have a smaller plan -- if you have a company of 50 employees. they adjust your premiums to reflect those claims, making it very difficult for small companies. it is a large part of their expenses. under all of the new plants, small companies will be in large pools -- new plans. the insurance company will not be able to rate based upon the experience of the people in that group. they will have to use the broader community. that will be the rates very similar to a larger company for small companies. >> these are your questions. question no. 3. do you support socialized medicine? is that not what this plan is all about? >> well, i am -- our current

system is not socialized medicine. we do have a public auction with the government collects the believe in diversity in our health care system. i do not believe in socialized medicine. i want an american health care system. i don't want to adopt the health care system from any other country. [applause] >> question number four before we go to the mikes: please explain how the senate plan saves money by implementing saves money by implementing preventive care. >> well, preventive care -- let me just give you one example of managing care where we've seen tremendous savings of money. safeway -- you all know safeway. they have a program for a large number of their employees which is a voluntary program. if you enter this program and you assume responsibility for just four of your health care concerns, if you manage your heart situation, whether it's high blood pressure, cholesterol, or blood-thinning drugs, if you manage your

diabetes so that you can prevent amputations and kidney problems, if you manage your weight and exercise by managing your own needs, and if you go through a smoking cessation program or you don't smoke, then safeway has guaranteed that your premiums will not be increased. and for four years, they've been able to keep costs constant by those four issues. wellness and prevention work. colon cancer can be prevented by colorectal examinations. they're expensive and they're not very nice and you have large copayments and deductibles, people are less likely to have these tests done because of that. so what we're trying to do is make -- we eliminate any copayment and deductions for these types of preventive tests where you can detect diseases, whether it's going to be breast cancer, colon cancer, prostate cancer, detect it early, prevent it, save money, save lives, make our system more cost-effective.

[applause] >> we're now ready for questions from the audience. let me just make a couple of comments. again, one, please ask questions that have not been asked before. there are many concerns in this room. we want to try to handle and address as many questions as possible. there are two microphones in the aisles. you should get behind the microphones. again, we are looking for questions, not statements. you should ask your question quickly. we will not be entertaining lengthy statements. are those in the aisles ready for the first questioner? >> renee, first questioner over there? please get behind the microphones.

[shouting] >> if will you get behind the microphones, we'll have more time to answer the questions. >> [audience shouting] >> renee, are we ready for the first question on your side? first questioner? >> senator cardin, one argument against the house health care reform bill is that there are so many nonhealth and noncatastrophic health concerns covered which will cost billions and billions of dollars. this includes, among other coverages, mental health coverage, covering all problems a person chooses to talk about with a mental health professional, as well as marriage counseling and other nonhealth concerns. how can you and democrats support such a costly,

irresponsible national health care insurance? >> well, as far as -- [applause] >> what we are seeking, we're seeking one simple goal and that's parity between mental illness and other types of physical illnesses. we think it's wrong to discriminate against mental illness. we have for a long period of time. we've had higher deductibles and copayments. [applause] >> and we think that's wrong. it's not up to congress, in my view, to determine what is appropriate mental health services. to me, that's a professional judgment that needs to be made by the medical community. i don't want to substitute my judgment. but i want a person who needs mental health services to be able to get what is reasonably necessary and the health care professional should be reimbursed. >> senator, let me just say one follow-up, that is simply incorrect. if i see a psychiatrist because my life isn't going well and i'm unhappy, a psychiatrist can say, ah-ha, he has adjustment disorder and you'll be covering

that as a medical disorder when it's not a medical disorder. why would you support that? [applause] >> well, i'm going to stick to my answer. i don't think you want -- i don't think you want elected officials making those types of medical judgments. it's not my job. it's unto the medical community. if the psychiatrist is giving -- if the psychiatrist is not giving the right advice, then there should be a way within our system to hold that psychiatrist liable. if it's fraud, let's go after the fraud. if it's abuse, let's go after it. but let's not deny people who may need mental health services because we're afraid of trying to find out the right answer to that question. >> let's have a question from this side of the room. first question? >> thanks for coming, senator. why isn't tort reform a part of any of these bills?

[cheers and applause] [cheese and plawz] >applause]>> there's a second py question. there's a second part to my question. senator, does it have to do with that nearly half of the representatives in congress are lawyers? [applause] >> you know, i don't have to give my own background here but i think i will for one moment. i was speaker of the house when we passed the maryland tort reform bill. i chaired the conference committee as speaker of the house, which was a very unusual thing to do, to bring out the maryland tort reform caps on damages. so i understand the desirability

of having a more efficient system. as relates to unnecessary tests. there are a lot of different parts to tort reform, including alternative dispute resolution, et cetera. i'm not certain we won't get to that in this bill. it may very well happen. so ihink you should judge us based upon the final bill bill t moves through congress. >> next question from this side of the room. yes? >> senator, please allow me to also commend you for showing up and taking the heat. i didn't think that you had it in you. please allow me to ask you two very quick questions. the first one is a yes-or-no answer, please. and the second one is -- you're not going to be able to answer but i'll ask it anyway. please specifically state if you are willing to include yourself

as well as other members of the house and senate in whatever bill that the congress, they pass, that you would be subject to all the laws and all the provisions of whatever the health care reform bill may be? that is a yes-or-no question. >> i'll answer the question. i first want to -- [cheers and applause] >> let the senator answer the question. >> it's a legitimate question. >> let the senator answer the question. >> first let me -- >let me answer the question, please. i'll save the humor for the next one. let me -- the answer is that congress, federal employees, all will be covered by the plan. you ask me personally, i happen to be a -- i turned 65 this year. i'm in a public plan. it's called medicare. >> all right, well, senator,

thank you. as a follow-up, if i may, please, senator. >> well, i want to answer the question, though. i answered the question. we're going to be covered by it. we want to have the ability to have backup. we want people to stay in their private insurance. that's our goal. the congressional budget offic office -- >> all right, senator. >> -- the overwhelming majority will stay in their current plans. that's what we want. we want to have the co-op or the public plan available for those who may need it. if i were to lose a job, which you never know -- i might need it. >> all right. senator -- [audience cheering and shouting] >> thank you. that was the longest yes-or-no answer i've ever heard. please, would you please, with your indulgence, would you please specify which article and section of the united states constitution gives the congress the right to forcibly interfere with my right to contract for my

own health care and for that of my family. please cite the constitutional article. >> article 1. article 1. >> thank you. >> article 1. >> thank you, senator. my question probably won't be funny, as you alluded to. the next one might be funny -- this isn't. will you commit to the residents of maryland that you will read this bill before you vote on it, since you completely understand what is there? and i have a second follow-up to that. >> yes. >> you're committing to us this evening that you'll look us in the eye and say that i read that bill and i understand what's in there? >> yes. >> okay. my second part is, i have a down's child. i am scared to death of what can

happen down the road when you have people that are advisors, they may not be, you know, connected advisors but they're there that are showing bell curves of what care they're going to give to people, at what age does a child become viable. will you have someone that says two years, two years that that child may not be valle really ve to our community? and then when my son, a down's child, is 45 years old, what is he going to get for care? are we going to look the other way? and i want to look you in the eye right now and know and understand, are you going to vote for a bill that limits the care that someone gets by the value that you or someone else in that u.s. congress puts on their ability to produce for the rest of the community? >> no. >> i'm looking you as a father of a down's child, i'm looking

you in the eye, sir. >> i said no. i would never support such a bill. >> thank you. >> senator cardin, i wanted to ask, because you repeatedly said in your presentation here, that you will not have to change health insurance that you're happy with. my question is: if i'm happy with the health insurance that i get from my employer and you come out with health care reform, including a public option, which i know is not finalized yet, but if that is part of the final bill, my question is, how are you going to keep my employer from stopping offering insurance and forcing me on to the public option if that's cheaper for their bottom line? [[applause] >> the -- we -- we could tell you that we have looked at behavior as to what was likely to happen. the -- those who have looked at

the likelihood of this say it's very remote. but -- [audience shouting] >> -- what is more remote is that ten years from now, if congress does nothing to keep costs in line, that there will be a significant loss of good private insurance coverage i think you are right. if congress does nothing it is a bigger risk than if we figure out a way to bring down costs and get those who are not paying their fair share today to come into the system. i think you are going to be a much better shape as far as preserving for health insurance option. >> thank you, senator. >> use cited reduced cited that

we were ranked 37 in the world for health care. the same organization has said that nationalized health care cannot occur without ration of care. you as a senator enjoy the benefits or have the opportunity of the greatest health care plan in the face of this earth. would not be the easiest thing to offer every american that same plan -- i realize that is not feasible. the only way we can offer health care to everyone would be to ration care or not to have the same benefits and options availability of medicare the and the senator have. what is the difference between your healthcare that you experience now and what is going to be offered to the public if this plan is approved? , if we were to provide everyone one plan,

that would be a single national health insurance plan, which people support. don't get me wrong. i don't support it. i don't support a single-payer plan. i know there are people out there who do but that's what it would be with the federal government basically -- >> senator, why don't we have the same plan do you? >> now, the second question -- i was answering your first. your second question as to the benefit level. the benefit levels are going to change because we're going to have a mandated federal requirement for all health care plans as it relates to preventive care and wellness and lifetime limits, et cetera. i expect all plans will have to conform with that, including the federal employees' health benefit plans. we're not going to be exempt. we pay a part of our premium. the federal employees' health benefit plan is a good plan. i think the federal workers are -- have a good health insurance plan. are there better plans out there? yes. are there plans that are not as good out there? yes. woulwhat i like about the federl

employees' health benefit plan is i have choice, i've got different plans that i can join. i can join a h.m.o., i can join a preferred provider network. yes, i would like to see that type of choice offered to more americans where you have real choice, yes, i would. >> we're trying to get in as many questions as we k. question over on this side. yes. >> hello, i'm alex peek, i'm the former president of the college libertarians at towson, here at this very university. [applause] harry brown once said, darwin is only good at one thing -- he knows how to break your legs, hand you crutches and say, "see, if it wasn't for government, you wouldn't be able to walk." considering that mary rubier, author of a best-selling book, has said that we can cut costs of health care by 80% by getting government out of health care, why have we not -- [audience cheering] -- why are we not going in this

direction instead of the direction of more government? thank you. >> i just flat-out disagree with that statement. i don't believe you can take -- cut 80% of health care in america. i think we would be worse than a third world nation if we were to try to do that. i just don't -- i don't agree with those numbers. i think your numbers are way off. i think if we don't have protection about preexisting conditions in health insurance, if we don't put parameters on how the private sector operates, i think you're in much greater danger of health care quality and costs. so i think there needs to be parameters in the health care system. government has a responsibility to protect the health and welfare of its citizens and i think this is a very important function. so i just disagree with the premise. >> question over here on this side the room. yes, sir? >> yeah, i'm a physician assistant so i understand this problem from the workings, from the inside. i also have traveled abroad as a

