>> what is the next step for harry reid? >> his next step is the need to figure out whether or not there are enough republicans to wheel and deal on this bill to have a compromise that could win a few republicans. [captions copyright national cable satellite corp. 2010] [captioning performed by national captioning institute] 1 democrats voted moving forward on this bill -- one democrat voted moving forward. .

a structure to the principles that the lawmakers have set out. >> a couple of the issues that the two parties are trying to work out and the bell? >> how strong an independent should a consumer protection agency be, and how should they handle hedge funds, particularly derivatives. those are complex financial instruments that allow big strains of capital. they are not now in the open. there's a question of how open they should be, going forward.

>> chris frates is a reporter at the politico. >> tomorrow morning, a look at the role that goldman sachs and other investment banks had in the financial downturn. would blankfein and other goldman executives testify before the senate investigations subcommittee. that is on c-span3. >> meet the grand prize winner of our studentcam competition tomorrow morning during "washington journal." see all the winning videos at studentcam.org. >> arizona recently passed the strictest immigration law in the nation. from "washington journal," this is just over 40 minutes. continues. host: we have folks talking about immigration policy.

daniel stein, federation for american immigration reform. thank you for being with us. frank sharry, founder and executive director of american boys. news this past week -- american voice. news this past week and immigration. let us look at an article from "usa today." opponents from nationals of rights activists to phoenix mayor vowed to take their fight to the court as soon as this week. looking back at the law that would take effect 90 days after the state legislature adjourns, requiring local law enforcement officials to determine immigration status of a person during any legitimate contacts made by an official or agency of the state if a reasonable suspicion exists. if the person is an alien who is on lawfully present in the united states. let us go to mr. daniel stein. guest: i think it is an

excellent law. i want to commend senator russell pearce for acting on a lawn not just needed a highlights a growing divide the country. a highlight in "usa today" says the law creates a race. adds of the rift is being carried by the fact that we have a failure in leadership of washington to recognize that the american people want the immigration laws enforced, they want to see a smooth, unified and forced the system between the federal government and the state and local governments. the arizona legislature is operating fully within its constitutional authority to enact laws that are entirely consistent with federal immigration enforcement scheme is, and yet what you have is this anniversary action of the president and administration sang -- american people want to see their laws and force are somehow not entitled to see it done. the growing clarity on this issue has been defined by a series of strategic interests that believe that the essentials

have a right to demand a mass amnesty with no real accountability for future enforcement or reform of the overall system. that is the proposal the president is pushing. aversive, the general public at a time of high employment, major job losses, structural changes in the american economy, many hard-working americans looking for work saying -- why isn't the federal government getting serious about enforcing the law? this is a rational response. what we are like -- would like to see. we are calling for the federal government to come in and ends -- assist arizona and other states, help them enforce the laws. it's co-founder of america's voice, give us your take. guest: a very important debate on how to eliminate illegal immigration. we don't think a patchwork of radical laws of at the state level should do it. we think congress should work with the president to pass comprehensive immigration reform, secures the border, cracks down on illegal hiring and make sure people are here

legally. the arizona law, i am afraid, is abruptly written it literally declared open season on 30% of the state which is hispanic. they say it you are suspect, the police have to ask your papers. who is suspect and who is illegal and not? we know when there is a disturbance at a soccer field, who will be asked for papers, most likely hispanic americans. many are here legally. so i think what arizona has done is institutionalize racial discrimination and racial profiling in a way contrary to basic american values of fairness, rather than pressing congress and the administration to step up and pass immigration reform that end illegal immigration. host: protesters turned out sunday at the arizona capitol assailing the measure. the mayor of phoenix and also a congressman, democrat from arizona. they called it racist and unjust. they are concerned, as

mentioned, how they would take effect. play out a scenario of concerns. guest: let us say there is a park with a soccer field. maybe 500 people doing very sector it is and a fight breaks out and the police show up and they, they the people that are involved. what do the police do? i have tremendous sympathy for police in this situation. one of the reasons there ever is on a police jeep opposes this bill is that they say it will -- police chief opposes the bill is that it will compromise with is critical to fighting crime. they will begin to ask questions. some people will run away because they don't have papers. other people to stay -- do all it ask for papers? as arizona become the kind of state where every interaction with police become commercially your papers, or just some big book asked. that is what the law does. it creates this awful situation whereby the way you look you can be asked for papers. brian bilbray, a supporter of

dan's group, they would be able to tell by the shoes they wear. that is how ridiculous it has become. the governor asks to how you could tell -- and she says, i don't know but the police will write a description and we will follow it. it is open season. host: daniel stein, why are you not concerned about civil rights? guest: they are as concerned as any other -- host: why don't you think this will be a civil rights -- guest: engaging in hypothetical on how a law might be enforced is extremely speculative. i think the law was carefully crafted to ensure the civil rights of all in arizona is respected. at some point, however, the constitutional norms need to prevail again that allows local police on reasonable suspicion to verify the person's right to be in the country and to have the services of the federal government to make the determination. americans ask, why is illegal

immigration out of control? if you look at the arizona situation and you get on line and read the law and take a look of the language, what you see is this sets up a very careful framework to try to bring about rationality on how we actually enforce these laws. naturally you want to monitor -- monitor the law carefully for civil-rights violations. at the same time we feel comfortable that the compass of the law as well as state authority -- and it will be administered properly and effectively. there is a climate of fear and arizona but the fear is that as a result of drug cartel, gang violence, mob violence, if you will, orchestrated. this is a very serious national security issues and to continue to talk at the federal level about an amnesty program, encouraging people the belief that we will not enforce these laws, we cannot expect it to work. we cannot expect it to work if we will growl off an entire agency in dhs, isolated from state and local police departments. no other area of federal law is

so isolated in its enforcement components as immigration law? the arizona law deals with another -- a number of other areas as well. but it empowers the police to be part of a team with the federal government. many police departments are recognizing the need to maintain trusting community relations, but they understand it is quixotic to try to contain crime if you cannot contain illegal immigration. all, but there is a wing and the democratic party that seems to believe that the civic fabric can be maintained when one population in the united states is essentially saying we do not have to obey the law -- we don't have to respect u.s. law, we don't have to play by the rules and we will be sent to get ahead of the game and get amnesty. people are saying, this is not what the american assimilation ethic is about, not what immigration is all about and it is causing a rift and our policy. the polarization and partisanship in this debate are deeply troubling right now. i did not believe i have seen in

the history of this country america's immigration policy debate become so polarizing and politicized as it is now in this congress. can that thing we are going down the wrong road. we are not dealing from a consensus basis. we have no commission to come up with a large view of the national interest. it is nothing more than a special interest political power grab and the reason why people are being -- being frustrated. host: and the scenario about the soccer match, and there is a disturbance and his organization is concerned that perhaps hispanics would be targeted by law enforcement officials and ask for their papers. why are you not concerned about that scenario? guest: welcome i think it is important not to engage in hypothetical. police departments are going to be looking to enforce over all laws in arizona, criminal laws, and what have you. to engage in this kind of speculation on how they will enforce the law -- clearly, if they in the course of a regular unlawful police conduct aside a one to ask for identification --

which they usually do -- and then have a basis saying we would like to see if you have off of a nation to be in this country. fair has been arguing for years that we need a single document to verify citizenship or alien status. we have been pushing it for 30 years. why we don't have it now? special interest lobby prevented it from happening. .

that is not a practical assessment. guest: i am looking at some areas where comfortable have to do with on the beat every day. but under the law, they are required to ask who is suspect. if they do not, they will be subject to a lawsuit. let us take a look at what "u.s. today says. the new la of course, there are r

opinions. walter, daytona beach, florida. democrat line. caller: when i travelled extensively through central and south america, i am often asked for my papers because i look different. i do not mind showing my papers to the door is, because i am aghast, so i do not know but the big deal is here. as well, there is a war going on in mexico. since 2006 there have been an average of 5000 killings a year because of the drug war, but

nobody is talking about that. nobody is mentioning this. janet napolitano says, no big deal, everything is fine. what is wrong with you people? host: let us get a response to the phone call. questions about how this measure could help with drug issues, border violence. guest: first of all, there are lots of laws against drug smuggling, kidnapping, going after drug cartels. when police say these things undermine their ability, it speaks volumes. border violence is incredibly

important, but that is a cross- border issue. the idea of open borders -- we have had defacto open borders for way too long in the u.s.. nothing that we have done has worked. why? the real key to stopping immigration is to turn off the jobs. you do not do not at the border with a wall that you can scale over. you do that at the point of higher where you have an employment verification process. but you have to couple that with a process by which workers pay their taxes, learn english, and get back to the citizenship line. that will eliminate illegal immigration and do a much better

job than we are doing currently. host: what about the idea of the enforcement being done at the job site? guest: we go back and forth on this issue. we have been working on this for very long. coupling employer sanctions here is not acceptable. we tried that in 1986. we are not trying that again we will not be giving illusory enforcement. this administration has made promises about border security, they have not met them. napolitano has not finished the border fence and that congress demanded be built. john mccain said in a obama does not like the arizona law, they can send troops down to the border. pretty much, they are saying,

put up or shut up. essentially, what we have been listening to from frank's side of it is fine if we do immigration law, as long as no one is deported. you undermine completely moral authority to make the argument that there is a good faith basis for believing any consensus compromise your side of the aisle is pushing would ever fulfill the commitment. the reason why we month not see in bill is because democratic leadership does not have a convincing, credible enforcement strategy in place.

host: joe, independent caller, lubbock, texas. caller: we are experiencing a building boom because of the cheap labor. they are seeking a better life. red than criminalizing the immigrants, how about the employers who are attracting them? employers who hire illegals are unpatriotic and should be jailed. i will take my answer off the line. guest: amen, and that is what drives illegal immigration. that at all employers are looking to hire these people without paying taxes or benefits. that is at the heart of illegal

immigration. so what do we do about it? in addition to the measures being taken at the border, we need aggressive enforcement at the worksite. we have to have an aggressive enforcement of labor laws, so that the same people and violating these calls, we need to go after them as well. we can lower the playing field, but you cannot do that only with the employer enforcement. you also have to make sure the 11 million people here become legal. dan favors making everyone so miserable that they eventually leave the country. we do not think that is realistic and politicians who favor that are not being realistic with the american people.

