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caller: considering the job they are doing, they deserve it. host: ok, new jersey up next on our democrats lined t. caller: we are paying

contractors ended number of people six times as much and nobody is complaining about that. if you want to save money, get rid of the contractors and you could afford an army three times as large. host: the story says both sides of the aisle are trying to send a clear message to the military that we appreciate their service. susan davis is the chairman of the subcommittee. she says the government has to set priorities better. do we want to fund weapons or people but the reality is we need both. any attempt to bring allies -- rising personal cost with the equipment is nonsense.

sioux falls is next and our republican line. you were in the military? caller: i served 12 years in the military in the u.s. navy. i think that question is a joke. we worked 24-7. the question of whether we were paid too much, it is not generous at all. it is a joke compared to the other military. host: what did you do in the military? caller: i was on a submarine. host: what was paid like for you when you were there. caller: considering the private

sector, we were probably paid sector, we were probably paid

.. coip gave themselves a pay raise but didn't give social security a pay raise seeing that the cost of living hadn't gone up. but they gave themselves pay

raises. i think the government spending all the way around is way too high. that's my thoughts. host: that was brian in boston. it says that the pentagon wants the pay raise of 1.4% for service members next year. that's an increase based on the employment cost index which the labor department uses to measure private sector salary increases. congress, as it has for the past several years, "the washington post" reports this morning, has indicated it favors a slightly bigger bump, that of 1.9%. according to todd harrison, defense budget expert at the center for strategic and budgetary assessments, the extra half of a percent may not sound like much but will accrue annually and cost abou about $3.5 billion over the next decade. and we're doing this in light of the front page of the "the washington post," a story by craig whitlock.

here's the headline that says it all for you. "according to the pentagon, the troop pay given to our military raises are too generous." and that's where we want to get your thoughts this morning. you can call on the line you see on the screen, as long as you pick the one that best represents you. you can also send us something on twit err and also -- switter and also via e-mail. new jersey democrats line. caller: north carolina. host: may poll jis. go ahead. caller: a couple of things. first of all, the congress has a very short memory. you start out with, oh, yes, we're going to send our boys to war. and they do. and then when they come home, they don't want to pay for any postwar costs of the veterans. and we've seen a lot of that in recent history. this goes back to the civil war with the whole veterans alleys

for pension rights. there's a historical problem there. the second thing is in previous wars when we had a draft, we were not as quick to throw our young men and our best human treasure into thoughtless, needless wars. the result was that they didn't make a lot of money. they did their service, and they got out and they were proud of that. today we have for all practical purposes a professional military. if we're going to do that, then we have to pay the professional going wage. if they don't like the price of that, they shouldn't send our young men to war. but last but not least, the costs -- an earlier gentleman called about the subcontracting out. when you have a person in the field who is a g.i., u.s.-issued, standing there earning x and some hot shot

contractor who may be a foreign national subcontractor from someplace else making x times three, what's the incentive? i think we were better served when our army did all of its own work, did all of its own contracting, and we had less corruption. in the long run, the cost of the campaign was lower and we pulled out and we were done and we were finished. i find the last 10 years of bush-cheney so despicable it's beyond my ability to really explain how i feel. charlie rangle recently suggested that if we want to send more men to war, we should go back to the draft. i'm in favor of paying the troops what they're worth. they're hard-working and they pay a very dear price if things

go wrong on their work. host: ok. we'll have to leave it there. we will continue on with this topic. this is off of twitter, by the way. this is saying, too generous, what an insult. caller: i feel the troops are not getting paid enough. my son is in the army. he's been deployed four times. and basically his income is poverty line. so, no. they are not paid enough, just like what you got from twitter. maybe the brass is getting paid more, but my son is an enlisted

man. host: do you know how much he makes generally? caller: $16,000. host: go ahead. caller: i didn't hear your reply. host: it's ok. i didn't make one. i didn't know if you wanted to finish up the statement. caller: no. that's basically it. there's a lot of young men and women in the military that are -nlisted, and everybody thinks that they get everything given to them. my son just recently went through a specialized training. he had to put out $800 for his own uniforms. that's not reimbursed to them. he is married. it's just a shame the way that america treats their military. i believe that we should support them more financially and also just by showing that we do, by hanging out the american flag. host: and we'll leave it there. that was from georgia.

this is richard perry of the "new york times." it shows the containment dome that's going to be used to cap the oil leak. that was put into the ground in hopes of tapping off that oil leak. below that is a photo of the chief operating officer of bridge petroleum. he says, "we're committed to trying to make this work," that of the containment effort. there was legislation this week dealing with the costs of cleanup, especially when oil accidents of this nature occur. jim snyder of "the hill" was joining us on the phone to tell us more. mr. snyder, there was a figure thrown around this week of $10 billion in regards to accidents like the one we've seen over the last couple of weeks. where did that figure come from? and how does it play into the legislation that's being debated?

>> congress passed the law in 1990 in response to the 1989 exxon valdez spill. it sets up a system where responsive parties, in this case b.p., and company that have oil spills, pay for the cleanup and then they also pay liability for the economic costs. the legislation caps those, and there's an effort in congress to raise it to $10 billion. host: how did that $10 billion figure come about? caller: well, the question that i think they were calculating on how much it could cost. host: as far as the other figure, the $75 million figure, what's been the response from republicans and democrats to change that figure? guest: well, they think it's far too low. the $75 million cap it can be

exceeded -- i mean it's the responsible party, b.p. in this case if found to be grossly negligent or operated misconduct or violated any federal regulations before the spill, then the cap doesn't apply and their liability would be, you know, infinite conceivably. but there's also a fund that a per barrel oil tax is imposed and the money is generate from the tax through the fund, that can pay, you know, hurt businesses and communities along the gulf coast affected by this spill. host: as far as the new figure, is this something that's being endorsed by both sides of the house or just democrats? guest: just democrats so far. i think a few republicans in the senate have spoken favorably of it. but it's got significant support in both the house and the senate. speaker pelosi has said that she supports it. i think democrat senate majority

leader harry reid has said he wants it on the floor. host: so give us the status report of where it stands right now. guest: it might be added to the bill going back and forth between the house and senate so it could move quickly. the administration also supports it though they haven't endorsed the $10 billion figure. guest: have there been response from oil companies like b.p.? guest: there's the main trade group for oil companies called the american petroleum institute. they say they're still reviewing the legislation. there's a group called the independent petroleum association of america, they represent so-called independence. independence are different in companies like b.p. they only do explorational drilling where b.p. explores, drills, and markets the product. if you raise liability much, they won't be able to get insurance if she can't get

insurance, they might be forced to shut down their operations. they would rather have the tax of the barrel of oil go up a little bit for a temporary period to replenish the fund, the government fund, that damaged interests can seek restitution from. host: is this $10 billion figure a static figure or could they move up from there? guest: oh, they could move up from there. sure. host: that's jim snyder. he's with "the hill" and covers, among other things, energy for the publication. you can see his writing on that on thehill.com. thanks for your time. guest: oh, sure. thank you. host: back to your thoughts on military pay. this is off e-mail. it says, "i am a retired colonel. pay is vastly improved over what it was when i entered in 1976. the concerns voiced by the pend gone is well placed. the choice in the future will be

pay or a smaller force. if congress wants to help boost the veterans administration." augusta, georgia, you're next. caller: yes. i found that colonel's comment quite interesting. our military is paid pretty well, considering the last couple of years. they have received increases. but risks they take cannot be compared to the difficulties to a normal job. i believe that the politicians need to stop posturing and start looking at structuring other pay and the rewards they receive. from the veterans that i have contact with in my daily life, i see the impacts and the change of the g.i. bill and the education funds. i think that congress needs to look at pay in this structure and restructuring pay in this method. host: that was augusta, georgia. memphis, tennessee, is next. chris on our democrats' line. caller: hi. i just wanted to ask a question.

how many civilian jobs put their life on the line 24/7, have to be on call 24/7? my son is now in his third tour in iraq. he's national guard. he had to stopped his education three times. he's had to quit his job three times. his wife has to rely on his pay. i'm a veteran myself. pay isn't across the board it depends on what rank you have. if you're an e-1 or e-2 you make different pay than an e-5 or e-7 and certainly less pay than any officer. so when you speak about what the government puts us through and asks us to do on a 24/7 basis, and put our life on the line, i don't think we're getting paid enough. i don't think my son's getting paid enough, especially with the

sacrifices he's had to make in his education and in his civilian jobs. and he's just national guard. he's now over in iraq and he went be back until the end of the year. he doesn't even know if his old job will rehire him again for the third time. and he has to restart his education. he's tried to get a bachelor's degree for five years now. every time he starts, he gets reenrolled, they redeploy him again. so the sacrifices the families make and the military person makes, far outweighs whatever they get paid. thank you very much. host: an op-ed in the "new york times" this morning, the author of a book "all about high frequent trading." he wrote about the events the last couple of days on wall street. fixing auto street's auto pilot. he writes --

host: that's just some of the thoughts in the "new york times" this morning. tallahassee, florida, republican line, kim. caller: yes. i was in the military, so i know what the pay scale has been. i joined in 2000 when i was an e-1. i made less than $1,000 a month. and people don't understand

about these subsidies. everyone does not get them, and you don't get any money for school. you're forced -- [inaudible] i lived in a condemned building at fort campbell, kentucky, that had asbestos in it. the d.o.d. hasn't built the new barracks that they were mandated to build. even now. i got out in 2003, and pay has risen. and i went back into the military in 2006, and pay is better but people -- when i got out, i was an e-4. i made like $2,000 a month. but civilians are paid to do the same jobs that you do, with your specialized training, $180,000 a year. they're paying army people, who are enlisted, maybe $24,000 a

year, officers pay is better. i think their pay maybe should be cut down. but enlisted pay has not stood up. it's an automatic adjustment based on what inflation is. it is in the congress adjusting the housing allowance or the cola or your allowance for food. and people work like 18 hours a day. it is a salary pay. it isn't an hourly job. it isn't, i want a sick day. you have to go to work. if the army says you have to go, that's what you do. host: we have a chart that we pulled from the pentagon, i believe when it talks about pay. if i'm reading this correctly, it says for an e-4, which you said you were, i think for two or less years of service they make $1,889.70 a month. does that sound right? >> yeah, that's about right. but every year you have in

service -- like on the two-years, on the four-years, the pay is different. and i received a food allowance, so my pay was more money. host: and it says even an e-1 starts at about $1,447 a month, and that's across the board, and it goes up from there. caller: well, yes. and this year, like you said -- well, i joined in 2000. it was much less than that. you can imagine what it was. host: then you have to calculate other costs. we had another cost saying even for some uniform purchases, that comes out of your own pocket as well. caller: that's not correct. every year you receive an allowance. it differs. but right now it's about $500 a year. if you go over that amount, it's a tax deductible so that person was not being completely honest. host: we appreciate the clarification and the insight. springfield, virginia, on our independent line. ed, good morning.

caller: hello? host: hello. is this springfield? caller: no. jacksonville, florida. host: since you're on, go ahead. caller: ok. i'm a spouse and i was also going to go in but i felt like one of us had to have some stability at home. i think the fact that the question even being asked is just an absolute disgrace. the types of sacrifice that are made are totally unaccounted for. i think that the fact that it's coming from the pentagon is just despicable. you don't make a lot of money. so the last caller, my husband did have to pay for his uniforms. i don't know what branch of service she was in, but he did. i think when you get to a certain pay level, they do require to you pay for your uniforms. when you are at a lower grade, they don't.

