it is very difficult absent an underlying reason to use rules to force members to do stuff they really don't want to do. on the other hand, if political incentives are such that even for a time you can bring members together and cut some or the to have a substantive comprise, rules and institutions and process seem to be, if used correctly, possible enforcement techniques. we're going to need to think about that as we consider more and more these proposals along the lines of what john mentioned. another process reform that lately is the study of the bipartisan commission and the chair of the budget committee and senator gregg and senator conrad have suggested creating a commission and bucking to the bipartisan commission made up of democrats and republicans and responsibility for coming up with some kind of a plan which would then receive guaranteed up-down vote in the house and senate. and this might work and might

not work.ñr i can understand why republicans would support such a process because they're in the minority and the commissioner will give them half of the vote and that is a leg up. why the democratic leadership would embrace this is beyond me, and my guess is they won't. and any time? >> you have another minute. >> another minute to wind up. and in the long term, one could imagine such añi[o mission pla in a viable and constructive role and providing member of congress with the cover necessary to come up with the kind of deal that i talked about before and then using pay-go and related kinds of procedures that john mentioned to lock that in place. blame avoidance is a powerful incentive and as alan murray describes in his book t tax reform act should not have passed based on the legislative theories but it did. the reason is nobody wanted to take the blame for killing it.

you can imagine the situation down the line to come up with a package that is credible with general support and we could use pay-go rules and others to lock in it place. >> two advertisements in one session. that is really good. it is still available -- amazon.com. and it is an interesting point. you are saying you have to have a bipartisan agreement to proceed the use of rules. >> well, no. what i am -- well, it depends. in this particular context, this could be slammed through on a party line vote. need a degree of bipartisanship. >> to add on to that, i agree with the idea that institutional rules are no substitute for bipartisan support. i fear that no governing party in power, like the democrats

with the current leverage they have wants to take it upon itself to impose pain. doesn't want to take sole responsibility for raising taxes or cutting spending or a combination of the two. >> even if they have the votes to do it. >> you need political cover and the coalition that wants to work together and that needs to converse and use it to show rules to help give additional cover, but unless that pre-existing agreement that we want to do this is there and bipartisan lines, i don't think institutions can bring it up. >> unless there is a real sense out there in the electorate that the cost of inaction is a real crisis that we talkeded about in session two yesterday. >> bill hoagland, you used to be a foot taller than he is now after working in the senate, but after three decades of budget wars, what have you learned? >> thank you, alan. let me just begin by the young man out here in the previous

panel. i am also bankrupt in the health care system. all cards on the table. i work for cigna, a private health insurance company, and i just have to put that -- and worse yet, i'm a registered federalñi lobbyist. okay? >> you are the problem. >> i am the problem. >> creating all the problem. >> that was only after three decades of trying to meet the solution. >> and a comment was raised -- and i'm just going to -- everything has been said here, but i haven't said it, so i'll get a chance to make my comments here. since there was a question raised and seeing the young students here from virginia, university of virginia where i send a lot of money with my daughter when she came down here, and what is the purpose of the senate and so many of us have heard the story so manyñr times that i assume you have heard this, but it goes back to

jefferson in france and wrote back to washington and said what's the purpose of this united states senate? and he used the analogy at that time here in the south where the hot tea in the cup was poured into the saucer to cool. and that the united states senate was like that saucer. and when you think about the fact that the house of representatives took all of 14 hours to pass a health care reform bill and the united states senate is at least on the 18th day of it, you can see that the saucer is cooling and the health care debate and i think bringing a number of visions. and quickly, and i will make a couple of points because a lot of what i have said has been given and john and i worked together in a bipartisan manner to achieve a balance budget agreement that came about after a major crisis, which was complete shutdown of the federal government, which is unprecedented. and a high level of partisanship that had built up prior to getting around to doing something to facing it.

one of the quick questioning to take away here is sometimes it takes a crisis to build a deficit reduction package.çó i began my year separate and apart from cigna working with a commission, bipartisan center, out of washington. and they issued a report in july which was entitled red ink rising. and then next monday i spent the with the pugh peterson commission on budget reform and they will be issuing their report on monday. it will follow some of the things you have suggested here and the title of theirs is "the the red sea -- the red ink rising" and i have drowning in red ink and red ink rising, so i concluded that the purpose was to part the red sea.