consultant for a medical products company so i also understand socialized medicine from the inside. europe, asia. my concern is that we've changed the debate here. it used to be called health care reform. now all of a sudden it's health insurance reform. it is health care reform. >> health care reform. >> correct. >> health care. >> now, i need to correct you. we have the best health care in the world. >> yeah, i agree. >> period. >> i agree. [cheers and applause] >> i agree with that. >> please state your question. >> yeah, it needs a little background here. the stanford study just released puts us way ahead, preventive care -- there's a lot there, you can read about it and go check it out -- my concern though is 46 million -- we're dealing with 46 million people who are -- quote -- "uninsured." 12 million to 15 million are

not -- are what they call noncitizen immigrants, illegal aliens. that's a u.s. census report. 8 million to 10 million are medicare-eligible patients that have not signed up for it. so we have plenty of access to health care. my question, seeing it from the inside with reimbursement with medicare is i've seen medicare reduce reimbursements over 20 years and the private health care insurance has followed medicare's lead in reducing reimbursement. never events are now and have been in effect for five months. never events say that after heart surgery, which i do, if you have an infection, it will no longer be paid for by medicare. and in this bill, it's going to continue the never event. it's also going to extend more cuts to medicare. so my question to you is, how can you support a bill -- my first question, how can you support a bill that's going to cut medicare reimbursement further? second, customer-driven health

care is the way to reform costs. private health care accounts is the way to drive down costs. [applause]>> catastrophic heae reform. do you -- >> is there a question? >> do you support private health care accounts, would be question number two? >> i think that was question number three. private health care -- h.s.a.? health savings accounts? >> right, that are not forefitted at the end of the year. >> f.s.a.'s? >> you would continue to keep the money from your employer. >> i think the question relates to right now you can take before-tax dollars, put them into an account with your employer and use them for heal health. you have to use them by the ends of thendsof the year. >> i would say to abolish that and allow the person to drive their own health care. >> i would say there would be rollover but have a reasonable amount for rollover. >> all of it and that way you use it to purchase your own

health care. >> i think you're talking abt two different things. >> no, i'm saying your employer instead of playing into cigna -- i've sent a lot of e-mails to you and i'd love to talk to you in person about it. >> appreciate it. >> forget the health savings accounts because they're a little bit complex. medicare -- medicare rationing is underway. >> give me a little time here. the first premise of your question about u.s. health care. i certainly agree that we have the best quality health care in the world. there's no question about it. you go to johns hopkins, university of maryland, i agree with you. but we have some real problems in our health care. i -- today i was at healthy starts in baltimore. give me a moment here, people. >> let him speak. >> our prenatal infant mortality rates are not good. we don't rank well with infant mortality issues now. >> let the senator answer the

question. we get tremendous savings in health care costs. they have saved many reaching moms ahead of time with prenatal care and also with nutrition issues. they have directly saved the medicare program $8 million. we know that. so my point is, we can do better and access the care now on medicare -- on medicare. what you about medicare reimburse snments >> i agree. look, if we don't do anything, we're going to continue to have these types of cuts. you know that the physician reimbursement rate are scheduled to go down -- i forget -- about 20% or 30% if we don't do nothing. thaw equals rationing. >> no, it means they won't treat seniors. >> right, rationing. >> they won't treat seniors. we've got to fix that. >> and medicare is hundreds of billions of dollars. >> we've got to picks it. my point is -- >> unfunded liability. >> right. >> unfunded. which means the insurance companies have to pay extra for that thousand dollar tylenol to

pay for the difference. we see it in our hospitals. >> let me answer your question, okay. wmedicare cannot be fixed unless we fix our health care system. you're right when you said -- no, it's health care costs. we've got to get health care costs. right now the medicare system pays a significant amount, which our seniors are contributing to under their -- under their premium for the uninsured. they pay a large part of that. there's a specific part of the reimbursement rate to hospitals that cover for uncompensated care. so we've got to fix the medicare system and strengthen it. it needs to be expanded and needs to be stronger benefits under medicare. it doesn't cover enough now. so i agree with you. >> but the bill is cutting reimbursement to medicare. >> we're not going to allow the -- we are not going to cut any benefits under the medicare system. we're going to expand medicare. i can tell you that. we're not going to cut benefits under medicare. i'm not going to vote to cut

benefits under medicare. . i appreciate the banter. you say you advocate coverage for every person in america. i would like to clarify this. i live like to know whether not when you say you want all persons to the cover, are you covering people that are here illegally or only the american citizens? that is the question i want to ask, whether you agree that it is not right for american citizens to be asked to pay for the health care and the health care insurance people here

illegally. d you agree with me on that? >> i agree. it is not in the bill. a question on this side of the room. champion for small business. >> have respect for the questioner. >> in section 421 of one of the house bill's, it says that the government will pay for 50% of health-care costs. but this is phased out very quickly, based on the average compensation of the employees. if the average compensation is about $40,000, up that government will not subsidize those all businesses whatsoever with their health care, according to the bill. are you going to vote for a bill that discriminates based on,

say, i shop and an analyst -- in annapolis run by a husbandnd wife, will they get help? or a small team of engineers helping to make tomorrow better, they are not going to get any health care benefits? i want to know what you are going to bed for a bill which demonstrates again such people? >> i am not sure i understand the question. >> it is in the bill. >> in regard to small business, this issue is not resolved yet. there are significant differences between the committees has to the requirements for company responsibility. there will be an exemption, depending on the size of a company. some companies will not have any new mandates as a result of the passage of this legislation, based on the payroll for number of employees. others will have

responsibilities and maybe a dollar amount, it may be a percentage of payroll, there is a difference between house and senate's bills. i don't know how it will come out. is being negotiated today. but there will be tax credits for small businesses to help pay for those additional costs. >> they are being specifically phased out by the bill. >> you were referring to the house bill. it's connected to pay role which the senate bill does not have. i can tell you that we are in the process of making sure -- and a small business community is at the table talking to us about this -- we got this to be a plus with a small businesses. they are one of the victims of the current system. we wanna make sure that they are protected. >> $40,000 is the median income -- >> $20,000 -- i don't know

what the $40,000 is. >> if someone pays their employs >> if someone pays their employs an average of $40, and not going to be eligible. >> i am not aware of that being gay role. i do not know the context of that. it does not sound like a logical part. what i'm asking if he would vote for that. >> there is not going to be a limit like that as far as small business. >> question on this side. >> i would like to thank the senator for having this meeting. i think very senators would do what you are doing. [applause] i will like to ask a quick

question for seniors. i have been working with seniors for many years. and they are concerned that in spite of what the president what has said, that the medicare will not change, and they are concerned about whether they are going to have to pay more for medicare or they are going to get less. what would you say to them to encourage them to support health care for everybody, which i think a lot of seniors do? >> there is a lot of pressure on congress to balance the federal budget. one of the biggest items is a health care cost of medicare. there has already been provider reductions that could have the backs of doctors participating in medicare. that is happening today. a lot of doctors are not taking medicare patients. happening.

we have got to bring down the overall cost of health care in america in order to be able to continue to provide the types of support for medicare. there will be no benefit reductions in the medicare program. we will not let that happen. i want to see an expansion of benefits. i have filed a half dozen bills that would provide stronger benefits to medicare, some of those being in this proposal. preventive care, the copays and deductibles in the medicare bill will be eliminated in this bill. you will see a strengthening and not a weakening of the medicare system. opponents -- allow this proponents are the ones that oppose medicare from that beginning. we are trying to strengthen the insurance programs and help those who otherwise could not afford to have health insurance. a question on the side.

>> thank you for being here. i have a two question. you said that it was bipartisan. >> the senate finance committee. >> on healthcare, and you said that senator snowe was on that, and susan collins. >> know, you've got the right one -- or wrong one. the senator from wyoming, senator grassley, iowa, and senator snowe from maine. >> i live in maine and maryland both. my first question to you is, are you going to put into the bill the ability to buy insurance between states? [applause] my insurance as a self-employed person required me to move to maryland, it went to $2,300 a month. the same exact policy for the

same exact sharon's -- insurance company is $789. are you going to require the insurance companies in health care reform to have interstate purchase of insurance? [applause] >> good question. >> and i have a second question. >> let me give you an answer to that. here is the balancing that we have to deal with. health insurance has generally been regulated by the states, not the federal government. i think that there is a strong preference to include the states as the primary regulator, rather than the federal government being the primary regulator. that presents challenges for a state such as maine to regulate insurance practices for someone who purchases in maryland. there is a challenge to maintaining state regulation and opening up the areas in which they can solicit enrollment.

you raise a ballot 0.31 of our primary objectives is to make sure you can continue coverage as you change your location in employment, and that is something certainly worth looking into. >> i did not want have to change by location. i was forced to. along that line, is your new health-care plan that we're going to pay for going have abortion on demand that we are paying for out of my tax dollars? >> the answer is, no, there will be no change in the concept -- current policies as it relates to the funding of abortion. >> i am not talking about roh v. wade. >> let me clarify this. we already have a government insurance. there have been certain prohibitions about the use of public funds for abortions. they are not changed at all by

this bill. >> not two years, like car czar? >> this bill is neutral on that issue. >> of the bills on the committee going to be neutral on this? >> we would like to see what the final bill looks like. so far everything we have seen indicates that the bill will be neutral on abortion. a question on the side. >> thank you, senator cardin. you just give us a synopsis of your health care program in five slides. why does it take congress 1000 pages to do the same thing? and a quick follow up on that. can you give us a specific example of something that was previously public or private that the government takeover and made more if they sent and save costs? [cheers and applause]

>> i personally think that our national park system represents such a system. the medicare system -- if we did not have medicare, but for the passage of medicare, the majority of our seniors had no health insurance. seniors have the most expensive health care of any age group. that is natural. as you get older, you need more help in -- health care. medicare has were. it is more cost-effective. look at one number. the taxpayers of this country

pay over the next tenure as an extra hundred $50 billion because of the private insurance option in medicare. it is cheaper. the government runs at more effectively than the private side. [booing] that is a fact. >> question on the side of the room. >> i want to congratulate you, senator cardin, on all your leadership on health care issue over the years. you mentioned, which is very true, that every time you pay your insurance premium, $1,100 at that coasted hospitalization of the uninsured. that is a hidden health care tax that is now imposed on small businesses like my friend brian england who owns an oil shock in howard county. that is why the businesses had

endorsed a plan in maryland will make sure it that all businesses do their fair share so that no one has to pay a hidden health care burden. what would you make sure to make sure that this this is doing the right thing to do not have an undue burden of health care for the uninsured by making sure that making sure that businesses that can provide health care but do not do so, do so? >> one of the reasons is to help small businesses. they are being priced out of the market. we have 300 more ensured today just in the state of maryland. we're losing about 300 people on health insurance. most that it is small companies that cannot afford their plans. you are absolutely right. if you are a small company today and you provide health insurance for your employees, you think it is the right thing to do. you are willing to do it and

invest in your employees. thing you have to pay for health insurance of the people you are competing against. that makes no sense at all. everyone should be in the system. >> question on this side of the rim. >>irst, let me say that i think that this health care plan is probably the best plan that the government has come up with so far to shore up social security. next, i want to say that -- [applause] my question for you is, apparently in the bill that after 10 years, the state of maryland as opposed to take over the cost of this care. that is in the bill. the states will become responsible for the costs of these plans. does it concern you at all that the state you are from, that you

represent, how we are going to ask taxpayers take over the costs of this plan? >> i understand that you're going to talk about medicare? you talk about the cost of medicaid? >> i cost of nationalizing health care. >> the cost of the plan is going to be paid for by the bill we passed. it will not be pushed on to the states. this year or 10 years from now, it is not going happen. i think what you are referring to is that there is an expansion of the medicaid system, making it more eligible for lower income families to be part of the medicaid system. the federal government will pay the cost of that. >> i am talking about the couple plan. it is going to be paid for somewhere.