we know we've had a should be able to seek citizenship after they learn english, get to the back of the citizenship line. in the future, people will not come if they know that the job to magnify and not let the markoff books. guest: your point is well taken, but there are states that are working to beef up sanctions against day labor employers. working aggressively to crack down on employers because the obama administration is doing more paperwork audits of employers but they're not actually increasing the fines or upper hand in the workers themselves. frank and objects to what the obama administration is doing, which is firing individuals from worksites, but they are not taking them into custody.

so the policy does not make sense because, at root, we are not going to solve the problem it be the party uses this situation for political gain. republicans believe that cheap later contribute to corporate contributions. this thing is coming to a head in the country. unless we start dealing with this, and will simply explode. host: this is from "the washington post" -- joe, republican caller. south carolina.

caller: i know that the republican support big business, want cheap labor, and democrats want more hispanic votes to overcome the moderate, center-right of voting blocvoti. this fellow on the right, frank sharry, he does not do anything. if you mention any ballot proposal, he would just knock it down, and anything defending our border, he is not for it. canada defends their border so

aggressively, mexico called them racist or something. guest: we strongly support professional accountable border patrol. we think it is essential as an exercise of national sovereignty and to protect the american people. we support aggressive work site in foresman, going after employers who deliberately seek out illegal to get an unfair advantage in the labor market. we also support the idea of making sure that the 11 million people who are here illegally -- this is the dividing point in the debate. his organization wants to drive the 11 million people out of the country. we do not think that is realistic. we think they need to get into the system. as a result of turning up the drums amendment, we will change

the immigration system into an orderly system. when you say that we are not for real control, i would argue that those of us who support comprehensive immigration reform are more interested in eliminating illegal immigration more than the people who think that driving a 11 million people out of the country will solve the problem. these people have been here for 10 years. you may not like it, but it is something that we have to deal with. that is why most americans are interested in a common-sense approach, rather than town names, come on, let us get serious. host: let us take a look at arizona gov. jan brewer and the signing last week >.

>> we are working to solve a crisis that we did not create and the federal government refuses to fix. the problemthis bill strengthene laws of our state. if all of us, every arizona citizen. it does so while insuring the constitutional rights bubble all and arizona remain solid, stable, and steadfast. host: the arizona governor. bruce in utah. democratic caller. caller: good morning. i support arizona. a lot of these issues are going

against u.s. best interest. i worry when people do not get their retirement or other things are, that they will go out and break the law. i worry about the future of the country when so many things are going wrong. host: let us get a response. guest: as you say, this country is facing long-term problems. there is a sense that washington is not a move to deal objectively with a significant percentage of the problems the country is facing. if democratic leadership or could take up an obama amnesty bill right now, it would be viewed as further evidence that the people in washington are completely out of touch with

what the average person is concerned about. if it were possible, we would seek congressional ratings plummet even further we have been immigration policy that continues to admit up to 1 million workers a year. we have extremely high level of unemployment in the country. people are desperate, looking for work, and we should be seeing federal strategies to make these jobs available for americans, but what do we hear instead? amnesty. what are we of electing these people to congress who only have to fringe group pressures, the seiu? they are behind a lot of the funding for this and they believe this is something that the democrats will benefit from. public interest need to prevail

now. we need to see the arizona model emulated across the country. we need the government to come to the aid of these states. poll after poll has shown that this is what the american people want but are frequently rebuffed by democrats. host: we have this e-mail from michael -- would that be too much? guest: that is part of the solution. we need a national employment verification system with a reliable database and appropriate safeguards. people are concerned, they want

to make sure immigration is illegal. if we make sure that these 11 million get into the system, we do not want 11 million more in a decade. that is why turning off the jobs magnet, with this employment verification system, with a background check system -- that is the combination that will be a huge leap forward in eliminating illegal immigration. the key is this. everyone agrees we have to do a better job to chairing the border. everyone agrees we have to crack down on bad actor employees. the reality is, we have to deal with these 11 million people, two-thirds of them are in families.

most of them will say that they are americans, in everything except the paperwork. we need to make sure that they are paying taxes, we the additional benefits that would come from comprehensive immigration reform. that will increase our security, reduce our deficit. we are hoping that congress can get to that this year. host: next phone call. michigan. caller: i have a couple of statements and a question. we are a nation of laws. here is the deal. e-verify.

why can we do that? i am from michigan. i come down to florida to work in the winter. i was the only american worker there. out of 13 people, of was the first person to have to go back home. here is a great solution for all the immigrants. instead of marching to washington, march 2 washington and sign up for the army, navy, marines. america is not free. guest: i think you raise an important point about the e- verify program. arizona it is one of the few states require a individuals to participate in this.

we are opposing this kind of program to push it nationally. in the end, there are a lot of programs out there that are conditioning robust worksite and foresman, which amnesty. what we are saying is, this is the wrong approach. to some extent, they are taking me the obama administration is painting themselves into a dangerous corner by saying we are going to take the interest of illegal aliens at a hard- working families who need enforcement. if they were serious about a pathway to citizenship, they would be talking about a far more comparable to a set of measures. they would be talking about curtailing future migration of extended family relatives. meaningful reforms that have

been recommended by every commission in the last 30 years to start burning some credibility into the system. instead, because of the legislation they are talking about at the federal level, which appears to be tailor-made to the seiu, amnesty, it appears to be more like a partisan power grab. host: what is your response to what has occurred in arizona? guest: this is going to result in some sort of legislation. everyone knows this system is broken. everyone knows that we have to deal with the fact that we have 11 million people here and we do not want 11 million more in the future. that is what comprehensive immigration reform is that for.

american people are frustrated, not with the fact that there are illegal workers and a little -- illegal immigration, as much as the fact that our political leaders are more concerned with scoring political points. we have heard all the political reasons why not. i am tired of hearing the excuse that we do not want to take a tough vote because there is an election coming up. the one other thing, as part of comprehensive immigration reform, there is something called the dream act. for young people, if they go to college, joined the military, they can become americans, and that is a bill that you will continue to see highlighted. president obama was at a citizenship ceremony for

individuals who served in the military and are now becoming citizens. to me, people talk about immigrants as some sort of criminal class. the vast majority are just hard working people who want nothing other than to become americans. the problem is, there is no system that will allow them to properly get in line. host: allen. republican phone call. caller: both of these people have good ideas. first of all, up 1/2 to blame mr. obama. -- first of all, we have to blame mr. obama.

we have to seal the border off before we do anything. with 10% unemployment, people losing homes, companies going bankrupt, do we really need to give the these people and our jobs? there are all sorts of things that we can do. just like you say, this is all political. it is all about who is going to be elected. i am not part of the tea party people, but i am thinking about it because i have the same feeling. it is just like this health-care thing. the american people do not want it. my question is, if you are a foreigner, and you have a baby, how come it automatically becomes an american citizen?

guest: that is what people call birth of touristourism. we need to clarify the 14th amendment or update it to update how people move around the world. in the end, we need an immigration system that can serve the broad interest, and it needs to be affordable. we need less immigration, more highly skilled. ultimately, it has to serve our broad national interest. it needs to correspond to our employer, environmental, energy goals. today, we are headed to 1 billion people. if we were to pass amnesty, like the obama administration wants to do, we could have over 1

billion in the country by the end of the century. nobody is talking about that. host: i want to get a response to that. we are running short on time. this idea of people coming into the country, having babies. guest: the 14th amendment says that if you are born in the country, you are a citizen. the idea of messing with the constitution on such a principle does not make sense to me. the solution is not dealing with these anchor babies, which by the way, is an offensive term. we have to broaden our understanding of the issues, that we can solve it correctly. you can only do so much at the border. the way to cut off the illegal hiring is to make sure that

people here are legal. that is the combination that will turn us into a legal system. it will give us control and reduce it to a minor irritant. this is not about giving special interests here, it is about solving problems. it has to be done on a bipartisan basis, and should be done this year. host: maria from minnesota. democrat line. caller: we are losing the point. i am an american. i am mexican. i was born in the united states. personally, i think it would be a wonderful idea if we could have a system like arizona where we could directly ask people about their citizenship. there is nothing wrong about

that. guest: in arizona, someone of your background is much more likely to be passed, compared to someone like me. if police do not aggressively enforce this law, they are subject to a lawsuit. they are stuck between a rock and a hard place. i do not know who you cahow youo this without asking everybody for their papers. host: we have to an e tweet -- guest: the major purpose of this is to ensure when someone is brought in to arrest procedures, that there is verification of their immigration status.

that has an indication of how they are processed, ultimately, questions for deportation, other things. the initial contact, and if you have a van going along with 15 people inside, and the police stopped them, that person may be asked if they have the right to be in the country. all permanent alien to in the country are required by law to have their alien registration documents on them at all times. we do not carry our birth record all the time, but these are immigration documents. this is not particularly onerous. state need to have the full support of the federal government. we got into this mess because of years of litigation by mexican groups who crowned state into

not cooperating with the federal government. that is how we wound up with all this immigration getting help of control. in the end, what you find is a every solution that we tried to propose to bring our borders under control, -- frank opposes everything that we say. there are threats, thuggery, political intimidation. isn't that right, frrank? rank? guest: we know that your organization, daniel, is extremely controversial. i have made it clear what our

organization stands for. you can call us names all you want to. what the american people want is what you do not want. they say that it is impractical and unamerican to drive 11 million people out of the country. we do have respect for the law by having laws that are enforceable. you do not like the idea of of all these hispanics getting citizenship, let us be honest. >> "washington journal" errors each morning at 7:00 a.m. eastern. john mccain and john kyle were on the senate floor talking about their state's new immigration legislation. this is about 15 minutes.

