>host: the government will porches 450 full body scanners which is 10 times the amount used presently across the united states. president barack obama will meet with the top labor leaders on monday over his proposal to tax health care plans. this is" fo "washington journalr

january 9. here is robert barnes this morning in "the washington post." a pending decision on whether restrictions on corporate and labor unions spent on political campaigns violates the first amendment. this arose from a question about whether conservative groups support of a documentary movie of hillary clinton + presidential pursuit violated the mccain-falling goeingold ac. justices said they would consider the larger question of whether it is constitutional to ban corporations and labour unions from drawing funds from the general treasuries to support or oppose candidates.

many legal experts say they expect the court use its imminent% ruling in the case of citizens united purses the federal electorate commission for money paid by corporations, unions, or advocacy organizations. the case centers on whether spending restrictions apply to "hillary: the movie." the 2010 elections will bring the for large-scale application of previous court decisions. the rulings have not challenged the ban on direct corporate contributions political operatives say it is a practical matter. the ruling is in a deadlock at the federal election commission and have opened a wide latitude for groups who advocate for end of -- and against a candidate.

in light of dealing with campaign finance laws with an expected dismantling of some of these laws, the question this morning is, does the united states need campaign finance law? the numbers are on your screen. get your thoughts on whether the u.s. need campaign finance laws. you can communicate with us by twitter twitter.com@cspanwj. a little more from the late new york times this morning -- if

the supreme court goes through with the previous look decision, if the supreme court rules against core elements of the existing limits, democrats say they'll try to enact new lawsmm to reinstate the restrictions in time for the midterm elections in november. advocates of stricter finance laws so they hold to the development that will prod the president - to fulfill a campain promise to update the president can't -- presidential campaign finance system even though it would diminish his edge as incumbent. with that in mind, does the u.s. still need campaign finance laws? pick the phone line that best represents you. you heard about the selection of an investigator into the christmas day attempted bombing.

that will be john mclaughlin. he is the former cia director. he will lead a review of missteps by u.s. intelligence agencies and assess proposals for correcting weaknesses in a system that did not respond to warnings about the terrorist suspect, umar farouk abdul mutallab. the review will also examine the events leading to the november 5 shootings at fort hood. a couple of related stories looking in that incident, this concerning full body scans, machinery that is used, about 40 machines so far, in 90 airports across the united states, the gsa will buy 450 machines which is 10 times the number now used. -- the tsa will buy 450 machines

which is 10 times the number now used. campaign finance laws and if they are still needed -- first up, is in new jersey on our republican line, good morning. caller: good morning. i look at the constitution and it says to be able to vote, you have to be a citizen of the united states, you have to be a president of the community in which the above applies to add to have a certain age. we should pass an amendment that requires campaign finances to be done according to the rules of of boating. we would eliminate corporations. we would eliminate multi millionaires. we would eliminate the influence of labor unions and any other group and keep the ability to contribute legally to the campaign to be the same rules that require a person to legally vote in a campaign.

host: how would that looked? caller: if there is a $5,000 limit, that would be fun. let's eliminate the $60 billion from a labor union or the mega- billion dollars from george soros and all the other sort of nonsense where people buy an entire congressional assembly instead of just contributed to a congressional district. host: river falls, texas is next on the democrats' line. good morning. are you there? go ahead. caller: i am here. i think that corporations are not humans. they have no right to contribute money. they are double dipping because

the people that work for those corporations contribute. i really think there needs to be some really stranstringent laws. host: what do you think about the the potential dismantling of these laws by the supreme court? caller: i am worried about because i think the court has not looked at this for a number of years. i don't know what will happen. i am kind a word about it. host: what do you think it will do for the upcoming midterm elections? caller: union with the election laws? if the supreme court changed the laws quickly, it will make a difference. that's it. i would like to see things straightened out.

i voted for obama for a change and i think he is doing everything he can do to fix things as rapidly as he can do it. he has opposition from the wealthy as people on the face of the earth. i think we are in for a real struggle. host: thank you for turning down your television set. that causes disruption when we tried to talk to you. go ahead and new york tv and that makes everything along very smoothly. houston, are independent line, good morning. caller: we need campaign finance reform, big time. when you look at what happened with the banking industry and wall street, that is the result of all the campaign contributions. bribery is not covered by the first amendment.

i don't care what corporations said. the constitution says, "we the people." the only way we can get the people is too heavily restrict corporations'. many states have collections where people run and pledged not to take corporate money. they get their campaign finance. this is the only solution to bring the country back. we have loads of problems with health care, with finance, with environmental issues, and these issues will never be solved as long as we have the current system we have now. host: a little bit more bit"the washington post" -- a broad decision to declare the restrictions unconstitutional has drawn lengthy dissent from those in the minority who have no incentive for rushing the ruling pri equally possible is

competing opinions where a narrow majority agrees only on the outcome in the specific case. this ruling could come by tuesday. from twitter -- yes, he says the larger voice of corporations is drowning the small voice of the people. the companies do not serve the people, they serve investors. up next, crosby, minn., good morning. caller: good morning. i am so happy to hear people from republicans, independents, and democrats all agreeing. it tells me that most americans agree that campaign finance is probably the biggest problem we have now. it affects all the other problems. if this -- if they dismantle campaign finance laws -- if you think money is in campaigns now,

that is nothing. when the supreme court changed and said corporations were people or had the rights of people and free speech and therefore could contribute to campaigns, that changed everything. ever since that ruling, our whole country has changed. the economy -- everything has changed. all of us have watched it. if they dismantle all laws -- i am praying they don't. i think people really need to use their voice and let our government know that we don't want this to happen for the only way to really fix it is to publicly-funded campaigns. right now, our government

officials, the only way they stay in office is to win campaigns and they win campaigns with money and the people that give the money our corporations. that is who they will represent it want them to represent us, we have to give them the money to win their campaigns. corporations need to stay out of it. host: the numbers will be on your screen and you couldn't reach as by twitter and e-mail. a couple of editorials, taking a look at the topic of intelligence and the administration. why won't the president take questions on the bombing in detroit? his homeland security secretary briefed reporters after the president's remarks on thursday but there are important presidential response on this serious matter the white house press secretary said the press

-- white house had no plans for a press conference. if the president took no questions from reporters. the american people are understandably concerned about the intelligence failings. they want to hear from president barack obama beyonce can a statement. -- beyond a canned statement. the 9/11 commission pointed to the hydro-headed system that hobbled congress. there are 88 separate committees claiming authority in the homeland security field plus a parallel wealth of panels for intelligence. it works more like a tower of babel in administration were witnesses shuttle among panels. the most obvious reforms would include combining the powers of rival committees in single new panels in the senate and house.

oversight and budgeting are separated by a fiefdom. detroit is the next, on our independent line, we are talking about campaign finance laws. caller: thank you for taking my call. can you hear me ok? beautiful. i believe we need campaign finance laws . people in the tea party groups need to campaign for finance reform. democrats who traditionally support labor unions and trial lawyers, tell them the same thing. i agree with the previous caller. republicans, democrats, independent voters will have to make demands in 2010. it is my hope and prayer that republicans and democrats will start taking a look at

independence, whether they are leading more conservative or libertarian or green party candidate. we will never get these laws on the books. health care reform, our budget reforms until we take them corporate money out of politics. this is running the country. that is what is going on. it is my prayer that independent people of all parties start thinking that way. thank you host: el paso, texas is next, on our independent line. caller: of course, we need campaign finance laws. the supreme court trying to decide to make corporations human beings is fundamentally wrong. money right now has our whole congress and even the executive office held hostage.

big money and big corporate interests and wall street, these people do not care about what is best for the country. they care what is best for profits. they get people who formerly worked on committees to then go and lobby for them. we, the americans who do not get a seat in the bleachers to see what is going on in congress, they are constantly getting laws changed, they are constantly getting loopholes so they can get away with whatever they want. we have seen this. congress has tried a couple of times to pass reform because of the financial debacle with this recession. they have been ablsbé get nothing done. they have been getting congressional aides to change the wording. this is fundamentally wrong for the country. i do not believe in it at all. you see constantly big business interfering and they all the

country hostage and they say what is best for them as best for the country. that is not true. we see the dow jones going up and people losing jobs. abraham lincoln once said that the supreme court must decide even controversial issues, they must not shy away from them, but no matter what they decide, we the people must not take it as solid law or we have given our liberty and our freedom to that great institution. if the supreme court makes corporation's human beings, this is the beginning of a long battle. host: off of twitter -- until we have publicly-funded elections, will be stuck with the heat of corporate representatives in the d.c. including the supreme court.

here is a story in "the wall street journal." sending al qaeda to rehab -- they say that u.s. officials agree that some sort of rehabilitation program could be attractive. a credible program would make it easier to eventually transfer the many detainee's at guantanamo bay. one solution being discussed by officials as the construction of a high-security facility in yemen washington and saudi arabia have balked at paying for such a facility in yemen. that is because of the fear of political fallout if the facility were to become see as a new guantanamo bay in the middle east. the saudi program uses the koran to argue against extremism. riyadh gives financial

assistance to help detainee's we built it into society. caller: i think we need to get rid of both parties to get that tea party in. we have the same people who have been running this country forever and ever. look at the center is from illinois. most of them are crooks. we have the same old people year after year. we have a chance this year to get republicans and democrats and maybe get an independent in there. host: what is the relation to campaign finance law? caller: people need to use their brain, not corporate money. if they use it, boat them out. -- vote them out. go back to term limits. that would solve the problem right out ooff the bat. they are a bunch of freeloaders.

