robert gibbs. it should begin shortly. expect some questions today about president obama's announcement earlier on a new fee he's proposing on banks aimed at recovering taxpayer money spent during last year's bailout of the financial industry and of course questions expected on the ongoing relief and recovery efforts in haiti following that earthquake earlier this week. .

>> are you giving an exclusive to somebody else back there? >> good afternoon. welcome to the white house. one quick announcement before we get to questions.

the president has invited a delegation from the u.s. conference of mayors to come to the white house on thursday, january 21 to talk about creating jobs in communities large and small across america. senior adviser, treasury secretary and dr. larry summers will convene a discussion on jobs and the economy while the mayors are here in town. on wednesday, january 20, first lady michelle obama will deliver remarks to the u.s. conference on the mayor' 78th winter meeting and discuss the launch of a major initiative to address childhood obesity and the impact it has on the health of the nation and communities around the country. with that -- >> on haiti, secretary clinton said this morning that the united states is providing a lot of the glue that is keeping people together and begin to do

what governments have to do and the president said this is one of these moments that calls out for american leadership. is the u.s. government essentially in charge of haiti at least for the foreseeable future? >> no. obviously, you know haiti is governed by a sovereign haitian government. we have been in contact, our administration has been in contact with the haitian government as they have with governments around the world in seeking and requesting the type of assistance that our nation and other nations are providing even as we speak. the president last evening spent a little more than an hour in the situation room and was clear with the entire team involved that it was important that we do everything in our human power to help american

citizens that are in haiti, to help the haitian people recover from a devastating earthquake. he was clear with all of us about the need to demonstrate american leadership in dealing with a disaster that happened so close to our home and is in basically our own neighborhood. >> is it the feeling of the white house that the haitian government is literally in a position to assert leadership there given the devastation right now? >> the haitian government is in control of haiti. they're the government of haiti. they have asked for, as you can imagine to meet the devastating earthquake, extraordinary assistance that the president has ininstructed all of the members of our team to work as

hard as humanly possible on helping to provide to them. we will -- the president will continue to get regular updates on this. you heard him speak this morning on this. i assume there will be more meetings with him this afternoon on this topic as well. >> i also wanted to ask you about health care. what can you tell the american public about the breakthrough that the white house has gotten with union leaders? >> i don't have any announcements to make at the moment. we may have more later in the day. i can tell you, ben, that as you got in the statement last evening the president and democratic members of congress and the senate worked throughout the day yesterday, made a tremendous amount of progress in bridging the differences that existed between the two pieces of legislation that passed the house and the senate.

we have discussed many of those issues here. one of which, obviously, was an excise tax on insurers that offer health plans that exceed a certain threshold. and we we may have more on that. >> you're unable to say more now because the details are still coming together or -- >> we aren't ready yet to talk about all of what may be pending. yes, sir. >> a couple of questions on haiti. the president announced $100 million in immediate assistance, relief aid. given the magnitude of the damage and destruction there, how much higher is that likely to go? >> i don't know. obviously there has been -- i don't know how much focus there has been on tallying in monetary terms the devastation

we have all seen on television over the last many hours since the earthquake struck. i know at this point, the president's focus is in search and rescue. we know there are some 45,000 american citizens that are in haiti. obviously there are -- there's u.n., n.g.o.'s, millions of haitians in the capital city and time is critical to ensure those safety efforts. we want to make sure we are doing all that we can right now in this window of time to get materials and assets as quickly as possible there to assist in that search and rescue. we know there are likely people still trapped in the rubble that have a good chance if we can get to them.

i think that's what our primary focus is right now. >> on bank fees, the president expressed outrage about the wall street bonuses. how can the administration practically get these banks to roll bank on that money to repay bailout funds as he suggests? >> well, the second part of that -- >> should roll back their bonuses and use that money to pay back the bailout money instead of passing it onto the customers? >> first and foremost, the president discussed today his proposal for financial crisis responsibility fee. you heard the president discuss ensuring that taxpayers that acted quickly to deal with quite frankly the wreckage left by excessive risk taking and

its threat to our financial and economic system t -- that those taxpayers deserve to be made whole and paid back for the money that was lent to financial institutions that have caused all this damage. we think it's structured in a way that is reasonable. it is a little hard hearing some of the criticism coming from banks about what the president has proposed based on the fact that the taxpayers have so generously lent their money at a time in which more money has been set aside for bonuses and compensation because they think the good times are back. doesn't seem to make a lot of sense to me or any sense to the

president and can't imagine it makes any sense to anybody watching in america to believe that somehow somebody that sets aside more for bonuses is going to pass this fee on to their customers. now, if they do, they put themselves at a competitive disadvantage and i think americans will look at one of the 8,000 or 9,000 banks in this country that acted responsibly and move their money there. americans have a choice in where they bank. again, i think it strains your credibility to somehow believe or even make the case that this is something you have to pass on to your customers if you're setting aside somewhere in the

order of 10 times that amount of money just to pay out bonuses. this is a responsible way to ensure that the laws are upheld and the taxpayers are paid back in full for the money that they lent to stabilize the financial system. >> if the marketplace fails to discipline these banks and prevent them from passing on the costs of these fees to their customers, are there legislative measures that the administration will contemplate? >> it's a little play off that slogan, yeah, i think you can let your money do the talking. you just -- if your bank has decided that as a way of repaying youren rossity in papering over their excessive risk taking that almost crashed this economy into something as deep as the great depression if their great reward to you is to

pass the bar tab for their wreckage on to you, i would suggest anybodyó that is at a bank like that to move it to any number of small and community banks throughout this country that somehow got by all these years playing by the rules. >> there are reports from sources familiar with the negotiations that a tentative deal has been reached on the excise tax in the health care reform effort. what can you tell us about that? >> nothing more than i just told ben in answering -- asking me largely the same thing. if we have more later today, we will certainly -- if we're in a position to talk about that, we will. the president met a few days ago with representatives from labor unions all over the

country who are concerned about the structure of the tax impacting their working men and women, their members. the president obviously has a strong desire to see a bending in the cost curve for health care while at the same time not impacting men and women. so those meetings have taken place in order to try to find some sort of compromise that does not impact working men and women while at the same time we take responsible actions to ensure that the amount of money that people are paying for health care that we change the direction of that curve. >> when you say working men and women, do you mean working men and women who are member of unions? >> those who are largely middle class employees. >> as a theoretical -- theoretically, is it fair to

exclude and i'm not saying this is what the deal was, but is it fair to exclude health insurance plans that were the result of collective bargaining from this tax and those that were not as a result of collective bargaining. >> let me wait for us to get into those details. i would say that throughout this legislation, there will be -- there are any number of areas measures and ideas that are phased in over time in order to transition from where we are to something that is better for the american people, more sustainable on our budgets and provides better quality care for those in need. >> i guess my question is,

certainly, you would not dispute the fact there are a lot of working people who are not members of the unions, maybe they have tried to form qunes and not been allowed to in so-called right to work states but the administration would not gee to something that would exclude working men and women -- >> we have a better chance to talk about this when we walk through hopefully something that has been agreed upon that moves health care closer. >> yesterday, when i asked you how are you guys going to avoid banks passing on this fee, this tax to the consumer, you said it would be constructed in such a way, but so far, all i can discern that the only thing that would prevent it is this idea of shame and 8

thundershowers are not. >> the way this is structured is -- you could have structured this a number of different ways. we could have sought -- well, you have a 100 -- we believe and will show in the budget $117 billion left to be repaid to the tarp to make it whole again. that's down from i think earlier in the year on the order of about $340 billion. we structured this in a way that we felt was reasonable and responsible for an industry that has quite honestly bounced back pretty quickly, again largely because of almost entirely because of the help of taxpayers in making sure that there was a floor.