taxes will be paid to pay for the medical health care plan that will cover every single person in the united states. >> the plan will be played for -- paid for, the short-term cost will be paid for from health care itself. it will be paid for because the pharmaceutical manufacturers are cutting down some of their charges to american consumers. we are cutting back on the insurance companies, on the providers. and there are different plans. we might tax insurance companies directly. that is how we're paying for the extra cost, short term. there is nothing on the states and that record. -- on that regard. let's cut a the next question. >> good evening. those of us that provide services to the uninsured know

that the current system is fragmented, medicare, medicaid, community health and senate -- community health centers. at its see bringing these entities together to create a more cohesive system of care? >> that is a great question. i met with the ceos of one of our major urban hospitals a week ago, and that was his major concern. how do we handle the influx of care in america? there are so many families not getting primary care needs. do we have any type of coordination? the past vehicle here are the community health centers. we're looking at significantly increasing the number of community health centers. we have 105 in maryland. we're looking at perhaps tripling the number, because that is where you get your primary care in the most cost- effective way. you are correct.

if this was based upon which plan you are in, we would not have an efficient system. we are looking at it -- a delivery system that will deal with the priorities we are talking about as well as prevention. another reason, even if we want it at face this and quickly, we could not get the facilities in place in our communities to deal with the influx of the uninsured into the health care system itself. >> thank you. and thank you for letting me get my question in. [applause] >> my thoughts and prayers are with the young lady on the stage there. [applause] my question is about fraud. there are approximately $120 billion of fraud in medicare which is a fraction of what this is going to be. it is too big to police. what will happen here?

will we have $1 trillion in fraud, $2 trillion? >> you are absolutely correct to be concerned about any fraud or abuse in our system. we have hot lines to try to track that down. my office spends a lot of time dealing with that. [booing] [booing] can i caution are in lot of doctors that are trying to get the appropriate care for their patients. they get very angry at the rules that we have. they did everything they can to make sure that a particular drug is approved. sometimes they go over the line as for advocating for their patient. it can get caught by fraud or abuse. that is not clear after.

there is too much fraud in medicare. there is too much fraud and private insurance. we have to do everything we can to root it out. i did not bother putting it on the chart. it is one of the major provisions in each one of the bills come to go after fraud. >> you do not know how to paver this bill yet. the president is saying you are making to one of the thousand dollars in tax breaks. are you kidding me? [laughter] seriously? you expect me to swallow that one? >> i have not seen now we are paying for the bill yet. i know what the president said. that is one of the points that put on the slide. i will not hold judgment until i see the package. i have not seen the package yet. >> we have about 10 minutes remaining. tes remaining on this. the gentleman over here.

>> can you speak louder? >> i went to a meeting like this when you are supporting hillary clinton's plan. here we are 13 years later and we're still debating the same argument. unfortunately tonight, why are you debating the argument with so many misstatements? in 1994, maryland passed small group reform that provides for a guaranteed issuance of health care but no pre-existing conditions, no ratings were gender, and a rating for health conditions, but a modified rating community, only for the age and location of a small group in the state. in 1996, one health insurance portability act passed and guarantee portability of coverage for any citizen of remains responsible and covered in the health-care system for 12

months and can never have a pre- existing cause reimposed upon them. why do we forget this and try to reinvent the wheel when marilyn is backing off in increments since 1994 saying that we need to expand the rating more and get a little mel rahm -- brunn to break appropriately? and we are adding a pre-existing clause back in to prevent the gaining of people to wait until they get sick to enroll in health care plan? >> i said point out -- [applause] as you point out, there is a six-month wait. if you are not enrolled in a plan. let me finish my answer. but there is a precondition. there are preconditions. that will be gone under this bill.

everyone's past has insurance. you cannot gain the system. everybody will be in the system. we think people are going to gain the system. we want a seamless system so you cannot game at. we want you have protection. >> we need global transparency so everybody knows what is being charged and what is being paid said that the consumer can do their job instead of asking you to do it for them. [cheers and applause] >> the help the exchanges will do that. they will allow consumers to make the choice that they want. today, what choice can you make -- you are working for an employer that offers one plan. what is your choice? that is one-third of our system. >> let me make one point about global transparency. the point i am making is that the decisions, all hospitals, the insurance companies, they

all need to did -- they all need to disclose their decisions. if we remove the ability to make profits based on behind- the-scenes negotiations -- $7 billion of wasted money said that doctors can negotiate with united healthcare, blue cross, and 70 other payers independently. we should all be paying the same, charge the same, and swer what we want to ensure. >> we had transparency in the bill in that there is -- all that. take a look at that. he seemed to be knowledgeable on that. tell me figure out how to make that provision stronger. i am with you on it. is there time for another question over here? >> we are so far removed from the philosophy is a founding fathers, that yet they were here today, we would be talking about

one thing and that is how to get the government out of health care. [cheers and applause] i want to ask you one question. are you trying to tell me that an anomaly, that government can deliver better health care than the competitive marketplace? are you trying to tell me that the government can deliver lower costs than the competitive marketplace, a monopoly? cannot do that? and then the solution is in more government? [shouting] >> all of the estimates showed that under the bills that are moving through congress, we're going have more people, not less, in private insurance.

>> right. >> more people, not less, in private insurance. i believe in competition and choice. i think that we are moving in the opposite direction if we do nothing. the concentration of a few insurance companies is becoming more and more evidence in maryland and around the nation. i want more choice, not less. and the choice that must employees having today being more expanded, not restricted. i think that this will allow -- tell us allow you to be better consumers. i want transparency not only from the private insurance but on the government plan, so that you can make the right choice. i think that makes sense. [shouting] one final question from the gentleman over on this side.

>> you have said that you want to strengthen medicare and medical care in general. how is that possible when the intention of this plan is to cut $2 trillion in medical benefits, which you know very well can only be done by rationing care? and the board has been set up in the senate version of this bill, at obama insistence, that would kill our elderly by rationing care. [applause] i want to know from you, [cheers and applause] -- i want to know from you, senator cardin, a board that would ration care and kill off the elderly and act capped -- and handicap, had you called that improving medical care? and if the intention is to cut

medical costs, why are you supporting a $24 trillion bailout of wall street, when we need a new economic system? we're inches array from an economic breakdown and you are trying to kill off the elderly. >> i urge you to stick to the facts. let me make a couple of points very clearly. >> senator cardin let make his comments. >> i will not support a plan that will cut $2 trillion in benefits. i am not going to support that plan. i do not believe that the final plan will be anything like that. i will not support a plan that will cut off benefits to people that are terminally ill. i will not vote for that. i tell you right now, it is not going happen. i think he do a disservice -- you do as disservice when you

use those types of hysteria comments that are not accurate all. [shouting] you present it the way that you want. i will tell you this. i will not support such a proposal. i can tell you that now. as your united states senator, i will not support that type proposal. now let me confi in you all one thing before we adjourn. i was asked a couple of times, why did i decide to have a town hall meeting when i knew i would get hostile questions? that was not a surprise. but i believe -- i want to share it with you one bit of humor if i might, just to try all light and things up as people go home tonight. senator cardi[shouting] >> can you let the senator made

his closing comments? >> i sat down to dinner with my wife at a chinese restaurant and my fortune cookie told me, you will soon be surrounded by good friends and laughter. i thought that perhaps tonight, it did not actually happen that way, but i think you all very much for being here tonight at this town hall meeting. >> on behalf of the senator cardin, thank you very much for your participation. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2009]

>> president obama takes questions about health care legislation at a town hall meeting in portsmouth new hampshire. in a little more than an hour, the georgian ambassador talks about the russian invasion a year ago. after that, lawrence summers talks on the economy and deficit. later, pennsylvania senator arlen specter hold a healthcare town hall meeting. on "washington journal" we are talking up the economy with mayors from around the country. tomorrow morning we will hear from youngstown, ohio mayor j. williams. greg ballard, the mayor of indianapolis joined this thursday.

on friday we will hear from jim humphrey. "washington journal" is live on c-span every day at 7:00 a.m. eastern. president obama went to portsmouth, new hampshire tuesday for a town hall meeting on health care. this is a little more than one hour. >> my name is lori hitchcock. i cannot tell you how pleased i am to be here today. i am the face of an uninsured. i build a company that provided benefits for my employees. those days are healthcare is unattainable and unaffordable.

i am uninsurable. i have a pre-existing condition. i have hepatitis c. no company will ensure may. no company will employ me knowing that i have this potentially catastrophic disease. i have never spoken about this publicly before. i chose to speak out today because this issue is too important to remain silent. [applause] [applause] i have the virus but,wz not the disease. the disease is horrible. i watched my ex-husband died from it. at any moment, this virus could explode. i live with hope, being my only

health plan. president barack obama ran on a platform of change and hope. he has been good to his word. now, he has taken on the fight to ensure all us. the enemies of health reform have circled the wagons, filled the airwaves with misinformation. president barack obama meets each and every one of us to stand up and demand health care reform. [applause] and now with my heart bursting with pride that my country made the right to is and pledge to

myself to do whatever it takes, watching the grace with which this man handles the very top issues, it is my pleasure to introduce our president, barack obama. [applause] [applause] q& [applause]

>> hello, portsmouth. thank you. thank you. thank you, so much. thank you but everybody had a seat. thank you. oh, i love you back. [laughter] it is great to be back in portsmouth [applause] it is great to be back in new hampshire. i have to say that most of my memories of this state are cold. [laughter] it is good to be here in august. [laughter] there are a couple of people that want with knowledge who are here today, special guests. first of all, i want to thank principal jeffrey collins and the staff here at the school. [applause] he is our host for the day.

your outstanding governor, john lynch is here. [applause] and his wonderful wife, susan lynch is here, the first lady of new hampshire. [applause] your united states senator, doing a great job, judy shahe is here. [applause] the governor of the great state of maine and we are glad he is here in new hampshire today, john baldacci is here. [applause] two of my favorite people, they are just taking congress by storm, outstanding work, paul hodes, carol shea porter, [applause] give them a big round of applause]

we also have your own mayor, tom parini is here. where is he? there he is. [applause] now, i want to thank, more than anybody, laurie for the introduction and sharing the story with the rest of us. thank you, laurie. [applause] her story is the same kind of story that i have read letters, i have heard in town hall meetings just like this one for the past five years. in fact, some of you were in those town hall meetings as i was traveling throughout new hampshire. it is the story of hard-working americans who are held hostage by health insurance companies that deny them coverage or drop their coverage or charge fees they cannot afford for care that they desperately need.

