manifest destiny and in his new biography of james polk, a country of vast designs, he looks at the life and times of our 11th president sunday on "q&a". >> the senate banking committee votes on ben bernanke is nomination to a second term as federal reserve chairman. the senate homeland security committee holds a hearing on the country's fiscal health and economic future. later, world leaders speak at the u.n. climate change conference in denmark. . .

>> secretary of international markets. u.s. department of treasury and stephen jakes the assistant specialist of public affairs u.s. department of development. we have a quorum. the ad vice of the colleagues the no, ma'am nation we all want to hear about is the federal reserve. briefly with senator shelby i was going to move those unless i was going to spend time with

which of course i would accommodate. i i'd like to spend the time on the ben bernanke nomination. anyone want to comment one way or the other on this? why don't i - we have a quorum and i ask unanimous consent to consider the following three. no, ma'am nations in block. i'm introducing them already. any introduction or objection to consider them in block. all those say eyaye. these nominees are reported and now the committee. ben bernanke. let me supercede and give everyone a chance to be heard on this and some i know, will want more time than others to talk about this and i appreciate that. in a way that accommodates our members in these matters. obviously to vote out we need a quorum present and majority have

to vote in the affirmative. can't have a majority by approximatey so i would like to get to the nam nations but get people a full opportunity to discuss the nomination in full. what i'll try and do is put a five minute time limit but not sustain anyone to exactly that. i know some have more time than others to be heard on the matter and we come to a point where i'll lose a quorum or senate will come back and then i'll stay around however long people would like after we have a vote to listen to why people voted for or against the nominee. i'll not do that now but at some point today i have to move this nomination and i want to not have a jam through on this thing without people having to be heard having a chance to do so. that is how i'll proceed. very brief comments during the

confirmation hearing i expressed myself about this nomination but others i've said have longer comments. any way when the quorum is present i move the three nominations and appreciate my colleagues understanding on that. today we vote now ben bernanke as i've said, my intention is to pass the nomination out of the committee to the full senate. some of the criticisms of the fed chairman, been voiced during this confirmation process have me right and i'd be remised if i didn't acknowledge that and fed failed my view, and it's oversight consumer protection responsible allowing holding companies to energy game in risk taking allowing much of the tamg to fall on ordinary americans reflected in lost jobs. lost retirement and lost sense of hope many have felt. you can't put a dollar sign on but obviously effected this

country and citizenship very profoundly but i think ben bernanke has to receive credit it in the critical role in the events of last fall and while the adjustment is still out i believe he and others that had not acted at a time of critical importance to our country, we'd be hooking at a far more dire situation which is otherwise the case and i think he deserves substantial credit for it heal hping navigate the waters stepping up in a critical time in our nation's history with wise leadership to benefit our nation. federal reserve took extraordinary action to prevent utter economic can as strophe and nothing short of that was at the risk of those actions and i believe better days do lie ahead for the country as well. therefore i strongly support this nomination. but with my support comes my in

sis stens that we carefully examine the institution and we're deeply involved in that debate along ourselves and our committee on a reform effort. i want to thank my coleagues for the tremendous effort they made to go through the waters in a deliberate fashion allow conclusions that i believe will strengthen our nation substantially. it's been proposed the fed assume a more important role in the overall financial stability. that's already charged with policy. supervising some state banks and all bank holding companies serving as the principal consumer protections for financial products and services. i feel more responsibilities we file on the fed plate the more ham strung it'll be in taking the very time of actions that help to save the economy from can as strophe.

i've outlined the critical information and most importantly it's independents and i can't stress that last point strongly enough. although chairman ben bernanke and i disagree on many things on the plan we're working on we committee to a strong central bank and strongly obvious american economy. i look forward to working with him in the months ahead and thank him for the service to our nation. to that senator shelby and we'll move down the lines for the comments and proceeding of the manner i suggested. >> i have a lengthy statement and i hope you indulge me. today the committee meets on the nomination of ben bernanke to serve a second term as chairman of the board of governors of the federal reserve system. our vote today will not only express our confidence to lead the fed out of the crisis but

also a judgement top years proceeding the crisis. after the recession that ended 2001 which was precipitated by the.com burst bubble. the fed was concerned about the sluggish economy and deflation. given those concerns the fed chose to hold interest rates remarkably low for years the fed rate was below 2% between december 2001 and november 2004. during most of that period. now ben bernanke cher served as a member of the n federal reserve. in 2002. then governor ben bernanke expressed concerns about the possibility of deflation and the potential for future financial crisis. his warning was clear. deflation he said, basically is a potential danger which would or could ignite a financial wild fire. the policy prescription seemed

equally clear. keep interest rates low and i will questionedty close high and lean hard against deflation pressure. however while keeping interest rates low for a refractive period of time the fed seemed remarkably unconcerned about the possibility of igniting a different financial crisis by inflateing a housing crisis price bubble. according to doctor anna schwartz the easy monetary policy advocated by doctor ben bernanke represents omission. as housing prices soared. wall street went on the notion was that in adverse market conditions the fed would absorb faltering assets and flood markets withly kidty. ben bernanke assured markets the

fed saved ready to protect the financial system and indication of the feds was indeed in plays. promoting the existence was unreasonable risk taking and hazard. in 2004 and 2005. ben bernanke and other members spoke of an emerging of a potential permanent reduction in macro economic risks they argued were a result of vigilant and in depth monetary policy in retrospect this misperception left markets believing that large risks had been mitigating opening the door for greater risk taking. doctor schwartz said doctor ben bernanke neglected overall risk. according to the home risk index by doctor shiler home prices

rose by a staupding 85 percent between 1996 and 2006. chairman ben bernanke was a member of the board of november governors during the last four years when home prices rose 43 percent. think this is remarkable to ten percent rye during real home prices during the entire period from 1996. i'd like to repeat those figures. in 106 year period beginning in 1890 home prices rose only ten percent in real terms with that in mind i do not believe there can be any disagreements that housing prices are becoming rationally high over the falling decade. as early as five. robert shiler warned about the outside game. a u double in real estate market. significant further rises could lead eventually to even worse

significant decline. the bad outcome to be that eventual decline the result in a substantial increase in the rate of personal bankruptcy that could lead to a secondary stream of financial dunk run si of institutions as well. another long run consequence decline in consumer business consequence and worldwide recession. think about it. chairman ben bernanke was indeed aware of the growing dangers however the fed ignored the risks identified by professor shiler and thought the housing market would bounce back from what was viewed as a slow down and problems in the ub prime market could be contained. chairman ben bernanke said and i quote. fundamental factors including solid growth and incomes and relatively low mortgage rate should support housing attend

troubles in the subprime sector seem unlikely to seriously spill over to the broader economy of the financial system. he followed a speech in october of 2007 by saying banking system is healthy. goodness. in october of 20027 banking system was decidedly as we all know not by many accounts the system was much into the time the post fall out that typically follows price depreciation like that that just occured the housing market. in making fundamental miss diagnosis he missed the clear signal. a housing bubble. weakened economy. instability in the credit market and he missed a clear chance to take action when he would not have required a massive commitment of taxpayer resources in considering chairman ben bernanke real appointment we need to be mindful that the

christ sis of 2008 was not day or weeks in the making. it took years mapped of those years chairman ben bernanke supported actions that contributed to the ultimate scale of the problems we encountered. an ascale not seen since the great depression. many of the fed's responses amplified the two large guy nanl institutions because the fed also made other forecast in error. it identified possible spill overs from the housing market into the general economy and financial system. consequently the fed took actions that appeared piece-mealed and to quote doctor anna schwart disease fed delivered plenty of rhetoric an about the importance of transparency. the market was bewilders when the fed rescued certain firm assed not you there's.

they failed convince the market the fed had a plan and was not performing in and add hock fashion the federal reserve vastly discounted discount window including provision of funds on which the fed had no oversight. the fed as you know also created new lending systems to channel liquidity and credit it a market that was so systemically important. the fed balance sheet ballooned from a pre crisis to 8 hundred billion to more than 2 point 2 trillion through credit extensions and purchases of risky private assets and forced treasury debt. some fed actions in the recent crisis were innovative ways to provide liquidity to a wide variety of financial market participants. some actions amounted to bail outs when handling failing individual institutions deemed

systemically important by the feds shareholders were wiped out and management was replaced. however in many, bondholders were made whole even though they were not legally entitled to such favor. is-3 of the federal reserve act made it clear certain activities would not be allowed to fail. the result was moral hazard on an unprecedented scale on the united states. for many years i've held the federal reserve right here in this committee in high regard. had respect for not only his critical role but also as his role as a preventional regulator. i believe it's to be the suppository of financial expertise but over the years we've enacted a number of law that demonstrated our confidence in this institution our expectation they would use the authority we gave them to avoid

financial cry cease. we trusted the fed to execute those laws when deemed prudent and necessary. i fear now our confidence and trust were misplaced. the senate's confusionle authority advise and cosent can be a highly effective means of this which body can hold people accountable. it's our area to express lack of future. i strongly disapprove of of some of the past deed of ben bernanke and when hes with chair and i lack confidence for the future he's articulating. i agree with doctor schwartz. he advocated monetary policies that contributed to action see save risk placing. failed use regulatory authority to prevent housing speculation and unsound lending practices

often miss jumped the market touch lance by appearing to act inconsistently in and add hock manner. these shortcomings stand in stark short comes of theñi stat objectives given in this white tea. his nomination before the hearing in 2005. during that hearing. doctor ben bernanke said, monetary policy is most effective when it is as it is as coherent consistent and predictable as possible. i do not believe that monetary policy during the recent crisis in which in some instances was effective fiscal policy was coherent, consistent or predictable. in 2005 doctor ben bernanke said that a monetary policy becoming frequently transparent to the public and a trend that i strongly support. as i mentioned earlier, i do not believe theres with any

transparency in some of the actions taking during crisis by the fed in 2005 he said the fed works closely with other regulators to ensure the safety and soundness of the u.s. banks system and has played a constructive role in managing and mitt gateing the financial crisis. if i'm confirmed he said, i'll work to enhance this stability of the financial system and to ensure that the resources procedures and expertise are in places neated to respond to any stability that may emerge. now, not only were there evident threats to the stability of the financial system prior to 2006 but also a complete lack of regulatory system by the feds and finally. in 2005 he said the federal reserve a long with other regulators is also engaged to trying ensure that consumers are treated fair in financial

dealings and that their privacy is protected and they receive information about the financial free meant and that they are not subject to discrimination lending practices is there any doubt at this point that we were experiencing in a break down in mortgage break down and fed did virtually nothing up until it was too late. he is a student of the monetary policy and financial markets. under his leadership they had innovative ways to object liquidities during the recent financesle crisis and while there may be some agreement we must also take into account his role leading up to the crisis. many said changing horses in the mid to feel stream will introduce an unacceptable level of uncertainty in the market. on the other hand i argue it can be equally damage together our economy and form of government

if we the united states senate fail to use our constitutional authority to disprove nomination when a particular nominee has not executed responsibilities in a manner consist at the present with his own climbs and our expectations. we talk a good game accountability but rarely match with it action. this is a case where we must not only express our disapproval but signal future nominees that we have expectations and that does expectations shouldú!ñmet. for this reason and others, i have articulated here i will be apposing a second term for doctor ben bernanke as chairman of the board of governors of the federal reserve. >> thank you. thank you mr. chairman and member shelby as we're tasked for ben bernanke to be chairman

of the federal reserve board of governors today. our nation is also faced with finding ways to restore financial stability. for most economic recovery. and to find solutions that ensure that economic crisis like the one we had last year never happens again. while there is been criticism of the federal reserve for not doing enough to protect consumers and for president actions it took during last years financial crisis, there is also been consistent in ben bernanke's response to the economic crisis kept their nation out of economic crisis. doing forward, there's no doubt the feds can do better. it can be more active and more and it can better communicate what's coming. but let's not forget what mr.

