action into the pursuit of impact. so it's migrate pleasure to introduce our president, dan mote. [applause] >> thank you very much, don and i very much appreciate this opportunity to welcome you to this forum. this is a really impressive opportunity for the university and for me personally. don is in his first year and public policy is one of his themes and has taken on the job by storm. dop has had a lot of help from his friends and the alumni and sall stern has given us wise council. he was the person you wanted to talk to. when he came, he drew people

because as he got you to do, you felt good about it at the same time. and nearly 95 years, what a splendid he had. but the saul stern professorship responseors a lecture series that inspire our students and faculty alike. congressman hoyer always speaks about his inspiration to public service through just such a contact on this campus. facilitating interactions between our university community and scholars and leaders in public policy experts in the region -- is a focus of the public policy school. we are really very fortunate to have that saul stern brought that version to us. i thank the concord coalition,

very well known and famous organization. in this tour is a collaboration between the saul stench professor and the coalition. the coalition attracts remarkably bright scholars from diverse fields and i would like to thank all of them and everyone for co-sponsoring this program today. the bipartisan basis for the coalition is important for identifiable solutions to various problems. and i would like to mention that the school of public policy has been focusing on these issues of economic policy for a very long time with very well known names in the school. alan shick and others who have been deeply involved. tracy gordon who may be here

today, explores public finance and management at the state level. and no one is more engaged in issues of fiscal policy than maryland's own majority leader, steny hoyer, who is in his 15th term. as a long time supporter of the school of the university of maryland and hashe education and throughout the nation, we are fortunate to have the majority leader hoyer in such a prominent position of national leadership. his dedication to the university and fiscal responsibility really are his hallmarks and for that, we all have a great debt to him. thank him for coming todd and wish this conference a fruitful discussion on this very important topic. [applause] ne of the

highlights of my life. i tell people that marrying my life was the only thing that surpassed my going to the university of maryland in terms of making an impact on my life. i'm always pleased to be here, pleased to be here with dan mote and with all of you and i'm certainly pleased to be here with steven and margaret. saul stern came into my life 46 years ago. i was 4. [laughter] ok, i'm a politician. we lie. you understand that. and saul stern worked for u.s. senator daniel brewster. a couple of summers later, steve certain is -- stern, who was a mere child at that point did an internship and that's when

i got to meet him and i met his dad at the same time who was, even then, very active in public policy, an influence in public policy. a leader not only in the democratic party but much more broadly, a leader in our community on so many different issues. it is not -- this program is not about celebrating the life of saul stern, but if any life can be celebrated joyfully and thankfully, it is the life of saul stern, who did so much for so many so frequently. and steve and margaret, we're pleased you're here to represent your dad and your father-in-law and we were all blessed to be a part of his life. thank you very much. i want to say how pleased i am to be here as well with dr. destler, who was our provost and who did such an extraordinary job and who is a wonderful representative of the

university of maryland. what? bill? what did i say, max? professor destler. i want to thank him for his leadership. i want to thank my former colleague, tom mcmillan for his service to this university in so many different ways. he has made us so extraordinarily proud of not only his prowess on the basketball court but more importantly the university of maryland that showed it to be an outstanding economic institution as well as athletic program. thank you for your con -- continuing fidelity to the university of maryland and for higher education. i also want to say how pleased i am to be here with ambassador swab. she and i worked closely together on behalf of a

better trading relationship on the rest of the world. to open up trade. as president obama is saying if we want to grow our economy, one way is by trade. i want to thank her for her leadership. i'm also honored to be here with my friend david walker and bill bixby and bob. all of whom i've worked closely with over the years on various aspects of the subjects we're going to discuss today. i haven't work is -- worked as closely as mr. biggs, andrew, but maybe we'll do that in the future. don ketti, thank you for your leadership. this is not a town meeting. if it were every seat here would be filled. indeed, when i held a town meeting on health care, there were 1,500 people in the auditorium and the subject we were discussing was not as important adds the subject we're

