involve and connected with their representatives and senators. host: economic news from michigan, front page of "the detroit free press." "results are due from gm, may show a profit. if gm posts a first quarter profit today as some expect, it would signal that the automakers historic trip to bankruptcy is helping gm regain its footing." appleton, wisconsin. brian, good morning. are you there? caller: yes i am, sir. how are you? call -- host: i am. thank you. what you like about the bill? -- what do you like about the bill? caller: the balance of it. i am making a fool of myself,

aren't i? host: note, you are not. finish up. go ahead. caller: the stability of what it represents is what i really like. host: more of your calls in a moment. the republican line is open. and for republicans, 202-737- 0001. for independents, 202-628-0205. of the consumers the winners as it moves through the senate? -- are the consumers the winners as it moves through the senate? "the wall street reform bill is taking a rare path through the senate is gaining tougher provisions against the industry as it perceives not being watered down to win votes. putting republicans in a difficult spot. they know that they risk looking like they are siding with wall street if they say no.

even top republicans like senator judd gregg predict that the bill will pass as early as this week but it is not clear how many republicans will be willing to sign on as they say it falls short supply and -- it fall short in key areas." david, good morning. caller: be passed bill after bill but we do not enforce nothing. in america of what we do is make sure that we make money. what happened to the eight years of bush? they stripped everything that makes money accountable of anything. even down to the dogcatchers in congress, no one is going in thinking they will help consumers. there is no one backing up the

quality of anything. like at general motors. it seems that if they made quality merchandise they would not have to go through these problems. to change as part of the public, they will not do anything. we are not going to do anything to help the little people in america. host: perhaps touching on something broader in terms of regulation, here is an article from "the christian science monitor." "the ethical weakness on wall street led to ripping the heart out of economic security of millions of no class americans. that is according to elizabeth warren, "with the financial crisis and financial recession

millions of homeowners have lost their houses. -- millions of homeowners have lost their houses. i am stunned that there has been such little discussion in the media about the moral failing a paul st.." chattanooga, tennessee. -- moral failing of wall street pier " chattanooga, tennessee. co-head. -- moral failing of wall street." chattanooga, tennessee. go ahead. caller: the poor should have free advertising for the wall street in washington, d.c. folks in need to take and put people in congress, then take

their credit cards away. go ahead and let them have an old house to live in. give them an old jalopy did drive. let's see them drive around for a couple of months like that. they could not live. finding out the value of a dollar, putting these kids back to work, everything this congress cares about is the rich. host: that was jimmy from chattanooga, tennessee. dallas, texas. good morning. caller: thank you for taking my call. i have read a few different articles recently. the point that they all make is that this bill draws strict rules about this particular behavior of the bank's.

it does not provide any financial penalties for this sort of thing. the bank can become too big to fail again and the behavior will be examined thoroughly. but there are no financial penalties. the american public will still have to pay any steps that will accrue from this kind of behavior. -- will have to pay any debts that we accrue from this kind of behavior. chris dodd and barney frank were found so guilty of over their total obliviousness to what was going on in fannie mae and freddie mac. which was the root of this problem. host: "and democrats ideal and moderate reform bill, -- "

democratic ideal for the moderate reform bill, banks pleaded with regulators and clients to help to overturn provisions of a financial regulation bill that they say will rock the market. chris dodd and blanche lincoln told the financial times that there was room to negotiate on a proposal that would force banks to spin off their swap desks. the industry and regulators warned that it is not workable. some are pushing for a $90 billion tax revenue to fill a funding hole created by the regulation bill. both measures are opposed by the industry but backed by mr. obama." this from the peace in "the financial times, "hedging --

financial times," "they also sells what the companies along with a floating rate loan to allow them to hedge their own interest rate risk." darlene, portland, oregon. good morning. caller: good morning. how are you today? >> fine -- host: fine. caller: i am impressed with this bill. but it might not go as far as we wanted it to go. it is as if the mafia to go or wall street and made all the rules. i hope that this bill really does something to help with the economy. host: lee shot in san diego. hi there. caller: good morning, everybody. my feeling on this bill is that the more that we regulate the finances, really the more

trouble will come across. the financial world is regulated by a self. -- by itself. along with it the people, if they have it in mind -- along with the people, if they have it in mind, it must be regulated by itself. it is my feeling that maybe politicians might have a background in law. attorneys that have no idea of the economy. i think that they are causing more trouble than benefits. fifth host: felicia, thank you -- host: ali shah, thank you for calling in on that. "in arkansas, hit from both

sides, pennsylvania veterans experienced the issue. here in kentucky there is a vital test of the strength of the tea party." they are talking about the senate race to replace jim bunting. "in kentucky the senate race has become a front amongst tea party activists. senator jim bunting is retiring. mr. grayson has never served in washington but his association with mr. mcconnell has made him a lightning rod in this anything but washington year." here is the picture from "the new york times" this morning. asheville, north carolina. joyce, go ahead. caller: everything that happens in washington is underhanded and crooked. i have no trust in our government.

social security, they say that we think of it as entitlement. i do feel like i was entitled, it was given to us by the government to help the taxpayer the pace for the schools in the streets and kept the politicians rich all these years. that is what we live on. i feel like affirmative action was in thailand. our biggest problem is the the legal aliens -- i feel like affirmative action was entitlement. our biggest problem is the illegal aliens. if that rule was in force over the united states the situation would be better. host: you said that social security was your main form of income? caller: yes. host: how else is that supplemented? caller: i pay for my own health care.

