banks something commented on regularly in the financial press? people either panic or they don't. >> we have seen through history that confidence can be lost in banks. . .

>> clearly, disclosure of this information will deter future borrowers. >> what is the cutoff? >> what i think the court should do -- >> katyusha make up that date -- >> who should make up that day? >> the alternative would be to reverse the ruling and they could file another request and ask for the separation back in 2008 and the fed would have to be done away whether the information was stale or not stale and then they could get the information that was not stale and then make the judgment as to whether the information was still for a particular bank >> are you saying that still cannot be about awaited on the present application -- >> are you saying that still cannot be awaited dutch

evaluated on the present application -- be evaluated on the present application? >> you can obviously remanded back to the district court -- remand it back to the district court. i would suggest that they pile another request and evaluate it is still stale or not. >> thank you. >> good afternoon. it may it please the court. i represent bloomberg.

the board's position appears to be that we are the experts when it comes to central banking. we have been doing it this way since 1913. but the rules changed since 1913 and the agency's determination is entitled to know deference. there is a good reason for that. the agency's natural inclination to work away from the public gaze, and others say it should be subject to scrutiny. indeed, i would submit that we have seen news reports concerning the fed's position that suggests that their expertise -- >> we have enough of a directive

here. >> thank you, your honor. i would like to address the staleness issue. bloomberg is requesting a role in regards to its request. it is not about the disclosure of documents within 20 days or 30 days of a request. hear, the record suggests that bloomberg sued seven months after its request when the board had not even responded to it one way or the other. this is the passage of seven months between the request and the lawsuit that is currently before the court. >> what ever rule we handout, will accommodate that? >> the board should have produced these documents on the 21st day and bloomberg would be delighted. that is not the case before the court. i think that the court need not

make that determination. >> if we ruled in your favor and all the appeals stop, when such a ruling took affect, what would you get in terms of the date coverage? ñiwhat information would you ge? >> we would get the remaining reports that were prepared between november of 20007 and may of 2008. -- november of 2007 and may of 2008. >to touch on some basic principles,çó and disclosure xdinsurers informed citizenry which isçó vital to the well functioning democracy. it breeds confidence in our public institutions which is something that is sorely needed right now. consequently, foiañi is in favor

ofçó disclosure. the agency has to construe the exemptions narrowly and determination at the apollo. -- at the appellate level. the board would have the court the discount window and say how much they want and get the money. ñithe record in this case, and i am referring toñi the doctors affidavit, he says thatñi when a borrower comes to the discount window, the bank must determine that the borrower is unable to obtain reasonable credit accommodations from other banking institutions. that is the first step. dr. ratigan also says that when

there is a request, -- the doctor also says that when there is a request, we have another step where the reserve bank is making the decision whether this borrowing should be approved. >> that should be only when the collateral offera confirms to the requirements. >> indeed, that is not simply an automatic request. >> it sounds as if it could be pretty automatic if you present collateral that comes within the guidelines, then you get the money. >> it may be, but we do not know. to take the example of the ilu, someone comes to the bank and says that if you paid me $10 today, i will pay you $11 next

month. the bank makes a notation in its own records. that is the bank's own records of its business dealings. this is not a case where a private business has generated information or data in connection with its own business activities and then subsequently submitted it to the government. this is a case where the information comes in at the time of government action -- >> which seems to me, a stronger argument, but these are not normal -- not ordinarily understood. those are actions. anything that is described includes information about the fact that it happened, but if

you shoot somebody, there is information about you having shot somebody. we would not disclose that you shot somebody who was information. you shot somebody. it was an action. that does not fit comfortably under the statutory term of information obtained from the borrower. çóthat is somethingçó differentm an action. >> i agree that that is a better argument. ok>> unless, of course, the person is the federal reserve rate that supplied the information to the board, which i take it to be. >> correct, and we would argue

that the regional bank is an agency for foia purposes. the agency would look at whether it isñi performing the governmet will function and it is subject to governmental control. in this case, it discharges its obligations and it acts as the central banker through the activities of the rebel serbs -- of the reserve bank. if you order disclosure, that will adversely impact the reserve bank's ability to land and will prevent us from discharging our public duties as a governmental agency. -- ability to lend and will prevent us from discharging our public duties as a governmental agency.

therefore, they are performing a governmental function, they are under governmental control, and they are agency and the affirmation shared between the two is not subject. >> how are they under government control? >> in respect to the makeup of the reserve banks and in respect to these lending programs because the record reflects that the lending programs take place under the supervision of the board. >> i think one of your opponents has said that the board actually sets the standards by which the banks are evaluated. they said the collateral amounts. >> yes sir. >> -- a base that the collateral amounts -- they set the

collateral amounts. >> yes sir. particularly with respect to these particular lending programs in which the board has stated that these are the programs by which we act as a central banker. >> i don't know if you know the answer to this question. i do not know if this is publicly available information. does the amount of collateral required, the collateral ratio, barry from bank to bank? >> i do not know that. i do not know if it would be revealed in the reports that are at issue. >> if you look at this information, could you calculate it? >> i do not know what is in this information other than the names of the bouras and the amounts borrowed. >> if it could be calculated, would that be a problem?

>> knott at this point, considering it wasñi borrowing that took place in 2007 and 2008. if they requested came in on day 21, falling foia request -- all in the foia request, -- following the foiarequest kahlah there would be sub zntial harm if it were released today. that is not the case before this court. that is not the case that bloomberg brought. >> what is the cut off that you would recommend that we look at? 20 days is what congress said, but you seem to suggest that 20 days may cause an appreciable

prejudice or accommodation. why should we makeñi that up? >> i do not think that the court has to make that up. ñ2r guess that is the point thai am trying to make. whatever may have been the case on may 21, when mr. pittman requested this information. >> which we do not know. >> i guess your honor could conclude that it is different today. çóbut in 2010, whether it is january 12 or february 13, with the passage of almost two years, the board's arguments do not withstand scrutiny. the boards have the responsibility.

at one point, they suggested that the burden shifts to bloomberg. it does not. with respect to the applicability of an exemption, the burden of proof, at all ñitimes, rest with the board. the boardñr has começó upxd witt they say are two examples. the first is in respect to citibank. rumors that citibank may be borrowing at the discount window in the early 1990's reportedly sparked runs as some up -- at some of its offices in asia. xdit is interesting that there s not a run in the united states. you could take the boards representation and say that it

did not spark a run in the united states. the clearing house, having lost out of the public record instead of the record on appeal, comes up with one other example, in northern iraq. -- northern rock. and then there is a news leak. >> you are saying that these examples show that the claim of prejudice, based on the possible run of a bank is speculative. >> indeed. >> i am looking at exemption 8 and it is discussing the exemption of banks. you can deduce that congress recognizes that the soundness of the banking system should be

brought to bear on the disclosure obligation. this kind of concern is not speculative. >> i have a couple of responses to that. the easiest is that theym board did not invoke section 8. the record makes clear that these are not -- >> i am not saying that they are. the danger of a run on a bank i. but exemption 8 says that congress recognized that this wasxd its cousin and could be damaging to the banking system. >> i am not sure that that exemption is really a cousin.

it talks about a very specific report concerning investigations as opposed to the mere fact of barley at a discount. we are not getting into the nitty gritty details, but rather the fact that they avail themselves of public money. >> one wonders why exemption 8 was necessary. it seems to be talking about information obtained from the banks. the only thing that is added to it is some government official's appraisal of that information. it almost seems superfluous since it is talking about the information obtained from the bank as to its financial condition. >> i would suggest that congress

made a deliberate decision in enacting -- >> it is showing that it is concerned. -- it decision in enacting -- >> it is showing that is concerned. >> congress concluded that there is certain types of informations that we are going to exempt from foia. ñigiven that exemptions are to e read narrowly, i think it would be at this -- a mistake to grab some overarching concern about information about banks in general from section 8. i am well over my time. >> the question i was an as

didn't was if section 8 -- i was asking was of section 8 -- two line >> with a run on the >> the record before this court is from one expert in respect to market activity. that is from the doctor, the former chairperson of a commission and part of the president's task force. her declaration makes clear that more disclosure breeds greater uncertainty in the market. the problem that the clearing house sitecites is the informat.

>> it seems to me that you are arguing that more disclosure leads to greater certainty analyst speculation and the board, on the other side, talking about the dangers. you are asking the court to be the policy maker with respect to this. it seems to me that that is a function that a court is ill- prepared to serve and ought to be served by congress. congress ought to make clear the limits of disclosure of this sort of the information. >> i believe that congress has made it clear that this sort of information should be disclosed unless the agency could carry its burden of proof that

disclosure would have real and immediate harm. >> that is not a standard that is provided in the statute. >> is not provided in the statute -- it is not provided in the statute. >> you are on their side, now. if they have shown that there will be real harm, we should disregard what the statute is and will with them but they do not have to comply with the terms of the statute. now you are joining them. you are making my job easier. >> they have adopted the standard regarding what exemption for means. but i think that under that standard, the board falls short. thank you. thank you, judge. >> good afternoon, may it please

the court. i represent the fox business network. the court has been at this for a little while and so i am going to put aside what i thought i was warned to stay and start with this conversation was ending a witch'which is to remak by bank, to see who might be harmed. he just hit on the major error that occurred in below. that is the teachings from national parks. if we just go back to national parks one and two and a look at what happened, what we see is that after the remand from national parks one, all the concession is intervene and then there were days of hearings were the court took evidence to see if there was actually competitive farm. what the court did was decide,

in some cases, there was. in some cases, there was not. what the banks have been pushing for is a blanket rule for exemption four. it would apply to big banks and small banks and regional banks. no one would have to come forward and show what would be required, which is competitive harm. at the competitive harm that was argued about in national parks, the plaintiffs were pushing for level of proof to be required of antitrust arm and the court said no. they wanted to require specific, not generalized crews, and what could be more -- non-generalized

proof. everybody knows what you borrowed. whether the world knows that you need to raise $35 billion, they say that for this court,ñr lookg at exemption for, we do not have to come forward with any proof that is specific to any bank. i think we just heard that they would change their argument again. >> so, it is the request by the bank of request to make a borrowing? is that what it is? >> as your honor has been feeling throughout this whole thing, nothing this is obtained from the person. you were focusing on this quite

a bit. what we do not know is all about underlying collateral information, which the board has shifted throughout the litigation from its very detailed process to a rubber- stamp. çówhat we have is a result of government and what foia is designed to do is to allow the public to know what government is doing. this is not about the banks. this is about the federal reserve bank. it is a agency -- is an agency of the united states government. >> what about the bank's request for the money? is that information obtained from the borrower or is it a

