[inaudible] i was wondering with america just struggling to pay their bills, losing their jobs [inaudible] and fail to pay taxes on rental properties? [inaudible] nseries why are you such a disgrace? i have my tax returns. can i be free from other penalties? ♪

♪ i want to introduce the next speaker a warrior here in washington, d.c. today in and day out is battling the injustice of the tax code. he formed the taxpayer protection pledge. he asked every candidate, every incumbent to sign it, reduce taxes this. he lives here in washington, d.c. but he is in part from washington, d.c. because he is a warrior who understands the tax code as well as anyone. i want you to give a big war round of applause for a fellow patriots, grover norquist from the americans for tax reform. [cheering]

>> we have thousands of americans getting together today and over a thousand rallies in washington, d.c. and across america and it's not possible to thank all the people who took the time and effort to organize that but i would like to say special thank you to the three who did the most to make this possible for all of us to get together and of course i'm thinking of harry reid, nancy pelosi and barack obama. as you watch demonstrations across america, those three hour community organizers. the organized american against what they are trying to do.

these politicians said to us back in 2008 they wanted change and a lot of people said yes we want change that corrupt washington but we were not reading the small print of what they meant. what obama and harry reid and pelosi are trying to do is use the power of washington, d.c. to change america into something else. but we want to do is take the strengths and traditions of america and change corrupt washington, d.c.. [cheering] the first thing they did they were going to create jobs. remember that? here was the plan they were going to take a dollar from somebody you earned it and give it to one of their friends from

chicago and that was way to create jobs. imagine if you would harry reid, pelosi and obama standing at one side of a leak and they all stick into a bucket, they take three buckets of one side of the lake and what route to the other side and in the front of the tv cameras that were the buckets into the lake and they announce they are stimulating the lake to great depths. they're going to do that 800 billion times. and we will have a big deep lake. that is why the stimulus spending didn't create jobs because every dollar that they stole and spent in from somewhere and a john died in -- jogging died for every one of their friends that got in chicago. [cheering] our friends on the left would

like to divide us to argue that we are not united. they are not paying attention. we are all united because we are active today here in the chris country because we all want one simple thing from our government. we want to be left alone. [cheering] on taxes, that is what i work on, leave our earnings alone. [cheering] some people focus on their families. the home school, they will their children left alone. [cheering] the board of directors and the national rifle association. [cheering]

we ask one thing of the government to leave the second amendment rights alone. [cheering] we don't know, where neighbors stores and told them they have to be hunters. we don't insist every fourth grade child in school [inaudible] we simply wish to be left alone. the other team is a takings coalition. setting the ground hillary clinton and barack obama and nancy pelosi and harry reid's table are the trial lawyers, labor unions, the big city political machines, the wings of the dependency movement, the people who are lost in the welfare dependency and the people who make $90,000 a year making sure none of us people

get jobs and become a republican. [cheering] you also have all of the course of utopia. these are the people, the radical environmentalists who invented cars too small to put your family into. the people who invented the toilet that is too small to flush completely. the have a lot of what the rest of us to follow and they say they have this town to push the rest of and they have a list of things we have to or can't do is significantly longer than slightly more tedious than leviticus. it keeps going on and on and on. you have to do this and you can't do that. ladies and gentlemen, we want to be left alone.

we don't have our hands and our neighbors pockets. we don't ask the government to put their hands to put in our pockets. it is true that we are promised by mr. obama and his team from chicago that they would not raise taxes on average americans there's a series of tax increases in the health care bill that tax all americans. the $60 billion in taxes on the health insurance if you have health insurance will pay more for it to pay taxes and they think if they haven't raised your taxes. they are hoping we will be foolish enough to think the insurance company in the hospital has raised fees rather than the government has raised taxes. register to vote, be sure to vote, get your friends and

neighbors and family and co-workers out to vote. [applause] be aware of the number one threat of the other team is preparing and that is the value added tax. they started to leak. if they win in november we will end up looking like where they have a 20% value-added tax. it will on top of other texas make the pension worth 20% less, salary worth 20% less, savings worth 20% less. no other high taxes, none of that. see you all at the election.

[cheering] we have a representative democracy, a republic. we count on the leaders to represent our best interest, not their best interest. not everybody is forgotten and that is why the one to introduce right now the representative tyler texas. [applause] >> thank you. thank you for coming. when you go back to the beginning of the stimulus craziness i was picked up on camera asking my plans of this. president bush, how do you get a rebate to people that didn't put

any bait? [cheering] now we find out we are about to have 47% of americans not helping on tax day. that doesn't work. when one more than 50% are in the wagon instead of pulling the wagon, the wagon is going to stop. and to follow up on something grover norquist said, and he has been a real warrior, but still we don't want somebody in washington telling us how we have to that our lives, right? [cheering] justice scalia told me many years ago somebody explained to him the difference between democrats and republicans. he said a democrat is someone who wants to control everybody and everything, and eight

republican is somebody who doesn't want them to. we have to go beyond that, beyond democrat, beyond republican. we've got to go to the american people seeing that bill laws are in place that keep the government from controlling people's lives. that is where we've got to go. [cheering] this was not a government of the people, it was a government of the liberal people. and that's where we ran into trouble. that is why i think god you are out here. it's got to be a government of all the people so that we don't get run off track by those who have and proper motivation spigot they want to control everything. and let me tell you i never try to use my position to push my

religious beliefs on some models by an a christian and here's some people say we are supposed to render under seizure, but the thing is in this incredible experiment in democracy we are given the blessing of having a country where the government was the people. under romans 13 if you are a citizen of this country you have an obligation to help govern the vote to get your input in place to run for office to affect the government and the country. that is your obligation and for too long that hasn't been addressed properly. let me leave you with this thought. a block or two over is the washington monument. over a hundred years ago the

capstone was put in place writing of all four sides put on the side facing the capitol they put the last please be to god because -- [cheering] because they wanted to make sure as the tallest point in the nation's capital that when the first rays of god's son hit the first thing in the capitol it was first the words of praise be to god. god bless you, god bless america and let's take the country back. [cheering] all across the united states every single every single day there is a voice that rings out with the american principles that have been forgotten by so many in

this town. he is a radio hall of famer. he is loved by people across the country. he has written a book. [cheering] i told you what, i cannot think of any group of people live but rather be with on april 15th. anywhere in the world than right here in washington, d.c. looking at the people who know we need to do something about the tax system, don't we? [cheering] how did you like the news stories what was it this week, last week. two stories nobody seemed to tie them together.

47% of the people of this country don't pay any federal income taxes. how curious is this? 47% of the people in this country seem to think they paid just the right amount of income tax every year. [applause] now, you are here to explain this to the members of congress and the democrats to occupy the buildings because they don't get the correlation. bullion the world would 47% of the people who don't pay income taxes think walleye paid just about the right amount of income taxes. it to think it's fair now. wait until they pop the value added tax on you. president obama has a deficit reduction committee working on ways to reduce the deficit. they are going to report -- they are going to report in december on how to do with insurer as we

are surrounded by democrats, they are going to say the way of is a value added tax. but me tell you what else there are going to say. they are going to say come on, it is only going to be 1%. you know what we heard that last time? when they were passing the 16th amendment to the constitution. it's like going to be about 1.5% and besides only the rich people will have to pay it. you're going to get a free ride. yeah, listen, in europe to be a member of the year and you have to have a value added tax. not only do you have to have a value-added tax but there is a minimum. it has to be 15% and we see with

this system for greece. it's working out really well for them. now they tossed obama care of this idea of we are the only big economic power in the world that doesn't have government-run health care so we've got to do it. in december, january of next year we will say we are the only nation out there that doesn't have its own tax, we are behind the times. we have to do that, too. >> we've been hearing stories about the economy and searching for growth. the jobs creation machine in this country is private business. [cheering] and i've already talked to some of you in the crowd. the private businessmen and women in this country and how we define a small business?

the people in these buildings actually have a definition. a small business employees and less than 500 people, 499 or less that we pose as incomes on the returns. the media has been a really pathetic job of explaining to you that when the democrats, when the community organizer, when they talk about raising taxes on people who were over $250,000 a year, they are talking about raising taxes on the very people we need to bring jobs back to the american economy. now these businessmen are out there. they want economic growth. they bought to expand businesses and make more money. they want to hire people, they want the good times to come back but they are back their thinking at the end of the year the bush tax cuts expire.

that is another 5%. did they want to raise taxes on dividends and get cap and trade and they want card check, to that which would make it easy for employees to unionize and then god knows what sort of penalties they want to put on me and my business if i don't provide exactly the type of health care to my workers that they want. so you know what? i'm going to sit back and wait and see how this all fleshes out before, before i started spending my business. you know what these business people are waiting for? they are waiting for you. [applause] they are waiting for you to make another march on washington that will be awhile. this next march on washington will be so much easier than this one. for some of you will be half a

mile, a quarter of a mile maybe three or 4 miles, it will be a march from your home or business on november 2nd to durham voting precincts. [cheering] now argue going to tell me to get off the stage? [laughter] about 200 years ago the man from this city was named lead patriots on a march. the revolutionary war. they didn't even come the day wrapped in burlap part of their feet and marched over the ground and they were easy to follow because they left bloody footprints in the ground and there were people waiting to suit them when they got where they were going. guess what you can do your march on november 2nd and shoes, no ice, bill blood, nobody is

waiting to shoot you. there is no excuse for you not to show up on november 2nd. [cheering] we know what has changed. we tell what type of change this country needs. we need change that brings leaders to washington that appreciate words like liberty at like freedom. and i want to hear a little bit less about redistribution. [cheering] america is great because of people like you who understand the dynamic of people working in the free economy under the rule of law. we have people down the street here who think america is great because of government. we have a chance to change things november 2nd. please don't lose your fervor or

enthusiasm. we have to make the real change in november. thank you very much. [applause] [cheering] radio hall of famer. the most important title in america today i believe grassroots colish and because we the people are rising up to save this great nation. we've lost the way and starting today we are making a stand and

we will put this country back on track. [cheering] one of the most important directors of grass-roots coalitions a amy kramer, tea party express. >> hello, america! [cheering] this is a great crowd. thanks for coming out and being with all of the great patriots. i feel blessed and honored to be here with all of you. i just finished up this morning at about 3:00 in the morning on a bus tour going across the country on the tea party express. [cheering] you may have heard we kicked off the past or in searchlight nevada harry reid's home town where we had a retirement party

for harry reid. [cheering] regardless the media reports there were 700 people there we had approximately 35,000 people. [cheering] we believe on the 48 stops in 23 states across the great country we finish yesterday because boston massachusetts with sarah palin. [cheering] and we celebrated with the people of boston about a victory for scott brown to happen in january. [cheering] last february there were 22 of us who can together through twitter and planned for tea

parties. we define our success with the tea parties 5200 people at each tea party. we all got busy and one week later we had 53 tea parties with approximately 30,000 people in attendance. you guys made that happen. next monday march 2nd i believe it was the website with life and for six weeks we planned for tea parties across this country and one year ago today we had over 850t parties with approximately 1.2 million people in attendance. the [cheering] and then in september we had the biggest tea party of all at our house, the u.s. capitol with approximately 1.7 million people

in attendance. [cheering] and you guys all made that happen. this is a movement that is continuing to grow. weeks ago a coalition group called for people to come to the capitol to have a rally because our congressmen were voting on the health care legislation. we surrounded that capital saturday and sunday. at one time they entered the committee because they said we were being so disruptive and then -- [laughter] and then on sunday night, late sunday night under the cover one everybody returned home to their families to go back to work and school the past the monstrosity of the health care legislation they've been shutting down our throats. and you know what we have a

message for them. they might not listen to us now but i guarantee you don't listen to us in november when we vote. [cheering] as i said this movement continued to grow and continues to grow on a daily basis. i was somewhere yesterday but it's time to put on the protest signs and pick up campaign signs. it is great we all come together and have these rallies but the real work is done outside of the rally and if we want that changed we are going to have to get involved in the election process in the campaigns and the true conservative center office. [cheering] one way we are going to do that is through education. we need to educate to in power so that when people go to the

ballot box in a vendor the vote on principle and evaluated not according to the letter next to someone's name. this is not about being a democrat or republican. it is about being american. i don't know how many of you are like me but i've never been burleigh active in my life until february and now i like to think along with all of you and this is a movement, this is a grassroots movement where we need to stand shoulder to shoulder and when you leave here today when you leave washington and go back to your home state i want you to do two things. you need to get involved in the campaign's going on. you need to do your research. find out with a conservative candidate is and get behind them not only with your time but with your money. it costs money to run the campaigns and whether we like it or not, $5 a month will go a

long way. and you can't sit back now because if you wait until november, you are going to be voting for the lesser of two evils. i just left a press conference with the tea party express. you can go to our website and get more information at teapartyexpress.org. harry reid is number one on the list. [cheering] last week we targeted bart stupak three of laughter [cheering] and last friday we went to michigan and chairman of the rally mr. stupak announced he is retiring. [cheering] we are having a great impact. if we were not having an impact those people and the media would

not be here [cheering] we would not have international media on the bus from china, austria, australia. but let me tell you something. we fed international media. we've had this international media attention but guess who has been on the bus the past five or six days? dateline nbc. they are intrigued by this movement and realizing the power of the people. and come november we are going to take back our country. [cheering] you guys keep up the good work. we are having a great impact and i am so proud to stand shoulder

to shoulder with all of you. god bless you all and god bless america. [cheering] >> amy kremer ka multi-party express. that is the big red bus going to towns across the country because that is where the mosul, the heart and the genius of the nation lives. now i told you we love him, we love his voice we love his heart market's going to take this next part of the program. he goes the tea party people better than i do. he's been on the bus with them through 45 cities. [cheering] sprick as a brave man giving a radio talk-show host.

this is our third national tour, and to number 150 on the tours of the last year. we traveled and we've made the hard core of left in the country and now it's because we have a great time. we have a great time. we celebrate america. we celebrate our liberty. we celebrate our freedom, and we do it with speeches, picnics, comedians and a couple of good ones for you. conservative hollywood fuchs and music acts to review what we are like church. everybody believes you've got to get jazzed up again and that is what we do. traveling with us on the third tea party expressed or ladies and gentlemen, from kentucky. [cheering] >> hello, patriots. >> you guys are all some. it's great to be here. i want to tell you some of you

may know us from our music video on youtube called press one for english. anyone ever see that? i just have got to get something out quick in all fairness to president obama model of his policies have been a blast. i know we live in a great commonwealth of kentucky and in kentucky the cash for clunkers program was a great success. seriously we've gotten rid of above 70% of the obama bumper stickers. [cheering] >> i know you are shocked beyond believe white people are part of this movement. i've been called racist in just about any other name the the white girl. and folks i have had death threats i wish you would die,

all of these standing up for the country but don't let them call you a racist. i do not care if my president is purple. it's the policies i disagree with. [cheering] we've had people ask where were you during the bush administration? i will tell you where i was, i was writing this song we are getting ready to perform. i wrote this song when the t.a.r.p. program was initiated. when i was growing up slash torch lagat paid an allowance. if i didn't do the chores i didn't get the allowance. i wasn't entitled to it. it was based on my work ethic. [cheering] don't spread my wealth, spread my work ethic. [cheering]

if you had that allowance like things the way to the movie on the weekends. one weekend i wanted to go to board and one of the so i invested my allowance into a lead stand. but i mismanaged that, let it stand because i let my friend, my broke bomb friends have their kool-aid on the promise they would pay me by the weekend. and when the weekend came the and they didn't pay me, guess what my mother didn't bail me out. [applause] [cheering] i'm tired of bailing out companies that best manage their money. the government doesn't have any money. that is our money and i am taxed enough already. this is a bailout song. hit it, rye and.

