the president is going on this very deep instinct. maybe in the 1930's it shifted a little bit. but i think that's his political problem in a shut shell. now as far as the question of the deficit commission, i did a column when i knew i was going to be coming down the pike being opposed to it, because one, that's the job of congress about spending and taxing and not to try to pass it off on people. it's undemocratic. to try to d that. host: isn't that the point, though? that these people would be elected -- guest: and we are a small country. and we don't want to be run by panels of bureaucrats. but to say we -- our democracy can want function so we're going to bring a panel in.

they've analogized this to the closing of the basis back in the 1990's, which was a little issue that went that way. this is the whole economy. this is all of our taxing decisions being turned over to a bunch of appointees and then force congress to vote up or down. this is why there's opposition. i opposed it. i think i quoted from daily cause on the day i wrote the column because people on their were just as agrieved. they were worried that they would cut benefits. i was concern that they would raise taxes. but for those reasons i think the right and the left oppose it. . d they would cut taxes. guest: good morning caller. caller: good morning, i guess i am on the right and left also. the question of the stage i want to present, i know we are talking about how the economy

is down now below 10%. but there is another economy, i guess i am in the ministry area of helping people to get their lives together. and i have seen for years the and i have seen for years the fact that, know, georgia they call us the state of prison. and there is a lot of guys getting out of prison. now there are some you can't rehabilitate. but talking about those who just want to get a second chance. and you know that part of the economy, you know where it touches me the most is the fact that nobody is really concerned about those guys, that portion of the jobless people. but now it seems that, you know when everybody else that is able to be employable has lost jobs or can't find a job. now it's a percentage put on the job market. you know what about the market

of helping the little guys. that can't dig their way out of a hole. host: tony blankley, your thoughts. guest: regarding the inmates i have a republican working in that area. if you look in the 19th century, there was a tremendous effort to think about the penitentiary of being humane and trying to raise these people. what has happened is a high level of centicism in the last 20 years, that people are thinking how to help these people when they come out and reform them. and in the 70's and 80's and 90's so much crime happened that they were left out on the street to commit crime. i agree with the caller, regarding them it may be time

for the society to pay more attention. host: caller, i will let you respond from virginia. caller: thank you, for having me on, in the spirit of talking about republicans and democrats to get along and trying to build coalitions. i suggest that one thing that we have forgotten is the strength of this nation is still there is the strength of home grown states men. and before we had people that knew issues and could represent people in their state. and as they were successful they were national leaders. and now we are in an era where we have migratory politicians that move from one end of the nation to the other and like a party is put ççin like a foot game. and there is no thought of the

local issues. host: oscar, çjrare you thinking u!of specifically?çqñ caller: yes v:i çcan çthink ñ7 cliñ new w3york and çwhy ñrçw3go ç seek írfdto ?;help people ió york? even çif it did work, there ç something inherently çt(wrong ç that çand mccauley moveç to ç virginia to ñrrun for governor. what does ççhe know about ç virginia what seems to be obvious that they say we have the money. we are going to pick the solution to this is that we need to focus on local citizens. winnie to teach people stability. we need to teach them how to get along and appreciate respect but of the need to understand

the state politics and what they are different assemblies are so they understand the mechanics of it. host: do you think the sentiment is inherent in the tea party movement? people who belong to that movement, some are anti- incumbent. do you see the similarity between what you are saying in the two-party limit? guest: i can see that in the form that people are searching for something. çey are searching for something i think they understand what we have. that is a place to expend energy. that is the great thing about politics. host: i think that is great. çdeigitely ymçóóoóça çneed more çççon i.rthe state leveç

i think xdñrçxdñrçthat highío is great.çok;ç and the voters will decide awhñ they çwant and if they iówant someone from out of town.[ that's their vote.çççççç xd one of the big debate check now is under paul terry procedure. you talked a little bit about the political problem. i do not think that is quite a thing what america wants most is results. i think people could be disappointed in the it ministration, because it has been since mid summer since the move the agenda. i'm very curious to hear a defense of that. there is a filibuster the evidence except the 10, 94-0.

last night, senator richard shelby put a hold on every single nominee of president obama, 200 officials said the ticket to pork-barrel projects. it seems to me that that is anti-democratic. edison and that needs to be fixed. guest: this is a classic example . we were republicans were company of the democrats could use the filibuster to block nominations. we talked of having a nuclear solution. guest: my was to abolish this. guest: i commend you for that. you complained about the procedure. it is certainly true that the requirement of 60 votes was no constitutional requirement and

has been growing. i have been down 30 years. and now is with rating, it happened once in awhile. under clinton, it happened a bit more often. it has been growing steadily. as to the first point about whether i was inaccurate in assessing the problem, we will find out. i think the liberals who support the president making it a bit of their own kool-aid in thinking what the public really wants is more action on their agenda. i hope that the president would go ahead and give them all the liberal step. i think the public has understood host: it this is the financial times industrial -- editorial. what if they want mr. obama to carry on must be in doubt, even if he is right he should get the generalities' a rest and be

more forceful advocate a specific policies on health care. rate çw3qeven t(ça recovery comingi] reciph çfáçç revive çhis pr it is a pretty decent thursday. i still think his presidency is in jeopardy. we will see what happened in 2010. congressmen have to change the approach big a thing to be a few years before he will be remembered as a bad one. host: what do you make of the financial times having this type of the torah? guest: i think we were the primary choice. i think we should be both. this is always a good time for presence inspired the citizens.

this should go without saying. what i think obama has failed to do give leadership to his own allies in congress. he is not been specific enough. he did the opposite of what clinton did on health care. they have done the opposite in have not given enough leadership. and the senators have complained. tell us what you want. you should add to list what you want us to fight and die for. he was a passive in letting the congress work its will. there were incapable of coming to get. i think he should give them more leadership. host: you are shaking your head. guest: i think he is right on. host: is the presence in jeopardy if in the same thing that guest: i do not know. if you ask me a week ago, i think we saw a much more forceful things coming out.

in the left weaker so, i know that there have been my house aides talking to people in the senate. this chick, the announcement have a lack of detail. i think people are still waiting to see that . and do not think it is too late for them to provide. monday is where we will appear in the see the vote. host: issue there is a press conference. the majority had these comments to say. >> we know that as it strives to create jobs, there will also be a force at work that will cost us jobs. many governments are laying off critical people, teachers, firefighters, and police. they will find ways to make sure

the jobs are not lost. the bottom line is this. this is a good faith offer. we are inviting our friends to join us. bring your best ideas forward. but put these on the floor and move on them with a sense of urgency. we need to have the jobs agenda that will pass through the senate. it is the highest priority. >host: should republicans vote for this? guest: i think they should support or participate in reform it. one of the questions that may be coming up is where is the money coming from? is it coming from tarp money? that limit congressional action but of i cannot help but be amused by senator drummond.

