curve, those will be the businesses that stand to gain as the nation changes in its food supply in the 21st century. host: let's get one more call from louisville, ky. caller: in schools and any place as far as our tax dollars are going, there should be control over what the food supply is. and it needs to be nutritious. but you cannot really control a person's behavior when they have a choice. in other words, when they send their child to school with their lunch, they can choose to put in their lunch what they want. i worked in schools for 20 years and i saw the things that people were using their food stamps for and they were choosing soft drinks, candy, cookies. the government assist them too

big for nutrition, -- nutritious foods, but they chose to do otherwise. and even on the infant and women program, does not tell them exactly what they have to purchase with that. many times when they were supposed to be purchasing one of% for jews, they would bring up these high for those things that have artificial sweeteners in them. they would try to bring up these the sweetened cereals that were not on the list. no matter how much money you spend, ultimately, you cannot control a person's behavior. they have to make their decisions. guest: i would agree and reemphasize that over the last three decades, things change that we did not recognize how damaging and how much a place our children at risk. the food change, the cafeteria's changed and we did not intentionally get to where we

are today. it will have to intentionally and do what we -- where we are today. i think our food stamp program is another program that we need to reexamine to build incentives into reinforce and support l.t. behavior's. this will be an opportunity to have democrats a a and republicans to come together. we all want good things for our children and this is a risk that we share. host: dr. thompson works for the sitter to prevent job of obesity. he is also the surgeon general of arkansas. thanks for being with us. that will about doing for washing -- "washington journal" this morning. we will be back at 7:00 a.m. eastern tomorrow. . .

capitol hill. here's the scene on capitol hill were copies have arrived. ççóç>> good morning.

>> good morning. ç>> go ahead.

[cameras flash]

>> the federal budget being delivered this morning and send to the budget committee. we have a number of related events. president obama will speak on this proposal. we will have that live for you here on c-span. the budget targets several areas. it freezes spending for a large number of government programs. increases funding for jobs creation. it puts more money into infrastructure. it would be a three-year freeze

on a variety of programs. expiration of bush administration tax cuts. it will support job creation and promotion of energy and infrastructure projects. reactions scheduled throughout the day. peter orszag will kick things off at 11:30 this morning. that will be live here as well. the pentagon will talk about their share of the proposal with robert gates and the chair of the joint chiefs of staff. a briefing at 1:00 p.m. eastern. there will be followed by representatives from each of the military branches. the state department will briefed on budget numbers. you can see that on c-span-3. we spoke earlier with a reporter.

host: just sort of briefly for us lay out what is ahead. guest: the budget will hit capitol hill. to start with, the president is trying to walk a fine wine. it is a tricky balancing act of creating jobs and addressing concerns about the deficit. it will include a lot of job creation measures including tax incentives to hire new employees. it is aimed at spurring job growth. host: what is the most surprising element in the budget for you? guest: what we have seen that

the president laid out the elements last week in the state of the deegan. the biggest most controversial piece maybe the discretionary spending. it is in historical perspective not that big of a deal. he wants to freeze spending in the budget. it will force the democrats to make hard decisions about what wins and loses. if you freeze domestic spending but you want to increase infrastructure spending, that means various programs will have to take a hit. host: where's the money coming from? guest: the president wants to extend the 2001 tax cuts for middle class families. but the tax-cut expire for the two top tax rates.

that is something republicans have been against from the start. the democrats sat it is key. much of the heavy lifting is not done in this budget proposal. the white house is leaning on this debt commission president said he would create in order to force a reduction on spending next year. that is what they are looking to to produce the deficit. host: that commission would have to wait well towards near the end of the year. guest: exactly. we may not see a movement on a lot of those pieces through the end of the year. some wonder if the democrats will even move a tax bill before the election. host: we are covering budget releases today. give us a viewer guide on what you think will be the most interesting piece to watch, the

defense budget at the white house, state department. guest: omb when peter orszag tells folks exactly how it is supposed to work in terms of deficit reduction later today. you will also be seeing -- he said yesterday that the white house will be voting on about 100,000 spending programs of that can be streamlined. a fincas where you will see some interesting news -- i think that is where you'll sat some interesting things. host: thank you for joining us. >> the president will speak at 10:45 eastern. earlier today we took your calls on the federal budget. host: north carolina.

barry. caller:ç if done properly, if none of the specialç interestsç can -- host: go ahead. caller: i am sorry. let's not give away. i do not want to do that either. what we have to do is figure out who needs it so we cannot be giving it to all the corporate people. we cannot give it to all the people on programs and stuff. host: new york. çamy. good morning. you are on the air. qcaller: ok. yes. i would like to know the spending freeze what cuts are

coming. it seems like anything is cut with anything that has to do with the welfare of people or humanitarian or expansion of jobs. the defense department is never discussed, never getting cut back from even line item budget checks on them. if we were to cut back some of this money that is being spent on defense, we could, you know, it would -- we -- host: thank you forç your comments. here is the headline from "usa today." a record $3.8 trillion. the deficit would stay above the trillion dollars mark.

the bushç tax cuts would end fr household earning above $250,000. businesses would get a tax cut for creating jobs. spending cuts. a freeze on domestic spending would save $250 billion over 10 years. war spending would go up this year. michigan. randy. go ahead. caller: i would like to thank you for c-span. i appreciate it. it is a good show. i think a spending freeze will hurtç at this time with the economy. i think we should jump off a cliff -- do i think we should spend everything we have? no. to make your budget look better, take both wars and medicare off the books. there is a whole lot more money opened up. let's get honest about the

budget. it is a fact that it looks bad because he brought sunlight to some of the costs the previous administration kept in the dark. that is my thought. i thank you very much. host: new york on the independents line. caller: too much money, way too much money. he raised the money is so high with the stimulus. last year the put some much money into the budget. it is like -- it was talked about last week in a column. they raise spending up to % and then put the spending freeze in. -- up to 40%. it is a ridiculous thing.

he should put the freeze in. fire a couple hundred thousand workers. the government needs to wind down and not get bigger. host: thank you, mario. host: that is the place to start. dan in kansas city. caller: i agree with the last caller. there is nothing else really to sat. the only thing that is authorized by the constitution is the military. that is the only thing that is authorized. that is the reason we have a budget for the military. host: thank you for your call. "defense noosed."