♪ ♪ i need a bailout ♪ want to help me ♪ i need a bailout ♪ disability rescue me ♪ i need someone to save me from the choices i've made ♪ ♪ i need a handout and a bailout ♪ will you help me out today ♪ i spend too much money because i told me i could ♪ ♪ and i refuse to live within the means i know why should ♪ ♪ [inaudible] i get instant gratification and say just charge it ♪ ♪ i need a bailout ♪ bald you help me, won't you please ♪ ♪ i need a bailout ♪ somebody rescue me ♪ i need someone to save me from the choice is i have made ♪ ♪ i need a handout and a bailout

♪ would you help me out today ♪ [inaudible] ♪ i knew i couldn't pay it when they gave me that there load ♪ ♪ but they sit here in america you deserve to lonnae helm ♪ ♪ not ♪ i need a bailout ♪ won't you help me please ♪ i need a bailout ♪ somebody rescue me ♪ i need someone to save me from bad choices i have made ♪ ♪ how i need a handout and a bailout ♪ ♪ won't you help me out today ..

thanks for your support. [cheering] from saturday night live, miss victoria jackson. if [cheering] >> thank you for being here! free demo! i am a beginner political activist. i never was involved for one second and politics, i think is really boring about what happened in 2008 was i heard someone was running for the president to was more than hillary. less than him uribe? a communist? so i wrote a song about a eighth. it is better than sitting at home in kind. we have to fight for freedom

because freedom is not for a. of [cheering] and we are in a spiritual battle, susan six: 12. and my right? chronicle seven: 14, of my people are called by my name will humble themselves and pray and seek my face and turned from their wicked ways and then they will heal their land. amen. [cheering] so i'm watching the news and as hard to get the truth because the mainstream media tells lies. [cheering] so we have to find it like little of gold dust in a big mountain of 13 and we're trying to find the truth, you know, and i notice there is a fight between tyranny and liberty. and the people on the tyrrany side are fighting with flying, how about this one? my health care plan will not at one time to the deficit.

[cheering] okay, they lie, they cheat, tax cheats, brandel, why aren't they in jail? [cheering] the use profanity, did you hear the vice president seen the f word on tv? did you hear about from using the f word naked in the shower? i don't think george washington bridge use the f word. they use the bride's and i just read the constitution made available and is as you can impeach a precedent for bribery. [cheering] and i know a little something about communism because i grew up in miami. [cheering] and during my childhood i saw my town turn into cuba. people from cuba were risking their lives coming to america

for freedom autographs. and my boyfriend when i was 15, i dated him -- i don't have time to go into the romantic tinge live with my past -- i am new at this. his name -- in english is angel and i said, angel, whereas your dad and he said he said in jail in cuba and i said why and he said because he resisted communism. and then i said to my neighbor, what's it like to grow up in a communist country? she said,, well i will tell you, in kindergarten they tell the kids to bother heads and pray come close their eyes and ask god who can be and when the kids open their eyes there is no can be there. then they tell them to buy out their heads and close their eyes and pray to castro and s kemper can be and when the little kids open their eyes and there is canadair. that is communism and have

starting to smell it in my country. [cheering] and obama is offering free stuff to people so they will vote for him. [cheering] ny to your education on politics i just learned that with the% of americans are paying taxes and 50 percent of americans are not paying taxes and they're the ones who voted were him and they don't care if he raises taxes because they aren't paying them anyway. [cheering] ♪ it seems these days i'm in a hazing get canaccord or sleep, still incomplete and scared and creepy. ♪ i look over my shoulder and shutter speed to i buy my nails and cuticles and watch my words carefully ♪ ♪ white house did cab, you heard of that ♪ ♪ were supposed to report our friends and neighbors to flags and they didn't agree with obama

care. that slipped another radar but i reported myself twice. [laughter] this is america, we don't turn in our friends for what they are thinking. [cheering] i have to wash my words carefully. ♪ i bite my lip and fidget with the buttons on my glaus ♪ ♪ y? because there is a cavernous living in the white house. ♪ why aren't people shocked and up in arms? ♪ does anyone read history or hear alarms ♪ ♪ the streets are filled with tom and i squeak like a mouse need to there is a communist in the white house ♪ ♪ of my parents, has been mrs. meese need to my parents think i've gone crazy ♪ ♪ of lakeland understands me ♪ [cheering]

glen beck end! ♪ end of a chorus sean ninth hannity sawtooths sean hick, -- rush limbaugh! archuleta an! and coulter! she's all lantastic but that is okay. besides those three and a sweet people who drink the tea, there is no one else who can see the communists in the white house ♪ ♪ yuma asked me if i have evidence to support my suppositions need to his mother was a communist ♪ ♪ his father was a communist ♪ when his parents abandoned him his grandparents introduce them to david ♪ ♪ is touted a mentor who was a

thomas ♪ ♪ he had marxist professors ♪ of he was friends with william errors ♪ ♪ he went to a church for 20 years ♪ ♪ where jeremiah wright did not teach christianity ♪ ♪ he teach black liberation theology which as marxism ♪ ♪ when he was on the campaign trail and he didn't have the -- what you call those banks -- when he didn't have the teleprompter he accidentally sent to john of the palmer a direct quote from the communist manifesto spread the wealth by a that other guy ♪ ♪ and then he appointed a man jones a communist as a green jobs are ♪ ♪ and would never appointed communist as an adviser ♪ ♪ then he got into office

♪ the banks end of a car's ♪ the student loans and the health care which is a peach -- piece of garbage ♪ ♪ did you know that the healthcare bill says that if you have cancer the government decides whether you get chemotherapy are not? ♪ now he wants to takeover energy with a cap and tax and then he wants to take away our freedom of speech. he wants to take away conservative talk radio and the internet and christian radio with the fairness doctrine which keeps changing names, they keep changing the names. so i think i have enough evidence. [cheering] ♪ maybe i have lost my mind ♪ there's a communist living in the white house ♪ ♪ there is a communist in the

white house ♪ ♪ there is a communist living in the white house ♪ ♪ there is a cavernous living in the white house ♪ ♪ what are we going to do about it? [cheering] i have one more time nissan. i just got to do it because it is okay. there are also angry. we are angry but we are smiling. [cheering] al qaeda, this was inspired by obama keira and it is called i hope i don't get sick. obama is a liar and we all know that while ♪ ♪ psr communist dictator and taking us to -- ♪ ♪ but on this march towards tyrrany ♪ ♪ any magic tricks i hope i don't get sick ♪ ♪ i hope i don't get sick ♪ i hope i don't get sick

♪ i don't want uncle sam coming for me with a stick, tongue depressor. ♪ they what are social security so keep your hands off me ♪ ♪ keep your hands off me ♪ keep your hands off me see to ♪ 22 of a conservative victory ♪ keep your hands off me ♪ of 2012 conservative victory. [cheering] obama told the people who for every child, man and wife ♪ ♪ even internalization ♪ that's a good line. ♪ somehow they all believed but i know one thing is true ♪ ♪ someone has to pay for that and i think it's me and use need to keep your hands off me ♪ ♪ 2012 conservative victory ♪ keep your hands off me

♪ and keep your hands off me ♪ 2001 of conservative victory! ♪ [cheering] and [cheering] >> last year in georgia a series that ads were taken out by cleverer -- clever political operatives in washington d.c. and they were trying to sell snake oil to the voters of georgia and say, that senator chambliss running for reelection and wants to raise your taxes with a fair tax. the people of georgia are so

smart to, they're so educated that it backfired on them like nobody's business. [cheering] it is going to keep backfiring and we are going to keep sending to congress people who will stand up for a fundamental tax reform, senator chambliss. [cheering] >> thank you. they do all very much, thank you for your great support last. with your help we brought in home in a big fashion. listen, i want to say thank-you to each and every one of you. thanks for coming to the devil city to help us to the lord's work. [cheering] you know, i want to make sure

that a protein is no longer considered it tax day. -- april 15th. i want to make sure that april the 15th is just another average stay in your life. i want to make sure that we don't add 16,500 and internal revenue agents in the internal revenue service. [cheering] i want to see if we can eliminate the internal revenue service. [cheering] and i want to make sure that the federal government can no longer dictate to you that irrespective of how hard you work, that federal government tells you how much in taxes you pay, but then you determine how much you paid in taxes. now, how do we do this? we do this by taking the

internal revenue code and pulling it out by its roots and throwing it away and enacting a fair tax. [cheering] [applause] it's exactly right, during my campaign in 2008 the liberals in this country came to georgia and spent millions of dollars trying to educate people about an issue that they knew nothing about. they tried to say that a fair tax was going to raise your taxes rather than decrease your taxes, but thank goodness. i represent the smart as constituents in the world, right? [cheering] combined with all of you, and at the end of the day we didn't prevail in a big way and as a result of the educating of georgians about the affair tax we now have a ethanol of the

largest one of the largest their tax support groups in america and i'm very pleased that are my friends. [applause] elections have consequences to, quote. we are suffering through some difficult times right now. but what we have got to make sure of is that we continue the momentum that you are showing today. all the way until november and then in november we turn out in record numbers to show this administration that we are serious about spending, that we are serious about tax reform, and that we are serious about bringing common sense back to the united states of america. [cheering] [applause] i want to close with a quota from a guy that i have the

utmost respect for. and one of my top two in favor of presidents of the united states, a guy you probably remember named ronald reagan. [cheering] here is what ronald reagan had to say: i believe we really can however say that god did give men a kind of virtually unlimited give us to invent, produce and create and that reason alone it would be wrong were government to devise a tax structure or economic system that suppresses and and i as those camps. the current tax structure we have in this country suppresses innovation and the ability to live the american dream. we need to quit adding to the taxes that americans pay an actor real meaningful tax reform and with your help we are going

to continue to do it. go to every senate office and tell them to support s296, the fair tax bill we have introduced -- once again and we're going to continue to introduce a every session until we ultimately get it passed. thank you for what you do. god bless you and god bless our great country! [cheering] >> fair tax! fair tax! fair tax! >> thank you. i love the fair tax also. i love the flat tax to, but you know what, i realized something. we can't get their attention unless we all come together.

and we have got to put aside the smaller differences and come together on the bigger causes. this will not be a tax system or a government of the, by and for the political class. [cheering] aristocrats, think about going to england. we don't want aristocrats' here. we threw them out 233 years ago. we're not going to allow them here anymore and. [cheering] that's what we have got today and it has got to change. i want to say to every union member who hears this. if you want jobs to stay in the united states, if you want more jobs to come to the united states, get this broken tax code out of the way!

[cheering] i want to say to the left, welcome to our movement. [cheering] i want to say to the new independent voters who now make up the majority of voters in this country, very healthy thing, welcome and thank you. [cheering] i want to say to the republicans and those on the right, we will take back ba'ath party also. [cheering] the american people are speaking and one of those who is speaking in the new media at fair tax nation, the first social networks site for the fair tax, one of the great participants here to -- is going to introduce you to summon a very important from iowa, but i want you to

meet right now jim deossie. come on up, jim. [applause] >> there's a lot of people out here. [cheering] did any fair tax shemtov? [cheering] hal yes, i can't hear you! what are you saying? what you want? we want fair tax, right? [cheering] that is right. i have not just . . get this thing and put on it in the early stages before copenhagen stepped-up, he turned in on pressing got people the flat tax and no tax and the other tax cutters in their taxes and everybody here, i appreciate his help. this is an amazing proud. the last time i did this was a few months back and had about

300 people show up, this is a heck of a turnaround. >> we love this country. >> yes, that is why we're here, >> yes, that is why we're here, we want our country and we want it back now! [applause] we the people have lost our voice and we have got to regain it and one way to do that is to get this tax code scrapped. we need to pull without by the roots, we have got to take the country back by taking back the way they take our money across. [cheering] there was a guy, i do lot of this tea party stuff lately, we spent the night a few nights back outside the capitol building because we are protesting a certain bill been voted on over the weekend and they said was going to be voted

on saturday morning, but they kept putting us off to paris out. we stayed there, slept in our cars and some people slept under trees, but we had our voice heard inside because of this man here. he is a tea party -- tea partiers on the inside, his name is congressman steve king from iowa. he is be one candidate and tea party approved. [applause] >> thank you, thank you. wow, you can see all i can but i got to walk away the other side of this crowd clear over where that high-rise is, all the way back through -- you are the awesome american people to take our country back! [cheering] [applause] and we believe in a lot of things together and most of them are in the constitution of the united states.

and the rest is in the culture and the character of our people. and we do not believe in a government that is a precedent. nor do we believe in a government that confiscates our earnings. and rewards people that don't earn. and eats out our substance and drains american vitality -- that's what's going on in america today. and i will say off the bat that obama care adds to that, it doesn't diminish its and obama care has to go. [cheering] nine [cheering] when i say obama care has to go i mean 100 percent root and branch, not a vestige of it left behind, all of it has to go! [cheering] the $569.2 billion in new taxes that's part of it, that's got to

go. [cheering] the nationalization of your body, the federal government taking over your liberty to manage your own health care, that's got to go. [cheering] and, in fact, i agree with saxby chambliss, the entire internal revenue code has got to go. [cheering] i was ordered one to many times back in the '70s, 1979, when i got done with that i came to this conclusion: i want rid of the irs and the federal income-tax code. i want them gone and it's not personal and they are good people to a job they are hired to do, the boys had tax collector's coin to the old testament, they are good people but there are so good people they can make money -- make money in the private sector making something that's value. [cheering] and now what we have seen happen

is this administration, i will take you back to this approved by the president, some say it actually started before president obama was elected, but as a senator and a candidate he approved of all of this and this is what happened. $700 billion in tarp spending with a blank check no condition, that needed to be a big no-no quote and i voted no. [cheering] with and then they said about the government takeover of eight huge national entities, three large investment banks, and aig to the tune of $180 billion. fannie mae and freddie mac to the tune -- $5.5 trillion in contingent liabilities with danny and freddie and still some people in this country thought the post and the white house knew there during until they came to mess with our car companies. we know cars, we love them and

build them and drive them, we will fix them, they are american cars and should be made by not just americans but the private sector. not the white house. [cheering] and then we understood what was going on. what was going on with the government takeover of business after business, so i went to the socialist website to see where their playbook was and found it there. says the socialist website we want to take over the fortune 500 companies. what has happened is one-third of the private sector activity had already been nationalized before obama care and now it's 51 percent and our liberty is being reached out and i see the red sign down here, president obama i don't know i want to put that particular label but i tell you bernie sanders is the only socialist u.s. senator and he is of the best and nobody argues he is in a socialist but i tell you

the facts show president obama voted to the left of bernie sanders when he was in the united states senate. in so the question isn't is the president a socialist, we're talking to what is the left of your assigned and you can figure that out. i'm not going to add to that dialogue anymore but i want to tell you we can get our liberty back, we can get our freedom back and shrink the size of government, we can and must put people in place that understand my cue that hard work must play and savings and investment has to have a reward, the policies that dreyfus' office equipment to socialism is have the vitality of american people and insults the character of the american dream and we can and we must rebuild the pillars of american exceptionalism and we must take this country from the shining city on a hill about ronald reagan constructed for and with us to the next level of our destiny -- that's what we will do as the awesome american

people. bless you, i'm so glad to be part of you! thank you so much. [cheering] with. >> those in the back, i have just been told not to speak with so much enthusiasm. sorry for your eardrums. and i am just talking to a member of congress over here from savannah, georgia. [cheering] you know what he said to me by this he said i've got people all the time sanguinary going to do about mr. obama's policy on this for some of these policy on that and his answer is, you know what you want to do about it, you want to take your country back. don't ask someone else to do it. that seems like the ride in answer to me. from savannah, georgia,