i believe it is wrong. it is bankrupting families and businesses and that is why we are going to pass health insurance reform in 2009. [applause] now, this is obviously a tough time for families in new hampshire and across america. six months ago, we were in the middle of the worst recession of our lifetimes. i want you to remember what things were like in january and february. we were losing about 700,000 jobs per month. economists of all stripes feared a second coming of the great depression. that was only six months ago. that is why we acted as fast as we could to pass a recovery act that would stop the freefall. i want to make sure everybody

understands what we did. 1/3 of the money and recovery act but to tax cuts that have already started showing up in the paychecks of about 500,000 working families in new hampshire. [applause] 500,000 families in new hampshire. we also cut taxes for small businesses on the investments they make and over 300 new venture small businesses have qualified for new loans backed by the recovery act. now, that was 1/3 of the recover at. another 1/3 of the money and recovery act is for emergency relief for folks who have borne the brunt of this recession. we have extended unemployment benefits for 20,000 new hampshire residents. [applause] we have made health insurance 65% cheaper for families who rely on cobra while they are

looking for work. [applause] and four states that were facing a historic budget shortfalls, we provided assistance that has saved the jobs of tens of thousands of workers who provide essential services like teachers and police officers. [applause] it has prevented a lot of painful cuts in the state but also a lot of painful state and local tax increases. the last 1/3 of the recovery act is for investments that are putting people back to work for these are jobs refurbishing bridges and pavement on i-95, or jobs at the community health centers here in portsmouth. it will be able to add nurses and extend hours and serve up to 500 new patients. these are good jobs, doing the work american he's done for it by the way, most of the work is being done by private, local businesses because that is how we will grow this economy again.

there is no doubt that the recovery act has helped put the brakes on this recession. we saw last friday, the job picture is beginning to turn. we are starting to see signs that business investment is coming back. but that does not mean we're out of the was and you know that. it does not mean we can sit back and do nothing while so many families are still struggling. because even before this recession hit, we have an economy that was working pretty well for the wealthiest americans. it was working pretty well for wall street bankers. it was working pretty well for big corporations but it was not working so well for everybody else. it was an economy of bubbles and busts. we cannot go back to the kind of economy. if we want this country to succeed in the 21st century and if we want our children to succeed in the 21st century, then we will have to take the steps necessary to lay a new foundation for economic growth.

we need to build an economy that works for everybody and not just some people. [applause] health insurance reform is one of those pillars that we need to build up that new foundation. i don't have to explain to you that nearly 46 million americans do not have health insurance coverage today. in the wealthiest nation on earth, 46 million of our fellow citizens have no coverage. they are just vulnerable if something happens. they will go bankrupt or they will market the care they need. it is just as important that we accomplish health insurance reform for the americans who do have health insurance. [applause]

because right now we have a health care system that too often works better for the insurance industry than it does for the american people. we have to change that. [applause] let me just start by setting the record straight on a few things i have been hearing. [laughter] about reform. under the reform we are proposing, if you like your doctor, you can keep your doctor. if you like your health care plan, you can keep your health care plan. you will not be waiting in any lines. this is not about putting the government in charge of your health insurance. i do not believe anyone should be in charge of your health insurance decisions but you and your doctor. [applause]

i do not think government bureaucrats should be meddling but also don't buy insurance company bureaucrats should be meddling. that is the health-care system i believe in. [applause] we just heard from laurie about how she cannot find an insurance company that will cover her because of her medical condition. she is not alone. a recent report actually shows that in the past three years, over 12 million americans were discriminated against by insurance companies because of a pre-existing condition. either the insurance company refused to cover the person or they drop their coverage when they got sick and needed it most or they refused to cover a specific colmes or condition or they charged higher premiums and out-of-pocket costs. no one holds these come --

companies accountable for these practices. i have to say, this is personal or laurie but it is personal for me. i talked about this when i was campaigning in new hampshire. i will never forget my own mother as she fought cancer in her final months, having to worry about whether her entrance would refuse to pay for her treatment. by the way, this was because the insurance company was arguing that somehow, she should have known that she had cancer when she took her new job, even though it had not been diagnosed. if it can happen to her, it can happen to anyone of us. i have heard from some americans who have the same words. one woman testified that the insurance company would not cover her internal organs because of an accident she had when she was 5-years old. about that project covers a lot of stuff. [laughter] they will only cover your skin. [laughter]

dermatology is covered but nothing else. [laughter] another loss is covered and a look chemotherapy because gallstones were discovered when he applied for insurance. that is wrong. that will change when we pass health care reform. that will be a priority. [applause] under the reform we are proposing, insurance companies will be prohibited from denying coverage because of a person's medical history, period. they will not be able to drop your coverage if you get sick. [applause] they will not be able to water down your coverage when you need it. [applause]

your health insurance should be there for you when it counts. not just when you are paying premiums but when you actually get sick. it will be when we pass this plan. [applause] when we pass health insurance reform, insurance companies will no longer be able to place some arbitrary cap on the amount of coverage you can receive in a given year or lifetime. we will place a limit on how much you can be charged for out- of-pocket expenses because no one in america should go broke because they get sick. [applause] finally, this is important -- we will require insurance companies to cover routine checkups and preventive care, like mammograms and colonoscopy iies.

[applause] because there is no reason why we should not be catching diseases like breast cancer and prostate cancer on the front end. that makes sense. it saves lives. it also saves money. we need to save money in this health care system. this is what reform is about. for all the chatter and yelling and shouting and the noise, what you need to know is this -- if you do not have health insurance, you will finally have quality, affordable options once we pass reform. [applause] if you do have health insurance, we will make sure that no insurance company or government bureaucrat gets between you and the care you need. we will do this without adding to our deficit over the next decade. it will largely be by cutting out the waste and insurance

company give boys and medicare that are not making any of our seniors healthy. [laughter] right. s that we start refining our own abuse because maybe other people have different perspectives and things we did not think of. where we do disagree, let's disagree over things that are

real, not these wild misrepresentations that bear no resemblance to anything that has actually been proposed [applause] ] the way politics works sometimes is that people want to keep things the way they are will try to scare the heck out of folks and they will create boogeyman that are not real. so, this is an important and complicated issue that deserves serious debate and we have months to go before we're done and years after that to phase in all these reforms and get them right. despite all the hand-wringing pundits and the best efforts of those who are profiting from the status quo, we are closer to achieving health insurance reform and we have ever been. we have the american nurses association supporting it. we have the american medical association on board. [applause]

america's doctors and nurses know firsthand how badly we need reform. we have broad agreement on congress on about 80% of what we want to do. we have a degree from drug companies to make prescription drugs more affordable for seniors. we can cut the doughnut hole in half if we pass reform. [applause] we have the aarp because they know this is a good deal for our seniors. [applause] but let's face it, now is the hard part. history is clear -- every time we come close to passing health insurance reform, the special interest groups fight back with everything they had. they use their inference. the use their political allies to scare and mislead the american4xt. they start running ads.

this is what they always do. we cannot let them do it again. not this time. not now. [applause] because for all the scare tactics out there, what is truly scary, what is truly risky, is if we do nothing. if we let this moment pass, if we keep the system the way it is now, we will continue to seek 14,000 americans lose their health insurance every day. your premiums will continue to skyrocket. they have gone up three times faster than your wages and they will keep on going up. our deficit will continue to grow because medicare and medicaid are on an unsustainable path. medicare is slated to go into the red in about 8-10 years. if i was a senior citizen, what i would be worried about is medicare starting to run out of money.

insurance companies will continue to profit by discriminating against people for the simple crime of being sick. that is not a future a lot for my children. it is not a future i want for the united states of america. new hampshire, i was up here campaigning along time. [laughter] a lot of you guys came to my town hall events and some of you voted for me as some of you didn't. here is one thing i have to say -- i never said this would be easy. and never said change would be easy. if it were easy, it would have already been done. change is hard. it does not start in washington. it begins in places like portsmouth with people like lowry, who have the courage to share their stories and fight for something better. that is what we need to do right now and i need your help.

if you want a health care system that works for the american people, as well support for the insurance companies, i need your help. knocking on doors, talking to neighbors, spread the facts, let's get this done. [applause] thank you. [applause] thank you. thank you. [applause] thank you. i remember that. a buddy have a seat. this is the fun part. first of all, by the way, let's back the ban. i did not to the band over here. thank you, banned. [applause] great job. here is how we will do this. we do a lot of town hall meetings in new hampshire so everybody knows the basic

outline of this thing. if you have a question, raise your hand. there are people with microphones in the audience. i will try to go girl-boy, girl- boy, to make sure it is fair. if i hear only from people who agree with me, i will actively asked some folks who are concerned about health care, give them a chance to ask their questions because we have to make sure we get out some of the debates and concerns people have carried some of them are legitimate. i will get through as many questions as i can bear it if you can keep your question or  thei will try to keep my answers oral different breed. -- relatively brief. we will go around the room and i will start with this gentleman, right here. please introduce yourself, if

you don't mind. >> thank you, mr. president. welcome to portsmouth in new hampshire. -peter schmidt. i'm a state representative from over. i'm a senior citizen. i have a wonderful government- run health care plan called medicare. i like it. it is affordable. it is reasonable. nobody tells me what i need to do. i just go to my doctor and possible and i get care. one of the things you have been doing in your campaign to change the situation is u.s. been striving for bipartisanship. i think that is a wonderful idea. my question is -- if the republicans actively refused to participate in a reasonable way with reasonable proposals, isn't it time to say, "we will pass with the american people need and what they want without the republicans?" >> let me make a couple points -- first of all, you make a point about medicare that is important. i have been getting a lot of

letters, pro and con, for health care reform. one letter i received recently, i woman was very excited about the plant. she said she did not want government-run health care. she did not want me meddling in the private market place and keep your hands up my medicare. [laughter] true story. and so, i think it is important for, particularly seniors who currently receive medicare, to understand that if we are able to get something right, like medicare, then there should be a little more confidence that maybe the government can have a role, not the dominant role, but a role in making sure the people are treated fairly when it comes to insurance. [applause]

under our proposal, the majority of americans will still get their health care from private insurers. all we want to do is make sure that private insurers are treating you fairly so that you are not buying something where you fail to read the fine print and the next thing you know, when you get sick, you have no coverage. we want to make sure that everybody has options. there has been talk about a public auction. this is where a lot of the idea of government takeover of health care comes from. all we want to do is set up a set of options so that if you do not have health insurance or you are underinsured, you can have the same deal that members of congress have, which is, they can look at a menu of options, an exchange, but it is a menu of different health care plans, and you'll be able to select the one that suits your family best and i do think that having a public auction as part of that would keep the insurance companies on must. if they have a public plan out

there that they have to compete against, as long as it is it is not being subsidized by taxpayers, that will give you some sense of a good bargain for basic health care. [applause] i think that there are some of my republican friends on capitol hill who are sincerely trying to figurqcx out if they can't finda health care bill that works. chuck grassley of iowa, mike enzie of wyoming, olympia snowe from maine -- i like olympia, too. they are diligently working to see if they can come up with a plan that could get both republican and democratic support.

i have to tell you, when i listen to folks like lori and families across america who are getting pounded by the current health-care system and when i look at the federal budget and realize that if we do not control costs on health care, there is no way for us to close the budget deficit. it will just keep on skyrocketing. when i look at those two things, i say we have to get it done. my hope is that we can do it in a bipartisan fashion. the most important thing is getting it done for the american people. all right. [applause] this young lady, right here. all right, this young lady, right here. she is still enjoying her summer. when you go back to school? >> i go back to school september 3.

