trends. >> when we going to see the loan sale? are you going to speed of fdic's loan sales? >> we are doing pretty good on our sales. we are planning some more sales, probably early next year. i am hoping we can start launching in the first quarter of next year. we need to be very careful with this. the eligibility requirements had to prioritize institutions. there are still some policy issues that need to be dealt with. hopefully in the first quarter of next year we will start seeing some sales. . .

>> i think it really is all about the economy at this point. past that, i did not want to make any predictions. think you very much. >> the second panel will not be making opening statements. there will just be additional questions and answers. >> what is the makeup of the banks of the problem list? are they smaller institutions, a midsize? >> they tend to be smaller institutions.

there are more institutions with commercial real estate issues. >> regarding the comments about the legacy loan program, was she referring to launch in first quarter of 2010 for open institutions, or would it still be more for failed institutions? >> i would want to check. i believe she would be referring to open institutions. but let's verify that. >> one more question about the deposit insurance fund. has there been any modification to the estimate of the $100 billion cost from 2013? >> that is still our estimate of loss. >> we have been hearing things

about interest-rate risk may be tied to debt obligations. i am wondering if you could talk about that in terms of interest rates starting to rise? >> one of the things we have been washing is the institution extending their assets in the interest of exposure on the assets side. essentially, the issue is that when they get too much mismatched relative to their funding, there is an incentive in this environment where if you do not want to increase risk, you can extend insurance. we have seen some of that. it is probably more institutions pacific. >> there is always a difficult transition when you go from an ultra low environment into something higher. you might see investors reaching

for yield when rates are low. the question is, what are they going to start rising? >> de expect the negative number to go into positive territory? >> we do not have a projection or estimate of that. that is unknown right now. >> would it be $45 billion -- >> the $45 billion will not affect the fund balance, just the cash balance. we will receive the cash but book and offset and liability that would be deferred revenue. the revenue from that would be recognizable over the three- year. -- three-year period.

>> can you talk a little bit about bank capital levels and what you saw the third quarter? our banks building capital, or is there some work on? -- still more to come? >> is probably a combination of things. the tier 1 level capital increase -- at the same time, as we noted, loan balances have declined in overall assets so there is some deal averaging. it has an upward effect -- deleveraging. finally, we noticed a shift in less risky as debt -- assets in the third quarter. holdings of u.s. treasury securities.

that has a positive effect on regulatory capital ratios as well. it is really a combination of several different factors. there was an increase in the total amount of capital. however you want to measure it, regulatory capital, total capital during the quarter. >> it does represent progress with higher capital levels with an institution in better position to lend. recognizing losses and moving off the balance sheet. we're looking for the industry to be a better position to lend early next year. >> does any of you have a story comparable to the level of the deposit insurance fund? is it the lowest level since the deficit? >> in terms of a dollar ballots,

the bank insurance fund low was $7 billion in 1991. >> with the issue of lending that seemed to be a big theme today, is there anything that you have talked about having the banks really kind of hold on the capital -- onto capital and restore credit? is this a sign that the tension is still there? >> the guidance that has been released -- and especially in commercial real estate we have experienced a lot of stress, we

ought to make sure and realize that institutions are dealing with borrowers that are under stress and to understand that we need to work with institutions as they work through these issues. it is intended to help the understanding. >> next year, do think clinton will -- lending will -- >> it puts the industry in a better position to lend. >> can you give us a number of

institutions that are well capitalized? >> we had 8099 institutions reported for september. 7763, about 96% met the requirements. they represented 98.4% total industry assets. >> aren't small businesses the highest risk? rescinding the banks mixed messages? -- are you sending the banks mixed messages? >> we want institutions to extend some credit. there's a lot of opportunity for

institutions to do that. we want to make sure that nothing is done deregulatory side to inhibit that. with that said, we want to make sure that the risk is recognized by the institutions when they go into lending arrangements. >> we don't have specific data on the performance of business loans by size. but what we have seen in previous cycles -- it tends to be lower than that with smaller institutions. their aggregate numbers are affected more by the performance of larger customers. smaller institutions are restricted by legal limits to how large a corporate customer

they can lend to. the rate for smaller banks is going to be more of a small business loss rate and vice versa for the larger institutions. in terms of the performance of the portfolio's, it is a smaller risk for businesses. >> we have been to this historic period of this location where we sought property values, residential and commercial fall. there is a small increase in residential value. had we have seen some improvement in the decline in final demand -- it affects the credit of existing borrowers and the guidance is hoping to work with existing borrowers.

as well as loan demand. they're cutting business spending. as this normalizes, the industry will be in better position to meet the demand when credit demand comes back. helping to work out with existing borrowers and what is appropriate is something that they are doing. >> [unintelligible] do you have an estimate for the fourth quarter into next year in terms of the number of institutions? >> the only projections we have made public is the five-year estimate of losses. that is $100 billion. we have not made public any estimates of numbers of banks or

any other orperiods. -- any other time periods. >> [inaudible] >> we indicated that most of that loss was going to occur in 2009 in 2010. -- and 2010. 2010 will probably be similar to 2009. >> the provision was almost double what the previous quarter was. the you expect that number to peak sometime soon? will it continue to rise? >> again, in terms of losses, we expect most of the $100 billion of loss to occur in 20 -- 2009 and 2010.

it will taper off after that. >> any other questions? >> it all depends on the economy, but what are you forecasting going forward in the real-estate market and the fed stops buying mortgage-backed securities? >> it is clear that the economy is expanding. certainly there is balance sheet in pyramid for households and financial institutions. to make the pace of recovery somewhat subdued, i think that is the consensus outlook. as balance sheets get cleaned up in 2010, it should pave the way for a more durable expansion going forward. i don't think anyone is looking for a rapid turnaround. and following previous recessions, balance sheets are

in difficult situations still. >> if we have no more questions, thank you for coming. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2009]

>> in a few moments, the congressional budget office on the economy and the deficit. in about an hour, a look at fraud and the medicare and medicaid systems. and after that, political strategists from both parties talk about bipartisanship in politics. the center for american progress is hosting a forum on the u.s. education system tomorrow morning and will include remarks by education secretary arne duncan and new york mayor michael bloomberg.

our coverage on the hearing of the long-term effects of head injuries in the national football league continues tomorrow night with testimony from medical professionals and former players. that is here on c-span, wednesday, 9:15 p.m. eastern. >> on this vote, the yay's are 60, the nay's are 39. having voted in the affirmative, the motion is agreed to. >> the senate moves its health- care bill to the floor. live, starting monday and through december, follow every minute of the debate. the public auction, taxes, abortion, and medicare. the only network that brings you the senate gavel-to-gavel. >> in and out congressional budget office director douglas elmendorf, who spoke to an hour

about the program analysis. >> when i was playing on wikipedia this weekend, i also learned that we live in interesting times. the second, you come to attention of those in authority. i think our morning speaker might have some entertaining comments on a statement like that. it is my pleasure to introduce doug elmendorf. as you know, the cbo provides objective insightful, timely, and clearly presented information about budget issues. he supervises the analytical papers and costs that we produce and testifies before congressional committees. [applause]

>> thank you, melissa. i appreciate the invitation to join you this morning and kickoff a very interesting conference. to set the stage regarding the changing environment and the new normal, i will take about the economic and budget outlook as cbo sees it. i am going to draw on the outlook update that cbo released this past summer at all the long-term budget outlook we released earlier this summer. we're currently in the process of updating the economic forecast and budget projections

for the outlook that we will release in january. the specific numbers are always changing, but the quality and the pattern is what i will focus on today. they're like to be similar when we update the numbers next year. i also want to leave time to take your questions. both about what i am saying today and about budgetary topics on your minds. let's get started. our forecast anticipates a very slow and tentative recovery. that is a consensus view. let's begin with the unemployment rate. we're projecting it has already risen to 10.5%.

the precise forecast going forward -- in general terms, it has the unemployment rate falling fairly rapidly. because it is so far above, even with a fairly rapid -- it takes years for the unemployment rate to get back down to the sustainable level. the consensus view is for an unemployment rate. by the excess, the unemployment rate -- the pain of the recession is ahead of us, not behind us.

even if the economy is growing again, it is growing from a level -- if you look at the gdp gap between the potential level of output, all resources are nearly fully employed. it is having a positive effect on economic activity. i will show you unemployment in a moment. it is difficult to quantify that precisely. last winter, we reported ranges of possible effects for this picture. it is uncertain, but we think it is fairly widely shared.

additional government spending and reduction of tax revenues in this package are pushing economic activity above where it would otherwise be. the fact that economic activity has been so weak that the employment has been so weak is a measure of just how the economy is. if you push ahead and talk about inflation rate, there is a good deal of variation in views. we expect the inflation rate to stay quite low for several years, principally because of the great amount of unused resources and the economy. there are other forecasters that the inflation rate will move back up. they're focused primarily on a great deal of liquidity. that liquidity only raises inflation to the extent that it

pushes up demand for goods and services beyond what can be readily produced. we don't think we are anywhere near that point. if this is right, we would be seeing unusually high unemployment and unusually low inflation for a number of years. so let me push on and talk about the short-term budget outlook. we wrote this past summer that in the coming years, as the economy improves, and the economic stimulus package fades, the deficit is projected to gradually shrink. i am not quite sure that the word gradually is appropriate. if you look at the picture of the federal deficit surplus, this goes back about 40 years and those 10 years in the future, you could see a very large deficit that we have experienced.