-- "defense news." the budget proposal will seek nearly $11 billion for the f-35 joint strike fighter, according to a draft overview. we will cover the defense briefing on their budget coming up this afternoon at 1:00 eastern here on c-span with secretary gates and amro michael mullen. good morning. it is dennis. go ahead. caller: we have a bad situation here. since 1970, we have $one trilli1 trillion in corporate

bailouts. we have tax breaks and exemptions, the subsidies, insurance rates. the list is endless. that is less money coming into the government. we have two wars going on simultaneously that their funding in the trillions. on top of all of this, we have massive unemployment permanently unemployed people that will never get their jobs back. we have corporations that are leaving by the hundreds every year to go to china, central america, south america. that is less money coming into the government. we have the corpse federer practically operating tax-free over in china -- we have the corpsçporations practically

operating tax free. he is spending more money to prop up this economy. as more money goes out, no money is coming in. not as much money coming in through workers paying taxes. it gets the government deeper into debt. this is not an economic problem. this is turning into a problem of capitalism. the system is failing. if it triesç unregulated capitalism, it is the corp orations running amuck. it will put the government into that. we have a serious problem here. host: thank you for the impact on maps -- thank you for the

input on that. this is "the washington post." i will read some from this article. the white house expects the gap to approach their record $1.6 trillion. ohio. independent line. good morning. caller: i do not believe it will hurt or help because it will be a small amounts. i think the president is the ceo of the united states. it makes a big impression on people if they would take a 10% cut from the president down to the low-paying government jobs. i thank you very much.

host: detroit next up, republican caller. caller: i wish they would address the cost overruns. these people take out contracts and then they run billions over. they expect them to pick it up. i am military. where are the nuclear weapons? is and that in the energy department bill -- isn't that in the energy department built? they're wasting so much. thank you. host: thank you. here's more from inside "defense news." helicopter manufacturers look to be in good shape for 2011. they talk about the public of what the pentagon will be concurrent with today's release of the budget. the pentagon will unveil their defense review which lays out the strategyç for the pentagon

for the next four years. the focus of the budget will call for, $6.3 billion for special operations, ma'am. they would buy new gear and isr assets to improve existing ones. dod plans to call for special operations forces to continue over the next several years. it will also propose adding 2000 new special ops personnel. that is from "defense news." the spending freeze -- will help or hurt the economy? we will be taking your calls. north carolina. this is a bill. caller: good morning. i cannot believe it.

china must be -- we are spending three under billion dollars a year on twoç wars on people tht do not have nothing in common. trying to rebuild these nations and roadways. when it comes to $100 billion a year in health care, we cannot do that. the first thing we should do is get out of these wars. it is not doing any good. i think that is why the people are disappointed with obama. we couldn't get out of -- we understand the military complex is very powerful. something needs to be done about it. the american people need to come together. i have a suggestion if you'll let me sat one thing. host: go ahead.

caller: ok. you can critique me. host: just keep it brief, bill. caller: thank you. the american people need to come together. early voting. if -- we know who all the voters are. if people understand and vote the incumbents out, you get 80% of the people saying yes. once they sign the contract, all we have to do is make sure we get 80%. once we get 80%, we know what the election will be. as long as people are in there, they sell out to special interests and different nations. we will not get nothing done. it takes too long to get them out. you can only vote every other year. it will take forever.

host: thank you for checking in. keeping it focused on the budget this segment. what may be ahead for the president on capitol hill. the budget may be a tough sell with democrats. he has been doing what george bush wouldshave done. john connors has been critical -- john conyers has been critical. marcy ckaptur has been critical and did a double take. caller: thank you. i'm not thinking you for "washington journal." it is so partisan. regarding the budget, at least we're doingç something. during the bush administration,

we heard almost nothing about the budget. he raised the debt ceiling and twice. he has his finger on the button. i am not a republican. i do remember when dick cheney mentioned the deficit was no big deal, so to speak. the producer said c-span have become the place of record for- is some. it is depressing. i have been listening to c-span for years. -- is becoming the place of record for negativism. now people can call end and put everybody down, all the congress people, everything it is just so horrible. i just wanted to remind people you have people calling in

skewing a lot of hate about the budget. if the president offered $1 million to more, somebody would complain. one important thing i wanted to sat. host: we appreciate your views and we do try to show all views and all newspapers. this is for the nation, a pretty major start with the release of the budget. we generally cover it every year and trying to give a look from all sides. we thank you for calling. here is "the wall street journal." "deficit to hit all-time high." next to pontiac, michigan. caller: i am for freezing the federal budget and reducing it.

you had a previous caller that was talking about pay cuts. there was a report today that the eu was going to force pay cuts on greece. we are not far down on that west along with greece with our debt rating to be reduced. the average pay is $73,000 without benefits. it's 40% higher than the average american. where are they going to go for a job? give them a payç cut and weaked balance the budget a lot easier that way. host: here is the story of the viewer was talking about. they talk about a freeze thr budget. paris pledges public spending curbs. that is in "the financial times

." they will tackle the crippling budget deficit, including a pledge to cut the total spending to less than 1% a year from 20 level. that is from thisçó morningç reporting on the budget issues in france. democrats line. good morning to build. -- good morning to bill. caller: it is nothing but a camouflage for gunrunners and gun producers, web producers. that is the biggest corporations in the world is pushing guns. -- weapons producers. independence said on defense. host: thank you for your call. this is "the washington post." "sunsets on nasa moon missions."

an ambitious new chapter in space exploration is about to vanish with hardly a whimper. ççnasa will finally get the marching orders and the one not be anything in there about flying to the moon. theç budget numbers will show e administration plans to kill the constellation program that called for a return to the moon by 2020. in michigan, this is george on our republican line. caller: this has been the biggest spending spree in american history. we had a seventh injured $83 billion stimulus plan. -- we had $783 okbillion stimuls plan.

it-non-defense discretionary spending another call% in fiscal year 2010. to freeze that and means nothing. consider this. george bush in his eight years brought the national debt from $3 trillion to $7 join in. obama will double it in five years and triple it in 10 years. look at the strategy and ask yourself why obama will not release any of this thesis or college ridings. he is trying to create a fiscal crisis in this country. çç-- he will not release his college right thing -- writings. caller: i think the caller's --

they have increased the budget, which they had to do. he is finding hard ways to stop the spending. he put a freezew3 on it. unfortunately, he had to raise its last year. at this point, he has his hands tied with the war. he probably wants to get out of there unless he found intelligence that said he should not get outç of there. his plan was to leave, so his hands are tied on up. domestically, there would be a big problem with that. he would have a problem getting reelected. that is the one thing george busht( was able to do. we cannot find ways to get new taxes to bring revenue into the

government. we cannot seem to stop spending. thank you very much. host: another of your ways then. we get a tweet from sasha. looking at the white house is released on the budget for this çyear, more spending is in that budget, close to $160 billion for more spending in fiscal year 2011. next up, chicago, margie. caller: good morning. i think the freeze will hurt current usually it goes to the people. but politicians on all sides and i hope mayor daley is up. i am calling from chicago. making the people depressed. last week to put the stimulus about the high-speed rail and how it will help chicago.

