Skip to main content

tv   Washington Journal  CSPAN  May 4, 2010 7:00am-10:00am EDT

7:00 am
representative from the commodities futures trading commission on financial regulation. later, an author who co-authored the book"landmark." this is "washington journal." . .
7:01 am
closing the main door to the supreme court since troubling signals, he says. it is a grand affront, architecturally, symbolically, and politically.
7:02 am
that is this morning in "the washington post" about the decision to close the front doors of the supreme court because of security concerns. the federal page of "the washington post" this morning says the new interestentrance ws designed based on a security study in 2001 and 2009. it says here that security enhancements have been part of a nearly seven-year renovations at the court.
7:03 am
a proposal to blockade second street after the september 11, 2001 attack was rejected. it says that the 44 marble steps leading to the entrance have taken on a romantic and symbolic importance for the court and the public. justice breyer said -- a new justices first public appearances on the steps. many remember the supreme court special we did. it is something that aired here on c-span. you can go to our web site if you want to see that. c-span is out with a new book based on that documentary. we will talk later on in the program with mark farkas, the
7:04 am
executive producer. it is on sale today at your favorite bookseller. in one of the interviews that we did, we talked to justice kennedy about the front entrance. he had some thoughts on what it means to walk through there. we will show you that and come back. >> it is important for the justices. it is important for the attorneys. it is important for the public to make sure people always want to come up the steps. not a day goes by that we must ask ourselves, "are we doing our jobs the right way?" host: the supreme court announced that it would close the front entrance. we want to hear from you this morning. what do you think about the symbolism of the front doors and security concerns?
7:05 am
if you are going to be coming to the court to visit, you'll have to enter through the side entrances. here is "the washington post" picture today. the first phone call on this, lancaster, pa.. john on the line for independents. john, what you think about the supreme court closing their doors? caller: they should let corporate clients come in the front door and let everybody else go in the side doors to reflect that the supreme court. i think it is crazy. we're living in fear and every aspect of our lives. host: when chief justice john roberts was selected for a spot on the court, he said, "i always got a lump in my throat when i
7:06 am
walked up those steps." that was chief justice john roberts on entering through the front doors. we want to get your phone calls this morning. we will put the phone numbers on the screen. democrats, 202-737-0002. republicans, 202-737-0001. independents, 202-628-0205. remember, you can also send us a tweet. a little bit this morning from "the washington post." he writes in the style section of "the washington post" -- "the full impact of the supreme court is concentrated in this entrance. it is the essential first experience of a design that breaks with the highly domestic base of the white house and the
7:07 am
balanced deliberative chambers of the capitol." world as is "despite its name, the great hall leads very quickly to the courtroom. in architectural terms, the court may be the most immediately accessible branch of government, and that is how it should be." that in ruins, diana -- that
7:08 am
gingrich, diana, -- baton rouge, diana. caller: we have done such a great job in the last decade of exporting democracy that we have exported all of it, i think. second of all, from now on, i think we should have all of the senators and representatives, in like nascar drivers with all the patches on them with all the corporations that are telling them what to do. thank you very much. have a good day. host: philadelphia, karen on the line for democrats. good morning, karen.
7:09 am
what are your thoughts on the supreme court closing its doors? caller: what is next? visiting the liberty bell in philadelphia? these things are part of our heritage. taxpayers have a right to know what is going on in washington. i think it is part of transparency to have our heritage available to ourselves. thank you. host: karen, are you still there? some say that you can still exit those doors. caller: well, it is up to the people in that community. they have different laws there. host: "the washington post" says visitors can still leave through the grand front doors is
7:10 am
of little comfort. damascus, md., joe on the line for independents. caller: good morning. if the objective of terrorism is to achieve -- i think the closing of the front doors is a major step forward in regards to that. host: the writer agrees with you. los angeles, trudy on the line
7:11 am
for republicademocrats, what dou think? caller: having been to washington, d.c. just one time in my life, and i remember the feel of locking up those steps -- walking up those steps. and the majestic feeling to our court system, and i have worked in other courts and so on. just walking up and walking into those doors made you feel the respect that the court should command. i'm not sure it commands that respect as much as it did when i was younger.
7:12 am
if you take away the symbols while you are not doing the job in the same way, it loses something. it takes something away from the american dialogue. i think it is a big thing to be missed. host: wesley on the line for independents. good morning. caller: i think perhaps the supreme court -- what they're doing now probably reflects their fear of the people. they are becoming more and more non reflective of the people's wishes. for instance, their decisions ever since bush versus gore. maybe they have a guilty conscience and fear the reaction of the people. host: in other news, the senate resumes its consideration of financial regulations bill. it is expected to be the first
7:13 am
vote today. joining us on the phone is the financial services reporter for "the hill." what will happen today? guest: senators will kickoff the debates on this 1400 page bill. the first couple members will come up today. some of the debate on the floor could get very specific. host: silla bursh, what should our viewers be watching for today? guest: it will talk about the issue of very large financial firms, whose failure could threaten a part of our economy. senators, democrats and republicans, have been looking for a way to prevent the
7:14 am
problems of too big to fail. some of the first amendments will deal with that. host: senator boxer has one amendment that aims to tighten up the language a little bit when it comes to how a bank fails and whether or not taxpayers have to pay for it. is that an accurate description? guest: it's a very short amendment. it says that no taxpayer funds will be used for failing firms. i think that is indicative of the type of sentiment a variety of senators in both parties have to tighten up the language to prevent future taxpayer bailouts and to get at this problem that is at the core of this bill. that is, how to deal with the failure of these large firms.
7:15 am
host: another amendment is from senator brown and senator kaufman. those who are for more regulations say that the underlying bill does not adequately address the issue of too big to fail. what would this amendment to? guest: it would go further than the current senate bill by basically setting numerical targets relative to the size, leveraging, and capital for big banks. the idea is that providing broad advice to regulators is not enough and that senators in congress should provide numerical limits. host: when do you expect a vote on the brown-kaufman amendment?
7:16 am
guest: it is very much up in the air as to how many votes it would need to pass. some of those questions remain to be answered. host: there are expected to be a slew of populist amendments. can you give us an idea of some of the language? guest: people would categorize the brown-kaufman amendment in that category. others include a much more heightened audit of the federal reserve, which is reminiscent of the battle and house. host: "the washington post" has this headline.
7:17 am
the proposal that would force banks to spin off of their derivatives business is getting objections from the obama administration. what is going on? guest: she love thila bair, thed of the fdic, wrote a letter over the weekend expressing concern. bair expressed concerns that instead of cracking down on the market, which is primarily dominated by big banks, the amendment would have unintended consequences. some being that the market for derivatives would not just go away. bair expressed concerns that it would be shifted to slightly less regulated institutions, and possibly overseas. an amendment originally aimed at giving regulators tougher tools to oversee the market for
7:18 am
a belovederivatives might actuad to less regulation. it is getting concerns from administration officials, regulators, and the industry. host: your story this morning in "the hill" -- what did you find out? guest: this deals with how much power the government should have to monitor the insurance industry. this has been a long-running fight. there is a part of the senate bill that would give new power to monitor the insurance industry. they concern is whether that office would have the power to enter into international agreements within the industry, and possibly preempt what state
7:19 am
still. there are concerns from senator merkel leak and a variety of consumer advocacy groups that that may go too far. they want to do their best to make sure the insurance industry remains regulated primarily at the state level. host: silla brush, thank you very much. guest: thank you. host: we are talking about supreme court's decision to close its front doors because of security concerns. here is "the washington post." that is philip kennicott article in the style section. what do you think about the decision? caller: i think it is a darn shame. the people have the right to enter and see what is going on in our country, especially now.
7:20 am
with our security the way it is, we're in trouble. i think the people need to find out more and to go to the polls and to get a stronger party that will protect us as people. not just for our country, but for our jobs, for our health, and for everything. we're losing our rights and i do not think it is fair. host: memphis, tenn., jasper on the line for democrats. caller: they supreme court -- the supreme court -- for all the right wing's to politicize this about the supreme court, they are the reason the supreme
7:21 am
court is closing the doors. there's no way that -- host: what do you do for a living? do you belong to a union? caller: no, i am independent. i run a small truckline. believe me, is tough out here. most of the laws are coming directly from the supreme court -- host: what decisions specifically? about caller: eight years ago, they made a decision to wear all the money we get for fuel, that will come directly to the truck driver. the court decided that we will just get a piece of it. those are things and really hurt the independent operators out here.
7:22 am
host: how closely do you watch the court's? caller: i watch it real close. ever since i was 17. host: have you ever visited? caller: i never had interest in seeing the court's. the court has never been for the working class and the taxpayers of this country. they have always been for the special interest in the big money people. host: pennsylvania, betty on the line for independents. caller: hi. i agree with the former caller. i have great respect for the supreme court until they decided to make corporations people. they decided to interfere. they decided to throw m&m maemit
7:23 am
domain to goebbels. i do not care if they close all the doors. i have no respect for the court at all. host: maine on the line for derepublicans. they have it wrong again. they should close the borders, not the halls of justice. host: we are talking about the supreme court's decisions to close its front doors due to the security concerns. caller: honestly, because they are closing the physical doors, that no way in peeves them from doing their jobs. yes, they need to fix the border problem, but honestly, this is a different time and a different place. we used to leave our doors open. now each and every one of us
7:24 am
takes precautions. it does not impede the work of the court. the court does not make decisions that everybody likes. that is not the issue. i think we should be mindful -- this is a different time and place. they're trying to protect the monuments. this no way impedes the court. host: and lots of articles this morning about the car bomb in 'w york on saturday. here is "the washington p"the ns ."
7:25 am
according to reports, the justice department took this person into custody at the kennedy airport. brooklyn, new york, andy on the line for independents. caller: if you go back recently and look at what is going on in new jersey with gov. christie the court has become so political that it is unbelievable. i believe in the three branches of government. the way government is being rammed non now -- the supreme cs become so political. all you have to do is look at the citizens united case it went away outside the argument and decided that corporations are individuals.