-- not in fiscal year 2010, you can see that in the far left- hand side of the picture, the deficit was just under 10% of gdp. in the current fiscal year, it will be just slightly smaller relative to gdp. but then we think in 2011 and 2012 will be a very sharp decline. what that means is the withdrawal of the stimulus being created. some of it comes from the automatic stabilizers, some of

it comes from the financial rescue package the effects winning. some comes from the stimulus package waiting period we draw a line that excludes the effects -- you could see the gap between the dark line. 2009, that is the extra effect. the gap is actually larger in 2010. right now, we're at the heart of the biggest stimulus affect on the economy. as you look ahead to 2011 and 2012, the gap between those lines and arrows. it will still be lowering taxes and raising spending relative to what would of been true without it. but to a lesser extent.

the stimulus package will start to be its bigger effect on the level of output. that is the drama of the stimulus. again, you can see the biggest effects are just upon us. the figures lacked a little bit. the biggest employment effects will be sometime next year. again, you see that affect waiting period -- waning. the federal government's fiscal thrust will be coming down very

rapidly, so there is discussion as you know -- if you think about the options that have been discussed, there is the debate going on now. one category would be policy options that aim to create jobs directly. they're all also policy proposals that involve supporting businesses helping to make credit more available while reducing the tax burden in some way. the proposals to boost demand and put more money into people's pockets and more money into the

state and local governments pockets -- and proposals to modify mortgage and housing policies to help people stay in their homes and provide broader support for the economy. given the economic outlook as we see it, i would turn your attention to these in the coming months. just to emphasize where people are concerned in the job market in particular, i showed the employment rate before. this is the picture of the reasons for people being unemployed. people are unemployed sometimes because they quit their jobs and can't find new ones right away. sometimes because they lose their jobs. the dark line is the share of people better job losers. the writer line below it is the share of people that have lost their jobs permanently. there is no expectation to hire

them back. so you can see at the far right edge of the picture, the layoffs now represent almost 60% of the total of people unemployed. that is well above the peaks reached in any other previous recessions. to an extent that was not true in past recessions, people are not willing to be able to go back to those jobs. this is another picture in which the lighter line is the separation rate. the darker job -- the darker line is the job finding rate. the to see that the rate has fallen to a much lower level than was observed in either the two previous recessions. a lot of people have lost their jobs permanently, and people --

if the near-term is not sure enough, we can talk about medium and long-term budget outlook. that remains true today. that levels out at about 3% or 4% of gdp. for example in the 1980's, the current fiscal challenge is especially acute. first of those is the current policy as perceived by many people.

[unintelligible] let me explain what i mean by the use of this picture. the solid lines sure revenues and outlays over the past decade or so, and also over the coming decade. from cbo's baseline forecast, the gap between the solid lines is the budget deficit. one particular feature of current law that not everybody understands is the tax cuts enacted in 2001 and 2003 are scheduled to expire at the end of next year. the threshold is under current law, going to fall back. it is included in the baseline,

but most americans and policy makers do not think of them in terms of policy. if one looks at what happens when those tax cuts are extended, you get a very different picture. a much more sobering picture of deficits in the coming decade. the-the lions do that. that is the direct effect of future tax law along what people might think of as current tax policy. there's also an indirect effect on spending because the larger deficits produce much larger interest payments. the gap between the two lines, rather than being a 3% or 4% of gdp is closer to 6% of gdp. that a deficit picture for the

rest of the decade, prices bad as it is up to the baseline. -- twice as that as it is under the base line. this is the same slide show you before, but with a second bullet in bold. the second reason why fiscal challenge is especially acute is because it is already very large relative to gdp by historical standards. this is the graph of federal debt held by the public going back 70 years. you could see this back -- the spike after the second world war, and a decline that lasted for decades. the economy was growing in the debt was not being accumulated. that was declining relative to gdp. -- that was declining relative

to gdp. the debt to gdp ratio is going upward. the federal debt held by the public was about 40% of u.s. gdp. at the end of this fiscal year 2010, it will be 60% of gdp. it is a move from 40% to 60% in just under two years. the debt to gdp ratio flattens out above 60% of gdp. that still the highest levels since the early 1950's. if what instead considers this particular alternative of extending the tax cuts, the ratio does not allow. it continues to rise. the end of the decade would be

pushing 90% of gdp. we're just in area where we do not have experience. there are other countries and other developed countries that have ratios that are below 100% gdp. few countries persist that way. we have never tried it. the united states to borrow more money more easily than other countries. despite all of the to halt -- the tumult, it is one of the safest assets in the world.

many observers think that that is a phenomenon that is distinctive, and investors turned the other places to rest their money. it will become more difficult there are also ongoing costs of that. capital flight from the united states and the resulting drop in the value of the dollar has jumped u.s. interest rates. the other crisis that people worry about would be the increase of inflation and some of the value of the debt. crises as we know are very difficult to predict, they're not much more straightforward to predict.

one is the tax revenues that we used to pay interest based on past government programs rather than used to finance current government programs. then there are reductions and savings and output. just to illustrate briefly, one aspect of the risk of capital flight is the picture of foreign holdings as a share of u.s. debt held by the public. in the past decade, a much larger share of u.s. government that is held overseas. -- debt is held overseas. there is a way they uses taxpayer money that pays for past programs. interest on the debt is fairly low right now because of interest rates being particularly low. with debt rising, interest rates

are expected to rise considerably. the burden of paying interest on the debt rises considerably. we saw this in "the new york times" yesterday to some effect. that is a very substantial increase in the burden. the third reason that the fiscal challenge is especially acute is the population aging and rising health spending are pushing up federal spending under current law. i think it surprises people at this point. -- this is not surprised people at this point, but it is much more upon us now than when i first started going to conferences. this picture shows revenues relative to outlays for some key programs, just to give you a sense of how pressures of aging are affecting the budget.

the dark line is revenues, and it assumes the alternative fiscal half, the tax cuts extending into the index. this is not exactly our baseline, but it is a path that a number of people talk about. you can see their revenues -- that revenues in the being a little below 18% of gdp. it is below the historical average for the last 40 years. the lighter line shows outlays for just a handful of government programs. social security, medicare, medicaid, defense, and net interest. this leaves aside everything else that the government does. the collection of number of entitlement programs, and a

large collection of non-defense discretionary spending. the outlays in just those programs are rising and are going to cross the dark line in about 56 years. six years from now, the total revenues -- in revenues5 or 6 year -- in about 5 or 6 years. there'll be nothing left for other programs. that is just a measure of how significantly imbalanced it is under current policies. and also a measure of how important these particular programs are increasing that imbalance relative to the historical experience. this is a picture from cbo's long-term budget outlook. this picture is from last summer, and actually predates

the august update to our 10-year outlook. if you look carefully at the jumping off point, it doesn't quite match the pictures. the general trend is not dependent on that. the line to the right is what we call the extended baseline scenario, assuming that occured plot unfolds as written. she for example, the tax cuts expire and the payments are not adjusted. the alternative scenario assumes that the tax cuts are and said it -- are extended. under the extended baseline scenario, the budget deficit or debt moves roughly sideways, and under an alternative, it goes straight up.

let's double little deeper into that. let's talk about aging and let's talk about health spending. this picture just shows the population of the country age 65 or older as a percentage of the population ages 20-64. this is the ratio of people that will be collecting social security and medicare benefits to those that will be supporting those benefits. this line has been drifting up a little bit, but will, over the coming two decades, move up very sharply. that is the retirement of the baby boomers. the retirement law and continues to drift up due to longevity. there is a very sharp move up. we're just about at the cusp of that. all the baby boomers are 63 this

year. you could see that over the coming couple of decades. there'll be a substantial increase of people collecting benefits relative to those paying taxes to support it. this picture shows rising health care spending. this is excess cost and growth. those of you familiar with the health care terminology, access does not been bad. it is eight -- excess does not mean bad. it is a number adjusted for their age relative to gdp per person. it is a measure of how the burden of health care spending has grown relative to other parts of the economy. the lighter line shows national health expenditures with the dark line showing medicare and medicaid. the cost varies a lot over time.

this is the crucial source of uncertainty in health-care projections and cost estimates for health care that the cbo makes. the underlying cost for health care is very uncertain. if you imagine yourself only knowing history up to the 1990's, you could see how badly surprised you would be. excess cost growth is almost always positive and often significantly so. it is a very distinct pattern over the past several decades that there is a rising share of the total income goes to health care. there are two factors i have said that are pushing up spending on medicare, medicaid, and social security. this next picture is our effort

to decompose the portraits of these effects. one thinks about population aging, not just social security, but medicare and medicaid. and health spending pushes up excess cost growth and health care, and pushing of spending in medicare and medicaid. there's also the fact of interaction between those factors having more americans is more expensive when health-care costs are higher. it matters more when there are older americans receiving health care. if your interested in that sort of thing, you can read our report. we try to decomposes into just two pieces. population aging is an important contributor to rising spending of these programs, and excess costs in health care is also an important contributor.

if i drew the picture further to the right as we do in our long- term budget outlook, health care spending because more important over time. it is because of the aging effect more or less levelling out as health spending in our projection continues to outpace other forms of spending. both of these factors are important. let's talk about policy options. the congressional budget office does not make policy recommendations. we do produce big books of options for policymakers to consider, in these next slides are taking from so those -- it is a more presentation friendly version.

their policy options that people discuss, and one is to increase the target age. it is working past 25 years ago. it possibly index is the social security to population longevity, how long people are likely to live. there are discussions about whether it should be just for social security. there are also options about decreasing benefits, that some people have advocated across the board production -- reductions. others have targeted beneficiaries or subgroups of the population. all of these options will be difficult for people and thus difficult politically.

advance notice would be helpful so that people can make plans accordingly. older people are not yet retired but close to retiring hold them harmless of the proposal and focus on changing the rules for a number of people. the slide talks about policy options to reduce projected spending for medicare and medicaid. for those that don't know, medicare is the health program directed at older americans. medicaid is a program directed at americans with less income. most medicaid beneficiaries are riyadh, -- young, but it tends to be less expensive but average. -- on average.

in broad terms, there are two ways to spend on health care. what is to decrease the payments made on the health care service, and the other is to -- the reductions are relative to current law play a significant role in current plans. a crucial question that policy makers are considering is how for those reductions can and should be pushed, and in particular if they will lead to increased efficiency that many people hope -- or whether reductions will affect the access to care or quality of care that is provided. in the second large bucket, decreasing the number of services provided raises a number of further questions. why is whether the government can adopt policies that will improve people's health and

reduce the demand for services. the second question is the appropriate role for comparative effectiveness research. what treatments or methods of organizing health-care seem to be more or less effective. and whether payments to providers can be restructured to provide more value rather than looking at the number of sources provided. of course, that provides some shift in burton and -- changes the incentives in determining the amount of health care they would get. the next slide talks about policy options to raise revenues. there are two broad categories. it was to increase rates or make changes in the current tax structure. the other is to raise revenue in

two ways. one is about tax reform, and that can be viewed as part of a plan to raise revenue or not. people think about reform and raising revenues as a joint project and will sometimes focus on personal tax cut, sometimes on corporate tax cut. it raises questions about whether we should tax income or consumption. whether the base should be broadened. before i came to washington, there is an effort to broaden the tax base. that effort was by design revenue neutral. . it could be designed differently. the distribution of the tax code -- and also discussions of

new ways of raising revenue. we also talk about environmental taxes and the possibility of carbon emissions or an auction of carbon emissions balances. that brings me to the bottom line. i use this line -- used this line a few weeks ago. it is a good summary of what the country faces. it is in port for everyone to know that the country faces a fundamental disconnect between the services expected to be provided by the government and the tax revenues that people are willing to sent to the government to finance those services. this fundamental disconnect will have to be addressed in some way if the federal budget is to

stay on a sustainable course. i will stop there. [applause] a>> he has graciously agreed answer questions, so we have a microphone on the floor. [inaudible] he is open to questions. [inaudible] we have had to think in different ways about of lot of programs and responses. i was wondering if you could address some of the more challenging aspects, and how we have fought about some of those problems. >> there are plenty of people that can speak about the challenges the cbo has faced. i guess i would highlight a few that we have faced.

