bart stupak said he had up to 12 house members who were willing to vote against the bill. so, that is an issue that could prove troublesome in trying to get the bill through the house. there are some other issues they need to work out as well. at this point, it is all but certain that some type of bill will pass. host: south carolina, you are next. caller: good morning. thank you for taking my call. i have a question i would like you to answer if you can. regarding the mandate and the subsidy for coverage, my situation is, long term,

unemployed, pre-existing conditions. 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 . . 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 thes >> sunday on washington journal. a look at the 48 states. the political outlook and the

2010 midterm elections with peter heart and bill mcinturff. following that anne kornblut, cracks in the creeling about women in politics. that's live president obama talks about the job's report followed by peter king who urges passage of the bill that transfers caught know detainees to the united states. this is just about nine minutes.

we learned in november, our economy saw the first job gains in years. job losses were one 10th of what we were in the first quarter. until we see a good sustainable job creation, we will be relentless to get america back to work. we need to rebuild our economy in such a way that's our families can feel a measure of security again. too many of the folks i talk to this year tell me they've known their own private recession since long before economist declared one.

the result was an economy where some made out well but the middle class took a beating. over the past decade, the income of households actually declined. hard working folks found themselves forced to down scale their dreams. we are talking simple, american dreams a chance 0 give our kids a better shot than we got. even as we focus on putting america back to work, we are building a new foundation to build good, lavetting jobs. in the clean energy that will

depen rate and keep the jobs of clean energy here in america. we are forming our education system so our kids are best prepared to compete within the world. we are fixing our broken system. that's what i'd like to focus on for a moment uninsurance

americans with preexisting illnesses will finally be able to face coverage. young adult also be able to stay on their parent's policy until they are 26 or 27 years old. small business owners will be given tax credit for coverage. early retirees will see protection. seniors falling in the doughnut hole will receive up to 50% as we begin to close that gap all together. every patient's choice of doctor will be protected. insurance plans will be required to offer precare to their customers to start

catching preventable illnesses on the front end. there will be prohibited from dropping coverage when you are sick or need it most. in short, once i sign the health insurance form into law, doctors and patients will have more control and insurance company burrow cats will have less. these changes will perform the most sweeping reforms that this country has ever known. that's how we'll make 2010 a healthier and more secure for every american. we enter a new decade now. we are going to meet them. it is a time of tremendous

promise. we will rebuild the american dream for a middle class and put the economy on the future. this year as one nation and one people. thanks for listening. >> hi, i'm republican congressman peat cane. i'm member of the house intelligence committee. two weeks ago, a terrorist plot was thwarted by a combination of luck and vig lense. it should never have even gotten to that point. last year, this plotter, a

widely respected member and shared his concerns that his son was becoming a radical jihaddist. that should have been more than enough review also take place and hearings will be held. this is about much more than when this gets longer or takes more time to get through security lines at the airport. this is about whether we have learned our weapons. they are always working on the extra tax and finding their method. september 11 is not just history. tds all too real. it is for administration to stop sending secret messages.

putting other terrorists on trial in downtown manhattan for an enormous risk as we propose the facility in chicago. it's a good reason why we have had a hard time transferring detainees in our country. terrorists should be held and tried as enemy combatants. keep terrorist out of america act will ensure we keep america as it is with the terrorist who

tried to bring down flight 253. we are a nation at war. we should act like it. we need to send a clear signal to our friends and enemy that's this government will stop at nothing to protect our homeland. thank you for listening. >> you are watching c-span. coming up, the state of the state addresses by california and new york. and after that ceremonies in houston and atlanta. >> earlier this week, california state governor delivered his state of the state address.

he won reelection in 206. he is not el gibble to run for office again. it is about half an hour. thank you senate president pro tem steinberg, speaker bass, senator hollingsworth, assemblyman blakeslee, attorney general brown, treasurer lockyer, secretary of state bowen, controller chung, insurance commissioner poizner, superintendent of public instruction o'connell, members of the board of equalization, all my cabinet secretaries, my chief of staff susan kennedy, and members of the legislature. it's good to see everyone together again. i would like to just introduce a few guest i have

in the gallery first of all my wife maria shriver my wife with our four children. [applause] >> and my friend secretary george shultz and his wonderful wife charlotte. [applause] >> and another friend mayor willie brown, he also was speaker willie brown at one point. [applause]

alice huffman, president of the california naacp, [applause] speaker hertzberg, right over here. [applause] also hone assie community college chancellor jack scott, big hand to him also. and then we have a very, very special guest here sara granda, who overcame great obstacles to pass

her bar exam and become an attorney. let's give her a special, big, big hand for the great work that she has been doing. [applause] i want to begin with a true story from which we can draw a worthwhile lesson. as you might guess, the schwarzenegger household is something of a menagerie: an austrian bodybuilder, a tv journalist, four children, a dog, the normal goldfish and hamsters and so forth. and in recent years we added a miniature pony and a pot-bellied pig. it's not unusual for me to look up from working on the budget or something to find a pig and a pony >> standing right there in front of me and staring me. now, the dog's food, which

we keep in a canister with a screw-on lid, sits on the top of the dog's kennel. the pony has learned to knock the canister off the top of the kennel, and then he and the pig wedge it into the corner. there's this ridge on the lid of the canister, and the pig with his snout pushes this ridge around and around until it loosens. and then they roll the canister around on the floor until the food spills out. and then of course they go to town and they eat it. i don't know how they ever figured all of that out. to tell you the truth. it's like humans figuring out how to create fire. but it is the greatest example of teamwork. i love it. it's about team work. so one lesson to draw from the pig and the pony story is what we can accomplish when we work together. and last year we here in this room did some great great work together. we had a pig and pony year. and i want to make sure now

before some reporters write that i compared the legislator to pigs and ponies that that is not the message. the message is about working together. team work. together as a team as fracture rouse and tentative and as uncertain as it might have been. together, we got california through the front end of the worst financial crisis since the great depression. although not without pain, we closed a budget gap of $60 billion. plus. these decisions were very hard for both sides of the aisle. on the republican side, we had leaders who sacrificed their careers or put them at risk. on the democratic side, we had legislators who were threatened by their own interest groups. to those on both sides of the aisle who took these risks for the good of the state, you have my deepest admiration. we did what we had to do. we made painful spending cuts. we passed temporary tax increases. we permanently eliminated colas for most state programs.

