health care has gone up three times faster than wages. so either the company is having to cover those costs, which means that is less moan they can use for hiring new workers or investing in plants and equipment, or they are passing on those costs to their employees in the form of higher premiums, higher deductibles. and what is happening federally, all the programs that we already have -- medicare, medicaid, children's health program, all those things are commeetly out of crool. -- control. so if you are concerned about the deficit, what you are really concerned about is the cost of medicare and medicaid. so here's what we did. what we said is, number one,

we'll have the basic principles that everybody gets coverage. and the way we're going to do that is to say that most people individually shouldn't buy health insurance on their own because they didn't have leverage and the health insurance companies take advantage of it. instead, what we're going to do is set up a big marp that allows everybody to buy into this pool that members will be a part of so you know it is going to be a big deal. members of congress, they have to look out for their own families, and just like wall mart is able to -- wal-mart is able to leverage a price from everything because they are a big purchase -- purchaser, this pool will be a big purchaser, that point, number one, that will drive down the prices for people who are participating,

and it will allow everybody to get a decent deal on insurance. and what we do is provide tax credits for people who still can't afford it, so that they can afford it. that's point number one. in the number two is we have the strongest insurance reforms in history. so all those things i dolled you about, you not being able to get insurance because of a preexisting condition, you finding yourself getting dropped even though you have been paying premiums for 15 years and suddenly they decide we don't want you because you're getting sick, those bols will be over. and so you mr. be protected as a consumer to make sure you have security and protection if you have insurance already. that's the second thing we do. the third thing we do is we actually put in place a whole bunch of mechanisms to start reducing the actual cost to health care. so for example, we're going to

start encouraging paying doctors not based on how many tests they take, but based on the quality of the health care they end up offering. you go referred to a specialist, you get another test, then make you go to a third person, a surgeon, you get a third test. it is all the same test, but you are paying three times. what you are trying to say is, we'll pay you for the first test and smale the test -- e-male test to everybody. [applause] or have all three doctors in the room when the test is being taken. but that's an example of the kinets of things that will save moan and start reducing costs over the long term.

so what we're doing is embedding these in the program to reduce the costs of care. so what we're hoping is that over-time, because of the next three, four, five, six years because of changes that we've actually saved moan from this, even though more people are covered. so, now, you'll hear the chrisics say, that defies common sense. if you are adding 30 million more people, you can't pretend how that is going to help us on the deficit. i've heard this criticism. let me give you an example. if you have a house and you have a big hole in your roof and it is raining and snowing through

that roof and there are some people who are inside the room where the roof is ok and they are nice and warm and then you have a few of your family members in that room where their is a big hole in the roof and they are shivering and they are coled, if you repair the roof, that is going to cost some moan. but if all the water damage from your floors and all the heat that's going out of the roof and all, you count all those savings, over time it may turn out that it actually is saving you moan, and by the way, all those family members are warm, too. you're not the only one who is warm, right? that's essentially what we're trying to set up. now, the last point i want to make. all those savings we're anticipating, we don't even discount those when it comes to

make sure we are deficit neutral. here's the two ways we are paying for everything. number one, we are eliminating a whole bunch of waste, fraud, and insurance subsidies that were being paid out under medicare that aren't making our seniors any healthier. i mean, you have a pretty sweet deal for insurance companies right now in a program called medicare advantage where they get $18 billion a year paid to them to manage a medicare program that about 80% of seniors are getting directly from the government and it is working just fine. it is just a subsidy to them that doesn't make anybody healthier. so what we're saying is, let's eliminate the subsidy. so that's about how we paid for half of this thing. the other half of it is true, that we have identified some additional taxes that we think

are fair. let me describe, just to give you an example, i don't think this will affect you, but i don't know if you're -- your family circumstances. right now if you're on salary, you get your salary from celgard or any of the other companies around here, you're paying medkear tax on all of that, right? you see it on -- as part of your fica. but if you're warren buffet and you get most of your moan from dividend and capital gains, you don't pay medicare tax on that. your eligible for it. you're going to get the same medicare benefits as anybody else, but because your source of income is what's called unearned income, you don't have to pay this. i'm thinking to myself, how is it that the guy who is cleaning