we believe it's structured in a way that banks shouldn't pass this on and that it shouldn't be something that is considered so amazingly onerous on them. again, if you're a bank and you're going to pay into a fee structure that we think will recoup on the order of $90 billion to $100 billion. that $117 billion is likely to come down some. but if you're likely to -- if that's the pool of money you're talking about, there's a number greater than that pool of money that is now being set aside for bonuses. maybe i missed their testimony yesterday when they said we're going to pass all of our bonuses, the cost of all of our

bonuses on to customers and pass each and everything on to -- we believe it is structured in a rational and reasonable way that would allow banks to meet their requirmentse, meet our requirements -- requirements under the law but at the same time not be such that it is a tremendously business expense that it would need to be passed on. [unintelligible question] >> they can't pass that onto the consumer. >> my guess is, jake, that you would have them say that they'll pass that on to -- >> you're already saying -- >> why do you care what they say? >> i'm trying to answer jake's question about what they pass on and whether or not they rationalize what's being

charged to them in a responsibility fee as to their m.o. for them passing it on to consumers. >> why not tax bonuses? >> again, it was structured in a way -- we believe this was structured in a way that makes this the most responsible way to do it. >> bonuses -- >> we came up with a way we thought was the best way to do this. >> aren't they supposed to have four years to pay this money back? >> the law calls for by 2013 congress and the executive branch have to have a way to make taxpayers whole. i don't believe the law stipulates the length of time for the actual repayment. i don't think they got into that. >> is the president pleased with the u.s. response in haiti? >> he is, but i think he was

clear with the team yesterday that day and night, we have to do all that we can as quickly as we can to get assets, to get teams, to get personnel, to get resources as quickly as possible to haiti. obviously as i talked about earlier, there's a window -- there's a time period, a window of time whereby we have the greatest ability to impact the search and rescue portion of what's likely to be a very long mission for the international community in dealing with the devastation that we've seen. that's been our goal. that's been the president's goal is to try to get that there as rapidly as possible. obviously there are logistical

hurdles to overcome. it takes a few days to get ships there. we have an aircraft carrier that's heading there now. obviously, the devastation in and around the capital will make -- no passing notes in class -- teachers used to take that stuff and read them -- but obviously there are logistical hurdles in moving some of this stuff, unloading, ensuring there are sufficient platforms for aircraft and helicopters getting stuff moved in and around the roads. i think the president is pleased, but took the beginning of the meeting last night to remind all of us that precious lives were at stake, that time was of the essence, that he expected the team to continue to work around the clock as they honestly as they've done

since we first got word of this many hours ago. >> any plans to send in former president bush or president clinton? president george w. bush obviously after the tsunami struck several years ago enlisted the help of his dad and former president clinton in coordinating and raising -- helping to coordinate relief and raising money for the efforts in the area affected by the tsunami. president obama last evening spoke with president george w. bush and asked if he would take part in an effort similar to the good idea he had around what has happened in haiti.

obviously, the administrations of george h.w. bush, the administration of bill clinton and president george w. bush lot of resources go to haiti and the haitian people. we obviously have a vested interest in the government and the people there. he asked them again to come together in an effort similar to the one that was done for the tsunami. we'll have more details on that in the coming days. again, our focus right now is on ensuring what resources and capabilities we have are gotten to the region and gotten to haiti as quickly as possible to affect that window of time for search and rescue. >> have they initially agreed? >> both of them have agreed to

take part in this. again, i don't have details past that at this point, but in the very, -- very near future, as we focus and for the time being focus on search and rescue. >> on banks and bonuses the president sounded particularly angry today. what made him catch up with the american people? >> helen, i remind you a little more than a year ago, the president was angry in the oval office about bonuses. and i think when you read as many of us did this weekend about the newest bonus season coming around and the money that's being set aside and it appears as if banks that through excessive risk helped

cause -- through that excessive risk helped cause an economic catastrophe believe that the good times have returned. i think that's upsetting and would make angry many people in this country. they have seen their tax money go to ensure that a financial system doesn't collapse further. and those finding work or trouble finding a loan, you have heard the president talk about this in financial reform. we have in financial regulatory reform our proposals for share holders to have a say on executive compensation. exps that have received extraordinary assistance have to have their pay packages approved.

but i was asked this yesterday before the hearing started about what caused all this and whether or not the banks should apologize and i said yesterday and i would say again today, i think apology is the least that the american people are owed. the president outlined today a plan for ensuring that that apology came with being made whole for the money that was lent to them after what they did to the economy. >> one more question. does the president feel remiss by not attaching some conditions except for repayment ? >> again, look, tarp was structured -- tarp was structured in september,

october of 2008 and didn't include -- it included the provision that requires repayment in full. it didn't require measures on executive compensation. so unfortunately that's a time that has past. there were extraordinary assistance rendered by the fed and other places even before tarp was set up. you even had companies and a.i.g. received the bulk of their assistance that is in a circle outside of what even tarp is. i think we're all -- we have all been remiss that they weren't stronger guidelines on that. >> following up on her question , does this -- this does not only apply to tarp banks, right? >> i think the call we did last

night lays out the formula for how this will be -- who this will apply to. i would have to ask some of these guys exactly which of the ones are in there. i think that -- i mean, look, there were big banks that some of them got tarp money that say they didn't want it or didn't need it but their excessive risk taking contributed to an industry that made decisions that in all honest if i i don't think were in their -- honesty i don't think were in their best interest or the american taxpayer. >> there were other tarp banks and paid their money bank.

>> because of what they caused this economy. >> sounds like punishment. >> it is making the tax pair -- taxpayer whole for the aid that was extended to the industry for a problem caused by the excessive risk taking of the industry. >> so if your bank behaved without engaging in that kind of risk, how do you get your bank off the list? >> depends on whether your bank's on the list. there is 8,000 to 9,000 banks in this country. i think the call said around 50 or so would be paying this fee. so as you can see, this is designed for the biggest banks that we all know had the biggest impact on what we all felt.

>> some who follow this closely on capitol hill say it's clear to them that it won't pass the senate. that republicans will vote against it and democrats will vote against it. isn't that politics to beat up on wall streetñr banks? >> no. it's a proposal by the president to uphold the law to ensure that taxpayers are made whole. if individual senators in either party want to make the decision that they don't think this is a good idea, they are certainly free to do that and they can explain to you just what i've explained -- as i've explained our view point on this responsibility fee. >> this does put republicans in a difficult position, in a box? >> i don't know why it would. why would you think it would? >> believe it's unfair to go after banks who have paid back the money. >> they can explain that to

their constituents and to the american people. if you want to be on the side of big banks, then you're certainly -- this is a great country, you're free to do so. >> it sounds like it's about the politics of trying to define republicans as being on the side of the big banks and president is on the side of main street. >> chip, i'll leave you to your own devices as to why you think all the republicans are on the side of big banks. maybe theyr maybe they aren't, they'll get to vote and decide who is on what side. the president has laid out that the american taxpayer isn't going to be left holding the tab for the reckless behavior of the banks. they are going to be made whole -- there's not -- they're going to be made whole. obviously as you point out,

this is going to have to go through congress and people are going to have to decide where there has been an awful lot of teeth gnashing and hand wringing about the way these banks have acted. we'll see it -- we'll see if people that have let their comments be known about the irresponsibility of their actions, we'll see if that's backed up by ensuring that the american taxpayers are made whole. >> the president has pushed the bankers to lend more million. isn't there $117 billion they won't be able to lend? >> if you believe that, you should get an interview with one bank and ask why their bank pulled $28 billion.

it strains any common sense to assume that what their share of $9 billion in a year would somehow preclude them from loaning money to a small business when they set aside $28 billion for bonuses. i mean, i don't know how math works on wall street, it's not the way it worked in alabama. chuck. >> i have a question on haiti. you are making the taxpayers hole through the bank but the outstanding creditors o tarp is a.i.g. are they part of this? >> let me -- >> i don't think they are. gmac, general motors, chrysler. >> a.i.g. is in here, but i have to find out. let me find out -- in the background call --

>> but the auto makers. i understand a.i.g. is sort of a fuzzy -- >> i don't think it's fuzzy. >> they are supposed to be part of this. my question is, does this mean that you have written off the auto makers paying off tarp? >> not at all. >> what happens when that money comes back? >> going back to the taxpayer. >> if you are making the taxpayer whole, where does this extra money come from? >> the extra money would go into the treasury. we're not and solving the auto companies for all the bad decisions that got us to the point where or that contributed to -- those decisions that contributed to getting to the point where two out of three of the american auto companies were in a position of needing to declare bankruptcy. >> they need to pay their debt. >> one, we expect as i think

you have seen these companies say, they do expect to be making payments. but, two, the largest contributor to the acceleration in the downturn of car companies' economic health was the overall economy. again, when you're selling 16 -- when you're producing cars and selling cars at a pace of 16 million a year for american auto companies and then because of excessive risk taking that caused an economic catastrophe to happen in this country and we now are dealing with an economic situation as we were last year where 10 million cars are being sold, that's going to affect anybody's bottom line. again let me just finish this -- no, i started to answer the question this is not to and

solve of the decisions that cape to that point, right -- that came to that point. but do we not think that? again, if you sold 16 million pairs of shoes in 2007 or 2008 and then you sold 10, do you think your company would be improving its economic picture? not likely. not certainly if you have -- hold on -- he's interrupted you and i'm now in his question -- dualy noted -- that you got a structure that's set up for the production of 16 million cars, an economic catastrophe hits caused primarilyly by a series of excessive risk taking that causes an economic slowdown, i

don't think -- i do not -- we do not think the structure of this unnecessarily penalizes banks in making those payments. >> aren't you and solving the auto companies? basically, you aren't expecting them to pay back. >> we have a plan to get all the money back. if the american taxpayers get more, that will go into the treasury. >> going to haiti. the security situation. is there an unlimited amount within reason, but is there an anticipation you will perhaps send more troops? i know the president said today the bra dylans are in charge of the u.n. security portion right now? >> obviously, the u.n. -- the u.n. provides a significant amount of security particularly domestic police security.

