insurance exchanges and later, an irs representative on their new regulations for tax preparers. from the nation's capital, this is guest:." . . . we will be talking to linda blumberg from the urban

institute as the president and democratic house and senate leaders continue to meet at the white house about the health care legislation. c. will talk specifically about one aspect, health insurance exchanges -- she will talk specifically about one aspect. we begin this morning with a discussion about haiti. here are the phone numbers -- our newspapers and online sources and television sets have been filling up with scenes of the other -- ushered devastation in haiti. "the daily news" in new york, where there is a large haitian community here. as we were all watching this on

the internet and cable television, a sidebar discussion yesterday beginning last evening after pat robertson on the 700 club talk about haiti. here is what he had to say. >> something happened a long time ago in haiti and people might not want to talk about it. they were under the heel of the french. napoleon deferred or whenever. -- napoleon iii or whatever. then they formed a pact with the devil sitting we will serve you if you free us from the french. the devils said ok, it is a deal,ç --q the devils said ok,t is a deal, and the haitians revolted but ever since they have been cursed by one thing after the other, desperately poor. host: pat robertson's comments lighting up the internet with

his suggestion. here in washington on politico, ben smith is reporting about it. we would like to talk to you about your reaction to this. there are many already posted. we would like to hear what you have to say as the united states and other nations around the world send relief efforts into the island nation. i]we will begin with a discussin çabout some of these efforts wh samuel worthington, president and ceo of a group called interaction. about u.s. efforts. we heard from southern command generals yesterday. but non-government organizations have a role as well. talk to us about what you are hoping to do. guest: at this point in time, there are over 40 nonprofits operating in haiti. they have large staffs.

hundreds of people on the ground trying to find their loved ones and get organized. ñrbut they already committed tes of millions of dollarsñrçó in from the americanq people and working very closely with the u.n. system. overnight in numberç of courtny mechanisms were set up -- coordinating mechanisms were set up. they are beginning to get engaged. already some search and rescue efforts haveç gone in. there is a government team during the assessment from international development. but it is a matter of trying to get people together, to get organized, and very much focused on professionals already on the ground. host: you are stillç getting çççççt(orga,a,ed, wherea!÷d in the rubble need immediate assistance and don'tç have much

time. how is the staging of all of this and the immediacy working and who is coordinating it? guest: the united nations has an office of coordination of humanitarian affairs that works closely with the red cross and the international ngo community. the first response is always local people. in at this case, because there are thousands of nonprofit staff and other staff in haiti, they will be part of the first response. we do know the world food program is flying in 86 metric tons of food, which will feed about 30,000 in seven days. just the beginning of what will be a very large effort. big organizations, whether catholic release, world vision, have emergency supplies both in country and the dominican republic. it is a tense situation.

we already found the world food program storehouse was looted. it becomes difficult to get anywhere because the road out of the airport and getting around, both communication and access. host: what individuals do if they are interested in helping? çguest: at this time, if you go to interaction.org, there are a list of 40 or 50 operations operating in haiti. they need cash and your support. at this point in time, do not tried to get on a plane the less you are a trainedç professional -- unless you are a trained professional because you will be adding to the chaos. çbut there is a tremendous need for resources. we see what a tsunami or other areas, that the american people with the private contributions are oftentimes the major part

of the solution for organizations to function on the ground. host: thank you very much. informix -- enormous task at hand did you give us a sense of what lies ahead for those interested in providing aid. samuel washington, president and ceo of interaction. thanks for being with us this morning. we would like to get to your telephone calls about pat robertson topos a contribution to this debateç, which lightedp the internet and blogs about haiti being cursed. atlantic, this is debbie beard caller: -- atlanta, this is debbie. caller: the comments areç stunningly ignoring. it is wanting to hold such opinions but another thing to be so stupid as to voice them. what i did want to find out is

where is the vatican in regards to helping this nation of haiti which is overwhelmingly catholic. where is france? but especially the vatican, not just now but in general. host: i cannot answer the question. i did here in one news report that an archbishop was killed in the quake. some of the reaction on the internet. one of the interesting ones this from huffington post. their religion editor. you can see the headline.

host: we would like to hear what you think about this sidebar conference as relief efforts for in from around the globe. from washington, d.c., tony of independent line. caller: pat robertson, his comment makes a lot of sense if it was -- they were imperialism.

the reason why haiti had been suffering hardship is because it broke with the french -- just like zimbabwe. the one thing i was curious to know about -- the heart machine and alaska, was that activated? it can create earthquakes. i would like to know if the heart machine was active during the heydey earthquake. it is in alaska. the other thing i want to know, the united nations is a criminal organization, responsible for the spread of swine flu as well as creating it and passing it as well. host: you believe the united

states has patented swine flu and responsible for spreading it? caller: i do not think the united states. i think the world health organization. host: why would they do that? caller: they want to reduce the population by 80% and this is part of their agenda -- agenda 21 is what they have for the united states. it is only meant to reduce the population. host: how long have you believe this? how long caller: have i read about this unproven facts? a lady has a lawsuit in court now against the world health organization suing them for spreading swine flu. that is why you never see anything about the ukraine -- host: tony -- the next call is from tucson. sayre on the democrats' line. -- sarah.

caller: the minute iw3 saw what was going on inok haiti i just t peers in my eyes and i just prayed for those people, and i just felt their pain. the kids and mothers and what kids were going through not being able to sleep in the bed and i was grateful for my four kids and that is where spirituality comes from. when pat robertson makes those comments it reminds me how much religion separate us and allows us to judge people and to justify things instead of lugging them and wanting them to be ok and what -- love bring them and one of them to be ok. he is saying these people are cursed having no idea about these individual people and what their thoughts are and how their relationships might be with god and i believe that is a contradiction to say, i believe in the bible and to love people and not judge them but then immediately is says, they are

all cursed. it is disgusting. all i can do is pray for him and people like him. host: like forest, illinois. judah on the republican line. caller: how are you today? host: have you called in the past 30 days? your voice sounds familiar. caller: no, it's been about 32 days. i was raised with you guys -- graduated from columbia university school of journalism. host: yes, you have. this one to make sure it was a month. caller: i know the rules and abide by them. mr. robertson, i am not necessarily pained by that. i think what you have is sort of a combination of i guess the

mention of -- dementia and what he was taught. people are educated by the parents or elders. it is nonsense and also touches on policy. qthe fact that a haitian to make on shore and the setback in cubans are refugees. the problems that we actually turned a blind eye to as far as haiti is not new. the fact that they had the audacity to rebel against slave owners and the french, and from that point forward they have been castigated by countries in the western hemisphere the fact that ireland was in that position is appalling and it reflects a lot of the policies.

right there in the shadow of us. this law shown on television. corruption. we would rather go half way around the world and take care of iraq but with haiti sitting right here, the aggression -- everything. host: let us move to our next one. sarasota -- saratoga springs, new york. caller: it is because haiti does not have a bunch of oil. i just think religion is taken way out of hand. pat robertson, what is it is crazy, almost as crazy as the guy who called in and said a machine called the earthquake. we got to get off all of this religion. you got the people here and other countries -- religion can be perverted into anything and i

kind of thing it was more of a senile old man than any religious thought. i just feel sorry for those poor people. it is just a shame we have so many ignorant people in this country and we are supposed to be educated about i listen to c- span all the time and believe me, they will be calling in. that is all i have to say. host: john from saratoga springs. i mentioned the president will be making a statement. secretary of state hillary clinton has been sent to all six morning shows beginning at 7:00 to talk about the administration's relief effort in haiti. we are taking your telephone calls about one sidebar stories lighting of the internet, pat robertson's comments on "the 700 that cause people to be cursed. on the website they released a statement from his

spokesperson, chris roslyn, about hisw3 comments and here is what they said. "based on the widely discussed slave rebellion in which the slaves allegedly made a famous packed with the devil in exchange for victory over the french. this history, combined with a horrible state of the country has led countless dollars and religious figures over the centuries to believe the country is cursed. dr. robertson never stated the earthquake was god's wrath. if you watch the entire videos segment dr. robert composite compassion for the people of haiti is clear. he called for prayer for them. his humanitarian arm has been working to help thousands of people in haiti over the last year." and john on the republican line. caller: pat's comments are based on -- if you believe people can be blessed you believeç that ty can be cursed.

the guide of the old testament bit nasty things jiging blood, -- the flood. and then you have the new testament -- that god is patients -- then all of this other stuff does not count. people are saying, you have a number of organizations like doctors without borders, the red cross, who really need money right now and who are in there legitimately. i would urge people to find the organizations that are most involved and most able to help the people of haiti and if you can donate, donate to them, and that makes a better expression about your believe, religious or otherwise, than any other words you can hear from somebody who may not have it all together right now. host: we will take more comments for another four minutes and then we will move on

to the question of google versus china. we have a caller who asked about the catholic church. catholic news service -- the pope praised for victims of hate it -- of the quake. the archbishop is bodies found. among the victims was archbishop of port-au-prince. the lifeless body of the archbishop was found this morning under the rubble of the evidence -- his residence. also a spokesman said the catholic church's charity organizations will immediately move into action to assist those most in need. baltimore, france is on the democrats' line. caller: please, let me make my statement. aside from all of the biblical psychobabble and statements from people who do not even have anything to do with the reality of this troubled nation, i never heard anything about the resistance to any other european nation on this earth that fought against their own

independence and freedom as the haitians did in 1791. now, i do, and all of the efforts of relief which is unbelievable but nothing short of a miracle will save this troubled nation from abject poverty, the outside of oppression, and continuance of ignorance, malfeasance, corruptions that steve's inside of us like a cancer. it will take years to recover from the madness. it makes no sense that this nation who is well beyond the rubicon of its misery can continue to survive with the same inside people who for so many generations caused the misery that has befallen the nation and caught us off guard to the point where it is just unbelievable. the destruction that has been done to a fragile skeletal nation that needs all the help it can get. so, the racial animus and outside bigotry from anybody is

nonsense because, like as said before, european nations all over the world throughout history fought for independence and bloody struggles but nobody says anything about that and it is only because you have black skin and african faces and to with france. host: haiti is the poorest nation in our hemisphere. prior to this devastating earthquake, 54% lived on less than $1 a day. illiteracy is estimated at 44% of the population. unemployment rate in the formal sector it is between 70% to 80%. 46% did not have sustainable access to potable water, and that was before the earthquake. that gives you a glimpse of the status of this country trying to respond to this incredible devastation of the earthquake. the next telephone call from jackson, mississippi. mike on independent line. caller: i would like to say

that most people don't understand -- haiti is cursed because of the religion they practice, voodoo. when they broke from france that had to pay france $20 million in the united states and forced that so from that point they are cursed. thank you, and have a great day. host: phil on the republican line. you will be the last on this. caller: first, i think it is a little bit unfortunate that c- span -- this is a little bit salacious, as far as i'm concerned, but since the issue is raised i suppose we could go into all the theological things. the thing that comes to mind in may are stories of the good samaritan, where jesus healed a blind man and the question is asked, whose san cause this and uses answer that question adequately.