i have been at the cbo for about 10 months now. it has been a very exciting 10 months. there are a few broad challenges. one issue we face is that the policy makers are considering policies that are outside of recent experience in their scope and problems they are tackling. as to work on health care reform, climate policy, financial market interventions, we're trying analyze policies that we don't have historical reference points for. the easiest thing for us to analyze is still plenty hard. there is a policy change of sorts that we have tried in the past. we can observe the effects that the changes had. it is more difficult for us to decide what the effect would be of overhaul of the health-care

system and putting a price on carbon emissions, or intervening financial markets. i think a second issue is that we have macroeconomic conditions we're not familiar with. if one thinks about the effects of the stimulus package, it happens against a backdrop of economic conditions. the size of the financial interventions are unprecedented. store the conditions that are being said. there are some parallels and other countries, but those parallels are pretty for in terms of national context and will be difficult for us to get a handle on.

on the financial side, how will the government budget accounts or not account for financial risk? the budget is mostly a cash flow accounting system for certain credit programs that was established about 20 years ago. a system of trying to account for the risk of defaults for example -- the faults, for example. we have been forced to confront a few like in tarp, fannie mae, and freddie mac. and how to take a budget that is basically on a cash flow basis and incorporate the effects of financial risks the government is taking on in a way it has not before. that is one particular challenge we have faced.

>> [inaudible] >> a very astute and pithy description of the problem. my guess is that if you show this paragraph to many people outside the beltway, they would say they you could make up the difference by going after waste, fraud, and abuse in government. members of congress introduced waste, fraud, and abuse amendments to make a very -- various proposals revenue neutral. how does the cbo estimate these proposals, and how big is the problem? what kind of methods to use to go after waste, fraud, and

abuse? >> that is a fair question. what we do depends on the context. a very important point to understand -- those three words are often used as a group. they actually mean quite different things. i will use an example from medicare. ec members in the papers about the amount of medicare spending in one year. it does not follow the rules for payment in medicare. define some block of money that does not follow the rules. maybe that is abuse, i don't know. a significant amount of misguided payments are misguided because the paperwork was not filled out right. like a social security number was written incorrectly or another mistake was made. if it had been corrected, the payment would still have been

inappropriate. it is a violation of the program's rules, but it is not what most people probably think of as true abuse, waste, it is certainly is not fraud. it has a particular meeting. -- meaning. the amount of money at stake is much smaller than the numbers that people hear about in terms of these payments that do not follow the rules, but try to look at the best guess that people have as to how much fraud there is. .

the our people out there working hard to discourage it. there are many people in this aspect of it and it is not easy to stop all the bad things. one has to think about what you mean by waste. there are pure inefficiencies. the government contracting badly, working a personal system in a sub optimal way, then there ways to improve that. if they do not like certain programs, but other people do like them, it is a judgment on

what we spend our money on. but it is not waste in the simple pure sense. >> i am with george washington university. when i heard about the cbo baseline forecast, and in a press conference a few years ago, we thought that full employment could reach lower rates by 1%, feasible. and then we began to think 6% was the best that we could achieve. and with the economic crisis that we have now, we have had to give up on the goal of that 4% or 3% goal. is that a possibility, given what we know now about our paul -- our economy?

>> economists agree that the sustainable level of unemployment is not a natural constant, like the pi or the speed of light. it responds to policies and also people's behavior. that rate -- what we would call the non-accelerated inflation rate of unemployment, it will move around. but it is difficult where tonight -- to know where it is at any point in time. certain sorts of changes in the economy, and in policies can raise or lower it. there's substantial concern now among experts -- we had a meeting of the economic advisers, and one of the top things that we discussed what those experts thought would be possible to bring the unemployment rate down, and how far down with it, ultimately. and there was concern in that group and in other places that

this very deep recession has accelerated structural shifts in the economy. recessions often do that, but in a way that has put people out of work who will not be able to find jobs to match their skills, going forward. also, this interact with problems in the housing market. research suggests that part of the way in which the labor market's comeback and pushing the unemployment rate down is that people move from areas they lived and where jobs have been lost to jobs -- two areas where jobs are being created. but the sharp drop in house prices, and more americans owe so much more on their homes than they are work, is slicing into that ratio. it will be harder to make that move. whether these effects are

literally permanent is less clear to me. there is reason to think that they will last for a while. if you lose your job in some industry and in some states, the fact that the economy will create a job in a different industry in a different state is not going to get that person a job very quickly as one might have hoped and other environments where that industry and that state itself would come back. it is a real concern. i cannot put a number on its effects but it is always a problem with a dynamic economy like ours, being offered by various forces, that individual people with particular focus skills and living in particular places " offers -- often suffer harm in a way that the macro economic picture may not reflect.

often we have to focus on those people be on the macroeconomic policies. -- beyond the macroeconomic policies. dollars the government accountability office. i am sure everyone has heard the term the nonpartisan congressional budget office. one of the things i'm curious about, and this is a question at the same time, when you guys have some numbers that you are running, people often say that they are making this assumption based -- the numbers are based on the assumption that they are given. you can make structural recommendations. as a taxpayer, i am often frustrated. you have been doing this a long time. there are assumptions in there that you know from your experience. as a taxpayer, i almost feel

like i am being given a disingenuous story. give me a real number, even if that is a number based on the assumption, and from your experience tell me how that is up front, if i want to hold a senator or congressman or congresswoman accountable. you find it frustrating that you cannot do this up front are you go behind closed doors and say, here is the number, $850 billion. [laughter] and you know that is not right. >> let me use health care is the example which could possibly be on your mind. [laughter] let me be clear. i did not do anything different behind closed doors that i do out here. i do not make recommendations behind closed doors or different numbers behind closed doors. i was interviewed simultaneously

by the democrats and republicans for my job. that was designed explicitly as a test for an organization that speaks the same thing to everybody all of the time. and when there are estimations, the responsiveness of a person to some policy, we are under no particular requirement for wheat pit we think is the right answer. but there are some restrictions. on health care, we released cost estimates of the legislation that passed the house, and which will be introduced in the senate, and those cost estimates say that we think that those pieces of legislation will reduce budget deficits by around $100 billion over the next decade, and would slightly reduce deficits beyond that in the second decade. i've heard four flavors of criticism of that conclusion. one flavor is that we just

estimated the policy wrong. for example, some people argued that more employers would stop providing coverage to their run employees, they would all end up in the insurance exchanges, and it would receive federal subsidies. we had underestimated the amount of subsidies. we say always that this is an uncertain thing that we're doing. but we worked hard to put our estimates in the middle of the distribution of possible outcomes, so we could be too and we could be too high. we try to balance those risks. and secondly for criticism is, maybe you have estimated the law as it is written correctly, but congress will change the law. and in particular, a lot of the savings over time comes, production and the growth rate of payment to providers of medicare.

that will squeeze them over time. it will put some into an unbearable blind and will hamper their quality of care. and there for people argue that congress will change the law. we are required and we need to be required to estimate the effect of all that is written. it is not our job to guess what congress may do. but in this particular case, we did want to emphasize the importance for investment of the current law remaining in place. if you look at the cost estimates that are released, there were long discussions at the back about the importance for our numbers of leaving those provisions in place. we talk about the experience with dr. payments to medicare, the sustainable growth rate mechanism. a decade ago, the agreement to

ratchet down doctor payments and congress has change that law many tames -- times and has considered doing it again. the house is voted out a bill to change that. we raise that as an example of sticking with payment reductions. over the past 20 years, medicare spending per been a sherry adjusted for inflation has grown 4% a year, whereas under the bill, both of these bills, in the future medicare payment would rise about 2%. some 4% to 2%. we have been very clear about how sharp the changes in policy that is embodied in the law. but it is not our place to offer a specific judgment about what congress may do in the future. our job is to illustrate the importance of the issues and our

estimate. but third flavor of concern that i've heard is that if a lot carried out as written, some of the changes being made in policy to pay for the new health care retirement would have been made otherwise in the face of the ballooning budget deficit. what we did a decade ago was reduced medicare payments and raise taxes. maybe those changes will be seen again in five years. and it will be used to finance the health entitlement, and had been taken off the table for deficit reduction. that is a legitimate issue to raise. but it is speculation about what congress would have done under those circumstances. we find budget projections hard enough. that is occurrence -- a concern worth raising by people but that is not anything that we can

speak to. and the fourth flavor of this concern that i've heard is not so much within the bill that is wrong, but there are more profound changes in how we organize our health-care system, our health insurance system, how they could have been made but are not being made. it is more of a lost opportunity that is in the bill. what we do for that, and i think correctly, is talk about options for changes. it is not our place to save what is right and wrong, because there are a lot of value judgments and professional analytical judgment that would go in that. but we continue to talk about options that could be used. and what else might be done as part of health reform. some of the options that have not been taken up in the bill. in all those ways, we are doing all that we can do it cbo. and i do not feel -- u.s. if i

worry about this. the answer is no, we try to be very clear. we follow the law as it is written and give congress options around that. i do not feel bad about that. i think it is inappropriate structure for us to work again. the most important thing we can do is to continually talk about the effective alternatives and illustrate different alternatives, and emphasize what is crucial to our estimates. and that provides the information that members of congress need to make the judgments. >> i appreciate your candor and inside. the and insight. >> other questions?