we made major reforms in welfare and parole. and there are two accomplishments in particular i want to recognize. just last night the assembly passed major educational reform, reform that once seemed impossible, but now will become law as soon as it hits my desk. for too many years, too many children were trapped in low-performing schools. the exit doors may as well have been chained. now, for the first time, parents -- without the principal's permission -- have the right to free their children from these destructive schools. that is a great freedom. also in the past, parents had no power to bring about change in their children's schools. but that will now change. parents will now have the means to get rid of incompetent principals and take other necessary steps to improve their children's education. to increase accountability, we broke down the firewall so that teacher performance

can be linked to student performance. [applause] >> so that's a great, great accomplishment and congratulations to all who did this great work. another major accomplishment: for decades this state was in a literal war over water, with old and deep divisions û northern california versus southern california, democrat versus republican, farmer versus environmentalist, business versus labor. and the list goes on and on. we here in this room made history with the most comprehensive water package in nearly half a century. we brought all stakeholders together. by workinging to we got it done. and now we must work to pass the $11 billion in water bonds that will be on the ballot in november. democrats and republicans will have to travel up and down the state to educate the people of california why those bonds are so important. because some people say how can we afford those bonds in

the current economic climate? i say, how can we not? it is the law that you cannot build a school, you cannot build a factory, you cannot build an office building or a housing development without identifying a source of water. as a result, huge projects with thousands of jobs have been put on hold. our economy cannot grow without water. our population cannot live without water. it is our state's lifeblood. now is exactly the time to invest in it, so that when californians turn on the faucet, there is safe, reliable and clean water coming out the tap -- not just five years from now but 30, 40 or 50 years. from now. that is so important. now let's talk about the coming year. if i had to summarize in one word our focus for the coming year, it would be the word "priorities." we have to get them straight and we have to keep them

straight. the first priority for the coming year is to get the economy and get jobs back. jobs, jobs, jobs. [applause] the people and businesses of california are an engine of self-betterment and progress. as long as government keeps the engine oiled with prudent policies, and, more importantly, does not pour sand in its gears, this state will persevere and prosper. i will come to the main thing we can do to help the economy in a moment, but there are four proposals to spur job growth that i will introduce. first, you will receive a $500 million jobs package that we estimate could train up to 140,000 workers and help create 100,000 jobs. second, you will receive a measure to streamline the permitting of construction projects

that already have a completed environmental report. third, to stimulate other construction jobs, you will receive a proposal for homebuyer tax credits of up to $10,000 for the purchase of new or existing homes. [applause] and fourth, since we want california to be the dynamo of green technology, i ask you to pass our proposal exempting the purchase of green tech manufacturing equipment from the sales tax. that, too, means jobs -- [applause] jobs for the new economy. while we still have a long way to go, the worst is over for california's economy. and the really good thing is that we have the right economic mix going forward -- high tech, green tech, biotech, hollywood-tech, farmer-tech and so forth. our economy is well-positioned to take advantage of the future.

so let me tell you the main thing that we here in this chamber can do to help the economy and jobs. we can be a better partner to the economy. because the state and government has a responsibility not to be an obstacle to success but to be a partner in prosperity. to strengthen the economy which is the foundation of all jobs, we here in this chamber must reform california's budget and tax system. that would be a huge stimulus. the basic problem is that our tax system does not reflect our economy. in 2009, california's economic growth declined only by 2.8%, but our tax revenues were down more than eight times that much. our economy is diverse, whereas our tax system is not. 144,000 taxpayers pay almost 50 percent of all personal income taxes. think about it.

38 million californians have to rely on 144,000 people for their schools, their fire protection, their health care, their public safety and many other services. that makes no sense. here is what we need to accept: our economy is 21st century, but our tax system is 20th century. it's stuck in the wrong century. the tax reform commission did its work and came up with a plan for reform that was praised by both willie brown and "the wall street journal". how often does that happen? [laughter] the commission proposed major, radical reforms. some people say they are too bold and thus they would be too hard to enact. what do they mean too bold? bold is what we do in california. what do they mean too hard? if i had hesitated in my career every time i made a move because it was

hard i would still be yodeling in austria. [laughter] we must begin work on these tax reforms because we simply cannot wait for the rich to bounce back. state revenues are not expected to return to where they were until 2013 to 2014. i sent you the tax reform commission's plan in late september, but it seems to have disappeared under this dome. where is it? maybe the pig and the pony have taken it. that's where it is. but you know something, i'm looking forward to working with the legislature to get this done. budget reform is just as important. this is something i've been talking about since i've become governor of this great state. the budget crisis is our katrina. we knew it was coming. we've known it for years. and yet sacramento would not reinforce the economic levees. in addition to taking action on the tax commission's plan,

i ask you to also take action on the best practices budget accountability act, which has been drafted by the reform group, california forward. under the leadership of bob hertzberg of course. i especially support its proposals for performance-based budgeting and applying one-time spikes in revenues to one-time uses, such as debt reduction, infrastructure, and creating a rainy day fund. the leaders of this body have said and said it many times that the legislature should be given a chance to enact reforms before reforms go directly to the people. here is that chance. i urge you to take it. and as we struggle to overcome our differences, what i ask you to remember is that the current tax and budget system is cruel. i tell you why i say that. it is cruel because it is forcing us to make a sophie's choice among our obligations. which child do we cut? the poor one? the sick one?

the uneducated one? the one with special needs? that is cruel. we overcame the divisions on water. i know we can also overcome our obstacles and divisions on tax reform and the tax system and the budget system. let's do it. i will address our immediate budget situation more fully in a few days when i present my budget but let me just give you an overview. we face a $19.9 billion deficit: $6.6 billion for the rest of this budget year and $13.3 billion for the upcoming budget year. big picture, let me tell you what will be required. first, as bitter as the words are in my mouth, we face additional cuts. we know what that means. we know the pain it entails. what can we say at this point except the truth, that we have no choice.

