allegations against goldman sachs and the diabetes association.

phone is the senior writer with bloomberg's business week joining us from new york to talk about yesterday's hearing. anything surprise you yesterday? guest: what is galling is how both sides -- the interrogators and the people being questions -- seemed to think of dog that -- stick doggedly to their positions but no concessions one way or another, from the goldman veterans, for example, that they may have been ethically untoward, or from the senators, that potentially there is a difference between being a market maker and being a fiduciary, it is as if they speak two completely different languages and we saw it continued to route. host: the first panel that testified yesterday went a

little over five hours. today the right in "the washington post" said what you just said -- wall street speak versus washington speak in a scene to talk past when another. you think that led to the lengthy panel yesterday? guest: i think it did. i saw senators from both sides of the aisle trying to break the result -- like a bunch of youngsters from goldman sachs, like a frat boy, pretty boy image, the whole tableaux, and a couple of senators like they were applying spankings. but claire mccaskill -- the clear mccaskill soliloquy was so shattering because it ties in that too smart for you, too smart for wall street and main street language to the suffering of her constituents back in missouri. that is where senators want to keep the discourse.

saying what you guys did with all of the smart bells and whistles and digits, in wall street's vernacular, really a band of the day was just plain wrong. to the extent, especially for the democrats, that they keep the debate on those terms, it is a winning equation for them. host: maureen dowd rights and "the new york times" that the people who've testified in the first panel, one of them being mr. fabrice tourre, fabulous fab, that he calls himself and refers to in e-mails the committee read yesterday, she talked about the first panel in her column and said she thought that they came across very arrogant. guest: they did. it is something there that -- iit is a once-in-a-lifetime thing. it is uniformly painful to go in front of these senators who are

going to say what they want to say regardless. these guys held on to some sort of resolve of arrogance. obviously they did not want to be there. it was just a terrible day for the goldman sachs name did you mention fabulous fab -- a strange pop culture references, millie the nellie, one of them was named fab -- millie vanilli, and they had a song that said blame it on the reagan. -- blame it on the rain. host: you mentioned senator mccaskill, one part of our q&a -- the q&a where she said there could be other ceo's up here with you. it is not just your firm. maybe it is a bit unfair that goldman sachs is the only firm up here today. guest: it is unfair.

but you know it was bound to happen. this was such a crash at the intersection of main and wall street, that the one wall street firm that came out of this the most successful -- goldman sachs had the most profitable year in wall street history last year, best -- just a few months removed from aig being bailed out to save the entire system. this makes them such a convenience, almost irresistible whipping boy for wall street -- sorry, for the senate. host: the money section of "usa today" says goldman hearing strikes a defiant note. when it comes to the case the sec brought against the firm, but yesterday's hearing strengthen or weaken the sec's kansas? guest: the sec's case will have to be fought on its own merits and i think for some it is going to be very, very hard to prove. the sec -- the insider-trading

investigations often have a very difficult time and and unsettling. in this case it is not being flanked by the justice department and the fbi. it is really on its own. the idea of probable deniability, i think, is still there potentially on goldman's side and it is going to be hard to prove that there was a call -- kabal, a back room conspiracy to play both sides of the trade. but at least in the public arena, goldman sachs lost big yesterday. this is enormous for them. reputation and reputation all capital is what they trade on and if this kind of grilling dissuade people from wanting to work at goldman sachs -- inconceivable as it sounds -- or dissuades clients from going to a firm in the cross hairs right now, you could see how expensive

it could be. host: what about the stock of goldman sachs? how did a fair? guest: the staff -- stock was actually up about and change. i did not -- and that was in a down market yesterday that was worried about the great crisis spreading to the rest of the world. some traders were saying is they were looking for the senate to bring out its biggest guns, damning e-mails, and of all the good it is a couple of swearwords or cocky exchanges then at the end of the day it might not be so incriminating for goldman. host: "the washington post" editorial says this -- growing goldman. -- grilling goldman.

guest: it is absolutely true. it is so hard to explain that to the individual investor or constituent of his not understand why firm would play two sides of a trade. almost trying to defend sharks or snakes or vultures. they are a necessary part of their respective ecosystems, the whole system would gum up without them and nature would be worse off without them. but it is very hard to defend them and to get people to empathize with them in the interim. host: can you explain how shorts work, and if you could, using the situation at goldman sachs and why the case was filed against them? guest: a huge client -- goldman sachs has lots of hedge fund clients. they love what the firm can do

for it. they come to goldman sachs at the beginning of 2007. john paulson -- he says, i think the housing market is in fact so sloppy we are already seeing a handful of fly by night mortgage shops blowing up. i think it is going to get much worse. what we see that as aaa rated is not necessarily. but isn't it a shame i cannot go and bet -- this will be a spectacular collapse, but i want to go out and participate because certainly everybody for the past four or five years bet on the upside. but i can't go and find a security out there. can you create one for me, goldman sachs? they meet together and goldman sachs put together what is known as a synthetic cdo, kind of make up on our own terms. what if you, clients, decide you want to go short on a security

that we make? for you to go short, you necessarily have to have another side going long. because there is not anyone there to do it for the size of the trade, mr. paulson, why don't we be back participants? we are going to go long, but temporarily. at the same time, to cover our own hides -- goldman sachs speaking -- we will buy insurance on our long position, which is going short through aig. what happens there is you have goldman in a position, both servicing client that is betting on something going down and that the same time being in a position, making a security that it needs to sell to other clients. like being a middle man. this is what goldman was hammering on the past few days. we are a market maker. the question is, what the sec thing hinges on, it is fine to be a market maker but were you actually allowing one side of

the trade, the short side, to help you structure in effect a self-fulfilling prophecy, making it as best possible, cram it with so much junk that it was doomed to fail and it was not a disclosure yet adequately made to the investors on the other side who were buying it. >> a senior writer from bloomberg business week -- thank you for joining us. we appreciate it. guest: always a pleasure. host: let us get your thoughts, what you think of yesterday's hearing. senators versus goldman sachs. silver spring, maryland, mike is joining us on the democratic line. you are the first phone call. caller: good morning. on this "washington journal" you hear people tried to blame cra, community reinvestment act, and fannie and freddie and they try to make it look like it is a minority issue, that they want to blame the minorities but there are more poor whites or

subprime white folks -- subprime is 620 or 650 or below, a class, meaning subprime and if you are above 650, you are a prime. so there are more poor whites that received in this community reinvestment act then there are blacks or latinos in number. in percentages, granted, but in total population, more whites -- because you can look at the states of new mexico, arizona, utah, and no black folks over there that really got hit in those markets, those states are in the west. i'm just trying to negate the attack that is going to come because there is always somebody who calls and wants to blame -- or implied it was blacks and latinos or them getting de-

redlined. but it was not in the black community or the latino community. it was more in the white community. host: we got your point. where do you go to find your data? guest: i have been hearing on the radio, just guys to -- i can't point that dated to you, but just in the welfare, more whites receive welfare than blacks and total population. host: all right, we will leave it there. we're talking about the senator's versus goldman sachs and what you referred to, mike, is part of the editorial in "the wall street journal." they said that yesterday's hearing had any value is the recognition of the real root causes of the crisis -- too many bad mortgage loans with poor underwriting and too many polls of these bad loans carrying aaa ratings. exploring the creation of junk loans should lead senate investigators to the same place where most of the taxpayers' losses are occurring -- vana mae and freddie mac.

new york, bernie his journey -- joining us on the republican minority caller: i think this whole thing was pretty much a poorly done public relations event. i watched it for awhile and i began to laugh because i did not understand half the terminology. i did not understand 90% of the terminology. from affidavits, page to page, they could have focused on one

or two people, said what he wanted to say. but for all day it was very confusing, and i was with it for awhile -- host: why did you two men in the first place? caller: i think that the topic, the financial sector, it is important with respect to the country. and i think that a certain amount of regulation would be good for the country. i'm for basically for not allowing so much borrowing. cut the borrowing in half. if you did that, you would not need anything else. thank you. host: "the washington post" editorial said this about the shorts and the need for a short span. -- shorts.

hawaii, marcus on the independent line. good morning. what are your thoughts? caller: my thought is, i watched the deal and i was just kind of sickened by the whole thing. i don't think the institutions they were questioning were the ones they should have been questioning. they should had the ceo's of barney frank -- barney frank -- [laughter] freddie mac and them up there along with clinton and gore who started the whole thing, who made the whole thing possible. host: what about at that time when republicans were in control of congress? guest: well, they have always --

all been using that as a political cash cow the same way so nobody is innocent. but for blaming the financial institutions for taking advantage of what they were doing, i just see it as the usual deal that causes some discontent right now among about 70% of the voters and people in america. host: let us go to keep of the democratic line in michigan. caller: i canappreciate c-span. thank you for taking my call. caller: clear mccaskill, her tone -- i did not watch it all. i saw bits and pieces. i saw bits and pieces on the news and everything. clare mccaskill, her tone was the right tone. she basically scold of them because they were kind of like a bunch of school kids. if you go down to school and something like that. her tone was the right to own as

far as i was concerned because -- her tone was the rights to hold as far as i was concerned because it was basically gambling. what they are doing is not too hard to understand. if you really listen to what is going on, the information from c-span and everything, not too hard to understand what they are doing. it goes to the notion that this invisible hand will eventually trickle down and make jobs. 6% up to 63% of gdp what these guys are doing and how much wealth they control. that is ridiculous. none of this money is trickling down to the economy. right now we are in trouble. we need jobs. and these guys are just basically making money for themselves. it is not going into innovation. it is not going into creating jobs on main street.

they are just basically making money for themselves. it is pretty ridiculous. 53% of gdp controlled by these companies. that is ridiculous. host: the hearing did air yesterday on c-span3. there were three panels. the first panel took about five and a half hours and the last panel was what the ceo lloyd blankfein it. if you are interested in watching it you can go to c- span.org, and you will find the different testimony's there. c-span.org is the website. and little bit from yesterday's hearing, question and answer, with senator pryor. >> do you believe goldman's actions contributed to the financial downturn we experienced in 2008? >> look, we had clients who lost money.

and that is not good. it is not good for us, not good for our clients. we dealt with institutional investors. but when you look at the overall economy, there were a lot of individuals out there who were harmed because of the financial crisis. although we didn't deal directly with them, i know that i do, and i think -- my colleagues do and my former colleagues do have sympathy for them. with respect for regret, which i think you may be asking -- >> i noticed, though, from the record -- >> if i could finish. regret to meet is something for what you did wrong. and i don't have that. but we made mistakes in our business, like i think every business does. and we made some poor business decisions in hindsight.

