about a proposed constitutional amendment to limit concept -- government spending and discussed health care policy with dennis kucinich. also, zachary goldfarb on the white house efforts to increase the authority of the securities and exchange commission. "washington journal" is next. . .

republican points. guest: i think these are ideas of protest in one way or another near -- during the health care summit held at blair house last week. i think members of both parties be the letter as the last effort for a bipartisan compromise before the democrats go ahead presumably without a single gop vote. these are modest proposals that i did not think will win them any support necessarily. but it does show that the president is still trying to have of the near of bipartisanship and at the same time considering the high plot -- hardball reconciliation. host: how committed is the presidents of these ideas, or is this just a peacemaker offering?

guest: a little bit both. i think they are valid ideas and i think he thinks they are valid. one of those from his friend from the senate days, tom coburn, an interesting night beer -- medical professionals engaged in almost an undercover to uncover abuse. a lot of these are tweaks. a little more medicare money for doctors in some states, more money for demonstration projects to see if there are alternative malpractice suits. these are things of that are not holding up the debate the past year. this is not akin to the public plan or how you would structure insurance exchanges or other things that are the source of so much friction. i think by doing this, he is showing he is trying to be open to ideas and also gives i think the democrats a little bit of political cover before they

presumably go ahead with a pretty contentious strategy. host: what is the reaction of republicans? you mentioned reconciliation could happen imminently. guest: i think the expectation is he will come out swinging today and say he wants an up or down vote quickly. that is going to be code for this reconciliate -- reconciliation strategy. but he probably is not going to be using the r word. i think he will be reminded the nation of the stakes involved, insurance premiums going up, a large number of americans being insured and he will talk about his efforts to incorporate gop ideas. host: republicans, is there any bargaining room left on the table? guest: the interesting thing is whether these ideas and letters

might at least put one or two moderate in play. that depends on how much more time the democrats want to devote to this. there has always been this hope among democrats that maybe they can entice the maine republican, olympia snowe, to come over. if they get one more republican maybe they do not have to use the reconciliation strategy. but i can't see -- as he mentioned themselves, how that would bring over republican votes and most of them are skeptical. most are expecting the reconciliation strategy. most are fully ready for it and hope to make the strategy itself and health care issue a referendum at the midterm election. host: where is house speaker nancy pelosi in all of this? guest: there is supportive of the president's efforts. she talked about how bipartisan he is, patient he has been and willing to listen to different ideas and willing to change the

composition of the overhaul this late in the game. she, of course, has the challenge of lining of the requisite number of house votes to start this ball rolling. remember, it is a two-step process, where the house would have to clear the health care bill that the senate passed on christmas eve and then the house and senate would have to negotiate with this sidecar bill that would essentially amend the senate plan. she has to get -- i believe to london 16 is the magic number because there are three vacancies. -- she has to get, i believe, 216 is the magic number. host: what is the reception right now in congress as well as at large in the political landscape of how involved the

president is becoming and what his role is turning out to be? guest: from the start, he talked more about broad principles for health care " -- overhaul and dictated a legislative outcome. that all changed -- losing track of time -- a week or 10 days ago when they posted on their site essentially an outline of what he would like the final bill to see. the first time in more of a year that they were given at a laundry list. a lot of members of congress wanted to see that for a long time. there is always this tension between the executive then -- and legislative branch, and congress goes off in a million different directions. there is criticism he did not step in earlier and maybe try to dictate an outcome or maybe shorten the time frame. now i think through today's events, he is going to kind of give the reconciliation strategy the presidential

blessing. he will give democrats some of the political cover there were looking for a long time. and he will not talk a lot about the process. the white house has never really benefited by talking about the process, getting into the minutia of senate rules and it is not the most compelling way to make the case to the public that this kind of weary. host: white house reporter for a "cq politics.com. let us check in with maryland on the democrats' line from columbus, ohio -- marylin. caller: we pay for everything in this country, from pencils to mistrals -- missiles, we are paying for wealthy politicians for their health care, and we

did not want to put something in the kitty for ourselves? tort reform, we need to leave it alone because it is another way to protect insurance companies. they're not going to be denying you your constitutional day in court. i don't care if you have one attorney or 20 attorneys, when you go to court it is the judge, the jury or a panel zero awards -- who awards what ever you are trying to get. but the republicans keep wanting to put down everybody who protects the common man. who are you for, the corporate attorney for for the man who is for you? host: that is go to john on independent line from lancaster, pennsylvania. caller: the add ons from obama, they are fine. they probably should have been

in there months ago. the health savings accounts are kind of -- they don't do a whole heck of a lot for the people need health insurance because they cannot afford it now and if they are not able to afford -- save money they will not able to put it into health savings accounts. more importantly, they have to go with a public option. without a public option this bill is a waste. host: of the you'd think there is a chance? caller: there are 30 senators signed up and i think conrad said he would support it -- or i think it is up to 34, and if we put pressure on them to do that, otherwise it is really a waste of time. and by the time this bill takes in in three or four years, the insurance companies will have raised the rates probably 50% to 75%. host: at a look at "the new york times" -- the paper reports that --

host: let us go to houston, texas. jeff is on the republican line. caller: i think there was a lot of grandstanding going on. i am not sure the president is really open to republican ideas. i think the central idea is if you go back historically, all of the programs that have been created, medicare, and so forth, are subsidies paid for by the taxpayer. so, to take people out of the insurance pools -- and once again, the amount of people actually paying health care is

lower. i see it politically as buying votes and taking money out of the smaller population to buy votes. the other thing i wanted to say was, if they want to improve medical care, they just need to tax it so that there is -- you preserve innovation but you favor -- you support the need for efficiency. and then you would have politicians opposing next to the health-care industry instead of trying to nationalize it. host: "the washington post" has a chart looking at how reconciliation works.

it takes you through the steps. " the washington post" laying out a possible path toward reconciliation. democrats line, annandale, virginia. the caller: i will say, obama should it shut this through. he should ram it through the republicans because it does not matter what obama does -- this

health-care means to anybody. obama campaigned as much as anything. he cannot even take the republicans' bill. as soon as obama's name is put on the title they will vote against it. it is like a lunatic going on in the senate. especially the republicans. some of the senators need psychological evaluations like mccain and bunning -- how can one person -- that people are taking the country away from them -- because they did not believe in it anymore and this is not even about policy. host: owillie on the independent line from michigan. caller: i have watched this president since he first took office back in december. i never seen a man -- i don't

know why the republicans -- i don't know why they can't give this president just a little support. it is obvious from what is happening so far that the president is working hard for the people, and we are all americans but the republicans act like insurgents or something. constantly attacking the president, and they have no policy, no nothing. here they are talking about winning an erection and taking a majority in the senate -- host: sorry to cut you off. i wanted to get to the president's letter he sent. it was sent out to speaker pelosi, senator harry reid, senator mcconnell and present of boehner.

let us look at the first one. senator coburn mentioned random investigations of providers to receive reimbursements. the second to point, he talks about provisions of the bill co- sponsored by senator coburn and republican representatives ryan and nunez -- grants for states for demonstration projects, and that could be considered as one of the points. he writes, however to avenge the shared interest and incentivizing what works in this arena he is open to approve ration of $50 million for additional grants. he also talks about that senator grassley raised a concern shared by democrats that medicare reimbursements to doctors are inadequate in many states and said senator barrasso raises suggestion we expand health savings accounts and he writes that many republicans believe in them. of those of the four -- those of

the four points. harold on the republican line from the jersey. caller: i would like to respond to the first caller, and if you let me, the last caller. the first caller, what we have really is defensive medicine and the large costs of the defensive medicine is our costs are ever so much higher than what they should be. i think it is far better to kill a very, very bad bill such as this one than to pass a good bill. this is a bad bill because of many reasons, but particularly because it permits abortion to be paid by the taxpayers of consider it to be wrong how could -- really, how could anybody do to a baby what they would never, ever do to a

kitten or a puppy? for the convenience of the abortionists, they rip the feet -- host: let us go to the democrats' line from sheboygan, wisconsin. what do you think about the president's four gop ideas. caller: i think that is great. he has been the wind at all along but the republicans keep accusing -- he has been doing that all along but the republicans keep accusing him. he has been giving them every opportunity over the last year. i think it is just time of the democrats do what we elected them to do, and that is to work for the people and get this health care bill done. i am especially pleased to hear about the 34 senators who signed that letter to put the public option backhand. i hope that catches on even further because we need that part of it, too. host: let us go to lee on the

republican line from pine bluff, arkansas. caller: i think this president is headed toward socialism as fast as it possibly can in order to lock this thing down for the democrats for 40 or 50 years. what he is doing now is a sham. thank you. host: let us look at other political stores. from "the new york times" -- that moved forward last night. " the new york times" reports that as soon as today federal workers can go back and the job and transportation funding can

go forward. taking a look at some other stories -- we will get to those in a minute. this one coming to us from politico. ex-aide dowd to host sunday's "this week." and this story from "the new york times" -- union disappointment may spell trouble for democrats in the fall. let's go to our next caller,

ron on the independent line from kansas. caller: how are you doing? host: fine, thank you. what do you think of the four points? caller: the republicans do not want government involved in it. they want the free market to cake -- to take care of anything. if you got enough money you can buy anything you want in this world. how much money has the pharmaceutical, the insurance companies and all of them spent in the last year, five years, manipulating what we have on the books right now? i think having the government' not run it or run it, that needs to work out. but we need to have somebody keeping an eye on the people and make sure they are doing what needs to be done and not as what -- what is good for their pockets. host: an e-mail comment on one of the points that the president

a tribute to senator coburn. that is an e-mail comments. let us go to brenda, a democrat in ohio. what do you think? caller: it seems like ever since obama came into the office the republicans are really fighting him on every issue -- just like they are poised to, we are going to destroy this man and hold back everything he does to help the american people and all they are doing is hurting everybody. people aren't rich. they don't have money to buy all of this health insurance. they are struggling now.