>> september 3, ok. what is your name? >> julia hall from northern massachusetts. >> nice to meet you, julia. >> as i was walking in, i saw many signs outside saying mean things about reforming health care. how do kids know it is true and why do people want a new system -- why don't people want in a system that helps more of us? >> i have seen some of the sides. [laughter] let me just be specific about some things i have been hearing lately. we need to dispose of these things. the rumor that has been circulating a lot lately is this idea that somehow the house of representatives voted for death pounds that will -- panels that

will pull the plug on grandma because we have decided that it is too expensive to let her live anymore. and there are some variations on this team. -- theme. this arose out of a provision out of one of the house bills that allowed medicare to reimburse people for consultations about and applied care and setting up living wills and the availability of hospice, etc. the intention of members of congress was to give people more information so they could handle issues of and of life care when they are ready, on their own terms. it was not forcing anybody to do anything very this is where the rumor come from, i guess. the irony is that one of the chief sponsors of this bill originally was a republican,

then house member, named johnny isaacson, that sense of the thought this would expand people's options. somehow it has gotten spun into this idea of death panels. i am not in favor of that. i want to clear the air here. in fairness, the underlying argument has to be addressed. that is people's concern that if we are reforming the health-care system, to make it more efficient, which i think we have to do, the concern is that somehow that will mean rationing of care. somehow, some government bureaucrat will be saying, "you cannot have a procedure because some bean counter decides this is not a good way to use l

health care dollars." this is a legitimate concern. i want to address this. we do think that systems like medicare are very inefficient, right now. but it has nothing to do, at tl> that is not a good use of money.

i would rather spend that money on making sure that lori can have coverage and making sure that people who do not have health insurance can get subsidies, rather than subsidize insurance companies. [applause] another way of putting this is, right now, insurance companies are rationing care. they are basically telling you what is covered and what is not. they are telling that they will cover one drug or another. you can have one procedure or another. why is it that people would prefer having insurance companies make those decisions rather than medical experts and doctors figuring out what are good deals for care and providing that information to you as a consumer and your doctor so you could make good

decisions? i want to be very clear about this. i recognize there is an underlying fear that people somehow will medicare they need. you will have, not only the care you need, but the care that, right now, is being denied to you, only if we get health care reform. that is what we're fighting for. [applause] all right. the german back here with the baseball -- the gentleman back here with a baseball cap. >> good morning -- good afternoon, mr. president. in reference to what you just said, i am presently under the new hampshire medicaid system. i have to take a drug takelipitor. they said they will not cover this even though i had been on that bill for 10 years. i had to go through two

different trials of other kinds of drugs before it was finally determined that i could go back on the lip-itor through the new hampshire medicaid system. the medicaid bed you guys are administering and you are telling me is good but i am dealing with the same thing and you are telling the insurance companies are doing. thank you. >> that is a legitimate point. i don't know all details. they probably want you to be generic, is that right? it turned out you did not have a good as good a reaction under the generic as the brand name and put you back on the brand name, is that what happens? right. there may be, in nine out of 10 cases, the generic might work as well or better than the brand name. we don't want to just subsidize the drug companies if you have

one that works just as well as another. the important thing about the story that you just told me is that once it was determined that, in fact, you needed the brennan, you were able to get it. -- brand name, you were able to get there will be instances where, if there is strong scientific evidence that the generic and brand-name work just as well, and the brand name cost twice as much, that the taxpayer should try to get the best deal possible as long as if it turns out that the generic does not work as well, you are able to get the brand name. the basic principle that we want to set up here is that if you are in private insurance, your private insurance can do whatever it wants. if you're under a government program, then it makes sense for

us to make sure we're getting the best deal possible and not just giving drug makers or insurers more money than they should be getting but ultimately, you get the best care based on what the doctor says. it sounds like that is essentially what happened. it may be that it was not as efficient or a smooth as it should then but that result is actually good one. you think about all the situations where a generic action would have worked. one of the things i want to do is to speed up generics getting introduced to the marketplace. right now, drug companies -- [applause] right now, drug companies are fighting so that they can keep essentially their patents on their brand name drugs all lot longer. if we can make those patents a little shorter, generics, market sooner and you as consumers will save money.

all right? that was an excellent question, thank you. it is a young woman's turn for a or a lady's turn. right here. yes, you. >> good afternoon, mr. president. i and. jackie fromwells, maine. i am presently on medicare and i have a supplement. if something happens to my husband, i lose the supplement for a -- supplement. i have had a lot of procedures. how will medicare, under the new proposal, help people who will need things like this? >> first of all, another myth that we have been hearing about is this notion that somehow we will be cutting medicare benefits. we're not.

the aarp would not be endorsing a bill if it was undermining medicare. i just want seniors to be clear about this. if you look at the pollling, it looks like seniors are most concerned about medicare. they have medicare and it is hard for people on medicare because the supplements and all the other costs out of pocket that they are still playing. i want to assure that we are talking -- not talking about cutting medicare benefits. we are talking about making medicare more efficient, eliminating the insurance subsidies, working with hospitals so that they are changing some of the reimbursement practices. right now, hospitals are not penalized if there are constantly admission rates for

patients that have gone through the hospital. if you go to a car company or an auto shop, and you say you want your car repaired, you get your car repaired. if two weeks later, it is broken down again, if you take it back, hopefully, they will not charge again for repairing a car. you want them to do it correctly the first time. too often, we're not seeing the best practices in some of these hospitals to prevent people from being readmitted. that cost a lot of money. those of the kind of changes we're talking about. in terms of savings for you as a medicare recipient, the biggest one is on prescription drugs. the prescription drug companies have already said that they would be willing to put up $80 billion in rebates for prescription drugs as part of a health care reform package. we may be able to get even more than that. think about it -- when the

prescription drug plan was passed, medicare part b, they decided they would not negotiate for the cheapest price on drugs. as a consequence, seniors are way over paying. there is that big doughnut hole that forces them to go out of pocket. you say you take a lot of medications. that means that dole is something that is looming out there for you. if we can cut the dome of coal in half, that is money directly out of your pocket. that is one the reasons why aarp is supported. they see this as a way potentially saving seniors a lot of money on prescription drugs. ok? all right. the german right here in the white shirt. -- the gentleman right here in the white shirt. >> good afternoon, mr. president. my name is ben hirshenson and i am a republican very i don't

know what i'm doing here, but i am here. [laughter] >> we are happy to have you. >> mr. president, you've been quoted over the years, when grace center and even before then, that you were essentially a supporter of universal health plan. i am beginning to say you are changing that. do you honestly believe that? that is my concern for it i medicare but i still worry that if we go to a public auction period, that the private companies, the insurance companies, who can compete with the government? nobody do you still support a universal plan or are you open to the private industry still being maintained? >> i think that is an excellent question. i appreciate the chance to respond. first of all, i want to make a distinction between a universal

plan versus a single-payer plan. those are two different things. a single-payer plan would be a plan like medicare for all or the kind of plan they have in canada, basically, government is the only person -- is the only entity that pays all health care. herrity as a government-paid-for plant fo. in some countries, the hospitals are owned by the arm but the point is, the government pays for everything. that is like medicare for all. that is a single-payer plan. i have not said that i was a single-payer supporters because, frankly, historical we have had an employer-based system in this country with private insurers and for us to transition to a system like that, i believe would be too disruptive.

what would end up happening would be that many people who have the employer-based health- care would suddenly find themselves dropped and it would have to go into an entirely new system that has not been fully set up yet. i would be concerned about the potential destructiveness of that kind of transition. all right? i am not promoting a single- payer plan. i am promoting a plan that will assure that every single person is able to get health insurance at an affordable price and that if they have health insurance, they are getting a good deal from the insurance companies. that is what i am fighting for. [applause] the way we have approached it is that if you have health care under a private plan, if your

employer provides health care or you buy your own health care and you're happy with it, you will not have to change. what we're saying is that if you don't have health care, then you'll be able to go to an exchange, similar to the menu of options that i used to have as a member congress, and i can look and see what are these various private health-care plans offering, what is a good deal, and i will be able to bu insurance from that exchange. because it is a big pool, i will be able to drive down the cost. i would get a better deal than if i was getting insurance on my own. this is true for small businesses, as well. many small businesses and the paying more than large businesses per person for health care because they have no bargaining power. they have no leverage. we want small businesses to be able to buy into this big pool, ok? the only thing i have said is that having a public auction in

that menu would provide competition for insurance companies to keep them honest. i recognize that you raise a legitimate concern. people wonder how a private company can compete against the government. my answer is, that if the private insurance companies are providing a good bargain and if the public auction has to be self-sustaining, meaning taxpayers are not subsidizing it but it has to run on charging premiums and providing good services and a good network of doctors, just like any other private insurers would do, then i think private insurers should be able to compete. they do it all the time. if you think about it, ups and fedex are doing just fine.

they are. it is the post of is that is always having problems. @@@@@@@@@ @ @ @ @ @ @ @ @ @ @ @ ok, thank you. [applause] [no audiright there, go ahead. >> thank you.

hello, mr. president. my name is namebecher from portsmouth and i have taught at the high school for 27 years. >> congratulations. [applause] what do you teach? >> i teach english and journalism. >> excellent. >> thank you. in those 37 years, i have been lucky to have held good health care coverage. my concern is for those who do not. my question is that if every american who needed it had access to good mental health care, what do you think the impact would be on our society? [applause] >> mental health has always been undervalued in the health insurance market. what we now know is that somebody who has severe depression, has a more

debilitating and dangerous illness than somebody who has a broken leg. nobody argues that a broken leg is covered. severe depression, an unfortunate, sometimes is not, even under existing insurance policies. i have been a strong believer in mental health parity, recognizing that those are serious illnesses. [applause] i would like to see a mental health component as part of a package that people are covered under, under our plan. ok? all right. this gentleman, right here. he is coming with the microphone. >> hello mr. president. i am from stratham, new

hampshire. there is a lot of misinformation about how we will pay for this health care plan. i'm wondering how we will do this without raising taxes in the middle class because i do not want the burden on my parents. i am also a college student. >> they already have enough problems paying a college tuition. [laughter] >> exactly. also, i am looking toward my future with career options and opportunities. i do not want inflation to skyrocket by adding this to the national debt. i'm wondering how we can avoid both those areas? >> that is a request in. [applause] -- as a great question. first of all, i said i will not sell -- sign a bill that adds to the deficit or the national debt. this will have to be paid for. that, by the way, is in contrast to the prescription drug bill that was passed that cost hundreds of billions of dollars

by the previous administration and previous congress that was not paid for at all. it was a major contributor to our current national debt. that is why, you will forgive me if sometimes i chuckle a little bit when i hear all these folks saying," 0, big spending obama. " i am proposing something that will be paid for and they signed into law something that was not and have no problem with it. it is the same people. it is the same folks. they say with a straight face how we have to be fiscally responsible. [applause] having said that, paying for it is not simple. i don't want to pretend that it is. by definition, if we are helping people who currently do not have health insurance, that will cost

some money. it has been estimated to cost somewhere between $800,000,000,000.10 dollars trillion over 10 years. it is important that we're talking about over 10 years. sometimes, the number of trillions get thrown out there and everybody thinks is $1 trillion per year. it is about $100 billion per year to cover everybody and to implement some of the insurance reforms we're talking about. about 2/3 of those costs, we can cover by eliminating the inefficiencies that i already mentioned. i already talked about $177 billion worth of subsidies to the insurance companies. let's take that money. let's put that in the kitty. there are about $600 billion over 10 years that can be saved without cutting that that's for people who are currently receiving medicare.