>> do you thank you contributed -- your actions contributed to the financial downturn we experienced in 2008? >> do i think my personal actions did? >> goldman sachs'. >> i don't know i would like to think about that and yoon i have not thought about that specifically. host: senator pryor talk -- questioning one of the executives at goldman sachs. we are getting your thoughts. jacksonville, florida. dexter on the democratic line. caller: i am quite amazed at people who call themselves holding people accountable now that these people have caught and nobody wants to hold them accountable. in and the fact that the republican party was in that job -- and the fact that the republican party was in charge during the clinton years, they

blame any law that came out on the clinton, such as nafta, which is a republican idea and was passed by new to gingrich and his gang but as far as the the situation we are in now, it is really about derivatives. that market is way bigger than what our holding market it was. all of the gambling going on through derivative is is really what caused this failure. not just poor people buying houses, even though dishonest people put a lot of them in bad situations. host: elizabeth town, north carolina. joe on the republican line. caller: my point would be this, when goldman structured this deal, there was no guarantee it was go down. i guess a lot of people are trying to say -- the politicians yesterday i guess we're trying to say you put together a deal that you would go down.

and the decline in value. if i am not mistaken, goldman itself lost money on these securities, and maybe goldman wanted to unload the securities on other people. but those other people, whoever they were, if they had done in due diligence -- that is, look at what the underlying securities in of this securities package, they would know that these were very risky securities. that, in turn, would factor into the pricing of the securities. as a market maker, i can't see that goldman did anything wrong. to have a market, you have to have people on the short side and on the long side. i think many of the people said this. when something is bought -- when one person buys something, another person sells something.

the buyer is long in that whatever it is and the seller is short in that. and over time you can see who was smart and was not smart. host: joe, senator kaufman -- i do not know if you watched that spared -- when he did the questioning he asked those execs about the fact that the packets that they put together in some cases included mortgages, 90% included mortgages that were agreed to from state income. a person came in and just stayed at their income. this point is you had to have known that those would fail given that they were made up of mortgages, 90% of mortgages that were based on stated income. caller: well, fine, and indeed, there is an old saying, let the buyer beware. anybody who buys any security -- i have bought and sold a lot of securities --

or how the guy is going to roll. host: do you think the financial regulation bill that has been written now in the senate addresses the issue of derivatives? that there would be a clearing house for them? caller: let me say this. i'm like 999 out of a thousand people out there. i really have no idea -- when the politicians say financial reform, those two words sound great, don't they? you are doing a great job as host the next time somebody calls and say, what is financial reform? what is in this bill we are talking about? it is like health care reform. it sounds great. you'll have better health care. but once you start peeling the onion away, it starts to sink.

but i think you will start to find a financial reform bill, if it passes, is going to contain all kinds of stuff like -- we didn't realize this, and now we have hundreds and thousands of financial industry jobs, those out sourced from new york to london or china or somewhere else off shore. host: "the new york times" editorial says this -- wall street casino. it says financial reform is needed to make sure the crisis does not happen again.

that is "the new york times" in support of the senate bill. this is "the financial times" on the senate bill. spotlight falls on democrat who defied his party, referring to senator ben nelson, democrat of nebraska, voting began last night not to move forward with this legislation. it says here that -- a place greater limits on the disk -- republican aides did not immediately confirm the authenticity of the document.

about senator ben nelson's note of the story says this, the senator has said that the bill may hurt small businesses but he has also tried to change a provision that would harm berkshire hathaway, his state's most famous large company and a big donor to is campaign. according to senate aides he told his colleagues that companies such as berkshire hathaway should not be forced to post cash collateral on existing derivatives contracts, a change that could prevent the group from having to tie up billions of dollars in cash. berkshire hathaway is mr. nelson's second-biggest campaign contributor in the past years. according to the center for responsive politics. california, mattie, good morning. go-ahead, mathieu. caller: i could not agree with the last caller more as far as when they put these reform packages together and slap a label like reform on, just like health care reform. there is very little health care

reform, it is more insurance. but on the golden -- goldman thing specifically there are two issues. one of them is regarding due diligence, is that i think that a lot of investors, especially small investors, assume that a certain amount of due diligence is done by the sec in those cases and that they are not selling something that isn't intended to explode, something that is an outright fraud. that being said, i think it is a little bit of a show trial right now and i'm kind of confused actually as to why, if they really wanted to prove a case against goldman sachs, why they would actually not go the route of insurance fraud because that isn't where the issue is. if i build a house and i built it out of paper next to an open flame, i think there is an expectation that the house is going to burn down. and if i then go and pull out insurance from aig on that

house, and they cannot look at it -- i will have to represent it in a way for them to make that policy. host: are you talking about the relationship goldman had with aig? caller: well, yeah. they could go after paulson and all the other people who went in and found managers to structure of these horrible securities with all of these mortgages that were expected to go down. then you go to aig and ensure this thing. it sounds to me like simple insurance fraud. host: the chairman of the committee yesterday talk to the ceo mr. blankfein about aig and the money that aig received from the federal government. >> money that was paid through aig tarp program and was open to you, is that true? >> aig -- yes, aig hold us

margin, most of what we collected. >> but they owe you money. and the tarp funds ended up paying their debt to you, did not? >> i don't know if those are tarp funds, i am not sure. then i don't know if the tarp on the that went to it aig came through to you? >> i did not know what pocket came through. i know government money went to aig and it flowed through. >> how many billions of dollars flowed through government money to you throughout the day? >> literally the cash flow was reported and that thing david the near -- david went through this, $12.9 billion flowed, they gave us up and we give them back stuff. >> what was it that flowed to you next? of those funds through aig? >> net of what we gave them

back? am the only thing that flowed through to us was an additional $2.5 billion worth of margin that they told us against which we had an insurance contract think is they didn't pay us. >> the government did not owe you $2.5 billion, did we? >> know, they did not. >host: talking about guest is hearing in the senate. minnesota, bob on the democratic line. your thoughts on the senator's first as goldman sachs. caller: good morning. i agree fully with your last caller but i would like to add to what he said.

i look at bank of america, i look at what low, i look at all of these banks -- wamu, i look at all of these banks that came up with these fantastic mortgages, lyres loans, and so on, knowing they could never possibly be paid back. then they sold them to customers who they knew could not possibly pay the mortgage is. then they packaged them into a security, knowing that they would fail, and bought an insurance policy on those knowing that they would fail. to make, the hearings, they are asking the wrong questions, to me. because i don't see how this wasn't fraud from day one. host: let's go to philip of the republican line from florida. go ahead. caller: how is it going? host: doing well. what do you think?

caller: i find it the height of hypocrisy the senators are grilling goldman sachs when they get their biggest contributions from goldman sachs for their campaigns and they are the one to write the regulatory laws against goldman sachs when they are in goldman sachs' pocket. i find that the height of hypocrisy when they stand and grandstand and act all indignant when they are the ones taking money. i just find that almost disgusting, to say the least. that is what i want to make a comment on. host: massachusetts, charles on the independent line. caller: i have been in the financial industry the last 40 years and i would just like to make a comment. i would like to pull back out that the senate hearings and all so -- also a number of stations that cover it in the media have generally all missed what i think is the most significant

about the financial crisis and about its causes, namely that there were all over the world -- the united states and the rest of the world -- huge number of institutions that had very, very large positions and securities that were all related to mortgages and the housing market and the question is, why did all of these institutions really buy all of these things, why were they so interested in holding these securities? and the thing that people sort of missed in this is that these securities were rated by credit rating agencies, and most of them got a triple a rating and a credit rating agencies basically have a monopoly on the rating system. so, when you got that rating, it meant that your security was supposedly safe to buy.

for example, if you were a european banke, because it had a aaa rating, you were able to buy that security without any collateral, which meant that you could make an enormous amount of money if the security increase in price. that is, of course, until the housing market started to go down, everybody was making money by buying mortgages. host: let me jump in and get your opinion on the stock in "the new york times." bank tax, insurance for us all.

what did you think, charles, since you have experience in this industry, about a bank tax? caller: it would be a while for me to explain the whole thing. the system in general is very flawed in the united states and throughout the world. i don't have any particular comment specifically about if you ought to tax a bank and not tax so and so or tax this. basically the taxes are supposed to be used to pay for what ever is deemed to be an expense of the government, the whole community. and the tax system as it stands is very warped because taxes are based on your income and, of course, very, very wealthy people simply don't have the kind of in, that would be in proportion to their wealth. so they are not really being

taxed at the same rate as people who are not wealthy, because the income is not proportional. for example, warren buffett takes an income of $100,000 a year so even if you tax him of 100% of its income, it would not make up for all of the wealthy is avoiding in his taxation. in general, i cannot say to tax a bank or not. in fact, i think everybody is taxed barrett and equally in the united states. that is a very complicated issue. but i was refering really to the cause of the financial crisis, and i think the senate committee really has not focused on the rights issue. the right issue is that people, institutions are allowed special privileges if they hold securities that are rated aaa and the rating comes from a monopolistic the credit rating agency. if you think about it for a second, look at the big

investment banks such as bear stearns, lehman, goldman sachs, morgan stanley, and merrill lynch. when they bought securities in the mortgage market, they did not rely on the ratings. they used their own judgments, their own internal things. and look at what happened -- some of them failed and some are still alive. that would have happened if it had not been rating agencies and you have to rely on your own analysis -- some of the banks would have said, wait a minute, this is too risky and we would not buy it. host: ok, charles, let me move on and get some other voices. democrats line. pat from pittsburgh, pennsylvania. caller: i think they should go to jail for what they did. i think they should be punished severely. they knew what they were doing. i love warren buffett but if berkshire -- i just read berkshire hathaway had to put

away $8 billion in a safe place so this would stop, so we don't have to bail them out. we can't go on like this. the whole world has been affected. as you mentioned earlier, greece, i read about that, too. it is just a moral dutyimmoral, and i hope -- it is just immoral and i hope they write laws that make it a felony. these people don't have any lack of -- i don't know. they don't care. they lead and a different world. people who have billions -- for instance, richard -- paid 12.5% taxes if you years back when he was fighting with his divorce lawyer.