ben bernanke in the senate did right during the last challenging months. as our nation continues on the path to economic recovery, there is no doubt one of the world's foremost exploits on the great depression at the help m of the federal reserve is a benefit o to our nation tcht fed has economic and financial expertise that is unrivalled and i believe that mr. ben bernanke is greatly been related for this post. i will support mr. ben bernanke's renomination as chairman of the board of governors of the federal reserve today. i'm confident he can assist our nation in finding solutions to be a stronger and more physically civil nation. >> thank you very much. senator bennett. >> thank you, mr. chairman.

um... we deal in alternatives around here. and initial reports of whom president barack obama might have nominated to be the chairman of the fed had me quite concerned so by comparison, i was relieved when he decided to stay with ben bernanke. spoken with chairman person bern, made clear on no uncertain terms my continued support is con tin gent on his fulfilling the commitments he made to me that he will one, implement a plan to pull government support back from the private sector and a companies to fail or succeed on their own, two, fight inflation aggressively and protect the value of the dollar through monetary policy decisions and three, work with the congress in a meaningful way to enhance the transparencies. given the large side of the fed balance sheet i think taxpayers

should expect nothing less. he's made those commitments to me in anticipation of what might happen if we defeated his nomination, i have told him i will support him in this committee on on the floor. thank you mr. chairman. >> thank you. senator? >> thanks, but this is one of those days where i'll fore go my opening statement. >> let me then turn to you senator. >> thank you mr. chairman i'm not going to fore go mine. >> i thought maybe a trend was setting in. >> two weeks ago at the hearing of ben bernanke's nomination i exmained a case for apposing his nomination and i'm not going to repeat that entire statement but i want to talk about those and a few more that have come up since the hearing. first i must comment on ben bernanke being named time

magazine's person of the year yesterday. one financial blogger wrote yesterday this was like rewarding the captain of the titanic for getting everyone off the sinking ship after he ramped it into the iceberg. and chairman ben bernanke may wonder if he really wants to be honored by an organization that has previously named people like joseph stall in twice, ora fat. hitler. among others. vladimir putin. richard nixon twice as their person of the year. i hope he at least turns out better than most of those people. four years ago when chairman ben bernanke was nominated to be chairman of the federal reserve i was the only senator to vote against him.

e i was the only one to raise serious concern about his nomination. i opposed him because i knew he would continue the legacy of alan greenspan and i was right. i did not know how right i was and could not imagine how wrong he would be in the following four years. from monetary policy to regulations consumer protection. transparency and independents. chairman ben bernanke's time as fed chair has been a failure. we must put an end to his and the federal reserves failures and there is no better time than now. as i said two weeks ago the greenspan legacy on monetary policy was breaking from the taylor rule to provide easy money and thus inflate bubbles. not only did chairman ben bernanke continue that policy, when he took control of the fed,

but he supported every greenspan rate decision when when he was a fed governor before becoming chairman. sometimes if you read the minutes of the fed, he wanted to go even further and provide easier money and chairman greenspan. yet at recently as last month chairman ben bernanke continues to deny that fed action played any role in inflateing the housing bubble. as recently as one month ago. on consumer protection. chairman ben bernanke went along with greenspan policy before he was chair and conti%]q" after he was promoted. most glaring example is it took him two-years to finally regulate subprime mortgages after the fed had already ready done nothing for 12 years. in other words. 14 years after this body, the

congress had given the fed as power to do that. even though he acted only after pressure from the congress. well as proof that there is justice in the world, it turns out chairman ben bernanke himself, would have benefitted from the fed acting sooner on consumer protection. in an interview in the time magazine issue where he got his award, chairman ben bernanke said he recently had to refinance his adjustable rate mortgage because in his words, it exploded. if that doesn't give you confidence in the man in charge of our financial system, i don't know what will. as the economy starts to slide in the housing bubble peak and then popped, chairman ben bernanke failed notice the problems or do anything about them until it was too late. during that time he made many statements showing just how he

did not understand what was really going on in the economy or how severe the crash would be. i want to read a few of those statements so that everyone understands just how wrong he has been. on march 28th, 2007, he said the impact on broader economy and financial markets are the problem in the subprime market seems likely to be contained. on may 17th. 2007 he said, we do not expect spill over from the subprime mark total the rest of the economy or the financial system. on february 28th, 2008 he said, among the largest banks the capital ratios remain good and i don't expect any serious problems of that sort among the large internationally active

banks that make up very substantial part of our banking system. on june 9th, 2008, he said that the risk it can economy has entered a substantialñr downtur appears to have diminished over the past month or so. on july 16th, 2008, he said, this - fannie mae and freddie mac are adequately capitalized. and in no danger of failing. and just a few months ago, may fifth, 2009, speaking about the unemployment rate he said, currently, we don't think it will get to ten percent. well we all wish he had been right on that one. i could read many more quotes but these are the ones to show you enough about how wrong he's been about the major economic

issues facing our country. of course everyone makes mistakes. everyone up here has made miss tabs so i ask chairman ben bernanke about the errors in a written question i gave him after his hearing. his answer did not make me feel any better. he said the fed did not understand the relationship between financial firms. how the problems in the financial sector would move to the real economy or how severe the financial crisis would be. that was his answer to me. in those, i thought, those were the kinds of things regulators or the fed in mare were paid to understand and a half. we shouldn't be paying fed chairman to get it wrong or to learn on the job. just like the consumer protection. chairman ben bernanke did not take the job of regulating the

ban bes under the fed's authority seriously. instead of closed supervision of the biggy and most dangerous banks he allowed them to grow balance sheet and increase risk. at the same is true about the derivatives. after taking over the fed, he did not see a need for serious regulation of derivatives until it was clear they were headed to a financial melt down thanks in part to those very products. even worse than those flawed policy i mentioned, chairman ben bernanke destroyed independent of the federal reserve and bowd to the political oppression of the bush and obama administration and turned the fed into an arm of the treasury. walking arm and arm with treasury, chairman ben bernanke

bailed out all the large financial institution including foreign banks and put the printing presses into overdrive funding government spending and out of cheap wall money to the wall street firms. instead of taking money and lending it to consumers, and cleaning up their balance sheets, the banks starting to profit record profits and pay out billions of dollars in bonuses. after the hearing we held two weeks ago i submitted a long list of questions to chairman ben bernanke. i also mentioned his disturbing answer to one of those question and now i want to talk about an answer and more accurately the nonanswer he gave to some other questions. i apologize to the chairman but this is very important. >> senator i know your strong interest and i'm not going to

put a clock on it but i hope you'll respect if >> i'll try my best. i'm picking from the people that passed. the price of gold in dollars the more than doubled since chairman ben bernanke took over the fed in 2006. the price has set several records higher records this year. this is matched by the slide of the value in the dollar. so i asked chairman ben bernanke what he thought that meant, particularly about the dollar and inflation. his answer was that it meant nothing. meant nothing. ask the senior citizens of this country that are on a fixed income if the dollar they had at the time ben bernanke took over as chairman, and now it's worth 76 cents if that means nothing

to them. a reduction in the buying power of that dollar from one dollar to 76 cents. i just don't see how he can make such an observation. i asked chairman ben bernanke what he thought the fed's legal authority to purchase freddie may and freddie mac and fannie mae securities since they are not government securities and as required by section 14 of the federal reserve about. his answer was that the fed has determined by regulation that they are government securities and in other words because i say so. in response to a question about the fed's decision to pay par, this is a beauty, to bay or pay par on the aig credit default swaps, chairman ben bernanke stated the foreign bank where is

prohibited by their regulators and some foreign laws from taking cuts. that's just not true. as european banks have indeed taken they're cut on the derivative positions with other trading partners. in another question i asked him and secretary paulson's claim that the first nine bank that got tarp money were all healthy when city group and bank of american later needed much more bail out money. this is just not my concern, as tarp inspector general says late er to paulson and ben bernanke should not have lied to the public about the health of those banks. chairman ben bernanke's response was that by healthy, they maintain that the panic where is viable.

and not in eminent danger of failure. based on the new dea definition healthy i hope nigh doctor never tells me i'm healthy again. i also followed up on a question asked by chairman dod about the fed's claim the banks supervision job helps with monetary policies. i asked for a specific about how that has helped in monetary policy. but received only general talking points. in fact, the only specific example provided about the bail out lending facility is not monetary policy and those facilities as was pointed out by a financial blogger yesterday were not su designed by a bank supervisor but the market division in new york. i will stop going through the

individual questions because most of them, his answers just ignoreed the question are repeated fed talking points. for this committee and senate to do our job, evaluating his performance, we need real answers not talking points. we have all heard chairman ben bernanke talk a lot about tracks paren si. he brags about it. but his actions speak a lot lawsuiteder than this words. he promised congress more transparency when he we became chairman and promised it to us when he begs for tarp money. while he has more information than before those efforts fall short and he still refuses to provide details on the fed's bail out last year. it is become clear, chairman ben bernanke is not going to open up the fed's action to review by

the taxpayers. but i thought he might at least provide more information to this committee as we considered his nomination. so i ask for a list of documents for us to review, all of which i think are reasonable for congress to see. here's what i asked for. a transcript of all, cmos meetings chairman ben bernanke has participated in. transcripts of all board meetings he has participated in. transcripts of meeting of the board of the new york fed while he was chairman. detail of any exceptions granted the federal reserve act sense section 23 a and b while he's been chairman. details of all this window transactions while he has been chairman. details of all transactions at facilities created under section

13-3 of the federal reserve about and legal opinions on the facilities. copies of any swap agreements with foreign central banks. legal opinions related to those agreements and any economic analysis about those agreements. economic analysis regarding need for an effectiveness of any federal reserve facility created under the federal reserve act. section 13-3. economic analysis regarding need for effectiveness of unconventional policy facilities and finally, other relative documents the bail out of aig, bank of america, citigroup, bears sterns. lehman bros. and general motor, chrysler. c i.t. and gmac.

instead of those documents, what i got in return was a folder full of paper that printed off the fed web page. just in case anybody was wondering those documents did not provide any new or useful information. that kind of response is not only disrespect full to the senate but it raises the question of what they are trying hide. i think we should know the answers to that question before we move forward on this nomination and every member of this commitment should demand the same. well, it turns out we actually may have an opportunity to find out some of the information. i hope every member of the committee listens to this. early this week i was informed that in spite of the fed's refuse toll provide individual

senators, or the public, without the information i requested, they have let committee staff of this very committee see some documents related to the aig bail out. when my staff asked for what was in the documents, we were informed that we could not be told because it was protected. since when does staff have higher clearance than members of the u.s. senate? members. that is a tremendous insult to senators of this committee and people that elected us. mr. chairman this committee should not move forward with chairman ben bernanke's no, ma'am nation until he provides us with the documents i requested and we certainly should not move forward until every member of this committee

has been given the opportunity to review the document your staff is seeing. we must know what the committee staff knows, but refuses to tell the snot tarenators. we have to know what has been seen but we've been denied. they should be before us to tell us what they know and what they're trying find out and what the fed has received and refused to tell them. i hope and ask every member of the committee will join me in demanding that we be given this information without moving forward. we know, we must know what the fed is hiding from us and the american people. thank you mr. chairman. >> let me say it's 10:20 and i know members are leaving for other obligations and i won't be rigid but i'd like to schedule a vote around 11:00.