as long as i just use it for the insurance and by homeowners' taxes and things like that i can make it less. host: we appreciate your joining the conversation this morning. bob, the democratic line. caller: how are you doing? host: doing fine, thanks. caller: i know that regulators are getting pressure by big business and stuff, but deregulation is how we got to where we are now. it is like corporate welfare. you know? that is all that we paid for. for them to advance and we are going nowhere. our wages are going down. they have got to be held accountable. they have got to have more

rules. host: less than half of our left for your calls and comments on the financial regulation bill. is it a win for consumers? we got the question from today's "usa today." this is an article in the money section this morning. they talk about proposed they talk about proposed amendments coming up. senator said -- senator brownback wants to exempt car dealers, "they were not responsible for the financial meltdown. democrats say that some dealers are paid to sell loans with higher fees. carl levin wants to ban banks that are assured by the federal deposit insurance corp. from making proprietary trades in high-risk securities. the measure would also prohibit investment banks from betting

against the securities that they sell." likely a round of votes this evening, 6:30 or so. madison, wisconsin. good morning, the areas. caller: i just have a brief comment. i think that the casino that is now wall street needs much more scrutiny than this particular piece of legislation provides. it vexes me that after what was probably the biggest financial crisis since the great depression the republicans and democrats cannot come to an agreement on this legislation. it shows you how poison the atmosphere is in washington. they cannot come together even in crisis.

the author of the bill, chris dodd, as a lot of financial questions about his role in financial matters leading up to the crisis. in this way we kind of watch over his role, but we really need to have transparency in our financial markets. without that no piece of legislation is going to help. thank you for taking my call. host: as gary mentioned, ethics. i will go back momentarily to the column this morning in the christian -- in "of the christian science monitor." "-- in "the christian science monitor." "in helping to finance the

conference in switzerland aimed at helping the next generation of business leaders to operate under an ethical mandate, he sees a bigger requirement for businesses to go beyond just seeking profit and to revisit the corporate reason for leadership efiks and make statements shoulship to make ita reality." tony, democratic line. is this a win for consumers? caller: it can be, there is a possibility. it seems that every time they want to take lot a little further you have filibusters -- every time i want to take the law it will further you have

filibusters from the conservatives and you cannot get anything done. people complain all the time that congress is broken. wake up, america. it is not the congress that is broken but the people that we send there. if we have an entire congress of michelle bodman, what will the country look like? take a look at the people you are sending to represent us and the job that we are sending them to do. stop sending people that you want to have a beer with. have thea beer at home. host: see if you agree with this piece from "of the washington post." -- from "the washington post."

"the process has been far more amiable, partnering with democrats on some measures in the bill. showing that the party has similar goals. the country's anti-wall street fervor played a clear role." he is writing that there is working together going on. what do you think? caller: i think that that is great if there is working together going on. there are many things that we can actually agree on. it would be wonderful if it happened more. again, you will get to the point where you start working and someone will look at the people who were voting and all of a sudden weight, you are voting with the democrats -- all a sudden -- wait, you are voting with the democrats. obama is trying to destroy our country. this kind of thing will flare up immediately. the news will jump on it.

nothing gets done. the next thing you know it will be filibustered. you know? it is a sad state. we are pretty secure sometimes, i love this country but our country is sick. i am sorry, people like michelle bachman, running a country right now, that is scary -- running our country right now, that is scary. host: henry, independent line. caller: i think that this is a bill that will restore some kind of transparency in wall street considering the high prices that banks are charging consumers every single day. there are also a lot of problems with the derivatives market. the banks are putting in a lot of money in terms of making sure that harsh regulations are

not put on them. also certain democratic senators and house representatives. overall i feel that anything that is different from the system right now would be good for the american public. i think that this bill is a step towards the right direction. it is not perfect but it is a step towards the right direction. host: i am not clear if the president's supreme court nominee will be back this week. here is the weekly cover of "c q." "it will be as much about activism as it will be about elena kagan. the high court nominee must take her came up a notch.

her style as solicitor general is likely to serve her in a confirmation hearing, but only to the extent that she has exhibited the dexterity necessary to respond to tough questions in a public forum. a senate judiciary hearing is a more politically charged setting. -- setting." comments here from jon kyle on one of the sunday show, elena kagan compared the bill to the action of dictators. "buying in 2005 when lindsay gramm and i were drafting a lot to -- "-- >> in 2005 we ultimately drafted a law that defined the term

enemy, attends -- enemy combatants. she wrote a letter, along with other law professors to the senate, describing the bill at the time in most unflattering terms, contending that we had to provide article 3 civilian court appeals from decisions of the military commissions, making the entire point of military commissions irrelevant. she compared the bill to the fundamental wallace actions of dictators. that is not very judicious. i dunno if she would recuse herself from those kinds of cases but that is something i will have to ask for about. can she lay those political views aside? host: let's look at a couple more headlines this morning.