7:26 am
i am just one person. to answer your questions about the doors being open and closed, i do not think a really matters. unless you have conservative justices -- just so you know, i am in law enforcement. these guys, they will rule conservative no matter what. host: the latest on the oil spill on the front page of "the houston chronicle" this morning. "bp explorers five options for stopping oil spill." "bp says the first of two boxes could be installed as early as this weekend. a second could be installed a few days later." some reports say the containment
7:27 am
could take up to one week. that is "the houston chronicle" this morning. here is "the times picayune" this morning. this is their story on the oil spill in the gulf coast. some of the headlines on this issue. "the chicago tribune" -- that is their story this morning with a picture of the alabama national guardsmen putting up a barrier to stop the oil slick from coming ashore. one more headline from "the orange county register" this morning. we will be talking about that at
7:28 am
8:00 a.m. eastern time with stephen power of the "wall street journal." and a call from new orleans this morning. william on the line for republicans. caller: good morning. host: good morning. caller: several weeks ago, c- span had a program related to this particular topic with a panel discussion with barry friedman and his book, "the will of the people." in this particular book, which is a magnificent reid, the supreme court, while claiming to be the non-political branch of government, mr. friedman indicates and concludes that the supreme court has always been a political branch. it has always followed the the
7:29 am
sentiment of the people. the supreme court does follow the elections and does follow public opinion. time and again, when supreme court strays too far to the left or too far to the right, it has always been disciplined in that particular sense through public opinion. and it has come back into the main street. today, i think the supreme court is in a difficult situation. it's probably the most respected branch of government. there is tremendous tension between freedom and security in our country. that is a particular attention we're having today. the setting of the doors of the supreme court, it makes good theater and it makes good press, but it also makes good sense to realize that very often the last
7:30 am
fire wall of individual liberty, security, and the common good, is the integrity of the supreme court. i think the supreme court in julie's its high standing -- enjoys its high standing because it is perceived to be the independent branch of government. i would hate to see that lost in our society today. host: indiana, randall on the line for democrats. good morning. caller: good morning. my comment is probably more philosophical and i will be brief. at the heart of the matter of every nuance to our society, you're talking about truth. whether we are talking about the
7:31 am
justices, or senators, pastors, or whoever you're talking about, at the end of the day, you're talking about human beings. human beings are prone to make mistakes. when people talk and speak in generalities and platitudes -- whatever the issue may be, if you abandon your core fundamental resolve to have truth at the heart of every matter, it does not matter whether it is the government you are talking about. it does not matter if you're talking about the garbage man or the tax collector. if people do not have the will to administer truth, you cannot have justice. the bottom line is, studies have shown -- do not blindly follow anyone. when you see the truth has been violated, remember what martin luther king said.
7:32 am
an injustice to anybody, anywhere is an injustice to everyone. host: in "the washington post" this morning -- "the obama administration world" -- clintos warned of a review conference that the world was facing a frightening new wave of proliferation. that is "the washington post" this morning. "the new york times" this morning has a poll on how americans feel about immigration. the public probably agrees across party lines that the
7:33 am
united states could be doing more across its borders to keep out illegal immigrants. this view was shared by 78% of those responding. unity fractures on a question of what to do with illegal immigrants who are already here and the role of states. tennessee, don on the line for independents. what do you think? caller: i would be in favor of some term limits on these judges in the supreme court. i cannot believe that only nine
7:34 am
people of a nation of 300 million can properly interpret the constitution at all times, especially when they are in question as much as some of these candidates are. i would like to see them have a limited time. that's my comment for this morning. thank you. host: general the crysmcchrystas the karzai visit is crucial. tom on the line for democrats. who is this? caller: no, this is chris in arizona. hi. good morning.
7:35 am
i'm so glad to be on. it's very early over year. i'm not quite a way to get -- awakwe yet. about two days ago, there was a big meeting. there was a big rally and they were all rallying for illegal immigrants that the higher education -- need higher education, and they should be left alone, and they have equal rights, and they go on and on. the congresswoman was talking about illegal immigration and how horrible it is. and they should all boycott our state for doing the right thing, for protecting our citizens here. i think it's disgusting. host: maryland, darren on the
7:36 am
line for independents. caller: thanks for having me. i was calling about the supreme court closing period. i have then to -- i have been to dc several times. it's a wonderful opportunity for children. i feel bad for people live in the midwest or the west coast and they do not get to see how beautiful our nation's capital is. i think it is wrong that the closed it for security concerns. put a couple more guards out in front. there are all kinds of memorials that are highly sensitive. we have security and everything is fine. host: "the washington post"
7:37 am
story this morning says justice thomas recently told a house appropriations subcommittee that the accord was looking to expand its police force by 12 members. -- the court was looking to expand its police force by 12 members. also this morning in "the financial times" about the cost of the oil spill in the gulf coast. but th2/3 of the estimated totat
7:38 am
of $12.5 billion and has done incalculable damage to its reputation in the united states. shares were down to $50.19 per share. that is "the financial times." steve on the line for democrats in new york. or thoughts on the supreme court closing its doors. caller: i suppose if they have to for security, i really could not say. i could not say exactly why they
7:39 am
did that. i was calling on the immigration thing. my whole opinion on that -- i know we found our country on that, and i think that is good. i think we all have to be honest and understand that they're coming in quicker than hot cakes on a sunday morning in a diner in alabama. host: we're talking about the supreme court closing its front doors. arthur on the line for republicans. caller: good morning. i do have a comment on the supreme court closing its doors.
7:40 am
it's the best minds in the security aspect of protecting the building cannot come up with anything better than this, why don't we just surrender to the taliban? if this country is so weak and feeble mind it, let's just give it to them. it has gone past ridiculous. i do not know who is running this country anymore. host: this is the front page of "the wall street journal" this morning. it says, "oil agency cross fire ." we will restocking be talking n
7:41 am
power later this morning. first, we want to talk more about the supreme court and a new book by c-span. mark farkas, c-span's "the supreme court" executive producer, joins us now to talk about this but. mark farkas, how did this go from a documentary to a book? guest: we had garnered interviews with all of the current and retired justices. we began reading through the transcripts. we were going to use the full and abuse on television. it hit us that no one had ever gotten all the living and retired justices together for a single project. the transcript read well and we came up with the idea that this could possibly be a good book. there are not a lot of projects
7:42 am
out there where all the justices participated at one time. this gives us a window. it gives the people who buy the book a window into how the third branch of government works. it is a branch of government that does not have television cameras inside. to many people, it is the least understood of the three branches. host: what is in the book? the documentary has interviews with all the justices. what is in the book? caller: we have all the interviews, except for the one with david souter. he agreed to the television interviewall the other interviee part one of the books. you do not get to hear them very often. part two of the book, all the interviews we did for the
7:43 am
television project with a great journalists, historians, and curators. part three of the book is the appendix. there's a great deal of historical information, as well of surveys that we have done with the american people. host: mark farkas, you said that this is in their own words. it is in the q&a style. was there any editing with how the questions were asked for how the justices answered? caller: tguest: the interviews e presented in the book as we taped them. there was a mistake made on one question about the budget for the supreme court. other than that, all the interviews are presented in their entirety.
7:44 am
host: how did you go about the interviews for the documentary? to give people an idea of what went into the interviews. guest: hopefully folks will not be frustrated by interviews. they will not seek the justice is talking about the big cases that happened during the tenure. we went in knowing that was off the table. the approach we took was to try to demystify the institution for our readers, and to really take them behind the scenes. i think it is one of the most fascinating projects. you see the cameras in the halls of congress and the white house , but you do not see them at the court. it is an interesting body.
7:45 am
it has a very intimate affect on many of our lives. host: we were just showing the banner, "equal justice under law" at the front entrance. we were talking about the decision by supreme court to close the front entrance for security concerns. you talked to justice kennedy about that. we showed that earlier. what was it like, the experience of taping these interviews, and the taping of the front doors? guest: we knew those doors would be closed. the have a longstanding construction project over there to modernize the place. it was interesting to me -- the song and dance of doing these interviews. we go in there asking for a certain amount of time. they say you can only have this amount of time.
7:46 am
with justice kennedy and justice roberts and some of the other ones, we thought we were going to get 30 minutes and we ended up getting close to an hour. it was interesting to hear what some of them thought about the entrance. it has become a symbolic entrance to the court. once you go inside, there's a very symbolic entrance into the courtroom. aid will be interesting to see if it changes the experience that people have -- it will be interesting to see if the changes the experience that people have. host: what were the most interesting interviews? guest: all the interviews with the justices were interesting. the other fascinating thing was when we talked to the journalists. unlike the justices, who were not going to talk about cases and personalities on the court -- the journalists were free to talk about how the place works
7:47 am
and some of the personalities and how the place functions or does not function. host: mark farkas, viewers can buy this book starting today. where can they buy it? where do the profits go? guest: you can buy this in bookstores. and also go on our web site. you can see it on the screen. you click on supreme court, you can put that in your shopping cart as well as some of our other books. does go on sale on bookstores and online today. host: also, the documentary, where can people go to watch that? guest: we have a supreme court website, c-span.org/supreme coucourt.
7:48 am
host: mark farkas, thank you for your time. guest: thank you. host: joining us this morning is energy correspondent stephen power of the "wall street journal." he is here to talk about the latest on the oil spill. can you give us the latest on the clean-up? guest: sure. first, to minimize the damage. there's a twisted pipes leaking in three different places. they are trying to contain it and fix the leaks. on the containment site, they're trying to inject the water with chemicals that can reduce the brilliancy of the petroleum that is leaking and make it less likely to rise toward the surface. they are also trying to create the containment domes that can be lowered on to the leaks.
7:49 am
on fixing it, they're trying to install a new shot off valve -- shut-off valve. the time period on doing this is extensive. the process of fixing the leak may take much longer. it may take as many as 90 days to drill a new relief well. host: how many more days, weeks, more months are we talking about that oil keeps coming out of this leak? guest: the interior secretary said it could be as long as 90 days. host: and what about the impact of the oil spill? what are they finding out as of right now on the coast line, the fisheries, and the wildlife there? guest: in some ways, they have caught a bit of a break on that point because the winds have
7:50 am
kept a lot of the oil from reaching the shore. the concern is that it will hit the islands off of louisiana, and the alabama coast, and the florida coast. so far, most of the oil has yet to hit the shoreline. in that sense, they have caught a bit of a break. host: what is the effort like on the government side? what is the effort like on bp's side? guest: the white housthe obama n keeps saying that bp is the responsible party, but the obama administration has put many resources in place to try to help bp. they have put -- the navy and the air force have deployed some of their resources. the epa is at the scene.
7:51 am
they're monitoring the impact on air quality. the governor of louisiana has declared a state of emergency secretary. gates has mobilized the national guard to also assist in the efforts as well. there are a number of efforts going on. the federal government is a lead body. in the end, it is bp's responsibility. host: what happens to the oil that they are able to capture? what happens to that oil? guest: they hope to bring it slowly to the surface and dispose of it safely on shore. it is not clear how successful they will be. the waters have been very
7:52 am
choppy. that has complicated some of the efforts. host: front page of "the wall street journal" as your story -- has your story. what is a story about? guest: they're starting to be more scrutiny about some of the regulations that were in place at the time of this action, and specifically, the agency in charge of regulating the nation's offshore oil and gas operators. that agency is called the minerals management service. they're part of the interior department. they said the regulations for safety. they're also in charge of collecting royalties from the oil and gas industry for drawing oil off of federal lands. the story discusses the concern or criticism of rep issa of california, who is one of the law makers starting to question whether or not the mms have the
7:53 am
adequate safety regulations in place. he is asking the secretary of interior to look into that. that is something that the interior secretary has already pledged to do. host: there was some back-and- forth yesterday between reporters and bp about where they were drilling, how deep they were drilling, and whether or not they were doing it within the law. guest: there seems to be a disputed point on whether or not they were operating within the law. there has been litigation filed by some claim that worked on the oil rig that claimed at the time of the accident it was really at a level that was beyond what the regulations said it could do. the company has disputed that so far and said they were operating within the law. host: there's also some dispute about whether or not bp actually had a blowout. what is a blowout?