[cheering] >> thank you, i want to welcome you back to washington dc. these rallies are doing a great job because i promise you without this kind of a grass-roots movement the healthcare bill would have been far worse and it would have been a lot of the land far earlier except for you sending a message. and we watered it down but they didn't get the message completely. ..

i spent a lot of time with tea party people. i have to tell you. this is probably the fifth or sixth time that i have spoken at t party rallies since this began. i have gone to a lot of rallies in washington d.c.. menu you will be home tomorrow. would you -- many of you will be home tomorrow. what usually happens is that there's trash and broken property and property that has to fit -- that has disappeared. but that never happens with the tea party movement. >i can tell you that we will never see that story on network tv. i just talked to a friend of mine who is a liberal and he said don't these people realize 95% of you got a tax cut under

the federal plan that president obama? and i am saying if you believe that then you believe the health care bill was going to give you better health care. and if you believe that you believe that the stimulus bill created more jobs. and if you believe that, then you believe that other countries can sign the nuclear treaty are going to abide by it. and if president obama himself believes that, why doesn't he just walk outside and go down the street and tell you how good his stimulus bill was? [cheering] i have a feeling he will not show up with demand tax simplification. and you know, it doesn't matter what group you are and whether it is fair tax, flat tax or something else, we are united by

the tax simplification. we've got to have it. cow many of you pay to have someone fill out your tax forms? now how many of you do it yourselves? i've got to tell you for those of you who did yourselves, god bless you but i'm sure it took hours upon a worse worth of your time that could have been spent building a better america. we need that simplification. we need tax reductions and we need tax fairness. you know, there is a consensus right now people don't realize. 131 million people today will file tax returns. 48 million brough have zero tax like a buddy. 38% of america right now does not pay taxes.

i believe and tax fairness. i believe we will have a better country where everyone has at least a little skin in the game. [cheering] that doesn't mean that we want to fill up and push you on down. we are a compassionate country that wants to help people but we also want you to help yourselves. [cheering] we need tax fairness and we also need to be concerned that this administration just a few blocks from us have signed off on the largest deficit in the history of america. $1.4 trillion. i've got to tell you we spent too much money.

we did a lousy job. but 12 years of republican deficits are still smaller than one year of the obama deficit. that's why you are here today. we cannot continue with their it is democrats or republicans in power. we've got to reduce spending and have tax fairness. we've got to have tax simplification and have grassroots involvement all over the united states of america. i don't join the national media be fearful of the movement. i embrace it and say america wants to be involved with the government. we want to be accountable for the government. and i want to say this. i've been in the united states congress for a while and we've

got a lot of great people who have come that perhaps there's not one members captured the heart or than the next speaker and she has been criticized for its and why has the media criticized so much? because they are afraid of her. ladies and gentlemen, let's welcome her. [cheering] >> hello, everyone. [cheering] thank you for coming isn't it

interesting how the freedom is so attractive? [cheering] you look happy to me. you don't look pingree. that's because you get it and you are smart enough to get off your couch and do something about that so this november what do you say let's take back our country. [cheering] how many of you think we are going to do it? i know we are going to it is all about this coming november. we have to take the house and the senate and two years from now barack obama is a one-term president. and we are not just sending anybody to washington this november, we are sending constitutional conservatives

this november. [cheering] and we are going to allow the most courageous, the strongest constitutional conservatives that have set in the presidency since abraham lincoln and george washington. it is so unbelievable to all of us as we have watched what happened over the last 18 months. to the history of the country, our private economy has been private. that seems normal, doesn't it? but what have we seen the last 18 months? it began unfortunately under the republican president with a 700 billion-dollar bill out -- bailout of voted against. that began the process of the federal government of private

industry. if you want a michelle of american history the last 18 months it is the federal government people of one private industry after another. they started by taking over the bank's, citibank, bank of america. then they bought aig, the port about $180 billion. they are still not done. then they bought thready and fannie. you know the federal government now owns over 50% of the home mortgages in the country today? if you go to buy a home mortgage today, nine times out of taking your mortgage is coming from uncle sam. also chrysler, gm, that also came out of the bailout money. and then there was the taking over of the student loan

industry and health care. [booing] and 14 different tax increases in the health care bill. you add all of that together now the federal government owns and controls 51% of the private economy. [booing] and for some reason, which is beyond me, these people that are run in washington, d.c. seem to be perfectly content with presiding over a decline in our economy. it doesn't seem to bother them. in fact, they want more of it. it's not enough for president obama. he wants another 8% of the economy because he wants to control enemy. he wants to tap and tax bills. [booing] she's got another thing coming,

and he's not going to stop there. he wants to own and control the financial services sector. they think they are going to pull one over on us because everybody is upset with wall street. they think they are going to make the republicans try on this. i am here to tell you this financial service overhaul that president obama has is a permanent bailout authority for the government for wall street and the big bank. that's what president obama, speaker pelosi, harry reid want to serve to you. i think they don't realize that you are iq scores are well above average. we are on to them. we are on to this government and we are not going to let them have their way. they don't get to take over any more of our economy. we are done with that game.

and if they want to believe they are the be all and end all the know better how to run our lives that we do then of course the need to have money to pay for it. but guess what lesson we just learned, government doesn't have money. they don't make money it is all of us, the private economy. we are the ones that make the money. we are the ones that are the producers, they are the consumers. they consumed what we produce and i see it is time for these little piggies to go home. [cheering] this nov that is where they are hit. so we are going to take all of our energy, all of our

happiness, all of our enthusiasm and we are going to work positively to defeat their agenda this november. [cheering] i just found out this morning that i am the number one target for yet one more extremist group to defeat this november. and so we need to have your help for candidates like me who stand up for you and we need you to take on some of these bad guys and replace them with people who listen to do and who love the freedom that we cherished that we are never going to give up because we are the tea party movement. [cheering] what was it about in boston? it was about the people who pay the tax saving this far and no more. that's what they said and that

is what we are seeing here in d.c.. this far and no more. thank you for being here. remember it is all about november. it is all about november. god bless. god bless united states of america. thank you. [cheering] [chanting "usa"] >> usa, the three most beautiful letters in the alphabet. i would like to introduce to you a mild dennis from minnesota who's become one of the leaders from the united states on a fair tax movement. help me welcome from the state of georgia representative john.

[applause] >> thank you. thank you for being here. yesterday morning on the floor of the house democratic leaders said in a very serious statement this administration cut taxes more than any administration in the last years. [booing] and you heard the president say as recently as a few weeks ago the trillion dollars stimulus bill was 50% tax cuts.

we are grateful in america who we represent here knows the truth and the truth will set us free. [cheering] and some of you know i am the author of the fair tax bill. and you will soon hear from dick armey. both of us agree on one thing. the system we have today is broken and must be fixed. we also know from the 18 years and house we also know this town

which has so much influence over this process is invested in the tax code. i was giving a talk down town to a large lobbying group of two years ago explaining that the fear tax would get rid of the irs and one of them who i knew well said just give us a few more years. they make their living off the tax code and all of us are here today on either side to say the code must go. i did an interview yesterday. i am retiring this year. [booing] and i was asked what would happen to the movement and i said tax reform is way bigger than me. and the people who show up by

the thousands and thousands across this country are an example of that. we knew from day one your not cui to change the tax code from washington. you're going to have to move it through the grassroots first. and you are doing that. [applause] please, we know that we hear from the towns lobbyist everyday. but we really listen to the people in the district. and if you folks will go back to your district and talk to everyone running about fundamental tax reform and sorting out this code and getting something that is simpler and thorough and honest and free we will succeed. i knew a very long time ago i've

been on the ballot every other year at the state of the federal level since 1974 and sometimes it is time to move on but i knew a long time ago that no one who speaks from the stage today is going to change the world. no one who speaks from the stage today is going to drive change. that comes from you and it comes from you over and over and over again. and i know for a fact that you will change the world. [cheering] does anybody here remember ronald reagan? [cheering] when he ran and was elected president he turned to you and said we have great challenges ahead but with your help and god

we shall see. the next eight years you and your neighbors, not me or anyone you know what here, you and your neighbors created a formula of new businesses. you read your neighbors increase the contribution to the federal government from $519 billion in 19801988. you increased contributions to strangers, people you've never met through charities from 43 billion to 88 billi we learn from that that this is a great nation, not because of cred political leadership, but because, in a free america, ordinary people do extraordinary things. if you will continue this charge and continue this battle

to the end, you will do it again. you'll get the tax code simpler, fairer, and freer. when you do that, my grandson's, thomas and john and matthew and philip, will say thank you as will live. thank you. ." >> at the heart of the corruption of our tax system is the ways and means committee. i want you to imagine the kind of courage and character it takes for the man you just heard, john linder, to stand up everyday for fundamental tax reform when he is on the house ways and means committee. thank you, john linder. [cheers and applause]

i to do that, in past years, we have been divided within our movement on the best way to fix this broken tax system. something wonderful is happening here today. erful was happening today. we are all coming together. we have different ideas on what is best. we are all passionate about it but we are more passionate about saving our country. five years ago you would not have seen dick armey and i on the same stage because our passions for solution run strong but before our house majority leader who hails from texas in the great state of texas, dick armey, is here today to talk about our unified cost. dick armey, a great american. [cheering]

>> you know, i'm looking on the comments of our sense of unity. don't you think having a chance to choose between to get ideas is better than being a slave to a bad idea? [cheering] the first thing we have to do is get rid of the bad idea. let me just give you a few observations. one, there is only one of legitimate reason to levy the task and that is to raise money. when you do that you should raise no more money than is absolutely necessary to pay for it as you go only the minimal necessary duty of the government. [cheering] and if this crowd in washington but understand that principle we would cut the size of the government to one-third of what it is today.

[cheering] and they could concentrate their attention on doing what they must do well with some degree of effectiveness and more importantly, effectiveness instead of squandering the the liberty of a bunch of their silly whimsical spending programs that are more about themselves and that this great nation. now going back to my point about the only legitimate test of the tax code is to raise money. this tax code that you are living under today is an abomination of cubans. principally because of two principal corruptions. the first is the audacity they have and believing they should use the money to control your behavior. they call the social and engineering. and the problem with social

engineers is they never have the ability to recognize their failure. so the difference being an engineer, a real engineer knows when he fails because the rage boils down. these words involved in social engineering know that you ought to act as if they think you might should act and you have to say who in the heck he win charge. reminds me of mr. big shot who do you feel you are. now the second audacity that corrupt the tax code is the notion they ought to redistribute income what did. i live by the notion that we can never legitimately use the power to do for ourselves what we cannot do legally on our own. and i can't steal your money and

give it to this guy. therefore i shouldn't be able to use the power of the state to steal your money and give this guy the money so i can get the granite. that is called income redistribution. [cheering] i was on a tv show one night with a leedy that felt that because she thought it was a good idea for her to be part of the crowd in charge of stealing your money to give it to that person. she had a sense of social justice. i said i have a sense of social justice, to back. my sense is if you earn the money you have a right to keep the money. [cheering] now how crazy is that? my final point, i have been warning us for years when the democrats get the majority of

the house and the majority of the senate and the white house, they are not going to give you the flat tax or the fair tax instead of this current abomination called the income tax. they are quick to give you the sales tax or flat tax in addition to it. [booing] and they have said it for one strategic reason alone. they can hide that tax from the people who pay the tax. that is the only basis by which is you could get away with putting taxes on people and then blaming the butcher. so this is where we must first rule the line. we cannot allow them to double tax by adding this tax to this abomination. once we stop that and let's fix this tax code and make it a

servant of america rather than you being servants to it. thank you. [applause] >> dick armey. [applause] he is an army of one and more than an army of many. and speaking of many, all of us here today don't let this feeling donner. in addition to all of us here today people in the media say how many. more than a quarter of a million. [cheering] all of us here today, 270,000 tax revolts. [applause] this doesn't end today. this begins today. [applause] we will march across this

country to every. we will form an army of sentiment, a people's army that they will have no choice but to listen. mark williams, come on not of. stat ladies and gentlemen from hollywood one that is worth something, somebody that is worth something and there's a, david of the late network. >> hello, everybody. before i go on i want to say one thing. i first generation, such a proud american jew and traveling up across the country with the tea party express i've noticed signs of support of israel. i want to thank you so much it's so important. thank you.

[cheering] it means the world. you have no idea. from even the crazy leftist once. thank you. listen up, are you sick and tired of hollywood speech really and portrayal of american values? [cheering] all right. i've got news, not everybody in hollywood is a crazy leftist. you guys are familiar with the great john foia, right? [cheering] weld my friend aid partner kelsey grammar is also a good one, right? well guess what we are starting a new conservative network this summer. [cheering] it's about time. how come i don't think of these things? i don't get it. all right we are doing a promo shot of each party. i need you to help me out.

it's very simple. i need you all to say right network of that's right with a world in unison as long as you can. ugly, young, look, everybody. together. here we go. listen up guys, one, two, three. [chanting "right network right now"] if you want to find out more go to rightnetwork.com. take a look of the programs we have in production right now. we want your opinions. this is a tv network that is going to be about us. it's not printed in a great american values or people of religious faith. it's not going to denigrate the military. it's not going to denigrate bothers and husbands. thank you, god bless you.

[applause] one quick moment here we have the gold star mother debbie lee going back to iraq to visit the camp came after her son in ramadi. god bless the veterans and those who've made the sacrifices. they've laid down their lives for what we are fighting for. we will not let them down. i brought along a couple of folks from hollywood with me. from home improvement he played denney in the hardware store. [applause] >> come on, give me a nice round of applause.

god bless him. i'm italian, i get nervous. we always get killed when we are eating in a restaurant. i hate that. it's good to be here in washington. i've got family. oliver these buildings. i get to visit them today. that's nice. any home improvement fans? [cheering] im tim allen, how are you giving? i played denney in the hardware store for five years and i know as soon as i open my mouth it is obvious i'm from alabama. [laughter] i grew up in the witness protection program. actually i grew up in a neighborhood of new york city where we had a lot of crime but no one ever stole or hurt anything and a matter how you got killed it was always a heart attack. you could throw a guy off of a 30 story building and i don't know, it looked like a heart attack. a by leaving here with an ice pick sticking out the back and the cops is what happened. i don't know, officer, looks

like a heart attack. he brought his chest and fell on it 17 times. i didn't see nothing. you ever notice i talions we weblog galt? because if somebody gets killed we are ready. two weeks ago i looked at the coffin and was nobody in it, just the hand. the widow is crying. i said what happened? she said hart attack. i said what was wrong with him? i come from a genuine italian family. you know the type of father. books like this, burping and fording. how are you doing? shot up. that means i loved you in an italian. shut up. good hard-working man my father, never did good in school. one year we were in the same

class. every guy in this college went to [inaudible] one time the teacher asked months father who shot lincoln. i said don't look at me. [laughter] i don't know nothing. it was a heart attack. i in cracking the up. one time my father wants to take me at my brother's hunting i'm like so this little deer comes near me and my brother. my father starts punching and kicking it. that really scared me because then they threw us out of the zoo. [laughter] the next time you go to sea world, bring a fishing pole. where are my catholic friends? where are my catholics? [cheers and applause]

i will make you all feel at home. b 14. i went to a tough church, our lady of i will break your face. my church was so tough that our nuns were meant. -- our nuns were men. if you did not know that -- you did not kneel down and pray to god in my church unless someone was covering you. i don't know, it looked like a heart attack. we have so many sins, our conventional had an electric chair. somebody give him a pillow, please. where are my veterans in the crowd. if you're a veteran, raise your

hand. raise your hand. [cheers and applause. ] -- cheers and applause] let's hear it for the real heroes. [cheers and applause] i was in the craziest -- i was in the service eight years, postal. nobody was not your famous. lagat the privilege to go to iraq to perform for the troops for eight days. it was my honor to be there and it was hard. it was 120, 130 degrees. i lost 10 pounds in eight days. my wife wants to go now. [laughter] but you know what, what became gambling kind of guy. i was on american airlines flight 5050. i call the airlines to you have anything with better odds? what about flight 9010.