meanwhile, we get the cta cut and we get transportation the people need desperately. host: and that is your local transit authority? caller: yes, it is like the subway in new york. they are cutting, cutting. they did not have the budget. but they announced a stimulus plan for high-speed rail. that money should start first in the regular people. best what they will start freezing that. this thing with haiti needs to pay attention with the health care about them saying they cannot, because the money. florida and georgia refused kidney dialysis and medicaid patients. why don't we start not freezing that? that is a death sentence. tell them to go to the e.r. we're being nice to haitians

because we do not want them here. our health care system is not a whole lot better than what you see down there when you pushed to show. host: thank you for your comments. is the proposed spending freeze good? will it be hurtful for the economy? that caller mentioned haiti. front-page picture on "the washington times." i will pull this off and show you the story this morning in today's "usa today." church members were saving orphans. an adoption scheme. they tried to take haitian children out of the country. 10ç american baptistsç schedud to have a hearingxd today after

trying to take 33 children out of haiti. the church members said there were trying to rescue abandoned and traumatized children even though they lacked the proper paperwork to do so. here is washington, d.c. frank, go ahead. caller: i do not think the spending freeze will do anything pretty much. if you have a home budget and you bring in $500 a week and w3spendw3 $1,500, it is a bad t. the needçóç to figure out howo stop the spending. they're not cutting backç enou. thereçt( are a lot of double standards with this president. the media doesn't report everything that is going on. when bushç was president, a number of people wereçq killedn afghanistan and iraq, and what

happened to that? we need not to have a double ççóstandard but giveç double e and all these things out. host:ç sacramento, california. mike. i will tell you why. we'reç spending tooi]çç muchy on wars. we are creatingç enemies. the way you go about finding these people is to dropç food n these people. why do you drop bombs? that would justw3 create hate. i receive a 50% pay cut. my wife is going to leave me. i am about to get played off from my job. we spend $1 trillion on afghanistan. stop listening to this mainstream media. it is destroying our families and our country.

we'reç spending all this moneyn killing people. thank you for your time. host: mccall honored democrat -- mdemocrat line. caller:q just stop the war and get rid of one airplane and one ship and that would be enough for us to make it. host: youx÷9:uár" of the t(entire program, the f-35? explain yourself. caller: here is what i'm saying. one warships. eliminate one warship or one airplane. how much of that saved? host: i will let you go. let me show you in "defense news" this morning. a big winner. this is a pictureç of one of te

predator drones. there will double the purchase for the mq-9 raptorq uav's. since a look from this morning's "defense news propelle." caller: good morning. i do not think the freeze will do anything for the economy. the first year obama was there, he jacked up spending for all of that. my concern, and i do not know if you have a guest on again, would be to ask if deficit spending was bet under bush, how can it be good under obama? when was the last time a country managed to tax and spend itself into prosperity? çi am pretty sure it has never

happened. thank you. host: thank you for that call. a tweet on line. ç qhost: you can send us your thoughts. the president is expected to talk about the budget this morning. later today he will hold a news conference on youtube. obamaxd will field question[ççy youtube users. onçq monday, the president is scheduled to sit downe1 for the 3t( the state of the union address. mr. obama will read and watch questions submitted by youtube users. it is a way to giveñrç access o the president that he feels is moreç participatory.

we will have that for you live. >> we will leave "washington journal" to go live to the white house. ç>> it is a budget reflectsçe xdçççççou.ç economy has ln jobs. çt(our government isq deeply it ççafter what can be describeda decade of profligacy. t(çwe had a budget surplus of e than $200 billionçó with projecd çsurpluses stretch it out towad theçç horizon. qover the course of the past 10 years, the previous administration and congress created an expensive drug program, passed massive drug cuts for the wealthy, this was compounded byç recession and by çrisingt( health-care costs. when i first walked through the

door, the deficit stood at $1.3 trillion. t(if we had taken office during ordinary times, we would have started breaking down these çdeficits immediately. one year ago, our country was in crisis. we were losingç nearly 700,000 jobs each month. the financial system was near collapse. many feared another great depression. çweek initiated a rescue. çit added to the deficit, as well. -- wheat initiated a rescue. we cannot move beyond this crisis. we have toç address the irresponsibility that led to it. from wall street toç washington to main street to fuel our growth. that is what we have to change.

we have to do with families are doing. save what we cannot afford what we need. qit is important to understand e will not be able tow3 bring ;9ì+ thisç deficit overnight. the recovery is still taking hold. families still need help. we willq continue to do what it takes to create jobs. it is reflected inç my budget. the budget includes new tax cutsçó. taxç credits for small businesses. investments that will create jobs and tax breaks for retrofitting homes to save energy. we continue to lay a new foundation for lasting growth it would be a terrible mistake to borrowç against our children's future toñr pay our way today. çwe á@át not fail to invest in

areas that willw3 determineç u[ success. çówe buildok on the largest investment in clean energy and increase investment in scientific research. we want to foster jobs of the future right here in america. i have proposed a more than 6% increase in funding for the education department. it is tied to reforms that inspire students to xl in math and science and a turnaround failing schools. in the 21st century, there's no better anti-poverty program than a world-class education. that is what we eliminate a wasteful subsidies to banks that lent to college students and use that money to revitalize community colleges and a college more affordable. this will help us reach the goal we have set. we will once again have the highest proportion of college graduates in the world. çthese are theç investments wd

opportunitiesnow and in the future. çin a departureçó from the way business has been done,-9 we sw how we pay for these investments while putting our country on a more fiscally sustainable path. i have proposed a freeze in government spending for three years. this will not affect medicaid or medicare. ç;çqit will not affect benefir veterans.c)it .511d8 apply to r discretionary programs. we're not photocopying last year's budget we will not cut what doesn't work to pay for what does. we have gone throughxdç every departmentt( spending line by line, lookingúgúoç for duplin and programsxzkçñrç-l3zç td ççççqzvthat is how we sawqe

discretionary spending. çñrsome ofw3ón these cutsç arn ] program that pays states to fáclean up mines and have alreay been cleanedç up. ççwe're cutting penrest servie program that strays so far from any mission that it funded a music festival. we're saving $20 million by stopping the refreshment of a science center that the department of energy does not want to refurbish. other cuts are more painful. the goals of the programs are worthy. we limit one program provides grants to do it in formal cleanup of abandoned buildings. there are other sources to achieve that. we eliminated a program that allows folks to get their earned income tax credit in advance.

i'm a big supporter of the earned income tax credit. 80% of people who got this advance did not comply with one more of the program's requirements. dv% çç[çxdçjnçoywñáçóçxdçç. i'mw3 asking membersv:i] of cons to do theçóñr same. 3xhrrepublicans and okxddemocrats to take a fresh lk programs that have supported to see what is working and what is now. like any business, we're looking to promote innovation. we consulted programs into fewer. we launched the save awards to solicit ideas about how to make government more efficient and more effective. they made it into the budget.

even though the department of defense is exempt from the budget freeze, it is not exempt from budget common sense permit is not exempt from looking for savings. ççççççççwe save moneyçg t(çi]programs that doi] nothinp usç safe. one example is the $2.5 billion that we're spending to build c- 17 transport aircraft. they decided to stop production because they acquired the number requested, 180. every year since, congress has provided unrequested money for more c-17's that the pentagon does not want or need. it is waste. there are other steps to rein in the deficit. there is a fee and big banks to pay back taxpayers. we're reforming the way contracts are awarded.