and i don't understand why they can't see that, that people are really, really hurting and this man is trying to help the american people and it just doesn't make sense. and one other thing, where were those tea party is or what ever it was when bush was in office and he did not care, he did what he wanted to do. no complaints from anybody. and it is just ridiculous. and he is president obama, not mr. obama like your body on the street. host: of the republican line from houston, north carolina -- malcolm on the republican line. caller: thank you for taking my call. i just got to say -- and i will say it again, and i heard a voice also on c-span -- i know one caller said he is working hard. he is working hard all right. i truly feel that he does not really like this country and trying his best to bankrupt it

and leave us with no money. flying from place to place talking about we will give this and that -- where is the money coming from? we are bankrupt? if we did not have the money, we cannot keep giving. my question is, where is the money coming from? i think he has a hidden agenda -- his inner circle. he is just trying to bankrupt the country. my personal opinion. host: might -- an e-mail from b.j. in annapolis. the next caller is owned independent line from leesburg, virginia. caller: i believe that the president is doing the best

thing for the people. because, first of all, if we don't get this health care passed, i know a lot of jobs, a lot of companies will not hire people for a full-time job because they don't want to provide benefits. and as far as this being a socialist thing, i think this is just a necessity for a country that they should be able to provide insurance, a public option. what is the fear? i think it is insurance companies that a lot of these republicans -- they enjoyed the power and making all of these private meetings they have been having and now all of the sudden everything is out and open so the other way they can get through it is to go ahead and put down the president and attack him with all of this propaganda and lies. putting signs of that he is hitler. what kind of nonsense?

if you don't have anything substantial to say, of course you will resort to these ridiculous -- this propaganda they are trying to do. host: let us look at some of the headlines. "the wall street journal" reports that wang colusa support in the house. -- charlie rangel loses support in the house.

that comes to us from "the wall street journal." other news -- energy savers may get rebates. that is the home star program that needs congressional approval. the postal service in trouble. this comes to us from "the washington post." let's get back to the president's four gop health care ideas. steve, democrats line, from deerfield, illinois. a caller: can you hear me? i have two points. one has to do with abortion and the second is how to pay for the health care plan.

i have been listening to people call up about abortion four years on c-span and if people go to the website -- a generalized website that attracts many things in america, you can see over the last 25 to 35 years, under a 20% of americans believe that abortion should be illegal at all times. it is sometimes as a low as 13% and sometimes as high as 20%. approximately today, 80% of americans believe abortion should be legal. the second part about abortion is that abortion will always be with us. what i think president obama and the democrats want to do is to make sure abortion is safe. the anti-abortion this will never ever get rid of abortion so let us make health care

available for women who want an abortion or who must have an abortion. how to pay for health care. i have a list of what i consider risky behavior is an america that is causing us to have bad health. number one, tax cigarettes more. two, tax alcohol more. tax fatty foods and fast foods. tax cheeseburgers. tax soda pop. tax the companies who are polluting our air and water such as the chemical companies and oil companies. a tax the people who own guns. tax the people who own and munition -- ammunition. when we find people who have illegal drugs, confiscate their assets. and also tax individuals involved in risky behavior such as reckless driving, speeding, and drunk driving. i think if we taxed all of those entities we could easily pay for health care. host:, also something steve

mentioned, looking at the abortion debate. in "the wall street journal" -- let's get to arkansas where charles is on our republican line. caller: good morning. you know, it is amazing. taxes, tax that. you know, 65% of the medical problems are in direct relation to the lifestyles of people. we are $14 trillion in debt, 60%

pay out more than they -- get out what they put in. 40% pay no taxes. 1% pays 41% of the taxes. but we don't want to try health savings plans that work. the federal government created these problems. they blame business. i want to tell you, the percentage of people that are in business that are crooks is far less than the percentage of crooks that are in senate and congress. and the amount of moneys put in is amazing. we are spending more money right now, we've got the best health service in the world, but, no, we are going to tax it. it has been proven it doesn't work. and it is amazing, these gimme people keep calling in, and i

want to tell you, with those figures, it does not last. you are not going to have health insurance because the country is going to be so bad in debt, you will not find a doctor. host: let us check in with the results of the texas primary. joe, politics editor with "the houston chronicle." good morning. thank you for talking with us this early hour. tell us about incumbent governor rick perry's win in the republican primary. guest: interesting, there is no love lost between rep. and his predecessor george w. bush, but they have at least one thing in common, they are often under estimated as politicians. rick perry, who has been derided occasionally as governor "good hair" has won 11 straight races

going back to the early 1980's. his opponent under estimate him at their peril. host: u.s. senator kay bailey hutchison did not prevail. how did she react? guest: she could never find her voice. she is the senior senator from texas. she has been in washington 16 years and rick perry reminded republican primary voters of that fact every time he campaigned. the breakdown was 51% for. and about 30% for hutcheson and 18% for a tea party libertarian candidate deborah medina. but she could not prevail against the washington insider label. host: you reported in your analysis that senator kay bailey hutcheson did not realize this time a year ago her fate may well have been sealed by tax

day last year when perry spoke at tea party rallies. guest: he was one of the first to perceive this anti- washington, anti-obama switching the nation among republicans and particularly among the activist type republicans who might be inclined to vote in a primary. so, he began flirting with the tea party types, the anti- government activists that might scare away other politicians. so on tax day last year, he was at tea party rallies around the state and hinting that maybe texas ought to secede from the union if washington did not back off. host: what kind of role did debra medina play? people talk about her potential as a spoiler? guest: she played a role similar to what ron paul made -- played

when he ran for president in 2008. they get people excited. she gets the disaffected out. but in the end, she did not play that much of a role in the race. she had once lived up on the glenn beck radio show a few weeks ago where she suggested, or at least was willing to entertain the idea that maybe the federal government had some role in 9/11. i think that scared away republicans who might have been inclined to consider voting for her. host of what happens in the governor's race? dogs that it gets very interesting. rick perry -- guest: @ it's interesting. rick. runs against bill white, former member of clinton

administration in the energy department, former businessman, who is not a flashy politician but as the reputation of being very smart and careful and will probably give with. a good race. -- will probably give rick perry a good race. host: what's next for kay bailey hutchison? guest: she did not give a clear answer about when or whether she would resign her senate seat. her term runs until 2012. so, presumably, if she wants to, she would just go back to washington and continue serving as the state's senior senator. host: thank you for being with us this morning. let us get back to our question for you. the president proposed incorporating four republican health-care ideas into the legislation before congress. what do you make of them, and to you think that is a sign of

progress or just political posturing? margaret, independent line. college park, maryland. caller: thank you for the wonderful opportunity. as obama regurgitates verbatim all the republican ideas, they will not vote. they honestly do not care about the average american. it is about their political survival. they just don't care. for people who just throw names and call obama socialism, do they know what it means? there was a reporter who asked a few question of some tea party years on television and a woman -- well, we don't want socialism, we did not want to be like germany. and he said, are you on medicare? yes. what do you think that means? there really wish you would challenge people when they call. i listen to c-span to be educated. when they call and just thrown names and throw their opinions

and make it sound like facts are really wish you would challenge them. and what we should do, these congress people have not earned their pay for the last six months. if they want to help america with the debt, they should all return their pay for the next month, refused their pay and put the money toward the debt. that would be a good gesture from people who have not learned of their pay. the same and the american people, even if the congress -- but the health insurance the rest of their life. host: massachusetts on the democrats' line. caller: i'm 77 years old. i really supported our president obama during his campaign, 2008. my impression of him is that he has a winning personality, but

he is really not capable of making a decision in standing behind it. -- and standing behind it. to be a profile in courage, he must take the steps -- he and the democrats -- that is good for the people. it is obvious the republicans are not going to work with him. it is necessary that he and the democrats do what is right -- if all of them only have this one term, they now have the congress, the senate, and the presidency. do what is right for the people. host: gloria, republicans line

from san diego. caller: i do not know how many are aware of this across the nation, but we are largely run by a democratic legislature here. in 2005, they determined that the state of california could not afford to do it anymore for the health care issues that existed then then they can now. and it seems like our senators and congress people are completely out of touch with the reality of the financial situation in this state and what has brought us to this point. i know a lot of people think that we are capable of paying for a lot of health care problems to solve them for everybody, but do they realize that they are asking their neighbors and people -- whether they are republicans or democrats -- to pull me up the

cash to do this? -- to pony up the cash to do this? it is a matter of money and not party. in the state of california we have had to reconcile ourselves to the fact we are bankrupt. what are the rest of the nations and states who have a lesser product to produce and support this nation? where are these people coming from? host: jacksonville, florida. kay on the independent line. good morning. caller: thank you for taking my call. i agree with the lady from california. we don't have the money. we are the most generous people in the world. but we just don't have the money anymore. host: what did you think about senator bunning's stand where he did not want to move forward on unemployment benefit extensions until there was a way to pay for it? caller: it was for show, to make a point that they don't have the

money. any time they could have filed cloture and the vote would have gone on and it would have turned out the same as it was before. host: do you support his stance? caller: the only point i like is he was telling the american people thatpaygo was not being done. i remember when pelosi took over, it was supposed to be paygo, from then on, our budget. so, they cannot blame republicans on that. when they come to all this, it comes down to the money. host: ken, democrat line from atlanta. what do you think of the president incorporation of these four republican ideas. caller: i think it is a noble idea. i think no matter what the

republicans put forth they are providing lip service but i don't believe they believe what they are saying. they really don't have any concept of cooperation. and i think they were going to be against them from day one a matter of what he proposed. i think it was a nice try. it sounds good -- but by and large i just really think they just do not care about health care, period. host: harrisburg, pennsylvania, and lee show on the republicans line. caller: good morning. host: what do you think about the president's collaboration of the ideas? -- incorporation of the ideas? caller: i used to be a democrat, then i change republicans and now i will change independent. i am sick and tired of this government. so sick and tired i can screen. i feel like i'm living in a communist country. it is not right. i think his ideas sup. -- suck.

he acts like he does not know whether to color green or red or purple. there are questions i have and no one can answer them for me. the first is, i would like to know, if this bill is so good, why did they have to pay people to vote for it? and the second question is, what are the people going to do for four years when we cannot use this bill? people are going to die. people are going to get sick but they still will not be able to use it. so, the american people, some of them are just as crazy as our government. host: henry on the democrats' line from maryland. caller: a couple of callers back, about this bill. half of the people calling in and talking about these things, that as take their health care away from them and let them deal with the situation and then they will stop talking nonsense because it is nonsense. yes, we did not have enough money to do certain things but

enough money to fight wars. we have money to do everything else but when it comes to help other people we have a problem with it. yes, we are responsible for one another. anybody who says we are not has a serious problem. they say they are christians, know they are not. they are fake christians is what they are. host: let us talk more about health care with ohio democratic congressman dennis kucinich. but coming up next, we have two guests, republican congressman's pence and hensarling here to talk to us about the proposal they have to include a constitutional amendment that would limit spending. we will be right back. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010]