when is that coming in? but i think the we've been looking for this guy eight or nine years. what better letters they miss, ten put full with a target with oliver technology we can't find this guy? let me tell you something. if this guy owns my uncle dominique a few dollars. [laughter] they would have found him in three days. he would have went to the president, give me a buick, some duct tape and i will take my own guys. [laughter] in the paper bin laden, heart attack. laughter koza we are going to vote these people out? [cheering] what happened to congress? i don't know, looked like a heart attack. [laughter] i'm proud to be an american and you guys make me proud to be american. god bless america. god bless america.

thank you. [applause] my web site is hahajim.com. all the money goes to charity. 100%. my wife's name is charity by the way. god bless. >> folks we are on the offensive radio talk shows, using a social networking, the world wide web, and one of the most effective world wide web sites helping the cause is an outfit called resistance, part of grass fire and adjoining from resistance crossfire is dewal. >> [inaudible] [cheering] my voice is kind of going through this is like day 21 on

the expressed or. we are honored to be a part of this. it's been an awesome experience to see so many lovely patriots across the country. we are all united by the important thing we are americans it doesn't matter if you are a democrat, republican, independent, libertarian. it matters that you are an american. a grass fire was started in 2001 by steve elliott and it was an opportunity for him to start an organization called the internet based e-mail based where he could send a message to you when you signed up you could then sign a petition or back your representative and we would deliver those to congress. the last nine years millions upon millions of petitions have

been delivered by our organization on behalf of the american people through the senate and house. just before the health care bill was passed people from all over the great nation signed petitions and we delivered over 1 million petitions telling them we don't want. but they didn't listen. and today as a matter of fact that the capitol, your message again opposing, giving your outrage, expressing your of rage 6,000 letters of your messages were delivered today. [cheering]

we are not going away. [cheering] we are here to stay. this is our country. this is our country, folks. , chris, can you hear us? this is our country? [cheering] so last year the day before the march on d.c. i happened to have the pleasure of being one of the national coordinators on march. we've let this house and you see some being flown on out here. they say flat this house 2010. [cheering] because we have got to flip of the radicals and the rhinos in the party. it is time for them to go. they are not listening to us, they don't represent us. we want them out. simple as that.

i want to give you our acronym for the flip this house program. the first letter is f. [laughter] okay. we won't go there. the first letter is f. fix this government. the second letter is pig book. limit taxes. we have got to abolish the income tax and get rid of the irs. they need to go. the more money they have, the more they feel they are entitled to use it however they want and they've got to stop that. i impose term limits. spending 40 some years waiting for one of them do have a heart

attack. before they get out of there to replace them has got to change we need to impose term limits and finally p, purge national industry. we are a free-market capitalist nation. we are not a socialist nation. we are not the socialist state of the united states of america. we need to take the country back, folks. i want you to do me a favor and i want you to tell me today will you make a commitment, number one, will you go to resistnet.com and i know some of you in the black can't see this but it's a blue and it has a capital that says flip this house. if you click on that you can sign a petition that says you will stand for the principles. can you do that? [cheering] second, will you both in your

primary election this year. third, will you take every measure to educate everyone you can between now and the general election on what it means to foot this house. i knew you would. finally, will you take someone with you that may not be able to get there otherwise and will you show up and vote in the general election in november [cheering] you guys are awesome. [cheering] i am proud that i would be like you standing in my living room yelling at my television throwing things at it and now i'm up here sharing this experience with all of you it goes to show we are regular americans sick and tired of the bureaucracy and the people not listening to us and we are going to flip this house. let me hear from you.

flout this house. [chanting "flip this house"] god bless you and god bless this effort. [applause] >> tea party express resistant. another great american voice. you learned when you're a kid is a quilt. it's not one color, it's not one thread it is 1 million threaded together for one idea. we the people. we are going to have to speak up and make it happen. the funding fathers all governments take power into themselves.

is it ideological? know it is human nature. that's why they built in all of the checks and balances. how many of those checks and balances have been he raced? are the state's the equal of the federal government? no. are the people and the majority being listened to? no. we have to make it happen. the founding fathers never said by the people would be done by someone else. it is done by us. it is a citizenship and one of the guys, a very bright young man, and nice fellow who is working on that put it together on his own the contract from america rye iain, contract for america. [applause]

it is a grassroots bottom-up contract from the people to the politicians. people were able to submit ideas, hundreds of thousands of people submitted thousands of ideas. they debated them. they are a series of surveys that narrow them down to 21 and there was an online vote over the past month and a half over which 450,000 votes were cast. what i can tell you is a fundamental tax reform is in the contract from america and it's in the contract for america because everyone knows their tax, flat tax, simplified tax code supporters this system does not work. the people are sick of it. we are sick of it and over and over again in the commons on the site on contract from american

bald, in the bald postings and in the boat it is very clear with the people want and what they are not listening to. they are not listening because of the special-interest and the like so the demand for fundamental tax reform. so i want to thank everyone and i hope everyone goes to the site and supports the contract for america we are on feeling the full list to might as the leader rally and we strongly i want to thank bet party patriots' leading this effort as well as fair tax which is a coalition partner and americans for tax reform in a series of other groups and hundreds of tea parties around the country which are unavailing the contract today at the local rally. this is a grassroots up from the bottom-up i hope he will choose to be volunteers in this effort to meet the congressman and candidates signed this document and to say you are listening to us now. it's not the other way around. thank you.

[cheering] have you noticed some times when the speeches from a long it is music that can touch your heart? well we've got one more up here on this stage and then afterwards i don't want to forget for a cloak of the west lawn of the capitol there's going to be a microphone fair taxation is putting on an instant tea party. you've listened to us. if you want to have your own voice at 4 o'clock go to the west lawn of the capitol. tonight is the washington monument. it's going to be another get together starting at 6:00 and that's going to be able closer to the party also you're going to hear some of the same things there. but in the idea that music can move the seóul and inspire people i want to introduce the

next and the last on the stage before we s i want to say thank-you to each and every one of you here, to each and everyone of you on line, to all of the americans in hometowns across this nation who make this country so great. thank you all. please give a few minutes' attention to politic. tell us how our constitution has changed. >> hello, america a want to thank each and every one of you for showing up today. it is peopled just like you who showed up last summer in downtown waco to protest cap and trade. i am a youth minister. when i walked up to the week -- to the wake goatee party, they did not turn me away because i

am of mexican descent. they did not turn me away because i live in one of the lowest income committees in waco. they welcomed me in. they encouraged me. since that time, i have read the declaration of independence, the constitution of the united states of america, founding era documents from our founders and i have learned and learn and learn. . relearned and i see today how big governments, socialist programs are destroying my community. [cheering] so we have some mainstream mainstream and others who want to marginalize the tea party movement. they want to marginalize this patriotic movement so my simple message to them, marginalize this.

[cheering] that was the cue. music. the collis extreme. >> i'm not angry with the rapper with his pants pulled up. ♪ ♪ limited the government the only solution ♪ ♪ the only foundation should be the constitution ♪ ♪ the tea party movement we are not involved in ♪ ♪ not a race thing speeding you hear that often ♪ ♪ don't believe the liberal spin ♪ here's where it begins ♪ 1776 the declaration written by the founders that formed a

new nation ♪ ♪ but wait some didn't like it through the years they've been working through ♪ ♪ ever since 2009 the days have returned ♪ ♪ so the people can run and what does have a tea party ♪ ♪ what happened [inaudible] the walls of the congress and senate are seeking ♪ ♪ this is the revolt when you wake up a free nation ♪ ♪ that's the tea party ♪ that's the key party. promote free-market ♪ ♪ that's the tea party. limited government the only solution hour only foundation should be our constitution ♪ ♪ so they chose to hit the streets. let the waco team pretty active eight me ♪ ♪ grassroots means from the bottom to the top ♪ ♪ communities to the top we point out the way don't let us see you lost we are turning out the votes that the money can't buy ♪ ♪ we've turned it into a campaign revolution ♪

♪ tea party here tea party there ♪ the tea party movement to run it their ♪ ♪ they cannot penetrate the truth ♪ ♪ 2010 the truth ♪ we don't care of you are a d or r ♪ ♪ let liberty prevail i dedicate my life is standing up for freedom for my babies and my wife ♪ ♪ that's the tea party ♪ limited government the only solution hour only foundation should be our constitution ♪ ♪ promote free-market ♪ that's the tea party ♪ limited government the only solution ♪ ♪ our only foundation should be our constitution ♪ ♪ politicians in washington blemished career politicians will be finished ♪ ♪ vote before the freedom 2010 ♪ trust me [inaudible] tea party muscle we are coming together like cards when you shuffle ♪ ♪ at jolie fisa lane 123 ♪ every state in the union is

breaking up t. ♪ ♪ they thought they already won now we are bringing out the young workers ♪ ♪ but as the tea party? that is a great question ♪ ♪ they all can quit dancing sweet and we are the people american blood ♪ ♪ we bought them and trudged through the mud ♪ ♪ we won't grow we really and we won't be shy ♪ ♪ this is a responsible to party ♪ promotes free market ♪ that's the key parties beaten limited government the only solution ♪ ♪ oral the foundation should be our constitution ♪ ♪ this is the responsibility ♪ promotes free market speeding that's the key parties the ten limited government the only solution ♪ ♪ and were only foundation should be our constitution. [cheering] i want to thank each and everyone of you for making a difference in my life. the tea party movement transforms the way i do ministries, transform the way i

operate and by standing up for my babies. this is my wife, michele and my daughter. [cheering] we will be passing out stickers. you can watch these light on teapartypress.tv. if you want to see a video shot from the tour, the tea party expressed, quote to www.youtube.com/rightnetwork. god bless the tea party of that. [cheering] >> all right, ladies and gentlemen. we have come to the wrap up of this great rally. 10,000 people here at least. 270,000 online, and if i can take one moment for something

personal i'm driven to get a better country to my children than the one i inherited. [cheering] jack 14-years-old, henry, my beautiful sons with a little help from our friends, you're going to get a better country than i inherited from my parents. now let's sing together. jack and henry i love you. let's sing together god bless the usa. everyone together now. thank you. [cheering] ♪ ♪ ♪

[inaudible] florence welke, everybody. who thought they would be singing rap songs today? all right. did the sound by have a heart attack? >> i have black on. i'm not ready. [laughter] >> let's just sing god bless america. ♪ god bless america ♪ land that i loved ♪ stand beside her ♪ and guy her ♪ through the night with a light

from above ♪ ♪ from the mountains to the prairie ♪ ♪ to the oceans white with foam ♪ god bless america ♪ my home sweet home ♪ god bless america ♪ my home sweet home [cheering] ..

>> thank you all again. safe travel, and god bless america. [cheers and applause] on >> coming up on c-span, federal reserve chair ben bernanke on the u.s. economy. also, the weekly addresses with president obama and rep house

whip, eric cantor. later, alec ross on how the department wants to use technology to advance diplomacy. >> tomorrow on "washington journal", unemployment, for closure and bankruptcy numbers in the 50 states. former new york governor george pataki talks about his political future. and after that, thomas defilippo, president and c.e.o. of the international children's services on the problems potential face on international adoptions. plus, your emails and phone calls. "washington journal" live sunday at 7:00 a.m. eastern on c-span. >> the vetting process has begun for a new supreme court justice. use the new c-span video library to find background

information on possible nominees, including michigan governor, jennifer gran home, janet napolitano and other names reported by the media. search it, watch it, clip it and share it. every program since 1987. the c-span video library, cable's latest gift to america. >> and now, a hearing with federal reserve ben bernanke, where he announced his expectations for growth in the economy and for unemployment to improve significantly in the near term. this portion is just over two hours. >> the committee will come to

order. and in order to have time for questions, i'm limiting opening statements to the ranking member, senator brownback for five minutes, and the vice chair and mr. brady for three minutes. and i would also like to ask for unanimous consent to accept written statements of members into the record. america is on a path toward economic recovery. a large part of the credit for this turnaround is due not only to president barack obama, but also to ben bernanke, the chairman of the federal reserve, a respected scholar on the great depression. under his guidance the fed took creative and effective actions to inject liquidity into our financial system, which saved owe nation from economic catastrophe. i am confident that you will continue to steer monetary policy at the fed carefully through the next set of obstacles, balancing the creation of robust economic

growth with the prevention of inflation. our hearing today on the economic outlook is timely for many reasons. just this week the committee on economists responsible for dating the end of recessions announced that recovery is still too fragile to announce that the recession is over. but there are indications that we are indeed well on our way to economic recovery. after four straight quarters of negative growth, the economy grew during the last two quarters of 2009. there is a consensus that when the latest g.d.p. numbers are announced on april 30, we will see that our economy continued to expand during the first quarter of 2010. the most recent employment report showed that 162,000 jobs were created in march. with 3/4 of those jobs in the private sector. manufacturing employment was up

for three straight months. the stock market is at its highest in almost 15 months. temporary help, a leading indicator of the health of the labor market, has added 313,000 jobs since october of 2009. sales of cars and light trucks were up in march, and many surveys of the economy are optimistic about growth in both the service and manufacturing sectors. these improvements in our economy are proof that actions taken by congress, the fed and the administration have started to have a positive impact. in the last year, congress enacted policies that supported struggling families and encouraged job creation. the reporter act provided tax relief for 95% of american families and created jobs while investing in clean energy, infrastructure and education. last year we extended the 8,000

first-time homebuyers credit that will spur construction jobs. we extended a host of safety net programs that will help struggling families weather the economic storm. we extended the net operating loss carryback provision that will help small businesses hire new employees, and we are boosting funding for small business loans via the small business administration. we passed the hire act to give tax breaks to businesses that hire unemployed workers. without these measures, the depth of the contraction would have been much deeper and far longer. although the recent estimates of the cost of the bailout of the financial system are much lower than initially expected, the true cost of the financial system failure in terms of lost employment and pain to working families is immeasurable. much of the budget deficit over the next 10 years should be attributed to the financial crisis. economists have estimated that

the budget deficit has increased by $3.1 trillion due to decline in revenues from the long line of workers who have lost their jobs. while we have come far in stabilizing the financial system, we would like to hear your thoughts on various reform proposals that have been introduced and are being considered before congress to make sure that the financial institutions don't take on excessive risk and have appropriate capital requirements. we also look forward to hearing your take on upcoming challenges, including the housing market. one important factor in the housing market's current recovery is the low mortgage interest rates that were sustained by the fed's purchases of mortgage-backed securities and fannie and freddie date. now that the fed has completed those purchases, we would like to hear your assessment of the housing market and the impact of the fed's exit on mortgage

rates. on the other hand, i am grateful for your leadership in ushering in new rules to prevent unfair or deceptive practices with respect to credit card accounts and the rules the fed put in place to curb excessive overdraft fees. we thank you for your testimony today, chairman bernanke, and look forwarded to working with you as the committee continues to focus on helping our economy recover and expand. thank you, and the chair recognizes mr. brady. >> thank you, madam chairman. i'm pleased to join in welcoming chairman bernanke to the committee. although i disagree with the fed's participation of the bailouts of a.i.g. and bear stearns, because these institutions were insolvent, the fed's timely action led to illiquid financial institutions and prevented the financial panic from becoming a depression. during the spring of 2009, the

stress test and subsequent capital increases restored confidence in financial institutions and markets. largely because of these decisive actions, the u.s. economy is now beginning to recover. however, the recovery will continue to be subpar as businesses delay critical hiring and investment decisions due to the uncertainty generated by president obama and congressional democrats to increase taxes, raise energy prices, enact job regulations and incur a dangerous level of debt. i'm concerned the bank examiners are exacerbating real estate problems through their inflexibility. pressed by regulators, community and regional banks are not renewing performing commercial loans, even though their underlying cash flow with service the debt. i'd like to share my concerns about monetary policy going forward. we're in danger repeating mistakes produced by inflation