the state always list policemen and firefighters as the first two jobs that they will lay off, when in fact, the states will lay off people who are not emergency responders. it is a high quality to that. the larger question i think is maybe, should the republicans generally be operating in alternatives? i think the need to have some idea of how they would govern if they were given the authority. they cannot be entirely negative. if they cannot agree, there is no reason why -- not at all. host: next phone call. caller: good morning. how're you doing? host: well. caller: i think it is time we

get back to the constitution. try the 10th amendment, tim. read it. really read it. second of all, this is the erratic spending that everyone is talking about, you want to know why we question the liberals? how about $30 million for the saltwater marsh mouse? speaker pelosi, how about the airports? $175,000 for two flights a day. you are wondering why we are questioning this? host: did you question the republicans when they were in control and they have earmarked? caller: they were terrible. host: president obama has been saying lately that earmarks only make up 01% of the federal budget. he is saying is we should look

at earmarks and make sure that they are legitimate, but the only make up 1% of the federal budget. what you think? caller: look at the site of the budget. give me a figure on 1%. host: it is still a lot. caller: that is the problem. in washington, it seems they forget what the numbers mean. how families could survive on what they go away on ridiculous projects. step that do not create any jobs. if you create a government job, what is that the limit -- dove creek? nothing. nothing. ç host: tim. guest: if you çlook at theç interstate highway ñrsystes4xdo( numerous projects, i think çth ç government creates thing. there çóççóis wasteful çspendç the budwe,1ñçand no one will

deny that, but as i]çyou said' a small part of the budget, and the real problem is in the entitlements and defense budget. it is in huge tax cuts. it is in our medical system. these are all huge problems. it is very hard to get people to come together when one person has wasteful spending. >> and nothing is a question of liberal and conservative. i think there is a lot of politics that come to play. coming together on these issues is very hard. guest: there is a senator in town a long time ago it started a project of highlighting this bill he made a career out of it. the point is, not only is the

money wasteful, it is comprehensible. you can understand the nature of washington waste and see these programs it implies that similar mentality when there is been in hundreds of billions. they do double damage to the public's trust in spending. they are wasteful. when they were talking about the trial in new york, to $1 million extra a year. putting aside the other arguments, i notice only two in a million dollars, but become much that is. that suggested remind and added to to where the people's money that is creating in your. host: pa., ed joseph, a democrat line. caller: morning. thank you for having me.

my question is concerning the health care. i recently was severed from my job. i did respond to obama's website and got a form letter back. why aren't we targeting specific groups that when you retire or your severed like me, that your health care costs are 2/3 of what your income is. after 32 years of service, the health care costs are going out of control. what are we targeting specific groups in the health care bill? host: what about that idea? guest: they actually are. there is an actuary rate for people who is older. there is going to make sure that insurance companies cannot charge them multiples more them

with younger people. the president also established a health insurance for people who are unemployed. one of the problems began is the politicized health care bill. you actually talk to people by what is in the bill. people support it. there is a lot of good stuff. that is why it is so big and complex. threatening that complexity is a bad thing is a travis approach to government -- is a tyrant shrewd a -- is a town this approach to government. -- childiash approach to garment. caller: he did not understand why they were complaining, because all the conferences. that went back before september. no one knows what the bill is

now. i have taken your ideals and i have presented them to people. no one says they will work. well, that is really great. the monday he says, republicans have no ideas. why did he go with the media? he said there at the party of no one. mitch mcconnell said, "i am looking forward to working with the democrat party." immediately after the sunday show , miti said republicans are not going to work with the democrats. it went all the way up to the hype. guest: there is an awful lot in your statements regarding by partisanship. i watched the hill for seven

years. everyone knows individually when a piece of legislation is being worked by both parties together and win the leadership of one party is doing itself. if you compare how medicare was processed the they legislate to in 1965. it had months of hearings. they had a conference open to 153 issues. it was all regular order. there are some complaint even then that certain elements of the hearings moved quickly by the democrats. to the personnel, 32 compare that now, -- to compare that now, the word did in the bill. sometimes the cutout the committee. çç forget the opposition çparty, they are not çpart of the process of çdrafting the legislation. one çóadvantage of going througç the committees is they çtend t represent çthe people çwho el

them. guest: çthe health xdcare refo party went through and çthroug the house and senate, the w3 republicans offered çhundreds amendments that were accepted.ç the fact it's been online and people are ñraware of what is  it.çfá guest: real çconversations occ in xdplaces or don't.ç and u!everyone that works çins that çbuilding knows which conversations are fáthe real onç and which weren't.w3w3 -- aren't.ç you can the fill the leadership is often rhaetian in in doing the real negotiations and telling the chairman here is what you'll do. u.s. guest: kerrey read it the things he had a lot of control. [unintelligible] guest: we can debate that. host: a want to give both of your thoughts on the article in the "washington post poll " he

touched on by partisanship. he argued. that cannot find the article right now. he writes that bipartisanship is really a misnomer. if anything, it is is really watered-down legislation. it has no impact whatsoever. guest: i have been saying that for 20 years. it does not mean that the two parties cannot work together. the idea that anyone is going to gratuitously sacrifice what they believe in out some commitment to a concept, i never seen a meeting where someone slams down the hammer and say i disagree so profoundly. for bipartisanship i will support it. it is certainly possible. we see it and a regular basis

where -- should we spend 100 million or 50 million. you can negotiate are you for a portion or against abortion? that is not so easily negotiate. i think you have to have the capacity to work through small differences the support a general view of the policy. people are going to give up their principles. guest: mentioned medicare a while ago. over the last 40 years, there is a pretty stunning realignment. given the republicans and conservative republicans. it was possible to fill of the liberals from both parties. over the past 30 years, we have seen more conservatives being

the republicans and democrats are more liberal. you are not going to get a compromise is used again. guest: there is no doubt that you used to have 30 or 40 or 50 moderate to liberal republicans in the house. now is down to a handful. used to have a lot conservative democrats. that doesn't make the partisanship. indian host: nablus. it morning. caller: i am an independent. i do not think there is much difference between democrats and republican these days. a bid to take opposite stance on everything. i am wondering if this form a government is not just plain overwhelmed and outdated. congress has become overwhelmed with these issues.

the bills are thousands of pages long. i just wonder if the whole system is breaking down before our eyes. i was wondering if there is someone you could sort this all out. guest: what they say is that democracy is the worst form of government except for all of the other ones. i do nothing now support a benevolent dictator. gerrymandering is a problem. congress is not the most efficient way of solving problems. if you did and what they are trying to do, it is in good will. the one to focus on reforming the government, we are going to have better representation.

and then we can have a better system of government could d. guest: i disagree with the collar about the difference between the parties. the parties are becoming further distinguish between each other. they are more different now than they used to be. there is a huge difference. given all the special interests, you get a very different set of policies when the democrats are trying to pass things. there are plenty of problems with the process of legislation. ivory with that. -- i agree with that. host: next phone call, michigan. caller: i will agree with the. in my lifetime, i believe i'm older than you, i have never seen the party's more separated . i am a strong democrat.

with the parties have diverged so drastically if the republican party has been taken over by the neocons and they do now believing government. they do not believe that government should serve the people. they believe that government should serve corporations. as an example of that, on you have to do is look at the supreme court ruling that is giving corporations such power. not only are they considered persons, and they are considered super persons, given more share of democracy than the people have. this is the supreme court that has been appointed by neocons, federalist society. this is with the tea party people are totally misguided.

