so the cost effectiveness question comes to the front. >> i have five minutes to go to vote. what we're going to do is call a recess until the chairman returns, until chairman lieberman returns. thank you. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] .

you have been helpful. i have a thought. i wanted to talk briefly about the counter-terrorism center. the focus more on the dni and general problem for the. the commission that created it to service the primary organization for analyzing and integrating all the intelligence possessed or acquired by the government pertaining to terrorism and counter-terrorism. it is designated it as the mission manager.

the president's report about the christmas bombing stays said there was analytic redundancies between the counter-terrorism center and the cia. we referred to this a bit earlier. responsibility is that designated. that analytical roles and responsibilities need to be clarified. be clarified. in your testimony, you reinforce these points and note that we need to do a better job of insuring that someone within the intelligence community is designated as in charge of running down all leads with a particular threat stream. let me ask you first generally, what is your assessment of why counter-terrorism analytic

roles and responsibilities are unclear five years after the 9/11 commission act was adopted into law? >> i am not sure i understand the question. >> i guess it is a general question about looking back five years. the law really put a charter are in place. why do you think of the analytic roles and responsibilities still seem to be unclear five years afterward? >> i think we simply do not yet realize the importance of the analysts in the system. it terrorism is the threat, and if he had massive amounts of information coming to you, collection and is one part of intelligence. analysis is the other part of the collection site, we're very good at. the analyst cited, last good at.

i think the reason for it is because we simply have not given it the priority it deserves. i am on a group that works with the director of the fbi, and he has certainly given greater priority to counter- terrorism. but in the fbi culture, the top man is the agent in charge. if you are an fbi person, that is the job that you have an ambition to achieve. it is only in very recent years that they have begun to elevate the analyst to a comparable position as the agent in charge. when you really think about it, the analyst drives with the fbi does. if their principal function is counter-terrorism, the analyst

has to drive the activity of the fbi. i do not think you have in the federal civil service the incentives that you need. maybe we do not have the pay that we need to elevate the job of the analyst. i think it is a very, very tough job. and it takes awhile for the federal bureaucracy to respond to the need. >> would you like to add anything? >> also remember that with the exception of the fbi, you had rotating people in every one of those positions. when you passed the act, we do not have its staying for a while. we need that. we need somebody to focus on these problems, and some of them are because a change in leadership. >> is that something we should think of attempting to do by way

of statutory amendment? to give the dni a longer term? >> well, the dni left voluntarily at first. i think maybe the way to do it is to have it through legislation or otherwise. and the understanding that was somebody gets the job, you know, providing that they're not doing their job well, other than that, we expect you to stay. >> it appears that you have a 10-year term for the fbi director. and the intelligence director seems to be in a comparable position. intelligence should be as removed from politics as possible. so it makes sense to me. >> i am glad to hear that. add not thought about going in, but there may be something to strengthen the dni. it has worked pretty well overall with the fbi director. we see it in this case with this

seamless transition between the administration's. let me go back to the nctc. will you talk a little bit about what you think its role should be in relationship to other analysis organizations and to the so-called operators or intelligence collectors in the community? so if i can borrow from what we were discussing earlier about the dni, is the nctc, or should the nownational counter- terrorism center, should they be the leader or just a coordinator? >> well, it is a good question. i think the analyst is the person who has to spot the problem and to spot the threat.

then there has to be an assignment of responsibility to someone to pursue vigorously that threat. i do not think that is likely to be the analyst, but somebody has to be in charge. in other words, the analyst says we have got five strands of information here that. to -- that point to x as a threat. you cannot stop there. somebody has to do it. somebody has to response orespoy of assigning someone to go after x. i do not think that is the role of the nctc. i am not sure that responsibility lies, but the assignment of the responsibility to investigate and to pursue a

suspect has to be very clear. you mentioned the word redundancy. i answered in response to senator kirk, i think it was, redundancy does not bother me. if you have got the cia doing analytical work on the the threat and the nctc, it is ok. the thing that impresses me about the analyst is the work can be boring. i mean, really boring. sorting through massive amounts of data and trying to figure out what is right or what is significant. and somebody is going to be asleep at the switch. cents -- so some redundancy does not bother me. >> i agree. it is the military concept, of

course, for personnel and four systems. >> it is not a bad word to say you have a redundant system. is there to protect the life of a military person. >> one thing we should check on -- and do not know the answer to this. with these various agencies, who is attending nctc? what kind of priority are these agencies giving it? the the people come back with something? -- are the people coming back with something? does anybody pay attention? one of the problems with the legislation is that these agencies have to give top priority and send their top people to the nctc to be effective. i do not know whether that is happening or not. >> it is a very good question. we're going to follow up these two introductory hearings with a series of subject matter hearings. we're going to do one on the nctc. that is a question i will ask.

when we first went over to the nctc after it was established at its new quarters, i remember that it was the then director of the said, look at this. this is where the cia people sit. this is where the fbi people said. end notes, they're no walls between them. that was a big breakthrough -- and note, there are no walls between them. that was a big breakthrough. are they sending over top-notch people? we all wanted to make sure that, just as the military does, we would encourage joint nesness ad reward it i interior paths -- reward it in career paths.

the last question. the 9/11 commission act also gay nctc the authority to pick -- also gave him nctc the authority to conduct a strategic operational planning for counter-terrorism activities. the memories and of the arguments over that particular provision and the fear could fill a book. we're going to focus on this in one of our hearings. what is your assessment of how the is authorities have been used by nctc up until this time? >> my assessment is that intelligence community is kind of overwhelmed by the tactical needs. in other words, you have a large number of military commanders who want intelligence on the enemy. we're pretty good at getting that information. you have a diplomat who wants to

sit down and talk with their counterpart in another country on whatever. we're pretty good in giving that diplomat, our double that, information. where we are less good, it seems to be, in the intelligence community is the question you are raising. longer-term thinking. there is a good example of it. we were behind the curve on yemen. we did not realize how convinced they were in terms of striking the united states. but we need to have a significant element of the intelligence community thinking five years, at 10 years ahead as to where the threats will come from. that is even a tougher job, i guess, than the imminent threat, but it is very important that the u.s. not be surprised by these developments to the extent that you can possibly avoid it.

i look upon our intelligence community is being very, very good. but if there is a weak spot, i think it tends to be longer term. >> well said. that is it. i thank you very much for your time. what i was going to say before was that a former secretary of state said america is the indispensable nation of the world. i say by way, and warn i feel you have made yourself indispensable. it is an extraordinary act of service that you performed. it is important in this particular moment in our government of history that you formed such a collaboration. it is not just bipartisan. i do not want either one of you to think of your party labels

when you do your work. it continues to make you very important and influential. we have been very substantive. i thought it was actually yewise and helpful to the committee. i thank you for it. we want to do a series the subject matter hearings. i would like to invite that you and your staff that we consult with you about the directions in which we were going. i cannot think you enough. it has been a constructive hearing for us. look keep the record of the hearing opened for 15 days. i thank you. the hearing is adjourned. us be the -- thank you.

>> now we will hear from the homeland security secretary. she recently returned from an overseas trip which included a series of meetings on aviation security. the briefing is almost 30 minutes. >> good afternoon. thank you for joining us. we will make remarks and then ask for questions. we have about 25 minutes or so. fire away. but thank you. good afternoon. it has been over a year before i came the secretary of homeland security. today i want to briefly discuss some of the department keep security priorities for the upcoming year. let me pause a moment to stress

that this is not an exhaustive list. we continue to have ongoing prior tories -- priorities. the attempted attack on the 25th of december was a powerful illustration that terrorists will stop at nothing to kill americans and the counter- terrorism remained our top priority. this administration is determined to thwart those plans, disrupt, dismantle, and the network. they are all working in concert with one another. our department is not solely responsible for this effort. a fight against terrorism is a broad based one the bombing all instruments of national power. diplomatic and law enforcement. in that fight, and the department of homeland security role is very clear.

protect air travelers, for davila illegal entry, enforce immigration law. we will pursue an agenda. we will strike aviation security by deploying technology, law-enforcement, and canine unit that domestic airports. we will embark on an initiative to raise global aviation security. the mes than a minute discussing this international initiative. the department of homeland security is a not screen passengers at overseas airports, we must assume the security of flights. blessed of this going to spain

and switzerland to move this forward. i met with officials and representatives of some of the largest airlines to talk about how we can strengthen aviation security. in spain, and met with foreign counterparts from across europe. it was a rare invitation for united states officials. there were four broad areas of discussion. information sharing, passenger venting, technology, international standards. i was very gratified to see that there exists a broad consensus in working on these four areas of mumbai european counterparts and a clear sense of urgency to take immediate action to strengthen security measures and identify areas of further

progress. we signed a joint declaration affirming the commitment. the gathering in spain was the first in a series of meetings around the globe. it was facilitated by the aviation organization, the united nations body. last week i was also pleased to find a similarly strong one in geneva. i met with representatives from more than 20 airlines. the private sector's role in aviation security cannot be overstated. i stressed the importance of working to improve international security standards and heard a strong response a commitment toward common approaches to aviation. i believe we have an important

opportunity marinell, right in front of us, to strengthen the system that has served as an extraordinary engine for progress and prosperity. that system has its weak links. we must address them without delay. beyond aviation security, we also have a responsibility for the security of our land and our seaports. just because the target of attack was in the air, we cannot afford to take our eyes of other areas. that is why in 2010 we are going to build on the unprecedented effort we existed in 2009 to deploy resources on the southwestern border and strengthened security along the northern border. we will continue that effort by bolstering security and seaports.