>> do you have the numbers? >> i think it's on the order of -- i thought the number i heard last night was 9,000. but the question -- i mean, obviously, it's likely i think that the u.n. has suffered -- well, it's obvious the u.n. suffered devastating losses likely as ever has been sustained on a single day. so we have gotten -- obviously the 82nd airborne is being moved -- parts of it, i should say, are being moved both for security as well as -- there will be units that will go in that deal with logistics and supply chain. there will be a tremendous amount of resources, food and water, that will be on its way

in that have to be distributed and moved. and we'll be working on that. >> other troops ready to go? how much more? guard units? >> the president last night in the situation room discussed with secretary gates, with admiral mullen and general frazier at southcom ensuring that all that can be done should be done. secretary gates said that there was no higher priority right now for the military in this country than ensuring our rescue and relief efforts are part of which obviously goes to that security. >> there are rumors about a gang from a prison that collapsed. is that going to be our responsibility? >> based on the devastation that has happened to the u.n.

and certainly what has happened in haiti, i think the international community is likely to have to contribute to a security force and stablization effort to ensure that what is on its way can safely get to where it needs to go. >> robert, first of all, has the president talked to the president of haiti and what is their conversation going to entail? >> we have -- the president tried a couple of times yesterday and as of me coming out here, they had no spoken directly. our ambassador on the ground in haiti had spoken several times with him yesterday. as soon as that call is completed, we'll have a detail for that. >> where are conversations on the hill about issues of medical attention and medical

help for many of haiti? they are saying because the hospitals are in shambles, there could possibly be a need for many of these haitians to be able to -- hospitals and medical facilities in the area and nearby and there is a conversation on the hill about this. if haitians had to be airlifted here, a specific matter of taking care of medical treatment? >> well, first and foremost, i have not heard discussion about -- and i'll check on the discussion about whether bringing anybody here. obviously -- the dominican republic and there may be some staging in guantanamo and one of the assets that is being readied to be moved is the

ship, the comfort, that obviously played a big role in the tsunami efforts that has primary mission is medical capabilities to ensure obviously -- we have seen the reports of the scope of the devastation relating to hospitals and medical facilities. >> but what if there is an overflow. three million people are affected in port awe prince and these -- port-au-prince. >> the president asked our team to continue to examine anyway that we can help. obviously as time goes, more assessments will be made about the level of resources that are needed from the international community and the role that we are going to play in providing

that. >> the president said that he would recruit the bonuses that are being paid to a.i.g. executives. there was legislation because the white house didn't like it. this is a $90 billion recoup over 10 years which doesn't reach this year's bonus pool, can we believe the president is serious on a.i.g. and this is a symbolic gesture of this $90 billion being recupid? >> it is not a symbolic gesture, $90 billion is going to be repaid and the president is going to get that money for taxpayers. it's not symbolic. i don't know who considers -- i don't know that they consider it symbolic. the president doesn't. the president has a plan that

will go get that money back for the taxpayers of this country that lent it to banks so that our financial system wouldn't collapse. >> do the idea of reaching out to presidents bush and clinton come up in a separate meeting last evening? >> the call to president george w. bush happened a half hour before that meeting convened. would have been 6:45ish if my memory serves. >> why didn't he announce it today? is he planning an event with them? >> i don't know what the detailsr i'll be honest with you. our focus has been and continues to be on ensuring that all of our energy is dedicated to moving resources there as quickly as possible to affect the search and rescue

phase of this operation. as i said there is a window of time that that those on the ground and those here believe is crucial for those that may be trapped still, to have hope to live. that's our focus for the time being and in the immediate future. but again, the president believed that the partnership that president george w. bush created between his dad and former president clinton was obviously a highly effective way ensuring that after this phase of the operation, this search and rescue phase of this operation, after that concludes , obviously there is going to be a tremendous need and there will be a tremendous need for

many months to come that that's the best vehicle and most effective vehicle for setting that up. i don't know whether we're talking about only a few hours from now giving you those details or in a couple of days, but we understand that you all and as soon as they're complete, we'll make sure you have them. >> is it president obama's plan to restore haiti to it's pre-earthquake conditions or better than that? >> i think the international community has been working for years and american governments again, as i mentioned going back to -- going back many, many administrations have focused on -- focused efforts on the haitian people.

immediatey we are focused on ensuring their safety and security, finding them, getting them out of buildings that may have collapsed, ensuring that they have food and water. obviously, the rebuilding effort will take quite some time. but all of those involved believe that the goal here is to create something that that was stronger than it was in the few moments before the devastating earthquake. >> i want to clear something up. you said primarily there. do you mean to indicate that auto industries' insolvency was the fault of the banking industry or the auto industry? >> i'm not and solving the auto industry for the decisions that contributed to -- that contributed to over the course, as you said, many years,

decades that we witnessed a decrease in their share of auto sales in this country and auto sales worldwide that nobody would and solve them of the series of poor decisions. what accelerated that in the short-term was a downturn in the economy that we have not seen since. don't know exactly when they rolled off those cars, but a long time since the economic conditions of this country have equaled what they did last year. >> the reference was to -- >> let me go back and look. >> on health care in the $80 billion deal that you announced, any effort to bump that up to get more from the pharmaceutical industry? >> one of the issues that was being discussed in the series of meetings was -- was the

doughnut hole for prescription drug coverage for seniors. from the call last night, a.i.g. would be covered by the criteria outlined last night and put forward by this legislation. >> on a.i.g., why shouldn't a.i.g. -- if you are going to be punitive about this, why shouldn't they pay more? >> we believe that the fee is structured and i won't go through -- >> they took greater risk. >> let me get to that in a second. again, we believe this thing is structured based on the size of

and is positioned at those that have seen their institutions become healthier faster in a way that allows us to recoup this money. in terms of fannie and fredy, they aren't at an economic standpoint yet. >> on health care, on the timing of the next couple of days, there seems to be some suggestion from the hill that this will be the end part of next week and the white house would like to see a broad outline of the deal done by friday. can you talk about the timing? i guess they are coming back later today. >> they'll be here at 2:15. i don't know fr -- >> is something done by friday? >> by last august.

>> in the event -- i think that speaks for itself, friday or monday. >> let me go through here. >> on haiti to go back to someone who asked you who is in charge in haiti and you said haiti. you have to say that from a diplomatic standpoint but from a practical standpoint, their institutions are broken, their buildings are collapsed, have no power. are some haitian officials working out of the u.s. embassy and have some sense there is a joint -- >> i can check with our representatives at the embassy. look, we have all seen the pictures. we have all heard the accounts. the scope is devastating. i don't remember the graphic i

saw on television of -- that went through -- didn't have the sound up for the first part of it but listed the magnitude of earthquakes and several thousand on the scale based on their level on the richter scale and number of earthquakes at 7.0 and above in the several thousand, either 17 or 18 wire in this 7.0 and above. the ones that -- again, this is an accounting of several thousands in number. the devastation is immense. it's unspeakable. so it is understandable that the capabilities that existed for the government in the moments before it struck don't exist in terms of power and communications, water, food, resources, roads, the airport.

they have asked for international assistance and i think it's -- we have contributed. others have contributed and i think what is nothing short in an extraordinary way to ensure their safety and security. >> would be interested in the actual working of the government and who is talking to who and who is making the decisions. >> our ambassador spoke at least twice yesterday with the president of haiti. but i will -- i'll let tom check on that. >> is it clear to you why president obama hasn't been able to speak to the haitian president? >> i think largely because of communications -- i don't know >> can't get a line through? >> the president tried on at least two separate occasions

yesterday. i will check during this briefing if that call has been completed. >> two questions, one on china. is there any concern within this administration that this issue could explode particularly if it gets wings or legs off of capitol hill? >> wings or legs how? >> if this strikes a chord with the american public -- >> i'm sure it does. i think the notion that -- the notion of what we have seen happen i can't imagine that it hasn't struck a chord. you heard the president in shanghai take a question from the internet about universal right of a free internet. he strongly supports that and we support google's action in

in a decision to no longer censor searches that happen using the google platform. whether or not it affects their relationship -- look, we have -- the president has strong beliefs about the universal rights of men and women throughout the globe. those don't -- those aren't carved out for certain countries. that's why the president answered the way he did in a town hall in shanghai about the importance of that freedom. >> how do you keep it contained then? you have several different issues with china. you have the google china issue. if we start getting things coming out of congress, for instance and this starts to strike more of a chord with the

public -- >> you mean like legislation -- i don't know what -- >> managing this within the framework. >> i think our concern is with actions that threaten the universal rights of a free internet. >> and just one more quick question, what did you think about pat robertson's comments that the haitians brought this on themselves? >> never creases to amaze that in times of amazing human suffering somebody says something that could be so utterly stupid. but like clock work happens with some regularity. well, i won't expand. >> go on. >> no. no. no. >> you wanted to say something.