mr. mccain: mr. president, as is well-known by my colleagues and most americans, over the weekend -- over the last several days the governor of arizona signed legislation which is controversial, which is designed to affect the issue of illegal immigrants into the country across the arizona border. that legislation was enacted by the arizona legislature and signed by the governor because of the frustration that the governor and the legislature and indeed the majority of my constituents have incredible frustration over the federal government's failure to carry out its responsibility to secure our border. and many have viewed this as a civil rights issue. there's no intention whatsoever to violate anyone's civil rights, but this is a national security issue. this is a national security issue where the united states of

america has an unsecured border between arizona and mexico, which has led to violence, the worst i have ever seen, and numbers that stagger those who are unfamiliar with the issue. numbers such as 241,000 illegal immigrants were apprehended on the tucson sector border of arizona just in the last year. you do the math -- we'r -- we'rg about a million people crowing our border illegally -- crossing our border illegally. this is not just a human smuggling issue. this is a drug issue. the flow of drugs is staggering across our border. last year in the tucson sector alone, there were over 1.3 million pounds of marijuana that were apprehended. 1.3 million pounds of marijuana apprehended on the arizona

border. the numbers of methamphetamine, cocaine, other drugs crossing our border by the drug cartels is staggering, as i said. "the los angeles times" reported last week that over 22,000 mexican citizens have been killed in the drug wars against the cartels. have no doubt, this is an existential struggle against the drug cartels, the human smugglers that work together and the security of the united states of america. the violence has already spilled across our borders, and unless we get it under control, it will get worse. three american citizens were murdered in juarez, mexico, as they were trying to get home. a rancher in southern arizona was murdered as he was out patrolling his own property. the people in southern arizona have had their rights violated by the unending and constant

flow of drug smugglers and human traffickers across their property. their homes are being broken into. their rights are being violated. their rights, as american citizens, to live in a safe and secure environment, as most of the pundits who are criticizing this legislation enjoy. the fact is that our borders are broken, they are not secure. it is a federal responsibility to secure our borders. it is not being done. senator kyl and i have a 10-point plan that can be enacted immediately in order for us to secure our borders and secure it quickly. and before i ask my colleague to comment, there is the question about whether we can secure our borders or not. of course we can. of course we can. we have seen in the yuma sector of arizona a dramatic decrease

in illegal crossing and drug smuggling. but, again, i want to mention to my friend from arizona, have no doubt that this is not just a human smuggling problem -- and people trying to cross our border illegally to find work. this is a human smuggling cartel aligned with the drug cartels that are sending drugs across our border and killing our citizens. and the cartels are in the human smugglers, a direct threat to this nation. just two weeks ago a highly organized syndicate that takes people who are coming across our border i will eelly to tucson -- illegally to tucson, taking them to phoenix in van vans. these individuals come from as far away as china. have no extent of the cruelty,

the barbarity. challenge we face -- of the challenge we face, of the human smugglers that are just south of our border. and the state of arizona has been bearing the brunt of trs and the administration has -- an--and the state of arizona has been bearing the brunt of it, and the administration has failed to act. we need to take a number of other steps that senator kyl and i will describe, but this situation is the worst i have ever seen. and it is time for the federal government to act. if you don't like the bill -- the legislation that the legislature passed and the governor signed in arizona, then carry out the federal responsibilities, which are to secure the border. you probably wouldn't have had this problem. mr. kyl: mr. president? the presiding officer: the senator from arizona. mr. kyl: mr. president, may i just ask my cleelg, senator mccain -- may i just ask my colleague, senator mccain, you have been down on the border recently. you went to the tucson sector,

which is the sector that has about half of all of the illegal immigration in the united states coming across in that one sector; is that correct? mr. mccain: i have. and i would point out again, there were 241,000 apprehended last year. there are estimates that five to one are not apprehended. so that could have been over a million people who cross the arizona illegally in one year. that's staggering in itself. mr. kyl: and, mr. president, the point here is that the tucson sector is one of two sectors in arizona -- it's maybe -- i'll just estimate here -- maybe 60% of our southern border. the yuma border, maybe the other 40%. and the tucson sector ends i believe at the new mexico border. so you're talking about a couple hundred miles, give or take, not that many miles, when you consider the more than 2,000-mile border all the way from the go gulf of mexico to -- all the way from the gull of mexico to the san diego area.

so about won-tenth of the-- --so about one-tenth of the entire border area. and my colleague senator mccain was there within the last month or soavment i was down in the yuma sector. these two sectors -- it is literally the tale of two approaches to immigration reform. as senator mccain said, there is absolutely no doubt that application of the right principles and resources to the border can secure the border. let me give my experience with the yuma sector and then ask my colleague to talk a little bit more about the tucson sector because those are the two sec fers in arizona. the yuma sector has virtually eliminated illegal immigration. now, there is substantial drug smuggling and that's a lot of what they're focused on right now. how could this have happened? mainly three thins things:

first of all, they completed the fencing in that particular area. there are just a couple of miles left to go. but they have 11 miles of good fencing in the urban area around yuma. there's so many areas where it is even triple-fenced. they have enough border patrol investigates, so we have to be careful that we don't take some and send them over to the tucson sector because they need them. once you take the arks you need to have enough troops to hold the area or the bad guys come back n so we need the border patrol there. and if we could have some national guard troops, as my colleague, senator mccain, has recommended, it would absolutely be the final person l solution here. i can remember when the guard was withdrawn and there was only one guardsman left and they still stayed away from him. i'm not even sure if he had his weapon with him. let's phut this way.

the bad guys on the other side of the border do not want to mess with the united states military. and they won't. and that's the reason my colleague, senator mccain, why then-governor napolitano and many others believe that we need more national guard on the border. and what was the third thing that brought the illegal immigration in the yuma sector almost to an end? it's called "operation streamline." it is very simple. when you cross the border, you get flown in jail. the first time it is about two weeks. the second time it is 30 days. the third time it is about 60 days. the rest of them want to come here for work. they can't work and make money while they're in jail. so there's a huge disincentive for them to dplos that area. so what the border patrol and

department of justice said was to say, fine, if you cross in this arks you go to jail. well, they stopped crossing in that eamplet they expanded those areas i until it covered the entire yuma sector. now the illegal coyotes know if they try to bring somebody across the yuma sector, immediately those people will go to jail. so they don't try it anymore. as a result, the statistics are, as my colleague just pointed, in the tucson sector you got almost a quarter of a million people apprehended. how many in the tucson sector? well, this year 4,946 so far. from a quarter of a million almost to 4,000-plus. and it wasn't always so. in the yuma sector in 1996, 114,000. the next year it went down to 37,000.

and then 8,000, 7,000, probably 5,000 in year. you can see that the impact of the fencing, the personnel, and "operation streamline" have made a huge difference. mr. president -- mr. mccain: i ask unanimous consent with the indulgence of my friend from hawaii, for three additional missense. the presiding officer: without objection. mr. kyl: mr. president, i've made my point here. senator mccain is absolutely right. if you want to do it, you can do it. you just have to apply the will and the resources. what worked in the yuma sector can work in the tucson sector. almost all of those things are included in the ten-point proposal that senator mccain and i have made. mr. mccain: i also emphasize the violence is worse than it's ever been. 22,000 mexicans have been murdered on the mexican border. american citizens have been murdered on our border. this is no longer a situation where someone from mexico or

some other country decides they want to cross our borders. these are highly organized, highly sophisticated, well equipped, well trained, armed cartels, drugs and human smuggling cartels coordinate with each other through these corridors. they have better communication than our enforcement agencies do due to our lack ofibility operability. they have sophisticated equipment, sending drugs over using ultra lights. this is a struggle for the existence of the government of mexico. this is a struggle on our side of the border for the fundamental obligation that any government has, and that is to provide its citizens with secure borders. right now our citizens are not safe. and, therefore, the federal government should be fulfilling its responsibilities to provide the necessary equipment and manpower to secure our borders.

as my colleague from arizona just pointed out, it can be achieved. it is now a massive failure on the part of the federal government, and they should also fund it. i thank my friend from arizona and i >> you are watching public affairs programming on c-span. british prime minister relations or about a week away. we will hear from gordon brown next. after that, a discussion on the benefits of the health-care bill. on tomorrow's washington journal, we get an update on the financial regulations built with zachary goldfarb. after that, shawn dubravac will talk about job growth and the economy. later, kathryn gerlach of the

nuclear energy institute joins us for conversation on nuclear energy with our studentcam prize winners. >> sunday on "in debt," three- time presidential candidate pat buchanan on conservative ideology and today's political climate. he will take your calls, e- mails, and tweets. three hours with pat buchanan on c-span2. >> the british election is may 5. most major polls shows that the labour party is in third place behind the conservative and liberal democrat party. their third debate is this coming thursday. this past weekend, prime minister brown unveiled the environmental agenda in a speech to students at westminster academy in london.

this is 25 minutes. >> i want to thank him for not only what is a great speech but an inspiring and challenging. i want to thank the woman who did a great member -- job as a member of parliament. he can see the difference in the increased provision in this area and the personal word of her. -- her personal work. [applause] this is one of the great myths perpetuated by the media that young people do not care about politics. in my experience, young people care more about the world around them than anyone. the world around you is what politics is about. that is why so many people

support the disaster for haiti fun. .