it ensures that all orders remain strong. we will be working to improve information sharing with our federal and territorial law enforcement departments through our robust network of joy and tears and passports. our goal is giving law enforcement the tools they need to disrupt terrorist acts. we will be working with the congress to address changes we can make to our immigration laws. we will never have fully effective national security so long as millions of people remain in the shadows in our country. look for announcement on each of these four areas in the weeks ahead. with the outline, i would be happy to take questions. >> on the issues of aviation,

the previous administration tried a lot of things you just talked about. are your efforts any different than what the previous administration was doing? that is particularly in regard to information sharing. >> whereas we were continuing at the bilateral level to do some of the information sharing of a passenger vetting agreements, what i saw no is a consensus among the countries of europe that it needs to be done. the discussion must not just the data sharing with the united states but within the eu itself so that's one of the differences is urgency and international recognition that the terrorists are going to look for any gap they can find in the system. they are very strategic about it. they will go to an international

system or they think the gap is. there will try to get someone with an explosive in the air. our system should never have allowed that to happen. now we need to use this as an opportunity as a catalyst for international action. b>> when you talk about technology, you are talking about 100 countries that have nonstop flights to the u.s.. what role with the u.s. play in improving technology in countries that might need financial support? >> there is a frank recognition that some countries like the resources or capacity in this area. that is why the involvement with

the united nations is so important. we will have passenger vetting technology and international standards. they all go together. there needs to be a discussion involving all the nations of the world on how to support a major that all international airports meet and maintain some basic level. that is one of the major point of this international issue. >> you mentioned in your opening remarks weapons of mass destruction. today commission appointed by congress said that the government still does 9 get in when it comes to weapons of mass destruction, particularly biological matters. little progress has been made in the threat is getting worse. is that a fair criticism? >> i have not read their report. i cannot respond to it directly.

what i can say is that it ministration has had major initiatives on detection in the biochemical area, a diagnosis of the bio area. we will continue to be working on that issue as well as what mentioned. >> apart from the report, how big a priority is a for the government to be able to counter the biological threat? >> it is a big priority. we know that it is one of the things that terrorists could use in the future or even now. it runs across the government and administration. major efforts have been taken in the past 11 months.

obviously, this is an area that will continue to work on. the goal is to keep the american people safe. >> the fourth thing she said cannot to these meetings seem to have been things that had been on the table or should have been on the table since the 9/11. there were talky but things like a clear sense of urgency. -- they were talking about things that a clear sense of urgency. why did take so long to get a commitment to this sort of thing? if we are ready done that, what is know about it? what is new about this? why has it taken this long? >> one of the things is that an international consensus has been reached. not at the level we are talking about. >> why? >> again, what we have now is an

international consensus. there is a sense of urgency. we are moving forward. the united states will play a couple of rolls. this is a community of nations. there were passages from 73 passengers from 17 countries who would have perished if he had been successful. >> it gave them a sense of urgency. that sense of urgency and dissipated overtime. it has been not only renew its, but added to the september 11 attack. there is a large scale of

conspiracy involving the takeover of airplanes. the kind of attack that he was embarking upon. that is a single individual who was able to get on a plane with this pact around his body. it is a different kind of thing from information sharing and passenger vetting types of the environment. that is why it is necessary to use december 25 as the catalyst. we will have an interest in this. the national aviation system is international. it is only as strong as we fizzling. we need to get together right now and move to get the agreements. it has been discussed for years by predecessors. get them done. get them implemented. it technology moving.

moves to increase technology. >> it seems to me that from what we know the weakest link that we know about is the screening overseas. this guy could have been screened into different ways. -- in two different ways. [unintelligible] whatever you doing specifically to try and improve the physical screening? what they doing to push the information in the system?

>> indeed. as you know, we do not do screening at international airports. just as we do not prepare the no-fly list. we receive the no fly this. there are things that are happening right now. number one is, given this new international sense of urgency, governments around the world, including the government in amsterdam, have already moved on the technology front. they are moving too bad fall but the images -- they are moving to add a full body images. there will be greater scheme -- screen with in the am airport are. you'll see them in different areas.

the international countries face of what we have seen already are moving on a technology fund. the advantage for the thing we are going to be doing is moving on what is the next moving of technology. what the media to improve the likelihood to pick up a potential,? how do we do that? that is why we have in a memorandum of understanding. they have gotten the national screening. what is the next fedestep?

when the things we have done is taken a particular part of the state department data, which is where that had been available in amsterdam and rather than in detroit, he would have them pulled aside for secondary questioning or we would have recommended to the debt that they recommended the to the dutch that they pulled him aside. -- we would have recommended to the dutch that they pulled him aside. it is available before someone boards and airplane. >> you are putting it into the hands of the foreign governments. >> in amsterdam, we have some u.s. officials located there. they will get in.

>> the state of the union is tomorrow. i am wondering if you or your department has any input in that? >> i do not think it appropriate to talk about what the president is like to talk about tomorrow. >> did to put any input into it? but again, we are always of the input. >> thank you for meeting with us. you did some sunday talk shows. you are asked if it was an al qaeda plot in the said it was too early. the next day, the president called it an isolated extremists. after that, the president came up and it became clear it was not an isolated extremist. he was an al qaeda operative. how did the u.s. government did it so wrong in terms of who this guy was, to send him here to

kill americans or other people who were on the plane? how do we get is so wrong? does that affect the posture in terms of defending the country if people are assuming that he was not with a terrorist group? he was just one guy, an isolated extremists. does that change the defensive posture of this country? how do we get it so wrong? >> i came -- i think that i didn't know it was that so much as making sure that the right information was giving the given to the public about with this fellow was. in absolutely no impact on our response. we immediately, what flights are in the air, notify pilots to alert their freight crews.

-- flight crews. wheeler to partners around the world to increase their screening potential. we immediately increased fares. some of that was happening within 120 minutes of the actual attack. >> what if there were 10 more guys or 20 more dead? -- guys? there is this assumption that it was not, that it was isolated. why did that get out there? i know you do not speak for the president. as a security director, how did that -- how do we get that wrong? >> i am going to say there was no operationally -- we assume the worst until we know that it

is not the worst. we assume that we needed to immediately provide information across the globe to both the carriers themselves, and domestic airports, and international airports, and international law enforcement. we practiced this. we carried out the assumption that there was an attempted terrorist attack. then removed accordingly. >> you talked about how there is this renewed sense of urgency in the international community. domestically, it seems, if i recall, he barely mentioned -- [unintelligible] you barely mentioned terrorism.

that seems to be the theme of your event today. is there some renewed sense of urgency within your own department? >> we have always had terrorism as our top priority. i think the attack of december 25 is something that instills in all of us the recognition that al qaeda and some of the spinoff groups literally will stop and nothing to kill americans. well we do not want to be a nation that lives in fear, and that is why they want to supply as much information to the public as we can and we want to make sure we are resilience because there are no guarantees of this world that somebody will not attack, nonetheless, i think

that we are -- we were created in the wake of 9/11. our priorities are now shaped around the counter-terrorism activities we must undergo an aviation and in other areas that are within this land, the seaports. immigration and looking at the security issues involving immigration. that is what we are going to do. >> the olympics are around the corner. i do not know if the terror picture is. >> we have been working with the canadians all year long on the security for the a olympics. we have a joint command center. we also have taken other measures, and we will be working very closely with them. obviously, they are the host nation. we are providing it.

>> is there any special concerns beyond the normal concerns such >? >> a couple of things. on the defense said, but on the aviation side, you said you had groups you are working. [unintelligible] there are very strict security laws in many of these nations. it has been a problem in the past. are you going to treat the people to get the information you need on the passengers after coming here given the laws that exist in the eu and other places? >> the discussions we had in europe where not only getting affirmation that standardizing the kind of information that we get so it is the most useful in identifying ahead of time passengers and giving as a greater ability to run passenger

lists against the terror watch lists and the no-fly lists. we understand that in europe there are privacy laws better different than those in the united states. they have a joint interest and security of their citizens as well. we believe we can reach these agreements and get this information and share it and also did it in a way bet deals with their privacy issues. our privacy has been involved in these from the beginning. we have been on the cusp so many times already was seven nations. i do not know that the nuisance of urgency. a renewed sense of urgency that we are talking about in the international realm. it is aviation security. if these peace pretty it is the

security of our seaports. -- it is the security of our seaports. these are the kinds of initiatives that this department can employ to keep the american public say. that is what we most need to do. >> are we pressing to get that information more quickly, sooner? >> yes. in some countries, that is the answer. that is all. >> thank you.

>> the director of the congressional budget office spoke about the federal deficit at a news conference earlier. he said the outlook for the federal budget is bleak. issue marks our next. after that, we will hear from kent conrad. later comedy ceo for the food -- ford motor company. -- later, the ceo for the ford motor company. we will talk to the maryland congressman about the midterm elections. he had said the -- overseeing democratic candidates. dennis johnson will discuss president obama's stated the union speech. they to, ryan crocker discusses

u.s. strategy in iraq, afghanistan, and pakistan. tomorrow morning, timothy geithner testifies about the government efforts in 2008 after the collapse of 80. at the time, he was the presence of the federal reserve bank of new york. henry paulson will also testify. live coverage from the house oversight committees are set and a glut eastern on c-span3 -- an oversight committee. live coverage begins at 10:00 a.m. eastern on c-span3. >> the state of the union address, wednesday night. our coverage starts it 8:00 p.m. eastern on c-span. you can also listen to the

president's address live on your iphone with the c-span radio application. the congressional budget office issued an outlook on the federal budget. the cbo report said that the deficit which currently stands at $1.40 trillion could rise to $1.60 trillion this year. the cbo director presented the report at the news briefing. this is just over an hour. >> for those of you i do not know, i am the associate director for communications at cbo. we release our budget and economic outlook. it is now live on the web at divi-divi -- at www.cbo.gov. the also launched a new interactive web page that will make easier for people to access the information. it is my pleasure to introduce our director. he will have a short statement. after which he will be happy to

take your questions. we plan to run to about an hour. we are live on c-span. we would appreciate it if you would please remember to identify yourself and your news organization when asked the question. with that, i will turn it over. yourselves and news organization when you ask your question. and with that we will start to. >> good morning. thank you all for coming. i will spend a few minutes describing the key aspects of the budget and economic outlook and then my colleagues and i will be happy to take your questions. under the current law, cbo projects the budget deficit this year, fiscal year 2010 will be about $1.3 trillion or more than 9% of the country's total output. the deficit would only be slightly smaller as a share of gdp than last year's deficit which was the largest since world war ii.