the taxpayers are paying the bill. have a good day. host: woodstock, ill., on our independent line. caller: thank you. i want to read a quick quote from abraham lincoln, 1864 -- "i see in the near future a crisis approaching that honors me and causes the trouble for the safety of my country. corporations have been enthroned an era of corruption in high places will follow. the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a pew and then the republicans destroy -- in the republic is destroyed." corporations were given personhood from the case in california for the reason they were given that was connected to slavery.

i believe that justice sonia sotomayor has expressed concern about this. i value her ideology in terms of even saying that we need to question this. i am a small corporation. i'm a single person corporation. the concept of corporations today -- i have a question, a public question. if you came to the shoreline of this country and uncle sam -- uncle sam stood there and offered you $100 and democracy or $100,000 and totalitarianism, which would you choose and why? that is the public conversation i propose. ben bernanke benefited from the $100 equation.

the ceo's of companies like goldman sachs benefited, they came from the bottom up. they know the value of about $100 and democracy. host: we will have to leave it there. thank you for your comments. silver spring, maryland, on our republican line. caller: this is my first call. i would like to echo the gentleman who called earlier. &x regarding limiting campaign funds to registered voters. in other words, labor unions or rifle association's or aarp or all of the interest lobbies and corporations would not be parties to being able to give money directly to a candidate. in any fashion and it should be

a criminal penalty if anyone gives more than $2,400 that is recommended by the early or individual. i think corruption in this country is our leading concern. our government has been lost. it will get worse. instead of getting better. the idea that we should have billions of dollars going into campaigns for national office is ridiculous. they can campaign just like everybody else. that does not mean that corporations and interest groups cannot lobby. or write letters or advertise anyway they want to. they have that right of free speech. we do not have the right to corrupt this government like we have been doing. we make criticisms of the afghanistan and the corruption and their government. our government is a million times worse than what is going

on in afghanistan our people do not realize it. we need a constitutional amendment that would start with the states and we would have term limits. we would limit the funds that could go to any congressman or federal office, president and so forth, and the federal officer running for governor, but the limite -- butnoñ limit of $2,40o a candidate. no one else can give any kind of donation or anything else in order to induce a boat. vote. host: we are asking about campaign finance laws which pence from -- which stems from a supreme court pending

decision. you could call on one of the numbers on our screen. let's tell you about "q&a" this sunday. we will have a 20th century skeptic who says a writer should not be a writer, but a man of action, as well. >> it was in that mold o-- in te english-speaking tradition, john steinbeck and hemingway, certainly, who believed that a writer should be not just a writer but a man of action, as well. they should participate in the politics of the day. they should go to hot spots and visit countries. they were particularly attracted

to revolutions in china and the soviet union. >> what you think of that idea? you'd believe that for yourself? >> yes and no. it now seems much more the business of foreign correspondents. our correspondent apply to iraq or china or sudan, to central africa, but it was very much, for the 20th century, it was a very strong phenomenon. it was a distinct vein of literature that crowd of this. -- that grew out of this. you can see that tomorrow at 8:00. verona, new york is up next.

caller: i think this topic is probably one of the best reasons why everybody should go to the we the people website. if we can't guarantee a legitimate form of government to do the people's business in this country, how can we succeed? how can anything turn out right? cc2009.0rg, we need to our thre. caller: i believe the decision by the supreme court making corporations enjoy the rights of an individual is totally wrong. corporations, in turn, demand total subordination by its employees.

it is interesting that we the people, who provide tax funding that these corporations lobbied to have these rights, take away our constitutional rights as employees. it is a mixed bag of deviance. i believe we should do away with the corporations rights in its 5entirety. thank you for hearing me. host: the president endorsed a tax and health plans. -- on health plans. unions' rally to oppose a tax on health insurance. with labor groups warning that the tax would infuriate a key part of the democratic base, union members, president barack obama has agreed to meet with top labor leaders on monday the group improves the head of the afl-cio, the teamsters, and service employees union.

there is a copy of a text from an e-mail sent to union members. this is from a key representative of the afl-cio. our message to represent health care reform that does not tax our healthcare benefits, requires employers to pay their fair share, control health-care costs and the best way to do that is to create a public health care option. pledged to make your call. fight for health care reform has been long and hard and are -- and is just weeks away from a final bill emerging the house and senate. both bills increased the number of people who have health care insurance and the most egregious health-care company abuses. it taxes hard-working families and you need to stick to your guns and boat for health care reform that will work for working families. this is the head of the afl-cio?

he says the senate bill is badly flawed. it will allow employers to not pay their fair sure. share. we want to make sure that health care reform works for us. pledged that you will call your representative and urge your friends to call in solidarity. mark leyton, afl-cio. that is a letter sent to their members and you confine that. michigan, and our republican line, go ahead. are you there? let me push the button, first rib-she is gone. let's move on to montgomery, new york, democrats long, good morning. caller: i had the privilege of living in australia for five years. they have a mandatory voting. every citizen has to go to the

polls and vote. that would be a big boost if they had that in america. it would take the money out of politics and i believe the corporations would not have a stranglehold on the american people. that is my opinion. host: pittsburgh, pa., on our independent line -- caller: all these people are calling and saying this has to be changed. it will never happen because the people in power to make the rules. we as the people have lost the power. unfortunately, one of these days, you'll come to the realization out there that there is only one with this government will give up that power and that is for you to take it back. it was given to you in the constitution. all this garbage about putting in a lot of or another, the

government will not give this power of bypassing those laws that you want. there is only one white. you'll come to that realization one dead. that is to take it from them. one day that will happen in this country because we keep going down hill and you have an in- depth congress. it is really a shame, thank you. host: harold ford has his picture in the pages of "the new york post" this morning. his side kick out swinging at top democrats, who are trying to pull out of a primary as the campaign efforts by recording a spokesman and advisers pulled from mayor bloomberg's atop a desperate what are they afraid of? the senate democratic majority

leader, harry reid, called bloomberg and asasked him not to back the candidate. union, missouri, good morning, republican line. caller: i agree with your last caller. he is absolutely right when obama takes money from a.i.g. campaign funds and the fact that bankers, he took campaign funds from them. he also bailed them out. he says he had to build about. keep in mind, it will get worse as time goes on. inflation will increase. this campaign stuff does not mean nothing. they put that out as a campaign to run for office. thank you, cspan, also keep in mind that when obama says cspan

should be going over our healthcare bill, it has not happened. he has said it sometimes. it is a lie. host: many papers are reporting for job losses, 85,000 jobs lost in december. "the wall street journal" talks about wages. it goes on to say that average hourly earnings for private- sector production and non- supervisory workers to account for about force last bottle of people on private payrolls rose 3 cents -- workers account for about 4/5 of people on private payrolls. average weekly earnings was 1.9% higher than one year before. the government's bras compensation number, the employment compensation index,

was up 1.5%. there are signs of change. after a very weak growth in earnings earlier in 2009, which is now appear to be growing modestly. gettysburg, pa., on our democrats line. caller: i agree with many people who called it and say we need campaign finance reform. i would really think that term limits for congressmen and senators would really help refresh the faces in both of those bodies.

i think people don't know really how much power a vote can actually hold. we should have a national voice for reelecting nobody would really shake things up. the people need to take the country back. reelect nobody with a strong demand on how we want our own personal values to be reflected in our government officials. that would definitely a difference. host: of twitter -- interest group television ads, not direct contributions, contaminate the process. our independent line, go ahead caller: let's call this campaign

reform what it really is. in the state and federal government, you have hundreds of men and women. all of these people come up for years, say they will work on health care, education, and jobs. out of all the hundreds of men and women in our state legislature to our federal government, they said it will not go through because it did not have enough votes. is there that many people did i care about health care, education, and jobs? the people in this country, when it comes time to vote in state people and federal people, do your homework, check on what their records are and what they have been doing, how much money they have been getting from

special -- special interest groups and then vote them out because they are tainted. i'm talking about the men and women who fought in wars and came home without arms and legs. for the people who want jobs and a good wage, benefits, the mother of my stay home, but the country the way it is being run is not working. go back 100 years or two in the years, it does not work when you have your people bought and paid for and getting things done for the people that do not need help. host: there is a story about the california budget. mr. schwarzenegger chose not to cut public funding for universities but has proposed eliminating the 1 billion welfare program with families.

it would reduce the state medicaid eligibility to save $500 million and ending the state network of subsidized health care for the poor. he also proposed ending the furloughs of state workers which were begun last year but it ministration and were overturned in part by court battles waged by some unions. in their place, the governor said he would like to see a 5% pay reduction across the board. one state employes to contribute additional 5% for the retirement costs. wheeling, west virginia, republican line. caller: we definitely need reform and not just in the campaign funds but charlie wilson across the river from ohio said my grandmother a card in the mail about the health care a couple of months back. i read on the bottom where it was paid for by drug companies. it is obvious that the drug

companies have an interest in getting health care reform done. we need to stop that, as well, as well as these corporations getting all the money to decide which politician they will get into office. host: springfield, va., on our democrats line. caller: i want to talk about campaign finance reform. i think there has been a lot of really good comments on the air today. many of them are things we need to do. one of the callers earlier said that it will never happened. he said the people in power in congress and the president will not put anything for to change the system. the only way to really change the system is by referendum. if there were something on balance, whether it is general elections in the terms or whether it is the presidential

year, something that is on a referendum regarding options for limiting corporate financing or simply a lawsuit, that might be another way to do it. it will never happen by going through our representatives i currently are in office. that is my comment. host: jack ewing in " the new york times" aznd saab. there have been bids for the companies including spyker cars. a third bid to recover from a group of swedish investors, led by former swedish cabinet

minister. he shares a common history with the automaker but as a separate company. hours after bidders submitted their proposals, a gm announced it had chosen alixpartners to supervise the closure of saab, which angered union officials. they also talk about the mother of the vice-president, a joan biden, the mother of jill biden. caller: i agree and believe that corporations do run this country. this has turned us into a fascist state. we should have seen this coming. president eisenhower warned us of this in his farewell address about the industrial corporate military establishment. in addition to private campaign

funding, the other problem that adds to this is the lobbyists. there will have to be controls put on lobbyists, as well. many of the previous callers had suggested, our politicians will not push this through. the vast majority of them are in office as a result of private campaign funding and they also benefit greatly by the lobbying efforts. how do we change this? one of the previous callers mentioned about a referendum. that notion has occurred to me. how does something like that come about? maybe put a question out there for the listening audience, if there is someone in the audience whether or not a referendum approach to this would be a viable, i would love to hear someone comment on that.