>> our congressional coverage includes a hearing looking at the national security budget for fiscal year 2011, the house foreign affairs committee meeting, live at 9:00 a.m. eastern on c-span 3. is it a defense secretary robert gates says he wants a pentagon review of the ban on openly gay service members wrapped up by december 1 of this year. the military personnel subcommittee in the house looks at issue today, live at 2:30 p.m. eastern also on c-span3. the house pays tribute to the late congressman john murtha who died last month. a memorial service from the

capital. live coverage at 11:00 a.m. eastern here on c-span. >> as "washington post" international correspondents, t.r. reid traveled the world. his books are not only on travel but global issues including "the united states of europe" and "confucius' lives next door." live sunday at noon eastern on c-span2. >> over 1000 middle and high school students entered this year's c-span students cam documentary competition with a short video on one of the country's greatest strengths or challenge. we will announce the 75 winners on march 10 and share the winning videos at student cam .org. >> which four presidents live past 90 years old? john adams, herbert hoover, rahm

of reagan, and gerald ford. find these and other presidents of facts and "who is buried in grant's tomb?" >> it is a guidebook, a travel log, but it is also a mini history work of biography of each of these presidents. let's face it, you can tell a lot about people at the end of their lives. >> a resource guide to every presidential gravesite, the story of their final moments and insights. now available at your favorite book seller or get a 25% discount at the publisher's web site, type in grant's tomb at checkout. >> "washington journal" continues. >host: our guest is representative hensarling, and congressman mike pence. you are here to talk about the spending limit amendment to the

u.s. constitution. tell us, where did the idea come from? guest: there is a spending crisis. every day we come to washington -- but this time you better believe it. people should not take our word for it. listen to what the director of the congressional budget office, but eleanor says. "in sum, the outlook for the federal government is bleak. u.s. fiscal policy to -- in unsustainable path to the extent it cannot be solved with minor tinkering." our former comptroller general, david walker, said the rising cost of our government entitlement spending is a "fiscal cancer close " that threatens "catastrophic consequences for our economy." economist robert samuelson stated spending could lead to " and economic and political death spiral." we know recently moody's said the american people, that our debt offerings are in peril of

losing the aaa rating. now we have a president of the united to submitted a 10-year federal budget that we know gives us the largest deficit in the history of america, $1.60 trillion, doubles the national debt in five years, tripled it 10 years from when he was first elected. america is on the road to bankruptcy. we believe if you look at the post world war ii era, spending has averaged 20% of the economy. spending is due under the current plan to rise to 40% of our economy in the lifetimes of my children. that is not right. that is not fair. so, myself, mike pence, john campbell from california are introducing an amendment to the constitution to cap a limit of the federal budget to the growth of the family budget and tie it to the economy before we literally bankrupt the nation and put the next generation on the path of having less

opportunity and lower standard of living. host: why constitutional amendment? guest: that think that is a great question. -- i think that is a great question. i want to agree very strongly first with jeb. we are facing a fiscal crisis and the american people know it. we know it in our gut. we brought some of the charts we put together here that demonstrate, since world war ii, this federal government has managed to get by on about 20 cents on the dollar in this economy. but we are on a pathway and a trajectory that, by the middle of the century, we will more than double the percentage of this economy that just the federal government consumes by itself. that will make the american people less free, less prosperous, and less secure. we need to know that, first and foremost. jeb references the current

director of the cbo, former comptroller general. we hear these warnings a margin but i think the reason why you see hundreds of thousands of people on the national on september 12, the reason why you see the tea party is, is the american bible know you cannot borrow and spend -- you see the tea parties, is the american people know you cannot borrow and spend. it asked the question, why constitutional amendment? i am in my fifth term. it seems longer. but i am pushing my 10th year on capitol hill. i have fought against runaway federal spending under a democrat congress and a democrat administration, and as my record will reflect and so will jeb's, we fought against runaway spending under republican controlled congress and republican administrations. and the one thing i know for sure is that everything we tried up to this point has not worked,

and frankly, it won't work. if senator bunning's experience in the last 24 hours is any teacher, paygo survived three weeks? the very first bill after the president signed an executive order under pay-as-you-go rules, they waived the rules. we saw gramm-rudman go the way of the dodo bird. we have seen pronouncements by republicans about fiscal discipline we were in charge and yet the government continues to expand the size and scope. debt doubled under the last administration and getting to triple under this administration dared what we have come to the conclusion of is that there has to be some outside force large enough and powerful enough to advocate for the american people in this process. and we believe -- and not little bipartisan commissions that have no force of law or authority -- but rather of the constitution

of the united states of america, that will say to congress this far and no farther. we carved out in our proposal, if there is a declaration of war, i think we went to 50% of the economy in federal spending to defeat nazi germany and imperial japan, but absent declaration of war or two-thirds vote in congress, the american people have the opportunity with this amendment to say, you can have 20 cents out of the dollar that i earn, and that is it, and anyone who thinks that is unreasonable, all we are talking bob is getting by in the next century with what the federal government has gotten by the last 60 years. 20% has been the historic average since world war ii. if memory serves, we were under 20% way back in 2007. this is not radical. we will have to make some choices, we will have to pursue reforms seriously, but we really

believe -- my decade and capitol hill, and jeb is about a year behind me -- has convinced me we have to employ that power that is the constitution of the united states, that charter with the american people and enact the bill in congress and send it to the states and let the american people say to their congress, this far and no farther and federal spending. host: what do you make of senator bunning's stand over the weekend? he did not want to move forward on what was a pretty pop the bill because he was concerned about paying for it. guest: what a radical notion inside the beltway that you should actually pay for something? we are not oblivious to the fact that we, unfortunately under the policies of this president and this democratic congress, we are still mired in roughly double digit unemployment. so many members of congress clearly want to continue to extend forms of unemployment insurance. but at the same time, one of the

things hindering job growth today is a there is no path to fiscal sustainability. one of the reasons -- and i talked to small business people all over the fifth district of texas that i have the honor of representing -- and they have anxiety and uncertainty about how will this spending be paid for. are there going to be massive tax increases on my small business? are we going to have massive inflation, to where we look longingly and nostalgically on the carter era with double-digit interest rates and inflation? that is keeping them from expanding jobs today. you can hear chairman ben bernanke say roughly the same thing. i did not speak to senator bunning about this, but the idea that if you will spend over here you ought to save over there is not foreign to any family or small business in america. it is simply a foreign concept inside the beltway. and if we would do what senator bunning suggested, we would

hasten the day where jobs are actually created in this economy. host: of is that a tough message back home when you are talking about unemployment benefits, money for doctors, reimbursement for medicare, highway money -- all things people back home may be in favor of. caller: the idea is that you don't take money away from children and grandchildren to do something that necessarily benefit us today. for decades and decades, the american ethic has been worked hard today so your children can have a better tomorrow. and washington is turning back on its head. saying washington has it easy today so children have to work harder tomorrow. that is not the vision of founding fathers, not the america you grew up here -- grew up in and not that we want to leave our children and grandchildren. host: you have an op-ed piece in "the wall street journal."

why is now the time to do this? people talk about that the economy is very fragile. there are so many people believe stimulus should continue and more money should be injected and later work on deficit reduction. why now? guest: well, i really do believe that the american people know that the strength of this nation is not derived from the size of our treasury or the size of our federal budget. the strength is found in the ingenuity, resources, creativity, courage and sacrifice of the american people. our founders knew that. the constitution of the united states is a document of limited government. but we are on the pathway to peace and chile transform the size and scope of government -- pathway to transform the size

and scope of government to the socialist governments of europe in its magnitude and size. and i don't think the american people have any confusion about what that means. people in this country understands that as government expands, freedom contracts. so, if we are going to double the size of the american government as a percentage of our economy we will be less free. i think most americans know that -- in our enterprises, personal lives. we know there would be less prosperous. there are statistics and a piece we will pose online, along perversion, forever percentage increase in the federal government's expenditure as a portion of gdp you actually see unemployment go up by a fraction of a percent. this means as government grows, it takes away opportunities for americans. the other piece of this is -- to look, the bible says that the bar were becomes the slave of

the lender. -- borrower becomes the slave of the lender. we currently borrowed $800 billion from communist china. they are our lead lender. the president went there recently to go visit our money. the american people understand that the communist chinese have a system that is antithetic call to most of the ideals of this free society. and they also have interest in the long term which could be different than our interests, specifically in the asia-pacific rim in the 21st century. and therefore we in rhode our security to the extent to -- erode our security to the extent we allowed our government to extend beyond reasonable and historical boundaries because we borrowed from those who have been antithetical ideals and a strategic interests to the united states of america.

so i think the american people know that it is imperative that we put this congress under either political party in this administration on a pathway toward maintaining the the role and the size and scope the federal government has played his starkly in our society, we will be less free and prosperous and less secure. .

rather than actually trying to bring -- to something that that have more of an immediate effect. it also strikes me as cover the. it is easy, politically, to say that we need a balanced budget. i am sure a constitutional amendment would be popular among republican voters, but it is more risky to say here is how we should we draw the budget to bring it back to balance. making cuts are often unpopular. one more question. i doubt that either of you did, but did either of you support president obama's proposal for congress to cooperate in creating a commission that would

examine and propose how to reduce the national debt? guest: and there were about six questions there, i am not sure i can remember them. please go to my website. i have introduced budgets into congress that would balance the budget. we put forth a project which was a menu of $700 billion worth of spending that we believed could be reduced, reformed, devolved back to the states. i am currently a co-sponsor of paul ryan's map for america that would make entitlement programs solvent and spare us from bankrupting future generations. i have done a few things.

i have authored the spending, debt, deficits and control act along with paul ryan, and it performs the budget process to put caps on spending, creates a rainy day fund, a number of good ideas that would limit spending. but that would be statutory. i try to reform the process. i signed onto a plan to get us where we need to cope. third, along with black pants, -- mike pence, this is congress. if you do not like something, it is up to you to come up with something. as a father, i feel a moral obligation not to leave them a sea of red ink.