-- whose sin called this, and jesus answered that question adequately. wouldn't it be better for c-span maybe to do this time to -- use this time to do fund raising or raise the issue, right, we had this problem in our hemisphere with haiti so long, it is poor, and it seems like in cycles we go about the whole thing of, what should we do? maybe, if nothing else happens out of this, what i consider to be this silliness going on, that finally maybe as a nation or as united nations or whatever the entities, we can finally decide what are we going to do to really rebuild haiti and make it, and gas -- i guess, is decided that functions. but i think it is unfortunate. it is just salacious, as far as i'm concerned. i think it is a little bit beneath what c-span's principles as far as i perceive them should be.

host: ok, bill, thank you for your comments. we are going to switch to another topic and that is a story we heard this week about google and the decision we will make about whether or not it should pull out of china. lots of stories to show you, and that want to begin with one editorial cartoon in "the philadelphia and china." you see big china, see no evil, with google, do no evil. we will talk to you in a few minutes about whether we -- you support google's decisions to pull out of china. we will talk about the pluses and minuses and would welcome your calls and comments. yesterday we told you about the supreme court's intervention in a discussion over whether the proposition 8 trial on -- and california should be on camera. the supreme court made a 5-4 decision yesterday afternoon and marc sherman is here to talk about it. guest: good morning.

host: what did the supreme court decide and how did the lines breakdown? guest: that there would be no broadcast of the proposition 8 trial. it broke down along ideological lines, a curiously. the five conservative justices in the majority and four liberal dissenting justices. host: can you help people understand why television in the court room could be it ecological issue? guest: i wish i could but it is not clear to me why, unless it telegraph something more, and it is impossible to know, how the court feels about the underlying issue of gay marriage. of course, it is not before the court. it might be. but not for a while, certainly not until this trial is resolved in california and lots of appeals and sued. it is not at all obvious why the accord broke down the way it did. it is true that some of the most

outspoken opponents of cameras in the courtroom are some of the conservative justices. that maybe this possible for some of the breakdown. host: it would be hard to know unless there is another case completely separate, whether cameras or the underlying case being discussed. in writing for the majority, who wrote the majority opinion? guest: we don't know. it is unsigned. often the chief justice rights of the opinion but as it is not signed, we don't know. host: prevailing argument was what? guest: of the prevailing argument was that the federal court in california did not follow the appropriate rules for changing rules to allow for the broadcast. the court said it was not speaking to really the appropriateness of televising this trial, but just said the rules were not followed. although, at the end of the 17 or so page opinion, the court did say that even if the rules had been followed there were

serious questions as to whether this would write experiment where the right child to test out whether trials should be broadcast, even civil trials or even trials without jurors without it -- as in a case of california. host: how would you characterize the dissents? guest: strong. at one point he accused the court of micromanaging the district court in california. the essence of his opinion is the court should have but it out of the court's business out there in san francisco. host: what happens to this trial in san francisco? guest: the trial goes on without any broadcast. there were to be a couple of different levels. one was real time streaming in other federal courthouses around the country and the potential of some sort of posting of a video on a delayed basis, either a

special youtube channel or the courts website. none of that will happen but the trial will go on. host: thank you very much for bringing us up to speed on the court's ruling of proposition 8 federal trial in california and, more importantly, whether cameras can televise it. let's get to your telephone calls. newspapers are filled with both news stories and also opinion pieces about google v. china. host: here is the front page of "the wall street journal."

host: we would like to get to your calls. we will begin with chantilly, virginia. mauricio of the republican line. caller: we need to understand where google and youtube, from -- they were bought last year by the cia. we all a lot of money to china, ok? the deal is it, the government is controlling everything. when you put a video on youtube now days talking about government, it is being removed. it is being removed because they

don't want people to know the truth about the things we do around the world. i do not know where this is going to go. but we need to wake up. host: before you go, you asserted that the cia has a majority shareholder interest in google? where did you find that information? caller: besides c-span, i don't listen to the media because i cannot listen to the media. i get my information through a website network that is growing so fast. they only started last april. he was only in one state and now he is in 11 states. host: you heard about this alleged cia investment in google from there? caller: it is a lot of information about health,

government -- i encourage everybody to go to the network. host: "the washington post" today. this is more about other companies that concerned about their security.

host: back to your calls. federal way, washington. sure when on the democrats' line. audicaller: i say, where's the beef? article points out where we are vulnerable through google and our government agencies and things, but at the same time we are doing the same thing to china. google, that is the nature of the beast. it goes with the territory. google can pull out of china if they want to, but that is not

going to stop a cyber war. host: north dakota from the democrats' line calling us from illinois -- eddie from the democrats' line. he is gone. a headline in "the wall street journal" -- what is new front among cold war foes. the next call is from austin, texas. caller: good morning to you. i was just reading the business section oft ofthe oregonian -- business section of "the orgonian." that other companies would follow their lead. but i thought it was kind of interesting, just a couple of

days ago, several chinese authors over there accused google of digitizing some of their books on google books without compensating for getting permission from of these offers. now we are hearing that google will fended -- offended the chinese government', that the hackers are trying to hack their information. i think googled has been known to steal works and not compensate a lot of authors right here in this country and it has gotten people were right. and i think they tried to do this over in china and china basically said, no way. can i also just real briefly comment -- i heard a guy called earlier about? host: very briefly. caller: you asked,ç why would't the government -- would the

government starts swine flu? was in our government behind infecting the blood of the tuskegees with syphilis? host: usec in 2010 you are concerned about the government doing this? caller: i don't put anything past them. in fact, a couple of years ago john hopkins university went to the poor neighborhoods in baltimore, maryland, and east st. louis and deliberately and without informing the poor people in those areas, the black people, that they were deliberately putting lead in the soil, and that was reported and "the baltimore sun." host: let us move on to ogden, kansas, norman on the republican line. caller: i think any company should be allowed to move out of any country that they want to.

yes, there probably is a lot of spying going on. but we people here in the united states should be able to do what we want to. as long as it is legal, that is what the constitution says. host: the off a lead and "the new york times." it quotes -- host: let's take a phone call from ogilvy, illinois.

caller: thank you for taking my call. host: what did you have to say? caller: we are talking about google pulling out of china and the comment i have to make, we still have to remember that china is communists, they want to put on a capitalist face but they are communists. we have gotten pet food from them that has been tainted. we have gotten toys from china that have been tarnished. it is just a little ridiculous that -- you can walk into wal- mart and everything is made in china. we need to stop this. the trainees are communists. they don't treat their people right. and -- the chinese are, as did everybody talk about all of this step, racial, i don't know where you are going but that is my comment. host: "the wall street journal" has an interesting inside look at google itself. you can see the headline. these are the founders of google

-- and their ceo, eric schmidt. it suggests the three engaged in a heated discussion. sayre de -- sergei is originally from russia and it talks about his philosophy toward china coming from that.

the next call is from travers' city, michigan. john on independent line. caller: thank you for c-span and open communication we have in terms of the education and understanding of the free society. it is my understanding that google went into china understanding that they were -- i guess the word is compliant with the censorship and restrictive regime said as a condition for doing business in china. therefore, to me, minnow, when you go -- you know, when you go

swimming with sharks reminded didn't. host: here is an editorial about the same thing. anymore reaction? caller: that sounds to me -- i mean, that's good. it is a good thing that everybody, and myself, got to hear it. but once again, this seeking of

the undoing of things like google and it being the access point for people to do hacking and destructive activity, or at least potentially so, given the general nature of the communist threat -- it comes as no great surprise. if google decides to get out, so much of the better. but given the lack of putting together and connecting the dots with respect to the christmas attempt, i only got to thinking, my goodness, if there is a company that could come up whiff a computer algorithm that would be successful at connecting the dots, something

as successful as the search engine of google, the people responsible for that could well be in a position so as to act in terms of a subcontractor in order to address the not connecting of the dots phenomenon we have with respect to intelligence. it seems to me them pulling out and at least appearing angry with the chinese or whenever would stand them and better stead so as to perhaps some land government contracts with that sort of security in mind. host: john, appreciate your comments. the next phone call is from belts bill, maryland. on the democrat line. caller: from the time that google said they were going to go into china in 2006, i felt

then that they had their heads in the sand. china is what it is, in it -- and oppressive country, and they show a good face to the public to get what they want. i feel that once they got the software it into china, they did exactly what they meant to do in the beginning, and that is to use it to hack into other countries and also to limit people in their country from the more knowledgeable by blocking certain things. i think google was there mainly out of greed. they got as big contract and was like, wow. and now look at it, all of the worms are coming out of the can. it and i think the world at large is at risk because of china's oppressive methods. but i don't feel sorry for google but i hope they get out of there because the things that the chinese are doing to the

people as far as limiting what they can here on the google, what good is it except a tool to have other nations? thank you. host: google's is not china posture majority internet. the majority of the market is a chinese search company. we will tell you more about it if i define it quickly. people talk about censorship. "the new york times" has this story. çó

host: it says also that outside the company's offices in beijing, a trickle of young people laid floral bouquets and notes at the multicolor sign bearing google's logo. as daylight faded, two law students approached with rice liquor and lighted candles. she wanted to make a public gesture of support to google who steadily lost market share to baidu, the chinese company. it is the major search engines in china. jim on the independent-minded you are the last voice on this. caller: basically i work for a company in massachusetts, and medical company. there was a chinese national who was working there and they were talking blueprints, stuff like this -- so there is domestic spying going on here.

but on top of that we have our companies over there. i'm just wondering what is the extent of the spying going on with those companies and the technological documentation that they are getting from those companies that operate in there. now, on top of that, during of the clinton administration, you've got to remember that it was aircraft that petitions clinton -- hughes aircraft guidance system for the missiles -- not the missiles, but the rockets soq they can launch american's satellite into orbit. the bottom line is, after they got the guidance system they instantly converted it over to their military warheads and nuclear warheads and then they started threatening to nuke los angeles. i don't think china has any of our interest in mind.

host: jim from madison, virginia. one person who is seriously applauding google posset contemplation of pulling out is nicholas christoph, columnist for "the new york times." he has aç chinese-american spouse. here is what he calls it -- caller: hohost:ç thanks very ml of your comments. speaking of banks, yesterday on capitol hill, the first day of the federal commission that

looks at the causes of last year's financial crisis. this is the scene as the ceo's were sworn in. in a moment or two youç will hr from former florida senator graham, who was a member of that commission.