and act as many -- i think i told this audience was accomplished in exodus with significant help from a higher authority and my conclusion bottom line here is probably, unfortunately, isçó that not's much divefference in how to par the red sea. quickly and smt interest of time here, we're going to face this issue next week in an interesting way. our statutory debt limit of this country reaches about $12.1 uq readyñr to breach that. there may be ways that treasury but that will be reached next week.ñi we go back to the debt limit and how to vote to raise the statutory debt limit and it will be slipped into a defense appropriation bill and a today and we're not really joining this issue, but in the process of getting to this issue, back to larry's issue,

will have this bill toñr establh this commission that's set up to report to congress and make him vote on it. he may get it out of the united states senate. i don't think ms. pelosi will ever agree to it in the house of representatives, but i think it gets to the point in this presentation is that it is un-- isn't it unfortunate that we good to the police in our political system that we have to contract out our legislative process to a commission. i think it's sad. i think it's unfortunate, but it comes back to the partisanship that i believe has developed and i don't disagree with lee. there was a time when it was much more partisan, going back, but over the last few years this partisanship has grown rather dramatically and i want to try to the panel last night that

margaret, that you were on out there, what's caused all this? and what's caused all this? and i guess political scientists have looked at this,çó but i fi that growing income, inquality, immigration, technology, and in margaret's words last night,ñi democracization of the media. and the interconnectedness between campaign costs and lobbyists campaign and -- bad lobbyist here -- and it has been observed that most americans will sacrifice for a larger public good, but few will sacrifice for a competing group and we have a lot of competing groups that have developed over the last 20, 30 years working in the halls of congress. we have the coalitions that feed this grid lock to both sides of the aisle fromñi moveon.org, ton fairness t club for growth on the other end. and those -- that polarization

is just fed out there by these organizations that in such a case that you have to twitters and facebooks and internet and all these other social networking that i think is -- in this country when it comes to this and not having the facts at hand. let me j answer to, as i say n time because a lot has been covered, i don't think you can address this issue, john, unless we somehow can depot larize the congress. now if there's a way. major legislation like medicare, civil rights, no child left behind, but they came about because of working together across the aisle and a bipartisan wan. and i know this is a downer and i don't see it in the

environment we areñrñi in today takes sometimes a crisis and whether that's generate bd by legislation and i am not as down on graham redman hollingsñi because i think we did force an issue at the time on deficit reduction or we are forced into it because of a national crisis and a 911 or ñrwe're forced on is when our creditors stop lending as much. and it will take a crisis to force, i think, bringing the sides out and bringing back and governing in the senate. >> will, that is very interesting and i want to go back to the crisis thing in amen, but you cited a number of reason for what you see as increasing polarization in our politics. you didn't mention redistricting. the creation of almost perfect

political ghettos resulting, some say n a generation ofñi politicians who have never had to have the experience of reaching to those on the other side of the aisle. >> by error i left that out and it's going to get worse after the next redistricting. >> frances? >> i think it is easy to exaggerate the role of redistricting in reducing party polarization. it has increased just as much in the senate as in the house and there is no redistricting in the senated. it has larger forces of what's happening. >> i would argue it's increased in the senate because member of the house have become senator. >> in terms of a slightly contrary push on this and -- >> that is why we're all here. >> in terms of the grinch,

mcchrystal said in afghanistan you have to start from somewhere in here and a lot of what's going on in the discussions of partisanship and american politics, bill is a good indiana farm boy who believes in america and apple pie and so washington has been traumatic for him. >> or washington has been trau matic for him, but take the situation as it is and we have more partisan society and geographically we have lined up more with the parties and the question is what are realistic ways forward in this drastic situation rather than the almost kind of momence that you hear in the air.

