department arms control negotiator will discuss u.s. nuclear-weapons policy. and we will look at this year's legislative agenda. "washington journal says. ." .

host: we will be digging into who the supporters of the tea party are. here are the telephone lines. we would like to begin the morning by showing a little from this "the york times" steady. there are many articles about the tea party today, this tax day. here is the survey. it is the first comprehensive look at who backs them. the percentage of those who are men, 59%. 89% our white.

45% our older. -- are older. 39% described themselves as very conservative compared to 12% of the adult population, and 37% of the post-graduate or college degree. many more questions were asked of them. we will get into those, but would like to talk to you this morning about who backs the tea party and what your view of this, and what influence it may or may not have in this election year. today the president is traveling to the orlando area to announce a new policy. it has been controversial. robert block was the space of the tour for the orlando " sentinel" is on the phone with us. is the president's announcement about the retooling of the space

program -- how was it being received? guest: with great trepidation and some of the state because it calls for a big change and the way nasa has generally conducted business here. it means there's a lot of uncertainty for jobs. host: we have seen some estimates and your paper and elsewhere. what is the likely cause of americans about the change of direction? in 2004, president bush announced they would start a new space program to return to the moon. one of the objectives would be a reduction and the standing army of workers that build the space shuttle which is a great, fantastic vehicle, but it is immensely labor intensive so they wanted something cheaper.

the idea that there would be an end to the shuttle program, a loss of jobs, and the gap between the start of the new program has been around for six years. a lot of people kind of ignored it. the gap grew. florida was always looking at a loss, some people said of the time of 6500 jobs. with the cancellation of the follow-on the moon a program which was constantly slipping, under-funded, becoming more expensive on its own because of technological problems, the gap grew from an original two years to the now seven years. there is nothing else behind. so, they are looking at around 1000 potential job losses with an indirect losses of as much as 14 losses. that is in an area of florida that is already 12.6% and its

unemployment rate. the local devastation would be huge. host: the president will redirect bush's concept into a more privatized program. it returns to the space station. what are the other elements? guest: the space station which was just about to be finished being built, which originally was for seeing to last through 2020 and beyond -- the new plan was supposed to be abandoned in 2016. now we are extending it back to the original 2016 -- i am sorry, 2020. the other provisions of the plan will rely more on morerocket companies, some of whom are upstarts, new companies. some are companies owned by

boeing and lockheed martin which have been doing this for a long time and have tremendous experience. other ideas are new technology developments. the idea is that if we can handle for the job of taking astronauts and carter to the space station in the lower orbit, directly around the earth, then nasa can concentrate energies and funding on trying to develop new game-changing technologies to go beyond the earth orbit to the moon and other points in the solar system, and eventually to mars. there is more money in his budget for earth science. it refocuses a lot of what nasa does from an operational agency, an agency that develops and operates spacecraft to an agency that does more research

and development. that is what it was very early in its life. host: thank you for the detail of what the president will speak about today. i understand he is convening a conference or summit for a few hours after his speech? guest: it is more like a conference. there will be the administrator of nasa and john, the president's space advisor who is influential to have been shaped this policy -- there will be four panels of various experts to talk about the aspect of what the program needs in the years ahead. the matter what the president proposes today, it is not the final word. it will ultimately depend on what congress wants. part of the resistance is, nasa has been one of those programs

that has always been important for politicians. this is old-fashioned pork. when programs changed and jobs go, there are many people on the hill who are uncomfortable. the other interesting thing about this whole change and the bay you are having as with the tea party -- and the debate you are having, as nasa has been an issue in which the roles are reversed. the one area where republicans and conservatives argue for a large government-sponsored program, and where you now have democrats advocating for privatization. so, that is a little twist. host: thanks for giving us the highlights and setting the stage for the continue debate here in washington over america's funding for the space program.

robert is a space editor at the land of newspaper, joining us from the space center. we will look at headlines, then get on to the tea party discussion with you. here is the front page. in "the usa today" -- obama tries to get support of space plan off the ground. finally, from inside "the wall street journal" -- china sets ambitious space goals. in less than 20 years, china has gone fromprogram to seeking to move into the lead. we will talk more about space. it is time to move on to our discussion on the tea party. it is prompted by a number of stories including this one. it is the first real demographic and policy steady of the who?

the tea party -- of who backs the tea party. they suggest that 84% hold an unfavorable view of barack obama. this is proof of the way that congress is handling its job. 96% disapprove of congress. the view of the national economy -- either fairly bad or very bad -- 93% say that it is compared to only 83% of republicans. only 20% rated their own household situation as fairly bad or very bad compared to even 22% of republicans. so, they feel that they're fairly well-off compared to the

country overall. here is bruce on the republican line from virginia. caller: i am republican and conservative, and i think -- and i would back the tea party if you were run for congress and the senate. host: they would have their own candidates and you would support them? why is that? caller: yes, because here where i live they have no jobs. they have shut down. [unintelligible] goodyear -- you have the schools with a big budget cut of $4 million, which will be layoffs. it is very bad here where i live. host: how do you see the principles of the tea party helping with that situation?

caller: i believe it would help to get jobs in this area. host: an independent from maryland. caller: i do not believe it will last. i think any progressive movement by the people in this country is doomed because it is only a matter of time were the get thoroughly infiltrated by the intelligence apparatus, and destroyed from within. i just came across something about these anti-american organizations, all these neo- nazi type of organizations. they give instructions to people targeting american citizens, saying that people with certain

bumper stickers are terrorists, and people who believe in the constitution are terrorists, veterans returning from the war are terrorists. we have to be careful. there is a movement. we are in the initial stages with the american citizens will be called the extremists, deserters, and things of that nature. host: next up is long island, n.y., on the democrats' line. caller: yes, i think the tea party is not really such, but who is behind it? i have a member of my family who is a member of the tea party and he believes anything the tea party says. he will call me 100 times and say this is a it! you read the article, and they only read what they want to see.

no facts, nothing. they just want to see obama fail, that is all that i see. i tell him, you are an american. you want to see the country go up the matter who is the president. once in office, you should back him to the max. host: this is built on our republican line. caller: yes, people who are members of the tea party used to recall the son of majority. take for instance the healthcare bill. none of the news organizations talk about the fact that the healthcare bill had a rider on it. -- the members used to be called the silent majority. millions of dollars would be given to a certain interest group. this is wrong. with people being out of work we have $2.5 billion to give to his

darklblack colleges. it is a travesty. host: this is a message by twitter. here there photographs from yesterday's partrally in boston. the support anti-tax energy. we will talk with one of the organizers later today. there were 5000 people gathered roughly 1 mile from the site of the original thetea party, and the ap article says that notably absent was scott bertrbrown. we're asking you to tell us your view of the tea party, who backs it, and its possible influence in the upcoming election year. this is bob on the republican

line from peoria. caller: what interests me about the tea party, and i really back their right to be an american citizen and to show their anger against the government, but what is interesting is the way the media's going after these folks. even nancy pelosi is calling them would ever come of nazis. it is ridiculous. it is more about how people are reacting to them than anything else. i back them 100%. i'm thinking about joining them, quite frankly, because corruption is out of hand. host: next, jack from san augustine, fla. caller: the main objective of the tea party is to take over congress, right? it amounts to the fact that

there have been three congressional elections since the tea party surface. last thursday down here in florida a heavily populated senior citizen audience -- rasputin predicted the democrat would lose by 10 points, but he won by over 35 points. didn't you just sit there were 5000 people there? host: yes, it in boston. caller: fox news reported that it was 10,000 of 212 dozen. host: some video from "the boston globe" on youtube. one other aspect from cbs. most of the the tea party supporters say their taxes are fair.

42% of supporters think the amount of income taxes but will pay this year is not fair. yet while some say the tea party stands for taxed-enough- already, 52% say that their taxes are fair. just one of five americans say they support the movement. the most active are less satisfied with the amount of income taxes that they will pay. americans overall are more likely to describe the income taxes they will pay as fair. majorities across all income levels say that their income taxes are fair, as do most republicans and democrats. next is a phone call from kentucky. caller: good morning.

as you just said about the taxes, if people look at the ones the received this year, they receive more money than they have for years. it is because of the tax cut that barack obama put into place. as far as who is in the tea party, those trying to run it are right-wing nuts like glenn beck and his people who are stirring the pot. there are not many blacks, hispanics, asians. it is an all-white party. i think it is just a racist place. host: next is a call from long beach, california, tina, a republican. caller: it seems to me the tea party is basically a party of people who want less government. they want more freedom, for things to be more like the constitution.

host: how does that square with your view? caller: i agree. i have not gotten involved as yet because i have a disability. if i could get involved i just might because of believe in the cause, but i am disabled. host: the reporting on yesterday's rally in the boston from the paper is the sarah palin tea party express hit a chord in the hub. the red three busloads of performers, as well as activist from the region, and as far away as texas. they also say the polarizing drew wild applause during her 22-minute speech was she said the government has been on a spending spree.

next is a call from midway, utah. please turn down the volume on your tv. are you there? jerry? ok, let's go want to the next call from upper marlboro, maryland. caller: first, thank you for c- span. about this tea party, i find it -- i find them humorous, but i would like to say that i do defend their right to speak, and to protest, because that is what america is about. the think we better be very careful about a small element that is weaving its way through the tea party, and i mean these are some dangerous people.

i'm afraid that somebody may try to do something to our president because i think that is the bottom line from all the rhetoric, from sarah palin and the other right wing speakers out there. i think they have the ability to insight another timothy mcvay, or something like that. i pray it does not happen, but i want all the tea party members out there to know that the great silent majority out here that i'm a part of, we're not going to tolerate any foolishness. so, if they want to march to virginia, right across the river with their guns, whenever that is going to happen -- you have millions of folks, millions just

like me who are able and ready to defend our constitutional government. so, do not -- i do not want them to make the mistake of believing that by them trying to ignite a second civil war that there is nobody on the other side. we are here. thank you, c-span, and thank you to the audience. host: here is more from the story. supporters are better educated, wealthier, and more conservative, the poll finds. the demographics and attitudes of those in the movement have been known largely anecdotal. this offers a detailed look at their supporters. the responses are like those of the general public and in many ways. most describe the amount they paid in taxes this year as a fair, and most send their children to public schools.

a plurality do not think that sarah palin is qualified to be president. they actually are just as likely as americans as a whole to have returned their census forms, despite some conservative leaders are urging a boycott. next is a call from georgia, joe, calling on the republican line. caller: good morning. i want to make a quick comment about the last caller's statement. it is absolutely ridiculous. the driving force behind the tea party is, of course, the overwhelming control that our

federal government is trying to take over its citizens in the course headed towards communism. we have been seeing it in small pieces over and over the past decade. so, as long as our federal government is going to reach out and take total and complete control of the masses through these different kinds of bills and legislation to get passed through, the majority of american people -- we are losing jobs through foreign policy. it is ridiculous. as long as our government will keep doing this, more and more americans will feel outraged because of the control the government is trying to take over citizens. host: next is a call from new

jersey, on the independent line. caller: yes, i think the tea party living can be summed up as "we the people are tired of the government," tired of corruption on both sides of the parties, tired of them selling out businesses, selling of the middle-class, the illegal immigration part of it -- there are 25 million illegal aliens here and we have how many out of work? it is about time for it to be about us. let's keep our money. i will be a congressional candidate here in the fifth district of new jersey. we have had enough host. host: mark, are you running under the republican banner? caller: no, they are just as corrupt as democrats. it is my employer's job to

protect people like me. he says that in harassing him. yes, i'm running as an independent. host: how are you organizing yourself? caller: right now is word-of- mouth. i have very little funding. we have a bigger deal with county fair's coming up. host: have you ever done anything like this before? caller: i tried to get on the ballot two years ago, organized a bunch of committees, asked for a deadbea debate. host: also, this story from the new york paper -- 16 years after the contract with america say hello to the contract from america. members of the tea party released a legislative agenda. there was elected officials to follow it.

