the european union delegation to the u.s. the u.s. embassy in kabul faces serious security issues. after that, we will talk about the two-year anniversary of the financial collapse of bear stearns. this is "washington journal." . .

host: are you active in the healthcare debate? there are ads going up, groups asking you to call your congressperson or senator, to drive past offices -- we want to know where you are doing. start dailing in now. here are a couple of ads recently put on air. >> next week, congress can make history by voting to make health care right. president obama's plan would rain and exploding insurance rates. it would prevent insurance giants from the dying coverage when you're sick. >> special interests are marshaling their forces for one last fight to save the status quo. we cannot let that happen.

that is why i am asking you to fuel this movement. >> i was diagnosed with breast cancer when i was 43. my mother died of cancer. early detection save my life. now government panel that did not include cancer specialists says women should not receive mammograms until age 50. that saves money, but could have cost july. my cancer would have spread undetected and my chances of survival would have been reduced. if government takes over health care, recommendations like these could become the law for all kinds of diseases. europe already has government- run health care. my odds were high because my

care was the best. what are your odds of the government takes over your health care? >> tell congress to start over and get health care right. host: are you active in the debate? that is the discussion for the first 30 minutes today. then we will keep talking about the politics of this debate with our guest from the hot line, joined us at around 7:30 a.m. eastern. massachusetts, john on the republican line. are you active? caller: i certainly am. i'm calling my senators and representatives. in donating money to the various groups that are putting together ads around the country in key districts, going after the members of the democratic -- house members at risk in the

coming fall election. host: are you opposed or supportive of the bill? caller: i and very supportive of healthcare reform, but deadly opposed to the socialist takeover of -- and the huge bureaucracy that is the goal of this bill. this bill has nothing to do with improving health care, and everything to do with the government taking over every aspect of our daily lives. host: who is your representative? caller: [inaudible] this is massachusetts -- [laughter] the scott brown idiosyncrasies is not indicative of the general trend in massachusetts. host: have you ever voted for delahunt in the past? caller: absolutely not. i would never vote for a democrat.

host: how much money have you donated to this? caller: over $1,000 so far. host: to these outside groups for their ads? how many caller: three different groups, especially the one by dick morris. i forget the name -- i do it online. i think it is something "for america" -- actually forget the name. it is very instrumental putting together ads to run against these democrats. host: at me ask you quickly, which member of congress are you watching in the debate? caller: every single one of them. i have over 1000 clients across the country. most of them are in lockstep

with the majority who oppose this draconian health care proposal. i am very active getting in touch with friends and people who might know, who have a chance to do the same sort of thing in their parts of the country. host: pennsylvania, another john, this time on the democrats' line. caller: hello. i am a first-time caller. i'm not that active in the health-care debate, that have been watching closely. what i think it is really coming down to is a power struggle between obama and the israeli lobby is. host: thises mesquite, texas. caller: i'm a lifelong democrat and actively against it. because i lived in texas, the way i have been active is making comments on the report,

calling speaker nancy pelosi, e- mailing speaker nancy pelosi, it-mailing the president. i don't think he gets our comments, though. he-mailing senator reid, and every other senator. my senator is a republican, and also my congressman. it does no good to e-mail them. i would be for strong insurance reform, but this is -- this is the awfullest mess -- i have multiple sclerosis, and 69 years old. this is a mess. my democratic party -- and i voted democrat since john f. kennedyt. hey always seemed to make a mess of everything. they had a majority. for the whole year they could've gotten together and have a good deal.

i really appreciate c-span, and am really disappointed in my country. i'm disappointed in president obama. host: syracuse, n.y., on the independent line. caller: i have been active, but i am a member of the working families party. we did pass a resolution, had a state committee meeting over the weekend. it was a press release that any u.s. representative who votes against the healthcare bill or reconciliation will not get the endorsement of the working families party based in new york state. host: let me ask you about this of line with president obama's rally in ohio yesterday. why is this a working-class issue? caller: because many working- class people either do not have

health insurance under jobs, or if they lose their jobs, they lose their health care. we can no longer go on to remain non-competitive with other countries like canada who have universal health coverage. host: moving on to wisconsin, dave, on the republican line. caller: i have been a lifelong republican, i think. i am active every day with this health-care -- and i am presently a jail minister. before here there were talking about abortion, if there were to be planned abortions, then you'd have to prove guilt or a non- planned abortion -- to prove it. well, i had six children. i think the only time there were

planned was from the time i knew that my wife was pregnant until they were born. this abortion thing -- this health-care thing, i think we have the best health-care system and the world and i was born 75 years ago. host: there are numerous democrats being targeted by their leadership to vote yes on the bill. we have a list week and put on the screen. on it is a dennis kucinich of ohio. he rode the are an air force one with the president. during the rally in that state yesterday he singled out dennis kucinich. >> this stake in this debate is not just our ability to solve this problem, but our ability to solve any problem. i told dennis kucinich on the way over here, you know what? it has been such a long time

since we made government on the side of ordinary working folks. [applause] where we did something for them. that relieves some of their struggles. that for those who work hard every day, are doing the right thing, looking out for their families, contributing to their committees -- it just gives them a better chance to live up the american dream. host: if you'd like to see the entire event go to our website, c-span.org. later in the week public and private events could pop up on his schedule. illinois, zach, on the in the

pentagon. are you active in the healthcare debate? caller: yes, ma'am. i watched the 24-hour news cycle as much as i can, try to stay informed, read all i can, and work for a man who was a longtime lobbyist/lawyer, and influential power breughbroker n springfield. he is a conservative republican, and i'm a lifelong democrat. host: here is a message from twitter. this person says vote already -- i am tired of this debate. va., on the democratic line. go ahead, are you active in this health care debate? caller: yes, i am.

in september 2008 and became very ill and had to be transported by ambulance to the local hospital. i was not injured in a hospital bill for six days totaled over $30,000. host: ok. caller: i support the president 100% because it is the moral and just thing to do. people, i am suffering. i cannot even afford follow-up care. host: inside the paper this morning, dem leaders are applying pressure. also, "the new york post" -- help hot seat, n.y. pulse push to back obama care. still not sure how would will be voted on and when.

here's the front page of "the washington post" about the process. nancy pelosi it may try to pass the bill without a vote. she would rely on a procedural sleight of hand. the house would vote on a more popular package, a fix it to the senate bill, and passage would signify that lawmakers deem the healthcare bill to be passed. dallas, texas, patricia on the republican line. how are you active? caller: i'm just involved in the

neighborhood, and sending money. a lot of the conservatives have websites. i don't think that people realize that now the that-- the federal government taking them over -- for colleges is in this bill now. it is not healthcare bill. they have just thrown anything in there, and i think that is really wrong. the healthcare bill does not go into effect until 2014, after we have been tax for four years. it is a disaster. host: patricia, who represents you? caller: pete sessions, and he is not for the bill. host: baltimore, good morning. caller: obama said yesterday that the new bill would lower

people's rate by between 14-20%, but insurance companies are raising things between 30-40% before that happens. people were dying at $1,100 -- my parents were paying $1,400 per month before my mother passed away. i know that he says in 10 years almost everyone's premium will double without this. but all the insurance companies are running to raise rates 40%, so how will this help people to lower it just by 14%? host: this story -- the executive director of the american league of voters says his organization will place a $547,000 television ad to target

21 legislators. also, this is from "the hill" newspaper -- excuse me, from political -- of full-page ad. edwin tells members they could be voted out of office if they vote for this health care bill. here is another one from the american future fund. they also have a couple of pages of the losers of 1994 with pictures of members of congress who lost their seats then because of voting, they claim, this group claims, that it is because they voted for health care back then.

cincinnati, gail, on the democrats' line. caller: hello, greta. i'm a democrat. i have been writing and calling. my congressman is from district 1. i have also been writing him and calling my other senator and brown. i'm supporting health care legislation. i have no insurance right now, but i just lost it in november. there is so much misinformation out there. it is really upsetting to me every time they said the government will decide what can be covered for you. when i did have insurance last year and paid for my own the mammogram. i had a $10,000 deductible, and at the end of the cobra, the policy i got offered would be

between $1,500.1600 dollars per month and i make about $40,000 per year. host: have you contacted your representative? caller: yes, i called him constantly. even belongs to my church. i let him know, say that i'm a member of "your church" -- not in charge of purchasing, but when i have written to him and talk to his staff members, a lot of times when i get a reply from him it is only about the abortion part of the bill -- i have not approached him in church, but when i have written and talk to his staff members it is often the only address the abortion issues. i do not have coverage. i am paying all of my own bills.