>> of the financial crisis inquiry commission holds its second public meeting today. they will start hearing from federal officials, including attorney general eric holder, the head of the federal deposit insuranceç corp., sheila there, and securities and exchange commission chairman mary schapiro. it is also online at c-span.org. president obama this afternoon speech to the house democratic caucus at the jobs summit at the capitol visitors center. live coverage at 4:45 p.m. eastern here on c-span. tonight, a texas gov. debate between the three main çcandidatesxdç for the republn nomination, including incumbent governor rick perry, senator kay bailey hutchison, and former republican party chairman debra medina. w3i]>> this weekend on "book tvt

marine corps university professor mark more year on military leadership and winning counter insurgency. and children's book author and illustrator on growing up in the communist check will slovakia. part of the weekend filled with non fiction books on c-span2. for the complete schedule go to booktv.org. >> "washington journal" continues. host: of former -- former senator bob graham is with us. it was a continuing ceo's of some of the nation's largest financial companies. he is here to talk about what he wants to accomplish, what the charge is from the federal government, and to get reactions. guest: good morning, susan, thank you. host: your observations? w3guest: we started with

representatives of about four major financial institutions, all of which have taken a federal bailout money and all of which agreed that they were part of the problem that created this crisis. then we had panels made up of state representatives, citizen groups, community bankers, academics, commenting about the crisis and what the impact has meant on the average american and the economy. host: if i had -- could show you the headlines, they were over the lot of whether they were -- it was a tough day for the ceo's or whether they got away lightly. guest: i think it was fair. we don't see ourselves as an attack dogs, trying to embarrass people. we are there to gather information. congress has given us a job and that job is to diagnose what happens, what were the causes of this most serious financial crisis since the great

depression, the 1930's. that is serious business and we are approaching it seriously. host: how many panel members? guest: 10. host: why did you accept the job? guest: it is a very serious assignment. the american people want to know what happens and congress needs to know if it will develop effective reform measures. a bit like going to the doctor, the first thing the doctor will typically do is take a number of tests and then describes -- prescribe what prescription to direct you toward. host: we will put the names of the 10 members of the financial crisis inquiry commission on the screen right now as we are talking to senator graham. you have been a around this town a long time. what effectiveness do these have in general? guest: it it depends. some have been very effective -- the 9/11 commission, for example. it was effective because it was serious about its work, well

staffed, it took considerable amount of time. good people who had the confidence of the american people and congress on it. t(i hope our commission has allf those things. çhost:ç itçq is led by phil angelides of california. guest:ç phil,i] former treasurr from california, and knowledgeable about financial issues as a public office holder and a financial business person, i think has given excellent direction, as has the co-chair, longtime former member of congress also the california, bill thomas, who was chairman of the house ways and means committee, essentially the finance committee of the house. so we have two knowledgeable leaders, one a democrat, won a republican, working very collaborative lee. host: we want to get your

telephone calls. senator graham is interested in your comments from day one, what you watched it. here are the numbers -- host: before we get the calls -- you and i were talking, injured reserve list. i don't want people to be concerned. what happened? guest: a lot of good things about living in florida but one thing you have to be protective about is exposure from the sun. in spite of my wife's best efforts, i was derelict and had a little situation on my right cheek that i just had it removed. so i am now i hope in the last stages of getting back to normal. host: the message there is get yourself checked. guest: and put a lot of

sunscreen on if you are out on a bright day. host: we are beginning with a call from crisp from dallas. xdyou are on the democrats' lin caller: i was wondering. we were hearing from the news media lately about a bank tax. i'm wondering if that wasç a realistic way to recoup money for the taxpayers that we put into the bank system? guest: what type of tax? host: let me read a little bit from the rest of this so you can answer.

is an appropriate tax. these institutions have not only taken an enormous amount of taxpayer money, but they have contributed to the worst financial crisis since the great depression. i hope part of this will also move in the direction of financing the fund that will avoid the concept of too big to fail, that if an institution does bad things and gets itself in trouble, that like any other enterprise, it should face the prospect of formal bankruptcy and this fund can be a means of helping to support that transition so that their failure it does not cause a broader economic problem for the nation.

host: joe is watching from gaithersburg, maryland. on the republican line. caller: my question had to do with exactly kind of the way this argument seems to go, whether or not people are viewing what happened sort of correctly. from my understanding -- and i would appreciate any correction -- what happened was, through programs like cra and other programs, which instituted policies that called for the expansion of home ownership. to groups that were not necessarily qualified, in many cases, for this home ownership. banks were threatened with a many types of different taxes -- tactics, like protests would ever, if they did not acquiesce. we did that, and the banks then looked for ways to make these profitable and came up with all of these crazy mortgage strategies and things of that nature. then we started to sell these

pieces because of the risks associated, and the rating agencies got involved and they were paid off by the investment banks to put aaa wrappers around them. then, here is where we are. i guess my question is, i just don't see how this can be fixed unless we sort of look at it from the root of the problem. we saw home ownership spiking through this process, from a government perspective should someone have seen the red flags associated with that and ask for, when the rating agencies start marking these as aaa and things of that nature -- i think the problem run to -- run into, there has to be a copy of mcorp mentality with some of the productsc -- caveat empor

mentality, that i still we start feeling pain as an investment class or an individual or institutional level, we did not learn lessons. whether we put bank officials to a higher standard, have more teeth in the long for people knowingly running their companies into bankruptcy -- mandatory sentences like jail, then i don't see how we fix it. host: joe, thank you for the call. lots there what the theory -- people have to feel pain and consequences. guest: you have given a narrative of what you think happened. i think there will be different narrative's as to what was above core series of causation. today at 9:00, please do into c- span because you will see a panel of representatives of the major federal agencies which had a role in the development of

this problem and which now have a role in trying to resolve or moderate the problem. i think you will find that to be a very interesting discussion. most of the people who talked yesterday, both the major financial institution representatives, as well as citizens, academics, representatives of smaller financial institutions, pointed to some things like, during the late 1990's and early part of the last decade, there was a lot of money sloshing around in the world looking for a home which could produce some reasonable return. interest rates were at a historic low. housing, which represents about $11 trillion segment of our economy, was a very major part of where that money went and peopleç did come up with exotic

subprime and other forms of the mortgages to get more people to buy homes. . this is an issue that will require some significant steps

to avoid repetition, challenge politically to the administration and congress. do we have the will to make those? host: talking about people facing criminal penalty. eric holder will be testifying before the commission today. that begins at 9:00 a.m. the justice department is also set to announce it is opening an investigative unit looking specifically at criminal activity around lending. the assistant attorney general for the department's civil rights division is expected to announce on thursday the administration is creating a unit that will focus on unfair lending practices. if you have not heard of perverse redlining, it is --

because the original lender would complete resell and loan after collecting its fees, it did not care about the risk of foreclosure. guest: we had a witness yesterday who come to not that precise situation where mortgage brokers were encouraged to go into low income neighborhoods, write contracts that had unusually strident policies, insofar as the mortgage holder was concerned. they were paid more for those mortgages than more typical, it economically-capable people. host: you are in the senate until 2005, a chairman on the intelligence committee. a governor of two terms before that.

when are you set to report back to the president? guest: in a few months. host: next phone call. caller: a woman representing the credit agencies said that the agencies were not responsible for the meltdown, and that the information was one neighbor told by the banks. do you believe the credit ratings agencies had little or nothing to do with the meltdown, and it is not there responsibility to look at the value of a bond, or at the very least, look at the response abilities to which they are given? guest: ratings agencies had a significant role because they were given the appearance of legitimacy to financial instruments that were very third class.

that, in turn, gave financial institutions reason not to exercise the level of due diligence that you would expect. i think rating agencies are going to be a significant part of our ongoing investigation and final report. host: here are some details about the mechanics of it. the president established a commission. the budget for the inquiry is a $8 million. next phone call from memphis, tennessee. larry on the democratic line. caller: i do not think we need an inquiry or commission. it is all corruption and fraud in these institutions, and it was done on purpose. these people need to be facing jail time.

our government was composite in this. these people take money from the american people. they do not give a damn about the american people. 9/11 was an inside job. the people of america, wake up. this guy is a joke. host: we are going to stop you there. concerns about the commission went washing the problems. guest: in the anger that you just expressed it is the same thing that all lot of people who testified the other day did not understand. the american people are mad as hell at what happened. they have been very personally affected today.

more than one of of 10 americans looking for a job cannot find one. we are in the deepest financial hole we have been, and for many americans, in a lifetime. one of the responsibilities of this commission will be to channel that anger into constructive action. we are not prosecutors, district attorney's, so we cannot take someone and throw them in jail. we will be meeting with somebody today who does have that power, and i would like for you to listen to see if, on the criminal side, that amount of of rage is being expressed. our job is to diagnose the problem for the purposes of the president and congress, in the hopes that they can use the information we find, as the basis for prescribing some changes in the system that will

avoid a repetition of this. i use the analogy of a doctor -- we are taking blood, we are going to examine it can find out what is going on inside the body of the financial system, and then we will give that information to congress. i hope they will use it to prescribe the right changes in lifestyle that will most likely solve the current problems and reduce the prospect of it happening again. host: here is a tweet on twitter -- we have events in our archives from the clinton and bush administration encouraging the lending community and the mortgage bankers association, national association of realtors, promoting home

ownership. specifically, as a policy development, promoting home ownership in poor communities. what is the government's role in this? guest: no question the policy of the u.s. for most of the 20th century was to incur ridge home ownership. we gave probably the largest single tax break in america. -- encourage home ownership. but i do not believe these banks were pressured into doing this. it was very much in their interest to the issue these high return mortgages, particularly, those institutions which felled in the back of their mind they were too big to fail and could take these high-level of risks

without the chance that they would end up paying for it. at this point, the first day in one of the year-long series of hearings, i do not want to make any final conclusions. while government policy has been to encourage home ownership, and that is something that we will be looking at in february, but i think there are a lot of other factors beyond that that caused the crisis of the severity we are currently experiencing. host: jim from michigan. good morning. caller: i agree to these banks and ratings agencies are partially to blame. the previous caller mentioned the community reinvestment act. if you look at the he pollution