-- they want elected officials to follow with. next is a jefferson, new jersey, veronica. caller: good morning, it is jefferson, n.y.. first of all, i agree that everyone has the right to demonstrate, but what has gotten very confused is the people who were yelling "do not touch my

medicare" but it is a government program. the same with social security. they are your own about the democrats in congress. what about the republicans in congress? they are the government. when they have and floods down south and they needed, they're yelling for the government to come in and help them out. what would we do without the government in these cases? so, i don't get it. all that i see is the sarah palins getting richer and richer. she made twelvemonth in dollars. i thought she was leaving the government to help alaska? i thought she was leaving to take care of her family? now she is out there making ching ching. the first time there is a disaster, they are yelling for the government. this is something i really do

not understand what they're trying to say or do. i'm really afraid there will be some type of violence. it frightens me. thank you very much. i hope that everyone stays peaceful, that is all. host: next up, columbia station, ohio. caller: we should have something in this country where we take a test. to see if you are informed enough, and intelligent enough to be allowed to vote. the tea party, i'm for it. the gays in this country to more in one day than the militias combined. every day, atlanta, ga. -- if you watch -- they have 10,000 or 20,000 gang members.

and the liberal movement is trying to say the tea party is racist. host: here is a big story from "the new york times" with this survey. while most americans blame the bush administration or wall street for the current state of the american economy, the greatest number of teeth party supporters blamed congress. -- of tea party supporters blamed congress. they do not want a third party and said the usually or almost always vote republican. we have some comments by e-mail. here is one by poll which says he believes that the tea party is organized by big business. the next telephone call is from little rock, ark., jason on the in the panama.

caller: good morning. i will tell you right now, i support the tea party. i voted for obama. he said he would change the structure. his definition of change of gas is not what i believe in. look, i voted for bush and was not happy with bush. when bush left that office our debt was $5.80 trillion. obama has taken it to $14.60 trillion in just one year? we are killing our children's future. i support the tea party. your caller earlier from maryland mentioned above all the silent majority -- it is ludicrous about people saying the tea party is racist and that

there are no hispanics. it is absurd. host: here is an e-mail from of your in tennessee. -- from tennessee. this a viewer says that the so- called tea party is going nowhere, drinking the kool-aid of negativity. the next caller is on the democrats' line from illinois. caller: good morning. my thoughts are clear and in a democratic and human being. yes, the tea party is not what the country was made from,

according to being a human person. i think that sarah palin has made a terrible mistake. she is trying to bring back the people of the 1960's. she resigned her job, left her job, left alaska it in a terrible situation. how she get out and try to tell people what to do now? this is all a bunch aunheard of things she is saying. she is turning people against people. this is only something that will cause people to get hurt. people have come a long way from the 1960's. they have been disrespected the president to the highest level. they never did anything like

this to george bush or another, none of the leaders. host: next is a call from melissa on the republican line in new york. caller: first of all, they did do this to george bush. there were people from live on the outboamoveon.org on march 24 with pictures of george bush and heller side by side. second of all, to the caller from maryland who was talking about people being egged on to kill obama, that is ridiculous. there are gun-toting maniacs from every party. as far as we're the tea party comes from, i can only speak

for myself. i'm in my late 20s, make less than $5$50 per year. i just went to a meeting this weekend and there were people from every political party and at the city represented. their people from the the nation fed up with the government putting itself in every sector of our lives. this is getting ridiculous. host: on the line with us is darla, executive director of the group, one of the tea party express organizers. she is joining us as they get ready for a series of events here in washington. give us a sense of events not only in washington, but around the country. guest: i believe it will be a

tremendous number of tea party years in people from the conservative movement -- of tea partiers. the rally, if it is any indication, there will be tremendous turnout today. host: we just showed the c-span audience your contract for america. how you and tend to use it in the election year? how do you intend to use the contract with candidates and the election year? guest: we promote all the different contracts out there, but have not subscribed to the actual contract. our goal is to teach and educate people. have a voice, hold a lea

elected officials accountable. elect people who are true to the party, true to the constitution, and make sure they care about what people have to say and set ablaze in disregarding the american people. host: what is next? how you build on the momentum of the tea party expressed? calleguest: every month, year tt we continue the fight, i see a tremendous amount of building on momentum already in existence. nearly every rally we participate in, there are anywhere from 45% to 55% of people who have never attended the tea party movement before.

we were able to have 50,000 show up in washington, d.c. with two- days' notice. a year ago it took seven or eight months to plan that for much less of the journal. the momentum is there. it is building and growing. you will see a lot more people who have been on the sidelines, yelling at the televisions, who have decided to do something. we are in a midterm year. the momentum will continue to grow as we head into the presidential election year. more senators will come up for reelection in 2012. host: do you see a third party coming from it? calleguest: my personal opinions that i hope not.

if we are taking our country back to limited government and the principles it was founded on, the need to take back all of our parties to the people. they need to hold parties and politicians accountable to the people they represent. i give this analogy a lot and on the tour. imagine you begin a new business and you hire staff, then hand out the keys and a book to all your stuff and say i will see you in four years. what would happen after four years? the business would probably not represent you and your views, probably not even sell your product. chances they have probably stolen money from you. the american people have voted people in, and they have been away. they have stepped away and not been involved in holding them accountable. now we have to say you can hire, like these people, but you

cannot give them the bank but and the passkey and all these things, then walk away. our goal is to teach people to be educated in the process, and make sure we are responsible as we the people. hold elected officials responsible as well. host: we have had a number of c- span colors this morning concerned about the possibility of the tea party movements spiraling into violence. your response? guest: the only violence and i see coming from anywhere is the liberal left. we were egged twice yesterday. they were throwing them over the top of the bus coming into the crowd. -- into the crowd. the only violence i see is from

the liberal left. they are out there to stop us, and they are the ones starting these "crash the tea parties" movements. we're not about violence, the belt racial slurs, or denigrating anybody. our goal is to teach people to stand for our country and constitution. host: thanks for your time. c-span will televise a the tea party rally here in washington, d.c. a bit more from the tea party. this story from yesterday, bunning endorses the tea party

favorite. it is a blow to the establishment and its preferred candidate, trey grayson. north carolina, an independent caller. caller: that last lady made me nearly six having to sit here and listen to her. i believe the tea partiers for just a bunch of nuts, running around trying to stir up trouble. that is exactly what happened last year. they did not even give a even100 days before they were out running their bigmouths, swinging their swords. i'm tired of it. in an anti-violent person. but, i see violence coming from this crowd of people. they are nuts. host: this is from rhode island,

this e-mail -- this seems to be more on opposing the initiatives of the present administration then on producing their own plans for the future. here is a message by twitter -- why didn't twittertea party complain about the patriot act and what it has done to americans' freedoms. good morning, james. caller: i think everyone has the right, but do not understand why people today -- we need the tea party -- but there are other things such as with the republicans voting one way, the democrats,one way. i don't understand how a sane republican person on one side, a democratic on the other. i hope they understand that god rules everything. host: here is thecall on this.

we will have an open phones again at the end of the hour. in the next segment we will talk about tax policy here on tax day 2010. our guest is eugene steuerle, the co-founder of the tax policy center. what is ahead, if the tax cuts expire next year. you'll hear the latest news update from c-span radio now. >> those looking for work will be looking at the senate today as a measure extending jobless benefits is back on track. that $18 billion bill could pass today. it would prevent even more people whose 26 weeks of state- paid benefits from running up from losing an average of $335 per week. you can watch the senate live on c-span2.

you can also listen live on c- span radio. several important economic reports are due out today. the weekly jobless claims. the federal report on industrial production, and the national association of home builders. president obama has reaffirmed his plan to begin withdrawing u.s. troops from afghanistan in 2011. speaking on australian television today, mr. obama says "the u.s. and its allies cannot be in afghanistan in perpetuity." and a volcano erupted in iceland is throwing a major wrench into european flight schedules. the ash poses a danger. that also closes at heathrow in london, the busiest airport of europe. those are some of the latest headlines >> today on c-span3,

3mueller testifies about his subcommittee's budget. later, live coverage of the first out of three planned debates between britain's political party leaders. voters elect a new parliament on may 6. all three candidates seek to be the next prime minister. live coverage of the first election debate, courtesy of british broadcaster i-tv begins at 3:30 p.m. eastern. host: let me introduce you to eugene steuerle, the co-founder of his center.

we reached an agreement by both to put the tax policy center there. host: you served during the reagan administration. what are the policies of the tax policy center? guest: they are strictly neutral. we have a number that has become bair on the percentage of taxpayers to pay any tax. it has been used quite a bit by conservatives to argue that lower income people should participate more. other times we have put out numbers on tax cuts for the rich, and liberals often use that to talk about the extent they want to increase taxes on them. host: the number you referred to is 47%. that is the number of households who owe no income tax. it has been reverberating since it came out. what is behind the number?