but it's still coming out of your pocket. i think that the job that the military personnel do both men and women is so critical to our survival as a country that we should be willing to pay them. and the fact that contractors are paid more is just really insulting. when i found out back in the 1980's, when we were at parris island, that contractors were going to be taking over the jobs that the military did every day, i was horrified. knew it was not going to be a good idea. and it has not been fruitful to our success as a country. it has caused a lot of problems. and i really think that when our military comes home that they should be paid well. no one has mentioned the amount of people in the military that are on welfare. the numbers are great. so we should be ashamed as a

country that we would be willing to allow bankers to make the type money that they do, sports stars, etc., but when our military is getting some type of raise, and most people that have called have agreed that they don't make enough. we laugh at it. and to the man who's making $700 a month and his mom $1,000, that is poverty rate. we can do better as a country for our military and for our citizenry. thank you. host: a couple of minutes to talk to you about our "newsmakers" program. this week's guest is senator dick durbin, majority whip. amongst the discussions he had with reporters here for about a half-hour, he talked about working relations in the senate, particularly the topic of polarization that takes place between democrats and republicans in this session. >> i believe short of changes in

rules and procedure that we are bound to go through this phase for some party even beyond the election. the republicans believe that the most successful strategy they can pursue on the floor is to make sure we do little or nothing. a few weeks ago we spent an entire week in the senate debating the extension of unemployment benefits for four weeks. one week to four weeks. you think to yourself, this isn't going to work out well. the following week we spent an entire week debating the nominations of five people who were all approved by the senate without much controversy. we have 97 -- as we take this program, 97 nominees or the calendar who have been passed out of comi virtually unanimous -- committee virtually unanimously because they're seen as bargaining chips. the democrats and administration. ok, we'll give you an assistant secretary in commerce to deal with oceans because, oh, there was that spill in the gulf. let's get that out of the way,

it's embarrassing. but let's hold 96 other ones and see what we can get for them. same is true when it comes to bills on the floor. so far we've had 96 filibusters in this congress. i might say to the viewers, that is not common. it's uncommon. it's becoming a recurring trend. host: senator dick durbin on our "newsmakers" program. see that after this program tomorrow at 10:00. and then you can see it again at 6:00. springfield, virginia, back to our calls on military pay being too generous according to the pentagon. independent line. ed, good morning. caller: good morning. i have three areas here. there's the service aspect of this which essentially, you know, touches on why people join. if people are joining because they're trying to get rich, i think they're in for the wrong purpose. when it comes to the sacrifice portion of this, yes. that's what the military service is for. there is the likelihood that

they may go overseas to an operation where they could be in danger. there's pay associated with that. although, you know, nothing can make up for a life. but there is pay associated to address that. there's also what's considered adequate. the military understands it's not going to make you rich. however, people have to understand that it needs to be adequate. with regards to that, there are a ton of incentive that compensate for the basic pay which everybody keeps talking about. there's housing allowances, food allowances. you get tax advantages. you get free medical and dental. there's the g.i. bill which pays for all of your college, your tuition. there's even a housing typened that pays for your housing if you go on to college. so those are the three areas. is pay adequate? people do make sacrifices. do they try to compensate for

that? yes. and why are people in the service? now, what the government needs to -- excuse me. what people need to understand also is that the department of defense is also fighting for a budget. and when you go online and you look at the budget request, you can see that the military personnel budget is almost one-third of the entire budget for d.o.d. so that's a huge thing they're trying to balance, not just now but going forward in the future. host: this twitter says -- host: annandale, virginia. caller: good morning. i agree the contractors are paid too much. this allows people to basically become mercenaries. a good part of our soldiers are also joining for the wrong reasons, too.

if you're trying to make a career out of the military, you need to get training, rotc, become an officer, etc. if you pay soldiers more, this allows people to use you as a pawn in a rapist war as george bush did in sending some of these soldiers to iraq. host: from the "the new york post" this morning, two republican legislators that are the chair and vice chair of the house republican conference talking about -- they say we're bailing out greece but u.s. taxpayers shouldn't be. amongst what they write, they say that the united states pays 17% of the total member contributions to the international monetary fund. number two is japan which provides 6%. that entitles us to a claim on the overall i.m.f. balance sheet, not a share of any specific loan. but it still means that our share of the $40 billion i.m.f.

package for greece is equivalent to $6.8 billion. last year congress passed another $100 billion line to the i.m.f. it funds -- would go to forestall or cope with an impairment of the international monetary system or to deal with an exceptional situation that poses a threat to the stability of that system. in other words, the too big to fail doctrine is being expanded to an international level with the united states as the primary stakeholder. fort worth, texas. pat, republican line. good morning. caller: yes. wanting to make a call. i was listening to the way you were reading your article about the pay raises, and that it would cost us $3.5 billion over 10 years. well, i don't think that's really exactly what's going to occur. there's going to be more changes. why don't they just say, what it going to cost us the next fiscal year? if you divide $3.5 billion by 10, it's going to cost us a lot

less. why don't they just say what it going to cost us next year instead of putting these numbers in there and throwing off high numbers in, say, over 10 years. that's the way the media has a tendency to skew things. that was an important thing for me to reiterate. i notice that's what they do. this is going to cost us over 10 years. well, we don't know what may happen. the reserves go home, which i think they should have never been there to begin with. but they have to teach them, you know, urban warfare. but the thing about it is, is that, you know, in 1968, can i tell you right now, privates made $100. yes, they were supplied for food and clothing. but i can tell you right now, when they went to vietnam, they had plenty of contractors right there making tons of money. this is not a new thing going on.

for all of these people to be saying something now, they don't really understand the system. and unfortunately there is experts. i didn't agree with the private contractors because i know what they did. i flew them around. but the thing about it is, we need to state it the way it is. and what it going to cost us in our next fiscal budge senate granted, we're spending way too much money. but the thing about it is, those things have been skewed. host: mark, in "the new york times," writes that the white house, according to headline, being pressed to reverse course and join the landmine ban. it says the military has long opposed signing the landmine treaty, arguing it would put the lives of american soldiers at risk. there are still nearly a million mines in the demilitarized zone in korean p peninsula. but some of the leading liberal inseeders, like harold koh, the state department's legal adviser, are pushing for the

united states to join a ban. and even the pentagon officials are said to favor a change. in a sign of the urgency, the white house is holding regular meet ings with the officials. the administration has summoned outside experts like karl inderfurth who led the delegation to ottawa in 1997. i'm guardedly optimistic, said a senior administration official, who favors the treaty. next, our independent line. caller: hi. how are you? host: fine, thank you. caller: you adjustment h just mentioned the i.m.f. i think we're asking the wrong question when it comes to the military. what we need to be asking is, why do we have bases as cro the world running -- across the world running an empire like the romans did? and just like the romans, we have a professional army that we pay. they eventually figured out that's not a good idea because

people will eventually go bankrupt. you go bankrupt. that's what we need to learn from the romans. secondly, about the i.m.f. and the whole central banking a whole, that's the problem. we need to end the federal reserve. we need to go back tock what abraham lincoln signed, a public central bank run through the treasury. and nor people who want more information on this, there's a great video that talks about the history of the federal reserve. it's called "money masters." it gives great information about how the federal reserve got started what it does, and how our money works. the problem is we won't ever get out of debt because all of our money is created out of debt. host: from the "wall street journal," this talks about the affordable modification program. this is to help those who are in troubled mortgages.

host: yorktowne, virginia. we're talking about military pay and the pentagon assaying in some cases it's -- assessing in some cases it's too generous. what do you think? caller: i don't know if too generous is the best words. it's fair. when you need soldiers mark rein, airmen and sailors deployed, you have to be able to provide them some compensation to actually leave home and be away from their families for an extended party. when you look at their educate peers, certainly the military is very well compensated. oftentimes you see people point out that pay chart that you showed earlier. they point to that lowest left corner as the pay the military are receiving and how it helps around poverty level when in fact, you factor in all the additional benefits that they get. it's amazingly generous.

and if you look at the health care, especially -- if you look at a base or a post hospital, half of that operation is obstetrics and birth delivery. so it's really interesting to see. i think that i saw a poll that said that 60% of spouses right now were encouraging their husbands or their spouse to remain in the military to 20 to get the retirement. so it sounds like by and large military members are fairly happy with how they're being compensated. host: one more call, richlapped, michigan. mish -- richland, michigan. randy on our republican line. caller: what happens when the wars are all over and all the reservists are going back to work? what's going to happen to our unemployment rate? aren't they going to have to go up? host: and we'll leave it there.

if you're an economist or someone who studies figures, you probably understand maps like the one you might see in today's paper looking at -- about job creation in the u.s. report released yesterday saying the job creation was about 290,000. again, this is a chart. if you need help interpreting that, you're in luck, because an economist joins us next to talk about job creations in light of unemployment, in light of over u.s. economic health. we'll have that discussion when we come right back.

>> today retiring supreme court justice john paul stevens on "the justices, life and legacy." "america and the courts" today, 7:00 p.m. eastern on c-span. this weekend on c-span2's "book tv," on "afterwards," 10 years after doing the crime, spending 15 months in prison. her book, "orange is the new black." sunday, new books from first ladies. rosslyn carter looks at how far the treatment of mental health issues has come in the u.s. and laura bush talks about her new memoir with cokie roberts. find the entire weekend's

schedule at booktv.com. and follow us on twitter. >> senate majority whip dick durbin is our guest sunday on c-span's "newsmakers." we'll talk about democratic efforts to pass financial reform legislation and look at the political landscape into the midterm elections, sunday at 10:00 a.m. and 6:00 p.m. eastern. >> this weekend, entrepreneur ted leonsis on his book, "the business of happiness." his documentary about the nanking massacre and what it means to own a professional sports team. >> "washington journal" continues. host: joining us from the economist's view, economics editor. as far as the numbers of jobs created, that's one thing what types of jobs were created? guest: it was across the board. one of the most encouraging things about the report we got was that you saw increases in

government, also increases in manufacturing, which has been hard hit for a number of years, construction where employment has been declining almost nonstop. those rose as well. you had hiring and temporary service agencies, which is a good leading indicator because companies usually hire temps before they hire permanent employees. so that was a very encouraging sign across the board hiring. host: and if you take with a assistance from the federal government to help businesses and certain types of, you know, industry, would those numbers still show a consistent amount of job creation being done aside from federal health? >> we don't actually know. the way the federal fiscal stimulus that came out a year ago works is that large sum of money went into taxpayers' pockets and form of tax withholding and refunds. they spend that money. it's a good bet that some of that will show up in jobs and stores. but you can't directly link the jobs created to the money spent. we do know that at the state and local government level, employment continues to be very weak to decline so that suggests

that whatever money they have gotten through the stimulus plan has not been enough to offset the other belt tightening. but it's a good question. we don't know whether this employment growth can continue once the stimulus runs out later this year. host: is it easy to assume that because we saw an incrrase this time around, will there be an increase in the months ahead? >> we have been through periods of strong growth and then things petered out. so you have to look at what's happening and other indicators of the economy. ask the question, is in a one-shot wonder or the sign of more positive things to happen? we've seen things like factory orders and durable goods and export demand, all holding in relatively well. it's true sales of cars seemed to tail off a bit, but that may be a volatile thing. again, mentioning the job gains. that suggests we have something durable going on. host: is there any indication from the numbers yesterday about wages? are they improving?

