a number of examples where people point out that small business is all ready paying far more than 8% and there is an exemption under the bill for the smaller ones. but i would call people's attention to the information from the chamber of commerce. in the second paragraph they are saying in 2007, the employee benefits totaled about 18.6% of total compensation. health insurance is a significant portion of that and for virtually all employers that are providing health insurance now is higher. i think with any analysis of the information that we have had presented before us, that this is not an unduly burdensome

level. it is, in fact, a bargain for most of the smaller companies and it will level the playing field so that everybody provide it and we will be protecting employer provided health insurance. failing that, within the next two or three years we will watch a continued and accelerating decline as it becomes more and more affordable. . .

i think it is important to understand what makes up that number and if we can direct the precious resources that the american taxpayers give us to this 13 million to 16 million, then we can move forward. >> i appreciate the gentleman talking about the complexity of that number. i would point out that some of the higher income people do not have a choice. for the sum, -- for some, the problems in our legislation will take care of that. the fact that there are people that they're finding that -- that is why we would want to of the assistance of two $80,000 as

a minimal amount. you have seen it in your state the increasing burden on employer-provided insurance. the numbers are going down and the premiums are going up and the future is bleak unless we do something similar to the legislation we have before us. >> thank you, mr. chairman. i want to follow up on a statement -- an observation made by the gentleman from michigan. that somehow of this spring's added discussion that reflects the difference between those of us who defended the status quo and want change. that is pretty hyperbolic. i will not touch that. but this amendment does separate those who want to place a priority on getting people

back to work and those who do not. that is it. there is a lot of talk around this discussion about the number of uninsured. we all know that the number is fluid and the make up the number can change in any discussion. >> what is the breakdown? >> at the end of the day, we ought to be focused on the 14 million plus people in this country who are unemployed and the families that are reliant on the paychecks that are no longer coming. you can begin to look there and say that you have probably 30 million people that now have no hope of getting through the end of the month. that is where we need to focus first. that is what we should be doing. this amendment goes in completely the opposite direction. . as it has been said, this amendment creates a payroll tax on small businesses. in fact, the new tax could be as

high as 8% of payroll for an entire company. let's really think about why small businesses, if they do not offer health care, why they do not offer health care. they do not because, frankly, they cannot afford it. 49% of small businesses with three workers to nine workers, that is really small business, only 49% of those offered some kind of health care. rather than reduce the cost for them, what this bill does is says, we are going to raise the cost. we are going to start with small businesses that have a payroll of $250,000. somehow, that is going to get us to have a more people insured. in response to the gentleman from oregon that this is the step to take toward preserving

the employer-based health -- the employer-based health care system, this does not even begin to preserve the employer base. this goes in the opposite direction. even more, this bill says that, if a small business, if one of the 51% of small businesses with three workers to nine workers does provide insurance, the government in washington can say that that insurance is inadequate. let's look at the facts there. the bill says, in order to be adequate, first off, a small business must cover 72.5% of premium costs. in the case of a family, it must be 65% of premium costs. 20% of small businesses cover less than 75%. a third of all businesses cover

less than 50% of premium costs. right away, you're going to provide and impose this tax. even more, the bill says that, if your employee decides he or she wants to participate in a government exchange and they like a richer plan elsewhere, even though the employer has decided to provide health insurance and is adequate, that employer would have to provide more money toward providing health insurance. it does not make sense. at the end of the day, if you pay tax to a payroll, it is a direct assault on providing jobs in this country. we ought not be doing this. an analysis that was performed by a model developed by the council of economic advisers demonstrated that this employee

mandate, this tax on small businesses, would destroy -- could potentially destroy 4.7 million jobs. this is why we need to support mr. johnson's amendment. >> mr. johnson is prepared to close. i have two speakers. if you two would take that into consideration, we can dispose one way or the other. >> in any other given time in 2008, there were 65 million people unemployed, period. >> the reason that we are against this mandate is because the mandate will put more americans up to 114 million americans onto the government plan. the government plan that we have today, medicaid and medicare, are broken.

they are trillions and trillions of dollars in the red. as long as we are going to send secretary geithner to the chinese to buy our bonds and in the treasury department is going to make money, he is correct. the question is how long will people bonus money and how much can we print before we completely destroy this economy? >> mr. johnson. >> thank you, mr. chairman. i would just like to quote fr,m mfib. instituting reforms is where we

ought to be going. they don't think we're going there by taxing our businesses. it seems to me that, if you are taxing a business that does not provide insurance, something is wrong with that picture. higher taxes are not the answer to get ourselves out of the problems that we are facing. i yield back. >> the question is on the amendment. the amendment is not successful. the clerk will call the roll. >> martin vaughn, we spent the day talking about h.r. 3200. what is the next step this fall? what do you foresee happening

first? >> as the house lawmakers come back, they have to integrate their bill into the committees. there will be some negotiating over that. we do expect to see a house floor vote probably within the october timeframe. the leadership will also have to respond to the concerns of their democrats, even back in their districts, from their constituents. there are a good deal positives and a good deal of negatives about the bill. the senate is really where the rubber hits the road. they need to either bring 60 senators on board. following senator kennedy's death, that means they need to find at least one republican another way to go is that they could pass a bill with a simple majority with 50 votes through a budgetary parliamentary maneuver

that is rarely used. to do that, they will have to shave its back and talk some of the provisions and have a more stripped-down bill than they have today. >> have the committees passed out a bill yet? >> yes. the house committee passed down a bill. it was one of the first committees to do so. that bill has been out there. the finance committee has not passed a bill. they are continuing to negotiate. the house committee bill did not get support from any republicans. the goal of the finance committee has been to do a bipartisan bill with the support of at least two republicans. there is a big question as to whether they can accomplish that given some of the comments about the direction the democrats are heading from republicans involved in the negotiations. >> so the health committee and the finance committee, did they

look at the same bill? or are they each starting from scratch? >> each pretty much started from scratch. they have their basic goals and objectives. president obama has laid out some of the things that he would like to see. but there would need to be some gearing up as things moving forward. they are not the same bill at all >> tomorrow night, we will be looking at the senate debate at 8:00 p.m. eastern time on c- span. by the way, you can see all of this act c-span.org. you can watch it on line as well as on television. what is the impact of the town halls have had in your view? >> i think the impact has been pretty big. there is a lot of questions about how much of the concerns raised and the practices -- and the participation has been from

activists and how much has been from legitimate constituents. i have questions about this bill. i think it has been a little bit of both. i think that what the town halls have done is to slow the process and ask more questions about what the effects are for these provisions. they brought to light a real trepidation in the electorate about turning over health care to the government, whether or not you think the bill does this. in other words, giving the government a much larger role in what now is a market dominated by private companies. >> if you would like to read a charge 3200, it is available at c-span.org. -- if you like to read h.r.

3200, it is available at c- span.org. you have read it. >> it is worth getting into the details of this bill. there's no question. i have been impressed with the degree to which the voters, of people, are involved and are trying to find out what the bill does. it is a real positive sign for our democracy and whether or not you slava through -- you slog through the entire bill, it is a good idea to have the key provisions in mind. >> thank you for giving us a little context on the health reform bill. >> is free to be with you. >> we will continue our review of the health-care debate tomorrow night with us from senate committee hearings. this weekend, there is a

comparison of health care systems around the world. that is sunday on q&a. >> as the debate over health care continues, c-span's healthcare hud is a key resource. go online, follow the latest video ads and links. what's the latest events, including town hall meetings, and share your thoughts on the issue with your own citizens video, including any video from -- including video from any town halls to have gone to. and there is more. >> coming up on c-span, vice- president joe biden says the economic stimulus package is looking better than expected. in a little more than an hour, we have more on the economy and a forum hosted by the u.s. chamber of commerce. after that, we will rear of the special coverage of the health- care legislation.

on washington journal tomorrow morning, economics professor carmen reinhardt. maxxam bid of the council on foreign relations will take calls about general the crystal's latest report. and then a case on campaign finance laws. washington journal is live on c- span every day at 7:00 a.m. eastern. vice president joe biden says the economic stimulus package is working better than the administration expected. he spoke at the brookings institution today for a little more than an hour.

the brookings institution. brookings institution. here [applause] [laughter] >> mr. vice president, this is not standard operating procedure. i think the stigma aggravation says it all. i am the president of the brookings institution. it is my pleasure to welcome all of you here today to join me in welcoming joe biden back to brookings where he has been on a

number of occasions. he is one of morning -- he is one of many americans who is hard work on the eve of labor day weekend. he is working hard on behalf of all of bust. the same is true of the director of the white house office of urban affairs who is also with us today. the vice president will speak to was on the economy and the status of the recovery plan. on behalf of the president, it is his leadership of the middle class task force, which looks for ways to help american families cope with the stresses of home foreclosures, loss of jobs, and the burden of school tuitions. the vice president also oversees the implementation of the $787 billion stimulus plan.

in that connection, he is a frequent -- he is in frequent contact with all parties around the country. a number of his efforts coincide with what is going on here on his promises. our mature program has worked with federal agencies to brainstorm on how stimulus programs can support innovative ways in creating quality jobs and developing greener, healthier, better educated communities. like all americans, we are looking for ways to track performance of the economy as it makes its way toward recovery. we will now hear how about looks from the highest levels of our government. after his speech, the vice president has agreed to take a few questions on the economy.

and i stress, that is the topic for today. you have our attention and our gratitude for being with us here today. >> thank you. [applause] it is a pleasure to be back. i told upstroke that many -- i told strobe that i hope i have the opportunity to discuss other areas at a later date. i want to talk about the recovery act. president obama an die or in the midst of what i referred to as the great recession. it seems that there was a new revelation to be added to the economic parade of horribles, some of which we have anticipated.