and the question is whether you need something that works forever or only for a while. usually in life things only work for a while. graham redman hollings and the budget deal that came it from and it is one of the reasons republicans will not do those deals again is they lost a presidented over it, but we have a good period. president clinton uses a lot of capital and raises tax and a 1997 budget deal and all that goes wit and we have a surplus and we can in a sense possibly do it here in america f i think john with the default has an idea and i would not rule out reconciliation because the american people voted in 2008 to give is report overwhelming political force to one party based on the last eight years. so it's fair for that party to

exert, i would agree -- i wouldn't agree wit, but it's fair the way we do it. winners get to make the rules and get to exert their authority. >> there is something extraordinary about the last election because if you think about the debate we had over the course of the election, there was a remarkable degree of discussion about exactly what bill hoagland and it wasn't a nostalgic lament for the past day when republicans and democrats could drink a scotch at tend of the work day. it was about a system that was a broad public perception that the system wasn't working very well and there needed to be an effort for people to pull together at the center and address some of the serious problems. you had one candidate, barack obama, who made it the heart of two books on the subject. and you had another candidate who while he didn't talk about it as much has made it the core reaching across whether it was russ feingold or ted kennedy or

depending on the topic and yet here we are. >> it was held on an inaccurate premise with respect to the fact that the american people wanted george bush and the republicans out and they wanted new leadership and the new leadership promised the word "change" which is certainly fine, but it was an inaccurate characterization of now the system was going forward. >> in retrospect, clearly, but did it have to be that way? >> i think partisanship is here to stay and we would be unwise to wait for its demise. and so i think this decade has been disappointing because the partisans have not had to live up to the principals in any

significant way. in other words, everybody has gotten a free ride whether it's medicare part d or cutting taxes. in other words, it's all been put on the tab and so i think the way you make partisanship work is by creating a box in which they must have the convictions of their principles and actually make choices. so thasz what i have tried to do. and it was on the way topazing before we even woke to it. >> john, larry's point, do you have too much at least the bipartisan agreement? >> to talk the strategy that i would approach this, there is a growing cadre of bipartisan fiscal hawks. it's not a majority, but a growing cadre as we talked about

or heard about in the other sessions a growing desire by thr electorate to sort of stop it. but believe it or not, there will be another debt limit coming alongçó here in the spri and the other thing is that one legislative strategy is to use reconciliation to end reconciliation. and because this definitely saves money and this could be put through on a majority line vote. >> will it be respected if it's pushed through on a party line vote? will it be held to? >> if it's in legislation, i would take that -- i worked with newt gingrich. although we disagreed about policies, he was a man of hisñi convictions and was willing to say i'm going to cut medicare to pay for this tax cut and there was a willingness to make choices about ñithat.

what i'm saying is that it is all about building the right box, but they can't be put in a bad situation where it it's such an easy way out. >> where i was going is i agree with john 100% that you need to reconcile to put the package in with prospects for eight years and a president who would defend it and substantial majorities behind it. if you get eight good years on this issue, that is a lot. and part of it, you could abolish reconciliation, but i think you will need it to get it in. that was the only point i was going to make. >> bill? >> first of all, i think john's got a very interesting proposal here. i think as i would from john always, thoughtful. i don't want to -- i don't want to go back on a couple of premises. number one, freeze everythingñr

where it is. freeze indexation? freeze colas, freeze tax expenditures, freeze everything. as you know when we went through graham redman hollings, the first thing to come off the table was social security and the next thing was limitation on medicare and the next thing was any programs associated with "the safety net." food stamp, child nutrition, down the line. one could argue, it seems to me, that freezing in where we are today is the wrong thing to freeze. in other words, you've taken where we are today u and some people say that's not where we should be. >> can i respond to that one? >> yes. >> the freeze tries to break the mindset of i'm entitled to my cola. i'm entitled to have my taxes protected from inflation, sort

of this psychological ability that we have developed over the last 30 years. i intentionally put tough things in there to force the political choices to go to theñr other kis of savings. >> but to get from here to there will be diflt. the allocation for the fiscal dividend and we had a fiscal f dividend and wouldn't let them spend and we added that to the deficit reduction, but i like the idea of the allocation and this is getting into more than we want to get into, but the problem i run into is i remember in 1990 in robert byrd, in fact, raised, well, wait a minute. what about forest fires in the west? what about hurricane katrina? what about tarp? what about bush i getting ready

to send troops into kuwait and it is eaten up pretty damn quickly. >> bill is raising a really important point which is the incredible abuse of the emergency provision and obama and bush are tied at this point having pushed through about $880 billion worth of emergency supplementals. bush, i mean, think of how different the concept of -- to me an emergency is something you can't expect and therefore can't budget for inçó advance, like a forest fire or like a hurricane katrina. the entire seven wars and going is being paid for as an emergency solution. and there are ways to deal with that that we could talk about and -- >> let me ask larry and frances a question keying off something bill said earlier. you suggest or pointed out in the 1990's it was a crisis of