i would never go to the emergency room. host: gail, are you watching your congressman closely? caller: yes, and i think so far he has been about to vote for it. host: you have heard that? he is still on this list. caller: yes, i am not sure. but the county for i am from is very republican. i think that he is in trouble either way. so, i am hoping that he will get a grip and stand with the people who put him into office and vote for it. i do not know. with the senator, i have written to him st. you are not even running again, one of do the right thing? i have gotten his replies were just generic, we got your

letter. brown, i get updates from him. he is my hero. he is great. host: let me clarify something for our viewers. the list we were showing are the democrats of being targeted by their own leadership to vote yes. your congressmen, stephen d., says yes on reform and on the abortion amendment, but is being targeted by his republican colleagues to vote no. did you watch the ohio rally yesterday? caller: i have seen big parts of it. i had c-span on on my last them. mostly i heard the budget committee. yes, i heard the president when he was talking, about the lady

who got cancer after she lost health-insurance. host: all right, we will leave it there. now we will hear from a republican in poughkeepsie, new york. caller: my congressman is on the undecided, scott murphy. i have written to him several times. he voted no the first time. i tell him my major concern. this is not a health care reform. this is health insurance reform. granted, this is a huge package, but nothing in there has addressed reimbursement for providers. nothing has addressed tort reform, or dressed access for regular patients. just because you have insurance does not mean you can go to any doctor or facility you want.

just give 96% interest does not mean you get quality care. your previous caller indicated that with her $10,000 deductible. host: you and all viewers might be interested in going to hot line.com, thehill.com, cnn as well -- there keeping a whip count on with the members of congress actually are. we'll keep to john mercurio coming of next about political fallout from this debate. here is open with the washington post" about the pressure applied to dennis kucinich. a quote from brown, all of us are making clear to dennis that we will not have another chance for a decade if this does not happen.

the independent line, n.y.. caller: the government is not tried to take over our health care. insurance is an instrument used by doctors to get paid. somewhere down the line insurance became a for-profit. they got between us and doctors to say which tests and procedures we could have, and how much. this is wrong. another thing, the fact that they can increase premiums and deductibles makes us carry the burden of them shifting costs. i realize this bill is not perfect. i prefer single-payer. i'm a veteran and have single- payer as do many congressmen and people who are opposing the bill. host: how are you getting involved? caller: i write for a magazine, called my senators, the president. i am an independent, but do

support this administration. this administration is doing more for us and then has been done in the past 30 years. my husband has private insurance which i refuse. host: which kind of tv ads to see up there in gary, new york? caller: not many, and the only ones are when i watched the morning shows. i don't watch tv so much. i am online more. i watch your show every morning. but i really just wish that the misinformation and little sound bites and political speech we're getting -- is almost like bumper sticker politics. we take a few words and drive them home over and over. most people are too busy to really sit down to listen. host: on those healthcare ads, this is the story on yahoo! -- new shots fired.

this reporter says both groups are spinning around $1.50 million on tv and radio buys to push their side of the debate. caller: first of all, i called my congressman who was one of the few republicans who voted last time for the healthcare bill. also, i called mary landrieu when she was wavering. it looks like she will be for it. the other thing i wanted to say was, in my situation, i wgot sick in 2000 and then got kicked off of insurance near 2001. i continue to go to the clinic and to get care.

it added up. it goes on your credit report. the bills of it up to $25,000. the average person cannot pull themselves out of that kind of a hole. host: in this spoke earlier. i said if you wanted to go to the hot line to read their whip count -- the website for this nationaljournal.com. georgia, tommy on the republican line. caller: good morning. all right, i have been discussing phone-wise with my congressman and my a senator. evidently, everybody down here, we are all against the healthcare debate. the deal. host: why are you against?

what are you doing about caller: it several things online. been meeting with both congressmen and the senator. but we're just all against the taking over one sixth of our economy. host: are right. let me show you a couple of opinions. here is "usa today" with their lead editorial. talking about how this legislation could be fixed. below that, kathleen sebelius writes her view -- it is the only sensible choice. "the wall street journal" -- their lead editorial is writing against the process for voting.

if nancy pelosi decides the house members would not have to vote, but would deem the senate bill passed. frisco, texas, on the independent line. caller: yes, i'm against the bill. there certain parts that i think are good. i'm working with my congressman, senator. my congressman who happens also to be a doctor and is against the healthcare bill -- they're both republicans, but for good reasons, i think they are against it. my center has come down with, if it does pass and in november, to repeal it -- my senator has come up with this plan. as several other colors have mentioned, the bill does not get to the root of the problem. from my perspective that is --

and from the group that i have put together, about 300,000 people now, it does not address the cost problem of health care. especially in a prescription drugs. even those who are elderly and on prescription, medicare part d. earlier this year they passed the exclusivity act -- eliminating the potential competition for generic drugs. the other is of course, hospital costs.

not keeping medicare/medicaid under control through proper oversight. that is why we have medicare only six or eight years away from bankruptcy, and medicaid for all purposes is bankrupt. host: on the front page, the chris dodd bill gains fresh impetus. yesterday he unveiled his legislation to reform the baking system. we will talk about that later with two guests. the acting head of the u.s. delegation to the eu here. we'll talk about reforms proposed by the u.s. and why the eu wants to do. later we will talk with william who brokwrote the book "the houf cards." that is about the collapse of the financial destitution, two years to the date.

we will get his thoughts on the new proposed legislation. one more phone call -- are you active in health care debate? lafayette, louisiana, daniel. caller: thank you. i have been calling my representative does. i have made a suggestion, ask why we don't have a suggestion box on the healthcare plan. but we have one for women who were single, get pregnant, and don't want to carry that. that is excluding women who get raped or have medical reasons for abortion. if a woman thinks she may not want to carry the pregnancy, check the box. it adds up to a certain amount per year. in other words, they would pay

for their own abortion if they decide to. if they do not check the box, then they would not be covered and could not use the taxpayer'' money. for the democrats, if you vote for it the bill the first time, the republicans want to use it against you. by not pass the bill, get it done, focus on jobs? people cannot see far into the future as to what this bill will do. just like we americans do not remember who is in charge between the parties. you could create jobs and a couple of months. people will have a more positive attitude, start feeling good about the government and health care system that they can look forward to, especially with pre- existing conditions. host: all right, daniel, we will leave it there.

first, we want to share with you a little about grannie d. it is a name many of you are familiar with. she died at age 100 on march 9. at 89 years old she walked across the country on behalf of campaign finance reform. the man who wrote this eulogy was her friend and co-author. he says it is difficult to understand why this woman from new hampshire should be so lionized in death. she was made exceptional by comparison with the world around her. the rest of us have become a little too reticent in response to these times of high challenge. she died at age 100 on march 9.

one more phone call from arizona. it is marty on the republican line. caller: yeah, i'm -- just a little comment. i was wondering if people are aware that we have a form of federal health care that exists in america? host: wire you mentioning that? caller: well, we do have the system -- now on the reservations throughout america. it is called indian health service, which is a federal service. my question is whether anyone has ever done a study on those? host: we will leave it there.

joining us is john mercurio to talk about the healthcare debate. here is a headline from open with the washington post" on the process. it says a nancy pelosi may try to pass the bill without a vote. the house would deem the senate bill passed. i was curious as to polling, or what the talk is like back in districts? about whether or not to process matters? let matter in november 2010? guest: i don't think that type of process will be what matters in november. people look at the overall bill, at the immediate impacts of the bill. it is something democrats have been talking more about. more people will be talking about the economy, the unemployment number which is

still at 9.7%. i think that will be the issue people are focusing on. this is a big procedural story that could come back to haunt democrats if they choose to pursue it as nancy pelosi said that they may. i ultimately believe it is a procedural story at the end of the day. i have not seen any polling done on certain solutions. host: your is good to nationaljournal.com to keep track of the whip count. -- viewers go to this website. republicans are also putting pressure on the democratic

colleagues to vote no. what is going on here with this whip count, and why is it getting so much attention? guest: all the focus has been on the house over the past week or two. the house is in the cross hairs, now responsible for passing the senate bill, then sending it directly to the president's desk. the senate then would take up some of the fixes that the house has requested. that would be a separate issue under budget reconciliation. if the democratic leadership in the senate is trying to get a majority of at least 51 to sign a letter saying that they would vote on those fixes. the whip count is the same. if you look to the members the

first group voted no in november on reform during that very close late night vote, and also no on the stupak amendment, the anti-abortion amendment. it really leaves like a list of vulnerable house members. you have a longtime member who could be vulnerable, stephanie, suzanne, frank, a freshman democrat from the eastern shore of maryland ofbets-- others, alf whom look like they are voting no. some have said that they are still undecided, but are leaning towards no. then you have the democratic longshots who voted no the first time, yes on stupak, might be

more amenable. it is a larger group of people who in the end could possibly be counted on to go with the democratic leadership. you get the clear sense that nancy pelosi believes she has two or three, maybe five it most of the democratic votes in her back pocket. people who will vote if it could make the difference between passage and failure. host: does she only knew that many? how the of the votes does she need? guest: at the end of the day we really do not know. we do not have the bill on the floor. until we do we still have a number of undecided members. there has not been an official whip count.