>> i am from gao. a question related to the way you analyze the risk. risk factors are one of the challenges that you face. i was thinking when you report that an estimate -- report at an estimate, have you thought of reporting also on the variance and the standard deviations and the future of the distribution of the estimates that makes that estimate either less reliable or more reliable? and also related to risk, whether you have considered ways of including interaction? one example being the housing tax credit that is likely to

lead to production -- to some reductions, because of the requirement that homeowners will have to put up less again in the house that the purchase as a result of the credit. how those interactions it? between programs that will affect the risk that the federal government is exposed to, how that would increase? >> yes to the first question about the variation 34 cost estimates, the process i think, the budget process and legislative process really requires numbers with estimates. and we provide does. when we move beyond things that our cost estimates, we do try, when we can, to offer ranges as a way of expressing the uncertainty. so when we reported the ethics

of the stimulus package on the economy, we have ranges of gdp, ranges for employment, and so on. in the health care analysis, the cost estimates, and we have and other asset -- aspects talk about them. in our announcement of the bill put forward by house republicans, we talked about the effects of that legislation on insurance premiums and we offered ranges. whenever we can and not something that has to be added up and bit in some budget resolution for some total allocation, we try to provide ranges. and we look for ways to do that, precisely because i believe it is the most direct way of reporting uncertainty. there is a downside to ranges. if we say something happens, we will salt -- call something to rise between 1% and 4%. some will quotas as saying up to

4%, and others will say as little as 1%. there is a risk in range that people will pick out the endpoints' that suit their purposes. but the balance is good for us to use ranges when we can. one interaction effects, we do work hard to trace through the effects of a piece of legislation on all aspects of the budget that we can trace it to. that is very challenging. a very complicated work. and even our understanding of the have your response of businesses and state and local governments, and for individual policies it can be difficult. and the new trace it through all the ways it can affect the budget, it is even more difficult. but we try it. it is our job to provide congress with the best estimate that we can. and that includes all the indirect effects that we can get our arms around in a serious, evidence-based, quantifiable way. i think-ago period thank you.

-- i think i should go. thank you. [applause] >> when we talk in all this about you joining us, we thought the tuesday before thanksgiving would be a call on time. and it has not happen that way. i appreciate you joining us this morning. as a small token, i have an aabpa mug for you. [laughter] and i look forward to seeing it prominently displayed in the director's office. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2009] >> in a few moments, a look that fraud in the medicare and medicaid systems. in about 45 minutes, political

strategists from both parties talk about bipartisanship in politics. after that, tonight state dinner at the white house for the indian prime minister, followed by his press conference with president obama. on "washington journal" tomorrow morning, all look at lobbying efforts with the director from the center for responsive politics. you can call in with your questions about medicare part d with tom scully. and former arkansas senator david pryor talks about his new autobiography and his 20 years in the senate. "washington journal" is live on c-span every day at 7:00 a.m. eastern. the center for american progress is hosting a forum on the u.s. education system tomorrow morning. it will include remarks by

education secretary arne duncan and new york mayor michael bloomberg. live on c-span2 at 8:00 eastern. >> thanksgiving day on c-span. bill clinton is on hand to present steven spielberg with the liberty medal from the national constitution center. a discussion assessing the obama presidency. from the jfk library and museum, nick burns on terrorism and nuclear weapons. at 5:00, on ludicris on a youth mentoring. and howard dean on -- and dick armey. >> more now all about fraud and abuse in the medicare and medicaid systems. from "washington journal," this is 45 minutes. host: lewis morris, department of health and human services deputy inspector general. one of his responsibilities is

investigating fraud in the medicare and medicaid programs. what kind of fraud are we talking about? guest: it ranges from organized criminals setting up sham medical equipment companies to regrettably some of the large fortune 500 companies in this country. every place we look we're finding evidence of fraud. host: how pervasive? guest: it is hard to say. fraud is a crime of deception. the most effective frauds are those that go undetected. the the news is that we're using high-tech screening devices. we're using tebaldi to get a jump on these crimes faster and faster -- we are using technology to get a jump on these crimes faster and faster. host: could you go back to what you said. what kind of tools are using to investigate fraud? guest: some of it is using

cutting edge technology, computer systems that are able to detect trends in billings much earlier than we used to. we also rely on good old- fashioned investigative work. we get a lot of tips from consumers. medicare patients will call us and tell us something looks wrong. we have whistle-blowers inside the criminal schemes themselves who decide to come forward and tell us about the fraud. the government has set up a program that gives financial incentives to whistle-blowers to come forward. a lot of the big corporate schemes that we learn about our a result of insiders telling us how the crimes took place. host: do you ever do audits like the irs? guest: we do a lot of audits. about 1600 men and women across the country.

we all did everything from hospital system billions. we all that the medical programs systems themselves, and then make recommendations to the administration. host: we're having a conversation about medicare and medicaid fraud with lewis morris, department of health and human services deputy inspector general. you can see the numbers/political affiliation. please allow 30 days between recalls. mr. morris, you mention medical equipment suppliers. guest: we have discovered that medical equipment suppliers are a hot spot for fraud. it's easier for a supplier to get into our program. medicare has got to make it more difficult for the scam artist to

get in. in south florida, we have seen thousands of sham companies set up. they are just storefronts. they provide no services. they build the medicare program billions in bogus claims. we have sent our auditors out. in one instance, we looked at 1600 and about a quarter of them were bogus. we close to those down and cut down substantially on the fraud in south florida. unfortunately, the equipment suppliers are very sophisticated. they set up a new operation almost instantaneously. host: you make it sound like it is almost easy to defraud medicare and medicaid. guest: i'm afraid we make it easy. the program set up based on trust. unfortunately, the criminal element has taken advantage of the tremendous amount of money

in the medicare program. one of the things we believe needs to be done is that we need to move from trusting to having people establish their credible suppliers. we have got to make it more difficult for the bad guys to get into the program and the first place. was there in, we need to do a better job of monitoring their behavior. it is still pretty easy for those to be exploited. host: your office provided this map to us. you have some hot spot locations. why california? why houston? why detroit? guest: they were each based on data analysis. we determined to these were places where medical equipment suppliers were exploiting our program.

what we have done in order to respond to these hot spots is organized strike forces of prosecutors and investigators, who are moving much quicker to identify the fraud. and then close them down. it has been very successful. we have almost 700 convictions as a result of this. we have brought back $225 million already as a result of these efforts overall. , our strategy is working. for every dollar that is spent on fraud prevention and protection, we bring back $8 to the medicare trust fund. host: there have been some big settlements with some large drug companies. guest: you have read about these in the paper. the most recent was against pfizer. pfizer was alleged to have deceptively marketed drugs for

purposes which were not approved by the fda. those actions put patients at risk, cause heart attacks, and death. in addition, allegations of kickbacks to doctors. the subsidiaries pled guilty. we found multiple year schemes to advance the marketing of drugs for purposes which had not been approved by the fda. host: a company like pfizer or eli lilly, do they set out in their board rooms to commit fraud? guest: i do not thing we have ever had someone be as explicit as say it is a crime and i'm looking forward to committee it, but they clearly understand the parameters of the law. in the case of pfizer, they understand that the fda says you cannot market this drug for acute pain, and they went ahead

and did it anyway because it increase market share in profits. i would say that executives at pfizer knew what they were doing was illegal. host: before we go to the colors, are the lo guest: they are very sophisticated. it is safer than dealing crack cocaine. we need more resources devoted to combating -- combating fraud problem. host: lew morris is a career rest at the office of the inspector general. first call for him comes from long bitclong beach. my question relates to the three giant words, waste, fraud, and abuse.

i am not considering fraud so much but waste and abuse. i've seen a myriad of commercials on cable television and network television every day for hours and hours for such things as mobility scooters from the scooter store, and the commercial says, we will give you a scooter absolutely free. we will process the paperwork. there will be absolutely no charge to you. and of course we all know that the charge is to the taxpayers who are paying and the medicare, medicaid, disability insurance. these organizations, in my mind, are parasites. guest: it is a fair point. i would point out that the scooter store has actually entered into a settlement with the federal government after

allegations of false claims. i would say a couple of things. nothing in this world is free. if the medicare supplier offers to give you something at no charge to you, waiting to copays, you should be suspicious. there are some circumstances where that is appropriate. generally speaking, beneficiaries are obligated to pay 20% copiague. you are right. when something is offered for free, you should put up the warnings. there's a distinction between fraud, waste, and abuse. waste is being prescribed a brand-name drug with a generic name would do just fine. what is abuse? prescribing tests that are medically unnecessary but help the doctor profit. we'll have a good idea of what fraud is. there are those that are committing fraud. there are also those that are taking advantage of the system on the margins.

we need to address all three. the inspector general's office is doing just that. a lot of the audits identify program vulnerabilities. host: could you give us the details of the scooters for settlement? guest: it was based on allegations that physicians were prescribing power wheelchair's for medicare patients that did not need them. in some instances, the certificates of necessity were in no relationship to the needs of the patient. los of them were mobile. they have these jurors to be in a client -- they had these chairs sitting in a closet. host: is there a way that's

doctors contribute to this fraud? guest: regrettably, yes, doctors contribute in a number of waste. perhaps the most obvious is there sunni prescriptions at the request of the patient when the doctor knows that the patient does not need it. -- perhaps the most obvious is the doctor prescribing things too impatient with the doctor knows that the patient does not needed. and we also find that the doctors are on the payroll of these scam companies. they are getting kickbacks. we think physicians are a critical part of addressing the fraud problem in this country. the vast majority of doctors in this country are honest and care about their patients. regrettably, there are some that put their personal profit before the patient.

caller: good morning. i think between mr. morris in the last caller, everything i had to say has been sent. i started getting medicaid years ago. the doctors have been a major part of this corruption. you go to one doctor and they say we will have to see an ear doctor. i bought a piece of medical equipment that costs medicaid $635. if i have my own cash money, i could buy the same piece of equipment for $167. it is things like these are running up the cost of health care in america. you were right, mr. morris. we are too slow in getting laws against what is happening here.