president obama's commission -- first of all, it is hard to call a bipartisan. second of all, i believe it has a five-year charge when there is a generational problem. we do not need a deficit commission, we need a spend anig commission. look at the charts of the congressional budget office, it is plain common sense. we are on the verge of becoming the first generation in american history to leave the next generation fewer opportunities and less freedoms. we will be breaking from the future -- founding fathers. that is why we need an amendment

to make sure we do not have this dire future. host: what would be a starting point? would there be room to craft it into something that you are more in favor of? guest: i never want to say never. but again, it is hard to take it seriously when, for example, they have already taken some of the serious in total microforms off the table. it is hard to get a bipartisan support for that. all they are doing is saying, let's kick around the problems for the next five years and not report until after the election so that we can get this off the table. it seems like a desperate cry from the president, stop me before i spend again. i never want to say never, but

given the ground rules, i would have low expectations for this commission. host: phone call on the independent line. caller: my question is about the spending issue. i keep on thinking to myself, this spending has to stop, but where were you in the bush administration when we misspending all of these massive amounts of money? it got as into this debt situation. i am not an economist, but i am pretty sure i know the concept. to make money, you have to spend

some money. we are spending a lot of money, but hopefully we can make some money in the future. guest: i love these softball pitches. yes, we have. part of our constitutional amendment is we have been offering these proposals and they have been falling on deaf ears, it in both political parties. the government is on a trajectory to double the amount consumed of the economy by the middle part of the century, and the american people know it. with regard to where were you guys? in all humility, check the record.

we fought against the leaders of our party on capitol hill and in the bush administration, medicare prescription drug entitlement, nclb. i was fighting for earmark reforms. what we are trying to say from our heart here, in offering this fall new idea -- a bold new idea, the truth is, government is broken. i am convinced that neither political party left to its own devices will ever reverse the trajectory that the government is on today, absent the direct engagement of the american people. alexander hamilton said famously referring to congress, he told some frenchmen that here, people govern. the truth is, there is a

political class in washington that is dealing with these frightening numbers by raising taxes. the majority leader of the house gave a thoughtful speech this week talking about the fiscal crisis we are facing as a nation, then he advocated raising taxes. a character test, and generally, involves whether or not i am willing to make sacrifices. whether or not i am willing to make the hard choices to keep my priorities where they belong, but washington d., d.c. -- as we have found it even in our own party, but we need to call on the constitution of the united states of america and say this

far, no further. we have been in these fights, we have seen the futility of them. we think we need to do something fundamentally different and that is where the constitutional amendment comes from. host: mary writes -- another you are reflecting back on what happened in the bush years. guest: if you look at the record, and as mike eloquently said, we all thought spending, under republican control. but if you look at the record for the 12 years that republicans were in control of congress, look at the annual budget deficit, then you look at the three years the democrats have been in control, you

discover our annual deficit has essentially become their monthly deficit. did we spend too much money? yes, but we are rank amateurs compared to them. with tax relief, you can look, president bush signed into law tax relief aimed at small businesses and families. tax revenue increased every year. check the record. by the way, it is the people's money. if i could harkened back to the previous caller who said that we need to spend money to make money, right now it seems like we have to spend money to lose money. the president is talking about another stimulus plan, but where did the first one get us? 3 million of our countrymen have lost their jobs, with one

exception. unemployment is mired in roughly double digits, a generational lines. what we need is a pathway to fiscal sanity, and that will help to create jobs here and now. that is when it is critical we put forth this plan. host: drew in new york city. republican line. caller: good morning. i commend you guys, trying to make a constitutional amendment. people do not understand the and not of money owed that to these banks. that is why inflation is a constant, why we need to keep on covering this perpetual deficit. thomas jefferson once said, "

will i believe banking institutions are more dangers than a standing army. banks will deprive people of their properties until their children wake up homeless." people do not understand -- they say the spending is necessary, but when you stop? when the american people have no opportunity for growth? obama has the tri-lateral conditions that got us into this mess. guest: thank you. my sense of this is the american people know in their gut that we are on a cut the lead to fiscal catastrophe -- pathway to fiscal catastrophe, but we have not

created an environment where the congress is prepared to deal with it. we need look no further than the headlines today about the situation in greece. according to our estimates, in about 20 years, on the current trajectory -- and the do not include obamacare, futures stimulus bill, the increased size and scope of government as cited by liberals. at the current rate of growth, in 20 years, our debt will exceed 130% of gdp. that is roughly where greece is today, and priest is in a fiscal crisis. -- greece is in a fiscal crisis.

the other powers in the eu will not loan the money because there is no confidence that they can make the interest payment. we are on a trajectory to have a national debt the size and magnitude relative to our economy of greece's national debt in 20 years. what i hope is, despite the gloom and doom of some of these projections, if the american people would simply say to their government, we want you to live within the means that we have been doing since world war ii. tell us some responsible ways to reform current systems so that we will meet obligations. absent a declaration of war or

two-thirds vote in congress, some national emergency, we want you to live on what you have been. while we allow a time for him, libby, 10 years for this to be implemented, the truth is the budget was never adopted. most americans recognize the discussion of setting a balanced budget to the table for the discussions in the 1990's. without a vision, people perish. what we are hoping to do it is not have an esoteric discussion on amending the constitution, but what is the proper structure to initiate a national debate over what is the proper size of government? we know that the date itself,

and the whole discussion of state legislatures, congress, will drive public policy on capitol hill. the truth is, the message on spending is getting through but we need to add some boundaries to it. we believe that one fifth of the economy by having an immediate impact on policy decisions as this moves forward. host: you mentioned the situation in greece. they will be offering a spending package and cuts. that country is facing some pretty financial situations. guest: and some pretty severe cuts. i cannot imagine they are going to get anyone lend them money

unless they cut a number of their entitlement programs. we can get to where we need to go by reducing the rate of growth in entitlement. if not, medicare goes bankrupt in 10 years. social security goes bankrupt by 2013. absent the american people, their effort to limit this spending, our children will be facing exactly the kinds of decisions greece is facing. guest: mike makes excellent point. that type of austerity programs, as the newspaper alluded to in greece, will be painful to that society. we still have an opportunity, if we act today. you do not need to cut, you need to restrain growth. if the family budget is growing at 2% per year, the government

cannot be growing at 5%, 6% per year. even under the president's budget today, by the end of the 10-year budget he proposed, we will be paying $800 billion in interest alone. that is roughly $700 per american family. that is why it is critical we act today. nothing will force congress to act like a constitutional amendment. host: tony on the democrat line. st. louis, missouri. caller: i understand you keep on talking about the size of government, it is too big. i do not want to ask too many questions, because apparently 6 is too many to handle. how big does the government need to be? people are complaining.

we have salmonella in spinach, but we need more workers. we need more people at the dmv. specifically, how big should government be? guest: first of all, i do not know how i get all the democrats questions. here is what we are saying. 20%. the government has always taken 20%, but as the economy grows, so gross government. as far as i know, the only part of the economy that is growing is the government. for us to talk about these jobs that were created or saved,

well, most of them are federal jobs. ultimately, the money to come from somewhere. most of us believe they are coming from the small businesses, small businesses in texas that i have the honor of representing. right now, we are on a pathway to double the size of government. maybe for yourself, for other democrats, that does not bother you, but it bothers me. i believe taking 40 cents out of every dollar, taking bread out of the table, fundamentally changing the role of government in a free society is not commensurate with the vision of the founding fathers. number two, it will lead to a future where my children and grandchildren will live in smaller houses, drive older

cars, will have shrinking paychecks, and will live in an america where the american dream is confined to a small confines. i think that puts us on the road to the crease. to be france without the wine. host: next phone call on the independent line. steven from louisiana. caller: good morning. why is it only 49% of the population is paying taxes? everyone should pay a flat tax. no one is exempt, including churches, businesses, and individuals. guest: i notice again, mike gets

all the easy questions. guest: i have been for a flat tax, for a national tax to replace the income tax. people that want to solve this debt picture by raising taxes are precisely the same people who think that you can raise taxes without harming the economy. the opposite is true. what you subsidize, and you get more of. right now we are subsidizing more government and we are taxing economic growth. if i could go back to tony's previous question, how big does government need to be? despite the dripping content in his question, that is the exactly right question. we want to have that debate. how big does government need to be? since world war ii, we have

created the most powerful and prosperous nation in the history of mankind. we are on track, by the middle of the century, to be taking 40 cents on the dollar from my paycheck, and on a trajectory -- most americans know -- we will be less prosperous, less secure. so we will have less freedom, less economic opportunity, and less ability to provide common defense. let's have that debate. i want to affirm to tony, that is precisely why jeff hensarling and i are introducing this. we believe the size of government has a lot to do with us becoming the most powerful nation in the world, and we believe that is worth debating in fighting for.

host: another caller from louisiana. on the republican line. caller: good morning. what an honor. thank you for digging in your heels for us. i want to make a comment on the amendment. thank you for bringing it up. they've run over the constitution like they are running red lights. how can they be held accountable? guest: ultimately, the way that they are held accountable is the voters have a chance to renew our contract every two years. you talk about how this will be enforced. ultimately, there is a supreme court that interprets the

constitution, makes rulings, but it is we, the people, if congress is a biting by the spirit and letter of the law. congress has tried everything they could to avoid any type of spending discipline in washington, and there is nothing easier to do and take money away from future generations and pay current political constituents. that is putting us on the road to bankruptcy today. that is putting us on the road to insuring our children and grandchildren have fewer opportunities. that is why we have introduced, what we believe, is the ultimate tool, a constitutional amendment. then it will be up to members of

congress to avoid the sacred foundation of our republic, the constitution. host: reggie on the independent line. washington, d.c. caller: i definitely appreciate the hard work that everyone is trying to do in congress. you are great politicians, i will give you credit for that, but politics need to end right now. we all know a constitutional amendment is not going to pass. why don't we focus on something that's can really be done? we see the future and it is not looking great. i do not think we are going to wind up like greece, but let's get something that will really pass, not politics. host: what would you like to see? do you have any suggestions?

caller: pay as you go is great. start paying for what is out there. i think a flat tax is unfair. -- is fair. if you raised taxes 15% across- the-board, no more sales tax. right now, it is not fair. guest: i love the spirit and temperament in your comments. i think you are selling the american people short on this one, reg. you sound like my kind of guy. i believe in the people.