the house majority whip said last night we will not know until we have the vote on the floor, or least not an official count. host: we asked viewers early this morning if they are active in healthcare debate. many called to say that they were, contributing money, calling members of congress repeatedly, and ones who do not represent them either. are you getting an idea from watching these districts as you do over at top line what kind of pressure these are feeling? it was out for yesterday when the president talked about dennis kucinich's budget during his rally, and asked dennis if you listening. guest: yes, dennis will back to ohio with the president on airforce one. he is a liberal member of the house. he was unique in his votes against the bill back in

november. he was voting against it from the left, did not think the house bill went far enough, or was aggressive enough in pursuing the public option. he does not believe the senate bill contains anything remotely close to the public option. he does appear to be wavering, though. across the board you see numbers like that -- facing pressure from all sides. conservative members are running ads, running and competitive districts. then, in some key interest in florida and north carolina you have members who voted against the bill who are facing pressure from the left in their democratic primaries.

they face a challenge from someone much more strongly in favor of the bill. the pressure is from all sides. there is pulling from the last 24 hours showing the bill increasingly unpopular in some of these districts. if you look at our blog, if you look of the comments, we are receiving probably more on the whip count then we have on many other blog posts recently. they run probably 3-1 against the healthcare bill. host: let me show viewers this of them. they voted 61-30 yesterday to remove the final hurdle to move forward on a jobs bill.

there's also this headline in "the hill" -- eight primaries that could make a difference. john, in november 2010 when people go to vote, which issue will be front and center? guest: jobs. very simple answer -- jobs. i think in polling has confirmed over the past several months that an employment and the overall economy are significantly more important to voters than healthcare reform. it is important, probably number three or number four, but at the end of the day the democratic majorities in congress pressed on whether they argued, perceived as addressing the more important issue of jobs. host: first phone call, kentucky, on the democratic line. caller: yes, ma'am.

the reason we're losing our jobs which nobody even knows -- it is because every employer has to pay for health insurance for employees. they do not have to pay in china health care for every individual that day hire, neither in europe. abortion should be out. republicans have done abortions, democrats aboard -- it has nothing at all to do with this. it is a little myth, the use of campaign issues. host: john, the so-called stupak meant the federal funding for abortion -- how much play is that getting?

guest: it is a major factor. bart stupak was instrumental in getting the house to pass the bill by getting a number of anti-abortion democrats to support it after this amendment was included. he has admitted over the past couple of days that his coalition is beginning to fracture. the democratic leadership has been able to get into that coalition. democrats are now undecided and may ultimately support the bill, even without restrictive language that stupak prefer. host: i believe that the beginning he said he had a coalition of around 40 or 41, and the latest number is around guest: 12 right, so ultimately

we will have to wait and see. host: savannah, georgia. caller: i want to talk about activism and then segue into policy. first, here in savannah, ga. we have a blue dog democrat who voted against the healthcare bill, but did vote for the stupak amendment. i think there is a lot of leftist, populist outrage here. [unintelligible] i saw that john barrow was not on the list as we bring, but he is with stupak. on the policy side -- health care is the second or fourth

thing on the list and jobs is number one. that is true. but health care affects every single person, and every single employer. when people lose their jobs, now they are uninsured. if we do not ensure them and they get sick, they will not be able to find a job or get health care, then they will die. we need to care more about the most important commodity we have instead of money. american lives. host: we will leave it there. john? guest: the caller is correct. john barrow is on the whip count in the second category. this is the 12th congressional district. obama one of this district nearly. nearly 19% of the district is now uninsured. this is a big issue for the caller and many voters there.

the congressman is being heavily targeted by democrats. the congressman himself in terms of his own reelection does not look as vulnerable as other members. to the other point about health care and the economy being inter-mixed, could not agree more. healthcare is a huge part of the economy and has a huge impact on american families. i think the point i was making in reference to the election is in terms of how voters are making decisions on who they will support. i have to limit, you're right, we have spent a year, more than a year in the washington debating health care -- all some

voters have seen is this debate. that will be for many what the voters take to the polls in november. host: john, as people go to the hot line and look at these lists you have put together -- have demographics in. in whether or not the district voted for obama or mccain and the last election -- you also have the percentage of uninsured. why? guest: it is relevant looking at how each of these individual lawmakers are making decisions. think about what this districts look like. we cannot get into a large discussion, but an important number is the uninsured.

every member of congress on both sides at this point in the debate knows that number, the percentage of people in districts without insurance. it weighs heavily on members, just as much for some as which candidate in the presidential race presidential2008 won the district. we included the other number, the percentage of voters constituents over 65. it is relevant in terms of health care coverage. host: here is a message from twitter. what does this term mean? guest: it is a d.c. expression -- means account of the votes.

for a substantial build this count can be a massive process. it is simply figuring out how members will vote. host: new york city, you are next. caller: i would just like to make a couple of statements. i think the politics is really beyond the fact that the bill being proposed drop congress is generally untenable. things like the public option, if there were a public option that tended to provide exactly the same health care as the

insurers did, there would be no way for them to really undercut the costs. the costs keep rising every year because of new medical technologies. there are very few limits on investor a part of madison, rather than providers and hospitals. then, the president opposes the idea of a line across state lines. all this will do is simply raise the prices. overall, everyone's costs will continue to go up as medical costs increase. probably the only useful thing that would help control the hospital and physician costs would be a single-payer system

rather than a general insurance system. it would cut down on the billing efforts of the hospitals and providers, probably to the level of 20% of expenses. host: roger, who represents you in new york city? caller: does it matter? they are all paid off. i don't really worry about who represents me. no, contacting them is relatively insignificant because most of the loudest voices are on the far left or the far right. i consider myself more or less in the middle. all of this is a big share rach. host: you have looked at the

legislation. where you go to find your analysis? caller: i am a physician who works for a medical insurance company and have been exposed to this for last four years. i can see what is going on. host: all right, dallas, texas, on the democratic line. caller: good show. my wife is here too. we both work in the medical field. my wife has never voted until last year. she voted for obama. i think you guys are missing the point as far as the polls are concerned. there are many voters out here like us who have been very frustrated with this bill not been passed. i think what you will see in the nov. are voters like us to will come out in droves, especially

if this bill passes. you will see such an overwhelming, and decided vote out here of people who have been waiting and waiting for this bill to pass. we will come out and vote in blocks you guys have never seen before and put these democrats back into office around the country. what were seen at the polls is a number of people who are just frustrated. host: we will leave it there. guest: that is an excellent point. the caller is correct. there are certainly a number of voters who are frustrated, sick of watching washington work. you definitely seek consensus building among democratic leaders and rank-and-file that more than anything, more than

any item of legislation, they just need to declare victory and move on. by declaring victory they are able to avoid the doomsday scenario. it is not passing a bill, and essentially allowing republican candidates and incumbents to run campaigns against them headed into the fall with every potential caricature of the bill that has existed such as the panels, a government takeover. deficit increasing -- all of these caricatures, none of which actually exist in the senate bill would make those democrats vulnerable. the caller is correct. once the bill is passed, you'd probably have to wait a couple of weeks or longer to figure ho out how the landscape has changed. host: ill., brian on the

republican line. caller: good morning. my comment is, my daughter, oldest daughter, is on medicaid. she has been turned down numerous times for prenatal health care. when i hear the president saying you will not return them for anything, that is a lie right there. can you tell me where in the constitution, or in bill of rights wirtz's that healthcare is a right? host: any thoughts, john? guest: sorry about the caller's daughter, and no, i have no thoughts about that. host: one more call, from mississippi, on the independent line. caller: yes, i think the focus

of the bill on insurance rather than on health care itself is the mistake it makes. the use of these community health care clinics for care of the uninsured and medicare and medicaid patients would be more effective. it would not involve so much government interference. host: before we go, i want to get your reaction, thoughts on november 2010. this headline -- it says that labor and gays are restless, blacks and hispanics are grumbling, even some in hollywood are disappointed. what is the state of play on

both the democratic and republican bases? guest: we are still seven, eight months away from this election. it is hard to predict. the democrats will probably lose one dozen or maybe two. yes, the visions exist within the democratic party. also, the republican party. typical constituencies like labor, liberals, homosexuals are not necessarily as pleased as they thought they would be with the leadership. at this point, i am not one of those who assume the healthcare bill will ultimately be connected to the fact that democrats could lose the house and senate as in 1994. host: 1 more headlined. -- one more headline. guest: yes, i am watching this

race. this is for the first congressional seat of hawaii. abercrombie decided to resign to run for governor. it could be very competitive. host: thank you, sir. the next, we will switch the discussion to us/eu relations, talking with the active head of the eu to the u.s. delegation when we return. . .

attorney general eric holder will testify on his department's budget and other issues such as closing guantanamo bay. that is live at 2:00 p.m. on c- span3. and there is concern that the nation invented the internet is in danger of falling behind. officials will go over it today. it will have live hearings today at 10:00 eastern on c-span.org. >> lawmakers are making a final push to get health care

legislation on the desk of the president. you can follow the progress and edited with no commercials or commentary on c-span. take us wherever you go on-line. they would house and senate members are saying. it fell late this with the radio application. "washington journal" continues. >> the acting head to the u.s. delegation for the european union here to talk about relations. let me share yo with you a heade this morning. what is the situation? guest: i think it is regarding fiscal sustainability, which is a problem all around the world.