they are blaming the government for what has happened because of the implants of corporations to take our jobs out of the country. to reduce the middle-class so that the rich keep getting richer. what and some of the nation controls 40% of the book. -- 01% of the nation controls 40% of the wealth. we have no idea how badly the government is serving the people. we are not allowed to compare with europe. they have not been in this economic freefall. they have a true social safety net. the money keeps blowing through the system. we just go into free-fall. the republican party does not care about people. there are some democrats to do. that is why i have worked

lifelong for the democratic party. i believe in the core by use of the democratic party. host: we will leave it there and let you know that the former republican senator from a piece this morning about campaign finance. he shares a sentiment about the about republicans think proceed as favoring corporations. perceived ç ar favoring corporations.ç guest: it's interesting because the tea party movement looked ç like the conservative movement that many participated in çthe 60's.ç the goldwater movement, çit looks more çlike that. if there is a feature ñrof the hey don't think there i

big çrole for public interveni in the sector. but there çis a strong strain populous welack i think he misread the conservatives. they are fractionalized. the small business is much more support it. big business get supported by both parties because of the influence financially share in the country. i do not think the republican party should be seen directly as merely part of the corporations. there is a lot of hostility toward corporations. guest: i think we need to separate republicans from conservative. here is the thing. if you but that's what the parties are doing in congress, the democrats but trying to restraint on the bank.

they are trying to see that things cannot do the same thing. they cannot sell loans. the cannot hide risks. they want a job hiding crashes. the republicans are opposing this across the board. john boehner has been making it clear, saying, we are going to fight tooth and nail to make sure no one can put any restrictions on you. in return, we need the money to fight the democrats. i think if you are concerned about the corporations, you really need to defend the policies people are putting forward. the republicans reject all restrictions. guest: the financial industry has supported the democrats. the reality is that a large

factors in america, whether the paper or finance, are going to and should have some impact in congress. that is part of the process. we call it special interests. the environmentalist -- it is proper to have some communication between large sector of america and the government. guest: absolutely. i did some people to look at policies people are proposing. host: the labor department reported the latest unemployment figures. there are reporting an unexpected drop, 9.7% from 10% while employers shed 20,000 jobs. caller: i teach sociology at california state.

liberal media servers as the offense. people talk about the of the level media. fox news offers that that is -- that the media starts with the new york times but do they get their lead from that. virtually every major newspaper in the country goes to the left. the left controls abc, nbc, cbs, virtually every cable station. this notion that fox news is somehow skewed because the offer the alternative ignores the

reality of the fact that the media briskly carry waters for the democrats every day. host: i hope that a lot of parents and other california send their children to class. i do not disagree with the word you said. i used to the press are written in this town. we need to get a story on cbs in the evening. we have to get the washington post -- it is the political choice -- and the new york times -- the networks took their guidance on political gesturjud. it is still the case that the general the girlish view of most of the media sheet most of the

headline news of the hours. all the close of the mainstream. -- all that flows out of the mainstream. i think it is undeniable that this is an objective and realistic description. host: list is joining us. caller: i have a question about what our president is doing for us to and people. i mean, we have mistakes. we make mistakes. then you become a felon and then the cannot vote. the and then you cannot vote. i do not understand why we are segregated. like, nobody cares if we make mistakes. they do not give as a second chance to vote and do things.

i mean, martin luther king had a dream that we would be equal. i feel like i'm not equal. guest: it is my view that if you search a time and have done what he did, you should be able to vote again. the if you served your time and have done what you did, you should be able to poach chicken. the way that we talk about the issues are skewed because of the last 30 years. and it's something çthat the onservatives can .30 years. and it's something that the liberals and conservatives cñn together on. president obama has looked xdat some things and ççthat's a movement that you can çsee a place wherei]ç çliberals and conservatives agree. and california is having a hard time çwith finances çand ç

martin luther king said we should be judged by the content of our character. that is a fact. it does not mean that you cannot become a viable part of society, but it is a process of getting back to the place that you gave up when he committed the felony. the fact that it is denied this numbing cannot not be a responsible citizen. the concept of not allowing people to some degree responsible for their moral concept is an indication. we need to have the balance between judgment and redemption. host: last phone call here. go ahead. caller: thank you for c-span. i'm like to talk about social security. i have a question to start up with. that has to do with how much of

the debt is actually owed from the social security surpluses of the past. can you tell me how much of the debt is owed to social security. it is about nine trillion dollars of unfunded liability. social security and has held i know you -- ious to the treasury. guest: social security is a symbol for a few more years. guest: it is only in the black in the sense that right now there is more coming. the liabilities of already been incurred mean that over time, it to be about $9 trillion of benefit both to beneficiaries.

there is deep debt in both. it is obligation for which it cannot get funding. host: are you still there? caller: i just want to know how much of the debt is owed to social security currently. guest: i'm sorry. there is not a simple way. right now, the fund is insolvent. it has enough money to pay out. it is taken and responsibilities that it cannot afford to pay. ultimately, the treasury will have to come up with nine trillion dollars over the next 65 or 70 years.

host: you have the last word. guest: we have plenty of time to do so secure the problem. there are ways to go about it. i think people like t social security. let's be realistic. there is no need to frighten people. we can talk about sensible reforms. we have a good 30 years of it being strong. guest: we have been talking earlier about this congress is not willing to start dealing with the problem. we want to wait until the crisis occurs. guest: i didn't think we should wait. host: we will have to leave it there. we will continue this conversation some other time. thank you. [captioning performed by

national captioning institute] [captions copyright national cable satellite corp. 2010] >> tomorrow on "washington journal" bloomberg news discusses the impact of this market on the economy. the founder and chair of the memphis tea party talks but the convention. and kathleen christensen and have the structure of work needs to be realigned with 21st century workforce. "washington journal" is live at 7:00 a.m. eastern here on c- span. >> white house budget director on the fiscal hudsonproposal.

>> c-span offers the new c-span classroom not work. -- c-spanclassroom.org. even watch video clips organized by subject and topics. there is the chance to connect to other teachers. it is all free. sign in at the new c- spanclassroom.org. now i house hearing on the budget request. it includes 3.8 trillion dollars in spending and some of the tax cuts passed during the putsch and bush -- bush administration.

there we go. welcome to the hearing. today we take a president obama pose those budget for 2011. -- president obama's budget for 2011. it helps to remember where we started. our economy began backsliding in 2007, one full year before president obama was sworn in. within weeks of taking office, they launched a program to get the economy moving again. it headed to the short-term debt estimated at $1.20 trillion. it was our islam by the recession.

but it was already swollen by the administration. this made a difference. it raised real gdp by 1.3%. it increased employment by as many as 1.6 million jobs. in the last quarter, and the economy grew by 5.7%. the obama administration has realized that it to be almost impossible for us to bring the deficit down without moving the economy up. that is what the president has

pushed the budget. 1 is on the economy. the other eye is on the deficit. americans are still filling the recession and not the recovery. no one can be satisfied with the average is 10% in many places. the biggest initiative in this budget is for a job bill. the present budget stays focused on the bottom line. the deficit is cut by half. from one trillion in 2010. 6% of gdp to 4.2% of gdp in 2013. in four years, it is cut in half. it keeps bringing the deficit down.

having the deficit in four years is a worthy goal. the president shifts the emphasis from big business to small business. it resists spending over all and sympathize priorities. the three-year freeze on non security spending is not enough to finish the job. i would like to see a lot more deficit reduction. these are not concrete commitments -- these are concrete commitment to bringing the deficit down. we proved in the 1990's that it is possible to be responsible.