i do not believe in this city. i have been here 10 years. since then, my opinion of the american people has gone up, and my opinion of this city has gone down. we have fought a runaway spending, but we were also fighting runaway spending when republicans were in power. what we are saying is -- and we have already been maligned on the internet, and that is great. you give the american people a reasonable range, based on what we have spent on the economy, and you say to them, up or down, would you like congress to

live within the mean that it has been doing for the past 20 years, or do you want to double the spending? do you think that would make us less secure, less prosperous? not only do i believe the american people got behind the spending limit amendment, but we could build some fans lined around spending. -- fence lines around spending. some historians actually believe the constitution was more of an economic document. not only could this be enforced, but i also believe this whole debate would get this town to fly straight. it looks like the american people want us to live within the same means as we have for

the last 60 years. guest: 1 of the things reggie was saying is, i am concerned here, but i do not see much opportunity. decade ago, we were discussing giving women the right to vote. all i can say is, i do not know the chances of getting this passed, but never in my lifetime has there ever been more anxiety, more angst, more gut reaction from the american people that something is amiss, that the government must live within its means. the last thing that i should say say on our behalf is, how can you not do something if you know that this is happening? we know where this is headed. it is either headed toward a

massive tax increase on the american people, incredible inflation, more debt where we go on bended knee to china and japan, and ultimately, to a less-free, less-prosperous, lower standard of living for our children. we feel an obligation to put this out there. what should the size of government the? that is exactly the debate we want to have. should there be a limit on the size and scope of the federal government? should that be enshrined in the constitution? if so, what are we going to do to keep this nation from bankruptcy and insure that we keeping the america that we know. host: thank you both for being with us. there op-ed piece is in today's

"wall street journal." coming up next, congressman dennis kucinich. first, an update from c-span radio. >> president obama discusses his provide health care bill. the head of that, tim kaine speaking today on "the early show" said that he expects healthcare overhaul to be passed and expects to the picture of republicans fighting health care is a benefit for democrats. meanwhile, mitch mcconnell says democrats will enact a plan at their own political peril, mallon to make it an issue in every race this fall. a group of democrats have been -- written a letter to timothy

geithner are asking the administration to suspend its spending program aimed at renewing -- financing renewable energy. they are concerned jobs are being created in foreign companies. betty kaine presented her credentials to the united nations earlier today. washington's kenny the mission had been without an ambassador since last year. violence in iraq today. police say one of the suicide bombers had been riding in an ambulance with some of the wounded from an earlier attack. the bombings killed at least 30 people, just days before elections as who will oversee iraq as u.s. forces depart. >> congressional coverage includes a hearing looking at the national security budget for

fiscal year 2011. a house foreign affairs committee meeting at 9:00. robert gates said he wants the pentagon review of that ban on openly gay service members wrapped up by december 1 of this year. a military subcommittee of looks at the issue today at 2:30 p.m. eastern on c-span 3. the house pays tribute to the late congressman john murtha. memorial fund capital beginning at 11:00 eastern. this weekend, former presidential candidate mitt romney in his latest "no apology" asserts that a strong america is essential for not only our own well-being, but for the world's. host: democratic congressman

dennis kucinich, thank you for being with us. health care, it sounds like the president will be doing some talking. this could be a turning point in getting things done. what do you think? guest: we have to wait and see what the president says. i did not support the house bill. i was one of 77 members who said unless there is a robust public option, count me out. as it happens, they passed a bill without the public option. a few of us held to understand and said, no public option, no vote. host: on your website, you outlined why you were against the affordable health care for america act. come to us -- talk to us about how the insurance companies

should be more accountable. guest: the insurance companies are the problem, not the solution. most of our money goes to their salaries, marketing, advertising. when you look at it, the help of $2.40 trillion that we spend a year on health care, it is about $800 billion going to the for-profit activities of this sector. if they put this into caring for people, we could take care of everybody. the central flaw of the bill that house passed was that it continues the privatization of health care in america. i am not going to support this bill if it does the same. host: what are your must-haves? guest: fundamentally, we need to

have the public option. right now, insurance companies are raising rates for relief. double digit increases in just about every state. they do that because there is no competition. the public option puts them in competition, which is why the interest industry fought it so bitterly. they do not want people to be able to compare rates outside their industry. the house recently passed the repeal the anti-trust exemption that insurance companies had, and that was a small step in the right direction, but under this system, insurance companies have a license to steal. i cannot support anything that continues to strengthen the grip that they already have on this country. a good number of bankruptcies that occur right now are people

who cannot afford to pay medical bills. they had insurance, they thought they were covered, but these companies found ways to stop giving people the payment they need. host: you wrote about your concerns about the privatization of health care and said -- this will lead to more subsidies, higher profits for insurance companies. guest: the fundamental flaw in the approach we have taken -- and the president identified this -- we are looking at reforming insurance within the framework of the present system,

but the present system is broken. it is the reason why 47 million americans do not have health care, they cannot afford it. so if the government is providing a subsidy to these companies, it does not mean that we are going to provide the care that these people need. every proposal that came from the house, senate, even the white house, resulted in insurance company stocks going up. smart money would say as long as you are within the current system, insurance companies will clean up. meanwhile, people are suffering. companies keep on raising rates. michigan, bluecross, 56% increase. connecticut, 24%. maine, 23%. rhode island, 13%-16%.

these insurance companies are gouging people, and we are going to give them keys to the treasury by allowing the government to subsidize another 30 million policyholders? i do not think so. host: let's look at what speaker nancy pelosi had to say about the president's health-care goals. >> he spelled out our areas of agreement that had emerged from last thursday's meeting, not that they were new, but he emphasized our common ground in keeping costs down in fighting fraud and abuse. where we disagree, as it was clear from the meeting, and the president went out in the letter, we disagree on in holding the insurance companies

accountable. our legislation does that, republican legislation does not. that is the difference. our legislation will make it affordable to the middle class and hold insurance companies accountable in doing so. host: what is your impression of where the debate is now? do you have a voice in negotiations? guest: in short, no. i think the american people do not feel they have a voice either. 15 million americans out of work, another 12 million underemployed. we are in a crisis that is without parallel, other than the

great depression. the president's letter -- i have a copy here. on want to read you one part of it. we also believe reform must be built around our existing private insurance system. i do not agree with that. the existing private insurance system is designed to create huge profits for health insurance companies at the expense of their subscribers. i emphatically disagree with that approach. do we want the president to succeed? of course we do. we have seen so many different plans that it is dizzying. so many contradictory proposals out there. the american people are confused by this. but the collective wisdom of the american people are saying, wait a minute, do not try to force

anything down our throats. congress need to be careful of forcing any kind of bill, so- called broad scale perform. host: mike on the republican line. florida. caller: good afternoon. it is a pleasure and an honor to speak with you. between you and bernie sanders, i think you are the only two in washington who are comfortably fighting for the american people -- constantly fighting for the american people. i think it is funny that the gop is using the s-word, socialism, now when there was nothing about big brother before. everything was ok with that, but when it comes to coping the

little guy, the gop has problems -- helping the little guy, the gop has problems for it. we are going to have to buy coverage. imagine being in insurance company and getting 45 million more customers? it will be business as usual. the only thing that we can use it is a public option. thank you for staying to your principles. guest: thank you for calling. i will say it again, insurance companies are the problem, not the solution. any solution within the current framework is doomed to fail. they are a business. they are not responsible for the health of the american people. go back to the founding of our nation.

look at the preamble to the constitution. it states the purposes for which the nation was founded, and one was to promote the general welfare. it is appropriate for the government to be able to have education, health care, to secure people in their senior years through social security, and we are forgetting the foundations of our purpose. it is not so that we can all the slaves on health insurance plantation. host: next phone call from david. republican line. caller: dennis just told a big lie -- he said promote instead of provide. promoting is not providing. totally different words. cpac -- george will gave a great

speech last week. he talked about how the democratic agenda -- it is not the result of them trying to help poor people. it is their agenda to create dependency. when dennis kucinich kept out of washington, his name done is how to create more dependency. how can we get more people to depend on the government to provide their every day care? 40 million people are on the federal food stamp program. you and did that program today, nobody would go hungry. guest: the only one who knows but i think about when i get up from bed is my wife, so you

stand corrected. this is not simply a cash cow for banks. it is not about watching poverty grow and not doing anything about people being out of work. it is not that 47 million people do not have health insurance. it is not about not caring that these businesses are failing. we have an obligation to be engaged. i voted against the bailout. i voted against this health insurance bill because i saw its limitations. i am not a rubber stamp for my party, but you need to see but the purpose of government is. we have a multi-billion dollar budget. is it only meant to fight wars around the world, many of which we had no business starting? host: sarasota, florida.

mike on the independent line. caller: good morning. i hear all lot of numbers that health care is 1/6 of our economy. is that just a health care economy? something must be wrong with that. guest: i think the figure relates roughly two figures 18 months ago, $2.40 trillion a year, about 70% of our gdp, goes to health care spending. of that amount, one out of every $3 goes to marketing, staffing, payroll. i believe we need to take the money that goes to the administration, things not related to health care, and put it into care. we could take care of dental,

mental care, vision, long-term care -- it could all be covered. we spend twice the amount per capita than any other country but we are not getting the results. host: the house looking at different provisions, what may change based on last year. you are not on this list in the "wall street journal." are you concerned that this thing could get scrapped and the work that has been done could go back to zero? guest: the work that has been done so far has many flaws in it. while on what the president to succeed, and i supported him, i do not want to be part of

locking in a privatization process without any controls over premiums at a time when they are going up 20% sun, wind industries had a double-digit increase for the last four consecutive years in profits. do we have to go back to square one? in state after state, people are beginning their own initiatives at the state level. pennsylvania -- pennsylvania health care for all. that is a statewide organization that is doing everything they can to the dance single payer that the state level. either it is pennsylvania, missouri, colorado, maryland, there are initiatives happening all over the country. i believe this process in the capital is totally flawed that it cannot succeed.