america, japan, and others are affected by this. host: yesterday, there was a proposal put forth on greece and the situation there. it is proposed by europe to help out with the situation by having loan guarantees for the country. can you explain to our american audience what that would entail? >guest: there is a new mechanism at the level of the yoat the eue available if needed. it is important to realize the specificity of the unique institutional framework that we have.

i know it is a big debate. it is simple really. it is the union of southern states. ahold mechanism to support the state is about monitoring -- our whole mechanism to support the state is about monitoring it. that is what is happening with greece. the state where it reaches the point of difficulty -- we are looking at that. this mechanism would be used if needed. host: how much money? guest: i do not think they have given an amount. they will do whatever is needed

to guarantee the security of europe. that is the basis on which we are working. host: the wall street journal with this headline. many economists argue this. "the financial times" lead editorial talks about this

regarding a long-term solution. guest: i think there is something more profound. when the euro zone was created, we knew from the beginning that the sustainability depends on a couple of things. one is fiscal stability. we have to let fiscal discipline by all of the sovereign states. if not, it is not good. the other is convergence. it member states need to move in the right direction. there is a whole spectrum that can be argued. we have germany and greece.

germany is a country that is very competitive, more so than others. there is a matter of social and economic and the political system. wages are increasing quicker than competitiveness. we are in a situation where greece is looking to change economic policy in ways that rebuild competitiveness. i do not think we can blame only one side of this relationship in a simplistic way. germany has been very effective in building competitiveness. precess to build more competitive this to sustain itself.

-- competitiveness to sustain itself. we need to build more convergence of the long term. it is not totally unjust in the short-term financial crisis in the next month. greece will become more competitive and from there on we will increase convergence. i do not think we can put the blame on certain aspects as if this was the cause for everything else. host: explain how the european union works. who speaks for europe?

the eu or the individual country? guest: they speak where they have a role to do so. the fundamental starting point comes from the uniqueness of this creation of the european union. this is the union of sovereign states. the eu has the competence is and the role of the southern states give it. then at the eu speaks from the health of the member states on the basis of its competencies'. for the quarter nation that is taking place. often they deal with issues such

as trade policy. you have many areas where our coordination allows husbands to talk with a unique voice. host: what is your responsibility here in the united states? guest: i am the ambassador. . we have the same functions like any other embassy. we look at all kinds of issues. host: how much access to you have to the obama administration? have you met with the president

himself? guest: the ambassador makes his presentations to the president. i have met with president obama in at some meetings with our high dignitaries syrian-backed we have very -- high dignitaries. we have a very good at this. host: tucson arizona, on the democratic line. caller: i was, about reform. i believe this test is really important since he comes from an industrialized nation where

health care reform does not need to have been because they do not treat human bodies like a commodity. what do you believe america can learn from others and what would you say to cover government about the health care debate? guest: i think the first question is about -- host: i think she is referring to your health care system and how you treat patients in europe and specifically your thoughts on the debate in this country over health care. guest: the debates is something for the u.s. government to deal with. i can safely say that all europeans will listen to this and we hope very much that we

will have some kind of universal coverage in this great country. we are more on that basis. more involvement of the states and the universal coverage for everybody. there is a kind of universal access to health for citizens and non-citizens in increase even. we believe it is very important. people who need basic treatment should be able to get it.

we hope very much there will be important reform in the u.s. host: what are they very interested? with europe benefit somehow from the united states? guest: the last speech of president obama, the state of the union, i was following that. i was in the chamber. i thought it was a very important speech. everything was of great interest to us.

everything happening of significance in the u.s. and in europe -- because of economics, market, the companies involved, the economic interests of everything and the way our society focuses on key values -- there are many at -- aspects that make it interesting for europeans. host: republican line is next. caller: this is a very good program. i have a question about the global market. it is about the currency. what would you do with some of the eurocurrencies you have already?

will you use in the future to an evolving global currency in about four years fact? host host: what do you mean by that? caller: will it be a global market in about four years? guest: i do not think there is any plan for any other global currency. i do not think this has anything to do with any kind of global currency. the situation as we have it will be with us maybe two decades or

more. host: independent line. caller: went afghanistan was a hot topic, i remember discussing the troop increases. i would like to know what efforts the european union is putting in support with that and how many troops will help protect the pipeline there? guest: the europeans are very committed in afghanistan as the united states. the u.s. is doing a lot of hard

work in afghanistan. we have important initiatives. for example, police training and security forces training. it is important to the election observation done last year. we are developing several sectors such as health. we are very committed along with the u.s. serving in afghanistan to finish the job. host: louisiana democrats line. caller: i have a question for

you. the european union claims to be a democratic society that was formed by a country that voted to join into it. isn't it true that in ireland, the country voted it down and was forced again by the u.k. to vote for it? guest: the argument was that -- host: ireland voted against it but the u.k. forced it to vote for it. guest: no one was forced to vote for it. we cannot force stuff on anybody.

all of the key decisions have to be supported by each individual state. you can argue that it creates pressure on them. they exercise their sovereign right. you can argue that the fact of having the necessity for each to approve both decisions is an element of democracy. we think of the united states as a subtle debate how much the concentration helps the liberal and democracy. we can easily make the case and come to a decision that every member state supports every

important in individual decision is an element of democracy. host: sheila, independence line. indiana. caller: i was wondering about health care. if the yoeu and united states stand to gain if we pass health care? guest: the more our systems are compatible, the more we feel closer to each other. the ambitions going in the same directions -- we want the best possible health care and the most efficient. nobody has a perfect formula for

that. i did not mean to say that our own system is perfect. we need to find ways to make them more effective. it this is an area where we faced some of the same problems and almost a common destiny. we are looking for the same solutions in society. host: what is the status of the u.s. and eu relationship? here is a piece from the "national journal". there is corliss. it comes as a surprise and it does matter according to a fellow at west point talking

about the u.s. relationship with europe. guest: you'll see people going in both directions. they say we are getting closure. others will say, difficulties are increasing. sometimes it is true for both issues. it is becoming more complex. we are more interdependent now than a few years ago.

the common interest and common space is also increasing. i would argue it is much weaker. the overall picture is that we are not becoming simpler but more promising an important in a role that is more complex. this relationship is moving in a very positive way. we are watching this very well. it is very positive overall. the elements that explained on the difficult side -- it took time in the u.s. to understand

this space. [unintelligible] we are creating new services. the summit was postponed. there are opposition forces. i would say this trend is going in a positive direction. host: republican line. caller: we recently returned from great britain. it said in one of the papers that in trying to deal with

deficit spending, one consideration was trying to reduce the spending on the military. the front page of the paper said that some will have to depend more on allies and international conflicts. great britain and the east end 6% or 7% in the gdp on military. we are spending about 21% of our gdp. what is going to happen if the u.s. starts reducing their military influence thanks will eu increase theirs to deal with us? there seems to be greater dependency on the u.s. >> is a fund -- guest: it is a

fundamental debate. after the second world war, america has been the dominant power. europe emerged from this terrible situation in a completely different situation focusing on the threat to its territory and the need to deal with the cold war and the u.s. umbrella. then when the berlin wall fell, the europeans found themselves without the real capability to deal with this power.

in the last eight years or so, they built the europeans defense policy more. it said capabilities for the europeans to be member states. we have worked in a significant way on our military. we have developed more than 20 missions to different parts of the world. the discussion about the budget is one aspect.

it is under debate. the other is how the europeans have adapted and have they are able to adapt and manage conflict. this will continue. host: new york city, democrats line. caller: my comment does not require an answer, because i know you are a guest. it puts you in a funny position. i will offer something to you. many people when you go back to europe are wondering what is the problem in america in

supporting the leadership that many of the world admirers, because he has universal qualities. i will say to you did you said america was dominant. there is a difference between being dominant in been young. we are the young this civilization. we are still catching bonn to what it is to live in a universal world. wheat for voting against our own interests. when you go back to your small groups and they asked about america, you'd tell them to go back to the generic question that was asked when barack obama first came onto the scene. is america ready for a black president? i will leave it to them and to you to enter that question according to the behavior of the people in this country. thank you. have a safe trip.

guest: did i say that america was dominant? i do not think so. i think the comment was about leadership. america has leadership in the world. we feel so much that we are part of the same force to promote the same values that we believe in and that they are universal indeed. we need to see more of around the world. we feel part of the united states and the global effort. in this process which is to

build a better world for everybody, we believe the best asset and hope and we utilize badge the role this country needs to take now -- and utilize the role this country takes now is important in the future. this leadership is indispensable. we are very comfortable with that. we are partners with the u.s. in this effort to contribute to build a better world according to the values. host: what issue is the you eager for the united states to

take up this year? guest: 1 that is very important for us that is subject to change its climate change. we need to get something this is sustainable. can and will need to secure our economic stabilization. we need to make sure i could react appropriately in a global way.

and the security-related agenda , where we need to deal with iran, afghanistan, and others around the world. they said the political objectives that we share very much. host: for you invited by the white house? what is the process? guest: the ambassadors are invited. we gather and are given a special place. there is a special area for us.