crisis of government that enabled you to reach some kind of an agreement. do you think that it's going to take a crisis, an economic crisis, a dollar crisis, something like that in order to overcome the very significant political obstacles that we have been talking about for the last hour? larry? >> absolutely. >> you do? >> i don't think we can use procedures and process to deal with the problem. the way to deal with the problem is to deal with the problem. >> how about getting people of goodwill together and saying can we all agree? >> they are called representatives for a reason. there has to be a lot of momentum in the electorate where they're willing to punish legislators for not taking action. and when a crisis occurs, let's say if people refuse to invest in treasury bills and the interest rates rise and unemployment rises and so on and so forth and you can trace it to

capitol hill, then that will create change and that's the way it's worked in the past. not the procedural fixes. >> frances? >> it is helpful to have a conspiracy of elites of both parties. a crisis helps to divide the momentum or public pressure for change, but in order to impose pain, it is very helpful for politicians to have political cover. and divided government often looks forward to that because neither party can accomplish the goals without some bipartisan cooperation, so they have to come to the table. and so when imposing pain, you can blame the other party for the pain. both sides will do that and you have a deal that can have reduction. >> bob dole after losing his attempt to be president after running a very partisan, devisive campaign, but he said han was to call the majority and

minority leaders to congress to the white house on day one and on day two and on day three and just have them meet there ef day until there was some agreement on the basic issues of common interest. can an approach -- is it naive to think that an approach like that, spending your political capital, if you really believe this is the biggest problem we face, spending your political capital to deal with the pol polarization of congress, is it naive to think that can get you anywhere, bill? >> i don't think it's naive. we all have -- listen, in fairness to president obama, he has said that we have to do health care reform because that is -- and i would agree -- that is our fundamental fiscal challenge that we're facing here. i just fundamentally disagree that what congress is considering right now will do

anything to reduce the fiscal pressure. >> what if he had said on day one the only way we're going to do it right, to get to frances' point s if we have bipartisan support and so let's start figuring out how we -- i'm sorry, rahm, stay out of the room. >> this is preten, uopretenious part, but a senator from this state that was in a meeting and i said bipartisan and he said, listen, it wasn't like this that we went this way and republicans went this way. we were willing -- we were willing to work here. but what happened is they went this way. >> that is always a matter of perspective, isn't it? >> obviously coming from the senator from virginia, i respect his opinion on this, but there

was an attempt this summer, gang of six, but the gang of 10 is not bipartisan. and when republicans criticize the gang of 10 and say, wait a minute, you had an opportunity and you ran away from us so that we had to negotiate with our right and our left. >> john, could it have been done? >> no, because the the political lessons of the 1980's and 1990's is there's severe political loss attached with stepping up and sort of either, well, stepping up and particularly as a single party doing it and president bush's 1991 deal, president clinton's 1993 deal, the contract with america in 1995, those were all lessons of political loss. and unfortunately, into this decade they have taken the lesson of political loss and not the obligation to act responsibly and that is why i think that -- but --

>> the public has punished politicians -- >> absolutely. and the only reason 1997 worked after having been beat up for so long they figured out the only way to do this is in a bipartisan way. and they hopefully will get something that can make them do that. i think our elected representatives actually behave pretty well in the right box. they are allowed to ring up $4 trillion worth of debt and so forth on that basis. >> we have a bipartisan agreement going on here. do you want to comment on that, lee? >> actually, i think there's one other factor that john's remarks kind of triggered in my mind. i mean, for something that's early and quick and bipartisan here in the near future, i am not sure i see it. but the real question would be, how wary is the administration

about a real crisis down the road? or how obligated do they feel or even in the house ranks and the leadership because i think the senate is getting to be almost a bipartisan working commission that can cause a lot of trouble in the senate with seven or republicans. i think that will be a problem over time. and starting to see a little mass there. and the question is, is this administration technically worried about a possible crisis and the impact and therefore, would there be parts -- they don't have to subscribe toçó jo and in any of the particulars, but the question is, is there some piece that they could envision that could be thrown in over time to these things it will later pain and there is a long term 15, 20 year fight. can you put the pain out beyond the immediate electoral future and then the president having in his mind knowing where he wants to go then starts talking to