americans have seen losses in the stock market. housing values have collapsed. and people were losing their savings and their homes. major banks were on the verge of failure, closure. people were talking about shuttering the doors. there was debate serious discussion for economists to be broadened about a bank holiday may be being necessary. we were on the verge of failure. businesses could not borrow, much less expand or higher. economists were handicapping the possibility of a true depression. paul krugman, let's not mince

words. this looks awful lot like the beginning of the second great depression. a look at some of the headlines about how precarious the situation was. "the financial situation cannot keep the economy humming." "economy strains." "bankruptcy looms." "governments brace for hard times." "new lines of food banks." we knew that action had to be taken. we had to stabilize the financial system. we took the necessary step of

rescuing the banks. eight out of 10 of the largest financial institutions in america as well as 16 smaller banks have repaid the government in full, and with a $4 billion profit for the taxpayer. we took action to stabilize the housing market. we're beginning to see the results of that. new housing starts rose 10% in july. we are moving. 200 days ago, president obama signed a law. the american recovery and reinvestment act. it is working. don't just take my word for it. analysts and others estimate the

recovery act is creating between 5000 and 750,000 jobs. some say it is as high as 1 million. economists say the package headed two percentage points to real growth in the quarter. 3.3 percentage points to the current quarter. i highly respected economist and former campaign aide and roche, "the fiscal stimulus is fodder for lower sales with lower apparel tax withholding, checks to social security recipients are buoying household incomes. it is no coincidence that the

recession is ending just one stimulus is providing maximum economic benefit." australian prime minister said this is a case study in bringing the world back from the brink. it was the american new ship from president obama that was the key. the recovery act has played a significant role in changing the trajectory of our economy, in changing the conversation of the economy in this country. we're now talking about the end of the recession eight months after taking office. the recovery act still has its critics. one is it is a grab bag of too many different programs. the recovery act is a multi faceted piece of legislation.

that was the intended design. our economy is so complex and so wounded that reinvigorating one segment alone and using one school alone would never do all that needed to be done. the recovery act is not a single silver bullet. i think of it as silver buckshot. the president cost recovery and reinvestment act isn't just working towards something. -- is not just working, it is working towards a more transformative economy. this act was designed to do three things. most people when you talk about it, they think it was $787 billion for highway projects.

they want tax cuts. it is part of it. it is a significant factor and benefit. people think it is a big $787 billion of public works projects. it is made up of three parts. it will bring relief to those hardest hit by the recession. republican critics think maybe we should not do it. i am not being facetious. it is a legitimate disagreement. bring relief to those who were fallen into the abyss. jump-start the economy. there are desperate economic circumstances. reinvest in existing infrastructure and lit a platform for economic growth in energy, and health care. that is what it was intended to

do. approximately one-third of the money, to under $88 billion, as in the form of tax cuts or tax incentives. we have delivered more than $62 billion in tax relief to billion in tax relief to busine by design, that will unfold over 18 months. it is not all paid out at once. there are almost 320,000 new homeowners that took advantage in the first time homebuyers tax credit, breathing life back into the housing market. in addition, we have been cursed the banks to loan to small businesses. by putting up front to $200 million in loan guarantees, we have been able to leverage for small businesses capital loans, a private capital, of $9.5

billion. that was for many banks that had not done a single long for a two and a half years. it helps some small businesses stay and some expand. another third of the money might be to relief for working americans who were most badly hit by the recession. whether it was through the state governments to keep copps, firefighters, and a teachers on the job for allowing states to continue food assistance to people who were in danger of going hungry or medicaid for the swelling rules of people desperately in need of health care to pell grants and to keep their kids in college is that fell below the $50,000 mark to extended unemployment benefits, extended cobra benefits, it covers 54 million seniors and veterans. not only does this give relief to the vulnerable americans who are in danger of falling into the abyss, it also has had the

economic effect of injecting nearly $90 billion in the first two hundred days into the bloodstream of the economy, stimulating growth. i believe this was the right thing to do morally. that is not what we are about today. it was also the smart thing to do economically. the last third is about rebuilding our communities while laying a platform for growth. we have made major investments in highways, bridges, waterways, but some resistence. this has increased the capital stock and has improved the safety in our highways for millions of americans. we're also investing in 24 centric economy. people say we are doing too

much. , presidents in the past have been able to take the problems they have and segregate them. we will take these first and put the other five or six a side and we will get to them next. but name me one problem landed on the president's desk that would allow him to say we will focus on this and then focus on this in three years. does anybody think we can leave the 21st century without it radically altered energy policy? can we sustain our position in the world without radically altered education system attacks does anybody think we can sustain our fiscal house without radical change with the cost of health care in this country?

look, we knew we had to begin to lay off the platform while we were laying economic growth, why not let a platform? reno were needed a new smart grid -- we know we needed a new smartrip grid. we saved lives and money. expanding broadbent to parts of the country that were left behind. and having a significant increase impact on productivity. high-speed rail, increasing efficiency, reducing pollution. electric motors for the next generation of vehicles. when all is said and done, we want an economy that is not built on a bubble. green energy and a modernized

health care system, providing good jobs. that is our vision and the vision we are determined to fulfil. we do not think the recovery act is the horse that can cover that alone. that is why i've held a cabinet meeting every week that we have been in session. the joke is, it is my job to hold cabinet meetings? there is the added benefit of getting them all together and watching the synergy among them. there has been ancillary benefits that have been a long lasting in terms of competence of government. every week, with notable exception, i hold a cabinet meeting. for the first 100 days, i was clear.

never write a memo to the president suggested a job. undertaking that you do not want to have. [laughter] do not ever do that. we had lunch. i said you should do this. he said, to it. i did not volunteer for this job. but when he and announced biden was going to be the sheriff, for the first 100 days, dealing with the cabinet members, i made clear our focus have to be accountability, transparency, and responsiveness. i wanted them all to set up systems where there would have a high degree of confidence that as it implemented what they were in charge of, but it would be done efficiently. i what? ej in trouble -- i will?

ej in trouble. he said will happen when you plan to attend dead trees in central park? opposite you'll have to plant 100 good trees in another part. what could have derailed that in the beginning where those stories. millions of dollars wasted and all of the things that everyone was predicting. the first 100 days was the dog that did not bite. i wanted to make sure that the county executives knew this was not business as usual. i have now spoken to every governor except one, who is now a former governor. it was not by design. she was going to be on but could not for other reasons. i have spoken to other governors

twice. i spea fivek to five to it -- i speak to five to seven governors. i said i want every question they have answered in 24 hours. pick up the phone and call any governor or mayor. we have given them an answer within 24 hours. if we do not have the answer, we will call them within 24 hours. this was all about establishing credibility. this was with accountability and transparency. otherwise, it had no chance. the criticism was a legitimate, that will work moving too slow in the first 100 days. we had to set up a system to

show the tax funds were not wasted. i think we're beginning to prove is an incredible important element over the next 18 months. i am very proud of the job the agencies have done in each of the departments. for the second 100 days, i instructed the cabinet that i wanted them to be much more aggressive in implementing the programs. i take responsibility for the mistakes that were made. i wanted to put more pace on the ball. this was also the season of building. you are able to go out and build highways and late broadband because of the season. it was the planning season. it was time to get the programs

up and running. they would let us know what happened. i asked them to set goals. someone said you are going to announce these goals? you're going to ask every cabinet member to tell you what cabinet member to tell you what they are going to do in i just said, yes. it was the only way to get credibility. and accountability. we publicly announced the goals, putting ourselves on the line. i am here to report the progress in achieving those goals. we wanted to be able to provide

expanded care for another three and a dozen patients. we have met it and exceeded it by a two hundred thousand patients. 500,000 patients are being treated. we wanted to dsave teachers. york where 15,000 got their pink slips. they were not going to be able to teach in the fall. i wanted to make sure this occurred. we set a goal and we have met that goal. we set a goal of keeping 500,000 law enforcement officers on the job as a crime rates began to go off.

we met that goal. we set a goal of having construction crews working on highway projects. we exceeded that goal by 94 airports and other highway projects. we started to build 200 water sanitary systems in rural america. we have matched that goal. approximately 4 million 500,000 people will have clean drinking water the did not have before. we set a goal of speeding up the cleanup worked of 20 superfunds sons. how many speakers have you heard talk about the superfund sites that exist in america? we met that goal. in some cases, we're taking years of the expected completion dates of cleaning up these superfund sites.

we met our goals with the summer youth jobs and veteran facilities. contrary to what many have heard an unusual practice, we have achieved them ahead of schedule and under budget. look, let me give you an example. the faa committed $1.1 billion to about 300 airport improvement projects. we will finish those projects with to wonder million dollars less than originally estimated. they can fund an additional 60 airport improvements. we're seeing the same thing in the department of defense. there are hundreds of millions of dollars in savings. the same can be said for some of our highway projects. we have so many highway projects out there. i had numbers but now we did not

have the accounting for all of them. the gsa has also seen projects, and under budget, a% to 10 ^ under cost. they are the facts. 100 days ago, i stated that we had saved or created 150,000 jobs in the first hundred days. i went on to say over the objections of some by more cautious and advisors that we will create another 600,000 jobs in the second hundred days. they plan to report to the nation the projection of jobs created in the recovery act. i am confident that report will show we have met or exceeded that goal as well.

to state the obvious, we will emerge from this great recession. i believe that is necessary but not sufficient. we have to emerge better positioned to lead the world in the 21st century as we did in the 20th century. the last cycle is generated billions of dollars by high- speed trains, this cycle needs to make real investment in high- speed rail. in this one, our innovation will bundle technologies and clean efficiencies and renewable technology. from 2000 to 2007, productive and a grew 20% -- productivity grew 2%, but household incomes

fell 3% this cycle must be one in which american workers get their fair share of the wealth they hope to produce. we look at the program as the two-year marathon. we're just at the nine-mile mark. some of the most exciting and a transformative initiatives are now just about to get under way. throughout the fall, we're going to be ramping up the loan guarantees that will help us guarantees solar wind and geothermal wind energy. it will help us in a significant way. in fact, we will have an announcement tomorrow on this score the department of energy open in the renewable energies program for applications. we can produce over a gigawatt of energy, enough power to power

have a million homes. buried in all of this is what i think is something that cannot be measured. the leveraging effect of what we're doing? that will be -- that will remain to be seen. i believe it will be consequential. this will be energy that is clean, renewable, and does not pollute. it will wean us off the other energy. a new super highway of connectivity that will allow consumers to have real information about how they are consuming their energy rather than decide to turn on their dishwasher on at 11:00. people are building smart toasters, smart washers, smart

dryers. this is real stuff. that is what i mean by the leverage in effect. i do not know how to measure that. but i know it is a real. investment in broadband will wrap block in november. -- will ramp up in november. we have over $30 billion of requests, seven times the amount of money we have to distribute. the result will be that rural hospitals to get consuls' from specialists who are hundreds of miles away. adults can go to a virtual classrooms. ranchers can get real-time price information and sell their cattle online in online auctions burning them more money with less consequence.