there are hard choices ahead of us. it marks one more step toward moving the economy up or bringing the deficit down. with a four tier testimony. but to return to the ranking member. >> thank you. welcome back. good to have the. last year, americans became focused on untroubled by the alarming growth of spending. they have a right to be. they inherited a difficult situation. what is happening now is our concern.

by year's end, the house passed to boost spending by $3 trillion over the next decade. leslie, and eight -- last week, any discussion at our republican retreat, the president was employing a far more open town. acknowledging the seriousness of our budget and entitlement problems. and talking up the need for real fiscal discipline. i was very heartened by his remarks. the president sounded as though he had received the message. the senate ready to moderate his agenda. yesterday, because the actual budget. it is remarkably similar to the plan last year, more government spending, more taxes, more deficits, and more debt. here is how the "new york times" summed it up. ." by his own optimistic projections, american deficit will not continue with levels

over the next 10 years. in 2019, they start rising again sharply. it draws a picture of a nation that simply cannot get above water, " let's look at a few key points. this deficit is $1.60 train. under this budget, and never falls below $700 billion to do it in the decade and $1 trillion. taxes increase by $2 trillion using the own evidence. how about the public? but more than doubled over five years. they have seen 60% of gdp -- 6% of gdp by the end of this year. we've heard a lot of hype surrounding a handful of proposals. it is aimed at tempering the government's growth.

that a buck at the spending spree. -- let's take a look at the spending spree. it would follow an 84% increase in non-defense discretionary spending that the president has signed since taking office. it cannot even start until next year. paygp. congress party has a paygo policy in place right now. the deficit has soared from $164 billion to $1.60 trillion this year. that is a tenfold increase. i am not sure how much kobe 12 place in paygo. when we do come is used to chase higher spending. i want to bring attention to this chart.

you cannot see this charge very well. on page 146 of the budget, we have the administration's actual unsustainable budget numbers up top. there is an advertisement at the bottom. it tells people do not worry, it will fix the fiscal and economic message. it will make it worse. that is not what budgeting is i do not think anyone can claim that is what governing is either. we are in a dire fiscal situation. many of the nation's problems lie in bickering and partisanship in washington. we need to avoid the policies of personal destruction. we need to start talking about the substance of the budget ... decisions ahead of us. -- budget and the decisions

ahead of us. i do not see anything in this year's budget that does not point to the exact same outcome of last year's budget. that is making an already unsustainable budget outlook look even worse. i appreciate your candor. i look forward to your testimony. >> i would ask unanimous consent that all members be allowed to submit an opening statement for the record of this forum. you have been here before. you know the rules of the road. makers they imparted the record. if you -- you can summarize it in any way you see fit. you can take all the time you need to explain the budget as you see fit. we are glad to have the. >> thank you.

the fiscal year 2011 budget focuses on spurring job creation, securing the middle class, and putting the nation back on a path to this close to me -- to fiscal sustainability. over the past year, we have averted a second great depression. at the end of 2008, it the economy was declining by more than 5% on an annualized basis. at the end 2009, it was expanding by more than 5%. a very substantial share of that has to do with the policy actions that were undertaken to avert a second great depression. while the economy is expanding, the employe market remains unacceptably weak. the unemployment rate is tender. there have been 7 million jobs lost. the president is stepping

forward with your proposal said the new jobs and wages tax credit. it helps for hiring today. we must bring down our deficit over time. essentially, the deficit will impede ongoing job creation. what about the pre-existing condition with guard to our fiscal front? the president and visiting with our republican friends pointed out that on january 7, 2009, the cbo offer it a budget outlook that showed very clearly an increase in spending for fiscal year 20008 at 20.9% of the economy to 2009, 24.9% of the economy. what happened in reality?

in reality, spending in 2009 was slightly lower than cbo initially projected, coming in at 24.7% of the economy. total spending was basically in line with what was initially projected in early 2009. what about our meeting in turn deficit? in early 2009, medium turned deficits of eight trillion dollars were apparent. neither were paid for. the economic downturn reduces revenue and increases spending on certain programs like unemployment insurance and food stamps. it added more than $2 trying to

the deficit. that is all an explanation of the situation in which we found ourselves. the key question is, what do we do about it? i think the first that is to embody or embrace the basic principle that we should not make the situation worse. the administration is glad that the senate has joined with the house in passing statute tory pants to kill legislation. -- statutory pay as you go legislation. it would be roughly two. -- 2% of gdp. we did not live by it them. we should now. economic recovery will help reduce the deficit. under our productions, the move from a dozen a tender the economy to roughly five some of

the economy by 2015. that 5% is still higher than our fiscal targets, which is roughly 3%. at that level, it would stabilize. how do we get from 5% to 3%? the first thing we do is put forward specific proposals to reduce the deficit by $1.20 trillion. the bu$1.20 trillion in deficit- reduction, more deficit reduction than embodied in any administration budget in over a decade. how do we do that? variety. raising $90 billion on financial services funds. it is not only discourage leveraged but also meet the statutory requirements

everything taxpayers in full with the cost of the tarp legislation. we allow the 2001 and 2003 tax cuts for those families with more than $250,000 in income to expire as scheduled in 2011. that reduces the deficit by alm.

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>> i commend the administration for supporting the bipartisan commission for trying to deal with entitlement spending. i know there has been criticism of that. yet, i have sat on this committee for a long, i recall 12 years the republicans parsed a partisan budget through this committee, and i don't remember any long-term entitlement spending reductions passed during those 12 years through the house. in fact, just the opposite occurred. on a partisan basis, they passed the largest increase in medicare spending since medicare was created in 1965. i do want to go on record saying i am one democrat who believes our short and medium reduction terms ought to be even more aggressive in the administration as proposed. i intended to speak out on that. having said that, i also must say it is disappointing that

some of the captains of the economic titanic, those who wrote budgets that put us in the worst recession since the great depression and gave us the largest deficits in american history after -- now take pot-shots at each of these four substantive proposals the administration has made. i welcome bipartisan support and dialogue. but those who were in charge when we went from the largest surplus to the largest deficit in american history ought to be more open-minded rather than criticizing each of these proposals. i do want to commend mr. ryan. i think his proposal is substantive, it is dramatic. it is not revolutionary. it is compared to programs we have now in the federal

government. i think this is an opportunity for people to see a dramatic difference and vision for the future of our country. one, the administration proposed, as we start to try to reducing the deficits. the other one, proposed by mr. ryan, not just any back-bench republican, but a well respected republican on the committee, general ri concerned about reducing the national depet, but one, nevertheless, a proposal that would eliminate -- would privatize social security. also, as we talk about new spending, i think republicans are right to talk about the levels of new spending. i think it is also fair to look at the levels of new tax cuts proposed by mr. ryan and his alternative vision for our country. let me ask you this question, do

you have any costs on quha it would add to the deficit? that republican roadmap? the cost of eliminating the estate tax over 10 years, reducing the highest tax rates in 35% to 25%, eliminating capital gains tax, interest income, and dividend income, and extending the 2001 and 2003 tax cuts. do you have any beark numbers on how those individual actions would increase the national debt over a 10-year period? >> we will give you exact figures, but we are talking about trillions trillions of dollars shifted and off-set through other changes particularly through medicare and medicaid to offset those huge shifts. the status quo is unsustainable. mode care as we know it has a

$38 trillion deficit. so we are kidding ourselves if we think medicare for under 55-year-olds is going to look the same as it does today. >> mr. ryan, you have never been able to get the vast majority of republicans in your own caucus to support your bold and honest -- >> that's what i'm doing. >> maybe we can do this on a bipartisan basis. i salute you for offering some tough choices. it is an honest proposal, and we ought to have a debate, and debate that relative to the president's budget proposal. >> thank you, mr. chairman.