groip unfortunately that was a negative spot. wages barely rose. they're barely growing over 2%. given that the unemployment rate is still stuck at afternoon 10% -- around 10%, there's a lot of competition for the jobs out there and people who have jobs are grateful to have the jobs and are not putting up a big fight for big raises. host: greg ip will be with us for about 45 minutes if you want to ask questions about the economy, unemployment, jobs, and other factors of the economy. host: you can also e-mail or twitter us. how does it work that you can get an increase in jobs but you could still get an increase in unemployment? guest: there are two reasons. first reasons -- our job report is two reports. one of them, the government asks

employers how many people did you hire? and they told us they thierd 290,000 -- told us they hired 290,000 people. they asked how many have jobs. over 500,000 more people had jobs. those two numbers will differ. we know that when you sample people, you can sometimes get the numbers wrong. the other reason there's a difference is that in the household survey, we ask people who weren't looking for work but are now look for work. we discovered a number of people who were not looking for work but now are increased extra malticly. -- dramatically. it's not a sign of the economy getting worse. if anything, it's a sign things are getting better because people who are too discouraged to look for work are now looking. host: so they're out there applying for jobs. guest: that's right. they're going through the ads, looking at craigz list, monster.com. these are people who might have gone back to graduate school or stayed home and helped their parents. or they're people who may have been laid off a year ago and gave up because there were no

jobs in town to look for. host: the president yesterday addressed the numbers. here's a little bit of what he had to say. we'll get your response. >> productivity is up. the hours people are working are up. both are signs a company may be hiring more workers in the months to come. we saw the largest increase in manufacturing employment since 1998. and we can see the benefits of our recovery act in the strong employment reports from construction and other sectors where we've made key investments in creating and saving jobs. of course, there are limits to what the government can do. a true engine of job growth in this country will be the private sector. that's why we are very pleased to seat strong employment growth on the -- see the strong employment growth on the private sector side. what the government can do is help create the conditions for companies to hire again. what it can do is build the infrastructure and offer the incentive that will allow small businesses to add workers, that will help entrepreneurs take a

chance on an idea, that will lead manufacturers to set up shop not overseas but rear in the united states of america. host: a couple things. productivity being up. could you expand on that? guest: basically how many wages per worker can the company make? one of the striking things we saw during the first session is that even when companies were seeing their output decline, they were cutting their workers and their hours even more so what that meant was that the amount of stuff they were getting for work was actually going up, which is not something we typically see happen during a recession. what we think happened what's that employers were so desperate to get their costs down that they became much more vigorous about cutting jobs and not hiring than they typically are. this may be for example, because of the financial crisis. so even though rising productivity is normally a good thing, it's basically why -- this is not necessarily something we were happy to see

during the recession because it meant people were losing their jobs. so what we think may now be happening, that as business comes back and employers are confident they can get the money they need to operate the businesses, they'll start hiring people back. essentially what was happening, they were pushing people, their existing work forces, passed their normal capacity, people running faster to the elevators, people you putting in june paid overtime and so on with things turning around, maybe they'll start filling the positions left vacant for a while if that's true, we might see productivity go down, which is normally something you don't want to see but this time may be a good sign. host: he said they were creating the environment and used the word create and saving jobs. this goes back to the stimulus. is there evidence of that? guest: you'll never be able to directly link the jobs created to the stimulus program with some narrow exceptions where the federal government hires those people. so all you can do is sort of say, well, what has the relationship been between this kind of tax cut? or this kind of spending in the past? just assume that that relationship more or less still

holds true. and people like the congressional budget office and private forecasting have addressed this question, things that have probably created at least 700,000 jobs, maybe two million jobs. so the president is essentially right that in all likelihood unemployment is lower than it otherwise would have been but it's difficult to prove. host: economic figures are one thing. what is the public sentiment? guest: it's still pretty low. most people still think we're in a bad recession. most people think things are going to get worse before they get better. but the margins by which they feel that are not as severe as a year or two ago. if you look at the political implications of this, definitely the mood in the boardrooms is getting a little bit better. well, it was at least until the problem in the market sort of sent the stock market down sharply. but when people go to the polls this fall, in the mid-terms, they're going to ask how they feel. and there's still going to be a lot of grumpiness about how high unemployment is if we can continue this pace of job creation, we should see the

unemployment rate move down. not in a rapid rate but to move down by the end of the year. guest: this is the cover story dealing with what's been going on as far as oil and america's energy policy and stories related to the economy as well. our guest is the economic editor for this publication. here to take your calls on this topic. riverside, ohio. and on our democrats line, you're on with greg ip. go ahead. caller: hi. i'm visiting my parents right down the street from g.m. it's in the northern part of the dateon, owe -- dayton, ohio. and the parking lot is empty, of course, because most of the automobile workers have been laid off. so the parking lott-- i think there were 3,000 people who had work there had prior, when things were in working condition. so what is happening? like our governor strickland and we hear president obama talking about alternative energy, and manufacturing jobs stay, for

instance in the parts of solar cells and wind technology. so i'm wondering what kind of jobs we've seen increased in that area, what kind of pay increases of jobs that have increased? and also i have a request of c-span. there is some topics you guys don't touch. i wish you would invite profession i can'tor kohl on to talk about iran. i wish you would do more shows about is the israeli-palestinian still in conflict? and why no one has been held account questionable for the prewar intelligence. thank you. guest: the caller mentioned general motors. of course, general meters went through bankruptcy as did chrysler and were allowed to re-open with a lifeline from the government. one of the conditions was they had to basically shrink themselves to the capacity they had for making cars much better aligned with the demand for those cars that was out there and from general motors' management, we've heard some good signs that they're general

rating cash, that they're seeing sales go up. i wouldn't expect those parking lots at the g.m. plant to start filling up again anytime soon. we're only now creeping back from extremely low levels. and the underlying level of demand in cars in this country is still a quarter to a third lower than it was before the recession set in. and so, yes, g.m. might be doing ok now, but that's in a much more shrunken version of itself. now, g.m. and chrysler was never the central part of the administration's job creation program. they're just too small. as i said, they end up with fewer jobs than they did when they started out. the main ideal is basically a combination of rescuing the financial system so that banks could lend and stimulating overall spending through the stimulus program so that people would go out and spend stuff. and that would create demand. the jobs that we have -- first of all, we've only started creating jobs in the last three, four months so it's premature to talk about what jobs are we creating. such as there has been

employment gains in the last year or so it's been predominantly in health and education p and, in fact -- education. and in fact, most people believe those are going to be the dominant new jobs, reflecting the age of population and our increased demand for medical services. i am optimistic that manufacturing, which has been shrinking for decades now -- in fact, the number of manufacturing jobs is the lowest it's been in decades. i don't expect that to come back rapidly, partly because every year manufacturing is getting more productive so they can make the same number of cars and so forth with fewer workers. but i do expect it to stabilize. partly because the last few decades the american economy is way too dependent on consumers. building houses, selling cars, credit cards. and we have been consuming way more than we produce which is why we have such a large trade deficit. believe that's going to turn around. now that the financial system is so much tougher to get credit out of, consumers won't be spending as much. and the rest of the world, not so much europe, of course, but

countries like china and brazil are growing quite rapidly. and the dollars -- that will be good for our exports. host: you touched on it, but maybe expand on it from -- somebody off twitter says, can small business make a dent in unemployment or the balance of trade deficit? and the second part, what industries should we rely on to do the job? guest: that's a great question. in fact, the treasury department recently analyzed data, discovered that small businesses have actually been hiring at a much lower rate than medium and large-sized businesses and even lower than they typically would at this stage of the cycle. one of the theories behind that is that, first of all, these companies didn't have lower skilled workers. so they tend to let those workers go more quickly because they're more competent in being able to replace them. the other thing is that small businesses don't have access to the corporate bond market, or the stock market. they need to raise capital. they rely on their banks. the banks have been very cautious about who they lend to. they've been husbanding cash

because their capital has been depleted by the loss in real estate. we haven't seen signs of that turning around now. but the administration would like to loosen up the small business lending to a $30 billion program that they're going to finance through the troubled asset relief program. going forward, if i'm right that the u.s. is going have to spend more on exports, well, what do we do well that we export at? well, first of all, we export high value added stuff. for example, intel is doing gangbusters right now. they're hiring people back at some of their fabrication plants in places like oregon and new mexico and arizona. ..

a if we continue with that. the good news is it's been mostly talk so far. it's not been sort of really damaging action. and the world trade organization exists to make sure that if there are any

disputes that they get resolved in a legal fashion as opposed to degenerating into a trade war. host: go ahead. caller: yes. first, i have two comments and a question. the first thing, i don't think that protectionism is actually bad. i know most economists say that but it worked for abraham lincoln. but secondly, the problem that we have today is systemic and is the fact that we have a very private central bank and the fact that we borrow money from them, which is our money, which once again abraham lincoln had a way better idea. then the third thing, going back to a debt-free money system, and increasing the reserve requirements of banks to 100% instead of the current 10% would

catch up when it comes to paying for things as our wages stay the same and yet prices keep rising. guest: well, i don't agree with the caller that protectionism works. it's true that in the early history of our country we would keep out manufacturing products. the consequence is that people who consumed those products like farmers paid more than they had to and that wasn't good for them. even if you could argue that would accelerate our industrial development, the united states is the most advanced, not withstanding the rapid progress made by other countries. and if we were to enact that now, our trading partners are not just going to sit there and take it. they're going to retaliate. so any time you advocate for protectionist policies, you have to realize there is an action and reaction. the fact that the federal

reserve stepped out of its normal job of just raising and lowering interest rates and lending money, bailing out groups, and creating all sorts of loan programs in the last year they purchased $1 trillion worth of mortgage-backed securities all with the aim of getting lending going again. by absolutely this is not something we want the fed doing normally. it's politicizing them. it risks creating inflation. the money that they printed to do that lending is not taken out of the system. but in the deptteds of the crisis when the private sector and the banks were completely shutting down and lending to nobody, we needed the fed to do that job. as to the point would society be better off with no debt? i'm certainly going to argue that we didn't overdose on debt in the last decade. we had people buying houses they couldn't afford. but let's not go overboard here. debt has a lot of uses as well. there's a lot of new, growing

companies that don't have enough money to get started. it's valuable that they can go out and borrow and share in that risk and maybe enjoy some of that reward. if we were a country with no mortgage market, you would have to wait until you're 60 years old to buy a house. you can buy a house when your family is young now. so i think the point is to get the balance right. host: off of twitter. i think he is frying to make a correlation -- trying to make a correlation. guest: it's like ritalin. if you do too much, a seizure will follow. so i think that when obama used the fiscal stimulus program to get the economy going, it was very well timed and about the very well timed and about the rise side. our debt levels at the time were not excessive and the federal reserve had done all it

could do. but the fact of the matter is a certain point comes when you borrow more money, even for noble purposes, the lenders are going to ask can you pay that money back. and greece has concluded no you cannot pay that money back. and what you have seen is interest rates sky rocketing to 20%. can that happen to the united states? it would be foolish to say that could not happen. i don't think it will happen any time soon. the united states is a very strong, diverse economy. we have a long history of repaying our debt. greece spent a lot in the last two centuries in default. but no question, we need to take our lesson from what happened to greece. we have a structural debt that will still be there even once we're out of recession. and we need something, we need to accept some pain, either higher taxes or lower spending or a combination of both to

make sure we don't one day become greece. >> host: how much more asassistance including from the u.s. will they need? guest: it's getting dicey in umplete they've made a lot of umplete they've made a lot of mits takes. the main mistake they've made is when there's a panic you have to reassure the market that you'll go in with overwhelming force. and however much money you need, you'll provide that and then some to make sure there's no doubt about greece to e able to pay that back. instead, you saw argument. you saw germany quarreling with france or other countries. and that tends to undermine investorrconfidence. they have now put up enough money to ensure that greece can get whatever it needs in the next two or three years. the risk now is that having seen kind of the faintness of courage in europe, investors are questioning whether the same thing could happen to portugal or italy or spain, and

now you're seeing their rates tart start to rise. today in europe there was a summit of the major european leaders where they said they were going to create a permanent mechanism to assist countries in trouble. maybe that's finally the step that will relieve the panic. that will relieve the panic. if that doesn't work, it may go to the central bank to buy the bonds. that's very risky. host: virginia. thanks for waiting, republican line. caller: good morning. i would like mr. ip to please make a note of a blog activity 777.com. it has a letter from president obama to me related to the economy. i don't understand why we keep trying to fix something that keeps breaking. there are alternate yivers on the blog i discuss a global incentive economy that requires absolutely no risk for businesses, it's a strategic, intelligent enhancement to create jobs and opportunities. and also, we haven't even

scratched the surface of cyber space. that's what this is all relate to. and when we learn how to think more creatively, interact with existing technologies and with each other in caring, sharing ways, we'll get this country back obtrack very quickly. and i also would like to know if he ever heard of the venous project. he talked about about the nonmonetary based economy. guest: i've never heard of the veenuss project. and i will check out the blog the caller referred me to. i don't know about a world with no risk for business. createive destruction for entrepreneurs get a crazy idea, get money and do it and then you have an i-pod or invent velcro. i think what the president and his administration have tried to do is to put enough confidence back in the financial system so that it can do what it was originally designed to do, which is basically to channel money from the savers who have capital to the investors who need capital.