guest: there are a number of things behind the number. to be fair, if you go back in the history before world war ii and immediately after, there were a substantial number who did not pay income tax. over the years, the story has gotten complicated. gradually we began to exempt some again under ronald reagan. in the recent years we began to increase things like an earned income credit. it is a wage subsidy going to low income people. it was largely to substitute for things like welfare. the 47% includes the number of people who get a tax credit on their wages. it is complicated. if you count social security and income taxes, that number drops to something like 25% of people. host: in federal budgeting we

talk about donor states compared to a contributor states. what is the best way to measure the fairness of who contributes and it benefits from the american tax system? guest: the best way to measure the benefits and who pays goes beyond taxes. it requires balancing what government buys, and what we pay for. you want to see what people get on debt from government, and whether it is appropriate. there are two measures. the one measure of fairness is that you and i are in equal circumstances. so, do we pay equal tax? are we treated equally under the law? do we both have an equal right to vote? treating = is equally is the technical term.

the other aspect is progressiv ity. to what extent do higher-income people pay more than lower income people? i think it is merely part of a natural law. you do not require your children to contribute equally while they're growing up -- that is some aspect of progressivity. it is because they cannot. the dilemma in terms of tax policies is how progressive do you want the system to be? there is no real, absolute standard. it is a matter of judgment. host: we're talking tax philosophy. if you have detailed questions, or would like to offer your opinion, we are about to engage on the big debate has the

administration and congress tackle taxation over the next year. our guest is here to answer your questions. here are the phone numbers. let me ask you about the so- called bush tax cuts. if they expire, how will the parameters change, and for whom? guest: there were begun in to doesn't think, and are set to expire in 2010. if they expire, many things would happen. people would -- the marriage penalty would be reintroduced. the so-called standard deduction would be lowered, that exempting a number of people from tax. many things would happen at

those income levels. the president has said he does not favor letting this particular provisions expire. despite the fact that the bush tax cuts were extravagant, obama is supporting most of them. he would allow income taxes to increase for those making over $200,000 for singles, 200 do the thousand dollars for families. for the most part, obama would allow the bush tax cuts to remain in place. host: how are the numbers $200,000/to the good do thousand dollars derived at? guest: politically -- they are campaign speech numbers. they are causing problems for people who dropped the tax laws. when do you begin to phase this in? you have to phase them in.

to some extent, it creates marriage penalties. by indexing numbers, do they just over time for collection? some of the tax increases and the recent health care reform are not indexed. over the next 10 years the $200,000 would it really equal $100,000. host: overall, how do american'' tax structure compare with england or canada? guest: generally speaking, we are slightly lower taxed. on average, our taxes are maybe up to eight percentage points lower. the federal government collects about 17%, lower than that right now because of the recession -- but on average about 18.5% of

our income. it would be closer to 25% in the other countries. host: please spend a minute on corporate taxes. guest: well, that was actually counting all taxes. corporate taxes have gone down over time a bit because corporations have become better at figuring out how to avoid them as international partnerships also make money. social security tax is the second-biggest tax. it is paid by many americans. host: when we say it taxes our lines light up. here is a caller from detroit.

caller: good morning. obviously, tax increases are bad. i think what we must look at is creating jobs. i would love to be able to pay more taxes if i had $250,000 per year in my pocket. the problem is, we do not have jobs and we need to create them. in the washington today we have all the money lenders making all the money. small business and your average people do not have jobs. the tax issue is a big concern because no one wants to pay more, but we have bigger issues then worry about people who make $250,000 per year. host: we will stop there. your response? guest: that is a good comment. we engage in enormous fights over levels of taxation.

the last 30 years we have bounced back and forth over whether the tax rate on higher income people should be either 28% or 35%, as high as 40%. but those amount of taxes paid by higher income people are only a moderate portion of what government does. the government is basically financed by the middle-class, and the middle class benefits from most of government. the amount paid by the rich is only a small portion of the bigger question. the amount of taxes we pay is moderate compared to what our income is. host: new orleans is next. caller: good morning.

i would like to know two parts of the question. how is a possible that a corporation earning $45 billion per year pays no u.s. taxes? and have is that help a middle- income or lie work in come person when they pay zero in income taxes? host: he is gone. i was going to ask which corp. he was referring to. guest: he is correct, though. there are corporations to pay no income tax. it was don regan who convinced president reagan to favor tax reform when he asked nearly the same question. he listed a number of corporations who pay no income taxes. there have been a number of reform efforts to make sure the corporations making substantial in come pay more.

corporations are more international in character. some who do business overseas -- there is a question of whether they should be taxed there or in the u.s. having said that, marty sullivan of a tax analyst has done some interesting analysis of companies that operate overseas. they tend to show that the share being paid abroad does tend to be a little high relative to the income we believe is earned abroad. host: this comment comes from of your on twitter. -- from a viewer. let's talk about the earned income tax credit and how it has changed over the past decade. guest: it is one of those items that should probably not be listed as a tax cut. it falls into the category of

tax expenditures. expenditures are essentially spending programs that pretty much operate like regular spending programs, only pay for them basically through the irs. so, they become a tax cut to some extent, more than the spending increase. now for all economic purposes the probably serve the same purpose. when we count them as a tax cut, we probably get a distorted view. . .

the amount of interest from the income tax that we pay on money that we borrow from the federal reserve? that is a significant amount of our income pact dollars -- tax dollars. if we are paying money on interest that the government is borrowing, it seems counterintuitive to the tax code. >> i do not know how much interest i would pay and how much is paid by the federal ledger. you are right, lot of what we

spend is through interest payments. despite the big fights we have had over the stimulus package enacted by president obama -- and by the way, we should count the bailout money and active under george bush. 80 look out five, six years, the biggest increase in spending will be interest payments. the budget says in 2015 we will be spending about $350 billion more in interest payments. so interesting is a huge items and we really have not gone there yet, but the budget is way out of whack because taxes fall so short of the overspending that we have to borrow from domestic taxpayers and for governments. that is a major issue that will have an impact on taxes in the

future. host: on social security, we learned that the outlays were greater than the intake. what is the implication of that? guest: in the short run, it may have some impact. social security does have a research. we would have to have a recession that would last quite a while before that fell apart. but i think the bigger issue is not what is in the trust fund, interest payments, or even what happened in recession. from about 2010 to 2030, baby boomers retire. then return and spending will rise about 2%, in terms of gdp.

that increased spending, regardless of where the money comes from, it is that increase in spending that we have to accommodate. host: our guest worked in the reagan administration. he was also the president of the tax association. he was the economic coordinator of the 1983 treasury study that led to the 1986 tax reform act. he is also a columnist for the "financial times. next phone call from linden, virginia. caller: i just wanted to make a comment about the gunman earlier about the government --

the gentleman earlier about the government, about how a family operates, talking about productivity. i think that is a poor analogy. and the relationship between a father and a child is different between the government and a citizen. i would ask you to comment on the notion of fairness, progression. it does not seem to be objective. the way that we judge fairness is completely dependent on who is in power at the time. guest: you might be surprised to hear that i agree with your second, it. there is no purely objective way to see how progressive of the system that i may want, you may want to.

that is what we decide as voters. but i would disagree with the analogy of the family not working. what about older people who do not have children, or income? what about the disabled? someone earlier said we have to worry about jobs. he may favor spending money to create jobs. these are matters of judgment, matters by which we can vote, but i think that's those who have greater ability to pay part of the those that can. on the spending side, those who have greater needs are the ones who spend money. we would spend more money if we gave money to everybody read than concentrating on those with the.

that is another argument. host: the flat tax raises its head as a discussion point every few years. what do you think of the content? -- concept? guest: it is in a misleading. xm at the top and bottom -- except at the top and bottom of the tax rates, there is a basic flat tax. taxes are regressive and a sense that lower income people pay a higher tax rate. what is confusing is we do not measure progress of the equally in taxes as we do in spending systems. a flat rate of tax can support a lot of redistribution.

let us suppose you make $100,000, i make $10,000, and we are both tapped 10%. then we read the ticket that money equally. you quickly realized that you've been distributed a lot of money to me. the confusion comes in -- and i blame my own profession because of this -- coming from very inconsistent measures of what we mean by progressivity. not only on the measures somewhat subjective, but even our definitions tend to vary over time. host: perce from alabama send this message over twitter --

guest: if you look at the reagan tax cuts, and george bush tax cuts, it is true the top income class, or greater. -- cuts were greater. but barrier all of other things going on as well. there was an increase in the alternative minimum tax that does start to affect the rich more. a lot othe congressional budgete has had to examine whether the system is becoming more or less progressive. and generally, they have found there has not been a huge changes. there have been changes at the very bottom and top, but those

have been over several presidents. host: 10 from maryland. democrat line -- ken from maryland. democrat line. caller: in the news now, exxon will pay $35 million in texas, of which, none was paid to the u.s.. two corporations have banned the alternative minimum tax, should they? guest: most economists would argue that companies do not pay taxes, individuals to. however, the argument could be made for taking taxes at the corporate law will.

the question to me is whether corporations should be withholding money, reflecting the taxes that the individual should and up the pain -- to put it another way, i do not care if they pay taxes. i care if their shareholders pay taxes. the exxon case goes back to an issue now i raised earlier which has to do with how well we are able to capture income abroad. i do not know the extent to which there are faint -- paying their taxes in the u.s. many companies have been successful at the trading more in, in countries that have low tax rates abroad. host: this one is from monty on

twitter -- donna from las vegas. let us move on. ohio. chris on the independent line. caller: good morning. i find it very interesting, the numbers that you have. 47% of americans not paying any income tax? i think it should be mentioned that that is a reflection of the income disparity in the nation. it sounds amazing that that many people would not be paying taxes on their income. but that income also has to be separated into earned and unearned income. i think that most people in this

country do not have much, if any, on earned income. much of that is wages, salary. it is not from investments, and so forth. you have a whole class of people making huge amounts of money from money that they already have. that income should not the lumped with the money that people are making working every day. i guess what i am saying is, what stands out to me from the numbers is, a certain portion of this country, a small portion, is making huge profits and they are benefiting from the government to make those profits. so they are receiving more benefits from the government that people who are just working

day to day, week to week. i think it is fair to have a progressive system. in fact, i feel that the system should be even more progressive. people who have a truckload of money from the get go have such a huge advantage over people who do not. that is just the way this country is. host: i am going to jump in. thanks. guest: so when income taxes become on equal, we should expect higher income individuals to pay more. that is fair, and a respect.