7:54 am
guest: an unexpected surge in pressure that can lead to a rupture. one of the issues here is -- one of the mysteries it in this case is why the blowout preventer did not work. this is a control system that is supposed to activate automatically in the event of one of these surges. for some reason, this piece of equipment did not work automatically and it did not respond to manuel attempts to activate it. that's one of the mysteries of this calamity. host: does it have to do with how deep they were? some have said that technology only works if you are 1,000 feet below, and bp was around 5,000 feet below. guest: there were questions about whether or not some of these control systems werorked t
7:55 am
these depths. although this was the bill, it was not as deep as others. host: i'm sure our viewers have a lot of questions. dennis, you are first. caller: in the course of the people you have talked with in the investigations you have done so far, what is your sense about how confident people are that they're actually going to really and truly be able to determine a cause? are they just going to come up with what they think it is, or are they going to nail down the exact cause? guest: there's a high degree of confidence that they will be able to find out what happened. the frustrating thing for a lot of people in the oil and gas
7:56 am
industry right now, and certainly for the obama administration is trying to figure out how to deal with this problem when you do not know what caused it in the first place. i was talking to someone who participated in a meeting last week with secretary salazar. they were trying to figure out solutions that the industry could offer to help bp. the meeting had eight problem of fumbling in the dark -- had a feeling of fumbling in the dark. the general statements that have been made by the oil and gas industry officials that i've spoken to is that, in all likelihood, this is probably the result of a cascade of failures. possibly some that were human errors and probably some that were mechanical. host: loretta on the line from cleveland, ohio. caller: good morning. host: good morning.
7:57 am
caller: stephen, this is not a good situation. it looks again like a mothanothr company is too big to fail. by that i mean that the taxpayers have to come behind them to make sure they do what ever is supposed to be done initially. president obama said he would spare no avenues of help in order to contain all of this, but that is our money. that is taxpayer money. we can see that this could certainly bank drorupt bp. the death of 11 employees, the cost of cleanup first three states, and the costs to multiple industries -- the
7:58 am
people whose lives depend on the fisheries. and then i heard they were supposed to have deep sea drilling safety caps, which they did not have. host: did you read that is an insurance issue then? caller: what does that mean? how much is that policy, and how come they did not have the safety precautions in place? host: stephen power. caller: there are a lot of questions there. the mineral management service does require various control systems, various back the plans in place in case of the equipment does not work. they do tend to give the industry a certain degree of discretion as to the precise types of control systems that they need to have. with regard to how much this will cost, the estimates vary.
7:59 am
it depends on a lot of unknowns, including what the weather will be like, and whether it pushes the oil out to sea. it ranges from $2.5 billion to $8 billion. it's not clear what the cost will be at this point. host: the loss following the oil spill -- this company has to repay for a loss -- economic loss for the fishermen at a cap of $75 million. there are three senators who want to raise that. guest: a group of senator are now pushing that legislation. there's a cap on certain types of damages. the law also stipulates that can be exceeded if it is found that
8:00 am
the responsible party violated a lot in a willful way or was really negligent in its handling of safety. there is a possibility of going beyond that cap. host: there's another story here in "the financial times." .
8:01 am
it is not clear yet whether
8:02 am
those ceo's will appear at the hearing. the committee is also asking for lots of documents about their safety record, their performance, audits, inspections, that sort of thing. there are still trying to gather this material. it is coming. lester -- host: winston salem, north carolina. lester, you are on the air. caller: if they do not do that, it will not happen. guest: that is true. the obama administration has pointed out that the gulf of mexico accounts for one-third of domestic petroleum production. it is not realistic that this accident is as a tragic will lead to a halt in domestic
8:03 am
drilling in the gulf of mexico. more likely, would you are likely to see is a renewed debate over the wisdom of the standing -- expanded offshore drilling. in has been energized by this accident. they are calling to reinstate one program that had existed for many years on certain places of the continental shelf. the debate may not be so much about whether, but whether to expand. >> on the issue of expanding drilling, the financial times says the oil industry expects to spend billions of dollars on the well development. up 37% from the previous five- year timeframe. where are they when it comes to
8:04 am
deep water drilling? five guest: because of federal policies -- guest: the oil and gas industry has to go deeper and deeper into the water to find the gas. this industry -- weston oral companies are finding it difficult to get oil that is under water and underground. you have nationalized oil companies and foreign governments that want to keep strict control over their oil and gas resources. there is a lot of interest which leads to death among the countries trying to get more of their own gas from the united states. >> one of our twitter followers rights this.
8:05 am
guest: i do not know where the device was made. it is a u.s. company -- company. >> whahost: what about getting engineer approval? guest: it would have to have achieved some sort of certification. host: new orleans, what is your perspective down there? caller: i used to work offshore. my first question is do you know if that rick had a black box on it? they had black boxes like airplanes when i was working on one. maybe if they could retrieve that, we would know what their last conversation was.
8:06 am
host: what was your job? caller: an electrician on a platform. they had a black boxes on them. host: i have read the residence in vienna are hesitant to criticize bp because those are good jobs they have from the oil industry down there. what is your perspective? caller: i guess it is hard to criticize somebody when it is a good job. i was really getting at if the rigs had to be closed guard regulated and we did not know what they were going through. guest: i do not know if they
8:07 am
were required to have some sort of recording device on the rig. this caught fire and it sank a couple of days after the fire started. i think they will try to get as many as they can that pertain to the safety of this raid. it will be complicated. it is at the bottom of the ocean. host: 4 myers, florida. democrat line. caller: -- host: fort myers, florida. democrat line. caller: this shows why week in florida are against offshore drilling. we like to keep our waters clean and pristine. soon we will be in the middle of hurricane season. what is going to happen when all
8:08 am
of that oil will be fall all over the place because of a tropical storm or a hurricane just blowing it all over the place? how will they address this issue? guest: a lot of what you will be hearing, there has been a debate in florida over whether to allow offshore drilling. high gas prices rose to record levels in 2008 were tipping the balance in favor of relaxing some of those. now, you will hear more of those concerns. one among authorities is that it will drift onto the florida coast, the alabama coast and islands off of louisiana. host: virginia officials are reconsidering their positions for offshore drilling. new york, independent line, you are next.
8:09 am
caller: there is a lot about -- a lot being said about domestic oil. this is to make the united states more energy independent. all of this oil goes into the international market. it is sold all over the world. it does not necessarily go specifically to the united states for consumption. that is my first question. the second thing that is most disturbing is we see these too big to fail. isn't it the united states that has to come in and clear of the mess? the taxpayers have to clean of the mess? i know bp will put some money on this. a look at the resources for some of this. the coast guard, the navy, all of those people on the coast line using the taxpayers' to foot the bill for another big
8:10 am
corporation. guest: to take your second question first, one of the biggest costs of this operation, even if bp is the response will party in pays for a lot of the dollar costs, one of the costs of this spill that you cannot get back is the amount of time the president and members of the cabinet have to deal with this. you cannot put a dollar figure on it, but it is very valuable. oil is a globally traded commodity. it is true that the energy information administration, which is a forecasting agency, has found that if you were to expand access to this, you would not have a significant impact on prices within the next decade.
8:11 am
proponents say it can reduce the u.s. trade deficit, because of the amount of oil we purchased overseas contributes to our trade deficit. host: some numbers on the impact of this oil spill on the fisheries and the recreation facilities in that area. the economic implications of the disaster is potentially mammoth. 1.6 billion in economic activity is tied to the wetlands directly exposed to this bill.
8:12 am
texas, bob, on the republican line. caller: high was watching the television. that oil seems to be burning out of the case. host: you were asking about -- what is your question? caller: is it coming out of the casing? is it still in tact? guest: i am not sure i completely understand the question. it sank to the bottom of the ocean. that is the issue that the authorities are trying to deal with callerh.
8:13 am
[unintelligible] host: do we have [unintelligible] out there? guest: i am not able to follow your lane go. the primary task for authorities is to try to stop the leak through a variety of mechanisms in trying to contain the damage as much as possible. host: wyoming, a democrat line. caller: the wall street journal is seen the united states is getting 30% of the oil out of the gulf. guest: one-third of the domestic comes out of the gulf. host: comment is going around
8:14 am
the world? -- caller: how much is going around world? host: how much does it cost for this oil rigs that bp has? the cost of them to operate? guest: these are billions of dollars of investments spread over the years. it is a high risk standard price for these industries. the cost to operate them is quite significant. host: the "financial times" puts it at 560 million for the deep water rising value for the area they were drilling. for one of the wells, they put the cost at about $100 million. they say that is typical for the industry. guest: the cost can be very
8:15 am
significant. it is a very high risk industry even with all the technology. host: west palm beach, florida. on the independent line. caller: i would hope some of these political argument could be put on hold until this emergency is taking care of. the winds have died down to my understanding over the next couple of days. do you know if they have any plans to do a controlled burn while these when conditions are favorable? guest: that is one of the approaches they have are they taken a look at to some extent. one of the trade-offs is that you released various pollutants into the area that can be hazardous to hear quality and human health. that is one of the approaches
8:16 am
the authorities have taken a look at. host: you are just getting the oil off the surface. you don't know how much oil is below the surface. guest: yes. a lot of these approaches do have trade-offs. the issue of using these chemical dispersants shooting back into the water should make the patrolling unless. . those chemicals can have an impact on the ocean quality. there are trade-offs involved with all of these things. host: what would happen to the oil if nothing was done? guest: it could drift on shore and affect sea life as well as birds. there could be a lot of harm to wildlife. host: if the winds were
8:17 am
favorable and it stayed out to sea, what would happen? guest: overtime is would deteriorate. it depends on the viscosity of the oil. that is something that i do not know. host: new port richey florida. caller: i would like to make a comment. it is appalling. host: why do you feel that? caller: i feel obama dropped the ball. when did he go and check out the oil spill in the gulf of mexico? he was too busy going around the nation, trying to sell whatever he is selling. we are hurting down here in florida.
8:18 am
i am really upset about this. i love the florida beaches. this is katrina all over again. guest: to stick with the facts for a second. within 24 hours of this accident, the no. 2 official was dispatched to the scene to help in dealing with this bill -- this spill. there was an immediate response by the federal government. it is not factual to say there was not an immediate response right away. president obama was assessing it over the weekend on sunday. cabinet officials have been there in recent days and between the last week, is senator, i'm administrators. at the same time, i think the
8:19 am
caller is getting at allusions to katrina. there has been some criticism on the ground. i have not heard them as loudly as others. host: what are some of the criticisms? guest: some state lawmakers in louisiana have complained that the governor should have declared a state of emergency faster, because it may have raised the urgency level of the federal response. had they done that in the beginning, it may have been better. there has been frustration with bp. i think that is shared by the obama administration. they have not figured out how to stop the leak. i heard there was some criticism. they have been fairly restrained at this time. host: fort lauderdale, florida.