obviously that if it flips we'll lower it but at least give people an indication when we'd like to get to a vote, if we could? >> i would object to setting a time. >> i appreciate that. >> is senator reid is out. is he coming in? . >> thank you very much mr. chairman and i pre hate the opportunity to say a few words regarding the confirmation of doctor ben bernanke chair person of the i will vote against this no, ma'am nation. the reason in short, is as chairman doctor ben bernanke failed remedy or recognize the factor that paveed the road to this dark and difficult recession. following the collapse of our economy, it is apparent doctor ben bernanke has not changed his

overall approach of prioritizing wall street over american families. my decision is based on my belief that our economy is not going to recover if we do not put main street first. our nation is just beginning to emerge from the greatest financial christ sis since the great depression and there's no garn deal we'll continue over long-term or short tern. unemployment remains far too high. credit is unavailable to far too many businesses. families are plagued by falling home prices and high foreclosure rates. even as we move forward with efforts to get the economy pack on track, it's critical we examine what led us to this point. for too many years, federal regulators turned a behind eye to impending crisis. tricks and traps in consumer

lending businesses. predator mortgage loans exploded with unsustainable housing bubbles. regulators lifted rules providing banks to have capital and an approach to appropriate tear trading encouraged risk taking in excess on wall street. as a many member of the board of governors and cha of the economic advisor and chair of the governors doctor ben bernanke supported each decision, failing to take the precautionary steps to prevent financial collapse. these are relevant to the future. we need economic leaders who understand that the ultimate goal of economic policy and the key to meaningful economic recovery should be financial successful families not oversized wall street profits.

indeed it should be recognized that all the wall street that prospered from the reduced leverage credit and security of mart gamings and americans did not prosper. the expansion that occurred between 2002-2007 became the first expansion in which working families were worse off at the opening expansion than they were at the beginning. that is not a path we a can afford to travel again. doctor ben bernanke is dedicated and honorable public servant. i appreciate this willingness to serve, i appreciate his scholarship and quite frankly, i appreciate this humble and engaged style and responding to the dialogue about economic policy. however, those factors in my mind, do not outweigh my

concerns on fundamental issues of regulation and rebuilding the economy. let me put this more sis tinthly. his approach help set our economic house on fire. that fire has destroyed jobs, the healthcare and retirement saving of millions of americans working families. since then, doctor ben bernanke has shown himself to be quite a one with the fire hostel helping to put that out. as we look to the future and beyond the stage of putting fire out, i think we need to look for leadership that will be in at rebuilding our economic house. for this reason i will be voting no on doctor ben bernanke's confirmation for a second term

as federal reserve chair. >> i'll be fairly brief. this may be our last meet of the year and i want to begin by thanking you as chair planned senator shelby for the effort underway right now. they've a bipartisan bill. thank you for the way your staffs work together and tone this thing set towards work together that end. obviously today is an important vote regarding chairman of the fed. i realize when anything is controversial like this, no is always safe vote. there's no question when there's controversy no is a good vote. did ben bernanke get all the calls right? absolutely not. did he make many mistakes? absolutely. did the day tans of our financial world make mistakes? absolutely.

are there any rule or any major ceo's in the financial industry that didn't make large mistakes? no. so i think there been a lot of mistakes made. a lot of conspiracy theories are floating around. we've chaseed a few of those and i will say that while we're voting today on this committee i reserve the right to extent i find something different occurring i may change my vote, but so far, i haven't been able to find any end in fact as it relates to those theory or some discussions regarding intended mistakes so let me just say. i want to sum up and say i plan that i will vote for chairman ben bernanke for a second term today. i plan to do that on the floor unless something changes and i'll do for it a cup of reasons. when i was a young business guy,

think each of us can give experiences in our live like this. started when i was 25 and built a company that grew to about 80 percent a year for 12 years. some people talked about my business success during those days. i was modest compared to a lot of people this room. then i went through a tough time in 1990 where i laid in bed for a year and a half trying calculate my net worth and understand if i could pay everybody pack. i did and paid everybody on time and made it through. but was i a better business person before that event or after? i can tell you that after going through some incredibly difficult prerns, i was by far, by far, better equipped to deal with business after that event than before. my guess is everybody in this place would say the same. not those things that occur during good times that make you strong.

it's those thing that occur during bad times. do i think there's anybody in this country that has been tested more than - and has the ability to be chairman of the fed right now than chairman ben bernanke? i don't think so. i know there have been comment of mistakes leading up to this. huge mistakes by many people if we were going to fire all regulators that made mistakes we'd have to start with a clean slate. i don't think there's any that didn't make mistakes but to i think the experience chairman ben bernanke has had over the a year and a half makes him by far of the people i know of the most well equipped person to he'd the fed over the next several years? i do. i don't know anybody that that would better. we've all watched what happened

in this presidential raise and i don't say this to be partisan. it would have happened but what we've seen is a president as you might expect, divorcing himself from the economic crisis. it's only natural. i think anybody elected would to that if they came in and a faced the kind of economic climate we have. the has thing we need is is fed chairman coming and divorcing themselves from the balance sheet that the fed has. i want someone dealing with the expanded balance sheet that has the capabilities that have to create all kinds of other problems throughout our country and in relationship to other countries, so have there been mistakes made? yes. is fed balance sheet human? yes. to we need it pack to normal? yes. but i would rather someone that opens that balance sheet to put

us in that mare place and manager that balance sheet back down, than having another person come in with no ownership of that and has the ability to maybe do some things and divorce themselves from the results that i think might not be good for our country so. look, i think chairman ben bernanke gets up every morning, i think he tries to do those things that he believes are best for this country. i believe that. don't think he has a political cell in his body. has he turn immediate off by trying build an empire with the fed? yes. and does he need to stop? yes. absolutely. and i've talked to him specifically and this committee will go back to reform that may clip back some responsibilities of the fed. i assume he's listening to this and my guess is, heñi is. does he need to quit expanding the empire of the fed, absolutely but based where we are today with balance sheet

issues a weaponed what has been learned through the last crisis, do i think he is in a good position to make prudent decisions for our country as we move ahead. i do and i plan to vote for him and mr. chairman, thank you for the time. >> senator mendez? >> let me thank you for your leadership of committee during throughout this year but particularly in this confirmation process. i think everybody has had the opportunity to make they're views very well-known. and that process should be reassure together the american people. thank you for your leadership. don't envy chairman ben bernanke's difficult position. he served in what can only be referred one of the hottest seats in american government for the last career making some of the toughest decisions coming before the country and well over again rabs shielding himself what's become a populace attack

on both side of the aisle. faced with an economy heading to the a business. the chairman had a series of choices. take it or leave it. do something or do nothing. and i think we hopefully can all agree that doing nothing was not an option. whatever of the disagreements we may have had. chairman ben bernanke took forceful action at a pivotal moment when the economy could have fallen off a cliff. there may be some le gate mate debate changing the tools the fed has as well as choices ben bernanke made. you can debate both issues and i know we'll continue to do so but i believe in the end, what we should not do is change leadership at the fed at what appears the very begin of an economic recovery. having said that, i do believe there's more the fed could have done to mitigate the housing bubble. supervise the bannings and enact

consumer protections and provide credit to small business. i believe in chairman ben bernanke admitted he could have done more to mitigate risk and require higher capital standards, but at the same time i do believe at this point we were better served by someone who has learned from those experiences. someone who did bring us back from the brink of a depression. i remember mr. chairman, november of 2008, after having been told that everything was find in the economy, and then that fateful meeting with the chair planned and secretary paulson saying, painting a pretty dire picture saying if we did not about we would have a global economic melt down. a global economic melt down. and you know, we constantly say now we have the worse economy since the great de remembers. there are some with short-term

memory as to how that all came about but the reality is we've also under mined what that means. i don't believe the american people know how much, how close we were to the brink of a major economic collapse in this country. that's what this president inherited and what chairman ben bernanke was dealing with. and so, someone who made decisions we could equivocate with maybe, but he did bring us back from the bring be of a depression and with these experiences i think he can steer us to fiscal policy that's not only safe harbor but sails towards economic growth. having said that in the future i hope the fed will be more responsive to the need of main street in america where there's small businesses developing something and creating new jobs of the 21st century. i expect it will be more vigilant to prevent a repeat of

the economic crisis we've experienced and we'll get ahead of the next problems we'll face such as commercial mortgage markets and credit card defaults with that expectations mr. chairman i will vote for confirmation. i think he did what we needed at a time of crisis and i think he has learned from those experiences and from the final point i'll make mr. chairman which you have done and which needs to be a constant effort of this committee is that whenever we have a regulator whether the fed or anyone else, it needed the oversight of congress to make sure the laws we pass are enforced to regulate and ultimately we're at their heals making sure that enforcement takes place. thank you. >> senator hutchinson? >> well, thank you mr. chairman. i left to go make a meeting where we're having a mark up but i did want to make a few

remarks. i won't read my entire statement but, i am appreciative of many of the things that the chairman has done and i think that he has tried very hard to steer this ship- a very tough time. . . assets of financial nstitutions so that they would have the ability to lend with their good assets unfettered. before the end of the year last year, the plan had changed

twice. and i cannot, in good conscience, condone that kind of behavior with so much trust that congress put in the group that put forward the t.a.r.p. and then, of course, we know that since this administration has started, it has changed yet again. and secondly, i am as concerned about the debt ceiling, where we are today, as any of our financial problems. and i think the chairman spoke too positively about needing big stimulus without raising the spectre of a debt that is insupportable. and i think that if he were going to speak for the big stimulus, that there should have been a huge warning signal about the amount of debt that this country was incurring. and it is for those reasons that

i will vote no. however, i will say that i respect chairman bernanke in many ways. i think he's very bright and i think he has worked tire lessly in every way that he saw fit to try to shore up our financial system. and i will say that he has been most accessible to members of congress, for which i am, also, appreciative. but, weighing all the factors, i will vote no today. thank you. >> thank the senator very much. senator brown? >> thank you, mr. chairman. i -- anything that this committee does and anything that this senate does should -- should all be about jobs and i -- i -- and i think that we are in -- mann of you in this committee have heard me perhaps ad nauseam talk about the importance of manufacturing and that manufacturing jobs, of course, have a multiplier

effect, 100 manufacturing jobs in a community results in hundreds of other good jobs created in addition to what it does for local tax base, for police and fire, all that. and i appreciate the comments of senator menendez about main street and my -- my concerns, my reservations about chairman bernanke is that he has not focused on job creation, understanding that's not the central purpose of the fed but he's not focused on job creation the way that i would hope he would. this past week, i had breakfast with sandy penalta, president of the cleveland fed and i urged her to use her influence, particularly representing a manufacturing area, the cleveland fed includes pittsburgh, ohio, the northern panhandle of west virginia. it's clearly one of the feds of the 12 districts, it's clearly one of the ones most focused on manufacturing and i talked to her, as many have, using her influence particularly for the

problem that senator merkley mentioned that, is credit, getting credit to small business, especially credit to manufacturing, especially credit to the supply chain for auto manufacturing as that supply chain begins to transition into alternative energy, those companies that make glass for automobiles can make glass for solar panels, those companies that make gears for trucks can make gear boxes for wind turbines. so far, obviously, we've not done the banking system hasn't done nearly as well as all of us hope in -- in unfreezing that credit, especially getting it to manufacturers. i hope that chairman bernanke understands that. i think that he understands that. i hope that he understands the urgency of using the powers of the fed, using the powers of the cleveland fed and the others to encourage member banks to -- to do what they can can to unfreeze credit and provide that credit to -- to local small business, especially. i'm going to vote for chairman