but we cannot have the rich pay a preponderance of the income tax without them paying taxes. as leona helmsley once said, the rich do not pay taxes, the port do. -- poor do. if you never sell your stock, your gains, the you in your real estate, basically, the income tax does not catch you. that is what she was referring to. we cannot have the rich paying the preponderant of the talks without paying their tax dollars. they do pay taxes. but you are correct that many rich people do get by without paying taxes. host: joe on twitter -- can you give us a history of the holding concept?

guest: it came around in world war ii. there it iis interesting history behind that. the people who did estimates for withholding more conservative people like milton friedman. much later, they had come to regret that they had held with withholding. as a simple matter, there is no way that the irs or any other administrative agency could come to us at the end of the year and say, you have not paid this amount of money in taxes and we are going to collect it in withholdings. whether people rebelled or not

is a separate question, if we try to do it at the end of the year. host: we are speaking with eugene steuerle from the tax policy center. maxine from cleveland. democrats wanline. caller: in my community, people all living with several children, a single mother living off of $15,000 a year. the working poor. we have a 70% divorce rate? these people do not have any tax money to pay. they can barely keep the heat going on. that is what is happening in america. i really called to comment on the tea party people.

if you do not give people the facts, they cannot make their decisions. we have so much propaganda and lies coming from people in high places, there should be consequences for these high officials that we hold in the steam and they just lie on tv, like sarah palin. she made $12 million in the last nine months. they have the psychological profile of these people, and they are using it. if you give the people the right fact, and then they will make their right decision. these lines are in print, on the television, radio. you do not know what to do. guest: you make an interesting on for priscian falling back to the earned income tax credit. a lot of our social welfare programs are focused on families

with children who are low income, and in any number of them are headed up by women who have been unfortunately abandoned by males. that is not all of them, but they do dominate. those programs are designed to help them. interestingly enough, despite program being put out there to increase consumption, to help the unemployed, this administration has not done much for boosting things looked it earned income credit. it was increased under ronald reagan, bill clinton. so we have had a member of president who have been tried to back away from subsidies for low income people, particularly

offsets to welfare. however, one group that has been left out of the subsidies are the low wage workers who do not have children. these are men who or often bouncing around families, sometimes not, and there are many of us who would like to find a way to bring them into a subsidy system for low-wage earners. host: there is an opinion piece in the paper about taxes. i wonder if you could talk about this one. the 2010 tax miracle. he writes --

guest: there are two different issues. one that we mentioned earlier, the bush tax cuts are scheduled in 2010, some of this will be a major item of legislation this year. your viewers can count on a lot of publicity about what we mildew on extending those tax cuts from president bush. president obama has only favored extending -- not extending the tax cuts for the fairly high income, which means most of the tax cut that came under george bush would still be in place.

i want to continue this a little bit because we have a huge fiscal problems. the president also has a fiscal position where he needs to make some comments. i think that some members will argue for further tax increases. the government is right now spending about $30,000 a household and is collecting $20,000 in taxes. basically, we are collecting nowhere near what we are spending, and that will put huge pressures on the government to either cut spending or increase taxes. one way to get an increased taxes goes back to this particular article, which is, you might have one way to increase taxes, just let more of the bush tax cut to expire. this is all dealing with the roth ira.

in my thinking, that is one of the worst tax provision you can have because it pretends to raise revenues, however, it is offering you and me, particularly if we have a fair amount of money in the account, an opportunity to pay a bit of tax today to the government to avoid taxes for the next 60, 70 years. so if i am willing to pay today, what this allows me to do is to take this money that i have in mind ira account, 401k, and then from then on never pay a tax that i earned from that income.

so for some payment up front, we can avoid some lawyers in taxes. it is not good to get people into those complicated calculations, but further, it is terrible policy. host: next phone call. caller: i hear from the deficit in california, some people are getting ious in their accounts. guest: i have not checked that out. thai had heard that they were doing the sort of thing. this could be saving them on interest payments and allowing the cash flow to come in. i do not know to the extent that that is happening. but you raise the interesting issue and these, and we are

seeing double the federal level are also playing out in the state as well. state and local governments are not collecting the taxes they need to support the program that they have. they have to face the fact that they either have to cut spending or raise taxes. host: hank from indiana. good morning. caller: it is my understanding that the federal income tax that the irs takes, and gives to the federal reserve, does not pay for one service, but pays for the interest on the money that the federal reserve bank loans back to us, which is our money. this is a direct tax. other than the fact that they have made it illegal to pay this tax, because it is a direct tax, which goes against the constitutional provision, that

is the only reason people would be forced to pay it . in fact, the federal reserve has usurped power and ability to print money. i would like you to answer me, what service, other than to pay the banks, what service does our money pay for other than the interest? and why should we pay, if this is illegal? guest: the federal reserve actually paid more money to the government then it gets in interest receipts. the reason for that is complicated. you have something where by creating the money supply, they

are able to make money on that. the reason we have a federal reserve system is largely because before we had one we had to configure and depressions -- we had significant depressions and that would lead to a complete strangling of credit, even more so than the previous recession. i would be hesitant to move forward in a world without a federal reserve. host: every year, gallup has been doing a poll on americans and their income taxes. throughout the history of gallup asked this question, never have more than 3% of americans said that they pay too little taxes. another note --

what does not to adjust or wallet -- a washington policy makers? -- what does that suggest for washington policymakers? guest: it means that lawmakers have to do something. the men of class larger the pays for government, gets the benefits from government. that means that they may have to ask the middle class to give up some of their incentives or pay for more taxes. host: thank you for being here. in a couple of minutes, we will be pleased to welcome from the state department ellen tauscher, the under secretary of state for arms control and international security. first, the latest winner in our

student can competition. -- studentcam competition. >> we asked students about one of our country's greatest strengths or challenges. today we are speaking with the third prize wintener, and a greater from knoxville, tennessee. why did you decide to focus on on the planet for your documentary? >> actually, we started with cash for clunkers, and then that program ended, so we have to find something else we ended up with unemployment but we could not figure out what to do with that, so we were thinking about our friends and we noticed a lot of them are unemployed. there were a lot of people on the news who were talking about being unemployed, so we decided to go with that because we

thought it was a big issue we are facing. >> how has unemployment affect your area? >> here, one of 10 people are unemployed. that is a lot of people. it is not good to have that many people out of a job. >> you mentioned your friends and family. how have they been affected? >> my youth group leader lost her job because she was unemployed and how to find another job. then one of my partners also had a neighbor, who is a close friend of hers, and she became unemployed and she could not support her family. they had to cut back on the things that they could get. >> what did you know about

unemployment before you did this documentary? >> for the most part, i just knew that it was that. it leaves people on of a job and doesn't allow them to have an income. i also knew that it was affecting a lot of people and has been getting worse. >> what have you learned from your research and from the interviews that you conducted? >> we learned it is affecting everything. it is done just the people that are affected. development is affected, along with the crime rate, members this owners -- business owners. >> in your community, how has the crime rate been effected? >> we expected it to go up more than it did. it went up all little bit, an increase from what it normally is because people do not have

that in, and they have to provide for themselves. >> after greeting your documentary, if someone is looking for a job, what advice do you have for them? >> do not give up. the recession will be over. even if you do not like it, stick with your job. unemployment levels will drop and then you will be able to find a job that you want to. >> since this was your first documentary, describe your experience creating it. >> it was hard, especially at detained. we had to find music, we had to conduct interviews with these people who were important to the community. it was hard, but it was fun to see the final product. >> we are very proud of you as well. congratulations. thank you for talking to us.

>> nice to be here. >> here is a portion of her documentary. >> people are being put behind bars. >> we have seen a slight increase in property crimes. probably partially because people are of work. in some cases, they are looking for some means of income to offset the loss of wages, that income being stealing from someone else. >> to watch all of the documentary as well as the rest of the winning videos, you can do to studentcam.org. host: joining us from the state department is ellen tauscher. she now serves as the under secretary of state for arms control and international security, giving her a key role in the nuclear summit that the president convened this week. good morning. if one were to pause at that one

of the most significant things to happen this week was the chinese president's signal to engage on iran, how would you respond? guest: that is true, but other things happened, too. the president hopeposted -- hosd many heads of state here in washington. he wanted to bring them together to bring them close to an issue that he is particularly concerned about, nuclear terrorism. the president had said in his speech a year ago can recently this week that things had changed. the world is not in the cold war times when the threat of the u.s. or russia having a huge, cataclysmic nuclear warhead is not a threat. the plan has more to into the thursday to acquiring nuclear weapons or terrorism groups of

acquiring nuclear weapons. having the historic 47 heads of states in town, making commitments to crown nuclear material -- the president has a plan to corral nuclear material and put it under safe allies and to eliminate as much as we can in the next four years, the starke agreement between russia, taking enough plutonium to make 17,000 weapons and eliminating it, countries like chilly, mexico, the ukraine all sell eliminating through the u.s. and russia and their highly enriched uranium. so there were many deliverable on this. but you are right, a lot of side conversations, including tougher sanctions on iran, which the president will be proposing soon. host: in "the new york times"

two writers suggest -- >> is a vital national security interest of the u.s. to reduce these conflicts. because whether we like it or not, we remain a dominant military superpower, and when conflicts break out, one way or another, we get pulled into it. that ends up costing us significantly, in terms of both blood and treasure. host: the conflict that he was talking about was the middle east. "the new york times" suggesting --

can you tell us more? guest: this is certainly an issue that president obama, secretary clinton, and george mitchell spend much of their day thinking about. the u.s. is a close ally of israel, as everyone knows. some would say that this is the antecedent problem of the stabilization in the middle east. many past presidents have tried to help broker an accommodation, the right kind of settlement, but we have been awarded so far, for many different reasons. i think the president is putting forward his central idea that to gain security for the u.s. and our allies and to create a more stable environment in the world generally, these conflicts have to be settled by people coming to the table and negotiating, as

opposed to using military force. host: looking ahead to the united nations meeting, the next that in this review, i wanted to ask you about a side meeting with secretary of state clinton that you were involved in with the egyptian foreign minister to perhaps bring their concerns about israel going into the meeting. kaska this is not in egypt issue about israel -- guest: this is not in egypt issue about israel. to step back, the non- proliferation treaty has hundreds of states that are signatories to it. it is the fundamental instrument that we all used to prevent nuclear proliferation. it need to be strengthened. there is a review every five years. back in 1995, the u.s. lead an effort to talk about a middle