both party. absent the strategy, let's go on and just talk. if one person, particularly the president of the united states, has a vision of where he wants to go and begins to start pulling the levers, you can never tell. it's like the nfl. you have to play the game. >> as they come out of congress, as they typically do, and you might be right that you need a crisis to get this done, but what we can hope for is that some of these bipartisan groups are formulating some of these changes that could be put on the table, but and that was hor tifk in those days. 21% drop in basically a day and so we gathered everybody to the capital and you remember these. we were going to cut the deficit and we got zip because the system didn't have a way to deal with it and didn't have in their minds a sort of rational, laid out path that would allow any kind of success. >> that also turned out to be a very temp require crisyorary cr.

>> we department know that tt. >> and even with a traumatic effect like 9/11, how long did the bipartisanship last? >> it is not that hard to see the fundamental origins of the crisis, right? we are borrowing immensely from overseas and that is fine right now because there's not a lot of private sector demand for those resources but as soon as there is and the fed starts to reseed significant pressure for action, is that what's going to -- should we sit back and wait? >> to a large extent it is stunning the extent to which the source of the problem is focused on a few entitlement programs. health care reform and this is

something, as lee said, will have to occur over time, 10, 20 years -- >> the last -- go ahead. >> i want to pick up on the last point and tie the previous pan toll this one for just a second and put my budget hat on, not the cigna hat. i work for republicans, yes, but this debate over cutting medicare turned me off completely. first of all, you're not cutting medicare. you're slowing the rate of growth and i don't know about the cameras, but probably get in trouble for this, but you're slowing the rate of growth. now, i agree that that was aboud $400 billion in the package and maybe $500 billion. at the same time, that package on the senate floor adds about $900 billion in subsidies, medicaid 100% and coverage. so you net-net are adding $500-some and you're going to tell me we're going to come back and take on medicare and if this package passes or we're going to

take taxes, by the way, raising taxs? i am very nervous that this package will make it that much more difficult. >> let's talk about because this pan seel is in agreement that there's not much that deals with the cost problem, but there was optimism on the last panel that deal with the coverage problem first and then we'll deal with the cost and maybe this comes from covering the 1986 tax act that it was the -- the candy was part of the incentive to get the people to take the castor oil. that you had to put the two things together to make the package work. >> the problem is the insurance industry has agree nod pre-existing conditions and guaranteed issuance and all the things that everybody wants. but those provisions really don't -- and the expansion and the changes and all that, they

have agreed to this, but most of those don't take effect until and all the other pain in terms of the raising of the tax and all that start right now and my fear is putting those taxes on bright now, çó$6.7 billion next year, all you're going to do is increase premiums in the near term. the american public thinks this lower their health care costs. they're in for a shock. it's not going to change anything in 2010 or 2011 and this is going to blow it up. >> frances, where is the problem? >> i think with respect to the health care debate, it highlights once again the importance of a sense of crisis among the public and that is really lacking here. i don't think the public has any sense for how serious the problem of cost inflation in the health sector is. people are so insulated from the rising costs. they don't pay them. they don't pay them because they have insurance through their employer. they don't pay them because of

medicare. and so people have not been exposed to these costs and van no real appreciation of how out of control they are. and so the politics of cutting medicare that we have seen unfold over the last few weeks is another illustration of the pills that a party understood takes to oppose any kind of political gain on it own soing l party line. cutting popular spending. >> the only thing i was going to say is putting -- and actually, i had the health care debate and i got the deficit as the a. issue for america. >> they are the same debate. >> well, folks say that but you've got, what, $1.2 trillion on the federal side and you are running about $4 drl out the door and the rate is about $3 trillion and you have lots of pieces that we're kind of confidently talking about health

care. what i have going to do is say health care is supposed to be one of the fees and over the last 20 or 30 years taxes are going up and down and we realize we can raise and lower taxes to some degree. and in fact, we have a major tax increase coming by the end of next year because the bush tax cuts expire. i don't know what the number is, but about $100 billion a year, $200 billion a year, coming through. so we've got a tax increase the one thing we have had on the spending side is completely asymmetrical. i have never seen us actually at any point cut spending and health care is just for me another good example where we wound up where we have universal kovrmg and coverage and it was supposed to be the key to getting the deficit under control. that was the way it was sold. unless we go to this, we have no chance with the deficit and it looks to me like it's a draw.