bernanke today. i think he does understand the urgency. it's a tough vote for me because i share some of the concerns. i'm not quite the depth of them and the breadth of them that senator bunning but i share some of those concerns. i plan to vote for him today. i'm not at all certain yet what i will do on the senate floor but my concern is that chairman bernanke and my hope and my belief is that he's beginning to understand that his job is the job of all of us, is really about job creation and what he needs to do to focus on that. thank you, mr. chairman. >> thank you, senator. snart crapo? >> thank you very much, mr. chairman. i'll help us get a little back more on schedule and yield back my time. >> okay. let me turn to senator vitter. >> thank you, mr. chairman. >> wonder how i'm doing this? i was given a list by the staff when people arrive. it's not an arbitrary decision. >> thank you, mr. chairman. before we get to the question of

the actual nomination, i want to suggest that we shouldn't be moving forward with a vote and moving forward with this nomination today and i strongly oppose moving forward today for two, i think, compelling reasons. the first is something that i think is really important for every committee member, our role as senators and that's what senator bunning mentioned regarding the document request and how that has been handled with regard to aig and other bailouts. there are a lot of questions yet to be answered about the loans that the federal reserve made to aig. some, quite frankly, firmly believe that the loans were made in clear violation of the federal reserve act. these loans were not adequately collateralized, resulting in the federal reserve bank of new york having to exchange debt claims on aig for equity stakes in two

insofrl vent insurance underwriting units. now, senator bunning, as he mentioned, put in his questions to chairman bernanke for the record a number of document requests, all sorts of very relevant, very important things, transcripts, minutes, legal opinions, economic analysis regarding these specific loans and specifically federal reserve act action 13-3 and similar actions with regard to aig and some other firms. the chairman declined to provide -- chairman bernanke, that is -- declined to provide senator bunning any new information in response to that request. instead, he basically provided a defense of further secrecy of the federal reserve decision-making process and a few links to their website. now, as senator bunning mentioned, it's my understanding that chairman

bernanke has now agreed to allow certain committee staff in his office to review some of the material related to aig. but, some committee staff has reviewed that and will not share it with all committee members and our staff. now, i think that's clearly just untennable. completely untennable, as we are asked to vote on this nomination. the staff isn't voting on the nomination. the staff that's gotten to see at least certain documents doesn't have a vote and doesn't have to vote one way or the other. we do. and i believe every member of this committee needs an opportunity to first, at a minimum, see whatever the staff has seen for ourselves with the help of our staff and then be open to requesting access to additional documents and

additional information because, certainly, even the committee staff has not been given access to everything that senator bunning and others have asked for. so, mr. chairman, i would specifically ask that we postpone this vote today and come up with some reasonable bipartisan way to give all members and our immediate banking staff access to, number one, the documents that the committee staff has had access to, and then possibly additional information and documents which we would request coming out of that. again, i think it's just completely untenable that committee staff has seen certain things that the senators on the committee, who are being asked to vote yes or no on the nomination have no access to. and i -- i trust and look forward to discussing this and hopefully resolving it in a reasonable way before the

vote -- any vote on a nomination today. the second broader reason i would like this particular committee vote delayed is that this committee, under your leadership, is looking at major regulatory reform legislation hopefully in a truly bipartisan way and, as lots of different drafts, including your draft released suggest, that discussion involves possibly fundamentally restructuring the role and the responsibility of the federal reserve in terms of the regulatory rejeechl. i think it's really putting the cart before the horse if we're confirming the chairman of the federal reserve before we're deciding the role of the federal reserve. and clearly, that role of the federal reserve is very much up for discussion and debate in terms of regulatory reform.

and i think we need to come to a consensus and hopefully we are moving in a bipartisan way toward that first and understand what the federal reserve is first, or will be first, before we confirm a chairman of the federal reserve. moving on to the chairman himself and this nomination, i have strong concerns that have been expressed by other members. one which has been expressed is that chairman bernanke was simply wrong on many, many different occasions on a number of key points under his authority leading up to the crisis. now, as has been said, nobody's been right throughout this. nobody's been perfect in predicting or resolving these issues. and certainly, i'm not suggesting we use that standard. but, some of the statements he's made, in terms of issues under

his direct authority, really are pretty startling and worry some and i'll just repeat a few of the ones that have been mentioned. july 2008, fannie mae and freddie mac are adequately capitalized and in no danger of failing. june 2008, the risk that the economy has entered a stngs downturn appears to have diminished over the past month or so. may hey 2007, we do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system. and on and on. the second specific reason if have so many concerns about the nomination is what senator hutchison mentioned, which is the whole rollout and presentation of the t.a.r.p. program, which the chairman was clearly a main architect and advocate of. and how that program was never

used as it was sold, never executed as it was sold to the congress from day one. and i have major, major concerns about how t.a.r.p. was first presented to us and then used in several substantially different ways to really become a slush fund for bailouts, too big to fail without -- without end. so, mr. chairman, those are my two big concerns about proceeding today and my two biggest concerns about the actual nomination. i look forward to hearing from our other colleagues and then i look forward to a discussion and some, hopefully, proper resolution of the issues i've brought up before any vote. thank you, mr. mr. @@@@@ @ @ 'r

>> this is not a partisan move. we often dismiss each other's opinion because of partisanship but mr. bernanke was nominated by a republican president. i supported mr. bernanke. i have every reason to try to justify the sport by finding good he has accomplished. he is from my home state of south carolina and i like him personally. there is no reason for me to oppose his nomination except the failure to achieve the goals of the federal reserve in -- and his personal goals for his time in office. we cannot overlook the fact he

has presided over one of the biggest economic catastrophes we have had as a country. certainly we cannot blame everything that has happened in our country on mr. bernanke. perhaps it has something to do with three years of democratic control of both houses of congress. it has to be about performance. we have very limited information to judge his performance except for the outcomes of what he has done. to protect the value of our dollar, the security of our financial system, to promote to employment in our country. e is nowhere we can look to find that he has achieved the goals that we have delegated to him or his stated goals when he took office. we have expressed many concerns

on this committee. many who are supporting him, including the chairman have expressed these concerns. but frankly there has been no commitment to actually make changes to increase accountability or transparency. i have met with mr. bernanke personally because i am one of the ones promoting a general accounting office audit so that members of congress and the american public can at least have a general idea of what this agency is doing. i offered him to come up with his own prescription for what that audit should be so that he could protect the independence of the agency, yet i haven't heard back from him.

that we are required constitutionally to do. because it is our job here in the congress to protect the value of our currency and we dell kated that to the federal reserve. we know that the world is losing confidence in our dollar, our ability to pay our debts, yet we are not hearing any changes from the federal reserve. we need to be clear here, we are not talking about another regulator. we are not talking about another appointment. our economic system rests on our currency. the whole world economy in many ways, rests on that currency. our wealth, our prosperity as a nation, our savings, everything, rides on what they do at the federal reserve, yet we have

very little idea about what hthy are doing. we know their mission has expanded well beyond what congress delegated to them. how can we provide the accou accountability and oversight and how can we find ourselves in a situation where we request documents that we, as a congress, should legitimately have the right to see. we are in a situation today where we know that some of the staff has read part but we don't know what part and we don't know what it says. how can we wave this nomination by when it is such an important. we ignored it with fannie mae.

we were encouraged and assured that it was well capitalized yet we now know they were the primary player in creating these toxic assets and telling them around the world. we now know that loose monetary policy contributed to the creation of the housing bubble and other problems that we had in our economy. yet as we consider the confirmation of mr. bernanke we have not heard from him one commitment to change those policies. one new idea. we have heard some say he has learned from the mistakes. he will be better for it. but folks in the hearing we did not hear mr. bernanke say we will ease the loose monetary policy we have had, there is going be more accountability. we did not hear that yet he agreed he did not reach his

goals. the constitution gives us the responsibility. we have delegated it to him. for us to wave the nomination by. i think we have had mixed respon response. we are told by many that we have been saved by a great depression. that is impossible to prove. had told us that if we did not buy a trillion dollars of these toxic assets that the whole worldwide economy was going collapse. and we had to do it immediately.

how can we say that he saved the economy when we allocated this money but we never bought one of these assets. forcing a lot of banks to take this money who didn't need it, didn't want it and didn't use it. that somehow that has saved oush country. what saved us is a very resilient free market system. we have heard esspoused by mr. bernanke, mr. geithner, and others. mr. chairman and my colleagues, this is far too serious for us to take as another confirmation. for us to rush through by 11:45. we have yet to get to the bottom of what the problems are and how we are going change them. we may be on the verge of changing how the fed operates

within this system, yet we want to move ahead with the nomination as quickly as we can before we consider it. we cannot have a federal reserve system that the americans no longer trust and that's where we are today. we cannot have a federal reserve that rating agencies are beginning to say that they no longer trust and we are on the verge of losing our good credit rating. ecan't rush through this when the rest of the world is looking at us and now doubting that we will continue to be the reserve currency. i hope that we can look past our normal partisan bickering. and look at this as people who are responsible for the well being of our whole country. millions of people have entrusted us with their economic well being and they are counting on the value of the dollar to be sound so that the work and sacrifice will mean something.

at the bottom of all of this is our federal reserve. folks we have literally failed to get to the bottom of the problem and we have nod heard the chairman say that we are going make any changes and we are hearing today despite the concerns, stay the course. it makes no sense. i think we are irresponsible in moving ahead. let's make a better decision at a later time. i have a whole lot more i would like to say but i don't want to abuse my time or my colleagues so thank you for the opportunity to speak. >> thank you. i am -- as a new member of this

committee, i was not here when this it is extraordinary to me to hear finger pointing and blaming as if one person or one political party is responsibility for the 20 year plus over-leveraging of our economy. somehow to say that this was all down to partisanship is an extraordinary comment. i think there are no clean hands. i think we do need to get it

right. i think working together to try to refocus the fed on its most important aspect, monetary policy, and that we make sure we create a 21st century regulatory system that never ever allows the whole notion of too big to fail. and the implications that allows the americans to take place again. i commend you who are diligent in trying to get that done in a by partisan fashion. looking at this as somebody who spent 20 years around the markets there are a lot of things that you all did and the fed did that were extraordinary. most of them very politically unpopular. but i absolutely believe and basically every reasonable economist believes that without those actions we could have

faced economic ka tast if i. monday morning quarter backing is, i guess, part of the job. i look forward to supporting the chairman in terms of his second term. >> thank you, mr. chairman. are we ready to vote? >> i thought you had comments. >> oh, okay.

that caused us to take a second look at what we do. we need to take a second look at whether we even need a fed. there are a number of people that believe that the fed is a mistake and should not have monetary policy managed outside of the congress. the monetary policy should be tied to some basket of goods whether it is gold or silver or soybeans or i don't know. i think we have to understand that the fed was developed for a very distinct purpose as the result of the nation having been through a time when our currency was set arbitrarily and tied to commodities. when the bank after the united states charter was repealed and president jackson sent the money back to state banks. until the fed was formed there

was no central banking in the item and we went through massive periods of disruption. we were on a tremendous roller coaster relative to the value of currency. then with the fed being created, we went to the gold standard and stayed on the gold standard. that worked for a fair amount of time. except for the fact that we had a great recession.