if we could be more diligent about the rules and regulations without loopholes, then we would do a good job. thank you very much. guest: medicare pays way too much for services. our audit teams and the value leaders have demonstrated this time and time again. you can buy an oxygen concentrator for $700. medicare pays $1,700 in rentals. not only is that coming out of the trust fund, but because beneficiaries are paying a copiague, that means they're paying for two hundred dollars that he does not need to. we need to be much more responsive. there are bills right now that would allow the medicare program to stop pena as quickly as it does in fraud hot spots. under the law, medicare has to pay a claim within 30 days. they have billions of claims

coming through every year. less than 3% are reviewed before payment. we need to change the system to a prevent and detect. host: tweet here. is there anything in the house health care legislation proposal that addresses the issue of fraud? guest: there are a number of provisions in both bills that would help. they would tighten up on eligibility, make it easier to close out scams quickly, suspend payments when we believe there is evidence of fraud. at the bottom of every one of

those medicare bills that they get is a number that they can call if they think there's a problem with the claim. in the same way you look at your visa or mastercard charge at the end of the month, people should be looking at those bills and making sure they got the services. if they have a problem, they should first call the provider. the second thing they should do is call medicare. finally, if they think there is fraud, they should call the office of inspector general outline. host: ohio, you are on. we need to move on to miami. joe, republican, hi. caller: good morning. unlikely were talking about -- i

like what you're talking about. i do not see any proposals. the consumers do not know how much things cost. they do not ask questions. you are talking about the generic version for the brand name drug. they do not hold the provider accountable. i do not seek a lot of stuff happening. guest: a lot of people who have looked at the health care system observed that the person receiving the benefits are not the person paying for the benefit. the co-payments are part of that. it to pay 20% of the costs, it is more likely you will ask the doctor if there's a less expensive drug. you are right. we trust our doctors to do what is best for us. they have advanced training and expertise. it's not likely that a senior citizen will challenge her physician's decision about a

drug for a therapy. the good news is that as we increase awareness, i think we will have much more of a dialogue between the patience and the physicians to ensure they are getting only the necessary services. drakessanders tweets in. we have for this again and again on this program. is this something that is addressed in the health-care system? is this something that's the oig would like to see addressed? guest: the oig has addressed this. we will do an audit and provide specific recommendations to close down the problem.

part of the problem is that there are vested interest that the white the system just the way it is. if you are a wheelchair owner, you are going to do you can to keep the status quo. congress is exploring ways to make it easier for us to change the rules in risk areas. there's a demonstration project about to get under way that would allow more competitive bidding around medical equipment. we think that will reduce excessive charges. there are some vested interest that like things just the way they are. host: sue in naples, new york. caller: good morning. the billing -- when people get bills from health care, they cannot tell what they were building for exactly. if they could, i do not know of

any other situation where you do not get an itemized bill. if people got that, they would see what they were charged for, how much it cost, and you would probably get a lot of calls on a hotline. guest: it is a good point. what we call an explanation of benefits is the way that the medicare program tells its beneficiaries what services it has paid for. they're very difficult to read. i have helped my parents read through their medical explanations. sometimes a legitimate service looks questionable because you do not recognize the provider. you did not realize that the radiology company billed separately. you are right. we need to make sure that those bills are intelligible. we need to keep reminding people that they need to help us by looking at those bills and calling us when they think there's a problem. host: according to the centers for medicare and medicaid services, a total health expenditures in the u.s. in 2007

-- $2.2 trillion. of the total costs, medicare spending was $431 billion, 19% of that total. medicaid and schip spending, at $329 billion, to 15% of that total. there are several estimates that say perhaps $60 billion per year is lost because of fraud. san jose, calif. caller: good morning. i have had social security disability since 2004. the first thing i noticed -- this has to do with the health care reform and medicare. in a lot of faults have had to do with medicare itself. i've seen changes with private doctors dropping all insurance companies because medicare would

try to change certain prescriptions. there are -- finally found a doctor that will prescribe my medication, but through medicare, i thought i would be getting things to help aid me get back into the community. instead, -- i am very thankful for medicare. i had an agent on the phone misinform me to tell of the animal forand will form that ken the program. people at the office here in california -- they should assign one person per person or a group of people.

there's a lot of jobs stimulus that could be added. host: thank you for sharing your experience and your ideas. guest: these are great suggestions. one of the challenges you recognize is that while these might create more jobs, there's funding required to support those jobs. one of the challenges that medicare faces is trying to keep a lean administrative machine so the money goes out in benefits and not running a bloated bureaucracy. medicare does a tremendous job at that. administrative overhead is a fraction of what private companies charge. it does mean that we do not have the luxury of caseworkers 40%. a lot of your ideas make sense. host: boca raton, chase,

republican. caller: thank you. i've reported in 2000 i was working for a nursing@@@@@@"az the reagan administration had a program where they hired retired judges all over the country, gave them a small salary, gave them lawyers coming right out of college, they could walk and talk, so they gave them 30 days to get a job, and if not, they would not be receiving any more medicaid from us. i know people on disability taking advantage of the plan.

they're collecting disability because they had a car accident. it really angers me. i will listen to your answer off the air. guest: you have absolutely every right to be angry. when people use this system, it is simply wrong. if you have information about people taking advantage of the system let someone know. what appears to be a lack of a disability, you may not fully understand the person's medical condition. it is worth being well-informed and being sure that you have a problem. being well-informed. host:, the calls a day to get at your hhs tips number? guest: we get hundreds of thousands of calls. sometimes their concerns that do not relate to our medicare

program. we for those to the appropriate agency. most get forwarded to medicare. we also find good tips that turn into a cramped buscriminal inve. we have operators that take the calls. every complete is assigned a tracking number. the information will likely be sent to the medicare program. their job is to forward to that to be cognizant agency contractor. and then the information is meant to be forwarded back up. we often cannot get to all the cases we would like to. we refer to other law

enforcement agencies. but things we believe our fraud, but we do not have the resources. the medicaid programs have fraud control units. we send a lot of this work to the states. host: boston, linda, democrat, good morning. caller: good morning. in my situation, i had to go on medical disability. i had worked all my life. i ended up having to get a lawyer because i was miss used three times, which i could not afford. and they took money for the lawyer. it took two years to get it done. i was only awarded one year back. a husband was in and out of work.

he is not being paid what used to be paid. we are on one income family. the economy has risen. i have a plan d prescription plan. i'm a diabetic title oype one. i want to know -- when you have these conversations, which are related, how do i get through to a real person? who can help me? guest: i am probably not able to answer your question. i do not have enough information about your particular circumstance. it sounds like you're doing the right thing. you have worked through the system. i would suggest you talk to one of the lawyers that is working with you. host: james tweets in --

guest: there are a number of proposals out there. it's hard to talk about a specific bill. and number of the issues that we believe would be helpful would be things like making it more difficult for scam artists to get into the program by changing enrollment standards. instead of it being a right, it would be a privilege. you would have to prove you have integrity. we think more resources will allow us to put agents on the ground to talk to witnesses to find out if there are criminal elements of whaafoot.

the vast majority of them were honest. they need help. they need to set in place internal control mechanisms, of its common traits. -- control mechanisms and training. guest: a do not know of that is true. if you go through parts of dade county, you will see office building after office building with hundreds of durable medical equipment companies listed. if you knock on the door, you may find there's nothing on the other side of the door. host: could they have a warehouse? is it possible?

guest: it may be possible, but it is not legal. there are specific requirements for what you have to do to be a supplier. you have to have an office treated has to have posted hours. you have to be running a business. our agency found that these are just shelves. sometimes they are storage bins or empty pizza huts. these are not businesses. host: why is south florida so attractive? guest: part of it is that there is a significant senior population there. health-care fraud is byviral. people learn how easy this and their brothers, cousins, and friends get in on it. south to florida has become the nation's hot spot for health care fraud.

for certain parts of the committee, everyone is doing at. host: do people go to jail? guest: more and more people are going to jail. one of the successes of the strike force model is to get people off the streets and into jail. we have put over four hundred people into prison in the last year as a result of the strike force model could we also throw out a lot of people from the medicare and medicaid program based on misconduct. be excluded them -- we exclude them. host: west virginia, you were on witare on with lewis morris. good morning. caller: good morning. i was reading an interview with malcolm sparrow.

guest: i have a signed copy of it. caller: in this interview, he said that you folks estimate 3% is fraud, which is $60 billion. he thinks it could be as high as 30%, or 20%, which could be $600 billion in fraud. he said we do not know how much is being lost. we should know. the government knows how to measure it, but it is avoiding doing it. the news would be too bad. he goes into detail exactly how you are refusing to measure the exact profit. i am sure you know this argument. guest: i am familiar with the argument. i think there are some assumptions teammate which we do

not share. first, it has got to be recognized that successful frauds, by the very nature, are undetected. i'm not sure we will ever know the full extent of fraud. i do agree it is possible that the fraud is far more extensive than we think. one of his point is that a very clever fraud scheme has the appearance that everything is regular, so it is harder to detect. i do not think we know what the fraud rate is and we are hiding it from the american people. this administration has made a real point of promoted transparency. we would benefit from having a more precise number. we are finding ways to identify the fraud quicker. we are finding ways to identify it through systems that are a lot faster than we have in the past.

host: barbara in lexington, indiana, please go ahead with your question. caller: good morning. host: please go ahead. caller: thank you for having me. i think we need reform, incremental reform. i was born with agwith a degenerative disk. there's nothing that can be done but to keep me on pain medication. i asked my doctor why do i have to come every month? it is a waste of money for me to be there and spread disease. it's a hardship for me to come down there every month. i was told that it is because of the bureaucrats in washington insist that we come down there and go to the doctor every month.

i have called in reported medicate fraud. all i get is, "ok, thanks for calling." i never get a response. guest: i'm sorry that you have been inconvenienced. unfortunately, it is on an individual case when someone such as yourself has to go through the extra hassle. one of the reasons a role like that is put in place is because our experience has been, and in some instances, people continue to draw benefits when they no longer need them. like any rule, sometimes it can be over applied, or not tailored to the needs of an individual. as to your concerns about making a referral or complain about health care fraud, that is most unfortunate. it should not happen that way. we do hear complaints from seniors and those who have gotten health care benefits that

they have filed complaints with the medicare and medicaid program and have not been satisfied. peirce, thank you for doing that. know that we are trying to do better. we've been in conversations with the medicare program to try to improve the way they respond to allegations of fraud. we are conscious of our duty to be responsive. we're trying to do a better job. host: lewis morris, department of health and human services deputy inspector general. the annual budget in his office, about $300 million. a staff of 1500. 80% of their work is dedicated to medicare and medicaid. riviera beach, fla., grace, good morning. caller: good morning and thank you for taking my call. i am a diabetic and i receive my

diabetic supplies through the advertised company. one thing i do dnot understand -- when i get the copy of the bill, it always seems to have more test strips then i get. when i asked for batteries, i never get the right of countries. when i called back and i tell them that you sent the wrong them that you sent the wrong batteries, they never send never send the right batteries. but the paperwork always goes into medicare. that i received all the stuff. host: is that fraud?