different thing? is it an application? >> it is simply an application. the facts in the record have changed from the argument will, and i first thought that there was a detailed process where people would actually consider an application before they loaned millions of dollars. the argument has shifted and the guy behind the window which give them the money until the to have a nice day. i think that the -- and tell them to have a nice day. i think that we do not have individual banks acting as banks. they are not loaning $50,000, they are learning hundreds of

millions of dollars. the terms have changed. where is this money coming from? it is not in a federal reserve bank out west, is backed by the united states treasury, so it is backed by all of us. >> i asked that question. i was told that this money sets in the coffers -- sits in the coffers of the regional banks because they have collected over the years from the banks that they serve. >> all i can say to you is that i do not see that in the record. maybe she can show us where that affirmation is, but i didn't --

i don't see that. the board is saying that these individual banks will loan up this money without getting any real information and the reason that they are doing that is because they are trying to squeeze themselves around -- trying to squeeze their round peg through a square hole. this is not about trade secret information. this is not about customer lists. this is not about proprietary information and secret formulas. this is now about something called stigma. stigma has never been in the 30 + years -- has never been, in the 30 plus years, something

that the corporate tax -- but the corporate tax. -- that the court protects. again, i agree with my colleague. there was no developed record, here. the interesting thing about exemption eight is that those are condition reports. it is sort ofñr like what the federal reserve did. and they did stress tests, which i would have thought would be an exemption. in the report, they say that the decision to depart from the standard practice of keeping examination in formation confidential stemmed from the belief that greater clarity

around the stress test process would make the exercise more effective on reducing -- more effective in restoring confidence. this is the same agency that is doing both. they are the same people that said that it restores confidence. this whole thing goes back to congress. this is the examination of banks, not the lending process, and the law also tells us that it shields the opinions and recommendations, not the underlying facts. for the board to be correct, you

have to grow national parks out the window and you have to throw this standard of a harm test -- standard of harm test out the window. the harm has to be competitive harm. competitive harm should not be taken to be any injury to competitive position. isn't that what stigma is? somebody might choose to take their money from one bank and put it in another bank. why is that a bad thing? >> assuming that you prevail on the argument you're making, your plan raises conditions

concerning information about collateral from the 12 regional federal reserve banks. i am wondering if that complicated issue would have been resolved if you just said -- sent 12 identical letters which is easy these days, to the 12 regional banks and the 13th letter to the board. >> you've raised a good point. none of the bank's have foia regulations. if i hammered on the door with a freedom of information act request, that would take me away in cuffs and we would have a different case. late in 1991, you had a case

with the federal reserve bank of new york, and in 1991, it was the federal reserve bank of new york's practice to comply with foia. they voluntarily complied. clearly, we do not have that, now. but what we do have is the freedom of in formation act regulations -- automation act -- freedom of of permission act -- a freedom of -- freedom of informatioation act. ñrthis is not day-to-day lendin. this is the implementation of

national policy at the direction of the board, to tell them to loan billions of dollars. if that is not being done, then i do not know what is. if you just read the regulations, they say that those documents of collateral belong to the board of governors. but then the board says that what you cannot see in the words is that it meant to say only if it is a delegated function and lending is not a delegated function. a trust us, they say, it has always been our understanding that this is the way we interpret this. in that same affidavit, and i think it is page 232 of the record, they say that this is

the first time that anyone has everñi asked for these documents so this is the first time that we have had to think about this. that is not a situation where agency deference is appropriate. the regulation should be red on its face -- should beñi read on its face. >> thank you. >> thank you. >> council just said that disinformation was not proprietary information. there can be no doubt that if a bank employee disclosed this information to a news reporter, that employee would be terminated and have the attorney's office prosecuting him. i feel that we are debating the pros and cons of disclosure

rules. exemption for an exemption eight should be read together -- exemption 4 an exemption 8 should be read together. this is highly confidential information. it is añr crime to miss use that information. -- to misuse that information. congress understood banks and that banks were different and that in formation on banks could hurt other banks. -- information on banks could hurt other banks. >> it says reformation, which is privileged and confidential -- information, which is privileged and confidential. xdit does not say request for a loan or for any other actionfáw.

xdñiçóñ&r÷z[[ññióthe bank s0 million. >> it does not say that it wants $100 million, it says that it is borrowing $100 million. >> correct, but the fact that the bank is engaged in activity, it is confidential. >> is it merely informational or is that a request? >> it is confidential information as well as a requestñrñixd. you are asking the fed to loan you some money. that is in permission from the bank. clearly, the disclosure of that information could call into question the soundness of a financial institution.

this court, -- >> how do you deal with the question that i asked earlier in the argument when i said, " suppose we are not talking about the fed but we're talking about government safety in petroleum drilling and someone comes and says that they request an exemption from certain state the standards -- is certain safety standards -- from certain safety standards. is this simply information that someone has come to the agency and asked for an exemption for these safety standards and the agency granted it? >> it could be.

there are cases that talk about people making applications and seeking things from the government and the process of providing a permission to the government to get something is treated -- >> i am not talking about providing affirmation. i am talking about the application providing information to get it ended arguably comes with them your definition -- comes within your definition. tell us all about the conditions of this oilwell. that is information. it is confidential. >> correct. >> is the fact of application nothing but emblidge -- information? that is it permission acquired from the applicant because the fact of the grant of the permanent -- of the permit?

>> that is confidential information. if the u.s. attorney's office calls up a company and says that they are interested in in formation about their company. that is confidential information. >> that is a request for information. that is different from somebody coming to the window of a government office and asking for government to take action on behalf of that person to give them some privilege or some benefit. that is an action of the government. >> is both. -- is both. -- it is both. >> there is nothing that happens in the world that cannot be described in terms of information. everything that happens, there is information that it happened.

are you saying that everything that happens in the world is information? >> the key point is that it has to be confidential affirmation. that is -- confidential information. that is likely to cause substantial competitive harm. the second circuit has had substantial information to show that there is not a stigma. they could not even get a law professor to say that there is not a stigma. it is something that has a recognized for nearly 100 years -- has been recognized for one -- has been recognized for nearly 100 years. if they run the risk of having that information disclosed, you would have to go to the discount

window and you have to hire a team of lawyers issue out all the reasons that you went to the discount window. he would have to have your press team out there to make sure there was not a run on the bank. we think that this court should not make this judgment. if they want to go to congress and say that the information becomes stale in a year, that is fine. but this court has nothing in the record to say whether the information in this stale now or not. there is nothing in the record. >> thank you.

>> thank you, your honor. there have been a number of very detailed decisions cited in our brief. this has been generated within the government. [unintelligible] >> i do not have any doubt that the information generated is information. am i just not getting it across? are you not understanding what i am saying? i say that there is an application of action, and that is something more than merely in formation. do you understand the point i am making? >> i do understand.

in one case, the bond was given to a person. this is exempt under the same exemptions that we're calling for here. >> what case was that? >> clark reverses the u.s. department of treasury -- clark raises the u.s. department of treasury. -- clark vs. the u.s. department of treasury. >> your describing the action that every nation has been requested and it is confidential in formation. >> yes, your honor. second, bloomberg has argued

that they are entitled to this. this is based on years of experience and expertise in the banking system and in this area and is entitled to a resumption of good faith. >> thank you. >> think you, your honor. -- thank you, your honor. >> ok, a few quick points here. the suggestion by banking council that we were manned and don't do it anything -- that we remand and don't do anything. the information is a few years old. on the next application, if the

court continues to resistñi it, but -- the board continues to resist it, they can invoke the regulations. if they could invoke those regulations and prove to a court that there was some basis, we are now up to 2.5 years, but let's not forget the bank's role. their role is to -- and their role heir -- their rule is never. the only way that never works is if this court about program the effectiveness and they say neverxd. this agency will stand up and say never, ever. >> hypothetically, suppose you

had a government clinic and there was no protection for that and it crested wished to know the people that applied a for a free treatment available at the clinic -- applied for a free treatment available at the clinic. if that person gave their name and said it wanted to participate in the program, wouldn't that be information supplied by a person and is that not really the argument that is being made by all of the lawyers at that table? >> a ultimately, what you are talking about is exemption six. that information would be withheld. so, exemption 6 is confidential

personal affirmation that can be withheld -- information that can be withheld. but understand that there are -- >> i understand that there are rules to control this, but i am asking if there is information supplied by a person went one goes to a government agency and someone says to give them the names of the people that went to the government and permit -- to the government agency. >> i could even agree with that. it may be that providing your name is information that came from a person. but we are talking about exemption for, and that information that is applied from

a person has to cause competitive harm. >> that is a different point. >> we are doing square peg round hole. that does not apply. that is prepared by the individual federal reserve banks and they are not going to be competitively arms. they passed the information along so that the board of governors knows what is going on. if there are no more questions -- to buy >> stake. >> becky. at this time -- a key. -- if there are no more questions -- >> thank you.

>> you can watch this program again c-span.org. just click "america and the courts." join us next week at 7:00 p.m. eastern on c-span. >> you are watching c-span, created for you as a public service by america's cable companies. next, the future of health care. after that, forñi work justice sandra day o'connor on the recent high court rulings.

qu>> congress talks about whether legislation is headed, next. this is about one part five hours. >> good morning. good morning, and welcome, it is great to see all of you bright eyed and energetic. we have a great session this morning. before we start, i thought i would do two quick things of business. last night,çó the illinois campaign for better health care representative decided that he

was born to be a little creative -- going to be a little creative. he broke out the words "budget reconciliation process." and then he wondered what words you could not make out of those letters and what words can you make out of those letters. i am going to read what you can can't not do. -- cannot do. you cannot spell the word filibuster. you can't spell out the word pass and pledge. you cannot spell out the word lieberman. [laughter] you can use those letters for pelosi, reed.

you can use those letters for the word urgent. >you cannot for the words lobbyist win. you cared for the word wimpy. you can for the word boalld. you can for the word "get a spine." for those of you, that are more hispanic lee inclined -- hispanic lely inclined.