but i am drawing this line. because our future economic well-being is so dependent upon education, i will protect education funding in this budget. [applause] and we can no longer afford to cut higher education either. [applause] the priorities have become out of whack over the years. i mean, think about it. thirty years ago, 10% of the general fund went to higher education and 3% went to prisons. today almost 11% goes to prisons and only 7% goes -- only 7 and a half percent goes to higher education. spending 45% more on prisons than universities is no way to proceed into the future. [applause]

what does it say about a state that focuses more on prison uniforms than caps and gowns? it simply is not healthy. i will submit to you a constitutional amendment so that never again do we spend a greater percentage of our money on prisons than on higher education. [applause] the way we get this done is to find more cost-effective ways to run our prison system and allows private prisons to compete with public prisons. competition and choice are always good. california spends $50,000 per prisoner. by comparison, the ten largest states spend $32,000. they spend less, and yet you do not see federal judges taking over their prison health care. why do we have to spend so much more than they do?

if california's prisons were privately run, it would save us billions of dollars a year. that's billions of dollars that could go back to higher education where it belongs and where it better serves our future. [applause] choosing universities over prisons -- this is a historic and transforming realignment of california's priorities. if you have two states and one spends more on educating and one spends more on incarcerating, in which state's economy would you invest? i ask you to make the right choice for california. another major item is this: federal funds have to be part of our budget solution because the federal government is part of our budget problem. when president clinton was in office, california got back 94 cents on the dollar from the federal government. today we get only 78 cents back.

texas gets 94 cents. pennsylvania gets $1.07. alaska, with all its oil, gets back $1.84 for every dollar. and guess what new mexico gets $2.03. this should be more fair and equitable. we are not looking for a federal bailout, just federal fairness. [applause] californians carry a special burden since we are a border state. the federal government alone controls immigration policy. it alone controls border security. while acknowledging its responsibility, the federal government is not even funding a 50-50 split of the costs of undocumented immigrants. we can no longer ignore what is owed to us, or what we are forced to spend on federal mandates. we are currently owed billions of dollars

by the federal government for various programs. we need to work with the feds so that we can fix the flawed formula that demands that states spend money they do not have. now congress is about to pile billions more onto california with the new health care bill. while i enthusiastically support health care reform, it is not reform to push more costs onto states that are already struggling while other states get sweetheart deals. health care reform, which started as noble and needed legislation, has become a trough of bribes, deals and loopholes. you've heard of the bridge to nowhere. this is health care to nowhere. california's congressional delegation should either vote against this bill that is a disaster for california or get in there and fight for the same sweetheart deal senator nelson of nebraska got for the cornhusker state.

[applause] because that senator got for the cornhusker state the corn and we got the husk. [laughter] now, another priority relating to the budget is pension reform. the cost for state employee pensions is up 2,000% in the last ten years, while >> -- you heard me right 2,000%. while revenues have only increased by 24%. the pension fund will not have enough money to cover this amount, so the state -- that means the taxpayer -- has to come up with the money. now we are already putting in there every year more than $3 billion for those pensions. that amount will go up to $10 billion and this is money that is taken away from important government services. this is money that cannot go to our universities, our parks and other government functions. now, for current employees these pensions cannot be changed, either legally

or morally. we cannot break the promises we already made. it is a done deal. but we are about to get run over by a locomotive. we can see the light coming at us. we can see the lyings coming. -- lights coming. i ask the legislature to join me in finding the equivalent of a water deal on pensions, so that we can meet current promises and yet reduce the burden going forward. these are serious issues we face. every year, in spite of whatever challenges are before us, i stand up here and tell you how much i believe in california's future. i tell you how much i believe in the dream. how this is the greatest place in the world. some people say "ya, ya, ya, that's just arnold being optimistic." but i am not alone in believing these things. "time" magazine recently did an article about california that sounded like one of my speeches.

i would like to read you a few sentences. that "time" magazine wrote. "california is still a dream state. in fact, the pioneering megastate is still the cutting edge of the american future -- economically, environmentally, demographically, culturally, and maybe politically. it is the greenest and the most diverse state, the most globalized, when the world is heading in all those directions. it's also an unparalleled engine of innovation, the mecca of high tech, biotech and now clean tech. in 2008, california's wipeout economy attracted more venture capital than the rest of the nation combined." so, now do you believe me? you see what i'm saying. this is the greatest place in the world. california has the means and the mind power to solve its problems. sometimes we are just too close to the problems to see the positives, and we need to step back.

a couple months ago i was in iraq visiting our men and women in uniform, it's the second time i've been over there and it was a great experience. and of course we have so many of our californians over there serving. i had breakfast with them. we chatted we worked out. i pumped them up. took pictures with them and they told me all kinds of stories. they've seen experiences that you cannot even believe. many have served tour after tour after tour and as a result, some have lost homes, spouses, limbs and even their lives. too often our soldiers bring back the enemy with them in their heads. we are seeing and hearing all about a lot of this post-traumatic stress syndrome. the suicide rate is disturbing. this country cannot continue

living in denial about those things. these men and women need help. [applause] california has more returning veterans than any other state, so our state, as well as the federal government, has a special responsibility. you will see that in our agenda. we have a fundamental obligation to anyone who has shed or risked blood for this country. that is a priority. [applause] their sacrifice is extraordinary and never fails to inspire me. and if you look to the gallery, you will see some californians wearing the uniform of our country who just came back from iraq and afghanistan so these brave men and women, i say

welcome home. welcome home. [applause] no matter how big the problems are that this state faces, no matter how harsh things may seem to us in the months ahead, those californians in uniform will tell you that this is still the greatest place to come home to, the greatest place to pursue a better life.

just ask them how often >> they dreamt of being back here at home in the golden state. so ladies and gentlemen, in closing we in this chamber must fulfill our sacred trust to keep california a great place to come home to, for our men and women in uniform, and for generations of californians yet to come. thank you very much. and god bless all of you. thank you. [applause]

[applause] >> at the same time governor schwarzenegger gave his address, governor pattern son addressed his state of new york during this half hour address in albany.