i will leave it at that. host: that is the last call of the subject. coming up at our next segment, we will discuss reaction in the united states to the alleged terror attack from december. we will have a guest from the council of u.s.-islamic relations. >> this offer an explanation for something that has been baffling westerners, in particular, for many years. that was show trials and the success. >> sunday, a biographer on the life of arthur koestler best known for his 1940 anti-, this novel. that is sunday night on cspan's

"q&a." "in fed we trust" on fed chairman ben bernanke and the role he played at the economic collapse of 2008. the offer will discuss his book with alice. rivlin. >> i am always concerned about unforeseen consequences of new regulations. regulations of any kind act as a tack. when you tax or regulate something, you get less of it and to manage it. >> this weekend on "the communicator's," and efforts to create a national broadband plan. that is today at 6:30 p.m., eastern, on c-span. >> "washington journal"

continues. host: the president spoke about the attempted terrorist attack on that flight to detroit. >> that is why we must communicate clearly to moslems around the world that al qaeda offers nothing except a bankrupt vision of misery and death, including the murder of fellow muslims. the united states stands with those who seek justice and progress. two events that progress, we have sought new beginnings with muslim communities around the world. we engage on the basis of mutual interest and respect and work together to fulfill the aspirations that all people share, to get an education, to work with dignity, to live in peace and security. that is what america believes that. that is the vision that is far more powerful than the hatred of these pilots extremists. host: joining us now is the executive director for the council of american-islamic relations.

where does the government need to go as far as what happened in december and from heading out from there? >> good morning. guest: when i saw the president's become that, it looked like the president had it together. he abolished that the information about the terrorist was in the system but was not acted on pe. the government knows a lot of information but it needs to use this information. security agencies need to communicate among themselves. information can be more and has tended more effective. we have questions about the effectiveness and the fact that the influence is being influenced against ethnic groups but the information we have, as the president said, could have helped the government prevent

this guy from even coming to the united states. the second thing i heard the president said was the fact that he wants to work with the moslem community here and abroad. he says the al qaeda vision is a vision of bankruptcy. it does not represent the moslem world or muslims. the overwhelming majority of muslims reject that light. host: you said you had questions. guest: the list of countries -- 13 countries out of 14 are moslem and arab countries. there are more countries that have terrorism problems. even terrorists who reach our borders, including richard reid, all of us who travel around the world have to take off our shoes and put them on a conveyor belt.

there are extremist problems in britain, as well. the idea of putting countries or not countries on the list, has to be reexamined. as the president said in his different pitches to the moslem world weather from turkey or cairo, he wants to reach the muslim world at large singling out moslem and arab countries for this problem, i think, it causes us to lose the hearts and minds we need to hostwin. the standard should be across the board in terms of any country that has tourism or extremism problems has to be put on ballistic. also, we have to judge behavior. we cannot judge the skin color or ethnic background or religious affiliations.

complaints that we received through our offices nationwide indicate that security agents are targeting some moslems because of their appearance. i believe this is ineffective and is counterproductive and communicates the wrong message. it gives a false sense of security. it says that al qaeda will exclude these 14 countries and include the next generation of suicide bombers from other countries. we need not to play catch-up all the time with al qaeda. host: if an expansion of that list to other countries, how do you make that work effectively at an airport where people have to go one by one through an examination point? guest: we all go through metal detectors, no exception to the role. we see that we are treated fairly and equally.

the security agents will not miss a person that has to go through the security. no exception to be made to anybody. we do not want again to fall in the position where we miss someone because we did not anticipate. tourism does not belong to any faith or skin color and we have to be prepared and have an open mind. our methods have to be affected. we have to base our decision on behavior analysis, not looks or ethnic background or religious affiliations. host: what about full body scanners? guest: technology can help. that has been one of our best assets. we need more sophisticated bomb- detecting machines. we need to get more bomb- sniffing dogs.

we need to get more security agents and airports. most importantly, the watch list as to be more effective. today, the watch list is clogged with irrelevant information. the system is overwhelmed with the relevant information that even when you get information about umar farouk abdul mutallab, it is there among hundreds of thousands, not millions of names, and you do not have enough people to deal with it. therefore, the watchless have to be reduced to the most known ineffective criteria that judges' behavior but not political affiliations. on the watch list, senator ted kennedy was on it. nelson mandela was on it. for god's sake, why do we have these people on this list? if you have, hundreds of thousands of names on this list, you will not have enough manpower to go through the list and detect the actual suspects

that need to be put on the no- fly list. host: our guest is the executive director for the american- islamic council of relations. if you want to ask him questions, the numbers are on your screen there was a poll put out about the topic of profiling. it shows that 59% favor russia best ethnic profiling force -- favre racial-ethnic profiling. guest: whenever we go through this difficult and challenging time, he motions will be high and people may have a knee-jerk

reaction to security, legitimate security concerns. again, our nation has learned. you cannot racially profile people and provide a false sense of security. it may satisfy some people but it does not solve the problem. you create bigger problem. you need to contain this problem and break it down and work on a affectively. you cannot make a widespread and involve many innocent people i believe racial profiling is not effective and security experts will tell you and members of the justice department and holland security department, profiling has never worked -- and homeland security departments, profiling has never worked. host: have been spoken to anybody in the administration about the specific list?

guest: we have sent a letter to the acting director of tsa, the transportation security administration, and we asked them to clarify the new measures, to make sure that at the end religious profiling is not enacted and is not the policy. we are still waiting for an answer. i wrote a letter to president barack obama a few days ago asking him to take steps to assure muslim-americans are not targeted because they are muslim. i believe the president, in his speech, in a way, is assuring us but we need that assurance to be communicated through the system so that average traveler' need not be singled out because they are muslim. host: have there been specific

situations put into the system that you would classify as racial profiling? guest: there have been incidents reported to us. some of them have been shown on the media including a moslem lady who wore a head cover, traveling from dulles airport to california. she was taken out of the lie. she was told because of her headdress, she had to go through extra security. she was patted down and someone was touching her body in an inappropriate way in from other people. she believed she was singled out. when she asked why she was taken a outlout of line, she was told because of her head dress parad. she said she had been traveling

for many years and she was told this was the new policy. a similar incident happened to a lady trying to enter the united states, visiting her husband in ohio. she was held and questioned about her believes and her headdress and she believed she was prevented from coming to the united states from canada because of her headdress. this is an allegation. we asked for clarification and i hope that the clarification will show this is not the policy. we need to assure the moslem- traveling population that they are not targets. host: our first call comes from detroit on our democrats line, go ahead. caller: in regards to the heightened security of the airports and this alleged terrorist blew from nigeria,

there was an intelligence a break. become a third world country and was inbound to detroit and we are all being made to suffer with all this extra screening. my question is -- have you written tsa for the administration and give it any suggestions in regards to how we can balance our civil liberties concerns with the security needs? i don't think we need these long lines and more body scanners can try to profile people of middle eastern or african background. i don't think that will make us safer at all. guest: when we broke to the acting director of the tsa asking for clarification, we offered our help and our support for the government to

make sure that our airports were safe. we need to have effective measures that are based on scientific and logical analysis. all those are frustrated when we go for long lines. if we introduce more sophisticated technology to detect bombs and explosives, i think that would help. also, trading tsa agents to judge behavior but not the looks of people, that would also help. to make the watch list more affective -- effective, it is clogged with irrelevant information and so many people are on that that should not be on it. that need to be reexamined.

those who are on the legitimately should have a way to redress that. i think they tsa should improve that measure. when i travel, i listen to people and i am shocked on the kind of people and the amount of people on the watch list. it is embarrassing. it is humiliating per. .

>> that the war on terrorism is a war on islam. this is dangerous. we have to do all we can as a nation as a government and as leaders to assure the muslim world that the war on terrorism which was invented in the past eight years is not a war on

islam. we have to work hard to alleviate the anxiety. we have to make sure the war on the terrorist is really a war on the terrorist. from obama's speech he has been communicating to the muslim world lending a hand to them. many people have seen -- have not seen effective change

in the policies of our country. for example the war in iraq, i hope it is winding down. working with the situation. the president of afghanistan and other's job have become more difficult when more civilians are being killed in the attacks. sometimes schools are being bombed and so many innocent people are being killed. we have to eliminate the casualties in the war. the second thing is >> he asked if you would boycott airports? >> again, i see the frustration. minorities in this country have suffered when we were in times

of tension after pearl harbor and world war i and world war ii and even throughout so many deck ates of discrimination against african americans. surely this has called for a boycott of one way or another. we have to work effectively with our government and others of faith community. there's no targeting the minority just because of who they are. i personally do not support the boycott because we need not to hurt our economy. we need it to go stronger. there are always better ways to communicate our fruft operation. speaking with the elected officials, be engage and as

muslims we are supposed to be engaging other people. i understand the frustration. as far as whether i'm on the watch list, when i travel and come back, i get a secondary check. i get up set when i see that but almost all major leaders in the muslim community they go through secondary check in the airports when they arive and get questioned. many are on the watch list. this is the wrong way to deal with the muslim community. that's why we are hoping president obama will take a second look at the watch list. the way