8:20 am
caller: once again our government has let down the people of this country. they have failed. they are supposed to protect our country, land, ecology, health, well-being. they are involved in all kinds of activities that are not related to protecting us in a very basic way. i am disgusted. i am really terrified. this is going to be an ecological disaster that many of us have ever seen in modern times. the government is not honest with people about how catastrophic this could be. host: let me show you a piece on the front page of the "new york times."
8:21 am
what do you think? caller: do you want your children swimming or eating fish that is in the gulf today? i do not feel confident in their response. i do not seeing anything ingenious going in the gulf? i do not know if it is the media and the way they are portraying it. the media does not show tons of a flotilla or engineers where everybody coming together to
8:22 am
have an effective response. we are not shown anything to contain the oil. guest: they have not figured out how to really effectively addressed the leak. that is the old met problem. the caller is voicing a frustration that many have at this problem not been solved yet. there was a response by the federal government'. host: this is from the "washington post. " half a million feet of bones are on hand. many have been set out. they work best in calm sees. why only half? guest: i do not know.
8:23 am
it is the issue of whether. if it is really choppy, it will affect the degree to which they can effectively deal with this. host: green fell, mississippi, in the pan . caller: i have a lot of questions, but i will focus on one. obama was supposed to investigate all of the rigs be have. over six to 600 rigs and only about 800 are meant. how long will it take for them -- are manned? how long will it take? guest: we are trying to figure that out. we have not yet gotten a lot of information yet from the obama administration about what the inspectors are finding. this particular one had been expected a few weeks before the
8:24 am
accident. there were no issues that turned of. i think this process will continue for some time. the president has asked the secretary of interior to report back about what they have learned so far. host: on that piece here is what the right. jacksonville, fla., mike republican line. caller: i have a couple of comments. the first is, i thought a lot of
8:25 am
congress and in farm analysts for pushing drilling away from where the resources are. there are resources in the gulf of mexico in 600 feet, 800 feet, and 1,000 feet of water that we do not have access to. the real issue with this problem has to do with the fact that it is 1 mile down. if this were to have happen in shallower water, we would have had the ability to cap something like this the same day or a day after it happened and stop the spill. guest: the caller is referring to you the written laws and regulations that are in place that say the trilling cannot happen within so many miles of shoreline. federal waters start 3 miles out in on murder. off the coast of florida, there is a law in place that prohibits
8:26 am
drilling -- i forget what the exact mileage is. but it is pushed far out into the central gulf. there are proposals to allow drilling closer s close to 46 miles near the florida coast line. that proposal will be much harder now in the wake of this accident. this is in burma's opposition and some from political leaders and businessmen's that are concerned about individual impact a turning their state into a more industrial economy. they do not want that type of economy in louisiana. one accident could have consequences that are too great.
8:27 am
there are facts given about the frequencies of all oil spills. guest: according to a management service, between 1985 and 2007, u.s. oil and gas producers produced roughly 10 billion barrels of oil. what is striking about this accident is it strikes what has been the strongest argument for expanding offshore drilling. these accidents are in frequents -- in frequent compared to the amount of oil they produced.
8:28 am
it is really extraordinary what is gone on right now. host: alabama, democrats line. caller: i am originally from the mobile area. i have been at the gulf all my life. my sister lives there. you have those ripped out there. you can see them from the beach. are plenty of them. are we still going to have the same problem as the others with the salt out there? will they have one shot off about that does not work on all
8:29 am
of them? what is going to happen? they need to have three different ways to cut it off before they go out there. guest: one of the things that is striking about this accident is this has been inspected about 10 days or a couple of weeks before the accident. the people i have spoken sick has expressed a sense of soul- searching as to how this has happened. this accident will lead to more regulations on the oil and gas offshore operators in terms of what type of equipment they may have. look at the cycle of how these things playoff, it is likely you will see additional more prescriptive regulation in the future.
8:30 am
host: long beach california, independent line. caller: i support president obama, but i am very disappointed with the federal response. one correspondent said she had
8:31 am
everything prepared and the government is prepared for this. obviously, they are not. the government can be slow on things, but in this situation, i think it is completely unacceptable. host: you have addressed the issue of them being there. the coast guard got new responsibilities after the exxon spill. what is the role of the coast guard in all of this? guest: it is to try to assist in minimizing the spill, the impact of it. one is in charge of coordinating the federal response and leading the efforts here. what they are working on is trying to assist bp as much as possible in containing this or else with. host: thanks for being here in giving us an update.
8:32 am
we appreciate it. up next, we will talk with michael green berger, he used to work of the trading commission in the trading and markets division back in 1987. we will talk about credit rating agencies. it is part of the debate going on in washington as the senate takes up the financial regulation bill. we will talk about that next. first an update on politics. it is primary day in three states. caller a >> . >> we started to see movement within conservatives. a little bit of dissatisfaction with dan coats. he is a registered lobbyist. there are a couple of conservatives.
8:33 am
that is a three-way race. one has a comfortable lead going into primary day. gov. mitch daniels is not openly supporting him. he is giving his tacit support to him. we have to watch closely the actual numbers tonight. if close wins by a narrow margin, he will go it has a strong democratic nominee, the current congressman. in the house, some interesting races. a longtime congressman, republican, a safe seat in indiana, faces a tough renomination battle in two dozen aid. he barely won. his opponent is running again. so are a lot of other
8:34 am
republicans trying to defeat him. there are a couple of other big names. one is a former indiana republican executive director. mike murphy, a state rep. we will watch very closely to see if dan burton can survive that anti-incumbency wave which is sweeping the country. the third district, marks daughter. he has never -- marked soldk so. bob thomas has put in a lot of his own money. we will see if he can defeat souder. host: is the tea party movement a factor? caller: it remains to be seen. we have to see what impact the
8:35 am
tea party movement will have. i think they will have a lot of support in the senate races going to certain people such as tea party activist that have organized long before them. it will be interesting to see how successful they are in getting their candida's across the finish line. what are your thoughts on that? >> it is not so much about the
8:36 am
primaries today. both parties are focused on what is going to happen in november, especially democrats in north carolina. they are optimistic they can win a seat. the republican incumbent has never pulled strongly. they have three candidates competing for the democratic nomination. it may go into a runoff. democrats are very hopeful that barack obama was able to carry in two dozen aides and one was able to defeat elizabeth dole by a decisive margin, they believe that richard can be extremely vulnerable. the difference is the turn of the took place is unlikely to be matched this year. host: the house seats in that state, north carolina? caller: we are following a couple of them. a blue dog could face a tough
8:37 am
renomination bell. -- battle. larry from the charlotte area voted against the health care reform bill. it did not sit well with liberals in his district. they did not get a strong challenger to him in the primary. but some are talking about running an independent candidate against him this fall. republicans view the big -- the eighth district as a big opportunity. host: if they can hold onto the states in north carolina, what does that mean for 2012? >> that is a very good question. it is really difficult to read with any reliability as to what they mean. looking back to 2008, we saw how
8:38 am
strong democrats were. their worst loss of -- there were were a lot of voters that turned out. they had a competitive primaries in ohio, north carolina and indiana. barack obama competed with hillary clinton. we saw a couple of years later how much enthusiasm matters and how little enthusiasm and the democrats have. a and china to make too many predictions about 2012. i am really -- i do not want to make to make predictions about 2012. i do not have a good idea about this year. republicans have unified behind rob portman. on the democratic side, a rise between the the tenet gov. who has been endorsed by the governor and secretary of state jennifer. the recent poll yesterday showed that lee is ahead by 20
8:39 am
points and there is about 35% undecided. he should win this race. he should have had this lot of the long time ago. he has statewide name recognition. he looked like a much stronger candidate. peebles in washington are disappointed that he is still trying to fend off -- people in must attend a disappointed that he is still trying to fend off this race. i think he needs to, of this race with a 30 point lead over jennifer to convince democrats that he is going to be successful in november. he has life considerable in fundraising -- lackgged considerably in fundraising.
8:40 am
host: we have our next guest here to talk about credit rating agencies. it is something that people have heard a lot about over the last year. these agencies and the role they play in the financial meltdown that we saw. what is a credit rating agency? guest: it is an agency that is licensed by the sec and makes valuations of the quality of investments, corporate bonds, municipal bonds, sovereign debt. they raided them like a teacher would rate a student with grades. the highest grade, aaa. that is considered a solid investment. the ratings go down the letters.
8:41 am
three major agencies use slightly different lettering. the investment is starting respective when you get to the los b's. -- low b's. if you want to demonstrate your a financial institution that has adequate capital to keep functioning in a bad financial situation, you are required to hold triple a rating bonds. there is a required portfolio on certain triple-a-rated bonds. they play an important role in the financial system. they are graders of the quality of investors -- investments. the credit bridgett -- the credit rating agencies evaluate
8:42 am
the quality of sub-prime investments. that was a problem in the sub- prime crisis. you are making a loan to someone whose creditworthiness is questionable. these loans got repackaged into mortgage-backed securities. host: those were a bunch of these sub-prime mortgages into one package. guest: exactly. then they got collateralized debt obligations. they're rated at different levels. the problem is the credit rating agencies were brought in by the bank we're trying to sell these prime investments. they use the exact same rating system for these investments that they use for highly state bonds. they made a decision that the state this of these investments would get a triple a rating.
8:43 am
as it moved from the loan to the mortgage-backed security, people lost track of the real financial transaction here, which was the loan was made it to somebody who did not have the credits that was normally available when you make a loan. many of these were fraudulently induce. either the people or the mortgage broker -- a bus driver was written down to have a $5,000 income. the credit rating agencies said -- $400,000 income. the credit rating agencies were responsible for some that got approved for loans that did not have the credit. they're looking at it credit 8
8:44 am
ratings that were supposed to be safe. host: did they give a rating just on the loan? guest: the agency is supposed to go back to the original transaction, analyze it. what angered a lot of people is that they should not have used aaa ratings, which of the listeners know indicates a very safe investment. the agency said, you do not understand. this was triple a for its sub- prime mortgage or a mortgage may to somebody who may not be able to pay it back. there was a lot of confusion in the industry. it is complicated that the people who created these collateralized debt obligations were paying the credit rating agencies for their evaluation.