and president reagan said, "i do not care what kind of communist he is." [laughter] what were his views? what did he stand for? and he said, "i stand for everyone who is able to realize the potential in every part of the world," and i think that is the instinct of most decent people in our world. the other thing about this election campaign is that there is no difference between the parties. i believe the differences are huge, and today, i want to give you not just reasons why we should keep going forward with the majority of the labour party and why we lose so much when we go back to the conservative government, i want to show that our doctrines are rooted in fairness and that these other things are wrong because they are unfair. how many times did you see what

is happening in the world, and deprivation abroad, and then contrast the excess of -- excesses of some, like the bankers, and say, "is not fair"? -- and say, "it is just not fair"? our dna, will we are as a people is defined by that. -- what we are as a people is defined by that. it is what we call a future fair for all. this speaks to who we are as a party, and i believe it speaks to the distant instincts of who we are as a people, so today, i want to talk to you about the different future, about the three big questions about our future that are relevant to the kind of fairness we are going to

have at the end of this century. the first is, as was just talked about, are broad, global campaign to address climate change -- our broad, global campaign. today, we are launching a dream manifesto, including new ways to fight for a new climate change agreement to make sure that more than 100 countries will not only sign up for the national emission targets but will agree to a framework in which we can all move forward together, to ensure that some of the poorest countries get the help they need to deal with climate change and climate change refugees and evacuees. we have a statute of consumer rights, to have 5000 low-carbon apprentices, and to show our commitment to fairness to help those with lower incomes with their energy bills, and i can

say today that this is to ensure fairness that the elderly of our country who are all pensioners over 75 get a pension credit in addition to the winter allowance they receive, 100 pounds of their energy bills. now, that is fairness in action. [applause] and the second fairness that i would like to see is about fairness in a new politics. that does not only inspire you, a politics that does not just inspire you, like beating cancer in this generation, or serving the public and not themselves, but one that also gives you the chance to get more involved in changing britain. we are proposing in this

election a referendum, a referendum on a new type of electoral system, a new kind of mechanical system of collecting them to the house of lords, new petitions -- a new kind of system of electing them to the house of lords, and we are also proposing that we have votes at 16 for young people. [applause] and let's be honest. the conservatives are not with us on this agenda of change. if they really were a party of change, they would say they would abolish the spears and the house of lords, something that has lasted a century -- they would abolish the peers. and if they really had changed, they would have changed their policy on fox hunting and accepting the ban on -- and

accepted the ban on fox hunting. if the conservative party cannot change on these things, they cannot change in another area. now, the third issue of fairness that i want to raise today is with government and unemployment, and i incredibly plowed -- proud that we now have a record number where a majority of women -- a majority of those going to college are women. we're still creating extra university places, and the student financing to go with it. that is because we do not believe in limited room at the top but that all have something to offer if given the right support to do so. and i am sure you know about the young people guaranteed. i think if we stay on the road to recovery, we can increase the

young people guarantee and create 1 million new skilled jobs in this country and give all of them the chance to not only get by in life but the chance to get on. what did we meet -- what did we read the newspapers this morning. allow nurseries to charge parents. just think of that. fees now for the under five. the very reason we have fought so hard to have hundreds of thousands of children out of poverty.

it is because it is unfair for it to be the destiny, and fear that the wealth of your parents should determine the end of your story, unfair that only some of these people can have some chances. we believe that everyone should have all of the chance to realize all of it. [applause] and i say we should apply to every policy. above all, it is it fair? we go to the heart of our modern welfare society. policies where i believe we can assure that they are hurting not middle-income families but others. revealing the intent of kicking

away so many of the letters of opportunity for thousands of young people. once you go behind the glass and the posters and the pr and the style and the presentation, you find that policy by policy, detail by detail, the tories are planning an assault on all of the pillars of that. there are our commitments to tackling poverty. chances for your children. meeting the first fairness test is insuring that nurseries schoolchildren should receive their education free of charge without a top coffee. just raising the number of hours they can be a nursery school, because getting your first chance to learn at nursery school is key to the development of your talent for the future. but the tories will not match our commitment to raise the real budget for nursery schools.

they have made it clear they will not match the cash for the under five that we have made available for 3.5000 children around our country. they propose now to top off these four children, which would create a two-tier and divided systems for three and four-year- olds in our country. it is what the head of the daycare industry calls an attack. but, do you know what makes me angry is? it is that there are mounting these taxes on children's rights as exactly the same time they're proposing a massive tax cut to be 3000 richest families where 200,000 pounds across the country. to give the richest the state's money while demanding money from parents for nursery school is

simply not fair. [applause] so fairness means decent education for all nursery children and not 200,000 for a wealthy few. the next fairness i apply is on tax credits. we have asked the tories to ensure as we would that every child is entitled to receive the child tax credit that are worth tens of pounds per week on top of the child benefit. when we pressed them, to continue these for middle-class families, they have walked by on the other side.

thousands of families losing the tax credits while they are prepared to see the richest few given 200,000 pounds each. this money would be given to the richest states in the country while middle-class families would permanently lose their tax credits on which they depend. fairness surely means giving children the tax credits they need and not 200,000 pounds for the very few. now, the third fairness test. remember, we have made a child fund available for every child in this country, a payment into a child trust fund made as the child is born, 250 pounds, an essential element of building up the savings culture among the younger generation, and why have we done this? that is because we want not just a few sons and daughters of wealthy families to have private

trust funds, but we want to give everyone as a child a chance to build up a trust fund for themselves. now, the tories have announced they would take them away from families of 16,000 pounds or more, and the liberals have announced they would take them away altogether. i say it is not fair to cut child trust fund that should be available for all children at the same time while cutting the inheritance tax for the richest you. even while they need to build it up for their own, this is the savings of the richest. now, the next test of fairness, we are at a great academy here that has made so much of the difference. we asked them to join us in maintaining school budgets so that in future years, the family could rely on school for their

children. we want to make sure that every child should be able to get it, and we wanted to make sure that every child in secondary school could have studies that would follow them through right to the course of their education and give them the advice that is needed. but the conservatives said they would not support rising budgets for our schools. they have voted against the free tuition we wished to give to our primary school pupils. it is right in my view that we make available for those who need tuition all the help that we can. when we asked the tories to support our children by funding our schools, they walked by on the other side, and, again, i have to say, they'd prefer the inheritance tax cut for the very few then guaranteeing investment in the education of the many.

i believe is not fair, and i believe people will see it is not fair. the fifth thing that is a fairness test, we asked the tories to support so that people could stay on in education part- time or full-time. we wanted a guarantee also that every school leader will have an opportunity and then they would have a chance with a future jobs fund which we have now created. we wanted to give a guarantee that they will get a job or get training or get work exchange. now, i do not know why the conservatives have refused this for the future jobs fund. that is the best guarantee of avoiding a resurgence of a desperate situation of the 1980's and 1990's. that was when too many young people became part of a lost and

wasted generation, and this is education to 18. they walked away on the other side. better early learning. more and better nursery education, better help with tuition at school, better health and advice to stay on at school, and a job that will give qualifications and support. this will not only help families today, but these are the main roots in our commentary. by bringing them together, someone with a low-income background is better guaranteed to get a middle income job in the future. this is pulling away the ladders of social mobility in our country.

they are pulling away opportunities that there should be for people to advance in our country. tax credit cuts for thousands of middle-class families. school budget cuts. now, we find nursery education will also be a casualty. you see, day-by-day, all of the same time they are promising an inheritance tax cut. their motto is that god helps those he has already helped, and i think that is morally wrong.

[applause] i think the british people know it is wrong. so i say that this election choice is becoming clear. someone to say it is between new and old. but i say it is between fairness and unfairness, between justice and injustice, between doing what is right for our country and doing wrong. now, let me just give one final instance. they have already marked out the regions to be hit hardest. the northeast of england was then singled out. they have talked in -- talked about that.

and what begins with the towns and cities of the north east will not end there but will set the blueprint for a tax on jobs and investments. this is in many places. coming towards london, too, but it does not mean that. britain deserves better, and britain will get better if we could persuade enough people to vote for fairness on may 6. you know, when i was at school with my brother, i was so determined to campaign for justice that we ran an organization to help raise money. and when i was at university, i was a determined that workers at the university properly paid, we wanted to get the university cleaner's paid a decent wage.

i am an idealist and now. i believe our labor party is the greatest source for fairness our country has ever seen, because our country has been moving forward these last few years. the fox hunting ban, smoke-free public places, devolutioned, the minimum wage, the social chapter, the winter fuel allowance, the new deal for young people, free museum and tree, paternity leave, freedom of information, peace in northern ireland, reform of the house of lords, the discrimination act, and others, and these are just a few of the changes we have made.

[applause] you know, we have come so far in our short lives, it is up to you to make sure that the country goes forward and not backwards. you have to vote for it. if you want to protect jobs and our policing, our schools and our hospitals, you have to vote for it, and vote labour. the inheritance tax cuts, you have to vote for it, and you have to vote labour. if you want to stop the cuts to every region of britain and nation in our land, you have to vote to stop them, and that means voting labour.

if you believe in fairness, you need to vote for it, because a fairer the future does not just happen. fight for the trial trust funds -- trifled trust funds -- the child trust funds. universal broadband, a high- speed rail. to beat cancer in this generation, get out and fight and fight and fight again. fight for our country's future. it is when you see the tory proposal that you realize fairness is in our dna. it is in the british people's dna. fairness is at the core of the british people's dna, and we are fighting for the recovery.

we are fighting an election on building britain's economy for the future. we are fighting an election for our schools and not putting them at risk. we are fighting an election for the british people. let's fight it, and let's win it. thank you. [captions copyright national cable satellite corp. 2010] [captioning performed by national captioning institute] >> here is more about the british elections with a bbc reporter covering the prime minister's campaign. >> i work for the bbc 24-hour newschannel, so i am on the labour party team, and that means i am following gordon brown the entire time. we hit the ground running, and then, similarly, we have other teams with the others, the conservative party but james

cameron and with the liberal party with nick clegg. we tried to analyze the policies as best as we can. i think it is important to hear from people, particularly voters who do not know how they are going to vote in may. you want to know their opinion and what they think about how it is going. the criticism thus far is that they say that gordon brown in particular is not meeting enough real people, and so it can be hard to try to interview people who are not affiliated with the party in some way. i have spent my whole campaign with labour. the main opposition party, the conservative party.

i believe there are probably some similarities, to be fair. in my case, you are dealing with the prime minister, and there are security issues. all of that said, we have a joe -- juke about a big supermarket chain, and we say, "ah, it is tuesday. it must be morrison's." i feel we have done quite a lot of things like that. the one thing we have picked up on in particular is very keen according to apprentices. these are sort of junior members of the staff. it could be plumbers, electricians, and there is a

slightly running joke that, "ah, it is wednesday. he must be talking to apprentices." it is about saying the economy is in a bad way, but we have made things better, so stick with us, because we have made things better. it is securing the recovery, talking to young burt members of staff and others. the polling suggests that the televised debates -- if that is true, that can only be good things. we have quite a few events,

where there are young people in the audience. they would attack the audience, 18, 19, voting for the first time on may 6. they are not nearly old enough to vote. by the time we get to the next general election, they will vote for labour. i think there is still some polling to be done in terms of which way the people will vote in this election. the speech gordon brown just gave, labour, a breath of fresh air. -- >> the speech gordon brown just gave was a breath of fresh air.