>> there are too many major factors you do not have control over. has it worked well? generally it has. i cannot think of anything more disruptive to our fiscal policy, our monetary policy than to have the fed become -- either be abolished or become massively influenced in its determination of monetary policy by the congress. we are political people here. we live for the next election. we're moved by the intensity of the moment. maybe not so much in the senate but certainly in the house. you do not want monetary policy being said by someone who is living by the intensity of the moment for the politics of the next election. you want that independence. so i think an independent fed free of interference from

congress on the issues of setting monetary policy is critical to the strength of our currency and to the strength of our economy. it would be a huge mistake if we were to move away from that position. are there things that need to be improved in the fed? obviously. senator shelby's ideas have been strong statements in this area. we still need a strong independent fed setting our monetary policy or we are going to be in serious trouble as a country relative to the value of our currency. this is especially true as we move forward because we are confronting a time when our debt as a nation is so large that our capacity to do fiscal policy is going to be significantly prescribed and an independent fed will be critical to us as we

move through this time of trying to straighten out the debt situation in our nation. or our nation. on the specifics of chairman bernanke, it is obvious that mistakes were made. monomoved out into congress needs to take a fair amount of

responsibility for this problem. we encourage people to buy homes and set up structure to allow people to buy homes who couldn't afford homes. and we had a banking system which basically abandoned the concept of sound underwriting when it came to lending. obviously there were mistakes made. i don't see them as being the primary drivers of what happened. when i hear the challenge to mr. bernanke, he basically made the mistakes to cause this downturn, i don't accept that and i don't think history will accept it. no analysis will find that was the essence of the problem. how did he react in the middle of the crisis? he pushed the envelope. significantly. he took their balance sheet from 800 billion up to over $2 trillion.

and he used those moneys to float thely k ll lillyl lly liq. this market had -- it would have had a much more who terrific economic event as a result of that. would it be a depression? i don't know. the chairman has already set up the procedures and protocols for how they will do it and they have been fairly public about it and they made sense. can it be done?

i don't know. certainly i hope it can be done. we certainly don't want the inflation if it is not done correctly. that is the issue going forward. i think on that issue that this chairman is out in front, taking leadership and that is the key issue for us as a nation. whether or not we see this economy suffer mass ive ive.

having spent some time over the last couple of days, going back and talking to senator sarbane staff as to how these things have worked in the past. they go to the -- they will not provide them unless the chairman of the ranking member, generally the chairman but it helps to have the ranking member sign on. in this case we did. what they did not understand at the time and i just want to say that i strongly disagree with and that is the idea that staff would have access and any member who wants to back this would not. my point is to those of you who would be interested, there are

rules. otherwise it would become chaotic. the process information is available. those kind of requests can go forward. and we also state the problem that i face here. come january 30th, if we do not complete this process then chairman bernanke cannot serve as chairman. he can be a member, not a chairman. a member of the board. we are under somewhat of a tight schedule as well in terms of how we move this. while i appreciate the concerns of those who disagree with the nomination, it is important having had a confirmation hearing.

i want to go forward with the vote this morning and members will have opportunity over the next month before we come back. i will not consider the nomination between now and when we adjourn for the holiday season. so we don't come back until the 19th of january. it will be sometime after that. again, depending upon the leadersh leadership. there will be ample opportunity. >> do i understand this will be a commitment that we will adjourn for the holiday season? >> either that or we will be sitting around the fireplaces in the marble room singing jingle bells. >> mr. chairman? >> briefly. >> briefly. it's my understanding that what you said about the 30th of january is in correct. >> i was told he could be a

member of the board but could not serve as chair. >> temporarily appointed as chair. >> vice chair would serve. if anyone wants to be heard on the matter. if not, people can submit comments on the nomination. i am deeply grateful. go ahead. >> i want to respond since i was one of the members who brought it up. agai again. >> we can go on. there is always a request and i would go on indefinitely.

this committee doesn't have such a rule. >> i would just offer one obvious alternative which doesn't delay the ultimate consideration on the floor one minute as far as i can see, which is simply we schedule a committee hearing for this vote, january 19th, so we can look at the documents before a vote and have discussion among members that could affect votes before and not after. and if we do that january 19th, which is when we are coming back anyway, how does that change anyway what any floor schedule might be. >> i appreciate the recommendation but i will move ahead with the vote. >> can i ask the chairman how that would change the schedule, any schedule on the floor? >> i don't control the floor time.

>> we have to move on. the clerk will call the roll. >> chairman? >> aye. >> mr. johnson? >> aye. >> mr. reid. >> aye. >> aye by proxy. >> mr. me nen dez? >> aye. >> mr. brown? mr. tester? mr. khol? mr. warner. mr. bennett? >> eye >> aye by proxy. >> mr. bennett?

mr. corker? >> aye. >> aye by proxy? >> ms. hutchison? >> mr. chairman, could i be recorded aye in person?

thank you. senator hutchison voted nay. 16 voting yay, 7 voting no, the nomination passed. >> let me thank my colleagues. the committee will report this accordingly and i will let members know when we can talk with leadership about scheduling the vote on the floor. and again the invitation, obviously on these documents and so forth, the members and or staff, i would urge both the minorities to get in touch with senator açcñcñcñcçcçcçcçcçcñcñc

>> ben bernanke is nomination proceeds through the senate where he is expected to be confirmed despite opposition. the fed's current term ends in february. senator ben nelson of nebraska today announced his opposition to the senate health care bill over the issue of abortion. for details, we talked with the congressional quarterly reporter. >> we're joined by alex dwaine of congressional quarterly. senator nelsen is still not ready to support the health care bill. is abortion his biggest concern? >> abortion is the issue he says he will vote against if it is

not resolved. he has a number of other issues with the bill that can be fix to his satisfaction. >> you quoted him from a radio interview, without further modifications it is not sufficient. >> the senator from pennsylvania has been working on compromise language that has been aimed at getting his vote on the bill. they're both opposed to abortion but senator casey has said abortion will not determine his boat. senator reid asked the senator casey to work on the language. nelsen looked at the language yesterday and today he said it is not sufficient. we do not know what the language does. his office has not shared with us and they have not shared much with interest groups on either side of the issue. it seems clear that the language would be another twist on what we call segregation and that means keeping money that is used

to pay for abortion separate from money that insurance plans would collect from the federal government and subsidies. a lot of anti-abortion groups said this would not work for them and nelsen seems to be going with them. >> how soon does the leader re id need to know? >> if they want to get out of here by christmas, reid needs to know by tomorrow or saturday. that is the final package of changes to the bill by saturday if they want to have a vote before christmas. >> taking the schedule into next week, what does it look like? >> a lot of votes in winning in between the votes. they will file and on friday or saturday they will file cloture petition is to end filibusters. that will be done at the same time following these petitions and they will wait for two days

and they will wait for 30 hours. it is like a five-day process. >> the republicans tactic of having the sanders a man in red on the floor, is it likely will see more actions like that? >> i see no reason why they would not. i do not know how long senator reid's managers amendment will be but it is a couple hundred pages we might be in for a few hours of bill reading. >> what is your best guess on the next vote we will see and what will that be on? >> the next vote is supposed to be defense appropriations friday night or early saturday morning. after that, there will not be any votes until sunday. that might be cloture on the manager's amendment to the health bill. >> lots to keep track of but we appreciate you helping us sort it out. thanks for the update.

>> sure thing. >> tonight the senate homeland security committee holds a hearing on the country's fiscal help the economic future. world leaders speak on the climate change conference in denmark. our interview about climate change and health care. friday, ilyse hogue discusses efforts to unseat senator joe lieberman. we will get the latest from senator tom coburn and a low against medical malpractice law with carolyn engelhard. live every morning on c-span. >> he was not an imposing figure. he was not a giant of his time.

he merged his -- emerged as a nominee at a time when the party was populated by big figures. >> his mark on history includes manifest destiny. robert merry looks at the life and times of our 11th president on "q&a". >> today, the senate homeland security committee held this hearing on the nation's fiscal health and economic future. we will hear from the chairmen and ranking members of the senate budget committee. david walker and from former reserve chairman alan greenspan who told the committee the current fiscal situation is " more urgent than any other time of our history." this is under three hours. >> i thank everyone for being here. i want to thank our colleagues and the chairman and ranking member of the budget committee and i would say for the purposes of this hearing, i will

officially designate u.s. leaders of the rebellion against our national debt. our focus here this morning is on our exploding nat our focus here this morning is our focus is on the national debt. g because under our traditional governmental affairs jurisdiction before we got to also be the homeland security committee with oversight of all government operations, including the office of management and budget and the major budget committee is the one led by the two gentlemen before us, but we oversee o.m.b. we hear the nominee -- nomination of director of o.m.b. it leads us to hold this hearing this morning. look, the facts and numbers of our current national debt which

is literally exploding are so large that i think sometimes they're numbing and hard for individuals to appreciate. when you think that we're now approaching $12 trillion in debt, trillion. the budget office tells us that we will run at least another $9 trillion into debt over the next 10 years. if you consider unfunded liabilities related to medicare, medicaid, social security and pensions, it totals over $40 trillion. by one estimate this is more than $480,000 of debt per american household. it's astounding. and more than being astounding, it represents it seems to me the most serious threat that our nation faces here at home.

in some senses, and i want to be care offul about this, it's -- careful about this, it's as much as dangerous as the islamist extremists on september 11. it's a different kind of threat because they aim to kill us as they did on 9/11. but they also aim to defeat our way of life, our national strength. and unless we do something about the debt, that's exactly what will happen. our country will not be what it's been for the generations before, including the one privileged to live and be in this -- the other consequence is that we will face economic difficulties that will be i think greater than the recession -- the great recession that we're just coming out of. so we have to do something about this. there is as i suggested at the beginning finally a rebellion

beginning against our national debt. and it is beginning hear in congress with senator conrad, senator gregg. and i guess my colleagues will feel the same as i go home to connecticut, the american people have reached the tipping point on this. they're getting it. it may be far away, the numbers may be beyond our comprehension, but they see that we in washington are just -- are incapable of dealing with the debt, of stopping it. it's not because for the insight that we're evil. it's because ultimately we're irresponsible. we like to spend money and we don't like to raise taxes. and you don't have to be alan greenspan to know if you keep doing that over a long period of time you're going to run an unsustainable debt. the rebolon has taken specific -- rebellion has taken specific

form in this congress and it is to push, as senator voinovich and i have done in the so-called safe act and senator conrad and senator gregg has done in their bipartisan task force for responsible fiscal action, which is really the leading vehicle of this rebellion today with more than 30 senate co-sponsors to create a process, a commission that will bring key decisionmakers from congress, perhaps the administration, perhaps from outside together to make the tough decisions in the national interest and then to bring it back to congress on a kind of up or down vote. and the reason for this i think we've all concluded ourselves that we're not capable for dealing with this problem as quickly as we have to deal with it. it's the old, i'm dating myself, but the old cartoon, we've met the enemy and it is us. and so we have decided it's a

kind of congressional fiscal 12-step program. we've got to discipline ourselves. and the way to do it is with a commission. and a group of us have said under the leadership of jat here, and i'm proud to see including a dozen democratic senators we're not going to vote to extend the debt limit beyond a $12.1 trillion that it's at now unless such a commission, such a process to deal with our debt is set up. and we've had a partial victory so far in that the house didn't approve a $2 trillion extension of the debt as it wanted, but $300 billion, which will take us to february. but we're still talking and i'll be interested to hear from senator conrad how he feels about that this morning about at least getting a vote for our proposal in the statutory commission before we agree to a short-term debt. so this morning with our two colleagues at the beginning, with chairman greenspan and dave walker, who's leading the

rebellion out in the provinces against the debt, we're going to consider what will happen if we don't deal with this and then how can we best deal with it to literally secure the future of our country. i tell you one reason why there's such anger at washington today among the american people is, of course, about the economy. but it is also because the economic troubles have let most every family i know to tighten their belt, to put their money away to save some, not spend so much, but they're watching us and we're not doing it. and this concern has obviously agitated people, affected the current debate over health care reform. it's certainly part of what i was so concerned about creating a new public government insurance option and expanding medicare at this time. anyway, that's my opening statement. i thank everybody for being

here. i hope this hearing can help, frankly, to build a rebellion against the national debt to the point where we finally do something about it. senator collins. >> thank you, mr. chairman. for conducting this hearing on a matter of such importance to our country. i want to join you in commending senator conrad and senator gregg for their extraordinary leadership in this area. as you pointed out, they're not johnny come latelys to this debate. they have be sounding the alarm on the fiscal crisis for a long time now. now, i hadn't thought of describing them as leading the rebellion, but then i thought of senator gregg's state motto, which as you know, is live free or die. and i guess it's really live free of debt or die.