8:45 am
that is how it has been done for many years. the agencies are paid by people to issue bonds. in this scenario, there was a hearing last week. the chairman made it clear that there were all sorts of conflicts. the banks were in negotiations over the payment for the ratings at the same time the ratings were done. there were conflicts of interest. people did not know the algorithms that for used were way out of date and too simplistic for determining the likelihood of these investments would pay off. less week, senator levin demonstrated that sometime in 2005, the three major credit ratings did not do this in a way that showed the investment
8:46 am
public what these investments were worth. it gave the impression that they were much safer than they were. there were working at better signals. it took them until 2006 to get them in place. they only apply to them going forward and left the old investments under the prior standard. sometime in 2007, the credit rating agencies are madly readjusting and saying what we told u.s. triple a, is not investment rating. investors found out that what was gold-plated was junk status. it is sent a shot into the system that caused the crisis itself host: you were referring to the goldman executives --
8:47 am
guest: it was before goldman. they brought in moody's and the three major ones. there were others that are more prominently known. he cross-examined the credit rating agency executives and said, what is going on? recent terrible signals into the economy. many bought these thinking they were buying gold plated investments. it was nothing more than junk. in 2007, 91% of these sub-prime investments dropped to junk status. almost overnight. host: on the goldman hearing that followed this, people heard about the credit rating agencies and the role they played with goldman and now this suit been filed against the firm. what is happening there?
8:48 am
guest: there were a couple of competing theories that led to the meltdown. one is, it does not matter how much a person who gets a mortgage gets paid. the appreciating value of the house will skyrocket. that will form something where these mortgages will be paid off. there was no risk. the credit rating agencies were initially part of that. there was no risk. even if you cannot afford your home, it would appreciate before you knew what would happen and you could extract that appreciating value to pay the mortgages. there was a competing be represented by this investor john paulson who plays an active role in the sec against coleman where he made the rational decision, this is -- against goldman for he made to the rational decision saying this is
8:49 am
a guess people who do not have good credit and pay their mortgages. i bet they will not pay their mortgages. he went through these collateralized debt obligations and picked out the weakest by virtue of the credit rating agencies. he looked for the junk bond status. he assembled a bunch of them. he said, even though we did not own them, and that these investments will fail. it is like trying to find insurance on somebody else's house that is about to be lit on fire. you cannot do that in the insurance industry. in is how highly -- he was able to say, i want to ensure we can invest in this. they had to find somebody to do the insurance. the claim is goldman defrauded a very small insurance company into taking the opposite side of
8:50 am
that bet. we will insure these houses about to go up in smoke. it pasted of its obligation to the royal bank of scotland. when paulson won his bet and these sub-prime mortgages defaulted, the ones he picked up that were read -- week, there is no capital to pay off paulson. that explains the meltdown. the american taxpayer has been the lender of last resort to people who were betting that things would fail even though they did not own them. the people that took the bet and the most prominent, aig did not have the capital to pay them off so we the taxpayer did. host: mark democratic line, philadelphia, pennsylvania. caller: i was watching cnbc regarding the financial muscle
8:51 am
bump. they had an interview with someone from the rating services. he was coming up with a bond rating. he said i cannot come up with this unable to do it. he had been in the business for ages. some say he cannot generate revenue for the ratings on. the credit agencies committed fraud. i am not an attorney but an accountant. if it was not criminal fraud, it was civil fraud. either they get hit with criminal fraud and wire these credit agencies not going to jail? guest: you ask some very good
8:52 am
questions. first, senator ben cardin has introduced legislation trying to be added to the senate financial reform package that will allow whistle-blowers within these companies to call out the credit agencies -- rating agencies and not be in a position to be fired. there were tons of emails within the company's employees said, this is not working. we are not doing the right thing. many people got fired and quit because they understoods was where people who were selling the city knows -- ceos were paying for their grades like a student paying their professor for their grades. some have been very aggressive with the way these agencies were
8:53 am
done. the pending senate legislation has a provision that allows people who have been defrauded to rosalyn negligence of these companies to sue these companies for damages. that is one measure that will be a controlling factor to present a common sense evaluations on these transactions. host: will these proposals be part of the financial regulation bills and the senate? guest: one part is in the legislation right now. it is considered by the senate. many think a standard could have been mapped in this environment. the house has a similar provision.
8:54 am
senator carden is going to offer an amendment that will protect people so they do not get fired that the this is something very dangerous to the economy. we talk about the great recession, the milk down, the bailout, the credit rating agencies must take the blame for this. host: voting starts today on amendments. they expect this to go a couple of weeks. what else in this bill is related to the credit rating agencies? guest: coleman dealt with some of these. there were various evaluations the agencies made. paulson did his own investigation and bet against them. finding someone to take the opposite end of the debt. those transactions have to be
8:55 am
conducted on a formal transparent exchange with all of this information going to regulators. they have the ability to say, what is this all about? this has nothing to do with the real economy. paulson has not been accused of doing anything wrong. amos betting that people would get kicked out of their houses. he wanted to find people to say their mortgages would be fine. there is a provision that says if this is a gaming transaction, go to las vegas where it is regulated. the regulators have a right to say this has no real bind to the economy. it is a threat, because the taxpayers are the bank of -- banker of last resort to the casinos that did not have enough money to pay off their bets. caller: this is going to boil
8:56 am
down to regulatory positions. right off the top of my head, i will throw out some people who were driven out of government. why did you leave your government position? another is elliott spitzer. we need people like this at the top who will watch out for public interest. guest: back in 1997 and 1999, we attempted to regulate what are called synthetic cbo's which were completely unregulated -- cdo's, which were completely unregulated. the $600 trillion value
8:57 am
worldwide, 10 times the world in gdp and there is no meaningful regulation. these derivatives. these are the things raided by the credit agencies. the senate legislation will control this if it passes by bringing them into the light, having regulators look at them. one woman -- alan greenspan, larry summers, many of the congressman were unsympathetic to what she was doing. her views have seen the light of day. there are others like sheila bear in the treasury department' and mary schapiro ad gary gensler and -- back in the
8:58 am
clinton administration was dubious about regulating these instruments. he has come back and has been one of the most particulates advocates within the administration for the kind of legislation working its way through congress. host: there is talk about one approaching chairman greenspan and been rejected. there is a piece yes today that i read talking about that she came up with concepts for regulating the derivatives. but she never put forth proposals for this. even that was not received well. guest: there is a pbs frontline documented in -- documentary the details this entire experience. i am sure it is on the website. in early 1998, we saw the market
8:59 am
was developing. at that time it was $27 trillion. we saw this market had no transparency. it did not have capital been brought to the table. people were making billions of dollars with commitment and nothing in the bank to back it up. that is like selling a stock to a bond or insurance. everybody has to have capital, but not here. we could see that this was pointed be a problem down the road. orange county had gone bankrupt in 1984. there was a scandal on wall street. one report was issued to regulate this stuff. we came along to a concept release like a white paper.
9:00 am
it is used by french regulators. we had a chinese menu of proposals to regulate these markets. they were just proposals. even though they were proposals, when they were issued, bob rubin and alan greenspan and arthur who had said he was wrong issued a statement saying congress should stop this woman. she is going to destroy the economy. six months later, congress stopped us. six months after that, they completely deregulated these instruments from all federal oversight and most state oversight. i told you this is nothing more than gaining. to get the market going, the
9:01 am
statute's pre-emptive certain things. a state cannot say, this is nothing more than gambling. it is not license. it is outlawed in our state. without the provision, this market and this meltdown would have died and early death. .
9:02 am
in 2008 we had the worst economic crisis since the great depression. this concept of 13 bankers, simon johnson johnson and james crock has written a book called "13 bankers" and the title comes from that conversation with larry summers but the real meeting where this played out is the april 21st, 1998 meeting in the conference room of the secretary of the treasury where rubin, somers, greenspan and levitt, in front of all the government regulators and white house officials, one by one took warren to task and asked her not to do this. she did it anyway and then congress stopped her in her tracks. most people believed that had we had transparency in 1998, 1999,
9:03 am
2000, we would have a thriving economy right now. the only reason our economy is in trouble right now is that we blew a multi-trillion dollar hole in it because the casinos didn't have the capital to pay off their bets, and now the american taxpayers had to do it. we paid. we have gone into huge deficit. one in six americans is unemployed or underemployed and much feels a sense of high economic insecurity and as we sit here today, greece, portugal, spain and italy are on the threshholds of default. the euro is in crisis. why? currency swaps and unregulated derivatives credit the fault swap. the european commission wants to ban these instruments outright. we're talking with mr. greenberger about credit rating agencies and the debate going on about financial regulation. he now serves on the financial inquiry crisis commission, which
9:04 am
is meeting this week, and has hearings a couple times this week. go to c-span.org for that schedule. ron on the independent line, you're next. go ahead. caller: the previous call her a similar question about has anybody been tried for fraud and i'll bring this back to 2005. i i know you're talking about the c.b.o.'s and mortgages but standard & poor's and some of the other ones gave ford and general motors junk bond status. at the time it didn't seem good but it seemed fair. in hindsight, it's totally not fair because i have a sibling that works for gmac and it was then sold 51% to cerberus and that was one money making entity general motors had. had they not done that, they might have kept it and it might not have gone bankrupt. it goes beyond the housing
9:05 am
market as well. while there have been many criticisms of what the credit rating agencies have done are talking about their rating of subprime mortgages which is an esoteric business they shouldn't have gotten in to begin with. senator levin's hearings pointed that out, but even in their main line of work, which is rating bonds of companies, five days before enron failed, they still were rating enron bonds as investment grade quality. the morning that lehman brothers failed, the rating agencies were still rating lehman bonds as having investment grade quality, so there is a lot of concern about this. the legislation that is pending now tries to deal with it. the s.e.c. has tried to deal with it, and in fairness, the credit rating agencies themselves have adopted reforms, but many people believe there is a funds amountal problem here,
9:06 am
and it's the teacher paying the professor for the grade. the people who need high grades for their investments pay the credit rating agency for that investment, and a lot of people believe that the fundamental flaw in the system that is not fully addressed by either the legislation that is pending or the s.e.c. actions. host: why doesn't the government give credit ratings ? >> i must say there are many debates about how to debate with this. one of them is that the government should do it. for some reason, that argument hasn't taken hold. i think throughout this debate on financial reform, there has sort of been a conservative view of let's keep the system as it is, but tinker with it. there is a very prominent professor at the stern school of business at n.y.u. lawrence wright who has said forget about certifying these people as being somehow knowing all. let's get a lot of competition from investment advisory services and let's get people in
9:07 am
here and use good common sense to rate these things, and by the way, the people who need the ratings shouldn't be able to go to credit rating agencies and say give me a letter grade. his view is that they have a burden to explain to the investing public using all these different services why their investments are solid investments. they shouldn't just use the simple thing of a triple a rating. host: battle creek, michigan on the democratic line, go ahead. caller: i'd like to know, you seem to be saying we have to reregulate -- reform the financial system, and that seems pretty obvious to me, but there is opposition from the conservatives and the traditional free marketers that you don't want to regulate, you know, you don't want to reform, you just want the free market to do whatever it is going to do. what are the chances of real reform and real regulation getting through, say, the
9:08 am
senate, where things seem to get bottled up? is there political will behind this? guest: there is political will behind this, but the vested interests, wall street, big fortune 500 companies, the big that goes to the floor of the senate is now written and is quite a good bill. i wouldn't say it's perfect, but it's very, very good. there are efforts as we speak to weaken it, and i think for people who care about this, they should read about it. my own personal view is that senators should be told the time has come to rein in the casino and start using money to create jobs, medical countermeasures, things that help the american public. this casino atmosphere of betting whether a market is going to go up or a market is going to go down and one of the bettors not having the capital has got to end. we need to go back to old fashioned american ingenuity and
9:09 am