>> i would ask with your understanding that we dispense with the nourishes and formalities. i would like to address all of you today just as fellow citizens off our great state. all equal under the eyes of god, all responsibly to the people of the state of new york whether our service be short lived or long remembered. this is a winter of reckoning. i come to you today not just to talk of the state of the state but of ourself government. the instrument that has become

the will to be popular. where it is easier to deny reality and demand this which we cannot afford than to accept the years the means can have to end. we come here to build new york's economy to a national model of strength, to build our people's struft in the fiscal stability of our state. to build our manufacturing to meet the energy standards of

this enlightened area and most importantly to build the trust that the people of new york once had in their state government. the last two budget battles have left its toll on all of us in this chamber. there are more deficits up ahead that will require an even greater sacrifice. if accept answer really is the prelude to recovery, then we have to accept that the old way of doing budgets is unsustainable and so dot special interest who intimidate, badger and push when they don't get their way even when they are aware that the cub board is bare. the time for that type of politics has to end.

we have to take -- [applause] we have to take firm steps we need ethics reform and an economic plan that will put new yorkers become to work. [applause] so today, i'm not just speaking of the state of the state as it is but we are talking about what the state of the state will be. the plan i have placed before you turns this crisis into an invitation for leadership and the decision foremost in my mind every time i make one answers the question are we doing what's right for the people of the state of new york. so in times of greater prosperity, the reforms we are

proposing ignored prosperity hides all realms of sin. we have to bring the lasting change they have long fought for and desired. >> there is no hierarchy in these reforms, they are all vital. [applause] i have asked our new lietenant governor to take the lead in a four-year plan for fiscal

recovery. it's the most reasonable way we can bring state spending into line and government into the right side no longer are we going to run new york like a pay day loan operation. yet, i'm renewing my call for a spending cap. [applause] i know this will be met with a lot of resistance. i fought 25 years to ratify the rockefeller drug laws. whether exist , in this administration or the next or the one after that, we have to

find a prsident your that occurs the spending structure that is fected our budget process for the last 20 years. the sooner we do that, the more control we'll have over spending, not less. i will not write bad checks and we will not mortgage our children's future. the legislature is the body of the people and should have an equal voice in deciding to hold spending in line with the times

after we have uncovered the sins of finance, we have to uncover the how breeding scorn with the people we represent. this is why today i'm introducing ethics reform not driven by the acts of any one person but in sted by what is legal and rampent by our entire system of government. [applause] . the reform albany act will have an independent ethics commission that will have

jurisdiction over state government. this commission will have the power to enforce campaign finance in pay to play and finally bring jurisdiction and oversite to so-called good government groups who hide owners behind walls of sent iment. the reform will significantly drive down campaign contribution and call for openness of outside income.

i recognize significant push back, however, when i step back and think about our roll in government, my cool eegs, how much more would it have been if we had instituted the right procedures to address unethic kl conduct. what has now happened is that the public wants bolder initiative in order to win back their trust. they have routinely demanded special treatment without any

regard for others no one person or group is deserving of anymore. there is no moral high grand. nothing lower than engaging in the currency of influence to the debtment of other new yorkers that don't have the same representation.

the reform are integral to the come back. we can attract businesses only if they agree in state government. we can initiate job creation as long as our credit rating is gone. we can be competitive if and only if we can keep spending down and restore money to school districts by alleviating the bubble that caused the problem in the first place. to pull this all together

unfortunately our zone program is no longer working. as i said last year, we are going to put it where it belongs, in the past. we are no longer going to provide tax credit for businesses that do not provide the job we were promised. [applause] . instead werks will replace it. this will be a new economy job's program that will focus on the clean energy and high tech jobs of tomorrow.

it will be open and transparent. seeming out business leaders giving out advice. we will come back with three aggressive initiative targeting clean energy, broadband and biotechnology. this combined with our energy plan which converts to cleaner

energy. we could not have gotten there unless a previous governor had already converted to us a 20% national average. he joins us today. that is governor george pita cki. so the jobs program will be the center piece of the most aggressive set in our state history. >> we have poise to lead the economy and we shall lead. .

>> there is one challenge which right now is holding us back from the leadership in the new economy that we feel that we have an immediate solution. simply put, it is the transfer and sharing of information from research and development institutions along with the sources of investments.

for very little of the public's money, very little taxpayer investment, we will be able to harness our government to marshall our command for the technology, data, and our relationship with the university community to create a free and open exchange of ideas that will bring these ideas to market. there are many cutting edge concepts on the table just waiting to be developed into the engine of our economic future. . with tax credits and also with rest of it for small businesses with the reform power for jobs program and a cutting edge and groundbreaking concept of buying up, retrofitting, and reselling abandoned manufacturing sites. in addition, we will not forget

the hundreds of thousands of trades and manufacturing and construction job holders who will be vital to our revitalizing this process. we also have to address the decades in which upstate new york has suffered in recession long before the rest of york and the country got there. we would do it by extending the erie canal research and development project. we want to make upstate the corporate office for up -- for america, particularly the franchises that are located downstate. [applause] this region is clearly one that

has demonstrated that they have with the rest of the country does not have. it is available housing stock, closed by schools, natural beauty, and the untouched small towns that families cherish. we have got to go back to promoting it that way. also, the efforts we are making for sustainable communities, with thousands of housing stocks lain dormant in cities like buffalo, rochester, and syracuse. we will develop that housing stock into affordable housing, starting with buffalo, which right now has 23,000 vacant units. [applause] earlier today, assemblyman wright and i attended the funeral of under peter, media

mogul, civil rights lawyer, and world war two fighter pilot percy, who was a friend and mentor to meet who was held in high esteem all around the state and the country. nearly a half century ago, when no one else was talking about it, it was a lone voice that advocated for the power of economic opportunity as the key to advancement. new york state economic development program has to make sure that it covers all corners of our boundaries. it is known historically that women and minority-owned businesses have not had the opportunities or the resources from the state to flourish. i was wondering if you knew how bad it actually was. when i was a candidate in 2006,

i read a report that noted that at that time, women and minority businesses in the area that state procurements were receiving only 5% in total of the contracts. to be specific, when who are 51.8% of the population and were 29.2% of the firms that were approved in advance got 2.64% of the contracts. but it gets worse. hispanic americans, 8.5% of the threshold of vendors, meaning that they had capital, they had been certified in, they passed all the test, received 0.74% of the contracts. african-americans, two-thirds of 1% of the deal. african-american women, 0.13%.