from "the washington post," "pp resumes efforts -- bp resumes efforts to divert oil." "rocket fire from protesters in bangkok." a photograph here from the barricades in "the new york times." "the wall street journal" leaves with a story about the oil spill. -- leads with a story about the oil spill. "showing progress, bp inserts a siphon. showing signs of early success and they began to burn off oil from the apparatus at the surface. giving it an improvised quality

showing the difficulties of working in the frontier of oil production. several earlier attempts, including attempted to place a large dome over the leaking oil on the ocean floor, have failed." the homeland security commission will hear from the head of bp, scheduled for 2:00 eastern here on c-span. democratic line, financial regulations -- will the bill be a win for consumers? caller: good morning. i am afraid that i do not think so. i like the consumer protection agency part of it. but i think that the man from missouri was right on. i agree with what he said. i do not think that there is any interest in congress to actually put to any firm regulations on the financial market.

they do not want to actually make a lot that can be discovered, prosecuted, and convicted -- make a law that can be discovered, prosecuted, and convicted in court. to me it has no teeth if there is not something that says "you cannot do this." i am disappointed and a little bit scared. host: houston, independent mind. go ahead. caller: yes, sir. the corruption in this government, we pass anything that we can think of. most of these people have never worked in manufacturing. they have never had to make payroll. this is why health care and insurance for workers out of the regulations that they have are

bringing down capitalism. people are taking advantage of this. people in politics and getting hired to do all types of speculations on voters. recently i worked for a man that did everything that he could for his supporters and took advantage of his employees and stuff. it is really bad. not a good thing that is happening right now. i am glad that the people of, up from the grass roots and are starting to move. -- i am glad that the people have come up from the grass roots and are starting to move. this is one of the worst president's i have ever seen in president's i have ever seen in my life. host: 15 more minutes of your calls on the financial regulations bill. we are joined on the phone by rep ross come from the sixth district of illinois.

today the republican conference will announce the results of what voters and participants are saying should be cut out of the government's budget after the initiative last week. first of all, tell us about the program. program. how did it get started? caller: a pretty straightforward initiative, giving choices to the american public to clearly understand and have come to the conclusion that spending is outrageous and out of control in washington, d.c. -- anthe democratic party has literally tripled the national debt over the next 10 years. americans are rightfully concerned. u-cut proposals are simply putting initiatives in front of the public and saying look, go

on line and make your choice. we as a nation need to make these choices. there are five substantive proposal before the public. the response has been overwhelming. nearly one-quarter of a million people have responded since thursday. i am encouraged by that. what we are proposing to do is later this week offer an amendment on the house floor to the house of representatives based on the results of these relief awful cuts that have been proposed. -- really thoughtful cuts that have been proposed. host: so, the amendment would be something in the nature of -- how would it work? caller: substantively the budget office would be working that

out. there will be an effort from house republicans this week to offer an amendment to the bill, whichever of these five proposed cuts that comes out on top based on the voting process. one, an invitation for americans to come back and engage the public again, engaging policy makers in ways that are substantive. it is one thing to say we should cut spending and the glib about it. it is another to say that there should be some choices that need to be made. which one do you prefer? let's move forward. host: the five choices that you gave, the presidential election fund, subsidized union activities, hud programs for

doctoral dissertations, non- reform welfare spending, and eliminating wealthier communities from the community development block grants. can you give me a sneak peek? caller: i can only tell you what i voted for, no. 2. i do not have the internal results. let me lobby your viewers a little bit. the notion of american taxpayers literally subsidizing federal workers and in that process -- the work that they do, god bless them, but supplementing them for their union activities on a full-time basis? i represent a district in an urban chicago and there is a

huge disconnect between my constituents paying taxes to support that and the federal workers doing that work. number two, i put together a short video that we sent out throughout the network. but your guess is as good as mine right now. i think that the interesting thing is how many folks have responded. this is a very interesting message that congressman eric cantor put out on the web site and internally in the house of representatives the it people had to expand the capacity to take on more responses. the rate at which people were responding was encouraging and profound. host: where in particular do you think is the biggest piece of

the government budget that you would vote to cut? caller: here is what i think we need to focus on moving forward. reevaluating what the expectations are in washington, d.c. what are the expectations of the federal government? at the time we are borrowing 43 cents on the dollar, that is the challenge. would you increase this budget based on the notion that we are borrowing 43 cents in order to finance it? i think it we have got to start right away with essentially those areas. obviously not social security so much, but those areas particularly in discretionary spending where there is a great deal of consensus. host: peter roskam, thank you for joining us this morning. caller: thank you.

host: in that conversation you may have seen the youtube video that was posted by eric cantor on that youcut web site. earlier this year the most popular youtube video of all time was a british toddler biting the finger of his toddler, knocked over by a newcomer, lady gaga's "bad romance." "the shift was a symbolic. youtube, once a search giant known for skateboarding cats and dancing geeks has begun featuring a smorgasbord of more professional video that is drawing even larger and more engaged audiences.

monday youtube will celebrate its fifth birthday. they reached the 1 billion videos watch mark in october. -- octoberwatched mark in octob" run, independent line. go ahead -- ron, dependent line. go ahead. caller: that congressman that you had on, that project of his is a joke. giving people a choice, none of those choices will actually affect the budget. what would affect the budget is if they gave $1 trillion to rich people that it would not want to give back. hundreds of trillions of dollars that they have not put on the books going towards war.