>> but it is worseñi than that because whether you -- i agree that there's a moral issue about health care for americans and so i absolutely agree with that. but if you look at the way the money has been raised, to pay for this, that seems good on its own. but all the easy pickings, particularly with the house is taking and nothing is easy, but the viability ways of raising revenue are going out the door. and what obama and his team do for the next three years? i have no idea how they pay for anything. >> in your view, this makes the problem more -- >> if you have questions, why don't you start moving to the back, please. larry, did you have a comment? >> no, i'm good. >> go ahead. >> i am not an american, so i have either the disinterest or the ignorance of an outsider. i want to change the focus añi little bit. all of you keep saying that only a crisis will change things.

we just had -- i thought we just had a major crisis and we will have unemployment for another five years and the question is, what is the lesson that we draw out of this crisis in this country? and one lesson out to be that a certain kind of market fundamentalism has been government that comes to the rescue and you need government. and therefore, if the united states can draw that lesson that less government is not necessarily good government and that you need more and better get that ideological idea, the whole fiscal thing is not really solvable in the long run. any discussion that we go through today and yesterday, it is hike raising taxes right off the table. >> i am not quite sure i follow. we have gotten more government

out of the crisis, but that's made the deficit problem worse, not better. >> that is because we had to do it otherwise unemployment would have been 20% reached during the depression. and the question is that what is the negative that comes out of the crisis for the average american in terms of what does it say about government? >> who wants to take thatñi on? >> i want to make a small comment which i said maybe it will take a crisis, but never underestimate the ability of congress to create a crisis. >> like in 1994 with the. ingñr crisis. >> i understand your question, but i would not rule out that this crisis hasn't brought about a discussion that wasn't really moving forward. when you push the deficit up and i am not disagreeing there wasn't a need for this, but it's interesting to me in 1987 stock market crash, what we were working on was reducing the

deficit. >> the last administration had 9/11 which enabled it to say fiscal discipline is out the window. this administration had the financial crisis which enabled it to say fiscal discipline is out the windows, which is why we have a mess on our hands. >> i think it's very important what the reasons for increasing the deficit are to prevent a >> maybe it is time. >> i would say one thing that this crisis t lesson people are learning is kind of a restoration of strong kenseanism and you need a large amount of federal deficit spending and there are those who think we haven't gone far enough. the second piece is in term of denial on the deficit side is next year we're going to spend on job creation and folk wills say rather than attack the

spending side, we need to restore the american economy so revenues return to their historic levels. so the lesson this crisis doesn't seem to me that it goes automatically to the deficit side and leads to a certain form of denial for another year in my mind. >> let's move on to the next question, but i guess the lesson is not any crisis will do. >> i think every good discussion should circle back to where it began and i would like to take us back to part of the first panel we had yesterday and the unattractiveness of the political strategy for increases taxes in this and many other countries. my question for the members of the pan sell i'm very interested in the bipartisan approach that's being discussed and i would like to hear each of you tell me what the bipartisan package of tax increases is today that will pass the congress and approximate the magnitude of the trillion dollar

structural imbalance which was discussed in the panel? what's going to close that gap? >> good question. i want to clarify your first comment. you talked about the unattractiveness of increasing taxes. for three decades we have had pretty stable taxation as a percent of g.d.p. >> stable isn't increasing. >> stable is stable. >> i'm sorry. i just misunderstood you. and what is the tax package going to look like? the last panel thought we might get to 24, 25 of g.d.p. which i think is optimistic. what is the tax package that pays for that? >> i'll make a macro comment which is that i agree congress knows how to raise taxes and they're not going to until hell freezes over and they're forced to make choices which is, you know, am i going to cut colas or raise taxes? that is the kind of situation in

which their wisdom they will find the politically viable way to raise taxing if it comes so that or do some of both. >>ñi bill? >> it wasn't here yesterday, so it's hard for me to turn back to where we were. but my thought is, number one, wherever our debt to g.d.p. on -- gets above 60%, i think there will be a need. if we don't turn this 11% annual deficit down and get back to a sustainable 3%, then i don't want to go to the taxes because i still don't think it's a tax problem as much as it is a spending problem. but discussion we just had here, unless you're in that box, if you go to the taxes, i hate to say if and if it's taken off the table through this health care reform, tax the hell out of the