they make -- that makes the system more efficient over time. that still leaves anywhere from $300 billion to $400 billion over 10 years or $40 billion per year. that has to be paid for. we will need new sources of revenue to pay for it. i have made a proposal that would, i want to be very clear, a proposal, my preferred approach, would have been to take people like myself, who make more than $250,000 per year and limit the itemized deductions that we can take to the same level as middle-class folks can take. right now, the average person, the average middle-class family, they are in the 28% tax bracket. they, basically, can't take a deduction that is about 28%.

since i am in a much higher tax bracket, i can take a much bigger deduction. as a consequence, if i give a charitable gift, i get a bigger break from uncle sam than you do. i have said that was just even that out. that would raise sufficient money. that was my preferred way of paying for it. members of congress have had different ideas. we are still exploring these ideas. by the time that we actually have a bill that is reconciled between house and senate and is voted on, it will be very clear what those ideas are. my belief is that it should not burden people who make $250,000 a year or less. that is the commitment i made. that is the pledge i made when i was running in new hampshire, folks. i do not want people saying that i am pulling the bait and switch. i said very specifically that i

think we should roll back the bush tax cut. we should use them to pay for health insurance. that is what i am intending to do. all right? ok. i have only time for a couple more questions. somebody here who has a concern about health care that has not been raised? or is skeptical and suspicious and wants to make sure -- i don't want people thinking that i have a bunch of plants im here. i have one right here. i'll ask the guy with two hands up bause he must have a burning question. all right. go ahead. >> thank you, mr. president. i have worked in the medical field for about 18 years. i have seen a lot of changes over those 18 years. i currently work here at the high school as a para- professional. i am from portsmouth and enter.

-- new hampshire. i have a question about the universal insurance program. if i understand you correctly, you seek to cover 50 million new people over and above the amount of people that are currently getting health care at this moment. >> i want to be honest here -- there are about 46 million people who are uninsured. under the proposals we have, even if you have an individual mandate, probably only about 38 million. somewhere in that ballpark. >> i'm off a little bit. >> i want to make sure i was not overselling my plan. >> is ok. [laughter] >> she's ok. >> he winked at me. my concern is for where we will

get the doctors and nurses to cover these. right now, i know that people are not going to school to become teachers to teach the nursing staff. doctors are -- have huge capacity and are leading private practice to go to administer the positions because of the caseload they are being made to hold. i really do feel that there will be more demand with the universal health care and no edit supply. i also understand that it will be taken from medicare, about $500 billion. correct me if i am wrong. >> i just said that. .

>> already mentioned we would be taking savings out of medicare that are currently going to ensure its subsidies, so that is absolutely true. i want to be clear again, seniors who are listening here, at this does not affect your benefits. this is not money going to you to pay for your benefits, it is subsidizing folks who don't need it. point number two, in terms of these expert help panels, this goes to the point about death panels. this is what folks are calling

them. the idea is actually pretty straightforward, which is if we have a panel of experts, health experts, doctors, who can provide guidelines to doctors and patients about what procedures work best in what situations, and find ways to reduce the number of tests that people take. these are not going to be forced on people but they will help guide the delivery system works, so that you are getting higher quality care. it turns out that higher quality care actually costs less. let me take the example of testing. right now a lot of medicare patients -- you have something wrong with the of the might you go to your doctor and the doctor checks up on you. maybe he it ministers a test --

he administers the test and now the doctor says you have to go to the specialist. the specialist does not have the first test so he does his own test, then maybe when you go to the hospital you have to take a third test. each time tax payers under medicare are paying for that test, so for a panel of experts to say why don't we have all the specialists and the doctors communicating after the first test, and let's have electronic medical records so that we can forward the results of the first test sue the others -- results of the first test to the others? that is a sensible thing to do. if high and a consumer and i know that i am overpaying -- if

i in a consumer and i am over paying $6,000, i would want the best deal, but for some reason in health care we continue to put up with getting a bad deal. we pay $6,000 more than any it danced country and we are not healthier for it. $6,000 more per person per year. there has to be a lot of waste in the system. the idea is to have doctors, nurses, medical experts look for it. the last question you ask is important, and i don't have a simple solution. if you look at the makeup of the medical profession right now, we have constant nurse suveges -- constant nursing shortages. primary-care physicians, family physicians should be the front lines of the medical profession

in encouraging prevention and wellness. [applause] @@@@@@@ @ '&@ @ primary-care physicians and are nursing core. on the doctor's front, one of the things we can do is to reimburse doctors who are

providing preventive care and not just the surgeon who provides care after somebody is sick. nothing against surgeons, i don't want to be getting letters from surgeons. i am. dising -- i am not dissing surgeons. let's take the example of diabetes, a disease that is skyrocketing partly because of obesity, partly because it is not treated as effectively as it could be. if we paid -- if a family care physician works with his or her patient to help them lose weight, modified diet, monitress whether they are taking their medications correctly, they might get reimbursed a bit, but if that same diabetic gets their

foot amputated, that is $30,000 the surgeon is reimbursed. why not make sure we are also reimbursing the care that prevents the amputation? that will save us money. [applause] but changing reimbursement rates will help. the other thing that will help is paying for medical education for those willing to go into primary care, and that is something we already started to do under the recovery act. we want to do more of that under health-care reform. last question right here. this is a skeptic, right? >> i am a skeptic. thank you for coming to portsmouth. i am from new hampshire. i am one of the people that turned myself in on the white house web page for being a

skeptic of this bill. >> before you answer this question just because you refer to it, can i say this is another example of how the media ends up just completely distorting what has taken place. what we have said is that if somebody has -- if you get an e- mail from somebody that says obama terrorists creating a debt panel, forward us the e- mail -- obama is creating a test panel, forward this to us and we will address it. this is being portrayed as obama collecting an enemies list. here i am trying to be responsive to questions that are being raised out there. >> and appreciated. [applause] >> i just want to be clear that all we're doing is try to answer questions. >> i know in the white house the stand which you are on is often

referred to as the bully pulpit. why have you not used it to chastise congress for having teo systems of health care? one for all of us and one for them? -- for having two systems of health care? >> first of all, if we do not have health care reform, the gap between what congress gets and ordinary americans get will continue to be as wide as it is right now. car i caol or paul would deny that they had a good deal. -- i do not think carol or paul would deny they don't have a good deal. their deal is no better than the janitor who cleans their offices, because they are part of a federal health-care employee plan. it is a huge pool, so you have millions of people part of it, which means they have enormous leverage with the insurance

companies. they can negotiate the same way that a big fortune 500 company can negotiate, and that drives down their costs. they get a better deal. what happens is those members of congress, and the same situation when i was a senator, at the beginning of the year i could look at a menu of a variety of different options, most of them private plans. they could beat not-for-profit, bluecross blueshield , they would have these plans and we would select which one works best for us, but there were certain requirements. if you wanted to sell insurance to federal employees you had to do certain things. you could not exclude for pre- existing conditions, there were a lot of rules that had been negotiated by the government for those workers. guess what? that is exactly what we want to do with health care reform.

we want to make sure that you -- [applause] we want to make sure that you are getting that same option. that is what the hell the change is all about, is that you, like a member of congress, can choose the plan that is right for you. if you have health care that you like, you do not have to use it. for awhile, my wife worked at the university of chicago hospital. she really liked her coverage that she was getting through that, so i did not have to use the federal employee plan, but i had that option available. the same is true for you. nobody will force you to be part of that plan, but if you say this is a good deal and i have more leverage because maybe i am a small business or maybe i am like ,ori and -- i am like lori

and nobody will take me because i have a pre-existing condition, why would i not take advantage of that? there are legitimate concerns about the cost, so i understand if you just think no matter how good the program as, you don't think we should be paying at all for additional people to be covered, then you will probably be against health care reform and i cannot persuade you. there are legitimate concerns about the public option. i understand some people think that if you set up that ifoption, it will drive private insurance out. i think that is a legitimate concern. but i want everybody to understand the status quo is not working for you. [applause] the status quo is not working for you.

and if we can set up a system, which i believe we can, that gives you options just like congress, that gives a little bit of help to people who are currently working hard but do not have health care insurance on the job, and if we can make sure that all of you who have insurance, which is probably 80% or 9%, that he will not be dropped because of a pre- existing condition or because you change your job. you will get what you paid for, he will not find out when you are sick that you got cheated. he will not hit of a lifetime cap or you thought you are paying for insurance, but suddenly you are paying out of pocket and bankrupting yourself. if we can set up a system that gives you some security, that is worth a lot. this is the best chance we have

ever had to do that, but we will have to come together to make it happen. i am confident we can do so but i will need your help new hampshire. thank you very much. god bless you. [applause] [applause] [applause] ♪ ♪ ♪

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it is a great honor to have larry with us. he is one of the most distinguished economists and economic policy-makers in the world. he currently serves as the director of the national economic council and is assistant to the president on economic policy. his past positions include president of harvard, awarded

the medal for the economics organization for his research contributions, and a list goes on. for a tough audience like you that does not cut much ice, so let me remind you of his contributions in the area of retirement security. reminded that his early work on life cycle savings helped to launch a three-decade long research program. how it can explain saving patterns in the economy of households. he was one of the first to suspect long term reversal of asset prices. they play in absolutely fundamental role in allocations also would make as they save for later years. as a policymaker in the mid- 1990s he helped to champion the cause of introducing indexed bonds in the u.s. which for many

years of discussions had been indicated a key lack for households in preparation. we do not have sessions on those topics any longer. in the late 1990's, teaming up he made it easier for firms to adopt it will plants and ways to encourage contribution involuntary retirement savings plans. i remember getting a call from the secretary of the treasury office asking if i could speak for a few moments. when larry kim on the line, he said he was working on a new working paper with the default plants encouraged participation in the 401k plans. he asked me about the research committee. but that brief conversation crystallized for me when i think is a key hallmark of his work as

both a policy maker and researcher. as a policymaker he has been successful i drawn on the latest successful i drawn on the latest research tog @ @ rp he has been focusing -- he has been focusing on the key items that they have been talking about. i have always profited from listening to his insightful analysis on economic issues. i want to share this as a closing thought. the last time that we were speaking together in stamford in march of 2008, there was a strikingly negative assessment over the state of the financial environment. according to the large and growing real-estate losses in the financial sector, these had not been noticed to a great extent.