it is real. these are tangible things that thus far have been denied significant sections of the population. our $7 billion will not answer it all. but once this begins, i believe, as the recovery increases and get stronger over the next several years, you will seek a commitment that did not exist before. we will connect people from the inner cities to areas that were worlds away from them. we will start investing in better rail travel. i am a bit of a hobby horse on that. the joke was that i was pushed for money on high-speed rail and there goes biden again. all kidding aside, it can be

transformative overtime. we have received three applications for thousands of miles of new real, for train cars go 1 under miles an hour and for two that would allow for trent says over 140 miles an hour -- and for transeprain set over 140 miles an hour. it will allow detroit to produce vehicles that would get the equivalent of over 200 miles a gallon. you need gas stations. you need plug-in stations to charge up these vehicles. we're beginning to fund that. it is having a leveraging of

fact, making people realize that this is the future. we will continue to invest in modernizing our health care system so that doctors can have access to individual records by the press of a button. there will be hundreds of thousands of unnecessary tests eliminated. my colleague's driver had chest pains. he pulls into the delaware hospital. he happened to have a particular element that had -- that, had they known this, it could have dealt with this hypertension. instead, he had several thousand dollars' worth of unnecessary tests. a doctor i met with pointed out the order of a cat scan. he had electronic record-keeping in this office he is set up, and

a big orange marker said, are you sure if you need this? eight former kasten have been done just two weeks earlier. this is real. -- a former cat scan have been done just two weeks earlier. are we going to do what? no. we are investing in new platforms. i believe other people will build off of them. we were about the necessity in the first 200 days. the next 200 days will be about possibilities. these investments are about more than creating jobs. they are about creating and renewing a sense of hope and possibilities. it is easy to sit in washington and talk about what is and isn't

happening. i have had the opportunity to travel the highways of this country. i have crisscrossed on highways and interstate highways in large states and small towns. i have met with officials, business officials, farmers, the most oft-heard remark, and i mean this literally, we would go by and they would say, that used to big -- that used to be. this used to be a steel mill. this factory used to employ 1200 people. this company used to have their headquarters here. the use to was the most oft- heard phrase. but because the investments and

the confidence is building, i am now hearing a different refrain -- literally, not bigger fleet. "this is going to be." this is going to be a factory that makes super efficient windows. this is a place still make batteries for cars. this is going to be the hub of a new smart grid to let the cities of the midwest. this abandoned factory is going to house hundreds of families in adequate, low-cost housing. this factory is expanding, not closing, because we are building new transformers. we will be adding two classrooms. this school will not shut down.

these are real stories. the recovery act is helping to write them. not totally responsible, but helping to write to. there will be a lot more of them in the days to come. we're at the nine-mile mark in this marathon. we know there is a great deal more to do. as my grandfather said, the recovery act is not the horse that is carrying out the whole sleigh. thanks to the recovery act, where we are today is a much better place than we cannot possibly been without it. even more exciting is where i think we're heading. the road ahead will remain very bumpy. there will be positive and negative economic news. i believe it is going to be three steps forward, one step back. that is the wake recovery's

work, particularly in the past four decades. we know we're on the right road to recover. we will be able to sustain the growth longer and more reliable. real jobs will pay real wages and allow people to live middle class lives. i thank you all for listening. i yield the floor to the president, as i always do. [applause] >> thank you very much, mr. vice president. we have about 15 minutes.

he is already in effect called on ej in advance. did they see a hand go up? antoine. >> try mind. >> thank you very much. -- try mine. >> thank you for the optimistic speech. when the administration -- things looked very dire. things are clearly better. would you say it is just the economic recovery, or was there perhaps an assessment at the time that was perhaps worse than it should depend on what the situation was. you talked about it all depends on oil.

your department of energy has wait up to the estimate for gas because of the shield gas. how dependent are we really on for an energy tax >> let me take the first question. do you think the recovery act is responsible for the recovery to the extent we are seeing it? no. i think it is part of it. everything from the intervention of the fed and what we did with regard to the banks and the housing markets and other things are combining to generate this impact. a local black and reference -- and i believe they are right -- the economist at goldman's. you cannot argue whether it is 2% or 3% -- you cannot argu arge

whether it is to% or 3% economic growth in gdp in the third quarter. i think it is about right. had we done just this and not on the incredibly unpopular thing of bailing out the banks, have we not done this and try to stabilize the housing market. had we done only this, we would not be where we are. had we done the other things and not done this, one thing is certain -- millions of americans would be a much more dire straits now. think of unemployment and cobra and f-map and all the things that were needed for people and extremists. that is for sure. i believe we would not be in a position, you would see an

absolute catastrophe occurring in the all but two states of america, who would know possibility -- ask them, republican and democrat -- without the billions of dollars of the recovery act stabilization fund coming and stabilization fund coming and could they maintain. in the state of pennsylvania alone, there would have laid off an additional 10,000 teachers and cops. it does not like your local elevator operator, which is not insignificant, but it was a lost job. pick up the phone and call any governor and ask them about the impact on their ability to balance their budget without decimating essentials services.

the third piece that i am confident of is the infrastructure, which has been badly neglected. we have been devoting eight tenths of our gdp to maintain infrastructure. china has gone as high as 8% of their gdp. granted, they started from a different platform than we did. but the point is that this is necessary anyway. those of us who were running for public office were talking about investment in infrastructure before we had a recession. part of what we're doing here is not only economically sound. it is worthwhile in and of itself. it is worthwhile to take some of those 5000 bridges out there that are ready to collapse and fix them. . the midwest, and fix them. it has the added benefit of giving good and decent jobs and

stimulating growth so the barbershop stays open and the deli dozen close. i do not think we translate it that way. that way. this is in the economic there are $90 billion in there now. in terms of the tax cuts. do people spend at all? no. do we wish they would spend more? people are not stupid. they're spending a lot of it, but they're trying to give straight. they are trying to get right. i think it has been very helpful. with regard to oil, i am not sure i understand your question. for an energy. we're going to continue to need foreign energy.

it is not in our interest to be energy independent. we have to be secure enough that we do not need any one source of energy. if tomorrow someone decided they're not sending any more oil, we would be ok. there is a second reason, moving away from fossil fuels. it is the environment. there are multiple benefits that flow here. the other aspect is there has been studies done here and others think tanks that shows the green jobs pay more for the same kind of effort and a more sustainable looking down erode. many of them are not exportable. there are a number of ancillary benefits that flow from some of the things we're doing. i am not making the case that

this is the be all, the end all, the answer to all our economic problems. i am saying that without it, we would be in much deeper trouble. with it, we're doing some really good things, and i believe we're changing the attitude in a number of areas of concern -- education, energy, and health care, modernization of the health care system. i think that has long term leveraging impact on what is going to happen over the next 10 years. >> i know you like hand-held microphones. we can get one back for you. darrell. >> mr. vice president, you mention projects are coming under the estimated costs. very impressive cost savings.

do you think it's time for the american public's to think that the government is wasteful. >> on the last point, i think it's too early to make that decision, to be very blunt about it. i am running the risk of setting myself up for a test on might not be able to pass 18 months from now. i have asked the cabinet members to do in number of things beyond transparently and accountability distribute the moneys that are in their jurisdiction. i have asked for us to put together a literally handbook on how to responsibly in the future for every government program that is administered from washington, be more accountable, be more transparent, and done more

efficiently. i hope the end result of what we're doing -- up until now, you could not find -- if you were to determine whether or not the toilet built in a rest area have been built and how much it cost and how many people in it employed and you went to the interior parts, you cannot find that answer. you can now. we have never done this before. we've never followed the dollar's like we are following them now. this should be the start of a new way of doing business rather than the implementation of a single program. with regard to the first part of your question, which are forget what it was. [laughter] the a% to -- the 8% to 10% of

projects. everybody knows that i am looking to hang somebody. not a joke. the guy who heads up the staff of 10 ig's. when i met with him -- he does not work for me. i asked what he was looking for. i said you would be doing make a big favor if you told me if something was wrong. i said i want to announce it. he said, that is not awful. to gain credibility, to be able to do this kind of work, but we have to demonstrate and technology when we screwed up, when we have made a mistake. folks do not have a lot of confidence in washington. there is a second reason.

people badly needed the work. contractors might have a different circumstances, in and say, i will bid $1,000 to do this job. i am really hurting. they will bid $920 to do the job. i think it is both. are we to gathering and gathering for it and are we making it work for leveraging those dollars to do more to employ those people and to generate a new infrastructure? >> we will give one last question to the floor from in me. i like to append what amy will ask you and say a word or two about health care reform. what you see is their prospects for a bill emerging and reaching the president's pascal -- desk.