we expect revenues will grow modestly this year. a criminal because we expect a slow pace of economic recovery. we expect outlays will be about even with last year's level as a decline in federal aid in the financial sector offset the increase in outlays from the stimulus package and for other purposes. a debt held by the public will reach $8.8 trillion by the end of the year or 60% of gdp. the largest burden since the early 1950's. in looking beyond this fiscal year the federal budget outlook is daunting. again under the current law, cbo projects the deficit will drop to about 3% of gdp by 2013. it will remain in that neighborhood through 2020. by that point interest payments alone would cost more than $700 billion per year. moreover, maintaining the policies embodied in current law we that underlie these

projections will not be easy. it will mean, flexible, allowing all of tax cuts active in 2001 and 2003 to expire in 2011 as scheduled. and to not extend the temporary changes that have cut the minimum tax or amt from affecting more taxpayers. but many policy makers expressed their intention of the current law of old as scheduled. if instead the extended all of the 2001 and the 2002 tax cuts and index the amt for inflation and made no other changes to revenue in spending for the deficit in 2020 would be twice the size that it is in the baseline projection. debt held by the public would equal 87% of gdp and be rising rapidly. the baseline projections also assume annual appropriations increase only with inflation. if, instead, policy makers increase such spending in line

with gdp which is about what actually happened over the past 20 years, the deficit in 2020 would be two-thirds again as large as is projected under the current law. in sum, the outlook for the federal budget is bleak. to be sure forecasts in economic conditions are highly uncertain. actual deficits can be significant smaller than we expect or significantly larger. we believe our projection balances those risks. one set of factors contributing to a bleak but did not look are the financial crisis and severe recession as well as policies implemented in response. at the point in which output begins to expand again. by that definition the recession appears to have ended in may 2009. however, payroll employment which has fallen by more than 7 million since the beginning of the recession has not yet begun to rise again.

and the unemployment rate finished last year at 10%, twice its level of two years earlier. unfortunately, cbo expects the pace of economic recovery will be slow. household spending is likely to be dampened by a weak income growth, lost wealth and constraints on their ability to borrow. investment spending will be slowed by the large number of vacant homes and offices. in addition, although aggressive action by the federal reserve and the fiscal stimulus package helped moderate the severity of the recession and shorten its duration, the support to the economy from those sources is expected to win. employment will almost certainly increase this year but it will take considerable time for everyone looking for work to find jobs and we project the unemployment rate will not return to its long run sustainable level of 5% until 2014.

thus more of the pain of unemployment from this downturn lies ahead of us been behind us. the deep recession and projected recovery mean under the current law lower tax revenues and higher always for certain benefit programs. cbo estimates these automatic stabilizers will increase the budget deficit by more than 2% of gdp in both 2010 and 2011. in addition cbo projects last year's fiscal stimulus package will increase the deficit by about 2% gdp and by a smaller amount next year. as averitt, economy recovers and the stabilizers and legislative policies fate awaits the budget deficit will shrink relative to gdp. however as i noted the deficit remains large throughout the decade under the current law and the current law changed in some way that more closely matches current policy the amount of

government borrowing relative to gdp would be unprecedented in the post war period. a large and persistent imbalance between federal spending and revenues is apparent in cbo projections for the next ten years. and it will be exacerbated in the coming decades by the aging population and rising costs of health care. that imbalance stems from policy choices made over many years. as a result of those choices, u.s. fiscal policies on an unsustainable path to an extent that cannot be solved by minor tinkering. the country faces a fundamental disconnect between the services the people expect the government to provide particularly in the form of benefits for older americans and the tax revenues they are prepared to send to the government to finance the services. but fundamental disconnect will have to be addressed in some way if the nation is to avoid serious and long term damage to the economy and to the well-being and the population.

thank you. we are happy to take your questions now. >> cbs news. as you probably heard, the president is proposing spending freeze on discretionary spending, mullen security spending. is that enough, or would you consider that minor the tinkering? >> we have not analyzed that aspect of the proposal or any other aspect. we'll of course be analyzing the proposals when they are released next week and released the analysis of them in march. but the administration estimates as reported in various newspapers i read this morning is that they are proposing would save about $250 billion over ten years. again i don't know of that is the estimate we would produce because we don't know the specifics of the proposal and have not done the guesstimate. savings of $250 billion of that were to occur are substantial savings but clearly they are only a small share of the

baseline deficit. we project a deficit over the next ten years of about $6 trillion under the current law and significantly more if the tax cuts were extended relative to those numbers the savings from this particular piece the at ministration has discussed would be a step in the right direction of a small step. >> [inaudible] >> of the number that we have is freezing all discretionary appropriations. as i am a stood the president's proposal, just again, from the newspapers this morning, he proposes freezing some piece of discretionary, the mountains and on security peace and for a period of a few years i think it was three years whereas our analysis is a freeze of all of the discretionary spending for the entire ten years of the projection. >> this number appears to be lower than 250. >> let me take a look at that.

the number i see is on page 16. free is total discretionary appropriations of the level provided for to those in line. so over the tin year period, robert, the savings are about $1.3 trillion. so as i understand the administration's number, it was a number for a period of a number of years based on a freeze of three years or a subset of this category, so i don't think one can tell this number here will naturally be much larger than the number for the policy the administration has discussed, but you can't reason from this number to what the number will be until we do the analysis i think. >> it seems to bottom out in 2014 but creep back up through 2020 and was wondering what the rationale is.

>> there are several factors at work throughout the tin your period spending on social security, medicare and medicaid are rising relative to the economy because the aging population and rising health care costs. discretionary spending is declining as a share of gdp over the period. crucially dependent on the baseline assumption of appropriations will increase only with inflation and more rapidly as they have with most of the past several decades. on top of that then there is the effect of the cyclical recovery as the economy improves the spending related to benefit programs will decline, tax revenue will rise, the effects also on top of that it affects the legislation so the stimulus package spending will wane and the tax increases in tax rates scheduled to occur under the current law as to those one,

2003 tax cuts expire will push up revenues considerably. all of those forces are at work throughout the production. i think basically what you are seeing in the first set of figures is declines in the deficit due to the cyclical recovery and increasing taxes as earlier tax cuts expire, and what you will see later, when you see over time is basically the growing spending entitlement programs sorting themselves. >> stephanie with pbs. we've been hearing from the cbo for a long time that the fiscal situation is in good and is getting worse and we continue on the same track. people don't really seem to care that much. why should they care? >> my reading is people do care but solving the problem is hard. there are a variety of reasons

why rising federal debt is a problem. the most basic one is that accumulating debt tends to crowd out the investment in plant and equipment, the sort of thing that makes our workers more productive over time and resister and comes. on top of that process which is a gradual one and whose effects will not be so visible in any particular year there also is the risk as the debt levels get high of large shocks arriving in the economy because of the growing debt. our debt has the in the fiscal year 2008 was about 40% of gdp. by the end of this fiscal year we expect will be 60% of gdp. under the baseline projection is growing only 70% at the end of the decade. almost 90% if one stands the tax cut as many people discuss and

amend the weather changes. those are numbers that are not very common among developed countries over the last several decades. so we are pushing our way toward debt levels that we don't have experience with in this country and we can't observe interest rates on treasury debt had been quite bill over the past few years. weeping that because of the financial crisis, they viewed it as the safest available assets. as the economy recovers and people take more risks, there is considerable concern that people will be less eager to hold the treasury bench. that will push up interest rates. it could be worse.

it raises the risk of some more precipitous withdrawal of capital fund the connected states. that the pitch and the guy you of the delicate of -- that could push down the value of the dollar. they are not good at predicting and settling one level of debt is the tipping point. we just do not know about that. there is little doubt from experience in this country and others that growing levels of debt particularly in economies with the booming levels of debt -- they have negative consequences for productivity and income. level of debt have negative consequences for productivity in income and those may or may not come home to roost in any particular moment but that does not mean the risks of their and

problems are not growing over time. >> national journal. t.a.r.p. program has been discussed as of set for spending and tax cuts this year. if that is used with that have the effect of increasing deficit projection or what zero out? >> what we report about the t.a.r.p. you can look at page 13 in the outlook if you have in front of you we expect the lifetime cost of the t.a.r.p. are now good deal less than we projected earlier basically stems from improvement in financial conditions. so we think that the lifetime cost will be $99 billion because that is less than was recorded in the deficit figures for last year we expect this year's figure will be essentially negative outlays that is a sort of credit we estimate from a financial program of this

general sort. if one word of -- the baseline against which we score the costs of legislation remains to baseline we put forward last march and that remains that because that was based on, it was from the baseline the congress thought a budget resolution allocated money to certain purposes and it is just confusing we think in the middle of that period to shift the basis from which we do estimates but it is true though in cases where the baseline has moved so much that we think a cost estimate based on the previous baseline might be actively misleading additional information beyond the official estimate but i would note for its simple things have changed in this particular case what this means is that because we expected last year a lot of the money to be used but reductions in the allocation for t.a.r.p. would appear to be a receiver

for the government but in effect relative to the new baseline which we think the money will not be used there isn't really money to be saved, the baseline incorporates these numbers to is an official cost estimate consistent with our practice of adhering to the past budget resolution baseline would show considerable savings perhaps from reducing the t.a.r.p. of 40 but those would not be real relative to the baseline we are presenting today. >> [inaudible] -- next baseline basically? so in this case one? >> in the upcoming baseline. currently it's like 50 cents on the dollar. can you get a sense of what will be in march? >> no, our best estimate based on the current information is that for the extra $50 billion that we assume might be used the cost of that would be 50%,

$25 billion. if i had a better idea what the cost would be in march we would put it and who now. >> service number for 2010 reflects the credit for t.a.r.p. because the loss is lower. how much is that credit? >> i don't remember the accept number to estimate the number we reported was 67 billion. that is what is recorded for 2010 and the baseline and it is essentially a credit readjustment. -- t.a.r.p. was turned into a profit center as we saw on paper. >> we didn't say that. >> the was a joke. >> we are on c-span we are not supposed to be humorous. [laughter] >> it's important looking at these numbers that when the government set out to purchase these particular assets there was a great deal of risk associated with them to the estimate we need at the time that the expected losses were

derived from market prices, the prices of private citizens were willing to sell or buy these assets act and those prices reflected a good deal of uncertainty and the chance that the financial system and economy would crash in a much more pronounced way than has actually happened. they also of course allow the possibility that things would be better than they were feared at the time and programs like t.a.r.p. probably played a role making negative and come now better but the fact that after the fact a piece of this trend of not cost much money doesn't mean that there wasn't a large commitment of funds made at the time because policy makers didn't know then what they all come would be and the market prices showed significant risks in the minds of private investors that this money would not be repaid. >> [inaudible] -- then i will be still. all these numbers also include a cost of funds for a government.