-- evolution of that act under the bush administration, and then fannie and freddie, they cranked it right up, just let the democrats who fostered this situation. having senator gramm on this committee is like having the fox in charge of the chicken coop. i believe the government created a situation like this. who is going to be responsible? you are going to give the report to barney frank when you are done? that is going to do a lot of good. guest: our job is to diagnose the problem. congress has reserved the responsibility to do something about it. the house has significant reform measures. the senate will be dealing with them later this year. so i think the institutions of government are starting to

engage on this, and i hope we can be helpful. host: i wonder if you are planning to call any investigative journalists? guest: hour hearing schedule has been lawfully set for the rest of the month. we know the general topics that we have not gone to the point where we know who we will call. it would be unusual to call and journalists whose job it is to report to the public what has happened. i would say that is an unlikely but possible set of witnesses. host: delaware county, pennsylvania. republican line. caller: nothing personal, but i believe in the 1930's roosevelt and the democrats put this in place. then in the 1990's, clinton and

the republican congress removed all those safeguards. there is no criminal activity because the lobbyists for the financial industry own congress, and they wrote the rules. who else is on the commission besides you? guest: they are a mixed group, business people, lawyers, the vice chair was a former member of congress. they are academics. guest: how about regular people? -- caller: how about regular people? guest: i think, besides our job, we are regular people. caller: the but you are all protected from this. i do not think you feel the pain of the american people.

guest: i would disagree with that. host: what would you most like to ask? caller: i want to know what is going to happen when this commission is done. are the lobbyists going to write the rules again? to i think the senate -- i think the senate is paid by the banking industry to write the rules. guest: you are expressing an opinion which many have had, which is our democracy has lost its way. one of our challenges is going to be to submit a report that is persuasive enough, in terms of its analysis of the problem, but also dramatic enough to cause

the congress and president to say this is not an issue we can sweep under the rug. this is not an issue where we can allow business as usual, allow outside interest to play a disproportionate role. right now there are a lot of people in washington getting paid a lot of money to avoid anything happening. part of our mission is to see that they do not win. host: we are speaking to former gov. bob gramm. here is a bit of the questioning from phil angelides to goldman sachs. >> because they were accumulating positions, which by the way, we got from clients, we have to go out ourselves and providing an source the other side of the transaction so we

can manage our risk. these are all exercises in risk- management. >> i will be blunt with you. it sounds a little bit like buying -- selling a car with a faulty brakes and then selling insurance on that basis. >> this is an institution, public professional-only investors, dedicated in most cases, to this business. >> representing pension funds -- >> these are professional investors who want this exposure. host: what did you think of that exchange? guest: i thought it was good. he was showing some of the public of rage -- outrage. there was an admitted fact that

firms were selling defective documents such as these subprime loans that people should have known were going to go into the fall -- default. at the same time, they were managing their own internal stocks and betting that those securities would fail. so you have the example of a person selling a car with faulty brakes and then buying interest policy -- an insurance policy. that is part of building a case that will hopefully, as the congress and president to use our report for the intended purpose, which is to make the necessary reform that will send a signal to the american people that government is functioning for them, not for special

interest. host: madison, ohio. democrat line. caller: my question of all around a.i.g. and their failed credit defaults swaps. insurance by any other name is still insurance. why is it that a ig -- a.i.g. has not been held to criminal activity for selling insurance without the proper reserves to do what they did? that was a huge part of what happened, and i think, is encouraged banks to be after -- extra risky because they did not have insurance. the federal government bailed out a.i.g. with our money, and to be honest, as a voter, i take extreme exception that we even call them representatives.

someone who makes $175,000 does not represent the average american. guest: for something to be a crime, there has to be a law that makes it a crime, and then prosecution then bring someone to account for violating that law. for a number of years, we operated under the philosophy that the market was self- correcting. we did not need laws. the market, the reference to this highly sophisticated investors -- they could take care of themselves. one of the lesson that we have learned is that philosophy does not work. that is not the way human nature operates. therefore, there were no laws

that made a criminal offense to be engaging in these credit defaults swaps without having to set aside -- as most interns arrangements would mandate -- enough money to pay, in the event that default became a reality. that is another issue the commission will be looking at. host: this, on twitter -- guest: the last stiegel -- class stiegel -- glass-steagall allows you to take deposits and make loans. on the other son, investment banks which deal in more risky activity. in 1999, that was removed with the explanation that it was no longer necessary and was

inhibited to the united states being able to participate in the increasing globalized financial community. there was a lot of discussion yesterday as to how much of the repeal of the that contributed to the crisis we are currently experiencing. that is another issue that i am sure we will be examining closely and have suggestions as to what part it played in the current financial collapse. host: patricia from brooklyn. on the republican line. caller: thank you for taking my call. it is goldman sachs, the jewish bankers, and they own obama. host: i just want to stop you. what are you calling all bankersçó do wish? that is certainly not the case. caller: you have the federal

reserve, all those bankers. ben bernanke. host: you do not have to respond if you do not want. baltimore is next. darren on the independent line. caller: thank you. this is my first time. i really hope that you do your best to find out what really happened. this country cannot take much more. and i am a young person. our future is at stake. i know so many people that have been affected by this. it makes me mad that regular people do not have a say. host: what would you like to ask, if you could? caller: i heard tim geithner will also be testifying.

i would like to know what he knew about a.i.g. there was a story that he knew more than people thought about the a.i.g. crisis when he was the head of the new york fed. i just hope that congress will follow through with a real financial reform. guest: mr. gardner when not be testifying today. he may testify at one of our public hearings, and i will make note of one of the question that you asked, and i will make sure he gets the chance to answer that question. in reference to the previous caller, this is a serious issue. it is not one that will be resolved or better understood by using a blanket statement of condemnation of any groups of

people, whether it is their personal background or their particular current employment. our job is more difficult. we have to look at all the alleged causes of this, assess their validity and significance, and then make a report to the american people. that is what we are going to do, and we will not be driven by any other factors. host: i want to go back to the comment that you made, that banks were too big to fail. guest: i am and capitalist, and part of that is accepting the rewarded if you serve the public, if they accept your product or service. but also, the failure if you do not do a good job. when you have some institutions

that are considered to be so system if we import into the economy that they cannot be allowed to fail, i think you have created the ingredients for sloppy behavior that is willing to take excessive risks. we had a lot of that going on in the past decade. i think part of the diagnosis is going to be what was the role of the too big to fail doctrine, what role did it have on encouraging excessive risk? they knew that if they won, they would win big, if they lost, the taxpayers would have to pay. host: here is one tweet --

guest: i will give chairman angelides that option. host: that their land. -- woodlawn, maryland. caller: i had a foreclosure on my deceased cousin. they were involved in it. they were the ones that authorized the foreclosure. what are you going to do about these particular mortgage companies robbing the states? my second comment was this community reinvestment act. i am sick and tired of this crap that somehow minorities are going to profit from this.

my third comment is -- that one person indicating that jewish people were somehow involved in these criminal acts. i do have to say that the ones involved with my cousin, and they were jewish, and they seem to have a problem with criminality. that is all i will say. guest: that injection of prejudice and particularly religious and other factors is not american. we believe every person deserves respect and equal treatment before the law. whatever your personal background, if you did bad things, you should be punished. if you conducted ourselves appropriately, you should be recognized for that as well.

regarding your specific situation, if there is a question that you would like to ask two people high up in the federal department of justice, including the attorney general, if you could send it through e- mail to me, i will be sure that question cats raised at the hearing this morning. i believe part of this issue of the financial crisis will be to sort out those instances where there was criminal behavior. as susan said, the department of justice is set up special units to look at mortgage fraud, securities fraud, to bring special attention, action, and prosecution to those who violated the law. host: fcic.gov.

they have video of the hearings, places where you can read about the direction of the inquiry. i would guess that you solicit comments from the public? guest: very much so. if there are questions that you think should be asked, please send them to fcic.gov. there were a number of question that came in during the hearing yesterday. host: washington, d.c. scott on the republican line. caller: i have heard in the media and in other places people talking about the failure of capitalism. the guest talked about the failure of the free-market system. i find it ironic because the

fact of the matter is we do not have a free-market system any longer. you can go back and trace -- the numbers have been crunched many times. every financial bubble and subsequent recession, the direct cause of it was government intervention in the markets. that is what we have here. many people have brought up the cra, and in connection with that, they say that nobody saw this coming. that is not true. you can go back to the 1980's and there was an economics professor in the fairfax area that had a special about the failure of the cra, and how it was going to lead to a recession. host: i am going to interrupt you there. thank you.

guest: first, let me say what is the cra, the community reinvestment act. if any financial institution is serving a particular community, it is prohibited from excluding loans from a particular neighborhood within that neighborhood. it has to treat all of the people that live within its service area with equal respect for their individual selves, not where they happen to live. i think the government has played a role in the crisis. whether that role was being too assertive or inadequately assertive is something we will explore. most of the head of the financial institutions stated one of the elements of the

common one that there was not enough regulation, not enough standards, the oversight on what was going on to avoid what could have been a mild economic alterationñi from collapsing ino this major recession. again, i will withhold final judgment on that until we have our hearings, but certainly the role of the government will be a key issue. host: could you tell us what kind of preparation as a committee or individually to have done? guest: we have put together a fine staff. they have been preparing papers, documents, directing us to materials to review. we had a briefing session prior

to the public hearing we held its today, and again today. ñicommissioners have been workig hard to carry out their public responsibilities of understanding what happened and telling the american people. host: thank you for being here. we will be interested to see what happens. we will be right back. in our next segment we will be talking about health care, specifically talking about health insurance exchanges. now to c-span radio for the latest headlines. >> more on the inquiry into the financial crisis. the attorney general will tell the panel today that the justice department is using every tool at its disposal to fight the financial crimes that contributed to the meltdown and could cause another. live coverage is at 10:00 eastern.

taxes and health care reform or on the president's agenda today. he need with democratic leaders on capitol hill after making a statement at the white house on the ticket mission in haiti. secretary clinton also focusing on haiti. she said this morning the u.s. will do all that can to help them surmount a cycle of hope and despair. and as more u.s. troops had to afghanistan, word this morning that a suicide bomber has killed at least 16 people in the market in central afghanistan. the provincial governor says that he blew himself up in an area with shoppers. >> the financial crisis enquiry commission hold its second meeting today. you will hear from federal officials including attorney general eric holder, fdic chair sheila bair, and mary schapiro.