>> make it a long question. >> good morning. thank you so much for your remarks. thank you so much to you and your team. we have been working with a number of local elected officials, business leaders, civil leaders around the country who are interested in making sure the stimulus dollars are used in catalytic ways. just like you, they do not want to waste their prices. they really want to not just focus on short-term job growth but making sure we achieve your third goal of transformative power comes and laying the outcome for that. but they are, as you learn, they are running into some

challenges, linking up broadband and smart grid investments, the desire to do neighborhood stabilization with mass transit investments so we really stabilized as neighborhoods and brink market fell you to those neighborhoods. they want to do this across jurisdictional lines in partnership. they are running into some challenges. there are 17.2 more miles left in this marathon. i think on behalf of many of these folks who are your partner in recovery, what kind of tools or flexibilities are you thinking about to make sure the next 18 months bring the changes about? >> you go put your finger on the biggest -- is is working? there you go.

let me make a broad statement first. compare the recovery program and how the moneys are being dispensed to a program that i had a hand in years ago, the cops program. there was a big fight and i insisted in not go to governors and not go to the states. go directly -- you could directly apply. you would put pressure on the mayor was the chief said we want to apply to get to more cops in town and the mayor had to decide whether or not he would write the application to get a consensus of whether you could do that. it also had a direct -- you can get out of jail, you do not have to do anything other than -- you pass go and you apply for

the grant. that is what we wanted to do for an awful lot of what was done in this legislation. the congress decided that the governors should have a bigger in. they might be right. they may be right and the governors had a bigger say, which has caused real conflicts some places. i have found myself in a place, just like you should never volunteer to negotiate a marriage difficulty. you should never volunteered to settle a dispute between a big city mayor and his governor about whether or not an off ramp that is needed should be funded verses 1 1/4 miles of highway in rural missouri that is needed but is arguably not needed as badly. and so what is happening is the

first 100 days, i spent, as you know, negotiating those things. i had no authority to tell the governor or the mayor, but i would get them together on the phone and say, cannot you work this out? cannot you do this? i have done, like it did in the cops the bill, the criticism is i am two hands on. a lot of this is cross jurisdictional. in some cities -- let me give you one of the big problems. governors now have a problem. everybody has to account for the money beginning october 1. we have a new modern website debt is going to blow you away in terms of how detailed it is. you'll see it in the middle of september. everything has to go up on the

website. governor's call and say, joe, i need guidance. you give money for a school district. i did not control that school district. . it works both ways. what we have tried to do is it two things. this is more detail than you want, but it is a really important question. the example you are familiar with of dealing with healthier cities, help their neighborhoods and communities. that affects everything from their water to their transportation system to their housing, so for the first time, as you are probably aware, we have hud it working with department of transportation,

and we or styling the grants that we are rewarding based upon whether or not we are impacting on the total health of that community. if you have a system where you know there has been a problem, people not able -- that have adequate housing but they did not have access to transportation for jobs and they are in a lower middle income group of people, and we have a request that comes in for both a housing program that relates to weatherization as well as transportation, we are trying to marry these things together. it is imperfect because we do not have an overall peace of legislation out there that is called urban policy a-b-c-d. when you get all these cabinet

secretaries together, most of them are new. we have some superstars. this guy arne duncan is a superstar. watch this guy. you have shawn at hud. these guys are innovative. they are excited. there is a lot of cross colonization going on. is it written into the act? no, it is not. we are trying to maximize the dollars. our hands are tied in some cases where we have no ability to dictate how the governor and the county executive and the mayor get together. the last example, broadband. when i am asking the folks in these conference calls, they say broadband is a big deal. way, we should have this cost date. i said why don't you get to get their? -- why don't you get together?

the governor of state aid, the governor of state be -- the governor of state a and b get together and make a single commission to us. and you will be surprised, i hope, not on what, that all lots of innovative step is coming at this. -- that a lot of innovative stuff is coming at of this. can we still qualify? i have not bent the law, but i have let the imagination take colhold in some places where i think it is spirited with the law. i should stop. health care.

i do foreign-policy, i do not do health care. i am often introduced as an expert on foreign policy. i say an expert is anyone from of town with a briefcase. the reason i choose foreign- policy is it is a lot easier than health care and a lot less complicated. that is not a joke. the thing i can speak to now is the part of the health care of modernization of the health-care system that has nothing to do with anything from public plans to how many people get covered. think of it as raw, simple terms. if you ran to our businesses from an i.t. standpoint, like doctors are forced to run their businesses, you would be out of business. you could not do it.

literally. think about what happened 20 years ago it york law firm or think tank, when you are just sitting at computers. -- but think about what happened when you were just setting up computers. basic stuff. we have to modernize the system that allows for the transfer of the information. it is archaic. it is absolutely archaic. i got trouble forcing once you have to spend money to save money. my right-wing friends said look at that fighting, a typical spending got. -- look at tahhat biden, typical spending guy.

i.t. is that one area. we put that platform down in this legislation. and beyond that is nothing to do with health care, other than also providing money for health care clinics, expansion of those clinics and increasing services. now, i am now about to go out of my brief. with regard to the question of whether or not or what the health-care system will look like they're bored to get, stay tuned for wednesday. one thing i have learned, do not step on you bosse's lines. [laughter] there will be a major speech with clear terms on what the administration wants to happen with health care, specifically. i can answer the question, do i think we will get?

i think the prospects of success are high. i think they're very high. they are high for three reasons. most of the stockholders -- stakeholders, have an overwhelming state in the fundamental change the way the system functions. many of you covered the impact of health care on american businesses. how can they compete? how can american business compete with the ball and chain they're dragging in terms of health care costs? competing with an international economy, companies from countries where they have a fundamentally different health care system and it is not all laying on top of them. how can they do that? i never thought i would give the dates -- i would see the day where dr. show up at political

functions. doctors desperately want health care reform. american business one's health care reform. hospitals know there is a need for reform. -- american businesses want health care reform. and not withstanding all the scare tactics, the vast majority of the american people still know that the system that exists is not serving them very well. those that have bid are desperately afraid they will lose it. those that haven't had had to dip into it, and know that their premiums go up without any rhyme or reason in their mind. small businesses are getting clobbered as a consequence of that. there is a real sense of need.

those details factors are the reason why, i think, that as bleak as it looks, think about every major change in health care. they passed by a couple votes. there are not a whole lot of republicans going for medicare. find a number of people who want to eliminate in the republican party. there are not a whole lot of people falling over themselves in the late 1930's quinto security came along. it only covered windows and orsondows and orphans. we will get something substantial. i know the president will lay out for you very clearly on wednesday what he thinks those pieces have to be and will be. that is as much as i should

said. the president will tell you a lot more on wednesday. thank you. [applause] can i go now? >> you bet. good luck to us on the 17.5 miles that remain. thank you. [applause] [captioning performed by national captioning institute] [captions copyright national [captions copyright national

>> you can watch vice president biden's speech and see other information about economic stimulus package on-line. our special web page also includes links to the white house, the congressional budget office, and news sources. in a few moments, more about the economy in a forum hosted by the u.s. chamber of commerce. members of congress will resume the debate on health care when they reconvene next week. in a little more than an hour, we will show you earlier hearings on the issue, including several house committees debating the so-called public

option and how to pay for the plan. after that, a forum looking ahead to the congressional debate on health care hosted by the alliance for health reform. >> september 1 marks the 70th anniversary of the start of world war two. german chancellor angela merkle, latimer putin, and the polish president, at 9:00 eastern and pacific. >> now, a u.s. chamber of commerce forum on the economic outlook and employment issues. it is about an hour and a half. >> good morning, ladies and gentlemen. i am the executive director of communications at the u.s. chamber of commerce. we are here today across from lafayette park at the white house for our annual labor day

greeting. we have our chief economist with us today, who is going to do a forecast on the economy, and head of our labor policy division, the senior vice president of the chamber, randy johnson. he will talk about the work force issues facing the business community and employees. with that, welcome, and we will start off with dr. regalia. >> i am going to take a few minutes and talk about what we are seeing specifically in labor markets and then turn it over to randy. as with most economic presentations, there is always some good news and some bad news. the economy is growing again and we are coming out of this economic downturn, one that without hyperbole can be described as the worst economic downturn since the depression. it beats the 1974 downturn, the 1982 downturn, both in derision

and dissent and rivals some of the rates of unemployment that we have seen in those instances. it was clearly a very severe economic downturn and a very trying economic times. i think we are coming out of date for a number of reasons. we saw price declines which have a tendency to boost real incomes and spending. we have seen a march price decline over the last year. secondly, we had a stabilization program put in place by the last administration, which has worked very well. it has stabilized the financial system which is what it was intended to do. it got landing back on track. it has kept the banking system

from disappearing into oblivion. all that was needed and i think it has worked. now we are starting to see some of the funds being paid back by the banking system, and they are doing so with interest and they're buying back warrants so the cost of government is turning out to be considerably less than what the face value of the tarp program was. we are also seeing stimulus programs being put in place. congress passed a $787 billion fiscal plan that i don think was necessarily the best plan that could have been put together, but it was one of the better plans that could have been passed. that is what was needed at the time. the stimulus program has helped to get the economy growing. we will feel the benefits for the next year or so and that is

probably a good thing because the economic recovery it is going to be a lack luster. we have seen significant changes in policy, a very aggressive monetary policy that open up their balance sheet, expanded them to medically to keep the banking system liquid. just this morning, there were more reports on the consumer asset-backed lending program and how successful that has been in re-liquefying those markets. they have addressed other asset- backed market in the consumer and auto area and i think high marks are deserved by those at the fed for those policies. they were precedential.

these were things we had never seen the fed do before, and i think we were well served to have the fed paul -- throw out the old playbook and bring in the new one, and i think they deserve a lot of credit for what has been a very, very trying time in financial markets, and for getting us through the worst of those. i was happy to see that the president agreed with me and reappointed chairman bernanke. i had done one of these press coverage is a couple of months ago, and at the time i said i thought that he deserves to be reappointed sooner rather than later, and i think that was a good choice. i certainly hope the congress approves the nomination in short order and keep him hard at work over there, because they are still are a number of areas that need his attention. then finally, the thing that really turned the corner on this economy was a bottom in the housing market. has bottomed.