>> the universal right of a free press secretary. i tell you afterwards, it actually applies to what i might have said and i quickly formulated it through. >> just briefly, coming at 2:15, is that the same group as yesterday or different staff? >> i believe staff is probably -- many on staff is probably working on what was worked on yesterday. i will get you a list. i don't know that they'll match up perfectly. some people may or may not be in town. >> can you give us a general sense of how close you think things are to a deal and at least a deal that could be submitted to c.b.o.? >> i think we are hopeful that by day's end they will have worked through house, senate

and the president, worked through any number of issues that remain outstanding, not just the excise tax on cadillac health plans, but other issues. so i think we are -- i think we are very, very close. i think they made extraordinary, tremendous progress yesterday. the president -- as you know, the meeting that was supposed to go several hours went several more than possibly the original one. >> on the whole thing or just the economics, just the score? >> on many aspects of what remains. >> on your favorite subject, the president -- >> what's my favorite subject? >> the president was talking about repaying the money to the taxpayers and you said tarp didn't you said we were all

remiss on this, you mean not doing something -- >> helen's original question in the original tarp as it was passed in october, were there -- did that tarp include strict requirements on executive bonuses. and the answer is no. and i said look, if i think people can go in the way back machine and land time -- way-back machine. i don't know what your is called. mine is the way-back machine. back then. what i was talking about. right. i think that is what ethan calls it, too. but obviously, the -- i think i did make mention in one of the economic answers here of

obviously, it runs all together, restrictions were put on banks that received extraordinary assistance. >> now most of them are out from under that. >> right. >> but the thing i'm trying to get at, he mentioned four times in extremely strong language today bonuses. and i guess what i'm trying to figure out the reason why somebody is so angry about bonuses, seems to be going out of their way not to do anything about the bonuses. what is preventing you from going after them? or is there some other reason that you have chosen not to? there has to be a reason. .

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quite challenging. we are committed stew a swift and committed response, a very aggressive one. a lot of our efforts have hit the ground and we are able to build up the efforts of search and rescue for individuals as well as making assessments for the kind of arrangements, to be able to ensure we can be as in tactful as possible. we have a whole of government approach. we had several meetings with the president where all the agencies have been represented in the of spoken to the agencies.

we will make sure the haitian people get the kind of support in response that will be necessary, given the dire ness of the situation -- given the direness of the situation. the haitian government has indicated they are beginning to be in a place where they can be more effective in the coordination for the disaster response. and i am looking forward to dealing with a lot of the challenging situations and being able to deal with that leadership. we're looking for to supporting them and making sure they have the necessary communication and the other equipment and the things they need to provide leadership to the haitian people. i would like to say, with respect to american citizens there, we are continuing our efforts to make sure we provide support to those individuals who are electing passage.

to date, we anticipate 330 people will be traveling back today. other than that, we're not seeing a large number of individuals who have indicated a desire to stay. some u.s. citizens are continuing to see havoc and best continue with the community they are part up. i want to make one note. those kinds of their nations are being offered -- we asked people make those through www.cidi.org. they can provide both guidance and coordination. with that, i will turn it over to my colleague. >> great. thank you. i would echo the comments that

we are learning about what we were able to survey. it is a tragic situation. we are in a position where we're learning every minute a little bit more information. it is a dramatic situation and one that is -- that continues to be a challenge for our team, to move around and do the work that we hope that they can do. nevertheless, we have been mounting a swift and aggressive response. we've been doing that in coordination with the department of defense and a number of major assets and entities in the federal government. we have our first wave of responders on the ground. they have been actively engaged in search and rescue since last night. since yesterday afternoon, actually. the fairfax county, va. agency

has been working for more than 24 hours. they have identified a number of buildings, serving as a point of coordination, continuing to work with the haitian government, the united nations, and other countries. we have more than 250 american relief workers actively engaged. that number has increased significantly as we speak as planes land at the airport. we have coordinated engaged with a number of other partners -- partners from canada and the united kingdom, belgium, others, to make sure we are deploying assets in an effective way. there are more than eight search and rescue teams working. i mentioned the fairfax team. a team from los angeles coming. multiple teams from miami are in

the process of doing their work. we've been doing a number of things in the areas of health and medical. we have a long history of working with nonprofit partners and contract partners in haiti and have been actively providing medical care and services to the haitian community. we're working to expand their access to medical care and trauma services. emergency medical rescue teams will be on the ground very shortly. we will provide tertiary support that is needed. we are working to make active plans for the transport of food and water and other critically- needed commodities. tarps, other kinds of equipment that could help, access to a shelter for the haitian people who have suffered this terrible

tragedy. all of this is taking place as we speak and is accelerating quite significantly. it does amount to the first wave of response. there is a second wave the president alluded to that we have a significant military capacity. we have a number of resources from the 82nd airborne. we have the u.s. hospital ship. those assets are on their way to being engaged. this will be a significant efforts. this will save lives in this critical 72-hour period. it will provide access to critically-needed commodities, water, water purification, and lay the groundwork for rebuilding. the teams are there. i want to thank in particular the fairfax, virginia team that was the first on the ground doing this work. they took great risks and had some early successes.

thank you. >> i think we have seven minutes for questions. please keep them brief and we will answer as many as we can. >> i will keep it very short. two things -- is there any update on american casualties? two -- the president has made it very clear this is going to be -- you are basically taking ownership of this crisis. who exactly is in charge? who is in charge of the military side? are you going to be the power broker in haiti, or will this be done differently? >> let me point out -- with american casualties, we are still obviously continuing to to our search. we're aware of one instance of american casualty. we continue to look through the rubble for others. we are hopeful. at this point, we have seven

americans we are aware of at this time. there are several folks who are unaccounted for. we will continue our search. we do say with respect to haiti -- we spent a fair amount of time over the last nine months -- the haitian people -- more particularly, this is a government that will be dedicated to providing the partnership that will be decided and affective in the international community. the president did appoint a prime minister for the team and spoke to how haiti could see the vast economic growth it should see. i am confident that this government is not looking to the united states to takeover. they are looking for a good partner. we are confident we will be the partner and provide the kind of leadership necessary to preserve

the communities of their wishing to help. we have no intention of taking over haiti. we see our relationship as the haitian government providing the leadership the haitian people expect them to provide. >> yes? >> said one casualty. do you mean fatality? >> the person is no longer alive. >> i would echo that comment. we have example after example. we are working in partnership with the haitian government, with the people of haiti, with the united nations. some of our overnight capacities were engaged in the united nations compound, and we have been working on the government sites. also, we have been meeting and communicating regularly with members of the government, our task team leader, our disaster assistance response team.

we're making sure that we to coordinate our efforts very closely. there are some things that we can provide in this crisis. part of the fairfax team has been sitting at the airport, hoping other search and -- helping other search and rescue teams come in. there are two teams in port of prince -- ports out prince -- port au prince. those are unique things we are able to do and we're committed to doing everything we can 0 to mount an aggressive response. >> thank you. >> i am curious what your plan is with this amount of aid that is backed up at the airport right now. it seems like a lot of roads are blocked. how are you planning to get this aid out?