it assumes a certain loss or gain on the investments and certain loss of money and that is what were reflected ms number. >> it does assume certain losses were gains for the government. weekly of the scenarios but it does not reflect the cost of the fund to the government. it is the fair market value of these transactions it is true the government will finance its activities in various ways and we will reflect in the projection for the net interest spending. >> thank you. robert? >> robert samuels, "newsweek." are your predictions of economic growth in the new term and over the decades substantially different from what they were a year ago and if so, why? and to what extent are your predictions sensitive to the rate of economic growth? if the rate of growth for half a percentage point of gdp greater

would i do if it was a half a percentage point less? and finally on the same vein, you are projecting that the long drawn unemployment rate that is consistent with steel inflation is 5%. in the last economic expansion the unemployment rate got down to 4.4%. is it possible the so-called unemployment rate might be lower than the 5% that you project? >> let me try to take this in turn. our forecast for gdp growth over the entire tenure period is essentially unchanged from what it was in august. we have lowered the gdp growth a little bit over the next couple of years. that reflects our assessment of the extent of damage to the financial system and the extent of the overhang of excess

housing office space, industrial capacity. so, and thinking also very carefully about the effects under the current law of the expiration of the annual amt patches and the explorations of the 2001, to those into tax cuts. so through all of those pieces together with a slightly lower our forecast from real gdp in the next couple of years and in a way that is hard to compare with outside forecasters who do not have to adhere to our baseline assumptions of fiscal policy but over the tenure period the gdp growth is essentially unchanged. the unemployment rate, could the sustainable rate be less than we project? most certainly. we also think it could be higher than we projected and this is as in any other area. we are trying to put the projections in the middle in the

law of the blight distribution of possible outcomes. it wouldn't be surprising if the unemployment rate did fall below along the stambaugh level on some occasions just as it rises above it on other occasions. so i don't think the fact it has been below 5% even means during that probe the long and unsustainable rate was below 5%. i do think we are a little concerned going forward about the dislocation of and from this severe recession and financial crisis. there is a good deal of evidence that recovery from financial crises tend to be slow and there is an active debate among analysts about the effect of financial crises and severe recessions on productivity growth and the natural rate of unemployment in their wake. again this is evidence that a number of countries experienced severe financial crises.

recoveries are very protracted in that capital is misallocated because of the problems the financial system that many workers need to find new jobs that don't along with their skills as closely as previous jobs did. on the other hand, much of the evidence from other countries comes from developing countries which face different economic conditions than we do. many had flight currencies crises which we obviously did not have so it's difficult to know how to apply that evidence, and we have been mauled to some long term affect some of the dislocation that we are seeing. but i think beyond that i guess one other thing to say is we did it just the estimate of the rate of unemployment from where it was before. for many years the cbo had none of 5%. a few years ago what was taken

down to 4.75% i believe, and -- 4.8% -- and we put it back at 5% and that is publicly looking again at the evidence of a major movement and the effect of just described the affect from the dislocation we are seeing to read like the estimate of that is fairly standard estimate. i don't think it deviates this uncertainty in divergence but that is not a case we are in any way out of the mainstream of the forecasters. >> just to follow up on one detail, do you have a kind of mechanical protection of how much the deficit would increase or decrease its growth was -- >> i forgot to refer to that. there is appendix, the letter escapes me, perhaps drc, appendix c which offers rules of thumb he essentially house what the economic changes and also with the changes economic

projections, appendix c how changes in economic projections can affect the budget projections and we offer four different alternatives, changes in gdp, inflation, changes in interest rates and changes in the wage and salary share. you can see the growth rate of gdp or one-tenth of one point different than we expect the would change the ten year deficit projection by about $300 billion. next question, yes. >> what impact if any do these numbers have on the cost of the democrats' proposal to overhaul health care? >> i don't know. we will continue to estimate health reform proposals on the basis of last year's baseline as we well for other proposals. as i mentioned earlier given the the budget resolution that was

adopted was based on economic forecast and technical assumptions and so one from last spring, cbo was traditionally continued to report estimates from the baseline until the budget resolution is adopted, as i also mentioned in cases where we think there has been some very sharp change in the baseline that makes dustin it's a matter earlier base misleading we what report additional information. i don't have any reason to think that estimates of health reform proposals from the new baseline would be substantially different than estimates from last year's baseline but we haven't updated all the pieces of the baseline we would need to know the answer to that question. so why don't know what effect it might have but i don't know of any particular reason to think that would be significant. >> jongh from the "wall street journal." is there some handy ranking of

the cost of the various bailouts to the government? i know you referred earlier to the t.a.r.p. estimates, but is there a overall ranking that might include the other bailouts the government has done? >> we don't have a total number. one reason for doubt that the government budget keeps track of different sorts of financial transactions in different ways so we've estimated the cost of the conservatorship of fannie and freddie mac on a fair value basis, risks adjusted basis. that's not the way the administration has actually reported last year's cost of those agencies. we estimated the effects of t.a.r.p. again on a fair value risk adjusted basis. the actions of the federal reserve's flow through to the budget depending on the remittances they made which is basically cash flow from their own balance sheet which is a

different wayã#fr calculated for estimated? >> we updated estimate from what we originally scored based on

what we've seen in the markets, with the provisions of our 45% interest costs or whatever that cover the difference between tax-exempt rate these bonds are actually paying and so it's an rapid growth and these bonds issued 60 billion or so at the end of the year and so we use that to its troubled eaglen forward. that is the basis. >> use of this is in addition -- is that in addition to the joint tax committee? been of the joint tax committee having had the of original estimate -- of the time we didn't think the bonds would be that popular and they've proven to be very popular and so, and so i believe we actually did the estimate of the new cost. >> so this is in the first cbo estimate. >> we work with the joint committee in the original

process. >> doug, could you talk a little about the impact of some combination of the house and senate health care bills remain where we could see the senate health care bill would have been had it been signed into law in time for this report would we be seeing much of an impact in terms of the cost containment? you didn't get a lot of credit to the cost containment, but it was a ten year negative i think, and would there be perhaps more broadly any potential there for longer term entitlement savings? would it be a different picture? >> our estimate of the bill that passed the house and bill that senator reed proposed including the manager's amendment for the beach reduce the budget deficit over the next ten years by about 130 some billion dollars. the ten year window capture is 2010 to 2019 which is the budget

window from last year's baseline. i don't know exactly what the numbers would be over the new ten year when the which would be 2011 to 2020. both of those bills have a small reductions in the deficit in 2019, so probably would also have small reductions in 2020. so maybe these numbers would be a little bit larger. if the bills had been passed in times to incorporate them in the adjustments they would be in their. i think you have trouble seeing the effect on the overall budget deficit we are projecting a deficit over the next ten years and more than $6 trillion, so their living by 130 or 140 or 150 billion wouldn't be recognizable. however you would see the bills very distinctly in the compliments of the budget. those bills due somewhat different things but both of them create a flow of new subsidies to buy health insurance. both of them significantly

increased the enrollment in medicaid both of them significantly reduce outlays for medicare. both of them raise other revenues in significant ways so you've seen the effect is very clearly in many of the important components of the budget projections. he would not have seen it on the bottom line. >> do you have anything for extending the tax cuts except for the wealthy games and dividends which not understanding where they go from one year that's probably where they are headed for ten and also anything on the got the fix? >> the answer to that is no. the options we present we present on pages the tax provisions, amt and other expiring tax provisions as a group.

we don't brag about more specifically. we expect the cost of maintaining the current level of medicare payments to physicians over the next decade relative to the current law which is a very substantial cut would be about $300 billion over the ten years to be to think the number of years in the text of the report. we haven't broken and beyond that. these numbers should be viewed as approximations. they are not official cost estimates of peace is scored by the tax committee against the baseline. they are meant to get a sense of orders of magnitude and fault. speaking the lubber donner and 300 billion because the 32010 to 19 you had 10 billion now you were up to 300 billion by just changing one year? >> i think that's right. i think the elks as about three and a billion and maybe it's

less. i don't know the exact number. i don't think we provide an exact number. it's true heading a european -- it's true adding a year -- >> [inaudible] >> just to thoughts -- one is -- >> i'm asking you changed one year and increasing the estimate buy almost 50%. i would recollect -- sprick i think the cost would be more than the 200. it depends exactly what the policy experiment is that one is describing and we have released a lot of estimates for a lot of very dense that will all come under the general heading of the dak fix the mess which isn't true adding one year will add 50% to the cost. >> there were many proposals considered last year had costs ranging from under 212 over 20 billion over the ten year period.

>> you may have dealt with this already and i apologize for going over familiar ground, but if you were to score the jobs bill that came through the house bill was paid for in part through the subsidy rate on the t.a.r.p., if that came through today, would that scoring in general look like versus what happened in december? and also can you give a brief idea what the economic impact you mentioned that you projected growth in the expiration of the tax cuts? is there any numerical breakdown of that? >> yes. on the first question is that bill khator today we would score in the same way that we scored a before because we traditionally continue to score legislation against the previous year's march baseline, the baseline that was used by the congress in the budget resolution and scoring legislation because as i mentioned it is simply too confusing to be changing the rules of the game as the game is going on.

but we did note when the jobs bill came through when we scored it that given the and provide a financial conditions we think the true cost of the t.a.r.p. would be much less than the previous official estimate and that meant that the savings that were available on paper would not represent real savings relative to what would happen in the absence of the legislation and if that bill came through now. as i said we would score the same way but would not specifically and refer to the of look as showing given the current financial conditions much of the savings that are available on paper do not represent real savings relative to what actually occurred. >> you mentioned -- the projected exploration tax cuts. >> we do say in the report in an effort to compare the forecast with the forecast felsite forecasters, without knowing

what fiscal policy assumptions the have made and what affects the would think the fiscal policy assumptions would have on the forecast we can't quite back them down to our baseline assumptions. what we did was to say if we change our assumptions to include a permanent extension of the 2001, 2003 tax cuts and index the amt for inflation and would bring up the growth rate the next two years to match that of the blue-chip and i don't remember if we give the exact number. i can't remember the number of hand but you can compare that 1.4% over quarter 11 would be the effect of those extensions. >> 1.4 -- >> 1.4 per cent faster growth between the fourth quarter to listen to the fourth quarter of