in the 1970's. because of the lag time between monetary policy decisions and their effects, the federal reserve must act to prevent inflation well before the public perceives that prices are rising. if there are voices demanding the federal reserve delay action. recently an economist advocated keeping the if you had ral funds rate extraordinarily low, even as prices rise to reduce the unemployment rate. the tradeoff between inflation and unemployment has been thoroughly discredited three decades ago. price stability contributes to economic growth and only the federal reserve can maintain price stability. my concern is that the administration officials may press the federal reserve to delay raising interest rates then winding the expansion of its balance sheet to cover for the obama administration's anti-growth policy. taxes, especially on small business and investment, are about to soar, as the 2001-2003

rates expires and the funding of the president's new health care plan. additional costs are lurking in the form of regulation to control greenhouse gas emissions and complex cap and trade legislation. despite these tax increases, the c.b.o. projects that higher spending on the president's budget would create deficits of $9.8 trillion over the next 10 fiscal years, spiking publicly held federal debt to 90% of g.d.p. by 2020. unless congress controls federal spending, these deficits will crowd out private investment and slow our economic growth. chairman bernanke, i urge you to resist any attempt to delay raising interest rates in order to offset these anti-growth policies. regarding financial services legislation, i am concerned about weakening the fed's independence and perp pep yating the status of -- perp it

yating the status of fannie and freddie, stripping the supervision of smaller banks which would weaken the federal reserve banks and undermine the fed's independence. moreover, diverting the fed's profit from the treasury to pay for the consumer financial protection bureau would set a dangerous precedent that would open the floodgates for other off-budget federal spending. this caused large financial institutions, especially fannie and freddie, to take excessive risks and inflate a huge bubble in the housing market. the senate bill would establish a permanent bailout fund for large financial institutions that may exacerbate this problem by identifying who the government regards as too big to fail. incredibly, the senate bill does not provide for final resolution of fannie and freddie, despite costing taxpayers $128 billion so far with no prospect for any recovery. like walking zombies, fannie

and freddie, with their explicit government backing, are frightening most private capital away from re-entering the housing finance. we have a lot of challenges before us. chairman bernanke, i look forward to your testimony. >> thank you. senator brownback. >> thank you, madam chairman. i appreciate it. chairman bernanke, welcome. good to have you here. i'd ask that my full statement be put into the record as if presented. mr. chairman, i really do look forward to your testimony today. seems like to me we've got some giant issues. you're used to large problems to be dealing with, and we continue to have them. it strikes me that the fiscal policy in the country is one that must be commented on, with its impact, its possibilities, problems down the road. i get very concerned about the very real prospect of a government bubble being created. we've come through the dot-com

bubble, the housing bubble, and i'm very concerned about us having a government bubble. how is it that we can ease through this period of time, which is something you'll sure that you and the staff of the federal reserve is something that you're talking a great deal about. one of the issues that i would hope you'd consider moving forward is the makeup of the fomc committee on monetary policy. a lot of us from all over the country were impacted by monetary policy. the federal reserve in new york has a permanent seat on that. is that truly reflective of the diversity of views across the country? some of the issues i've been looking at and researching is, should that committee be broadened out on its representation of federal bank chairmen on the fomc committee? and it's something that we'll be presenting. several of us in the congress have joined on to a bill to press on china to allow its exchange rate to float.

a number of us feel that the artificially holding down of the exchange rate has been a major impact on the u.s. economy and doesn't reflect current economic realities, adds to the permanent feel of the imbalance between us and china on trade. and one of the things that should happen when you have a trade imbalance is that currencies then should be adjusting to reflect that under basic economic theory. and yet, the chinese government doesn't allow that to happen. that has a big impact on the prices of goods coming into this country. it has a big impact on us exporting to china. it has a big impact on other countries around china are fellow -- that are exporters as well. and it seems to a number of us if the chinese are not going to allow this float to take place, that we should be forcing this through trade policies, through the possibility of sanctions. this would be something i'm sure you probably don't want to be drug into, but it's going to

be something that will probably land on your doorsteps as well. those are the big issues. plus, i would hope, in looking at interest rates down the road, that it seems to me it shows strength in our economy if we're able to start saying, you know, we should allow these interest rates to move up a little bit, that we think the recovery is moving forward, that we're getting to a stabilized point, that it would show some strength and resiliency if you allow those interest rates to start edging upward. that's something that obviously is on your plate and you guys have to decide. but looking at it as an outside observer, seems like we might be at a point that that would be a wise move and one that would show strength and get maybe some of the fear out of what may happen in the future. it's more like, well, we think

things are moving forward and we want to get away from this bubble, fiscal and monetary policy and start to ease off the pressure on that in a slow and prudent fashion. chairman, i thank you for the hearing and i look forward very much to your testimony, chairman bernanke. >> thank you very much. we expect senator schumer to join us. he has a conflict with his committee work. when he comes, we will recognize him. i would now like to introduce chairman bernanke. dr. ben bernanke began a second term as chairman of the board of the federal reserve system on february 1, 2010. dr. bernanke also serves as chairman of the federal open market committee. the system's principal policymaking body. he originally took office as chairman on february 1, 2006, when he also began a 14-year term as a member of the board. dr. bernanke was chairman of the president's council of economic advisors from june,

2005, to january of 2006. prior to beginning public service, dr. bernanke was the class of 1926 professor of economics and public affairs at princeton university. dr. bernanke had been a professor of economics and public affairs at princeton since 1985. welcome. we look forward to your testimony. >> i'm pleased to be here today. supported by stimulative monetary and fiscal policies and the concerted efforts of policymakers to stabilize the system, recovery seems to have begun in the second half of last year. an important impetus was firm success in working down the excess inventories that had built up during the contraction, which left companies more willing to

expands production. indeed, the boost from the slower dradown in inventories accounted for the majority of the sharp rites in gross domestic product, during which real g.d.p. increased at 5.6%. with support from fiscal policies set to diminish in the coming year, further economic expansion will depend on continued growth and private final demand. on balance, the incoming data suggests that growth in private final demand will be sufficient to promote a moderate economic recovery in coming quarters. consumer spending continues to increase in the first two months of this year and has now risen at an annual rate of about 2.5% in real terms since the middle of 2009. in particular, after slowing in january and february, sales of new light motor vehicles bounced back in march, as manufacturers offered a new round of incentives. going forward, consumer spending should be aided by a gradual pick-up in earnings,

the recovery from recent lows and improvement in credit availability. in the business sector, capital spending on equipment and software appears to have increased at a solid pace, again, in the first quarter. u.s. manufacturing output, which is benefiting from stronger export demand as well as the inventory adjustment rose at an annual rate of 8% during the eight months ending in february. also, as i will discuss further in a moment, financial conditions continue to strengthen, thus reducing an important headwind for the economy. to be sure, significant restraints on the pace of recovery remain, including weakness in both residential and non-residential construction and the poor physical condition of many state and local governments. sales of new and existing homes dropped back in january and february, and the pace of new single-family housing starts has changed little since the middle of last year. outlays for non-residential construction continue to contract, amid rising vacancy rates, falling property prices and difficulties in obtaining

financing. pressures on state and local budgets, though tempered by ongoing federal support, have led to continuing declines in employment and construction spending by state and local governments. as you know, the labor market was particularly hard hit by the recession. recently we have seen some encouraging signs that layoffs are slowing and that employment has turned up. manufacturing employment increased for a third month in march and the number of temporary jobs often a precursor of more permanent employment, has been rising since last october. new claims for unemployment insurance continue on a generally downward trend. however, if the pace of recovery is moderate, as i expect, a significant amount of time will be required to restore the 8.5 million jobs that were lost during the past two years. i'm particularly concerned about the fact that in march, 44% of the unemployed had been without a job for six months or more. long periods without work erode individual skills and hurt future employment prospects.

younger workers may be particularly adversely affected if a weak market prevents them from finding a first job or from gaining important work experience. recent data continued to show a subdued rate of increase in consumer prices. for the three months ended in february, prices for personal consumption rose at an annual rate of 1.25%, despite a further steep run-up in energy prices. core inflation which includes prices of food and energy slod to an annual rate of.5%. the moderation in inflation has been broadly-based, affecting goods and services, with the principal exception of globally traded commodities, including crude oil. expectations appear stable, for example, expected inflation over the next five to 10 years, as measured by the university of michigan surveys to consumers, was 2.75% in march, which is the lower end of the narrow range that has prevailed for the past few years.

financial markets have improved considerably since i last testified before this committee in may have last year. conditions in short-term credit markets have continued to normalize. spreads in bank funding markets and the commercial paper market have returned to near pre-crisis levels. in light of these improvements, the federal reserve has wound down the extraordinary programs that it created to support the financial crisis. the only remaining pam is the loan facility for loans backed by new-issue mortgage-backed securities and that facility is scheduled to close at the end of june. overall the federal reserve's liquidity programs appear to have made a significant contribution to the stabilization of the financial system, and they did so at no cost to taxpayers and with no credit losses. the federal reserve also recently completed its purchases of 1.75 trillion dollars of mortgage-backed

securities and $105 billion of agency debt. purchases under these programs were phased down gradually and to date the transition in markets has been relatively smooth. the federal reserve's asset purchase program appears to have improved market functioning and reduce interest rate spreads not only in the mortgage market, but in other longer-term debt markets as well. last spring the federal reserve and other banking regulators evaluated the nation's largest bank holding companies under the supervisory capital assessment program, popularly known as the stress test, to ensure that they would have sufficient capital and to lend to creditworthy borrowers. the release of the stress test result significantly increased market confidence in the banking system. greater investor confidence, in turn, allowed the banks to raise substantial amounts of new equity capital and in many cases to repay government capital. the federal reserve and other bank regulators continue to

encourage the banks to build up their capital, ensure that they have adequate liquidity, improve their risk management and restructure their employee compensation programs to better align risk and reward. despite their stronger financial positions, banks lending to both households and businesses has continued to fall. the decline in large part reflects sluggish loan demands, and the fact that many potential borrowers no longer qualify for credit, both results of a weak economy. the high rate of write-downs has also reduced the quantity of loans and banks books. but banks have also been conservative in their lending policies, imposing tough standards and terms. this reflects bankers' concerns about the uncertainty of their own future and capital positions. the federal reserve has been working to ensure that our bank supervision does not inadvertently impede sound lending and, thus, slow the recovery. achieving the appropriate balance between necessary prudence and the need to continue making sound loans to

creditworthy borrowers is in the interest of banks, borrowers and the economy as a whole. toward this end, in cooperation with the other banking regulators, we have issued policy statements to bankers and examiners, emphasizing the importance of lending to creditworthy customers, working with troubled borrowers to restructure loans, and taking a careful, but balanced approach, to small business lending. we have accompanied our guidance with training programs for both federal reserve and state examiners and with outreach to bankers throughout the industry. for example, we just completed a training initiative that reached about 1,000 examiners. we are also conducting a series of meetings across the country with private and public sector partners to gather information about the credit needs of small businesses and how those needs can best be met. we've also stepped up our information gathering so we can better understand factors that may be inhibiting bank lending. these efforts included a survey of bank practices and working out loans, the results of which will serve as a baseline

against which we will assess the effectiveness of our supervisory guidance. we are also obtaining additional information on small business credit conditions. for example, we assisted the national federation of independent business in developing a survey to assess barriers to credit access by small businesses. and we are using our own senior loan officer opinion survey on bank lending practices to monitor changes in bank lending to small businesses. in addition to the near-term challenge of fostering improved economic performance and stronger labor markets, we as a nation face the difficult, but essential task of achieving longer-term sustainability of the nation's fiscal position. the federal budget deficit is on track this year to be nearly as wide as the $1.4 trillion gap recorded in fiscal 2009. to an important extent, these extremely large deficits are the result of the effects of a weak economy on revenues and outlays, along with the necessary action that is were taken to counter the recession and restore financial stability. but an important part of the

deficit appears to be structural, that is, that it is expected to remain, even after economic and financial conditions have returned to normal. in particular, the administration and the congressional budget office project that the deficit will recede somewhat over the next two years as the temporary stimulus measures winds down and economic recovery leads to higher revenues. thereafter the deficit is expected to remain high until 2020. deficits at that level would lead the ratio of federal debt held by the public to the g.d.p., already expected to be greater than 70% at the end of fiscal 2012 to rise considerably further. this baseline projection assumes that most discretionary spending gross more slowly than normal g.d.p., that no expiring tax cuts are extended, and current provisions to provide taxpayers relief from the minimum tax are also not further extended. under an alternative scenario that drops those assumption,

the deficit would be 9% of g.d.p. at the end of 2020 and the federal debt would balloon to more than 100% of g.d.p. although sizable deficits are unavoidable in the near term, maintaining the confidence of the public and financial markets requires that policymakers move decisively to set the federal budget toward sustainable fiscal balance. a credible plan for fiscal sustainability could yield substantial near-term benefits in terms, lower, long-term interest rates and increase consumer confidence. timely attention to these issues is important not only for maintaining credibility, but because budgetary changes are less likely to create hardships or dislocations when the individuals affected are given adequate time to plan and to adjust. in other words, addressing the country's fiscal problems will require difficult choices, but postponing them will only make them more difficult. thank you. i'd be pleased to take your questions.