>> the airport is the primary way to get people in a technical capacity and the equipment in. we do have the southern command' operating, and we're running at around the clock to maximize our ability to get planes in there. there will be times when things do -- one planes to get jammed up there. we're doing everything we can possibly do. we are trying to get the teams out fast, i get the teams deployed as quickly as possible. it is important to be self sustaining in the 72 out -- 72- hour period. we have teams working and we feel confident we can get that done in the next day and a half. search and rescue has engaged in

that effort while we try to save lives. >> that is up the question. the actual policy of aid that areñi arriving -- >> part of it depends on the commodities we are talking about. our team leader and our disaster response team has identified priority needs and priorities commodities. those flow into where they are surveying. there are a lot of things that are coming from other countries, stemming from other sources. we become part of that supply chain. it is one of the reasons why the generosity of the american people is best displayed by giving cash at this point. this is the most effective way to provide individual support. there are a number of ways to do that. >> [unintelligible]

the united nations mission -- what it was able to accomplish. how you help the u.n. that rebuild what it had? >> there was excess of what the u.n. in haiti had done. it had allowed the kind of progress we were seeing. i think in a lot of ways, one of the things we were grateful for was it the ability to deploy the team's for the civilians that were there. we do think that as a general matter, there are so many things that haiti has begun to do. they've been successful in tracking investments and to to the stand of the kind of resources and arrangements that would make it attractive for people to start investing in haiti. that is something i want people to pay attention to and be

thoughtful about. certainly, in the long term this will be a rebuilding exercise. the investors in haiti will appreciate the kind of support that will be necessary. thank you. >> no, i would just add to that. one thing i would add is as we are doing this overall, we are trying to be conscious of putting in place resources and assets that would meet the immediate need and also be appropriate and sustainable for the haitian people. we will do things that will create the basis of that affect the service provision and the affective rebuilding of part of the society. >> thank you. that is all the time we have. thank you, ladies and gentleman, from the state department. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> later this afternoon, president obama speaks at a jobs

summit. congress is out of the session so members can attend, which is being held at the capitol visitors center. it begins just after 5:00 eastern here on c-span. tonight, a texas gov. debate between the three main candidates for the republican nomination. governor rick perry debates senator kay bailey hutchinson and debra medina. 7 on your side. live on c-span2. >> mark moyar on counterinsurgency wars. also peter sis on growing up in communist czechoslovakia. for the complete schedule, go to booktv.org. >> did you know the number one

freed news up for your iphone form -- oroipod -- or ipod touch is c-span? it is all free and available from the out store. >> americans icon. available on tv. a new journey through the homes of the three branches of american government. see the exquisite detail of the supreme court. go beyond the velvet ropes of the white house, america's most famous home. and explore the history, art, and architecture of the capitol. it is 24 $95. one of the many -- $24.95. one of the many items available. >> now governor tim kaine

delivers his state of the state address. state law allows a governor to serve only one term. he currently serves as the dnc chairman. this is 25 minutes. >> i present to you, his excellency -- [laughter] the hon. tim kaine. [applause] >> thank you. please be seated. place. -- please. thank you very much. please. please be seated. do not encourage me. [laughter]

my fellow virginians, i stand before you today with many convictions to deliver, but finally -- while the quick passage of four years has its bittersweet aspects, the most significant feelings i have our gratitude for those who have supported me during my time in public life and pride of what we have been able to accomplish in this administration. let me reflect on what we have done together before i conclude with the most important part of the comments, my expressions of banks. when i was inaugurated as governor in williamsburg on a rainy day four years ago, i chose a simple motto. "virginia leading the way." ever since we moved to richmond in 1994, i believed in my city and my common walls.

i wondered why we were not seeing more leaders nationally in the same way as we did in the early years of the american republic. the historian susan dnn wrestled with the -- susan dunn wrestled with the same question. she contrasted virginias of leadership during the first 50 years of the country with its decline afterward. there was a lack of leadership evidence by the ill-fated -- what better place than it williamsburg on a rainy day, where patrick henry and thomas jefferson were inaugurated, to declare that virginia was once again ready to claim the mantle of national leadership.

as i leave office, i can say this with confidence. virginia has achieved that role. no state in america has enjoyed the success we have seen in recent years. some of our remarkable forward movement in virginia has been obscured by the very difficult national recession we have worked through since 2007. but virginia is well-positioned for award because of our economic, educational, and political leadership. the virginia economy is one of the nation's most vibrant. we are one of the top 10 states in the nation on median income and we have one of the lowest unemployment rates in the country. only new hampshire can claim that decision. contrast this with the virginia of 50 years ago, when personal income was in the bottom third of the nation.

in the past four years, we've recruited five fortune 500 companies to move their headquarters to virginia. two of them, just during this past year alone, as well as announcing more than $13 billion in new investments during the longest recession since the 1939 s. these developments have been achieved all through the commonwealth. volkswagen, cic, ikea, sri, all fun national resources -- alpha national resources, or bottle, among many others. during my time as governor, we have been recognized eight times as the best states for business in america by business organizations like forbes.com and cnbc.

with international economic assets like the port of dulles and dulles airport, a new development center, and the largest percentage of technology workers in the nation, there is no reason why virginia cannot hold on to our position of economic dominance for many years to come. in education, 50 years ago, our system was no model, despite the fact that jefferson put education at the center of public policy. our schools were struggling, in our higher education system offered only limited opportunities -- and our hair education system offered only limited opportunities. education now ranks virginia as with the top five states in

educational quality, recognizing our commonwealth in 2007 as a place where a child born today is most likely to have a successful life. our high schools ranked third in the nation in students passing advanced placement, and our latino students leave the country -- leaving the country -- lead the country. we have expanded pre- kindergarten education, meaning that thousands more low-income virginia children can receive a strong start in life. as a result of strong early childhood education programs and intervention strategy is approved in recent years, we have to match -- dramatically improved scores of students on third grade reading tests, which is a crucial indicator of future

success. as a former technical school principal, it gives me a lot of ñipleasure to see our kidsñr eag industry certifications. more than 20,000 last year. or working to achieve our new technical appointment. finally, even in a tough time, our higher education system is clearly one of the two or three best in the nation. our capacity to serve our students has been enhanced by the passage by this body for the with largest package for education construction in the history of this country. our community colleges are expanding their ability to educate students in key disciplines, meet the state's workforce needs, and undertake critical research.

we will be building a platform for greater economic success tomorrow through expanding education. while i am speaking of higher education, i have got to take this opportunity to applaud the newly-named president of the university of virginia, teresa sullivan. the choice of a dynamic and experience president to lead one of the most historic universities is always worth celebrating, and what a wonderful thing to see a woman president of the university that did not allow students when she began -- did not allow women students when she began her own education. we are the best-managed stay in america, according to governing magazine. [applause] we are one of the few states to

hold the rare aaa bond rating from all financial agencies, and even as we of cut billions of dollars through declining state revenues, we have still managed to take this huge steps forward and in key areas of state government. we have cut our infant mortality rate in the last three years by 15%. we have dramatically reformed our foster care and community health systems. it invested more than $1.1 billion in the cleanliness of rivers and the chesapeake bay and taken steps to protect the blue crab and manhattan oyster ñipopulations so many depend on. we have restored more voting rights in any previous administration. we've banned smoking in public places. we of tripled for dissipation in small minority-owned businesses, and we have managed to permanently -- we have

tripled participation in small minority-run businesses, and we have managed to permanently -- [applause] this significant acreage, more than twice the size -- the size of the shenandoah national park is a permanent easement, largely working farms and forests, and it encompasses significant public lands. we have added three new state parks in the last four years. 13 new natural area preserves, five new wildlife management areas, and protected all of parts of 25 civil war battlefields. never before has this commonwealth moved so aggressively to protect the national -- the natural beauty

of our states. with the finalization just yesterday of a new easements to preserve an additional 13,350 acres in the chesapeake bay watershed, up parcel -- a parcel that will be announced as soon as the deal is filed, we continue the momentum to continue this effort. we've seen amazing advances, especially given the tough circumstances we face together. it has been our circumstance to be the common wealth through the most challenging economic climate since the 1930's. we have met the challenge of hard work and innovative governments and we stand on yen a unique position because of our efforts. there are significant challenges ahead. this is think in large part to the effects of the federal recovery act, -- thanks in large

part to the effects of the federal recovery act, we had a decrease of lost jobs of nearly 90% in one year. as we all wrestle with that incredible national challenge, there are other issues for the commonwealth we must contend with. i still believe the biggest challenge facing us going forward is the decade's long the gridlock. i hoped to sell that as governor, but i could not convince you that we needed to invest state money. together, we made progress in the last four years in implementing smart growth strategies that could mitigate congested. and we did very strong work to advance rail, including the extension of metrorail to dulles airport. but we still have too much