so it's appropriate that they are here today. and i also want to thank mr. greenspan and mr. walker for their service to our country, for their leadership and for their participation today. earlier this year, mr. walker brought the concord coalition fiscal wake-up tour to the state of maine, and i will tell you the numbers are a clairian call to action. to paraphrase the senator for whom this building is named, a trillion here, a trillion there, pretty soon you're talking about a real fiscal catastrophe. nothing underscores the scope of the crisis we face more than the fact that the billions of taxpayer money that so concerns senator dierkson just a few

decades ago paled by comparison to the prospect of annual deficits exceeding $1 trillion that we confront today. the dire consequences are found in new mexico rabble charts, graphs and spreadsheet -- in numerable graphs, charts and spreadsheets. spreadsheets. the basic problem is that >> the basic problem is iran has promised more than it can pay. one columnist has described it one coluhe collision between the high and rising demand for government services and for the capacity of the economy to produce the tax revenues to pay

for those demands. historically, americans have paid 18% of gdp in federal taxes. with the explosion in entitlement spending that is tied to the retirement of the baby boom generation, and interest on the debt, americans would have to pay taxes equal to 34% of gdp to keep pace with spending 25 years from now. . . @ :rzgi'::rrzg)b:rz::rz$

>> the bill introduced by senators conrad and gregg are thought fall approaches to this crisis. i will not repeat in my testimony exactly their approach. let me say, however, that this examination is not merely necessary. it is urgently needed. we simply cannot continue business as usual. there is no better evidence of the need for change than the budgets that we have recently approved. i oppose -- opposed the budget

because i believe it accelerates our journey down the primrose paths to fiscal runin. it will double the public debt in just five years. this is a moment in history in which we must confront the conflict between what we want and what we can afford. new course. the budget reform proposals, the thoughtful legislation presented by our colleagues would begin to move us forward as a nation in facing our fiscal challenges. i do want to say that i believe the legislation could be improved. instead of legislation that would not be amendable, i believe that members of congress should have some ability to amend the budget commission's recommendations. what i would suggest is that

ability should not be unlimited and that amendments should be required to be revenue neutral, not effecting the overall balance. we can put this country back on track. we can do what needs to be done to ensure that future generations of americans enjoy what every american generation has proudly proclaimed as a birthright. and that is the promise of a better quality of life than the generations that preceded it. thank you, mr. chairman. >> thank you very much, senator collins. senator voinovich, you've been so active in this quest for so many years. and i know because you announced you're retiring after this term that you really focused on this as something you want to feel you made some progress on before you leave public office after an extraordinary career at many levels of government. so i would with respect invite to you fwiff an opening

statement this morning. >> thank you, mr. chairman. thank you for holding this hearing and after national security i think the most important issue congress and our nation faces today is this issue of our debt and budgets that aren't balanced as far as the eye can see in the future. and as you said, if we don't deal with it it will affect our national security and will have an impact on world peace. so i want to thank you for your work and our work on the safe commission. i want to thank our panel, the chairman, the ranking member of the senate budget committee, senators conrad and gregg, for your leadership to unite efforts of the members of the senate to come up with a bill that we can get passed and that will start to make a difference. the bill would force congress to fully address our nation's fiscal crisis.

it forces us. it recognizes that despite all our good intentions congress has failed to balance our budgets and stop our rapidly declining debt. $1.4 trillion deficit last year, over $12 trillion in terms of our debt limit. i think it's important to point out that the american people as well as the international community -- i think it's really important the international community recognizes the crisis our nation faces. all around the world people are asking, what are you guys doing? the canadians, they said, if you don't get your house in order, we're dead because our economies are intertwined. you must face up to doing something about it. so our nation does stand on thin ice, and our credit and our credibility are in jeopardy. and it doesn't take an economist to realize our

courses -- course is unsustainable. the united states is the worse credit card abuser in the world. we are putting everything on the tab of our children and grandchildren. so today we're here to discuss senator conrad and gregg's bipartisan task force. we had our press conference. i told you there's a big smile on my face. that's something i've been working on for a long time around here, as senator conrad knows and senator gregg. the thing that tickles me is last count we have 33 sponsors. that's pretty darn good for the united states senate. i just heard, though, yesterday that president obama is considering an executive order to create a bipartisan debt commission, but i think it's important to recognize that that authority does not mandate congressional action. and i'm going to ask chairman greenspan, he was the last one that had a successful commission around here, what the differences are between

today and when he did it in 1983, but the fact is that should be made up of members of congress. if we get the 14-vote majority, those members who worked their you know what off on that committee and their staff should know that their hard work is going to result in some action and not be dilly-dallied like so many other things where people bust their back and nothing happens. i know that some members of congress say this should be done over in regular order, particularly over on the house side. in a regular world that's what we do. unfortunately, for my entire time in the senate we have not been able to address this crisis. congress is simply not willing or capable of enduring short-term pain for long-term gain. it's the way it is. it's a reality. so that's why we need a commission to provide solutions

and an expedited procedure for an up our done vote so that the reform proposals don't die in committee or become an exercise in political messaging. i'm fed up with political messaging. we have it all the time on both sliles. and you want to know what -- both sides of the aisle. and you know what, the american people see through it. that's why they're so upset. i won't use another word that i would normally use. this is a hearing. but conrad-gregg fiscal task force is an example of bipartisan compromise to achieve a productive process to tackle an enormous problem. i hope this committee and my colleagues tonight make the mistake that we otoo often make and that is we let the perfect get in the way of good. ok. and that's what i think you guys were able to do. you put this together. you combined a lot of good ideas. i think the legislation you have you put together is terrific. and i'm hoping that it gets the support of the senate and the

house and it's a strong message, i think, to the president that we got to act now. and i think the president and our o.m.b. director realize it needs to be addressed. as both a policy and a political issue. you know, we're going into november. what are the people up for election in november say to the american people about what they have done, what they have done to deal with this problem? and the american people are going to want to know it's real and not another saturday night special. and we got people out there that are saying, what are you doing? some are saying, we are losing america. i was really upset the other day, and i think senator lieberman, you were there when we had the expert on china saying that the chinese once looked at us as the model and now they concluded that we are on our way out. i think that this can't be the last generation of americans

like senator conrad said that they're not going to have an opportunity to -- for the same standard of living that we have had. and i think that this is a moral issue for us and our country and frankly for the world. thank you. >> thanks so much, he -- senator voinovich. i want to make clear that it's a patriotic rebellion to help the government. so thanks very much for being here. we'll begin with chairman conrad. >> i will be mindful of the others as we move hopefully to

the end of another session. mr. chairman, thank you for holding this hearing. thank you for your strong leadership on this issue. i personally appreciate it very much. senator collins, to you as well. you have been a stall wart. and we very much -- stalwart and we very much appreciate it. senator voinovich, there couldn't be a more passionate, articulate advocate for taking on the debt of this country than you are and that you have been. and we thank you for your willingness to partner with us, to try to get something done. it's in the important interests of the country. as always, it's always good to be with the former chairman of the budget committee and my friend, senator gregg, to discuss this critical issue. senator lieberman, you've been a leader in the senate bringing attention to our long-term fiscal crisis. along with senator voinovich, you've introduced securing america's future economy commission act, or safe

commission act, which would establish a special process to develop legislation to significantly improve our long-term fiscal condition. i believe that you are exactly right, that a special process is required. those who say, leave it to the regular order, it won't happen. we all know it won't happen. we only need to point to the most recent effort on health care reform which i believe does make modest improvements. but it doesn't fundamentally address the long-term imbalances. and it is the nature of the beast here. i've been here 23 years. if there's anything i'm certain of i am certain that the regular order is not going to take on this burgeoning debt. as you know, last week senator gregg and i reintroduced our proposal for a special process.

we call it the bipartisan task force for responsible fiscal action. that bill already has the support now of 34 of our colleagues. we had another colleague join just last night. 20 republicans and 14 democrats, including senator lieberman, senator mccould you say key, who is the one -- senator murkowski, who is the one who joined yesterday. i thank you for your support. 34 co-sponsors in that short of period, because we just circulated this proposal days ago. i thank all of the members who have signed up and >> i thank all of the members who have signed up and some of them under pretty fierce lobbying by those who do not want to see us proceed in this way. we have colleagues who are

buried dug-in on the notion that this invades their turf. and this upsets the normal distribution of responsibilities to the committees of congress. i would say to those members, i respect the jurisdiction of your committees. but, even more than that, i believe the threat posed by the debt crisis in this country supersedes any commitment to the jurisdiction of any specific committee. because the committees of jurisdiction have had years to face up to this problem and have failed to do so. that is a fact. before i discuss the specifics of the conrad-grade task force, allow me to take a moment on how i see the economic future and how i think some special process is absolutely essential. nothing short of the economic

future of our nation is at stake. here is "newsweek" cover story of december 7 -- pearl harbor day. i hope we do not have to have a similar catastrophe before we wake up and face up to this problem. the cover is entitled open q" how great powers fall." -- high spending kills empires and america could be next. if you go inside the magazine and read the article, this is one paragraph. "this is out empire's decline. it begins with the debt explosion. it ends with an in exorable production and the resources available for the army, navy and air force. if the united states does not

come up soon with a credible plan to restore the federal budget to balance over the next 5 to 10 years, the danger is very real that that debt crisis could lead to a major weakening of american power." we cannot allow that to happen. the debt explosion in our country has already begun. the chairman reference to it. as did senator voinovich. as did senator collins. 114% above our gross domestic product by 2019. that is approaching the 100% above our gross domestic product, a debt level reached at the end of world war ii. i don't know what it's going to take to convince some of our colleagues that we have to act and we have to begin to act now. if this isn't a warning sign, if this isn't an indication that it is imperative that we take on this burgeoning debt, i don't know what it would take.

but you know, the longer term outlook is even more serious. mr. chairman, according to the congressional budget office and their long-term fiscal outlook, over the next 50 years with rising health care costs, the retirement of the baby boom generation, the permanent extension of all the 2001 and 2003 tax cuts, federal debt could climb to more than 400% of gross domestic product. that is totally unsustainable. and you don't have to have my word for it or senator gregg's word for it. we have had the head of the congressional budget office tell us that's completely unsustainable, the head of the government accountability office when the distinguished david walker was in that position who will be testifying before you shortly. we have had testimony from the secretary of the treasury in the previous administration and

this administration. we have had the testimony of the chairman of the federal reserve, and you'll be hearing from a former chairman of the federal reserve a little later in this hearing. no doubt he'll make the same judgment. we have never had a debt in this country's history of 400% of the gross domestic product. we believe that our task force proposal will work because it's based on several key principles. first, it's based on the bipartisan of accountability. all of the members will be directly accountable to the american people. the panel would include 18 members. 10 democrats, two of whom would be from the administration, and eight republicans. so in terms of members of congress, it would be eight democrats, eight republicans, two representatives of the administration. it would be made up of currently serving members of congress selected by the democratic and republican

leaders in congress. the administration officials would be the treasury secretary and one other official selected by the president. this means the bipartisan leadership at the highest levels of the government would be responsible for the panel's outcome. second, task force would have broad coverage. everything would be on the table. including spending and revenues. we can't solve this problem, i believe, by looking at only one side of the ledger. third, the task force would follow an expedited process. to minimize politicization of the task force, its recommendations would be submitted after the 2010 election. if there is a broad bipartisan agreement of the task force members at least 14 of the 18 members agreeing, the recommendations would get fast-track consideration in the senate. no amendments. no filibustering.