those are the big problems in the deficit. as far as the financial reform bill is concerned, they have switched it and they're very clever in a way that they do it. saying that democrats and republicans cannot get together on this. taking a look at the way that the parties can get together. but that is not what it is. democrats have put in legislation saying they should regulate wall street again. they used have regulation that said that you had to be a bank and you could not engage in risky behavior. an insurance company was an insurance company. we have deregulated them all and allowed them to gamble with our savings and pensions across the country. now the democrats are putting in legislation that will put some

of that stability back. republicans know that people are upset about it. this is not to say that they will filibuster the entire bill, but the banks are coming in to say that we can tweak it here and there and make it weaker so that there are enough loopholes so that we can still engage in this risky behavior with pension-fund money. all we have got are these republicans that are stopping these things, a couple of bills from the house going over to the senate. we do not have this situation where we can say it is congress where we can say it is congress or large corporations getting together, they are blocking everything that can be done in government. host: one of the amendments to be considered this week, reinstating some of the blast

glass-stiegel provisions. republicans haven't -- " republicans have acknowledged that passage seems certain and that a handful of members would likely join the democrats. from the administration's perspective, "this bill has got to be and out of the park home run." "i realize that the bill will pass in terms of policy, but it has wound up in a different place than i had hope," according to judd gregg. the bill will amongst other things create an independent consumer watchdog aimed at

protecting farmers from lending abuses." md., the morning. caller: the gentleman that just spoke was very intelligent and it is strange to agree with anyone these days as an independent. it seems like there's a giant bowl of money that is getting larger and larger, the consequence is -- where is it going? follow the money and you will find the problem. host: real quickly, if you follow the money now, where is it going? caller: that is exactly what i want to know. more and more money is being printed and there is more and more out there and everyone in my financial group has less, where is it? someone making $65,000 or less

each year, they have less cash. there are many more people in the situation right now where they are not unemployed but -- for instance in making 70% less than night made in 2006. i am 61 years old. host: are you working in the same field as you were in 2006? caller: not at all. it is financial work but right now i am trying to save people's mortgages. we try to help people do their paperwork to get their loans modified. host: thank you for the call. we will be talking about home foreclosure mortgages next with lawrence yun. from "the guardian uk," "the euro is being pushed to a four

year low today over fears of escalation of the financial crisis." also this morning in "the wall street journal -- excuse me, "the new york times" this morning, "the bailout was not done to help the greeks but rather the french and german banks. they put some water on the fire but the fire has not gone out. the european rescue plan is intended to head off the risk of defaults but would vastly increase borrowing that could hamstring europe's nascent recovery." republican line, is the financial regulation bill a win for consumers? caller: you cannot win unless fannie mae and freddie mac are involved. barney frank is involved half,

he should have told bush what was going on with the financial market. with the democrats in charge it cannot work. host: "senate bill leaves the fed at the center of u.s. oversight. facing an audit, overhauls could widen the scope." mary, democratic line. caller: i had a comment on consumer protection but i wanted to remind the people that stimulus part ii is working. any of the street repair the ec -- that you see is stimulus part ii. anyone that says that the stimulus is not working, look around. cities and states have no money. for consumer protection, i am aware that it will be watered down in the effort to try to

work with republicans. remember when i went to wall remember when i went to wall street and i asked the people on wall street what they can do to help? not the consumers or the american people, but wall street. what can they do to help wall street. they can slow down bills, do this for you. just contribute to us and not to the democrats. people will remember that. i hope it will come out as a strong bill for consumers, not wall street. thank you. host: in the next segment we will look at the housing market and the impact of the financial incentives and tax breaks as well as tax credits. we will be talking to lawrence yun, the chief economist of the national association of realtors. we will take your calls as well. right after this.

♪ >> defending united statescybes against cyber attacks. tonight, philippe reitinger on "thj communicateors."

>> the senate homeland security committee hears from the head of bp america today on the gulf coast oil spill. tomorrow is primary day in kentucky, arkansas, and pennsylvania. coverage tonight will focus on the 12th conventional district in pennsylvania. first tonight, a get-out-the- vote rally for a democrat mark kris, then the republican candidate, tim burns. that is tonight beginning at 8:00 eastern on c-span, c-span radio, and c-span.org. supreme court nominee elena kagan is meeting with senators in advance of her supreme court nomination.

learn more about the process in the latest book about the supreme court, providing unique insight about the court. available now in hardcover and also as an e-book. >> "washington journal" continues. host: lawrence yun is the president of the chief economist of the national association of realtors. news is that home foreclosures are down nationwide. that is a good sign. what about the housing market itself in terms of sales? are people able to get back into the market? guest: thank you for having me on your show. we have seen the buyers back in the market as a result of the tax credit. prices are stabilizing and increasing in markets across the u.s.

consumer markets are experiencing a price decline, but once there is stabilization we can anticipate the foreclosure rate to help out. the foreclosure situation is still unacceptably high. we have a long way to go back to normal but it at least appears we are going in the right direction. host: is it too early to tell the impact of the new home buyer tax credit? >> it is no longer available. -- guest: it is no longer available and i would have to say that it was a really successful program, bringing in in our calculations roughly 1 million additional buyers. creating a huge reduction in inventory. making a price swing of about 5%. in some markets where there was a small decline there is now

stabilization. host: people in the pipeline still taking advantage of it, but basically ended, looking three months out what does it hold for people coming into the market without the benefit of that tax credit? what do you see the market looking like? of guest: the housing market has got to get back on its own feet. this may be the perfect timing in terms of when the tax credit expires. what is needed for a sustainable recovery and job creation over the past few months, it needs to continue for the remainder of the year into 2011. the other factor -- given that prices are stabilizing, that translates into an increase in consumer confidence amongst home buyers. usually in economics people come in and buy.