congestion in northern virginia in hampton roads, too many substandard bridges, and to many rural communities with insufficient transportation to attract and generate new jobs. our aging infrastructure cannot continue to meet the needs of virginians. we do not have sufficient evacuation capacity should hurricane threaten rudd's. although we have made public and private agreements, we have failed to invest or create a road system that we should have for our size. the only significant problem we can claim is this -- we accepted infrastructure money from the federal recovery package. i do admit to pride in helping a president who cares about the infrastructure needs of the

states. but the dollar's run-up in 2011, in virginia must have more dedicated revenue. i humbly submit that the largest obstacle to solving our transportation needs is a philosophy espoused by some. thank goodness previous state leaders did not hold that the. if they did not, we would not have community colleges. we would have 30 reverse. we would have a lackluster public education system and fewer roads. virginia is a state with a tax burden, and no state in the nation can maintain economic edge with a declining infrastructure. so essentially we need leadership from this body to find the path for responsible advances. a second challenge is the need to keep our higher education system in the place of national

preeminence and enjoys today. 11 years ago, we had federal education ratings less than half of the national average. we're the only southern state now that can make the claim. higher education attainment has flattened out in the last couple of decades. while that is still good by american standards, the leading nations of the world are educating 60% of their adult populations with higher education degrees. we have a huge that we have to overcome if we're going to maintain our strength and competitiveness in this important area. we face an additional problem. virginia college tuition is higher than the national averages, effectively reducing access to many students who are most in need of educational advancement in this challenging

economy. by eliminating the $950 million car tax subsidy, it creates the possibility for directing our resources to expand into higher education in the future. after four years of doing this job, and working to lead virginia to accolades for management, fiscal stewardship and business, i truly believe i presented you with a budget that will create an opportunity looking forward to investments the virginia needs. i know you are wrestling with what to do. i hope you will remember that you are leading a state that stands at or near the top in virtually every meaningful category in this country, the competition is very intense. if we do not act boldly to move forward, the commonwealth will move backward.

let me conclude with a few simple words of thanks. they cannot capture the death of the gratitude i have. first, i will thank each of you for your willingness to sacrifice. very few can understand the deaths of the sacrifice. -- for the deaths of sacrifice. -- depths of sacrifice. i thank you for your kind business -- consciousness over the last four years. to virginia at employees. it is hard to do theñ;everyday work of serving our federal -- our fellow citizens. i am deeply aware, after 16 years in public life, the things that you do as part of your

daily work, is nothing short of the extraordinary. tonight, i want to recognize the fairfax county rescue team that is on its way to haiti to offer support in the wake of the devastating earthquake that has threatened that nation. [applause] as we think of them, we should also think of all the virginians in harm's way. they are all of the world protecting us. they keep us safe and educate our kids. the last years have been tough. there are no races.

there is an increased need for services in are challenging times i see the concern a public employees were every travel. i am so proud. i want to express my gratitude to my team of cabinet secretaries for been through the -- at the home. your leadership has been exemplary. [applause] to the citizens of america -- you have welcome me in times of joy and tragedy.

i have no doubt why virginia in as -- is in such a strong position today. you are the reason. i thank you for the honor. i want to say a special thanks to the citizens of the city of richmond. you are my strongest supporters. i think you for that. finally, a lot to think my family and friends. you are my strength, before i even thought about political life. [applause]

you supported me through the joys and trials of the sacrifices of public service. i think you with all of my heart. i will sum up with this. we unveiled my official portrait last week. the audience reacted with surprise. in a departure from other portraits, i was not wearing a jacket. just a shirt and tie. in standing where i want to be standing on the banks of the river. the main reaction was surprise that was smiling. [laughter] one of the members of the press came up to me after and i asked -- in an incredulous sense -- all the challenges of your term

and you are smiling? in the toughest of circumstances, i had the full experience of serving the best and worst times. i play the harmonica with bluegrass bands all over the commonwealth. in visiting virginia guard troops in iraq and afghanistan, welcoming queen elizabeth, comforting the families of law enforcement slain in the line of duty, and the homes of truly wonderful people who lost their lives on one of the most tragic days in 2007. i prefer strengthening our days. i am always honored to play my small role in the great sweep of virginia history. i am smiling because i am proud

of what we have accomplished. i am satisfied to leave the reins of the successful state in the hands of a friend -- bob macdonald. i wish each of you the very best and i look forward to working alongside all virginians as we continue to lead this for years to come. thank you very much. [applause]

>> now a look at another state addresses we hear from the iowa governor, chet culver. he is currently running for reelection. this is 40 minutes. thank you. [applause] thank you very much. thank you very much.

thank you, folks. thank you. thank you place. a special welcome to chief justice turnes, members of the court, my fellow statewide elected officials, my extremely capable partner and friends. speaker murphy, leader mccarthy, leader granstall, and leaders paulson and mckinley. it is my privilege to be here. i am happy to be with you for this extraordinary 80-day

session. there is much to do and no time to waste. we face real challenges, once we did not create, but once we will overcome. on the one hand, we will recover from natural disasters which are historic in their scope. the fourth natural gas master -- natural disaster in our history. we continue to address these challenges head-on, with resilience, optimism, determination, and good old- fashioned hard work. we're also a people of great faith, a faith that teaches us with god's help, all things are possible.

[applause] with god's help, all things are possible. perserverance, there is nothing we can not indoor, and there's no -- we cannot endure, and there it is a challenge we cannot overcome. regardless of what part of the state we come from, our political views, or are station in life. you see, despite the obstacles that did a year anyway, i winds continue to look for work, not

backward. they believe, as i do, that the 21st century will be i was century. -- i i am's century. -- iowa's century. for these reasons, are you happy to report the condition of the state is resilience because the people of iowa are resilience. -- i am happy to report the condition of the state is resilience because the people of iowa are resilience. [applause] we have never stopped in our work for the people we have the honor to represent. for example, to address both the

state wide challenges and the double challenges related to the economy, related to the natural disaster, you passed and i signed ijobs, our statewide job infrastructure creation initiative. it was a yes vote for floodlit tennis. a yes vote on ijobs was of votes to rebuild our economy. it was a vote for businesses and communities as we struggle across our state to get back on their feet. i want to be clear. i am proud of the fact we give me the difficult decisions necessary to put our stayed on the road to recovery. i am proud of the fact that on my watch, we have earned the possible -- the highest possible on trading for good fiscal management. [applause]

i am proud of the fact that we have balanced the budget, three years in a row without raising taxes on a hard-working iowans. [applause] .

>> it happened because we made the tough choices. we managed the budget responsibly and effectively. here are the 10 steps that i have taken to successfully manage our stake through this economic downturn. first, starting in 2008, i cut spending 3%. i froze state hiring, cut employee travel, and reduced the state's health insurance costs by $20 million. in 2009, i instituted a lean government initiative to further cuts spending by 10%. this saved $500 million. in addition, i cut my own pay by 10%, ordered state directors to do the same, and mandated that

3500 non-contract employees in the executive branch take furlough days. in addition to further cut costs executive order no. 20 to improve efficiency, eliminate redundancies and identify wasteful spending. this order will save up to $140 million next year and over $500 million during the next five years. then, we took a huge step. we successfully negotiated a cost in jobs savings agreement with two of our state's largest unions, the state police officers and afsmi. fortunately , their members agreed in the sacrifice for the greater good. i want to salute them and their members for these historic measures. [applause]

this demonstrates when iowans come to the table in good faith, we can meet our challenges. finally, we have done all of these things to balance the budget while protecting our priorities and renewable energy. -- and renewable energy, work force to open, early childhood education, health care for kids, and public safety. but there is another priority must always find time to fund, and the money, i should say, to fund. as you know, in the coming months at 3500 men and women of the iowa national guard will be deployed to afghanistan.

as the commander in chief of the guard, is my duty both morally and legally to make sure that these fighting iowans are prepared for service. the 3500 troops represent the largest single overseas deployment since world war ii. we must give them every tool they need to complete their mission and come home safely. [applause] these brave men and women have earned our support.