rich, i don't care. there's only so much you can get out here. then i have to tell you i'm afraid we're headed, personally, toward a back tax in this country. and boy, that is an open ended, raise whatever you want. and i am up into the 25, 30 percent range g.d.p. >> anybody else? >> i would going to say that we have a tax increase coming next year. it is sitting there for the president and all he has to do is veto any little billion. it is a trillion dollar tax increase. >> but dunlt git doesn't get us we need to be. >> if you have that in the bank and fritter it and you have to talk about the spending side and it's not a one-way street. there is an assumption we have to raise taxes for all the program we have got and anybody who has gone through the basis

knows that there is vast amounts of sludge in there. >> and no abuse in there, though. >> so any kind of pruning and i don't think you can prune back but you can slow the rate of growth in it. we did on discretionary side and the president for many years just sends the congress something on the discretionary side and says here's the number and the congress adjusts every year and a trillion x or whatever is on it. and there are ways to do it. it's just that we have put it intoments off to the side -- we have put entitlements off to the side. i think they will need to see something on the spending side since we have a large tax increase coming in next year. >> frances? >> i think there's a bit of complacency here where we rest assured that in the face of a crisis congress can come together and can legislate. and that congress is -- i like to think of the legislative body as ways of our institutions that

encourage and require consensus building. and in the absence of an ability to come to consensus about what needs to be done, i think thes protect of ungovernability does really rear its ugly head. it is entirely possible that in congress there is neither the ability to cut spunneding nor the ability to raise taxes. and so i wouldn't -- i know failure is not an option, but i think it can happen. >> my name is mike atkinson and i am a professor here at u.v.a. and john talked about congress doing things responsibly and frances has talked about how easy it is to be attacked. we happen to be in a district where our congressman is quite vulnerable or considered vulnerable. and every time he seems to make a move, we get bombarded with

television commercials that appear to be from organizations that are quite nonpartisan until you start looking into the websites that they come from. and two are pref leapt right now. one is an organization that looks like it is an alternative to aarp which ends up being a website or an organization whose money isñi funneled through a p. firm in d.c. that gets its funds from the pharmaceutical industry. another one looks like another nonprofit organization by the website and go to that website and it's a domain nan owned by another firm and gets the money from the tobacco industry primarily. >> i am glad you didn't say the

>> i'm sure. >> but we are cobombarded not knowing where this money is coming from which appears to be coming from more of a nonpartisan group which obviously is. so it's very difficult for congress to behave responsibly when there is so much money out there and for many years there was sort of a check on negative campaigning because you knew as a candidate if you launched a negative campaign, it could backfire. but when it's done by amorphous groups and nobody quite knows who they are, then the dynamic is very different. >> could be worse. you would be living in little rock where all you see is health care commercials on "it's a wonderful life." >> but that is an inescapable part of political communication.

>> there is no political reform? >> we have the first amendment. >> transparency? >> read the first amendment. >> go ahead. read it. >> that congress shall make no law respecting an establishment of religion as mr. jefferson and prohibiting free exercise thereof or abridging the freedom of speech or of the press or of the right of the people to peacefully to assemble and to petition the government. >> can you require them to saying? about their funding. >> one thing is and i forget exactly when it happened but we had mccain-feingold that released this and mcconnell said that you're going to weaken the par tis. you may not like party, but which they have to repeat and be

accountable and the tresz gets a solid look at that. and basically ma what you're going to do is weaken the parties and lose accountability and create a plethora of an interest groups that will not have to account and so folk wills not know the origin of this money and you're actually going to take politics down a side road and i think he is's been right. >> it does raise the question of unintended consequences which will be present in senate reforms. >> my name is matt newmark. i'm retired but i want to point out during my peak learning years the government was not afraid to increase marginal tax rates which i was paying. they used it to pay for wars and similar things. we have been at war now for quite a few years and all that's been done duringing that time is to lower taxes.