east wmd-free zone. because of the particular problems in the middle east, this was an idea that we were promoting. subsequently, this has become an issue that egypt has carried the banner on. working with the egyptians, secretary clinton and i, the egyptians are a leader in the arab league, non-alliance movement nations, so there are fundamental to this. we have been working together to come together on how to satisfy this 1995 resolution and to make sure that we have a negotiated consensus settlement so that we can move forward. i am happy to say that the russians, british, and french

are working with us. we are working to get the chinese on board soon. this is an issue looming ahead of us into the may conference. that will be in new york and the big issues are decided there, including how you manage the non-proliferation issue, how you manage states like iran and north korea who are not living up to their obligations. so we are working with the egyptians on getting a settlement that will promote and wmd-free zone, but do it in a way that is responsible and does not call on one country or another. but at the same time, showing the type of progress we are looking for. host: how does the urgency change after yesterday's announcement from military officials that iran could amass enough nuclear material to build a bomb within a year, and with

help, build a missile powerful enough to build the u.s.? guest: the issue of time has been there for awhile. when president obama came into office, he made clear that he would change strategy, that he was not going to hold iran at arme's length and not talk to them. but he made clear that if that hand was met with a clenched fist, he would pull back. there were serious violations of treaties. it is under a violation of the iaea sanctions. they are obviously moving toward building a nuclear weapon, which will tremendous need to stabilize the middle east, and frankly, change the nuclear equation around the world. our friend is not from the cold

war-type of nuclear war, but from the existing states getting additional weapons. back into timberman the president was at the un, their one another nuclear meeting there. we found out that the iranians had a hidden facility where they were having centrifuges and rich uranium. so this is a failure on the part of the iranians to take a good offer to engage and work on what we have called the persuasion track. we want to persuade them that they can have civilian, peaceful pieces of nuclear power. they said that they would not have nuclear weapons when they signed the nonproliferation

treaty. now that they have done this, we need to move to the pressure track which is another piece of diplomacy where we use economic and political pressure to persuade them. host: how significant is it to the administration's efforts for peace in stabilization in the region that israel decided not to attend a summit? guest: there was a holiday on monday. we knew for quite awhile that the prime minister had a scheduling conflict. the deputy prime minister did come. there was a big israeli delegation there. i would not read too much into it. we have a long-lasting relationship with the israelis, but sometimes scheduling conflicts occur. host: let's go to the phone calls for alan tauscher. wallace on the democrats' line. caller: i appreciate that this

course on nuclear problems. there is a lot that i do not know, but i do know -- it always seems odd that the u.s. and israel has hundreds of nuclear weapons and the u.s. has been instrumental in that happening to some level. iran, they cannot have a nuclear weapon. with iran, we do not want someone who is an enemy getting a nuclear weapon because they could possibly use it i think obama is on the right track, trying to reduce nuclear weapons. that is great.

host: do you have a question? caller: yes, the lady is very knowledgeable, but it sounds like you are preventing the word navicular -- nucular instead of nuclear. i would appreciate it if everyone pronounced the word correctly. host: would you like to respond to that? guest: no. host: next phone call. caller: good morning. i wonder what obama need the media leave the summit, and then the next day everyone to add that it was a wonderful success even though they were not even there. host: why was this close to the media? guest: this was an historic meeting.

i think we know what happened when the cameras turn on. people's said the security to talk about things that are classified or particularly things that should be talked about quietly are diminished. i think the decision was made that this was meant to be -- even though that this was larger than we had originally proposed -- it was a meeting that was meant to be off the record. people could speak their mind and say what they thought. i think the utility of it was so that the president could make clear his deep concern about nuclear terrorism and nuclear security, and the issue of securing nuclear material is fundamentally not just the responsibility of nuclear power states, but for every country. every country needs to be responsible of making sure there is not a terrorist group or another bad guy or another state

that goes nuclear. host: larry on the independent line. north carolina. call, thank you for taking my call. i want to ask her why we did not demand that israel be there. i think obama is trying to get tougher with israel. without them being there, i do not see where this is going to go. they are the only ones in the middle east with a nuclear weapon. personally, i think in the future, most of these countries are going to get nuclear weapons anyway. if they have money, they are going to get them. we were the first, then the soviets. it is a proven fact. if you have the money, sooner or later, they will get them. host: thank you. guest: the israelis or their the

deputy prime minister was in town. they did sign the communique, they did the work group, they did the same thing that the other 47 countries did. the point here is that the president had a significant conversation, major commitments were made, and additionally, the south koreans have agreed to host a conference in 2012. foreign ministers and ambassadors working for getting the communicate and work products, all the agreements to eliminate both highly enriched uranium and plutonium, will be working over the next two years on the south korean conference in 2012. so i think this has not changed from a one-time conference with

some heads of states to insignificant two-day conference that will go on into the future. i think that that's both call for the u.s. coast, louisville, ky -- host: of louisville, ky -- louisville, ky. mary, good morning. colorado, i heard -- caller: i heard this morning from don mackay said we need to pull the trigger on iran -- john mccain say that we need to pull the trigger on iran. if we did that, -- bomb, bomb, iran, as he said he would do,

and jokingly -- would we also have to fight russia, china, and possibly venezuela? we've talked iraq, who used to be our friend when daddy bush had his regime going, but wouldn't we also have to do with them? wouldn't we be in a situation like germany or the world was against them? guest: let me make clear, the president has said consistently, as he attempts to persuade iran through diplomacy, that they should not require a nuclear weapon. he has said consistently that the military option is not on the table. -- not off the table. it is not his preference, but it is still an option. what the president have done is working with countries like

russia, china, united kingdom, france, germany -- to work with them, and other countries around the world, to make it clear that we cannot allow iran to acquire nuclear weapons. they have significant security council sanctions against them. they need to use diplomacy first. but we are running of time. iran has been a reckless and has been rebuffing all efforts to engage. we have been asking them consistently to allow us to understand what is happening, more transparency, explain these hidden facilities, explain to the iaea how we can understand why they are doing things that they are not meant to be. it is clear the president is using his office to persuade. but in the end, this has always been about time.

the clock is ticking until iran has a weapon, and then there is no coming back from that. so we are working closely with our allies. the president has done a good job bringing a coalition together. the un willoughby a place where -- will be a place where the action will be. certainly, it would be bad for us and for everyone if iran got a nuclear weapon. host: the president expressed a concern that non-actors acquiring nuclear capability is a big threat to the globe. what about pressures on pakistan for its nuclear ambitions? guest: pakistan is an ally, and fundamentally important to get in afghanistan standing up properly.

we have constant engagement with them on many different issues, including nuclear weapons. it is a sovereign state, a state that we have a longstanding relationship with. like in many cases, we are always looking for more confidence on how countries are managing their nuclear weapons, how they are managing their material, no how, and in the pakistan's case, we have a friend and an allied air. but the world generally is looking for more confidence in nuclear weapons powers to project that they are doing all the things that they must to keep these weapons and know how safe. host: here is a clip from yesterday's show, trent franks talking about the republican point of view of what happened. >> we are not trying to grow our nuclear arsenal to the extent

that we can do more damage. we are making sure that our deterrent is credible, that it can be effective for our allies, and to make sure that it does not fall into the hands of monsters. that is the astonishing aspect of this that this administration seems to be blind to that reality. guest: some people just cannot take yes for an answer. this administration, in the budget that was delivered to the congress, increased the money being spent by $600 million on the national infrastructure and management to make sure that we have the safest and most reliable nuclear deterrent in the world. some of these comments are irresponsible and certainly overblown. it sounded a bit partisan. the truth is, most people understand the president's

commitment as commander in chief is to have the strongest stockpile that we can have, that smaller numbers, as he is decreasing our reliance on nuclear weapons. we have the best conventional warfare and the finest military in the world. i think the president's position is clear. while we have a clear weapons, we will be safe and reliable and second to none, but at the same time, he will be decreasing our dependence on them by moving more to diplomacy. that is something that people generally appreciate, and it is appreciated around the world because it also makes the world safer. host: 5 more minutes with ellen tauscher with the state apartments. -- department.

next phone call from a runny. republican line. -- next phone call from ronnie. caller: in the early 1950's, we deposed a democratically elected government in iran and reinstated the shaw, a brutal dictator, who kept their people down for many years. we supplied iraq with a poisonous gas to use against the iranians. we supplied israel with nuclear weapons in the 1950's, 1960's. they have the icbm's, nuclear submarines, the cells that are intercontinental. -- missiles that are

intercontinental. they are an ethnic-cleansing, near genocidal state. and weaker supply the iranians for trying to protect themselves. -- we crucify the iranians for trying to protect themselves. we invaded iraq with no cows whatsoever. why would they think they are next? guest: i have to disagree with the color's characterization of israel. while he is right that we have had relationships with different countries that have not turned out well, we have made clear that we want a two- state solution. we are certainly very invested in that. president obama and secretary clinton spend a part of each day

working toward that solution. host: next phone call from an elite in north carolina. caller: i just want to say that you are disagreeing with factor regarding israel and our involvement with arming the world. i also want to say that israel is not in the nonproliferation treaty, and that should be a huge concern. what are we still giving billions of dollars to is mel, who does not respect us or international law, and are guilty of genocide? guest: once again, i disagree with your characterization. host: with regard to signing the treaty, is the u.s. continuing to pressure the government there to be a part of the treaty? guest: we have called for all

countries to sign the non- proliferation treaty. we are very much for the universality of it. we work on these issues every day host. host: could you talk to the process of countries giving up some of their nuclear capability, including mexico, canada? did i read that they would be moved to the u.s. and russia for disposal? can you speak about how that will work? guest: yes, it is a blending down of the material to lower gingrich levels, and that is stored until it can be eliminated. as i said, the u.s. and russia signed this agreement on monday.

it is the plutonium disposition agreement. this is 10 years in the making. 17,000 weapons could be destroyed because of this. we are hoping the iaea will monitor the disposition of the plutonium to give transparency to the world community that the two great nuclear powers are doing this in a transparent way. host: we are already having a debate of storage here, more on a long-term basis, environmental concerns. how does this play into the debate domestically? . .

host: our next guest this morning is going to be senator mike johanns of nebraska. he is the republican member of the banking housing and urban affairs committees, and he will be here for a half-hour to take your calls. >> it is 9:01 in washington, d.c. in the headlines, a civil-rights leader benjamin hooks is dead in memphis, tennessee.