[unintelligible] >> we have some creativity. [applause] >> we have talked a bit about the pathway to getting this done. we have talked about the reconciliation process. we had our rally on thursday and it was the first time i heard a rallying cry using reconciliation as part of a cry. . ñrthis has been circulated throughout capitol hill. it describes how frequently the reconciliation process has been used.

there have been nine bills -- a 19 bills -- 19 bills enacted into law for the reconciliation act. there were three others that past but were vetoed by the president. -- that passed, but were vetoed by the president. in 1996, it was passed through budget reconciliation. the two major tax cuts by president bush in 2001 and 2003, are interestingly, the reconciliation process is designed to reduce the enicit, but in 2001, it was the only reconciliation bill that passed that increased the deficit.

with respect to health care, so many of you care about the children's health insurance program. that was an active reconciliation and you all know aboutñr cobra. those of you that were laid ndf and continue to get coverage by paying in. do you know what cobra stands for? the consolidated omnibus budget reconciliation act. cobra actually has the word reconciliation in it when itñi s passed in 1985. when you are a lot to talk about this extraordinary process, please remember that this has

been used with great frequency. turning to our wonderful program, we have a three of the most thoughtful journalists and people that really care about america's health-care system who have joined us on a saturday morning. in no particular order, i will start on my left. he is a blocker that writes a periodic column for the washington post. he was formerly associate editor for "american prospect." his work has appeared in the " washington times" and other publications.

he interviewed a couple of years ago, a man that said the following. he said that ezra was very top of very good, and very, very young because when ezra interviewed him in a restaurant, he was carded. >> i think he was just tell us about that. >> i think thatezra is even -- i think ezra is more proud that rush limbaugh called him a rising star. i do not know how to take that. [laughter] [applause] >> what came after that was somewhat less complimentary, but you'll never see that on the back of my book.

don't worry. >> seated to my immediate right is susan. she is the editor in chief of the nation's leading journal of health policy. she has been, for quite awhile, the auditor analyst on health issues -- the news analyst on health issues. she has been a columnist for " u.s. news and world report." çóher work on television includd appearances as a regular analyst and commentator on cnn. she was a nieman fellow at harvard university, and if i read to you all the accolades and prizes that she has won four terrific work, we will not have

the presentation this morning. . . the author of the book sick, the untold story of america's health care crisis. and the people who pay the price. and he's a senior fellow at the think tank demos. so please give a warm welcome to these -- this wonderful

group. [applause] it's a privilege to be with them this morning. when we first discussed this, we thought we would have health reform done already. and we were going to talk about the future of the health reform movement after -- and we'll talk some about that. but we've got some other things i guess we need to address first. so i'm going to ask each of you first, give your own take about where you think we are today with respect to the fight to get health reform legislation through the finish line. so i'm going to start first on my left and we'll do it in other orders on other questions. >> i think you could -- well, thankbe=u2ujrp+ing me. good morning. i think you could say there's good news and there's bad news. and as has been happening recently in the news cycle,

we'll begin with the bad. the democrats don't really know how to move forward. we can tell them. but for reasons that escape rational thought they don't seem to themselves know. the good news is what they do know is they can't move backward. that there be dragons. and this is not they well know 1994. they cannot pretend that the bill never came to the floor, wasn't their fault. they all voted for it. it passed their chambers. they've brought david ploufe to run the campaign and he wrote an op-ed for my paper saying you have to pass this bill because if you don't you're still running on this bill. the difference between passing a bill and not passing a bill and you get to run on the bill or a caricature of the bill. but that's basically where we are. that the upside to the

situation is that all logic, all moral decency, all disinterested observers say you have to pass a bill. you have votes to do it. here's how you do it. the downside is we're dealing with congressional democrats. and they can be a tricky lot to herd. >> susan, what's your take on it? >> well, ron, i saw that you were quoted yesterday as saying that the initial reaction of the democrats was one of grief. and if i remember my elizabeth coobler roswell enough, they have to move from grief through denial first before they get to acceptance. and i think that we're in the denial phase at this point. which is that they really are still not only paralyzed with the sense of how to move forward, fut just a denial that they have to make a decision fast. which they do. i mean, the legislative time clock is tight. this is an election year.

they really have to move very, very swiftly to get anything done. whichever course they take. i suspect that where they will evolve, once they move on to denial to acceptance, is a kind of a two-track approach. one of which will be to look to do the reconciliation business. the other, it's pretty clear, republicans yesterday, at least in terms of the popular perception, they have to look like they're negotiating with the republicans to find some kind of a compromise. they just do. because of the polarization of the political environment. and unless they do that, they can't keep quietly negotiating how to do the reconciliation, which is in effect the one that's going to prevail. because nebraska who tells you that there's -- because anybody who tells you that there's going to be a meeting of the minds around a narrower proposal that the republicans and democrats can agree on is

just garbage. it's just garbage. there just is not -- we had a breakfast a couple of weeks ago with dave camp who's the ranking member on the ways and means committee. who kept talking about common ground. and david brooks from the times was there and said, i hear you talking about common ground. i don't even see common pebbles here. there's really not a meeting of the minds. but i think perperception they've got to continue this notion that there's some kind of negotiation while working through the reconciliation. that's the only realistic strategy and hope they move through denial to the acceptance of that as quickly as possible. >> jonathan. >> let me preface this by saying e. -- by saying ezara, i've been a bit of a yo-yo. temperamentally about this lately. and i remember last week, i don't know how many of you remember what happened,4what day, thursday was a very bad day last week. house democrats, it was bad.

and actually i was getting on a plane with my kids and wife to go to florida. and hiding the blackberry so the stewardesses and flight attendants don't shut me down. i get an email from someone who i talked to. and the message is just dead. so i said -- i emailed back and said, only mostly dead? question mark? hopefully? [laughter] and i got back, no, dead, bleeping, didn't say bleeping, dead bleeping dead. and i got on the plane and my kids were -- my 10-year-old, are you ok? i just sat there staring at the seat in front of me. i hadn't felt like this since the red sox blew game seven in 2003. that sick pit to my stomach. but i got off the plane. and i didn't check my ismael that night i was so depressed -- my email that night i was so depressed and the next person emailed back and said "alive." [laughter] so with the caveat that i'm all over the map on this, i

actually just being here yesterday, and talking to people, relatively -- cautious will he but relatively enthusiastic certainly compared to where i was last week. and the reason i'm enthusiastic is there is more work has been done than i realized. we're not seeing it. i don't know much about it or i would be writing about it but there is more work going on behind the scenes among the people in congress who really want this to happen. the leadership, the committee chairs, they've made a lot of progress on figuring out this formula. the hard part is once they get this agreement, and we all know how this is going to happen. there's going to be -- they want to pass the senate bill and pass a fix in the reconciliation process. the stages, they have to come to agreement on what thatization. and then they actually have to go through this long process of actually convincing all their members to do it. they have to get it scored. they have to then deal with the senate parliament aaron and this whole -- and we're

learning that reconciliation, you don't -- 60 votes, you don't need 60 but it can go slowly. the other party can obstruct. so there's a long process. and what i think -- the great unnone is i don't know if it's a collective action problem but the three actors, the president, the house democrats, the senate democrats, each one of them has to be willing to kind of take that leap. and at the moment, like all three of them are -- looking over. but they're like -- and a little further back than i would like them to be. but the house democrats have to understand they're going to have to do this. they have to take this vote on the senate bill that they just don't want to do. the senate democrats need to understand yes, they're going to have to go through the reconciliation process. the white house needs to understand that neither of those two are going to do it unless the white house tells them they have to do it. and i feel like everybody is still holding back right now. and i don't know how that plays out.

but i do know, i do feel like there's an opportunity there and i actually feel like pressure on all three of them makes potentially some difference in this. not to be giving you guys a message what to be doing in the next few weeks. but i feel like there's -- there's an opportunity there. a definite opportunity. more than i would have thought at this point. but they need to be pushed. >> the other thing that would really help here is if the public opinion numbers at least in the polls started coming up. for the president obviously. but also just over around health reform. and to fast forward to the part of what do you all do next, it's pretty darn clear the kaiser family foundation, harvard tracking poll, or not the tracking -- the tracking poll shows -- i'm thinking specifically of the poll they did at the massachusetts -- of the massachusetts voters after the election, show that if you start taking the pieces of what's in the bills they have very high favorability ratings among the public. so a very important agenda at this point is to educate people

as to the specifics of what's in the legislation. people like the specifics. they hate the whole thing. go figure. right? but there's an opportunity, i think, there. such that if you could at least start bumping those numbers forward a bit, and frankly, the rebound of the economy probably is going to produce some -- a little bit more satisfaction with the public, notwithstanding what's happening with the job numbers. but if they can just at least see sort of the light at the end of the tunnel on the public opinion side, i think that's going to buck them up. the other thing is, frankly, if christine ferguson were here, christine was john chafee's health person for a long, long time. christine would say there's nothing that helps more than starting to give people lots of awards and recognition for things. you know, this is the time to go and throw, you know, think of, you know, best congressman

ever on something. and just start giving people awards and recognition. and telling them you're -- you got their backes. for the election. because -- for the democrats in the house, this is all about the election. this is all about november. and they can't see beyond november. so anything that tells them that you're going to be there for them during the course of the campaign, and help them along the way, and help them, give them cover to vote for this, can only help. it can't hurt. >> i want to -- a good segue to a question i wanted to ask politically. if you were -- if you were thinking through the political consequences for democrats in the congress and perhaps less so for the president, what do you think the political

equation is in terms of passing or not passing reform? you've got certainly blue dogs who are in districts that are more conservative. are less amenable to health reform. but they're the ones in the tightest margin districts. i'm just wondering how do you each assess the politics for democratic members if they fail to pass health reform? so i'm going to go this way and start with you, jonathan. >> well, i mean, like ezra was saying, i think the political logic of this is unbelievably compelling. i mean, the way i would put it to all of them, is they have to decide what that one word is, you voted for that horrible, awful liberal golvet takeover of -- government takeover of health care that passed or you voted for that horrible awful liberal government take joseph of -- takeover that almost

passed. i want to go into that campaign being able to defend that vote. because we all know how it works when i was for something before i was against something. we've tried that. and i think you keep hyping the early stuff. and there's not as you have early as i would like. because we -- the ironies on the ironies on the ironies of this, in order to make the more conservative voters happy, cut the bill down to size because the bill was cut down to size and there's less to run on. but ok, whatever. i'll get over that. there are things to run on. and i think that's a straightforward, the obvious, the case to make, is that you're going to get attacked on this. and this is -- you are going to be painted as supporting this. and your -- you're best off having something to show for it. and i think i'm -- i'm

surprised more people, the mechanics of -- the mechanics of assigning -- of a signing ceremony are always good. passing a law is good. a lot of this is -- there's this -- a failure, we're going along and trudging along and this endless process. bring it to a closure of having the bill signed. that will help the poll numbers a little bit. and whatever, these are members of congress. not human beings. [laughter] >> susan. >> i tend to agree. i think that the -- a really interesting question, first of all, we all know that success breeds its own sense of success, right? success is just better. and even if people -- and since we can assume that a large portion of the american public will still not understand what's in the bill, they will nonetheless, there will be this aurea if things are passed, if things are accomplished and there will be this sense of victory which is the other key