president obama this afternoon speech to the house democratic caucus at their jobs summit. live coverage at 4:45 eastern. and a texas governor debate tonight between the three republican nominees. live this evening at 8:00 eastern. host: yesterday, the white house that with a defect of conference committee with house leaders and the president over the health care bill. one of the headlines here in the "new york times" -- this is about the different

versions in the house and senate versions over insurance exchanges. here to talk about that is linda blumberg from the urban institute. she is a senior health policy fellow. she has her ph.d. in health care. what is the basic concept of in exchange, and what is the difference between a state-run and federally-run? guest: the health insurance exchange is a government entity that creates an organized help enter the marketplace. it is focused largely in pieces of legislation involving purchasers and those who would be purchasing through small groups. it does not bear risk itself, it contracts with insurers to provide the coverage. its intention is to ensure that they are complying with consumer protections, that it is fostering cost-efficient, good

competition among health insurers, and is helping people and all and expand health- insurance coverage to those who do not have it today. host: most states have health insurance commissioners whose job it is to oversee the insurance providers. what is the difference? guest: insurance regulators do not play a role in helping people get coverage. they do not provide as much oversight, frankly, for the consumer protections, as we would like to see. right now we are creating a system where we will facilitate health insurance competition, which is lacking in the best majority of markets today. the exchange is a way to organize the market, held it function better, and assist people to get coverage, which injured commissioners do not do today.

host: no. any states that are currently running successful the changes? guest: yes, massachusetts has done a good job. the uninsured rate in the state is below 3%, analyst in the country. host: how did they do it? just go through a variety of tools. they have this thing called a connector, basically, an organization to help with coverage. it provides subsidies for health insurance coverage to those up to 300% of the poverty level. all low-income adults and children have subsidized health insurance coverage there. and they provided different insurance regulations to help make sure risk was being spread broadly, that the sec -- sick were not being discriminated against.

host: we would love to hear from you, particularly you in massachusetts. it looks like the debate will be if legislation should be at the state or federal level. is that correct? guest: senate is the state, house is federal. host: they were the ones most interested in the public option. this is one way to help those people who wanted that. guest: you could still have a public option if it was state- based. massachusetts does not have that right now. host: the phone numbers are on the screen. massachusetts, let us talk specifically at what has happened to health care costs. guest: their health-care costs

are growing basically at the same rate that they had been prior to reforms. so what they are doing is spending more government dollars as they move from federal interstate dollars to provide coverage for people who did not have it before, but in terms of the cost-containment concern, that is the biggest issue. while they have done the expansion and it has not created a worst cost situation, they are struggling with to do now in the second phase in terms of slowing the rate of health care spending, which is an issue we face all over the country, not just massachusetts. host: what should be the issue as congress looks at this cost side? guest: we want to be able to put in place as many strategies as we can in order to slow down the

rate of growth in a way that will not affect medical care. in these proposals, congress is putting in a number of different strategies to do that, but frankly, we are in a situation where some of the science has not caught up with our desires, and we are trying to figure out what will be the most effective. what we do know that has been helpful -- although it is controversial -- is the public option plan. host: how long will states have to set up these exchanges? yes, as it stands now, they would need to be set up by -- guest: as it stands now, they would be set up -- need to be set up by 2014.

there are requirements to obtain coverage. host: could you explain the difference in how they federal plan would be structured, compared to a state plan? guest: it is a manner of who will be overseeing these exchanges. either it will be the federal government or individual states. under the senate version, which is state-oriented, they could opt out, or if they demonstrate they are not able, the government could step in. on house side, the opposite could happen. in individual state such as massachusetts who had it up and running code apply to run it on their own and get approval. so there are some outlets on both sides for the opposite to occur but the key is how much uniformity there will be across states in the types of plants people are for dissipating in,

which plans are in, which are out, how the information is collected and dispersed to consumers. host: the house has a suite of plans to choose from. guest: the federal employee health benefit plan has a flavor of the help change to it. it is still employer-based, so it operates differently. the only people who can obtain coverage through the federal plan a party their people working actively for the government, or are retirees. it is different because they do not have to worry about enrolling uninsured people. the notion that you have a suite

of plans, and someone is giving you information, which is great, compared to what other employers to, it does help consumers compare their options and figure out what is best for them. so there are some similarities, but the connector would go quite a bit further. host: does the urban institute have a position? guest: we did not take issues. we are a nonprofit organization. we are about information, not advocacy. host: chris in michigan. on the republican line. caller: i have a couple of questions. i have family in massachusetts. i have sold health insurance and

private markets before, so i am familiar with what is happening there. i am in michigan and i am unemployed, so i understand a range of these issues. my question with exchanges has to do with two things. it assumes people are not capable of making choices and understanding health insurance on their own. i have a variety of companies i can choose from for private insurance, but the cost of that insurance is still prohibitive. if you add exchange, it seems to me that will increase costs and would put the government in control of private health insurance companies. massachusetts is twice as expensive as any policy and i can buy in michigan with equal coverage. can i do not see how the hell the exchange lowers cost for

makes it easier for me to have insurance. guest: you raise a number of points. the issue of the information is a big one in health insurance right now. particularly, in the non-group insurance market, those people who have to buy in on their own. there are a number of options out there but there is also an enormous lack of information. it is typical for companies not to provide documentation of that policy until someone is enrolled so people do not have full information of what they're getting. they do not have all lot of information -- a lot of information about what their cost sharing will be, services. people will get little information ahead of time in terms of what drugs are in the

formularies, which doctors will participate, etc. to help it turns exchange could provide uniform information to make sure that someone is buying something that they understand. it does not mean that there will be fewer options available to people, especially because it will be costly for people to apply for health insurance coverage on their own. they often have to pay a fee just to go through the application process. so there would be changes in terms of the uniformity and completeness of information. in terms of cost, individual health insurance is the most expensive way to buy coverage. it is the option of last resort. the administrative costs, as a share of what the benefits are that are paid out can be 30% to 40%, so this is an expensive way

to buy coverage. so expanding the group, centralizing marketing, facilitating in moments of the individuals have an easier time getting in, could hold down those costs. also, the more information you give people and allow them to compare plans easily, the more incentive you are giving interest to be cost efficient. if you compare, that is what creates competition. host: trees port. -- shreveport. lonnie on the republican line. caller: thank you for taking my call. the so-called reduction in medicare -- is this information

or misinformation? are they really going to reduce the amount of money in medicare to pay for this plan? also, the public option. how come they do not want to fight for that? it seems to me that it would be a good way to go. if people are insuring -- purchasing insurance, they are responsible for reading the policy and numbing their coverage. it is just like taking out a loan. if you sign on the dotted line, you are responsible because it is a contract. i think republicans are just fear-mongering, trying to kill

the bill simply because of the input of lobbyists. host: thank you for the call. guest: public comment on the medicare question. the pieces in the legislation that would reduce cost under medicare are comprised of a number of components that have been discussed by legislative advisory commissions in the past, such as the medicare advisory council, which advises congress on issues of payment in medicare. issues have also been raised by the congressional budget office. these are pieces of the medicare puzzle that have been pretty frequently discussed in places where there are overpayments in the certain -- current system. regardless of reform, these have been savings which many experts

feel should be put in place anyway. so what has been going on is this notion that we have this large expansion of health insurance coverage, there are costs associated with that. let us put in place could print -- good business practices for the medicare program and use those savings to directly finance health care reform. my expectation, in the current budget deficit environment, if we did not have reform, these components would be put in place anyway for deficit reduction. here we are using it for financing health care reform. they are not things that will -- medicare beneficiaries will feel just as adversely affected. this has been one of the most controversial components of the legislation. with regard to what we believe would be the impact of having a

public option -- a strong public option available in the health insurance exchange, is one that would basically catalog their competition. it would be there as a lower administrative costs and a somewhat lower payment rate-type of plan available. because of its presence, it would force other insurers to negotiate with providers in a more aggressive way. right now we have a lot of concentration in health insurance market, but we also have a concentration in the hospital markets. this has created a situation where there is not a lot of incentive for in jurors to lower the rates -- insurers to lower the rate the our pain thethey are paying. host: next phone call.

caller: i have a couple of questions. i am on medicare and medicaid. under the current bill, would i be required to purchase insurance? my second question is, what are people not looking harder into why the's health care system? even rush limbaugh has praised it as the best health-care system in the world. -- hawaii's health care system? i understand it is a social system and he seems to praise it as the best in the world. i am sure he is angering the gop world. guest: those individuals that are dual eligible would feel little difference, if any, under the reforms. as far as individual mandates to have health insurance coverage,

it would apply to those non- elderly individuals who are over the poverty threshold. in terms of medicare and medicaid coverage, that would certainly qualify as acceptable coverage. so the world should stay pretty much the same. hawaii is an interesting state. it is a state that does not have a government system, although that is a misunderstanding. what they have is different from other states. they have some requirements by their employers to purchase health insurance for their workers. there are a lot of exemptions, so there are a lot of people who do not have employer-based insurance, but that is why they have somewhat more coverage compared to other states. however, they do not have an

extensive system to provide financial support to the low- income population beyond medicaid. so they could use a lot of help, and would get a lot of assistance from this reform in terms of providing for their low income population. host: this is a question that house and senate negotiators are facing. a national market for insurance or one in every state? in the "new york times" -- what would that do? guest: i think that would create complexity. what we do not want is people be eligible for more than one exchange. what that does is create more administrative costs. it also sets up a situation where there could be competition between federal and state

exchanges for the healthiest individuals which then creates a problem where we have to worry about whether or not people who have higher costs will be affordable. so it creates an extra layer of bureaucracy and complexity that i think would be an error. host: let me read from one account of the event yesterday --

any comments from that? guest: i am not privy to the conversation, so it is hard to come in, but it is a good sign the president is involved. he is trying to bring the parties together in an efficient manner as possible. host: another article in the "washington post" -- back to your phone calls as we

talk about health insurance exchanges. tallahassee, clinton on the republican line. caller: i had some concerns about the nature of the debate. my concerns were two fold. it seems strange to put these burdens on the states. medical providers seemed to dwindle and of course, more people will be in need. some people, unfortunately -- there is a stigma associated with medicaid. some people also know that if you have medicare, it is harder for primary care providers to find a provider for medicare.