where we were hoping with what we were seeing earlier this year as a bottom or a foreman of the bottom is clear at this point that it has bottomed out. you will see in the slides, pictures of housing prices, sales, starts, all of which have bottomed and turned up modestly. the affordability members, the mortgage interest rate members all of which are providing credit for credit-worthy borrowers. we still have some problems in the subprime area, elevated delinquencies, and foreclosures, and those will remain for quite some time. i don't think we will see significant increases in those categories. they are at high levels but i do not think we will see increases in those categories going forward. even in the commercial mortgage

market where there are questions to be answered, i think we are seeing some improvement there as well, and the fed is addressing that with their term asset lending program as well. the reasons i think that what we are going to see is a subpar recession, something on the order of a u-shape rather than a v-shape recovery, is that the economy is still on balance. consumption has seemed to have picked up but it is still relatively weak. we will not see the bounceback in consumption, the pent-up demand coming forth. we are going to see a consumer that is experiencing high rates of unemployment going forward and high rates of job loss that were greater during this downturn than they had been in

prior downturns. it will take more time to turn these job losses are round, generate new jobs, and higher income growth. for all of those reasons, i think we will see consumption to be weaker than expected coming out of a downturn. investment is virtually non existent at this point. investment is always the second leg in a recovery. you get consumption, new orders, spending, people coming back to work, new jobs being created, and more investment in capital, equipment, and structures. we are not likely to see that transpire in the near term because i think investment is probably a year away from any kind of significant improvement. we will probably stop declining over the remainder of this year but it is going to be hard to envision businesses investing

when they have excess capacity and still relatively few customers. the normal course of recovery, i don think, will manifest itself this time around. the trade deficits have shrunk, we have sold goods abroad into new markets, that is going to continue but it is not going to increase in pace. i think the best we can hope for is more of a neutral contribution to our gdp growth. growth abroad is still relatively weak and for the most part is lacking our improvement. it appears it is going to take longer for them to catch up where we are and that is required before we can start selling abroad in the manner that we have over the last couple of years. one of the major components of

this recovery, he will see weaker but positive consumption, very soft investment, and kind of neutral on the trade side. all those things conspire to give you an economic recovery. as we look at our forecast, we are seeing growth may be as much as 3% in the third quarter and a continued positive growth in the 2.5% or 3% range for next year. unless the economy has reached some balancing and reacquired its footing, there is quite likely to be some black -- there is quite likely to be some backsliding for next year. the reaction that this economy is showing to the economic

downturn, as i said, is just different from what we have come to expect. because of that, we will see a slightly different modification in growth rates from what would normally be the case. i also think that the policies that we are addressing at this time and do raise the uncertainty level and the economy so we are looking at some very fundamental issues that randy will talk about, energy issues that are going to be important for our long term growth, and we are also on the down side of the productivity surge that began in the mid 1990's and continued into this decade but is now starting to slow a little bit. those are the advances that give an economy some lasting power. with those weaker rather than stronger it is hard to be be

optimistic about economic growth over the immediate horizon. the mortgage rates, the financial side, and the fact that the subprime market is still creating a problem, these investment numbers are very, very weak and are likely to continue to be weak because when you look at what drives investment, industrial production, demand is still fairly weak and is not anticipated to snap back stronger as it has in other recoveries. business confidence is picking up in the purchasing managers' index, finally going above 50 for the first time in 17 months but still relatively weak numbers. this is what i want to

concentrate on today. when we have an economic downturn in this country, where you feel it is in the labour market. this one was a considerable hit to the american worker. we have lost 6.6 million jobs since the beginning of the recession. we are looking at an unemployment rate of 9.4% but more than likely one that will rise closer to 10% over the next couple of months. the initial claims numbers that, weakly cannot this morning and did not show much improvement. they were down on a weekly average basis from last week's revised # but if you look at the four-week moving average, it is right on. that is an elevated number. one of the things to watch for on a weekly basis is one that

number starts improving. a good number is down in the 200's. we would like to see more sustained improvement in that number going forward. we look at what is happening in some of the other areas. one of the reasons why we think the unemployment rate will hang out for a while is that growth is not strong enough. unless you have growth well above potential, you are not going to drive the unemployment rate down. that is our forecast rate of growth over the next year. it does not generate enough to push the unemployment rate down. we have a significant number of unemployed individuals who are now working part-time. they are counted as working. when the economy picks up a little bit, the first thing that businesses will do is bring those part-time workers back on

to full time before they start creating new jobs so you have to reabsorb those marginal workers. we have a category called discouraged workers, workers that are unemployed but have quit looking for a job because they feel there are no jobs available. those individuals are not counted in the work force nor are they counted as unemployed. once the economy starts to pick up a bit and there is discouraged workers look for work, they will be unemployed but they will no longer be out of the workforce so they will be counted as unemployed. you have to redeploy the marginal worker and then you have to redeploy the discouraged workers, and there are 800,000 of those held there. we have a ways to go before we generate enough growth to get all these people reemployed. the duration of unemployment

during this downturn has been significantly longer than what we have seen before. as you can see from the charts, the last couple of peaks in the duration of unemployment, they peaked at the end of the recession so we still have some bad news to go on the duration of unemployment. participation rates, they are holding in there at about 66% and i expect they will stay in that range. when we look at the issue of this economic downturn versus prior downturns in so far as the labor market is concerned, you see some fairly drastic differences. we have lost significantly more workers so it is deeper than what we have seen in the past. we are a bigger economy but this is proportionally the deeper.

those bars -- the blue bars indicate the length of time it took from the beginning of the recession until enough jobs were created to surpass the prior peak in unemployment. how long did it take for not only that we got out of the recession but before we created enough jobs to match the prior peak? the red bars is how long a term from the end of the recession. the difference between the two is the length of the recessions. the last couple of recessions took significantly longer to reach the prior peak even though those two were eight months in duration of the relatively mild in terms of gdp drop. yet it took two years in the 1991 recession and it took a little over three years in the 2001 recession before we

generated enough jobs. we are going to have to deal with a much steeper decline in unemployment this time around. i have seen projections that is going to be at least five years before we generate enough jobs could we add about 1 million people to the labour force each year, a little bit more or less in others. roughly 1 million a year. over the next five years, you have to make up 5 million new entrants and you have to make up about 7 million lost jobs. in the best of all possible worlds, to get back to where we were, you are going to have to create 12 and in some cases even more. you are going to have to create up to 15 million net new jobs in the next five years just to get

back to where we were. this is a daunting task. you are going to need the economy to grow at significantly greater than its long run potential in order to generate that kind of jobs. for instance, when the economy is performing just about at its potential rate, you create about 150 to 180,000 new jobs. what you need is something a little bit greater than that to reach your prior peaks. we could go growing at our potential rate and create 180,000 new jobs per month and we would not reach the old peak in five years. this is where the labor markets have changed over the

we have seen the time it takes to fully recover and get back to prior peaks being stretched out. i think that is quite likely to happen again. that can go along with some other shifts we have seen in the labor force, and i am going to jump through this slide and look at what we see in terms of some of the distributional impact in the labor force. if you look at the lower right hand panel, that is a measure of how desperate the income distribution is. as that number goes up, the distribution gets more uneven. as it comes down, the distribution gets more even. we have actually seen in the last couple of years some improvement in the distribution. there is a very significant upward trend in the direction of

less equality in the income distribution in this country. it is going to have to require long-term fundamental policy changes and they are going to have to be in the education and skill- accumulation area because the economy is becoming much more technically complicated and complex, and the workers that can address that are rewarded and the ones that are not are not. we are seeing a hollowing out of jobs that paid significantly higher wages for doing me deal tasks. if you were running an assembly line in doing the same job again and again, you still made a pretty good living and you still had a pretty good in come from that activity. with the robotics and the fit -- and the deficiencies over the last couple of decades, those jobs really do not exist anymore

and they are not going to exist in the future. trying to reconstitute those jobs in a competitive economy is a fool's errand. what we have to do is get our work force prepared to meet the next challenge and that requires greater education and greater scale accumulation. that takes time. you do not do that overnight. a tax policy to try to address the income distribution is a fool's errand. if you look at that coefficient, you will see that during the clinton administration when we had significant tax increases, we actually saw the rich get richer. we had a big productivity surge and a big technology surge, and the people that had the education to take advantage of that benefited quite nicely. during the bush and initiation where we see them villified often for having given tax cuts

to the rich, we see the coefficient come down. because those tax cuts were not just for the rich. they were tax cuts across the board. when we look at some of those income groups, we see that over time, if you look at the bottom to, those are your top of the income distribution. those are getting a larger share of total income in the united states. the two lower groups are getting a lower share. the tax shares of the same upper groups have gone up more than their income shares. the fact of the matter is, we have had lower effective tax rates on the lower income

groups, higher affected tax rates on the higher group, and it has not done a whole lot to affect the income distribution. it is and more fundamental problem. we have seen a capping off of late with the bush tax cuts, but the tax increases that were designed in the mid 1990's to achieve balance and a better income distribution were woefully unsuccessful. to sum up, when i look at the economy right now, things are definitely looking better. i think we are out of this economic downturn. when we are told when it officially the recession ended, i bet at this point that it is going to be pretty close to the third quarter of this year. the economic recovery is going to be slower than normal where

you really feel the recession in the labor markets, and the unemployed, in which growth, those things are likely to be subpar for quite some period of time and that is going to be the political challenges to create economic policies that provide significant economic growth because in turn, that economic growth will provide job growth, wage growth, and it will also provide revenue growth for the federal government so that we can address the absolutely huge deficits that have been projected over the next 10 years, that this that are clearly unsustainable and that deficits that will wreak havoc if they manifest themselves over the next 10 years we will see our dollar decline in value, inflation come back and we will see a real tug of war between the fed and the administration whether to end like this economy or not. thank you very much.