that's the job of a financial system. there's no country that has gotten rich without that kind of a banking system. the good news is it seems to be working. we've seen interest rates that investors demand to lend companies come down quite dramatically. we saw in the last week or two survey evidence that for the first time banks are starting to loosen lending standards. it's still very, very tight. it's still very, very tight. it's still difficult for persons to get credit than it was three years ago. and that's going to be a major head wind for the economy for some years to come. host: indiana, thanks for waiting, go ahead george on our democrat line. caller: yes. this is just a few random thoughts off the top of my thoughts off the top of my head. and i want you to comment on this. number one, i do not believe that small businesses are the engine of the economy creating jobs and workers are pitted against shareholders.

commercial real estate gravitate to only a fuge folks can hold. what you've seen is one big huge corporate chain after another after another everywhere and they can control all the public infrastructure because they can pay the immense rents. now, with workers, which most businesses are still applying frederick taylor's style management jever where you go. and when workers managers who have hands on they try to apply skills, desm territory, working with other people, communicative skills. but you still see people from corporate offices trying to micromanage down to every minutia taking all discretion and problem solving away from people and discouraging people from applying madge gnat nation. i -- imagination. i think that's hurting ouu people. number two, we have product tivity wage gaps. we have highly productive workers working hard every day,

but it's not matched by worker wage gain because people are not paid on product tivity basis. they are paid on a replaceability basis, based on how easily they can be replaced as opposed to how much quality or quantity goods. and one last thing, i would love to see robby balker, trade economist from southern methodist university get on this program one time and talk about some of these issues about extteme wealth concentration. share holders get more when workers get less. guest: let's see, corporate executives discouraging creativity. i see that in dill bert all the time so we're not talking about a new phenomenon. if you look at the data, you see that the numbers of jobs that are accounted for by small businesses, large businesses, has actually been stable over time, with the exception of the last year, where small businesses do seem to be having a lot of trouble creating jobs.

and there are a number of steps under way to try to relieve sooe of that pressure. the caller is absolutely right that there's been a big divergeance between product tivity and wages, and there's many reasons for this. one is that workers are increasingly getting a lot of their compensation in the form of benefits, and that go to the well known health care inflation. another reason that's been a another reason that's been a bifeication in terms of skill level where the highest wages seem to fw going to the highest education or creativity. that's because outsourcing has hollowed out demand for people in the middle. in the middle. that's a problem we don't have an obvious solution for. and the final reason is that, yes, there was a lot of concentration of wealth in people at the top. especially in the financial arena. now, i can guarantee you that those people are a little less wealthy than a couple years ago. so that might have been taken care of. but this problem of concentration of income at the

top has not been fixed and it's going to require an effort to improve the education and training standards both at community college level, high school level, and people who are returning to work after being laid off. being laid off. host: the chart in the latest issue of the economist. this shows the changes in real hourly earnings by education level. this is from 1979 to 2007 and it charts males and females going, and showing increases with some college, college graduate, and a post graduate education. what does it mean though, is folks, people are getting degrees. what are their prospects? guest: well, the prospect for everybody is pretty rotten right now. tun employment rate is 10%. but there's no question that those who have the degrees get at least fewer job rejections than people without degrees. what we have seen in the last 20 years, is that even jobs that used to be guaranteed,

degrees that were guaranteed, like computer programming have been hollowed out partly because anything that you could sort of outsource to another country or train a computer to do because there's a discreet number of steps, it's very hard now to pay a human being a lot of money to do that. where as a person, an analyst, a film maker who uses that technology to create a product that no computer can do, they've actually done very well. i mean, i like to use avatar as an example. this involved a combination of creativity and imagination and technology that only hollywood can do. eevep though we've seen studios in places like south south korea and india up their name in action movies, only the united states can still make a movie like avatar. but the gains from the ticket sales get primarily concentrated among a few lucky people at the top, james cameron and the actors. the guys who put the movies

together, build the sets, they're just not doing as well. so that's kind of the way the american economy is going. i don't think anybody has an obvious answer how to fix this. host: chicago is next. steve on our independent line. caller: hi, c-span. i just had a couple of quick comments. i'm speaking on protectionism. i believe that it's not so much an idea about just fair trade agreements. china, they practice protectionism against us, only so many products that they allow to come in their country from the u.s. but we on the other hand, everything in wal-mart is from china. so that being said, i think that's a big issue. and the way that they're giving jobs to individuals now is not based on merit any more, it's based on who you know and what type of relationships you have with hr or the hiring managers. and i believe that's hurting businesses also, because you're not getting the best people in there to work. you're just getting cousins and

unchingsles and brothers and sisters. and that happens on the public, in the public sector as well as the private sector, especially in government. thanks. host: guest: well, he is absolutely right. we have a trade deficit with china. and this has been a source of frustration for years now. china artificially holds their trade rate low, which makes trade rate low, which makes their exports cheaper and our imports more expensive. and this has been something the administration has been trying to get the chinese to change. recently it looks like we've had positive signals. and the united states is on the verge of putting out a report from the treasury department that basically says, hey, you're manipulating your currency. they pulled back and said we're going to give them a little more time. the other reason that china as a country saved a lot and consumes very little. when you have that happening, the savings had to go

somewhere. and they have a trade surplus. and we as a country consume too much and don't have enough. so that shows up in the i form of a trade deficit. it's going to take some strong cultural thinking to change that around. there is a lot of chinese protectionism. and last of all, china made a lot of american companies angry that said any government technology contract has to be procured from indidgenuss innovation, which shut out a lot of american high-tech companies. and the administration has been working with the chinese to knock that back down. and china is not helping sevts by going around passing these kinds of laws. it's just inflaming a lot of anger already there over like the exchange rate. the exchange rate. and i think we'll see the chinese trying to walk back from some of those steps. host: one of the thing that came out of the debt commission meeting was the idea of a value-added tax. could you explain as far as i

guess your sense of the seriousness, if there is such a seriousness to put this into place and what this would mean? guest: a value added tax is sort of the metric system, one of the things that the rest of the word thinks is a great idea but we do not. it's like a sales tax except it's charged at every level of the production process. if i'm a baker and i make bred, i pay 5 cents to the flour company. then when i sell the bread i collect 25 cents. i send the difference of the 20 to the government and the other 5 i get a rebate for. there's some reasons to have a value add tax. we tax income too much and we don't tax consumption too much so small wonder then that the country as a whole consumes too much. the reason people are a -- so you hear a lot of people saying, well, we've got a serious deficit problem. everybody know that is it won't be spending cuts. some taxes will have to rise. let's address this anomaly and

introduce the value added tax. what some people worry is that it becomes a cash cow. once you put in a 10% value added tax, some future government will say letts make it 11%, let's make it 12%. and we'll accome date a lot more wasteful spending. will that happen? it's hard to say. i'm not a big fan. i think there's other steps. one would be raising the gasoline tax, which is probably too low. host: minneapolis, good morning. tracy on our republican line. caller: hey, good morning. i have a question. how long does it take before like say people are released from prison to get on -- are they considered unemployed? or, and disabled people coming back from the military? are they considered unemployed? or illegal immigrants? i just don't believe those numbers that the government is giving. i believe it's worse than what they're saying. that's all.

guest: for the government to consider you unemployed, you have to be available for work and to have looked for work sometime in the last four weeks and in the period when they come around and request you the question. and it comes to around 10% of the labor force. but there are some people, for example, who aren't working who were looking for work but have stopped because they've been looking for a year now and there's just no jobs available. those are what we call discouraged workers. there is people who have part-time jobs but would rather be working full time. when you add in all these other people, you come up with an unemployment rate of 17%. if you were in prison but now looking for a job, you would be counted as unemployment. if you're in the military, and now looking for a job. people still in prison or in the still in the the military would not be considered unemployment. host: this is from twitter. guest: well, we borrowed it.

you know, i was saying earlier that we run these large trade deficits. how do we pay for that that we didn't make? we borrow the money. so when china would send us that stuff we would give them bonds or something like that. and that money essentially was ways of financing all our construction and loans and so forth. it was channeled through the banking system. well, now that the banks have discord that it wasn't a good idea to people who couldn't afford those monster homes, there's a lot less going on. and our trade deficit has narrowed quite a bit. so we are borrowing quite a bit less than we were from overseas. caller: i was just wanting to know if they're going to give another extension. host: to what? caller: to unemployment. guest: i believe the senate just passed an extension to unemployment benefits. host: do you have a follow-up? dallas, texas. independent line. go ahead.

caller: three quick questions. what's your background? are you an economist? are you an economist? and if so,,where along the speck frum would you consider yourds falling ideologically. second, what could be done realistically to get economic development and job growth in inner city areas in the short term and interimmediate term? and then finally, do you think -- well, i guess if i could -- the last one. i happen to sit on the board of the county workforce development board here in dallas, and one of the things we're seeing is with what the job growth going to come is small and medium-sized business. what needs to happen to really stimulate that? thank you. guest: i have a degree in economics and journalism. as to the ideology, my magazine, the economist would be considered libertarian. generally we prefer less government, less regulation. but we're not inflexible.

we endorsed president obama, we supported his fiscal stimulus plan. and we also believed that financial reform is necessary to prevent another financial crisis. as to the problem of job creation, it's a very serious problem in the inner city. it's not new but it got worse, as it got worse everywhere. the best way to create jobs there is through steps that the administration has taken, through stimulus, and state and local governments who can do things like repairing, renovating schools, weather rising buildings and so forth. in the long term this goes back to what we were talking about a second ago. we have seen a hollowing out of the market for people who have only limited education and skills. what you have in the inner cities is a very troubling level of people not completing high school or not completing college. and one of the most important things we can do in the long run is to take the training and educate the steps necessary to ensure that once people enter schools or college that they fineish. so they have a better chance of

getting a good-paying job. host: what's wall street going to be like? guest: what you're going to see is less leverage. i mean for every dollar, they'll have fewer loans. they're going to be less complicated and complex. no more of these toxic, collateralized synthetic thing a ma jigs. you're going to see fewer products for consumers. we're going to have a tough cop on the consumer products beat on the consumer products beat that's going to raise a lot of questions and a lot of banks are going to say it's not worth the trouble. so there will be fewer people who had car repo loans or low credit scores getting loans. i'm not sure that's a bad thing. this country as a whole has to learn to save more and borrow less. you're also, i think, going to see almost a la gopization of our financialization. we're not going to let banks to get larger.