we have our own opinions. >> is your family political prove >> yes. they work for labour,l as well --is your family political? >> yes. they work for labour, as well. gun crimes is a key issue right now. i hope that when labour do come in to control, they will change it, change the situation right now. >> when i first heard, i was really excited.

it is really good. we have ideas to share with other people. >> how old do you have to be now to vote? >> you have to be 18. they are trying to change the law to 16, and that is really good. >> what issues do you think are most important in this election right now? >> the issue most important is with education, children should get a chance to be educated, and they should have a chance, and i

think that gordon brown is offering all of those chances. >> i believe in every word he says. he just brings young people into politics and just makes them believe and get their trust by everyone. he is actually doing what he says. that is why i believe in them. >> what are the particular issues that you think are important in this election? >> i believe about the nursery, and that they should be charged, i found that really appalling. he or she needs an education to start them off and get them ready for primary school, so for

them to be charged i think is not fair, and, like he says, i think fairness is something needed. >> between gordon brown and the other leaders, the debate that was going on was quite intense. and it does not just appeal to the rich people. they reach out to people, people like me, my family, middle class, who are not rich. >> and what about the liberal

democrat party and its leader? are you curious at all about that? >> to be honest, i am not really into the liberal democrats. not many people are going to vote for them. >> and do you have any opinion about america's political system? what do you think? >> it is kind of hard because i do not live in america, but i think it is just like here. you get a chance to vote. like barack obama. what was his name? the the republican john mccain.

it is very similar. >> tomorrow morning, a look at the world goldman sachs and other investment banks had in the recent conventional -- the latest downturn. they testified before a subcommittee. that is live at 10:00 a.m. eastern on our companion -- companion network, c-span3. meet the grand prize winners of the c-span student cam contest during "washington journal." >> now, a look at how the new health-care law can affect businesses. they will discuss the tax credits offered to small

business is. this two-hour event is hosted by the u.s. chamber of commerce. >> good morning, everybody, and we welcome you all to the u.s. chamber and welcomed those small-business owners and human- resources professionals, members of the press who are joining us, the international audience that is watching with the webcast. i and the executive vice president here at the u.s. chamber, and on behalf of the chamber, i want to thank our two partners who helped make this event possible. this includes the national federation of independent business, along with our own health care and communications team. all of our groups supported health care reform.

we all a acknowledge the problem. we all the acknowledge the need, and we all wanted to make changes to lower our health care costs and make it more affordable. we opposed the patient protection and affordable care act because we actually think it will not actually lower the costs, and we continue to worry in the end that may increase them. whether the new law will do that, i suggest that remains a bit of an open question. the fact of the matter is, we have a new law. changes to the system r already beginning. -- are already beginning. in january. other changes will be

implemented between 2014 and 2018. some of these provisions may never be implemented, at least not in the current legislative form. after all, 2018 is four federal elections and two presidential elections away. health care dominated congress for a year. now we have a bill that has become law and health care will dominate the regulatory agencies for some time to come. we expect thousands of pages of new regulations. groups like the chamber and others will become highly active in trying to shape the outcome of those regulations and efforts to minimize the cost they will impose on business and the overall economy. with any 3000 page bill, without the benefit of being invested in a variety of conference

committees, it is highly likely we will also see numerous rounds of technical corrections evolves over time. employer groups have varied memberships. they sometimes have competing priorities. the number one priority right now is explaining the new law to businesses so they understand what it will mean to them, their employees, and how best to cope with it. we're not here to give legal advice nor are we here to give financial advice. one of the complaints we had during the health care reform debate was that this legislation would end up being a bit of the stimulus bill for actuaries, consultants, and compliance attorneys. nonetheless, we're here to try to provide guidance and general

understanding of what the new landscape will mean for businesses and their employees, as it relates to providing health care coverage. before our expert panel begins to delve into the specific provisions of the new law, i thought it would be worth noting what is not in the law to eliminate some confusion that still seems to circulate outside. for one thing, there is no government-1 public option. there's no expansion of medicare to people below 65 years of age. those are two important points. there could be serious consequences still yet to come stemming from putting another 80 million people into the government run medicaid program. the fact that the government run option in the expanded option did not make it into the final bill helps to contain government

expansion into the health care marketplace. there is no payroll tax employer mandate. the bill would of had an 8% payroll tax on businesses that did not offer government- approved health insurance. that did not make it into the final bill. there will still be consequences for businesses that do not offer coverage. we believe they are a lot less damaging than they could of been. there is no special committee of bureaucrats that gets to determine what every health plan must cover. businesses are not required to offer coverage to employees' dependents. if they do, that responsibility is expanded, but it is left up to the businesses to decide. help savings accounts are not outlawed by this new law. -- health savings accounts are not outlawed by this new law.

overall, you can still keep your savings account and you will not be fined for not having coverage. you can offer it to employees and still not be fined. private insurance has not been outlawed. there are changes that will make it more expensive. there are compliance issues that need to be resolved with all of the new rules. but private health insurance will still be available. many of you are well aware of all that, but we wanted to start today with a clean slate to eliminate any outstanding confusion. there was an important report released last week by the centers for medicare and medicaid services the department administers government health care programs. it contains sobering findings.

the savings in the new law are more than erased by the new spending in the new law. people who go without insurance and employers who do not provide coverage meeting federal standards will pay $120 billion in penalties from 2014 to 2019. individuals pay $33 billion of that total. employers will pay the remaining $87 billion. the report found that if the medicare cuts in the bill are maintained, an estimated 15% of providers who treat medicare patients will become unprofitable within the next decade. that means they may also stop seeing medicare patients. the savings estimates with the $500 billion in medicare cuts cannot be used to keep medicare

from going bankrupt while simultaneously being used to fund a new subsidy program. another important finding in that work was the class act, the long term care act imbedded in the bill. it will go bankrupt after the five-year waiting period when it begins to pay claims. if those points sound of all familiar to you, that is because groups like the chamber and many others in the business community have been repeating them over the past year. as i said at the beginning, this bill has passed and is now law. it is time to start thinking about what businesses need to know in order to comply with the new law, how to avoid fines, and to explore options to reduce or minimize the cost. before we go to our panel, let's remember that the solutions to

make the health care delivery system more efficient that keep people healthy, that those changes have never been invented in congressional committee rooms. they come from partnerships between people who provide health insurance, the people who administer the claims for health insurance, networks, and the people who pay for health insurance, including american businesses. as we go forward, we need to remember the important things we can do and that we're working on in the private sector. that is where real budgets and real bottom lines forces to come up with real, practical, and workable solutions. we will continue to highlight the successful well as programs that businesses are implementing to help control costs and keep people healthy. the chamber has already held two major symposiums to help businesses navigate the world of

wellness programs. we plan to continue our outreach on our own and with our partners, like the u.s. workplace wellness alliance. we will convened stakeholders to discuss best practices for businesses, insurers, and providers to get the best returns on investment for the benefits they provide. the first step towards collaboration always lies in dialogue. we will bring together small businesses, insurers and foster a conversation about premium increases, the cost curve, new insurance rules, and the realities of our current health care system. we will support efforts to broaden the implementation of health information technology and move the health care delivery system forward into the 21st century. we will continue to encourage efforts to curb frivolous

liability lawsuits. we may not have gotten tort reform in the law, but that does not mean we cannot continue to showcase successful programs of the state level and hope that others adopt similar strategies of the federal level. we will continue to urge real discussions on how to address costs at the end of life. we will educate more americans and businesses about the benefits of consumer-directed health care, value driven health plans, transparency, the value- based payment systems, and personal ownership of health care funds and their cost. businesses want to provide quality benefits to employees, but we will never get costs under control in a system where patients and consumers are disconnected from the costs and quality of care delivery. we will continue to support programs built around the

patient-centered medical home, reimbursement reforms that provide incentives to the doctors to keep patients healthy, to coordinate care, maximize efficiency, and to focus on quality outcomes. we're going to keep talking about solutions that should have been included in this bill, real medical liability reform, small business purchasing options, tax. for the self-employed, purchasing of health insurance across state lines, and more freedom to use consumerism like health savings accounts to cover insurance. in this debate, a health care reform is not over. fixing the health care system and managing the parts of the broken and managing those who are working well is a challenging job. it is going to take a lot of

time, effort, and move from the floor debate to much more than a signing ceremony. we will continue to work for good regulations, to make legislative changes, and if necessary to pursue legal action. we will hold members of congress accountable for helping or hurting america's job creators in the toughest economic climate they have had. businesses do not have the luxury of waiting for our work to be completed today. they know there is a massive new law on the books and they are on the hook for making sure the parts of it implements new flea and correctly. that is why the chamber, along with the american benefits council and the national federation of independent business, are pleased to be holding this conference with businesses large and small on

what they need to know. i know you are eager to hear from our expert panel. thank you for attending the day. let me call james gelfand appear to introduce our panelists. [applause] >> i am james gelfand on the health care team here at the chamber of commerce. i have a special message for those of you watching. you can participate in the conversation today by email in a question to the panel at any time. we will be able to get those here on stage and passed them on to our panelists. that is if you are watching on the web cast. if you are watching on c-span, you can e-mail the questions as well. i will be manning the computer during the q&a the presentations will not be money -- i will be

manning the computer during the q&a. the presentations will not be by me. marilyn werber serafini has been that health care reporter for "national journal" since 1995. she is one multiple awards. the most recent was from the association of health care journalists. she also got an award from the journalism center on children and families for an article that scrutinized president bush' controversy a proposal to give states money to encourage marriage and discourage divorce. she is written extensively about medicare policy, the insured, and by terrorism. she is covered congress since 1985. she served two terms as a member of the executive committee of the congressional periodical galleries. she received a master's in journalism and public affairs. she is the umpire for the national journalism health care experts blog, a highly regarded

website where people talk about the best solutions for health care. she was the natural choice for a referee to daday. thank you. i will hand it over to the panel. [applause] >> and good morning. i am not sure i have ever been called an umpire before. i have never thought of my job that way, but i guess it is in many ways. let me have a show of hands who has heard in the past month or so since the law as passed are you relieved it is all over and done?