we are facing the most serious combination of macroeconomics stress that the united states has faced in a generation. morning bear stearns traded at $75 per share. i flew home thinking, maybe larry has just gotten pessimistic these days. [laughter] those doubts only lasted for 10 days because we were together on a friday and a week from monday bear stearns had been taken over $40 per share. we were writing a new chapter in global financial and economic history. this fnn he will talk about the administration's economic program. i am delighted to welcome him to the platform. -- this afternoon he will talk about the economic program. [applause] >> jim, thank you very much for

that generous introduction. can we be a tag team wherever i go and you introduce me? that was really terrific. it reminded me of the old lyndon johnson line, about -- i wish my parents had been here for that. my father would have appreciated it. my mother would have believed it. i really do appreciate what you said and i have valued our friendship. it must now be more than 30 years since you came to work as a research assistant for me in the late 1970's. there has been an enormous

amount of research amending technical change if you think about computers. but i don't think there is still to this day a research assistant who could do so much and so little time so accurately as jim poterba could in the 1970's. it was quite remarkable. there was remarkable leadership will marty feldstein. now it can look forward to an even longer term of leadership from jim. the bureau and the economics profession are fortunate to have you in the position, jim. i would say that our country is fortunate to have come source

yet and groups -- consortiums and groups and conferences like this one. it is not the case that your average senator curls up on the average evening with a working paper, i am sorry to tell you. it is the case that the president walked into my office one day and observed a copy of the papers on economic activity sitting on my table, picked it up and looked at it, and said, you know, larry, i don't think i will be taken as some for the weekend.

but this story jim told about research on defaults and movements toward changes in ira rules is a true story. as one who now has responsibility for daily briefing of the president on economic policy for we take up an economic subject each day in addition to reporting on that news, i can tell you that the kind of research done at this conference, whether it is work that establishes that 70 is the

new 60, or work that looks at the surprisingly large number of people with surprisingly low levels of financial assets, or whether it is work that explores and tries to bring honesty to the question of funding, adequacy of funding of defined benefit pensions plans, it has an enormous impact over time on the course of public policy. just because the puzzle chains are long and variable does not mean that the impact is not very real. one of the great strengths of american economic policy, and i think it is actually an area where the united states is stronger than almost any other

country, is the cross- fertilization between a rich and vibrant research community in universities and think tanks and the actual process of creation of public policy. whether it is the two-way movement of individuals of which i and several others in this room have been an example, or whether it is simply the example that comes from the reading and communication -- it really does make a big difference. i thought what i would do for just a few minutes this afternoon is talk about the administration's economic strategy. i will touch on how some retirement security issues relate to it.

priority number one for the administration following the president's election, during the transition, was rescuing the american economy from what paul klugman had captured in the prevailing sentiment -- let's not mince words he wrote in january to a dozen and, this looks an awful lot like the beginning of the second great depression. -- in january 2000. economy had lost 700,000 jobs per month in the quarter ending january. gdp had fallen faster than any time since 1958. the budget deficit was projected to be in excess of $1 trillion. the market at one point was at the same level. inflation adjusted, that had been in 1966. options implied a one of six

chance that the dow would fall beyond 5000, and the 38% of investment-grade corporate bonds would defaults over the coming decade. large numbers of cities and states could issue debt despite their tax exemption of rates only a significantly greater than the treasury. frankly from the point of view of asian-americans, as from the point of view of other americans, a single issue stopping the decline, bringing about a reversal, establishing an element of normalcy was of central importance. without a halt to the free fall no other economic policy was

going to succeed and no other economic goals, whether the incorporation of technical change or the reduction of poverty, whether the promotion of old age security or the strengthening of access to higher education, whether the restoration of budget balance or the return of banks to help, no other objective had any chance of being met if a free fall was not contained. that is why the administration moved immediately to contain the freefall. with a diagnosis that started from the premise that we had was a vicious cycle in which a weak economy contributed to a weak financial system and the weak financial system contributed to

a weak economy, and that was necessary to intervene strongly at both nodes with a strong program of fiscal expansion to raise incomes, increased the ability to repay loans, create demand in the economy. and with a strong set of measures to address excess foreclosures, to promote transparency, and encourage capital-raising on the part of the major financial institutions. we put that program in place. the recovery act was legislated in less than 30 days after the president took office.

already it has obligated more than $200 billion and led to the commencement of several thousand projects. the financial recovery has been manifest if one looks at financial indicators, credit spreads, many of which have now returned to pre-lehman brothers levels. we have a long way to go. problems were not created in a week or month or year. and they will not be resolved on the timeline.

but looking at prevailing forecasts for gdp growth in the second half of this year, which on the part of almost all professional forecasters are no positive -- looking at the rate of job loss which is running at have or less of earlier rates, looking at market indicators not because policy can be judged by the market, but because there is information in markets. more obvious indicators like stock markets, less obvious ones like credit spreads spread between libor and federal funds -- forward markets and what they suggest about housing prices, some distance in the future. what one sees is a substantial

return toward immoralitnormalit. it is reasonable in the context to say that we are in a good place compared to six months ago. the sense of vertical decline has been contained. we are beginning to lay a foundation for future. future -- for future growth. at that point becomes crucial to think about the kind of foundation we want to lay and the kind of growth that we want to have going forward. if one looks carefully at the last two recoveries, the last two expansions, and even to some

extent the expansion before, extent the expansion before, those expansions@@@@@@@@@ r,sá >> this was supported by the asset bubbles in the technology and the broad stock market. these were associated with the financial stabilization of the economy and this was associated as a consequence an increase in inequality, and they coincided with important lags in crucial systems in the economy that were essential for the future. health care, education, energy.

i would suggest periods in which the economy move forward, but related to the substantial increases in inequality we did not make the progress in promoting retirement security that we might have hoped to make during a period of substantial expansion. so the president was very clear. this was something he was clear run from the very beginning even in the darkest days. he was very clear that we could not pursue, and his judgment, a strategy of simply trying to restore employment and leave the

questions of economic structure for the future. that as we were stimulating the economy we had to think about what kind of stimulus we were providing. how could not be a good idea at a time when fiscal stimulus was necessary and large numbers of people were out of work not to create jobs remedying the situation where the average hospital used less information technology than the average supermarket. how could not be read at a time when we needed demand and the economy not to be engaged in substantial with a rescission of buildings that the federal government owned or the payback -- weatherizations of buildings where there would be paid back over three or four years?

how cannot be right to seek to revitalize deposition and high- speed rail and other key areas of infrastructure, and in particular in renewable energy? how could not be right to take steps that would be desirable at any time, but were essential as we were pursuing stimulus just on the brink of the time that the baby boom generation was going to begin to turn 65? that is why the president has recognized the crucial relationship between retirement security issues and the lone-run health of the federal budget. what is true if you study the

federal budget closely is this. you look not over three years or five, but over 15 years or more. if you do not get health care, costs under care the budget will not be under control -- if you do not get health care costs under control, the budget will not be no matter what. if you do get health care costs under control and make substantial progress in slowing the growth of health-care costs, the stakes are very large. even several tenths of a percent, as peter orszag likes to point out regularly, contain substantial reductions in costs is sustaineif sustained is large impact of social security on the deficit on a 75-year basis. that is why the administration

has done something unusual. on one level this city has seen it many times. a new progressive administration is pushing for measures to substantially change healthcare, and that would widen access. but on another level this is dierent. the question of cost is at the center of the debate. you can debate the specific measures and programs the administration has proposed. you can debate the particular compromises the political process may or may not make in the future. but when you cannot debate -- what we cannot debate is that the cost is at the center of the debate, and you cannot dispute

that we cut taxes without thinking about doing it in a balanced budget way. thinking what it would be in 2001 or 2003. we expanded prescription drug benefits without anybody considering the issue of what a thepay-fors were. we just did not think about the question. we launched a major war in the middle east without anybody thinking about what the costs were. let's have the best possible debate, but let's remember that for the first time we have a debate where it cost is going to be absolutely at the center. second, we have got crucial issues in thinking about the

savings aspects of retirement security. you know, if someone had said they have a policy that would lift the personal savings rate from zero to 6%, most in this room would say that is pretty good. many have written papers that say it is hard to do policy to influence the rate by very much. we showed them. [laughter] now i would not recommend incipient depression as an attractive strategy to change the savings rate. there is such a thing as adjustment that is too radical.

there is an aspect that i think has gotten too little attention over time, though no doubt some researchers here have thought about it carefully. that is this. you can imagine people having a wealth income ratio of four because they have no debt and has assets equal to four times their income, or you can imagine they're having a wealth income ratio of four because they have six times their income and assets and two times their income in liabilities. from the point of view of my 1981 paper or many other analyses those are basically the same thing. what matters is the net worth to income ratio. but if they are levered, then

the volatility of their wealth is the much greater, even if the volatility of the underlying assets does not change. now what about the underlying volatility of their assets? the single largest asset in most americans portfolio is their house. it is hard to believe that whatever stigma one attached to one's house five years from now, one should not attach a much greater one today. i am not sure what financial asset the same can be said about. in a world of more levered households and substantially greater leverage on the part of

households, i think we need to think very carefully about target asset income ratios, target savings rates, and about retirement security. the more traditional static view that focused only on the ratio of net assets to income may not be appropriate. a related aspect and one receiving substantial policy attention right now is the microeconomics, the microeconomics of saving. we have much more extensively,

we have extensive issues around the transaction's cost, the undisclosed risks associated with a range of savings vehicles. while credit cards have been much in the news, and we have legislated in that area, while overdraft fees had seized headlines in the last several days, there is in my judgment room for considerable policy attention to the fraction of the return on individual savings that is produced in one way or

another by marketing, administrative, and other kinds of transactions, costs. one crucial area of exploration as we pursue financial regulation will be preserving the range of choice that we have, but making sure that individuals are given a fair opportunity to understand what they buy, and that the forces of the market are properly channeled towards containing transaction costs for the benefit of retirement security. finally, there will be the set of questions and these are also indicated by recent trends.

if one looks at the data, one of the surprising features of recent data is that liberal force participation among the relatively aged has been stricken the robust during the current recession. the normal pattern is a cyclical aspects among those who do not absolutely have to be working, and part of that has traditionally manifest itself in a cycle among the older labor force. i don't think anyone understands why one natural politiethe pouls this to a delay in returning from the labour force. and prior experience i know from the a typical segment of the population, university professors, that there is substantial sensitivity return

of behavior to tiaa performance. i suspect that if you extrapolate current trends, recognize the consequences of the increased financial uncertainty, recognize the consequences of longer life spans and increased health and ability, and reduced visibility on the part of the aged, that more people work longer. i think this will push us to think very hard about our labour market institutions and the traditional pattern in many large organizations in this country where an individual works through their lifetime, periodically been promoted to more responsibility and pay, and then at a certain time leaves.