discussing today. it was not, perhaps, as consequential, certainly in the long term as the subject we discuss today. and i want to congratulate those with this entire effort to indicate our public and to look for solutions. it's easy to lament reality, what is. it's difficult to say what should be and how we're going to get there. we're here to discuss what i believe is america's single most pressing challenge. putting our fiscal house in order. america's accumulation of debt is a common danger and one that ought to engage the best efforts of liberals and queverts -- conservatives alike. because while all of us here have our own view of the prop proper role of government, facts do not have ideal zpwi. to a government that does nothing that pay for

entitlement and interest to our creditors and an end to american leadership in the world. then -- on their book on the american crisis, they tell us that public debt exceeding 90% of g.t.p. is often a tipping point into a wrenching crisis, a point we are on pace to reach too soon. we only have to look at greece to see where the path we're on leads. we're here because we are committed to changing that course. getting america out of debt isn't the work of one president or one kong or one bill, or perhaps in this case, one decade. but i believe our work in kong must be about breaking a long pattern of fiscal irresponsibility and easy decisions. and putting america make on a more sustainable course.

we just passed health reform bill. that $143 billion and some $1 trillion in the decade after that. those savings, however, as david walker correctly points out, in part are contingent on kong keeping its pledge and taking hard votes to control health care costs in the years ahead. kong does not have a good track record on that objective. doing so will take courage, the willingness to value our neigh -- nation's fiscal future over the political precious of the moment. it will be essential for the kong to show that courage and it will be

incumbent on the american people to demand that courage. that is why i lament that fact that every seat here is not filled. and david, i hope in your sessions to come around the country that the seats will be filled. c.d. and that americans will come as you hope, as concord coalition hopes, and bill, as you've been working towards the public does in fact understand. we're all of one mind on this issue. i understand there's no fiscal sleight of hand or silver bullet to eliminate waste and inefficiency in our health care system. i know that no expert can tell us definitively the best steps to cut costs. but i do know that american health care is the most expensive per capita in the world and that we don't have better health to show for it.

so doing the bill we passed was not an option. but it's only the beginning of the struggle to control health care costs, the single greatest driver of our deficit. i believe this administration and this congress must be committed to this. president obama has proposed a deficit that would cut our budget in half my -- by 2010. it's a daunting and foreboding message of how difficult that will be to obtain. it proposes a freeze on nondiscretionary spending, a powerful sign that kong gress must tighten -- con

gress must tighting its belt. the president signed a bill to reform weapons acquisition and help control the $92 billion in dense cost overruns identified by the government accountability office. we have also reinstated the crucial pay as you go law that forces con gress to find a dollar of savings for every dollar it spends. understood president clinton pay-go helped. the chip was the major reason we churned deficits into surplus, the growth in the economy. it was the rapid expansion of the economy that helped produce the unprecedented balanced budget. whether it comes to increasing medicare benefits, pay-go removes from the table the easily usually unspoken solution. and that is, of course, to

pass the costs long to our children. i was proud to sponsor the pay-go law, not because it gets us out of our deep fiscal hole, but because it stops us from digging any deeper. theoretically. david again is right. they are rhettically, because it can be waived. he can -- we can clang the law. hopefully we will not, certainly we must not. all of these steps are important to helping control the damage to our budget and to our future. but they are together a small part of the solution. that's why president obama create add bipartisan fiscal commission to tackle the most pressing long term challenges. i've long been an advocate for fiscal commission. i was the only leader of either party that testified on behalf of the creation of the commission before senator konrad and senator gray. i'm glad to see that two

proven budget balancers have been appointed as co-chairs. a former clinton white house chief of statue and former republican senator alan simpson. congress must act on the commission proposals at the end of the year. we did not pass statutory commission. i was for statutory commission. we did not pass it. president obama did what he could do in tde@@@@ r bd and both majority leader reid and speaker pelosi and myself, i scheduled legislation, that pledged that we will put on the floor between december 1 and december 31 the results of the commission. now the results of the commission are not guaranteed, as you probably know you need 14 out of 18 votes on the commission to make a