we extend middle class tax cuts. we will not continue costly tax cuts for investment fund managers and those making over $250,000 a year. we cannot afford it. changing spending depends on changing politics as usual. i proposed a fiscal commission, a panel of democrats and republicans who would hammer out a concrete proposals over the medium and long term, but would come up with those answers by a certain deadline. i should point out that is an idea that had strong bipartisan support and was introduced by senators gregg and conrad. it had a lot of co-sponsors to that idea. i hope despite the fact it got voted down in the senate that both republican leader mitch

mcconnell and the republican leader in the house, john boehner, go ahead and fully embrace what has been a bipartisan idea to get our arms around this budget. it is why we are restoring pay as you go. congress cannot spend a dime without cutting a done elsewhere. this will help lead to the budget surpluses of the 1990's and is one of the most important steps we can take to restore fiscal discipline in washington. you can read more about the budget and budget.gov. very easy to remember. we simply cannot continue to spend as if deficits do not have consequences. as if waste does not matter. as if the hard earned tax dollars can be treated like monopoly money. in order to meet this challenge, i welcome any idea from

democrats or republicans. a one-out walk and, what i reject is the same old grandstanding when the cameras are on. it is time to hold washington to the same standards businesses and families hold themselves. it is time to spend what we must and live within our means once again. thanks very much. >> president obama presenting his budget proposal for fiscal year 2011. here's a look at the budget as it physically arrived on capitol hill this morning.

>> good morning. >> good morning.

>> the budget proposal being delivered earlier today. this happened about 8:00 this morning. the president targets several different areas in his budget proposal for 20 level. it freezes spending for a large number of government programs. it boost taxes on the wealthy. it puts more money into energy and infrastructure. you can read the proposal overview on our website c- span.org. plan to have the complete proposal available. we'll get reaction and briefings scheduled throughout today with peter orszag taking things off in about half an hour. he will speak with reporters and that will be live here on c- span. then the pentagon will talk about their share of the proposal. robert gates, admiral mike

mullen, a briefing at 1:00 p.m. that will be alive here on c- span also. the state department briefs live at 1:00 eastern on c-span-3. earlier today, there was a discussion on the impact on independent voters on the coming elections. host: we have reporter for politico and john kornacki from george washington university joining us to talk about the role of independent voters. i wanted to show some of the swing in independent voters and where they are. here are the numbers, the latest gallup numbers on the percentage of independence. 36%. which way these independents are

leaning. this is 2010. 43% leaning republican. 48% leaning democratic per take you back to the middle of the bush administration towards the end of the first term. 2004, january, republican, 40%. leading democrat, 46% corporate the recent election in virginia, new jersey, republican governors one there. then scott brown in massachusetts. it seems more democrats are leaning republican. guest: this is a global. is about the entire united states. if you went by states, it would be a little bit different. alex was up there before. virginia, a larger group of republican-leaning independents moved dramatically toward bob

mcdonnell. it seems to of happened in massachusetts. host: to the independences -- did the independents , out of the woodworks? guest: use salt voters who were economically hard-hit -- you saw voters in places like boston and plymouth county, those voters decided that we have had enough and we will take out our anger at the ballot box. i think scott brown spoke to them. host: a writer writes about the role of independents going for it and she quotes summoned from brookings. obama can improve the economy. people are worried about their jobs. prosperity we do a lot to reduce

the populist anger. guest: i would agree. one thing that animates the independents right now is their economic prospects. i used to be older workers, middle age and beyond, the were looking at their prospects negatively. younger people feel the same way. looking at independents in general is tough because they are a diverse group of people. they lean democratic because of you can see they are soft democrats. this sometimes go there and is sometimes stay in between. there is a group that are leaning republican. these people are very animated. they make up a lot of libertarians. this group has been coming out in droves and helped determine these last set of elections. host: they make up the tea

parties but the have no representation on capitol hill. guest: if you look at those poll numbers, there is a trickling off as people identify themselves as republicans. the have drifted off into the independent movement. there are hardly to become democrats. they may sit on their hands. they're coming back but as strong conservatives. this is the heart and soul of the tea party movement. they have been important over the last couple of elections. host: do you have the makings of a candidate or even a democrat that would answer more directly or perhaps be more prone to cancer to independent voices rather than their own party? . "g

host: why has the president not been able to harness more of that independence support now that he is president, the spore that voted him into office? >> the party aired to a certain degree in focusing so much on health care as opposed to jobs in the economy. to a certain extent, democrats failed to connect healthcare and the debate over health care to resume on capitol hill, and they connect thatñixd to the issue ob losses which have been hitting states so hard right now? we have been talking about

the proposed domestic spending freeze. will that resonate with independent voters? guest: the words, but actions have yet to be determined. if you listen to what the president says, the spending freeze is not take place until next year, which means there is all kinds of spending that takes place this year and the headline, as you pointed out in the earlier segment, $1.20 trillion is a lot of money and people are very much concerned about it. i want to go back to something you said before, and that is, what happened between the election and now. one of the things that happened is the president ran on a platform of a new politics, he called it, a new way of getting people to work together to get things achieved. but in the past year it has been the old politics that of driven things. majority driven health-care bill largely written by one party and one party only. the president may have changed his mind on that -- he met with some republicans this weekend -- but at least the past record shows what he ran on is not what the government. host: we will look a president's

comments in just a bit but let us listen to viewers. the numbers on your screen. here is bob, an independent from miami. go ahead. john kornacki and alex isenstadt. caller: good morning, gentlemen. i wanted to ask the question -- in the past political history, whenever an independent movement has emerged, hasn't the incumbent president to benefit from that movement by having the opposition votes shoved off through the independencts? nixon, 1968, george wallace took away democratic votes from humphrey and richard nixon was reelected. i think that could be a repeat performance. guest: it ever good point. the answer is, independent

voters affect the election. but overall conclusion is somewhat mixed. you are right about 1968, but remember 1972. ross perot was in that election and the incumbent president was george w. bush -- a lot believe that that tilt the back to george clinton -- bill clinton. host: the role of ross perot. guest: we have not seen a ross perot figure emerge into many different cycles -- to many races where independent voters can't throw their boats off to an independent candidate. but you look at massachusetts governor race, state treasurer, cahill, he could divide the republican vote and give the election to democrat patrick. which is somewhat interesting given that democrats right now are those that perceived to have problems with independents. the problem democrats are facing

right now is a lot of these independent voters, while the man of the happy with the republican party they are willing to take up that anger, and right now they may be willing to take their anger out on democrats. host: birmingham, alabama, gwenn on the independent line. guest: this young man sort of answered the question i was going to ask about, independent s were really leaning toward the republican, leaving the democrats because of their disillusioned with democrats at the present time. you sort of answer that for me. but another point i wanted to make also jiging the independents, be careful how you are moving away from the democrats because the republicans, they were in office for eight years and a lot of things didn't get done and also what is going to happen if they do have the majority in the senate and house, will they work

with the president? if they do have control of the congress and the senate, what would they do then? would they work with the president? and will all be disillusioned again with the republicans? thank you. host: who wants to have at it? guest: i think the caller brings up a key point. polls show independence are not happy with either party. the question, that maybe enough for the republicans in this case because just -- if voters are so angry and willing to take anger out on the party in power, that probably benefits republicans. i think what we are starting to see is president obama and the democratic party moved very aggressively in the last week or so, even beyond that, to sort of portray republicans as an opposition party. you are either going to work with me or not constructively. we saw the president did that in baltimore last week.