i don't even know what percentage of 1% that is, but i knew a task force had to be started in 2008. here are the results. [applause] we have quadrupled the nwbe participation. we went from 4.2% in 2007 to where they stand now, 23.9%. [applause] since i have taken office, minority and women firms have yielded $162 million of profit over what -- over where they were at that particular time. we do not want them to miss out

on the new opportunities involving stimulus money and also our new economy programs, which is why we will synchronize mwbe into any action that the state takes. [applause] i was visiting some business leaders in long island in 2007. they were white business leaders and they said to me, how can we get into the mwbe program, because the state ignores most of us as well. the reality is, business is run by people of all colors have not been flourishing. in july of 2009, we initiated the small business task force. they put their findings on my desk december 1 of last year and we are already starting to implement them. the biggest obstacles to small

business are startup costs. we will try a tried and true remedy. we will inevitably create a revolving loan program so that these engines of our economy, vital as they are, will have the capital they need to thrive. [applause] finally, there are a number of incentives both large and small that i have put in front of you, including the people first incentive, the one that will allow bolar will new citizens they come to new york the opportunity to be able vulnerable new citizens to locate services of which they may not be aware. one of the boldest endeavors is to rebuild the new york insurance exchange. by bringing together the buyers and sellers of complex commercial insurance, the

exchange will reaffirm our status as the focal point of international trade and finance. it will also curtail the transactions -- the types of transactions that were unregulated that decimated the global economy. new york being at the epicenter of so much that went terribly wrong in 2008, we as new yorkers have to take responsibility for america and around the world to take the lead in rebuilding and reform of these vital, global markets. [applause] so this is the state of the state as it will be. we will come full circle from the chaos of our own state budget to rebuilding our state

and our country pursuant to the chaos of a national meltdown. a plan that i put before you is a plant that will make us stronger. it will grow our economy and put new yorkers back to work. it would ever imagine on that cold day in january that we would be faced with so many challenges, trying to rebuild and restore faith. some say we will not succeed. the stories are already written, and the ending is ordained. but storylines change, and people change. when i spoke on television to new yorkers in july 2008, i warned that a withering economy would drive costs up and revenues the account. the faster we address this, the stronger and sooner we would recover from this crisis.

there are those who said there was not a crisis, and when it hit, there were others who still refused to act. i say to all of you today, there is still time to rebuild the empire state. [applause] i say to the elected members of the legislature, work with me, follow me, so that new york can turn the corner. i know a lot about adversity, and mistakes can be made, but if you stand true to your principles and honestly accept reality for what it is, you can get to a better place. there is always an opportunity to remake ourselves and our state. that is the promise of new york. new yorkers have arisen from epic economic perils before.

new yorkers have rebuild after disasters, natural and man-made. but every time the capacity of our hope has been questioned, every time our faith has been challenged, every time we have come to a hill that seemed too steep, we have demonstrated an undeniable ability to achieve, and a desire and determination to endure. and so, once again, we have to rebuild, but we will reignite the engine of our economy. we will be able to win back the public trust of the people we represent, and we will rebuild new york, but we have to work together. in these times of struggle, i remember the enduring faith of a child who grew up in a world of darkness, who chooses to believe

in something bigger than himself or herself. in spite of the adversity and the doubts of others, they can find strength and humility and perseverance. and so can all of us. thank you so much for attending. thank you for listening. god bless all of you, and god bless the people of new york. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> in a moment, we will show you the swearing-in ceremonies for the mayors of houston and atlanta.

that will be followed by discussion of credit card rules that go into effect next month. after that, remarks from the ambassador of women's issues at large. >> the house is back in session tuesday, january 12. live coverage on c-span. the senate returns january 20. they plan to consider a judicial nomination and an increase in the federal debt ceiling. watch live coverage on c-span2. off the floor, house and senate democratic leaders are negotiating with the white house on the health care bill. the senate passed its bill on christmas eve, but it does not include the public option, which is in the house bill. they have to agree on the same version before sending it to the president. the aim is to get a final bill

to president obama's desk before the state of the union address sometime in early february. >> the inauguration ceremony now for houston's new makyor. this is about 25 minutes. >> i do love this city. [applause] i think you have heard that before, but i cannot stop saying it. thank you. [applause] i want to thank all of houston ians for honoring me with your trust in your hopes for the future.

to serve this suit has to my high as aspiration. -- to serve this city has been my highest aspiration. to work on the challenges that we face is the highest position. i will revere the post i have taken. i want to congratulate the new city council members and the city comptroller. having served in both of those positions, i know the challenges and opportunities that they face. i salute their service to our city. this is a good counsel. truly representative of our city. and its diversity. so, please honor them again. [applause] there will be times when we disagree on how to view success.

but understand each of us is here because we cared deeply about this city and we will bring our best forward. i look forward to working with you. this is an opportunity for me to welcome my extended family and acknowledged the family members that i have here down on the front row. starting with my mother, kay parker. [applause] i cannot quite see them, but i know they are there. our children. please stand. [applause]

yes, our family also looks a bit like houston. [laughter] my sister, allison, in from georgia, and three of her four children, please rise. [applause] my sister-in-law, her husband, and their son as well. please rise. [applause] my in-laws -dick a, dick and giy hubbard, please rise. all of the way in from buffalo -- they like the weather here a bit better. [laughter] thank you.