however, americans will someday have a health care for all plan. it will work this way. some states will pass health care reform. the california senate's four weeks ago passed a single payer- type of initiative. they passed it twice but the governor vetoed it. one state will break through. when that happens, as it happened in canada, in saskatchewan, the rest come. neither we believe health care is a basic right in a democratic society, or we believe each of us are subject to being exploited by interest companies not providing health care. -- insurance companies not providing health care. there are people all over the country organizing. pennsylvania has a great website. if anyone is interested in

helping at the state level, see what they are doing in pennsylvania. there will be a break at some point. host: bill on the democratic line. maryland. caller: people keep on coming on tv, talking about the american people. well, i am an american, and they are not voicing my opinion. i see so much misinformation, and the news media is not correcting it. no one is challenging these false opinions. the federal government, everyone talks about big government. i am a minority. the government has always been the protector of civil rights. the federal government does not have the same connotation to minorities and the dust to the

white population. -- dust to the white population. guest: minorities, african- americans in particular, are bearing a disproportionate burden of not having health care, of being unemployed. bearing a disproportionate burden of mortgage foreclosures. the economic injustice of our time is being piled on people in minority communities across our nation. many of those who have been able to merge into working class, middle class, are being slammed back down. where are the remedies? are they in this health care bill? i do not think so. it gives control to the insurance companies. on another federal level, i think it is incumbent, when the

private sector is not providing jobs, that we have a responsibility to provide for a new type of program to put millions of people back to work. that is part of the rising tide that would prime the pump of the economy. so many minorities are in danger of default, so many are under water with their homes. we need a write-down printable as a way to keep people in the game. there are some things that the federal government can do, and something that will be done at the state level. notwithstanding the limitations that state governments have, that the ultimate solution of healthcare will start at the state level, and then be accomplished at the federal level. host: independent phone call, louisiana -- minnesota.

caller: i wish you were a democrat here. he would have my vote. keith ellison does not seem to be getting the job done. in minnesota, we already have a public option. it is called minnesota care. it is for the uninsured, the underemployed, disabled. you pay based on your income. it works well. i wish the republicans and some democrats would take a look at what minnesota is doing, and has done since 1992. this works well. it is not a government takeover. it is a public auction naturally -- option that truly works. guest: i appreciate that.

there are some states that have taken health care into their own hands. but you also said it is not a government takeover. what we have right now, what is being proposed, is being described by some republicans as a takeover, but that is laughable. we're giving interest company's 20 million new customers. how is that socialist? the fact is, the private sector runs health care in america. if you have tadvocate a private takeover, that is a problem. host: we have to go to the house where charlie rangel is making a statement. >> so much attention to the press. in order to avoid my colleagues

having to defend me during their elections, i have, this morning, sent a letter to speaker pelosi, asking her to grant me a leave of absence until such time as the ethics committee completes its work. now, i know that all of you have a professional obligation to ask questions, but i am afraid if i went down that road, that it would distract me from what i have to do, including the completion of the president's health bill, as well as making certain our committee get a good jobs bill. i will not consider it prove if

you insist on asking questions. i hope that you understand that i do not intend to be rude to you. thank you. >> this is not because of the press attention that you are stepping down, is it? >> mr. rangel, who is going to take over? >> as i said, i hope you do not mind if i do not take questions. let me also say, from the very beginning, i have offered this to speaker pelosi. .

host: do you think the investigation is a cloud over the democrats? guest: any serious ethical violation creates a problem for the entire institution. that is why it is important that mr. riegle took the step he did. that is a big decision on his part, especially with these

important pieces of legislation that goes through his committee. i support his decision. host: let's get back to our callers -- we have wind on the republican line from massachusetts. caller: can you hear me? host: yes, i can. caller: i am a union carpenter. today is when you're exactly since i have worked. everybody thinks that union carpenters make a ton of dough. we pay out of our total pay package about $8 per hour for every hour we work towards our health plan. it is not really that great of a deal. my other point is, why not as a matter of national security can we and pose an immediate freeze on the price that these insurance companies are charging us?

guest: price controls on health insurance policies would be a great idea. i also think, as a union carpenter you and the number of other tradesmen, look at the so- called cavelike tax -- so-called cadillac tax -- this is another reason why i oppose the bill. people to negotiate to get a good health insurance package. they often give up wage gains in order to do that. the cadillac tax ends up being a wage cut for people who are working on an hourly basis that is why i oppose it so strongly. furthermore, i want to say to you as a brother union member, i remember of the local 600, we still need to keep our commitment to working men and women to have the right to

organize confirmed by our congress. these are fundamental rights, the right to organize, the right to collective bargaining, the right to strike, the right to decent wages and benefits, the right to retire, the right to a safe workplace. people benefit everywhere because of the labor movement. i appreciate the carpenter called in. you helped build america and we want to make sure we can put america back to work so that you and all the others who have been out of work for a year or longer have a chance to do what you do best and that is to reinvest in america. we're talking about health care reform. we need monetary policy reform. we need to find a way to invest in our country. fdr rebuild america with the wpa. we need to put millions of people back to work, the bricklayers, the carpenters, the iron workers, we can't get america back to work.

health care is one of the interlocking economic difficulties which americans are having along with being out of work and having their homes in jeopardy. host: there was an article today looking at union relationships with the president at the white house. do you think the white house has done a good enough job of keeping unions on their side? guest: are they trying? i am sure they are trying. let's not forget that obama took over on an unmitigated mess. he took over wars that we did not have to be in that cost trillions of dollars. he took over an expanding federal deficit that was driven by tax cuts that accelerated the wealth of the nation to the tub. it took over an expanded military budget. this bailout he had to take over. what do you expect? the country is collapsing, if

obama made a mistake, it is not appropriately letting the american people know the depth of the mess that he stepped into. let's get away from the republican-democrat thinker we are all in this together. we have to work to stop the practice. this is not about democrat- republican anymore. it is about up or down. people are having trouble because the will of the nation is accelerating up for it. that is the fundamental problem in america. it is about whether you are up or down. there are many more americans down today. that is the essence of the tea party movement. that is the essence of the people struggling to be able to come to grips with a political system that seems to be failing. this is not just about barack obama. we have to take a deep look at who we or as a nation and decide what is it we want. do we want health care for all? do we want people back to work?

do we want people to save their homes or do we want to look the other way and let the big money machine make the money and having the wealth of the nation accelerate upwards? those are the decisions we have to make. i know which side i am on. hostcaller: i am glad there are people like you, dennis kucinich. my concern is by the fascism of private industry controlling government. with the new supreme court ruling allowing them to dump as much money as they want. we might as well put labels on our congressman. i am concerned that lobbying is getting of control. that is was controlling it. they are able to dump money to foundations to manipulate the people that have less information. you have self-appointed guardians who are sheep that need to be educated.

when i was in school, i used to see the pictures of the firemen and police officer and there was a doctor and a nurse but those were not together. those are not part of the public servants. doctors and hospitals are not public servants at all. they make money off of you being sick. guest: when you take china trade, nafta, the repeal of classical, what you have is a government of the lobbyist, by the lobbyist, and for the special interest groups which these lobbyists work for to enhance the economic interests of wall street's, of banks, other insurance companies, of these multinational corporations who have taken jobs out of our country and sent them to places where people will work for next to nothing if we do not start standing up for our country, if we do not start standing up for

the rights of people to be able to have a job -- it is not that people do not want to work, the jobs are not there. to be able to have health care and stay in our own home, if we don't stand up for people's bake -- basic economic rights, we have a -- an economic democracy. why is america becoming less democratic tax because the economy is moving in a less- democratic direction. when we see china having a $200 billion traded at the start of the united states and we see our jobs go there, why should we be surprised? china is a communist country. are we holding that up as the ideal? they have their political system but we have hours and have to work to protect our system and protect our basic liberties. there's a definite link with the economy. host: you mentioned the tea

party movement. why has that got in harnessed into a conservative slant? do you see a way to channel that into a more liberal agenda and platform? guest: government has to be listening. i met with people involved in the tea party movement in my own district. i sat down with about 70 people in my office. i found that these are people who are concerned about whether or not they can keep their homes, they're concerned about their investments, their retirement security. they have the same concerns as everyone else. we cannot abandon people just because we may have a slightly different political philosophy we should listen. i may agree with them on some issues. that does not mean that the solutions i would suggest would be the same. we have to respect each other enough to listen. we should not discuss people

because we think that they don't understand. -- we should not dismiss people because we think they don't understand. there is a common wisdom around this country. it is not that people who disagree with us know nothing. people do know and we need to listen to what it is they are saying. the defining moments of our time involve redistribution of the wealth of the national ports and government is being used as a machine to redistribute the wealth through bailouts through trade agreements, through health insurance schemes that deliver more people to the health insurance industry, through tax breaks that go to the top, through wars. when we look at the wealth of the american people, which took generations to accumulate, start to dissipate, people not being

able to afford their mortgage payments, we're looking at a system that has gone wrong. we have a greater responsibility in america. it is not about protecting a partisan position, it is about saving our nation. host: an independent caller from michigan. caller: the health-care system has quality problems. -- has quite a few problems. we need to get people out of the merged to rooms. we have to use tried and true medicines that are still in the seven-year patent. we know there is no money in the church. they set up that with all these angles how to police america's from big pharmacy to the doctors -- they don't actually

help you with your problem. it is pretty upsetting. guest: i hear something in what you are saying. i would like to offer this observation. when it comes to health care, even though i think we should have medicare for all, ultimately, government is not the solution. each of us as an individual has to provide the solution. i will share something with you. when i was a younger person, i had a very bad case of crowns disease and it almost killed me. madison could only take me so far. i had to change my diet. i had to take responsibility for my own choices with nutrition. i found out that i could not do

dairy, meat, any kind of animal proteins. i started using chinese medicine. i use conventional medicine if i needed. i took that decision for myself. ultimately, each of us is responsible for the choices we make that either produces health or disease. that is the american way when you think about it, that kind of forthright independence that is our birthright. at the same time, for whatever choices we make and for what ever heredity we may have, we still need some help in terms of being able to back us. -- if we do get ill. when you think about health care, government is not the solution. we have to make better choices about what we do, about our diet, exercise, nutrition. these are things we need a larger discussion about

nationally. host: does the government have a role in that tax guest: i think so. andguest: childhood obesity is a huge health problem. you look at the family'ies who have a morbidly obese kids. the junk food industry sends out pets and they want kids to consume these products. kids and up with diabetes and other diseases that you would not normally wind up with until later in life. take away the advertising tax credit which5+ñpp these junk fd industries have now when they advertise to kids. that is one way. put that money into childhood nutrition programs. we need to look at how the