2011 of the tax cuts were extended permanently and amt was indexed for inflation. >> that is an estimate. every time i get a number it's like i should add immediately the estimate is on certain. maybe i should stipulate that at the beginning of the conversations and you can apply them to every question but that is the estimate. yes? >> samuel with tax notes. i was wondering if you could assess the economy's ability at this point to handle deficit-reduction last year at this time the cbo was talking about the potential benefits of a large scale stimulus and i just want to see where the cbo sees that balance. >> i said in a talk i gave a few weeks ago i think fiscal policy on its current path poses to challenges to macroeconomics stability one in the near term and one and the long term. the near-term challenge to the macroeconomic stability is

fiscal stability would be withdrawn very rapidly over the next few years. the effects of the american recovery reinvestment notte will wane. the expiration of tax cuts will push up tax rates. that withdraw of stimulus is headwind is the economy will be pushing against in the early stages of the recovery and as an important reason we expect recovery to be slow at first. the second challenge that the current path to fiscal policy poses for the economy is the longer run. it is that after the next couple of years there is no further with all of fiscal stimulus the deficits remain substantial even under the current law and a very large and growing under some closer approximation to current policy. so i think there is as policymakers way what to do about the budget situation some tension between the long-term

problems could push indirection of deficit reduction and the shorter run problem of a tremendous amount of unemployed labor and used capacity in the industrial sector in houses and offices which would argue in the direction of not withdrawing stimulus as quickly as it is under the current law or providing additional stimulus and i think that is attention policymakers will need to wrestle with. of course cbo does not make policy recommendations but a number of these blue ribbon commissions that are thinking about the budget issues have expressed positions like deficit reduction needs to be large. it means to incredibly committed to now but it should not actually begin right now. it should begin some number of years into the future in response to that but that is a judgment call out of our --

beyond our work. >> what, if any, restraint does this budget to put on the administration's agenda? >> well, we are not on the business of imposing constraints we are trying to outline for the members of the congress and the public what we think is the likely evolution of the budget under the current policies it's like the evolution under some alternatives to the current policies. how that affects the which the president proposes or the laws the, this is not really our business. it would be inappropriate for us to be predicting recommending a particular policy actions. our job is to frame the choices of the choices are appropriately left to the policymakers, our elected representatives to make.

>> [inaudible] could you discuss the cbo assumptions with regard to spending for the war in afghanistan and iraq? >> i can. so there is a table in the box in the first chapter that summarizes the history of appropriations for iraq and afghanistan and military operations. pages six and seven. what we do going forward is from this aspect of appropriated funds as for others simply to protect them forward based on the latest appropriations from congress with increases for inflation over time as the baseline projection takes no cents one way or the other about what the defense department is likely to need and funding to undertake particular activities. because there is a general sense that the number of troops deployed overseas will decline over time we offer in the set of

alternatives on pages 16 and 17 alternatives on pages 16 and 17 to read we offer to@@@@@@@@@ ivr projections. on the other hand, i would note that we've wrote a letter sent to chairman spread of the house budget committee last week estimating the cost of the

additional cost of the additional troops the president is sending to afghanistan. we estimated that as being about $36 billion over the next several years because there's been no appropriation for that that is not included in our estimate. what we released a report yesterday analysis of the future years defense plans from the department of defense in which we look at the cost as we see of the proposals they have laid out and the estimate is those proposals would be more costly than they expect and more costly than the numbers and our baseline projections. so i think there are tensions in different directions. i think by projecting current appropriations for what we are probably overstating the need for funding for troops in these particular overseas operations. but we have to -- will be understood and other needs to acquisition of equipment to replace aging equipment and so

on. >> can i come back to the health care reform. can you give an order of magnitude bills like either the house bill or the senate bill were passed what share of gdp would they add to spending and to revenues say 2020. would it be three-quarters of a percentage? can you give an order of magnitude? >> i can answer a version of that question. what we wrote in the letter think both estimates about the house bill and senate bill were the expansions of coverage, the subsidies through the exchanges and extra spending for medicaid would add about 1% of gdp worth of federal budgetary commitment. some of that is actually a place, some would-be tax

reductions because there are tax credits. again, it varies across the bills. so it's not all spending in that sense that with about 1% of gdp to the federal budget commitment to health care and then the bills of other reductions in spending and increases in taxes that make them in our judgment slight deficit reducers. >> you mentioned of the reduction in spending, the stimulus spending and increasing the taxes that are in the outlook would produce a headwind for the economy and the short term. is there a measurable effect in 2011 on gdp of the spending reductions on the tax increases? >> i don't think we have reported one and the outlook. we do say the automatic stabilizers which respond to economic conditions we say in

the outlook represent about or increasing the deficit by about 2% of gdp and both 2010 and in 2011 so that is not a differential between the two years. the effect of the stimulus package we see would increase the budget deficit last year by about to enter billion dollars to increase this year by about four entered billion dollars and the increase by lesser amounts going forward. i don't think we spell out the 2011 number but would be a good deal smaller than 200, it would be 100 something i guess comes of that is a reduction in the stimulus from the stimulus package on the order of two or $300 billion for 2010 to 2011. they're also is the effect of the expiring tax provisions and a lack of extension of the amt patch which we sit changing that if that were changing the permanent way that would add about 1.4 percentage points to our estimates of gdp growth in

2011. very little effect in 2010 so i think we can put up the other way around which is to say the features of the current law we are depressing gdp growth of 1.5 percentage points of 2011 relative to 2010. there are other pieces of stimulus harder to quantify in the same way and harder to predict. so the financial intervention of the government particularly to the federal reserve are being reduced overtime. we think as a very important effect but qantas fleeing the effect on growth is difficult and what course the federal reserve will take later this year is very difficult to predict as well. other aspects of the overdose of government policies that have affected economic growth that are harder to quantify and that is probably why we don't have a complete totaling about all those facts. you can see some of this in a very simple way. too simplistic ways by looking

at the budget deficit which is projected this year to be over 90% of gdp and in 2011 to be about 4% of gdp. very substantial -- unsury, 2012. so the next two years it is about 9% to 4% with intermediate blend of six and a half percent. that gives you some sense of the withdrawal of the fiscal stimulus. again, an important chunk of that is the automatic stabilizers only declining because it will be strengthening. that is why it is a little too simplistic to look at those numbers would over the years the decline in the deficit is one crude measure of the withdrawal of the fiscal stimulus. >> i'm not sure you will touch this one but given the dismal nature of this report will you venture out into the area of the wisdom or lack thereof of forming a commission task force, something statutory or something

by the executive branch to at least come up with proposals to tackle this deficit and debt as opposed to trying to do it by regular order? >> si beagle doesn't make policy recommendations. that includes recommendations about -- that includes recommendations about how the congress should organize itself to make decisions. a number of my predecessors have said over time the change in the process doesn't eliminate the need for difficult decisions. i think the crucial question is whether it somehow increases the chance those decisions are made soon rather than being deferred. we don't have an official position of all that. it is true that a number of my predecessors have endorsed such a commission.

alice rivlin, bob reischauer and douglas aiken in different ways have mentioned their support for that approach. i think it is fair to say grudging support. douglas walz said he had come to that process of elimination because other things seemed to not be getting the job done. but analysis that have been done of the effects of various commissions and budget rules and other process, changes in budget process showed that sometimes they work and sometimes they don't and that depends partly on whether the change in process is trying to enforce its position that is widely held or whether it was trying to impose something against the views of most people involved in the

process so the sense of most people in the number of previous co detectors testified to this effect is that the paygo rules and the discretionary spending caps in the 1990's did help to restrain the policies the would have made the deficit worse. during the period most policy makers were very concerned about budget deficits when that concern waned lead in the 90's than those process constraints were generally ignored. moreover, the process constraints were easier in the sense they were trying to prevent of policies that make the problem worse. there were all by themselves ways of reducing the problem. so the mission that is being discussed for budget commission now is more difficult than the mission assigned to these various roles in the 1990's because the intent is to take policy actions that would actively narrow the budget

deficit whether that particular structure were different sorts of structures being discussed would be effective it think it is difficult to know and something we are taking a position on petraeus too to supply technical questions. one is i wonder if you expect the same difference in the gse treatment between you and the administration has and no non-committal so since we are hearing about this idea for fiscal discretionary spending can you give us a rough breakdown of how much of a loss in the discretionary and how much as defense, va, homeland? >> the first question i will not speculate about what the administration will do. you can find people in better position to comment on that than i to be on the second question about the distribution of discretionary spending, appropriated spending i would turn to page 68 and 69 in the outlook.

page 60 -- table three negative eight on 68 shows defense and nondefense outlays over history. other tables show the projection. and table three prudhoe nine on the other side breaks down non-defense discretionary spending in 12 or 15 budget functions. one thing you will not find in this table on the right is a subhead which is a homeland security. that is because it isn't a budget function, so one complication in trying to apply what i've read in the newspaper about the devastation announcement to a table like this it sounds like they were excluding certain categories of spending that this table doesn't particularly highlight and we will of course analyze when we get the details on the budget proposal. ..

i can't really compare that to how they felt in the 1980's. having been a graduate do not that time. and i would not in any case speculate on any correlation of the concern between elected officials and their constituents. >> can you describe the outlook, is it bleak and looking bleaker or is there any -- could you

characterize that a bit more from what you meant? >> so, the term we use in the report for the budget outlook under current law is daunting. i used that this morning because under current law the deficits remain substantial throughout the decade and would be increasing in the decade beyond the one i hand because the population aging and rising health costs. so under current law, we have debt to gdp ratio that is higher than it's been since they are early 50's. and it is rising beyond the ten year projection. i think the extra complication, the piece of the budget picture that is more worrisome is that current law, which has to be the basis for our baseline

projections to verges in such important ways from current policy as most members of congress i think end of most members of the american people perceive it. and so, i think would make the outlook bleak is that if one extrapolates the current tax rates, the current reach of the return of minimum tax, that one ends up with deficits that are pushing debt to gdp upward at the very bracket pays, even within the ten-year budget. and then one also thinks about whether discretionary spending, whether holding discretionary spending comes to real terms, which is somewhat a lower growth rate than the past decade or two, reflects current policy or not. i think one increasingly gets the view that current policy that is perceived by most people has put us on an unsustainable fiscal project or basically

immediately, not just in the [inaudible] and groups like hispanics have been mostly affected by the economic crisis, so i was wondering how do you see the economic reality for minorities based on this outlook?