a family friend says mr. hooks died early today at the age of 85 following a long illness. he was best known for his longtime leadership of the naacp. new jobless figures just out. the number of newly laid-off people signing up for unemployment benefits rose sharply for the second straight week, suggesting jobs are still hard to come by, even as the economic recovery gained some traction. the labor department says first- timer quests for jobless benefits rose by 24,000 last week to a seasonally adjusted 484,000. that is the highest level since late february. many economists were predicting the claims would fall. a record number of u.s. homes were lost to foreclosure in the first three months of this year, a sign that banks are starting to wade through the backlog of troubled home loans at a faster pace. this of dust is all according to a new reporting by reality track. the homes taken over by banks

jumped 35% in the first quarter of this year. the more -- the most of any order going back to 2005. that is when realtytrac began reporting data. toyota is testing all of its suv's to see if it finds the same problem found by "consumer reports." the magazine says people should not buy the new lexus 460 because it can easily roll over. some of the lettuce headlines from c-span3 a. >> on c-span3 today, fbi director robert mulleeller. live coverage of the senate appropriations subcommittee begins at 10:00 a.m. eastern time. later, live coverage of the first of three planned debates between britain's party leaders.

gordon brown, david cameron, and nick clegg are all seeking to be the next prime minister. beginning at 3:30 p.m. eastern time on c-span3. >> "washington journal" continues. host: senator mike johanns of nebraska. we will start from the local news reports that you spend a good time during the break doing, with town meetings, a visiting classrooms. you talk about financial reform, listing your priorities of what should change. what are they? guest: i think there are obvious things, and i did a dozen town hall meetings. this is one of the things i talked about. since derivatives legislation, i think there is consensus on doing something there.

it makes a lot of sense. ending too-big-to-fail, ending the concept that if you are too big you cannot fail, that the government will come in and bail you out. with that, you have to have some kind of resolution process. if a company has placed itself in a position where it is literally financially nonviable, this should not be a situation where you turn to the taxpayers and say you have now got to protect me and bail me out of this situation i have placed my company in. no, there has got to be a resolution process that brings that company to an end or, as the fdic does, it literally sells off what is left of the company. you know, those are some of the things that i have talked about, and there are some other things, too. we can get a bill here, and that is one of the points i made at the town hall meetings that i had, is i keep believing there

is some hope you can get 60, 70 votes on the senate floor with this bill. but, boy, i tell you what, a ranch has been thrown in the process in the last week or 10 days. >> the headlines today suggest a reaction to a number of events yesterday, including four presidents -- including the president asking for leaders to come to the white house. "gop fights for unified opposition to bill." "financial overhaul battle." what is going on? guest: i do not know if it is the son or daughter of health care. whether you are republican or democrat, you should want to get a sensible bill passed. i think it is just the right course of action and the right policy. we were headed in that direction. i will tell you as a republican i have a lot of respect for chris dodd. he has been fair with me. we have worked together well. i think he is a sensible,

thoughtful guy. but i will also share with you in the last week to 10 days, this has taken a partisan edge that we did not see before that. i will give you a perfect example. saxby chambliss, very, very smart guy, republican. blanche lincoln, just a very intelligent woman. she is the chair of the ag committee, he is the ranking member. they were working through the complex derivatives language and coming up with something i thought was good policy. on friday, the word i got was that they had shook hands and an agreement was reached. but by the end of the weekend, she was pulled off of that. now the river is built that she is proposing -- no one could agree to it. -- now the bill that she is proposing, no one could agree to it.

it is just terrible. host: explain why. >guest: it basically eliminates the opportunities to work with the risk that they are opposed to in the marketplace. it just basically says to major financial institutions, you will not be able to trade in derivatives. it is so onerous, i cannot even believe that it would be proposed. the bottom line is, those companies will find a place where they can deal with risk in the economy. it may not be the united states, it may be another country. they can easily trade derivatives in a number of other places in the world. it does not have to be in the united states. but the important thing is we need to keep it in the united states. that is part of what keeps our economy viable and growing. you know, this started a long, long time ago with the idea that farmers could hedge their risk by preselling product.

of course, it has grown and grown from that, but, like i said, you could do this work in singapore and that is what happened -- that is what would happen. if you pass this legislation, it really is a situation where companies will find a place to do this business. it will not be in the united states, and our economy will suffer from that. >> let me move from policy to politics for a moment and echo some observations made by commentators i was listening to. if you enter colleagues on the republican side of the the policy u.s. about as the correct one, the politics of it -- the policy you espouse as the correct one, the politics of it, it looks though-it looks as though the republicans are supporting wall street in proposing what you just suggested. guest: no, it actually makes the situation worse for the average person out there to pass this legislation. for example, i think if you went out and ask the average person

in my home state of nebraska about the cost of the country, do you want to permanently and forever end to big to fail, it would probably 90% slam the door shut on too big to fail. people would be very hard core and hardline on this. this bill does not go that far. so there is just simply problems with this bill. now, again, i want to assert something. i believe, given the opportunity to work together, you know, get the white house fingerprints out of this and let us work through this, you have sensible people, thoughtful, careful people on both sides that, yeah, can come up with a good bill, and i think it would be a good bill for the country and it would do what people want done. but when you have a derivative

is peace that is going in the right direction, and all of a sudden -- a derivatives p iece that is going in the right direction, and all of a sudden it turns so left, how do you manage risk than? there is this -- derivatives is really a fancy way of saying how you manage risk? it goes to another part of the world, and they will be the beneficiary of that capital and that business. host: i want to get to phone calls because they are ringing off the hook for you. one important point in the senator pice biography, he served two terms as the governor of nebraska, which gives him a lot of hands-on experience with the economy and also health care, medicaid, and medicare responsibilities. if you would like to go in that direction with the conversation, you are most welcome to. thus began with a phone call from beach park, illinois, from diane, independent.

caller: yes. i question if we do not bring in too big to fail as these two big institutions are intertwined, we are never going to let them fail, whether there is a republican or a democrat in the white house. it does not matter. we are going -- the american people are going down the tubes. watching both parties sell us out for contributions from these banks. this is what needs to be corrected. guest: diane, you could not be more right. i am a fairly new senator, only been there for about a year and a half. one of the first votes i had was the second piece of the tarp money, which in my opinion has

really become a slush fund. i voted against it. i thought it was the wrong course of action, the wrong direction. we need to firmly planted a stake in the heart of too big to fail. you get so big that taxpayers are -- the idea that you get so big that taxpayers are duty- bound to bail you out is ridiculous. we need to pass a very strong piece of legislation here. i do not believe that this current bill goes far enough. on that issue alone, i would vote against the bill and not hesitate a moment. so i just want to call people back to reason here. this is not so much a partisan effort and it should not be partisan effort, and all of a sudden when the white house got involved it became a partisan effort. these are principles that we need to agree upon. i do not care what your party registration is. these are principles the american people not only expect us to accomplish with this legislation, but they are

demanding it, and i believe rightly so. i think you're right on track here. let's get a good piece of legislation here and let's and those kinds of practices. host: just to understand, one of the major points of contention seems to be the new legislation's creation of a fund that would assist with future bailouts, but it would be industry sponsored rather than taxpayers sponsored. what are your concerns with that? guest: here is the problem you run into when you create a fun. that money has to come somewhere, so if it comes from a bank, the bank is going to pass that on to the people it lends money to its customers, etc. so let's not be fooled by that old sleight of hand thing, like, oh, this comes from the business, not from you. with the business gets revenue from? it comes from you. the point is you create that

fun, and today let's say that is a $50 billion fund, just to pick a number. and somewhere along the line somebody comes in and says $50 billion really is not adequate, and that is 10 years down the road and memories have faded about what we went through here. so it needs to be $100 billion fund, then it needs to be $150 billion fund. and then you are truly off to the races. where do you stop? i do not understand why we need a fund. it is not likely give bankruptcy court's huge amounts of money to keep failing businesses going. no, we say to bankruptcy courts that if this business is failing, put it out of its misery. that is what we need here. we need a bankruptcy approach that basically says this company is going to be taken out of business. they have put themselves in that kind of financial situation. another important point i want to make here, it is the only way you can have a level playing field. otherwise, companies will look at this and say we are going to

be protected. you know, we can push the risk here. because in the and there is this fund that will protect us and keep us going, and then the economy -- because in the end, there is this fund that will protect us and keep us going, and then the economy will survive. small mom and pop operations, small banks, etc. -- the playing field aspect of this, that again i do not think is being accomplished by this current piece of legislation, but it can be. host: next call is from providence, rhode island. mary grace, independence line. caller: i think you are one of the most accurate reporting that i have seen on tv, and my question is to the senator. why shouldn't the government regulate, after there was such deregulation? in my limited knowledge of the constitution, i believe that the

federal government is supposed to take care of people for their public safety. if something is going on. millions of americans have lost their homes, etc. so why should the government regulate? and my other question is, you said that's to put businesses out of business if they have bad practices, but that is not a solution because that will take away many jobs. so those are my questions. guest: two really good questions. in terms of the government putting businesses out of business, you know, if a business has failed in our country, it iour currentin our i believe it should fail. i woke up monday morning and found out that over the weekend president obama had bought general motors.

you have got to be kidding me -- buy general motors? it just makes no sense whatsoever. so i would just argue strenuously that if you do not have the system to put failing businesses out of business, then quite honestly there is no end to taxpayer bailouts. we do not want to go anywhere near this. i worry this bill has not gone far enough. in terms of government regulating government regulation is a part of life, and i really would suggest respectfully that this is not a debate about should we regulate or not regulate. it is how we do it in a way that we do not devastate the economy. you know, this has very, very broad implications here. you do this one wrong and literally you will send jobs out of this country. you will send business out of this country. and you may end up with a regulatory scheme that quite honestly does not work, as in the too big to fail example.

so i agree with you. i think sensible, thoughtful regulation makes sense, but we have got to get the policy right. but for me it is not a question of should you or should you not regulate. that is a part of our economy, too. host: next up is gail, belgrade, maine. caller: senator, i wanted to ask you a question. some of the better accounts that i read about the genesis of the federal meltdown in 2008, two culprits kept coming up in all the accounts i read. it was the expansion of the monetary base that created the -- of the federal reserve that treated the housing bubble. there was also the house segal act that put a wall between fdic insurance in the investment bank. but that was repealed under the clinton administration but with the help of a republican

congressman. i believed it was led by phil gramm, the republican senator from texas at the time. this seemed to give an implicit guarantee to the investment banks that when all these complicated derivatives and collateral debt obligations just collapsed, it gave an implicit government guarantee that it happened, we taxpayers bail out these firms, so we bailed out aig and allowed taxpayers to pay for aig and goldman sachs. isn't it time we institute -- we reinstitute glass siegel to do it again? guest: i would not go there. let me offer a general fought and zero in specifically on your question. by the time this is all said and done, volumes and volumes will be written about what caused this financial collapse.