disease is created. there are problems with alcoholism, tobacco. we make choices. in a democracy, that is what you were supposed to do. sometimes we have to help those who made bad choices for you don't pro people aside. we also have to regain our power to look at some basic issues such as diet and nutrition. i do not tell people that they have to eat as i e. my diet is somewhat spare pair of i know from my own experience that the adverse health symptoms that i had that could cut my life short started to dissipate and even disappear over a period of time through a change in diet and from using some alternative medicine. i understand we have to take some responsibility for our own choices but the government, as

abraham lincoln said, people -- we have to collectively what people cannot do for themselves individually. people can afford the hospitals and the care they need when they do become ill. host: 22 cleveland, ohio, republican line. caller: a couple of questions for you -- thank you so much for being here in cleveland, confronting george forbes and getting his tyrant's the taken care of in cleveland. question about the health care -- [unintelligible] charging taxes for the rich and the poor, congressmen pay less

than what they're secretaries' pay and make four times the amount of money. guest: first of all, thank you from cold -- calling from cleveland. is an honor to represent the people of cleveland in the united states congress. we have the cleveland clinic which is a marvelous world famous institution under the proposal that i backed. this is so they would have a global budget and they would be able to function as they have. there were billboards that would review and control costs there. we do not want to provide disincentives for fine institutions that keep advancing medicine. across the board, we need to keep controlling costs and global budgeting is one way to do it. you mentioned george forbes. he is a friend of mine. when i was mayor of cleveland, i had a battle with the council president. as life goes on, he became a close friend. we need to maintain our capacity to be able to find ways to work

with people later on in life. that is one reason why partisanship can be a misdirection. you have to work with people so forget the labels. you raised deep questions about what can we do to make sure that there will be enough money for health care. we spend twice per capita than any other nation spends. on the take up corporate profits, stock options, executive salaries, advertising, marketing, the cost of paperwork, we then take those savings and put it into care for people and enough money is there. it is not that we have to have a tax increase. we have to reallocate the funds within the system. later on, if we want to expand the benefits, we can have a national discussion on that. right now, people are paying for a national standard. they are just not getting it.

it is a for-profit system. host: democrats line from westport, ky. caller: how are you today? guest: hello. caller: i wanted to commend you on a good job. i hope someday you will the president and we will have a president with some gumption. i'm a member of 369 vietnam war vets. i was foreclosed after i was like two months and two days. i have heard many people had not been foreclosed on for six months. i was wondering about the health care. i think we need health care for all. it should be a god-given right. a lot of the jobs are going

overseas. people are out of work. we have thousands of electricians out of work right now. guest: i hope is -- i hope everyone is watching and listening deeply to this caller from westport. he is the voice of america. he is a trained tradesmen, an electrician, who cannot find work. people all across this country have done the right thing. they prepared themselves for the world of work, they have the skills, work is not there, you don't have a regular paycheck, your home gets in trouble, you can lose your home as this gentleman is faced with. he is a veteran, he served his country. when is this country going to serve him?

we have an economically and just society. it is fixable. we need to get every trace person in america back on the job per when people are working, they can pay their mortgages. if people are in danger of losing their homes, we need to have a system of writing down the principle so that people will not walk away or the banks will have an interest in keeping people in their homes. you may say that you pay your mortgage and i don't want somebody else getting a break. there is a tremendous -- there is a figure that can up from a study yesterday saying that families havewf lost-dç%r $50n by being neighbors of people who have been foreclosed. you have foreclosures in your neighborhood? your0u property's -- property values go down. our nation is capable of dealing with these things.

it is not just like things are happening and we cannot deal with it. we need a jobs program. we need to make sure that people have the right to organize. we need to make sure that people have health care. we have the capacity to do that and we could do something about keeping people in the homes. those are the three main issues now. unemployed as a national crisis. the fact that people are losing their homes and there is negative equity. they are under water and need help. the current programs are not enough. we need to make sure that everyone has health care. we are capable of doing those things. washington is in this paralysis right now. it cannot function but it will because the american people will eventually find a way to make it function. congress host: men dennis to senate, thank you for being with us. he is from the 10th district of ohio coming up next, business writer zachary goldfarb will

talk about the fcc's proposed budget. >> it is 9:23 eastern time. same-sex couples have begin applying for marriage licenses here in the nation's capital. at least 16 couples were waiting at the courthouse early this morning at the city's marriage bureau. court officials are expecting up to 200 people. washington becomes the sixth place in america where the americans can take place the new york governor is vowing not to step down despite a growing scandal that has claimed two top law-enforcement officials. the latest to resign is the state police superintendent. david paterson is accused of intervening in a domestic violence case. police want to know what he told the woman who declined to press charges. the european union says it shares u.n. fears that tehran may be secretly working on developing nuclear weapons. a strongly worded in station -- a statement says europe supports

new u.n. security council actions if iran continues its nuclear defiance. greece has announced a new austerity plan aimed at saving $6.5 billion. theús measures includeo/ a boosn the sales tax from 19% to hy21% and a cut in salary and bonuses for civil service workers. nog to the international monetarynog fund to seek help. qzkgreece is already receiving m at advice on how to deal with the crisis. european union officialsen oppoe an i.m.f. bailout. those are some of the latest headlines on cspan radio. =0z>> our congressional cover ty includes a hearing looking at the national security budget for fiscal year 2011. that is live at 9:00 a.m. eastern on cspan 3. yesterday, defense secretary ñ wantse pentagon review of the ban on openly gay militaryop[ service members wrapped up by december 1

of this year. the military personnel subcommittee in the house looks at the issue today. that is live at 2:30 p.m. eastern on cspan 3. the house today pays tribute to the late congressman john murtha who died last month. a memorial service from the capital, we will have live c-span. >> "washington post" international correspondents tr reid has traveled the world. join our three-hour conversation with him and your phone calls live sunday at noon eastern. that is on c-span 2. >> "washington journal" continues. host: thank you for being with us. we are looking at the proposed

budget this week. you were kind enough to talk to usjby-bú about the fcccéa propod budget. çyguest: the president wants to see the fcc reversed their budget where it has been flat or declined in the agency did not have enough resources to police the markets on wall street as needed. we saw that one of the results of that was the financial crisis that we experienced last year and the year before. they are trying to begin a process where the sec gets the oversee an increasingly complex and difficult to understand stock market, bond market, and exceedingly complex instrument that many do not understand. host: securities and exchange commission, give us a brief on what their role is now. guest: they were created in the 1930's. it was considered a model regulatory agency.

a bunch of people want to make sure that people on wall street played by the rules. over the years, it has changedé+ some decades, it was considered a shining beacon in washington. úthey look like hard edged investigators. the past few years, it was seen as a weak regulator, one that protect the interests of business before investorsbb or they were not seen as an aggressive regulator. they are trying to change that. this has to do with the bernie madoff scandal, burke -- bear stearns. they are trying to reverse course host: we are talking about the sec and its proposed budget. you can give us a call. the numbers are on your screen screen

the budget request for fiscal year 2011 is $1.23 billion. this year it was $1.12 billion. guest: that is a significant increase. the secda wants to be able to self-fund itself. they collect in fees one penny on each stock you sell. the problem with having them go through the appropriation process, almost all the other financial regulators write their own budget for the problem is that they cannot plan for long- term and it makes them vulnerable to political pressures. the congressmen upset about

short-selling rules or other regulations may say that they will affect their budget. technology cannot be implemented in one year. it requires a 5410-year plan. -- it requires a five or 10-year plan. if they do not know what its budget will be over that time, it can be sure -- it cannot be sure they can buy the technology and implement it. every agency would like to write its own budget. an agency like the sec needs that capacity. capitol hill is hearing these concerns somewhat. senator schumer has legislation to overhaul financial oversight.

senator dodd should come on board with that. the bill that passed the house does not have that in there. it is unresolved whether the sec will get that ability. there seems to be growing support for that. host: what would it take for that to pass the house? guest: people are still skeptical in the house about the sec. lawmakers in the house who hill -- hear from community banks and other locals are worried about giving that authority to the sec or losing the leverage. it is hard to know if they will get that ability. host: republican line, from new jersey. caller: i work on -- i worked on wall street along time ago for a long time. the banks were then separate from real estate.

it was banking insurance. we are on our knees to these firms now for the sec cannot possibly go into all these firms and try to do audits on stock commodities and other things. for one person or a group of people to specialize in that place, they would be in that firm for 10 months. i don't think that we have the money for this i think this should all be separate. it -- we never would have the mortgage problems we have now if the banks were held responsible for what they wrote and did not have insurance to bail them out. guest: you raised two important points. the first is, our banks too big to fail and too big for -- to be

regulated. the bank as many internal components and is hard to understand the spirit some public officials have suggested that we split apart these banks. they want to require a hedge fund association of a bank to be separate. they don't want there to be leakages between the riskier parts of banks and the safer parts of banks. the second question is the issue of resources in the sec budget. their budget has grown over recent years the amount of activity in the market has increased 50% or more depending on what you count. it is true there is not enough people on the ground at the sec or several other regulators to oversee what is there.

the more fundamental question is whether these banks and financial operations are too big to oversee and should they be split up? host: the president proposed budget would boost employees at the sec. what would that do and how could that help with enforcement, regulation? guest: a boost in employees is focused on some areas like oversight. the one periodic exams to sec officials to the best and visors and so forth. there is simply not enough. the bernie madoff fraud is one startling figure that most investment advisers are not reviewed except once in every 10 years.