>> thank you very much. the fed's stance is that it plans on, and i quote, "maintaining exceptionally low levels of the federal funds rate for an extended period of time." since there's been a great deal of speculation about the possibility that you might change your mind, let me simply ask you, do you still hold that opinion? >> well, the market committee has stated clearly that they currently anticipate that very low -- extremely low rates will be needed for an extended period. they have emphasized, however, that that projection, that forecast, is conditional on three sets of conditions -- one, very low resource utilization, second, subdued inflation trends, low inflation, and third, stabilization of expectations.

if those increase to hold and we anticipate changes in the outlook, of course well respond to that. but the committee, at its last meeting, issued a statement reiterating that expectation about interest rates. >> and you mentioned certain criteria. are there any other particular measures that the fed will be using to determine when to raise the federal funds rate? >> well, we'll certainly be looking at a broad range of economic indicators to try to assess where the economy is going. as was mentioned earlier, our policies take a while to work, and, therefore, we have to look at the outlook as well as the current situation. so i tried today to give you some sense of our outlook, which is for moderate economic recovery going forward. in addition, of course, we'll continue to look at inflation and look at inflation expectations. we will also look at what's happened in the financial markets. and that was also mentioned

earlier. we want to be sure that financial imbalances are not building. and to the best that we can tell, we've been trying to evaluate that criterion. and to the best we can tell, of course, it's very difficult. we're not seeing obvious imbalances at this point. but certainly it is an issue, and recent experience suggests that we need to be very cautious about that, and we're paying attention to those issues. >> thank you. mr. brownback. >> thank you, madam chairman. mr. chairman, your last statement on fiscal policy, thus running a deficit of 4% to 5% g.d.p., but the more likely scenario is 9% of g.d.p. is the way i interpret you to say that if -- you don't make any of these adjustments, and yet the congress does on alternative minimum tax, that we regularly waive these off. you're saying we're on track to be at 9% of g.d.p. debt by 2020 . are we on a sustainable path

right now on our fiscal policy? >> well, senator, first, let me just say that those numbers are based on c.b.o. analysis and assume that, as you say, that fixes will continue to be extended, as they have been, and that expiring tax cuts are extended and that non-military spending grows as fast as g.d.p. so there's some assumptions about policy. i think it's fair to say that deficits -- structural deficits, longer-term deficit, anywhere between 4% and 9%, anywhere in that range is not sustainable, because it leads to a debt to g.d.p. ratio, which grows indefinitely, does not stabilize, leads to higher interest payments, which then feedback into the deficit. so i think it's very important that we consider how, looking forward -- not this year, because many economic conditions that are moving towards higher spending and

lower revenues -- but over the medium term, as we try to plan our fiscal policy going forward, we need to find a sustainable path, and that would require lower deficits than we currently are projecting, or at least the c.b.o. is projecting. >> are we on track to have the same sort of problems as ireland or some other european countries presently? >> well, we are a much larger, diversified, advanced economy than greece and some of the other countries. but clearly at some point we need to address those balances. we need to make sure we have a sustainable fiscal program that will not lead to indefinite growth in the debt to relative g.d.p.. >> at what point in time does the global financial community say the united states is not showing seriousness -- being serious enough about its fiscal policy, that it starts raising the cost to capital into the united states? >> senator, that's inherently very hard to know.

at some point the markets will make a judgment about really not our economic capacity, but our political ability, our political will, to achieve longer-term sustainability. and at that point interest rates could go up, and that would be, of course, a negative for economic growth and recovery. so we don't know when that point would be reached. and for that reason, i think it's important, even if we cannot balance the budget immediately, that we begin to think about how, in the medium to long term, we can put the federal budget on a sustainable trajectory. >> but it's clear that markets could even anticipate that happening now. >> it's absolutely possible, certainly. >> chairman bernanke, we've got financial regulatory reform bill, which has come out of the senate banking committee. i want to ask you a specific issue regarding the fed in this. my concern is placement of an independent consumer financial protection bureau within the federal reserve, funded by the

fed's ability primarily to print money. do you have views on this stand-alone agency being placed within the fed? >> well, i'd like to understand better how it would work. my current understanding is that the agency would not be within the fed in any kind of accountability sense, that the agency would not be reporting to the board or to the chairman. it would essentially be free-standing, so that means that being within the fed is kind of a vague idea at this point. it is true that the current proposal would involve the federal reserve financing this agency. that, of course, doesn't make it any less costly to the taxpayer. it just means that there would be less revenue remitted from the federal reserve to the treasury. so it's really up to congress how you want to account for and finance the agency. but that particular way of

doing it would lead to less revenue being remitted from the fed to the treasury, because some would be used to support the agency. >> mr. chairman, i want to urge you to continue to speak out about the physical condition of the country. i just -- i think we are in a path that is not a good one at all and that at any point in time the markets could start to react negatively to us on this. and i think the sooner we start to react to that and to show the ability to address it, the better for the country. thank you very much. madam chairman. >> thank you, mr. chairman. i very much appreciate you being here. you have often spoken about imbalances in the global economy and the role that they played leading up to the financial crisis. vice chairman cohen noted in a

speech last week that deficit countries like the u.s. need to rely less on consumption, but surplus countries like china, must increase their domestic demand if the global economy is going to thrive. which brings me to my first question -- it's clear to me and many experts agree that china's policy of keeping its currency pegged to the u.s. dollar helps to perpetuate the imbalances in the global economy by subsidizing even more chinese exports at the cost of increasing american exports. it makes us too much of a consumption country and china, too much of an exporting country and not enough of a consumption country. this has a direct impact on american jobs now. just about everyone i speak to admits that that's the case. when lindsay graham and i started out on this five years ago, everyone was saying, oh, please, just go away, we're not. so if china appreciated its currency and moved to a

free-floating exchange rate, it would do more for jobs here in the u.s. than any single stimulus program we could pass into law. and now we have combined our currency reform bills into one. we intend to push for action on it in congress. first question dosh agree that china's policies contribute on harmful imbalances and was one of the causes of the worldwide recession? >> yes, i broadly agree with that. i think most economists agree that their currency is undervalued and has been used to promote a more export-oriented economy. i think it would be good for the chinese to allow more flexibility in their exchange rate. it would give them more autonomy in their monetary policy, so they could address inflation and bubbles within their own economy. and i think that they should combine -- it would be in their interest also to combine a more flexible exchange rate with other efforts to increase domestic demand and consumption and achieve a more balanced

economy. i don't think the he can change rate is the only factor, but it is a contributing factor. >> isn't it a large contributing factor? >> 30%. 30%. let's just assume that for the sake of argument right now. that's huge. >> i don't know what share of the imbalances can be attributed to the exchange rate and how much to just the other policies that lead to an imbalance of domestic versus foreign demand, but it clearly is a contributing factor. >> ok. now, why do you think, if it's in china's interest to do it, why don't they do it? >> well, because, like us, they have a variety of political considerations and concerns. they are being conservative, first of all, because i think they're concerned about the effect of any large changes, given what they still perceive as the fragile state of the global economy. i think that they are -- like we do, they have political factors, such as the influence

of exporters, who are interested in maintaining that strong export orientation. so we have a variety of both intellectual, if you will, and political rationales. >> and don't we lose thousands and thousands of jobs because of this? and don't billions and billions of dollars flow out of the american economy that wouldn't if just, argue yen do, their economy floated? >> i would like to qualify that and say that besides floating the exchange rate, they would also need to take action such as creating a stronger safety net that would increase consumption and create a more domestic orientation toward spending. i don't think the exchange rate by itself in the short term would have a major impact, but over time it would have an impact. >> of course it would. ok. why don't they move? you mentioned political forces. so you're me, or one of us here. and we hear of our manufacturers, for instance, saying they cannot compete. i've been to manufacturers in

upstate new york that make great product. they're selling them in china. the chinese are now copying their products. not letting them sell them in china anymore for all kinds of -- but then going to sell them here. and this firm is worried it's going to go oust business. i hear this story over and over again. this is a high-end product. it's the ceramic that deals with pollution in coal-producing electricity plants. what do you do if you're us? i've been talking about this for five years. talking gets you nowhere. and we're ready to act. what do you suggest we do? what do i tell all those workers who have lost their jobs? what do i tell good new york manufacturers, who are being put out of business, they believe, by unfair competition? >> senator, it's an important issue, and i think we should continue to press for a more flexible -- >> don't i think we should take

stronger action than we have so far? it's produced virtually nothing. >> well, there has been some appreciation, as you know. >> i know, but that was made up for. we're now still about 30% out of balance, which we were five years ago. >> senator, i'm not disagreeing with your economic premise at all. but, of course, the relationship of the united states and china is a very complex one and covers many, many different issues. >> it's about time we put jobs and american wealth first, and we're not. and i worry about the future of the country for that reason. let me go to one final question, madam chair. this relates to consumer protection. one substantive and one theoretical. it's clear that non-bank mortgage companies and others outside the mainstream banking system played a major role in the financial crisis, committed some of the worst consumer abuses. the new consumer bureau proposed in the senate financial reform bill will only have enforcement power over large non-banks and that power will have to be exercised

through a rule-making process. they should be able to enforce its rules against non-bank financial companies, large or small, payday lenders, rents to own debt collectors. these are some of the most rapacious people. they pay on the poor. and under our bill they're not regulated, because they're small, non-financial. do you agree they should be regulated? >> i think they should be regulated. i think it should be an even playing field, if you wish, between, say, banks and non-banks in terms of the rules that they face. the only complexity is that, of course, there are many states involved in regulating. some do a better job than others. and i think working with the states would be an important part of trying to do this effectively. >> yeah, but to just exempt small non-financial companies doesn't make any sense, right? >> i think there should be an even playing field. >> and the final question, and that's following up on senator brownback. the cfpa -- why would you want it in the fed?

i mean, it would seem to me that the whole mission of the fed is not consumer protection. it's safety and soundness. in my experience, and as you know, i think the fed has done a good job in many areas. it's done a poor job in consumer protection. why would you want it in any form in the fed? wouldn't it be better to have it be an independent agency? the fed can always -- they have lots of external events that affect safety and soundness. why wouldn't it be better to be independent? >> we haven't made any -- we haven't asserted anything on this issue. >> i understand. i'm asking you, as the head of the fed, why would you want this? >> well, the one thing that i would like -- >> or are you saying you don't? you don't want it? >> i understand why people would be concerned, given that we were late in making some important -- in taking some important steps. i can understand why some

advocates would want to have a purely independent agency that would have this as the top priority. i understand that. it's perfectly sensible. >> i think i want to cut you off right there. >> all right. may i just say, though, that while we have acknowledged, again, being late on these issues, i do believe that we should receive credit for a much better performance in recent years. and note that there are advantages. i know that congress has been grappling with the issue of whether or not the agency should completely be separated completely from the safety and soundness regulatory functions. >> if your number one goal were consumer protection, you'd want it independent, isn't that correct? i'm not saying it should be or it shouldn't be, i'm just saying if. >> well, i think we all should be concerned about issues like credit availability, for example. and there may be benefits to having some strong interaction between this agency or this set of rulemakings and the bank

regulate organization. >> thank you, madam their. thank you, mr. chairman. >> thank you very much. representative brady. >> thank you, madam chairman. i think we all agree china's economy is undervalue. there's real concerns about the deficit and real concerns about the impact of raising prices on u.s. consumers. it's also important to note that it's equally important that we not allow that single issue to overshadow concerns we have with intellectual property rights, protection in china, subsidies and other issues, such as protecting investments and chinese barriers to u.s. exports. especially in light of the view of this congress and white house to not pursue pending trade agreements which could create 250,000 jobs in america, by ratifying agreements with panama, colombia and south korea. a couple of thoughts. one, i appreciate in your testimony your reference to the commercial real estate market.

i still am convinced that there is not a real differentiation in the fed and the other banking regulators between growth markets in regions and contracting regions. i'm concerned that there's not an understanding that community and regional banks have picked up the demand left unmet by the fall of the cmbs region and the inflexibility of bank examiners. i'm convinced that today in the real world among banks, there is a clear statement that commercial real estate loans are problem loans. the sooner you get them off your book, the sooner you contract that portfolio, the better for us. the result of that, i believe, is that we're going to be exacerbating the problem with more than $1 trillion of those loans coming up for renewal. i do appreciate the effort that you are making. in fact, you had representatives at a recent roundtable this week with some of our most sound banks and

real estate leadsers in the houston region. i appreciate the fact that you're listening to those concerns. two thoughts -- independence and monetizing the debt. you referenced the deficit today in your remarks. it's so critical. it's reasonable to expect the administration to repress freezing money in the hope of artificially lifting out and putting unemployment in the short run. will you resist pressure to monetize the debt as rising borrowing costs intensify our federal budget problems? >> well, congressman, first, absolutely we will. our holdings of treasury securities today are about the same as they were before the crisis. we have not monetized the debt. and we will not. and we will, of course, continue to make sure that price stability is central to our objectives. so let me just assure you on that point. let me just add prenthetcally that given the structure of our debt, it wouldn't even help reduce the debt if -- again, we

will not do this, but given that so many of our obligations are either short-term or indexed or are real obligations, such as medical obligations or social security obligations, which are indexed, i wouldn't have a substantial effect, even if there were a willingness to do that, which, of course, there is not. so there really is no alternative but to try to find real solutions. inflation is just not an answer, either for economic reasons. and just because it wouldn't even affect the balance very much. >> well, the reason -- i noticed o.m.b.'s projections on treasury note yields for the next few years is much lower than what is already occurring today. so i think that pressure will increase, not just from the white house, but from members of congress. i worry about the independence of the fed and i wanted to ask you -- obviously, we're all aware of the senate bill dealing with some making major changes to the federal reserve, such as making the president the reserve bank of new york a presidential appoint tee,

removing certain voting rights and transferring your jurisdiction to certain banks. do you any concerns about that? . >> i think that our structure that was created in the late 1930's has worked pretty well. as a good combination of presidential appointed governors

in washington and reserve bank presidents ran the country. there are 19 people, will come to every meeting and everyone's views are heard. notwithstanding the voting arrangements, it really is a collective decision, a consensus decision. we get both the washington perspective and the washington accountability, but we also get very important information and input from around the country. you mentioned this earlier that one of the sources of that information is our over stipe -- oversight of state member banks, which are well informed about the local economy and a great source of information for us. that is also concern we have that we would lose that oversight. independence is very important, and the main issue here is just to make sure that we are allowed to take actions in pursuit of our mandate without

intervention by either cut the congress or administration. >> converse -- congresswomen sanchez. >> mr. chairman, i think that i am having the same problem that a lot of other people are with respect to what is going on in our country. that is that we continue to say that small businesses in particular create the jobs. we know that employment lags behind when the economy is turning around. let's just say for a minute that maybe we are turning around, maybe we have gone to the break-even point or might be growing a little bit. we are not going to see unemployment pick up for a while. i think everybody is coming to that realization. here is a problem ahead. most of the small businesses that were in business who are

one of those business that is in business because of the good times, so there is money flowing and loss of excess fat and people are getting into business for that reason. those are gone. now you have your businesses that have been around for a while, some took precautions in a normal time, financially pretty sound. they cannot get working capital. they just cannot get loans to buy inventory or to upgrade the technology that they need, and banks are not lending still. but we are at almost 0% interest-rate. money is pretty cheap, but even those credits that before were

good credits, and today are still pretty good credits, cannot get to the money. so what do you suggest? what is happening out there? what we missing? what do we need to do. it does not seem like the sba administration -- there is so much paperwork to that. the caveat is are sometimes difficult to get to, and it is a long process. these businesses today are saying we have made it through, we are still around, but we still cannot get the working capital to really move forward. i have seen a lot of businesses like that. they have no equity in their homes where they used to borrow against their personal wealth. what do you suggest? what can we do to get that moving? >> let me first agree with your premise that small businesses to

create a lot of jobs, particularly in economic recoveries. to the extent they cannot get credit, that will slow or prevent their expansion. that is a top priority for the federal reserve. the issues really are complicated. there are some firms that got easy credit earlier and now they cannot qualify for credit terms. there are some firms that are not demanding credit, frankly. if you look at the surveys, the number one problem is lack of demand, lack of customers. the surveys also suggests that some firms are able to get credit, though not all. it is a complicated picture. that being said, one credit or other small business they cannot get credit is too many. we want to fix that. we have approached this from a long list of policy actions, including strengthening the banking system, including our

interest rate policies as you mentioned. i mentioned in our supervisory role, as i discussed briefly in my remarks, we issued very strong guidance to banks and examiners that small businesses are to be evaluated based on their ability to pay, not based on their industry, not based on their geography, and we encouraged second round reviews, if the first one does not pass. we are very explicit that decline in the value of the collateral, the home or the store, is not a reason to mark down or deny the loan. we have been working very hard to get feedback. one of the problems we get is that bankers tell their congressman we are having a problem, but they will not tell us, for one reason or another. we are trying to get as much the

deck as possible. we have been having meetings all around the country at reserve banks in the different districts with bankers, small businesses, with community activists to understand what are the barriers. we are working very hard to improve that situation. unfortunately, credit is somewhat tighter and that is probably unavoidable. we want to make sure that creditworthy borrowers are able to access credit. in terms of what congress can do, there are some proposals. the administration has a proposal to use some left over tarp funds to essentially incentivize small banks. the small banks are more likely to be lenders to small businesses. they know them better and have longer-term relationships. we have been doing a lot to try to increase our data information about those loans. it would take another lengthy discussion to talk about the

pros and cons of the specific proposals, but there may be different ways to incentivize or support either through the sba or directly, small banks to increase their lending. >> chairman, i would like to discuss with you or your people how we might get to that point. we have information from our bankers. maybe we need to bring the men and talk to you. it seems like there is a disconnect -- maybe we need to bring them in and talk to you. i used to be in the financial industry. when they would come and talk to me and i look to their balance sheets, it is almost like the money is right here, but we cannot get to it. >> i encourage anyone around the table there who would like to bring in folks. we can work out ways to have

those conversations. it would be very helpful to us. >> i want to make a brief comment and then i want to ask a question about the imf. the answer you gave mr. brady got monetizing debt. because your balance sheet remains relatively stable with treasury bills does not mean that the fed cannot monetize debt. you mentioned in your statement about agency debt. it is over 1.3 trillion dollars. where did you get the money? you created this money, so you did monetize the debt. the banking system can buy treasury bills and they can borrow money at 0%. that is why they are making a lot of money right now because they can buy other debt and make a little bit more. it looks magic, except for the people who are losing their mortgage and losing their houses right now.