and i know there are many who are concerned about the no amendment provision. senator collins, you referenced it. let me just say there are some who have suggested alternatives such as actuarily equivalent amendments. let me just say the reason senator gregg and i reached the conclusion to no amendments is because in watching the process here, we've concluded if there are amendments the republicans would put up an amendment that will say we'll address the deficit but just in one particular way. democrats will do the same. everybody will have their amendment to explain to their constituents why they didn't support the final package and therefore we never get to implementation of an actual solution. the final vote on the recommendations would occur before the 111th congress adjourns. that is what we call the voinovich provision.

senator voinovich, after all this effort, deserves to be here to vote as does senator gregg. senator gregg has also announced, and i lament this, that he is going to be retiring . and he and senator voinovich, if we don't vote in the 111th, won't have a chance to do something that they have worked so hard to achieve. fourth and perhaps most important, the task force would ensure a bipartisan outcome. as i noted, it would take 14 of the 18 task force members to agree to report the recommendations to get fast-track consideration. final passage would require 3/5, supermajority, in both the senate and the house. and the president would still have to sign the bill. of course, he would reserve and preserve his ability to veto. so everybody would have to be

in. everybody would have to be supportive of a solution. we believe, senator gregg and i, that that is important for the sustainability for whatever is done because this won't be a single year solution or a couple of years of alterations of the trajectory. this is going to have to be a long-term strategy and plan if it is to succeed. we believe this is the best way to accomplish the changes that are needed and to maintain them over time. no one party can or will do this on its own. it's not going to happen. and if we're going to be honest with each other and honest with the american people, we have to acknowledge it is going to take a special process to get this job done. this is the formulation that senator gregg and i have come to after many months of discussions and negotiation. it's very similar in many ways

to your safe commission. both of our proposals require bipartisanship. in the task force and in congress. both require that everything be on the table and both guarantee that the task force recommendations get a vote. i cannot overemphasize that point. we have got to structure a circumstance that allows the recommendations to get a vote. your proposal would have some private citizens serve on the safe commission and require the commission to hold public town hall meetings. certainly those are worthy ideas. we held a budget committee hearing on this topic in november and you testified about the safe commission. and we appreciate your testimony. and as a result of that hearing, senator gregg and i made changes to our task force that would allow it to benefit from the assistance of knowledgeable and reputable citizens as part of an advisory panel. these same people could help the task force, engage the

public and build support for the ideas contained in the recommendations. one area where our proposals different is the use of alternative ways of budget scoring to evaluate the long-term effects, discussion about whether there are better ways to evaluate the budgetary effects of legislation is complicated. i personally prefer traditional c.b.o. scoring, but, again, i don't think we should let any of these issues stand in the way of a resolution. the single most important thing we can do in terms of our fiscal future is to put in place a process, a process that can lead to a conclusion and can lead to the implementation of a solution. senator lieberman, chairman lieberman, the work of any task force like you and i have proposed will not just be formidable but it is critical to our country's future.

thank you and senator collins for this opportunity and, again, special thanks to my colleague, senator voinovich, for his leadership over a very long time on this issue. and he just doesn't talk the talk. he's walked the walk, as of you, chairman lieberman, senator collins. and i noticed that senator carper has joined us. he, too, has been somebody who is a -- as a member of this committee and as a member of the senate finance committee who has shown a real willingness to take on this threat. i've said to my colleagues on many occasions, the debt is the threat. that's where we must focus our energy and attention. i thank you very much for this opportunity. >> thank you, chairman conrad, for an excellent opening statement. senator gregg, great to see you. thank you for your leadership. long time here. i can see a theme building. we are going to win this one for george and jud. >> i like that. >> -- >> george and judd. >> i like that. >> and anyone else who is retiring. >> all our grandchildren,

hopefully. >> amen. >> well, thank you, mr. chairman. thank you for holding this hearing. senator collins, senator carper, senator voinovich, thank you for your interest and your proactive approach to this issue. a lot of good statements and thoughts have already been given. i just would like to tie together a few. unfortunately, i am going to have to leave before i speak because we are about to confirm the chairman of the federal reserve and the banking committee and i want to make sure i make that vote. as you said, mr. chairman, this issue -- i view this issue as the most serious issue or nation confronts after the issue of a terrorist getting weapons of mass destruction. and possibly using it against us. because the implications of the numbers that senator conrad have -- has outlined here in a very stark way are pretty clear . essentially we will reduce the quality of life of our nation and our children and our children's children if we don't do something about the burden of the debt that we're passing

on to them. we are already seeing signs of this. this used to be an issue that was over the horizon. no longer. it's coming at you, it's on the horizon. we are seeing signs of it in the world community. we are seeing nations which are confronting the problem today. greece, ireland, potentially spain, maybe austria. where they basically have run up so much debt as a result of not running proper fiscal policy that they are essentially collapsing. we have the unique luxury of being able to monitorize our debt because we are the world currency. but even that luxury and strength cannot confront and stand up to the debt numbers that are copping at us. we know that for a fact. and we're being told this. we're being told it by independent groups, moody's just put us on a special list. there are 17 industrialized

nations which they have in a certain category in rating bonds. they have decided that mongse those 17, the united kingdom and america won't be on a special group. they haven't put us on a warning or watch list. but they have given us a new title. i think it's called relevant or something. it's reflecting the fact that there's -- they know the problem's coming unless we address it and atres it soon. the -- and address it soon. the issue, of course, is, why don't we do it in regular order? i mean, that's our job, isn't it? that's what we're paid for. that's why people send us here. and it's pretty obvious why we don't do it through regular order, because the political system doesn't allow it to happen. it's that simple. you quoted pogo. i've used that line a few times myself. myself. another way to express it is we >> another way to express that

is we keep looking around for the next risk and our economy -- the next systemic risk is the congress. as a practical matter, what happens here is when you put policy on the table, when the far side -- our side of the aisle suggests something on social security or tax policy, immediately there is this massive cut-rate of interest groups out there -- cadre of interest groups out there that make their lead -- they're living out of poisoning the well and making it impossible. we cannot get the policy of the start line when it is big issues like this. so we concluded, senator conrad and i, that starting at the policy and inevitably leads to virtually nothing happening. so what we have to do is set up a procedure that drives policy. and that is what we tried to do

with this proposal. the proposal itself has obviously some differences from your say fact and from concepts that are on the house side. -- and from me safethe safe act. these other concepts. at the core of this, the american people have to believe that whatever is proposed as absolutely bipartisan. these issues are so all encompassing. big impact every american and a personal way -- so security, medicare, tax laws -- that unless you do it in a bipartisan manner, the american people will reject it. and so the process of drawing out the policy must be seen as fair and bipartisan. a lot of effort was put into the issue of the makeup of the

commission, what the membership would be and how the vote process would occur. that is how we have the super majorities -- 14 reporting to 18 people. the majority, the democratic party, you will have eight members from the house and senate and two members from the administration. and the minority, which would be eight members from the house and senate. so a majority and minority basically has to vote for the final product. assuming they got in that conflict which hopefully they wouldn't. the message is it has to be fair and bipartisan which i think is critical to this effort. the commission has a co-chairman. one republican, one democrat. so it's very clear that the purpose is to have bipartisanship. why didn't we put outsiders on the commission? well, that's a legitimate point. i mean, how do you handle it? our conclusion was this. we wanted people who had skin

in the game, knew the process because we -- this has to be done. the people that reach these conclusions have to be able to execute the conclusions. and that means we think they should be members of congress and members of the administration. and the secondary issue which concern us about the outsider issue is, who do you pick? i mean, there are so many people that have a legitimate right to be on this -- in this undertaking that once you start choosing from one group how do you say no to the next group? and you end up with a massive commission, probably unyielding, and there would be questions of whether or not it was going to be fair and bipartisan because these different issue groups would bring so many things to the table that would be singular in their sense of purpose. so we went with purely members of congress and members of the administration. the issue of amendment, that's probably the key issue, in my opinion.

i think senator conrad explained it. amendments make people hide in the corner. you vote against the amendment and vote against the final package. the brac commission didn't allow amendments and i think it worked because it didn't if there would have been amendments the brac commission probably would have nevada passed. so i don't think you can do amendments and have this work. -- would have passed. so i don't think you can do amendments and have this work. i think the way the place works, people vote for the amendment and vote for final passage and claim simply their amendment wasn't included. you take this root that people sitting on this commission and come to this conclusion aren't going to do anything that isn't bipartisan and fair. and it's structured so they can't. so you really -- the amendment process, while it was stressed in the development of the

issues the policies. it is obviously time to act. you know, even if we were to put this in place today and have this fast time frame, the voinovich time frame, that it's concluded, the policies that's going to correct this aren't going to be precipitously undertaken. you know, you can't do that precipitously. it would be too much dislocation to the economy. it's going to take probably years for these policies to be implemented. most -- many of them are going to require fairly significant phase-in times. and yet the debt's going to mount all the time. so we need to start acting now. as a very practical matter, if we pass this commission today or within the next -- within the near term, we would be sending a message, an unequivocal message to the world that america is going to stand up to our problem and we are going to do something about

it. and i think that would have a massively positive impact on our ability to sell our debt, on the cost -- on the interest rates in this country and on our economy generally because the american people would see that we're going to do something and the world would see we are going to do something. so i think just the passage of this commission or this task force would be a hugely positive -- would have a hugely positive effect on our nation's economic well-being. i thank you very much for your time. i apologize. >> not at all, senator gregg. thanks for your time. thanks for an excellent statement. i say for myself, i think you know this, i think i speak for senator voinovich but obviously ell for himself, though we sponsored -- and we may want to tinker with this, but this is the vehicle for finally doing

something about this. so i appreciate it. normally we don't ask our colleagues questions. if you got time, senator gregg, senator conrad, and i don't want to keep chairman greenspan and mr. walker waiting too much, maybe we take one question to ask of you. >> i'm happy to answer any questions you have. >> good. and my question -- i am going to try to ask two questions in one. sorry. i really want to ask you where we are now in the process. and part of it really is the question which is, some people say this can be a -- a commission can be established to do what we want to do by executive order. now, of course, the great challenge to that is the executive cannot bind congress to a no amendment process. executive can set up a

commission very much like the commission we're talking about here. so how do you evaluate those two ways to achieve our goal? >> let me say that an executive order commission and the commission in the 1980's to deal with social security was an executive order commission. we ought to acknowledge that. i think this is a different time and a different circumstance. then, you had an immediate crisis. and then you had a special relationship between the speaker and the president of the united states who were of opposite parties. >> right. >> that is a different circumstance than we have today. so we chose to have a statutory commission, one that would be in law, that would be able to assure -- and i think this is the single most important point that the recommendations get to a vote up or down in the