little guys never pay that little in taxes. it is just stunning to me. what they are forgetting is we need a strong middle-class. and it is dying. host: the caller mentioned gree ce and that is the headline in many newspapers. financial fears grow in europe over great debt. here's a story about ford -- fourth positive quarter in a row. the finance division played a part in the $2 billion earnings. the chief executive warns of a challenging outlook. that is the front page of "the financial times" this morning. utah, on the republican line. caller: listened. -- listen. i work in the financial services industry and i sit down with

families, and i talked to them about their mortgages. you find out that people were more interested in what they could qualify for bad what they could afford. so, the consumer likewise had a hand in the financial crisis, the banks also have a hand in the financial crisis because they were giving out risky loans to people that they knew could not afford them. but why wouldn't you if you are a banker and you know you could turn around and sell that mortgage to somebody like freddie mac and fannie mae, so you now have no risk because you handed the ball to somebody else and they assumed the risk. so, the republicans have blood on their hands, the democrats have blood of their hands, the consumer have blood on their hands. we are all responsible for the financial crisis because we have been spending beyond our means. so, it all goes back to the accumulating debt and what is going on in washington right now

is basically a dog and pony show because senators all want to make the american be the thing they are trying to do something to fix anything when in reality there are a fair number of them that have either current or former ties to goldman sachs, including our president, who used to sit on some board connected to a couple of foundations that went back to goldman sachs. these guys keep thumping their chests trying to tell the american people they will fix everything but the thing you need to remember is these things called the derivatives are high risk investments because they are based on very complex formulas. and if everything goes perfectly well, people make a lot of money. if they don't go well, people are going to lose a lot of money. albert einstein once said, you can't fix a problem when you are thinking it was at the same level it was at when the problem was created. host: refering to debt, the top

of our next segment coming up. we will talk to congresswoman schakowsky. experts say the deficit cut vital to prevent another crisis. officials forecast the u.s. will suffer another severe economic crisis unless it takes steps to rein in the country's structural, fiscal deficit. according to the peterson foundation that put out a report yesterday, the same day as the panel's first hearing. the peterson foundation is having a fiscal summit, 2010 fiscal summit, today, and we are covering it. on c-span. 8:45 a.m., c-span3. participants include cochairs of that commission, erskine bowles and alan simpson.

michigan. terry on the independent line. caller: some of the things i find ironic is the idea that all they are talking about is fraud and things like this, but some of this is insider-trading also, isn't it? host: do you think it is? caller: martha stewart was thrown in jail because she move money out when she found out it was going bad. you sell me a stock, i am long run it and you are on the short side but you have more information than i have. isn't that insider trading? it is not just the federal government that we have to watch and have trouble with. this goes from federal, to state, all the way down to your local governments. in some of our areas around here, you can buy your property and own it but then they dictate the size of the house you have to build. so, we've got 300 or $400,000

homes, or what they say is 300,000 or $400,000 homes, and how are they supposed to pay for that and by $40,000 cars and people pay for it working at places like wal-mart making maybe $9 or $10 an hour? host: we would turn our attention to dead in our country with jan schakowsky, a democrat from illinois. >> here is what we are covering on c-span3 today. first, the 2010 fiscal summit

hosted by peter peterson foundation. we will hear from members of the national debt commission, former federal reserve chairman paul volcker and alan greenspan, and former president bill clinton. that starts at 8:45 eastern. and later, a senate hearing on the annual budgets of the securities and exchange commission and the commodities futures trading commission. the heads of both financial regulatory agencies will testify. live coverage begins at 2:30 p.m. eastern on c-span3. >> sunday on book tv's "in- depth," television analyst, author, columnist, 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 live at noon eastern on c-span2. >> "washington journal" continues.

8:congresswoman jan schakowsky is a member of the debt commission. a first meeting was today. guest: clearly people talk about what their priorities were. but i did get a sense that we are ready to roll of our sleeves and get to work. host: how do you think this will be different from all the other commissions that have been created in washington and some of that already looked at this issue of debt? guest: actually a number of commissions have worked. speaking of the 9/11 commission and other commissions that separate out members of congress and people from the public and actually resolved problems. a i think even if we don't come to a total consensus i think a lot of good ideas will come out of it that will actually be translated into legislation. host: do you think -- 14 out of haiti have to agree on

recommendations. did you think that is doable? guest: i think probably on some. i don't think we could have a comprehensive report were all of us agree on everything and go out singing kumbaya o. but i think we would have a number of items on which we agree and others we will not be. host: where do you draw the line in the sand? guest: i think a number of the people of the commission and some of the outsiders think that entitlements -- talking about social security, medicare, and medicaid -- are the first things on the chopping block. and i disagree. i think we have to look at fiscal policies, deficits and debt and how they affect ordinary people. and if we are going to target the most vulnerable, then i think we will be doing ourselves a disservice. so, i think what we have to look at is in a very comprehensive way revenues as well as cuts,

what are the appropriate kinds of cuts -- and i would be happy to go into some of the things that i think we could do. host: let us first listen to former cbo director who testified yesterday before the debt commission and what he had to say about the entitlement spending. here it is. >> recently the public has shown increasing concern over large deficit and the growth of federal debt, but it is clear that few americans understand the seriousness of the problem, the consequences of inaction, or the degree of sacrifice that is required to fix the problem. thus, the commission's first task would be to make it clear and convincing case to the public that, first, significant adjustments to current spending and tax policies are unavoidable, second, that if we don't begin these adjustments soon, our economy's vitality

will gradually be zapped, or ability to chart our own course and our standing in the world will erode, our government's capacity to meet crises and address emerging priorities will be constrained, and our dependence on foreign creditors and their influence on policies will grow. the longer we delay, the greater the risk of a catastrophic economic collapse. third, the magnitude of the required adjustments is so large that spending cuts will have to affect programs we all care about and benefit from and revenue increases will have to come from a wide swath of americans -- in other words, raising taxes on the rich, corporations, holding entitlement programs harmless, closing loopholes, eliminating wasteful or low priority programs, prohibiting earmarks, things like that, are not going to do enough to solve the problem. fourth and finally, the public

needs to be informed that the sooner we start addressing the problem, the less wrenching the adjustments will have to be and the more control week, as opposed to market forces or our creditors or in extreme circumstances, international agencies like the imf, will have over the timing, size, and composition of these unavoidable adjustment. host: congresswoman, your reaction. guest: i agree with a good deal of what he said. i think what is missing from that clip is the view of that right now our problem is not deficit. right now, because of this recession we are in that is caused largely by the collapse of the housing bubble, that we actually need to be spending money in order to continue economic growth and turn the economy around in order to create jobs and the vitality we need.

most economists agree this is not the moment -- in fact, our mission is by this commission that by 2015 we should reduced -- reduce the deficit -- so it is medium-term and long-term that we have to get this budget issue under control. host: not in the short term, but in the long term, what are some areas where you think there could be spending cuts? caller: i think that we could make government much more efficient. this is not mission in pot -- impossible. we could do that. for example, we could do $40 billion in savings from reforms in the contracting process, our whole procurement process needs to be looked at. using information technology, we could reduce the deficit by $15 billion. we also need to make

investments that spurred the economy. we have a great capacity as the country but it is be underutilized. that is the deficit as well. investments in education, scientific research, and availability of credit, if we did not get money out of small businesses, they cannot grow. we need to jump-start new technology and energy and we need to put the defense budget on the table. not to weaken our national security in any way, but we spend as much on defense as every other nation combined. and by 2015 that will be about 20% of our total federal budget. for example -- if we just cut the purchase of half-35 joint strike fighters and half, we would save $4 billion. if we keep missile defense

systems in the research phase until they work -- which i think would be a good idea -- we could save about $6 billion. there are a number of outdated cold war weapons systems. so, if we literally do put everything on the table and we scrub the budget without prejudice and look at all of the pieces, i think there definitely are a tax revenues -- if we close loopholes -- and we have a bipartisan bill in the senate, judd gregg, senators widen and gregg -- tax reform bill's beard looking at corporate loopholes, they suggest we can cut $646 billion from 2011 until 2020, 10 years. personal income tax loophole,

$815 billion. a number of members, republicans and democrats, said if we just collect the taxes that are due, we would collect billions of dollars her, and as to make a real dent in the deficit. host: what about social security and medicare and medicaid? that was not on your list. are you saying you will not agree to any cut? guest: let us talk about that. first of all, social security, for more than almost two decades is not the problem. the social security is generating surpluses that actually right now certainly until 2015 are reducing the deficit because those numbers -- because of the surplus in the trust fund are causing the deficit to be lower. so, social security right now is not an issue. if we are talking about the solvency of social security for another 75 years, i think there

are some simple things that we can do. right now people pay into social security only up to $106,000 of income. were we to raise the cap, the wage cap, who pays and -- i am not saying take it off altogether -- we could collect more money. right now, if you are 62 years old, you can collect social security, but you sacrifice the amount of money you make by not making until your full retirement age. what if we said that for the -- i don't want to retire at 65, let's say. let us say i'm lucky enough to be reelected and i want to stay until 70. maybe there could be incentives for me to postpone my retirement. right now at age about 66, you are collecting social security, what did you want to or not. if i postpone that, that would

save the trust fund money and maybe, at the low bid more, but his salt -- but still there would be a net gain appeared that are a number, i think of our creative ways that don't cut benefits. the average senior citizen makes $18,000 a year. we are not talking about wealthy seniors. by and large -- let's remember, social security is also an insurance plan for spouses that are widows or widowers and children and persons with disabilities. my grandchildren, by the way, because they lost their mother, did get benefits from social security. believe you me, that will help them with the college fund. h. carl -- host: medicare. guest: medicare has been on the table. the health care bill -- the congressional budget office projects that $1.20 trillion

will be realized in savings and, in debt reduction, because of the bill. so, there were a number of people, including reishauer who said less than give this a chance to see it works -- let us give this a chance to work. bending the cost curve and hulls -- healthcare, a driver of the deficit. i think are some other things we could do as well, even now. but i think that in terms of going in wholesale into health care, let's get a chance to this health care bill. host: the first phone call comes from philly, jim on the republican line. caller: what you are saying is enough to drive anybody over the edge. there is no way that this new health care bill is going to save a dime. it will cost everybody more money. i just don't want to come out and say this -- but i will say

it. you are part of the problem, not part of the solution. this is a debt commission is, i would say, almost ridiculous. it will never amount to anything. it will not cause anybody to save any money. and these plans to -- you say it does not matter -- we are going to have to cut services. there is not any way. medicare is bankrupt. medicaid is bankrupt. social security is bankrupt. -- that is not -- guest: that is not true. social security certainly is not bankrupt. until 2037 it will have plenty of money to pay benefits. i certainly don't want to push you over the edge but let me tell you some of the ground rules of the commission. .