but i think there are some underlying lessons here. number one is there really was this concept that if you were of a certain size you were going to be protected, that if you got so big, so big that the government could not allow you to collapse, the too-big-to-fail phenomenon. that is just terrible. that is the wrong approach to policy. no one is too big to fail. if you are too big to fail, you are too big, in my personal opinion. the second thing that happened here is companies, even individuals, expose themselves to a level of risk, and it was going to work as long as the real-estate market went up 5%, 10%, even more than that year after year. but there is a point where what goes up does come down, and all of a sudden the music stopped and there were not enough chairs and we saw companies in

very serious financial situations, etc. but i do think there was a relaxation of credit, and literally where you can buy a house, not putting anything down, and practically take money away from closing, that justifies economic principles. or where the payment on your home would be determined by an interest-only loan, and they would figure out whether or not you could afford that -- i mean, that is hugely, hugely risky. then i also have to say there were some very, very underhanded financial practices out there. so i think there are some other issues. now, to get your question about institutions getting in the banking business, etc. -- i would not go in the direction you are suggesting. however, i would suggest this. i think there were huge gaps in our financial system that just had no oversight whatsoever. that needs to be fixed.

it just simply does. when you can have major companies exposing themselves to and less risk, and jeopardize in deposits, jeopardize in jobs, etc., you have a mass on your hands. -you have a mess on your hands. in reference to your call and the previously that called, i think what you have got to get down to is some very sensible approach is to this. i think all sides should be willing to do that, and i think you can come up with a good piece of legislation to fix those very problems that you are talking about. host: an e-mail -- "if guests suggest passage of the bill would be a job killer. the existence of trading in derivatives and the resulting financial collapse has killed a job in many industries and has been a disaster for the united states." guest: you have just made a blanket statement, and i can say that all trading in derivatives

is evil and needs to be ended. all i can say to you is that it will not end. it just simply will not. you will chase it to another part of the world, and all that capital will exist in another part of the world. and the jobs created around that also will be impacted. wouldn't it be much better to have a sensible approach to this and say,, we want transparency? we want the vast majority of these derivatives to be exposed to a clearing sort of process, and start working with the concept of how do you deal with this in a way to protect those jobs, protect those consumers, make the rules transparent? i think if you go in the direction that this bill is headed, and where you are suggesting, you are going to have a hugely serious downside and will regret the day it happened 10 years from now.

we will be asking ourselves, how did singapore and up with all of this capital formation that once existed in the united states? and i think that would be the wrong course of action for our economy, not only today but for the future. host: for senator john heinz, next is a call from minnesota -- senator johanns -- next call is from minnesota, and an ally. caller: where was it aig located? guest: aig business office, do you mean? seek out aig business office. guest: i am not sure i can tell you. caller: i can tell you. aig business offices were located out of the united states. that is why this whole thing was made up. you talk about development of

capital. we had all that capital development, and it just vanished. so do not tell me about derivatives been good. derivatives need to be for specific things like oil, for people who are buying oil. crops, for people who grow crops. we do not need to be putting bets on burning down your neighbor's house, for god's sake. i will take my answer off the phone. guest: here is what i will tell you. i just simply disagree where you are headed with all of that. the problem with aig is there was a whole piece of their book of business, the risk exposure was just phenomenal. i mean, you look back at that and you say to yourself, how could people be paid so much to make some many stupid decisions and literally put that company at a huge risk?

you look back and it was just phenomenal. the problem there is a solvable problem. you cannot regulate that area, i think you can come up with a sensible approach to that and deal with it very effectively. again i will say to you, you can pass a law that says no derivatives. it can be a two or three- sentence law, literally. in derivatives would cease to exist in this country, and they would spawn a huge business in another part of the world, where all that capital formation would go someplace else, all the impact-and jobs would be felt in a positive way some place else and in a negative way some place in the united states. why not regulate this area in a thoughtful sort of way that brings transparency to it but does not have the exposure that an aig created for our economy? you can do it that way. this is the wrong approach. i just think, again, my friend,

you will subject this economy to such a huge downside, you will regret the day that you ever argued that point. host: another area of contention between the parties on legislation it seems to be the establishment of a consumer protection organization. do you support that. and if so, what type of support powers will it have? guest: i think there is a place for a consumer protection approach here that makes sense. again, how we do it and the approach we take is kind of the key. if this is a situation where literally we have consumer protection but we want to overlay that with a bigger, grander, faster, greater government, then i think you have some problems. if on the other hand your approach here is to make sure that all of the consumer protection laws in effect are truly being enforced, and truly protecting people, then i think you can build consensus and you

can literally do this in a way that provides the protection that you are trying to the cheese. this bill was making good progress in consumer protection. this started out from a silicon -- from a philosophical standpoint. but again, because of the work of richard shelby, chris dodd, bob corker, and others, this thing was starting to make its way to a point where we were going to get a good piece of legislation. we were not there yet. let me emphasize that. but unfortunately, i think that is now again, like so many other things in washington, a political football. somehow we have to tamp down the rhetoric and get back to people at the table working together because these are problems that can be solved. host: bill on the democrats' line, you are on. seek of senator, i would like to ask a question please. you said --

caller: senator, i would like to ask a question please. you said something earlier about the bank's beat -- i want to know, the president, mitch mcconnell, and john boehner, they came out and said it was not going to work. come to find out that john boehner, it was never a fact that too big to fail, the banks are falling apart. included in the proposal was $50 billion that the banks would have to put up so that if they do fail the taxpayer would not have to put the bill. so i am trying to understand -- to foot the bill. to me, you are not agreeing, given the republican talking points. never again should this happen again. never again.

host: thanks for your call. guest: well, you have just kind of hit the point that i am making here. this notion that, well, the $50 billion comes from the banks so that does not come from the people -- well, where do you suppose the banks get the money? it comes from the people. it comes from the businesses they lend to through a higher interest rate or whatever. banks do not have the printing press. only the federal government has that. so, you know, they collect this money from the services they provide or the interest rate they charge on your home mortgage or whatever. so i think that this kind of a bait-and-switch sort of argument. quite honestly, i do not buy into that. secondly, let me be very clear. our purpose is to end too big to fail. no ifs, ands, or buts.

no potential that that $50 billion package will someday become $100 billion or $250 billion. now, the american people deserve a better bill than that. we need to and too-big-to-fail, and we need to put these companies out of business that have run themselves out of business. no more bailout from the taxpayer. the $50 billion fund, which in effect is collected from the people -- i just think it is the start down the pathway to another scenario where a company is going to get itself in trouble, i hope to get some funding together to get out of the $50 billion or whatever it may turn out to be. and then in the end you still have the same problem where taxpayers are going to say what the heck is going on here. with all due respect, i think you have to end too big to fail, and the $50 billion fund is just

a step into reopening the window. host: i know you have to leave us soon. next call from north carolina. caller: i always wondered -- the banks seem to fall under the antitrust laws, and why were they never brought upon it? all of the banks seemed to emerge even bigger after the bailout, and what antitrust violations might fall under the umbrella of more regulation and trying to do something about it? guest: great question, and there are probably antitrust lawyers that will be much more confident than i would be to answer this. but here is what i would tell you. i do think you had banks that really recognize that if they grew to a point that they control so much of the economy, that the plug can never be pulled on them. unfortunately, with the tarp

funding and the approval of that, i think literally you got in a situation where we were bailing out these too-big-to- fail situations. it did not make a lot of sense to me when i came to the senate. one of my first votes was to vote against it, and i did. here is what i would say. again, if you look at aig, there were areas here that were kind of wild, wild west. there really was not a regulatory mechanism here. we need to fix that. approaching this from a standpoint of having a panel of systemic risk analyzers, if you will, who can look across the country and say wait a second here, that is way too much risk, that is too dangerous for the economy, we stop you right here -- i think that kind of approach makes sense. that it's back to kind of my core point. we can do a great bill here, we can do it right. we can continue to grow our

economy, create jobs, and do things that people want done. but let's do it in a thoughtful, sensible sort of way. this is not a political football. this important to get done. host: quicker town, pennsylvania. last question. quick one, bob, please calle? caller: the banks that received money from the bailout, what kind of interest are they paying back? thanks. host: very, very good questions. what you are really referring to is us ts usury loss. that started to change, and i remember south dakota was one of the first states to raise that or eliminate it or whatever, and all of a sudden a whole lot of business grew around that.

here is what i would say. in a free economy, what you want to achieve is a sensible approach to regulation while you are encouraging job creation. that job creation encourages homeownership and that sort of thing. i just worry these days that what you are getting yourself into is a situation where you are financing businesses that should not be financed any more, that should not be too big to fail, that have exposed themselves to a situation where they should be put out of business. again, you kind of work through the various pieces of the financial bill, i think you can get a really good, very thoughtful piece of legislation that would get a lot of support in the country, a lot of support in the senate and the house. the question that exists today is, is the white house going to allow that to happen? do they just want to politicize this between now and november?

that would be terribly unfortunate if that is where we are headed. host: are you predicting whether there will be a bill signed this year? guest: i believe that we can get a bill done with 60 or 70 votes. i am still optimistic that volume can be reduced and we can sit down and start working through this, because there are some things here that i think are very, very good. we need to have them done. my hope is we still get a bill. host: thank you very much for taking our viewers' col. open funds for the last 20 minutes. we will be right back.