that is why i am asking you here today to pass a supplemental appropriations bill early this session to restore some of the cuts to the department of public defense. no family better understands the importance of preparation and training than the mills family about tuna aboutof altoona. capt. mills is deployed in iraq and his wife, mary, is with us today. she is joined by our leader of the national guard. please join me in thanking both them and their families for their sacrifice and service. [applause]

now want to talk about next year's budget. the budget i will submit at the end of the month will be balanced and it will reflect our values as iowans. here are my top legislative priorities for 2010. number one, my top priority is jobs. job creation, job retention -- they're both incredibly important. i am asking you to fully fund community college job training programs and to adequately fund the department of workforce development so that we can keep these work-force development offices open all across the state and give people the services that they need during these challenging times. and to create more green collar jobs in the future. i ask you -- in the future, i ask you to fully fund the iowa

power fund once again. in addition, to help create more jobs, invest in infrastructure, stimulate our economy, and continue our flood recovery effort, i look forward to working with all of you to best allocate the remaining $100 million of our ijobs initiative in fiscal year 2011. number two, i am asking you to enact the remaining recommendations contained in my government efficiency report. this will require legislative record -- approval and will allow us to save more than $200 million next year and nearly $1 billion over the next five years. these are common sense ideas that allow a -- that will allow us to streamline state operations, offer early retirement to some state employees, and a four-day work week, perhaps, to others. it will allow us to implement

strategic purchasing across the entire state and a price of government. it will reduce our state vehicle fleet, and eliminate redundant and unnecessary information technology services. [applause] #3, finding and efficiencies in state government is only the first step. a major reorganization of state government needs to be the next. i believe it is time for all of us to rethink the way state government does business. let me be clear, we are talking about real reform for the 21st century, not just short-term cost savings. this will move us closer to the kind of smarter, more efficient government that is our goal and that iowa taxpayers deserve. i look forward to working with you this session to get this

done. fourth, last session you pass, and i signed, recovery assistance that offer both immediate and long-term health for iowans affected by the floods. this included funding be rebuilt by what office, which thanks to the lieutenant general's leadership, was recently recognized as being a national model for effective flood recovery. i am asking you to fully fund once again the rebuild iowa office once -- next year. here is why. the office has helped us successfully secured $3.6 billion in state and a federal money to help iowans rebuild from the devastation of the storms and tornadoes last year. and our efforts are working. for example, the 3000 iowans who lost their homes are now guaranteed the funds necessary

to buy a new one. [applause] finally, i hope that we can work together to commit a significant portion of the remaining ijobs funding, specifically for flood recovery projects across the state. fifth, i respectfully ask you to explore every option available, including transferring money from the road fund to ensure that we adequately fund the iowa state patrol and the department of public safety. we have done it before and i believe we can do it again. sixth, as you know, in an effort to save taxpayer money and increase transparency, we have recently completed a thorough review of all tax credits in iowa. last week, the tax credit review panel issued their report.

i asked you to act on their recommendations and do all you can to make these credits work exactly as the legislature intended. [applause] seventh, let's talk about honoring our most important responsibility as i once, that is, -- as i wince, that is, our duty in shepard in our children. speaking of children, my two wonderful children, john and clare, are here this morning along with the first lady and i would ask that you welcome them to the chamber. [applause] i am proud of the fact that

working together, we have made a long-term investment in the health and education of all of our children in this state. just think, despite the challenges we have had in the past three years, we have extended health insurance to 52,000 kids in iowa. [applause] this investment now makes iowa number one in the nation when it comes to ensuring -- insuring our children. together, we must continue this important investment. additionally, we must do all we can to expand access to early

childhood education across iowa. to date, we have helped more than 12,000 kids and 175 school districts get a quality preschool education that will prepare them well in this competitive 21st century economy. [applause] my budget request will include the last installment of our four-year, $60 million commitment to preschool. number eight, in order to insure that all iowans can compete in this new -- to ensure that all iowans can compete in this new legislation, i ask that legislation be required to allow iowa to compete to the federal -- in the federal race

to the top funds. i was the -- iowa stands to receive $175 million. this will allow us to be more competitive in the classroom, build the infrastructure that our students need, turnaround underperforming schools, and allow more parental choice. let's make sure i what does not miss out on this great opportunity -- let's make sure iowa does not miss out on this great opportunity. let's make sure i what remains on the cutting edge of education reform. number nine, i am asking school districts to spend down a portion of their cash reserves instead of shifting the burden to local property tax payers. no. 10, as a governor and former teacher, my commitment to education transcends even our most difficult budget challenges. in my budget, i will fully fund allowable growth at 2%. that is right, we are not only

going to set it, but found it this session. -- but fund it this session. [applause] and on top of that, i will be asking you to dedicate at least $100 million from the reserves to restore some of the recent cuts to our k-12 schools. this will be a short-term shot in the arm for some of our schools, especially in rural districts which are already cash strapped with depleted reserves. additionally, i want us to do all we can to support our community colleges, private colleges, and regents institutions. we have some of the best in the country and they have also earned our support. and speaking of the best in the country, wasn't it great for iowa state and iowa to win those bowl games this year?

[applause] i want to congratulate the coaches, players, the fans for all of their support, and it was a great thing for our state to have those two teams win during the bowl season. speaking of, i want to welcome to the chamber the president of iowa state university, and members of the board of regents, and thank the three of them for a terrific cost service to our state as well. [applause]

so, as you can see, we have a lot of ground to cover in a very short time for in the session, but as i have said, nothing we do here is more important than doing our part to help create and retain good pay in private sector jobs. and speaking of jobs, and our want to recognize and thank those of you who have the courage and foresight to stand up and join me in passing hour ijobs initiative and infrastructure last session. this is a very important step. let's remember remember what ijobs did. it is fair and equitable. every county in the state will receive funds the local leaders can dedicate to high priority infrastructure projects of their

own choice. and the process of getting the funds to each of our 99 counties is transparent and merit-based. the bipartisan board is compromise -- is comprised of islands -- iowans who volunteered their expertise with one goal in mind, to award ijobs funds according to the letter andñi spirit of law. because in iowa we do not build bridges to know where. -- bridges to know whernowhere. [applause] we also have a little bit of history here. past administrations have used their constitutional authority to bonn for capital investment. ijobs is an investment in iowa as the future -- in iowa's

future at an unprecedented level. it will be paid back at an historically lowçó interest rats through gaming revenue and not by raising taxes. [applause] not one penny of the funds will be used for state operating costs. in other words, we're not bonding to pay our bills. ñi[applause] [oin the short term, ijobs is creating jobs. in the long term, it will strengthen our economy and allow us to speed up our flood recovery efforts. we have made and in -- and made q5q through ijobs to modernize our to our state infrastructure, to repair

our road and bridge system, to rebuild the worst roads in iowa history, and to protect our state and communities from future disasters. [applause] additionally, it will allow us to invest in our renewable energy and telecommunications network across the state. through ijobs we have kept our promise to the men and women who have served in the military by expanding and renovating the iowa veterans' home in marshalltown. when the renovation is complete, we will have the nicest, most advanced 21st century veterans' home in america, and our veterans deserve it. [applause]

here are some of the examples of why ijobs means for iowans. in some of our hardest hit areas, there are currently 54 ijobs projects under way for a total investment of nearly $100 million. in butler county, where parkersburg was hit and the f- five tornado devastated that committee, there are 14 separate ñrijobs projects under way at close to $3 million. this list is long. as i have said, every county in this state will benefit from ijobs. we now have improved more than 1400 projects and invested more

than $530 million statewide. these things matter, just ask the people impacted by the floods. ask the people of charles city what they think of their new fire station after the two they had before were lost in the floods. or the people in fort dodge and perry whose community colleges will be renovated because of ijobs. finally, we have used ijobs to help iowans secure the funds they need and to help them with their recovery efforts. because of our $100 million commitment, they have now secured three-quarters of a million dollars in needed federal funds to help them rebuild the cantor auditorium and 11 others that were lost because of the floods. [applause]

we are literally rebuilding our state and our economy at the same time. this focus on building for the long haul is now paying big dividends. we now have the eighth fastest- growing economy in the u.s. that is right, number eight. [applause] we recently recognized as being the fourth best place in america to do business, up from no. 9 last year. [applause] and iowa now is number one in the nation in terms of low cost for doing business, of all 50 states. there is more. [applause] two weeks ago, according to

market watch, des moines, iowa was named the no. 1 city in america to do business. [applause] these are not just statistics. they are the tools we will need to help us continue to attract good paying jobs to iowa, and encourage existing companies to expand here. as an example, i am proud of the fact that we have worked very hard to bring new jobs to this state. 3500 new, good paying jobs at companies like google and council bluffs, and viva and ibm in dubuque. these are just the tip of the iceberg. since 2007, private industry has brought more than $7 billion in new capital and investment to our state. our business climate, even during this difficult recession,