>> we don't project unemployment rates by demographic group. but it is a regularity on the american economy that's unemployment rates of members of minority groups are often higher than the average national unemployment rate. and rise more dramatically in downturns. and that has happened. the national unemployment rate of 10% is the national average and it masks a good deal of heterogeneity across the region among men and women and among people of different racial or ethnic groups. and our view is that an improvement in the economy, which would be declined to be an implant rate would the unemployed and great in a lot of states and so on. but we just don't have the capacity to do our projection to

the level of that sort of granularity. so i don't have anything more specific to say. yeah? >> what would be the effect on the unemployment rate in extending the tax cuts? and you also compare what economic impact you would see from that to the impact of this kind of spending be sought in the recovery act last year. >> so on the first question, i don't have an alternative economic scenario. we offered a number for the effective real gdp, but we haven't played out the scenario fully. i can't explain its effects on the other economic variables of interest. in terms of comparing it to other sorts of policies, we released along a report last week or the week before? that was just last week.

the compare all policies for their effects on open employment in the next two years. and we look that maybe ten or so different sorts of tax and spending policies. the particular version in that report of the extending the 2,012,003 tax cuts and the amt was focused on a temporary extension because the policies we were considering were temporary in nature. we want to put them on a more apples to apples basis for a comparison. so the effects we share in that report for that policy would be something different than the permanent extension, the effects of a permanent extension described in a year. but you can look at that report and it compares the effects of different ways -- different sorts of stimulus. there is a fair -- there's a lot

of variation across policies in the stimulus that we expected it would have. there's also a great deal of uncertainty for an individual policy about the effect that it would have because economy is a complicated place and policies would work or not work in a variety of different channels. and careful evidence regarding the effectiveness, the strength about his possible channels is just not clear. i mean can we try to offer a range of effects to reflect that uncertainty. even with the ranges we can see across different policies. the differences depend partly on how quickly the money can get into the economic stream. they depend partly on who gets the money and the propensity to spend other people who get it. it depends partly on how much they're changing incentives for certain kinds of behavior versus just spending money regardless

of whether behavior has changed. so i encourage about to take a close look at that report. other questions? so i think we spent our our. if you have follow-up questions, please give me a call or give melissa mercer are communications person ecology can direct you to the right person who would really have the answer to your question. we hope this is helpful for you. thank you very much for coming. [inaudible

.

[captions copyright national cable satellite corp. 2010] [captioning performed by national captioning institute] we knew that things weren't right in america. we saw the lives of many americans out of work. americans forced to leave their homes after lives of hard work. we saw it in small business laying off workers in the face of falling sales and rising health care costs. we knew that things weren't right when our middle class had been running just to stand still for over a decade and we knew that something wasn't right for a political culture that has thrifed for too long on easy

choices on the philosophy of deficits don't matter, publicly or personally. tax cuts for the privileged. all paid with borrowed cash to be paid back by our children. for six years our republican colleagues had an unprecedented chance to put their ideology into law and they did and they drove our economy into a ditch. that failure is a fact. and we have to learn from that fact if we want to do better. but placing blame is not the point. because america's recovery is now our responsibility. the shared responsibility of both parties and the test on which we should be judged. democrats have accepted it. my fear is that republicans

should, but have not. we accepted responsibility when weeks into president obama's term, we passed the american recovery and reinvestment act. the government has to pick up the slack. a recovery act passed without a single republican vote, just as president clinton's economic program in 1993 passed without a single republican vote. that policy, however, helped lead to the best economy this nation had seen in 50 years. as they did in 1993, the minority essentially bet on the failure of our economy. indeed, they predicted it in 1993 and the recovery act was

being debated -- as it was being debated, campaign chairman piece sessions in his recovery party, he said needs to get over the idea that they are participating in legislation. get over the idea that they are participating in legislation. despite a year of republican efforts to paint the recovery act as unsuccessful, many conservative economists agree that it has grown our economy and saved and created jobs. john malcon recently concluded that the recovery act helped and i quote add about 4 percentage points to u.s. growth during the second half of 2009. that's progress according to the nonpartisan office, the recovery act is already responsible for as many as 2.4 million jobs.

job losses for more than two million for the last three months of the bush administration, a reduction of 200,000 in the last quarter of last year. average losses of 673,000 jobs per month to 69,000 jobs lost. that's too many jobs to lose. we need to be gaining jobs. but it is significant progress. it ensured, it being the american recovery reinvestment act, it ensured that teachers and firefighters and police officers would stay on the job across america, educating our children, protecting our homes and keeping our streets safe. it has cut taxes for 95% of americans. made loans to nearly 40,000 small businesses and funded over

11,500 transportation construction projects adding jobs as we speak and thanks largely to the recovery act, our economy grew by 2.2% in the last fiscal quarter. its fastest rate of growth in 24 months and the first quarter of 2009 by contrast, our economy shrank by 6.4%. that reflects an almost 9% improvement in the growth of our economy. unfortunately, many of my republican colleagues either out of ignorance or intent ignored those improvements. we've seen progress but still not success, as i said. democrats recognize these results are not good enough, particularly if you're one of the millions of americans left jobless in this recession. that's why creating jobs has

been at the heart of our past year's work. it helped make the congress one of the most productive in our history. democrats helped students and businesses access credit. stop credit card companies' exploitation of their customers and extend unemployment insurance and help families stay in their homes. in 20 10, our efforts will be even more focused and vigorous with both job creation and long-term deficit reduction as our most important priorities. jobs and fiscal balance. that's why the house passed a jobs for main street act. increase the availability of loans to small businesses and increase emergency add for families that continue to struggle with long-term joblessness. that bill, as you know, is

pending in the united states senate. it is not only essential to those making good faith effort to find work but a direct spark to local economies. the bill will help us build roads, lay tracks and upgrade water systems and more. some of the best ways to create good-paying jobs. building needed infrastructure. it is critical the bill gets taken to the president's job as soon as possible. in the last administration, turned a massive surplus into record deficits. on today's right, fiscal denial

accuracy deficit. meanwhile the country is rightfully worried that washington is spending too much money. democrats get it and we will do something about it. our country faces hard choices. it can no longer and no longer should be put off. so we're working to pass a strong pay as you go legislation, which is as we speak being considered in the senate this week because the pledge to pay for what we buy is a proven deficit reduce you are. president obama has announced a freeze of discretionary spending which will require us to choose our top priorities for funding. that will not be nearly enough. the single greatest contributor to our deficit is the growing cost of our entitlement programs

which is why i'm eager to work with a bipartisan commission. that commission is also under discussion in the united states senate as we speak. even if it is ultimately created by executive order as opposed to statutory, the leadership in congress has pledged to up its recommendations for an up or down vote. if republicans are as concerned about the deficit as they say they are, i hope they will contribute their own ideas on balance instead of sitting the process out as they have been threatening to do. some argue that creating jobs and reducing the deficit are contrasting goals. we cannot get our budget under control until americans are back to work and our economy is consistently growing again.

so that investment and growing our economy and getting to fiscal balance are one and the same effort. as i have said, the economy was also the focus on 2009. health reform has not been a distraction from these hard economic times. in fact, times like these show how vitally it is needed. the ability to bring insurance and coverage at lower costs to working families and to create some four million jobs over the next decade. the form is a powerful response to economic insecurity. which of us hasn't heard of a business unable to create a new job because of the health care cost? for families pushed into bankruptcy. for seniors choosing between food and their prescription drugs. that's why democrats are taking

their time to find the best way to make reform a reality. as i see it, we ve four options. the first, of course, is not to pass a bill. the second is to pass a smaller bill that will make some moddest improve identicals for americans. the third is for the thousands pass the senate bill as is and the fourth is for the thousands pass the senate bill and both chambers to pass the bill to bridge the differences between the two bills. all of these choices have pluses and minuses. democrat leaders are taking time to talk to our members about what they are hearing from their constituents and to digest with some clarity the message that voters in massachusetts were sending. so there are no easy choices but the objective of accessible, affordable quality health care

remains because every presidential candidate from 2008 identify the health care crisis that is squeezing if military class. it remains because social security and medicaid were attacked as america's way of life and they are now for the most part a cherished part of the social fabric of america and it remains because in massachusetts, the state that has all right adopted a similar health care program, not even the republican senate who voted for it would speak against it. this year we will work hard to enact legislation to build our energy independence and create clean energy jobs. we'll push for final passage of wall street reform. that bill will protect americans from some of the most abusive

practices that led to the economic crisis. keep taxpayers off the hook for future bailouts. for too big to fail firm, safeguard our economy from another collapse of wall street eat. energy legislation and regulatory reform is both powerful actions on behalf of working families. it goes without saying -- if the majority ruled in the senate, america would be closer to energy independence and the rules for wall street would be clear, more deaf and tougher. -- more definite and tougher. for the use and abuse of the filibuster. turning the nat from george washington's cooling saucer into the place where solutions to our

nation's most pressing problems are simply put in the deep freeze. under current rules, taking a posture of perpt construction is the republican's right but this fall we will challenge them to stand up, own their record and offer something more than opposition. in 2010, republicans by their own admission will offer a steady diet of negativity. as plit co reporters said, republicans will attack democrats relentlessly. internally, the republicans call it the 80-20 strategy. spending 80% of the time chacking democrats and the remainder talking up their own ideas. the american public deserve 100%

from each party on focusing solving their problems. not attacking the other party. unfortunately in this political environment, constructive republican are of a minority. in fact my state of maryland is mourning the death of one such leader. senator charles matt mathias. finally, as we tackle all challenges at home with jobs and fiscal responsibility, we must consider our individual lance against threats from -- vigilance from threats interest abroad. in afghanistan, pwba set in

motion a troop increase intended to prevent that nation from averting to a terrorist haven. in iraq, december was the first month without an american combat death since the war began. a hopeful sign as the united states prepares to withdraw combat forces this year. as we speak, american troops are risking their lives around the world and our terrorist enemies are working hard to undermine our security and safety but the president's thoughtful decision-making process in efforts to build with our allies are sign of an effective foreign policy at work. in closing, we know this is a time of real anger and angst in america. for those of us who were not alive for the great depression, these are the hardest economic times we have ever seen and the size of our hardship is the size

of our test as well. for those of us called to govern, the test is this. will we profit from anger and seek power simply for its own sake or can we show the people who sent us here a hope worth fighting for? a country creating jobs once more. a pros parity that is truly and deeply shared. a congress not afraid to look our fiscal future in the eye and act to protect the generations to come from irresponsible policies. a country that holds wall street interests to account and holds ourselves to account as well. a country that is building again. it is a test america has seen before and history can give us this much comfort. america has never failed it. we intend to leave so that it