guest: i do not know. the first thing you should do is contact the company, which you have been doing. explain your problem. i would also ask that you contact the medicare program and tell them that you are not getting as many strips as you are being billed for. you are being billed for extra supplies. bring the medicare program into the discussion with the supplier. this may be -- this may be a billing error or just what the business. this is the first thing, to try to pursue this with the company and the medicare program. but after that, if you conclude is that they are charging us as taxpayers for services that were not provided, call the medicare program's hot line, 1-800-hhs- tips. guest: hello, i'm just amazed

that there has ever been done -- ever anything been done. i knew when company that should have been shut down because there was so much fraud, $4,000 for two months of service. they have to write me when i talk to them about it. . it. they gave me an explanation of benefits on everything. this did not happen until the medicare and medicaid bill went through and was pretty much forced on everybody. it took years to get any help. even when i would call to tell about frauds in my hospital bills, and how poorly we were treated in emergency rooms, they

just leave you there on the table. it is wasting the tax dollars when you were rushed there in an ambulance. when we lost a certain doctors -- this is columbus, indiana. we fear telling anything because i think they put it on your medical health records. host: thank you very much for sharing your story with us. mr. morris, we only have a few minutes left. we have not talked much about the pharmaceutical companies and the fraud that has been uncovered. according to your office, $3.5 billion in fraud settlements was paid out so far in 2009. where does that money go? guest: the good news is that money goes back to the medicare trust fund to provide services to senior citizens.

there are two vehicles by which we get the money. there are criminal fines imposed by courts, and there are false claims act settlements. they pay both criminal fines and civil settlements. as we talked about, those civil settlements are brought together in part by whistle-blowers who bring information to the government, give us the documents we need to build the case. those whistle-blowers get paid millions of dollars as a result of their contribution to the fight against fraud. it's a very effective way of us identifying crime that we would not otherwise be able to find because it is still insulated within a corporate structure. the whistleblower benefits, the taxpayer benefits, and the money goes back to the trust fund. host: health-care fraud recovery, such as medical equipment companies, you can see $1.6 billion has been recovered so far in 2009.

besides medical equipment, what is another avenue for people to use when they want to commit fraud? medical equipment, buiilling, infusion therapies. we have discovered that in south florida, they are not getting the drugs they need. they are getting b12 injections. home health is a hot spot for fraud. people are supposed to be getting services in their homes. they are not getting those services. those are two other examples of the type offs. host: middletown, new jersey, bob. caller: i am happy to see mr. morris on, especially after the "60 minutes" interview. where are the indictments and

the prosecution's? listen to him, he explained that there are many prosecuted, which i'm happy to see. i am happy to see and hear today. guest: you will be pleased to know we brought 700 convictions this year alone. by the end of this year, we will have brought back $4 billion as a rt the efforts of law enforcement officers and prosecutors. we are on the job and we appreciate your support. host: if you could change one olaw, what would it be? guest: to make it easier for the medicare program to scrutinize to the lead in the program and to stop payment faster. .

>> as the debate on health care continues, c-span's health care hub is your source for congressional hearings and events, speeches and town hall meeting. also videos, ads, link, via twitter. go to c-span.org/healthcare. the senate returns on monday for more health care debate. senators are allowed for amendments during the thanksgiving break. one of the debate won a contest sponsored by the group organizing for america. >> a year from now i'll break my leg and my parents will have to sell our house because we couldn't afford health care. >> three months from now i'll need surgery, and my parents will go bankrupt. >> three years from now i'll be

digse -- diagnosed with leukemia. and i'll die. >> eight million children, we all deserve health care. the democratic committee is responsible for that advertisement. >> in a little more than an hour, tonight's state dinner at the white house for the indian prime minister followed by the prime minister's news conference with president obama. >> the center for american progress is hosting a forum on the u.s. education system that will include remarks by arnie duncan and new york mayor michael bloomberg. live on c-span2 at 8:00

eastern. our coverage of the hearing on the long-term affects of head injuries in the national football league continues tomorrow night. from testimony from medical professionals from players tikki barber and andrew parrish. that's at 9:00 p.m. eastern. >> coming this thanksgiving on c-span. three nights of original documentaries on the three branches of american government. the supreme court, home to america's highest court reveals the building exquisite detail through the eyes of supreme court justities. then on friday, the white house, beyond the velvet ropes of public tours. our footage shows the rarely seen spaces. and finally the capitol, one of america's most symbolic

structures. american icon, three memorable nights, thursday, friday, and saturday on c-span. and get your own copy of american aye icons, a three-disk d.v.d. set. order online at c-span.org/store. >> now a forum on how to reduce political partisan. this team meet for more than an hour. >> good day, everybody. i'm president of the new orleans tulane university. from hughey long to edwin edwards to our current mayor

ray nay began. politics is one of our favorite passtimes in this great state. we talk about it continuously and with a fair amount of knowledge and usually partisan viewpoints. another reason why i'm particularly happy that we're having the bipartisan policy center today. in new orleans there are many hot, political topics that sometimes there are so many hot political topics that sometimes it's hard to fit into any one subject. whether it's parrish state, the new orlean or leanian -- the knew or leanian will have time to talk about it. it will have different answers from from the senators. so does your political association color what you think is fair? or is it something else?

i'm sure you'll leave the program today with some very interesting thoughts from the six individuals who are speaking about what's fair in politics. i had the privilege at lunch today to join our 16 consultants in an off the record, informal conversation about various topics. and since it was off the record, i cannot talk about the substance and content at all. but i will tell you this, it was civil. it was thoughtful. and it was encouraging. and i for one learned a great deal about a lot of issues and found a lot more common ground that i ever thought was possible between people representing two different parties. there's too many people for me to recognize today. but there are three that i want to recognize. first is walter y zachson. we all know walter. he's a new orleans -- new

orleanian. and walter it's a delight to have you on campus in your tulane tie. and next i want to call out marry mad -- mary madeline and james carville. them moving to new orleans was symbolic after katrina. they have proven to be outstanding citizens of our particular city and our state. they are also very responsible for this summit being here at tulane university. and i want you to know that i'm extremely proud to have james as a professor in tulane university. he has done a marvelous job. and yes, the children love him.

and yes, he is bipartisan when he teaches his class. there were two conditions of employment. one was bipartisan and the other was rhetoric about l.s.u. on the tulane campus. and he has abided those since he's been here. now i have not been successful with mary being a professor here. until i get her to teach a course, i won't call it a success yet. but please welcome to the podium, mary and james. [applause] >> well, our role here is only to welcome our friends and we're here as neworleanans. we're not on any panels and our friends from national politics saw the title "taking the

poison out of bipartisan." we did not jump to their minds. let's just say i always operate under the statement that one man's poison is another man's kool-aid. i want to say how incredible this panel and all the consultants are. james and i both worked with all of them for the last however many years and for the past 30 or 40, four decades, charlie. this is the leader, these are the leaders in national politics and state politics and local politics. there's no race. there's nothing that you haven't seen. and you're in all of our adult lifetimes that these people haven't been here. and for them to come and participate at this time is is is -- we are very grateful for it. and we want you to have a great

time in this wonderful place. and to our friends from washington, you're always going to meet while you're here, some of the best citizen soldier ackity vists. i don't know what party they belong to. but i do know in addition to -- you heard about the doctor's role in merging the two federal and local assets. and we wouldn't be here today. we wouldn't be a sliver on the river to quote my husband if it wasn't for scott cow went. even from city knows it. what you might not know is that walter was knocking on everybody's door, calling everybody, every asset at every level to do what he could be done for his bloved city, our bloved city. you will learn something from the washington side on how to get stuff done without killing

each other. starting women of the storm. this is a bipartisan issue. coastal restoration. i never thought i would make a pitch about something that's important for the whole country tonight. we mostly hope you have fun. we thank you so much for coming. and thank you for providing this forum. one man's poison is another man's kool-aid, honey. >> you know, jus -- justice stewart couldn't define pornography, but he knew it when he's -- he saw it. i'm not going to define talent. but you're looking at it. what i encourage you to do is read the biography of the people on stage.

these are people that have enormous influence on this country. not just influence that they work for politics. many of them are in the press. and i think -- i just want to emphasize how much we in new orleans are delighted that you came down here, each and every one of you. and to every new orleanan and louisianaian have to pay attention because these are people's who's opinion really, really matter. i don't know if i have ever been to a conference that has the level of confidence, talent, experience that has been put together right here in new orleans. and i was thinking it says something that people of this kind of influence and this kind of experience chose to come to our city. so i just want to be sure that we all put our best foot forward and listen to what they

have to say because each one of these people are enormously talented and experienced. and i urge everybody to read the bios to be aware of our city. we look forward to hosting you. thank you very much. [applause] >> hey, folks. i'm jason gremay. i'm the president of the bipartisan policy center. thank you for being here today. i just want to give you two minutes about our organization. the organization was formed a few years ago by a former senate majority leaders tom daschle, howard baker, george mitchell. excuse me. in order to bring forth the principle compromise that was necessary for bipartisan. the organization is not of the view that we should be bipartisan because it's a lovely thing for everything to be nice for each other but it's the only way that we could get the durable change that we need

in the country. we are also to have this group together. it's often seen as kind of soft and mellow and just kind of friendly. and while these are lovely people. these are smart people. these are principled people. these are not mellow people. and i hope during the course of this discussion and the rest of the couple of days you'll hear that. it's my final pleasure to welcome walter y zachson who will be mot -- moderating this panel. he is also a board member of the b.p.c. walter? >> thank you very much, jason and james, the chairman of the b.b.c. board. there's jeff larson, a minnesota political fundraiser has been affiliated with norm coleman, many other republicans and knows the fundraising side of politics. charlie black is the senior elders statesman of the field.