>> thank you. does that mean i am going to get a raise next year or not? marty has pinpointed are challenges ahead. i think one of the questions as we go forward is whether or not the unions will work with business groups to create an agenda for capitol hill that helps create jobs or whether or not we will go down the usual path of unions demonizing the employer community and saying that nothing has changed since the 1930's. employers do not take care of their employees so we need more regulations and new burdens on those employers. obviously, more costs on employers, much of that will be

passed on to workers or consumers and that is not a recipe for job growth. it is a bit ironic for me at least to look back on some of the pieces of legislation on capitol hill and seeing that this -- that it is much of the same old that a party was pushing a decade ago without much creativity because of the environment that we are in. the folder in front of you is chock full of good information. i am sorry we were unable to break it down in sound bites. what is pending on capitol hill, i think you will find a lot of that information very valuable. in a recent speech, -- we sometimes criticized the unions

fork over the criticizing the employer community. that is not what the employer community is. on labor day, we celebrate the contributions of workers but i think it is worth noting that what the workplace is is a pact between employers and employees. together, there is an environment created. hopefully a decent wage is received from that and the employee can create a product in which he or she can make a profit. eventually, things are worked out. there are ups and downs but overall there is a satisfaction between employers and employees.

sometimes with unions, i think they argued much to their discredit that is not true but it undermines their credibility generally. it does not mean that there are some bad employers. if you would take a second to look at the benefits sheet in your packet, we point out that employers provide $7.80 trillion worth of compensation to employees, $1.50 trillion in employee benefits. employers provide in a world where we are talking about health care benefits, still providing close to 180 million americans with health care insurance, about 160 million is to private sector employers. over $500 billion for health care insurance.

in a world where employers are still struggling with health care costs, they are not just cutting copays but they are experienced -- they are experimenting things -- with things. despite all of the rhetoric, the level of health care coverage has remained relatively stable although the census bureau will likely come up with new debt next week. private sector employers, close to $200 billion in retirement income. often paid leave is a benefit provided by employers. even in these dire economic straits, the survey data with regard to american workers is quite compelling in terms of job satisfaction. the american enterprise institute came out in august,

american still displayed a high degree of satisfaction with their jobs. 50 percent side of employed people said they were completely satisfied with their jobs and another 30% or somewhat satisfied. for those with jobs, job stress, the amount that they earned, and even health benefits remained remarkably stable 68% were satisfied with the chances for promotion. 71% in 2009 said they were satisfied with the amount of money they earned. 67% in 2009 were satisfied with their health insurance benefits. the obama administration is running up against one of those figures with the health-care issue.

before i get to health care, let's talk a little bit about the general labor agenda. the employer free choice act is back in the press where there could be room for compromise. the three parts of the bill is that they provide if a union rounds of 50% of cards, the employer must recognize the union. the second part is an arbitration on employers when a union and an employer cannot agree on a contract an arbitrator will be appointed to write the terms for the employer. our objections real quickly have traditionally been that these cards are subject to closure and union organizers, this is not the chamber speaking it is the

courts that have said this. in fact, the hell is -- i am going to read one quick paragraph from a union organizer because many things -- here is a former union organizer. i began to realize that the number of signed cards have less to do with support for the union and more to do with how effective and organizer was in doing their job. the vote count is significantly less than the number of cards actually collected. card check campaigns have little to do with giving workers information. we are trying to avoid topics like dues increases or a strike. many employers have been asked to have their burkhart -- to have their cards returned to them. that is one union organizer but

if you take the time to go through the hearings on capitol hill, there is testimony in hear from people and they have had the courage to come forward and talk about how that system is manipulated by union organizers. it is not the chamber that i am talking about. it is actually people who are out there where the rubber meets the road. the second part of the bill is equally unacceptable to the employer community. the idea that a government arbitrator appointed by the government could step in and write a contract for the employer which would govern every term and condition of the workplace has never been accepted and certainly i think is ludicrous on its face and is unacceptable to our members. . .

i raise that because there has always been talk about it decision makers on capitol hill throw out the card check provisions of the bill, would be except arbitration? the at -- the answer is absolutely not. not surprisingly, polling by the american public on the arbitration provisions have shown that run-of-the-mill americans recognize that both of these ideas are bad ideas and certainly should not be accepted by congress. with regard to compromises, we will see the top goes. we are not going to compromise the employee free choice act. the unions want to start at square one, start with some objective balance hearings with regard to the national labor relations act, which is not been updated since 1947. we can certainly buy into that process, and we will go from

there. . . -- will not negotiate as a base. recently, the unions went after george mcgovern, which many of you remember, for his opposition to the employment free choice act. i want to read what exactly he did say. i find it is interesting now that the union is a turncoat. that the union is a turncoat. as a longtime friend of labor unions, i must raise my voice against pending legislation about management and labour. that legislation is called the employer free choice act. i am sad to see it runs counter to ideas that were once at the court to the labor movement. they would lose the freedom to express their desire to make a decision without anyone over their shoulder without fear of reprisal. and even on arbitration, he said

that it is a government dictating to employees with no opportunity to approve the agreement. why should employees' pay union dues to pick get such a contract? i do not think the employees are there for the employment choice act. i do not believe the votes will be there. it is just a question of time of actually educating policy decision makers so they know what is in the bill. employee free choice act is out there. it appears that the majority it is not moving until the free choice act is done with. there is an expansion of family medical leave to ocean reform, to plant-closing laws. there is a myriad of other issues such as eliminating

binding arbitration. the common theme through all these bills is, again, not really how we should help employers learn how to comply with the law, but let's increase damages -- let's make it easier for the board filed class-action lawsuits. that is why these posters are on the left in case you're wondering how complex our laws are here. that is one page out of federal regulations, and is a typical book. it is one book of 90. when i see the department of labor talking about more enforcement against employers and you see this trend on capitol hill of new laws, new burdens, and it is worth reminding people that employers

don't have millions of dollars to hire lawyers to figure out every page in the code of regulations and every sentence in that page. there was a time under some administrations where we recognize that there was a need to perhaps help employers, particularly small employers, learn how to comply with the law. i am hoping we see some of that in this administration. i am hoping we see that in capitol hill. the common theme is that we have a lot of laws on the books. we can figure out where we catch them on some violation. this is a matter of great concern for the u.s. chamber. we will be revisiting the theme. the reality is that nobody can really comply with all provisions of the law. it is simply too complicated. how about helping small

businesses understand the law through some sort of voluntary compliance programs? i do have to note that where the department of labor has increased exponentially, the one area we do see reductions is in the one program under the labor- management disclosure act which has cut the budget at that enforces the law against union leadership to protect union members. back in the 50's, -- under bobby kennedy, many hearings going in the union corruption and coercion of union members and the needed to create a lot to protect union members from the union leadership. it is a disclosure act. it is enforced by the department of labour. ironically, that is the one

budget being cut by the department of labour. in the department is also engaged in rulemaking which is obviously directed at reducing the reporting requirements of unions in this entire area making it more difficult for union leaders. we have comment on those of course. imagine on health care, and smallish on capitol hill, there is testimony in your packet where i testified in front of the ways and means committee. the president is going to give a speech next week, and we will see if that reshapes where things are or not. our concerns have been fairly clear. we have not hidden this. one is the employer mandate. the house bill says that you, as

an employer, except for the smallest employers, must provide a qualified health-care plan defined by the federal government. you have to do that or pay a fine to the federal government. we have concerns. someone making $40,000 a year is $3,200. that can add up pretty quickly for a small business guy. why shouldn't all employers have to participate? not all employers can do that. small startup businesses can't. we think they are already doing their fair share. many cities have come out on the employer mandate to the cbo. invariably, it concludes that tax session such as this will

lead to not just slowing job growth but job elimination. there is really no argument on that basis. with regard to the public auction, -- option, we will see where the president goes on that. the grassroots has been tremendously -- mostly in opposition, but it depends on which poll you read. our concerns have been that the so-called public auction -- option has an unfair advantage over the private sector and will drive out private-sector insurers. we found that millions of workers will move to the public sector option and under studies have documented the cost shift between public sector plans and medicare, and they will always

have an unfair advantage. were we going to go and health care? the path is fairly clear. the president should come back in and admit that we were trying to do too much too soon. people are scared about what they're hearing. it is not that they necessarily know what is going on, but they are scared. i was on the hill when hillary clinton came up and presented her plan to congress. she was criticized for hiding the ball at the time as you recall. i would say that the process back in '94 was a model of transparency as compared to what we saw on capitol hill over the last six months. it is unfortunate the process has been slow down, the unfortunate for those in power that the bill did not go to the floor in august so that the american public could have time to weigh in.

hopefully, the president will come in with a proposal of some sort, and we can come together over a package that is slimmer, more understandable, and move on the other issues. maybe we shouldn't resolve health-care if it goes to the employee free choice act. it seems to me the public has pretty much made it clear -- they recognize there is a problem. we're fairly help -- happy, don't mess it up. it's hard to believe that message has not gotten through to the white house. we traditionally do work closely with the unions. we're hopeful about a comprehensive package of immigration reform. we do have some disagreements over the temporary worker programs.

if you look at the demographics over the long term, there is a greater need for immigration. there is some solution for the undocumented in this country, and we hope congress will take that up and the next couple of years thank you. >> do have any questions on anything that randy said or anything that i said? we will start over there and work right across. >> [inaudible] in my own situation, as an administrative contractor, [unintelligible]

>> anecdotal information isn't bad, it's just hard organized. the anecdotal information we've got is that as the economy has gone into the severe downturn, it has been harder for people to pay. we have heard stories of loan delinquency, and we have seen the data rise. other business loan delinquencies are also up. loan-loss reserves are up. the hard data we have on that indicates and support to the anecdotal data that is become harder and harder to make ends meet in an economy where there are fewer and fewer customers, and the customers you do have are spending less and less. we're hopeful that with the economy beginning to improve, those stories kind of peaked and

received as we go forward. with the slowness of the economic growth, i am afraid we will continue to hear of problems that ongoing businesses have meeting their commitments because of the weak economy. go over here. >> regarding health care reform, you have said that they will merely adopt a small conference. it would a government auction -- option provide coverage? >> it depends on how it would be structured. 90% of the chamber is comprised of small businesses.

generally speaking, our members would rather the devil they know than the devil they don't. they would rather work with the current market and combine the reforms we are seeing like a guaranteed issuance, no limitation on exclusion for pre- existing conditions. we all agree with a federal website that would help small businesses go one place to shop for the best deal, a characteristic in all these bills combined with some sort of subsidies for small businesses that can't afford insurance. our membership would rather try to get your point then take a chance on the creation of some unknown and the myths -- with some new, unknown that behemoth

-- new, on non behemoth. -- new,@@@@@@@@@@ @ @ @ @ @ @ @ the other part of this is the employer mandate, and we see this as sort of a package, and clearly, even with the exception of the small business, they have continued to resist any kind of new employment, -- >> given that you think jobs are in a lag, do you think that the administration and members of congress will become more available to your concerns about the labor related issues, and you think that they can be educational on these issues? way to lock in--

>> the employer free choice act was slow down for a couple of months because of the economy. we did, with some studies which were criticized about job loss and -- to your point, people understand this is not a time to create uncertainty with regard to however the new laws are going to impact the bottom line. it does help our argument on capitol hill with the cluster of conservative democrats. those are key votes. there is a lot of stuff back up. the allies of the democratic party -- the answer is no. there are some real sweeping changes to our nation's unemployment laws.