>> i see where he is coming from. there is a threat we have to deal with. again, we need when we deal with security issues, we have to be open minded and have to be careful not to make the problem bigger. yes, there is radicalization among young muslims that are being recruited. this number is very small. we need not to make it bigger. all it takes if we focus on one community, all it takes is al qaeda to go through someone else or other extremist groups to attack our country from within or outside and we will

just play catch up after that. for example when timothy mcvay bombed oklahoma city most of our attention had been focused on our minds. the one arrested first was an arab american in the oklahoma city airport. it was an october of god that timothy mcvay was in custody already and the government discovered the bomber was not arab but a white suspect. >> we should not do that. >> good morning

>> good morning caller: salam. you mentioned afghanistan. it's pretty well-known in the military that they are saying they killed children because the u.s. paid out big bucks. they know that the muslims burry the bodies within 24 hours. there's a little problem there. that's not why i'm calling. a lot of your points are valid. president obama needs to physically reach out to the american community. there's over 5,000 muslims serving. we need those people. we don't want to scare them away. but i'm in concern about racial profiling. peter king in new york has a point.

just like when we are looking for white suppose recommendists, we don't go to harlem to look for them. >> guest: sometimes these views are not heard. i'm happy to hear my fellow muslims to speak. i think our perspective is needed because we try to look at the bigger picture. to help our government deal with this issue because of the connection because of our

loyalty, we can do a job. i hope president obama will reach out to the muslim community included in the promise of not only giving action to events but planning and being proactive >> good morning. caller: i understand you are writing a let tore psa and to president obama.

they should speak to their congregation about this problem of terrorism they are going no this on friday and blowing up muslim worshipers during prayer. these are muslims killing muslims. we should attack this problem within the muslim community. crr and other organizations should be contacting each other to keep this thing and stop

this problem that we have. guest: thank you. this is an unfortunate reality that there is a political instability and violence. that's why we all have to work together. i think part of the problem is internal. we need to remind our fellow muslims that our religion is a religion of diversity. the united states muslim community is the most diverse muslim community in the world. we are happy and proud of our faith. we celebrate our diversity everyday. whenever you walk into a mosque in a united states, it is as if you are walking into the united nations. you see all sorts of people. that is the essence of islam. unfor the anyly, lack of

understanding of islam also by many muslims. it is a lack of understanding. it is a lack of sow fiss toe indication and yes, leadership has to be involved. the united states has a great model in the leadership we have in the mosque and the communication among so many groups. i believe american muslims can be and serve as a great model to the muslim world in many areas. whenever we have political stability, you see a coexist answer. whenever you have disturbances and political violence, you see extreme ix. unfortunately, all what we seed on television is negative in news we hardly see news

coverage and the 1.5 billion muslims who lead a life of dignity and hard work. getting their kids a good education and getting jobs and working hard. all of these values that we live as muslims around the world does not get communicated. they are seen to define the image of muslims in the u.s. media. host: our next call is bob on the republican line from cincinnati. caller: good morning. go ahead. i don't have a question. i have a comment. i would like all listeners to pay close attention to a book called muslim mafia and pay

close attention to chapter 8. . that's all i have for you and i'll hang up. guest: that's a book based on stolen documents written by extremist individuals designed to sell books against the muslim community. host: who were the documents stolen by? guest: several organizations. this was a spy that came our national office and pretended to be a muslim and an intern, stole documents. we sued this individual. the judge ruled in our favor. we welcome interns to be trained. unfortunately sometimes, people

exploit this and try to drive a wedge between the muslim community. >> what was the purpose of the book? guest: i think to sell the book. because it is a legal case now, the judge ruled in our favor. i cannot comment in more detail. host: new york city. fran on the independent line. caller: this question is for the best. you mentioned timothy mcvay. i have a problem with that. since that time, all the terrorist attacks have been instituted by extremist muslims. what do you say to that? guest: again, probably what we see on the news is attempted violent action by muslims or those who claim to be muslims

the overwhelming majority of muslims done dem this act. our faith is great faith. a faith of 1 billion people or more. it is a mainstream community. the acts of these individuals should not reflect on all of us. second, there are terrorist attacks that took place in the united states at hands of muslims even after timothy mcvay, even attacks on abortion doctors and clinics have claimed the life of people for political reasons. if we follow the definition of terrorism, these are terrorist acts taken and conducted at the hands of people who are non-muslim. terrorist knows no religion or ethnic background or border. what we see on television is we

see political instability in some places. we recognize that. we condemn it. >> denise from california on the democrat line. you are next. caller: good morning. i have a question and also a comment. my comment is since like the war is not against muslim or islam, the war is against islam extremist. if we look, we see in the mosque sometimes they have

extremist rhetoric. i am trying to figure out what are you doing to prevent that. what action have you made to prevent that? to me, i feel like the good muslim people should rice up against extremist. they are the problems. thank you. guest: thank you. i see where you come from and i agree with you. lieutenant me share with you traditionally and historically, the muslim american community have been systematic and consistent when it comes to condemning violent extreme ix and terrorism. whenever there is an event that war rents to be condemned, we do. a lot of our statements are condemnation assuring the

public and everybody that muslim community stands clear when it comes to the issue of extreme ix and terror ix. we have coordinated a verdict of what we call fatuah by the national panel of the united states to condemn extremeists and terror ism. hundreds of institutions in the united states we are talking proactive initiative conducting

an initiative. i hope we can denounce it soon just to make sure our young people are on track when it comes to priorities and understanding. the overwhelming majority of our people are in good shape. but also we are trying to monitor the situation and make sure that we are ahead of the curve. politically and provide counseling for those who may have tendencies for those who may be recruited by extremist. we said in previous conferences that we have a small problem. it is very small. we are going to deal with it effectively. it is something that warrants attention. we are going to take care of it. my ultimate goal here is our

community is patriotic, involved, vibrant. the muslim community is a partner in making america better and stronger. host: how do you square that with the five youths from america in pakistan. you call it a small problem, but then we have incidents that come here in d.c. that happen. guest: speaking of the five young americans who have been arrested in pakistan. it was the families who came us to community the fear about the disappearance of the five kids. they wanted to communicate with the government and facilitated with the f.b.i. in the presence of lawyers. we realize the shock that the

community has and the parents had about the disappearance. they did not see any sign of radicalization in their kids. they have not been charged with any crime to my knowledge. because of thisnd others, we wanted to deal with this issue to make sure our kids, those who go on the internet have answers at home and in the community. they are open and can community and speak their mind. we give them a sense of direction and priority and understanding so that they lead a protuck tiff life. let me say this. if you see extremist video, they try to exploit religious grievances people have around the world, especially among muslims. they try to appeal to the since

of injustice many people have. it is important for us as a nation to look at the bigger issue and war for peace and community. to drag the carpet from underneath these groups trying to recruit people that do not have a past history. that's the element of surprise to empower the leaders i think

hopefully this will come soon. next call on the republican line from virginia . caller: good morning. related to profiling and technology, they had an incident in an airport why are we allowing anybody getting on any plain without knowing who they are to begin with. if there's a watch list with thousands on it, the finger print should see who is who

real quick. even for a few moments someone can slip through the airport we need accurate information on

which we can monitor people which will redwuse possibility of the next terrorist who will slip through the sister teem when all of our surses are consumed one more call from maryland on the independent line. caller: thank you and the various staff across the nation of care who do an excellent job of representing islam. i speak for many americans who appreciate what you do against the pressure of the right wing neocons action against. how would you deal with the talking heads and the views listing from extremist what

would be a better substitute for those terms. if president obama's staff called you today. he definitely needs a good news story for the muslim community. we hear about the truck bombers and the five american that's left to bomb pakistan, what is the good news story you would pass on to the staff to assure him and the american public that muslims by and large, 99% are god fearing, law abiding citizens. guest: thank you.

they are miss informing the public about the description of things and the analysis. eventually, they make the problem worse. they are saying, listen, the united states isn't discriminating against muslims because they are muslims. look they are being pulled out of lines in the airport. that makes the point of al

qaeda. let's not do the pr there for itself. al kidea is small and limited when you see the policy makers or an listed targeting muslims. then you are outside the problem trying to make the problem with people who are your friends or even calling these people jihadists. some talking heads like to use this word. they appear to be educated and want to impress people. this is a big mistake. these people who killed innocent people who use

religious means these are not martyrs, they are murders. we should be accurate. jihad is a mainstream ferm inology. we have to educate ourselves. when you use the word jihad, you are giving leg is massy to the terrorists. when you replace that term inology, you are losing many muslims. terrorists are terrorists, murders are murders, that does not give legitimacy to their acts. the last question is what would i say to the president or any government officials, i would say the americans are an asset.

they are after fluent, education they should be our partners to bridge the growing gap between americans and the muslim world explaining the culture and could be the best asset for our nation to fix some of our policies and depide us. in order to do that, they have to be assured they are equal citizens protecting nrt law and included in the political process and they are given position in the government, that would be useful. thank you for your call. i think we as muslim americans despite this difficult time, we should be positive and reach out and should not let the

ignorance of people sway us from doing what we have to do as muslims. host: we'll have a discussion about healthcare coming up. first a look at the week's political story through the pen and ink of political cartoonists.

washington journal conditions. >> our guest to talk about

health care, welcome. when was important this week when the president endorsed taxing healthcare plans. the idea is that generous health plans encourage wasteful spending. employers would be encouraged to offer less generous plans. i think while it wasn't a surprise for the white house, what was interesting about it is now we are at the point where the administration is making it clear what they want from these bills and the president himself is spelling

it out. the house feels strongly that they want this in any final bill. host: their willingness -- how do you mesh two then? especially if the president has weighed himself on this question? guest: it's a great question. it is possible they could increase the principal one of the things in the senate bim is essentially a medicare tax that

hits individuals who earn more than $200,000 a year and couples earning more than $250,000 a year. it does reflect that principal. we can see the final bill coming out from what's already in the senate version. from those decisions mbings it's the wall street journal that reported he is going to meet with labor leaders on monday. what's the significance of that. labor has been one of the most vocal proponents of the past. getting higher benefits and trading wage increases. they may end up having to be taxed on those benefits or see employers get rid of them. key to reach out labor and try to alleviate concerns. labor is making clear they are going to make a lot of noise about this.