everyone in this room has been following it closely. everyone in this room knows that health reform is far from done. there is a very long journey ahead of us. most of us have become busier as opposed to having free time on our hands since the law has passed. very early on this year and into the beginning of 2011, there will be a handful of early provisions to be implemented. most of them focus on new requirements on insurers. we even have a small business tax credit. most of the work will take place over the next decade or so throughout a long implementation. we are expecting there will be some bumps in the road that could lead to some adjustments in the law and perhaps the

repeal of some provisions. some folks are already looking in that direction. much is going to depend on the public perception of the law. that is rapidly changing. in january, the public was roughly equally split between supporters and opponents of the overall law. today, it is quite different there have been a number of polls in april. the opposition has been increasing. in some polls, the opposition is now 54%. that is the highest number i have seen. the opposition is increasing. the support tends to be decreasing. there are pockets of specific provisions where the support is greater than that. clearly for businesses, this is going to be a very new world. here to help us understand what that world is going to look

like our paul dennetanis paul d. he is an expert on help businesses reduce benefits with larger businesses. his head at congressional relations of the blue cross/blue shield association. he works on health care issues for the chairman of the finance committee. before that, he was at the department of health and human services. he worked in the office of management and budget. also with us is amanda austin, director of federal public policy for the national federation of independent business. she works with policymakers on capitol hill regarding the impact of health care positions

on small businesses. before joining them, she worked for several members of congress. we will go first to amanda will focus mostly on the impact of the law on small businesses. then we will move to paul who will help us understand what larger businesses can expect and when. amanda, start us off. >> this has been a long process for the business community. we were at the table. we were involved. at the end of the day, we felt like this bill was more about coverage than cost. an important statistic that came to light at the end of the debate for us was that overall, this bill was going to at best do this a 2% savings on small group premiums.

in the individual market, it could be a 13% increase on those premiums. to us, that was a concern. our interest in being involved in this legislation was to reduce the cost for small employers. we feel like this bill as a number of tax increases on the business community that will offset the spending. i will run through two key points that a timely for small employers today. i will talk about what employers can look forward to on the road. their questions about grandfathered status. all of our policies are "grandfathered." what does that mean? and small employers make changes to their plans?

and they increase their deductible? -- candice small employers make changes to their plans? can they increase their deductibles? we're looking forward to more guidance from them on this. we do know some specifics. we do know that for grandfathered plans, there will be changes. these will affect smaller employers and employees that have coverage today. they will begin eliminating pre- existing conditions in group plans for children under the age of 19. they go on to limit them for everyone in group coverage over the years. you see some of the carriers now are already allowing dependence up to age 26 to jump on to their parent's plans if they do not have an offer of employer- sponsored coverage today. there will be a prohibition of

annual and lifetime limits. that could increase the costs of plants. there's going to be an elimination of waiting periods. employers typically to have a waiting period because of high turnover rates, especially with employers like restaurants. another important point that is timely is the small business tax credit. that was a big talking point for why this bill should be passed. of the most in this room would agree that small employers and self-employed individuals need all the help they can get in a foreign coverage. a tax credit could offset the amount that the employer is paying. the key word is "offset." we do not want to go back year after year and ask congress for another offset and tax credit.

we want them to drop costs of long-term and help market stability and competition. we're thankful that the credit is there. we do believe it will offset some costs. but we believe the credit is tight and limited. it is available now for four years outside of the exchange. when the exchanges of been going, it is available for two years. that means the employer has to go into the exchange in two years to get the credit. they will give up the grandfather plant and get the new plan if they want to retain the credit. that is something to keep in mind. the credit is only available for employers with 25 or fewer full- time employees. the full credit of 35% is only available in full for employers with 10 and under full-time employees. it begins to phase out between

10 and 25. if you are in the sweet spot, you can get the full credit. there are a lot of employers who may have won high-wage workers and may not be able to get the credit. i think it is limited. we're not sure how many people will be able to access the credit. looking to the future, there are a few key tax provisions and requirements on small employers. starting this year, we will see a 10% tax on tanning. they're adding this to gain more revenue. they can look forward to a new 10% tax on usage. in 2011, employers will begin reporting their employees'health insurance costs on their w0-2.

there will be new drug taxes on every type of drug use. there are no over the counterpurchases with pre-tax dollars. you will not be able to get a eye solution. -tax in 2011. there will be a new business reporting requirement. all businesses now will be required to report any services or property transactions to the federal government. this will require all businesses the purchase these businesses the purchase these services r $600 to acquire attacks by the number -- to acquire a tax i.d. number and

send in paperwork. businesses are spending almost $100 per hour dealing with requirements from the government. in 2013, we are looking at an increase in medicare payroll tax. we're looking and a new tax on investments for earners making overt $200,000 single. there's another medical device tax. there are limitations on fsa at $2,500. 2014 is a big year for employers. there is a lot of discussion about exchanges. the individual and small group market will be turned upside down. each state will be required to operate an exchange. if they do not, the federal government will come in and set one up. there are a host of new things going on in these exchanges.

let me say who is able to access these. individuals, self-employed can access the exchange. in 2014, the states can do one to 50 with discretion to go up to one to 100. in 2017, it is that state discretion to implored -- allow employers with above 101 employees to come into the exchange. these are designed to provide insurance options for small group individual policies and for people gaining access to subsidies for poverty. we will have tight reaching rules requirements. -- we will have tight reaching -- rating rule requirements. right now, the states vary

widely. the northeast is much tighter on what they can rate someone's health up or down on. this will have a significant impact on premiums when the scuds into place. in 2014, they will require minimal coverage. we have worked hard to figure out how we can get the coverage affordable and what will be required of small employers. we feel strongly that the coverage requirement on individuals is too high. we remain concerned about how hhs will report on what will be required on individuals and small employers to have. we do not know yet. the bill set a minimum threshold. there's more meat to be put on those bones by hhs.

there will still be a market for employers. they do not have to purchase within the exchange. the real driver will be to see how these plans and exchange match up to what people currently have when the exchanges open. we do not know yet. people may want to retain their plan or come into the exchange. it is an unknown at this point. the individual mandate goes into place in 2014. the employer mandate was 58 for more employees. paul will talk more about that. it can have an effect on growing businesses and businesses having employees seeking coverage in the exchange. i could go on and on. that is kind of where we are. we look forward to working with the regulatory process and watching the national

association of insurance commissioners developed models for the exchanges. we think it is one to be a long road. thank you -- we think is going to be a long road. thank you. >> let me start off by thanking the chamber for having us with you today. i want to pick up on one of the remarks that burris made. now that health care is completed from the legislative phase and far from complete in terms of the regulatory phase, it is the number-one issue for employers, simply to understand what the law requires and what their responsibilities are. presumably, that is why you are here today or tuning in from the web cast. there's tremendous interest in knowing what these new responsibilities are. i want to start by highlighting

some of the good news and not so good news aspects of the law for large employers. i want to touch on a few more aspects of the grandfathering rules. it is a terribly important issue to get straight for employers from a complex point of view and for decision making purposes down the road. i will then talk about the employer responsibility provisions of the legislation and touch on a couple of the other tax issues. in terms of the good news, for large employers the first and central issue that they organized around was the notion that the current federal framework for regulating health insurance coverage in large groups is the erisa framework. that allows plans to operate under a uniform theme of regulations and federal law.

the good news there is that message was understood and resonated in the legislation. there is some new state flexibility provided in the legislation that is given to hhs and the department of treasury. erisa remains intact. there will still be the option for large employers to operate under that uniform scheme to have relied on since it was enacted in 1974. that was terribly important. there is no public plan option in this overall scheme. that is important for large employers who are very much concerned that it could have a disruptive effect on cost shifting and adversely impact on their plans. another important feature is that for large employers, they

retain the ability to do their own plan designed in terms of the coverage they provide to their employees. we will talk about that more than a minute. the coverage requirements for the small group market and the individual markets will largely be determined by regulation that will come from hhs and other agencies. the larger group market will be determined by what employers provide, although they will have to meet new minimum standards for affordability. i will talk about what those look like. i totally agreed there is a big disappointment on major initiatives in the legislation to address the problem that all employers have on the cost front. there are at least some seeds that could grow into a more

robust changes down the road. most of those are things like investing in comparative effectiveness research, making more strides in the medicare program towards measuring quality and performance for health care providers and reporting that information to consumers and purchaseers so they can make more intelligent decisions about where to get care. there are some glimmers of hope. on the not so good side, there are no major changes whatsoever on the medical liability front. there is a little bit of seed money for state experimentation. there's going to be tremendous new administrative and regulatory requirements.

employers will have to pay much closer attention to that the we have had to in the past. for many of us, there are a lot of unknowns about how this will impact in keeping groups together. for the first time, this is good news and bad news. the good news of having a reformed insurance market through exchanges will mean that people can vote with their feet as to whether they think a better deal will come from employer-sponsored coverage or the new health insurance exchanges. that will present challenges for employers as well in terms of trying to keep their employees groups intact so that they can make the coverage is affordable as possible to all their employees. let me turn and talk about some of the plan requirements that

apply to the grandfathered plans. the most important thing to know is both what they are and what the timing is for them. for all plans, grandfathered or new, the magic date is march 23, 2010. that is when the present but did sign the first of the two laws related to health insurance reform. in the first year, for any plant your the begins within six months -- after six months from the date of enactment, that would be september 23, 2010. any plan that begins after that

point has to remove any lifetime dollar lent its rigid limits on the plan. the annual limits will only be permitted under regulations to be issued by the secretary. we do not know yet what the annual limits will be that will be permitted. those will also phase out as of 2014 that is when the insurance exchanges will be up and running. there is a transition rule. there is the ability to maintain annual limits if the secretary allows them, but only until 2014. then those are prohibited as well. the waiting times that plans can have for after someone is initially hired cannot exceed 90 days. that provision kicks in in 2014

when the insurance exchanges become effective. starting on the same 2010 schedule, pre-existing conditions for children up to age 19 are prohibited. when employers are getting the most questions about from employees would be for adding dependents on to family coverage. i will hold for questions on that. there probably are quite a few. one of the issues where there has been a lot of ambiguity has been that until 2014, there is a special rule that says you do not have to offer an individual

up to the age of 26 the option to enroll in the family planned if they have coverage for another employer-sponsored plan. we think some of the initial information from hhs makes it clear that exception only applies if the adult child themselves as employment through another source. if i am 24 years old and working and have the availability to enroll in coverage through my own employer, the family coverage for my parents would not be available to me, at least initially. that exception goes away in 2014. it is a transition rule. the other two that apply to all plans are the prohibition on rescinding in force coverage and

minimum loss ratio requirements. those provisions would primarily affect insured coverage rather than any self-insured plans. there are a lot of other provisions that you are grandfathered for. one is preventive health care services, if you would not be required to meet the new requirements for those until you are a new plan or would potentially fall out of grandfathering status. that is a plan in effect prior to the date of enactment. there are new appeals requirements in the legislation. those would apply to new plans.