does not in 2010 either. thank you very much. >> and thank you for your time congressman hoyer. we'll have time for several questions here. if you are in the audience or watching on crmp span, please submit what you wish. our first question is given your address and given that the prub is going to be giving the state of the union address shortly, what would you like the theme to be? >> well, i think that there are other things that needed to be focused on and i'm sure the president will as well because there are many component parts to building our economy and growing jobs, keeping america secure and returning to fiscal baltz. i'm sure that he will talk about energy independence, i'm sure that he will talk about health care, which is part of economic recovery and individual and

corporate security. i'm sure that he will talk about a future that is fiscally sound while nevertheless investing in growing our economy. so i expect those to be the two main themes but i also expect him to talk about our national security as i am, continuing to be vigilant in keeping this country and its people safe from those who would undermine our security. >> on president obama's spending freeze proposal, how practical will that be in an environment where you have many vulnerable incumbents who are needing programs for their districts to seek re-election. >> i think the american people have made it very clear that they want us to focus on two subjects. they are very concerned about jobs the economy as they should be. secondly, they understand that

both under president bush who asked the president to pass the tarp program and president obama who asked the congress to pass the recovery and reinvestment act, those two pieces of legislation, as the american public is well aware, caused us to borrow significant sums of money. they are concerned about that. they know that we need to return to balance. they know their children will be adversely affected and generations to come if we do not get a handle on the finances of our country. they asked us to look at both of these twin priorities and work towards the accomplishment of of both. in the short-term we need to build jobs and in the long-term we need to balance our budgets. the bush administration inherited a $5.6 surplus from the bush administration's estimates. not from the clinton

administration's estimateds. we turned that into substantial trillions of dollars deficits confronting us when this administration took over so yes, the freeze will be a constraint but i think most of the members to which you refer understand that their publics and they are commilted to fiscal balance in the long-term and i think they understand that we have to make priorities. the freeze will certainly give the congress the challenge to make a choice on priorities within those freeze numbers and i think we will do that and i think members will make it clear to their constituents that we are making progress on an item very important to their constituents and i frankly think that will be politically helpful to them. >> you discussed some of your

concerns with the use of a filibuster and closer process in the u.s. senate. what remedies could the democrats consider? >> as you can imagine i've had many discussions with senator reid and senator durbin. they share the frustration and they understand the frustrations the house represents. there are over 250 pieces of legislation. some passed, 70% passed with significant republican involvement. over 50 republicans voting for those pieceses of legislation, which are pending in the united states senate. that is a frustration to the u.s. we worked hard on those pieceses of legislation covering broad sections in policy. i mentioned that george washington's theory and founding father's theory was to perhaps

cool the passions that may be enacted by a body elected every two years. of course the senate was originally representatives of the state, not of the people they are now directly elected of course starting in the last century but what they have become, very rapidly over the last few years and both parties have effected this but over the last four years, they have grown this to historic proportions in interprets of the utilization the filibuster by geometric proo aggression. -- progression. americans are frustrated by that. the majority rules in america. it is one thing to have a considered process and it is another thing to have a broken process and many of us believe that the senate process is

broken and when i say many of us, i speak for many members of the united states senate as well. i think the american public, the better informed they are of that gridlock created by this necessity not to have a majority vote but to have some sort of super majority, if we require that in elections, many members of congress would not be elected into office if they needed to get 60%. in fact, when we get over 55% of the vote we think it is a pretty big victory. we get 59% in the senate, the senate still does not have the majority revail. that is a time that can not stand. the american public expect more and deserve more. >> could this mean a -- for example, could the senate fix its health care bill through reconciliation in a way that

would pass the house? >> well, it is regular order. adopted in the rules, the reconciliation process was adopted for the purpose of making sure that the filibuster could not stop important action from happening. the reconciliation process is somewhat esoteric for the average member of congress. only the narrow band of things that you can accomplish with reconciliation. first of all, you could not accomplish all of the reforms in the health care bill or some other bills in a reconciliation process. you must with the budget process. it is limited in its scope but the answer to your question, could it be used to accomplish some of those objectives to allow the majority to rule and the answer to that question is it could be.

>> there are several questions regarding health care. you talked about health reform as part of the economic and jobs program for the obama administration. it took a lot of attention in the later sessions of congress and i'm wondering was the health care debate a distraction from some of the things the democrats were doing on the economy and jobs? >> first of all, let me remind you what i said in congressional quarterly, not steny hoyer or speak or or anything else. called the first session one of the most productive in history. i think that was the case if you look at the actions taken by the house of representatives and addressing the issues that president obama and the democrats in the last election said we would attend to. there was no surprise. there were no new issues. we indicated in the course of the election. in 2006 and 2008 that we

wouldard certain issues. one of which was the economy. one of which was health care. one of which was energy and one of which was education, among others. in fact, the house of representatives passed major pieces of legislation dealing with all those subjects as we told the american people we would do. as you know, many of those issues are still pending in the united states senate. the senate is working on that and we continue to work on them but i want to remind you that when people ask me was it a distraction to focus on health care from essentially after passing energy on, although they were wouk odd in a parallel way in the -- -- worked on in a parallel way in the economies. within weeks of president obama taking office we passed one of the most significant recovery packages in history. to bring the economy back and to

try to grow the economy. let me remind you what i said in my peach. that we went from a loss of about 650,000 jobs per month in the previous three months to the last three months a loss of jobs about 69,000 jobs per month. to go from 650,000 to 69,000 loss is a big step forward. however, it is not success. what you wanting to is from a loss of jobs to a growth of jobs. that is what we're going to be focused on very vigilantly. i would reject the premise that we have not focused and jobs and in fact, i would wednesday this reminder. what was the last bill that the houps passed? the -- house of representatives passed? it was a jobs bill that we sent to is senate. building jobs, infrastructure,

politics, fire, safety personnel, teachers and giving substantial investment to additional infrastructure, which creates jobs here in america. so that our almost first act on the recovery act and our last act last year were both focused like a laser on job creation. >> one of the four priorities -- approaches that you outlined for health care reform would be a more gradual incremental approach. if that approach were to be taken what might be some of the low hanging fruit on health care reform that could get bipartisan support? >> there are a number of our friends on the other side of the aisle indicate they are supportive of some of these things. the answer to the question -- let me preface with this. much of the bill is an integrated hole.

that is to say to accomplish the objectives, you need to both include many more people in the coverage under insurance, spread the risk, bring costs down for individuals. at the same time that you effect reforms. so that americans are not worried about being precludes if they lose their job for insurance because their child has diabetes or epilepsy, some preexisting conditions, they will not be bankrupted by no lifetime limits or annual caps and their coverage will be adequate. and protect them and their families. much of those and another very significant reform is that your 23-year-old won't be automatically kicked off your policy. that we will make it until 26. some of those require broadening

of the base, which is why we have created an exchange with affordability, which spreads the base and adds 30-35 millions of uninsured americans to have access to quality affordable health care. that is an integrated whole that works as a whole. it is more difficult when you take out individual items. there is, i think, a broad-based belief that we need to empower small businesses to come together to create larger markets, not small groups but large groups so they will get better prices and bring them down. we want to do so. while at the same time preserving the protection states have given to their citizens for coverage. there are obviously within

affordability smaller things that you can do but i think thr some things that we can work together on but the challenge is that we indicated and err -- as i said, -- every, as i said, every k candidate running for president in 2008, spoke extensively about the need to have major health care reform in america. that was not a partisan difference. there were partisan difference rs or individual differences within parties as to how you get from here to there but the need to get to there, which is an accessibility to affordable health care was something which almost all candidates agree. therefore it is difficult to take small pieces and accomplish the objective that you want to accomplish but it is not impossible and insurance reforms are not popular. there is a real concern that

insurance companies exedges interest antitrust laws have given to the insurance companies a lacking in need of competing. a lack of transparency and as a result higher costs for consumers. we think that can be with individually there are other items like that that may well be available to us to deal with individually. your made reference to congressional democrats taking a moment to understand the lessons of what the massachusetts voters were saying. what do you think the massachusetts voters were saying? >> i think the massachusetts voters were saying, what the voters in 2006 and 2008 said. our country is not working right and we want you to change it. in 2007 and 2008 and 2006, they elected democrats to lead the house and senate. not withstanding republicans --

well, you were there this 2007 and 2008. we were not able to change any of the economic policies. why? because plush either threatened to or did, in fact, veto legislation and we could not override his veto, which is to say that therefore the policies put in place in twun 2001 through january 2007 stayed in place but january 2009 to we had eight year of an economic policy that we think did not work. americans were angry about 2006 and 2008 and angry in massachusetts and all over this country that we have not got on the a place where they think we need to be. that is where we're not losing jobs. where the values of their hopes are not deappreciatesing but appreciating. the values of their savings accounts are going up, not down. during the eight years of the bush administration, the value

of 401 (k) programs essentially went down by 25%. contrast with the difference between the clinton administration and that economic policy that said that every republican opposed and appreciate the value of those retirement programs by 226%. clinton 226% up, bush 25% down. i was accused of just simply looking back and blame 3. blame not is issue here. what is the issue what works. what works for families and what works for our country the only reason to look back is to see what worked and what didn't work. do what did work. don't do what didn't work. and i think so we will do that. >> so is the lesson for massachusetts then go slower or faster? >> i think the lesson from

massachusetts is they want to make sure that we are focused on the needs of them and their families. on job creation, on fiscal responsibility and growing our economy and i think that certainly all the polls i have seen indicate that health care was of dorn the voters of massachusetts but after all, we were dealing with a state who had in place with senators brown's vote and mitt romney's signature, a plan very similar to the plan that the united states senator put forward in terms of including people and having the responsibility to be involved in an insurance program covering their health in america so it is somewhat ironic that the state that has chosen and supports in the polling data by 68%, a program similar to that

proposed by the united states senate that someone would extrapolate from the vote in massachusetts a concern solely about health care. the concern in massachusetts and in maryland and in minnesota and in montana, i'm trying to think of all michigan's that are around the country, is that their country is not working the way they think it ought to and they are thinking, it means that very few of them had any experience in the great depression. this is the worst of times that they have seen. they are expecting us to bring them better times and hopefully the best of times. >> a concern for many voters in places like mississippi, michigan, missouri, other places in the united states. >> you got the m's.