continues to outperform our neighbors, putting us on a clear path to recovery. [applause] so, in an effort to make sure we do all we can to continue to keep iowa and moving forward and prepare our state for a bright economic future, i am going to join the lieutenant governor over the next several weeks on an iowa jobs to work to do all we can to highlight some of the great things that are happening, to talk to some of the local business leaders and industry leaders to talk about what more we can do to keep moving iowa's economy forward. and speaking of the future, let's talk about building the greet economy of tomorrow. today, there are more than 8000

new green collar jobs in iowa. and through the power fund, we have now invested in 26 exciting research and development projects in places like ames and shenandoah. these second and third generation renewable energy projects will help us secure our energy future. they have also attracted more than $200 million in private capital because of the interest in so many of these breakthrough technologies. [applause] so, the power fund is allowing us to fast become the silicon prairie of the midwest and the renewable energy capital of the united states. we are now -- [applause] we are now leading the way,

generating 15% of all of our power from renewable sources. and in just a few short years, iowa will become one of the only state in the nation to be a net exporter of energy. [applause] in closing, i believe that we should never lose sight of the fact that everything we do here in these chambers are about real people. those people are counting on us every day for help, especially now. as i have said, the people of our state are resilient. let me give you two very

powerful examples of iowans overcoming adversity. charlene shertz is one of two people -- one of many in cedar rapids that lost everything she owned. but now i'm happy to report that she is one of 3000 iowans eligible for a home buyout. which means as soon, she will be in her new home, where she belongs. [applause] ñiand cindy becheecker is a smal businesswoman from waverly and her life changed in june of 2008 when the floods destroyed her floral business. but i'm happy to report that she

is back in business, and she is one of the thousand small- business owners who benefited from our successful jumpstart iowa business program. [applause] charlene and cindy are with us today. would you please join me in recognizing them here in the chamber? [applause] what have we learned from these resilience iowans?

we have learned that the spirit of iowans is unbroken regardless of the adversity we may face. as we enter a new decade, approach a new session, and craft a new budget, we have some fundamental choices in spite of some real challenges which remain. will we move this state forward by reforming and reorganizing state government? will we continue to be a leader in renewable energy and green -- a green collar job creation and stay on the path to economic recovery? will we continue to make investments in our kids by expanding access to health care and adequately funding early childhood education and education at all levels? will we fight for the men and women who wear the uniform of the united states military? finally, will we finish our work and overcome the

devastations from the floods and tornadoes and rebuild a strong work, greener, more sustainable state? -- a stronger, greener, more sustainable state? [applause] i believe history teaches us time and time again that the iowa way, the american way is that when we are faced with great adversity and great challenge, we need them with bold, decisive action. this is no time for fear, partisanship and inaction. instead, let's finish what we started. and afraid of tomorrow and inspired by its possibilities -- unafraid of tomorrow and inspired by its possibilities, i will work together with the leadership and i know that together we will have a

successful session. good luck in the days ahead and i look forward to working with each and every one of you. may god bless the great state of iowa. let's blessed theqñ future,w3 making this iowa century, with the unwavering faith that our best days are ahead of us. thank you, and god bless. ñi[applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] ñr >> thank you, thank you. >> later this afternoon, president obama speaks at a jobs summit held by the house democratic caucus. congress is out of session so members can attend the meeting,

which is being held at the capitol visitors' center. the event begins live at just after 5:00 p.m. eastern here on c-span. tonight, a texas government -- governor debate between the three main candidates. incumbent governor recovery debates k. bailey hutcheson and wharton county republican county chairman, debora and medina. that is tonight at 8:00 p.m. eastern on c-span2. >> this weekend, tufts univew peniel joseph will discuss his book with the "washington post" national editor on c-span2. >> the deadline is approaching to enter c-span's 2010 studentcam contest.

$50,000 in prizes to high school students. -- to middle and high school students. the $5,000 to the top prize. enter before midnight, january 20. winning entries will be shown on c-span. go to studentcam -- toward and upload your project today. -- gutu studentcam.org and of loader project today. "abraham lincoln" a unique and contemporary perspective from 56 scholars, a journalist -- and journalists. it is in hard cover of your favorite bookseller and in digital audio available where digital audio downloads are sold. learn more at c-span.org /lincolnbook.

>> now look at the role of the hearing crisis commission. from this morning's "washington journal" this is 45 minutes. 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 this problem and which now have a role in i think you'll 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 -- citizens, academics, as well as representatives of smaller institutions pointed to things like the late nineties and the early part of the last decade, there was a lot of money are around the world looking for a home that could produce a reasonable return. interest rates were at an historic low. housing, which represents about and $11 trillion segment of our economy, was a very major part of where that money went. people did come up with exotic subprime and other forms of mortgages to get more people to buy homes. i do not think it is fair to say that the big banks were forced or coerced or there were

people standing on the sign -- on the sidewalk with assigned to engage in these practices. they were enthusiastic about engaging in them because they were making a very great deal of money. our people will submit a report that is an assessment of the key factors. i hope it will be influential on congress and what it does. one thing i do not think we can tolerate is to do nothing. clearly, this is an issue that is going to require some significant steps to avoid a repetition. the challenge politically to the

administration and to congress is, do we have the will to remove -- to make those reforms. 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. disproportionate role. right now, there are a lot of people in washington who are getting paid a lot of money to avoid anything happening. one part of our mission is to see that they do not win. host: we are talking with former florida senator bob gramm about day one of the inquiry commission. here is a little flavor of it yesterday when the chairman question the ceo of 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. 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. 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 understand the event begins live just after 5:00 p.m. eastern on c-span. tonight, a texas gov. debate between the three main candidates for the republican nomination, in cabinet governor -- incumbent governor rick perry. see their comments live from denton tonight at 8:00 p.m. eastern on c-span 2. >> marine corps university professor mark moyer on military leadership and winning counterinsurgency wars.

also, peter sis. >> did you know that the no. 1 news application is c-span radio. now you can get quick and easy access to free streaming audio channels. there is also a tie with links to allow podcast, including q&a and afterwards appeared it is all free and available from the app store. >> now there's a discussion on the new irs regulations for tax preparers and why the organization is unable to answer three out of every 10 calls it receives. from this morning's "washington journal," this is 40 minutes. s 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 have a 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 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%rr

host: he was best about the 70% target rate. here's what he had to save. >> and understand that it is the ira'sñi goal -- only 70% will gt through to a real person. why such a low percentage? >> first of5a all, with every s program, my belief is that we can always get better. 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 they start hanging up. 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, -- now, the man from florida, i believe, is correct. but until you get rid of the entire ira's, that means your job to, it is not going -- get rid of the entire irs, that means your job, too, is not going to be fair to anybody.

by the way, there is no tax man that i have ever talked to that will give you the same -- and will tell you exactly what he believes. there will always give you eight different one. host: we are out of time, charles. guest: as far as sales tax, not designated to speak about tax policy. but we did a study of value- added taxes, which is a sales tax, which the fair tax is a version of a value-added tax. we looked at how these things were a minister or around the world and for people who are saying that there would be no irs, that is just a misconception. there is someone there, some entity that is collecting this tax. i'm very much a pragmatist and one of the things we learned in studying all of the sales taxes, including state sales taxes is that there are all sorts of

exemptions in these taxes. the complexity -- what i call the complexity creep happens very early in these taxes. they may start out simple, but then some entity comes in and says, do not tax me. my service or my good should be excluded from this. and pretty soon you have a very complicated tax. i just have to say -- and this is coming from me as an administrator, not as a policymaker -- human nature being what it is, people are going to come in the matter what tax we have for special rules, >> later this afternoon, president obama speaks at a jobs summit. congress is out of session. members can attend the meeting which is being held at the capitol visitor center.

the event begins live at just after 5:00 p.m. eastern here on c-span. tonight, a texas gov. debate between the three main candidates for the republican nomination. see their comments live from denton tonight at 8:00 p.m. eastern on c-span 2. >> this weekend, the 1965 voting rights act and how it paved the way for future african- american leadership. this is part of the sweat -- this weekend's facebook tv. >> the deadline is approaching to enter c-span's 2010 student

cam. it must incorporate c-span programming and show varying points of view. enter before january 28. do not wait another minute. up litter project today. >> they do know that the number one free news application is c- span radio. now you can get quick and easy access to three streaming audio channels. there's also a tab with links to all of our podcast, including q&a and afterwards. it is all free and available from the app store. >> in 15 minutes, president obama speaks at a jobs summit. congress is out of session so members canñr attend the meeting which is being held at the capitol visitor center. the event begins live