host: thanks for your time. please come back to us. guest: my pleasure. thanks for inviting me, and thanks for all of the questions. host: we will talk about this headline next as we switch topics. we will talk with the inspector general who wrote that report. that is when we come back. here is a news update from c- span radio. >> it is 8:36 eastern time. president obama is urging democrats to cast their votes for the health care reform bill. some house freshmen members plan to vote against the measure. democratic leaders are hoping to finalize the legislative

language and get a cost estimate from the congressional budget office today. also today, the federal reserve board meets to discuss interest rates. they will modify its pledge to hold record rates down for an extended time frame. note time change is expected today. an apparent u.s. missile is suspected of destroying a compound in f -- pakistan. it is not clear who was targeted in the strike. the cia has repeatedly targeted militant operations in pakistan when seven cia employees were killed in afghanistan. the afghan president was infuriated when the taliban #two man was captured in pakistan. according to one of its advisers, it is raising new questions about the u.s. backing

peace discussions with leaders that harbor terrorists after the 9/11 attacks. in the mexican border city has an investigation going on with three u.s. citizens in connection with the u.s. consulate. the killings showed a significant danger that mexico presents with the united states. eight fbi agents will work alongside mexican authorities in those investigations. those of the latest stories on c-span radio. >> lawmakers are making the final push to get health care legislation to the desk of the president. you can follow the latest on capitol hill, and edited, with no commercials. that is on c-span. you can take as everywhere you go c-span.org.

iphone users can get the latersst information with the radio app. >> "washington journal" continues. host: an internal report has been written. and there is proper oversight that is lacking. what did you find? guest: it is going to be a tremendous challenge for the embassy to the extent that the administration wanted to.

it is going from 300 people to 900 people. less than a year. that is one of the many problems. hi, a big problem is to supervise the police training contracts that are under way. these are billions of dollars. you need people out in the field that no what they are doing and we get our values and money from these contracts. whenever you have a big government bureaucracy, you have to the people supporting that bureaucracy. we have been slow to get enough well-trained people to support

it. i will give you an example that people here take for granted. water and sanitation. you cannot depend on what is available in kabul. the embassy will have to increase its water purifying facilities tremendously. it goes on and on. we do not do policy at the office of inspector general. we do the implementation of policies. you need a lot of resources to implement. it is a matter of having the right people at the right time. host: who is supposed to be overseeing these contracts? guest: the key where we were most concerned is the contract

officers of representatives. they go back to the contract in officer and say, yes, you can pay this bill. the government has received what the contractor agreed to give. it is hard to get well-trained contract office representatives. it is hard to get people to go into the field and supervise them. in afghanistan, both the civilians in the military are turning over rapidly. as soon as you get someone trained up, you may lose them. host: what are the obstacles to getting out in the field? guest: it is a supporting people along with it being dangerous. housing, communications, feeding

them. it is tough. the recommendations -- the report was more than a simple part of we do not have enough representatives to properly supervise. the report was a photograph of the way the embassy was operating. it was average of to tell congress and the american people how well the embassy is doing in foreign violations. it is negotiations with the afghans themselves. it is a drug eradication policy.

it is such things as how well the border dogs are working or not working. one of the most important areas is police training and the will of law -- rule of law. are they still taking in demanding handouts? the answer is yes. we found out that the embassy is under resources for the job that it has to dou tonder -- under- resourced for the job that it has to do. host: what should to the embassy do? guest: it has to work with people in washington and with the military to do a better job

of training a new crop of police officers. they have a problem. the u.s. government had until recently been saying the most important job is to get the police to respect the rule of law. they are not above the law, but they enforce the law. all of the sudden, we say wait a minute. the taliban are shooting at people. our military is saying, maybe we have to spend less time teaching police the will of law and wartime teaching them how to defend themselves. host: a recent report about contracts in afghanistan. here are the numbers to call.

you can start dialing in now with your questions about contracts in afghanistan. the ambassador and the team have made impressive progress according to this report. it to treat some problems to the rapid expansion of the embassy staff. let's take a first bullet point. how many times is the embassy being visited by senior officials and members of congress? guest: countless of times.

i am glad they are coming. they need to know what is going on. people on the hill and the state department care about their mission. what we were worried about is sometimes you have a straw -- a staff member that insists there it member go to the front. this they say the military resources. it is dangerous. you have people that say i want to have an interview with the afghan president. the next one says the same thing. and i do not want to sit with the other guy, but i want my own interview. then the president says i have a government to run. i cannot spend my whole day

talking to these important people. host: why is the third point an issue? guest: how can they do public diplomacy with people that probably do not speak english? host: did you evaluate that situation where there is a language barrier? guest: yes. we use interpreters. there is a real problem especially when you are depending on them. you cannot always assume the best. and is the filter effect. what are you losing in your message when you can't communicate directly with the person that you are speaking to? host: newport news, virginia.

caller: thanks for showing your issues on the air. i would like to speak about the military. i have been offered to iraq. i have seen this issue in the military. it is the same issue in the state department where it is an uphill battle in a matter what you do. i was wondering -- in afghanistan, people make a living by selling drugs. the police department is corrupt because that is how they are used to living their lives. i do not see of throwing money at it will fix the situation. it is. to go over budget no matter what we do. there is nothing we can do.

when you are over there as i was as a military member trying to do the best i could, you feel how can you fix this situation in my little area over there? the task seems so impossible. sometimes you give up. you do the best you can, but you say, it is pointless at times. it is almost an impossible task. host: what is your question for our guest? is there something you would like to know from him who has inspected this situation? caller: i wish we could inform people that sometimes we take a bite that is bigger than we can chew. i do not see a fixed in answer to this.

i see as throwing tons of money at it and it seems to voiceless. -- it seems like a waste. guest: if there was a fix that could fix everything, and i said that, i would insult everybody listening. the stakes are so important, we have to keep trying. we are worried about the taliban. it is not just because we were about the danger of drugs coming from afghanistan. it is a very central position in a very key part of the world. i do not think we will get it 100% right. i would like to get it as right as we can. we should stay within budget as

well. host: the pullout in afghanistan is jeopardized. the union and how much this problem will delay the united states leading afghanistan? guest: i do not. if you are spending too much time worried about your support, you cannot be spending enough time working on this problem to get out by june 2011. host: democrats line. caller: good morning. thanks for taking my call. i am a vietnam veteran. i am unemployed. i am doing temporary work with the senses government now. they are looking for someone to oversee work in afghanistan, i will go anywhere in the world as

long as i am paid. they are bringing people of here just looking for a job. the inspector general of the fatherland there are people ready to go there. i believe in the afghan war. i think we need to be out there. people need to get out of the oppression by the taliban. guest: i know there are a lot of people who believe in what we are trying to accomplish in afghanistan. anchorage you to apply. it is a bit complicated process to get somewhere over to work in afghanistan. think about it. we have to spend a lot of money doing the security clearance. we do not want people who run not loyal to our country.

then you have to work on trading in the language. if you are not doing the language, -- i cannot just take a good person that wants to be a contracting officer representative but does not have any experience with the work that is being done. anyone who thinks they have the right skills, can apply it. -- can apply. many would love to work for us helping the u.s. government. i encourage them to apply. we need to train them as well. we need to reduce security clearance and get you over

there. and if you have to say, you want to go to afghanistan, even though it is a dangerous part of the world. the government does a pretty good job of letting people know what they're getting themselves in to. many do not cut it. many think it is about shooting of the town, which it is not. it is about winning over these people that we need on our side. host: buffalo, new york, republican side. caller: how much interference is fair -- is there from members of congress? how much interference as their from attorneys for aclu or any kind of group affecting you

doing your job? guest: i do not consider any one of goodwill wanting to do the right thing. i cannot quantify how much interference there is. non-government organizations have a tough time going over to afghanistan. i am not worried about what there is so far. host: independent line.

caller: i see these parallels between what was going on vietnam's. some said they had more advisers. it seems that you want a certain level of security clearance here. is there a parallel between the situation in afghanistan and the situation that was in vietnam? guest: i was in the army while we were still in vietnam. there are some parallels of course.

vietnam' was a much bigger effort. our goal was different in vietnam. it was much more fighting a war against a group of soldiers. we spoke about hearts and minds, but it is not quite what we are doing here. there were problems with the drug, but not the problems in afghanistan. and this is -- i hate to use the expression. this is part of the war on terrorism. afghanistan is a lot more open than vietnam's was because communications are a whole lot better.

now, you carry a tv camera that is lighter than a back pack. reporters are embedded with the truth. it would be a lot harder to fit in a particular line and get away with it that was in vietnam. host: independent line. caller: in your recommendation, he suggested the use of the army contract vehicle that it would provide expedited security clearance as well as a clear speaker in the language. guest: we did not. the farming is swallowing all of its own linguists that it can

get its hands on. it is a great idea. host: next caller. caller: it is about the contractors in iraq. no one was sure where the money was being spent. would the contractors who would be in afghanistan be required to hire? blackwater will be in afghanistan. they have gunned down people.