recommendation. that is an extraordinarily high bar. whether it can be reached given the membership of the commission is problematic. as you recall, the greenspan commission had great difficulty in 1982 in reaching a conclusion as well. it was jim baker and the white house that got a conclusion reached so we could address social security. to get to that point, both republicans and democrats that point being we have a recommendation to put on the floor on the house and the senate, republicans and democrats have to come to the table without pre-conditions and can't rule out any solution. on the revenue or the spending side. we can't give into the temptation to turn this challenge into the subof demagog erie. i was disappointed that leader boehner made the suggestion that this commission report prior to the election. if it did so, it would simply

become the object of politics in september and october and every member would be asked to sign a pledge that we will not cut this, we will not cut that, won't raise this tax, we won't do anything. and too many of us would have signed such a pledge. may inclu raising the retirement age and might also make social security benefits more progressive. a number of my colleagues don't like that when i say that. but those who are doing very well cannot expect to get what the very needy need. on the side of revenues, i think president obama was correct in refusing to take any option off the commission's table.

a useful model is the work of president reagan and speaker o'neal to create a more efficient tax code in 1986 and their work preserved social security in 19 3. those are some of the challenges and options for the bipartisan commission to wrestle with. but my last word of advice is for every one of us and particularly the young people in this all of a sudden. this mention more to you than it does to me. it means a lot to me, but to you it is crushing your generation with debt. and if we are not careful, if you have your iraq and afghanistan or your h 1 n 1 or your katrina, you will have no resources with which to respond and your generation needs or energized to demand my generation and those younger than i serving in the congress of the united states that we act with

courage and marlty on your behalf and on behalf of the strength of our country. my last word is they are work of every one of us. getting out of debt is about looking reality in the face. it's about sacrifices and hard choices. america needs a fiscal wake-up because our choice isn't between painful and painless. as steven pearlstein wrote in yesterday's "washington post," "whether we will begin to make these adjustments voluntarily, gaugely and fairly or wait until they are imposed on us harshly and unfairly during the inevitable crisis that follows. so much i think is spilled on the question of fiscal responsibility. i leave you with the question -- responsibility to what? responsibility -- to our budget and our future? certainly. but just as importantly, responsibility to one

another. elected officials and the public -- and the public -- have a responsibility to one another in this debate and if either side fails, we will all fail. washington has a responsibility to show political courage and not to exploit for temporary advantage someone else's willingness to make hard choices. some of my colleagues have criticized paul ryan. i don't agree with his suggestions but i applaud his courage for putting something on the table that in fact does what he says it's going to do, wlorget you agree with that policy. it is what we all ought to be doing and not criticizes the other for doing it or using it for political advantage. what is politically easy is often fiscally deadly. easy choices are selfish choices because they leave the work of cleaning up to someone else. easy choices may be popular

but that popularity is bought on credit. the people have a responsibility too, to refpblgt easy answers from their representatives, to indicate themselves about the source of the debt and realistic ways of ways out and understand that lower taxes and higher spending may be superofficially popular but they are road to ruin. debt is a test of character for all of us. i believe we have the character to pass. let us pray that we will. thank you very much. [applause] >> magically it appeared. well, thank you very much, mr. hoyer, for your dedication to this issue

and for having a fiscal forum on the first really nice sunny day of the spring and thank all of you for coming and showing some interest in this issue, which does affect the young very definitely. thank you to the university of maryland for hosting us today. it is a recognition that the difference of wise or unwise fiscal policies will make for the future of our country and the people who live in it. uh, i'm going to start by just doing a little budget 101 to give you an idea of where the budget is today and what are some of the demographic and health care challenges that face the budget and then others will look at where we're projected guard and then hopefully we can get into a good talk about solutions, what we do about it. so the first thing to recognize about the federal budget is that this year we're going to run a big deficit, somewhere around