congress of the united states. senator gregg said it well. i think if any structure that is put in place that does not assure an up or down vote on the recommendations is highly unlikely to succeed. with respect to amendments, we chose, again, only -- the only way you can do it is in a statutory commission to have no amendments is in that way because then it's law. and an executive order commission you could not restrict the number of amendments. but there are negotiations ongoing to deal with a whole series of issues. one possibility on the amendment front is actuarily equivalent amendments. so, for example, if the commission said you have to save $1 trillion over five years and it's 50% revenue and 50% spending cuts or it's 60%

spending cuts and 40% revenue, whatever it is, that you require amendments to be actuarily equivalent, that they would have to meet those same metrics, that same amount of savings, that same distribution. that would be one way to prevent the gaming of the system and still provide an ability to amend. i think senator collins was describing in some way an actuarily equivalent approach. so that is one possibility. >> thanks for that -- that's my one question. i say as i listen to you and think of this, it's clear that the preferable course is a commission because then we create a process. we may come to pint of decision for some reason we can't enact a statutory commission through both houses of congress. and then we're going to have to decide if the president is intending or willing to issue an executive order because of the urgency of the crisis, is that a better way to proceed

and is there some way we can try to do what the commission would do to limit amendments? so i'm going to yield to senator collins. >> thank you. senator conrad, there is a third commission approach that has been proposed by our colleagues. i think it's senators feinstein and cornyn. they have proposed a commission that would focus on the three major entitlement programs -- social security, medicare and medicaid. they argue that those three programs are the big cost drivers in the budget and that it would be best to try to have a more narrow focus and get a consensus on what to do with those three programs. what's your reaction to that approach? >> my reaction is i think you

also have to have revenue on the table. and i say that because as i analyze our current revenue system, it is inefficient, it's unfair and it's hurting the competitive position of the country. i say that because by my calculations, we're only collecting about 76% of what's actually owed under the current system. we have an extraordinarily in effect system that's hindering revenue to offshore tax havens, to abusive tax shelters, the tax gap. i think we are going to have to fundamentally change the tax code in light of the world we live in today. our tax system was constructed at a time where we didn't have to be worried about the competitive position of the united states. we were so dominant. that's no longer the case. you know, so many people say, well, if it's revenue, that automatically means a tax increase. my own belief is before you ask anybody for a tax increase, we

ought to construct a tax system that collects most of what is owed in a far more efficient way and a far more fairway and in a way that enhances the competitive position of the country. so i think revenue has to be on the table. finally, what they're suggesting leaves out, of course, is domestic discretionary spending, including defense. and we have found in reactions across the country people want everything on the table. they want everything on the table. they simply don't believe that there are only a few places where money is being wasted. and, you know what, i think they're right. as chairman of the budget committee, i've often thought about writing a book about what i've seen and what i've -- what i've found. i think the american people get it.

they know we can do a lot better. >> thank you. thank you for your leadership. >> senator voinovich. senator voinovich, one question. >> as you know, there's some difference of opinion in the house, i think, on their safe legislation. we have about 100 sponsors, but it's been pretty clear that the speaker and the chairman of the ways and means committee aren't enthusiastic about this. do you believe this cannot get done without the support of the president of the united states? well, we could -- just as a factual matter, we could put in place a commission through negotiation because there are those of us that have taken the position we will not vote for any long-term extension of the

debt without this being included. but as a practical matter, the president i think has to be supportive. now, does that mean he's got to support every outand twiddle of what we've outlined here? what we've outlined here? >> is there room for negotiation? yes. it is possible we could find ourselves in a circumstance where we cannot task and statutory commission because it would require 60 votes. we had 34 co-sponsors. 34 is not 60. it is all paulson -- also possible that if we pass it in the senate, it would not get passed in the house. we have to preserve the alternative for some other type of commission. my first preference would be another form of statutory

commission, maybe not of braque like process but at least one that would insure as by law that you would get to vote for the recommendations of the commission. an executive order commission, properly designed and properly committed to by the leadership, including the president, could result in a vote on the commission recommendations. i think by far the most preferable is a statutory commission. as we have outlined and as you have outlined. >> the answer is is that the president will have to embrace something and take a leadership role for this to take effect? >> as a practical matter, i find it hard to believe that we could get to the end of this process without a president been engaged and the president being supportive. and i cannot speak for the

president or the leaders in the house. i believe there is growing momentum behind this idea. in the negotiations i have had with the white house, with colleagues in the house -- the majority leader there, mr. steny hoyer is a strong supporter of the commission approach. something here that is going to require a special process. >> thank you. senator carper. >> i am almost reluctant to ask . i want to say thank you so much day-to-day in the budget committee and all the time that you and senator gregg put into this idea. i know it's extraordinary. and to your staffs. just thank you for standing up and saying, all right, this is where we draw the line. i also want to thank you for showing a fair amount of flexibility in taking input and

suggestions to modify the original proposal that you started off -- that you started off with. i'm not going to ask a question. i just want to say yesterday in the same room i hosted a charity hearing of another nature. when i was in the house, we sponsored a balanced budget amendment to the constitution. not one that mandated a balanced budget every year but mandated a proposal to the budget balanced and had the congress to unbalance the budget with a 3/5 vote, allow the congress to raise the debt ceiling by a 3/5 vote. but it put emphasis on the president. i was struck by one comment, it is congress' mess -- congress' fault that we are in this mess. i say it's both the legislative and executive branch. when the hearing that i held yesterday was one that would

attempt to allow -- would require a vote, would require a vote on the president's recisions. would allow us to defeat a rescission with simple a majority vote in the house or senate. would compel us to vote on a rescission. i am struck by one of the themes of your -- comes through your proposal is that we have to vote. i think that's part of the beauty of it. in terms -- the question i'll ask is this. i'm mindful having work with some of my colleagues in this group of 10, five centrist democrats and five progressives, coming up with a decision on a public plan in health care. it's hard for members to spend concentrated amounts of time for an extended period of time. it's very difficult to do that. as you well know. and in terms of constructing the membership where it's largely house and senate

members, i would just ask us to keep that in mind. there are a number of people who used to serve here, though, who know a lot about the budget process, who understand government very well. and frankly, who might have a little more time on their hands than we do. and i would ask that we keep -- particularly keep some of them in mind as possible people to serve here and could add a whole lot to the -- not just to the process but to the outcome as well. any thoughts on that? >> you know, all of this is delicate in terms of responses i might make because we're in a negotiation and i don't want to negotiate against myself. especially in public. >> don't. >> so we've been careful to outline what we think would be the most effective way to approach this. are there other ways? yes, there are. and many of those are on the table.

and i think without my referencing what i would support, i am flexible. senator gregg is willing to be flexible. we're interested in getting a result, and we are interested in getting a result that can actually transfer into this country effectively taking on this debt threat. >> thanks. >> senator burres, and we are doing one question in this round because i can't to get to the next panel. >> thank you, mr. chairman. i have a quick one. is there conflict between 28, 35 and 1056? you have a bill, conrad. is there conflict? >> there are conflicts. there's conflict in the sense where there are different approaches which i outlined in my statement. but by and large, they have a

lot of commonality. and the commonality is, it's got to be bipartisan, it's got to have a special process, it requires a supermajority to advance and that the president retains all of his powers. those are commonalities. there are differences but really the differences are in nuance and membership. we have all members of congress and representatives of the administration. the alternative proposal has some outsiders. and so i'd say that's probably the major difference. whether there should be outsiders as members or it should all be members of congress and representatives of the administration. >> and i still have a little time, mr. chairman. i'll take my time. senator, you know, i assume we are trying to do this after the 2010 elections. and you got a strict timetable

and strict restrictions. so you're trying to freeze things as they are and your proposal going forward so we do not do any borrowing, and you look at how you're going to educate the public saying every demand that the citizens make on the federal government cannot be met if we go to this type of process. you do know the reason why we have debt, right? because we believe we have to meet the demand of our citizens and everybody has their little special project that they need. i hope any commission that takes this into consideration would definitely understand because i spent half my life in government, especially on the state level, and we have balanced budgets. right now those balanced budgets are killing all the states. most all of them have deficits. and they don't know how to meet it. demand of the citizenry. so please, with all due respect, we got to do it but we have to keep that in mind. >> yeah, i couldn't agree more,

senator burris. i want to be clear that we recognize, you know, debt can be a positive thing. the problem is when debt swamps you. and we know the united states can handle the debt. the problem is where we're headed. where we're headed is unsustainable debt. and the goal we've outlined here is to try to prevent that unsustainable debt from becoming a reality. we recognize debt financing is healthy for families and for governments up to a point. the problem we confront is we all know we're headed for a circumstance in which if we stay on the current trend line we will have a debt that totally swamps us. and that's what we have to try to prevent. >> thanks, senator burris. senator conrad, thanks so much. you know, you said at one point, i forgot your exact words, that the process,

executive and legislative, seems now to be responding to what you and those of us that support you're asking for and honestly because of all we've said about the process, the only reason i believe it -- well, two reasons. one is that the problem of debt is getting so serious for our country. but the second is that a group of us in the senate, including about a dozen democrats have said we're simply not going to vote in the next week for a long-term extension of the debt unless something is done about this, unless we create a process, unless we vote on a statutory commission. this is unprecedented. and this is why i called it a rebellion. the stress level is going to get up and the pressure on all of us is going to go up. this is so critical to our country's future and i pledge to you my support as well as we

go forward. it's only going to take -- you mentioned about 60 votes. to pass this commission. it also takes 60 votes to extend our current debt limit. and i think that's going to be very hard to obtain before the end of this year. certainly long-term. unless we get a response that a group of us is asking under your leadership. so i thank you for that. if we stick together we can make something good happen. . >> we are not going to approve any long-term extension of the debt without this being

addressed. >> thank you. i am glad now to call the second panel of alan greenspan, former chairman of the federal reserve and david walker, former comptroller general of the united states of america and now what do you go by now? >> i am the ceo of that peterson foundation. >> the peterson foundation. i thank both of you for your patience as we were listening to, and i think i it then encouraged and learning from -- >> mr. chairman, i am sorry i was not here to ask -- how do you want to have a commission to cut spending and at the same time approve of and vote for $4 billion in pork barrel projects? i'm sorry i was not here to ask

the senator that. there is a certain amount of double standard that right strenuously objected. >> i am sure that the senator -- senator conrad is upset you were not here to ask him that, too. chairman greenspan, thank you so much for being here, to bring your own experience, are your voice of authority, all but sure know about the economy to bear on this. at this moment, in this congress, your voice publicly i think really can be very critical, very important. so we welcome your testimony at this time. there is a time limit up there, but do not feel controlled by it. speak as long as you want to speak. i say that you because you are not a senator. please, proceed. >> thank you very much, mr. chairman.

of the committee for coming to what i think is the most critical hearing-in quite a long time. for more than two centuries we have been able to hold the level of u.s. federal debt to well below our capacity to borrow. but for the next decade or two on some reasonable-l of -- reasonable sets of assumptions, our borrowing cushion shrinks significantly testing our capacity to raise funds to finance unprecedented deficits. the challenge to contain this threat is more urgent than at any time in our history. in part because of today's limited flexibility of adjustment, especially of entitlement spending whose constituencies are very well entrenched. compounding this concern is our inability to accurately forecast

current services spending. projecting social security 10 or 20 years into the future is not too difficult. it is a defined benefit program whose payments in real terms are narrowly defined by law. similarly, owing to long experience and forecasting nonmilitary discretionary budgets, outlaid projections in budgets, outlaid projections in >> -- projections of medicare and medicaid are far more daunting. on light social security, these are in kind and ottomans who -- unlike social security, these are in kind entitlements. the number of future beneficiaries and 2030 is readily