it would seem that had the specter of the stigma is growing taller, whether they are eligible due to circumstances, seemed to becoming second-class citizens, and this is slipping away from the debate. i could go on for quite some time about this, but i wonder if anyone will address these issues of the dwindling pool of primary care providers and the stigma that some of these existing plants are getting, not to mention the stigma of the public plan. where are these providers going to come from with the ever- increasing cost? i will be happy to take my comments off the air.

guest: with regard to state medicaid and cost, all those would be made newly eligible for the program through the reform. they would be enrolled in the states, but states would receive very high matching rates. so the government would be internalizing the vast majority of the cost associated with those newly-eligible individuals coming into the medicaid program. .

once the culture of the community changes in terms of the notion that there is an expectation that people will have health insurance coverage and there is some community responsibility involvement in ensuring that happening -- that is happening, that eases that stigma. i think with a great deal more outreach and facilitation and making it easier for people to get enrolled in these programs, it will improve quite a bit. provider supply is an issue and i think it will be a continuing one. the house legislation does include some additional funds

increasing some payment rates in the medicaid program. whether that will exist in the senate, we do not know. i think it will occur for some of the reasons you are loading to, and with regard to the differentials between payments to physicians between medicaid and under medicare, because medicaid generally pays quite a bit less than medicare to providers, i think that would be one that continues over time and it will become closer to medicare levels. host: assuming a deal is reached between negotiators and legislation returns to the floor, it is a question of how it gets to a vote. cnn news is asking white house spokesman robert gibbs about posting health-care bill 72 hours before the vote.

any comments on process? guest: the process is very complicated and that is not my specialty. it is a situation that is unfortunate that we have such a patchwork incurred -- in terms of our current health care system. lots of different pieces that work differently for different populations, that if you are trying to improve the situation

for many people and at the same time preserving the peace is that people like, which is what they're trying to do here, then it creates a very complicated legislation. we have these very large bills that are difficult to get host:ñi mississippi, democrats line. caller:çó good morning, i've ben listening to c-span -- i watched the whole health care debate from gavel-to-gavel. i was very hopeful by what the outcome was. then i watched my spirits think as i watched what happened to it in the senate. right away that sounded exactly to me like that massachusetts bill, which i had heard about a long time ago -- which i knew was mitt romney cosy dea's deal. it came to mind what gore vidal

said, he said, you have two conservative parties in this country and one is just as conservative than the other one. the thing about with the romney plan is that, like any state that has auto insurance -- or you require auto insurance in iowa, we just had that happen to was about three or four years ago. the auto insurance premiums went up 30%. it was exactly the opposite of what they claimed would happen. i like the way this woman talks about all this health care and everything because she seems so thorough. and she has mentioned the massachusetts plan a couple of times. what i do not get is, once you have an external -- an insurance exchange, but it is still a mandate -- you are still going to have the mandate.

the insurance companies in the exchange, would inspire them to lower their costs? i do not get it at all. it still seems like a two party system, but one less conservative. it is like we are spoon feeding customers to the insurance companies. guest: i will try to respond to the issues of your concern, about cost containment and what the incentives are. the situation with the exchanges -- actually, let's take a step back and talk about today for a moment. right now, there is not a lot of incentive for cost containment in the private health insurance system. nor in the provider systems. the way things are structured nowñi, there is a lack of availability for customers to bargain with providers of their

fees and pass the savings on to the consumers. the idea for the exchange is not one to have the government set rates, which is what made you are alluding to with a more government-oriented system. cost containment is a bit more straightforward where the government would set the rate and provide -- and decide what the providers would be paid and cool down the rate of spending that way. what is going on here is trying to create an environment that is less politically controversial than that kind of approach where you set up a marketplace that would function better than the markets where -- that we have now, where the incentives are not for the insurers to save money by avoiding those who have high medical needs, the sick, and trying to attract the healthiest groups and individuals, but instead, were this risk is spread very broadly for these populations. but to do that you have to have these requirements of coverage

so that individuals who are healthy cannot opt out of the system and not sharing the costs associated with people who are sick. as we all know, everybody ages and everyone has episodes of bad health. to have everybody in, whether sick or healthy, means that everyone is protected later on down the road whether they are sick or healthy. these pieces -- bringing a structured marketplace together and then putting information in place, putting rules in place to encourage the health insurers to compete at providing cost efficient care instead of avoiding high cost individuals. that is the idea. host: mike allen in his political rupp this morning looks atñr the media and says ia front-page "los angelesñr times" story --

the idea discussed wednesday in a meeting at the white house could placate those who bitterly opposed -- bitterly oppose president obama's high tax insurance coverage that would affect many union members. what has your experience been in massachusetts with your exchange? caller: i'm a diabeticçó and i'm on social security. i fortunately get my health insurance through my wife. i noticed with our insurance here, our rates keep going up. i went to see my kidney specialist is today and i asked him what his opinion was on the health care bill coming up and he told me about -- if he had

about two hours, he could tell me. apparently, he is not in favor of that. up here, -- ok, we did on after keiko pay on our tests. like i said, my wife is still working, and she has had lesions on her brain. those tests are usually covered, and now all of a sudden, it is a $50 per pay period -- $50 copay. i've got to tell you that up here in massachusetts, we pay quite a bit. if you do not have a number from the insurance company when you file your income tax, you get penalized. i feel bad for people who need

insurance at all, and then are penalized on their taxes. guest: the issue of cost continuing to increase in massachusetts is one -- as i mentioned before -- it is a problem we have across the country. we need to think long and carefully about what the best strategies are for containing costs and slowing the rate of growth. we've got some strategies in these pieces of legislation, but i think we will need more, and part of that will have to be based on research and analysis that is in progress and will follow what is being put in place by these bills to see what is the most effective in that. it is very difficult politically to do cost containment in a very effective way because cost containment means taking money out of somebody's pocket, very much so

out of hospitals, physicians, and potentially the insurers. what we have is a lot of political force working against cost containment, but then a lot of real perception and understanding of the need for it in terms of helping the system move forward and keeping coverage affordable. one of the things that would be included in the legislation here for those that would be eligible for coverage through the exchanges, in addition to subsidies to help people by premiums and make sure that the coverage is affordable in that respect, there would also be some out of pocket financial and stick --óú financial assistance for the low-income population. it would have limits on how much of pockets -- out of pocket could be applied to individuals when they get sick.

there would be some assistance in this legislation for that. host: camden, republican line. caller: from all indications and everything i've heard, this government takeover is still only going to cover 95% to 96% of people. but we will still have many that are not going to be covered. and the insurance that is going to be offered is going to have such huge deductibles and co- payments that people are going drop to think twice about going to the hospital and doctor and they are still going to declare bankruptcy because -- when they cannot pay them. and if you pay a penalty or a tax because you choose not to buy insurance, when you go to the emergency room or if you have a catastrophic illness, it is still not going to be covered. the situation will remain the same. and you talk about

administrative costs, when you enter the government into the administrative costs, we're talking billions of dollars. the president said he would reduce costs. let's throw out this health care bill and get something worked out before it is crammed down our throat. how are they going to reduce cost? that is what we need to know. the insurance companies only have a 3% profit margin. the media has the biggest profit margin, as well as the fed and wall street. these things need to be written in stone before weekends -- so that we can see them before this is crammed down our throat. our going to keep people from going bankrupt because of huge deductibles and co pay? what are you going to do with the panelists asians for people

through taxes and people are still going to get sick? guest: there are a lot of issues that you raised there. i will try to touch on what i can. in terms of there not been complete coverage in these health care bills, that is correct. there would be roughly 5% of the population that is expected to remain uninsured. a significant a part of that population would be individuals who are here from other countries and do not have legal status to be here. that was a very significant political issue and members of congress felt strongly that there was not public support for providing financial assistance to individuals who were not here legally. as a consequence, there is a population that will remain uninsured and it will be a significant issue as it is today, in states where there is

high immigrant populations such as california, texas, florida. some of elements of assistance to those states will be necessary. other individuals who will not pick up coverage voluntarily will be eligible for public coverage through medicaid so that if they become ill or injured and they go to a hospital, they can get enrolled at that point. but there will be others who remain outside. as far as the out-of-pocket costs go, the relatively high deductible plans that would be offered within the health insurance exchange and would be the minimum amount of coverage that people would be required to have -- however, that does not keep them from getting comprehensive coverage as many people do today, that would also be for those in the exchange of modest income and an eligible

for financial assistance. they would get not only premium assistance, but also required to payçó lower out-of-pocket costs. they would have cost sharing subsidies as well. there is a good deal of assistance, but insurance -- in terms of making sure everyone has very low pocket liability across the board, while that is a very nice idea and a lot of people supported, it also costs more in government dollars. -- a lot of people support it, it also costs more in government dollars. ñrand they're trying to moderate ñibetween those concerns. host: springfield, missouri, you are a last question on this topic. caller: on insurance exchanges, my opinion is that a national change would be much more cost- effective and efficient and other than state plans.

with respect to automobile insurance, the state has -- the state assigned risk pools have been quite effective. çóa few comments on things thate hear -- if i could buy insurance across state lines -- every insurance company rights in the states that they choose. but they choose a produced eight, that is where they do business -- if they choose a particular state, that is where they do business. with respect to this current health care plan -- i know it has been destroyed as it has gone through congress -- i personally think it is a mistake to enact the current plan.

there is nothing in there to control costs. the only thing that will control costs is competition and there is no competition. the cost of current health care is created by people and it is also created by providers. an example on providers, i've wanted to change my primary position -- i wanted to change my primary physician to another location, and the only medication ayman is 5 milligrams of alpace a day. a couple of days later i got a call from the nurse and they said he wanted to see me in a month. i said, why? and they said, well, you take blood pressure medication and he wants to check your blood pressure. it turns out that if i did on a creek -- unless i agreed to go

to his office once a month to have my bloodñi pressure taken, which there was no where was going to do, he would not accept me as evasion. host: -- accept me as a patient. host: that is obviously an example of cost containment. guest: they have some of us -- some liability if they are not monitoring you properly while you are on medication. i cannot compliment -- comment on the appropriateness of that. the position may feel that is a corporate care. in terms of the state vs. -- the physician may feel that is appropriate care. in terms of the state vs. medical exchanges, the first is one of uniformity in terms of access to coverage that is comparable across the state. we do have some concerns that the more variation you allow, the more flexibility that states

have, you may end up with people -- very similar people in two somdifferent states have ben very different access in terms of coverage of is available to them. the second concern is one of federal dollars. this reform is largely spending federal dollars. not state dollars. and so, when you have the federal government not administering the health insurance exchanges, not doing the oversight of how the markets are working and how the money is being spent on insurance plans as director, then you have a situation where somebody who is doing oversight is not really the one hand the on money and there is a bit of disconnect in terms of incentives for the states and being aggressive in containing costs and making sure the federal dollars are being used efficiently.