$126 billion in the first 10 years. by forcing more efficiencies in health care system, getting away from fee-for-service, or anything that is a bill to medicare they pay, but with much more scrutiny, encouraging more combined payments, different kinds of cost cutting measures, we could actually do that.

everyone agrees that we will accept those cbo numbers. host: woodbridge, virginia. angel. caller: i am a big fan of yours. everything you have been doing is awesome, represented schakowsky. -- representative schakowsky. have you thought about putting homeland security on the table, cutting them down to 5%, putting them under the cia? guest: i think we ought to put everything on the table. clearly, a lot of the functions in homeland security, which include disaster relief, immigration, those kinds of things, can there be

efficiencies? absolutely. do we want to have 5% cuts, have been arbitrary number and say that we are going to cut everything by 5%? i think that is a cup ocop out t could hurt us. setting something archer across the board would be a bad idea -- something across the board would be a bad idea. host: here is a tweet -- guest: they may be talking about health care costs in general.

that is why we have to look at it systemwide, not just medicare, medicaid. what about all the expenditures? for example, dianne feinstein and i had a piece of legislation that would allow the federal government to have the power to say to companies like wellpoint, and thumaanthem, whod their rates 39%, we would give the government the power to ask the question if that is correct. they could say to insurance companies, we will not allow you to raise those rates that high. 24 states already have the ability to do that, but the federal government does not.

i think we can help lower costs, if we say only justifiable rate increases. we are not against profits, but they cannot consumers. -- gouge consumers. host: next phone call. caller: i feel bad for politicians on both sides. you all are being attacked. the american system. don't you believe a public campaign-funding system would be advantageous to it all, as far as the disappearance of the idea

of conflict of interest? guest: i could not agree with you more. i think we need to get the special interest money out of campaigns. there are so many things wrong with the system right now. because campaigns have become so expensive, we have to spend so much of our time trying to raise money. inevitably, we go to special interests that had an agenda. if we were able to get that motivation out, we would be able to restore confidence in the american people. and no question, when we vote, we think, how is this going to fit with my constituents, not how is this going to sit with my

sunders? even the appearance destroys confidence. -- with my sponsors? but i agree with what you say. we need more campaign to whics h restore integrity. host: shall be on the republican line. colorado, i think the general fund helps to keep the deficit down. i wonder if you would ever vote to take social security account of the general fund so that the stigma of a social program could not be attached to it. guest: i think the fact that social security is there does reduce the deficit, but i do not

think that that create a stigma for social security. certainly, we want to protect the trust fund, so is available for payment of benefits. that is torture. -- for sure. we do not want to run all other kinds of expenditures. but the ious in the trust fund are very secure. social security is one of the most the effective and popular programs that we have right now. and more important than ever. more and more people are finding that private pensions are disappearing, investment that they had paid have taken a deep dive. maybe you know already, but a quarter of recipients live --

rely on it as 90% or more of their income. 60% find and then they need a social security for more than half of their income. so is no longer just one leg of a three-legged stool. now it is almost like a pedestal, where social security is holding up retirement security for most americans. i think we want to protect that fund. i do not know if we need to separate that from the general, but i think we want to make sure it is there for seniors and persons with disabilities, and children. host: still on the democratic line. canton, illinois. caller: i have been a lifelong

democrat and i am ashamed the way the government is spending to get some of the recovery most major economists have claimed that the stimulus did nothing. it did not lower unemployment, t.a.r.p. is a joke. this is only taking care of 1/1 thousand of the people that it was intended to help. you do not understand the major concern of this economy is getting people back to work. the only way you are going to do that is to put tariffs on imported goods. we need to build up our own industries and compete. host: and a headline in the "washington post" -- guest: let me respond specifically to what you said. most economists agree, in order

to address a recession, like happened in the depression years, the government has to make up for the loss of revenues that are in the private sector, in order to stimulate the economy, in order to put money in people's pockets. not just to build up banks. by the way, most of that t.a.r.p. money has been repaid -- i think we should demand all of it repaid with interest. we could argue tariffs, but that is a separate discussion. the injection of money into the economy is the thing that will promote growth. the other thing you said is also not true. the congressional budget office

believes the recovery act has created a couple million guns, some of which would have been lost -- jobs, some of which would have been lost, and yes, we have lost jobs, but we are now in the positive column. that is directly attributable in the 1930's. in the 1930's, there was a double dip recession because that idea prevailed and the government stop putting money into the economy and we had a second recession. most economists believe that in the short term we need to be creating jobs by spending money, saving jobs as well. i am sorry that you have lost touch faith in government, but we have been there before.

we had a surplus under the clinton and ministration, so we can do this. the american people and your government can do this. host: francis on the independent line. go ahead. caller: i believe you were encouraging incentives for people to delay receiving social security benefits. it was my understanding, from the social security, where they discussed retirement age considerations, that i would receive an additional 8% and i delayed retirement from social security after age 70. is that still in effect? guest: yes, but we can do that even further, if we want to appear could we can increase the incentives for people to delay retirement in a way that the

actuaries can figure out how we can maximize the benefit. it is an idea coming from both sides of the aisle. i think there are a number of ways we can encourage people who are healthy and want to continue to work to defer their social security even further, 70, 71. we have extended longevity, people are living longer. some are fortunate enough to be able to work. others, of course, are being pushed into early retirement, so we have to make sure that those benefits are there for them, if working is not an option. we want to make sure that helping people is feasible.

host: baltimore, maryland. gary on the republican line. caller: i had a question on the defense budget. i agree, there needs to be some attention paid in there. i would caution going after a big project like the joint strike jet fighters. instead, look at the way that the government does contracts. there are numerous cases where the government has component within itself to perform certain functions but is not allowed to because it would be in conflict with the civilian sector. there are components of the government that could build and launch its own spacecraft but are not allowed to. yes, the defense sector should be looked at, but not a large,

big projects that are easy to hit. guest: i have been involved in the issue of private contractors, mostly on the military contract signed, the use of companies like black water, which has threatened our mission, as well as cost of money and i really like your idea. what are essential government functions, and why can we do this as a cost-saving measure? i appreciate the suggestion. to the extent that the united states could be in the business of the defense rather than contracting out at a much higher cost, that is something that we should be looking at. host: this viewer on twitter is

concerned about government jobs -- guest: i think that is right. we ought to look at that so that we can attract the best and brightest. maybe if we were not wasting money, as the dumb and suggests, by going up to the government, we could perform those functions ourselves, and we could be more competitive, in terms of our salaries. host: columbia, tennessee. good morning. caller: good morning. i appreciate y'all so much. c-span is the window to all three branches of the government. we can see what is going on in america. i heard senator dodd mr. de talking about financial reform

-- guest today -- yesterday talking about financial reform. just like in the health reform bill, everybody came up winners, except for the people in america. democrats and president obama had health reform passed. and then you had the republicans -- they watered it down so much insurance companies had a great windfall from it. insurance companies, of course, are the ones that are rejoicing. and they came out not only with their premiums and consolidation of power, but they also came out with a new group of the enrollees where the government

will make sure that they become part of the system. guest: i think this week, let me say, we will see financial reform, wall street reform passed, and it will be a good, strong bill to make sure that we no longer have financial institutions that are too big to fail and that will create a consumer protection agency for financial consumers that will be able to be the watchdog for consumers. i look forward to that passing and i think it will be a big improvement. in terms of the insurance companies, right now, this legislation says 80 cents to 85 cents of every dollar is going to have to go to health care, cannot go to cdo salary, to profits. -- c. itceo salary, to profits.

and if they have these kinds of large rate increases, they will not be able to go into the new exchanges, and along in 2014 that will give them access to the big markets of consumers. senator feinstein and i have legislation that would also get a grip on, and not allow, and these huge, unjustified rate increases. by the way, they are not necessarily so anxious to get everyone in. up until now, they have been able to carry pick their customers. recisions, canceling policies when you get sick, that is gone. they have been able to exclude people because of pre-existing

conditions. they will not be able to do that anymore. it is not that insurance companies have popped open the champagne. they are going to have to conform to the new rules that are going to make sure that finally almost every american will have access to affordable health care in the country. host: congressman schakowsky is a member of the debt commission, which president obama created. we have today tweet -- do you think a value-added tax is a good idea? guest: and the discussions yesterday, there was not a lot of talk from anybody about a

vat. some thought that this commission was a stalking horse for that. the concern i have with that is that it can have aggressive consequences. not me explain what i mean. -- let me explain what i mean. we have to look at who this affects. then we have to decide, is this the right way to do it? i think a value added tax has the disadvantage of making middle and low income people pay even more of their income -- is a kind of sales tax. i thought it was interesting -- it did not really come up yesterday. host: guest speakers did not

bring it up? guest: maybe a couple of sentences, but it was not laid on the table and a serious proposal. host: ben bernanke did say that congress need to look at the tax system over all, that that could be revamped. what do you think about that? guest: absolutely, there are a number of ways where we can close loopholes, simplify the system. i do not know how much the commission between then and now is going to talk about an overhaul of the tax system. certainly, and marriot worthy of our scrutiny. there is a subcommittee on revenues. maybe they will get into the systemic issue of the tax policy. host: the commission meets this

week. then there will be sub committees. how often will you meet, which one will be be serving on? guest: they have not been organized yet, but i am interested in the mandatory spending that would include not only the big three, but all the mandatory spending of the government. discretionary spending as well. i think those are the two or will choose. then there are revenues. host: next phone call. ray on the independent line. caller: first, if i could, how many members in the commission, background? where could i get that information? host: there is no website for

that commission, is there? our producer was unable to find one. guest: if you google, it is called the fiscal responsibility and reform program. if you look for the fiscal responsibility in reform members, i am sure that it will come up. we have three democrats, three republicans, the co-chairman, -- 18 members. there are some business people, labor leaders. caller: ok, fine. let me jump in with a question and comment. i just heard you say, looking into the television, that we are

going to grow ourselves out of this. guest: no, i do not -- caller: i believe you did. have you reviewed david walker's piece? excuse me. you know that we have 60 trillion dollars -- $60 a trillion in debt not too far in front of us. i am talking to you as an accounting professor. there is no way we are growing our way out of this. second, just like everyone else, you have made comments that we are going to keep it in the general fund of social security. that is why we happen to have a multibillion-dollar foreign investment in our trust fund. it is because we kept using

president after president, democrat and republican, kept using the surplus after the alan greenspan commission to resolve this program, kept using that surplus to offset the real deficit. since you do know about david walker's program, which i assigned as extra credit to my students, you know that we did not have a $455 billion deficit with bush in his last year, we had a $675 billion number as the deficit. just like every deficit before, including the clinton years. there was not one clinton year where we had a surplus, but i will say that we had the lowest

spending and then, when we had a mix of republicans and democrats. host: let me have the congress will then respond. guest: -- congresswoman respond. guest: in the short term, when i am saying is i think most economists agree that now is not the time to cut spending because we could find ourselves in a double dip recession. david walker and i, by the way, i agree there are nis no crisisn social security. that does not solve your problem with the general budget. you are right, in some ways, masks the true extent of our deficit and debt. and i agree that we are going

to have to do some major things in the future to make sure that we get the economy in balance. but i think it is this mix of investments, increasing revenue, and that is what we're trying to do, to figure out, what is the proper combination that is going to make sure we do not settle our grandchildren with crippling debts but at the same time making sure they are educated, that we fund innovation, that we make sure team usa is no. 1 in the kinds of technologies that are going to fuel the world. so we are going to have to spend the money hos. host: are you still there? we only have 30 seconds. please follow up fast.