>> i appreciate the fact you have indicated that tough choices have to be made. this chart focuses on the tough choices that were made in 1993. we passed a budget making tough choices that was criticized so effectively that democrats lost their majority in the next election. in 1995 when the new majority took over, they passed a budget that was viewed by president clinton as irresponsible, and they vetoed all of them. in fact, the government was closed down because he refused to sign the republican budget. if you want to know what would happen if we -- he did sign them, you can see what happened in 2001 when they did pass them. look at the red line and you can

see what happened when they signed them. at the end of bill clinton we had a projected surplus that was converted to additional debt of approximately $3.5 trillion or more. had we not messed up the budget in 2001, we would have paid off the national debt two years ago, debt paid for by the public. one -- now we are in the ditch with the deficit. my first question is, if we cut spending -- affecting the deficit. if we cut spending what effect would that have on jobs? >> right now? >> right now. >> either in 2010, either raising taxes or reducing spending today would be harmful to jobs because the key

impediment to job growth now is boosting demand for how much firms could produce. that situation changes over time, but for 2010, that's the answer. >> so if we were to do anything about the deficit this year -- >> it would be counter-productive, yes. it is not to deny that we need to get the deficit down over time, but this year it would be counter-productive. >> we create jobs on the federal level and states are laying people off. the recovery act provided $140 billion for states, and yet they still cut their budgets an additional $300 billion for a total of almost $450 billion. that just went to offset what the states were doing. is that accurate? we essentially offset the damage

the states were doing to the economy? >> we have, through direct state fiscal relief, and through federal actions, offset -- i'll get the exact calculations, but offset the drag that state and local governments typically exert on a resession because they are doing counterproductive steps during a recession. >> so one of the challenges we had is just to keep up to zero to the point where we are offsetting where the states are laying off. so the first almost $450 billion. >> yes, without commenting on exact figures, because i think there is ambiguity. one of the reasons i think state fiscal law was changed was to offset actions states would have to take to lay off workers and teachers and cops and so-on and so forth which would exacerbate the downturn. >> when we had good fiscal responsibility during the

clinton administration we created an average of 237,000 jobs a month. during the bush administration, although we were overspending the budget about $8 trillion over 10 years, we did worse. the long-term fiscal challenges we have on the chart, this chart shows the change in percentage or g.d.p. of social security, medicare, medicaid, net interest, and all other spending. if you look closely, the only thing that's really growing is medicare. so if you wanted to solve the problems, it seems like getting rid of medicare would be one way to do it, that's a stuff choice that you would make. can you talk about the effect -- how much -- i understand you would have to cut medicare 75%. can you explain what impact that would have on a person who was trying to get health care with a medicare voufer that's only 25% of the cost of health care and

what it would do to employees if you eliminated the tax preference for health care, if you eliminated that and had people going out on individuals, what the tough choices would amount to in the health care choices that the republican alternative would envision? >> and i think with regard to the 75%, you are referring to the reduction that would occur in medicare and medicaid spending under mr. ryan, the republican alternative. >> look, the fact of the matter is, again, i'm going to give him credit for stepping forward with the proposal, but there is a significant question as to whether that is a feasible approach because you would be providing individuals with a voufer that would not pay for the cost of health care over time, an increasingly small share of the cost of health care over time. they would not have the type of benefit that would be provided through medicare where there is less uncertainty about the costs

they would face. they would face not only more definite money out of their pocket, but more uncertainty that they would have to pay, and they would be struggling with a lot of things people in the current market struggle with which are unfortunate. so in that situation, i wonder whether future congresses would actually stick to a voucher level that was inadequate for the nation's elderly to bur their own heament insurance. and if a future congress didn't, not only would you have dramatically changed the medicare program, you wouldn't even get the budget savings that mr. ryan is aiming for. the point of which is, i think what we need to do with regard to medicare and medicaid is get at those underlying drivers, provide much better information about what works and what doesn't, change incentives for providers so they have incentives to provide quality not quantity, improved percentages for prevention and

wellness, and so on and so forth. that is a different structure and a different approach. but i would say frankly without all those components present anyway, i'm not sure mr. ryan's approach would even work. >> thank you mr. chairman. one of the freshmen on this committee gets to ask a question. i'm going to stry to ask three questions, mr. orzag. one is local but important in this region. in the budget, o.m.b. states that environmental projects are not related to the core missionaries in deciding to divest the corps. many obviously that has impolitics for the chesapeake bay. and many are concerned if you don't have the court capacity at e.p.a. to do the same thing the

corps of engineers does. you may comment. >> again, what we are trying to do with our army corps of engineer proposal is focus on the tree traditional issues that the corps has worked on -- commercial navigation, aquatic ecosystem, and there has been an area added by the congress, we think that is better addressed through other funding streams. we have more than $3 billion for the state and for the various revolving funds involving clean water. we think that is a better approach than funding projects through the army corps of engineers. >> hopefully this is the beginning of a dialogue. >> help me understand, at least in my district, the recovery act is working. it has helped with our school system. but they are not out of the woods.

it is funding important technology, r & d related projects. i guess if the stimulus is working, why do we need another jbs bill or jobs initiative? and aren't we concerned that given the surprising strength and economic growth in the last quarter, should it be sustained, we're going to start to see jobs created any how and the lag time for this money being vested and actual jobs created is going to be, as we just saw with the recovery act. >> the recovery act has succeeded primarily in restoring economic activity. in moving from a collapsing economy to a growing one. where we still lag behind is in the employment market. so the jobs package is focused specifically on steps we can take just to more tightly link

g.d.p. growth to employment growth. so something like the johns and wagse wages tax cut. so the recovery act is working. it has averlted a second great depression, along with other measures that were taken, but the employment market remains too week, and -- too weak. i agree with you that private sector forecasters are suggesting that -- projecting that by this spring there will be positive job growth. even when that happens, it is likely to be smaller than would be necessary even to work the unemployment rate down. don't forget we have that $7 million job gap in terms of jobs lost in 2007 that needs to be worked off. so i don't think that the biggest risk we face is that job growth will be too rapid without further action. i think further action is beneficial.