when i watched the program about the history of them, they were off their site with no permission. i wanted to ask your guests -- i saw another documentary about the afghan massacre. it was done by an irish documentarian. after invading in 2001, there was several taliban that surrendered. .

there are issues. you may remember a couple of months ago, and afghan soldier or policeman was with some british troops all of a sudden when they were relaxing, he picked up his weapon and shot them. so, there are issues, but in

principle, absolutely yes. on the subject of blackwater, my lips are sealed. the reason for that is because there are lot of judicial matters going on right now and i just cannot comment. finally, on the alleged massacre, i remember reading about that as well. i did not know if they were taliban or who they work, but i remember reading at the time, i was not even working for the government at that time, but i remember reading about that. i must explain, that is not our job, as the office of inspector general. it sure as heck is someone's job, probably someone in the realm of criminal justice.

unless it was department of state people that was locking them up and suffocating them, that would be outside of my 40. host: -- outside of my authority. host: bruce, independent line. caller: we were all created by god, black and white. the rules and regulations say that all citizens everywhere, going back to the 10 commandments that god gave us, thou shalt not kill and stuff like that. all people are created equal regardless of red, yellow, black and white. they should be treated equally and fairly in all rules and regulations regardless of race.

host: francisco, south carolina. caller: my comment is that afghanistan is not really a country. it is 121 describes the do not really get along with each other. some of them are corrupt, including the president. we get out of one war or situation and we get into another. we started with the situation, trying to solve the peace process with the palestinians, jumping into iraq, then afghanistan. seems like we can not even finish one plate of food before we want to eat another plate of food.

we know we do not want afghanistan with nuclear weapons, i understand that. but we know that israel does have it. they do have it. there should be no nuclear weapons in the middle east. host: what about his comments, switching from iraq to afghanistan? in looking at the contracts in afghanistan, did you see a lot of that mobility? does it cause problems? guest: of course. i like the analogy about starting on a second plate of food. the problem is, that is the way the world is. just like in the old days when people thought it would fight a war on one front and got themselves in trouble when it was suddenly three or four

fronts. the united states did not ask for the problems that we face. it certainly would have been a lot easier if we had been able to take care of one problem before moving on to the next, but the world does not work that way. host: front page of "the new york times" this morning has this headline, "general mcchrystal will be taking control. civilian casualties are a concern." is this having an impact on contracts in the embassy work? guest: i do not want to get outside of my area, that is more the department of the defense inspector general. but i would say that as far as the work of the embassy is concerned, five with say no.

as a matter of fact, special forces are a great thing. we depend on them so much out in the field, they are terrific people. coastal louisiana, independent line. jeanne? caller: let's ask about [unintelligible] how he is going to spill the beans and why they murdered him. let's talk about the whistleblower translator that blew the beans on the drug dealing that our country is doing out of their and how the poppies are twelvefold now. let's talk about our troops guarding the poppy fields. let's talk about the fact that the eu said the u.s. did not ask to be over there -- that the u.s. did that as to be over

there. what really brought those powers down? host: drug trade is one of the issues you look aboued at in the contract. what is the problem there? guest: a farmer that grows poppies can make anywhere from 5 to 10 times as much growing poppies as he can growing anything else. is that the sink? host: what is the issue with the guest: that the embassy has a lot on its plate. there is another problem, if you think about it. not everyone has the same position on the drug trade as we do. there are a lot of people in afghanistan, some of them very important people, who do not have the revulsion that we have

against the drug trade. some of these people might be needed in the war on terror. it really is one of these things where it is hard to draw firm lines. host: charlotte, north carolina. democratic line. caller: good morning. i wanted to specifically state that we have a gentleman running for district attorney here in charlotte [unintelligible] he was in the coast guard. to what extent have the operatives that were murdered -- i understand that their code name was jawbreaker. to what extent is there a

sharing of information between these agencies? who not only collectively share information, but deal with foreign and domestic terrorism. host: we will have to leave it there, it is difficult to understand you. talking about intelligence gathering, is that something you look at? guest: every time we do an inspection we prepare a memorandum on the state of u.s. intelligence activities in the country where we are doing the inspection. unfortunately, surprisingly, those reports are very classified, i cannot talk about that. host: state college, pennsylvania. republican line. you are the last caller. caller: good morning. thank you for what you do. in the mother of a marine in that want to say that i so appreciate any positive stories that do come from that area.

even if it is negative, any stories that show what is going on to be very complicated. when i first -- when my foot son signed up to be a marine, we thought he would go to iraq. of course after training he went to afghanistan. we have all learned so much about the country. at first i was thinking that you would go and get very involved in a lot of combat, which is a part of it, but he has had very positive interactions with the people there. of course, there might be some combat, but i would like for you to share that there really is something that they're trying to achieve. i would like to show my support for the military in that they are trying very hard to achieve something. guest: god bless you and your

son, that is all i can say. in the state department we have always had a close relationship with the marine corps. i cannot say anything other than that. host: what about her comments on the efforts that she talked about in her son's correspondence? reaching out to the children in afghanistan? guest: i am thrilled, what else can i say? host: what is the impact on diplomatic efforts? guest: it can only be favorable. look, there are a lot of layers there. the more good that we can do in the countryside, it will ultimately reflect up words. host: harold geisel, thank you very much for being with us and talking about your report. guest: a great pleasure.

host: next we will talk with william cohen about his new book, "house of cards." timely as it is. we will be back with that discussion. first, an update from c-span radio. >> economic numbers are back in, the commerce department reports that housing construction fell in february as a result of winter storms. january activity was revised upwards. the rebound is seen as critical to overseeing the overall economic recovery. following the president -- vice president's trip to the middle east, dozens of palestinians are setting fires in east jerusalem, protesting israeli plans to build 1600 apartments there. george mitchell has postponed a trip aimed at wrapping up preparations for launching peace talks again. the army has decided to change

its basic training regimen. instead of 5 mile runs and bayonet drills, stretching, body twists, and races will be the focus. this is to follow the advice iraqi war veterans, saying that modern combat has more to do with bursts of speed than all day endurance. john paul stevens said that he would decide next month when he will retire. justice stevens at the age of 89 is the court's oldest justice. he told the magazine that he has his options open and that he will certainly step down before president obama's term expires. the interview took place last week. an internal justice department documents said that law enforcement agents are following the internet world in popular social networking services,

going undercover with, and profiles to communicate with suspects and gather private information, leading some to ask if the friend request might be the fbi. those are some of the latest headlines from c-span radio. >> a couple of budget and policy hearings coming up today on c- span 3. this morning, timothy geithner, pierre or sag -- peter or is thorzag and christine roemer wil testify. closing guantanamo is like good, live at 2:00 p.m. on c-span 3. the associated press rights to the fcc's announced broadband plan reflects the obama administration's concern that the nation that invented the internet is in danger of falling behind. officials will go over the plan

today, we will have live coverage this morning on c-span. " if this week lawmakers are making a final push to get legislation on health care to the president's desk. funds c-span, take us wherever you go, online, we have a health care's hub where you can see where house and senate members are going. >> the house budget committee met yesterday, approving the bill by 21 to 16. rules committee is next, working out the structure for the debate. it is likely that it will begin later this week. >> "washington journal" continues. host: we are joined by william cohen this morning to talk

about the financial industry. two years to the day that bear stearns and lehman brothers failed. the front page of "the financial times" this morning as a story about what congress wants to do. "fresh impetus." that is how they frame it. it says that the so-called paul volcker will will be put forward despite the frustration that christopher dodd showed earlier. it says that yesterday mark warner, a democratic senator from virginia, "said he did not necessarily think it needed to be a mandate in the final legislation." what is your take on the volcker will -- rule them of guest: i have a tremendous amount of

respect for paul volcker, especially his willingness to take tough stands against wall street and being prescient, as early as february of 2005, he gave a speech to stanford where he correctly predicted, very interesting, the kinds of risks being taken in the mortgage market and the real-estate market. i think that he was most effective when he was not standing by the side of president obama. what i mean by that is that when he was on the outside of the administration looking in, some of what he was saying in terms of risk-taking and revamping the way that wall street works made a lot of sense. unfortunately, i am not a big plant -- big fan of the volcker rule. i do not know if he was coopted on the way to the side of president obama, but preventing deposits in banks and

institutions from taking proprietary risks or being in the private equity business, i think it misses the point completely, from my perspective. this was not a crisis caused by private equity, a private equity firms, or even proprietary advances. this was a crisis perpetrated by wall street as a result of the improper incentives that bankers had and continue to have, which is to take risks with other people's money and to forget that they are a fiduciary, thinking looked seriously and hard before worrying about how big their bonuses going to be next season before they start pushing out the door all of these securities in products they do not understand. that is the problem, not whether or not some proprietary debt in