the ones who are large have a built-in advantages. and when we say no big bank can fail in a disorderly way that damaging the economy, lenders are going to say i can lend to that bank safely because the government will bail me out. that lends ab advantage to those who are already big. host: is there a parallel between all those types of new regulation and the freing up of lending of capital that you have talked about earlier that you're starting to see but maybe not in the degree it was? guest: it's funny. you're almost seing the government pressing on the brake and accelerator at the same time. they're passing all these rules, whether it's the credit card act, whether it's new regulations the senate is now debating. all these will have the net effect of tightening credit. credit got too loose in the years up to the crisis. but what we have seen is that the pendulum has swung to the opposite direction where nobody can get credit now. that's a slight exaggeration. and so you have banks saying,

what do you want me to do? you're telling me to lend more but to lend less or be more careful. it's kind of a mixed message. it's kind of a mixed message. host: two more calls. lexington, kentucky. carolyn, democrat's line. caller: good morning. i'd like to ask you the different topic today on money market or something. and the gentleman was saying that we are -- we're facing a -- the financial institutions -- the financial institutions are facing a collateral recession versus the past recessions of liquidity. he said collateral recessions, we've never experienced before, and this will take longer to recover. and my second question is,

president obama is trying to spur innovation with energy, with the cap and trade. and maybe not at this moment would be a good time to, like, policies for it. but i could see if he implemented something like that where the brains out there would really get to stirring and create manufacturing jobs. and i'd like to know what you think about that. and i'll take my answer off line. thanks. guest: the call ser right. i mean, one of the reasons this recession has been so severe and the recovery to weak is because the value of homes and stocks and all the other thing that is people use as collateral have been devasted. and that's one of the reason that is we anticipate that the

recovery will be weak as compared to other recessions. as to spurring innovation, the president unveiled a lot of tax credits and grants trying to ssur green energy and the like. i'm not surwe've seen a lot of results so far. we haven't got a cap and trade bill yet. there's one being talked about in the senate. the house has passed one. it is a conversation perhaps throwing so much uncertainty over the future of energy is perhaps discouraging businesses perhaps discouraging businesses from making investments now. but i'm not sure what the answer is. climate change is a reality now. and if we don't fix it now, we're asking for a bigger clamty in the future. the sooner, the better, and then entrepreneurs and innovators can look at what the market is like for the types of technologies they have in mind. scombloo next call, new jersey, on our republican line.

caller: thank you for taking my call. the reason i'm calling is regard to the figure 9.9 versus 17 unemployment, because that figure comes up at times. and it seems to give the real picture. also, a view of the fact that the press down here said that there was a difference between the figures coming from the white house. jobs creations down here. and later on it was found out the labor statistic showed a different figure and the gap was 60,000. there was a difference between white house and the actual labor figures. so people are doubtful about figures. so i appreciate your response. guest: i don't know specifically what the gap is that he is referring to. the administration early on in its tenure did forecast that with their stimulus program they'd be able to keep the unemployment to 8%, and as we know it went up to 10%. some have said that's evidence that the stimulus didn't work. i think it's more evidence that the economy was weaker than

they anticipated. and without the stimulus it would be even higher than 10%. host: greg ip writes for the economist. if you want to check out his work and others on the economist, it is tied to our c-span website where you can check out their contebt as well. thank you for your time. guest: thank you. host: the intersection of the "wall street journal" has a story about senator robert bennett this morning talking about political fight for his life, so to speak. joining us to give more context to what's going on in utah today concerning the senator is robert gerkive with the stimulate tribune. their political reporter. mr. bennett, senator bennett goes up a challenge today. what is that challenge? guest: well, it's kind of a challenge on two fronts. on one hand, he's got seven conservative opponents who are

all gunning for him. he is also facing sort of a tidal waive of opposition and outrage i guess from sort of the tea party movement, the 912 movement, sort of this anti washington fervor that is probably also showing up in other reelections around the country but is particularly strong here in utah this year. host: talk about the political process that takes place today in utah and how is it different than other states? guest: we've got kind of a unique process here. we have sort of a two-tiered system. we have our convention today, and basically 3500 delegates. and these delegates will come today and if one of -- if any one of the candidates can get up to 60% through a series of ballotting, then that candidate will get the nomination. if nobody gets 60%, then the to

if nobody gets 60%, then the to two candsgates -- candidates go to the primary in june. so what it does is it puts a lot of power in the hands of these dell -- delegates, and they could ultimately be the ones make the decision on who ones make the decision on who is going to end up on the ballot in november. and because you have such a republican state, the winner of the republican nomination is typically the one who is going to be elected senator in november. host: so as far as challengers are concerned, who is the are concerned, who is the strongest among them, and why is that person such a challenge to senator bennett? guest: well, the strongest among them right now is an attorney named mike lee, son of former reagan solicitor rex lee. he is a constitutional lawyer. he has interned for justice sam alito. and represented -- worked on a

number of constitutional cases. his strength is kind of two-fold. he has mounted a pretty substantial challenge, pinning his campaign to restoring the government to the constitutional bounds, which is resonating with delegates because they're worried about the spending and the debt and the spending and the debt and the deficit. and he in his own right is a pretty solid candidate. he is smart. he is good on the stump. he has been able to articulate a case for ousting an 18-year incumbent. host: as far as senator bennett is concerned, if i were a conservative in utah and i did want him back for another term, what would be my main criticisms of him? guest: if you wanted him back? host: if i wanted him out, what would be my main criticism. guest: well, there's two key

votes i guess that are the most at the forefront. the first is he voted for the tarp, the first bailout package during the bush administration and as a senior member on the banking committee he was actually involved in some of the negotiations on getting that worked out. and philosophically, that's something that the delegates, conservative republicans in the state can't stomach. they don't want the government mezzing in businesses. so he has been sort of labeled bailout bob. the other one is he co sponsored a health reform bill sponsored a health reform bill with senator widen that never actually passed but it included some things that they weren't happy with, particularly individual mandates, which again philosophically the conservative republicans don't feel that's constitutional and he's been hammered on that by he's been hammered on that by his opponents.

and they just don't feel that the government needs to be telling people to buy a product. host: the papers talk about how the senator has been talking to a lot of people this week in order to way voters to him. is there polling that suggests that's taking place? where duh f does he stand? guest: it looks like it's going to be pretty dicey for him today torks be honest. earlier polls had him at 16%, but he has got to get up to 40 to even survive to a primary. right now it's a three-way race . so mike lee will probably emerge as the leader at least, a question today i guess is can he get the 60% he needs to cinch the nomination today. or is senator bennett or tim

bridge water going to force him to a june primary. it's looking, bennett has been pretty aggressive in the last week or two, but it's looking like he may not make it out of the convention today. and it would be the first time in seven dickades in the state that -- decades that a sitting senator hasn't been able to clinch the nomination. host: give us a tick tock so to speak of the process. guest: sure. well, each of the candidates will speak this morning starting at about 10:00, so they'll do their first round of ballotting. and again there's eight candidates on the first ballot. many of them are -- have very small support. so they'll do the first round of ballotting. and that will narrow the field to the top three that will advance to a second round. and then they'll vote again. the top two will go to a third round later this afternoon,

probably around 3:00 there should be a third round of blats. -- ballots. and the top candidates gets the 60%, he'll be the nominee. and if he doesn't, we'll head to a primary. host: utah politics is where you can find the work of mr. geherke. thank you. guest: thank you. host: and don't forget that you can watch part of that campaign coverage. that will be tonight at 8:00 right here on c-span. you can also go to c-span.org to find out the latest on that as well. joining us now, from the home star coalition, their

representative. this week there was passage of something called cash for caufers. what is that? guest: the home star bill. people call it that because what it is is a market-based incentive that gist a direct payment for folks who want to remodel their homes for energy efficiency. it's a very smart low bureaucracy program that puts money directly into the market so that we can jump start the tremendously hard hit construction industry right now. it's the kind of stream lined market-driven incentive for consumers to stimulate demand that we really need in the market right now at a time when housing and construction have been tremendously hard hit. host: what types of jobs are we talking under this program? guest: it's a rebate that would go for doing anything that would save energy on your home and drive down your energy build. so it's things like insulating your attic with appropriate proper air ceiling or swapping

out an inefficient hot water heart or vent lating system. and this will put money into the hands of local contractors on the ground in communities. i'm a senior fellow at the center for american progress and we put out a paper called the toolbelt recession. it's as bad as things are with this slow and fairly jobless recovery, it's really a depression level of unemployment in the construction industry. 25%. in some states they've seen asa drop of as much as over 40% of the construction workers employed at the height of the housing boom until today. this is over a million construction workers sitting on the slines. banks aren't lending. we need something that will add real value, increasing the vamu of homes, cutting consumers on the bills, help them save money and help them stay in the home. and home star is just the ticket to do that and to put people back to work where it really is adding moonfully to

the economy. host: you had talked about it but under this there are two levels. guest: the bill is very we crafted to build the kinds of energy efficiency market that we need over the long term. it has something called the silver star track, which we imagine will be the most common way for people to start to use the program. you get a rebate for buying a single thing, for swapping out an inefficient hot water heater or replacing leaky windows. and those will range from $250 for a couple doors up to 1500 for atic insulation and air ceiling. and that caps at $3,000 per homeowner. but there's also something called the gold star track which we think is incredibly important. the gold star track, instead of buying a particular thing, it actually invests in the kind of energy efficiency industry that we need over the long term. you start by doing a home energy audit and they list all

the thing that is would save energy in your home. and every home is different. some people don't have a basement but they need to creel their crawl space. some people have old windows. but every home can save money. you start with the energy audit. figure out how you could get a 20% savings. get a $3,000 incentive or roughly about half the cost of the job to get that 20%. and there's an increasing and there's an increasing incentive to go deeper. so you can get up to 40% savings. and as you save energy, that directly translates into savings on your bills. so these are investments that pay for themselves over time. it's not -- it's good for the economy. there's real value there. host: cash for caulkers program. we're talking about it with our guest who serves on the home star coalition. do you want to ask him questions about it? our numbers are on the bottom of your screen.

host: when you talk about these savings, do people take it off savings, do people take it off their taxes? guest: there are some, but this is different. this is a rebate. so it flows directly to consumers and contractors as they do the job. so it cuts about 50% off the cost of the work for an investment that could be a few thousand dollars up to 10,000, $12,000. caps at an $8,000 rebate. and it's a direct rebate. it can flow either to the consumer or the contractor. it's easier if it flows to the contractor and then comes off the cost of the job. so it's 50% less to do this work. we believe that will be a very powerful market incentive to stimulate demand in this near term. mckinsey and company have estimated that there's about