>> our guest until 9:15 if you have questions about the current working bill. guest: the public plan and the whole debate over whether the bill should include the public plan and what m many should see as the mechanism about what the public plan could do. a brief description. they get technical. basically in short, this is a mechanism of people buying on the individual market for people buying coverage from their employers, small business owners and people who are going

to get a new tax credit. thozz people instead of going through an agent, they'll go straight to the exchange to buy their palestines from now on. the idea is that they want to set it up like a travelicity and see this plan side by side. from a regulatory stand point, the debate is who should be regulating those exchanges. the senate bill would regulate while the house bill would allow for a national exchange which would be a federal exchange. because they had to give up on having this public plan in the bill, they don't have enough support in the senate, they are saying we should have a national exchange that will have some of the power to do the things the public plan could have done. the senate is very concerned,

you have moderate democrats concerned about having too much government intervention. this is something we expect the senate will push back. host: how much will happen between the work of the senate democrats and white house. what other things came out between the three? guest: the president made clear that according to aids this these meetings, this is something we have known all along. the senate bill is expected to be known. the conference committee are going to work and make modifications and send that bill to the house for a vote and then to the senate. there still would be a process of negotiating where the house could get things to the senate bill that they like. one of the things that the president has indicated in those meetings is that he likes

the afford blet measures in the house bill doing more to make coverage affordable to the lowest income. going up to the middle income people earning a little over $30,000 a year whereas the senate bill makes insurance more affordable for people who are just under the $88,000 a year, just under that income level. that is something that could really change the shape of the final bill from where it is in the senate if they add more of those afford ability measures. host: are there still penalties attached? guest: the senate bill it is a penalty of about $750 a year for individuals or for a family, it can go up to $250 a year.

the house bill does it at 2.5% of income capped at the cost of the basic policy. you would never be paying more in a penalty than what a basic policy would cost. host: that doesn't kick in until when? guest: either 2013 in the house bill or 2014 in the senate bill. that's another one of the issues they'll have to work out. there's an expectation that the democrats want to move some of these things up and have them happen earlier. financially in order to raise all the money for the bills, it's a little more effective if they wait to see some of these measures like starting the exchanges and all those penalties. if they do that whole part, they can have time to raise money beforehand. the taxes start going into effect almost within the first year that the bill would take effect. we see taxes not on individuals

per se but on insurance companies and medical device makers staggered within the tirs two years of the bill even though the extended coverage wouldn't kick in until 2014. host: it wouldn't go into effect when it is signed then? guest: effectively when it is signed. 9 insurance industry was making a hard push for having those delayed a lot longer. >> on our independent line. go ahead. >> as far as getting taxed and the constitution, i hear there's some of the governors going for this. i as an individual consider this an act of war considering

the confusion and me as an individual. ly tell you right now,ly not be a part of the plan. if the government of the united states is saying that i'm going to go to prizzon or they are going to take my money from me because i don't want to become socialized, you got a problem here. a major constitutional problem. as far as i'm concerned, i consider the legislative body right now in contempt of the constitution and a direct threat to our nation and the world in general just off of this ridiculous bill. but the corruption that's going on with the financial reality and this healthcare bill, it just is prove positive to any anybody with a thinking mind who loves the constitution that

this country has lost its way seriously. host: he mentioned major constitutional problems. is that true? guest: this is an argument we have heard a lot from republicans throughout the senate debate saying that it went gebs the constitution for the government to require. not a requirement that you have to necesarily own an automobile. the research i have seen suggests there would not be a strong iron clad case that could determine that this would be unconstitutional and the democrats have taken a close look at this and done their

homework to ensure that they wouldn't be running into serious problems. there are hundreds of scholars raising the issue on whether there could be some challenges and make this politically difficult to the democrats. host: he used the term going to prison is that a possibility? guest: in the senate debate that came up. democrats made clear that they do not want to send anyone to prison for carrying health insurance. i think we would be surprised to see that type of thing happening. a great question, one of the concerns is if you got this new government system in place new employers dropping back into the plan or just pay the penalty. it's a lot cheaper to dump

their employees into this exchange and that they wouldn't have to provide coverage anymore. they do not antisipate any employers. depending on which version of the bill they go with, penalties are stiff enough that they are relatively strong disincentives to do that. levying the tax and the payroll. it would either be a fine of $750 per worker or $3,000 per worker depending on how many went into the ex-change or system there are talk among the

employer group seeing the penalty stiffened a bit. the bottom line is that we don't expect a lot of employers to dump coverage. they have designed a way to prevent that. >> who determines what plans are put into the exchanges and the kind of options those plans can offer. the low care cost and the higher one. >> this is one of the areas where they are seeing details worked out. exchanges would have to have in order for an insurancer to participate, they have to offer plans that had a minimum level of benefits. benefits are structured in a way that they would be relatively depenrouse there

will be restrictions on which insurers can run with the plan. host: going to the line. caller: i appreciate you bringing on somebody from the wall street journal to discuss this. it wouldn't allow those across the board for people above 60 but would have allowed them to buy in.

that meeting with moderate dats. host: from twitter, she asks what is in this bill regarding the very poor is there going to be changes in eligible to medicaid? guest: the house bill expands it to 50% of poverty, the senate bill expands it to 133% of poverty. we are going to see a very big medicaid expansion. host: if i'm a doctor looking at this, what is my chief concern? guest: for doctors, they don't like to have patients at medicare or medicaid.

they don't want so many of the newly insuranced to be going on to medicaid. for consumers, the problem is whether they'll be able to find a doctor. if they have a new insurance program and can't find a doctor. having insurance doesn't do them very good. host: if i'm a hospital, how does this change the practices of the hospital as far as tests given by the practice? hospitals have the same concern. broadly speaking, they like the fact that they are not going to have so many uninsured people. they give a lot of caraway for people that don't pay their bills. they wouldn't have to make -- basically throwing so much money away. host: is this through the emergency room? guest: that's the main avenue. they also get government payments to offset the cost of

that care. there for, they are not going to be getting those payments anymore. donald on the democrat line you've answered a lot of my questions sitting here listening to you. i'm a little upset with our president. we need the public option. i really think he should push more for the public option and let the ball fall where it falls and the talking heads on

the right, let them explain how they are going to help with the coverage. we have to start looking out as a whole for all the american people. there are many people who can't afford to go to the hospital. on the other hand, they are still going to go to the emergency room and create a bill that taxpayers are going to have to pay. we are paying it right. that's really all i have to stay. have a good day. i love c-span and i hope we can get the public option back in the bill and get the sick some care. kids, babies, elderly, people that fought for this country, they deserve to be able to go to the hospital and get treated. guest: donald raises a question we have heard a lot from the

left in this debate. at the beginning of the debate, you heard the president say he did want a public option in the bill. as the debate went along, he made clear he was willing to comprimise if he doesn't get that. it has been a disa appointment. they don't have enough votes to get public option specifically through the senate. you have a number of key moderates that said they couldn't live with the bill. democrats have been trying to present a system of universal health for decades.

you are going to have subsidies. you will have a system that can no longer deny people care when they are sick. democrats say these are so many things we are going to get that even if we don't have a public option, the bill does a lot for the public goal. >> as far as concessions made putting this bill together, is there a positive sense that they can get the votes to pass on this ultimately. guest: that is the sense. there are a couple of issues that could gum this up at this point. one point is how the bill deal was abortion. the two bills are very

difficult about those. they would allow women to enroll in that policy but they would have to make a separate payment for that. the house sees that as a real battle they want to win. saying this week telling one media outlet that he felt he had somewhere between 10-12 house members willing to vote against the bill if it didn't have something close to the language he got into the house bill. that's an issue that it's all

but certain some type of bill is going to pass. host: going to the phone caller: thank you. i have a request if you could answer. regarding the mandate and subsidy for coverage. my situation is long term unemployed with preexisting condition but i do still have some retirement savings which is what i've been surviving on. if this mandate goes into effect, would i be able to qualify for a subsidy for the coverage or would that have to come out of pocket. would this have to be income tested or means tested. my other comment would be that this whole thing smells a lot

like mitt romneys republican plan in massachusetts which is basically mandating you pump private insurance. thanks a lot. guest: based on what you told me, it sounds like you would certainlyly qualify for some kind of assistance whether it would be an expansion or medicaid expansion depending on if you are married and have any other income. yes, it wouldn't be determined by any aspect of your health. it would be determined by your income. you might be eligible for medicaid and if not, it sounds likely you would be eligible for some type of tax credit that would help you buy insurance. those tax credits stratch out to a family of four earning up to $88,000 a year having their premiums capped. you mentioned the massachusetts model. you are right, lawmakers looked

closely at what was done in massachusetts a couple years ago. that's the only state that has a near universal health system within their state where people are mandated to buy insurance. it is true that the democrats took a close look at this and modeled things like the exchanges and penalty for not carrying insurance after the insurance model. host: on the republican line. . .