jpmorgan chase is taking risks with the firm's money. host: from what you have heard this morning, does the senate bill address with you have talked about? guest: unfortunately neither chris dodd's bill for the bill passed by the house, there was not a single republican vote in support of that. neither one of them goes to the heart of the matter, neither one addresses the incentive on wall street. i do not know if this is like the third rail that nobody wants to get close to, or politicians like chris dodd and barney frank are too close to wall street to begin with, getting so much of their campaign contributions from wall street, so they do not want to touch this sensitive issue of wall street compensation, but all of these proposals -- by the way, i

think they will be very poor -- very expensive. if you want a new consumer protection agency, all of these proposals wind up costing a heckuva lot of money. i think if you force wall street to once again think about the partnerships that they once were. until 1970, wall street was a series of small, private partnerships for each partner had their own money and net worth on the line in case something went wrong. when the firm started to go public, beginning in 1970, up until and including goldman sachs in 1998, the ethic on wall street changed from taking risks with their own money and being prudent to taking risks with shareholder and creditor money, where prudence went out the

window and it was all about taking asynchronous risks that were designed to generate revenue so that bankers and traders could get big bonuses. that is the problem here. that is why we have had one series of economic financial crisis after another. it stems from a disconnect between risk-taking and reward the thin consequences for making bad decisions. when there were private partner geddes, people were much more attuned to the red. now if it is something goes wrong, it is creditor mining and shareholder money. that is what is missing from all of this legislation on capitol hill. host: our guest touched on some of the provisions in the bill, they were outlined yesterday by chris dodd. consumer authority to be housed within the federal reserve, it becomes a supervision of banks.

up front, a fee on the industry related to costs with orderly liquidation of the company. unresolved, whether senator gregg and jack reed has yet to settle on who is excluded by an exchange trading being mandatory. how do you read that? guest: i think what they're referring to there is the trading of over-the-counter derivatives getting them into so much trouble in this last crisis, because it linked securities between firms and investors around the world. they absolutely should be traded on the exchange. absolutely, pricing information should be publicly available and known to everyone, not just the traders on each side of the

trade and hidden from the rest of the markets. that is one of the best provisions in the house bill, the mandatory requirements that over-the-counter derivatives are traded in the public market. that is hugely important. host: our guest is the author of "house of cards" which is out in paperback right now. a former wall street'seer himse, the book is about bear stearns two years ago, today is the anniversary of its fall. where are the players today? guest: they have scattered to the winds, by and large. a surprising number have gotten new jobs at different firms. very few remain at jpmorgan

chase, they are literally a few blocks from where i am now. very few of the former bear stearns employees remain a jpmorgan chase. the best asset that jpmorgan chase wound up with from bear stearns, frankly, was a brand new building that was built in 2001, which now houses jpmorgan chase's investment banking group. it allowed them to move into that building next to their headquarters, they avoided having to build a new building downtown. they also got an oil trading group that has worked out well. some brokers, which is where the former gaf ceo -- former ceo of bear stearns is. if other ceos of bear stearns,

like alan schwartz, is now that a firm called guggenheim partners. james kane has now retired to play bridge. the cfo of the firm has not found a job yet, but most of the other people have, one of the benefits that they had by being the first to collapse was a wound up getting $10 per share in stock from jpmorgan, as well as the creditors on the dollar, many employees were able to find employment elsewhere and had a six month head start on the lehman brothers and aig employees and all the other carnage across wall street. part of the problem is that what you do on wall street is so

specialized, you get over paid to such a huge extent, if you lose that job there are very few things that you cannot just go and do. the job is the severely narrowed to what you're doing all street. talking about a chance of getting comparable pay, that is very difficult. many of these people are struggling, in their 40's and 30's and do not know what direction to turn to. i am not saying we should spiel sorry for these guys, but it is an indication of where we are in society. host: democratic line, go ahead, columbia. caller: you seem to think that the current democratic party and the president are responsible for what is happening with

finances today. i just wanted to say that within the last 25 years or so, would you explain it to me, because i think it will take long time to get this straightened out. guest: let me say that if i give the impression that i thought the current administration was responsible for what happened in this financial crisis, i did not mean to do that. i do not believe that the current administration is responsible for the crisis, quite the opposite. frankly. this crisis originated in the square mile around where i am sitting now. a self-inflicted wound by wall street bankers and traders, entirely preventable preventable by their own behavior, if regulators had been watching,

and frankly that as a result of a generation of deregulation that began in the reagan administration and continued on earth -- uninterrupted until this day, a even through two terms of the clinton and ministration. i do not believe that obama official caused this. timothy geithner, before he went to washington, he had a role in regulating parts of the industry and in trying to solve the crisis. he is probably the right guy to be at the treasury in a moment, because they have the best understanding. i also agree with the caller in that this has been a long time coming. one crisis after another since these firms began to go public in 1970. i do not think that that is a coincidence. i think that incentives on wall

street have become very skewed and a disconnected between risk taking and the consequences of risk taking, which is why we had the crash of 1987, the asian crisis, the mexican crisis, the internet bubble, the telecom crisis, and now a mortgage- backed security crisis. one thing that you can be sure of is that wall street is very good at not fighting the last war. we will munsee repeat of the mortgage-backed security crisis for an internet bubble crisis, but there will be something else that they will hook up, probably cooking it up right now, unfortunately the legislation that might be passed, either as a result of all this two years later, will most likely be ineffectual. it is unfortunately a part of human nature, figuring out ways around of the legislation the wall street its right and human

nature to not learn from the past and get in trouble all over again. host: maryland, republican line. caller: i lived through the s&l crisis of the '70s, in that old. everyone said there would be measures so that this never happened again. i believe that congress is so corrupt, people like barney frank -- from the other side i cannot even think who is on the republican side, but both of them are doing absolutely nothing to protect the american people. i have lost $200,000 on the

value of my home. lost money in my 401k, as everyone has in the middle- class. the rich are getting richer, the pore are getting for, and the middle class is being squeezed out. vote them out in november, whether they're republican or democrat. host: "compensation, consumer abuses, legal authority, and too big to fail." "those credit rating agencies, restoring credibility to

derivatives, the black hole that nearly sunk aig." your thoughts? guest: with regard to the caller, she has a valid point about the revolving door that has existed between wall street and washington. there is no question that wall street is one of the largest contributors to campaign coffers and by the time you have been in the senate as long as chris dodd or barney frank, you have received hundreds of thousands of dollars in contributions. wall street is very good at lining the coffers of these politicians on both sides of the aisle. that is an important point. very frustrating. it is amazing how little money it actually takes to get your way in washington.

hundreds of thousands of dollars, not millions. for wall street, that is pocket change. as far as the article, those are absolutely the right issues they are highlighting. these are the issues. once upon a time in the 1950's there was an antitrust suit brought against wall street's, 17 firms were individual named. they thought that there was collusion going on, a cartel. eventually the judge ruled against the department. the industry was bared any kind of degree. fast-forward 57 years, you have

got intensely more concentration, very little competition now. with all of them failing and becoming a part of bank of america, goldman sachs has virtually no competition for the kinds of businesses -- blumberg had an interesting article the other day about how goldman sachs is able to charge its clients a lot more money for its services because essentially there is no competition anymore. morgan stanley does not even compete very often anymore. there has been a quadrupling of the cartel-like aspect of wall street now. maybe that is something that the justice department might want to look at.

something is wrong, it is not functioning properly, rohm emmanuel said. a good crisis is a terrible thing to waste. the problems on wall street were so extraordinary, they were revealed to everyone. two years later is like nothing ever happened. the legislation proposed does not go to the heart of the issues in terms of changing behavior. you need to have a complete bring replacement, lobotomizing the current thinking and replacing it with something new. we had a deal once upon a time when these were private partnerships. it all gets back to taking proper risks with accountability. that just does not exist anymore. host: what about the way that these companies did their books? their accounting practices? in the business section of "the new york times" they said "the

watchdogs of saw it all at lehman brothers." talking about the sec under the leadership of chris cox. "at the end of the quarter they were doing something known as repo 105 transactions." explain what that means to our viewers. we have one twitter message, "is anyone going to jail for betting against america"? that is what andrew ross is saying this morning, they're getting off the hook because the government knew what they are doing. guest: i love it when a new phrase enters the lexicon overnight, that is what has happened with repio 105.

thanks to the examiner's report, which is extraordinary in its own right, a 2200 page examiner's report gave us knowledge on something that very few people outside ever had any idea about, this insidious action by executives to move $50 billion of swirling assets of the books of the company at the end of the quarter so that they would not have to report it on their balance sheet to the sec and to investors in the public around the world. after the quarter ended, they got the assets back again and went on as if nothing ever happened. they were deceiving investors,

creditors. absolutely a outrageous. to the question about the twitter, at the moment there are two bear stearns hedge fund managers that were indicted and prosecuted, the prosecution put on a horrible case there. there was much more to it than they focused on. be that as a day, those defendants have been acquitted. it is examiner's report does not provide new impetus to go after them, i do not know what will. it is absolutely outrageous, if true, and it seems that it was, that these executives were behaving in this behavior. it is completely against the

nature of what their balance sheets actually look like. exactly what this outspoken critic of art -- lehman brothers said in terms of getting the negative publicity, we knew that he was correct thing. now in the examiner's report we know that he was extraordinarily correct. i am not a lawyer or prosecutor, but it seems to me that criminal behavior is safe here. host: missouri, independent line. joe, thank you for waiting. caller: i look forward to reading your book. i agree with that the lady from maryland 100%. these people need to be held accountable. i would say that this is one of the biggest scams that has ever been perpetrated on the american taxpayer.