1.25 trillion or a little bit more. one thing i would note about the deficit -- just on the spending side oaf this chart is the amount of net interest. slightly over 200 billion. that's the interest that the government pays on the debt on its borrowing. to give you some perspectives, it's considerably more than we're spending on the wars in iraq and afghanistan this year. deficits run up interest costs, which is an suspense to the taxpayers. another thing to notice about that on the spending column is social security, medicare, and medicaid take up around 40% of the federal budget right now. those programs, unlike say defense or the other appropriations programs, are -- they're called entitlement programs,

sometimes called mandatory spending. the key point is they grow by benefit formulas and population and they're not annually appropriated which makes it a little more difficult to keep control. that gives you an idea of the size of social security, medicare, and medicaid in the context of the current budget. a lot of economists like to look at the budget in terms of the percentage of the economy so it gives you some better context than just looking at the dollar figures alone. the importance of a chart like this is showing you what federal revenues and spending and the resulting deficits of surplus are in relation to the size of our national economy. we've expended the federal level around 20% of g.d.p. and tax a little over, leaving a deficit somewhere in between. the key thing to take out

of this is really the trend line. not so much, you can see right now we're way off the charts because of the recession primarily and the bailouts and attempts to deal with the recession. revenues have dropped considerably. spending has gone way up. in the past people would say deficits are always caused by recessions and war. as the recession fades and we presume the war costs will be winding down, won't we get back to some sort of normal? the answer is no. in the congressional office projections, anybody that does, this when you look out, even assuming that we have a robust economic recovery and war costs fade, we're on on an unsustainable track. the lines never come even close to coming back together again and that's part of our problem. we have a structural

built-in deficit rather than a cyclical one caused by the economy. a consequence of deficits -- one is we're doing more borrowing from abroad. a growing part of our national debt is owned by foreign investors. the benefit of that flows abroad and not to our own domestic economy so it acts like a mortgage on future national income and it makes us vulnerable to decisions made elsewhere. another consequence of deficits is running up interest costs. the interest of $200 billion or so this year is projected to go to around 800 billion within two 10 years. that would be more than we spend on national defense. that's quite a lot. having interest costs get up more than we're paying or all of the rest of

government you would say besides national defense, it would be more than we're spending on that. so it really is a problem. and why is this going to be happening? two factors. one is the aging of the population. demographics. we're going to have people living longer and the baby boomers are getting set to retire. that alone is going to drive up the cost of programs like social security and medicare but that's hardly the only problem. the other thing is health care costs. and the representative had a lot of discussion about that this year. rising health care costs we really have to get ahold of. aging of the population, rising health care costs and that's why our budget is on an unsustainable track, even with a strong economic recovery. so we've been doing fiscal wake-up tours with lots of people. often the brookings and heritage organizations are involved as well.

and what we've found with our fiscal wake-up tour or solutions tour is there are certain points that everybody agrees to. it's not a matter of ideology, it's a matter of alittle bit matich. the current fiscal possible is unsustainable. there are no easy answers for it. we should do everything we can to grow the economy, cut waste, fraud, and abuse but the problem is much bigger than that. it is going to retire bipartisan cooperation and a willingness to look at these things without preconditions. public engagement is very, very important. the public is going to have to be aware of what the choice are. that's why we're out on the road. we encourage members of congress to have discussions with this about their constituents. even though we talk about a lot of numbers and show lots of charts, this is

really not a numbers issue. it is a moral issue, about the legacy we're leaving to future generations and right now that legacy doesn't look so good. so it's really up to my generation and the people that are in charge now to leave a better, more prosperous nation boiled. . let me turn it over to david walk. in our stage of life, it's great to be referred to as a rock star, isn't it? [applause] >> thank you, bob. thank all of you for coming on this beautiful spring day and thanks to the university of maryland and everybody who made today possible. in particular, thank you to