$1.2 trillion of wasted energy annually in the united states, and that's excluding motor vecks. that's electricity in holes and natural gas. -- homes. about less than half the cost, you could actually save that much energy. so it's about a 28% safings across the economy. so these are cost effective investments. you could get a return of 2-1 off of doing this. it makes the economy more efficient. but we need to educate folks and give people a way to get access to the kinds of quality construction and the information that they need to make an educated consumer choice. host: some of the jobs you listed could be done by handi men or women around the home. would they qualify as well? guest: you need to be licensed and insured contractor. so in any community around the country and the state, these are the folks sitting on the sidelines. over a million construction

workers, ventilation and air conditioning contractedors. conditioning contractedors. electricians, all across the construction trade. and over 90% small businesses. so this would absolutely flow to the mom and pop. host: how long is this option open? would there the be a time limit? guest: once the bill goes into effect, it's not yet a law, it's passed through the house of representatives, good movement in the senate. but once it's enacted it would be a year for the silver star track and the gold star would continue on for two years. so the hope is that people would get interested through silver star, start seeing the opportunity to saae money and opportunity to saae money and improve the value of their home and then move into building a very robust, what we call a home performance contracting industry. and again, as you say, these are good construction jobs, they're in communities, and the amazing thing about energy efficiency is you take those very same dollars that we're very same dollars that we're currently spending on wasted energy and instead spend it on a skilled construction worker in your community or on high

quality advanced manufactured products. and very interestingly, at the center for american progress we looked at the composition of the industries that are doing the manufacturing, the duct work, the water heaters, and plfering insulation, and these jobs are well over 90% american made. it doesn't make sense to manufacture fiber glass insulation and ship it from china. you're filling a tanker with air. people like to manufacture these products closes to the market. so we are certain that the $6 billion that will flow into communities and good construction and manufacturing jobs. it's exactly the sort of medicine we need to come out of this recovery. host: roseland, new jersey up first. go ahead. caller: good morning. my question really is about creating construction jobs. and i want to know what you think about my experience in new york has been that the zoning allows for tax

abatements. and in new jersey, it has to go through city councils where they have not approved, from my experience. i want to hear what you have to say about that. guest: you bring up a very important point. so many of these things are dependent on the policy. this is a market-based approach. it's putting money into the market, into the hands of home owners and contractors to voluntarily enter into this incentive. but the decisions that people make about energy efficiency are very, very dependent on are very, very dependent on state policies, on building codes, on energy efficiency standards and manufacturing. there's many, many ways where policy really does have an impact. what home star does is it starts to make it cheap tore do this in er community in a number of states, as the caller mentioned new york state. mentioned new york state. they've got some of the best energy efficiency programs in the country. there's a really aggressive statewide commitment and as a result they have very good energy use per capita. and lower energy bills for home

owners. but it absolutely does vary state by state. so as we were putting together home start star and working with champions on the hill to do this, we wanted to design an incentive that would work in a state where you had the absolute best energy. and in a state that had virtuely no infrastructure at all. that's why we have to do thing that is folks know how to do very well and then to build this industry that is fairly robust in some states like new york, texas, california. there's a number of states around the country that have very good energy efficiency programs, but that's uneven. host: off of twitter. guest: that's a good point. you want this to be responsive to the market. you don't want to stimulate you don't want to stimulate investment and things that aren't adding value to the economy. the situation with contractors is they're the ones who were adding real value all the way through the incredible market

collapse, this global economic collapse that was led with the collapse in finance for housing. but it wasn't the home owners or the builders who caused that decline. it was the financial speculators who were gaming the system. creating very elaborate financial products that were adding very little real value to the economy. home star, interestingly, is the exact opposite. it's an investment directly into buildings, into improved construction, improved home performance and value. it's going to save about $10 billion for home owners over the next decade. that's very, very significant savings. host: pennsylvania. conrad on our independent line. go ahead. caller: good morning. you're a long-time coming. the construction industry, the remodeling industry is certainly in very, very bad condition. i belong to a magazine

professional remodelers, and it looks like a post card. the thickness of it. my question for you this morning is solar energy going to be a competitive area for a contractor to get into? the government's got a program for windows and insulation, which is very competitive and i'm calling actually to see about the solar energy at this point because it looks like it has a good opportunity to start here in the pennsylvania area. we're just outside of philadelphia. and i've been in the building business since 1979 and it's bad. you know? it's really in a bad situation here. i'm also a realtor. so, you know, the program, the tax program works but unless that gets reinstated i think it's going to start to fail again. but if you would, comment on the solar energy. guest: i'm happy to talk about

that. and i think conrad raise as very real point. it real sli bad. the pain that people are feeling around the country, it's hard to overstate. 25% unemployment. that's one in four construction workers is out of their job right now today. and that's in every community. and that's in every community. and economic recovery is driven by as how people feel it in their community. and that's one reason why this was a strongly bipartisan bill. this has been a very divided time on capitol hill and this is something we're able to get strong republican and strong republican and democratic sponsors in both the house and senate and very strong support across the aisle and from business. we had endorsements in the last few days from the national association of manufacturers, the u.s. chamber of commerce, and the national association of home builders. and they actually indicated that they may make this a score card issue as they look to the end of the year. this is a critical key vote for manufacturing. so it's not just the pain in the construction industry. it's also in sales, in

manufacturing, the wood products industry is operating about 50% capacity. that's devastating. and it hits, has a regional impact and a very broad national impact. conrad asked about solar power. and one of the thing that is we tried to do as we look to how to jump start demand for energy efficiency products in the building trades was to look at a range of different products that would have an impact in different communities. we heard from folks in hawaii, for example, they've got a very robust program to install solar hot water hearts. they will qualify under home star along with the most energy efficient natural gas powered water hearts as well. so we tried to go across the different technologies where there's an incentive. and the incentive is tied to technology that's available. you don't want to create demand for something that you can't supply. but you want it to be at the top end because you want to be driving new demand.

you don't want to be throwing government subsidies to things people were going to buy anyway. so we believe that the $6 billion is well targetted. it will drive high penetrations of energy efficiency, new demand for jobs and new technology like solar. solar is a very smart technology in many, many parts of the country. there's really no point in burning natural gas to keep a big tank of water hot when you only use it now and then. if you have a solar hot water if you have a solar hot water heart, there's no fuel cost. there's just the cost of manufacturing and installing. and there's no volatility as natural gas prices fluctuate, as global demand for energy spikes. renewable energy resources will always remain fixed and that's a real asset as we look to the future. so i think conrad in pennsylvania, there's good incentives there. and hopefully this is the kind of growth and demand that you will be able to see as you look to grow your fwizz and get back to work. host: how would you make the

case that these jobs would be sustainable after the program ends? guest: this is one of the most important features of home star. we really take very seriously that this has to grow the market. you know, government programs are good, they're important, they can be very helpful. there's a weatherization assistance program that does very good work for low income folks. but thht's not how we move to a low carbon economy. if we want the whole economy to operate on clean energy and reduce our carbon footprint, it has to become part of the daily way that we do business. and that means it has to be driven by contractors, driven in the market and home owners have to be choosing it. so there was an unprecedented investment in energy efficiency in the recovery act. it was historic, the commitment that president obama and his administration and the congress made for energy efficiency. and that really jump started demand, and there's an historic level of new investment going into it. but we need a way to make sure that as we approach the end of

the recovery act that the market is taking over. and home star very well designed. it will drive consumer education, technologies down the cost curve as it creates demand. and as people become aware, the incentive will fade out first after one year, the silver star goes away, after two years the goes away, after two years the gold star goes away. but we believe that by retro fitting 3 million homes over that 2 two-year period, we will get very significant levels of consumer awareness in every community of the united states and will help train and certify those contractors so they can do this work and become a core part of their business. host: pennsylvania next, will ma on our democrat's line caller: good morning, is this a tax credit or the money comes off the bill? guest: that's a very good question. it's not a tax credit because in order for a tax credit to work first you need to owe taxes. and it's a tough time right noww and you don't want to make

businesses dependent on that or home owners dependent on that. and it's a very fast-acting, low bureaucracy direct incentive into the market. the home star coalition believes that it's best if that rebate flows directly to the contractor because it will just be a lot easier to administrator. the homeowner won't be sitting around waiting for a check from the government. they will find a contractor, probably an hvac repair company will advertise in the local sunday circular, they'll decide they want to make this investment, make a phone call. the contractor will come out, figure out the cost of the job and deduct the cost of the incentive. as a contractor chooses to enter into this program, the first thing they'll do is register with something called a rebate aggregator, and it can be a local company, a big-box company, a software company, anybody who has the ability to process checks, manage large

amounts of documentation. we've got to make sure there's no waste or fraud. so there will be some documentation of what the job was and then fale file a very simple maper. a check will be cut to the crackor and within a -- contractor within a short period of days. that's how this will work. a direct payment into the market to stimulate demand and flow into the existing flow into the existing industry. host: from twitter. guest: they're intended for home owners to invest in their principal home. and that is the principal vehicle. the rental properties is critically important piece. you want the savings to be broadly accessible. and i don't have a precise answer on the mechanism through which there will throw to

rental properties. host: republican line. good morning. caller: good morning. i've got a serious question at the end of this but i want to relate to the way i feel about this to what i'm thinking. i've watched general motors being taken over, i have watched various banks being taken over controlled by the government. now they all got money from the federal government. now, if i go out and get something for nothing basically from the government which doesn't exist by the way, but the bottom line is if i put a new fur nass, am i allowing a lean to be put on by the federal government? because i borrowed the money? you see, there's a matter of trust here. i don't trust these people at all. and i mean that's just the way it is. and i don't know too many people that do. as time goes on, i e see less and less people trust the federal government.

so that's my question. i will be happy to listen to your answer. guest: i think it's an important question and the issue of trust is critically important. you're letting someone into your home. the home is the most important investment that most families make in their entire lifetime. so the caller asked a couple very important questions. first of all, is there a lean placed on your home? absolutely not. this is a short-term incentive market. oing directly into the - it's not a new government program. the checks will flow to contractors to do the work that home owners ask for. nobody is going to make you join this program if you don't want it. it's only if you think it's a good deal to reduce the cost of a new furnyass, less leaky windows, more insulation in your attic. if you want to make that investment, this will lower if cost. the federal government will for a short term limited time be driveling down the cost in order to stimulate new demand for the work of contractors to do this. there's absolutely no lein, no

ongoing commitment. there is a small pot of money, it's a good-sized pot of money, about $200 million will flow into financing that can flow through various state programs to lower the cost or to eliminate the up-front cost barrier for home owners. so if there's some out-of-pocket payments, it will be possible to finance that investment. but that will be like taking any sort of a small loan and very, very importantly with energy efficiency your bill will go down more than the cost of the repayment. that's critical to the nature of energy efficiency investments. the cost effective investments the cost effective investments yield more savings than they cost out of pocket. so we're trying to figure out how to help folks make these investments up front. but trust is absolutely important. you need to trust the contractors. these are the name-brand in your community. low's and home depot have gotten a lot of attention but 3

community, the local hardware store chain, the heating and haven't lation contractor whose truction you see roll around the community every day. are host: are there protections for u.s. labor and will all materials be u.s. made? guest: the way this is structured, this incentive flows almost entirely to u.s. jobs, u.s. businesses and u.s. workers but it doesn't do it through building a wall to exclude international folks. simply, construction workers in communities are in american communities. the money is throwing to american home owners to make these local investments in skilled construction workers, in the communities where they live. that's by nature a domestic activity. when those contractors go to a lumber yard or a retail building supply warehouse, they buy it again from a u.s. company and a u.s. facility. and importantly, i mentioned earlier the study by the center for american progress on the

manufacturing, the density of american jobs. and these are 99% in many cases u.s. manufacturers. if you look at the production of vinyl replacement windows, 99% u.s. made. insulation, whether it's fiber glass or some of the other, foam insulation, these are 95, 96% american made. again, the metal ductwork, if you're replacing an h vack system, that is 98% u.s. made. even hot water heaters i think are some of the lower american content but they're in the high 80s. and the average american content on any manufactured product is in the 70-some%. so virtually every single technology in this bill is very, very highly concentrated in american firms and american workers. . .

but, there are very important divisions in quality assurance,

to make sure that jobs are done well and done by folks that are trained and certified. the quality assurance is something that everyone in the coalition of grisons. we need the industry -- agrees on. we need the industry to have a high level of reliability so that the energy savings are real as are the job creations. we need to be taken over by the market. we do not want the short-term boom-bust. host: the work does not have to be done by union labor? guest: no, it does not host: guest: no, it does not host: gary -- no it does not. host: gary. caller:, i think obama is right on the money. this is an investment in our infrastructure.

we need to invest in it. i heard a lot of people say we do not want to burden our kids. it is important that we leave our kids a great country, a country with an and the structure that is good, so that when we spend money, we spend it on the infrastructure. it is an investment for them. we can say look at the bridges. look at the houses. we're not dependent on oil. i think that what is happening in the gulf, it should be a wake-up call for everyone. i think we should be starting to invest into things that would get us off --, you know, that we would use less energy for. i think upgrading our houses is a really great thing. guest: i could not agree with you more. you touched on three things.