word that unfortunately those letters don't spell. but that's the critical word, "victory." so that will be -- that will be very helpful. and energizing obviously all the democrats and getting people to turn out. i think there's an interesting -- the interesting question for me is if you look at what the republicans are saying, even those -- the house republicans who put forward a bill, that bill basically says we don't care about universal coverage. right? because that bill at most, i think the c.b.o. scored it as picking up three million, right? so there's -- of course the concerns the middle class has about premiums, about the stability of insurance coverage, but for those who still care about universal coverage or getting toward it, the republicans have nothing to say on that subject. and so to the degree that there is -- the capability of

rallying a lot of people in america who frankly don't vote, because that's -- that's why the republicans can walk away from this population. a lot of them don't vote. but a lot of you represent those communities. you know, and if there can be some sort of marshaling of that force so you can get a turnout in november that will reward people for having delivered on this, that is going to be extremely important. and i know that the white house is still in this mode of we're calling this health insurance reform. i don't think they can do that anymore. i think they have to go back to sort of the ted kennedy universal coverage and speak to that!population. i do think they have to talk about health insurance reform for the middle class. and the other thing they have to do is talk about the delivery system reform pieces that are in the legislation that are going to slow the rate of growth of health spending. because if you sort of put together the coalitions of

people who care about health reform, it's about the people who care about universal coverage, it's the people who care about insurance reform and it's the people who care about not having a fiscal nightmare at the end of this whole progresses. and you got to speak to all of those constituencies and say it's not a perfect bill for any of those purposes. but it's a whole lot more than anybody ever expected across the board in those three areas. and the time is now. >> so how many of you all are terminator fans? on dark thursday last week, my friend, matt iglesias, was on the hill and said he wanted to run around like sarah connor shaking people saying you don't understand, you're already dead. everybody dies. [laughter] and that's the political logic. of passing health care reform. if they don't do it, everybody dies. all of them. they all go down. the base doesn't move. the base sees them as losers,

which they are. the other side hates the bill. and i just want to note one thing. when health care was failing last week i surfed over to my friends at "time" magazine. and my friend, mike sheer, who's a very nice guy and even if -- wrote a piece about the five things barack obama did wrong on health care reform. and then i went over to news week and michael hirsch had written the five things barack obama did wrong in his first year. and one thing to know about the media, because my colleagues are very, very, very bad at their jobs, is you work backward from outcomes, right? oh, so we failed. all right. well, what contributed to failure? well, overreach, it was too liberal, whatever. you succeed. well, my god, how did they make that happen? you have the five things barack obama did right. we amplify outcomes. we cannot keep things in perspective by definition the way we do our work. we amplify outcomes. if this bill fails, it's a much

worse bill nanne it ever was. if it passes, it will have been a better bill than it was. two other quick points. one, we should not miss here the fact that if health care fails, then the people who actually die are real people. that if all the congressmen did not get health care insurance, unless some version of this bill went through, i guarantee you, we would strike a deal. frankly, we could probably strike a deal. [laughter] sometimes when i -- you can strike a deal if you promise everybody an spad. -- an ipad. the difference between here and there is not that great. there's also a moral case which i think people miss. i remember evan bayh speaking about you're saying that these guys, they might need armageddon or such a clamity to get this into their heads. and he wasn't talking about hundreds of thousands of people dying unnecessarily with an election going the wrong way for democrats in order for them to become more moderate. and these are individual human

beings at some point have to be held account on a moral calculus. and whether or not they are, and whether or not at the end of the day, when they sit down in the dark of the room at night and think about what's happening tomorrow, they think my god i can't live with myself. if i let these people down. i generally believe going to play a part in this. but the last quick thing, you have to be very clear on what they're afraid of. it is not the bill. they know they're tied to the bill. it is the process. if you ask them why they are not ready to do reconciliation, it is because they are afraid of being seen to craft another back room deal. what has made americans hate the bill, the reason all the compone parts are popular -- component parts are the process. there is nothing people hate more than congress. and the only way you can pass legislation is to go through this process. and it makes everybody hate your legislation. well, how do you pass legislation? i think the answer that i think

the bush administration, when they were being able to pass things, figured out, was you just bear it. you just get through it. and you assume it will be more popular when you're done. that may or may not work but the only chance they have because there's no pared back bill or no magical pony that will save the democrats here. it's this bill or everybody dies. >> i want to ask each of you a question and it will sound like a rhetorical question. if there was a role reversal, and it were the republicans who were pushing the legislation, what would they be doing right now? >> well, we saw it in 2003. with the passage of the medicare modernization act. exactly what they did. and that's -- as we know, that barely squeaked through. it was the famous three-hour vote. which is the other important point to make here. which is that no matter what anybody tells you what the rules are, they make up the rules as they go along. right?

and so -- and particularly on the senate side. they can pretty much figure out a way, if they want to, to do what they want. so that said, what happened in 2003, there was not even support within the republican ranks to pass that legislation. there was a huge dispute over whether it was a massive new entitlement or whether it was privatization of medicare or whether that was good or bad, the whole bit. and there was some democratic support. but clearly the bulk of the caucus would not vote for it. what did they do? they kept at it. and they did -- a dark of night series of back room deals. >> and what about the budget? >> and no pay forings. and there's a lot you can do in this town if you aren't -- if you're going to pass a $400 billion plus benefit and not pay for it. it's amazing. even among republicans who should have been crying foul as some of them obviously were,

but they just did it. and basically the calculus that was just discussed was the one that prevailed. which is once it's done, people are going to like it. once you got a benefit in place, people, the money is flowing, and look -- i have to say, for all of the democratic opposition, and all of the argument about repealing that, that you heard from the democratic side, they didn't do it. they haven't done that. and they haven't even done that now. nobody's talking about undoing medicare part d. they want to modify obviously some important pieces of it. get rid of the doughnut hole. all of that. but the structure, having passed, even though many democrats wouldn't do that this way again, they're going to leave it alone because it's done. and it's something to build on. and they recognize that at the end of the day it's better to get people coverage rather than the harebrained way it was

done. so it's exactly as has been said you tough it out and you basically get it done fast. because the longer it drags out, the more -- as one of the cartoons in the post this morning has a picture of, the dead fish. and it's labeled health reform. and obama is saying ok, wrap it up, i'll take it. the dead fish is just going to smell worse and worse unless you turn public opinion around and get this done fast. >> yes. what the republicans, they would have moved on their agenda because they would have passed this six months ago. they move fast. and actually we're all kicking the democrats around a lot. and they deserve a lot of kicking right now. i plan to keep kicking them. a lot of us will be kicking them. but i do think, in fairness to them, to give them some credit, they did this the hard way.

and in some ways, how this turns out, it's weird to be second-guessing. it's weird fob second-guessing health care -- weird to be second-guessing health care because we are having like a victory lap, there's a fair amount of chant at the end at least that this -- the genie set this outcome or not. but you think about the medicare part d and the games they played with the actuary and the cost estimates. i mean, this administration, this congress, i mean, they produced a bill that they were determined was going to be scored by the congressional budget office. as paying for itself and bending the curvee over the long run. in some way, shape or form. at the end of the day they didn't do a whole lot of curving bending and it barely pays for itself. but that's a pretty high standard to me. and there would be no excise tax if they weren't determined to do that. that excise tax is like the

huge sticking point to the extent that there's a substantive one right now. i remember -- and goes to the broader way they approached it. obama gave an interview with david lien heart. it was early in the process when he was talking about how do we save money on health care? he had this long discussion and many more times about his grandmother, when she was dying, and how you decide what treatments work and don't work. and we spend so much money on things. at the end of life. i remember thinking that is a really adult conversation you're trying to have with the united states of america. [laughter] and i was thrilled. i thought that was a great thing. it was spoke well of him. and i think -- i don't think i was the first to say this. but i wrote at the time and said it's not too far leap from that to your pulling the plug on grandma. and there we are pulling the plug on grandma. and they -- i think this whole thing is actually a test of whether you can do it this way. and i guess i'm not really answering the question but in

thinking about the democrats and we're beating up on them, i think this is important to get through and part to show that you can do that. this is a test. can you really honestly create policy in the united states of america? because that's what they tried to do. whatever they did wrong and whatever people don't like about the bill, to their credit, they stuck to that. and i admire that. and i'm one -- one of the many things that worry me about what's happening now if this doesn't mass is we will have a conclusive verdict -- doesn't pass is we will have a conclusive verdict. you can't do it. and just throw out the rules and ignore responsibility. and i would prefer to think we don't live in that kind of world but i'm not sure that we do. >> so ezra, a life-long republican, what would your colleagues do? >> i like to think that i'm -- joking about this earlier. but i'm a liberal with a personality of republican. i think we do live in that world. i think that the primary impediment to change and

progress on important problems is the rules of the united states senate. i think the idea that the democrats have this absurd notion that there is some principled way to save hundreds of thousands of lives and whether or not you make it,0you do it that way is more important than whether you do it is shocking. absolutely shocking. and so i think that one thing you have seen from this, and i'm answering i think john's question here rather than ron's, but we'll go with that, is that they put a lot of time as john said into constructing a policy. that would work for what is fundamentally a broken dysfunctional, dilapidated political system. so they structured it such that most industries were bought off. they made it very, very moderate. the joke about the -- we were talking about this huge transformation is how incremental and around the margins this is. we're talking about 4% of annual spending in a given year. and we're not touching the insurance of 90% of americans. we really are not.

we're doing much less on cost than we need to do. but you had to do that. you have to build. you have to be incremental. and they put all this time as they did also in a very different way in the clinton years where they tried to create this beautiful, delicate compromise between the visions of the left and right. what they don't get, i think, what they did not do was figure out how to create a process that would turn the american people off. and as we look back, the truly problematic mistake. that they didn't -- i think take seriously enough what time does to legislation in the united states congress. that it is unstoppable trend toward unpopularity. it doesn't matter what legislation you're talking about. they didn't realize it with every day that goes by, the people that care about this bill are making another compromise so they like it less. the people who hate this bill are learning why they hate it more. so that by the end of it the people who hate it are at maximum levels of enthusiasm and the people who like it are

depressed and crying into their coffee in the morning. and it goes on and on. that more time is more time for deals. it's more time for my colleagues to report on process. and back rooms. and scandals. and in-fighting. it's all about speed here. and i think that what they need to understand going forward in not only this, the end of this process, but the next one and the one after that and the one after that and the one after that, is that the american people rightfully hate american politics. and that if they're going to get things done, they're going to have to prize getting things done. over the bodies in which they get them done. and i think republicans, to their great credit, get that. and i say that without a trace of sarcasm. they are right to think that what is more drn that it is more important what they do than how they do that. i don't think they believe mccrery part d was a good bill but if they did, granting them that premise, they were dead right on how they did it. and it's a lesson democrats

should learn. >> i want to ask each of you, i think that passing this bill probably the biggest political impediment on capitol hill are those in the more moderate or conservative districts, the so-called blue dogs. i don't mean to suggest they're the only impediment. there are folks on the left and right who have concerns about the process that we thought is the pathway to get in done. but i think at the end of the day, it's the blue dogs who are going to be probably the last and the most difficult to come over and vote for this bill. assess their interests and how you would speak to those interests. first on that one. >> well, obviously, the number one issue for the blue dogs other than surviving in november, the substantive issue for them on health reform is bending the curve by in large.