henry paulson ran out to chastise, the sky is falling, goldman sachs needs billions of dollars. i think that he should be in there with his buddy, madoff. host: william cohan? guest: i agree with some of what he said, but equating henry paulson with madoff is a bit too far. henry paulson was right when he was saying that the sky was falling, metaphorically. the sky was falling. it was not his doing. frankly, even though everyone likes to come down hard on goldman sachs at the moment -- my new book is about goldman

sachs, i wanted to make sure the people understood that -- they were better at understanding the risks than the rest of wall street. not much better, but better as a relative matter. as i said before, this was a crisis that did not have to happen, completely avoidable. wall street executives talked about it before, testifying in front of congress, they thought it was a once in a lifetime tsunami. i completely disagree with that, they knew exactly what was going on. they could easily have prevented this from happening. they may have had to laugh off 5000 employees that were dedicated to creating and manufacturing, selling toxic securities we have now come to know and love. it was entirely preventable.

they did these things because they were making so much money from them without any accountability. they were paying themselves these huge bonuses. this is what mean by taking risks with shareholder money and thinking will come of it as their own money. without taking the time to think about the risks. i do not think that any of them knew. all they knew was how much money they were making. they should never have been able to sell these securities without knowing the risks they were taking. that is inexcusable and criminal, but i do not think it has anything to do with henry paulson. it has to do with the behavior of wall street that is unconscionable. host: md., democratic line. go ahead. caller: i want everyone to listen to my very important statement.

listen very carefully. over the last 1520 years i've lost anywhere from $50,000 to $70,000 in the stock market. i am a senior citizens cannot afford health insurance. in a breast cancer survivor and i cannot afford my own medicare. also, i think that smith barney was at fault. i agree with the other lady from maryland. these big insurance corporations, backing up the republicans and paying their way into congress, everyone should listen up. republicans do not want the health care bill because they will cut their throats if they go for it. i hoped and prayed to god that we get the health care bill pass this week. host: we will leave it there and move on to jay, north carolina. republican line. caller: good morning.

thank you for taking my call. in a 65-year-old small businessman. i have a comment and a question. as far as wall street is concerned, i have no faith in them whatsoever. the only thing they will not steal is the red-hot stove. what i would like to ask is this -- these ratings agencies, moody's, etc., they knew perfectly well that what they were rating as aaa was a joke. any fool knows that there are only so many concerns that can be rated aaa. my question, why have none of these people been prosecuted for fraud? guest: that is a very good question. there is no explanation. the problem is that the ratings agencies like moody's and s&p

were paid by wall street firms to provide the ratings the wall street wanted on these securities. that is unconscionable as well. that should not be allowed continue. unfortunately it is being allowed to continue. people should be complaining to the sec about this. round-table discussions have been held about ways to deregulate and fix this problem with the ratings agencies. they have gone nowhere. round tables have been held, there has been no change to the methodology about wall street firms paying ratings agencies. the only good thing that we can say is that there is so much attention placed on mortgage- backed securities and collateralized debt obligations and the like that the ratings agencies were rating, there is a chance of something exactly like

this happening again happening in the near term are pretty remote. people are scared to death to write something as aaa that clearly is not. there has been no reform of the ratings agencies. another part that is astounding to me. there have been hearings before congress. they have been fascinating. one thing i like about these hearings in front of the house oversight committee is that you get a little bit of a window into the documents in e-mails that are released. by the way, i think that they should be releasing buttloads more of these documents. they have been getting hundreds of thousands of these documents as part of the committee hearings and government hearings, but they will release only a tiny fraction of them. the need to release them all in

this new spirit of openness that supposedly exists in the obama administration. they need to start releasing documents in e-mails on a much more regular basis than they have been so far. frankly, i think that system as as broken as ever. employer requests go nowhere. i have a number of them dying on the line and going nowhere. it is incredibly frustrating. i read about how the obama administration is talking about more openness, and i see a complete disconnect. i agree with the justice that said let the sun night -- sunlight in. we need to focus more attention, more sunlight needs to be shown on every corner of wall street'. host: our next twitter comment reflects that caller,

"accountability, accountability, accountability." jacksonville, go ahead. caller: thank you so much, mr. williams, for shedding a little bit of light. 40 states were involved in [unintelligible] in bankruptcy court. it is incredible to me how this person got 36 other companies to shift their way from one to another. the corporation's staff and attorneys handling this, making $450,000 per month for the work attorneys are getting on that side. it is baffling to me how they're

getting away with laundering this money. host: are you familiar with this? guest: i am afraid i am not. but the question embedded in there somewhere, i believe, that would be happy to address, there is no connection -- there's no question that financial fraud is always with us, it is part of human nature. of course, we would like to eliminate it. but i do have seen that happening. the idea of buyer beware. if someone like chessmadoff -- if someone like madoff is offering something too good to be true view, even if they are making it sound real and genuine, you have to take that with a column of salts.

host: democratic line, baltimore. good morning. caller: good morning. they should have done a better job of regulating these mortgage companies. i started complaining about this problem of subprime lending since 2004. even to this day, to the federal trade commission, the comptroller, the office of supervision. more recently to the department of justice, who has done nothing to help me or other people, thought of and how people are calling in outraged today. in my opinion, this is nothing but racketeering. that is all i have to say. thank you. host: roy, republican line. las vegas. caller: i know the timothy geithner is going to establish

new bureaucracies to rein in all of the bad management, but the mission statement of the u.s. securities and exchange commission, maintaining their order and efficient markets in facilitating capital formation, that agency is already charged with those responsibilities. does your guests feel that we need more bureaucracies? or that we already have enough in place? guest: i think we have a huge bureaucracy already in place. i think that putting more in place costs a lot of money we do not have at the moment. more enforcement dollars probably need to go into the sec. it has never really been a fair fight between wall street and

the sec. wall street helps to write those rules and regulations. the sec goes out and seek the views of wall street before putting new regulation in play. as is often the case, people that work at the sec later go to work on wall street. there's a revolving door. the problem is, in this past crisis it was not that the regulation was not in place, it was that it was not enforced or that regulators were not able to figure out what wall street is doing. and i think that this goes back to the laws a fair approach to regulations that have been building up in this country since the reagan administration. i have no idea what chris cox did during his years at the sec. and this former california congressman, sometimes i think

he has been surfing instead of regulating wall street. because what he allowed wall street to get away with under his watch -- by the way, i am shocked we have not heard from him. talk about someone that needs to testify in front of congress. and i know that he is scheduled to speak, he got out of the last time he was asked to speak. i want to know what he was thinking during his time running that agency and why he did not do his job. is astounding to me that he did not do with, but the things that got away with under his watch were extraordinary. host: richard, independent line, good morning. caller: good morning. i am not intelligent enough to be attached to a think tank.

guest: neither live. caller: but when businesses are allowed to spend this kind of money to buy gold, that is the problem in this country. cost if it was banned for them to bring in money to congress, that would be simple. thank you. guest: that is the reason that this recent supreme court decision is so troubling, the businesses being allowed to spend as much money as they want to influence elections, the symbiotic relationship that has always existed between wall street and washington, that has been going on for 100 years. there is no stopping it now, for sure.

the ethics of this need to change. the way the people think about their leadership in washington and what they want from their congress people and president, it has to come from the people. we are the ones the boat. we are the ones that allow wall street to purchase influence in washington. when i was on jon stewart's show in april, he asked me the difference between an investment bank and a ponzi scheme. a funny line, but the difference is that madoff was operating against the law, clearly. on wall street, because they have written the rules and regulations that they live by, it has been very hard for prosecutors to figure out what laws they broke, even though we

know in our gut that the behavior was reprehensible. and it feels criminal to us. because wall street was able to, for relatively little money, helped write the rules and regulations that they live by, it was hard to find a road map for prosecutors to go by. one of the things that is so interesting about this lehman brothers examiner's report. a 220 page road map for prosecutors, we will have to see if something comes of it. host: a couple more phone calls. we need quick questions and quick answers to get them in. anthony, atlanta. go ahead. caller: all this money that i allegedly lost, you play the game and there are risks. supposedly you understand. but there are coaches on the other end the play with higher risks that no one is in on. we did not really lose the

money, it just moved. is there a way to trail the money? cover it? borrowing that money to pay off banks? guest: i am sorry that you lost money, i do not know how to go about getting it back except through the legal system, perhaps. for every trade there is a party and the other side. we know from the new book from michael lewis, he profiles four or five people who were on the other side of the trades, they made a tremendous amount of money betting against wall street, which obviously takes a lot of guts to do. there are always ways, every day, there are ways to make money. it feels like a casino, i agree, of but there are ways to make money by betting correctly on the market and that is why people do it.