>> in a macro economic sense, if you look at the weak economy into superimpose the budget issue and the debt issue, one thing that i have a slide on that did not cover specifically was the projected debt levels are going from around 40% to 44% in 2008, projected to over 80% in 2019. these are unsustainable debt increases. to the extent that you have to address the deficit, it has to be done -- there has to be spending restraint and economic growth. you cannot balance the budget by raising rates without making sure that you have a base to apply that rate to. we have seen enormous increases in revenues over the 2001-2008.

we had at declining rates and stronger growth. congress is going to have to come to grips with -- on the one hand, if we have a health care policy or an energy policy that does not cut costs, and it has been suggested that the health care system would not, then you're not addressing the spending restraints. to the extent that you have a weak economy and those types of policies, you have a double win the on the budget. -- double-whammy on the budget. it understates the true cost of health care industry is the true cost of the energy policies. in a macro sense, more and more

congressmen and congresswomen are seeing the dynamic where we have to have economic growth. it will have to do things that will control spending. and how much each one focuses on any given idea is virtually impossible to say. the general conception of these twin problems is out there. as we see a bigger deficit numbers, men and as we see some of the negative impacts from the bigger -- bigger deficit numbers come in, and as we see some of the negative impacts, it will come in as well. >> [inaudible] let me ask you a big picture

question. help us think about what a normal was going to be. consumption is going to be depressed. wage growth is going to be suppressed. what is the new normal? those psychological changes, as overstating saying that it is going to be a significantly new normal? >> there is always a new normal. everybody likes to coin the phrase, so they talk about it. i don't think we're going to see an american consumer that tries to more for themselves into the japanese way that we have seen in the past. i think there is going to be an attempt by the american consumer to be more judicious in terms of

its spending, and to try to gradually get its balance sheets in order. the consumer balance sheet can be called in order if they curtail their borrowing, not necessarily if they save out of their current income. i think that we see higher savings rates. we have seen a jump to 5% or 6% from the- negative rates. the new norm is somewhat more saving and a gradual repairing of the balance sheet. what does that mean in terms of gdp growth? i think we're seeing potential rates of growth and better in the two or 2.5 range. it is what we thought it was --

it was a movement to a slower growth economy. i don't think it is an abrupt move. it is not the new norm. what we saw prior to the recession -- is the best you can do in terms of focusing on an important question that we will be watching to see. we have seen people -- a look at the cash for clunkers deal. he put a little bit of an incentive. it did not apply to all the vehicles, it only applied to vehicles with gas mileage constraints. look what it did. it kicked up the sales rate to 14.1 million units, well above

what anybody thought. we will see what it goes back to next month. there were people ready to buy. we saw the same thing in the housing market. it has given rise to sales at existing and new homes. those people weren't afraid to step back in. i think that where we make the mistake is to look at what is actually happening in the recession and say, that is going to be the new form -- the new norm. we will not see the french credits that people should not be borrowing. the people that do not have the financial wherewithal to buy a new house getting credit at virtually zero rates of interest. >> the federal reserve has indicated on a number of occasions that it tends to keep the current interest rates over

an extended period of time. today, the president of the federal reserve bank said that the interest rate should be [unintelligible] i would like to know how you see that -- >> i was at the board. they gave a speech that had a policy directive that is considerably different from what is coming out of the board. they did an interview. they talked about how they will maintain the interest rate policy for some indefinite. they felt they can control --

through some controls of payment of interest on reserves. it can keep the banks for lending up the reserve and generating inflationary pressures by increasing the interest rate that had on reserves or by unwinding some of the borrowings they conducted which was done with a repurchase agreement and other short-term borrowing so they had a natural tendency to unwind. i think there is a modest disagreement among some of the members of the fomc. i would like to see some more retch -- more hawkish regression on the part of the fed. this is what is the dynamic to the fed, and it is a good thing. you don't want to the fed in

groupthink. this is the group we have been entrusted to conduct monetary policy. they do it in a relatively independent manner. you want there to be a little bit of discussion at these meetings. what you are seeing in the different, from bill dudley or someone else, that dynamic at work. i see it as a positive. i take the lead from where chairman bernanke is going. he says he has seen the need for continued monetary accommodation to be relatively important. he is moving in that direction, though he is cognizant of the fact that he is going back to pullback. i see a bigger issue, and it is not between what the president of the philadelphia or the pittsburgh saint louis bank

says or what the board thinks. it is with the group as a whole thanks and what the administration thinks. the president says he will reappoint him, and i think the congress will confirm the reappointment. the question is when the fed starts to pull this back. it may be the middle of next year or a little sooner. at that point, the administration will look at the fed slowing down gdp growth the slowing growth will mean that revenue growth does not return to normal path as quickly as it otherwise would. at that point, you will see the traditional sides form between the administration that generally leans to the side of more growth. that is not a partisan

statement. the first bush had a great wars over restrictive monetary policy. we will see that natural antagonism grow a little bit over the course of the next year. it will be much more important than the internal discussions. >> you mentioned earlier the possibility of the economy backsliding in the second half of 2010 as the effects of the stimulus wayne. will that be more of a slowdown or an actual -- >> it will be more of a slowdown, but the problem is, when you're running gdp growth at or below potential, your only a hair's breadth away from another recession. the closer you get to any kind of extraneous shot -- shock, it can to be back in. do we slide back into recession?

that is not my forecast, but the possibility is certainly there. the probability is not inconsequential. we have a potential for a double-dip recession. we could see that occur in two ways. either the fed is overly aggressive in tightening, and about the same time the stimulus is wearing out, we see a high budget deficits and higher interest rates. a fed that is concerned about inflation and pulls back a little too quickly could take you into recession. on the other hand, if you go into the middle of next year and the economy is doing quite well, you still have the economic stimulus coming on line and you start to see the economy hit its stride. the money supply injected into the system starts to create more transactions.

most work on a product base. so you have too much money chasing too few goods. the fed does not pull the money back fast enough and you startj and those higher interest rates, could trigger an economic decline. you are walking a tightrope at this time, and as long as the economy is growing, in a matter slightly above the potential, you have some leeway, some wiggle room. but when you start to grow at the slower rate, and the artificial stimulus is pulling back and you expect for the economy to run on its own, it gets very temperamental, and in those situations, being over aggressive or under aggressive can produce an economic downturn. we are not out of the possible recession. double-dip recession.

we will not know until the middle of next year. >> you have not talked about financial-services. >> reform? i did not know if you had a couple hours. it is definitely on the play. our center for capital markets for competitive capital markets -- they are currently working at some of the reform proposals. the ones that sound of the worst us at this point are things that are providing a new consumer protection agency. there is not one government entity out there that thinks that is necessary. i do not know how that plays with you all, whether it is necessary, but it is something that has come out of the administration. every single one of the administration's regulatory

agencies have said they do not like it. there is a lot not to like about that policy. elsewhere in the regulatory framework, we're going to have to learn that companies in that area are going to have the wrong with more rather than less capital. the overall average allowed the situation to get out of hand. others at the treasury will have to control the leverage and have somewhat more capital. it forces you to take into account the risk that is out there. beyond that, over regulation would be a real problem that would stymie the return of credit availability in this country. we will continue to run on credit.

you are not going to get the return of a more normal functioning economy. we have seen an administration outlined in some of the congressional individuals -- we have not seen a comprehensive plan. the way the administration goes to plan has unfolded is a piece at a time. it is clear we have too many bank regulators from an economist's point of view. when i was working at a bank and i was a bank executive, i thought my regulator was good and everybody else was crazy. i did not want the other guys regulating. there was a very proprietary feeling. my regulator was my regulator.

he understood my problems. he did not always agree with me, she did not always agree with me, but i had some reports there. there is a real fear of getting away from that. one of the things that you look at is this hodgepodge of bank regulation. you have that that, the comptroller, the fdic, state regulators, individual regulators at the state level. these institutions all interact and crossover. it is hard to draw a distinct line from where the part of the bank and is and the underwriting part of the bank begins. we do not have an investment banking system. there are distinctions about commercial and -- the commercial entity is not there anymore.

with the labor standards act that has not been amended since 1947, it took 10 years to hammer out. it was a less than perfect compromise. now we're going to sit down and toss that out. it is a little less than 10 years old, i guess. we will toss that out and go down this road again. there is a lot of areas where we saw real problems. the credit rating issue is a real problem. that has to be addressed. there is a lot of hazard because if you pay for the credit rating to save weight pay for your auditor, we have seen that cause problems. a good deal of the issues that set higher on the congressional totem pole, whether they get handled and how much time we have to do this -- a potential

for over regulation while at the same time a clear understanding that the current level of regulation did not cut it. >> i understand that this weekend in london, the g-20 meetings and the pittsburgh summit, regulatory reform is going to come up. there is talk about accepting compensations and regulations. can you elaborate a little more on why you are opposed to it? >> i have not said we are opposed to anything except the consumer protection agency. >> start with that. >> we do not think it is necessary. we don't think that the consumer -- the lack of consumer protections is what caused this economic downturn. many people that got mortgages they could not afford to pay did

not get mortgages because they were duped into it. in many cases, these loans got the term "wires on" because the individual lead to the bank -- "liar's loan." the broker did not do the due diligence. going out and raising a problem and addressing it in a < appropriate way, we don't think it is good public policy. we don't think layering not at the broad brush of the proposed consumer protection agency would virtually allowed them to go and even small businesses that have an accounts receivable and tell them -- the institution has floated you alone. we don't consider ourselves a bank.