and the word tax has become as obnoxious as the f-word. so i would urge congress to consider the fact that we have to look at the income side of the budget if we don't want to grow into a major inflationary period and completely lose the american ability to exist in the modern world. >> that is true. it is the lessons of political loss that enable us to act reresponsibly. but some of the -- the elephant in the room that's underneath all this is the reason it's so, so fuf these days is because we're still in the age of scarcity fundamentally. and that productivity, technology, the demands of the people and expectations all collide to make it very, very difficult for our leader s s to

reconcile these competing demands and when you add about the previous question about the perfection of partisanship and the divides that have happened and the taking out of the mid until congress, it makes it very, very hard to do these kinds of things which your suggestion i completely agree with, but it is the fundamentals about where civilization and progress is with regard to many regards of expectations and demands that make it difficult for our leaders to act responsibly. >> and i was going to say, sir, that ai an i degree with you. ic we should -- i agree with you. i think we should pay for our services. we have borrowed to pay for government that we want, but i have always believed that entitlement reform and tax reform are inextricably linked and to the commissioner sitting down here, i think the next round shouldn't be just a vat of going back and looking at the whole tax code because that

could be made a lot more efficient and a lot less disruptive to the market and at efficient in raising revenues. somehow we haven't been able to put tax reform in this discussion. we have only been talking about raising taxes and raising marginal rates. >> another question back here. >> i'm edward slaughter jr. from charlottesville and this is for mr. rawls who has taken the position that the bigger the majorities, the less the partisanship. misunderstood you -- >> a chance for less bipartisanship, i think. >> well, as i understood it, back in the 1970's and before where the democrats had large majoriti majorities, there was less

partisanship. did i my understand you? >> competitive politics. >> the competitive politics -- >> and the partisanship was nots a intense for unique reasons but go ahead. >> my question really is, how big does the majorities have to get for this partisanship to diminish? and since the democrats are now in substantial majorities in and if so, when? >> my view is that the democrats have all the votes they need to implement their programs if they stay united. i think actually that you would need in the present situation, i don't see a basis for increasing participateship. i think the parties both have strategic interests and the republicans will want to make

moves to regain some power in the 2010 election. i think there's one psychological mistake that really whenever i was negotiating with other side, i always assumed that they were acting in good faith and i was acting in good faith. and there is a human psychological piece where you think you're right and the other guy is wrong. but basically i don't see a large return to bipartisanship and i do think if the republicans got three or four seats in the stratp in 2010, which i do not'd and they have enough for the filibuster. >> we have been talking about partisanship and participateship and also the question about

tablt? >> tom keane, former governor of new jersey, told me when they was an acre in washington, his father was the ranking member on the ways and means committee when wilbur mills was the chairman. and every sunday wilbur mills would stop and have a cup of coffee with his father to talk about the problems they faced in the week ahead and ways to deal with those problems. [inaudible comment] >> that was pretty good. >> and is there some -- has there be son some basic decline in civility that is separate from this question that we have been talking about of partisanship that may also be part of the equation? >> well, yes, there has been, but we're all senate folks but you cannot, like going to conference when you work at the white house or anything, it is

unmistakable the difference in civility between the house and the senate. they a they ares in house at each other's throats constantly and it has a lot to do with the rules. we don't need you. we can roll you. in the senate because of the forced mechanisms to make them work across the aisle, that reinforces the civility and they get along better. >> and they are forced to work together and looking forward to be in legislating and democrats are at the high water mark now -- >> it is not going to get better in the next election. >> no. >> they need to negotiate across party lines now because they can't hold 60 votes together in the senate snot something democrats are capable of doing even on the issue that is the top domestic party priority. and even there they are relying on some republicans votes.

they're going to need to do more bargaining going forward after the next set of elections. >> i actually think civility is an issue and we're less civil society as a whole. and the kind of blogs you are getting now in the media you would haven't gotten 20 years ago and we're a more wiseguy n your face society and that spills over into politics. >> i agree that the civility issue in the years that we were up there going back to humphrey and mcgovern and it has changed dramatically but i will never, we'd finished a budget 1:00, 2:00 in the morning and nobody was around and i was going down the escalators to take the tram back to the dirksen office building and there were these two senators in front of me.

both elderly senators. both having trouble walking. one was helping the other. and it was jesse helms and claiborne pell. helping them get on the tram. that still sticks in my mind as the type of senate that we used to have.ñi i doubt if i would find that today,çó john. >> thank you, all, very much. i think that's a good way to end. . . . .