>> my third and final question has to do with the ranking members proposal, and i certainly joined in the chorus of praise that he at least has put something on the table. i part ways with some of my colleagues in praising that proposal, because quite frankly i see it as a radical departure from a -- from decades of hard work in the united states to protect senior citizens both with respect to their pensions and their health care through medicare. we made a conscious decision in this country to provide that kind of protection to under the guys of deficit reduction to now threaten that presents us with a stark choice. for me, it is an easy one. i believe for my constituents when they understand it, it may also be easy. you may also comment. >> i'm not going to dissuade you

from the depiction there is a dramatic change. there is no question about it. >> as i said, it not only means higher cost for beneficiaries, it means more uncertainty around those costs for medicare beneficiaries. we haven't gotten to the tax changes where there would be tax reductions at the top and tax increases in the middle and toward the bottom so that the total doesn't change, but if the burden is shifted away from higher earners and toward middle earners. >> i thank the request gentleman. my time is up. >> thank you mr. chirm. there has been a lot of talk about mr. ryan's proposal. i would like to know if mr. ryan's proposal is a proposal that the republican leadership is seriously entertaining. we can find out if this is a proposal, that the party of no is moving off the party of no and actually going to go with a

legitimate proposal. i think that would be -- i think it is eath either one or the other. i think as another representative pointed out, there are not a lot of other proposals out there. we can either be against these things or embrace a proposal from the ranking member, from the bg budget committee. just a few quick questions, if i might. six or seven republican

co-sponsors of their very own bill switched to "no owe "on that and ended up defeating our opportunity to go with statchtri -- >> that is correct. >> i think it is a good comment that the president, despite that setback, is willing to step out and offer the olive branch and say, i'll do it on my own in a bipartisan way. let's get serious about the debt. we'll put everything on the table. not say it is going to be one proposal or another. i think that should indicate to the american people that this president is serious about bipartisanship and wanting to work together with both. >> i think that is exactly right. >> a couple quick comments. believe it or not, a couple things haven't been brought up in three hours. one is, i'm a little concerned about just the focus on nondiscretionary spending in my area, education, health care, public safety, and the zphi are the top issues.

i've heard it threat the great -- i've heard it said the greatest threat to our nation is the economy, not -- that inefficiencies in the defense procurement system has a long way to go in terms of becoming a functioning body in terms of what we've seen here in recent years, and i have terns concerns about the build-up in afghanistan. so i would hope that the administration might consider some initiatives in those areas. >> yes. let me again emphasize, the defense budget has been scrutinized, and there are eefficiencies possible that secretary gates has identified, so there are some particular -- especially in a procurement budget basis, frankly. canceling additional purchases of the c-17, carns he willing the f-35 fighter jet, canceling the c.g.x. navy chip. there are a number of

reductions. secretary gates was effective in working with the president and congress in terminating unnecessary weapons systems last year. we want to build on that, continue that success, and continue to reform the defense procurement of the budget. >> applaud your efforts in trying to stimulate small business. i have some degree of skepticism over the tax proposal. i am going to be pulling from my chambers members. but what about the administration stepping in a little stronger than they have already with our banking and regular industry community? there seems to be this tension going on about over-regulation, making the bankers concerned. at the same time we don't want to end up back in the mess we are in. are there new initiatives or thoughts that the administration will use to pursue areas of

increasing lending from the private sector, which i think is the long-term best bet here? >> i think with the regulatory system, two comments, the first is that clearly, the system is strongly in favor of regulatory reform legislation. the second is, my belief, i believe it is correct that secretary geithner will be appearing before your committee in the near future. with regard to more specifics on regulatory policy i'm going to refer to him regarding the sense activities in the appropriate boundaries in regulatory policies. >> thank you very much. >> thank you for your patience in being here today and for the hard work you've put into putting the budget together. we're going to take quite a bit of time in scrutinizing it and

working with the administration to try to get this right. we're obviously deeply concerned about the economy at this point. we've come a long way from where we were. one year ago we were losing over $700 it,000 jobs. we are seeing a slow turn around because we saw job losses at 1/10 the rate and economic growth at 5.7 is my understanding. that is remarkable progress. quite frankly, right now my constituents can't find jobs. in rhode island we have the third highest unemployment rate at 12.9%. can you, once again, both for my own knowledge and my constituents back home, please tell me how these programs are projected to decrease unemployment and over what period of time.

and if you could, after that part of it, talk about specifically the funds that would be going in job creation portion of it to the states, what specifically to local cities and towns? one of the criticisms we had that it didn't filter down the way we hoped, so if you can talk to these issues, which is something that our local administrators have been clamoring for because those are projects if we have taffled the first part. >> with regard to the first part, we have put forward $100 billion jobs package. some of the details are still to be worked out, working with the house and senate. we have identified, for example, a $33 billion jobs and wages tax credit, which would provide up to a $500,000 tax credit for

expanding more wages at a firm. that will help to promote job growth because some small businesses are right on the edge of either hiring someone or providing a wage increase. in return for this tax credit, they would go ahead and do that. so that is one of the -- you -- i'll get the exact figure, but i think we are we're funding it at $44 billion, $4.4 billion in 2011. we also have a cat litic --

catalytic grant formation. >> the money that would go toward tax credit and other small businesses, that's included in that -- >> within the $100 billion, yes. >> as we've talked about as equally important, deficit reduction, can you talk about your projections and can you talk about how that will be translated to g.d.p., once the job is created. is this economic growth enough to reduce our deficit to sustainable levels. >> when you generate economic

activity, you typically reduce the deficit by somewhere between 25 cents and 33 cents on the dollar. so if a dollar of additional job creation activity from the federal government creates a dollar of additional additional activity -- the key thing is, though, let me emphasize, unless this economic recovery continues, and unless we spur it on, we will never get our deficits down. we are at 10% now. we need to get to a lower number. the big reduction comes from as we move from 10% of the economy to 5% of the economy by 2015 because of economic recovery. because of economic activity picking up, that's abnormally low levels of share of g.d.p. will increase. and certain cyclically sensitive

programs, like unemployment insurance, food stamps, et cetera, naturally decline as the economy picks up. both of which -- by the way, the enact is happening, revenues down, that's beneficial to help mitigate the economic downturn now, but as the recovery takes hold, those natural stabilizers automatically fade, and that's crucial to getting this deficit down over time. >> my time has expired. i applaud the president for working with you in creating jobs, jobs, jobs like a laser beam. we have to have that focus. there are too many people out of work. we get it here in the congress. i know the president gets it. this is going to be a strong partnership to make sure we get this right. thank you. >> thank you, mr. chairman. thank you for your presentation and answers. last week i was on fox business news with stewart varney

responding to the state of the union and he asked me whether i thought restoring the pre-tax rate on upper income earners would be an impediment to growth and would stop job creation. i responded to him, as smon someone who started a business, ran it, has two brothers and a sister all who run businesses, i have a father who ran a company when the income tax rate was at its highest, that i hadn't seen that in my experience. now whether it was when president clinton raised the highest rate or when president bush lowered it. so i didn't see any reason to believe that. he disagreed with me. i couldn't find any evidence that he had run a business or been involved in the private sector. but i did notice that he, like you, went to the london school of economics. so my question is whether you learned anything at the london school of economics that would

help business people behave like that? >> unlike him, but i guess like you, i ran a small business which we subsequently sold, and i would join you in saying the key thing for a small business is not the marginal tax rate, especially if you are just returning it to the levels that existed in the 1990's, but rather depand for your product, access to good workers. a variety of steps from the small business administration and a new proposal that the president is thinking about today to spur small business lending, and investing in education, because those are the workers of the future. >> thank you for clearing that up for me. i have to turn to a more parochial subject that affects my state, kentucky, but also

includes other states, including the ranking members, this is the reduction of the counting message, which would affect the burbon industry in my state. that is an important factor in my state. i know it affects the wine business, and many other business yizzes in which aging is a factor, aging of inventory. the president, and i applaud these goals as suggested, that we want to expand our exports, we want to increase our manufacturing base, and we obviously want to add jobs. by eliminating lifo and doing it not just perspectively but receipt actively and in the business -- but retroactively which would put some of these companies out of business, have you thought about the impact in regard to those three goals the