we send out a bill that says "please pay for your disk -- a for prescriptions. we don't think that is inappropriate function for consumer protection agency is not, and any sense, making a loan. there is a very short term financial issue. but technically speaking, they would. in terms of the broader discussions, we haven't opposed anything. we have supported consolidations. we have supported some level of agreement among international regulators. that way the regulations that are imposed are consistent in a broader international market.

we have not gone out and approved something that is essentially a pig-in-a-poke . there of a lot of very nebulous proposals. the we have had a broad outline put out there, and it leaves all the details out. in this case, the devil is in the details. at this point, we have not supported or opposed many of these pieces. >> how about executive compensation? >> there is no doubt that there have been some egregious cases of executive compensation. so as someone who represents businesses, that is a decision that should be made by boards of directors.

this is a business decision. it is not a government decision. the government doesn't have to like what the bonuses are. it is the system that determines them. as a been determined correctly in all cases? no. absolutely not. but to suggest that the government oppose the compensation of one size fits all that would be a better approach would be ridiculous. we recognize the failure of some of the private sector compensation mechanisms. at the same time, the suggestion that you impose a government limit on everything is absolutely ridiculous. the minute they start imposing government limits on a-rod's salary, we will hear what the american people really think about this. you can go down a whole lot of areas other than executive compensation and find cases of egregious payments.

i don't see any of those guys had their buses back because they struck out four times with runners in scoring position. >> that avoids the point of executive compensation is. if a-rod fails, there is no risk to the government's structure or the consumer. it is not putting the financial system at risk. that is the rationale between why there is a government action. >> in the cases where the government has taken ownership positions, they have exercised those ownership positions to put certain compensation limits in place. in a few places, they did not put them in place. afterwards, they wanted to retroactively put them in place, aig in particular.

so they got it wrong. ok? they got it wrong by their own admission, although they have not made that admission yet the fact is, they put things in place that they would later admitted did not do what they wanted it to do. in other cases where they have an executive compensation limits and they have run them down into the mid-level, they have found that those companies are now the voice of the financial talent that they need to recover -- are now devoid of the financial talent that they need to recover. if people are compensated for the same activity a greater amount in one area more than another area, there'll be a flow of talent from one area to the other. what is the appropriate policy for compensation? the appropriate policy is to

have the private sector said those compensation limits. if the government has to come in and rescue them, you play with the government's money and you get to set the rules. i am talking about things like banks that are regulated entities that are regulated -- they are different than entities that are, and a sense, owned and operated by the government. the one thing i was interested with the press response was, when the aig bonuses came out, there was a vilification in the press. in the same week, the fannie and freddie bonuses came out and there was not one word in the press. everybody knows fannie and freddie, even before they were taken over, were government sponsored enterprises that traded on the government guarantee. afterwards, there is no question that they are government owned enterprises.

bonuses were paid their, and nothing was said. it has to be a concept well thought out and applied in a very consistent basis. in the end, the private sector, while not being free of mistakes, does a better job of figuring out what people ought to be compensated than does a federal bureaucrat. that is my opinion. i can substantiate enough cases where the federal bureaucracy has made mistakes that you can't make a compelling case that the private sector mistakes were so pervasive that they need a federal pre-emption or federal regulation. i did not think wage and price controls work. we have shown that again and again. this is another form of federal price controls. price controls. i have written this many times

myself, it is very difficult to actually do this. one thing that they are struggling with is the risks, the balance of the short term and the long term. not so much where they are taking over the banks, but to the extent that we have seen a demonstration, with the banks and the enterprises that do things in the short term that caused massive losses, to the extent that they believe the payment and the bonus structure have affected that with the long-term and short-term risk. you do not think that there is any legitimate government role in talking about how these structures should be set up? >> i do not. i will answer your question, i do not. when the government is getting in on the regulation, they are asked to regulate the transfer

of the risk. have to maintain these capital standards. you have to maintain these type of loan loss standards. you have to provide this type of protection for the insurance agency. i send any regulator on a regular basis. monthly, quarterly, semi-annual way, by annually, as required for me, the government, to maintain what is i think the appropriate risk level. beyond that, it is the stockholders that are financing the operation because we're talking about government regulated operations the stockholders that have that stock at risk -- it is something that can help them achieve the proper rate of return and still maintain those government levels of risk. if the government thinks that

institution is too risky, then stepped in and do something about the risk profile either through premium adjustments or whatever. if this is to you can hire, and i don't want anybody with a w in their last name, and not someone who cannot work for less money, this is what i want to do. i think is wrong headed, and i don't think it will work. what is the appropriate level of government supervision and government regulation of entities in our financial system? i have a tendency to err on the side of the appropriate capital standards and appropriate risk standards. there is an ongoing assessment of how that institution is doing so that people in the institution are looking at what they're doing rather than going in and making business decisions for that institution.

that i just don't get. >> i have a question about everify. the think you will be able to halt the contractor rule on tuesday? we talk a bit about your emergency court filing? and can you comment on the enforcement peace of immigration which presumably will have to happen in september or sometime this fall ahead of comprehensive reform because e-verify has to be authorized? >> unfortunately, we did lose that case in district court. it deals with the implementation of an executive order that in poses an e-verify worker system on federal contracts. the challenges that because we did not believe president bush

had the authority to impose such an executive order on federal contractors because the undermine the statute. we argued and said it must remain voluntary. the district court, surprisingly to us, and we have filed a stay of the regulation pending appeal. we should hear about that fairly quickly. if the district court denies it, we will have to evaluate our next steps. we are also pursuing relief on capitol hill. most importantly, to modify the regulation to -- so that it does not apply to acquired verification of existing employees. as you know, the regulation says that we must also not just to verify new employees but those employees working under federal

contract. for many companies, is difficult to separate who was working under contract and who is not. many companies will just be forced to verify everybody. so pending possible success in the courts, which -- we're pursuing legislation in the court very aggressively. it will also pre-empts state laws in regard to e-verify requirements. it is to say that the verification of existing employees will not be required. a think you're referring to the fact that underlying authorization known as the pilot program will expire by the end of september. if congress does not reauthorize that, federal regulation will

have no statutory authority. because of that, we don't think congress will allow that to happen. we think it will be reauthorize. if you want more information, i can certainly give you that. >> we're winding down here. it just another questioner to. -- just another question or two. >> [unintelligible] >> no, it isn't. as of yet, we don't know that there is -- we know there is a bit -- we know there is a potential problem. it if we were to see significant defaults in the real estate market or considerable illiquidity in the ability to refinance many of these contracts that will come up for

refinancing, then it would be very problematic and we would have to -- the fed is well aware of that problem. we have spoken to many others closely involved in that issue. the fed is continuing to monitor that issue. it would be ready to step into the breach if there was a significant lack of liquidity and inabilities to roll over some of these things. i am guardedly optimistic while fully aware that there is a significant size the potential issue about that. if it were to blow up, it could cause a seizure in the financial markets. the big decline as a result in a lot of different factors. the erosion in the value of the housing assets -- the liquidity into the liquidity in the institutions, the lack of capital in the institutions, many have been able to rebuild a

bit of their capital. they're more aware of the problem, so i don't think it will catch them by surprise. i did not factor it into the forecast. i am guardedly optimistic that you will not see a complete meltdown. everybody is watching. >> you touched upon being hopeful for reform for the next two years. were you talking about before or after the midterm election? lee elaborate on the differences between labor [unintelligible] >> a lot of our allies -- we're hopeful that obama will come out with a bill with senator schumer by the end of this year to go

forward next year. i always thought and still think, with health care and other issues, the american public -- i do not think the senator schumer or the lenders -- the administration understands how hard the legalization is and how difficult it would be to pass legislation that would legalize a great many of the undocumented workers here. because of that, politically, the best time would be the first year of the next term of the congress, 2011. a lot of my friends disagree. in regard to our differences, organized labor has always been very opposed and skeptical of

the need for temporary worker programs. the congress should create a commission to study that. it should be slanted towards the conclusions that they feel the commission wants. we need a robust temporary worker program provided that there are mechanisms to make sure that employers recruit from the domestic workforce first. they want a commission, and we don't. that is where the disagreement lies, essentially. we have talked to senator schumer about this. we have encouraged him to try and sort this through. we have tried to come up with a bill that provides better security and pathway utilization providing certain conditions are met. learning english, paying a civil

penalty, tougher employment, verification requirements on employers. programs to help the undocumented learn english. to me, that is one of the great concerns of many of us here. it is sort of a visceral reaction, people cannot speak english in this country. people are mistaken that they do not want to learn english. it is the key to advancement. if we could provide some federal help in that area, -- >> are you pushing for some piecemeal and vision to deal -- envisioned deal? >> is capped at 65,000 because

of the economy. it is market-based and is responsive to the economy. the other is capped at 66,000. we're negotiating those bills on separate tracks. they want to put in more hoops and hurdles that employers must go through before you can recruit any worker. we understand that, but you render the program know if you want a greater numbers because you have to go through some many hoops and hurdles to get to the point -- as you probably know, the hispanic caucus supports not doing things piecemeal. we're trying to pursue relief on separate tracks, but it is going slowly. >> you did not talk at all about trade.

there is talk that the president will come out with the long- awaited speech on trade and clarify the position. what is your sense of what is going on? do you have any sense on how much they are -- >> i would say two things. we have an area that specializes in that, so i defer to them on the trade questions. i am sure john murphy to give you a more thorough answer on that. aren't we doing a major presentation in a couple of weeks? at that point, the chamber's entire policy will be laid out in exemplary fashion. i will not begin to preempt any of that discussion. i will pass on that one. sorry. [captioning performed by

national captioning institute] national captioning institute] [captions copyright national [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2009] >> members of congress will resume the debate on health care when they reconvene next week. over the next three hours, you will see the reaction of several house brigitte several house committees on the public auction and how to pay for the plan. and then a couple of other prospective on health care, including a form from the alliance for health reform, followed by house democrats on health care for seniors. >> on "washington journal," carmen