caller: so if we agree that we are not going to get our way out of this problem with economic growth, there is only one other way, and the entitlements are a problem, and that has to be cuts. guest: we have a number of problems. health-care spending is clearly a driver. it is constantly medicare, medicaid. we think we have made a start on that. i agree, we have to look at the long-term solvency of social security, and first of all -- in the ending, these are not crises that our great country cannot manage. you have a great group of people who want to do this, and people should have confidence that, not just our commission, but our country will be able to secure

our future, and the united states of america will still be no. 1. host: we are going to try to get one last phone call. william on the republican line. new haven, conn. caller: i have a proposal where we can get all the wealth that we want to. 200,000 miles from us, the gold rush in california will be nothing compared to what is up there. we might just have the technology in our country to go get that gold. all we have to do is put two satellites around the moon and survey for natural resources. guest: maybe the answer is in the sky. thank you. host: talk about your work in

the debt commission and who you will be working with closely, how do you expect this work to go over the next few months? guest: i am looking forward to the committees. that is when we really start to say, it ihere it is an idea for0 billion, an idea for another 20. we met with the president before our meeting convened, and he definitely wanted us to come up with specific proposals. i do not know who will be on the various committees, but we do not have too much stuff. we will be talking to economists.

we will be talking to people in business, in the administration, to find out what those proposals are. host: how much money will the commission get to do its work? guest: very little. there are only two, three full- time staffers right now. host: we covered that commission hearing commissionthe debt -- the debt commission hearing yesterday. that hearing continues today. thank you for being here today. we will turn our attention to over side of the securities exchange commission with daryl i said, a republican of california, ranking member of the oversight and government reform committee.

-- darrell issa, a republican of california, ranking member of the oversight and government reform committee. >> here is what we are covering of c-span 3. the fiscal summit hosted by peter peterson foundation. we will hear from paul volcker and alan greenspan. that starts at 8:45 a.m.

eastern. later, as a senate hearing on the annual budgets of the securities and exchange commission and cftc. the head of both the natural regulatory agencies will testify. live coverage at 2:30 eastern. >> sunday, a television analyst, author, and three-time presidential candidate pat buchanan on conservative i ideology. three hours with pat buchanan. sunday at noon eastern. host: california republican darrell issa is here to talk about the oversight of the securities and exchange commission, which is at the heart of the discussion. the suit that the sec filed

against the firm. in general, what do you think about the job that the sec is doing? guest: this was one of the most unforgettable political move that the sec could have made. goldman sachs how things had they have a legitimate defense and believe they will prevail in court. having said that, the sec, released in the middle of the day this information. it is the largest suit in history, so by definition, the most controversial one to release in the middle of the day. they did it on the same day that there inspector general released reports on the bad job that they had done for half a generation. they simply ignored the ponzi schemes, the difficult cases,

and went after the cheap shots. this case is also timed to come in the middle of a debate on financial reform, would dramatically move power to warn the government and away from the private sector. you put all that together, they could have done the six months ago, two weeks from now. they did it in the trading day, exactly when the administration and house and senate are moving a piece of legislation. very controversial. host: the inspector general has agreed to look into a request from you to look into the timing of this suit. this was a piece yesterday in the "new york times" -- guest: are you talking about freddie and fannie? host: actually, no --

talking about the oversight of the sec. there are several articles about the lack of oversight, when republicans were in charge as well, that congress should have been the ones to step in. guest: they are absolutely right, congress has systematically reduced its ability to oversight. when newt gingrich became speaker, he cut the oversight committee, and he did so because he thought, we will do it by other committees. speaker policy -- we were the only committee not to receive an increase in the budget last year. the reason was because she said other committees would do oversight. the fact is, oversight is a special job.

there are not enough resources to begin to save the hundreds of billions of dollars that would be saved by better oversight, and it is one of the problems. we could go back to president nixon. every president has been an imperial presidency. even after talking about transparency, they immediately change their tune and suddenly, everything is confidential to them. as a result, the fed has refused, even under subpoena, to provide proper documents. the sec is reluctant to do it. committee after committee asks for information, but you get slow world. and jan schakowsky was talking about the president's commission bache church on. we have separation of power. it is time that we provide growth to the executive branch.

host: what should be the role of the sec, in your opinion? guest: they have an obligation to transparency in the decisionmaking process of the individual stock purchasers and sellers. that simple. they have an obligation to look at our boards so that the stockholder knows what is going on. the only thing that the sec, relative to public companies, has an obligation on, is what stakeholders know. if you have people who tell you how good and as it is, then they have a separate question. are those agencies' acting on behalf of stock trading and those rating those stocks and bonds, are they, in fact, doing their job? if they do their job poorly, as

the ratings agencies did, then, as individual stockholders and bondholders, we cannot begin to know the details of these complex instruments. but we rely on ratings agencies. so we have problems not yet been dealt with in the reform. host: in the senate reform bill. guest: president bush was counting the highest level of ownership, just as a growing, and unsustainable, almost ponzi scheme-like level of home buying euphoria was reaching its crescendo. the fact is, everyone from the president on down should have known that you cannot have higher and higher levels of home ownership when it was less and less affordable. it historic interest rates did

not stay low and home but did not go up in value, nobody questioned that. government is trying to shirk any blame by trying to find a villain, and goldman sachs is a convenient villain because of their high profits and relatively small amount of employees. private enterprise reacted to government stimulus. if we provided all those incentives and set the ground rules that way, then, in fact, we are responsible, even before we get into the question of other agencies crossing the line, it is clear we are responsible. by the way, hud is still in a bowler. you can get a no money down non recourse loan today. -- still an enabler.

even if they could pay them, they would default on them in a short amount of time. host: 1 phone call in our opening segment, we were talking about the goldman sachs hearing. he said he did not like the fact that he saw politicians grilling executives even though they take money for can traicampaign contributions from companies like this. do you? guest: i do not know. i would have to check. i think the important thing is not to judge people on whether they get money and then turn on people, but if they never turn on people. you have to be able to take their money and then vote against them. that is shortening down an old

axiom. if we go to public financing and we take completely all interest money -- there is no such thing as special interest. if someone tells them $35 on monday, and they still have an interest. the fact is, unless we go to all public financing, we are still going to have people taking money, and hopefully, doing what they think is right, which often is what is different from the people who gave them money. right now, it is convenient to- one group -- bash one group. freddie and fannie, even though these were government entities basically, they are getting huge bonuses right now as well. we have trillions in risk.

the fed is essentially holding that balance sheet. so two government entities are still paying bonuses and are still not solved. how many hearings have you seen in the house on that? host: your committee have hearings on the role of the sec? guest: one of the challenges is, i am the minority. i do not get to stretch will hearings or issue subpoenas. for the most part, no, we cannot. we can work with public opinion to move toward these hearings. i do have a good chairman that is trying to be fair, but there is no question, there are some things that the party in power does not want to deal with, and

one of them is dealing with freddie and fannie until long after they do with financial reform. i think that is part of the problem. host: barrel is the is a top republican on the oversight and government reform -- carol it is up -- darrell issa is a top republican on the oversight and government reform committee. next phone call. caller: somebody mentioned martha from ohio. she asked the department of justice to investigate this problem as a criminal case. currently, it is only known as a civil case. but a criminal case, under the recourse statutes, which were designed specifically to

prosecute criminal fraud conspiracy, and this is what we have been dealing with, and nobody wants to recognize it because nobody wants to open up this can of worms, i am afraid. it would extend out to the other moneychangers in washington. guest: you have a good point, but i want to make sure that we put it in perspective. the sec, for good reason, it is doing several. this is a disclosure question -- civil. this is a disclosure question. the shorting question was publicly known. so there is a limited scope as to whether or not goldman sachs did something wrong. if you do not disclose and as a

result, people may have invested differently, that is typically civil. you are right, attorneys should be looking at every part of the meltdown and should be asking who did something criminal, and can we prevent this from happening again by having to disclose? if you look at the ponzi schemes of allen stanford, bernie madoff, there are examples where it was clearly criminal. and they are time consuming, the other way. by the way, we fought not to have t.a.r.p. we did not want to have a hundred billion dollars of floating around -- $800 billion floating around.