now, to those of you in the room today, and those of you who might be watching or hearing this, i will be asking of you three things. first, i am going to ask for your prayers. we have enormous challenges ahead. all that we must do will be done. but there are many things that we should do, that can be done, and we will strive for it. i know that we can achieve anything that we want to do. with hard work with your prayers. prayers. by ask for the city is a continuum. projects begun under one administration continued into

another and perhaps another. it may seem as if very little progress is being made, and the compromises, the give-and-take of government can be a slow and difficult process. but we have our range of voices and opinions in the council chamber because no one of us has all the answers, and all voices must be heard. sometimes democracy is a little messy, but we get there. thirdly, i will ask for your perseverance. we are in this together for the duration. you must commit your time and your energy to houston. we rise or we faulll together. we succeed or we fail together. ask for a

fourth thing. as much as we try, as hard as we work, for all of the right reasons that we do things, we will make mistakes. we will have failures. i will ask for your forgiveness in advance. [applause] i have already introduced my mother. i know how proud she is of me. although my father died many, many years ago, i know that he too is extremely proud. i want to say how proud i am of them. and that of the values that they taught me. -- and of the values that they taught me. many of you know that i grew up here in houston.

we grew up in a short street in spring branch. we did not have much money. both of my parents worked. my father usually worked two and three jobs. my mother always worked that out side of the home. in fact, both of my grandmothers did as well. i come from a long line of working women. [applause] my family taught me to work hard. my family taught me to accept responsibility. my family taught me to always get the job done. my family also taught me to contribute back to my community. [applause] thank you. those are the values on which houston was founded. those are the values that i

tried to teach my own children. those of the values that i think will shape our future as a city. in these past few months -- more than a few months of campaigning, as i have travelled across the city by kept meeting folks who reminded me of my own mother and father. people struggling with two and three jobs just to get by. others worried about food on the table. mothers worried about crime and their children's education. family worry about taxes. neighbors worried about preserving the community that they loved. i want you to know this, all of

you, the city of houston is on your side. we will get through this together. i know that the city's work force is one of the best anywhere. [applause] i see them every day. i know many of them. i know the commitment that they have to doing a great job. we hear on the news about the problems, the things that go wrong in this city, and in truth we rarely noticed a smooth workings of our city. how much of this city goes right every day. we miss the smaller in visible events, like two water department crews that work through a cold february night to repair a sewage leak. the nurse at one of our clinics

that work a double she short staffed and worked the double shift three days in a row. the bark employee that rescued a dog from a drainage culvert in the middle of a thunderstorm, getting thoroughly soaked and britain in the doing. probably a ball with the dog -- soap and begitten in the doing. probably along with the dog. those of the unsung heroes of the city. to them, i want you to know that the citizens of houston are on your side. we are in this together. [applause] every speech by every mayor in this country these days will address the economic downturn.

in many cities services have been cut back. employees have been furloughed or laid off. the quality of life in many cities is not what it was four years ago. we will not let that happen to the city of houston. [applause] we do face challenges. we have a budget shortfall here in the city. like all big cities, we have departments that could take a good look at themselves and honestly ask if they are doing the best job. there are always opportunities for efficiency and improvement. but i have been handed a good city, in good shape, and i think mayor white for that.

-- thank mayor white for that. [applause] yes, there is an aging infrastructure. there are issues with tension. the city will need to be redistricted. those are challenges that i know we are all eager to address. [applause] -- [laughter] i will speak in some detail about those priorities when i deliver the state of the city speech in april. but i firmly believe that the future of the city will be shaped by our citizens, not our politicians. i welcome your suggestions and i seek your ideas for the future. a city's success can be measured

by the involvement and satisfaction of its citizens. how they view the quality of life in this city. and what our citizens want the city to be for their children. as i have said, we are in this together. you are a part of the process. the city must be a place, as margaret mead said, where groups of women and men are seeking and developing the high as things that they know. i know that houston is a city of open arms and warm hearts. after hurricane katrina, the entire world knew that as well. thank you for opening ourselves to those in need. [applause] we are a city of opportunity and

a city of optimism. we have a sense of partnering and a respect for our differences. houston is a city built on dreams. but our dreams are always power by hard work, guided by common sense, and inspired by creativity. i spoke of election night of is being an historic election. my election made news around the world. people in houston were not surprised that they had elected the first gay mayorñi of a major american city. we have a tradition of electing a mayor is not for who they are, but for what they believe we can do as a city. [applause]

but i do want to speak just briefly to those from my community. to those who are gay, lesbian, bisexual or transgendered. i understand how much this day means to you. i can feel your excitement in youñijulyand and your joy. but i am also feel your apprehension and longing for acceptance. i will gladly carry you forward. but today is simply ones that.

and -- simply wants that. when the time comes i will gladly pass the torch to the next person i am waiting. i will cheer for them as you do for me. your bravery in the face of threats, your grace in the face of insults sustains me. we will support each other. [applause] do not fear to dream big dreams. frame your whole self to everything that you do. face the world with dignity and

integrity. i promise you, the paint is worth the reward. thank you for being with me. [applause] [shouting] >> thank you. [laughter] i do know this city well. i would not want to live anywhere else. this is a great city. i have been asked many times over the last month to name a city to which i would compare houston. i have thought about that quite a bit. there is, in fact, one said city. -- one such city. that is the houston in my

imagination. [applause] the houston that could be. the houston that should be. the houston that can be and will be if we will get to be to achieve it. [applause] imagine with mea some very real possibilities for our city. imagine neighborhoods where the police are known and recognized and they, in turn, know the neighborhoods and we are all safer. imagine a neighborhood where all children can play outside and the parents do not worry about where they are. and who could harm them. imagine a more unified approach

to public safety, where all the law enforcement agencies in this area, houston police working with harris county sheriff's, together i crime initiative. something that makes sense for all of us. imagine an extensive mobility system embraced by the public. houston is an immense city. we need all possible transit options to move was quickly and efficiently around the city. [applause] that can happen here. and it will happen here. imagine a city with clean and safe air. [applause] [applause] as we prosper, we must what is good for people and what is good for neighborhoods is

also ultimately good for business. we have to get it done. [applause] imagine a city safe from the ravages of flood water. [applause] i think we have experience that little. as we know, whether can be volatile, and there is not much to rein in houston. -- not much terrain in houston. we should expect our city to work toward alleviating flooding, especially in neighborhoods where it has happened over and over and over again. e heard my colleagues on the campaign trail talking about that and expressing their willingness to tackle long term flooding problems in the city of houston.