>> this weekend on c-span2's book tv, live on saturday from the annapolis book festival, panels on global security and the world's water supply. also, william cohen and barry lynn. afterwards, harry margolis -- his book is "no one would listen." sunday, this year's pulitzer prize winners for history, biography, and general nonfiction. find out the entire book schedule as book tv.org. this weekend, the first of three british election debates. for the first time, prime minister gordon brown, conservative party leader david cameron, and liberal democrat leader nick clegg will face off in debates. the first election debate will be courtesy of itv, sunday at

9:00 p.m. eastern and pacific on c-span. host: we are back live for 20 minutes and we will do open funds. you can send as a tweet, send us an e-mail message, and comment on anything we have got to today or not gotten to pre thursday is the day we get the dollar -- got into. thursday is the day we get jobless numbers. ap reports the number of newly laid-off people signing up for unemployment benefits rose sharply for the second straight week, suggesting jobs are still hard to come by as the economic recovery gains treachery delivered a partner reported thursday that first-timer quest for jobless -- economic recovery gains. the highest level since late february. economists were predicting that claims would fall. it marks the second week that claims took an unexpected leap. in the prior week, they were

18,000 to 460,000. clouded by seasonal adjustment difficulties related to the easter holiday which falls on different weeks each year. let's go to open funds and begin with oakland, california. jane, republican line, good morning. caller: hi. i am just calling to say that everybody that you have had online today, from the tea party on down to this last individual who was on -- i mean, totally ridiculous about not wanting to rein in these derivatives risks. that is what is giving us all of these problems. republicans won all these solutions, but they do not want us messing with wall street. it is just ridiculous. host: next from missouri, on the independent-minded caller: i am

calling to comment on -- can you hear me? host: yes. caller: on the senator that was just on. if people have been watching cable where they have seen the republican talking points, trying to link the financial regulation to the bank bailout -- they find it -- the fund in the current legislation is just a wind up fund, exactly like the fdic currently is, as most people know. the banks pay a fee to the fdic, and when the fdic has to take over the fund, that is what they used. this is the equivalent. on derivatives -- derivatives need to be regulated. derivatives is what clogs up the system to begin with. the concept of too-big-to-fail came into existence because of

the situation that existed. the derivatives were unregulated. nobody knew who was on the hook for what. all debt is insured by someone. and basically my understanding is the current legislation restricts, insurance. if you do not have an insurable interest, then you would not be able to buy or sell derivatives on that product. for example, if abc bank issues debt, the holder of that debt can purchase at a derivative, which is a financial guarantee. but someone who did not hold that debt would not be able to bet that they are going to default, or stuff like that. so the republicans are on a campaign to try to say that financial regulation is bad because banks do not want to do

it. it allows them to hide risk, to continue to high risk, and trading in derivatives is certainly not a financial accumulation of capital, or it would not cost, you know, american jobs. it might save american jobs by preventing companies from risk. host: next up is a call from jacksonville, florida. this is george, republican line. go ahead, please. caller: yes, i am hopefully in agreements that derivatives is an evil thing. derivatives is hurting you. it is at least 10 to 15 years old. before that, the united states had decent business, and we never really collapsed because derivatives is saving us.

the idea that other countries will feel that they should save the derivatives business from us is a lie. if we do not plan drugs all of the united states, other countries are going to plant drugs and take the business of drug dealing out of the united states. it is illegal. derivatives just allows businesses to stay away from doing decent decision making. host: thanks, george. earlier in the program, i mentioned that the tea party rally here in washington, d.c., was going to be on c-span live. it is actually being taped by our cameras. i forgot that the congress is back in session. so c-span will bring in the house of representatives today. lynn, on the democrats' line. go ahead. you are on the air. caller: good morning, good morning.

i was wondering why there was no comment about benjamin netanyahu not coming to the white house for the conference having to do with atomic weaponry and such like this. host: no comment, when? we talked about it during the segment of secretary tauscher a couple of times. i guess you missed it. caller: i am wondering what the comments were, then. host: well, you can go back and watch the program online, and type in the search engine for israel. it will come right up if you want to see it. next, sugarland, texas, cynthia. caller: i would like to comment on the derivatives fraud. your last guest, the senator, i think sugarcoated the situation. wall street and congress are in bed together. that creates special rules for

special people to make special profit in a special way. it is called special interests. the united states taxpayers are guaranteeing these terraces -- in these derivatives through fannie and freddie, but in fact they are junk bonds. i bought a freddie derivative bond and i researched it, and there was no description of the collateral for these bonds, and there was no notice in the real property records of this interest having been sold. so the most basic rules of business and banking and law have been thrown out the window and have created a special category. but we have good regulations that have served well for decades. but those regulations do not apply to these instruments. they carved out an exception, and they paid our congress off to come up with these regulations that gave them a

license to steal, and nobody cares that the bonds are junk bonds because they are guaranteed by the american government. and the new regulation by timothy geithner carves out another exception that you can drive a truck through. so they are still up to the same thing. they are ripping off the american public, guaranteeing junk bonds. so there is an endless market to these bonds. they pay 7.5%. host: cynthia, from sugarland, texas in "usa today," this morning, "in-house ban on the practice -- no hurry in senate to ban private firm earmarks."

"this year a spending bill found that senate majority leader harry reid and senate minority leader mitch mcconnell represent the top sponsors of the earmarks for private companies. your march 4 -- mcconnell directed $21.4 million in year marks, according to the analysis. john murtha was top on the list as 63 million, daniel in a way of hawaii next. jerry lewis of california, $40.4 million. jim moran of virginia, $26 million. thad cochrane, $24.8 million. judd greg on the budget committee, $22.3 million. dave obey of wisconsin, $21.5

million. mitch mcconnell, $21.4 million. next is a call from danville, ohio. jim, republican, you are on the air. caller: my first comment is i think you need another phone number up there to call in. you need a phone number for people who are none of the above. because i do not think there is much difference in either none of the parties except who gives them the money. host: how come you are not on the independent line either? caller: i am none of the above. i am none of the above. the tea party was at the ports. i do not see none of them at the ports to shut down the ports, shut down the imports and bring the jobs back to this country. host: next is ryland, mary, on

our democrats line. -- is rhode island, mary come on our democrats line. caller: i have been a democrat virtually all my life. i am soon to be real affiliating, though. what i wanted to say after watching the last segment, what will save this company-this country is factories, industry and manufacturing, not banks. two of my fellow democrats who are due to thinking this is going to be some regulation formed to punish bad bankers -- i am sorry, it is not if you read it. it is a never-ending bailout, unaccountable. the people will not have any transparency. there will be no oversight. you look at mr. obama's contributors who are being able to take advantage of cheap deals to buy out things like that. mr. soros is going to back up the bill on that. most of the tarp money is going overseas, and i know george bush

fought for it, but mr. obama was right up there. he was demanding the democrats vote for it in congress. we need to say no to this. chris dodd and barney frank have practiced bad legislation. we need common sense regulation that demands more investment in our country, which will help curtail all these derivatives and other things. that is all i have to say. host: the ap is reporting today foreclosure rates surged amid the biggest jump in five years, the record number of u.s. homes were lost in the first three months of this year. banks are starting to wade through the backlog of troubled home month at a faster pace. the number of u.s. homes taken over by banks jumped from a year ago. foreclosure grew 60% by 16%.

more homes were taken over by banks than in any quarter going back to at least january, 2005, when realtytrac first began reporting the data "we are right now on pace to see more than 1 million bank repossessions this year." florida, david, independent line, go ahead, please. caller: i am a first-time caller. host: what made you call this morning? caller: well, i have been watching c-span regularly now for the last couple of months. the one thing that is drilled into me from watching this and regular politics over the years is that nothing is ever going to change until people get it into their heads that neither democrats nor republicans is any different from the other one except for their rhetoric. they represent the same interest

groups, the same lobbyists who offer millions of dollars to the republicans for legislation, also offer the same millions of dollars to democrats for the same legislative favors. and people need to stop voting for democrats and republicans all together. they will not give themselves term limitations where we want them to, so we have to do it. we have to vote for independence, libertarians, even anybody who consider themselves an anarchist. who cares? the only real way you are going to get real change is to completely overhaul the system by beating them at their own game and not voting for the same shmucks who keep making the same mistakes, because they are not mistakes. they only look like mistakes, but these people are not stupid. they cannot be stupid because they are in powers of position.

so every time they do something stupid that looks like a mistake, look a little closer and see who is benefiting from it. it is certainly not us. host: next up is pearl, republican from detroit, michigan. caller: good morning, how are you? host: what is on your mind to that? caller: i really wanted to talk to the senator that was on earlier today. you know, it seems to me over the last year and a half we have been going through all these iterations and gyrations through the politics of health-care and cap and trade and everything else. one thing that is truly, truly missing from all aspects of the equation -- senators and representatives that take money from banks, health care organizations, and what have you, should recuse themselves from voting on any legislation.

they are basically being funded by those corporations. why is that not a breach of their judiciary responsibility and a conflict of interest? this is the one thing i do not understand. host: jim, a democrat, boston, good morning. you are on, open phones. caller: good morning. i am calling to say that i agree with the gentleman who was on earlier who said that too-big- to-fail is wrong and we should stop it. there is important legislation coming up that will require 67% of votes on nuclear arms reduction, which is very important. it is going to be interesting to see the reasons that the no party is going to have to vote on this legislation -- the no

party being republicans. they have made their mistakes. they did not make a good car, and they are paying for it. let's hope they learned their lesson. the economy needed to have the auto industry in this country. have a good morning. host: dee is next from oregon. caller: good morning, susan. always a pleasure to see you at the table. i have an important message for america. please go out and rent the dvd "food inc.." we have a food safety crisis in this country. please see the documentary, "food inc.," and then demand that the head of usda be fired. thank you. have a lovely day. host: next up is john javel, virginia. boyd, on a republican line.

-- lloyd, on the republican line. caller: i think our nation needs to turn back to god. we have turned away, and i hope everybody has a pencil because i will give them a number for a free dvd. if you learn -- if you turn to matthew chapter 24, you will hear about the earthquakes, in a lot of which are going on now. it will tell you when the end will come. one-800-643-4645, and you can get a free dvd. i appreciate your time. host: that is lloyd, from jones ville, virginia. john byrne, a veteran reporter from london, ithe prime minister vassalage when he was asked in a television interview that he would agree to tell a lie-

televise the debates c-span will carry all three of them here and the u.s. here in the u.s.. the format is one we have become accustomed to over a few generations. next to the orange, connecticut. john, democrats line, go ahead, please. caller: i just want to make a short point. when i wake up and turn c-span on and i hear sarah palin, sarah palin, sarah palin, i hear divisiveness, divisiveness, divisiveness, and it continues to go on and on and on. i wonder if the people ever stop to think, with the tragedy that happened in new york city with 9/11, with the people intend to destroy a america, could it be that he is sitting back and watching what is perceived as a possible implosion, a division? you have an attack on our

government, from the population itself. they are measuring -- they are mere riirroring the same word, t we call terrorists. the reactions of those intentions could really lead us down the wrong path. so, people, stop, look, and listen to ourselves, and ask yourselves -- is this the united states of america where we can have difference of opinion? the question is, are we destroying ourselves? do we really want to not have a government to keep us, you know, an army? keep the navy, keep the roads going? who do you call? host: let's take our last phone call, and a quick one if we can from rockford, illinois. you are last on the air. caller: you know what, i am very