-- by and larnddle. and some way out of the fiscal armageddon that awaits us. these are complicated issues. but let's just look at what's at stake here. we got 17% of the gross domestic product devoted now to health care. you cannot pass a law that moderates the growth of that. there is no law that could be passed that would do that. that the american people would accept. so bending the curve itself is going to be a long, long process. and the point of the bill, what is good in it is that it lays the groundwork, assuming the secretary seizes the reins, all of this is contained in those magical words the secretary's shell, the secretary shell set up these pilot projects, accountable care organizations, etc., etc., etc. that has to be the piece that's played up for the blue dogs. you know, so if i were at the

white house, what i would be doing is figuring out a way that once a week, for the next six weeks, secretary sebelius and others get up and launch a new pilot project already with whatever executive authority they have. to start doing this. and start playing up the systems that do exist in this country that have already bent the curve internal to the system. and they are out there. and it's basically just going to be reminding the blue dogs that this is possible. and then it's going to be coming up with some kind of a deal finally and you see the president now doing this. to deal with the other undone big issue. which is going to be a big medicare reform. because everybody knows that once health reform is done, the next big conversation is overall on medicare and medicaid reform. call it entitlement reform, call it whatever you want. but basically figuring out a way to get that on to a path of

stability or something closer to stability than what we have now. so i think it's all about talking about those pieces. and i go back to what i said earlier, talk about the things that matter to the populations that matter. and for them, that's the number one piece that matters. >> you know, i think to some extent i would -- offer the same generic advice i would offer to a liberal member of congress. and i actually think to some extent -- there's ideological issues but also a lot of this is freshman versus nonfreshman. the ones who are safe versus the ones who aren't as safe. because they're new. and i guess i would say to the blue dogs, particularly you have a choice here. this election is going to be about the obama presidency and how it's going. and you have two choices. you can make the choice to basically be the guy who's not in favor of the obama presidency because you didn't support that health care bill.

which is great except i guarantee you whoever you're running against is going to be more opposed to the obama presidency than you are. you are not going to win that race. this becomes a who's more opposed to the obama presidency and health care bill, you're going to lose. that's a given. or you can try to do things that make the obama presidency and make health care reform not a liability. and an asset. and that's true of the health care bill generally. again, this is -- this should work for a liberal also. but there's a lot of money in there for hiring nurses and direct care workers and training people. photo ops. campaign photo ops. go to the job training fair and have an event with -- when they're breaking ground on a new community clinic somewhere. these are good, generic photo ops. things you can run on that are tangible. seniors, senior citizens, they vote in off year elections, talk about t(e closing of the doughnut hole. these are things you can do to

build it up. keep in mind the effect on the obama presidency. this dies, the obama presidency is not going to have a good year. it's just done. and this idea that we can move on to jobs after it, well, you aren't going to get more on jobs if health care dies and their political capital is gone. and the truth is that helping the obama presidency in the long run, helping health care reform, both of these are in your interests. because the other decision like i said is to run against these things. that you aren't going to be as against it as the republicans. you're going to lose that fight. and this is your best shot. >> i think the blue dogs are probably the most interesting people in washington. and it's sort of the way that "lost" is the most interesting show on television. the plot doesn't make any sense and you don't think the writers can like wrap all this up. because blue dogs, their issue is the deficit. except when they vote to repeal the estate tax. blowing the deficit up.

tax cuts. the war supplement. you can go right down the line. and that's what makes it very hard to do substantive compromise here. because the issue isn't the deficit. it is perception of the deficit. and above that perception, is different bills. the problem for health care reform, which was built in serious respect, and actually agreement with this premise, with the premise the deficit reduction is important, is that nobody believes it reduces the deficit. the latest kaiser poll, 60% think it increases it. 15% think it reduces it. the rest don't know. those are not good numbers. so you do end up in this political advice place which i think is a very difficult place to be. because who knows? it is just very hard to say what will help an individual blue dog in their district. the one thing that i would say, it's a mistake that a lot of people in this whole process made. the mental model of -- take ben nelson as your example. if i'm a moderate democrat from

a conservative district or state, and i want to vote for what will be perceived as a liberal bill, how do i do it? the answer is i appear very ambivalent and not a rubber stamp. and this isn't where i needed to be. this doesn't have a lot of things i want to do and reduce the deficit more. and at the end you do two things. you cut a deal to make it a more moderate bill. and you cut a deal to bring something back for your state or your district. and then it turned out those things didn't work because what you did during that whole interim period when you and all of your friends are saying this isn't a very good bill you convinced everyone. your constituents didn't know were you playing for leverage and they don't think it's a very good bill and you cut a deal and they think you're craven. and they don't like the bill and also don't like you. this is a problem a lot of them are in. so i would strongly, strongly suggest that what they stop doing is going on tv and this goes for all the liberals, too,

and all of them and saying this bill, it's not my first choice or my second or my third but somewhere over there in choices or this bill doesn't do the things i wanted to do but probably a good start and a starter home. there's a complete inability on the part of democrats to stand up and say this bill, sure, maybe not where i am butness a great bill. this is the biggest step forward we've had since the great society. this will save countless lives, prevent countless medical bankruptcies. prevent chronic pain and infirmity and anxiety. and to say this is a good bill, on the night of brown's election they just said we are sorry that our candidates decided to repeatedly insult the red sox and mock the concept that you would touch the flesh of a voter. but health care is a very important thing to the people of this country and we're going to move forward. we would not be in this situation. but one thing is if the blue dogs aren't going to be the people out there reminding their constituencies of what's good this this bill, you have

to ask yourself, who is? >> i want to make an observation. i don't know whether any of you want to respond to it, and we'll move to the next question. it strikes me that blue dogs actually have the most to lose if health reform doesn't pass for two reasons. one is they are in the most marginal districts. by definition. they are democrats in more conservative districts. and typically when a party switches over, as republicans saw in the last election, if we don't pass something, it would strike me that the folks who are most vulnerable to losing are those in those marginal districts. and the second irony is that in those more conservative districts, you got a less of a safety net where people who are uninsured or underinsured. you got higher rates of people without health coverage. those are the places that are going to be helped the most by this legislation. so it strikes me that there's somewhat of an easterny.

-- of an irony. >> further irony, if this goes down, what is the vehicle to moderate the rate of growth of health spending? and where is the next bill going to come for that does nothing but that and doesn't deal with all of these other factors? so if you take them at their word they really do care about the deficit and the debt, then this has to pass. because there is not going to be another vehicle that comes along. and to talk further about the contrast between what people say and la they do, if you -- and what they do, if you ask the house republicans, for example, do you like what's in this bill? do you like the independent medicare advisory board that's in the senate bill? which essentially would take away -- save congress from itself basically in terms of making decisions about medicare? they don't like that.

because they don't want the power taken away from them. but they want somehow medicare to be fixed. right? so if we assume that -- there are rare fleeting moments of rationality among some of these folks, then this has to go forward. and i think -- if there's hope, it's going to be appealing to those in the party and there are, among the blue dogs, and there are, people who will understand that. and understand that this is not going to happen independent of this broader vehicle. >> i'm going to ask one last question with respect to this process. and then i want to talk about have you -- have you talk about the post enactment phase. yesterday we saw in "the new york times" rahm emanuel was quoted perhaps not surprisingly saying that the next things that are going to get the attention of congress before we

complete health reform are the jobs legislation, bank regulation, and we also know that to tee up the final bill, there are some steps that need to be taken. they have not yet reached full agreement in terms of how to work out the differences between the house and the senate. they've got to talk to the senate parliament aaron -- parliamentarian of what can be included in a reconciliation bill and get a score from the congressional budget office. they've got to work out the sequencing process for passing the senate bill in the house. and the reconciliation. because there are things that need to be done. you raised the question, susan, before, about timing and it seems to me there may be a balance here. on the one hand, timing is not on our side. we don't want to move this --

have this take much longer. on the other hand, the grieving process has not completed. and having time for a breather might actually make folks more determined to move forward. do you want to talk a little bit about the challenge of timing? >> sure. i don't believe that a breather is a good idea. i want to say one thing, i think that people in this room particularly need to be very clear on because it needs to be communicated very clearly. there are two ways that health care reform dies. and they don't look like these. here's what they don't look like. they do not look like rahm emanuel comes out and says we're not doing health care reform anymore. we don't like it. and it does not look like health care reform fails in a vote. it will die in either of those ways, i promise you. here's what it will do. if it dies. number one, rahm emanuel and other congressional democrats will come out and say we are as committed to health care reform as we always have been. this is a key priority.

that's why we are in washington. we're just not going to do it right now. that's number one. and number two, is pareback. we get some magical -- your insurance company, there are no more rescissions and this is a great victory for the american people. but that article scared me much more than anything else has so far. because the way this goes down is that it grows old and it dies. like other organic matter. and i think this needs to be called out. if emanuel is saying that it needs to be called out by people in the base and people who care about this as the death of health care reform. because you can't run that timetable. you can't deal with jobs. and i don't know -- he seems to think jobs will pass by tuesday at noon. i'm pretty sure it will take longer. they don't even have their bill it should be noted. then banking. you don't have the votes for banking, number one. bank tax is going to be your

election issue, number two. so we're going to turn to this in mid october? nobody's going to be there. and even before the summer, and everybody's already back home campaigning. this goes soon or it doesn't move. and then there's the reconciliation structure which expires. when the new budget and there's disagreement on when the new budget is taken up or enacted but either way, that reconciliation instruction, you can pass a new one but that's difficult to do. but the white house last week, and it may be john heard the same, they were telling me, the president didn't set a timetable in his speech. he didn't need to. we all know we have to move quickly due to the reconciliation instruction expiration. so this goes quick or it doesn't go. and one thing that nobody should let anybody get away with is suggesting that it is viable or honest to say that oh, we'll do this after we do everything else. but we're still going to do it. this moves or it doesn't. >> didn't you read -- i mean,

we all know rahm. he's a very smart guy. i read that as that -- what they're going to do is just for a few weeks take this off the front page. while the deal is negotiated behind the scenes. there's no lack of will in the white house to do this. and to push this forward. i thought that was all about rahm saying -- rahm is a deeply politically calculating animal. and very effective because of it. and he's saying we're going to yank this off the front page. we're going to put jobs upon the front page for the next three weeks. to shift the conversation. while pelosi and i everybody else behind the scenes figures out how to do that. that's what i took away from it. >> my understanding, and i'd like john's take on this as well, from my reporting on the white house, is that rahm wants to cut bait. that there's an argument internally in the white house going on right now, and this is