one other quick question is, the thousand examiner's your training, or any of these new, or are they already on the payroll? >> on the payroll, and they include federal reserve examiners. >> it is not a lack of examination if you do not deal with the problem, and the problem really comes from a monetary policy of low interest rates. as long as low interest rates -- all the examiners in the world cannot compensate for this. this whole idea that capital can come from a printing press rather than savings, i still have a terrible time trying to understand how an economy can thrive on that because it rejects every notion of free market capitalism. the question i have on the imf is, this week the imf has announced they are going to open

up a new arrangement to borrow. there's a commitment of $50 billion that will go up to $560 billion. it coincides with the crisis going on in greece and europe and how they will be bailed out. the irony of this promise is that in the new arrangement, this increase, reece is going to put $2.50 billion in there. be prepared to bailout even other countries. we are going to go from 10 up to 105. that is $105 billion we are going to commit to bailing out the various countries of the world, and who knows what. i want to get your comments on this. why does it coincide with

greece? what are they anticipating? when it comes to that time where we have to make this commitment, who pays for this? where does it come from? will this all come out of the printing press once again, and we are expected to bail out the world? are you in favor of this increase in the imf funding and are additional commitment to $105 billion? >> the source of this was going back to that g-20 meeting in the crisis. the leaders came up with a mutual commitment to put more money into the imf as a way of addressing the financial crisis around the world. the federal reserve was not involved in those meetings. if money is put out to any country, it will be done first

of all with specific approval from the executive board, which includes the u.s. in a veto position, with conditionality. the country has to meet certain conditions. if the g-20 leadership disagreed that this is a way to provide credit to avoid fiscal or exchange rate crises in countries around the world. >> but do you think this is a good idea? do you agree that we should make this commitment? >> in general, having the imf to avoid crises is a good idea. >> again, where will the money come from? along this line, do you feel like -- what are going to do when a state it's under the gun, like california and others? they are approaching the state that greece is in.

we cannot turn down california. if we can bailout all these banks and they get off the hook and now they are making billions, do think we would ever turn down california or any other state that gets in the same situation? >> that is congress's decision. >> you bailed out a lot of people from the imf. you have the capability of buying up some debt and doing all these things. you can do anything you want. you can create as much money as you want. >> any transaction we make, we are happy to provide that information to you. the imf is a separate institution -- >> were with the money come from? >> eventually we would created out of thin air.

>> thank you for being here. i do not often agree with things that my friend from texas, mr. brady, says. at the beginning of the harry -- at the beginning of the hearing he said you had quelled the panic. on page 4 of your statement, you said the financial conditions of banking firms has strengthened markedly. i want to ask about the more amorphous of ethics in banking. what concerns me is this. if i want to buy a car, i will study who puts out the best car , and the manufacturers and dealers stand by their service and stand by their products.

if i am looking for someone to pay my house, i will ask about roundabout who does the best job of painting houses. i will get references about who does the best job. the providers work to put out a product that satisfies me. the situation with major players in financial services industry, they work for ways that companies will be unsuccessful. the one where most familiar with is bank of america. the computer program -- this happened to mee. banks closed on good friday, saturday, sunday, and all the debit purchases i did through the weekend, regardless of when i did them, are processed according to the largest first, down to the $3 coffee at

starbucks. we all know what that is about. the goal is to drive people unknowingly into overdraft fees. they want me to fail as a customer. if that is how they are treating -- what the studies show about they make most of their money from overdraft fees on 14% of their customers. they are preying on people hoping we do not succeed in managing our money. we had this history that led into this problem of loans that should never have been made, but they made them, and then sell them so they can walk away from their mistakes. they then did not care about whether they succeed or not. you have done a great job at quelling the panic, and i think that history is going to treat you well. my question is on the more vague one. what about the ethics, the morality of the financial- services industry?

they are responsible to their shareholders. so are my painters and car dealers. what about the responsibility of customers -- were you want your customers to succeed, were you want to put out a product that will help them meet the financial needs of their family? where does that come into all these discussions? >> it is the heart of good business, the ethical treatment of your employees and customers and so on. my experience is that among bankers, there are some that are ethical and some who are not. in the cases of those who are not, we need to make sure there is adequate protection like a better business bureau. in the case of overdraft protection, the fed recently put out rules requiring of dan and debit card, atm transactions. you have to opt end in order to be allowed to receive an overdraft feet.

>> but you did not do anything about this computer program that processes them from larger to smaller. >> the electronic funds transfer act did not have a place to put that in, soda speak. we are in fact looking at those practices and will try to address them. they are not completely straightforward because there are arguments for the big one first, because people want to make sure that their mortgage is paid for their coffee gets paid. in any case, we are looking at that very seriously and will try to come up with a solution that will address the problem you are talking about. >> i have had the personal experience of going in and checking a balanced before i get some cash out on a saturday and it says i have $130. i take out $100, and because of the reprocessing, it did push me

into an overdraft. that is how nefarious it is, and most people do not go on line and follow it like i do. they are just preying on people. i just think is very difficult to deal with all these issues. if there is a morality in the industry that says ultimately our goal is to get money from people, not necessarily to see them have a successful commercial real estate venture or a successful home loan, but to package and sell and move on. >> thank you. welcome to the committee. dr. paul made an observation that bears repeating. it was the concept that banks that got into trouble were able to get money at the very low

interest rate and now turn around and loaded back to you at a much higher interest rate and there is no reason for them to make loans to the entrepreneur or the small business person. they are making -- de making money working off the system that the fed has provided for them. i do urge you to look at that. if it makes them appear noncredit with it, this is a real problem. i heard from people all of the district saying this is going on. to the extent that you offered help and that, i intend to take you up on that offer. i will have several of these individuals visiting in washington next week and i would like for them to be able to tell somebody at the fed just

what they told me last week and part of it is marked to market and part of it is very slow rate of getting appraisals back and the appraisals are so slow in coming back that they do not reflect rapidly changing market conditions and people in the real world cannot function in the system that we created for them. rep sanchez had some very good point and abel take you up on that because i think it needs -- there needs to be more hands- on from the fed about what the actual effects of the monetary policy that you are pursuing. you also made a comment that the fed is open. dr. paul talked a lot about auditing the fed and knowing what is in there. is there a way for me to know what the fed holds as far as

real holdings in my congressional district? you hear stories about the fed owning a shopping center in oklahoma city. i cannot know you were into it. what do you own in my congressional district? can i get that information? >> the answer is yes. the only kind of strange assets like that you are referred to, basically what we own our treasuries and the liabilities of fannie and freddie. that is what we own. we do have some assets that were involved in the bailouts of bear stearns and aig to still on our balance sheets. we did not have an option at the time, but we have released all information about that group of assets including information about who the loan is to and so on.

you can find that out. >> i appreciate that. i will have somebody from my office follow up on that. in your response to senator brown back paws question about concern about the structural tax provisions that are due to expire and the presumptions made, here is a report from the joint committee on taxation. this 50 pages of tax cuts that are expiring and the next 10 years, some of them are quite obscure and it appears some of them should expire. have people at the fed to come through this and really put a pencil to paper about which of these that congress lets kick in? i did not know what we are going to do about that or how we will pay for that but we always do something. i expect you are correct in that assumption. has somebody at the fed gone through this entire report,

looking at the expiring tax provisions over the next 10 years so we have some idea of what we are dealing with? >> we are using the publicly available projections and on the tax side, and i am not making any policy or advocating any, i am telling you how these projections are done, that particular projection is one where all the expiring taxes -- tax cuts are extended and quantitatively, the two biggest are the 2001 and 2003 tax cuts and to the amt. there are others that are often extended. >> all that directly affects the policy that we all talked about that we should be concentrating on with job

creation and job growth. one final thought to leave you with. i heard from so many people over the brick and you referenced this in your testimony, the young person getting out of college with terrible difficulties finding a job and that may set a tone for their productive years because of this recession and then you have the person my age, what i'd like to refer to as the late bloomer, who is having difficulty. those jobs do not exist and that is where we have to look at the beginning and the latter end of the employment years because they are both in serious trouble. >> the gentleman's time has expired. >> i would agree with that. bowfins -- both ends are having difficulty and there are different ways to address those different parts. it is clear that long-term unemployment has a long-term

implication for the person's ability to earn a living. >> thank you. >> thank you. chairman bernanke, thank you. you have a very interesting job and it is fascinating because of the set of circumstances that our existing currently that you have to deal with. among all the things you have to deal with, the organization of the monetary policy of this country is a critical issue that has to be engaged in. one of the things that we are confronting is this huge national debt. it is important -- the unjustified invasion into iraq and what continues to be spent there which will hopefully be ended shortly. the tax reduction for the wealthiest people in this

country which has not brought about the greatest concentration of wealth in the hands of 1% son of the population that we have seen since 1929 and the dramatic drop in the income of virtually everybody else across the country, almost all of the working people. and other things like the inability to negotiate the price of prescription drugs in the context of medicare which is jeopardized and the future of medicare. all of these things are critically important. i hope that you will make a contribution to our working with them. the tax cut expires at the end of this year. all of these other things that we had to deal with our important and we have to understand what they are about. the engagement of commercial banks now continues in spite of the fact that the economy is beginning to get a little bit

better. their ways in which this is being attempted to be addressed. one way is the context of the financial reform bill of german dodd. one thing he is trying to do is introduce the elements of the volcker rule to deal essentially with what happened with the elimination of the glass-steagall act. the interaction of commercial and investment banks. that aspect of this legislation is not solid by any dates. there is a study that will make a determination as to whether the provisions of the volcker rule, which are only partly effective in the context of dealing with the interaction and manipulation of investments, so what do you expect will come out of that study with regard to the inclusion of the volcker

rule and if it comes out positively, with the inclusion of that, how effective will be built be? >> first, we do not want banks or investment banks taking speculative positions with the u.s. safety net behind it. clearly, we have to draw that line. inevitably, what the study will fund is drawing a sharp line is not easy because various activities or making markets that involve temporary proprietary holdings and so on. it might not be quite as easy to say this is proprietary and this is not. we need to have a set of rules or criteria that helps us distinguish which is up -- which is applicable and which is not. that will be the big challenge.

we have to say a clear decision. >> that opposition will come as a result of the huge amount of income that has generated -- that has been generated and the situation. this is something that has to pay brought about -- has to be brought about effectively. but we can bring back something like the glass-steagall act and separate those banks and eliminate the conflict of this type of investment. it would seem to me that that would be something that would be very effective. back in 1933 when it was put into place, it had a very effective situation on the context of the great depression. there is a great resistance to doing that and that resistance is coming from a handful of people who were effectively engaged in this kind of manipulation of investments. i wonder if you can tell us a bit more about what you think should happen and if there is

any way in which your operation and this congress can be engaged more effectively in about a more open and honest way in which the banking system is engaged and to the elimination of this manipulation that has been one of the major causes of this the person -- of this deep recession. >> i do not think glass-steagall by itself would solve our problems because we had commercial banks losing money on a regular loans and investment banks losing money on speculative securities trades. separating that would not have saved lehman brothers nor protected in number of the banks. >> some of that elimination had occurred prior to the elimination of that complete legislation in 1999. there were interactions in the glass-steagall act and interventions and some manipulation of that, all of

which brought about some of the declines. >> i do not think it is just the separation. i am trying to say that we need to take important steps that would include stronger capital requirements to make sure that the institutions who are taking risks are bearing those risks themselves. it would include making sure every large financial firm has a strong and consolidated supervisor and we did not have the gaps we had where some firms can sneak by without being overseen. it is very important to have this resolution machine to wind up a failing firm which means that the creditors and shareholders would bear the costs which creates another set of incentives to keep banks and other financial firms away from potentially risky investments. but there are a bunch of things that we can do. i do not think glass-steagall alone will solve this complex problem. >> thank you.

thank you for being here. i was just in my state last week and we have a 7.3% unemployment rate which is a bit better than the national average. despite the struggles, there are glimmers of hope which i know you see with your number crunching. we have 2500 employees and they are hiring. more at one company. we have some glimmers of hope. what i wanted to talk to you about where i see a potential limitation on our recovery is very -- is the [inaudible] a lot of us have held our votes on that. i was very distraught that some of our colleagues changed their votes or did not do it and the president went on. did you talk about the importance of getting something

done on the debt for the long term and for the economy and what something like this that commission, if we can get some recommendations, that we can have an up and down vote on is so important? >> it has direct implications for the health of our economy and maybe not just in the long run. in the long run, if we have higher interest rates, it will reduce investment. we will have to borrow more from abroad which also means a heavier burden on our children to pay back. those are the classic problems. worse than that is the markets right now are signaling a lot of confidence that our political system will deliver a sustainable trajectory of fiscal policy going into the next few decades. it is very encouraging that we can borrow at 30 years at 4% or 4% plus.

they believe we will do it. >> if we do not? >> if we do not or to a strong -- if we do not, it would be something we have to worry about on wednesday. it could happen that the markets would lose confidence. i want to draw a strong distinction between the fiscal position and that of some other countries but we have seen from the world a number of countries that have come under pressure because of loss of confidence in their resolve or ability to address -- to address these problems. it does not mean we have to solve these problems tomorrow but we have to have a plan and a credible process to show that we can manage these difficult problems. they are very difficult. you have all of my sympathy because they are extremely difficult politically and intellectually to solve. how to do it, i think the commission is very good.