housing, prices declining, why buy now or later? with that those prices removed, it will increase customer confidence in the marketplace. host: lawrence yun is here until 8:30. we will take your calls on housing and home foreclosures. for democrats, 202-737-0002. for republicans, 202-737-0001. for independents, 202-628-0205. we will get to your calls momentarily. in terms of inventory, housing watch reports from last week rights that while the rest of the economy is moving on from the great recession, the housing backlog is still filled with property that has entered the foreclosure process. is this a good thing to have these extra properties

available? guest: from the past lending mistakes still dealing with distressed properties, the interesting figure is the mortgage delinquency amount. people that are 30 days late. these people that are entering the pipeline is declining. people are undergoing foreclosure from all of these past lending mistakes going through the system. there is a program from the federal government to affect the process in a short sale, giving financial incentive to the lenders and homeowners to expedite short sales. host: how can a first home buyer -- how is a new home buyer today different from the beginning of the recession? guest: there is a much higher percentage of new home buyers in

the most recent cycle. we have seen 57%, historically it is 40%. it is a combination of the tax credit and the fact that prices have declined so much in some markets that people that were priced out during the boom recognize a great opportunity to step into the market. these days people that are entering now have to financially qualified, a big difference -- half the financially qualifiey,- have to financially qualify, a big difference. host: what is the average down payment? guest: many first-time buyers are relying on fha, they

require 3.5% down payment. some people might say that that is low. what we are finding is that if people spend within their budget in a way that leads to a good long-term performance, veterans of the long term programs find they are the best performing loans out there. mortgages with large down payments have higher rates of delinquency. host: what percentage of mortgages today are backed by the government? guest: 90%-95% are matched by -- backed by fha or fannie and freddie. we cannot leave it at this high government level. at some point the rest of the market needs to get back in.

host: historical what should the number be? guest: around 50%. some people of classified fannie and freddie in the past as private but we know that they are government back. h-- backed. host: russell, texas. good morning. independent line. caller: we are in tennessee. host: yes, i apologize. go ahead. caller: with all respect to mr. yun, i have been in my house for two decades and it has not been paid for get. we are on a sinking ship. a compound fracture. i look at the compound interest as an open wound in this economy. things are not going to happen very fast on this recovery business because compound

interest on these loans for these houses that we need to shelter ourselves with, the compound interest is leaving ourselves drive. -- leading ourselves and dry -- thebelieve leeding ourselves drive. host: what is the interest rate on your house? caller: 6%. host: people at higher levels got into trouble -- guest: people at higher levels got into trouble. today because of the resetting higher benchmark rate from the federal reserve, some of it will be less painful. when we find people that are taking adjustable-rate mortgages contrast against 30%

fixed, different regions of the country have different cycles. tennessee, that part of the region was the last market to go down. it is struggling to get back up. we have seen other areas turning around already on an upward path. tennessee was one of the last markets to go down and it could be the last to come out. host: frank, northridge. republican line. go ahead. caller: good morning. i appreciate what you are doing for realtors and for the public. as a realtor, and i have dealt in bank foreclosures for 25 years, i think that the incentive given by the government', $9,000, that is a

good thing that should have been continued. we are not out of it yet. especially in california. fortunately our governor has given an incentive of $10,000 to new buyers. we need to continue to keep the market firing a little bit. we still need that $9,000 incentive to the buyers. guest: the $8,000 home buyer tax credit has been a very effective program. given the large u.s. budget deficit situation, we must understand that this program cannot last forever. right now it looks like the housing market can get back on its own feet. but there is still uncertainty out there. in the state of california there is a state tax credit on top of the federal tax credit. the gentleman is correct.

there are places in california where houses have tumbled by 50%. those people are deeply under water. it may take many years for them to fully realize the price action. what people are realizing now by purchasing at much lower prices, the question is what about the people that purchased at the peak? this is where the lender's need to recognize that one of the key ways to reduce the default rate is principal production. what about the neighbor that paid in cash? a very comprehensive problem. . .

the newspaper reports the declines were unprecedented in 20 counties around atlanta. we have the "washington post" on the washington, d.c. area market healthy signs in area's housing market. this is milton on the democrats' line from georgia. caller: i was wondering, i have worked in construction and things like that. when realtors are involved in

building a home and putting $50,000 in labor and materials, we are tphnot seeing houses sel for $150,000 but didn't drive a nail or lay a foundation and the prices are tripled. and it is amazing how prices of material and labor and everything in construction of a home and it is turned around and sold for outrageous prices by people that don't doing anything as far as the building is concerned. guest: the construction industry has taken a big hit. the overall home sales have fall been 30% from peak but new home construction has fallen 80% so that is a huge reduction. and it is a new home construction that is the general big driver of the economy as people hire construction workers, buy materials, it generates the secondary spending.

but that has halted. it is stabilizing at a very low level so we need to see bounce back in construction. we have high inventory so we don't want to add additional new holes where there is an oversupply. but among some builders realize there is a market opportunity and they see buyers that can sell their home and they are having difficult times getting construction loans from the banks and can't build homes. as i do my analysis in looking at the u.s. population growth, how many new homes we are constructing we may potentially encounter housing shortages situations two or three years from now if the building activity remains at this low level. host: even with the glut of foreclosed houses you think this could be an issue two or three years down the road? guest: one looks at the population growth and how the formation has been suppressed.