the plans in effect now are already subject to claims review an appeals requirements. a third one of interest to a lot of employers is that the legislation has a provision that applies non-discrimination standards that already apply to self-insured coverage to fully insured coverage. it says you cannot discriminate in your health care offering on the basis of income. this would primarily before plans structured for executive -- this would primarily be for plans structured for executives. they would have higher level plans. in the future, those would not be allowed under the non- discrimination provision. that would be a grandfather provision so it would apply to

new coverage after the 2011 effective date for those provisions. let me talk about the coverage requirements for employer- sponsored coverage. it does not go into effect until 2014. it is one of the major changes in the legislation. starting in 2014, individuals will have the responsibility to have something called minimum essential coverage. that is the term in the legislation. employers will have the responsibility to provide minimum essential coverage or face penalties. for an individual, they have three different places where they can obtain minimum essential coverage. one is through their employer. the other will be through the new insurance exchanges that will be created. if they did not have coverage

through their employer, they could obtain coverage on their own in the new exchange. that would satisfy the requirement. the third would be if they're eligible for coverage under a government plan like medicare or medicaid. those would be the three basic sources for coverage. for employers it is important to keep in mind that this requirement applies to any employer that has more than 50 employees. i will talk about how that works. the basic responsibility is that an employer with more than 50 employees has to provide the opportunity for employees to enroll in minimum essential coverage. the basic responsibility is that the employer has to give someone at least the opportunity to enroll in coverage offered to that employer plan. it implies -- applies to full-

time employees. the basic responsibility is to make the offer of coverage available to full-time employees. when you determine whether you have more than 50 employees, you count that on a full-time equivalent basis. that becomes really important for smaller employers. you do not discount the individuals or working 30 or 35 hours a week. you also add up all of the part- time employees and calculate those on a full-time equivalent basis to determine if you have 54 more employees. if you fail the test because you do not provide coverage to your employees, there is a little bit of relief in the legislation were you are not penalized for the first 30 employees. but then you pay a penalty of $2,000 on each of your full-time

employees above that 30 exemption on all the rest if you fail to provide coverage. another important responsibility that the legislation establishes for employers is to provide affordable coverage. this situation applies to employers that are providing health insurance coverage, but the losses to have to make it affordable as of 2014. affordable basically means that the coverage you provide has to cost more rigid no more than 9.5% income for that employee, household income. the coverage has to have a value of at least 60%. that is the actuarial value. it is a measure of how much the plan pays in aggregate vs how

much the employee pays out of pocket for things like deductibles. whenever the plan is providing, it has to pay an average debt -- aggregate of 60% of the cost of the claims for those covered benefits. if the plan fails to provide affordable coverage because it is not affordable to the employee because it cost more than 9.5% or does not deliver at least 60% value, then the employer is required to pay $3,000 for each employee to obtain health insurance coverage in the health insurance exchange and receives a subsidy in the exchange for the coverage they obtained their. that same trigger also applies

in the case of not providing coverage at all. what triggers the penalty for employers in that case is if even one employee goes into the health insurance exchange and obtains a premium tax subsidy. there is also a unique affordability test in the legislation that would require employers to provide a voucher to employees if they do not provide affordable coverage through the work force. that comes in at a lower amount starting at 8%. if the coverage costs the employee more than 8% of their income, then the employee is required to provide a voucher that would go to that employee. they could take that voucher and purchase coverage on their own in the health insurance exchange. that voucher has to be equal to

the largest amount that the employer would provide for coverage for employees to which the offer coverage. if you are providing a range of options, this the largest contribution you make to any of those options. that was added to the legislation by senator widen. larger employers will be required for the first time to automatically enrolled employees into health insurance coverage at the time of highere. that will be subject to regulations to be issued by the secretary. we do not know details on that or when the timing would kick in for the requirement. we expect it would be another 2014 effective date, but that will be determined by the

secretary for regulation. there is a new notice requirement that employers will have to let employees and new hires know about the existence of health insurance exchanges and what the consequences of that would be if they do not elect employer coverage but instead decide to get coverage through the exchanges. i also wanted to mention a couple of the other tax provisions and then we will open it up for questions. in addition to the tax provisions that amanda mentioned, there is one that would be important to a lot of employers. starting in 2013, there is a limit on the amount that can be contributed to flexible spending accounts. it is limited to $2,500 starting in 2013. then for each year after that,

it is indexed by the consumer price index. nothing in the legislation prohibits helalth savings accounts. that is good news. but there is an important tax change. starting in 2011, the penalty for using phones from held savings account for something other than qualified medical expenses doubles to discourage the use of health savings accounts for non-medical uses. it goes up to 20% starting in 2011. one that was of particular concern to the large employer community is that starting in 2013 large employers face a

major tax change in the treatment of federal subsidies that encourage them to continue to provide prescription drug coverage to medicare eligible retirees. that was established when medicare created the prescription drug benefit. it was the subsidy provided to employers on a tax-free basis. this change means that employers would now have to lower their tax deduction that they are otherwise entitled to by the amount that they received in the subsidy payments. as you probably saw immediately after the legislation, that impact of large employers significantly. for those employers that receive the subsidy on behalf of their eligible retirees, they had to post a major change in their

earnings immediately upon enactment. in some cases, those hundreds of millions of dollars as a result of that single tax change. for some, it was over $1 billion for that provision alone. that was a significant provision in the large employer community. we can stop and see if folks have any questions. >> thank you for the overview. i will take the opportunity to ask the first question. then we will spend the rest of the time and your questions. amanda, when you are talking about coverage requirements, you said there is more meat to be put on the bones by hhs. that statement applies to many provisions that affect businesses. how much leeway does hhs have in

writing these regulations? what kind of an impact could there be on businesses, depending on how these regulations are written? are there any areas of particular concern moving forward? >> this was an enormous issue of debate and discussion about the health care bill discussion. for small employers today, what is allowable for them to purchase means of the insurer takes on the risk. that is dictated by the state. we know what state benefit mandates are. some states have a higher threshold of benefit requirements than others.

it is extremely hard to find a perfect point of what would be affordable for small employers. there are regional differences. the northeast tends to be more expensive with the larger scope of coverage for small employers than the midwest and the south. our major concern was how you will find affordable for small employers. what is that? today, it is already unaffordable. our concern lies with what else they are going to dictate be included in the new minimum the essential benefits package. this is the baseline for where all health benefit plans will pivot off of. small employers shop.

they tend to change policies often, if not your to your, every couple of years. . . we haven't issue of 04 and knows ceiling for the benefit packages. this could add extra costs that they do not have today, and now we have limitations on the decibel levels where we do not today, 2000 for single and 4004

families. i think the only state that does has done that is massachusetts. what kind of impact will that have? what is going to be required carriers to cover and how that is when the impact the cost? impact the cost? >> there are lots of questions players are asking now about the legislation -- some of them are very technical and some of them are very broad. let me mention a few people are very eager to get answers to. amanda mentioned one of the issues would be for plans and are grandfathered in effect on march 23rd when the president signed the bill. how do they maintain that grandfather status? in the house bill, there were some provisions that said you could not make changes that

change the premium amount played by -- paid by employee or the cost sharing my board and certain percentages. if it did, that ended grandfather status. that was not improved in the senate bill or the bill the president signed. what was signed was largely based off the senate package. it's not clear whether the intent was to provide that flexibility in the future -- they need to make adjustments to keep the packages affordable and there are simply best practices people are trying to incorporate all the time into the way they design health-insurance plans. or if they do that, could any of those things inadvertently trigger them to lose their grandfather status and face all

these new plan requirements. another big unanswered question we get asked all lot is how does this legislation affect retiree plans? was it even if -- with even intended to affect plans offered to retirees? much of the legislation refers to employees, but there are big unanswered questions about whether the plans require -- the plans apply to retirement only plans. annual limits are going to be subject until 2014 to restrictions issued under guidance by the secretary. we do not know what those are yet. yet a lot of plans to that annual limits, either on the plan as a whole in terms of the total about available or by category of benefits. people really want to know the

answer to that probably the last one people ask all the time is they are very much aware it can take the agency's many months to interpret legislation this sort. they have to go through their own internal review before it is finalized, yet employers and insurers have to make decisions right now about the types of plans they will be offering starting next year. they are already well into the planning schedule. one of the things they want to know is if i make a decision based on the best information i have and try to take a reasonable, good, safe interpretation of the legislation, am i protected from agency enforcement actions or liability? otherwise, if i do the best i can in the guidance because that is in the real world will not

happen for many employers. >> let's turn to your questions. there are two microphones, so if you have a question, give us a sign and one of the microphones will come to you. we already have some questions coming in by e-mail. any questions in the room? >> i work with anchor national organization. i have a basic question that four different webinars have been unable to answer. what is the requirement for coverage of dependence? requirement, -- most of the focus has been on allowing

