from being too big to fail. the situation now is a lot of money in these banks, open them up. it is not the best for lending or for conflict of interest. it is expensive for the taxpayer. the good news is that the banks are beginning to pay back the loans. they paid back a big chunk a few weeks ago. they are currently sort of earning their way out of the problem they face. it does not mean they're not still too big or that there are not pernicious issues. right now the banks will probably be ok. it does not answer what is coming next.

hopefully it reforms will have. if things get worse than predicted, and right now they are pretty bad -- the last employment report was worse than expected. we are walking on a niche with the financial system and are not out of the woods. host: here is a message by twitter. guest: this agency is not concerned with provincial regulation, making sure that banks do not collapse. its entire role is to protect consumers. it will focus on making sure that people out there do not get taken advantage of. it could help to protect from collapses. if you did not have bad loans being made we would not have had the collapse we faced. because it is entirely focused on consumers and will not have some of the regulatory capture

problems as when the get too close to banks in the not enforce things, that is a real problem, but ultimately can only go so far with how you structure and what its jurisdiction is. you need people asking tough questions of banks. releasing the full extent of their authority. host: the next call comes from falls church, va. it is on the independent mind. you are in your car there? yes, that is better. caller: it is good to have a true blue liberal on the show who admits it. i love it. i am conservative. guest: admit it? i'm proud of it. caller: we all are proud of what we are. aside from all my differences,

it seems like the people who really care about this country -- we do share something in common. we all can agree that the government is sort of out of control, left, right, and middle. we do not have as much of a say as we should. they don't seem to be government for the people anymore. i am thinking that if you limit the terms of these senators and congressman to one term, two terms of the most, i think it would help to rid us of these live long indebted politicians who just grow in power and isolation. what do you think? guest: that is interesting.

term limits are somewhat important, but it is more a burden to have people in those jobs as legislators who really want to learn how to legislate and do well. and you see a first-year congressman come to washington, d.c. intra to do something on the hill it is very hard to pass a bill. most do not do it in the first two years. it takes time to learn the ropes. you're right that the government is not as accountable to people as it ought to be. we were talking earlier about campaign finance reform to get people's voices heard more. it is a hard question but i'm not sure that term limits are the right answer. host: let's take the call next from apache junction. caller: good morning, i wanted to run an idea buy you out of the banks. can as few as 100 individuals put $5,000 together, have a

half-million, by a businesses, retool freezing sba . around the banks entirely and have employee-owned companies? -- retool and go around a big toe. guest: it is entirely possible to have an employee-owned company. host: if they raise their own capital. maybe the best way to into that concerns the small business association. beshas the sba been effective in getting money out businesses? guest: the administration did launch a program to try to get money through the sba to give money to small businesses. the results are coming back. on the issue of credit for

businesses and for people, what the fed has been doing to provide a lot of funds through its facilities has held for student lending and credit cards more than sba has a thit this p. but as more attention goes to we may see more help there. host: the next call from virginia -- caller: it looks like this guy is promoting irresponsibility. host: how so? caller: he is talking about things like public or digital medical records when you cannot even get your own computer systems. people needing some kind of organization to govern or oversee what they're doing with their loans -- it is called a lawyer. that is how people have privacy.

you're stealing privacy by having another -- i do not know. every time you turn around this government it grows and grows. it is incorrect. it is not american. in a better was appointed -- widened to a point of the no betterczar. it is ridiculous and has to stop. -- by then to a point of peanapt butter czar? guest: i disagree. it was impossible. and you look at the last couple of years it is clear things are broken and no redeeming of people are being taken advantage of. these are predatory loans. it is not an issue of being stupid or people being stupid. most people cannot afford lawyers to do with every matters like a mortgage loan. i am more concerned about not having a crisis like this again.

if the government is in the best position, that is what it is therefore. on the issue of privacy, electronic medical records will not be public. it does not mean anyone can go to look your medical record. we have the same system now. it is just on paper. i would not be too concerned about the government's doing your privacy. that is not really the pressing issue right now. host: the last question is from johnson city, tennessee. caller: good morning. i would like to know why the same people, barney frank is in charge of the bank, chris dodd in charge of the financial committees, and nancy pelosi with credit cards -- why are these people still having these committees and the goddess into the scrap to start with? guest: most physically they're still heading the committee is because no one has voted them from office. chris dodd is having trouble in his home state with us to think he io