when the economy comes around it begins to rise proportionate to the economy so you will see more seeking their housing unit whether for rental or ownership. but if the housing construction remains oppressed i think that the distressed sale property will be the first to be absorbed but afterwards there could be lack of housing. host: where is the biggest growth going to come from, single family homes, town homes? condominiums? guest: in terms of the mix of homes, we have seen trends toward more urbanized areas where cities are trying to revitalize the walking communities. the multifamily housing unit near transport stations. so there could be a shift toward more multifamily constructions. but americans have the desire to have green grass in front of

them. host: let's go to glen burnie, maryland. caller: i'm a realtor and i have a comment about some of the statistics that are out there about the housing and a question about an f.h.a. mortgage. to give national housing statistics and forecasts and even state statistics is very misleading and it create problems in areas that are not as distressed as others t. is like giving a national weather forecast. there is no way a guy on the tv a guy can give a national foreca forecast. you can't say this is what the housing situation is in the united states because it is not even a state issue or county issue. the zip code stats you gave would be more indicative. i happen to work and live in an area that has not been impacted nearly as much as other areas, yet the people in my area think things are worse because they

keep reading in the newspaper stats put out not only by the national association of realtors but by news media bus it is sensational to say how bad it is. host: during the housing bubble did prices in glen burnie rise as quickly as the rest of the country? caller: yes, we had increases 20%, 25% per year was typical four or five years 2001 through 2005. then people don't realize that what started the collapse for us when katrina hit and gas went up people started having a little problem and in maryland it was a unique situation the gas and electric company announced after katrina hit the increase would be 72% in electric bills and that was the tphebnext punch in stomach. then the national economy went to crap and that was the next one. so, it is different in offensive area. and to give national numbers is

very misleading for one and can be damaging for areas that are not impacted as much as other areas and gives people an impression that things are worse than they are. i do have a question for lawrence yun about f.h.a. mortgages. maybe he can get an answer for this. f.h.a. mortgages are the only ones that we you pay them off and refinance or go to closing that you have to pay interest once the first day of the month hits you have to pay interest for the full month, which means the banks could be raking in up to 30 days of extra interest and it is costing millions and probably hundreds of millions of dollars a year to consumers. why is that set up that way and why does the national association of realtors not put the campaign out to get the money back to the people? guest: first, the analogy on the national weather and local

weather forecast is a terrific one. i love that because without a doubt all real estate is local. there is so much variation between local communities. from the national data, just like the dow stock market one reports the dow and individual stocks there is a different movement but from is a national figure. for some companies they need that national figure, for example, the u.s. government needs the national figure to compute g.d.p. as part of the economic activity. some of the large firms, whether it is a lending firm or the brokerage firm, want to know what the overall lines are. but we emphasize these are the national figures and there is a tremendous local market variation much different from detroit, say, to dallas, texas. we emphasize those points and hope the media picks that up. on the f.h.a. i'm not quite clear on the question but i will check it out. you may be referring to the

insurance premium for people who take out the f.h.a. mortgages. there is an insurance premium to cover potential default among some of the borrowers. the f.h.a. program since its inspgs never requested a single dime of taxpayer money. the reason is the insurance premium was able to cover defaults in the f.h.a. but that is more of trying to balance the risks versus the availability of mortgages. but if you are saying somehow the banks getting the whole month of interest on a single day, that is clearly not fair and we will look into that to assure that, if that is going on, something is not right. host: next call indianapolis. carol, good morning. caller: good morning. i just have two questions. i want to know do they get a separate check for the $7,000 for the taxpayers? and if that is true i would like

to know how much money times the one million people that have gotten new homes, i want to though how much that comes to. guest: the tax credit program, one would get it from filing their income taxes. so normally for april 15 people final their tax and say i owe the government $2,000, for example. they say they purchase a hem and qualify they say here is $2,000 that i will pay the government but since i have a home i have an $8,000 credit. so on net i will get $6,000 become from the government. now, there was a one million additional induced buyers but in terms of the total people that purchased it is closer to four million people. so, four million people getting the credit, we estimate that as about $30 billion at the $35

billion price tag for the u.s. government. but this spending for the u.s. federal program has been a big success from my perspective because it stabilized prices. the roughly of -- the swing of roughly five percentage points which realized $1 trillion of housing wealth and that is mostly for middle class americans. so, i think that the program has been a huge success. host: dem from pennsylvania on t the democrat line. caller: good morning, mr. yun. thank you for the information you gave us. that realtor that called in was excellent. i'm not in real estate but i hear the constant hammer iing a freddie mac and fannie mae and all of this. i read in several places that a corporation named countrywide was responsible for 80% of theed about loans.

is this true or not? fox news people keep hammering and just regurgitating what they know on fox and it is so far from the truth it ridiculous. may i have your response in >> freddie mac and freddie mac do not directly originate the loans. it will be countries like countrywide, bank of america and those who originate the loans and sell to freddie and franny. franny and freddie is another institution created during the time of the great depression -- freddie a little later -- but their job was to borrow money cheaply bus they have government -- because they have government ties and pass it to the consumers. but from about 1990 franny and freddie pursued other activities

which was in essence they created this gigantic portfolio or hedge fund and bet on the housing market. if this hedge fund turned out well it was a huge profit for the shareholders and managers. if it failed, and we know it has failed, taxpayers are on the hook. so what we recommend is franny and freddie gradually have critical role in bringing down the interest rate and they need to get back to that without worrying about the portfolio investment. host: a twaoeplt by john -- a tweet by john. host: here is a call from vancouver, washington. caller: i wanted to make a couple of comments before i get cut off. first i would like to say this gentleman seems to be well informed and i really wish you guys had him on last year.