and it stops working altogether. and it stops working altogether. that is a less typical patte i think it will be a substantially less distinct pattern in a generation from now. how we adapt to take the advantage of the tremendous human resources that we have at our disposal as individuals, as they adjust their efforts over the life cycle, will be a very substantial challenge. i do not think that there will have been a more consequential decade in economic policy than the decade that we are entering. at least not pay more consequential decade since the 1930's. i think that the retirement security issues are part of

this, and the contribution of research will be very substantial. thank you very much. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2009] i would be happy to encircle questions. yes, sir? >> mike, drilling down a little further, would you see as a possible consideration to amending the tax laws in terms of encouraging phased retirement so people can retire and take a pension for which you are knowledgeable and not be taxed disadvantageous the figure to work somewhere else? >> how do i answer that question? experience teaches me that something like that is difficult.

if i say we're open to all possibilities you will write a headline that says "summers open to possibility of pension reform" but if i say "no, that is not american submarine" you will write "larry summers rules out tax pension reform." so, how to give an answer that will not change your prior probability on that question at all is very difficult. but the answer has just occurred to me. you should continue to believe whatever prior probability you had. yes? >> al -- are there any

differences in looking toward retirement and investing that you feel safe in talking about in differences between men and women? [applause] [laughter] >> you just but at risk -- put at risk the health of my staff. they watched the introductory remarks with anxiety, with a sigh of relief as i have not announced my intention to be provocative and you have put

them at risk. i believe that i will move to the next question. like to give you an easy one. [inaudible] >> over the course of the president's term the administration will, i am confident, address social security and from the perspective that in an increasingly uncertain world, uncertain because of the greater volatility of financial markets we spoke of, uncertain because of the greater leverage households find themselves, themselves uncertain because of you want to speak and a bloodless coup about it, the value of human capital is much

less certain in theof volatile economy, that the protection of the bedrock of the system must be an absolutely central value. so, reforming social security in a way that will assure people that it is something they can rely on, a base from which the can build their retirement security, would i am confident be at the center of any approach. yes, sir?

>> approach to the social security, and a consulting actuary in have been setting the basis for social security for about 10-50 years in my conclusion has been that it with the backing of trustees who are normally conservative came up with a federal substance that may the costs higher than it should be instead of using inappropriate number of substance that there is a slight number of profit and not the officer. secondly, you have to take into account, the future of social security -- that there has been a tremendous demise of the ability for people to have a retirement plans through corporations or through their own efforts. many have been terminated. the stock market is so volatile. contrary to the normal things,

you should consider raising the social security benefits for the average worker. you should rates of up to 70%. it would not cost that much. i hope you would think of these things and not think about the negative terms concerning the mix of volatility. think more positively of what will be accomplished. >> 41% signedto 7% i think i'm not the one who made -- 41% - 70% i did not make the most provocative suggestion here. but seriously, many have a different range of views. . .

this has to be seen with enormous uncertainty. i should have said that when i spoke about the increased uncertainty, in the world and the movement from the defined benefit, to the contribution plans, and the increased uncertainty is something that i should -- i should've mentioned as well. this is obviously a factor in the equations, thank you very much. >> thank you for joining us today. you have made your teachers

proud by answering these questions from the media. ill try our level best to write the kind of working papers that you and your staff will find productive and useful in the future >> in a few moments, arlen specter hosts a town hall meeting on health care.

"washington journal" will talk about president obama's campaign promises to the gay community. today we are talking about the economy with mayors. we will hear from youngstown ohio mayor jay williams, then greg ballard joins us, and then we will hear from jim humphrey. "washington journal" is live at 7:00pm. >> ellis cose on his public radio series, "against the odds." >> arlen specter met with his constituents about health care

legislation. this was in lebanon, near to it -- near harrisburg. >> good morning, ladies and gentleman. thank you for coming out this morning. for the past three decades in august, i have made it a practice to have town meetings. i will make a very short opening statement for about five or seven minutes. . . i will make a brief summary about what is happening in washington, and i have come here to find out what is on your mind. in a representative democracy, for me to do a job as one of the united states senators, i have to be in touch with the people of my state. and i will make it a practice

every year to cover every one of the pennsylvania districts to keep me advised as to what is going on. i am looking forward to a civil discussion. where we have ideas, and freedom of speech is a precious commodity in america. freedom of speech means to express yourself, but if somebody else wants to express themselves, to have stability, so we can exchange ideas. there are a great many subjects of importance in washington today. we're working very hard on global warming, the president has put immigration on the agenda for later this year, we

are working on judicial nominations and confirmation of supreme court justice sotomayor. we are working hard on the issue of economic recovery, and there are already some positive signs. but it is too early with less than six months on a two-year program to really know. the preliminary indications are positive. but they are tentative. it is understandable that there is a lot of concern in america about what is happening in our country because of the loss of more than 4 million jobs. people are losing their health insurance. there is uncertainty of the future, concern about the large

deficit, concern about the large national debt. after being in touch with 12 million people in pennsylvania for meetings, calls, letters, there is a lot of anger in america. there is a lot of cynicism about what is going on in washington. the best way to deal with it in my opinion is to have meetings like this one where i tell you briefly what is happening, but rely principally -- is a big issue in america today. people are very concerned about what is going to happen. i know that you do not want to add to the deficit.

the president says he will not sign a bill that adds to the deficit [applause] >> we know preventative care is very important, and one of the requirements for insurance will have to be that you have to have an annual check up. if you have this, you will catch a lot of problems early on, and i am the beneficiary of an early check-up. and there are a lot of questions about medical care that members of congress have, because they want the same kind of care for everyone. like the plan you have at the present time, you can keep

it. we're talking about a government auction, a public auction, we are debating it. so far, no bill has passed the congress. in the house of representatives, five committees have passed bills, but the house has not passed a bill. in the senate, we are still working on a bill, trying to get bipartisanship. i know the american people are sick and tired of republicans and democrats fighting. and the american people would like to see some bipartisanship and coming together in the public interest. and whether we will have a public auction, we have talked about single payer, everything is on the table in my opinion. we ought to be flexible and let's see how it works out. we want to stop insurance companies from denying coverage on pre-existing conditions.

we want to eliminate the so- called done knotholes for senior citizens -- donut holes for senior citizens. everybody is paying an additional thousand dollars, a hidden tax. when people go to the emergency rooms, taxpayers and up paying for it. we want to solve that issue. these are all very important matters. 6.5 metz's as long as anybody ought to talk. -- booing.

it is up to you. >> i'm sorry, i don't really have a question. my concern is, i am angry. i am a voter and a taxpayer. i do not like the fact that my elected officials are running around calling me un-american, and rabble-rousers', [applause] i am sick of allies. i did not being lied to. i'd not being lied about. this administration is doing both of those things. go back to washington d.c. and tell the people what the president said i should do.

shut up, get out of the way. [applause] >> i am not calling you a rabble rouser. we had a session the week ago on sunday, nine days ago. the secretary of health was there, and some people were talking about it being organized. i said, and america, people have a right to organize. if it is organized, that is fine. you have a right to freedom of speech. i make a point to lay on the line. their entire career, i am known for it. who has number three? >> i appreciate your time and your courage to show up today.

[applause] i want to first tell you that i am here of my own free will and accord, not with any organization. it eliminates the private option. this hurts capitalism to the creation of monopolies. what are you specifically going to do to ensure that the private option is there and viable? >> the plan will allow people who have insurance coverage on the present time for their employers or individually to maintain their current policy. if you like your policy can keep it? -- if you like your policy, you can keep it. >> [inaudible]

>> the question is, if the policy changes, it creates a new program. first of all, there is no bill in the senate. >> what is your specific plan to ensure [inaudible] they will only vote if this [inaudible] >> how can i be sure that we will have a private auction or a public auction? you want to have a private auction, you will have it. you can maintain your current policy. if there is a change, you can have a modification of the policy in public auction -- a public option is just that, an

option. when you say public option, you have exchange through private companies. this country is a capitalistic country. and free enterprise. [applause] >> [inaudible] >> you want to be led out of here, you're welcome to go. wait a minute. wait a minute. wait a minute. >> he is traveling on my rights. >> wait a minute. he has a right to leave. >> [inaudible]

>> wait a minute. you want to leave? leave. >> i am going to speak my mind a bit for leave because your people told me i could. i called your office and i was told i could have our right to speak. and i was lied to because i came prepared to speak. instead, you wouldn't let anybody speak. you handed out what? 30 cards? i have news for you. you and your cronies in the government do this kind of stuff all the time. [applause] i don't care how damn corrected york, -- crooked you are. he will keep the citizens of

this country. i will leave, and you can do whatever the hell -- one day god is going to stand before you and judge you and the rest of your damn cronies up on the hill. [applause] and you'll getour just desserts. i'm leaving. >> ok. we have just had a demonstration of democracy. [applause] when the gentleman says he is dissatisfied with the procedure, we have to figure out some way to have an orderly procedure. an hour-and-a-half is a fair

amount of time. we had a lot of notice that there would be a lot of people here. and we had his comment, and i made a decision. even though he did not have a card, to let him speak his piece. if you wanted to leave, he has a right to leave. when he says i am traveling on constitutional rights, i have to disagree with that. i am encouraging constitutional rights. i am encouraging constitutional rights by coming to lebanon to talk to my constituents. i can be somewhere else. i don't get extra pay, i have no requirement to be here. [yelling] i am reporting to you.

no. 4. you have the floor. >> i do not want to pay on a health-care plan that includes the right for a woman to kill her unborn baby. is it true that this plan is in the healthcare bill? >> her question is, will there be payments for abortions in the healthcare bill? first of all, we do not have a bill and the seine at, as i said -- in the senate, as i said. what we're looking for is to have both options. if you want to have a health care plan which does not have payments for abortions, you can have that one where you will not be charged for somebody who has an abortion. if you want a different health care plan, an option where you

can have payments for abortion, and you pay for it because it will be a little bigger premium, you have the choice of being in one plan or another. nobody has to be in a plan to pay for somebody else's abortion? >> president obama stated more than once that his goal is to have a single payer system. are you for a single payer system, and will you vote for a bill that will make a single player system either through the bill or in the future? >> i am prepared to keep single payer on the table as a matter of consideration and flexibility. [applause and boos] when we are in the formative stage of figuring out what to do, we ought to consider every option. we ought to hear the people out. the public opinion polls are

high in favor of single payer. [yelling] ok. ok. well, i guess you can get a poll about any way you wanted. my idea is to keep the public auction on the table, to keep single payer on the table, to get a sense in america as we are going to be debating this all month, with meetings like these, and figure out what the american people would like to have. i am flexible. who has number six? >> i love you, buddy. that's ok. thanks for being here today. i have reviewed the 3200 best i could. to me, is obviously written with the assumption that government has the right to control our lives from prebirth to death.

for that reason, it is not worth considering, it is not worth modifying, it is not worth amending, it needs to be dumped. [cheers and applause] i believe the polls show that most people are happy with their health care. there are a few problems. the early goals him -- and the illegals. they shouldn't even be here. i would ask congress to do something to send them home so we can't -- so we do not have to deal with them. there are people that cannot pay for the service when they get the service. we should not have to provide for that. there are some people who are both evidence late -- it like to have care and are unable. president bush used to say help those who can't help themselves.