host: that is it for our time. thank you very much for being here. as the house and senate democratic leaders worked out the differences between their different pieces of legislation, we will continue to talk about health care as it works its way through the process here in washington. we will take a quick break back to c-span radio. our final guest of the morning is a national taxpayer advocate. >> it is 9:22 a.m. eastern time. the labor department says unemployment claims rose more than expected last week, partly the result of large seasonal layoffs. the number of people continuing to claim benefits dropped from the previous week. retail sales declined in december compared to november, much weaker than economists had been expecting. for the year, sales showing the biggest decline on record dating back to 1992. the associated press says the in-house legal counsel for the joint chiefs chair of raw mike mullen reports that now was not

the time to lift the ban on gays in the military. stress in wartime is adding to that. the advisers recommended delaying the appeal process for a year until 2012. president obama made allowing gays to serve -- openly in the military one of his campaign promises. officials say the taliban chief is a lie. there have been reports that he was killed in a u.s. missile strike on a school where taliban leaders were meeting. twelp people were killed in that attack. in yemen, clerk's report that it will call for a holy war if the u.s. sends troops to fight a credit in yemen. president obama says he does not plan to send troops to yemen. although, he is increasing aid to yemeni forces. those are some of the latest headlines on c-span radio. >> this weekend, history professor on the 1965 voting

rights act, and the effect on politics and out of pave the way for future african american leadership. he will discuss his book on afterwards as part of the c- span book t.a.r.p. -- "book tv." host: our guest is here with us today to talk about the irs and changes they have suggested about people who prepare income taxes for you. the irs commissioner is announcing there will be new regulations, the people must be trained and licensed and regulated. can you tell us more about what the thinking is and what will happen? guest: this is an issue that the high office recognized in 2002 and recommended that congress regulate what we call on enrolled prepares, people who

were not attorneys, certified public accountants, or a group agents that how to take a test to demonstrate their competency for the irs. there is a group of preparers are there -- and in full disclosure, i used to be one of those procurers, was not a a a cpa or attorney and later became an attorney. they do not have any training necessarily whatsoever. the commission agreed that we needed to tell the u.s. the taxpayers -- the u.s. taxpayers when they went to get their returns prepared that there was some minimum level of competency that people that. the irs studied this at the behest of the commissioner and they announced earlier this year that they were going to start to regulate and enrolled return repairprepares as well as thosee who already had training to register with the irs.

host: when will this take effect? guest: i think the thinking is that sometime this year, prepared, whether their attorneys, accountants, and enrolled or enrolled, will have to register with the irs and get a number. and over the next three years they will often take a an entry test, and over time, do continuing education so they can take -- stay on top of the changes in the tax laws. is there host: concern with -- within the irs about confusion as people get into the tax season as they have heard about this and asking the taxpayers, are you regulated? are you certified? guest: if people are asking their preparer that, that is a very good thing. asking what qualifications do you have, that is the whole point of this, to be able -- to make the taxpayer to be able to be a better consumer, so they have some kind of insignia or some kind of indication that this person has taken these extra steps and are ultimately,

if the taxpayer asks the preparer about this and they say, no, then they should go somewhere else. host: we will also take other questions about the irs is -- and your relationship with it if you like to pose those as well. the numbers are on the screen. as a percentage basis, how many americans use preparers as opposed to doing their own or on-line services? guest: about 58% of individual taxpayers use paid preparers, and then there are another 3% that do volunteer organizations. then there is about 20% to 22% that use software. you really do have about 80% that get some kind of assistance with preparing their taxes, which is a pretty sad commentary

on our tax system, that of a and many people feel uncomfortable doing their own taxes. i, myself, do my own taxes. host: what regulations to the makers of the software face? guest: it is a wide range of regulation, and in my opinion, probably not enough. the report that the commissioner issued noted that there are several major players in the software market and they do a pretty good job of regulating themselves. and then there are some minor ones. i think there're some competition issues if you are going to rely on the major ones to do their own regulation. but what we really need to be concerned about is the security aspects of it as well as the accuracy. it is the taxpayer who is liable if the software company does not program things properly. the taxpayer could ask for penalties to be abated if we

charge penalties for not getting the right answer, but they still have to pay the tax. host: north carolina, joseph, you are on the air. caller:çó a question about the people who do the taxes, like an accountant or lawyer or whatever, making them register, is it going to cause [unintelligible] guest: any what for these people? caller: the people who do the taxes for individuals, you say they have to be registered. guest: yes. caller: do they have to pay anything to be registered? guest: yes, they will have to pay user fee and they obviously have to pay for other on a continuing education. and when they take the entry test, which is a one-time test, they want to pay an administration fee. these details have not been completely worked out.

they will be worked out in the next couple of months, but that is what i would recommend. the idea is that this be self sustaining. it would not require the government -- that the fee that is charged on prepares would cover the costs of running the program. host: do you anticipate that the cost of having your taxes done will not go up because these people are having to do this? guest: that is a very good idea, but the thing is, the enrolled agents estimates are very, very small. we were bouncing this fee around and it was anywhere from $35 to $100 a year. they could certainly spread that out so that it would be $1 per return or something like that. it should not be very much. if someone is inflating their fees gravy, that might be something that the tax consumers could certainly make their -- inflating their fees and greatly, that might be some of

the tax consumers could turn to make their decision over, whether that is worth it or not. host: washington d.c., go ahead. caller: how does the irs regulate those taxpayers who are not lawyers or accountants? [unintelligible] and there is no form of identity for the tax preparers. how you plan to do this from the recommendations you have made? guest: that is a good question and it is one of my concerns with the proposal as it stands right now. there is a pattern, a model of doing a tax preparation were the person actually need at the tax -- the person that the customer meet at the tax preparation shop may not be the person who signed the return. and as you all may not know, anyone who have -- and as you

all know, anyone who prepares a return has to sign it and track whether they are accurate themselves in doing the return. the person who you are meeting may not be the one that signs in who we can track. the irs is proposing to recall require not -- to require non- signers to be regulated. that concerns me because someone who may not have ever met the taxpayer is the one assigned to return and we may not have them in the system. i propose including all of these prepares. the idea is that we have to ask taxpayers them -- the taxpayers themselves -- taxpayers themselves to be the watchdog, they can be part of the enforcement. it says to taxpayers, you should

not be going to anyone who has not registered before the irs and taking a test and gotten continuing education. it will have a card from a something that we can be giving out that the taxpayer can say, i want to see this. and if you see someone that does not have it and they're putting themselves out as competent to prepare returns, you should go to someone else because that person has not demonstrated that they know enough to even pass a test about basic return preparation. we are really in power in the taxpayer to make a smart consumer choice. once we've got them in the system, we can look at returns and to see whether a particular preparer is having more errors in a particular erarea than othr preparers are. that might mean we might have to make a visit with upper end say, you realize that -- with that preparer, and say, you realize that you may need some

continuing education? it is shady, than the enforcement ramps up and there could be penalties against the preparer against the negligence that they're showing, or even the criminal activity. host: last week there was something can -- some concern about this. i read something that suggested that the mom and pop shops would be hardest hit by this and that it would favor the bigger companies. guest: i come at this as a former mom and pop shop. i did this for 18 years as an attorney. if i am not willing to go and get continuing education, then i should not be in business. if i'm not willing to go and get continuing education and increased mike competency and provide a good product to the taxpayers for whom i'm making my living, then i should close shop. that is precisely what we are trying to get at. what we want is for people to

say, yes, i'm looking forward to showing people that i'm a professional. that will say to the world, you can be confident in my services. host: tulsa, democrats line. caller: you answer my question earlier about the cost. i was going to ask whether this would drive up the cost for preparers. guest: your income tax return is tax deductible if you itemize deductions, and write out as the law is set up, the income tax return -- right out as the law set up, the income tax return would be a miscellaneous deduction, which is subject to a 2% deduction for your gross income and very few people are actually able to take that. if you are self-employed and you have a portion of your return was for your sole proprietorship or you were in a business and you were hiring a corporation to

do your corporate return, then those are business expenses. it is deductible, but in reality, because of the floor, very few people get to take it. host: you brought with you your report to congress, which you are required to do, and if you also highlighted the service line that the iris -- but the irs has seven up -- that the irs has set up. you were not happy with that. guest: 30% of the taxpayers are the calls that do not get through. this is not something that is caused by the irs exactly. we had a very high level of service in 2007. and just so the listeners understand, the levels -- the level of service on talking about here is, the percentage of calls where a taxpayer has said i want to talk to a live person.

it is the percentage of calls that get through to that life person. what we found is that last year, 69% of the calls that said they wanted to talk to a live person got through, and they had to wait on average nine minutes on hold. two years before that we were at an 83% level of service. what happened in those two years? it was the result of a lot of things that congress has passed, the economic stimulus things, we have payments, the first-time homebuyer credit -- but just a lot of calls coming in. 95 million calls last fiscal year. just the volume of calls has gone up. the irs has set a goal this year of 71.2% with a 12-minute wait time. and that is the goal.

last week, our rate was 68% and it was about a 13.5 minute wait time. i just personally think that is too long to mask any taxpayer and that their record to be problems because taxpayers will not get the right -- and there are going to be problems because taxpayers will not get the right and answers to their questions. they will give up. host: here is an article about paying for tax preparation. u.s. taxpayers and businesses spend 700 hours per year. in 2006, it cost taxpayers and businesses $193 billion to meet their filing requirements. the irs estimates that there are 3.7 million words in our tax code. in 2001 -- since 2001, there have been nearly 3500 changes to the tax code.