build things and create things and not have slips of paper that represents betting obligations. host: our next call comes from vegas, michael on the republican line. go ahead. caller: good morning. first i want to say that i think c-span is probably about the only place you can hear the truth about anything. the news media seem to -- you can listen to 100 reports and you couldn't get 1/10 of the information this guy just gave people because it's just so stupid, but these gambling -- so many people in the news media go along and say this was all a set price. the truth is if you took all the subprime homes in the united states and bought them and gave them to the people, you would be talking about less than a trillion dollars. we have thrown away ten to 20 times that in this game and the problem is when mr. paulson came along, it wasn't that, you know,
9:10 am
he came along and had this great idea. they were all doing this. all the banks were doing. this i think most people don't know that all of this is that all the product on earth is $60 trillion and these derivatives and c.e.o.'s and credit defaults they add it up to $100 trillion. host: we'll leave it there. we're having trouble hearing you. what about the point? guest: the point is well taken. i think up until the last few weeks, most people thought the meltdown was directly related by people unable to pay their mortgages. that was the problem, but that problem was multiplied by a factor of three or four by the betting on whether people would pay the mortgages. if we didn't have the betting and the american taxpayer having to be the lender of last resort to the casinos like a.i.g.'s and merrill lynches who had to be bought by bank of america, if we
9:11 am
didn't have the betting, this crisis would have been a lot smaller. we wouldn't have one in six americans either unemployed or underemployed. >> host: we will go to mike in arkansas. good morning. caller: good morning. thank you for c-span. i wish we could get c-span 3 with directv but that's another story. my question fits into your criteria, i hope. i live on social security. i used to have an extremely high credit score. through some bad dealings and a loss of a home and a fire, et cetera, my credit score is now in the low 500's. i used to receive credit card offers from every bank on the planet, you know, and just junk after junk after junk. when my credit score dropped, i quit receiving all this stuff, and i got to wondering, well, somebody evidently is getting my information from the credit bureaus and how are they doing that without my authority or if
9:12 am
i make a loan at a bank do i sign something that says ok, we can release the information to the credit bureaus and they can just sell it to whoever they want? what is the law here and when does invasion of privacy come in? >> when you apply for a loan, you allow the person you're trying to get money from, whether it be a bank or credit card company to look at your credit card score. credit card scores is another gaming system. you can, by using certain devices, get your credit score way back up, by challenging certain transactions. that's a subject really for another day, but the point i think that you raise is a good one. we have been talking about subprime mortgages and the gambling that is built around subprime mortgages. the same instruments are built around prime mortgages, commercial real estate mortgages, credit card loans, auto loans, and this could
9:13 am
trigger the same house of cards that collapseed in the subprime mortgage and keep your eye on what's happening in southern europe and to the euro. greece, a week ago they needed $30 billion, two days later $60 billion and two days later $120 billion. yesterday the european union agreed to give greece $160 billion. germany is giving greece $30 billion because if greece collapses, the whole european union will collapse, and obviously, that will cause worldwide ramifications. how did this get started? currency swaps. greece bought, for example, $300 million from goldman sachs, a package that made it appear that they had no debt, so they could gain entry into the european union. greece now has a huge debt.
9:14 am
now the investment companies are buying credit default swaps on greece's, whether or not they will survive financially, and those people who are betting that greece will fail have enough economic power to deny greece, portugal, spain loans at commercial rates. that's why the european union has got to flood in taxpayer dollars from those countries to save greece and soon they may have to do it for spain and portugal, too. host: san antonio, mike on the democratic line. you're on the air. caller: thank you. thanks for c-span. i have a comment and a question. my comment is i think the people making all the money off of these scams knew exactly what was going on, because it doesn't seem that complicated to me, and my question is, when these people count their losses from the defaults on these loans, are they counting out, like, if you borrow 30 grand for a house and
9:15 am
you pay it back in 30 years you pay back 150 grand. do these people count when someone defaults on a $30,000 loan, do they count that they have lost $120,000 in equity? guest: all i can tell you is when we gave money to a.i.g. to bail a.i.g. out, that money went in the front door of a.i.g., $160 to $180 billion and out the back door to people who i believe used a.i.g. as the betting thing, that a.i.g. was betting the market would stabilize. the paulsons, the goldmans of this world were betting it would collapse. they won the bet. the paul sons and goldmans, et cetera. we paid that bet off 100 scents on the dollar. goldman sachs got at least $12.9 billion in taxpayer money that went into a.i.g. and out to them at 100 cents on the dollar, so whatever they insured, whatever trawn muchs they picked out said
9:16 am
these things will fail, we don't want to bet on, that but you and i paid goldman to be sure they would be able to collect their bets. by the way, if they didn't collect that bet, their balance sheet would have gone awry and they would have been in significant financial difficulty as well. just think about they had a liability or an asset, rather, of $12.9 billion. if we didn't pay a.i.g. and a.i.g. didn't pay goldman, they would have been minus $12.9 billion. host: my tweets are rated a.a.a. and i started a tweeting agency, sar cam, but there is -- sarcasm, but there is a market for the credit rating agencies. guest: for credit rating agencies there is a market but i think the whole dependence, they won't go away, but people are going to be asking, in fact, the fed even in dealing with its own assets that it has taken in, is
9:17 am
looking to other sources of intelligent evaluation, investment advisory services, economists and i think there is a market here for people who can provide intelligence, sophisticated and common sense evaluation of investments. host: michael greenberger, thank you very much. guest: you're welcome. host: coming up we will talk with lindsay jones a public affairs editor to talk about c-span's new book on the supreme court, the supreme court court, a c-span justices featuring justices in their own words coming out of the documentary we recently did. we will talk to her coming up next but first a news update from c-span radio. >> it's 19 -- it's 9:17 in washington, d.c. in the headlines, a law enforcement official in new york city says the man accused of driving that bomb-laden s.u.v. into times square was arrested onboard a flight set to leave a new york air airport for dubai.
9:18 am
the official tells the associateed press that faisal shahzad was taken into custody aboard the flight at kennedy airport. he also says investigators don't have any evidence that mr. shahzad is connected to the pakistani taliban or any foreign terror groups. the official says, quote, he claims to have acted alone, but there are things that have to be investigated, end of quote. earlier to today, attorney genel eric holder also said that the investigation continues. the united states has 5113 active and inactive nuclear warheads in its stockpile. many thousands more have been retired and are awaiting dismantling. according to a senior defense official. the release of the number of warheads marks only the second time in u.s. history that the government has released this once top secret information. a sign that more of us are reaching for the plastic as the economy rebounds. with mastercard today reporting its first quarter profit rose
9:19 am
24%. the payment processor says it earned $455 million, an increase of 5% in the number of transactions processed. and young children who watch a lot of t.v. aren't just missing out on more stimulating activities. they could also be destined for a problem at school and problems at school, and unhealthier habits later in life. this is according to a new study in the archives of pediatrics and adolescent medicine. the study says each additional hour of t.v. that toddlers watch per week translates into poorer classroom behavior, lower math scores, less physical activity and more snacking by the age of ten. and those are some of the latest headlines on c-span radio. host: lindsay jones is joining us from new york, the editor at public affairs, the editor of c-span's new book "the supreme court," featuring the justices in their own words.
9:20 am
why did public affairs think this would make a good book? this comes from our recent documentary. guest: well, we have worked with c-span a number of times over the years, and are in touch with them fairly regularly about what they're doing, that they're excited by, and they had done the interviews with the justices over the summer last year in 2009, and they started looking at the transcripts, and you know, realizing it was the first time that all the justices had sat down for an interview at with one time, and they realized they had never been collected in one place before in writing, and so it seemed like a natural option for a book, so we started working on the book right after the series aired in october of last year. host: and the book goes on sale today. you can find it at book star stores starting today. you were integral in organizing this book.
9:21 am
how did you decide and how is it organized? guest: well, we put the justices' interviews first, and that was fairly easy decision in order of seniority with chief justice roberts in the beginning, and then the second portion of the book features the interviews that c-span did with supreme court experts, so you have two journalists, a historian, and the clerk of the supreme court, and those are very interesting interviews as well, in that they were quite candid and offered a lot of insight into sort of the inside workings of the court, so i had a lot of fun reading those, and then the third part of the book is sort of supplement ry material, and susan swain who worked on the series and i, just talked about what leaders would want, and so you have short biographies of the justices and a poll that the c-span did on
9:22 am
the public's knowledge of the supreme court, which was not a visible part of our government, and that was the reason behind doing the series in the first place. host: the third party you are talking about, is that the appendix? >> yes. host: that's important why? guest: well i think one of the things about this book is that it appeals to people that have a lot of knowledge about the supreme court. you know, a recent reviewer was just commenting that you can see from reading the interviews that it's the conservative members of the court that are interested in hearing more cases in a year. that's a fairly inside baseball thing that you wouldn't necessarily know if you weren't reading closely, but at the same time we wanted it to be accessible to people who knew very little about the court and just wanted to know, you know,
9:23 am
where the justices come from, where they went to law school, you know. there is lists of the number of cases that have been heard since 1980, and you can see that it's dropped by -- it used to be about 150 a year and now they're doing about 75, 80 a year, so it just adds some texture to what you're reading in the interviews. host: what were some things that you learned by editing and reading this book? guest: one of the things i learned is that being a supreme court justice is much more of a solitary endeavor than i had imagined. what the book offers is sort of a look at a lot of the daily routines an rituals of the court and what goes on when they're not in oral argument or sitting together at conference, and most of the justices are their world is with their clerks and some of
9:24 am
them work from home in the morning and come in in the afternoon. justice stevens often works in florida, and there is a sunny little an anecdote in the book about sensing his colleagues' envy when he opens a brief and sand falls out of it on the bench but it really is in some ways, one of the justices said this, more like an academic life than i had realized. host: what about the photos that are in this book? there are colored photos, there are black and white photos and there is also screen graphs from the documentary we did. why include all of those? guest: well, we wanted the book to really complement the documentary and give readers the same feel as the documentary of entering an institution that is, you know, relatively closed off iously a little bit controversial right now that they're closing the front doors. you can still go inside, but there are, you know, c-span went
9:25 am
to places that the public never sees, the roving room, back into the justices' chambers. there is pictures of most of the justices in their chambers. you can see justice ginsberg holding up her robe, and it just gave us the same sort of intimacy that the c-span producers had when they were walking around the court. host: as i said this is in bookstores starting today. people can go out an buy it, but is it also available digitally? guest: yes, it should be. it should be available everywhere that books are sold. today is the sale date and readers can get it on-line. if it's not in your local bookstore, it probably will be soon. you can always get it on-line and digital versions should be availablable. host: for more information go to c-span.org/books. thank you very etch for joining us. appreciate it. guest: thank you. host: now we turn our attention to the new healthcare bill that
9:26 am
was passed into law recently. joining us at the table is alice mcgillis of "the washington post" here to talk about also a new book, "the washington post" put out a book "inside story of america's new healthcare law" and what it means for us all. you can see my notes here. there are a couple of stories this morning in the paper about the latest on this healthcare bill. this is one from the "washington post" -- 18 states decline to run high-risk insurance pools. what's going on? guest: this is one of the first provisions in the bill that we're setting up high-risk pools across the country, a temporary thing, sort of a bridge to get us to the main provision of the bill which goes in effect in 2014. people who have pre-existing conditions who are in big trouble because they can't get plans they are going to be able to go into the high risk pools that are being set up. this will be a a temporary stopgap until 2014. starting in 2014, insurers will
9:27 am
have to take these people. the high risk pool will probably be a problem. it's going to be tricky to set up. there may not be enough money for it. some states are already resisting setting them up in their states. host: 18 states are declining right now. guest: yes. host: states are concerned that if funds run out there could be difficult choices, political choices, reducing benefits, raising premiums or limiting enrollment. guest: right. this is really kind of a -- this problem is because they waited until the 2014 to implement the main parts of this law, so they had to find a way to take care of people in the worst off positions until then. this is not an ideal solution. basically what you're doing is taking the sickest people and putting them into a pool which is not the way insurance is supposed to work. on top of that, you have some of these states that are ropesed to this bill saying we're not going to cooperate. this could get messy.