having been a senior political advisor to ronald reagan. jornl h. wrment bush. and -- george h.w. bush. and john mccain and alongside you steve schmitt who was the manager of the mccain company and the george w. bush 2004 election campaign. i have some of that slightly wrong but is in the bio right. hillary rosen was for a long time chair of the recording industry of america. also a founder of rock to vote, a democratic strategist. teddy vine who i saw on the moon walk this morning getting his coffee and do nuts in front of jackson square. think you've had 17 winning independence campaigns and you work for kerry and gore, helping the senior strategist on their campaigns. and kiki mclean senior advisor

to hillary clinton. and you were the advicer for d.n.c. president cow went asked me to -- off our lunch, said, i've got one question. if a political consultant really feels strongly about something for the good of both the campaign and the government or whatever, what influence do they have on what the candidate will say are you really just a hired gun who's not there to provide the advice, you're just there to get the candidate's message across? i'll start with charlie. >> i'll give you a lawyer's answer. >> all right. then let's move to steve. >> the fact is that we work for candidates. i think we believe in all the candidates even if they're people we just met and haven't known a long time before we work for them. but in some cases we work for people that we have known and have relationships with truth

and confidence for many, many years, in which case we may have influence on them. there are a lot of public policy issues that aren't clear black and whitish shoes. they are gray areas. a lot of people even if they have a strong set of principles have to think about it and analyze it and determine where to come down on something. sure, sometimes we have influence, but 99% of your job is to figure out where that candidate stands. make sure that he or she does do their homework and be prepared to take positions on issues. then you help them talk it through and help them present it in the best possible fashion. >> steve, did you want to add with that? >> no, i agree with that. i think your role is to help them tell the story. i don't really recall in my career of ever going to a candidate for office and saying, you must believe this. they have strong beliefs and

you may be in a circumstance where you walk through them and say, well, if you go out and say, a, the consequence will be b. so long as you can live with the consequence of b, that's fine by me. a great example of that, you know, charlie and i experienced on senator mccain's campaign was on the surge in iraq. he said, quite publicly that i'd rather lose a political campaign than lose a war, whether you agree or disagree where he came out on on that position, that was his position and he meant it. whether it was that or immigration, those are issues that >> injurious in the moment of the campaign. but he believed in what he believed. and we helped advise him of the consequences and how do you most effectively communicate. but you never imprint your beliefs on a candidate in my experience. >> i go to kiki.

they've actually won campaigns as well. erry don't think -- i one of the reason that i don't have to influence someone is i think voters are smart and they can disagree with you on an issue or set of issue but if they believe that you stand up for what they believe and they believe that you are ontary side on things that matter, the difference isn't consequencetial. i try to help them communicate what they believe to people. >> i'm going the take a sloothly different tact it's not my job to give my opinion about a political policy position to a candidate. but i have been in situations before, not many, very rare where i have looked at an elected official and looked at, i think the position you have taken is not true to who you are.

>> give me an example. >> well, they're still in public office. but if you look at somebody where their record is and perhaps life is taking them to a different job in a campaign and the two times i've really had to do it, and one time this particular person looked up and said, you're absolutely right. i agree with you. let me rekenoider here. i work for you. i'm going to execute on what you tell me toe do. but you have me here because i'm here for that. it's nice where you can get to a place in your career, i'm here because you've asked me to be here. >> one reason we're here gathered for these two days in new orleans, in case you're wondering is we're trying to have a set of discussions about is there a way to pull the

poison and the partisan in politics that's increased for the past 30 years, it seems on both sides. one reason i would pause it and you can disagree with the premise that that there's been more partisan and poison is that it's become a view of both consultants, polsters and good politicians that playing to the base works better than works better than playing toward the center. i throw that out. tell me if that's both a correct thing and whether there has been more playing to the base recently. >> well, i don't know that it's -- people play to the base more. i think that politics and partisan have changed for two other reasons. princeably because of the accessibility of information about the differences between candidates is so much greater whether it's opposition research or whether it's a 24-hour news cycle. you can find out so much more

about what the skeant do. in that time span there are going to be different things to create differences with the other candidate. the other piece is frankly that types demand a more well-rounded perspective of our candidates. and whether we like that or not, it's a reality. and so whether it's their personal life or whether it's their values or whether it's their policies, each thing becomes of equal importance to voters. and so what feels like a more personal poisonous environment in some respects is only that because so many more components of a candidate's life is out for execute ni, i think. >> steve, did karl rove when you in the 2004 campaign make a conscious decision with the candidate to play more to the base? and then when you had the 2008 mccain campaign, did you make a conscious decision not to go

that route? >> i've always thought that the strategy in 2004 was mischaracterized in that it was played to the base. we did well in the center of the electorate. and part of the strategy that karl rove and ken mehlman put in place was to turn out every available republican voter. pre-president bush campaigns republicans were lacking in our turnout mechanisms, compared to the unions, compared to the democratic party. and they took a great leap forward. and it was a very successful program. in the same way that the obama campaign took a great leap forward and organizing voters and using social media to turn out, you know, to turn out supporters in 2008. but it was never the strategy of the push campaign to turn out every return in the

country. both political parties, you know, when you go into an election, you want to turn out every available vote ner your party. and we certainly in a tactical level in the bush campaigns were able to do that effectively. but that doesn't displace the necessity of trying to win the senator offer the electorate because he who controls or he who controls the center of the electorate is going to win the election at the end of the day. >> i was on the other side of that campaign. and i guess my perspective that the bush campaign did have a base strategy. and my evidence for that would be the following that when you -- if you want to understand the strategy of a campaign it is manifested objectively in its media bye bye. if you analyze the 2004 bush media bye bye if you rank it market by market, pensacola,

florida were the most. you would see going back to florida, orlando, tampa, big swing market. and by the way it was a very successful strategy. congratulations. you know, the president won re-election at a difficult time. you know, there was not a lot of job creation during his first term. he was very focused. princeably about the aftermath of naven. they targeted the base voters and turned them up in tremendous numbers. that's why kerry could get 5,000 votes and still lose to george bush four years later. >> jeff, did you want to get into this? >> agree with all statements in that it was about turnout in 2004. and i think it will be again in 2010 about who's base is more energized. and i believe that the republicans base is going to be

more energized because of what's been happening with the economy. what's been happening with the spending programs on the democrat side. and so i think that it was crected in, 2004 you can call it a base or you can call it a turnout. but it was all designed to get republicans to get out and vote in higher numbers than they had before. when you only have 60% of the electorate that shows up and votes anymore, it becomes a base election in some ways. >> let me go with the hole pa tpwhell this question. starting kiki. give me two suxes for reducing the amount of poison in the political system. and if you want i prefer you put it off toward later. you can make the counter argument that it's better we have poison. that it's good for democracy. let's leave that argue aside.

if you wanted to reduce the poison in our political atmosphere, what could you from your advantage point do? >> you're already doing it today by having greater exposure. this is not any different with foreign policy when world leaders know each other at the table. it doesn't mean that two people that respect each other can't have the third world war on each other. when people know each other and the other guy at the other end of the country, that it takes it down some. and par of it, i have to say, you have to take some cues from your candidate. i think candidates have a flole this to look at their consultants. and say this is the expectation i'm setting. i say this about obama because i don't have the familiarly with the mccain campaign. but it is one thing that president obama said to his twheem he would tolerate and what he would not tolerate. and

the instances in his campaign, we were on the primary and in the general, it's been pretty well documented where he laid down the law on his staff. >> just to be fair about it, i truly think in the last campaign both candidates were -- tried very hard to reduce unfair partisan and say that they were the type who could reach across the aisle and take us away from this bitter partisan divide. and certainly, mccain had proof of the pudding. he had done it on everything from immigration reform and other issues where he had bills on the other side. >> tim? >> i think the most mediate way to reduce the poison of politics would be to convince the president to cover it. when we had blackboards, i would start one of my lectures

with conflict quals coverage if you want the press to cover you, tax somebody. as long as that equation remains in tact and the subject particularly ideas, is giving very short sh rift over almost nothing. minor points of disagreement. then we're going to have to continue that drives itself toward it. >> technology is driving the conflict right now. >> and hillary, both cable tv and blogs? >> it didn't take that long for this to be the media's fault. having been at -- i was at cnn and huffington post during the last election. i can tell you having sat in their editorial meetings, there was more substance covered by the media, i think, than there have been in recent memory.

because there was more real estate to cover. whether it was 24 hour cable or whether it was unlimited online space that the audience's appetite for substance was actually pretty substantial. there's no question that, you know, 6:00 to 8 clp 30 news, you know, two and a half hour span the sound bites is most pervasive. i go back to what kiki said. this has to drive from the candidates. sometimes it require as level of stepping back and saying what does the country need? we need to br brought together. >> other times i would argue that pointing out the differences in an aggressive way is exactly what an electorate needs. i'm not sure if there's a sort of mix.

>> we live in momentous times. they out to be aired. in this country we don't throw cocktails at each other. we do negative addses. and we point out the differences in the campaigns. and i think that -- at the end of the day, i agree with both with kiki and todd said, that it is up to the candidates to set the tone. mccain forbade the use of jeremiah wright because he knew what an explosive and divisive issue that it would become. and it would me tassity sized it -- me tassity sized it. the ratings are dritch by niche markets. that the lowest common

denominators and both pears who say the most outrageous things are the people most likely to get covered. and while that might not imprint on the american people. it does force in the political de band in the commin country because it squeeds out the seerns people. and both parties who are able to go out there and articulate what the actual difference is on a wide range of issues. >> well, the purpose of campaigns is to show differences. on issues. differents in experience if there are legitimate difference in character. we can tell them based on facts. if we use analogies they need to fairly portray what the candidate's position or history or background is. far from blaming it on the press, the press plays an important role as fact checker

and referees in this debate between the company's adds and speeches and who's hitting below the belt. i wish the press would be more aggressive about that in some cases. but in the end, we now have third parties behind just the campaigns and the press. you have independent expenditures, third party groups. now a lot of times, we are vendors to those and we have to take these same responsibilities to be fact and fair and not overreaching. it's unfair for the press to take some anonymous blog thing and treat it as juremism when it's not. a lot of trouble we get into these days is because of a third party.