i think that is an early attempt to show voters as we head into the 2010 election year, you may not like what is going on in washington, i am trying, and if i am not getting much done it is that republicans and not willing to work with him. host: he did about getting things done and washington and working with both parties. here is the president from last wednesday. >> what frustrates the american people is in washington, every day is election day. we can to wage a perpetual campaign where the only goal is to see who can get the most embarrassing headlines about if the other side. a belief that if you lose, i wind. -- i win. neither party should delay or obstruct of a single bill just because they can. [applause] i am speaking to both parties.

the confirmation of well qualified public servants should not be held hostage to pet projects or grudges of a few individual senators. i will not give up trying to change the tone of our politics. i know it is an election year. and eyes for last week it is clear campaign fever has come even earlier than usual, but we still need the government. host: john kornacki, he is speaking to congress but it sounds like he is speaking directly to the american people. guest: of the independent voter, in particular. by the way, that same tone is what scott brown ran on. he wanted to be -- what did he call himself? a scott brown republican. and many of the people who voted for him, as i understand it, wanted to see things change in washington's of things do get done. it is not an automatic no vote, it is about changing the tone. the problem the president has is

even though he talks about that, for the democrats to get things done in congress, the bills they want, the way they are presently written, requires a very partisan approach so there is a disconnect. . the president talking to them was an elevation of their position. is showed some set of reasonableness and the backbone. the president also gained from this. as he said in his basketball interview yesterday, it can go to his right. he does not do it often,ñi but e can. he clearly won. the big losers were the house

democratsxd. he seemed to push his agenda site, at least for the moment. we will see which of the president's strategy is work on this one, but if the field is open for some kind of activity. open for some kind of activity. to host: let's take a call from tennessee. caller: i would like people to understand that the working class people in this country, if they were to understand this, and this was since 1994 until just last year, $43 trillion was taken out of the economy. cash money gone. who is to repaid that? the people do not want to pay wages. our wages have declined 48%,

down since 1973. somebody has got to pay, and where did it the $43 trillion go? i would like the independents to really know about that. thank you. thank you. alex isenstadt? guest: the caller identified a problem in washington. one person i wrote to several weeks ago, a colleague of mine said, to a certain extent, this is a problem we brought upon ourselves. all we talked about on capitol hill was spend, spend. when you look at voters, they say there is too much spending in washington.

democrats talk too much about the health care, stimulus. these are all expensive programs and they did not spend as much time talking about jobs. right now, there could be some backlash to that. host: next phone call. columbus, ohio. caller: the republicans took the wars of the budget. the democrats are trying to be honest and put it into the budget. i want to hear what they say have to -- what they say about that. guest: if you listen to what the president said talking about freezing spending, next year, the only thing that this has

anything to do with it is the discretionary spending, about 16%. the other part of the budget, which is much more difficult to get that, the defense spending but we are fighting two wars and we have need for homeland security. on the other side, debt keeps getting higher. trying to go after entitlements with medicaid and medicare is hard to do politically. host: we're in the country -- where in the country are independents prominent? guest: as i understand it, there

is a lot of momentum coming from the independent side, coming from the tea party, libertarian side of things. i think what you see in florida, use could see in other states. host: bill in boston. democrat line. caller: i am confused about what happened in massachusetts. i worked in the obama and coakley campaign. she would have been a wonderful senator but she decided not to stand at fenway park in the cold, all these political, vot

e-gathering things. i do not think this was a reaction to the policies of the obama administration, or her administration. i simply believe she did not campaign where she should have, did not show the enthusiasm. i campaigned for her. i tried my best. for example, our phone banks were not open when they were supposed to be. it was poorly organized. it was not a reaction to the obama policy@@@@@@@@@ @ @ @ @ @ clearly, there is little disagreement about the question that martha: plea -- martha when coakley did not run a good

campaign. she was holding a fund raiser with lobbyists on capitol hill which became fodder for scott brown's campaign. she ran a very cold, very distant campaign. i think it certainly hurt her with the voters. she had a lot of verbal stumbles and miscues. there were a lot of problems with the campaign. if you look across the state of look at a lot of the voters who make up the massachusetts electorate, 51% of those voters are independent. if the look at what is that in exit polls of the words, they said we're worried about the economy, and nothing that was reflected in the results on election day. >> the economy being a key issue in massachusetts, but yesterday, senator-elect brown talked about his views on abortion. talked about his views on abortion. >> you are pro-choice. gay marriage is legal in

massachusetts, but the republican party, apart from language, calls for the repeal of roe v. wade and do not agree with same-sex marriage. do you think the party has to change the platform? >> we have always been an inclusive party. we need more people to contribute to the conversation. the difference between me and others is i am against partial birth abortions, federal funding of abortions. i think we should do more for adoptions. >> but you are still pro-choice? >> yes, this is an issue that is best decided between a woman and her doctor. i believe an individual has the right to decide their own destiny.

host: and john kornacki, is he's dealinhe still appealing to the independents? guest: absolutely. if you have the choice between a pro-choice candidate and a semi-pro-choice person, your course is clear. they may not like either of them, but he is the better option. if you are going to appeal to the independence-minded voters, and still get conservatives, that mind set works. host: next phone call. caller: one year ago, i called and spoke to john fund, talking about the republican party after

the election. at that time, i was republican but i left the party to become independent because the republican party no longer had conservative values. basically, obama has too many marxists who useviews. host: who did you vote for before you became independent? guest: mr. fund, when we were talking, i said the democrats and republicans do not represent the wishes of the people. they actually govern against the

will of the people. if you see what happened in massachusetts, the independents were the plurally, not majority. i believe this is what is happening in many states. however, we do not really have a candidate, per say, but they are going to try to control the election as much as they can. host: alex isenstadt, is the independent party benefiting from the flight from the republican party? and generallyguest: as the call, we do not have the emergence of a strong independent candidate.

malkiaside from the special elen in new york, the independent candidate almost ended up winning. in that case, you had a lot of conservatives and independents voting for the conservative party candidate. host: your colleague writes about how the t party -- tea party people are lashing out. guest: i think this highlights the lives that quality of the tea party movement. this is not a tight, centralized structure of a movement.