-- and i've reported it so i'm not laying on anything secret here and rahm wants to pare back. that the reason there was not a clear declaration of intent from the white house for a while after massachusetts when all those hill offices were screaming for direction, was because the white house was internally divided about how to move forward. so i think you're completely right. that is one outcome. of what we're talking about here. but i also think that it's -- that way of moving forward scares me because that is another way of saying they're keeping their options open. when you take health care reform off the front pages which maybe you need to do and it also makes it easier not to put it back on. and one thing that's hard to do is to get members' attention to go back into something hard and difficult and scary. they don't necessarily want to make a choice to kill health care in the congress. but they also don't want to do the work to pass it at the moment. a lot of them. they just don't want to do this anymore.

they're tired. they are tired of health care reform. and so i do think that there is a serious danger here that this thing dies just due to inaction, due to inertia. where it is right now it can be right there and not pass. so i'm less sanguine on this than you are. both because sthri rahm himself is less committed -- because i think rahm himself is less committed to the cause and not that they're saying we're not going to do this. it could be the timetable that you say. but constructing this new timetable where they're not just doing health care reform until they get it done, it makes it easier for them to not get it done. >> jonathan, you want to respond. >> i think it's known, i think this has been reported, rahm has always been among the more skeptical. i don't think this is a substantive thing and don't think he has anything to do against doing a big health care plan in principle and give everybody health care and it was a political thing that he has always been skeptical that this was reaching too far.

and not the only person in the white house who feels that. this has been an ongoing debate. and to some extent you want that debate happening internally at the white house. from the beginning. you do want different political views. i don't think it was -- i do worry that sending mixed messages doesn't help at a time when congress itself is at this -- do we go, do we stay, do we go, do we stay, the message from the white house should have been from tuesday night. i think that the tuesday night to me, if this all goes down, it will be the tuesday night massacre. i'm still waiting for the administration to officially get on msnbc tuesday night and say we lost the race and we're going forward anyway. i think it was criminal malpractice that they didn't have their talking points in order. but my understanding was that was -- there was a good deal of indecision there. that they weren't sure how they wanted to proceed. i tend to think the timing issue, i'll put myself between you two a litt÷e bit in the sense that i do think number

one there is this process that's going to take time. i don't think i fully appreciated that myself until recently. but the scoring, the parl parliamentarian, we can't have a vote tomorrow. we could have a vote in the house of representatives. 218 members of the house of representatives willing to vote for this bill, nancy pelosi could schedule a vote and in 24 hours we could vote and the bill could go to the president. everybody should remember that by the way. if this goes down that we are 24 hours away give or take from passing this giant health care bill, whatever you think the flaws are in it. but there is -- if we're going to go through reconciliation, you have to go through the scoring and the senate parliamentarian and round up the votes. and i do think to some extent, obviously insofaras the political push to get this through is dependent on the obama administration generally, the democrats in congress having some favorability ratings, i think doing events like the ones in tampa. i like trains. building trains.

good stuff. bring up -- that's fine. i don't think at the end of the world to have a little bit of this spotlight -- hanging on evan payh's every word and a couple of days? on the one hand, the longer we go, as -- the urgency phase. and it becomes easier to become adjusted that maybe we don't do this. and i think that's a real danger. and actually, in some ways, i was thinking about this yesterday we were all writing about what rahm said. what to say and what to think. and i was asking people who are in the middle of this, what do you think he was saying? and i sort of realize that in some ways, i don't live in washington. so i don't have the secret washington decoder ring that everybody gets here. [laughter] but my sense was that maybe one of the things that's going on here is we're seeing trial balloons. so what happens if we don't do this for a while? see how people react. and damn it, react badly. you know? no, that's not good. we want it now. we want it as soon as possible.

if that push doesn't happen -- [applause] it will fade. >> the other thing we will say here is let's remember, rahm is not the president. what does the president say -- >> does he know that? >> of course, yeah. >> and i want to actually move -- i'm going to ask a question of -- after -- about the post enactment process. but those people after that -- after folks respond to that question, we're going to open this up. so we've got two microphones so why don't you start lining up and i'm foge to -- going to ask the last question preceding that. but actually, i won't actually respond to this dialogue that just went forward. because i think there's several things here. for many weeks, this is well before massachusetts, the president and the white house

when they were gearing up for the state of the union message, they had a very different assumption about what they would face at the state of the union message. they were looking to come into the -- the president to come in triumphantly, health reform would be passed, and the conversation would be moved to jobs. and the white house for months, not the last week, for months, has been thinking about this major jobs initiative. they want to focus on jobs. they wanted to focus on the budget. and so it's not surprising that that's what the state of the union message was mostly about. that was not a change as a result of massachusetts. so number one, those -- those folks who commented that health reform was not in the speech until half an hour, that was not because of massachusetts. that was long determined way

ahead of time. and indeed, that the white house had not scheduled a state of the union message for quite some time. i remember asking jim musina, deputy chief of staff, when are you going to schedule the state of the union message? and the answer was always, you know, tell me the schedule on health care reform. and as it became clear that that was not going to move quite as quickly, they had to move forward with the state of the union message and that state of the union message, the key element of that had been crafted long ago. maybe the exact wording was changed. but was crafted long ago. so i wouldn't make anything of that. jonathan, you wrote months ago about the internal match nakeses -- machinations within the white house when a determination was ultimately made that health reform would be the top domestic priority. whether it be included in the budget. and the white house was divided.

and i think the white house on tuesday night after the massachusetts election was divided. but i will tell you my view is éhere is no division in the white house at this moment about passing health reform. you know, things in the white house, when staff gets together, they may have their own internal vote. but there's only one vote that counts. and that's the president. and he really is determined to get this done. i don't think -- whatever ambiguity there was tuesday night, and wednesday, and maybe even running into thursday, and rahm was looking at small ball options to be sure, i don't think there's any ambiguity in the white house today. so i'm going to ask one last question and keep on lining up and then we'll open it up. so the health reform process in congress comes to an end. we pass the legislation. what is our main job looking forward and i'm going to ask you that, both from a political

perspective and from a substantive perspective, what is it that all of us should be thinking about are the krill cal things that need to happen -- are the critical things that need to happen after the legislation gets enacted into law? if anyone wants to take a first crack at that. >> shoring up public support. explaining to people what's in this. especially highlighting the things that happen fast. the fair number of things that -- that are supposed to happen in the first year. and the more those things happen, and get highlighted, for example, preexisting condition restrictions not being held against kids. those kinds of things. that is going to be very important. so shoring up the public support. secondly, making sure they don't repeal the damn thing. and any of you in t$e audience who lived through catastrophic coverage in the 1980's know that this is potentially a real threat. and again, you have a very

similar dynamic at play. you had a big bill that got passed. people didn't fully understand it. and then a bunch of people suddenly woke up to the fact that they were going to be taxed at a higher rate for the provision and the whole thing came apart. basically within the space of about six weeks. intensive -- there was a longer lag between the passage of the bill and the repeal. but the real opposition to it jelled within a period of about six weeks. and then it was gone. and that is a real possibility. particularly -- we don't know what the outcome is of november. we presume the democrats will hold the house. but we don't know that. right? so making sure that it is not repealed will be step number two. number three is the implementation of all the rest of it. and this is going to be a long, hard slog. particularly if the senate

version ultimately prevails and most of this is done around the states. and just sort of working at the state level to make sure that the pieces of this that will be in the hands of the states are implemented. and i think there's going to be an extremely important role for advocates there, both in helping them to decide how this plays out but also to retain a sense of momentum at the state level to get this structure put in place. . no carr0

>> for people who want to see action on america's problems, the first thing is it is a process. i think -- if you look at an alcoholic, he may be facing cirrhosis of the liver, losing his job his family is in debt, but that is not his biggest problem. it is his first problem. you have to solve that problem

before you can save any others -- salt in the others. people will have to start thinking more about that long term problem. >> i agree with everything that has been said here. the implementation has been made here. there is a lot of work that needs to be done. the difference between a well- implemented bill and a poorly- implemented bill is huge. in terms of politics and policy, i am a big believer in intangibles. everybody gets the training. -- everybody gets a train to ride on. i think the things in this bill

that are tangible -- some kind of universal labeling on insurance. things like that. having and a website that people can look up things. this should not be something abstract years from now. this is a political thing, but it is important. it speaks to the process problem. if this bill passes, people who supported it should start supporting the people that voted for it. you want congress to understand that when they vote for something and it may be a hard vote, they better feel rewarded for that. there is going to be a fury

coming down on them in november. get out there and say this congressman voted for this bill. i think that is so important. in january, this will pass and people may not be happy that there is no public plan. at the end of the day, these people are going to get a fury from the right. if the answer on the left is it could have been better, no one is going to vote for these things any more. and you will not be able to fix it. [laughter] [applause] >> i want to add one thing to it and then open it up for questions. in addition to the political work that is done, there is one area that i think all of us will need to rise to the challenge. under the house and senate bills the 37 million people that

will be eligible for new coverage -- eligibility standards are going to change enormously with respect to medicaid in ways that are truly unprecedented. you will have millions of people who are going to be eligible for subsidies. we have to make sure that all of the people eligible for medicaid safety net and for these subsidies actually get enrolled, stay enrolled. we have to make sure the systems are put in place said these are enrollment-brimley systems. that is all our challenge. -- enrollment-friendly systems. that is all our challenge. i do not want to break presidents. we do these teleconferences roughly every two weeks. we get the questions on our computer screen.