host: how does it work? caller: if we get sick we go to the hospital. we called them and we share our needs with each other. i am little concern that suddenly i will be forced out of this. i havey"p been comfortable sharg my needs with like-minded people and i will be thrown into a larger pot. it is not my choice. my choice would be to stay where i am at. i am a little concerned that i would be forced into something i don't want to do. guest: your situation is pretty unique. it would be difficult to say exactly what would happen to you. you raise a good point about religious beliefs. we will have to see what is in

the final bill but there are provisions that would give people a exemptions for certain religious beliefs. if you do not feel you should carry insurance, you may be able to seek an exemption. i don't know what your specific case would apply to that but that may be one avenue. it is likely that you could be required to not carry health insurance. there are exemptions for some people who can complain arch of. they define hardship -- does not clear at this point. you have -- you would have avenues to having to pay the penalty or carry insurance. host: betty, and our democrats line, good morning. caller: the question i have is about the cadillac plant tax. the employees bargain for the better plan.

when you give up extra pay, that cuts your retirement down and it also cut your social security because everything is based on what your income was. if they text a cadillac plan, they will also take it three ways. they have already given money out and they will turn around and give up social security and better retirement benefits. i don't agree with taxing the people that have worked hard to get these benefits because if you would see how some of these people have to work to get those benefits -- i don't think they should go out and tax them because they are called a cadillac plan. guest: that is a point or during a from labor and a lot of liberal democrats. they have the exact concern you

have that these are not people who are co's of goldman sachs but have traded of salary increases for better benefits and having lower copays and better returns. the democrats are talking about structure in the bill anyway that would protect some of these people. they have put in exemptions for certain professions, certain union percept professions and there is talk of raising those thresholds. for an individual who has a policy that is worth $8,500 or more, they would see that taxed. or a family that has a policy worth $23,000 per year or more, it is a 40% tax and it applies to the level beyond that threshold. it is likely that people will not have to pay the tax and that instead, what will happen is that you'll get company's restructuring their benefits so that the plants fall below that

threshold. that is giving up something, as well, but i think some people should anticipate that is probably what will happen first. that is still a concern. your concern is one the democrats are really wrestling with now. host: someone asked about the exchanges. can the insurance companies charge more for pre-existing conditions? guest: no, that is exactly what the exchanges are designed to do. an individual having to deal with pre-existing conditions for their individual policies, no, they cannot charge more. some activist groups have pointed out that those restrictions are not as tight as they would necessarily like and there may be loopholes. for the most part, people would be protected from those practices. host: has been determined who will oversee these exchanges? guest: it has not.

that is a battle we will see over the next couple of weeks. the house wants the national exchanges -- the senate wants them state-based exchanges. host: indiana, on our independent line, go ahead. caller: how are we paying for this? i think we will be taxing the industry, not the individual? wouldn't that force industry to raise prices in order to compensate for the tax burden? guest: that is one thing we have heard the industry say. pharmaceutical makers will be taxed $22 billion over a decade. medical device companies will be taxed $20 billion. insurers would have a flat fee of $60 billion.

tanning salons would see a 10% tax intending services. what we have heard is that insurance companies and others say they will have to pass these taxes on. that is a concern we are hearing. host: do you have another question? caller: is there no tax on individuals for this plant? guest: in the house bill, it is a high income tax and that would be a piper -- 5.4% tax other individuals earning $500,000 per year for families earning $1 million per year or more. that is in the house bill. that tax is not expected to survive the final legislation. however, the senate bill has an increase in the medical -- medicare payroll tax. that goes down to slightly lower high income individuals, individuals earning $200,000 per

year or families earning to order $50,000 per year or more. that is part of the senate bill. that is a tax that would fall on individuals. we also talked about the cadillac plan tax. that would be levied specifically on insurance companies but the effect is it would trickle down to individuals either through having the company's lower their benefits or insurers have indicated they would pass those costs on. host: some plans to optical and dental, how will those get treated? guest: those would go toward the high income threshold. all of those things would be factored into the cost of whether you hit that high income tax. host: these are things found in cadillac plans? guest: it could be. the question is, what is a cadillac plan? union members have these plans and because the plans are not

indexed toward medical inflation, they are at a slightly lower rate than medical benefits. people might get that capped quickly over the purse tenures of the bill. if you have a flexible spending account, those are the tax-free accounts where people can use tax-free money to pay for this -- prescription deductibles and copays. that factor into this. host: is there a worldcom to consider whether you have a cadillac plan are not? guest: what may not be a cadillac plan in two years with the rate of increase in medical spending could very quickly turned into a cadillac plan. if you are a union member, you may want to talk to your union about what they would value your plan at, to get a sense of it. host: madison, india and, on a republican line. caller: a few questions -- i am concerned about the health care

plan. the main issue i have with this is will be illegal immigrants that are in the united states be covered under this plan? since the taxpayers are paying for this anyway, will we also have to pick them up, too, on this? guest: this has been a sleeper issue in the debate that got some attention during the summer and faded away as abortion got more attention. i am expecting that this will get to be more of an issue as we see the bill in march. the senate bill, broadly speaking, neither of the bills would use government money to pay for care for illegal immigrants. in fact, there would be no money going directly for illegal immigrants in the bill to help give them care. however, in the house bill, there is one wrinkle that gives

illegal immigrants may be some benefits that could be seen as helpful. that would allow illegal immigrants to buy policies on the exchange. they would have to pay their entire way the government would not pay any money for them but they would be participating in what amounts to either a state or federal government-run exchange. that is in the house bill. we expect the senate bill to form the backbone of the final bill. we are hearing from some members in the hispanic-democratic caucus in the house that they have concerns about how the senate handles that and they may be advocating for their version of the bill. host: from twitter -- will old folks be able to buy their scooters under the new program and will they be able to stop the pharmaceutical companies from advertising? guest: far, there is -- so far,

there is nothing that would prohibit pharmaceutical advertising. medicare benefits, broadly speaking, the bill would cut about a round $400 billion out of the medicare program in terms of how much it pays providers. we would see cuts through that but we are not expected to see cuts in actual medicare benefits. whatever medicare benefits people get now whether it is a school or something else, they should expect to be able to do that. host: the president wants a final version signed by the time of the state of the union. is that possible? guest: it is still possible but that is a tight timeline. in late january, there could be taught that it could be moved to early february because they want to get as much progress done as possible on the bill before the state of the union. i think it is still a realistic goal at this point point.

but there is a lot of ground they need to cover in merging these two bills. host:wsj.com if you want to find that information there. we will talk about legislation that kicks in in february concerning credit cards. we will learn about details of that in a few minutes. a little but now from our "newsmakers" program. doug shulamn was asked about farm calls from taxpayers who call the irs and now they are handled. >> if you meet your service goal, almost -- only 71% of the people who reach the irs can get through to a real person >> >> let me talk about serviceberry with every irs program, whether it is service

or enforcement, my belief is that we can always get better. the report you are referencing talked about declining service levels these last two years as opposed to the years before. to put it in broad context, i try to make sure we run very good service channels. by that i mean phone service, web service, service over the internet, walk in service, as well. and our phone level of service has decreased the last couple of years. demand has really exploited. on average, we get about 65 million calls every year. a few years ago when the center of federal tax checks to everyone, we had 1 million calls. even though our levels of service was decreasing, we were answering and servicing more

taxpayers than ever before. we went to 35 million calls answered to 40 million calls answered. we want to bring those numbers back up this year. we are providing more service over the web that you used to have to call in for. the last couple of years, instead of calling in, we have an application called "where's my refund" where you can find out where your refund is. we also have "what's your adjusted gross income." you need that information for a variety of federal government forms. we are trying to push for service to the web. we are trying to route calls this year. we are also trying to make sure that when people do: get more accurate service. while this internal measure which is level of service went

down several percentage points in the last couple of years, when you do get through, accuracy is going up which means you only have to call once. host: irs commissioner douglas shulman. you confine that twice tomorrow on this program and you could watch it again at 6:00 in the evening. our guest for this final segment is a reporter for couple interest magazine. there's something called the credit card act of 2009. what was the purpose of this? guest: it was mainly to make this better for consumers. people are angry at the banks. they feel as if they have credit card rates going up, or what, that they were being treated really poorly, people were getting interest rate hikes one on top of another so they could not pay. a relatively small bad -- alice had escalated into an enormous balance and people were upset. host: this is a congressional

legislation. was there a move by federal agencies that oversee credit cards? where the differences between the 12th? guest: the federal reserve board has to issue this. the federal reserve board explains how it will work. host: as far as the specifics, i will read some of them and you can add. there would be one that would ban on fair rate increases. what would happen on this? guest: if you get a new car, you have to get a rate last for eight years except there are exceptions. promotional rights must last six months and after the end of the introductory rate, your bricken automatically rise. if your rate is based on an index of most cars are now based on some kind of index such as the primary, your rate will rise when the index rises no matter

how often that is. the other thing is that if you are 60 days late on your payment, they can raise your host: this is just for new cards that people get, not for existing ones? guest: the rules don't go into effect until next month. it has to stay in effect for one year. if you get the low rate, it will last for at least six months. host: it deals with something that is categorize -- categorized as unfair the traps. guest: you used to pay your bill at 10:00 and tyour bill came in and was processed at 3:00 in the afternoon and you might be charged he paid by telephone because you have forgotten and

you want to make sure it got in on time. he might be charged a fee for that. those kind of little these are eliminated. they cannot do that. if it arrives at 5:00 on the day it is due, it is on time. if you're due date is is a weekend or holiday and the bill arrives the next day, it is on time. you can i get fees for those kinds of actions. host: when you talk about the interest rate, are these four folks who would be classified as a good credit people or anybody? guest: those kind of things apply to everyone. there are no exceptions for that closed rules. there are specific rules for people who have poor credit and are in the subprime category because those fees are particularly onerous. if you or someone with poor credit or no credit and you have to apply for a subprime card, it

can be extremely expensive and the credit card act limits those fees to no more than 25% of your total credit limit. host: what kind of interest are you talking about? guest: probably 80% or 20% host: we talk about details but one complaint from credit-card people is how they get information about their credit cards. what does it do for disclosure? guest: that should be much better. the act requires that your statement be much clearer, much simpler, it has to have a box and at that tells you how long it will take you to pay off your balance if you pay only at the minimum rate and it has to tell you what your monthly payment will be to pay off whatever your balance is within 36 months. host: most people don't have guese that kind of information.