hello? host: mr. yun has been on several times with us, jim. caller: i'm kind of an old fashioned kind of thinker and what i think in terms of buying a house i look at my annual income and tithe that by three and figure that is the house that i can afford. that is really good common sense. i kind of saw a lot of that going through the roof. i worked in the air force the past 10 years and i had people yelling at me if you don't buy now you will never be able to afford to. and i thought they are telling me i can afford a $250,000 and i'm only making $40,000 a year. then when the interest-only loans came out i realized this is at the top of the pyramid scheme and i tried to tell my friends that and a lot of my friends in the military are being told they didn't have the

credit to get a better rate but they could get there and in a couple of years it could be transferred over to a better rate once they had a better established credit rating. i saw this shell game and sure enough i was right. but i just wanted to say i think maybe the federal government shouldn't have bailed anybody out. i think they should have let it all crash and let the market fix itself bus every time the market gets involved the market never does quite fix itself. there are a lot of people right now who are out there who could afford to make their payments and they are walking away basically from their mortgages because they are taking too much of a hit and they realize it. guest: the common sense, the income to price ratio or price to income of three or four times, those are good metrics. and if the lending had abide bid

that we would not see this problem. but that metric was thrown out and one of the problems was all these people on wall street that were doing the technical analysis and they said somehow that they could create a utopian society with subprime mortgages and that was based on somehow the prices always rising. we know that prices do not always rise. one of the financial market reforms which we're very supportive of is the reform of the credit rating agencies, because the moody's, standard & poor's, they sell the subprime mortgage products and they are of triple a quality and all the money floated into the mortgage companies and for the mortgage companies there was a financial incentive to originate the align independent of the income ratios. so, it led to this condition where we didn't have the norm checks and balances. checks and balances are consumers want to buy a home but the learned would say show me your income and documentation.

let's make sure that the ratio is well within the normal rate. that was bipassed. -- that was by passed. host: the former country wiwide facing legal action. how have they survived as a mortgage lender? guest: the bank of america purchased countrywide so the burden of all the bad mortgage origination from countrywide is on bank of america. the specifics of the c.e.o. i don't know if there was any specifics to mislead the market or consumers. i don't know that specific. host: we go to roanoke, virginia. katherine. a republican caller. caller: i want you to know i just love c-span. i have quick question. host: go ahead. caller: i want to know why an f.h.a. loan takes six weeks to

two months to go through. especially this day and age with internet. guest: the f.h.a. perhaps need to adopt the latest technology platform to originate those loans much faster. i think one of the reasons is in light of the fact many bad loans were made during the bottom years, people are looking over the documents much more carefully and going through the process. and also the appraisal rules have made it a little longer in terms of trying to move the system through. that could be one of the hiccups in the system. but you are right, in today's high tech environment where we can use the computer to send quickly that things should be a hrelittle faster. host: call from oregon, a call from peter. caller: i have a tough question four. i'm a citizen lobbyist in oregon. i represent manufactured home

park residents. currently we have a huge sacred cow which involves the mortgage deduction, the interest deduction. and it represents about $600 billion every four years. and, given, that we know that over 70% of that goes to people who own homes and make more than $100,000 a year. my question to you is this. why don't we stand that on its head and if we are going to do that kind of subsidy, represent the people who are under $100,000 because we know home ownership makes good sense and economic sense, and that is my question. thank you. guest: the mortgage interest deduction was in place when the income tax was created in the early 1900's. so it has been over 100 years.

through that the budget situation has always been able to manage the mortgage interest deduction so you cannot blame the current situation on that. furthermore, one cannot blame the mortgage interest deduction for the housing bubble because it has been in place a long time. the mortgage interest deduction was in place because fundamentally i think americans believed owning a home is preferable to renting, other things equal. we want to have successful ownership policies so people who are not yet qualified need to save for the down payment and wait. plus the ability is providing more to own their home. from a societal point of view what one finds is various academic studies show families of tkwl circumstances, one is a homeowner, one is not, and their children do better on test scores, there is less incidence

of juvenile delinquency and lower teen pregnancy. so something about owning transforms some of the mentality among families. perhaps they are thinking 30 years out rather than trying to think week to week. so, there is a large societal benefit. so this $600 billion you mentioned the past four years, yes, that is a tax break for the american homeowners, yet it is providing a tremendous societal benefit externalities. host: tampa bay, jerry on the independence line. caller: how do you to, mr. yun? i would like to ask you a few questions and see if you agree with me. firstly i presume you are a licensed broker. and during both my college years and during my college training we were taught that new constructi construction, the entire economy

depended on new construction. how does that work? of course, you have cement that goes into a home, you have wood that goes into a home, you have a tile roof that goes into a home or you have a vinyl roof that goes into a home. you have tile floors. people tend to buy new furniture that goes into a home. people tend to have cement for the driveways and new lawns are landscaped. new construction is, would you agr agree, tied to our entire economy? first of all, would you agree with that statement? guest: well, all the past economic cycles that the u.s. economy underwent was generally led by the housing. if the housing market went down it dragged the rest of the economy down. when it picked up it brought the economy become out of the recession. so, the housing is a big driver