even though it is not criminal for politicians to lie and get $800 billion, and then use it differently -- although it is not criminal, it is wrong. i still believe it was absolutely wrong to give them that kind of money. host: so you think president bush and president obama lied? guest: yes, president obama voted for a use, but he is using it for walking around money. president bush to see it through his administration, not him personally. they tried to have a timeline that said, we were changing our mind just as we were getting the money. the fact is, they took the money under false pretenses, saying

that they would buy up and hold for a period time these toxic assets. the truth is, the fed could have taken them off of the asset market. t.a.r.p. has been used sort of like stimulus one, and then we had stimulus two. so we have trillions floating around in discretionary money. we talked about having oversight. constitutionally, we were never supposed to give the money to spend as they wish. we have appropriated two baskets of money that are unconscionable and unparalleled in history. fdr, with his heavy majority and all of that, never got the kind of discretionary spending that the last two presidents have had. host: then from shreveport, louisiana. -- ben from shreveport,

louisiana. caller: if i could make a complaint. all of your letters at the bottom of the screen -- you could read and it was so nice. now i cannot see it. host: it is a work in progress. we are transforming to high definition. it is a work in progress. i appreciate your input calle. caller: ok, fannie mae and freddie mac. the republicans stand strong on this. barney frank is trying to sweep this under the table. that was the cause of this. one more comment. stay on acorn, mr. republican. i want a democrat to comment on this. how are we going to pay for 20

million illegal aliens, health care, and when there are able to bring their family members in, and that comes to $100 billion, and i am on social security, how are we going to pay for 100 million people? host: we are getting off topic. guest: i will just try to focus. i just got a notification that the government had shut down their funding to acorn, based on court decisions. it is not in our hands. federal court is going back and forth on whether or not the actions that we took to shut down acorn is allowed or not. we are going to stay on top of that. certainly, we are going to lobby to say that they do not deserve to have our government money. but back to the point, jan

schakowsky was saying, do not worry about social security, do not worry about this and that. these are the kinds of things that if you take care of today will not be problems. immigration reform needs to be considered in light of these social welfare programs are already upside-down. so hopefully, all of us will begin to hear the american people. yes, we are looking at goldman sachs, but they create capital for private investment. if we killed the goose that lays the golden egg, the ability to form capital when you grow or start a company, in shreveport, we are going to lose a lot in the way of the opportunities in the private sector. at the same time, social welwele programs will be paid for by americans, not the government. and it is a growing problem of

why we are not attacking ourselves for not having a social security system that is all that. we have a medicaid system and that, even with huge amounts of state money, is upside down. medicare is the third pillar to this problem. we have no answer. this person is in the unique situation where he watches us going after goldman sachs, but he is realizing that we are not dealing with his situation. if he is disabled, he has to live under our social welfare program. if we do not make sure that that net is available for those who want to use it, it will be a problem. so i do have a question about the timing of this with goldman sachs. its capital comes from the government, this will never be

world class. we have been a world-class producer for innovation, google, ebay. that does not happen when the government makes decisions. host: west palm beach, florida. jim on the republican line. caller: thank you for taking my call. thank you for being thoughtful and careful about reform. the future of the country is at stake. i wanted to focus on the rating agencies. if i understand correctly, what happens when a security is downgraded, some people are forced to sell it based on the roles of their mutual fund. i am not a sophisticated investor, but now it looks like countries are being downgraded, like a country of greece. when that happens, the price is driven down even further. my concern is u.s. debt. i hope we do not get to a point

where our ratings are downgraded. i wanted to get your thoughts about that. guest: you are right, if we lose our aaa rating, we have two problems. first of all, it is an excuse for those holding our debt to dump them. if we go to anything other than aaa, that magical cost to lend the money would increase. ias you look at the national debt, and as we've absorbed a chunk of the economy's, it squeezes out anything. we would have to choose between military and social security payments if we had a 12% rate based on our current so it is important that we keep our aaa rating because it is how we

manage our debt. it is also important to have these rating agencies be more transparent. they want to tell us they have their own private, secret way of knowing how to read a bond, and it is proprietary. the truth is, there are only two agencies that represent almost all of ratings. so when you have a duopoly, effectively, and you have a secret, and that secret fails, then the government, like any other antitrust situation, has to come in and say that you are determining a market. we need to make sure that there is transparency, particularly since you have been proven to be so wrong. i do not want to be putting any blame on the s&p or moody's, and this is an sec-type job. can you show us that this is not going to happen again? can you show us the confidence the triple a means triple like?

i am from california. we see-saw with our ratings, and a difference in rating is a huge difference in the value of your portfolio. host: next phone call. caller: i would like to respond quickly after the representative makes his comments. i live in manhattan. i know many people who work on wall street, retired from wall street. friends have told me, the majority of the people there are among the most unethical people that you will find in business, and that, regulation is something that must come about. i always see the republicans as the party of no, they want to leave the taxpayer holding the bag, on the hook.

democrats seem to want to get the taxpayer off the hook. i am no expert, but i know there is talk that banks should be more liquid. if you do not get the taxpayer off the hook for the risk taking on wall street, you are not doing your job. just a final point, business liability insurance policies, were compotation -- work compensation policies, if they do not allow coverage for accidents in business, or illegal workers, if there was an exemption in insurance policies, liability policies for companies, did not allow for coverage for illegal workers, then the employers would be forced to employ workers, that if there was an accident or injury, they would have coverage for illegal workers. host: we have to leave it there.

guest: first of all, your comments on insurance are thoughtful. i had not thought about that before in the debate of legal, illegal. it is part of the idea of what we can provide to illegals, in the forms of a job. let us stop them from in getting employment if they are not here illegally. well, we are not stopping their children from getting an education, hospitals are not closed to them. but what if an employer knowingly has illegals and then claims something? i do not have an easy answer for that period. .

so i would argue that although president bush did not say that in the crisis, that the majority of republicans voted against tarp, and wanted bankruptcy to be an alternative. the exception being the individual depositor fdic which needs to be solid. we made a promise that your deposits are guaranteed, but have never made the promise that we will not without a stockholder if the company goes bust. i would argue that he has a reverse on which party. >> taxpayers may not have to

step in, but if the taxpayer's steps in -- the company's go bust? guest: no, the only way the jobs are lost as if they move overseas. if general motors goes bankrupt, will the local plant in ohio get more business? will the plants in georgia and kentucky get more business? will ford motors? ford motor stern have a profit without bankruptcy or government money. but general motors light was on to be about how they have paid off their debt had a time when the only transferred money from one government account to another. we must be very careful. their times in which an industry, if it goes away -- jobs will transfer overseas. that is where government has to decide if we can bafford to be without such an industry. but when you talk about an

individual company such as chrysler -- look, chrysler did not make good enough cars to make a profit and only relied on jeeps and trucks for a long time. general motors made a similar mistake. we bail them out on some premise that the crisis caused the trouble, but they're losing money before that. two were not producing cars good enough to compete against domestically-produced foreign companies. caller: good morning. first of all, representative, i have a question. i phoned your office yesterday and your staff must have taken, gee, somewhere between seven and 10 minutes with me. i just got off jan's office [inaudible] -- and her office personnel did

not even know she was on c-span. tate had no clue, but gave me three minutes because she knew where i was going. i tell you what, representative. i never thought i would ever see my country like this. i blame everybody, including myself. we have allowed this treasure to tarnish on us. we have not taken care of her. the american people are waking up. let me tell you, i plan on rocking this world. i have been calling since 9/11. every week. rico is a real important because it was made it for mafia so organizations like acorn. host: let's leave it there and take the consumer part of this. are the consumers to blame for

the financial crisis? guest: i do not blame the voters or the consumer and less, as this caller said, in light of where we are today they're not taking strong action. it is time for americans to say, we talk about not leaving our children a debt, but we are. we talk about making sure social security is solvent. it clearly is not. no economist can show you numbers that they are so that. with about health care reform when we added to the cost instead of taking it away. the debate began to we want to go with canadian-style health care? they have a system that costs are roughly 9% of their economy. hours costs 18% and we have made it more expensive. the american public must ask, if governmenis government meeting e

requirement, or will use powers to change that? if stockholders do not have power to control goldman sachs or anyone else they owned stock in, the we need to make sure they do have the power to. government is at fault at the same time. the people are not to blame because they elected bad leaders to make bad mistakes, but they do need to ask if we need to change direction. i happen to be a republican. we are vying for how we think we would change directions, and democrats need to make the same argument. host: the next phone call from jane, in new jersey. you are on the air with theissa. caller: no, this is betty from gaithersburg. guest: we are happy to have you. caller: i really believed that congress just needs to work together to get this job done. i am very distressed at how

divided they are for political reasons. when you look at the senate you see senator jim bunning was very much against any kind of governmental action. then you realize [inaudible] political philosophy to say for the good of the country we need some regulation. both in the house and senate we need some regulation, not too much. it was important for republicans to knocked do too much with the idea of fannie mae and freddie mac. not let that the strike from moving forward and passing of financial reform bill. guest: betty, i could not disagree more. it is my obligation to do what is right for our country. i swear allegiance to the

constitution, not to my party. if i think something is wrong, how have the obligation to be cordial, civil, but an obligation to argue and use every power i can to stop bad things. if i think that something is not constitutional, i'm obligated to not allowed to become law. if compromise is being defined as get out of the way, both with us, or shut up -- i have to say that is not compromise. that is not meeting and asking what your concerns are. i spent 20 years building a company in the private sector. i never asked for a party affiliation of my employees. i worked with competitors to build new products. i've understand what it is to find win-win. i look for every day. i sit on all kinds of committees. we work on a bipartisan basis.

i have traveled overseas to work on the middle east crisis. it is always with some one of the other party. understand that as a republican in the minority to make the best argument to slow down or stop bad legislation is our obligation. oddly enough, particularly health care in nonfinancial, to a great extent we're not willing to reach out and get one republican. people like susan collins are those known to cross over at the drop of a hat if they agree, or you find a compromise. they are not trying to find compromise. i will blame the democrats for being heavy handed. you can judge for yourself, but please, after we do cordial and civil debate, do not expect me to go with the other party just because they are the maggiore. i have an obligation to the constitution. they can get rid of me if my

vote will be out, but my voters want me to stay in and move the country and a more fiscally conservative direction. host: the senate voted again last night to open debate on the legislation for the financial reform but. the vote failed 57-41 with all democrats and one republican -- with all the republicans and one democrat voting against it. guest: i must interrupt. that is the way that it is phrased againshere. if this center is standing up and filibustering, known as saying that he is stopping debate. that is what he was doing. the tradition is any one senator, unless the majority of 60 think that senator is wrong on the principles of just tried to slow down and argue, unless they're willing to override him,

that senator has a right to defend the principle. it has been a vexing for house members. when we work in the majority we called it the elephants greater because everything went there to die. having said that, it is that saucer in which the hot decisions in the congress passed cool. we can make a bologna sandwich law as long as they take it to the floor and it becomes a a bill. it did not allow debate. it was called closed rules. you cannot amend anything. if i simply say in its present form it is bad, and you say it is perfect, and you do not allow any members -- that is not what was envisioned by the constitution. that is the house. right now the senate is largely

saying these things that are running through the house on a purely partisan basis, sometimes with big chunks of democrats not even liking them are voting for them -- they get to the senate and one senator or 40 senators say -- hold it, we are supposed to be a place of compromise. the senate did not change that much. if you look at the 40 or so senators like hatch who were always working with ted kennedy -- that was when we were in the majority -- the think that orrin suddenly will not work with a majority because we are in the minority? they're more likely to work with majorities if there's a tradition of working in a bipartisan fashion. the tradition goes away if they are not working with the other side. host: john, your next.