it is sort of a loosely-found the movement as -- movement where people are trying to do things as they go. hostguest: i remember back in 1, republicans were able to resonate with a lot of voters, a conservative, free-marketers. many of them had not been to the polls before and they needed something to talk about. the tea party is like that. they do not like large

government solutions as answers to the problem of the country. that is not good news for parents because they like to use the government to alleviate problems this group of people does not see that as an answer. they are not automatically in lockstep with republicans either. however, they are economic conservatives. whoever can tap into that will have a lot of leverage in the upcoming elections. host: newcastle, pennsylvania. democratic collacaller. caller: if you look at the facts, a lot of that is rhetoric. democrats have not always been the ones to spend. people may believe the rhetoric,

but it has not really been the case. i would like you to check yourself. guest: the tea party movements are not automatically republicans for the reasons you said. the past administration spend almost as freely as the past democratic ones. in a sense, i agree with you. host: the president spoke about jobs in baltimore, going to new england this week. is he trying to tap into some of these folks, these scott brown supporters? guest: no question. the state of the union was all about jobs. democrats will tell you that that is the top of their agenda. in baltimore, he talked about the economy and jobs. democrats are pivoting from

health care to focus on jobs. host: from what you know of the independents, what do you hear about health care, what needs to be done? guest: i do not think it is off the table. certainly, the giant, humongous bill before congress is another example why it seems that democrats are hoping to see a big solution to the problem. if they believe creating jobs and cutting health care through an insurance plan can work, we will see. the problem is, i do not know how you can get a jobs bill passed, health care, and all before the midterm elections.

host: moderate congress people, how best to they reflect the views of the american people? guest: senator lieberman is sort of a right of center individual. i do not think you see any representation of this tea party movement in washington. jim demint, mike pence, tom proce -ice -- those are some pee that conservative-minded republicans like. host: next phone call. caller: the question was

independents are moving to the right. right. they you can see what is going on. the question i would have about the budget is, what would happen tomorrow morning if we went to our mailbox and got the bill do from the federal government of $100,000 per person? that has people scared in this country. we're going broke. we're going to be a third world but we're not careful. we cannot keep spending and spending. i think that is why a lot of people are going from independent over to the right. and they do show a little bit more conservatism when it comes to the budget. host:ñi thank you. i think that feeling of hopelessness and almost all the people looking at the amount of debt being piled up, and all of it is coming out of washington, and it seems to be more spending

ideas coming out of washington. that has to stop. i think that is what the people are saying. it is not that they love republicans. they just do not like what they're getting from washington. it is being led by congressional in front. host: the concern over jobs. they want some spending. the 1 jobs taken care of. guest: they do. but the question is how to create jobs. people on the right side would say you certainly do not create jobs by more government spending. the only way to do that is giving people more money in their pockets. so they would like to have tax cuts. even with that, how do you create a lot of jobs in the short term, which is what democrats in the house would like to see? ñiçóthat is difficult evenñi wih government spending. >> what did you think of the president small business tax proposals in the state of the union? guest: the rhetoric and ideas at was fine. but for him, his time scale is not next fall. his time still is two to three

years from now, when he is up for reelection. that kind of approach and more like it may resonate well for them. the problem is his own party in the house is up for election within the year. and the ability of the cut tax cut to do much as problematic. host: look of this long term for the president. looking to 2012, will the sort of abandoned concerns about getting people reelected in 2010? guest: well, you know, i do not think so. i do not think he necessarily wants to. i do not think he necessarily once the large scale democratic losses. i am sure he does not. they're going to focus on the economy this year. i think that is what house and senate democrats both want. we will see what happens. host: about 10 more minutes with my guests. let's go to california. mike is on our independents line.

caller: good morning. thank you for a very thoughtful discussion. i am it a libertarian. this strikes me that major party politicians, the only time the credibility is when they are saying something bad about the other political party. that reflects a very deep corruption on the the part of the major parties. republicans are no longer a republican. that is with the r. democratic politicians are no longer democratic. there d. republicans and democrats are destroying the republic in favor of an empire. we have 130 different countries in which we're taking sides, making enemies, creating the than the rest of the world combined democrats have corrupted the election process to such an extent with gerrymandering than 95% of the cummins said 13 elections and the last four cycles in the house of representatives, this is a reelection rate that seems to be a sham democracy.

that have burned to the above that of democratic party. man of your comment, please? guest: i like the last part. your present, like many callers have come but the frustration with this continual conflict. the president is part of it. you said something interesting. that was, why is it so partisan? one of the reasons, among many, is the way we do this in the country. it is done by the state legislators and in a very partisan manner. you could say that they wink at each other and say i will make this district more republican if you make that one more democratic and we guarantee we're both reelected. that sound frivolous, but it is really not the size from 6 iowa maybe, most of these things done in a very partisan basis. you can get very homogeneous

seat so that the member can vote solidly left of center and not have the retribution. republicans can do the same thing. that is frustrating. i do not know if you can do except you can say to stop because this is not the proper process. >host: the first caller actually said i am a member of the libertarian party. how porn is that four independents or the libertarian independents or the libertarian free to have that? >> the obama administration is releasing its budget request today for fiscal year 2011. the white house budget director is about to give an overview of the plan. this is live coverage on c-span. >> fiscal year 2011 budget focuses on three things. job creation, middlekauff security, and putting the nation back on a path of fiscal

sustainability. before turning to the details of the budget, let me give a little bit of context and background. we just came through a year in which the second great depression was afforded -- was averted. at the end of 2008, real gdp was declining at 5% on an annualized basis. at the end of 2009, it was increasing by more than 5% on an annualized basis although real gdp in the economy is expanding, the employment department remains too weak. the and implement rate is 10%, and there are 7 million fewer jobs than in december 2007. that is why this budget includes important investments to spur job creation now, including the jobs and wages tax credit that the president spoke about last week and including key investments in the drivers of longer-term economic growth, education, innovation, and moving toward a clean energy future.

let's also do a little bit of background in context on the budget. in january 2009, the situation that was apparent at that time involved two key features that are still the case. one was a significant increase in spending from 2008 to 2009. the sec it was significant out- year deficits. both of those were already appeared before the administration took office. in particular on the first case, in the january 2009, several weeks before the administration took office, the congressional budget office issued an economic and budget outlook. it showed an increase in spending as a share of the economy from 20.9% in fiscal year 2008 to 24.9% in 2009. the reality actually came in slightly lower than that, 20 four 0.7% the point was less mandatory spending, more discretionary spending, and a significant increase in spending as a share of the economy was

already apparent at the end of 2008 and early 2009. second, we also face not only the 2009 deficit that was in excess of $1.30 trillion but medium turned deficit in excess of $8 trillion. they came from two primary sources. the first was a set of policies, the 2001, 2003 tax cuts, and the medicare prescription drug benefit that had not been paid for. that amounts to almost $6 trillion without -- with added interest over the next decade because those policies were not offset. second, the effects of the economic downturn and amounted to about $2.5 drilling because when the economy weakens, tax revenue declines in certain types of spending increases. the automatic stabilizers added about $2.5 trillion to the projected deficit over the ticket. that is an explanation of the