9:28 am
host: alec mcgillis is one of the coauthors of this book "inside story of the america healthcare law" and here to talk about what it means and what does it mean for doctors, hospitals, medicare. start dialing in now. the phone numbers will be on your screen. lots of questions about the impact of this. let's start with doctors, what does it mean for doctors first? guest: doctors -- it's interesting. doctors are going to see this impact but not as much impact as maybe people thought they should have. this law did not do as much as it could have to take on sort of the cost problems on the provider side for the cost problems that we're facing among hospitals, doctors, drugmakers. really the law is more focused on the insurers, and so doctors are going to see some sort of more peripheral impacts. there is going to be more money for doctors who want to go into
9:29 am
primary care, more money to help them with their medical loans and whatnot. they are going to be encouraged over are time to change the way they work to get into networks basically where they're working together instead of small practiced, working more on a salary rate instead of fee for service which is the way most of our healthcare is delivered now. in a lot of ways, doctors partly because they have such a powerful lobby in washington really avoided a more direct impact than they could have had. host: the story today in "the washington post" featuring the book says there is going to be an an emphasis on primary crare. guest: yes. there is a big concern that when you expand coverage as we do in this bill, that you will have a lack of access to primary crare, more people coming into the system and just not enough doctors to go around, and so the bill does provide a substantial amount of money to encourage
9:30 am
doctors to go into primary care to go into served and underserved areas, and again, that's not really the main thrust of the bill. host: for doctors, a big concern was reimbursement, medicare reimbursements. here is a tweet "hhs published medicare broke in 2016. boomers at 65 at 40% to the number of seniors and the health bill cuts $50 billion. what will be cut? " the cuts in medicare, there is a lot of concern about this obviously during the debate. the cuts in medicare are really -- and they were agreed to by the hospitals and doctors. they come to about $150 billion over the first ten years calling them cuts is a bit of a misnomer. every year doctors will get more from medicare to account for inflation and the rising costs. this he are now agreeing to a smaller increase in the medicare
9:31 am
reimbursement than they would have otherwise got they agreed to this because they realize fire department they didn't, they would take a bigger hit. this was their deal to avoid the public option. doctors and hospitals assumed the insureds were opposed to of government run option. in fact, it was the doctors and hospitals who were just as opposed to it because it would lead to lower reimbursements in all likelihood. host: a lot of questions out there, a lot of debate about what the healthcare bill will do. alec mcgillis is co-author of a new book, and mark on the republican line, you're our first phone call, go ahead. hello, this is sheila. host: go ahead, sheila.
9:32 am
caller: our insurance commissioner, osmgen hediner said he sent a letter to kathleen sebelius saying that georgia would not participate. i'm one of those people that needs insurance because of preexisting conditions. is there -- is the federal government going to take that over? guest: yes, sheila. you're right. he was the first commissioner to come out and say he would not go along with the high-risk pool in his state, sort of another aspect of the states' rights opposition we're seeing in a lot of states which has mostly taken, manifested itself in people saying they're going to sue about this mandate that's in the law, the mandate that everyone carry insurance. when the insurance commissioner came out and said he would not help in setting up the high-risk pooght, kathleen sebelius said
9:33 am
the federal government would be able to do that for the state, that there is a provision in the law that high-risk pools, states will not be left without them just because their state is refusing to cooperate. there is going to be everyone more of a problem with states not being cooperative when it comes to the really big part of the law in 2014 when we start setting up the newmarket places called exchanges that the states have to set up where people buy insurance. if states are are brie grudging and opposed to this law, that will be a tremendous problem. they are simply not helping to set up good exchanges in the state. host: mark on the are republican line from boston. go ahead. caller: if the federal government forces the states to violate their religion beliefs by violating the free expression clauses of the united states constitution by forcing states to fund abortion and federal government is breaking the tenth
9:34 am
amendment. host: what about the abortion provision? there is great uncertainty of how this will play out a lot of people think it is quite possible that it is actually going to be libel abortion coverage provided in these plans offered on these new exchanges. the language we ended up with is that companies can offer plans that include abortion coverage on these exchanges, on these marketplaces where we're going to buy insurance, but people who buy into those plans are going to have to write separate checks, make separate payments every month for their premiums, one to go to the bulk of their coverage, and then a very small payment like a dollar a month or something to go towards the abortion coverage a lot of people think this is going to be so unwieldy for the inshiewrpers to implement and a lot of people will think this is crazy. why do have i i have to write
9:35 am
for checks for my insurance plan. everyone buys into these plans will have to write separate checks for abortion coverage. there may not be a market for these plans. the people will think it is wierd and unappealing. it is actually quite possible that you're going to see little abortion coverage in these plans. it is worth noting that most private insurance plans today do include abortion coverage. lots of people don't realize it but chances are from you are getting coverage through your employer, that coverage may very well include abortion coverage. host: another tweet from gun toting dem says where is the list of the rogue 18 states? i want to call their governors." are these states able to opt out of high-risk pools? guest: they can't op ochts out. the federal government is able to set up the pools. the bigger question is whether they will work.
9:36 am
they set aside $5 billion over the next four years until the main parts of the bill go into effect. a lot of people think that's not enough money. right now, some states already have high-risk pools on their own and we're spending about $2 billion a year to cover 250,000 people. $5 billion over four years probably ain't going to cut it. it is not an ideal way to be helping these people in this interim period. there is a reason why this is not the permanent solution. it is not a very good solution. host: buzz on the democratic line. good morning. caller: thanks for c-span. good morning. first of all, i was curious about the tax credit that i see, you know big industry are receiving. for an individual like myself that purchases my own insurance, i wondered if i would get a tax credit for the premiums that i pay, because my employer doesn't supply insurance or provide it.
9:37 am
also, i wondered why the delay was implemented, because it seems like these states are juxtaposing themselves against the bill. also, i wondered if it is an insurance giveaway and how will it affect pharmaceuticals. guest: to start off on the tax credit, you make a good point. people who buy insurance on their own have to pay for their insurance on a post-tax basis. you don't get that benefit that people do when they get insurance through their employers but the idea with this new law is that you are going to -- you're still going to be paying with after-tax dollars but if your income is below a certain level, you're going to get help to buy your insurance. it is a recognition that you're kind of getting -- not getting shafted a little bit in the existing tax structure. you're going to be gebtsing a subsidy that people who get insurance through their employer are not going to be getting. i'm not sure what your income is, but families up to $88,000 a
9:38 am
year of income are going to be getting subsidies to help them purchase insurance on a sliding scale going up to that many as to the question about the delay, one is that implementation will be a hassle to set this system up, set up the newmarket places so they had to give themselves time to implement it. another thing is they had to delay it to make the numbers work. by waiting on the main parts of this bill, they have also reduced the cost of the bill over the first ten years of the bill, and so there is a little bit of funny number stuff going on there. finally on the pharmaceuticals, the drug industry made out pretty well in this bill. they were the industry that right from the start tried to get in to be at the able and to -- they paid a lot in ads supporting the bill, and they
9:39 am
were very key supporters of it. in exchange, they basically got -- avoided some of the things they were most worried about, such as reimporting drugs from canada and also letting medicare buy drugs in bulk for their medicare drug benefits. the one thing drug companies did concede basically which will help people is that there is the doughnut hole in the medicare drug benefit that a lot of seniors have to deal with and don't like is going to shrink. seniors will get a $250 check in the upcoming weeks, seniors who go into that doughnut are getting a check to sort of help them with that problem right off the bat. host: carol, independent line, you're on the air. caller: good morning. it's nice to see you. i'm curious about all the people who call in about they don't want their taxes going towards
9:40 am
abortions. they're so afraid of this, but they take my taxes all the time for a war that i'm morally opposed to, and i'm wondering how they can justify that anything and if they have an argument that would hold up. host: do you have a question about the implementation of this law? are you curious about anything? caller: i'm curious about so much. i'm wondering how these people think they can get out of paying taxes because they think some of it might be going toward abortions. host: yes, we got your point. alec mcgillis is a healthcare reporter and can't answer that question. eddie on the republican line. go ahead. caller: i don't consider it reform at all. i think it is more of the same. that's all we're going to do is just insure more people. we're nation of litigants. we have twice as many lawyers as we have doctors. we're just going to have three
9:41 am
times as many lawyers as doctors. the beauty of europe is that a doctor in a hospital is sacro sanct. you don't bite the hand that feeds you. don't go there and sue them, please. host: what about tort reform? guest: you're right. there is some language raring tort reform. i think about 25 million or $250 million to encourage states to head up some new pilot programs to deal with the problem of malpractice, concerns about malpractice. you know, and just beyond that, you said that you don't see this bill as reform, there are a lot of people that think that's really true in a broader sense, that this bill did a lot to cover the 40 million americans that don't have coverage but didn't do enough on the side of
9:42 am
reducing costs, not just, you know malpractice issues for people who think that is a cost driver, but really beyond that, there is a lot in this bill to try to get us to use healthcare less, to reduce our utilization in healthcare and wasteful use of healthcare, but there is not a lot to reduce the price we pay for healthcare, the price we pay for all the things we get when we go to the hospitals. host: bill on the democratic line. caller: i'm interested in looking at your book and reading it. i would also like to ask all the people that call in all the time and say that the government can't force them to buy insurance, does that mean that if i was in a car accident with their wife and child they can reach in their glove compartment and pull out $50,000 and give it to the hospital when they arrive? guest: this is one of the big questions of this law, what people are going to make of the mandate that everyone has to have insurance. this is at the heart of the law,
9:43 am
this idea that we're basically making insurers to behave better to cover everyone to stop doing some of the things we don't like n exchange for that, they will get all these new customers because we require people to have insurance, the idea being if you don't get insurance then you're shifting the cost to everyone when you do get sick. the argument against the mandate is, well, yes, with car insurance i got to get insurance but i don't have to buy a car. here you're saying if i'm human, i have to get insurance to cover my health and myself, but from a sort of the implementation of this law and from the way it's supposed to function, it is really going to be important that the mandate work, and that people don't find ways to skirt it and just pay the penalty. the penalty is not very big. a lot of people may pay the penalty to get out of it and if they do that and a lot of people don't get insurance, the law really may not work because you will then have insurers
9:44 am
basically having to cover older, sing sicker people without the benefitting of having younger, more healthy people in the pool that. is the only way this can work is if you get everyone into the pool. host: when is the deadline for insurance companies to start accepting young adults on to their parents' insurance? guest: that is in the coming months that. is one of the early provisions you can stay up to 2 6, which is a big deal for families. the biggest provision, the one that says it all, everyone including young people have to have insurance, that doesn't go in effect until 2014. host: some insurance companies have started to accept young adults on their parents' insurance. guest: they have, for ease of a transition, they just started doing it already. that is definitely a tangible benefit for a lot of people right there.