up the office is paying the medicare tax and the guy who is making capital gains isn't? so what we said was, look, if you make more than $250,000 a year, then that moan that you make over $200 thousand, $250,000 a year that's unearned that's from capital gains and dividends, you should have to pitch in to medicare just like everybody else, because you're going to be using it just like everybody else. what the congressional stiss has said -- i'm sorry these answers are long, but i want to make sure i'm answering your questions. i want to make sure i am respecting the importance of your question. what the congressional budget office has said is that as a consequence of savings of waste and fraud combined with other

resources this is going to reduce our deficit by over a trillion dollars. we're actually saving moan for the government. there were a whole bunch of people left out in the coled war . that's the concept. a lot of people have legitimate concern that gosh it seems like government spending is out of control. i understand that. i feel that. but understand what happens -- when i walked in, we already had a 1.3 trillion deficit. that's an annual deficit of $1.3 trillion. the day i got sworn in, we had

$8 trillion in accumulated debt from the war in rak, not paid for. the prescription drug plan, medicare part b, not paid for. bush tax cuts not paid for. so we already had all this debt that had just piled up, but nobody noticed because things were going kind of good, just like a lot of folks didn't notice their credit card was going up or that their home equity loans were going up, because when things were going good, you tend not to notice. so all that debt had already accumulated. we then had to spend $787 billion dollars on the recovery act to do all the things unemployment insurance, cobra, what's called fmat, which is essentially helping states to keep their budgets so they

didn't have to lay off teachers and cops and firefighters, all of which if that had happened would have furt depressed the economy and we would have recovered a lot later. the investments we're making in clean energy in things like celgard to help spur economic growth. so we had to spend that, but that was only a fraction of what our debt was. and in addition, what happens is, when the economy goes south, there are fewer tax revenues. and so you are putting more moan out to help people with unemployment insurance, but you are getting more moan in -- but you have less moan going in. we have a significant debt. that's why i'm freezing government spending. that's why we've reinstituted pay-as-you-go. our health care program is paid for. but the big thing is if you are really worried about leaving

debt to the next generation, which know you are, the most important thing we're going to have to taffle is our health care costs. because medicare is by far -- medicare and medicaid are the biggest things that are looming in the horizon of what our debt is going to be. nothing comes close. if this health care bill never existed, if i didn't do anything about it, we'd actually be $1 trillion worse off. but even with whatted savings are we're getting from health care, we're still going to do more. if you don't believe that, go on our web site www.white house.gov and you're going to look at how the federal government works. a lot of people think if you eliminated foreign aid -- earmarks, a pork project, those account for about 1% of the budget, less than 1%.

foreign aid accounts for about 1.5% to 2% of the budget. most of the budget is medicare, social security, medicaid, defense spending and interest on the national debt. that accounts for 70% of the budget. we're going to have to taffle the big stuff if we're going to get our budget under control. boy, that was a long answer. but i hope i answered your question. i got to ask this young man right here. >> my name is maut and i flew down from cleveland, ohio this morning. we're a supplier here to celgard. about 75,000 of those 100,000

jobs are in northeast ohio. the limousines that you drive -- electric with celgard membranes in them sometime soon? >> you know, the answer -- i'm going to be honest with you -- [applause] when i first got secret service protection, i asked, can we make these cars hybrids. and i apologize because secret service said no. the reason is not because secret service are bad guys. it is because the cars that i'm in are like tanks. as you might imagine, there's a little bit extra stuff on there. there is a little reinforcement. so they weigh twice or three times what an ordinary car weighs. so they just couldn't get the

performance in terms of acceleration using a hybrid engine. but here's the good news. as part of our overall energy strategy, i have ordered us to triple the federal fleet that is hybrid. and so government purchases an awful lot of cars for all kinds of things. i think -- i'm assuming the biggest car purchaser. maybe herts is -- hertz is bigger, i don't know, but we're big, and we are using our purchasing power to help encourage the clean car industry. and hopefully to get you more business, all right? thank you very much, everybody. god bless you! thank you! [applause]

♪ [applause] ♪

♪ >> this year's c-span

student cam asked students to create a video. here's a third-place winner.