what does that say to you? guest: we need tax reform. we have recommended for years that congress really start the hard job of slogging through the code and simplifying it for the vast majority of taxpayers. instead, we are seeing is much more complexity being added in. it is not just the day to day compliance cost of this. there also is an erosion, i think, where as more things get put through the internal revenue code, taxpayers are believeing there are these things that other people get to take advantage of that they are not. it goes to the fairness of the code. host: marjorie, your honor. -- you are on. caller: the way you described

this training like being a teacher -- in iowa, we have a certification program for the teachers of they can keep up their certification. i was just wondering about this training for these tax preparers, is this a federal or state program? host: how you do your taxes? do use a prepared? caller: yes. host: do you think this is a good idea? caller: yeah, that i do not have to study the whole thing because i have other things to do. host: great, thank you. guest: it is a program that will be administered by the internal revenue service for federal income-tax preparation. there are some states that are already getting into, or have been regulating return preparation for prepares in their states. one of the things we will have to do is work of coordination

with the status of the preparers will not have conflicting roles to abide by, but both the federal and state rules. we will be working that out over the next few months. the testing itself is going to be a one-time thing. once you have taken the entry test, then you'll have a continuing education requirement where you will have to take a certain number of hours of courses each year to keep up with the tax law. the testing will be administered throughout the united states by -- we are not sure who. it will not be the irs. we will probably contract with somebody. and the continuing education, we think that different groups throughout the u.s. can come in and show us, here is the course we are teaching. is that a good enough course? we will probably put out standards saying, will want you to cover this issue, this issue, this issue. then you can get that continuing education. and the irs runs seminars around

the country, too, where a lot of prayers go to get their continuing education. -- a lot of preparers go to get their continuing education. the goal is to make sure the taxpayers know that the person they're going to -- that they are paying to prepare their return has passed some minimal level of competency and kept up on the laws. that is what we are trying to achieve. host: rock springs, wyoming, democrats line. caller: i do h&r block. i work at wal-mart. i just go to them. i do not have a clue about how to do my own taxes. i have never tried to attacks -- turbo tax. how do you prepare your taxes,

anyway? guest: how do i prepare my taxes? well, first, i am a tax lawyer with a max -- masters in taxation from law school. i have a background in tax law, but also as i said earlier, i was in the business of preparing taxes. it has sort of been in my blood since 1975. i prepare my son's taxes and every year i talk about how i'm going to show him how to do his, and somehow, the transition has not occurred yet. i think that really speaks to just how complicated it is. for many people, it is not necessarily complicated, but they are afraid of it. i had many clients who could very easily prepare their own taxes, but they were afraid of making mistakes and would rather go to a purveyopreparer and paya little extra.

host: when someone uses a professional preparer, who is culpable if there are mistakes? guest: there is a penalty on preparers for negligence or reckless disregard on regulations, for -- or for even aiding and abetting tax evasion. the preparer can be held responsible for his or her own mistakes, but the taxpayer is on the hook for the actual tax and interest that could be occurring because you did not pay on time. the taxpayer could say, i rely on a prayer and please do not give this penalty to me. the irs will usually a bait that. but you do have to pay the taxes. host: va, eric, independent

line. caller: first-time caller, so thanks for letting me through. two things, how is the tax code actually legal and that you can provide evidence against yourself that can be used in a court proceeding? and two, why is the tax code in existence at all for wage earners given that is their only property income at all? guest: first, the tax code is constitutional. the courts have ruled on that over and over again. there was an amendment to the constitution to allow us to do an income tax by individual rather than working out a tax that is distributed by the states for population. now, why does it go against individuals on income? the internal revenue code says

all income from whatever source derived is income. unless congress makes an exclusion, and congress has not made an exclusion for wages -- in fact, congress has gone in the opposite direction. we did not have withholding until world war ii and congress enacted the withholding mechanism, which is the major way that individuals have their taxes paid into the system, you know, just taken out of their paychecks and paid out by their employer. host: richmond, independent line. caller: i'm in agreement with a licensed purveyor, a special when you are dealing with security bonds and property and inheritance and all of that. you need a professional opinion. my opinion about the internal revenue service, and not very critical of it, but let's say you get a job and you have two children and you are married,

head of household, a whole 9 yards. -- of the whole 9 yards. çóyou go to work and the internl revenue service has already got all of the information they need. why don't they just file a simple form and they just send you the money? what they do is they do not tell you that you owe any money -- that you are going to get any money back because they know they are going to keep your money. i do not think that is fair. i think a person should just file a simple form and they can't reject and double check -- and they can double check if you made a mistake. i do not see any reason why we cannot file just a simple 1040. you see what i'm saying?

guest: yes, i do, sir, and the proposal has come up very often. many countries do prepare returns for their citizens and send it out and say, if you have any changes to put on it, or if you have a self-employed income, or capital gain income or loss for the last few years, you know, fill in the additional part of the return, but we know about your interest income, your dividend income, and your wage income. in fact, we hava legislative proposal this year about the fact that the irs does not actually get this data from the wage earners. the wage earner in come first goes to social security. the w-2 goes to social security and they send us the information later. if we do not get the banking information form that we can use until about may. we really do not have that information until later after the filing season is over. at one of our recommendations is that congress will require the

irs to -- and treasury to study what it would take to get the information that you are talking are, the w-2, the interest and dividend statements early and perhaps make this information accessible to taxpayers of that they can go online and create a return themselves. or the government could maybe do a return, or at least we could check any returns coming in to be sure we are catching the errors of front -- up front, rather than after we have sent out a return to the taxpayer and then catching that there is some income that you did not report and how you owe a tax and penalties. it makes a lot of sense to me. it may mean we have to move the filing season back. most people are ready to go filing by january 15 as soon as they get their w-2. we have a bunch of people filing between january 15 and the first

week of february. and we will not have the information by then to be able to read -- to create returns for them. we may have to look back into pushing it and of little bit further. but we are recommending that we start talking about that. host: the irs commissioner was our weekly guests on a half hour program last week. here is what he had to say. >> i understand from this report that is the irs's goal, if you meet your service co, only 71% of the people who call the irs will actually be able to get through to a real person. why such a low percentage? >> let me talk about service in general, with every irs program, my belief is that we can always get better. the report you are referencing talked about some decline in

service levels this last two years as compared to years complete -- years before. to put it in broad context, i tried to be sure we run very good service channels. when i say channels, i mean phone service, web service, service over the internet, what in service as well as the paper that goes back and forth between taxpayers and the irs. our phone levels of service have decrease the last couple of years. to give you a sense why, demand has really exploded. on average, we get about 65 million calls every year. two years ago when we sent out the economic stimulus checks to everyone, we have 150 million calls. last year we had about 100 million calls. even though our levels of service were decreasing, we were answering and servicing more taxpayers than ever before. we went from about 35 million calls answered to 40 million calls answered. host: do you have anything you

would like to say? guest: yeah, i do, first of all, commissioner shalik my direct report lee -- aita report directly to him, but i am employed by the treasury. i am appointed to be the taxpayer inside the irs. i think many taxpayers are uncomfortable giving substantive tax information from guay -- from the internet for their accounts, legal issues, tax law questions, complicated things. i have gotten a letter from the irs, what does this mean? they want to talk to a live human being. and it is incumbent on the tax collector to answer the phone. a former commissioner, charles ramadi, the man who suggested need for this position road in a book that he published a really

great statement, which is he failed to recognize why anyone would not pick up the phone and talk to someone who is trying to pay them money. i think that is really my point. it is not to beat up the irs, but to highlight the fact that 71.2% -- 30% of the taxpayers are not getting through. and they have to wait 12 minutes. the same people who answer the calls at the irs on the main lines are the same people who process our correspondents. you get into a cycle. you make a call, you cannot get through. first, you write a letter to the irs, you send in information. the irs does not acknowledge that letter. so you call the irs, but you have to wait 12 minutes to get through to find out whether the irs actually got your piece of paper you sent in. so, you do not get through. then you said in a piece of paper again, which sits somewhere and we do not have

enough human beings to process the paperwork. and then you call again. it goes downhill from then. then the taxpayer gives up. we can talk about the reasons for why this is happening. i agree that the volume of calls has gone up, and part of my message is that the irs needs to be funded to the level that we can answer 85% of the calls within five minutes because we know from our surveys that taxpayers will wait five minutes and after that t. host: next telephone call, fairfield, ohio, democrats line. caller: thank you for taking my call. my question is that, i think this is going to be helpful. as an individual, do you have to undergo the training before filing were there will be a penalty if you go and file?

guest: if you are preparing your own return, there is no need for you to go and get additional training unless you want to. there are a lot of good software packages out there that, as i said earlier, the irs is looking at what kinds of standards they need to set for these software packages to be sure they are as accurate as possible. but they're working -- that they are working through questions and answers, so that you have reasonable confidence that you have gotten the right answer. if you're like me, you sit down with all of the publications and things and try to prepare your return. you have to do some reading yourself, but the irs has some excellent publications. i have recommended that the irs create a template to fill in a form on the internet or you do not have to pay anything to anybody and you can file

directly to the irs. and each line, you would be able to go to the instructions for the line and if there was a publication explaining what the issue was, then you could click on the link to the publication and you would not have to pay anybody. it would do basic math and make sure that you did not add things up incorrectly. the irs now has something called filiform -- fillable forms. my understanding is that you cannot save the return to your own computer, so somebody has got it somewhere. that makes me nervous. i have advocated that taxpayers be able to save their return to their own computer and keep it for their own records. host: arcadia, richard, good morning. caller: i disagree with the tax code thoroughly and completely. first, the constitution says

that taxes should be direct and proportional. karl marx, his idea was a progressive tax code like we have to be able to control the people. there are about 20,000 or 40 dozen pages to the tax code. we could make a criminal out of just about anybody at any time they want to. i think that your understanding of the law, you are leaving something out. the supreme court ruled in 1924 that income could not include wages or salary. it was investment income and it did not give the legislature of or the irs the authority to tax wages or sovereign. -- or salary. congress has decided to ignore the ruling and so have the lower courts. but my question to you, the secretary of the treasury, tim

geithner, refused to pay his taxes for four years and got away with it. in fact when he did not even fill out a 1040. would you please comment on that? guest: first, let me comment on the constitutional arguments. i have to disagree with you. i have read those cases as a lawyer, and i have read them carefully and i just have to disagree with you. i think the majority -- not the majority come all of the courts in the opinions i have read actually uphold the internal revenue code as it is today. that is not to say that it cannot be vastly improved and that we need tax reform desperately. i am the first person to say that. i cannot comment on specific taxpayers case. i am bound as a virus employee -- as an irs employee to not speak about an individual case. it is a criminal offense and i would lose my job if i discussed individual tax cases.

the weather is a large business, small business, secretary of the treasury, or anyone. in my own organization, we work about 270,000 cases per year for taxpayers who have problems. i am not authorized to speak about them unless they have given a specific written waiver in which i can speak about them and secretary geithner has not done so. host: last call from charles. caller: every year, they submit with 10 different prepares and become up with 10 different answers. they come up with one thing, is the code that is entirely wrong. when they get rid of the irs and they have a federal sales tax, as the fair tax book does as and explains