that is a challenge that would take years and dollars and commitment. i thank them for expressing that and stepping up. [applause] imagine a city within during partnerships where we work closely with other -- with an during partnerships -- enduring partnership where we will work closely and create new ones wherever there are benefits. imagine a city with a high- school dropout rate is insignificant. -- imagine a city where the high school dropout rate is insignificant. [applause] think about what that would mean. think about quality of life and the ability to attract jobs. think about what that would mean for the lines of our children and our children's children. -- for the lives of our

children and our children's children. we are an international city. [applause] the entire world lives in houston. we are cosmopolitan, international, the verse and tolerant. -- diverse and tolerant. i have tried to use the media coverage around my election to tell the world about houston. but i am only one voice. so, today i hereby delegate and to designate you as ambassadors -- delegate and designate you as ambassadors as well. let us tell the world why we live here and why we love this city. [applause] a great city is an ideal. a symbol for other cities. a great city embraces diversity.

a great city refuses discrimination. a great city reaches into every corner of itself to assist those in need. a great city of quartz elitism and selfishness. a great city -rolls up it's sleeves and revels in the work it performs. a great city has no patience for idleness. a great city is one in which all citizens feel the warmth of community, the presence of safety, and the pleasure of dignity. a great city imagines its own bright future and it sets about to make it happen. please join me in helping to make these stains, these things that we are imagining today a

reality in the city of houston -- please join me in helping to make these things, these things that we are imagining today, a reality in the city of houston. thank you very much. [applause] [applause] [applause] "m >> this past monday, a let -- atlanta's new mayor, kasim reed, was sworn in as well. here is a look at that ceremony. >> let's welcome to the stage the hon. chief justice of the

georgia supreme court, who will administer the oath of office to mr. reed. [applause] >> i do solemnly swear that i will faithfully and impartially discharge the duties of the mayor of the city of atlanta, georgia during my term in office. i will not knowingly permit my vote in the election or appointment of any person to a

position in the city government's to be influenced by fear, favre, or affection -- i fear, favor, or affection. in all things pertaining to my said office, i will be governed by the public good and interest of the city. i will observe the provisions of the charter, ordinance, and regulations of the city of atlanta. i further swear that i will support and defend the constitution and the laws of the state of georgia and of the united states of america.

i further swear that i am not the holder of in the office of trust under the government of the united states, any other state, or any foreign state which i am prohibited from holding by the laws of the state of georgia, and that i am not the holder of antique and accounted for public money -- any unaccounted for public money for any political subdivision or authority thereof. i further swear that i will uphold and support the ethics code of the city of atlanta. i further swear that i have been a resident of the city of atlanta for the time required by

the constitution and laws of this state and the charter and ordinances of the city of atlanta. i further swear that i am otherwise qualified to hold said office according to the constitution, the loss of georgia, and ordinances of the city of atlanta, so help me god. >> congratulations. [applause]

[applause] >> i love you back. to the members of the judiciary, to my counsel on the atlantic city council, to my colleagues, to my friend and the leader of council, president cesar mitchell, what we now definitely know after that moment and detailed swearing-in is that if we were not in this together, we are definitely in it together now. [laughter]

i want to welcome visitors from the state of georgia. in addition, i would like to take the time to welcome three mayors who have joined me today. [applause] i also want to extend my warm appreciation to my predecessors who are here with the, ambassador andrew young and my friend shirley franklin who have honored us with their presence. i also want to thank members of the fulton county commission, members of the dekalb county commission and members of the door to general assembly who are present with us today. i look forward to working with you -- members of the georgia general assembly to our present with us today. to take the oaths of the office

of mayor of the city of atlanta with my father and my mother standing beside me is a moment that i will never forget for as long as i live. [applause] to my family, particular in my brother's, thank you for dreamig with me and thank you for helping make this possible. [applause] i also want to thank my stepmother for being here as well. [applause] thank you for allowing me the privilege of standing before you today as the fifth denied mayor of the great state -- a great city of atlanta.

-- the 59th mayor of atlanta. i will always remember that i would not be where i am today were it not for you, the citizens of atlanta. no man or woman is an island, and no one rises to leadership without being lifted to such heights by those around him. such really is the moral of my story. along path to this podium i have felt the disappointments and found myself deeply moved by the dreams of people in our communities. i carry those personal encounters in my heart, and i will use this office you have given me to make a positive difference in the lives of all i can. for today, i am the recipient of a sacred gift, a gift of the public trust. and its collective hopes for a

brighter future. i assure you, i take neither that gift nor its attendant responsibilities lightly. stewardship of one of america's great cities is now the mandate that has been entrusted to me, the members of the judiciary, the president of the city council, and the members of the city council. i am deeply held by the calls. more than anything, i know that i cannot do it without you. i ask for both your prayers and your earnest efforts in making atlanta that shining city on a hill, as dr. king would have it be. i also know, as so many of the great leaders of atlanta have known before me, that service is the tangible way we demonstrate our own acceptance of responsibility. when we put others in front of ourselves, when we sacrifice self interest in the name of collective responsibility, when we stand with others rather than going it alone, we do so because

we recognize that the responsibilities we have are greater than anyone of us. there is an african proverb that i would like to share with you because it means so much to me. it is simple and elegant. it says if you want to go fast, go along, but if you want to go far, go with others. atlanta, let's go far today. [applause] so while i stand here before you as a mayor who has sworn to undertake those responsibilities, as a servant of this city, i am looking out at so many of you who have also understood and shared in this effort. your service inspires me and will continue to inspire me as we face a set of responsibilities that call each and everyone of us to serve

atlanta. i would like to share with you my vision of the shared responsibility we face at this moment. our responsibility to our past, to our present, to our future, and most importantly, to one another. it is often said that to know where we are going, we must know where we have come from. with that in mind, i believe we must understand and acknowledge that the atlanta that we cherish today, the atlanta where a movement of freedom that changed the history of the world was launched, would have never come to be were it not for the combination of people and initiatives that have come before us. . .