>> so it's always tough on a six-person panel. >> but i do agree with most of the thoughts here in that the electorates are pretty smart when they're given the fact. a lot of times the candidates are the wons who aren't winning. it's those who are perceived to running a more negative company generally are the ones who are not winning. i think you saw that in virginia this last cycle. but it's -- i think the media does have a stronger role to play in terms of being a referee. and the pointing out that -- when facts aren't correct that let the people know that. let the public know that these -- you know, this is an unfair attack. here are the real facts of what you're talking about. >> what comes to mind, remember the mccain barak obama called sarah palin a pig because he said no lipstick on that pig.

and they ran that commercial. there was this three-day fight on lipstick on a pig. it was the media -- >> i'm a recovering journalist. but there was no reason for three days of cable tv talk shows to be talking -- >> it was the campaigns talking about it. and the media kept on actually replaying what obama said and what the palin comment was. and it was the campaign -- >> but don't you think that if cable had ignored that silly little thing on lipstick on a pig it would have died down? >> well, i think these commercials are written for cable. you do a small buy and you hope they expand it. the campaigns are on the phone with the media. did you see that. did you hear that? and didn't you see what he said? >> good point. >> accelerating that point. >> but in some respects the

media's willing here. but in other respects like that issue, i distinctly recall the media kind of shut it down. >> we can be on the -- be on the phone with the media, but we're going to go towards the coverage if the coverage is there and we can get our message out through media as opposed to having to pay for it, then that's the way we're going to go. >> i know there are members of media and audience, but i'll be happy to meet with anybody who wants to buy into it. it's a challenge for the electorate to design side what blog posting did i just read that actually meets a journalistic standard of two sources conformed or not vs. somebody who picked up somebody's e-mails about berthers and it explodes.

i'm curious about when the media news organizations are going to come together and set an online standard. i don't know if you're part of the f.t.d. network the good house seal of journalism. but it lets consumer know -- let's the consumer know this. we have to work to find that. >> but if the public did not know what was fact and what was fiction, barack obama would not be president today. because what was said about him early on whether he was a muslim or whether as a charge or whether he wasn't born in this country or whatever those charges were, if the public believeed what they read, he would not be president. >> uh-huh. >> but i think the public is a lot as a matter of fact than we give them credit for. >> independent, incredible bloggers putting stuff out.

>> and this happened in the coleman race. somebody wrote a blog inner the magazine. and that ends up showing up in a paid ad as a -- you know, this is a fact. here es a fact and it was completely irrones you. but it runs because somebody ran it op a blog. it's going into the paid advertising. >> leave aside the media for a moment. >> technology allows more initia communication. is there something in the technology compared to the technology of broadcast tv compared in the 50's or 60's that lead to more pole ryization. >> there are are lots of good

example for this. but go to the lieberman in connecticut. the sort of difficult primary and an unusual general election. and with the level of anonymity on a state wide race chatting at a local level, the vitriol went past candidated. and the individuals. i had a staffer from one of the campaigns call me in tears, a young 30-year-old woman, she's number four out of 12 kids from chicago. and she said, what do i tell my little brothers who are seeing this stuff. and there are people who hate joe lieberman are writing stuff about me. >> forgive me for saying this. i said i assume the nominees would be obama and mccain.

>> you did, really? >> yeah. >> you're smart. >> because they were both the candidate in each party who's most parne and less divisive. i think the public was hungering to get away from some of the extreme fights we've been having for the past two decades to people who are more willing to walk across aisles and indeed that was the theme of the campaign yet, we haven't goaten closer to being partisan. i how could you make that case? i don't want to be as poisonous this is. how do you make an eath based upon that. you'd have to ano, just do attack ads. >> coleman went out and said i'm going to run out an only

positive campaign. >> but he lost, sort of. barely. would you think that you can't run a post partisan campaign and win? >> i don't think you can unilaterally disarm. >> i don't think you can impose your will on voters. i think the whole experience that we go through is to try to cover where the voters are. what they're thinking, what they're feeling and what motivates them? i think james has said that there is ooh a domicile requirement. if someone like you said i want the center piece of my campaign that we're going to bring the parties together and bring people together around a common goat. i would say ok if you wanted me to do your ads, we have to continue that mission to the economic sopingsity that voters feel today. we have to make them understand

what you're going to co is going to make their lives better in terms of finding job. that's the only way we could do is to find the answers. >> in every town hall meeting that i saw in almost every one, john mccain did that party where he said. i'll reach across the aisle. his air hand shabe and i'll work the other party. did that resonate? would it had raise nated more with the economic issue. well, at the owned of the day, the candidate that occupied and won that space in this election was barak obama. so you have one guy that said this is what i'm going to do, vs. one guy who didn't do it. we lost control to a guy who

said i'm going to do it. i think there are a lot of reasons for that that were out of the control of -- out of the control of back. i've worked with go the governor and ran his campaign. that was a post partisan campaign, but there were sharp issue contrasts and like not paying taxes on a range of issues on the state. and charlie's point that campaigns are a contest of ideas. and post partisan to me means that weapon don't question each other's motives or intentions. that the other party has a bad intention here. for example on health care. i think it's misguided. but i don't think that it is born out of malice towards the american people. and so we ought not to say in our campaigns criticizing your opponent's record or contrasting the idea is in and of itself inthere.

>> let me open it up. yes, go ahead. just shout it out. i'll repeat it. >> [inaudible] >> jerry mandarin of congressional districts. we had one of the great congressmen of all times. he represented the black sub you ares -- black suburbs. as soon as they left the stage, it was carved up. so you had an intercity that bill jefferson got -- and that's an example of jerrymand

erring. -- jerry manderring. >> what effect would that have? >> what effect does that have? >> i think it's -- somebody said it earlier that most of the districts are either democratic districts and republican districts. it's really, you know, we're fighting over 50 or 60 seats in congress which is really competitive. does that mean that the primary, each candidate has to worry about being outflanked if you're a republican on your right if you're a democrat on your left. so you go more to the base. >> there are 45 or 50 districts where a primary fight from your base is real next year. but i was going to say, we actually are experiencing in 2010 the first election where

jerrymand erring won't be as much of a factor because democrats, we took more seats than we should have last time in some respects that we're going to have so many competitive seat where is democrats won in districts had that difficult sips or heavily republicans votes. this will be the first time in four or five conferences where jerry mandarin will be less of an issue. >> you can look at this two ways. for years and years, most luns advocated more competitive districts, you know, draw the line some way other than politically so you don't have jerry mandarin. most of the 435 districts are competitive. congress would be more responsive oz to what is on the voter's minds. if you're going to have 80 to

85% of congratulation seats, not be competitive. it should give these guys the incentive to work and be able to take some rest. there's no good excuse. there are 80% to 85% that are not competitive. maybe we could get a little movement going to have piers that help piers. let's break the mold. you studied this. aren't there a lot of people who have the same republicans seats. but they fear a challenge from their right. >> well, they do, but their might be in the whole country, 15 in each party that really have to worry about ate. if they do the rest of their

job, if they take advantage of all the perks, even if they vote against the district on a couple of issue, there's no reason for them to lose. you have to be totally income tant if you're on on one of those 80 to 85 on the districts. or big jefferson being totally indicted. i'm saying in those 80% to 85% had to quote. see you would have to be an idiot to lose your seat. >> what does that same about the representation? you're strong partisan one way or the other? why not vote against my constituents? because i can? >> i didn't say -- >> they're representatives -- >> let's take a specific example. what's the incentive of a person in a safe district to try to find a compromise on health care? in the house?

charlie? >> you raise the classic question that every elected official faces. do i take a poll and vote the way they want. or me having studied it more than anybody else, do i vote with my policy. i don't think there's an elected official that hasn't confronted that in their career. suppose there's a hugely complex issue like let's say we're going to reform social security or health care. like this health care bill is $200. voters don't have opinions about everything in that bill. but in most cases most voters believe it's better for the two parties to get together and people to work across party lines to achieve something and to just pass things.

those are thing that tend to be undone or edited when the other party gets back in. >> yes, sir, in the blue shirt. >> you said something earlier -- [inaudible] >> i said the opposite. >> i think there are about 15 in each party that truly have to fear primaries. >> ok. well, let me expand on that. >> uh-huh. >> basically >> i lost my train of thought a little bit. basically in order to achieve bipartisan policy, you have to get your entire party to get behind things and if you have people in close districts that are competing, you know, like, i'm from tennessee, and right now a lot of the democrats in tennessee are blue dogs and are

very conservative. the health care reform is one of the big ones. tanner, bar gordon. i've worked for them. it's a little dishearting to vote on health care was one of the reason a lot of the democrats got elected in. how do you go from an electoral standpoint to a policy standpoint. like when it comes to something like health care. don't you need like a lot of people in your party just to support something like that. >> if you want there,'s a legislation agenda you can achieve and you have the votes regardless of what party you are in. there's a different milestone if you can bring two two -- it's not from the elected

officials it's from us too. those of white house vote. one of the questions that hillary was pointing out, is do you want your conks congressman and learn everything he or she can about an issue and use their good judgment? are you voting for them to use their judgment and use a judgment as a reflection of what they know in your hometown and the community and the culture that you have? or do you want somebody who comes in and polls takes the formal opinion of the community, regardless of what they learn in washington and goes back and executes on that. ok? it's a tough mix. i suspect most successful elected officials who have dealt with a competitive issue in their career, have done some of both. that's where voters and con stitch wants you're an elected official. >> i think you should go back and get mad at their tennessee dead cats. because i actually think --

tennessee democrats. i think the president's approval ratings are high. yes, he's taken some political unpopular positions this year. but i think generally people wanted a president to come in and make those tough decision and i think the democrats who don't follow along, are going to find themselves right there. >> right there in turquoise blue. i am in thomas mcgow's district which is formerly bill jefferson's district. he did do polling and saying what are you saying. my own view if he learns all this detail, it's his job to educate his voters to what he has learned and whyless thinking and voting that way. >> good point. >> the second is, the reason i came today is because i really would like to have discussed

disability that we need to bring back. i'm a democratic living in a republicans world. it's been a very tough eight years. it's getting to be very tough additional four years. and so i would like to discuss discussion -- discuss disability. >> how could you bring disability back if you just believed in your heart? >> there's a way to be respectful and throw down a good fight. i think wherch people lose their head or lose their cool. and that doesn't mean you disagree veemently. that's when voters start to lose respect for you. the person that goes on a tear or a tan gent is the person who will pay a bryce voters, i think. >> -- price with voters, i think. >> it's poll tks who don't practice