people lined up. tony always gets the first question. you go first. >> is this on? we have four blue dog democrats in tennessee. only one of them voted for the house bill the first time. two of the others are retiring. one of those basically said when we ask him directly to support and pass the senate bill, the response is i always like the senate bill better than the house bill. this is a blue dog democrat that would not vote for it but it's likely to vote for the senate bill. maybe we picked up a vote. his response was which you please some people in my area

that have insurance to call up and support this? they want to hear from people that have interest and support the plan. these are from some blue dog democrats. >> does anyone want to respond? >> i think that underlines the point we have been making. political support in november. >> i will keep on switching the microphones. >> good morning. i am from new hampshire. i want to get some feedback from a session i attended yesterday when we were talking about what to do when we go home and what message to give. somebody said we should be focusing on the cost of not passing this legislation when we go home. that resonated with me because i think a lot of people, because of the lack of transparency and the way insurance companies

handle the money changing, we do not have a really good idea of what some of these issues are. and not are saying, what is in these bills? what is the real cost of not passing the legislation? i hope those in the media will consider that and comment on that or do some writing on that. >> you can see it in the scoring of the cbo. millions did not have health insurance in a matter of years. we anticipate certain things happening with respect to the fiscal sustainability of the program. if you want to live in a country where it that if people do not have health insurance. it gets more expensive and it is difficult for people who have it to afford it. employers will continue to drop it particularly in the small

business community. on top of that, it costs a lot of money. we tied a future generation to a level to having to sustain u.s. debt to the degree that no other generation has been compelled to do that. i know there are still a lot of people that still hate the senate bill. and want to go with a refrain from the '60s, if you cannot be with the one you love, love the one you are with. [applause] look at the arc of history on this. can anybody remember what the political dynamic was in the months leading up to the passage of medicare? nil. can anybody remember with

medicare coverage in 1966 and how it is different from today? no. get something on the books. fix it overturned. love the one you are with. -- fix its overtime. love the one you are with. >> i am a primary-care doctor in los angeles. my question is -- i wanted to respond to some important points that resonated with me particularly in my practice at the community health center. you mentioned how congressmen and gentlemen have to go through the stages of grief and a mile. i want to say how we have to model that and then forced this change. we need to move past that time of indignation, because that is

not what my patients need. what i have been doing is to sit there are some concrete things to celebrate in this bill. this bill will change the lives of my patients. what role do you see providers planning -- playing? we want to celebrate these things and move past the brief and talk about what really matters. >> you are from south central? >> st. john's. >> there are a lot of great community clinics associations in l.a. i think providers are incredibly

important and somewhat under appreciated by some that are promoting these bills. the single biggest way -- you are a provider, you talk to people you see. your patients have a better understanding than those in a middle-class suburban office. even so, telling people that you see every day -- it makes a difference. i also think people trust doctors, nurses, health care professionals. they will be looking to providers. whether that is as an individual or a group, you are involved locally. calling members of congress, talking to them as an organization -- the want to hear from people with insurance.

most of the uninsured -- maybe you think that does not make you very good. providers will resonate in a congressional office. they may have some clout in the community and may have some money to give me. that makes a difference. talking about what is good in this makes sense. >> it is one thing we are trying to do which i would like to talk about it on about which isñi the role providers complain not just for policymakers but bringing voter registration services directly to health care centers in a non-partisan way. we have an effort for we are doing just that. there are creative ways in which health-care can play a role. [applause] i think we have to think

creatively and have providers come to the table and say what do we need to do to get the votes in party and their support. we may have to bring ourselves to the political sphere in a way that is smart and savvy. >> next question. >> i am a primary-care physician and the executive director of doctors for america. many have been looking to the president for leadership. i want to get your take on his address to the gop retreat yesterday and his interaction with tom price, also a physician and some of their discussion? is it going to change? talk about his commitment to health reform. >> i think that was the most compelling political television

i have watched ever. it is fascinating because there is serious disagreement. obama would have gone down to the retreat and people would say we would like to work together. everybody would have gone home and clapped and went back to what the retooling. it did not happen. obama went down there and we have will talk. he said no, that is incorrect. your bill does not do what you say it does. your claims of tort reform is. to hold down spending. it was delivered pretty much in those words. it was fascinating.

if they do not work with us, we are going to highlight that we are reaching out and really attempt to shine a light on their obstruction. they have been doing that then you're pull -- your poll numbers like this. if they keep this up, they will not win an election. it was the first time where you say, maybe they actually have a plan. putting a camera with him in house gop and letting him sell these bills. what we saw there is that people watched it. when price cut of -- got up for others -- or others, went a couple of proposals are put in a room together and somebody is at a microphone talking about it,

you can explain the differences in one and the other. it was the first time the american people said we are watching. it was nice to see somebody saying there are real differences here. i thought that was very powerful. it was a very powerful event. >> there should be more of it. what was incredible was that after the election of scott brown, the people of massachusetts like the health reform. we just feel that we have already paid for them and we do not have to pay any more towards national reform. where were the people saying, hello, the u.s. taxpayer that throws more than 3 billion in that reform for medicaid. we enabled massachusetts to do

that. we are happy that massachusetts is on its way to universal coverage. now we wanted for the rest of us. calling out people who say these things -- maybe some of them really believe they just do not know the facts. let us not let them get away with it. correct the record every step of the way. >> we have time for a couple of questions. then we will talk to one of our board members. >> you have done such a good job of bringing these people here. i want to return to the diversity of opinions on the

stage about what did rahm emanuel say in what it means and are we going to have a couple of weeks we talk about jobs or several months. if there has been a fight in the white house about whether to move forward on health care, at this point, rahm emanuel is losing. second, while we may need to push back, inside baseball, this is one of those process stories that has alienated a lot of the public from broader health reform efforts. it did not get past process to look at what was in the bills. i challenge all of the advocates of the organizers, including the journalists to talk about lessons about what one person said and another person said in more about what

is in the bills and what it means in this particular community. >> thanks. >> i am from st. louis, missouri. thank you for sharing with us. my concern with health care reform and other legislation is what someone calls a speedy process. there is an open, transparent government and how do you balance that to insure a sense of trust. they are not all idiots on capitol hill. we can get something done. i am afraid that speedy process for set out of balance. can you address have that trust in government combined with our

message of reform? >> this is a very hard thing for people to balance. you saw it with obama who made this pledge that everything is going to be open to c-span. but of course not, everything is not one to be open to c-span. there is a reason why my fights with my girlfriend is not open to c-span. [laughter] if you open it to c-span, you have a meeting and then a back room meeting where people make decisions. if we put the age ban two-one, young people will get screwed year. but if -- these are hard trade- offs. the way the media works -- obama challenges republicans to provide answers. the whole point is to get out of that one line sound bite.

it is very hard to say what i am about to say from the view of a politician. transparency is a way people on the other side of the debate deal with issues. there is something called transparency that you can help people's understanding of it. when the senate releases a bill, it is called the chairman's mark. it is in english. people who can read a novel can read that bill. and to get an idea of what is going on. i ensure all of your legislative people are ecstatic when there is a chairman's mark up.

real transparency would be saying everybody has to release a chairman's mark. that would really change the way people can assess what is going on. there is also this type of transparency -- you need cameras everywhere you are at or spend eight months negotiating a bill. the gang of six process -- people equate transparency with bipartisanship. it is complicated. there are places where you can make real gains to help people understand all of the process. there are places where people are scoring points or what could tv. it is very hard.

public trust in the process is the ultimate goal. the american people would be much happier with a system in which things moved fairly quickly and things were getting done then a system where transparency gives them a good look. we all trapped in the sausage factory trying to get out. nothing gets done and we get upset. we say we want more transparency. >> i am going to reward your persistence. you get the last question. >> i am with the center for medicare advocacy. i was chatting with a woman on the train platform and told her

of is going to this health advocate conference. we were talking about health reform. we got on the train in parted ways. then she walked up and found me, gave me her car and tell me what the talking points are that you learn from this conference to tell my members of congress. i am asking you what are the three bullet points that detail everyone to say when we call our congressional delegation? >> will want to take the first crack? >> the richest country in the world and the leading country that does not guarantee basic health coverage for every citizen. how can we leave this legacy to future generations? this country not to the standing the fact that it does not guarantee coverage still covers

a lot of people and spend a hell of a lot of money on health care. it is unsustainable. if you look at the long-term picture over the next 75 years, 119% in gdp could go into health care. we still would not cover everybody unless we have certain laws. let us go back to some of the basic values of american life. ñri mean pre-colonialism. eight americans had the notion of doing something in thinking about the ramifications to the seventh generation. let us think about the first generation all the way up to the seventh generation. do we want to leave them as a society -- we spend as much as we do on health care. we break the backs of future generations and not everybody reaps the benefits.

there is an increasingly shrinking pool of people. these to me are the talking points. get it done. >> it was really out last weekend so you cannot hear what everyone was saying at a bar mitzvah last weekend. people were asking me whatñiñi s health care bill is going to do. here are my three sentences. everybody can get insurance. the insurance israel. over time -- the insurance is real. over time it will get less expensive. i feel like anybody can grasp those. >> if i were calling a congressional office i would say to them, talk to them and if you

do not, i will not vote for you. [applause] i am not mad at you. i cannot reward this. i cannot donate to you or vote for you. future congresses, we need to punish this behavior. there are scared people. they are more scared about if they do not vote for it than if they did. >> we have to make sure people understand what the cost of doing nothing. what is going to happen to the

additional people who are going to join the ranks of the uninsured? what is going to happen to small businesses that cannot afford coverage? what is going to happen to seniors as the doughnut hole gets larger and larger? as you look at those things and you consider your audience, you can contrast that with what is in the bill. i think you can make a powerful statement. i want to take three remarkable people. [applause] >> and we want to thank our remarkable moderator. [applause] >> thank you all. we go to our workshops next.

we have a wonderful clothes and lunch. thank you all. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> still to come tonight, remarks from the ceo and his agency on making home ownership more affordable. and after that, sandra day o'connor. and later, a weekly address is with president obama and susan collins. tomorrow on newsmaker, a senator, chair of the policy committee for the democrats talks about if the president

made a mistake on putting health care as such a high place on his agenda this past year. >> the president made that his signature legislative push in 2009. do you think he made a mistake? >> i did. that's because health care is not important, i just think the timing is not good. that was a high goal to try to reach during a difficult time. i would have said, let us work exclusively and starting the economic engine once again and putting people back to work. the president would say he was working on that as well. i would have saved a health care for later. the president won the election. i did not. you cannot fix the economy without fixing health care. this is some truth to that. it is very difficult to find a menu of health care changes that

can be enacted and signed into law. >> you can see the entire interview on "newsmakers" tomorrow at 10:00 a.m. eastern on c-span. >> american jazz spreads goodwill overseas. >> i think so. it is like a religion. >> he was without question the single most important figure in jazz in the 20th century. >> "q&a" sunday and a documentary on louis armstrong. >> remarks now from freddie mac ceo on his agency's initiative on making home ownership affordable. he says the whole -- the housing crisis appears to have bottomed out.

it is hosted by the detroit economic club. this is about 50 minutes. >> before joining, he served as chairman and was chief executive officer from 2003 that to estimate. as ceo of putnam, he was charged with three organizing business and improving business policies in compliance following a series of probes into the industry's business practices.