administration set of something like the distilling industry and others where it would seem to be something that run counter to the goals of the other economic goals that you have, that we all have? >> well, again, if you know, the purpose of that proposal is that some firms use last-in, first-out accounting for tack purposes. sometimes they use different accounting in different settings. and there is a tax policy justification for moving away from that. now there may well be consequences for a particular industry. i'm giving that as a tax proposal and you will have secretary geithner here defer to him on the specific proposals in certain industries, but again, the underlying tax policy justification for the change i think has been well laid out in a variety of articles. we'll have to work with you on the impact. >> i appreciate that. it may have been answered here before, but some of our colleagues were making a claim

that in terms of nonsecurity discretionary income that we raised at 84% in one year, would you respond to that and speculate on maybe how they got that number and whether -- just comment on that claim, please. >> well, it is not an accurate depiction on the base off which we are freezing nondiscretionary spending. what happened is that category of spending went from just north of $400 billion in 2008 to south of $700 billion in 2009 because of the recovery act and because of the measures necessary to try to mitigate the economic downturn. in 2010, it then declined to roughly $450 billion, a little south of that. we are freezing off of that lower level. it went up, it came down. we are freezing off the lower level. to claim we are freezing off that higher level is simply wrong. >> good.

i appreciate that explanation. thank you, mr. chairman. >> thank you very much. [unintelligible] >> thank you very much for your patience for having answered every member's questions who atnded -- attended this hearing. i appreciate the president's remarks in his state of the union speech last week. appreciate that he hears the plight of so many american families. i would like to talk about more why this is an important discussion. as we talk about a budget and deficits, and we talk in terms of trillions trillions and billions, most americans are thinking only in terms of number one, and that's the job that each of those individuals has. unfortunately, for far too long, we saw americans losing thousands of jobs to the point where it got to be millions of

jobs. while finally we're starting to see a reversal of that job loss, it has taken some time. each one of those bars that we have seen on that screen represents the number of jobs lost in the thousands. so you have to add up, if i'm correct, dr., you have to put up each one of those bars and stack them on top of themselves in order to find out n how many jobs have been lost in recent years, most of them under the previous administration. and it is has been good in the course of those months to see some progress made. i note there is one lone positive bar on that graph, and that was back in november a come months ago where we actually saw job growth. it was only 4,000 jobs that we net in to that month, but at least it was 4,000. if i recall correctly, you said we had lost as a country, more

than 700,000 jobs the day that president barack obama was handed the keys by former president bush in january 2009. 741,000 jobs, i believe the act exact number was, which amounts to 24,000 jobs americans were losing a day in january 2009 as president bush exited the white house. that's changed. obviously not enough because we have to add each of those bars for those months depicted on that screen, but as you mentioned before, we are hoping to see positive net growth in the next couple months. so when you put that in the context of this discussion about deficits, i think most of us recognize that our priorities should be to make sure the private sector is creating the jobs that people need, because once they are working, then they can pay taxes. and if they can pay taxes, we can take care of our obstacle gages to make sure our men and women in uniform are well

protected, well trained. so to me the most important discussion is not so much about the trillions trillions and billions in deficits, but about the men and women who are working very hard to hold on to their jobs and their homes. you mention the tough discretion spending cuts the president has to make. i was disappointed to hear the president say it is nonsecurity discretionary spending as others have indicated before. we used to hear about the $700 toilet seat. we know during the height of the iraq war halaburton charged taxpayers tens of millions in meals to our soldiers that were never served. in afghanistan we can account

for at least a billion dollars of contractor-related spending that we have no idea how it was spent. but it was a billion dollars in those catagories that were spent. it totals 16% of the contractor dollars that have been expended by the taxpayers. so many of us believe that while we have to make tough decisions to freeze spending in all accounts, if you are going to freeze spending for schools, if you are going to freeze spendings for seniors programs, if you are going to freeze spending for home housing programs, for environmental clean-up programs, we should take the same brush to scrub the department of defense. i don't think any military leader, general and admiral, would say he or she is opposed to having the department run in as efficient a matter as possible so we can expend every dollar in expense for our men and women in uniform. i would hope that the president and you-all would reconsider

this notion that there are some agencies that are protected while others that do very important work are not. i know you mentioned also some reduction in cuts that are being made in d.o.d., but that doesn't mean we can't continue to examine it and i suspect congress will continue to do so. i want to get into one final concept, and that is the proposal put by our colleague and friend, mr. ryan, the republican budget proposal, which you have mentioned before. i would agree with those that said it is appreciated when with someone puts forward a propose -- proposal. i would disagree with mr. connelly that i disagree with it, and i would ask that you talk more about our health care for seniors since it would move us toward privatizing seniors' health care at a time when we saw a major dip in the economy. i suspect you have answered my question by having answered any number of members' questions in

the past. i hope you will take a closer look at that defense budget, because while we all agree that we have to protect our men and women, we have to give them the best we can offer. >> thank you for your excellent answers. thank you for your endurance and equanimity. we look forward to working with you as we move forward in the budget system. at this point i ask unanimous consent that all members that have not been given an opportunity to ask questions be given seven days to submit questions for the record. >> mr. chairman, i would like to ask unanimous consent to place questions in the record regarding o.m.b.'s restricted bonding, borrowing, enhanced use in leen programs and also on the f.b.i. and financial fraud and the staffing that would be attended to this budget in that regard. >> without objection.

>> thank you again. we look forward to working with you. >> today, live continuing coverage from the first national

tea part in tennessee. we'll have -- it will get underway at 11:15 a.m. eastern on c-span. a look at some of the people attending that gathering this weekend. >> my name is field mcconnell from missouri. i have been down here since tuesday, and this is very encouraging. >> that's two days before you can even register. >> i wanted to make sure i was here. i flew from fargo, north dakota, to atlanta, georgia. i was taken to a car dealership where i picked up a used car which i drove to here. >> why did you fly to atlanta, buy a car? >> the car is, what i would like to think of as a demonstration of commitment where i bought an

unusual car and had it completely repainted for this event. because i think this is so critical to the united states. >> what do you mean by an unusual car? >> it is a 1955 limousine which i had painted purple, and the purple is to draw attention to the event and to god. >> how do you think the event is going so far? >> i think it is very encouraging. i understand there are only 600 tickets. everything sold out, and i think it is a great success for the convention goers as well as americans. >> what do you hope comes out of this weekend of activities? >> i would like to think of refocus of both of the big parties, the republicans and the democrats, and i would hope that they think about their policies

going forward. and this tea party, apparently, is catching on like wildfire all over the country, and we as a nation, regardless of what party we belong to, we need to hope and prey -- pray that this country can be restored. >> thank you. >> and we'll have more coverage from nashville tonight with a speech from normer alaska governor sarah palin. that will start at 9:00 eastern here on c-span. >> now, secretary of state hillary clinton on an agreement in the governments between the u.k. and northern ireland land to transfer police from british to local control. during a question and answer session she comments on other questions including the state of

the military and the americans being held in haiti on kidnapping charges. >> good morning, everyone. >> well, today is a positive day for northern ireland. northern ireland has taken an important step toward a full and lasting peace. its political leaders have agreed on a roadmap and timeline for the devolution of policing and justice powers, and they have taken other productive steps steps as well. the accord they announced today will help consolidate the hard-won gains of the past decade. this has not been an easy road. there were plenty of bumps along the way. i have been in regular contact with the parties during the past year, and especially since my trip to belfast in october. i know that the way forward was