guest: know, if you of your credit card bill, it will not tell you that to a $1,000. host: our banks required to lay this out in big print or it can send you something like junk mail? guest: i am sure some things will be in small print but that is supposed to be very clear and easy to understand. the federal reserve spent a lot of time with focus groups to study it and figure out how to make the statements much clearer, more intelligible, and the requirements are that you should be able to read them and know what they say. host: if someone called their back and ask for an explanation, does the government require someone on the other end of that line to explain in english what that means? guest: there is a customer service number and you should be

able to get relatively clear, easy to understand answers from customer service. host: how does a deal with students? guest: you will not see the ubiquitous tables on college campuses offering free pizza, t- shirts, or whatever, if you sign up for a credit card. they may be unhappy about the but parents may be fine. if you are under 21, you must either have somebody cosign the credit card for you who has demonstrated the ability to repay that debt or you must give some proof that you have the income to pay that debt back. host: does that mean a parent's signature? guest: it will probably mean that a parent has to cosign a card if the student is under 21. host: when do these parts of the rules take effect? guest: next month, february 22.

host: as far as the whole bill was concerned, are there more rules that will come down the line? guest: there are a couple of rules about gift cards that go into effect next august but almost everything goes into effect next month. the provisions about advance notice, a 45-day notice of advance rate went into effect last august. host:joabn goldwasser is our guest from kiplingers'. the numbers are on your screen3. . if i am a bank that is a credit

card and i look at these rules, to simply comply with them or are there ways to go around them? guest: since last may when the bill was signed, many people have already seen their credit limits cut, their interest rates are raised, and changes in their credit cards from a fixed rate to a variable rate. banks have been preparing for this for months. host: what is the magic behind a fixed rate changeover? guest: if you have a fixed rate, you know what the rate will be. a variable rate can rise as economic conditions in the country change. host: it can change from month to month? guest: it depends on what index they go by. the prime rate is what the most common and that has stayed stable for a very long time and is very low now, it is only 3.25%. one assumes that it will rise as the economy recovers.

host: what about airline travel or hotel stays? do these new rules affect these? guest: the rules themselves don't affect on but what will probably happen is that those programs will become a less generous. the banks are hurting now. one problem is that the percentage of charge-offs' when the bank rights of your account completely when you're not paying, they are at historically high levels. because of this, they are trying to figure out what they can do. one thing they are doing is adding annual fees to credit cards. the airline cards are one that traditionally had fees and look for more of them. they are also cutting back on rewards programs. it takes more miles to get a free ticket or perhaps more points to get a free hotel room. it makes them less generous host: does this mean every type of bank in the united states?

guest: every bank could potentially do a pretty big banks are less generous with their programs and have higher fees than the small banks or credit unions. everybody is covered under this. host: smaller banks, credit unions, it doesn't matter? guest: that doesn't matter. host: will community banks agree with this as much as a big bank would? would they say they are being unfairly treated because of their size? guest: i don't know about that. they probably have not have the same kinds of pressures. the big banks are the ones that issue the most credit cards and were probably the most liberal in issuing credit cards to a greater number of people. the community banks have always been a little bit more careful in whom they make loans to. and a credit card is a lumber they probably don't have the

same kind of problem that some of the big bags do. host: turkey village, arkansas, you are up first. caller: i wanted to know about the credit card interest rates. how would they raise the matter what your credit would be? is this going to stay in the fact after the new law begins or will they drop back down to what the prime is? i have a good credit rating but every credit card i have has gone up into the double digits. over the last six months. guest: your interest rates will probably stay where they are. if your credit card issuer raise your rates because of a change in your credit condition, that determines that your less credit or the individual, the new rules require a revisit on an interest

rate after six months and they will see if you deserve to have your rate a lord. no one is quite sure how this will work but that is what the law requires. host: our next call is jasper, indiana, democrats line, good morning. caller: good morning. my question goes to the balance transfer offers the credit cards make. i took advantage of a balance transfer would city card. -- with city carter it was a low rate. the next billing cycle came through and that balance had been reduced by the amount of our people as payment. we made a call out they were applying pigments to the lower interest rate portion of our debt first instead of applying a first to the higher interest rate portion that we made purchases on every month. that obviates the whole point of

making a balance transfer to a low rate. people -- we were not apprised of this bomb to the bands of the offer and felt like we had been deceived and we were wondering what would be the new policy with regard to this sort of thing. guest: that is one place where the car back makes a difference. from now on, when the new rules go into effect next month, if you make more than a minimum payment, whatever your payment is will automatically go to the higher interest rate balance. if you only make the minimum payment, the issuer has the right to apply it to whichever balance it was pretty if you make more than the minimum payment, it will go to your higher interest rate. host: what will that do for the balance as a whole? guest: you will be paying off your higher rate balance at whatever rate you're paying it off. you will not be accruing interest on that before, if you had a 0% balance t/rf offer

and used your card and had a 10% interest rate and your payment went to the 0%, your 10% interest rate balance was accruing interest at 10% as he said, you lost the benefit of having the to 0% offered. host: we will have two more guests during this segment. you have done work on this legislation. what does this mean for the consumer? guest: this means more honest and upfront pricing. they will be able to understand the credit card terms much better and know what they're getting. does a better environment for consumers. host: what does ultimately mean for the lenders from your association perspective? hosguest: the lenders have latitude to charge with they want but they can charge the interest rate they want.

they just have to do it in a more honest way. it sure is will need to move to more honest pricing. however, our report shows many issuers have not follow the spirit of this and are trying new tracks and tactics to get around these rules. host: such as? guest: we talked about variable- rate becoming more prominent. there is manipulation of the bowery bar rates in a pure waste. one is that they are being set so that even if the prime rate goes down, the variable-rate can't go down. they have a floor at what they are issued at. they are only variable of board. the other thing they do is instead of fixing the index to the prime rate now, they are actually reaching back and cherry picking the highs primary over a long period of time.

that can have a large effect on consumers. we estimate it at seven other $20 million or more in impact. host: as far as disclosure, do you think banks will falter with the spirit of was -- what is being laid out a disclosure- wise? guest: i think there'll be some issuers who will try to use whatever they don't have to disclose and try to use those to raise your prices. i should be clear that this was a very positive and good law for consumers that will improve the environment boa does not fix everything. disclosure will be better although it will not be perfect one problem with disclosure is the pricing is so complex and credit cards and that is intentional. no matter how much disclosure you have, there is a limit to how much someone can digest. there is a one-page summary of

terms. you have a term agreement which could be 20 pages. there is a one-page summary and that could have 30 numbers on it in a typical issuers agreement. the low will help because of improved disclosure but the complexity is there that makes it hard for anybody to interpret paren. host: did the law go far enough? guest: in new -- in many ways it did. the only way to make adequate regulation in this kind of changing environment is something like a consumer financial protection agency which is currently under consideration now. issuers are adjusting and a loss can adjust quickly and upper there is to be a regulator who was dedicated to addressing these issues as they come up. host: the regulators would be sure that the banks are all

doing what is laid out in the legislation? guest: exactly, prices need to be fair and upfront and honest. host: you can find it on the website, responsible toa lending.com. guest: the obama administration is trying to get more legislation through. there has been debate about it. one of the issues is that there are so many different agencies that deal with consumer financial issues. this way, they would be all under one agency. host: how many agencies in general? guest: it is something like a dozen boarded it is a large number. there ain't -- a new agency wouldn't just be to look out for the consumer. host: augusta, maine, on our

independent line. caller: like so many other people, my insurance rates went up 7%. the letter i got from my credit union, a very conservative organization, the navy credible -- navy federal credit union, they said do to change in regulations, they would have to recalculate how we figure out your interest. the result of that is that it went up by nearly 8%. they said it was because of recent federal changes, nothing that i did. what is it that changed that the federal government did that helps me out by increasing my interest rate tax host: do you carry a balance, typically?

caller: typically, but i paid off from time to time. it has ebbs and flows. guest: 10 the banks acted prospectively. they knew they would be impacted by the legislation and a raised interest rates even for people who paid on time, who were very good customers. tizthe difference is that now ty will not be able to raise your balance -- your interest rate instantly, overnight because you have done something wrong it will be a lot more measured. people are not happy and i can understand that when they have their interest rates raised but the bill does give them certain protections that they did not have before. host: if it gets to the point where they are not happy, can they close their accounts and make amends with the bank? guest: sure, this provision went

into effect last august. if your bank richard wright, it did not have too many options. now, you'll get 45 days notice and you can pay off your balance at the old rate either within five years or the bank can require that you have a minimum payment of no more than twice what it was before. when you pay it off of the old rate, you cannot use the card anymore. it is your only credit card, you get -- you better get another one in a bad. host: how does that show up on a credit report? guest: it will not hurt your credit score to have it closed. host: is there a way to make credit scores more consistent? guest: no, there are three credit bureaus and everybody figures out the credits

corporate the fico score's most common. it is created by fair-isaac and they create that through their own credit -- computer models. there are other scores that are used and those are proprietary. you cannot get a free credit score to can get a free credit reports from each of the three credit bureaus. you should always get a free credit report as opposed to paying for one. there is no reason to pay for it. host: our republican line, good morning. caller: good morning. i want to know if you haven't of a credit card or line of credit and it is paid off and you to close a, is it better for the customer to close the account or to wait for the company to close the account for non-activity? how does that affect your credit

score? guest: it really will matter who close the account if it says it is paid as agreed. closing an account affect your credit score only to the extent that it changes the amount of your credit utilization. your credit card had a credit limit, and you were using some percentage of that credit. when you close the account, that credit limit is removed. you would be using a higher percentage of your remaining credit limit. you never want to use more than 50%, at the most, and it is better if you only use up to about 30% of your credit limit. closing a card might affect that. that would be a negative. host: san diego, california, go ahead. caller: besides credit cards, i use and pay them off and i do not have a huge problem so far.