9:45 am
host: helen on the independent line. caller: i wanted to know do you have a handle on how many new bureaucratic agencies are created by this bill? guest: good question. the main agencies that are going to be implementing it really are the ones we have now, our health and human services department, medicare and medicaid department, the actual exchanges that i keep referring to, these marketplaces where you're going to go to buy insurance if you don't get it through your employer, they're going to be sent up on a state by state basis or regional basis. it will be up to the states to set these things up which could be a problem in states that the political leadership doesn't like the bill and it won't be moabts straighted to make it work. in massachusetts, which really passed a model of this bill back in 2006, it took a lot of effort to get their version of the exchange working.
9:46 am
that was the state where you had bipartisan political support around the bill including the then governor mitt romney, are republican, who signed the bill, this real consensus around it and everyone was onboard to make it work. now you're going to try to do it in states like texas, arkansas, alabama, georgia, states that, a, just don't have much insurance regulation right now at all. that's just not something that they do very much of and don't have much capacity for, but also where there will be a real political resistance for doing this. that will be more of a bureaucratic concern than the bureaucratic load at the federal level. host: this viewer is asking do you think insurance companies will offer multi-family discounts since there is a mandate to have insurance? will this create a new market? guest: well, yes, that's sort of the premise that you're requiring people to have insurance, you're going to get more people into the pool.
9:47 am
that is really the idea here. right now, the problem somebody that people who try to buy insurance on their own have a really hard time of it, a, because in some states insurance companies can reject someone with a preexisting condition or charge for their time. and b, the rates are very high because the pool is not big enough. you only have people in the pool who really think they need insurance, so it doesn't really work the way that insurance is supposed to would work, so the s that you will create this healthy, busy thriving private sector marketplace, and eventually if it works, the long-term hope is that you will get more of us going into these exchanges over are time. they might become the base of our insurance system, not employer had-based coverage. host: shirley on the republican line. caller: good morning, everywhere i go and i go to a lot of the tea parties, i hear a lot of senior citizens complaining that
9:48 am
they paid into this system all their life and now they have to worry about medicare, are we going to lose our medicare? they keep saying how much money is going to be taken out of medicare. people are upset about this. host: what are the facts? guest: it is more complicated than that. the impact that a medicare recipient is going to see, negative impact is, if they are people who are in medicare advantage plan, which are the plans that are run by hmo's by private insurers who get money from the government to provide medicare-like product to seniors. these plans are getting their subsidies cut, so the companies that offer these plans are getting less money from the federal government to offer the plan, so they might stop offering the plans or might make the plans less appealing by cutting out some of the benefits that come with theme like free gym memberships, that kind of stuff. people with medicare advantage plans might feel the pinch. the real hope is for medicare
9:49 am
generally that possibly doctors are getting slightly lower reimbursements over time than they would have, but they will have to find ways to deal with that and some of the other reforms in the bill that are meant to change the way we deliver care and change the ways we deliver care that is more inefficient, the hope is that the reforms will help them deal with the medicare services. finally, i'm not sure if you have to deal with the doughnut hole problem. a lot of people do. that problem is going to go away with this bill over the next few years. that will shrink not to nothing but almost nothing. host: democratic line from richmond, virginia. go ahead, sir. caller: my comment is more in line for being a question, and i understand that the states want to sue the government on that they don't have to be mandated
9:50 am
or not to be mandated. my question is if the citizens of that state want to participate, can the citizens sue the state? guest: good question. in a sense, the best response for a citizen of one of these states where the political leadership is not being cooperative with this law is basically pure political pressure. i mean, it's really a matter of trying to change the political leadership in your state if you don't like the way that it is acting on this, and we'll just have to see how that plays out. it's possible that the leadership of these states keeps being uncooperative they might start to hear from their constituents people saying hey, we need help, we can't get insurance, it's not going to make any sense if these benefits are going to our neighbors in the next state over. we want these benefits, too, so stop doing this. it is also worth noting that it
9:51 am
is possible that these legal challenges of the mandate of the main provisions of the law will have to see if they actually go anywhere. there is a lot of constitutional law folks who don't think these challenges will go very far. you can never say for sure but it is possible they might fade away as legal challenges. i think the real more pressing concern is that the states where the political leadership is not onboard is not going to be dock enough to sort of make sure that the law works, not being encouraging people to observe the mandate and it is possible that the new system isn't going to work well in their state. that is more of a concern than the actual legal challenges in my view. host: rayon the independent line. guest: i enjoy your show. i have a question about workman's compensation. businesses are required to furnish that for employees ysm not let the employee pay half the cost and go ahead and extend
9:52 am
workman's compensation to the entire family and they get 24 hours a day, 7 days a week? >> well, once i finished this book and read the law, i don't think worker's comp is included in the law. there is a lot in the law i should add that is intended to help employers, especially small employers. one of the first provisions that that is it is going to affect is a fairly substantial credit that that is going out to small businesses to help them buy insurance, businesses of, i believe, under 25 employees or it might be -6b 0. i will have to double-check, but they're going to be getting credits, businesses that have employees making under $50,000 a year on of average. this he will get fairly large cred its to help them buy insurance. there is a lot in the bill for going beyond that and try to ease the burden on employers.
9:53 am
the employers will be rieshed to provide coverage, employers of a certain size, of 100 employees or more will be rieshed to provide coverage. it is worth noting that most employers of that size do provide coverage. it is in the small business sector that you see a lot of non-coverage, and those smaller businesses are not going to have to provide coverage. they're going to get help to do so but they don't actually have to. host: don on the republican line. caller: good morning. could you sort of explain specifically what it is that the attorney generals are actually suing for? i think there is a misconception and perhaps maybe you can clear it up that they're suing to reform the healthcare bill. host: to overturn it, you mean? caller: correct. but what they're actually dealing with are specifics of the bill that actually mandate that the state is going to have to pick up certain medicare or
9:54 am
medicate patients as well as the fact that the national government, the federal government is trying to mandate or tell individuals that they have to have healthcare. guest: good point. they're raising several different claims and some states are raising some claims and others are raisings others. some are just objecting to the mandate saying that the mandate that we all obtain insurance is unconstitutional. some are coming it from a states' rights standpoint saying it is unconstitutional for the federal government to require states to set up these new marketplaces, and also, you know, not right for the federal government to take on more medicaid patients. a big part is that we will expand medicaid by a lot, by about 15 million people, expand it up to 133% of the poverty level. anyone below that level is going to qualify for medicaid. it is worth noting and this has
9:55 am
gotten lost a lot in the discussion that a lot of states that right now have stringent medicaid threshholds, basically the states that don't let a lot of people in to medicaid, they are going to have to be sened a whole lot more people into medicaid which they're very worried about but they're going to get massive help from the federal government to do so. right now the federal government picks up only about 50, 60, 70% of medicaid costs on average. under this new law, all these new people coming into the medicaid system will be covered at 100%, the federal government will pick up the first couple of years and that's going to go down to 95% or so over the next two years so states are going to be getting just tremendous surge of federal dollars, and in a way it is the states that have the most stringent medicaid eligibility until now that are going to be making out the best because they're going to get all this federal help to pay for people who noth ore states, states that have been more
9:56 am
generous, those states will be getting lower reimbursements from the feds to keep covering those people. host: brenda on our democratic like in north carolina. caller: good morning. i've got a couple of questions i would like to ask you. i went on-line on the internet checking insurance companies to see what was available and the companies that i talked to were more like discount insurance rather than insurance with major medical. i do have preexisting conditions, and i need to know is the state going to set it up with the major medicals along with everything else so i can get insurance? guest: you're really a classic example of someone that this law is meant to help. come 2014 -- i know you're dealing right now in the present, but 2014, the whole
9:57 am
idea is that you are going to have a much more sort of easy to use and easily understandable marketplace to go buy insurance. you're not going to be out there alone on-line going around looking to see, gosh, is this what i need? what does this provide? right now, as you know, it's very difficult to figure out this marketplace on your own, especially if you're in a state that is not well regulated. come 2014, it's going to be like really kind of easy comparison shopping. your state will have this new marketplace where it will be all transparent. you will have cheer price levels -- clear price levels, clear explanations of what each product gives you. that's how that works. in the interim, your best bet will be the high-risk pool that will be set up to service a bridge. as i said, there is real concerns of how that's going to work but hopefully it's going to work ok for most people in your situation with preexisting
9:58 am
conditions. host: david in clinton township, michigan on the independent line. caller: good morning, america. i heard a woman call in and said she was attending tea bag parties and then she started to say she was complaining about her medicare coverage. now, if i'm not wrong, these tea party conventions rally against socialism, and medicare, social security, farm subsidies, those are all little bits of socialism that america has had all along, so i know that -- how can you suck on a socialist tit and complain about socialism but then most tea party members fell off the republican bandwagon so hypocrisy is in their playbook. host: former republican donna in augusta, georgia. guest: good morning. first thing i would like to ask you a question about, i'm on
9:59 am
medicare and medicaid. it's hard for me to find doctors now. some of them won't even accept my medicare. also, the doughnut hole, it doesn't start until ten years, right, and the other insurance doesn't go into effect until four years, and another segment of my statement i would like to say is i'm losing my cardiac thoracic surgeon, the one that has saved my life from cancer four times. i also have other doctors that are retiring because of the healthcare bill. could you comment on that, please? guest: the -- you're right. there is a concern about doctors , access to doctors and doctors accepting medicare and medicaid. right now, as you know, it is more of a problem with medicaid. medicaid rates are lower than medicare reimbursement rates. you are seeing doctors stopping accepting medicaid patients. the law does t

202 Views

info Stream Only

Uploaded by TV Archive on