>> those leaders who built the opportunity where barriers are not overwhelming but obsticles to beover come.

those move on quietly. no expectation of glory or fame have made atlanta what it was always meant to be, the city on a hill. each of us has the responsibility to lead to the leadership. adretsing challenges that limit our capacity to invest in our city and one another. first we must recognize that our city must not say it is open for business but we must act like it is it is open for business. i have said before and i believe now in order for atlanta to truly be great. it must be a city for all of us.

while job creation with fair wages must be a responsibility of the private sector. we have a responsibility to create a culture where the city enables businesses to rapidly respond to our ability and not impede our response to red tape and red ink. we must recognize creating a culture con ducive to the development is a function of the government. starting right now. it is these people of vision that will employ our vision , take atlanta to new heights. we will create opportunity and

have the best and brightest public servants in city hall to develop the next engines that will fuel our city. while the challenges we face are unprecedented, so too are the opportunities. rather a source of growth. i promise and commit today that in my first year of office, we will completely reform the city permitting office once and for all. by embracing business, we will continue every work yr is

worthy of merit and appreciation. you are kept the city moving and made atlanta great. but the stark reality today is that one out of every five of our dollars is going to the pension system. we must work as a team to get through these tough times. we need to face this challenge head on being mindful of the responsibility of taxpayers to fund this system. we will get through it together as a team.

we know that the times in which we live and the hardships we face have created for many of our citizens a sense of hopelessness. when people are without resources to make things meet when the flames of their legislation may be fanned will become desperate. please know, we are going to be smart on crime. [applause] whilely be vigulant to protect those when women cannot walk to

their cars at night without feeling save. when students don't feel safe walking to class and convention attendees can't walk downtown, we must undertake this effort with seriousness. we must work harder to prevent crime and eliminate violence fueled by gang activity. these activities such as aggressive panhandling. we must also treat our police officers better by paying them a wage that allows them to

support their family. we must have more police officers walking and working among us. the next year, i will honor this commitment. it should be so and it will be so. the foundation of my campaign was built upon my fulfillment of the promise. i pledge to open every single recreation center in the city of atlanta. [applause]

opening them isn't enough. more than opening them, we will turn them into what they must be, cities of hope. that's what they must be for the sake of our children. [applause] i also want to thank bill kent, the chairman and ceo of turner broadcasting. making sure the depen operation behind us has what i had and what seizer mitchell and i had. we grew up about 10:00 from each other. here we stand as the mayor and

president elect of the council. [applause] we must ask ourselves is our story possible for someone coming to atlanta in 2010. this year $1 out of cnn tool will be dedicated to open recreation centers. that will go to the city of atlanta. we'll have action, not words. [applause]

turner broadcasting has turned out an option that's appropriate. making sure young people have opportunities they need to go as high as intelect and hard work will take you. we must take responsibility by creating responsibility for each of our children to achieve. my story is a simple one. my journey is one that should not be viewed as too far by the

children of ravel bunch middle school where i voted on election day. my story, ceaser's story must be one of thousands for atlanta to become what it can be. you know what? i want to say this to the young people, the children and teenagers and those going to college. when the judiciary branch and council and president and when i am working a long with other people in our city deliver more resources, we are going to demand more of you.

success in life is not accidental. now is not a time of ease. you must always work harder than you dream, young people. [applause] i embrace the partnership we have and to other elected state and local officials, i'm proud to be on your team, to work with you as we face the challenge of our region and state. let us partner together as if

the future of our city and state depended on it. it does. it is not enough to say we must do better. we must actually do better. every encounter with an employee or official of the city of atlanta must be one that inspires confidence. to tran send and respect that which makes us unique. the diversity of our sex, age,

religion and background and personal heritage is what brings us together. the tapestry of atlanta should be the source of strength. we should be kind to one another. it's not a sign of weakness to be nice to one another and treat each other well. [applause] .

>> two came back believing there was a promised land worth sacrificing for. one of those five was joshua who went on to lead his people into the land of the future.

atlanta, we are all on the a lookout, we are all spies. we can see that future or be fearful. we can see that future boldly. i choose the latter, we will act boldly. what i know is that the atlanta i know and love is worth sacrificing for. yes, we stand in the midst of storm clouds in an economic recession that has challenged our ability to deliver. just as much as we stand between valleys of local and national issues. we cannot ignore those clouds or valleys. friend as your mayor,ly share with you this, we will see the sun leist of our future. we will be a city on the hill. we will embrace the shared

responsibilities we have and together in spirit and service, we will succeed. come with me, our journey has just gun. god speed. [applause] >> sunday, a look at the 48 states facing short fall with scott pattison. the political outlook and 2010

midterm election was peter heart. co-founder of public opinion strategies. >> up next, a discussion on new credit card rules that take effect next month, later remarks for ambassadors at large melanne verveer and then a look at u.s.-south korea relations.

from washington journal, this is about 45 minutes 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 commufy@@@ aúk) the big banks are the one that's issue the most credit cards the most liberal to the greater number of people. community banks have been more careful to who they make a loan to so that they don't have the same problems some of the big banks do. we'll go to the republican line, you are up first. caller: yes. host: you are on, sir. go ahead. caller: i was wanting to know about the credit card interest rates, how they would raise

them no matter what your credit would be. is this going to stay into effect after the new law goes in? 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@@@@@@$"d""g j$ >> how much money the bank is going to receive and how much the retailer is going to have to pay the visa or the bank that does the processing. >> if i have a strict department store card, macies, does that fall snr? >> yes, those definitely will fall under the rules. they are covered. host: frank on the independent line. go ahead. caller: good morning. host: you are on, sir. go ahead. caller: ok.

good morning. host: you are on the air. go ahead with your question or comment. caller: i'm from connecticut. 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