situation in which we found ourselves in die in which we identified ourselves, but it does not explain the fast forward. so what are we doing to bring the deficit down from roughly 10% of the economy in 2009? several things. the first step is to make sure you do not dig the hole deeper. we're particularly pleased that the senate has now joined the house and embracing a proposal that the administration pay as you go legislation it is a common-sense principle that any new proposals or new tax cuts need to be offset so that they do not cause a deterioration in the budget deficit. if we lived by this simple principle over the past several years, we would be phasing out- year deficits that would be roughly 2% of the economy and debt as a share of the, who would be declining rather than rising. second, the economic recovery, which will also lead to a cold, will all to reduce the deficit

from about 10% to the economy down to about 5% of the economy by 2015. tax revenue will recover, and those automatic stabilizers and the spending side will also decline. our goal is roughly 3% of the economy, which would balance the budget, excluding interest payments on the debt. to get from 5% to 3%, we have a series of proposals. the first is specific steps to reduce the deficit over the next decade by $1.20 trillion, which remove this from by the son of the economy in 2015 to 4%. it includes measures such as the financial services fee, which raises $90 billion over a decade, helps to repay taxpayers for the full cost of tar, and also by imposing the tax on our largest financial institutions he$xáháo discourage the leverage that was partly because of a financial meltdown that we have experienced. second, will allow the 2001 and

to those in three tax cuts to çóexpire for those with incomes above $250,000 in 2011 and thereafter as scheduled by the legislation. that reduces the deficit by almost $700 billion over the next decade. third, as part of our effort to move towards a clean energy future, we eliminate fossil fuel subsidies which reduces the of senate by about $40 billion over the next decade. in addition to all of that, we have the three-year freeze on non security discretionary spending, which will reduce the deficit by $250 billion. let me be clear about this freeze. first, it is not across the board. some agencies and programs are going up. others are going down. we are investing an additional $3 billion in education because that is one of the keys to future economic prosperity, even while we are reforming those programs, for example, taking 38

existing programs, consolidating them and putting more emphasis on results rather than just funding. second, we're investing significantly in research and development, including more than $61 billion in fiscal year 2011, which is up 6% because research and development in novation are key drivers of economic activity. third, we are investing in clean energy. more than $6 billion to move towards the energy sources of the future,ñi working in concert with the elimination of fossil fuel subsidies so that we can become the world's leader in green energy. all of these together move the deficit in 2015 to roughly 4% of the economy, which is above where we would like to be. to get the rest of the way there will require a bipartisan process, which is why we're calling for a bipartisan this goal condition, a path to address long-term fiscal balance, and also producing

plants that will balance the budget excluding interest payments on the debt by 2015. finally, let me note that it all has to do with the deficit over the next decade, making the investments in job creation for reducing the deficit by $1.20 trillion over the next decade, while investing in education, and ovation, a clean energy. in addition to that, we face a long term fiscal gap which is driven primarily by health care costs. one of the reasons why the administration has been so focused on comprehensive health reform legislation as it would not only reduce the debt is a of the next decade but, perhaps as a portly, put in place the infrastructure and the policies that will help to constrain costsnd improve quality in the decades hereafter. and we will continue to face a very substantial long term fiscal gap. thank you. i will turn it over to christie to go through the economic consumption.

>> well, thank you. as he suggested, i will take just a few minutes to summarize the key economic assumptions underlying the fiscal 2011 budget. as you may know, the council of economic advisers takes the lead in a process that includes the office of management and budget's and the department of treasury to produce the administration forecast that goes into all the bridge at chins. our forecast was finalized back in mid november, on november 17. so it is based on data through the middle of november. i should say right up front that the professional forecasters in each of our offices to contribute to the forecast frequently say that we are economists and not soothsayers. all forecasts have to be interested to be subject to substantial margins of error. i would say in the wake of a severe downturn such as we have beenaab%uáuk usual patterns

provide less and guidance than in more ordinary times. we have certainly attended debates the budget projections on our bestçó estimate of what lies ahead. first let me talk about our forecast for real gdp growth. in this discussion, i will focus on fourth quarter to fourth quarter per cent changes. i find it is the mystery forward toñr interpret and to compare. the administration forecast growth of 3% in 2010. followed by growth of 4.3% in both 2011 and 2012. our estimate ofñr growth late 20 is virtually identical to the consensus of private forecasters surveyed by the blue chip economic indicators. it is right in the middle of the tendency of the federal reserve's federal open market committee forecast that was released back in november. our medium term forecasts are also within the range of the

other forecasts, but it think it is true there are substantial variations across the different forecasts. that is actually shown in chart 2.5 of the perspectives of volume. the projection for the five years after did gdp trough is 3.8%. similar to the 4.2% historical average during recoveries. the forecasts that the congressional budget office released last week was considerably more pessimistic about both 2010 and 2011 than either of the administration forecasts or the blue chip consensus. the cbo noted in its release that they are required to make forecasts under the assumption than none of the recovery act provisions are extended. there is no new jobs bill enacted. and all of the 2001 and 2003 tax cuts expire at the end of the year. the cbo report is careful to

explain that under the assumption of some of these policies will be extended, is forecast would have looked much similar to other forecasts. all right, for the unemployment rate, the administration projects that we will end 2010 with an unemployment rate at approximately 9.8%. by the fourth quarter of 2011, it is projected to be 8.9%. by the fourth quarter of 2012, 7.9%. these estimates are again in the range of other forecasts, both for the short and medium run. our projections of the unemployment rate reflect the burden grew severe toll of this recession has taken on the labor market and on american workers. to counteract the painfully high rate of unemployment and to accelerate the recovery of the labor market, the president has called for a number of targeted actions to jump-start the

private sector job creation. among these is the small business jobs in wage credit that he announced just last week. finally, let me say a word about inflation rate. i will focus on the measure using the gdp price index. we project that inflation will be 1% over the four quarters of 2010. ñi1.4% over 2011. at 1.7% over 2012. they say that these projections are lower than those of some forecasters in higher than others. the low levels the projected inflation reflect the effects of continued high levels of slack in the economy. under these conditions, we see little risk of noticeably increased inflation. at the same time, inflationary expectations appear to be quite well anchored. so we do not project rapid declines in inflation or deflation. the administration and his aides

said the inflation rate will level off at about 1.8%, squarely within the federal reserve's long run projection range of 1.7% to 2%. but there's no question that the past year has been an incredibly difficult one for the american economy and for the american people. because of the actions taken over the past year, the trajectory of the economy is greatly improved as peter mentioned, real gdp expanded strongly in the fourth quarter of 2009 and shows every sign of continuing to grow steadily. however, as our forecast makes clear, the path back to full employment will take time and continued vigilance. the president is committed to taking a responsible action to accelerate job creation and speed recovery. >> ok, i think we will not open it up to questions. there are wireless microphones