first of all, the oil spill in the gulf of mexico is a wake-up call. our current pattern of energy use is unsustainable. it makes our country weaker, more vulnerable, and more dependent on countries that do not have our best interest at heart. also, we are all vulnerable to the devastating economic and natural disasters that we are seeing -- shutting down the entire fishing industry in louisiana. it is devastating for those communities. we're also very vulnerable to price fluctuations, the spikes in the prices that we saw a few years back when gas prices went out of control. as we use less energy, we are less vulnerable. that is critically important. i want to stress the question of investment, and the notion of the legacy of infrastructure that we leave behind.

for many years, america had a great tradition of investing for a long term. we built the railroads, the interstate highway system, modern communication, the internet, all of the incredible computing power. whether it is a canal system or a fiber optic cable, investments are different than charging up money on a credit card. over the last decade, we have gotten away from a tradition of investing in real value-creating assets that create a long-term in doreen legacy that strengthen the economy. we believe very strongly that home star is exactly the sort of infrastructure investment for long-term. my home is my greatest savings. it is going to be left for my

kids. if we can add value, we can add value to our communities. that is the right way to jump- start the economy, the right way to put people back to work, not the speculative wall street bubbles. this is the kind of long-term investment that we need. host: monica, on our independent line. caller: i have two questions. right now, people are having a hard time getting home's appraised at their value due to four clashed -- due to foreclosures. right now, there is not a lot of value given to anything that is not an energy efficient upgrade. a new furnace is just a new furnace, not anything added for true energy efficiency.

we are a window supplier and and installer. if money is going to come off of the contract up front, are you now saying the contractor will have to fund the costs of those windows because he is glad to have to place survivors -- suppliers and wait for the rebates to come back? that could be difficult to handle if he is not getttng all the money at the time of the contract. thank you. guest: these are important questions. what is the burden or responsibility on the contractor? in many cases, their margins are small and carrying costs for an extended time would be burdensome. we spent a long time in putting together this bill and the coalition, really looking at that question, making sure that

it was absolutely streamlined, and making sure that there would not be delays on the government's side in releasing these checks and processing paperwork. we believe we now have a streamlined program that will release the checks very quickly to contractors. it is the minimum of hurdles that have to be overcome. it is not uncommon for contractors to carry 430 or 45 days, the cost of a job. they started doing the work once the job is completed. beyond that window, it could be burdensome. the bill has controls in it to make sure that the money is released rapidly. also, if there is a quality assurance provision, it will not

slow releasing the check. if the contractor is acting in bad faith, it will catch up with them. it will not slow down the rapid cutting of checks for the folks playing by the rules and doing a high-quality work, as most small businesses do. the question of appraisals in home value is a great one. there is clear documentation coming out of green building that shows that, especially in commercial real-estate, that green building spends less time on the -- green buildings spend last -- lost time on the market. a green building is actually a better investment on the basis of the dollar's. in the marketplace, you are

absolutely right -- there have not been the kind of signals. you do not look at the operating costs of paying for that energy overtime. we believe that as people get comfortable and really understand the difference home star can make, it can be hundreds of dollars a year, a rebate check that goes into the homeowner's pocket -- when they start experiencing the value, we believe the market will respond. it will be up to homeowners to determine that what they want is greened buildings. everything suggests that is the truth. host: for wayne, indiana. democrats line. caller: i was calling in reference to schooling. you were speaking of the contract in the inspectors. i am trying to find out what i would go to school for, what

type of class's? guest: it is a good question. for better or worse, a lot of people are having to answer these questions. a lot of people are out of work. it is very important that this demand for energy efficiency translates into a new demand for workers. we believe that will be the case. the skills involved in being a home performance contractor are attainable. the barriers to entry are not insurmountable. there is home energy auditing. this area will grow rapidly. this is managing software, understanding basic tools, understanding how building systems work. it is important to understand the science. it is also an opportunity to

enter into the building and construction trade. for a trade construction worker to become a certified contractor, the folks that will do the whole home energy performance retrofit, that only takes a couple of weeks if you are already a skilled builder. there are some basic foundation skills that are required. we believe this is something that can provide decent wages and relatively low barriers of entry for folks that really need the work. we see it as a very important piece of economic development. host: fred, and penn line -- independent line. caller: i am a contractor. to me, it sounds like the wrong approach. it is the approach that we have

been listening to for the past couple of years, which is, basically, the taxpayers, not the government, are subsidizing people. with a stroke of a pen, president obama could change the tax law which they did in the 1980's with ronald reagan and make it an incentive to invest in the properties of the united states again and be able to get growth that way instead of spending monny that way. let's try to solve the main problem. let's get the housing values up again it by making tax incentives to people that will get them to invest. we would be able to go back to work fixing them up.

guest: i would disagree very strongly. this is not a handout. this is using the market to help jump-start an area that there is a strong public interested in realizing. there is $1.20 trillion of wasted energy in the economy every single day. -- excuse me, every single year. we are not making these investments because the real market barriers. we need policy so that the market can take over. the question of if this is a rebate or a tax incentive, we actually believe that a rebate will be more fast-acting, more streamlined, and it will put the money into the market. pe think it will be more

effective than using the tax code. it is a little bit of a blunt instrument. it is good for the market. it will help sustain a -- it will help create a sustainable market for american workers. over 90% of workers are small business workers. it is not coming from one side of the aisle or the other. it is a broad, by 8-partisan -- -- bi-partisan -- i have never seen such broad-based support. it is not an ideological bill. it is about putting americans back to work now, when people are desperately hurting. we need solutions. home star is the right medicine. it can help people put go back

-- go back to work. host: what is the likelihood it will pass in the senate? guest: there has been a hearing. it has been introduced with bipartisan sponsorship, supported by democratic senators and republican senators. i think we will see rapid movement in the senate. every day that we delay is hard for construction workers, hard for folks in communities -- we need to move as rapidly if we went to get the kind of impact we believe is possible. we have a president who would like to see this bill land on his desk. host: if it does it signed, when it does it take effect? guest: very rapidly, within a matter of days. host: our guest is with the home star coalition. you can go to the web site to

find out more. bracken hendricks, thank you for your time. in our last segment, we'll talk about the taliban's presence in pakistan. our guest is nicholas schmidle of the new america foundation. we will now take a look at this week put the stories to the ink and penned a political cartoonists. -- and the end of political cartoonists. -- pen political cartoonists.

>> we now return to "washington journal." host: nicholas schmidle is our guest to talk about the taliban 's presence in pakistan. he is the author of the book "to live or to perish forever: two tumultuous years in pakistan." thank you for coming by.

you have a piece this morning. can you expand on that? guest: sure. last sunday morning, the pakistani taliban issued a video claiming credit for the times were attacked. the question is, why take credit for a flocked attack? there are a couple of things at play. there is a power struggle inside the pakistani taliban. shortly after this the video was issued, an official spokesperson said that was not us. you have an interesting power dynamic. the second thing is largely a positive result of u.s. counter- terrorism policy, in that you have an increased splintering within these groups. brand integrity does not mean the same thing in 2010 that it

did in the 2001. you now have been taking credit for the failed underwear bombing in december. host: what does it mean in light of this attack, particularly about their counter-terrorism efforts? guest: i think it bodes well. we have seen pakistan's cooperation with the u.s. improved dramatically over the past year. there have been a lot of questions as to why. operations have been relatively sustained. in the course of the last several months, we have seen several arrests of high-level leaders. we have the pakistani government, going after, and

clamping down on associates of faisal shahzad. it is hard to know what triggered this. i do think that something qualitative has shifted. host: influence? guest: i think his influence is more muted than the army chief of staff. he is either in washington, or in an islamabad. i think it is much more significance. host: some of the papers this morning talk about the role of no. been a central point. would you agree? guest: it is the last remaining bastion for a military stronghold.

they are certainly south, but the army has pushed him and scattered them. these places, two years ago, or absolute taliban strongholds. absolute taliban strongholds. host: our guest is with us for the remainder of our program to talk about the taliban's presence in pakistan. you can ask questions and get some responses. host: you can also twitter and e-mail. there was a response to the efforts from the president and eric holder. could you grade the response?

guest: i think the u.s. response has been mixed. the details are emerging by the hours. at first, it was this last- minute "we know he is on the plane." the reason it was pushed to the last minute was because the fbi surveillance team had lost track of faisal shahzad. i think you have to applaud the work of the fbi investigators who are able to track the guy down in a short amount of time. immediately jumping to the notion that he was a lone wolf, and that this was an isolated incident, was obviously premature. i think the response of the administration was want to come down the public, rather than saying he was part of an al qaeda plot. host: here is eric holder. all the -- >> this was another

reminder that terrorists are still plotting to kill americans. in february, a key participant in the plot to bomb new york city plus the voice system pleaded guilty. less than two weeks ago, we received another guilty plea. three others have also been charged as a result of our charged as a result of our investigation. he's attempted attacks are stark reminders of the threats that we face as a nation, and that we must confront. must confront. for the department of justice, there is no higher priority than disrupting potential attacks and bring in those who applaud them to justice. host: how would you respond to that statement? guest: i think it does show that al qaeda and the buttons

associated with al qaeda again tribal areas are still targeting the united states the question is whether the capacity is there any more. one of the interesting things about the pakistani taliban, for instance, is since march 2009 they have been talking about their strike on the united states. this is followed by a weird mission in april of 2009. shortly after the bullets stopped, pakistani leaders said that was one of our guys. you have to scratch your head and wonder if they are taking credit for these. host: we had a response from twitter. guest: it's a great question. one of the reasons i must

suggest that faisal shahzad's threat was successful which set the training facilities have been curbed. al qaeda can not set up the kind of jungle gym and training facilities that we saw in the videos shortly after september 11. i think the pakistani taliban -- i think the taliban at large, the notion of fighting in the name of a radical version of islam, against a foreign presence, whether it is the perception that the pakistani government is working for the u.s., that remains. there is significant qualitative difference between the afghan taliban and the pakistani taliban. host: you talk about the new guard and the old guard.

guest: right. a former spy showed up dead. it was a startling thing. people have been showing up dead for 10 years and now on the side of the road. what was so startling of this particular guy was that i had met him several times. he described himself as a confidante of osama bin laden. he was very close with the old guard. yet, there was a new group of militants that killed him, made him read a forced confession. him read a forced confession. this does reveal that what played well with the old generation no longer works. i think that process up radicalization among the g hyde groups in pakistan is really fundamental. this signals the next generation of taliban that have emerged.

host: wilmington, delaware, on our independent line. caller: a professor who came to the delaware told the audience that he was from maryland and he thought that the main reason everyone was doing the attacks was always the israel-palestine issue. when i was in pakistan myself, i kept asking this question. i'm just wondering. this was not his position. i'm wondering, myself, having been to pakistan and also hanging with a lot pakistani here, and seeing how they are -- if it is a political ploy?

guest: great question. i think there are a couple of different parts to the question. thank you for coming out to the university of delaware, a couple of months ago. israel-palestine -- like the crisis in kashmir, the fundamental grievances will be able to leverage as an indication that the united states is cooperating with non- islamic powers. i do not know that you can solve israel-palestine tomorrow, like some people think. i think it would be a huge step, in the same way that i think resolving the crisis in kashmir would be a huge step. the agreement -- grievances have piled up. there was an audio report from osama bin laden that sounded

very desperate. israel-palestine used to be the base grievance. of a sudden, he was talking about climate change, corruption on wall street. the grievances have expanded, so long as the recruitment is down a little bit. host: you mentioned the john kerry-dick lugar bill. g. culp i think the cynicism and skepticism toward american policy, the bill was intended to support civilian institutions at the expense of just giving money to the army and that in the pakistani government deal with it. yet, when this bill came out, because there were elements that tried to give up the civilian government influence over the army's promotion process, the

pakistani people were up in arms that the u.s. was trying to influence the policy. host: louisville, ky. republican line. caller: i was wondering if you could differentiate between the pakistani taliban and the afghan taliban. what binds them together? is it religious ideology or political ideology? if you hear so much about each one, and what are their relationships and their differences? guest: a fantastic question. i will try to trace the lineage. the afghan taliban are running afghanistan before september 11. most of the leadership goes to pakistan following the american invasion.