there was an earmark on a bill that national parks were legal. i never heard this before. i was wondering if this was ever brought up again anywhere and if anybody is fighting this? guest: was she saying something about guns? host: yes, guns and national parks. guest: i saw something about that but i think that was eliminated. that was not included in the credit card act. she said guns -- they said guns would not be allowed a national park. i am not an expert on that. host: if i go to restore and have a debit card, sometimes they ask if i have double or credit for it if i use it as credit, does it apply to the

same principles as a credit card deck? guest: no, a debit card is covered under the electronic funds transfer act which is another piece of legislation. the rules are not as strict for the issuers as they are under the fair credit lending act -- fair practices lending act. in general, you are pretty safe using it. there are certain protections. the difference in whether use your debit card has to do with how much money the bank will receive and how much the retailer will have to pay. host: if i have a strict department store card, doesn't that fall under credit cards? guest: those definitely will fall under the rules. those are credit cards.

host: danbury, connecticut, on our independent line. caller: good morning. host: you are on the air, go ahead. caller: i am from connecticut. can you hear me? host: yes, go ahead. caller: i received four or five credit cards a couple of years ago. i am retired. i'm on social security. can you hear me? host: you are on the air, go ahead, please. caller: i received all these credit cards and i was wondering how come i received these credit cards and i am not working? guest: a few years ago, banks were issuing credit cards very liberally.

almost anyone would received numerous offers in the mail and they would say that you have been pre-approved for a card. it was pretty easy to get a credit card. that has changed partly as a result of the recession and the economy but also, the credit card act addresses that and it says that companies should not issue credit cards without having some indication they will be able to repay the amount of money they are borrowing. host: is consumer use of credit, has changed? because of the recession? guest: i don't know whether consumers are using them differently. people are definitely setting more and trying to pay down debt. they are trying to be more careful, in general. host: citadel, louisiana, on our democrats live. if you could turn down your

television, that would help. caller: ok. i am trying to find out something about payment on a credit card. for instance, if my credit card limit is $100 per month, and i pay $200, and the interest rate still goes up -- if the interest rate was 15% and in the next two months, even though i am paying $100 extra, the interest rate goes up to 21%. it keeps going up each month

like that, at the end of the year, i am paying like $70 every three months on interest. how would you avoid that? guest: that should not happen anymore. credit issuers will not be able to raise your interest rate, assuming you are paying on time in that respect. if you have a card, your rate should remain stable. i am not quite sure you are paying on time that the rate is being raised every month. it should not be happening. that should stop. host: there is something called double cycle billing. how does that work? guest: the legislation forbids double cycle ballot. that is a complicated way of calculating interest where if you pay on time one month but do not pay on time the next month, the interest rate is calculated based on the previous month plus

balance even though you paid off most of it and it ends up being in much more expensive way for you to zero interests. that has been eliminated. host: another perspective is todd wicky, a professor of law at george mason university. what does the legislation mean for the banks? mr zewicky? guest: both congress and consumers are finding that congress can pass all laws it wants but it cannot repeal laws of supply and demand. i think that is what we are ending up seeing is that -- i don't know what the perspective of the banks are.

i don't work in the bags. i am interested from the impact of consumers and the economy. we are finding out that while a lot of these ideas may be well- intentioned, we are finding out they have all loved severe unintended consequences for consumers that are resulting in less access to credit, higher interest rates and all sorts of things that will end up restricting consumer access to credit. host: in the long term, people who need credit will probably not be able to get access because of these new laws? guest:sure, it limits the ability of credit tours. some of the provisions are fairly innocuous. some of the provisions limit the ability of creditors to accurately price the risk of cardholders when circumstances change. anybody understands that if a card issuer will be limited its ability to raise the customer's

interest rate if they become riskier, they will charge a higher interest rate in the first place. that will impact everybody, both good and bad risk. one way to deal with it is they could try to price this more accurately predict they cannot price risk more accurately, the second option would be that they can reduce risk exposure which means it gives people less credit. in the end, the beneficiaries of this will not likely to be consumers. it is likely to be of a title letters were poised to lend to people who cannot get credit because they have limited the ability of banks to price risk accurately host: as far as banks provisions to disclose information to consumers, is that a good thing? guest: yes, i have gotten some of those things and there's nothing wrong with that the big problem comes when you get to

more arcane politically- motivated disclosures. for instance, your guest earlier talked about the requirements that would create more clutter on a monthly statement such as requiring issuers to disclose how long it would take to pay off your full balance it all made the minimum payment. ithe reserve estimate that provision would estimate about 4% of cardholders. 4% in america say they're interested in knowing how long it would take them to pay off their bill, making the minimum payment, if they don't make any more charges. i think it is a relevant question to ask whether we want to impose more costs on issuers and cluttered monthly statements for consumers to make it more difficult for them to figure out what they need.

we think that 4% of consumers might benefit. that is not enough host: what happens to record programs? guest: all that will probably end up being cut. you can think of lending in general as a balloon which if you squeeze of one part of the balloon, it will pop up somewhere else if you reduce the ability to adjust interest rates and reduce the ability to charge fees based on consumers' behavior and the costs of that they impose, you are likely to see other fees and interest rates adjusted. . they will reduce customer service and the quality of cards including things like rewards, cash back, and airline miles.

you will also probably see higher annual fees and more annual fees recur. annual fees are a bad deal for consumer. they apply to everybody, whether good risk or bad risk, and a limit and deter consumers from holding multiple credit cards. the fact the consumers can hold multiple credit cards is an incredible win for the credit- card industry. we will see a lot less competition and that may be the most far-reaching negative consequence. host: we're talking about the need for a financial agency to oversee this and see that the rules are followed. would you support that? guest: the consumer financial protection agency is a particularly bad idea.

if you anticipate the impact of the credit card act which is a fairly mild piece of legislation, people are getting their credit lines cut and are less exposed to credit. if we are talking about an agency that would streamline the enforcement of laws and -- that would encourage competition through better disclosure and that sort of thing, i think that would be great. if we are talking about an agency that would have far- reaching discretion to regulate the substance of credit-card terms, then i think we're talking about a completely different story. one example is the cfda would have the ability to bet abuse of credit card products, whatever

those are. "the wall street journal" had an article that talked about the new 79% a puerto rico credit card. that was the credit card that was invented because of the credit card act. this used to be a car that had high up-front fees. it limits the up front fees that can be charged for it. they are required to reduce the up-front fees and charge a 79% the to consumers in order to make the product feasible. i don't see how you can meaningfully talk about that as being less abusive that another. it shows the wavy cfda is flawed in keeping a super-regulator that will look over consumer shoulders and protect them from

their own choices. while we need to have a more streamlined and coherent system, i don't think it will help consumers or economic recovery to drop a giant new bureaucracy and the middle -- in the middle. host: that you for your time this morning tampa, florida, thank you for waiting, on our independent line. caller: i have four credit cards, two are with the same bank, citibank. i want to merge both cars because one has a high limit and the other has a low limit. they're both mastercard and the bank told they could not do because of a federal law, the new federal law. why should i be penalized if i keep they zero balance.

if i pay off my credit cards, why should i be penalized as far as my credit rating is concerned? guest: you are not being penalized in terms of your credit rating. i assume you are talking about closing one of the accounts and having your credit score change. fico scores are an algorithm that is designed to predict whether you will pay your bill. it has nothing to built with anything else except a mathematical probability of whether you pay your bill. part of that is your payment history. that is a large part of it, actually. credit utilization is another part of it. when you close a card, your credit record still stays on the record for a very long time. we are talking 7-10 years.

it remains there and it will not penalize you. it has a small affecting the only reason it would have a large effect is it the car has a high credit limit and you were using most of your credit and you removed the credit limit set your spending a lot of your credit limit. if you go near the maximum and taken away so you're using a high percentage, otherwise, causing a credit card does not have a significant effect on your score. host: tucson, ariz., on a republican line. caller: this has to do with credit utilization i got roped into a credit card as a college student in my early 20's and ran up $10,000 in debt. that is a lot of money for a 20- year-old. i paid off over many years. last year, i got that paid off.

i closed the account. i have no credit cards now. i have now play harder time getting any kind of credit because i have no credit. in the past, i would of had an option of $10,000 and i would of had a better chance of getting another credit card. now that i have no opportunities to run up debts, i cannot get credit. hostguest: in order to have a ct score, you need to have one open account and it has to have been open for six months. that is the minimum for fico to calculate credits corporate. you can also have a car loan, a mortgage, or some kind of personal loan that has also been

opened for six months and which there is a payment record. if you have none of those days, you will have trouble when you go to apply for credit. you have closed all of your couch and you do not have a mortgage and you don't have a car loan and you suddenly decide that you need credit, you will be in trouble. if you know that will happen, it is probably worthwhile to try to get a credit card and establish a payment record so that you have a credit score and you can prove that you were creditworthy. host: joan goldwasser is the senior reporters forkiplinger's magazine. thank you so much for your time. guest: happy to be with you. host: scott patterson will be here tomorrow from the state -- association of state budget officers. we will talk about states that are facing a budget shortfall. we'll talkut