for people asking questions. i see a lot of hands up over here. let's start here. >> [inaudible] frozen from november 17. the dead include the fourth quarter, the 5.7 number regatta friday? >> absolutely not. >> is that when you decided you woulai at $100 billion in stimulus funds or job funds -- $100 billion that is driving your forecast for your 3% growth for naught? you're not getting towards the version of the house of $154 billion what is the place holder? >> the place holderñr -- >> just to answer the question about locking down. >> yes, we certainly locked it down before we got the fourth quarter gdp number. >> and quickly on a place holder, we have $100 billion in

a jobs package that includes $33 billion or so for the new jobs and wages tax credit of the president talked about jews were double-talk about to spur small-business hiring. we talked about wages, and there will be other components forthcoming. >> did it influence the modeling that dr. romer has? >> there'll be additional job activity. >> it would not vary that much whether not that number is $100 billion to $154 billion? >> i also think you're comparing -- the house had $155 billion. it is not completely apples to apples with regard to our place holder. be careful about jumping to conclusions about relative magnitudes there. >> the assumption you have to include the additional jobs, money, in the range of $100 million? >> yes. >> do any of the projections in the budget, for 2011 or outlying

years, assume that some version of health care reform are even incremental health care reform will be signed into law? >> yes, we took a simple approach in both the house and senate. which of the average of the two. you'll see the net deficit impact from taking the average of the house and senate legislation. i would note, for example, that is slightly north of $100 billion in debt is a reduction. it is a small share of the more than $1.20 trillion in debt is a reduction contained in the budget. that amount does not include the impact of winding down the wars in iraq and afghanistan. if you included that, you're well north of $2 trillion in debt is a reduction. >> thank you. i am from reuters. can you explain a little bit about what is driving their

optimism on gdp? he seemed to be a little bit further than a consensus on gdp but in line with consensus on unemployment. >> ok. and in the first thing to say is, as you point out, we're smack equal to the consensus in 2010. for 2011, we're within the range of the fomc put out in their november forecast. we are a little bit higher than the consensus. i do want to come back to historical experience. one of the sayings that i mentioned is coming out of past recessions, average growth in the five years after the gdp drop has been some 4.2%. we are actually forecasting 3.8%. we're being very true to history, if anything, airing on slightly below the historical

average. we think, you know, based on what we're doing in the policies in place, we think it is a reasonable and honest forecast. >> remember last year you give a forecast on unemployment that was a little bit more optimistic than some others were saying. you indicated then that you had information or data that others were not looking at. do have data or information driving your forecast that others are not looking at? >> we talked some about last year. what i was talking very much about last year was that we certainly got better assumptions about what the policies that we put in place would be. i think the first thing to do is acknowledge that, like many forecasters, certainly our unemployment forecasts last year was lower than had turned out to be. i think that reflects in large part of this recession as

affected the labor market. the behavior of unemployment has been unusual given the behavior of gdp. i cannot help but to add that when we got the fourth quarter number for gdp, we now know what actual gdp change was from the end of 2008 to the end of 2009. it was. 1%. last year, our forecast was for it to grow. 3%. we were on the gdp forecast and they were remarkably accurate. ñithe blue chips, at the same time, was -1.5%. >> that is an economist version of "told you so." [laughter] ñi>> so the budget identified as high priority performance goals

that agency's limited. but it does not say whether or not those goals will lead to an increase in funding for the agencies. can you talk about whether you are proposing additional funding in the areas that agencies identified as important? >> yes, the high performance goals which are new this year were fed into the budget process and will continue to play a key role. we're integrate those goals with funding streamsçó and holding it does is accountable for progress on the goals. yes, the goals are and will be reflected over time in funding for each agency. >> i am curious about what you read into the fact that you are raising taxes to the tune of nearly $1 trillion on upper- income families. you have a lot of tax increases

on multinational corporations. and yet, you do not get the budget down to below 4% of gdp. does that tell you -- what does that tell you mathematically about the ability of president obama to keep his pledge not to raise taxes on families under $250,000? what is the commission's instructions on taxes below that? i am also curious, you have a debt burden of 77% of gdp by the end of the decade. do you think the u.s. can handle that without courting a financial crisis? >> first, one of the reasons why -- let me start with the first question. i think what that reflects actually is the depth of the medium term deficits that, as i mentioned, reflected the

environment that we face, even at the beginning of last year. you have to remember, $5.80 trillion, because the two thousand one-to dozen three tax cuts and the medicare prescription drug benefit were not subject toçó pay-go. now we say they have to be subject to that. $2.5 trillion because the economic downturn. we do face a substantial medium- term deficit problem, and what we have said is we put forward proposals to give us part of the way there. the commission will have to get us the rest of the way there. we have been very clear about our stance on taxes and on other spending proposals. the commission has not even been named yet. let's let it do its work and see what it can come up with. >> [inaudible] >> again, we have been clear on our position on taxes. but the commission has not even be formed yet.

>> a point of clarification. could you clarify, once and for all, when the pledge to cut the deficit in half -- my memory is that it was a nominal number, but it would be like half up $1.30 trillion, then number you said was the deficit on the date the president took office. does that mean $650 billion by fiscal year 2013? if so, you have not had that in this budget. you are over that. >> the projected deficit was 9.2% of the economy in 2009. we hit 4.2% by 2013. so we're cutting the deficit more than half as the share of the economy. >> ok, and the second one is, on the three-year freeze which you said would be held for the share of non security spending, i was looking on table s-4. i do not see that figure.

can use the reconcile that? >> yes, if you look at the bottom of table s-4, on page 152, is this memorandum of funding for appropriated programs not security. we are actually below the amount in 2011. then you continue the freeze in 2012 and 2013. there has been some misconception on this. what is clear from that table is that you see in 2009 a bomb but up in spending in that category the bush -- there is a bump up in spending in that category because of the recovery act. as you can see, our freeze is not often that higher base. instead, it is of of the base in 2010, which excludes the recovery act. the the argument that was raised prices before putting seven on sale is misleading.

we're going off of a base that excludes that bump up. >> [inaudible] what would you sent to federal employees who were slated to get an increase, butñr significantly lower than previous years/r and also the budget costs for hiring several hundred thousand urg workers are the mixed few years? >> first, federal employees will get a 1.4% increase in their salaries, which frankly, to a lot of americans this sounds pretty good. it reflects a formula that is used to compute wage and salary increases. it is lower than it has been in the past because inflation is lower than it has been in the past. it follows from that observation. with regard to expansions in federal personnel, over the past couple years they have been

disproportionately in the department of defense, the department of homeland security, the department of veterans affairs. some areas where we're expanding the work force include the acquisition work force. we have $500 billion, north of that, in federal contracts over the past eight or nine years, and they have doubled in size. the acquisition work force has stayed constant. it is not hard to figure out that oversight of those contracts has not kept pace with what it should be. we are investing in a variety of things to try to improve oversight of what the federal government buys, including cracking down on and no bid contracts, trying to bulk up on bulk purchases of goods and services. and also, expanding the acqusition work force so we have better oversight of those contracts. >>