>> is climate change. >> on issues that the house dealt with last year that is currently before the senate. you spoke of an incremental approach on health care. energy and climate change could be separate bills. >> i think the house of representatives and i think i speak for all of our leadership wants to move forward on this issue. there are two major issues. first of all, critically important is energy independence. america cannot be in the position of being held hostage by the oil barons throughout the world who do not wish our country well. we cannot have our economy and the cost of our energy to run that economy to be solely in the control of others across the seas. we need to be energy independent. what does that mean? it means that we need to utilize better that energy which we have

now in a cleaner, safer, healthier way. then we, as well, needs to transist to greater utilization of cleaner, more efficient renewable fuels. all types of fuels that -- sole a obviously is one of those. geothermal is another. wind is another. we invested in the american recovery investment act in that objective so we are already moving forward on this objective. the other issue of concern is the sustainability of our global environment. whether or not we're going to be able to sustain this global environment with the gaseses, reducing co 2.

fureling economy with n a -- fueling our economy in a way that does not damage our environment. they want to do that in a cost-efficient way. in the senate two committees deal with that and in the house one committee dement with it. it is a unified issue. -- dealt with it. we are hopeful that the senate will move on energy independence. we think that is important for our national security. our defense security. and our economic security. and we hope that they will move on that front. we also hope that they will move on the front of terms of environmental security. we await their action and are ready to meet with them in conference or in other

discussions to see how we got together to move ahead on these dual objectives important to the american public and future generations. >> in the afternath of the financial crisis there is still much public outrage against practices on wall street and the feeling that too big to fail hasn't been adequately addressed. given that you have already passed several measures in the house relating to these issues, what can the house do on this top nick 2010 and when might be a fine time to do it? >> we can do it again. i say that somewhat facetiously. the house has acted. i think the two major failures of the previous administration and the previous congresses led by republicans was fiscal irresponsibility and regulatory

neglect. there were a lot of others but a fiscal irresponsibility in that we incurred great debt and bought a lot of stuff. in fact, we increased discretionary spending at twice the rate that we did turned clinton administration. 3.5% alyulely under the clinton administration. we increased spending and cut revenues. the result was added deficits. very substantial increased deficits. i'm sorry. remind me of the very last part of that question. >> any additional actions that the house of representatives is making? >> the congress, the house of representatives, as i said, very significant pieces of legislation to deal with too big to fail with the

irresponsibility and we're going to continue to focus on that. there are other items being discussed. paul volcker made some recommendations. glass-stegal is one that he wanted to focus on. we are going to work with the senate. we have passed legislation on credit r cards and regulatory reform and on being tougher on large financial institutions and very frankly we need to be tougher on those in the consumer community that would go deeper into debt as well. if we point the finger of fiscal irresponsibility, we can point it at us all. government went into deep debt, business went into deep debt and consumers went into deep debt and at some point in time, the light went on and said you cannot co-do that for all time without there being a consequence and that light went

on frankly in september 2008 which is when really all of us found out how deep the crisis was. that's when we went into this deep recession. we have acted and look forward to working with the senate and if we need to act additionally on additional items that paul volcker or others may recommend, we will certainly give them careful consideration and act. >> currently there are three pending free trade agreements affecting jobs from places like maine to new mexico that could create thousands of u.s. jobs. how should free trade agreement fit into any job stimulus efforts? >> i am a proponent of at least two of the pending free trade agreements. i think we have additional work to do with south korea, which is the largest of the agreement but columbia and panama, we ought to

pass those. trade is very flofrl both parties and the bipartisan opposition and bipartisan support. the president is interested in moving a head on trade. we need to continue working on those. i believe that america is coming pettive can and will compete with the rest of the world in open markets. now, we need to asure fair markets, fair access to markets by our manufactures and service sector, all of those entities in our country that can do business overseas effect ily if they are given a fair -- effectively if they are given a fair shot to do so. we need to couple our trade

agreements with new trade agreements to make sure that, in fact, americans are being allowed to compete effectively. the new director of government relations for general motors was in my office yesterday giving me a very good piece of news, by the way. we passed legislation which tried to give a fair shake to dealers that had been shut down. that legislation passed and general motors has decided not to appeal that legislation, but to pursue the internal appellate process to make sure that our dealers were not treated unfairly but in the course of our discussion, they are selling twice as many lacrosse automobiles in china than they are in the united states. we would like to increase by the factor of two sales in the

united states but the tact that we are selling so many buicks in china relative to where we're selling them here is good news. we need grow that competition. grow that ability to have access to markets and when we do, we will compete but i think that those trade agreements of which we spoke are in fact, a component of our continuing to raise our confidence, understand that we can compete but understand that we need a fair, level playing field to do so. >> what is the democratic caucus' plan for dealing with the expireation of the bush era tax cuts? >> the president and democratic caucus have indicated that we are strongly committed to the middle class working families not getting a tax increase and our plan would be to sustain that present level.

in fact, as i said earlier in the recovery act, we gave 95% of working americans a tax cut. in the debate that is now going on in the senate are reference to the statute we passed in the house, we allowed from a scoring standpoint, middle class tax cuts to be considered baseline. what that simply means in english language opposed to legislate i jargonon is that we can pass those tax cuts without the necessity of offsetting them with additional revenues. that will ease their passage but it is our intent to do just that. >> how will this year's congressional races be impacted by last week's supreme court decision on campaign finance? do you anticipate corporate and union spending to be more decisive? >> i certainly think the opinion

was unfortunate and maligned essentially a century of policy, adopted over the years and supported by republicans and democrats and confirmed by many supreme court decisions. it was a 5u4 degrees decision. a very -- it was a 5-4 decision. a very close decision. we're looking at to make sure that big corporations and big can't come in and, in fact, take it out on those who do not support their objectives. we think that this undermines the independents -- independence of the political system and we think it also empowers corporations that may have large investments from overseas. we will have to be looking at this and the ramifications of the decision but to perhaps

involving themselves where they could not do directly, but through a corporate entity in the public life of our country. we don't think that is appropriate. we're going to look at this very carefully. how do i think it will impact in the short-term? probably not a lot in the short-term but over the long-term it can have great consequence. i think in the short-term, i think corporations in particular will be somewhat heps and the. one of the things -- hesitant. if they want to run ads sthray to do it in a -- they have to do it in a transparent way so that people know which large corporate interest is running ads against candidate a or b or proposition a or b. they know who ran that ad. they know who to hold responsible and how much credibility that ad has given

the purveyor of that ad. we're looking at that very closely. as you know, chris van holen, chairman of our congressional campaign committee and assistant to the speaker has been tasked by the speaker to look at this and he is working with chuck shumer in the united states senate to see what options are available to us. >> we are almost out of time and we still have a final question for you but before asking that we have a couple of matters to take care of. first of all to remind our audience of future speakers. secretary gary lock discussing back to basics. a blueprint for exports driven job growth. the reauthorization to have child nutrition act and on february 12, admiral of the

coast guard will deliver his final state of the coast guard address. our second bit of business, we would like to present our guest with the traditional press club mug. >> is there any reason to come to the press club other than getting this mug? i ask you. >> there are thousands. thousands. ilt like to thank you very much for coming today and our final question deals with the situation in haiti. there has been talk of granting refugee status or some sort of work stat us to haitians who are currently homeless. given the the u.s. economy, how feasible is opening our borders to displaced haitians before congress this year? >> well, i certainly think we're going to be discussing that issue so that we can engage and

try to help the haitian people who have experienced an extraordinary calamity of historic proportions. a loss of life that is stunning. the quality of life that exists today is tragic and the moral responsibility we have as a nation and as a people in my opinion is substantial. in that context, i think we have to look very carefully, first of all at immediate relief on the ground. i think we're all very proud of the members of our armed forces and civilian sector that have joined in. i think all of us were -- i don't know that i've seen a -- short of a national news event where four net works have reserved four hours or three hours for coverage of a subject as was done the other night when all four networks reserved a total time, no advertisements

for focus on haiti, haitians and the plight of their people. so that not only are we going to be focused on additional relief, our whip from south carolina has been tasked with the responsibility in the house to oversee the congress' interface on issues with relief and issues with additional dollars and as you know, we passed through the house a tax bill last week which would say that contributions made this year prior to i think april 30, i may be wrong on that date. it may be april 15. prior to april 30 or april 15 could be deducted from your 2009 taxes so we have already acted. that is just a very preliminary action. we need to take an assessment

now. clearly high unemployment in our country, the haitian people need to have a country that can sustain them in the long run but in the short run, i think we have to look at what humanitarian accessibility might be made available for short-term stays and under what circumstances they would be. as you know, one of the things that we have done, i don't know whether you -- any of you have seen this on television, we have facilitated some adoptions that were held up for months that were effects within a few days based upon that humanitarian motivation. but i think you're absolutely right, longer term, it has to be looked at as all other immigration has to be looked at as to sustaining it in the united states.

>> thank you congressman hoyer. thank you for attending this event today. for more information about the national press club please go to our website, www. press.org. thank you for joining us this morning. [captions copyright national cable satellite corp. 2010] [captioning performed by national captioning institute]

>> up next on c-span, secretary of state clinton talks about haiti, nigeria and the attempted bombing of an american airliner. on this morning's "washington journal" topics include president obama's state of the union speech tonight, the midterm elections and afghanistan and the house gavel is in this morning for legislative business at 10:00 eastern. >> this weekend on c-span 2's book tv, how the growth of the muslim middle class and middle east could end extremism. the political cartoon tunes of dr. seuss and foreign policy going back to the knickson

administration. get the latest book tv updates on -- nixon administration. >> now secretary of state hillary clinton talks at a taun hall meeting she had the state department with state employees. it is about an hour. it has been one year since we welcomed the secretary of state to the state department and one year since she held her very first town hall meeting with us and it has certainly been an eventful year. what i would like for you to do is please rise for a moment of silence for the thousands of haitians who are lost and also for vicker to yea delong who died in haiti as well as the

wife and two children of andrew wiley, an officer in the p.r.m. who was on assignment in haiti as well. an officer in the prm who was assigned in haiti as well. thank you very much. i know the secretary of state will address many of their issues, but i'd like to thank all of you who so generously committed your funds coming to her personal funds to the haitian relief efforts and also i'd like to note that we are also engaging in a separate and parallel effort to collect funds for what we called the foreign service national relief fund. we have a large number of foreign service national employees in haiti, many of whom