>> sometime soon approximately 1.7 million american soleders will be returning from combat to the over-burdened veterans health unit. combat-related stress contribute to rising numbers of divorces, domestic violence. in order to cope with nightmares in the stress of returning, veterans often find relief through drugs and alcohol addiction. 76% of our returning veterans

battle alcohol, drugs, or mental illness. 1/3 of our entire homeless adult population are veterans. that's a figure of up to 100,000 people. the u.s. department of juss reported in twue that there were over 225,000 veterans held in our nation's prisons and jails. pledges to hire more mental health specialists. new re-start programs are being implemented however access is limited. the hardest part is a new beginning is the embarrassment soleders often feel admitting they need help. >> we have a nation that has a spob to help our returning veterans.

this country did a magnificent with soleders -- soldiers while they are m in uniform, but as soon as they get out of uniform, they are not helped. once thre get in civilian clothes, we forget about them. we need to remember the impact that the family goes through of the returning veteran. the veteran comes back to a wife and children, they have grown and they have changed in ways that the veteran hasn't been able to understand and they have changed because of their experience. the thing we need to do is not reach the assumption that they can just very easily get back into the civilian world.

as a nation we do a fantastic job of training the military to become proficient in the military way of doing things, but when we bring them back to civilian life, we expect them to do it in three hours. that's not going to happen in three hours. we just assume that the veteran, he or she, can just switch uniforms, switch their dress, and switch their way of thinking, and that's just not going to happen. it is a very common everyday occurrence. nobody thinks twice about it. when a veteran walks in a classroom with 150 people they have been trained day and night day after day that you don't walk into a crowd of 150 people because that has all kinds of

potential dangers associated with it. if you and i are in a classroom and i have a text boom on my desk and in my movement that textbook drops off and slams on the floor, nobody thinks about it. but that textbook falls and makes that noise for the veteran his or her immediate reaction is to hit the deck. >> it has been a difficult war, a hard war, and our soleders have symptoms of post-tralmic stress or actually have the disorder, and that can be one of the most contributing factors that gets in the way of relationships. >> as i said at the veterans administration i would ask them to consider expanding the application of the g.i. bill that is so fantastically generous of the veterans but have it also apply to the veterans smouse. have them get a degree that has

a wife and the husband stay at home and not grow along with them does not help that relationship for that man and woman regardless of who wears the uniform. >> so programs now are really focused on rebuilding relationships. the chap lanes have a program called strong bonds for example. the other thing we're trying to do very hard is through early detection and screening for post-tralmic stress disorders, we are doing treatment with what we call evidence-based treatment, that is treatment that there is good research for, and we're also looking at new and alternative treatments. yoga, for example, or virt wall reality therapy and we're opening to exploring anything that will help our soleders. -- soldiers.

we are looking into treatment for the effects of war. >> i want to be here at arizona state university studying micro biology without being a military policeman for the united states army. >> it not only affects each soldier but it affects their families, as well. i would ask every civilian and help with the effort. >> many people right now do not

support the war, but i think support of the troops is at an all-time hi. having people just say thank you , that makes it -- as corny as it sounds, it makes it worth it. >> to see all the winning entries of this year's student competition visit studentcam.org. >> up next live at 7:00 eastern your calls and comments on " washington journal." then president obama discusses the health care and off-shore drilling. then u.n. ambassador john bolton.

>> the minute that the wall street firms were in the business of harvesting middle class and lower middle class americans for their home equity value and making loans to them against it, there was a nal natural risk of abuse. >> sunday michael lewis on the subprime mortgage crisis. his latest is "the big short." he's also the author of "liar's poker" and "the blind side" which was the basis for the movie. >> this morning we'll talk with christian weller from the center of progress and drue biggs. thenha