cf a magazine named him one of the most influential institute members in december to a dozen sex. it was setting his personal commitments, his work to restore certain assets of its to increase trust in the firm. he served as chairman and ceo of delaware investment. s president and ceo of united asset management corp.. he earned his mba from harvard business school. he turned his j.d. from harvard law school. he graduated summa cum laude from dartmouth college with a degree in economics. he currently serves as chairman

for dartmouth college and is on the business school of hard red and vices. faith in a warm welcome -- ladies and gentlemen, please give a warm welcome to him. [applause] >> thank you. i am not from detroit, but i feel like i have things in common with. why corruption philadelphia, helping us run our family business. it is like the automobile dealers. have had some experience with the ups and downs of the automobile business. when an automobile dealer closed up and went out of business, our

families often suffered as well. it was because of an unsafe building had to be written off. over the years, i remember watching the 76 and the pistons make -- play a great basketball game. many of you watched the same games. you can imagine what a thrill it was for me this morning to meet with your new mayor. i actually got a signed basketball. i have been here at freddie mac for about six months. i took the job because i wanted to motivate our talented workforce. i wanted to help reshape and strengthen the company for a successful future. most of all, i believe in the public purpose of the company of supporting housing in our

nation. despite our being in a conservatorship, and in some ways because of its, freddie mac him play a vital role in helping our nation recover from the economic and foreclosure crisis. there is a great deal we are doing to help the country, the housing sector, and america's families. i want to help them do all they can for this important mission. the choice is a fitting place to discuss the housing crisis and our nation's response to it. i cannot think of a major city that has been more hard hit in this crisis or one whose people are more resilient in the face of it. i would like to take about -- talk about three main things

today. first, our nation is working through the most severe housing correction since the great depression. i want to focus on the implications of the foreclosure crisis nationally and here in michigan. in looking at housing in the broader economy, i will look at the challenges and opportunities for recovery. second, i will cover the top priorities our regulator has identified for freddie mac. i will discuss our work efforts to make the program making home affordable successful. i will survey some of the many other events we do to provide stability, liquidity, and affordability to the housing finance system. finally, i will conclude with a few brief thoughts on the nature of our housing finance system

and the kinds of secondary mortgage market we need going forward. let me start with the view of the foreclosure crisis and then speak to some macro economic issues as well. for many years with manufacturing in decline, sub- prime billing once the rates in michigan were among the highest in our nation. at the start of 2005, michigan's serious dilemma was the rate for sub-prime loans was 50% higher than the national average. these rate rose rapidly ending the third quarter of 2009 28.9%. today, you have plenty of company. nationally, the sub-prime and delinquency rate rose even

faster. stands at 28.7%, is essentially the same as yours. michigan's serious delinquency rate among prime loans is also very close to the national average at 6.9% versus 6.3% for the nation. these numbers are painful. that is why the signs of improvement we are seeing now are some encouraging. nationally, the macro economic data seems to indicate we are in transition to a recovery. the best estimate is at the rate of growth this year would be modest following such a severe recession may be 3.5%. the recovery will be sustained over time some main factors

support this in my view. the recovery is supported by the fiscal stimulus of last year. only half of which has been spent or obligated. the fed is keeping interest rates at record lows. that is also helping private sectors. in housing, we are seeing signs of stabilization as well. the numbers will always bounce around. from home sales to house prices, nationally, we may be approaching a bottom at last. the big downside risk to all of this is a long wave of homes fell in foreclosure potentially hitting the market at prices that are destructive. upside factors is the tax credits for home purchases that were extended through april 30. it really hail -- helps that mortgage rates are low. we expect the 30-year fixed rate

to remain between 5 and 6% throughout 2010. even the high end of that range is historically a very low rate. you may be asking yourself a couple of questions. what about employment and what about detroit? employment is typically a lagging indicator in a recovery. we do not expect the national unemployment rate to decline until the second quarter of this year. as for detroit, the unimplemented rate of 15.8% is more than five percentage points above the national average. i would point out however that other great cities have faced similar challenges successfully. pittsburg went from being world leader in film production to

economic wasteland when that industry collapsed. pittsburg's rebirth has been based on diversified employment in such fields as education and health care. their largest manufacturing firm is no longer one of the city's top 10 employers. the city's unemployment rate is well below the national average. in pittsburgh, they helped spur innovation and economic growth. here at wayne state university and the university of michigan have played similar roles.

a recent poll shows that despite their acute awareness of the region's problems, 63% of respondents are optimistic about the future of the detroit area. that does not strike me as optimism. the people of detroit now -- no that with patience and determination, this can be a vibrant economic center once again. it takes some time, but it has been done before and it can be done again. we are trying to attract employers. i will bet on the people of detroit. let me now turn into freddie mac.

let me turn to the broad priorities as identified by our regulator and conservator. the federal housing finance agency has described the three main duties of the government sponsored entities as follows. we are to provide ongoing support to the housing market. the mediates witnesses in our company. -- we mediaremediate witnesses r company. we are to prevent avoidable foreclosures. first, i will describe our

stable, ongoing support to the housing market which includes a large part of our every day mission. with the market's still see step, we continue to provide funding for mortgages every day in all geographic markets. we funded almost three- quarters, 72% of all mortgage loans originated last year. gst, 72% last year. we have done this at a time when most other sources of liquidity have dried up. even when private label investors abandoned the market, freddie mac continued to serve our mission on behalf of homeowners and renters across the nation. in this kind of an environment, our cost of c and stability is very valuable.

as the head secretary testified before congress in october, we cannot lose sight of the important role that the tse's are playing today in the recovery of the market. without them, they would not be mortgage capital available and it would not be available at the rates that have been available. last year, freddie mac provided liquidity for nearly $550 billion in home loans. by purchasing or guaranteeing over half a trillion dollars in mortgages or mortgage securities, we helped to 0.2 million borrowers and another 350,000 of renters. compare all of this to the year 2006 when private institutions

provided over 60% of the liquidity. we stay in this market in good times and bad. the history shows private lenders to abandon house and when the going gets tough. we also look at the matters that are safe and affordable. freddie mac owns almost a quarter of the mortgages in the united states less -- get the account for less than 10% of the seriously delinquent mortgages. we own 25%, of which account for less than 10%. by contrast, private label securities represent only 12%

of first mortgages outstanding, but they account for one-third of all seriously delinquent loans. when you ask people what fraction they are seriously delinquent, the estimates usually start in go up from there. less than one than 25 of our loans are seriously delinquent. this record puts us among the very best in the industry. freddie mac is devoting tremendous energy and resources to the task of preventing preventable foreclosures. this is a new focus for us. we are a longtime leader and innovator in helping families hold onto their homes.

for the past five years, we have worked to help half a million seriously delinquent borrowers avoid foreclosure. for some home owners, we modified the original terms of the loan to make it more affordable. to others, we offered forbearance, and agreement that temporarily suspend or lowest payments after a job loss, health issue, or other major event. we also have repayment plans that had passed to amounts to monthly payments to bring homeowners coverage over time. in the first three quarters of 2009 alone, using methods like these that freddie mac helped pioneer could help nearly 100,000 struggling far worse avoid foreclosures.

nonetheless, with over 4.5 million families on the brink of losing their home, there is a historic need for a national effort to address these precent -- pressing issues. we are striving to do our part in that effort. i want to talk about foreclosure but not exclusively escalates to making the home affordable program. mha is the anti foreclosure and refinance program from the obama administration. we are presently focusing most of our home ownership preservation work there. it consists of a couple of main parts. a refinance program and a loan modification program. i will discuss both. over the past year, ours have

flocked to take advantage of low interest rates and refinanced their home loans. before mha it was difficult for borrowers to qualify for refinancing if they owed more than 80% of their home's value. however program -- they wanted to take advantage of the low interest rates available today. the loan to value ratio can be as high as 125%. the program has made a real

difference. through the end of last year, we had refinanced loans for almost 170,000 families through this program. families often see their interest payments trot by thousands of dollars per year. together with our longstanding program, refinance about three had a $79 billion in home loans in the year 2009. this created an estimated $4.5 billion in annual aggregate interest savings for more than 1.7 families -- 1.7 million families. the second piece of this program is called home affordable modification program. this part is designed to modify existing mortgages so they are

more sustainable for the long term. through the end of last year, we had initiated nearly 143,000 trial modifications. borrowers are saving an average of $600 per month. now it may be small compared to the nation's needs. the universe of @ risk borrowers we can help is less than one- tenth of the total. that is the fraction of seriously delinquent loans held by freddie mac. moreover, for a third of the homes on which freddie mac would like to arrange a modification are empty.

it is hard to work out a loan modification when nobody is home. if modifying these loans racine, this program will not be needed. we are challenged -- we are committed to supporting this program of the president. to be even more proactive, we have rolled out additional initiatives and began to invest $25 million in new strategies and products. this initial investment will allow us to see what works best. we are helping tens of thousands of families at the same time. for those of us working to help families save their homes, there is nothing more frustrating

than an avoidable foreclosure. when there are so many options available to home owners, but they often do not know what to do or who to believe, who to trust. when borrowers actually work one-on-one with a trusted housing counselor, they are far more likely to take the steps to save their home. for anti foreclosure team has been reaching out in unprecedented ways for at risk far worse. for example, we hired titanium solution, a national expert in contacting in counseling homeowners to go to the homes of borrowers, and explain, what will happen if they do not take action. when needed, they returned.

the homeowners fill out the required documents. to reach even more the lynwood borrowers, our foreclosure prevention experts have teamed up with our team to pilot creative efforts. let me tell you about one we are announcing this week. it is a health network. we are reaching out to those that have been confused by the mortgage modification process. this net worth using several of the nation's most trusted non- profit organizations to give these borrowers confidential, personalized, holistic financial counseling over the phone and help them work through the different options for or

boarding foreclosure. holistic counseling address is credit cards and other debts, not just mortgage debt in isolation. this can substantially improve the odds of a borrower to avoid foreclosure. here in detroit, freddie mac has a network that includes southwest housing solutions. it is an outstanding organization that is already working with over 2400 distressed detroit borrowers and successfully helps near the 1400 of them. the health network is national in scope. by working within national urban league, the national council and

other established non-profit organizations, our goal is to make the same counseling available to thousands of freddie mac borrowers across the country. in addition, we will deliver these same kinds of counseling services through regional bar or health centers. we are announcing a were first pilot centers this week in chicago, washington, d.c., phoenix, and the inland empire in california. the scale and scope of this pilot initiative is unprecedented for freddie mac. if it is successful, we hope to replicate it in other cities. all of these ambitious, aggressive efforts are directed as a difficult task to help more borrowers modify their loans and save their homes.