in cleveland, ohio. caller: i'm on the west side. i have been a c-span junkie for 30 years. i have two questions. one, there is no problem in hexing are betting of futures, but the conflict of interest is so obvious with rating agencies that even if only two of them are making this country poor, it is obvious is to do something more than you have been. number two, even if the futures have no problem. even if they want to bring in some future housing -- if not this, then some new thing. i want to know why you allow synthetic instruments to even be traded if you do not allow it in the gambling? you cannot allow the odds to be changed what you are playing the

game in the gambling. guest: john, the 30 years has served you well. there is a question about how rating agencies get their money and whether there is conflict of interest. how you get your money is affecting how you rate companies. most listeners have no idea, but we just open the idea to bet against a specific movie. if "terminator12" comes out and you think it will be a dud, then you can invest against it. as john said, that is only gamba. this is not capital going into a market. it is purely a bet. goldman sachs' hedging instrument the subject of a lawsuit could a great extent you're good to be only an extension of in most types of bets other than legitimate hedging. in style chicken by something at

this price and sell it at another press. you have decided how much you're willing to lose. that kind of instrument has been around a long time. even after gambling was eliminated after the crash of the stock market the cap that capability. but john is right, there are many instruments that have been allowed for decades that nothing but gambling. if we really wanted to reduce the amount of money being spent and in the stock market rather than investing in a private enterprise, we would get rid of most of those instruments. host: congressman, thank you for your time. and next we'll talk about diabetes. the conference will happen here in d.c., so we will look at that, the cost, and policies. first, a little bit of video of an interview we did with two

british journalists about whether the british campaign is becoming more americanized. we should do the first and second the bank for the prime minister's campaign last week. the next one is tomorrow. >> the british election is may 6 and c-span is covering the leaders, issues, and process. >> we are definitely getting more focus on the character, the personalities, family lives of the leaders. [unintelligible] away from that we're getting there wives for the first time. i do not remember having a spouse's plan such a central part before.

the daily concern with a wardrobe and dress of srah brown, samantha cannon, and so on. it is a family package around each leader as opposed to the traditional party platform. >> you can go back over 100 years were people complained that the british system is becoming americanized -- usually an insult by the british. under tony blair a lot of the bill clinton campaigning strategy -- it was indeed the same personal advisers. stan greenberg and others like him were advising. it is a familiar charge. the big innovation is the debates of the leaders. there is a big contrast from the american one of the last two years.

now our campaign is basically four weeks -- much shorter. within the time they're packing 390-minute debate, the last of which will be before the polling day. many of the dynamics have been dictated by these debates. -- they are packing three 90- minute debates and to this time. though one of have very much looks ready questions. the audience loves to clap. >> the third and final leaders' debate is this coming thursday. you can watch it on c-span this sunday night. on our website c-span.org you can watch campaign events and interviews. other featured links go to the

2010 british election page. "washington journal" continues. host: our guest is here to talk about diabetes. and the cost and impact. let we put some numbers on the screen for viewers. 81 million americans are affected. there are about 57 million who are pre-that that it. the cost of diabetes is one have $174 billion. $58 billion in the indirect costs. that is disability, work lost. viewers are looking at 186,300 having diabetes. nearly one out of every 500 has

type 1 diabetes. there are two million adolescents aged 12 through 19 have a pre-diabetes. guest: type 1 diabetes is an auto-immune disease. it used to be called juvenile diabetes, but you get later in life. in late type 1 diabetes your body does not produce any insulin which is a hormone that helps you to take in food to be used as energy. type 2 is a different disease involving insulin. either your body cannot take in the insulin, or you are not producing enough. it impacts nearly 24 million americans. it is associated with overweight and obesity. only 80% with those with type 2 diabetes are overweight.

host: when it comes to diabetes, is that the pre- diabetic no. we talked about at the beginning? 57 million people? guest: no, the pre-diabetes are those were close to reaching the level. they are most at risk for getting diabetes. they are at risk for type 2 diabetes. they are on the edge. there are people for whom we have great programs. another group mentioned -- the fact that a quarter of those with diabetes do not know they have it. all the terrible complications can begin to happen. they are not realizing it is going on or taken the care they need to manage it. host: how can type 2 diabetes be

prevented? guest: lend a great deal about prevention. the nih took a program with moderate exercise and weight loss, and through clinical study, 50% of participants were able to prevent or at least delay diabetes. through the centers for disease control took that into communities and found we can get the same great results. one of the great policy success lately is in the recent health reform is the national provincial program for diabetes. it would take the community prevention program to scale. 50% reduction as a result. the cost is miniscule per year. it has great success.

host: some people may think obesity leads to diabetes, so of these people must lose a lot of weight in order to reach their limit the impact of the disease or prevented in the first place. is that not true? guest: it is not true. we obviously want everyone to get to an ideal weight. really, with even moderate weight-loss and exercise we saw huge gains for the program. host: the figure of one of six overweight adolescents between 12 and 19 have pre-diabetes. how the enough a person is diabetes and diabetes -- how do you know if and ellison is overweight and diabetes could be a factor? guest: we need to do a better job of testing. we know the signs and factors, but we don't have in place of

public policy. in schools there are many positive things happening. though let's move initiative that the first lady has done that will make schools and children more aware. some states have implemented programs as part of what they do regularly. the check the b.m.i. of kids a report that confidentially to parents. it makes a lot of sense with children because we see huge potential there. right now if we do not take action, one of three kids born in 2000 will end up with diabetes at some time in their life. but it is happening earlier and earlier. host: people are getting younger when they get diabetes? guest: yes, and it goes hand-in- hand with obesity in young

people. even worse than that is one of two children in minority committee's faces its. there is a great disparity. host: you said there are not public policies in place for testing. what would you like to see put into place? guest: we need to encourage testing. one of the barriers we see is that the u.s. preventive services task force does not see the value -- it tells us the evidence is not conclusive for testing for the following persons -- she's 55, obese. her close relatives of diabetes. she had gestational diabetes, but does not have high blood pressure. we hear from the agency that is not conclusive whether to test the person.

also, if the woman happens to be younger and pregnant we still do not have a policy about testing her for the health of the baby and herself. host: newton, mass., good morning. caller: i have a son was not 28, and when he was 21 after being a college for a couple of years, he came down with type 1 and he did not even know it. he ended up in the intensive care. my position has been said he likely contract that as a virus -- my husband who is a physician said that. it then led to his diabetes. a couple of years later a family from the neighborhood had the same thing happen to their son at college. i am just wondering -- both boys were athletic, played sports.

they were very healthy. there has been a diabetes in the family. could you talk a little about that? guest: i am not a physician, but will say we do not know the causes of type 1 diabetes. there is wonderful research. the nih has done great work to identify potential viruses or environmental factors. we are involved in the program that provides $150 million for type one and a certain amount for native americans who have the highest prevalence in the country. those sorts of programs will get us closer. there is never a good time to

have your child diagnosed with it. been further away from your son of the time must have made it even more difficult. there is no conclusive evidence yet to, but these type of cases are the ones that scientists need to study. host: which agency would do the research for the programs your referenced? guest: nih does the research for type one. when i say that it is focused on type one, but when they look at how to better manage the disease, it will also impact type to people. the indian health service the does the program -- 17.5% prevalence. programs which have had a really wonderful impact in luring the

blood-glucose levels. when you talk about tax dollars making a difference, these two programs have been very effective. host: is there a correlation between a high prevalence in the native americans and their diets? or what is the reason? guest: there are a number of factors. they will genetically be more predisposed. the asian-american population has a higher incidence, but at a lower weight. there was no diabetes and the native american population before the western addition. it is a combination of diet, poverty, poor health care -- all those things make diabetes disproportion and in their nations. host: good morning, tommy.

caller: i have a question about the disparities. do you think any party is working more towards having an impact? any democrats, republicans, independents -- are the impact in the research? guest: congress's work on research. we have had great bipartisan support. we certainly have bipartisan support for both bills. we talk about the research that needs to have been, health reform, discrimination. it is necessary to have support

from both parties. to move against the epidemic and have a response that mirrors the epidemic, we will have to have bipartisan support on initiatives. host: here is a message by twitter -- it is a national security issue. whom will we recruits? indiana, on the independent line. caller: my name is anna and i have had a 35-year issue with the approach to the diagnosis of diabetes based on what is called a simple blood sugar tests. i want to know if you are aware of what is called factors that promote glucose and tolerance? host: are you familiar with that? guest: are you talking about factors in terms of biological

or lifestyle? host: why don't you address both. but guest: there are two things. how retest to define diabetes. there are several ways to doo it tone is of fasting blood glucose test -- several ways to do it. another test which recently scientists have said is another way --and not sure if that is your concern. it looks at your blood glucose levels over three months. again, we have a lot of people with diabetes. and many with pre-diabetes who are not making changes. what causes cells to be resisted

-- i'm not a scientist. there are a number of factors. we know about the correlation with overweight and other factors. the scientists making great progress in addressing those factors. host: in new york, alfred, on the republic's nine. caller: thank you. is it worse for diabetic to be too low, or too high? like over 200? or between 140 and 180? guest: two things here. diabetes in itself is the condition of your blood sugar being too high because you're not producing insulin.

but medications you take in codger blood glucose to go too low. this is particularly dangerous for those with type 1. also, some oral medications can lower your blood sugar. the complications of diabetes which i'm not sure if we have talked about -- blindness, imputation. today 230 people will have amputations because of that disease. 120 people will go into and stage renal disease. these long-term complications including deaths are caused by high glucose. unfortunately, if it goes too low though, you can lose consciousness or have seizures. hypoglycemia is a short-term

complication. it is a balancing act. it is important to have access to health care to have the education and tools to keep a balance. host: you mentioned 150 million for research for type one, 150 million for type to research. the cost of diabetes according to the association is $174 billion total. -$150 billion-- million for typ. how much would it address the overall cost if you take those numbers we just gave down? guest: let me correct one thing. the special that these group

which we seek reauthorization at $400 million per year is an important part of the research, but not everything. you put all the research together on diabetes and it is somewhere around $1 billion per year. it does not begin to address -- think about the man -- it comes from the misunderstanding that diabetes is not serious. think of the seriousness of its complications. we looked to double the number by 2035. 45 million people with diabetes? if you look at nih, less than 2% of resources go towards diabetes. we're not addressing this as the serious crisis in this. host: nantucket, on the democratic line. calvin?