the second part of the story is the enforcement people. the other -- these are the investigators who try to find where the fraud is happening and stop them. they have been trying to increase that. the third important aspect are people who are lawyers and not accountants. these are not necessarily ex- wall street people. they are trying to increase the number of people that have real world experience. they might be able to think like people on wall street. they are trying to hire people like that. the sec cannot pay wall street firm can pay. they have had some success in recruiting people from wall street. they are trying to get some real world experience in there. host: let's go to hamilton,

montana, on the independent line. caller: there has been a mass of fat here. -- there has been a massive theft here it is world wide theft. we need to get it drummed into power at about how we deregulated -- into our head about how we the regulated. the same people that were telling us that stop or the ones that ripped us off. it seems to me that this is adding insult to injury. as americans, we are not as stupid as the people in the financial world think we are. this is bigger than the building of the pyramids. this is freaking huge. guest: there has been support of regulation and deregulation over

the years. one thing that financial regulators talk about is when the stock market is drying up in the economy is good, people like to deregulate and when things are bad, people like to regulate. we see this now operate in the late 1990's, the market was great and we deregulated a lot. the housing bubble market was great. we had the financial calamity of the past few years. the economy is in a deep recession. there was a huge push on capitol hill for financial regulation. we are here in 2010 and the stock market has rebounded somewhat but is in better shape than it was before. they are still working toward reform, many of the proposals are being held back. there's not as much push of a financial regulatory agency anymore. there are other discussions about modest reforms for wall street. you definitely see the public

appetite for reform change. an improvement in the stock market and economy her retarded change. a crisis is a terrible thing to waste, it is said, with the improvement of the economy, it is hard to know if we are learning the lessons from the past years. host: the sec has five commissioners who are appointed by the president. only three at most can be from one party? guest: right, there are now two republicans and two democrats appointed by president bush and the president, mary schapiro, was appointed by president obama and she is an independent. she is in a democratic mold. she can usually get through what she likes to get through. people do not realize that the sec authority is relatively

limited. they do not have power over hedge funds, for example. they have some powers over credit agencies. it's authorities are limited and they are trying to increase their authority but there is only so much they can do. host: rising sun, maryland, go- ahead. caller: how are you today? guest: fine, thank you. caller: why don't the people in this country take responsibility for their own actions? we have obese people. we have obie's kids. it is because the parents allow these kids to buy things that are not fit for them. they do not take responsibility. the fda is putting things in our food that are destroying our

bodies physically and they make addicts out of these kids to want to eat that stuff. host: let's see how this relates to the sec. guest: we are talking about the concern of a month -- mentality of greed on wall street where people think we can have good times without paying a price. we bought homes that were too much for us to afford. we bought big tv screens and a credit cards and increased debt. that was the heart of the crisis. we bought too much. wall street found ways to allow us to do that and push us even more. regulators it because they were captured by industry and did not want to interfere or because they were not looking closely enough at what was happening, they did not stop these practices every part of our economic system from the home

buyer to the home regulator and a complex analyst on wall street thought we could live in the golden days for ever. the caller touches on a reasonable point which is that we all have responsibility from the bottom to the top. for what has happened and we are trying to figure out what is appropriate to prevent that from happening again. host: twitter says is in regulation like a little text running the asylum? guest: there is a plus and a- involved in this. one of the sec regulators was spent at deutsche bank.

he prosecuted white-collar crime in new york. his experience is mostly in public service. you always wonder if the regulators are here to get a high-paying job afterwards or is the real world experience helpful tax many people leave the sec after a few years to get into the private sector. kusami pointed out to me that he left the job but being a top lawyer is a good job. the revolving door is a problem. in his case, it is not as worrisome as others. host: has that phenomenon been brought up to members of congress? are the critical of that? guest: congress has its own revolving door problem. they are critical of that. it is relieve the securities

industry. it is a revolving door. just like the criminal prosecutors become criminal defense lawyers, you are never allowed to work on a case that you have been involved with on the other side. it is hard to stop that completely. very few would join the agency if they could not work in the private industry afterwards. host: democrats line, go ahead caller: the revolving door is absolutely astounding. if someone had some guts like teddy roosevelt who got rid of the trust's and they could get rid of derivatives and program short-selling and get rid of credit defaults swaps and stop the mass of purchasing and borrowing without strict market requirements, every senate and house committee that i ever saw hearings on recommended this.

to remember what mr. paulson did on the night before tarp was approved when he said he would never approve a hedge fund being bailed out and that same night, the federal reserve came out and approved goldman sachs being changed from a private equity firm to a corporation, a corporation that could receive bailout funds. this has been nothing but in the mainstream of washington deliberating with their friends. host: our caller brought up short selling. guest: short-selling is a good example of the kind of quandary the sec finds itself and often. short-selling is a way to bet on whether a stock will fall. you borrow shares from someone

out there on the market. you sell them immediately and hope to buy them back at a lower price making a profit in between. this provides a very helpful source of liquidity and activity for the market. what people have been concerned about and this has been around for decades, is that people will manipulate the stock. during a turbulent times this will happen. there were concerns that during the crisis, people were able to manipulate stocks and pushed them down. there has been a lot of pressure on the sec from lawmakers and some banks to crack down. they issued a restriction on short-selling which is supposed to stop that if there is a piling on the fact of there is very little evidence that it has this defect.

-- that has this effect. the sec says that even if the stock is not manipulated, from an investor confidence point of view, wanted to give the market that feeling that things are right, they want to put some this -- some restrictions on that. that is an interesting illustration of that. host: our independent line from connecticut. caller: i am calling to find out if they have clarks that work at the sec and what do they do? i am not talking about lawyers or mary schapiro the politician. i am talking about people that go in there and work. what is their job? when harry marcoplis tried to tell about the bernie madoff ponzi scheme, didn't anybody look at it?

he went there at least six times and told them. is it just a bunch of lawyers that go out and start arresting people after it comes out a newspaper or the television that somebody is doing something terrible? what are they doing? are they afraid of goldman sachs and all those people who are investing and taking people's money? what is their job? guest: you raise a very good point. the bernie madoff fraud, for example, and how marcopolis -- and harry marcopolis illustrates that he went to the sec multiple times and give a detailed road map to the bernie madoff fraud. why didn't they use that to stop

this earlier on? this has been a deeply studied question. thousands of documents have been released and many articles have been written. the actors seem to be a combination of factors. one answer is that because there are many lawyers said sec -- at the sec did not understand the allegations being made. another issue was the bureaucracy. bernie madoff was being investigated by the washington and new york offices of the sec. how did the washington office find out that in your office was investigating? bernie madoff told them. the internal bureaucracy problems and other things, they

have all the problems bubbling up in the bernie madoff case. the sec is trying to learn those lessons and reorganize itself internally so it does not happen again. host: what is the difference between the two offices in new york and washington in the sec? guest: the office here is the headquarters and they do a lot of their work and actual rulemaking. by contrast, the new york office has some role in writing the rules. they are inside the investment banks and other wall street companies. they work with prosecutors on sec cases.

that happens in washington, too, but mainly in washington they are involved with rulemaking. there is an overlap but that is the general distinction. host: republican line in flatwoods, caller: k ky. caller: the old soviet republic brushed away the idea of communism and saw that democracy would work and were smart enough to make a change per at -- a change. why is it our government say that the communists can make a change, why can't we stop nafta or stop shipping all of our jobs and money overseas? why can't we make a change and snap this thing? nafta is what started all our

problems. guest: in the financial policy making world, your question is relevant. we talk about a lot of regulation now, a few years ago, there were concerns that the sec 1gwas too regulated and companis were going to london and other countries. they were less regulated and easier to operate in. question comes up whether we want to be a country where we are the destination for investors or we want to be a country where maybe you don't make as much money and don't grow as fast economically but it is safer and more stable? this question comes up here in washington and around the country.

host: democrats line from detroit. caller: who oversees the hedge fund which is gambling on insurance like they do in las vegas? is it true that back in the 1980's with ronald reagan, when he became a buddy with the guy and goldman sachs that there is -- that is where all the deregulation started? why is it the sec used to have more power? where is their oversight? it all started with ronald reagan and a guy from goldman sachs, i cannot remember his name. guest: hedge funds are overseen

by a bunch of different entities, really no one overseas them. the sec assures that they are committing fraud but they do not have legal oversight over hedge funds. the biggest hedge funds are having problems. no one really overseas hedge funds in a clear, legal fashion. that is what some argue is a big problem within the regulatory framework. under ronald reagan, there was a lot of deregulation. until recently, there has been a the regulatory approach to the market for many years only now, are people starting to talk about reversing that trend we will see it that has traction or not host t. caller: i want to ask about the

401k and how it is regulated. i see where they force you into a group of funds and you have no way of monitoring those funds and you're not skilled enough to recognize what is going 7le with them. everybody tells you to let it ride. ou would have a broker to call. they don't tell you what it is and you cannot monitor it and you cannot look up these funds. you have the money markets that disappear and to give you a fund in place of it. i found that the one i had was a bunch of banks where they get my money and i don't know if that will come back to me. that is one of the issues because i worked on wall street for 30 years. i look at how they do not regulate the way they did in the 1980's were the brokers would

have all audits every year -- would have audits every year. in the last 15 years, there has not been audit, it seems like caller. the payback from the funds that happen the 1990's, i have seen that money come back and never get distributed to customers because they cannot determine who the customers asumì(lc@&c+ there -- because of the takeovers that have happened guest. guest: the 401k industry is overseen in part by the sec. they have struggled a lot in the past year because of the decline in the past few years. they generally tend to follow the direction of the s&p 500. if your company has a match

proposal policy, you go to the match and it is best to put money in an ira or other retirement vehicle because it 401k feet tends to be higher in general. ian ira tends to have no fees. host: the caller mentioned apparent regulation going on in 20 years ago or so. from the people who work in the industry, what are they seeing our feeling? is there a clampdown atmosphere right now? guest: in the short term, the sec felt a short-term aggressiveness. there are more questions being asked and more day to day oversight. they are still playing by the new rules because there have not been in new rules written by congress. wall street hates the idea of

uncertainty. wall street does not like the ideamqt of newk=ñ regulations, consumer regulations, or financial regulations. they want it over with. wall street is called -- is coalescing about what ever it will be, get it done. ñt÷host: let's go to baltimore, maryland, republican line. caller: what in the world did they ever allow the securitization and loans because it does absolute nothing for home owners? bishop learned their lesson when they have the savings and loan ,oscandal -- they should have learned their lesson in the savings and loan scandal. this lobbying is highway robbery. why it would be allowed to pay

for campaign funds when they are just trying to have someone look at things from their perspective. have a good day. guest: your point of securitization is interesting. that is a process by which it can get a loan for your home, the bank can take your loan and edit with other loans and turn it into a security, an investment and sell it to investors in the u.s. or abroad. china is a huge supplier of funds that end up as money for home loans in the u.s. the reason why they started securitization in the 1970's was to get more funds available for homeowners. the country was running out of funds. in the old days, banks would take the deposits and turn them around to home loans. it was more money available to

make more home loans. the--- the-was -- the-was that investor in another country, how can that of the answer -- how can you as the bar or afford to pay it? -- as the bar were forced to pay it? it was perhaps a lack of common sense. securitization market got way out of control. it is hard to say that securitization in and of itself is a bad thing. host: independent caller, good morning. caller: i can tell you both that i have stocks older than both of you.