over the next several years, the al qaeda leadership also takes refuge in pakistan's tribal areas. in response, costumes -- postions are joining the taliban. the difference is the pakistani taliban have been giving refuge to al qaeda longer than the afghan taliban gave refuge to al qaeda in afghanistan. i think it is a serious distinction to note. it means that the influence the al qaeda has had over the pakistani taliban has been more profound because it has been a long bear. long bear. the tactics, and objectives, i think are much more an arctic. there are much more destructive than the afghan taliban, what

think are more nationalistic. host: college park, maryland. caller:, i was hoping the speaker would be able to comment on the general outlook of the pakistani people on the role of the united states since president obama has become president against our previous administration. guest: it is hard forrme to comment too much on the public temperament. i live there in 2006 and 2007. in january 20008, i was deported for writing a story. the next time i came back, i was chased out. my information about what the street is thinking at this point, it is a little distant.

reading newspapers and talking to pakistani friends, there was a great amount of optimism that something would be different about the obama administration. in home, something has been different. in substance, in cooperation with the civil institutions, there has been a difference. they will melt, that the drum the strikes have increased. if the drowned strikes were a force of radicalization, that argument is now stronger. drone strikes have increased. it also shows that even though obama has not articulated -- even though he does not talk about the war against al qaeda and terrorism in the way

president bush used to do, i think he takes the threat very seriously. this is a top priority for him. host: one of the stories about the bomber himself is that the investigators have still not pieced together the complete picture of faisal shahzad's finances . guest: there was a piece talking about how fbi agents are try to follow the money trail. the money trail is a huge question. it will be difficult to trace. the associations and affiliations that faisal shahzad has up until now, there are some loose associations with the pakistani taliban, but the strongest affiliatioo comes with

an organization called mohammad's army. this illustrates the witch's brew, if you will, of military groups that are taking place in tribal areas. host: baltimore, maryland. you are next, keith, on our independent line. caller: i would like to ask the question about the whole problem of the middle east and how it might stem from the fact that the united states backs up all of the dictators. they do it in the name of oil. that is the real problem. every time there is a leader that wants to share resources, the cia and the united states for oil all the plans for that. guest: it is a great question. pakistan does not have oil.

what some of the military leaders have offered, and that have been an influencing factor has been the perception of stability. the army chief that took power in 1999, and only recourse power in the summer of 2008, he held power for so long largely because of u.s. support. toward the end of his regime was when the pakistani taliban emerged, and when the society began to turn against the united states. that was largely the result of the bush administration's support despite the fact that he was so deeply unpopular. i think it has less to do with oil. the u.s. will always look for its own self interest and its own self-interest is stability. many times, that does override

democratic principle. host: ohio. republican line, robert. caller: thank you for c-span. my question is, the intelligence service for pakistan -- how involved are they with taliban. i remember reading several years ago that they are very much involved and you cannot really trust the pakistani intelligence service. i want to know your perception of how involved they are? thank you. guest: that is a fundamental question in trying to figure out counter-terrorism cooperation -- how it has gone and how it will conttnue to go.

let's keep in mind that the chief of army staff, who is seen as independent, honest, natural warrior. the pentagon sees him as trustworthy. yet, in his past job, he was ahead of the pakistani intelligence agency. officers are temporarily stationed there. then, they go back to the regular army. it has definitely supported elements of the taliban fighting in afghanistan and based in pakistan since september 11. the recent death of the individual that i mentioned was killed last friday, here is a former officer who was seen as a nexus between the intelligence agencies and the military.

yet, this guy was just wacked by the pakistani taliban. even the hard-core militants see a isi as doing the bidding of the united states. the dynamic that existed there is beginning to fray. host: florida. kelly on our independent line -- caller: yu said the new generation is changing, which means that we cannot control the middle east and what they are doing. our main purpose was to get osama bin laden. if we wanted him, we would that had him. meanwhile, our borders are open for what ever, and every day we have to worry about a lunch box under a bench in new york city. we are wasting money and lives.

these people have not changed clothes for two thousand years, and we are going to change their attitudes? i do not get it. guest: i understand your position, and i understand your anger. u.s. policy will not change the pakistan late taliban or the culture of pakistan, or the culture of the middle east. it has to evolve and change on its own. host: did it mean anything when president karzai talked about forming alliances with the taliban? did it have significance in pakistan? guest: i think present karzai is feeling beleaguered, and feeling that if the u.s. is going to doubt my legitimacy, that i might make sure that i have a

peace at home. i will throw something out for the local people, see if i can rile up the united states i think the alliance, in karzai's confidence has also significantly frayed since president obama came to power. the car blotches that was given to him from the bush administration is no longer there. i think it was more of a domestic gesture. host: there is a store at about improving relations. what is afghanistan's role then, in pakistan, as far as the taliban? guest: i think it is much less significant than the pakistan's role in afghanistan. i think the afghan intelligence agencies are nowhere near as sophisticated as the pakistan agencies. i think it is a misnomer to think they can influence them.

host: new jersey. our democrat's line. guest: i have a difficult question for you -- caller: i have a difficult question for you. how is the united states military, with all of its sophisticated training, going to chart out a strategy to capture osama bin laden? the president once admitted in front of "newsweek" that he and his intelligence did not have the knowledge as to where president obama -- to where osama bin laden is hiding. can you comment on that guest: it is a great question. your guess is as good as mine, and i think anyone put the gas

is as good as anyone's. u.s. intelligence officials admit that the trail has gone completely cold. i happen to believe that he is somewhere. it is a vast region. there are thousands of caves where he could be hiding. in october, 2007, i spent several days in what was then taliban-occupied swapped valley. one particular evening, we were dining. a military commander decided to start showing off some of his al qaeda paraphernalia. he was showing me weapons that he had recovered from american soldiers in afghanistan. he pointed to a bag. we're talking about osama bin laden's political philosophy.

he said to me that a book was in that bag. we were in the middle of this dense pine forest, really far from civilization. i asked him, whose back is that? he mentioned that the bag had been left by a top official. i quickly grabbed my translator, and said we should head back to town. the guy's credibility was unquestionable. it did communicate that he was in these areas, and i think osama bin laden is, too. host: portland, ore.. janet, and our republican line.

caller: i was wearing what the effect of the opium trade is on our policy in the middle east, and is there any news on osama bin laden being linked to the opium trade? guest: the opium trade is a great question. it is undoubtedly supporting the afghan taliban fight against american soldiers. i do not know the extent to which the opium trade -- the proceeds of the opium trade are making their way up to the pakistani taliban, and ultimately, to al qaeda. i do not think that osama bin laden, keeping a low profile, i do not think he is the elbow- deep in the opium trade. host: jacksonville, florida.

caller: good morning. i am puzzled. faisal shahzad, and the black fellow from africa on christmas time, there were both naturalized americans. is it a new connection with folks that are naturalized american citizens? also, are they getting some kind of help? how can they just coming in and go back overseas? is no one watching? it is like the lady who mentioned our borders being opened. though -- those that are ready here -- is it like a trial run?

do you see what i am saying? guest: definitely, william. it is a squeak -- it is a scary thought that there are sleepers sells the united states just waiting for the call. faisal shahzad was a naturalized faisal shahzad was a naturalized citizen. it follows a similar path from a group of somali-american men in minneapolis who have been disappearing from their homes, going home to somalia to train, and there are instances of it least two of them blowing themselves up in a suicide bombs. i spent several weeks in minneapolis reported the story. the question of home-grown terrorism is a new one for experts to wrestle with. in the years after september 11, we saw home-grown radicalization in europe. i think there was a lot of

complacency on the part of american counter-terrorism folks, saying that we do not suffer from these sorts of problems. now, we are starting to see it. whether it is the tip of the iceberg -- i do not think these two are the only ones we will see. host: from twitter -- guest: that is a fantastic question. everyone is thinking about non- military means. i have been attempts to try to use a moderate cleric's against the taliban. the problem is this generational gap is changing the culture faster than and nato or any moderate cleric could change the culture. if a moderate cleric or a

hardline cleric emerges tomorrow and denounces the taliban and suicide attacks, all of a sudden that guy is killed the next day. it is sending a message that you do not speak out against these guys. we have seen a race by the military to out-flanked anyone that tries to speak against the taliban. it puts nato, the pakistani government, pakistani society, afghan society -- all of the middle east in quite a bind. host: texas, democrats line. caller: how come no one has ever gone after george w. bush ever since he called all the -- caused all this? why is it everyone is looking at the united states like we are the bad people, but it is not us?

guest: um. host: we will on. who was on the front line as far as our operation in pakistan and what did they bring to the relationship? guest: the embassy to the public from line. right now, there are fbi agents there temporarily investigating the faisal shahzad case. there are small members of the military cooperation with the army. the military presence is not openly admitted. the cia drones are not openly admitted, and i would suggest they are the most from line you could get. host: idaho, go ahead. we will go to rick, cherokee,

north carolina." caller: i want to know why we can always discussed muslim terrorism, but one we have sites that turn out to be jewish, we cannot freely discussed this. we pretend we have a free media, and it is really disgusting. that is all i have to say. guest: the caller raises a good point in that radicalization, religious fundamentalism, it is not the sole party of it as long. there are christian fund -- fundamentalist groups. look at the rise and enrollment in domestic militias. jewish fundamentalism is there. religious fundamentalism is not the sole domain of islam, however, we are talking about this man because of the frequency and the numbers and

the fact that jewish fundamentalists did not try to blow up times square last week. there is a quantitative difference between the two, and it is not so much a qualitative difference. host: idaho, again. caller: thank you very much. i do not think the situation is hopeless in afghanistan. i think the fellow that wrote the book "two cups of tea." -- i think he would be a key in establishing a good country. those people have been isolated, and they are not allowed to be educated. the other question i have is why is saudi arabia allowed to build mosques in america, but we are not allowed to have any christian schools were churches in saudi arabia?

thank you, very much. i think the key is education. guest: a great couple of points. i think the education is fundamental. one of the characters that i had the opportunity to spend a lot of time with and that i've profiled in my books -- that profiled in my book, is a hard court militant who was killed in july, 2007. he is to say to me, you educate a man, and you educate one. he said that if you educate a woman, and you can educate and entire family. entire family. that is actually the nefarious side of your concept of education. it is fundamental, like you said. the reason why we allow saudi arabia and other investors to

build mosques in the united states, and saudi arabia does not allow us to do it there, is simply because we are a country that prides ourselves on religious pluralism. a viewer asks what we are doing to train -- to train and arm -- host: what are we doing to train and arm the women in afghanistan? guest: there is nn doubt that they are significantly oppressed. we are setting up women's schools, but you can only do them in certain areas. it is almost the kind of ink blot counter-and surgeons say strategy that the -- counter- insurgency strategy that the u.s. has employed. you cannot go into tend heart, which a taliban controls, and

set a women's school, and think it will go off without a hitch. host: our next caller. caller: i would like to ask the guest about u.s. involvement, specifically, cia involvement in the opium trade. how is this playing into the overall strategy? overall strategy? guest: the fact that opium production and cultivation went up so dramatically after american presence in afghanistan, there is no doubt that it is there. whether that reflects -- i am was convinced that that reflects some sort of under-the-table, nefarious role in the opium production.

morceau reflects the taliban leadership. host: our guest's book is "to live or to perish forever: two tumultuous years in pakistan." nicholas schmidle as with the new america foundation. thank you for having the thank you for being with us this morning. host: we will talk about plans for united and continental to emerge on tomorrows program. that starts at 7:00 a.m. in the morning. we will see you then. [captions copyright national cable satellite corp. 2010] [captioning performed by national captioning it