>> it is. this idea that we just put our heads in the sand is not going to work in the long term and i hope my colleagues take seriously, on both sides of the aisle, the recommendations of this commission. my second focus is small business lending. i have been working with mark warner on that proposal. the second thing is this proposal by chairman dodd to look at taking back some of the power of the federal reserve. we found it to be helpful. what do you think of that proposal and the other concern i have heard from the small community banks is the proposal to limit your supervision to banks that have more than $50 billion in assets. our community banks are not big

fans of that proposal and out of like to hear your opinion of these proposals to consolidate the fed away from regionals and to take the community banks from under the federal reserve. >> we are very concerned and understand we need to play a role as a part of a process of keeping our financial systems stable. it would be a very bad outcome to lose connection with the small and medium-sized banks we currently supervise. it provides us a great deal of information about what is happening out there in a country about small business loans and the local economy. it gives us a perspective on the whole financial system. we do not just want to look at wall street. we need to look at the whole economy not only for monetary policy purposes but for stability purposes. small banks can be a part of the crisis, too, as they were

during the great depression or 1982 or many other examples. we want to have that connection with the economy [inaudible] [no audio] so that the fed has the ability to supervise and have a strong connection with small and medium-sized banks as well as those large banks. >> the idea of the regional federal reserve are our ears to the ground. they are with the supervisors' reside and they do the operational work and they have those regional connections. washington is were the policy is set and the overall

accountability flows from. we rely heavily on those eyes and ears around the country to get that the back. >> excellent. thank you. >> senator casey. >> thank you. thank you for being here. we appreciate your testimony and public service. i know it is not easy. i wanted to explore two general areas, and jobs and currency. first of all, with regard to some of the data that is out there as well as your testimony, there is a good bit to be positive about. i have said a number of times that the actions that were taken in the fall of 2008 when you came to us and presented the gravity of the financial situation plus the recovery bill in 2009 and additional and

more recent job creation bills had a positive impact and even more so the next couple of months. we still face a situation in our state where even though if you look at the rate, we are at 8.9% unemployment which is lower than several big states but it still means 577,000 people out of work. if it is not a record, it is close to a record. then i looked at individual regions. we have had this unfortunate confluence of misery in places as large as philadelphia with the unemployment rate has been at 10% for a long time and it bumped up to over 11%. next to philadelphia, you have numbers higher than that. a very small -- in very small rural counties, you can have on

deployment of 30% with the loss of one company. in the midst of all that misery, we hear that small businesses have trouble accessing credit. the dichotomy between that difficulty and the headline in the new york times saying j.p. morgan is upbeat on the economy as it posts profit. for a lot of people out there, that are at odds with were there are. one is up beat and the other is profit. as a long predicate, i know that they highlight concerns about fiscal matters of the deficit. you said and i quote that it is a fact that it shows sluggish

loan demand in many borrowers cannot qualify. that is the diagnosis of the problem. what steps to we take in the next short months or year that will have a positive impact on the job climate as it relates in a very particular way to small business. >> the small business problem is very difficult because we want small business to have credit but we want to make good loans. we do not want to go back to the weak lending standards before the crisis. as i discussed earlier today, it is a very high priority of the federal reserve to work with banks and the examiners to make sure that there is an

appropriate balance and that loans are appropriately under written and as they have been sufficiently -- and they are likely to be paid. we certainly do not want a modern equivalent of redlining. we do not want to say the entire category of small business is not to receive credit or nobody in the state of florida is to receive credit because of the general category. part of this is the cooperation between the banks and the examiners working together and understanding each other to make sure that every loan is evaluated on its own 2 feet. you could very well have a situation where the value of their property is going down but the company has a stable business and has been able to

pay for many years in which case we have provided guidance to our examiners and training and asking for feedback in which case that loan should be made or at least be given a very careful assessment. and this is something that goes back to a point that was raised earlier is the fed's involvement with the banking system. we are bank examiners. we are obviously very concerned about making sure the banks are safe and sound and making good loans. on the other hand, we are also very concerned about the overall health of our financial system and our economy. therefore, perhaps more than others, we are focusing on getting that balance right. we want to make sure that could loans get made. i have talked about some of our

programs and our information gathering. we have had meetings around the country and conferences and we are collecting extra data we did not collect before about small business lending. we put extra questions into the survey to get more insight and as i said earlier, i invite direct feedback from members of congress and their constituents and how we can better meet this need. from congress's point of view, it is a difficult problem. it will provide additional capital incent banks to make loans. that is one direction that is possible. >> thank you. >> chairman bernanke, you testified earlier that in reform , we should have stronger capital requirements.

many believe we should limit leverage of some of these financial institutions. 35%, 60%, or some of them. do you believe the leverage should be limited and if so, do we have a specific member put into the legislation? >> we have a risk-weighted capital ratio which is not a straight leverage ratio, it is amount of capital we have to hold against assets. this makes sense. the riskier the asset, the more capital you want to hold. we are working very actively with other regulators around the world to strengthen the capital requirements. we have already made proposals to do that and we will get assessments from the banks to see how big of an impact that will have. it is our intention to move

forward with more strict capital requirements. but the leverage ratio is kind of a backstop or fail safe. it is a simple ratio. it is a ratio of capital against total assets without making any distinction between treasury, loans to small businesses, and others. the u.s. has long had a leverage ratio as a backstop to our capital. one of the interesting things that appears to be coming out of the international negotiations is that the u.s. leverage ratio, which was never used a broad, looks like it will be adopted by other countries which is good for us because it will create a more even playing field and greater safety in the global banking system. the leverage ratio is part of the negotiations we are having internationally and there are proposals on the table. we have not yet gone to the whole process of doing the quantitative analysis in

figuring out the right number. i cannot tell you what the final number will be but we are certainly looking to make the leverage ratio part of the more conservative approach to make sure banks have enough capital to absorb even in the process. >> i think you should reach for conclusion by the time we pass this bill. we should have something definite. i would like to ask your assessment on international banking. your comments on what has been happening in greece. testified the fed will look into credit default swaps on sovereign debt. can you tell us what you found?

-- goldman saks arrangement with greece. there was an agreement between them which by using exchange rates that were different from the market rates had the effect of modestly changing the reported that been ratios that the country report -- that the country reported to their statistical agency. goldman sold this position into a great bank in thousand five. i mentioned the effects of distorting the numbers but those were relatively modest, about one percentage point. the debt to gdp ratio changed to 100%. it was not a large effect but there was in effect. before that happened, this was before the federal reserve was

supervising goldman sacks and before the enron episode, following which the fed and other supervisors strengthened our rules against the arrangements which are basically and tended to have accounting and tax to affect. we have discussed the issue and they have a much more elaborate procedure to evaluate such deals to make sure that there are not being motivated by accounting and other appearance issues. we believe in that situation that they divested that position in 2005. on the credit default swaps, we have not found large positions

in u.s. banks but we have not addressed the question specifically of using cds to manipulate pricing which would be evil and inappropriate. that would be more and sec issue. exposures of u.s. banks through direct holdings to european governments is relatively limited. >> are you satisfied with the solution europe has reached? do you see the problems plaguing greece spilling over into other countries or having an impact on the u.s.? >> it is a work in progress. they have made a good bit of progress but it is politically difficult. on one hand, the europeans do not want to assist greece unless they are persuaded that the greeks have made a good- faith effort on their own to

reduce their deficit and improve their own fiscal position. at the same time, the europeans themselves have to agree but how they're going to share the burden and how they're want to set up the arrangements. but there is a broad understanding that it is important to come to a solution and they have made a good bit of progress. i think there will be further discussions going forward. the u.s. is not directly involved in the negotiations but we have been informed that they have made good progress and they are quite confident that a solution will be forthcoming. >> thank you. mr. brady. >> thank you, madam chairman. i do believe in the issue of small business credit. it is not an issue, it is over correction on behalf of the regulators and banks.

i am not a banker nor an expert but especially in large real- estate, even though they are told these are guidelines, banks know if they go over a time over the concentration threshold's, they will enjoy it a special visitation from their friendly banking but the -- banking regulator setting aside capital reserves for commercial real estate is really creating the problems of creditworthy projects inhibiting growth and creating a much more severe commercial real estate crisis where we are pretty know there are real challenges any ways. i do appreciate your focus on that area are among all the

other things you are doing. it is critical that the fed be listening and injecting common- sense wherever possible and that process. one question about the trade-off between inflation and unemployment hall in a question about the balance sheet. we have had people testify and for the of congress, one advocated raising the inflation target to 4%. the argument was higher inflation would alleviate the unemployment and produce more nominal interest rates in the future. how do you respond to the argument that unemployment is so dire that we should inflate our way to more rapid recovery? >> his argument is at a higher inflation rate, nominal interest rates would also be higher on average and that would give more space to cut during a recession and perhaps more

ability to create and the test. that is not a logical arguments but it has substantial risks. the federal reserve over a long period of time have established a great deal of credibility in terms of keeping inflation low around 2%. you can see that an inflation index treasury debt which people expect about 2.2% over that 10 year period. if we were to go to 4%, we would risk losing a lot of that hard-won credibility because people would say if we go to 4%, 1 not 6%, 1 not 8%. it would be difficult to tie down expectations at 4%, beyond which, in the longer term, low inflation is good for the

economy and four% is getting up there a bit and would probably have detrimental effects on the continent of our markets. i understand the market but that is not a direction we are interested in pursuing. we will keep our inflationary objectives about where they are, to% is about up corporate given biases and measurements of inflation and having a little bit of space between the average inflation rate and the risk of having deflationary or falling prices. that is where we are going to be. >> recent the issue of expectations. there are rational expectations that businesses will see higher tax rates and more regulation. i think that has an impact. individuals, as well. somebody has to pay that debt back. that is all a part of the psyche

and confidence of businesses and consumers. one of those areas of uncertainty is the extraordinary balance sheet expansion of the fed. recently, testifying for the house financial services committee, one professor stressed how important it would be for the fed to provide an exit strategy with an explicit decision rules such as to allay fears of future inflation, rusher congress that the fed will not continue to exceed the traditional purview of monetary policy. are you prepared to lay out a definitive road map to normalization? >> yes, to the extent that we have determined all of the details. we have to see how things evolved. i have recently testified and released separately document which is laid out our proposed exit strategy and we are developing the tools to do that.

this has been an ongoing campaign on my part and the fed's part to bring back to last summer when i published an op ed that laid out the strategy. my impression is that early on, there was a lot of concern and the market about this large balance sheet and the large amount of reserves. on and not saying the concerns have completely evaporated, we have provided a lot of information about our exit strategy and my sense is that it has had a good effect. for the most part, there is a lot of confidence in financial markets that we do know how to exit effectively and we will exit effectively and do so in a way that does not lead to any increase in inflation. one piece of evidence is the long term break-evens in the bond market. i do not think we can give quantitative rules at this market exactly at this moment but we have the tools we need to reduce the balance sheet

over time and to raise interest rates when it becomes necessary to do so to avoid inflation. >> thank you. . .

the conditions are about to change. one of the ways in which the change is the federal reserve stopped for good -- stopped purchasing mortgage-backed securities which kept interest rates low and help stabilize the housing market. can you give us the justification for that and what you think the aspects of that are going to be? >> well, we -- let's go back to the comments by mr. brady. we have already explained our balance sheet quite -- we expanded our balance sheet quite considerably. we did not want to create uncertainty or concern about our ability to normalize policy in the inappropriate times. we worried about the potential

impact of this decision of -- the cessation of mbs purchases. we reduced our purchases very gradually. but tapered off -- we tapered off our purposes. we've seen very little effect on mortgage rates. we've seen very little effect on mortgage-backed security yields. at this point w, i did not anticipate any significant impact on mortgage rates. -- i do not anticipate any significant impact on mortgage rates. >> there have been a number of announcements about interest rates for mortgages going up, and specific elements have talked about how they are about to do it. >> the net changed since we stopped purchasing is very close to zero. we will continue to watch that. there is nothing that says if

the economy weakens and the issue is housing and mortgage rates, there is nothing that says we could not resume those purchases if necessary. we will keep that option open. again, at this point, the main effect seems that we're still holding $1.40 trillion in agency, and b.s. -- in agency mbs debt, which seems to have the effect of keeping mortgage rates pretty low. >> there is no question that it has had a positive effect. my concern, frankly, is that the positive defect is being eliminated. we already see issues that indicate that the interest rates will go up. as they go up, that will reduce the housing market, particularly in the context of the ongoing economic circumstances that most working people are confronting. i am deeply worried about this. i thank you for saying that you will be looking at it and considering it and you may be

making some changes, hopefully, if it seems to be necessary. there are other aspects of the housing market that are also about to cause some serious problems, it seems to me. among those, the first-time home buyer tax credit is due to expire april 30. the fha as recently tightened its restrictions on loan eligibility. the housing market has not yet stabilized. i wonder what you think about all three of these issues that are essentially being eliminated now which were put into play to deal with economic circumstances and which caused a positive effect on the housing market, but now those effects are being eliminated. it seems to me that the situation is likely to get progressively worse, maybe rapidly. >> well, the number of starts

on housing have been very low. unfortunately, all of the efforts, including the low mortgage rates have not rejuvenated new construction very much. that remains a concern. you did not mention one other important aspect, the foreclosure mitigation issues. one of the most important aspects of the housing market is not even the amount of construction, but the house prices. if house prices stabilize, that will help consumer confidence, because people will feel that they are not -- that the value of their home is not falling anymore. it will help improve -- reduce mortgage delinquencies as well when concern we have is that -- it will help reduce mortgage to lindsay's as well. one concern that we have is that -- it will help reduce mortgage delinquencies as well.

one concern is that. >> i am deeply concerned about the effective elimination of these three issues, which have had a positive effect. the elimination of these issues prior to the moment when the housing market is improving significantly. i think that this is something -- >> the gentleman's time has expired. we look forward to your response. >> i agree. the housing market has been a big part of the whole cycle. absolutely. we have to watch that sector very carefully, not just in terms of construction, but in terms of prices and foreclosures predict are all big issues for people in this economy. -- prices in foreclosures. these are all big issues for people in this economy. >> we were talking about jobs when my time ran out before. midlife crises, retirement --

it seems like some of the things we have done recently in the last 14 award 15 months, health care being a big one -- i heard from 17 -- from seven people -- from certain people at home to let small businesses who provided roughly 320 or three under 53-level jobs -- or 350 and three-level jobs -- entry- levekl jobs who are looking at a $2,000 fine they may have for health care. they cannot continue -- but will have to sell their businesses and retire and go to reno or something different, but it cannot continue to do -- they cannot continue to do what they're doing.

they're providing 300 to print and 50 entry-level ---- they are providing 300 too 35o 350 jobs. we're frightened people with financial regulatory reform. people do not know what to expect around the next corner. there are 50 pages of tax cuts that are going to expire. where do we begin to ratchet back the uncertainty that we are providing to the small business person to prevent them from adding a job right now -- that prevents them from adding a job right now? they cannot do what they have been asked to do. >> we have heard around the country that uncertainty, economic uncertainty about the recovery, and policy

uncertainty, including about what the regulatory environment is going to look like, has had some adverse effects on businesses. they do not know how to plan. they do not know what the environment will look like. while it is very important that on these very important issues of health care and environment and regulatory reform and so on, congress to a deliberate process and come up with the best possible outcomes, earlier resolution and clarity is better than delay. that is an issue to try to reduce the overhang of uncertainty. there were many people -- >> there were many people who asked us to look at the problems with joblessness, then they were asking us to deal with global warming -- than were asking us to deal with global warming and health care. senator klobuchar, you were talking about the deficit position -- the deficit commission that has been

created. congress, the house in particular, we do control the purse strings. you talked, when you're in dallas -- you were in dallas, about developing a plan for meeting our long-term challenges. i think that ought to come from a legislative body, not from an executive order on the deficit commission. are you familiar with ranking member paul ryan on the budget committee and his road map for america's future? it is a big list. he tackles tax code, medicare, social security, and tries to deal with our long term, fiscal future from that standpoint. would that not be a better way of going about looking at this, rather than the targeted reductions that the commission is going to come back with? >> in general, i think the entitlements, social security and medicare are the biggest

parts of the -- are quantitatively, a very big part of the fiscal issue going forward. creative thinking in general about how to make -- control those costs is extremely important. to go back to your question about health care costs for small business, it is not just a fiscal issue. anything we can do to reduce the cost of health care and make it more effective is going to help not only the federal budget, but it is going to help the function of the economy. i can only agree encourage any kind of creative thinking about bringing forth proposals that come from congress, as you say, all the better. the trouble is that obviously, by its nature, congress is very focused on the near-term. it is hard to get attention on the long-term issues. >> this bill that was passed on health care -- 4000 pages that did nothing to reduce the long- term cost of health care, other

than provide for rationing in the very near future. thank you, madam chairman. i yield back my time. >> i thank the gentleman. the cbo estimates that the health care bills will save the economy $1 trillion. what is the primary source of risk to the recovery at this time? what is your assessment of the risk of a double-dip recession? >> i have become -- i was always fairly humble about forecasting. in the last few years, i have become extremely humble about forecasting. i have to be very cautious. having said that, i think there is a pretty broad view that we are seeing some building momentum in final demand, and consumer spending is picking up. equipment and software investments look healthy. the broader global economy is stronger.

it looks like we are on a path to moderate recovery. the risk of a double-dip, while not certainly negligible, is certainly less than it was a few months ago. that being said, there are any number of possible things that could derail it. if, for whatever reason, consumers under the pressure of a weak labor market and tough balance sheets decided to become more conservative and slow their spending, a financial problem emanating, you know, from greece or whenever unknown source could cause more problems in