caller: yes, i was wondering how close to getting on health care bill -- because people really need health care. host: how does the healthcare bill address this issue? guest: begin with where people with diabetes were before this bill. you were one job away from losing health insurance. if you could get it through your employer, that was one thing. but if not, you can be turned down. if you get sick because of diabetes weekend for you off are charged exorbitant prices. the people who most need health care -- to been the cost curve, it will be a personal cost to those with diabetes. if you add in all the costs it

will be more. so, people were out of the system or hanging by a thread before healthcare reform. reform changes that and and discrimination. a number of things are very positive. first, we will not be able to be kept out of the system. i know parents of kids with type 1 were graduating from college say oh, my goodness. now my kid will have healthcare when the child needs it and can follow their dream. instead of choosing their employer by health care. a number of things will help more with diabetes to get coverage. the expansion of medicaid, subsidies for people at a certain lovell of the poverty line. there are also wonderful things happening for prevention.

the trust fund -- menu labelling. we can go into fast food restaurants and get education we need about what is in a food item. that is an important piece. another i have mentioned is talking about the diabetes prevention program. it works with community partners and the ymca has been a wonderful model for this to take prevention into the community setting. the program is also in health reform. we see a wide variety of things that can turn the system. health care would pay for the amputation, but not tools to prevent it. host: darlene joins us on the independent line. caller: of like to know what the

preservatives and the food like the high fructose corn syrup put into nearly everything people buy in the stores -- what do that have to do with diabetes problem? especially with the kids? host: do you know the answer to guest: that at the end you talk about the kids. we have seen the high eight incidents of kids drinking sugared drinks that have no nutritional value, but many calories. corn syrup is a way to get calories quickly. there is a research concerning corn syrup, but generally we are talking about blood glucose being raised by carbohydrates. corn syrup is a very simple carbohydrate that raises blood glucose quickly. it is important for those with

diabetes to understand. empty calories are quick way -- a quick method to get people overweight and obese. i commend the first lady for the initiative in partnership with organizations. part of that will begin to educate youths. one is the child enters an act that looks not only at what is in a school lunch, but what else is being sold in the schools. it also looks at labeling standards for items in vending machines. we have seen a lot of movement in the past 10 years toward healthier things, and partnership with industry. we need schools to be a place -- through the fit kids act, another pending bill in congress

-- where children learn about the importance of exercise and good nutrition. only learn, but see it model. host: the line from michigan. caller: congratulations. i cannot live without c-span. i have a generic question. albeit the philosophy of diabetes is all good, don't you fit into the world of special interests, lobbyists, working in the government world? number one, is that correct translation of your position? number two, in that role if you are a lobbyist -- and there's a general negative opinion of lobbyists -- how do you apply your resources to influence your cause, whether political or physical, or psychological? guest: i certainly do have a

team that includes lobbyists and volunteers around the country. i think it is essential for non-profit organizations such as ourselves to give voice to patients. we are patient advocacy group. we speak on behalf of the nearly 24 million people with diabetes. it is essential congress understand. i know the term lobbyist may have a negative connotation. if we think about it, we want congress to be well-informed by groups, not just money groups. but also by groups of patients. and by healthcare providers. it is an important part of what we do, to make sure congress and the administration understand the problem. a lot of what i see whether facing discrimination kids see

us go, or employment discrimination is a misunderstanding about diabetes. sometimes in employment, people think if you have diabetes you are not capable of doing anything. it is often a misunderstanding about the seriousness. i have called a serious, but we have all had the oh-- so and so has a touch of sugar, and have had a leg amputated. not putting those things together it is a disservice. host: carl, from kansas city. caller: i do not purport muscle to be an expert, but i worked in the area. good grief, we need to get a handle on it because it will bankrupt the healthcare system. people should look up the internet, a certain law in physiology which basically says

that if you do not exercise, you have a heart attack. certain cells in the body do not have a limit and will work until they die. this is true of the cell that produces insulin. my helpful, and for thousands -- when i talk health i bring this out a lot -- anybody who pushes their limit -- there is such a thing as resiliency. some people can abuse their bodies and other people cannot. the up shoot in diabetes is connected to starling's law which says that's a cell will do all nothing, will work until it dies. many people who are borderline who get a glucose tolerance test that reveals they have a marginal capacity -- they typically have a higher blood sugar level -- if they go on a

regimen prescribe for those with full-blown type 2 diabetes, then if they begin to monitor its -- then the of law will preserve enough pancreatic cells that they will never develop full- blown diabetes. guest: first, i want to commend you for being a health teacher. it returns to educating youth in the schools. to the physiology of diabetes, there are a lot of interesting and important experiments as to whether people should be treated early with certain drugs that are used typically later -- whether that will have an impact. and the setting up what point the best course is -- that an exercise? and i'm talking about those with type 2 diabetes. if you are tied 1 diabetes, of

course, you are using islam. there is another website -- diabetes.org. we can provide a great deal of information. what is the next step? we have a movement that the american diabetes association to stop the bees. it will take all of us from the health teacher through the scientists, and all of us to understand the impact. host: toledo, ohio. caller: first, you have a fantastic program and i love it. what i want to bring up with diabetes, especially for low- income people -- a lot of the food banks, god bless them, do not provide vegetables. a lot of what they provide is

high in the sugar. when someone is trying to use coupons -- most of that is high sugar impact. also, when i go to the supermarket to buy something better for me, there are never sales on those items. then you also have the political system. when the man talked about you being a lobbyist -- this may not be you, but in the world health organization they had scientists a couple of years ago coming to show the detriment of high fructose corn syrup. how it is a really bad factor in people's diet. there was a lobbyist group headed by the grandson of george bush who stopped them. they were not able to give at the information. what about those powerful forces that are keeping the status quo? guest: first, concerning your point about healthy food not been available. we call it the "food desert."

the idea that everyone has access to being healthy -- if you are not healthy is all your fault -- we forget the fact that in many committees there are not any good for restores. produce will be overpriced, and not even be very good. they are past their prime. people lived in places without access to those things. they live in places where they cannot go out to running after work either because it is not a safe environment, or the people must go to their second or third job. to your second point, the scientists, health professionals, the patient groups really need to give a voice, as well as giving research to show what is and is not help. we need to make sure we balance input to congress from a variety

of groups. that is why i'm proud that the american diabetes association makes a strong point to educate congressional members. host: tampa, fla. caller: one thing and menaced but i have not heard you speak of is medication that threw into diabetes. i was diagnosed with audit- immune hepatitis and one steroid was placed on automatically threw me into diabetes. after two days of taking the medication which the doctor told me would probably occur -- after i went to the diabetic clinic, and after learning how to measure my food, and then going on exercising programs, i was able to get off the insulin i had to take. i could not take the pills because there were toxic.

they would go through my liver, so i was put on two different types of insulin. i think people need to know that various medications can also for you into type 2 diabetes. guest: i think that is red. there are a number of factors that can cause it. people who have had transplants. i think you mentioned you were on some suppressants. there's wonderful research helping us to identify factors, but one of the things with some and undergoing treatment is to get the education -- returning to what i said about health care, one of the key things as making sure people have diabetes education. it can be a tricky disease to manage. we have so many tools to manage it well. in your case looking at the proper medication to not cause

further side effects -- just because you have diabetes does not make it so that you will not necessarily have other things going on. you must take them all into account. it is good we have a variety of treatment options. host: good morning. caller: yes, i have type 2 diabetes and and also over with. i have been told by several different positions that surgery would more unless you're the type 2 diabetes. i'm curious if the association has a position on this weight- loss surgery and its control of diabetes? guest: yes, we have recently made a statement. i'd wouldirect you to the websi. i am not an expert. there has also done research

about the impact of the surgery. it is important that you consult with your physician. make an educated decision. host: mass., and laying on the independent line. caller: you hear all the time about a obesity contributing to diabetes. but i lost about 20 pounds and went to the doctor, and i guess they did a blood test, and then told me i had diabetes. i was just shocked. host: was it type 1 diabetes or type 2 diabetes? caller: at first they thought it was typed one, caused by a virus. later went to another doctor who told me was type 2 diabetes. guest: i can relate to you

personally. i had gestational diabetes twice. it makes me a high risk. i am not overweight. it is a stereotype that is only overweight people who get type 2 diabetes. certain people have a predisposition. i know tons of people with diabetes through my work. some what type 2 diabetes are overweight. a number are not. we see predispositions and certain racial groups. china rivals us for the prevalence. a just returned from there. if you look around you see a population which is much, much thinner than ours. host: greensboro, n.c. caller: good morning.

i have more of a common to. -- more a ofa comment. i have always had a high sugar level, since i was a teenager. as i was getting older my doctor was concerned i have that type 1 diabetes. even though i was limiting my diet it was not enough and they had to begin taking the pill. upon the diagnoseis and his determination, the nurse gave me a number to call for the association. when i called them, she suggested i call to get some recipes. they will send you the recipes but you have to send them $25 or so. i have since then discovered

that the american dietetic association is a self-serving entity that is a useless for moderate and low-income people. i frankly resent congress giving them any tax money. they do not serve the general public. guest: first, we do not receive funds from the government. we are non-profit. i send you to the website for the recipes available there. our magazine is $24 per year and provides many resources. it is true that people write recipes. we do connect with people if other people want to join them to buy resources. if you do not have internet access at home, perhaps the local library can provide it. my team on government affairs

has a focus on expanding medicaid. we're pushing a bill to expand coverage for diabetes. we spent a lot of time in the reform debate working on access for low and moderate income people for health care. there are a number of free resources. hopefully, we can make those available. either through the internet or through our call center. we provide a great many materials for free. part of it is getting recipes. the other is getting information about diabetes. i think we are a wonderful resource for those things on the web. if people want to buy books about diabetes, it is important that those are available as well. host: here is a message from

guest: twitter one thing happening in the conference today -- they looked at the rural population. i do not think that it apipaints that way. we also see a lot of rural diabetes. we need to look at that also. people can have access to health care and specialists in my diabetes -- and can be particularly challenging in an urban environment. think of the rural and native american populations with a high incidence of diabetes. host: samuel, on the democratic line. caller: i have a quick question.

i found out i was diabetic. when i went to the doctor at john f. kennedy hospital i did not know that i was tested was180. ever since i came from the hospital they sent me home. my level always [unintelligible] it was very low and trended down like 150, 130. they gave me a home machine. at one time it would show me 112, then 115. they're not really accurate so that you can know your level. which type is more dangerous? i or ii? guest: type i is dangerous because you get it