adults to the age of 26. second question -- when you get reconciliation talked about, that's an issue of full-time. then there was full time equivalent, and you added up of the part-time and/120. would you explain to me what that means it you have to hundred employees and 75 of them are part-time. >> let me take a stab at the first one. this is going to be this this webinar that does not give you an answer. the reason is there is not an answer. what it says in the employee responsibility provisions is if an employer fails to provide full-time employees and their

dependents the opportunity to enroll in minimal essential coverage, they're subject to penalties i described. in the house bill and the bill approved by the senate health committee, there was a much more clear statement about the required to cover employees and their dependents. our understanding is in the discussion of the senate bill when those were ultimately emerged between the two committees, -- ultimately emerged between the two committees, there was what i would call constructive ambiguity. it is clear yet to provide the opportunity to full time and place to obtain minimal essential coverage or be subject to penalty. it is not clear what the parentheses means. if you have to make it available to dependence or whether it

remains as it is today, an option. we would hope and expect legislation leaves it an option because that goes on to make clear the only penalties apply to an employer if he did not provide affordable coverage would be based on the assessment of your full-time employees. whether the front end requirements is meant to require employers to require coverage to dependence maine -- remains ambiguous. on a full-time equivalents issue, in the example you gave, the employer would be subject to the employer responsibility provisions because this begin with 50 full-time and police -- full-time employees, 75 which -- 75 of which are part time, would

be subject to the provision. basically, you count up all of the hours worked by part-time employees and divide by 120 hours, which is 30 hours a week minimum times for weeks and determine how many of those part-time and police are full- time equivalent employees and add them -- part-time employees are full time equivalent and add them -- but once you are over that, that's the only reason you count part-time employees at all. >> the coverage offered to the so-called part-time -- is that prorated or must be the entire package? >> is not covered for part-time. it is for the purposes of whether the employer fails the test. you're not technically providing coverage to part-time workers.

they just assess what triggers the employee size and weight can be exposed to. >> what is the requirement for the employer -- anderson would you are saying what triggers that -- i understand what you are saying triggers that -- which have given the best answer yet on the dependent one. what would an employer's obligation be for those 75 people who provide part-time -- >> you only consider the part time for the purpose of determining if you have more than 50 employees and have requirements with respect to full-time employees if you do not offer coverage or affordable coverage. there is no employer responsibility to cover part- time employees, and that is defined as an individual working less than 30 hours a week on a monthly basis.

somebody working less than 120 hours a month. that remains an employer option. if that individual does not have affordable coverage, they would have the ability to get coverage through the exchanges in the future. >> other questions? >> and with the associated press. my question has to do with the extension of dependent coverage for kids up to age 26. last week we saw some of the insurance companies said it would make this effective immediately for people to buy insurance directly from them. what do you think large employers are going to do? are they going to follow suit and make it effective, available immediately, or, practically

speaking, when do you think we will start to see that for employees at big firms that are self insured? >> it's a good question. it's probably the number-one question employers are getting from their employees -- how soon can i offer coverage for my children up to age 26 and get them on my family plan? there are a number of questions that need to be asked by the agencies and to the extent employers get guidance on this questions will determine the lot as to how quickly they can act. for example, one of the things that them that -- that affects employers and and police are what are the tax consequences of moving rapidly to add a dependent age 26 on to family coverage.

there are provisions, but it's not clear when they are intended to be affected. if you do that, you don't have to add to the belly of that dependent coverage to the employee so they would have to pay taxes on that. that affects employers because that amount or value of the coverage is considered to be taxable income to the employees and the employer has to pay payroll taxes on that amount. they need to know what tax consequences of making that change before the beginning of next year. there is a similar issue that arises for the timing of all

this. that has to do with this clarification of whether until 2014, an individual has coverage through another source of employment and is not offered coverage through the parents plan but is required to obtain it through other employer plans, whether that is only as we think is the case, only applies if the adult child has covers their unemployment. there are just a few questions that need to be clarified so that people can make sure if they make these decisions, they're doing it in the right

way and can inform employees what the tax consequences would be for that change. >> there are a lot of employees out there that have more than one job and often work two 30 hour per week jobs. which employer would be possible and where would they get coverage from? >> any employee working more than 30 hours, the employer would have a responsibility to provide that individuals the opportunity to enroll in coverage or would face penalties if they did not.

if they were working to jobs, working more than 30 hours a week, presumably they would have that opportunity for both jobs and would simply choose which was the better offer for them. if there are working under 30 hours a week, they might have that opportunity as a part-time and lee and many employers to have the opportunity to provide part-time workers to enroll in a plan. the employer would be required to and if they didn't, they have an individual responsibility to obtain coverage after 2014. they would get that to the health insurance exchanges. >> if the new law opens up a lot of privacy-related issues between the relationship of the employer and employee. how does the spouse obtain coverage? who is going into the exchanges to is not? there are still lot of unanswered questions as to

applications on penalties and to is getting coverage where. we still assume these questions will be asked because the individual mandate will precipitate a lot of that and probably precipitate more conversation between employers and employees on their requirements. >> we have a question -- she would like to know if you believe there would be a clarification of grandfathering before september 23rd? >> i will take the bet. yes, i believe so. >> i don't think we will have to wait a lot longer. the first batch of agency guidance is to out this friday, april 30th. that's an important day to walk of -- to mark on your calendar. our understanding is there will be some guidance that will be

out on annual and lifetime limits and on the age 26 requirement and the pre-existing condition of to age 19. something we did not touch on today is a new reinsurance program for early retirees, individuals between the ages 55 and 65. that becomes effective within 90 days after the date of enactment. all those provisions will see some initial guidance possibly this friday. when they do that, it would seem to me it's pretty likely we would start to see some initial agency thinking around the grandfathering rules. >> let's take one more question from e-mail. this person wants to know whether the exchanges are

intended to lower the cost for small businesses and will work -- will it work? >> @ think the intent behind the exchange's is to set up a more functional marketplace. these exchanges have been obtained at the state level and state regulatory oversight is that the state level so the federal rules come out and the states implement them. a couple of the comments over what the concerns are are frankly what they wanted to do is to achieve more efficiency with administrative costs -- small group policies and individual policies and have more costs than a large employer. drafters would hope these exchanges can shave some costs there. the agent and broker role is an important one for most small

businesses. i think it is unclear to the extent of how the exchanges will utilize agent-broker and will look to shave off the cost -- like selling your house for sale by owner as to paying a commission -- a broker. i think they will be a source of the information and there's a lot of uncertainty about what the new law is going to look like. probably the biggest issue for us is what the benefit will be on the actual exchange. that will be the driver of cost and the driver of utilization. if more people use this system, the cost is going to go up. that's not funny mass, is the way it goes. that is why the question is what

is middle essential coverage going to look like in this package compared to what people have today? we're working with a smaller risk pool. some states are bigger than others. we're hopeful more people come into these exchanges and access coverage, both young and old. but right now, we have to separate pools where looking at -- grandfather policies retain pooling of the rhone and the exchanges will pool outside of it. -- retain pulling on their own and the exchanges will pull out side of it. we do not know what that risk is going to look like yet. i think it is uncertain right now how much is going to be shaved off at the end of the day for purchasers in the exchange, but we are hopeful. >> i would add one other item -- starting in 2017, states will make decisions about whether to

make exchanges available to larger and players -- large either being about 50 or 100 and and how the state defines small employer. the same question about small employers, large employers may be confronting it as well after 2017. does make sense for me to get health coverage as large employers do today outside of health insurance exchange or does the availability of coverage through an exchange in some states down the road, does that provide for some new opportunities for large employers who were not there before? a lot of that will turn on the issue of what is the most affordable choice but as for the employer, but for the employee.

>> i'm with the tire industry association. back to the 200 figure for a moment. with regards to automatic enrollment, to questions -- are the fte's part of that and what are the ramifications of automatic enrollment. >> they're not included for automatic enrollment, that's only when you include part-time employees on an fte basis. it's apple -- applicable only for that 50-employee threshold. that is the responsibility of providing coverage and affordable coverage, but that's an interesting question. in terms of administrative, we don't know yet because the way the way -- the way the provision

is written is pursuant to regulations issued by the secretary. the basic requirement is simply that you provide the opportunity for individuals to be auto- enrolled in a policy once those policies are issued and toss with the effective dates would be. -- and they tell us what does effective dates will be. they will tell us if the employee can opt out of and they were bought a-enrolled in. this will be holding a practice. it only applies to employees -- employers with more than 200 employees. we will have to see exactly what the requirements are. it is consistent with the notion that everybody has in 2014 and beyond a responsibility to obtain coverage.

the idea here for coverage is to get everybody in as quickly as possible in a plan of the have went through their employer, but not to requirement. the individual can still opt out of that placement into a plan if they choose to. >> good morning. what would the federal law mean with regard state-imposed health benefit mandates for the small group plans in the states and with the health insurance exchange of policy that can be picked up? >> i believe the states can go over and be on the level of coverage required by the federal government. maryland is pretty high already. i don't know if there is more a question of whether minimal

essential coverage is going to be lower than what a state has and what does that do as far as requirements? as far as i know, it can be sold or at the federal level. >> i don't think that would be the case. i think once the federal rules for minimum coverage are issued, that state flexibility for insured coverage would begin above this federal minimum requirement. the coverage would only apply to the insured plans and provide obligations on a minimum basis -- as far as the exchanges, understanding is the way the legislation is crafted is there

are many states that have exchanges today but the secretary could review -- but the state could deem these requirements for leas own exchanges of as one hour has put one in place before 2014. >> but the bottom line is the coverage in maryland will be what is applicable. it will be over in your opinion? they can go over what the federal floor sets cluster >> any state can go over the federal floor, but i do not think they can go under it. >> we have a couple of e-mail questions on the same subject. people want to know how much they're going to be on the hook for in terms of premiums? how much employees premiums does

a business with more than 50 employees have to pay? is there a maximum planned deductible for employees? a body shop worker wants to know if he is already paying 50% of premiums, is the going to have to pay more than that? >> the basic requirement is to make coverage affordable. if an employer provides coverage that the amount of the premium paid by the employee may not exceed more than 9.5% of that employees household and come -- household in come. if it does exceed that out, they employee gets coverage in the exchange and receives a tax credit or subsidy in exchange for the