far from clear. so i really want to applaud all of the parties for ultimately choosing negotiations over confrontation. in finalizing this deal, peter robinson and martin mcginnis and their teams displayed the kind of leadership that the people of northern ireland deserve. i want to recognize the leadership and the patient resolve of prim brown and tisha could youian as well as northern ireland secretary sean woodward and irish foreign minister mihal martin. they have resolutely focused on moving this process forward, forging common ground, and reaching an outcome that will keep northern ireland in the path of peace and stability. this is not the end of a journey. so far the dev illusion -- devolution progress has enabled northern ireland to enact reforms from house to safety, and now they have greater

authority. with that authority comes greater responsibility. they must continue to lead. the people of northern ireland are poised to build a thriving society, a country where neighbors can live free of fear and all people have the potential to fulfill their god-given rights. this is a dream nurtured for so long in the hearts of people across northern ireland. it is also a dream that lives far beyond its borders in countries and communities where ethnic and religious conflict persist. this latest success in northern ireland points the way forward, and not only for this conflict. northern ireland gives us hope that despite entrenched opposition and imnumerable setbacks, diligent diplomacy and committed leadership can overcome generations of suspicion and hospital tilt tilt. so now we join the world in looking to the leaders of northern ireland to build upon their efforts by promoting a new spirit of cooperation among all of the parties.

and as they do the united states will help. our economic envoy will continue working to help northern ireland reap the dividends of peace, economic growth, and small investment and other opportunities. in the future, we will host first minister mcginnis here in northern ireland and discuss ways to build on this agreement. i spoke very, very late in the evening in the evening in northern ireland with both sean and mihal and congratulated them,ed them for their efforts. i spoke with peter martin and did the same, and pledged our continuing support for their efforts. today we salute this achievement. we recognize that a new chapter, a partnership among northern ireland's political leadership and people can now begin. i am confident that the people

of northern ireland will make the most of this moment. i want to reaffirm the commitment of the united states and my personal commitment to support them in every way we can as they continue on this positive path into the future. i'd be glad to take your questions. good morning. here comes a microphone. >> also, if i may add, is the united states studying the idea of withholding recognition of the iraqi electrics in march if the 500 suni candidates are excluded? the reason i ask is the vice president told a few state department reporters last night that that was the case. he raised it with you, and he heard that you are -- >> well, first, on the 10 american citizens detained and now charged in haiti, we are providing counselor services. we have full access to them.

the american ambassador is speaking with his counterparts in the haitian government. obviously this is a matter for the haitian judicial system. we're going to continue to provide support as we do in every instance like this to american citizens that have been charged and hope that this matter can be resolved in an expeditious way, but it is something that a sovereign nation is pursuing based on the evidence that its presented when the charges were announced. with respect to iraq, we were heartened by the decision earlier this week to reverse the deletion of the 5500 names from the election list for the upcoming election. we care very deeply that this election be free and fair and viewed as legitimate by all of the communities within iraq and

by the neighbors. this is an extraordinary opportunity for iraqis to consolidate their democracy. we have not made any decision about reacting to events that might occur within the context of the election, but we certainly were heartened by the court decision earlier. >> may i follow up, madam secretary, on that same matter. you said no decision has been made about how you would view the outcome of the election. could i ask you, are you considering the option of seeing -- saying in advance that you would not accept the outcome -- recognize the outcome of the election? >> we are not actively considering any option, bob. we are very pleased that the decision made by the iraqis themselves opens the way for these 500 individuals to stand for election. we think that is an appropriate joum outcome, and the iraqis

made it on their own within their own legal process. we do very much encourage all of the parties and leaders of iraq to ensure that nothing is done with undermines the legitimate massey -- the legitimacy of this election. we see an enormous amount of political activity which is all for the good. iraq is now engaged in politics. people are forming coalitions and reaching votes and reaching beyond their own community to do so. that is exactly what we want to encourage. so anybody that would undermine the potential security would be of concern to us. >> the chinese foreign minister said yesterday it thinks it is too early to be talking about sanctions, that they need more time for diplomatic efforts to resolve the situation. i was wondering, do you feel we need more time on the diplomatic side, and how important do you

think it is that the -- can we move forward even if china isn't on board? >> first, let me say, we have pursued diplomatic engagement with the iranians steadly since president -- steadily since president obama took office. as you know, we have always had a two-track process. we hope that our colleagues and other members of the p5 plus 1 across the globe recognize that, because they have been involved in it. they have helped to enable the negotiations to go forward by joining with very strong language about what was expected from iran. the fact s. we -- the fact is, we haven't really seen much in the way of response. sometimes we see a response from a part of the government that is then retracted from another part

of the government. so i think our position is that we have, in good faith, engaged in a diplomacy with the iranians. we have always had a two-track process. we think it is important that we move now toward looking at what pressure, what sanctions can be brought to bear on the iranians. we are going to continue to reach out to all these countries, including cha -- china, and as the process continues we will have more to report. thank you all. enjoy the snow. take care. >> president obama was outside the nation's capital meeting

with small business owners. the president discussed job creation and small business initiatives, including a proposal to extend small business administration's lending programs. the president's remarks came on the heels of today's news that the unemployment rate fell to 9.7% last month from 10% in december. this is about 10 minutes. >> good afternoon. i appreciate the warm welcome from rick cummings and dennis bean and all the folks at oasis. thank you so much. these guys are experts in heating and cooling systems. so having spent some time in washington, i actually am already very familiar with hot air, i have to say. that, by the way, does not apply to the head of the small business administration, karen mills who is here today. karen has focused like a laser on helping small businesses not only survivor but to thrive amid

the economic storm of the past two years. we're also joined here by ruth gresser who is the owner and chef at paradisso. i am a little upset because she did not bring samples. i have heard the pizza is outstanding. she has restaurants in washington. and also the owner of the potomac riverboat in alexandria, virginia, there as well. these folks, no. these folks know that these have been a rough couple of years for our economy and for our country. the deepest downturn since the great depression ripped through our economy, costing more than eight million jobs and rocking businesses large and small. that's why we took some very tough steps, in some cases, some unpopular steps, when i took office to break the back of this

recession. today we received additional news suggesting that we are climbing out of the huge hole that we found ourselves in. last january, the month i took office, almost 800,000 americans lost their jobs. today we learned that job losses for this january were 20,000. the unemployment rate dropped below 10% for the first time since the summer. manufacturing employment grew last month for the first time in three years. led by increased activity in the production of cars and trucks and auto parts. now, these numbers, while positive, are a cause for hope, but not celebration. because far too much of our neighbors, friends, and family, are still out of work. we can't be satisfied when another 20,000 have joined the ranks and millions more of americans are sunday e under-employed picking up what work they can.

it is encouraging the job loss in january was a small fraction of what it was a year ago and that the unemployment rate went down and not up. understanding that these numbers will continue to fluctuate for months to come, these are welcome if modest signs of progress along the road to recovery. even as we take additional steps to hasten that recovery, we know what government can do to create jobs. the true engine of job creation will always be business. what government can do is fuel that engine by giving entrepreneurs the fuel to support and open their doors to expand and hire more workers. that's exactly what this administration intends to do and what we've been doing working with the s.b.a. and karen mills. we're