of the economy and no doubt as you mentioned, hiring of construction workers, buying lumb lumber. so all the secondary impact to the economy. furthermore, one thing that is left out in in your equation is the housing wealth. if the housing wealth is stabilized that is a source of stability for many americans and they feel comfortable purchasing an automobile or purchasing cloth clothes. so their financial stability is another driver of the housing market and how it interacts. host: jerry, do you have a follow-up? caller: yes. what i'm trying to say is without a viable new construction industry, new construction, this economy will never recover, it is not going to recover. with an unemployment rate that is not paying a living wage,

here in florida we are in a situation where we have -- well, nationwide, would you agree, mr. yun, there is still somewhere between two million and five million foreclosures to be resolved? guest: this area could be about 2.5 million foreclosures which would match last year. next year could be less but that is still higher than normal so we have a long way to go in terms of the foreclosures that need to be absorbed. host: just following up on jerry's comments, a tweet. following up on the construction being the driver of the economy, a front page article in yesterday's "new york times" wrote about the housing construction industry on the rise in las vegas, nevada. home prices there are down 60%

from 2006 and one of the steepest stkaepbts -- descents. there are 9,500 sitting empty. builders are putting up 1,100 homes and they are buying lots for more. focusing on las vegas in particular, can you tell us what is going on there? guest: the new home construction area in areas like las vegas has tumbled at about 90% so they are at rock bottom and they are beginning to increase somewhat. but it is still a very low electrical of activity. but it is up to the builders to recognize that some of the oversupply inventory needs to be absorbed before the builders can kick into the market system. there are always buyers just like there are buyers who say i want to buy a new car only, i don't want to consider a used car. there are people that say existing homes are fine but i really want to have my own

tastes, my own features in the new homes so there will be buyers who are looking for the new home construction. and from the rock bottom levels it is only one direction where it can go, which is upward. but still the home billers need to very cautious about where to build. but as i mentioned earlier in the program, some of the home builders are saying they want to build, they see a demand, they see a buyer but can't get the construction loan. host: here is steven from new windsor, new york. caller: good morning, mr. yun. i have a couple of comments. you were talking about that man who just called or he was talking about jobs important. that i was going to follow up on, but there is one other thing. i knew a person who was constructing homes in 1970. what happened with him is he went into the construction business and he was building 10 homes a year up to around 2006. in 2007 and 2008 he was unable

to sell and had two homes left. he's gone out of construction to find other jobs. but the point is he told me it cost like $40,000 to $50,000 to build a home today. the point was he was selling the homes for up to $300,000. that is a real big increase in price. people were willing to pay, he made a lot of money. but now he can't sell homes. all of these homes, when i bought mine in anyone 70 -- 1970 it was $30,000. i was thinking of selling it and it was $240,000 they said it was worth. i have heard the stories where people would buy a home and they would say well, you can afford that even though it is way above what you can afford because of

your type of job and how much you are making. guest: many mall builders have had a difficult housing cycle. but with the housing market appearing to stabilize hopefully this provides work opportunities. but the construction loans, now that banks are making decent profit, they should be looking into the areas where they do normal business, which is lending for construction loans, lending for jumbo mortgages, lending for second home purchases. those are private mortgages without think government backing and they need to flow. and given that wall street appears to be stabilizing, the financial market is raking in a nice profit i think there will be more lending into purely private sectors and hopefully this will turn around the sector. host: he was the second one to mention the difference 2010 the cost of building a house and the sales price of the house and the large increase in price. is that percentage much different than it was 10 or 20

years ago? guest: there is always -- the builders will be responding to the profit margin. and during the downturn the profit margin disappears because it has to compete with distressed properties. but now buyers are willing to pay the price that is bringing the profit margin so we are returning to that more normal lev level. we are far from being normal but the direction on the way things are improving. host: one more quick call, tammy in pope county, florida. caller: you are talking about people buying new homes and getting in debt. i would like to explain something right quick. we build our homes. it took us five years to pay off the property that we are on right now. we got a mortgage and built our home. we put $150,000 in building our home. our bank, we have been dealing with them since 1994, talked us into doing a refinance. if we had said like we were we

would have been fine. but the refinance, predatory steering, our payment went from $1,300 to $2,700. they didn't explain that. it was a 30-year fixed interest rate at 5.25. that was the end of 2007. right now currently i don't know if you realize it, 500,000 homes in florida are clogging up our court systems that are in foreclosure. it is not only people that bought homes but people like me and my husband in our 50's that refinanced that we were not told about the the debt ratios. they said no problem. they called us in and sign this, initial, initial. they didn't explain that we had a balloon or an adjustable rate. guest: one thing that we need to get in this, the financial market reform and transparency. we need to assure what stkaourpls sign they fully understand. because one thing in the footnote and as you know signing

the document particularly for home purchases or refi are so many pages to sign it can be easily overlooked. we need to assure there is a clear transparency as to what people are signing. host: lawrence kwrurpb, thank you for -- lawrence yun, thank you for joining us. there is more on line at realtor.org. we will stay on the economy next focusing on jobs. in particular install job creation. the chamber of commerce is holding their small job summit. first an update from c-span radio. >> in the headlines business owners will get details about a new health insurance tax credit that would cover up to 35% of premiums some firms pay on behalf of their workers. the i.r.s. will explain the provision. even as a business lobbying group joins a lawsuit arguing

congress exceeded et cetera authority by requiring coverage. engineers have figured out how to siphon some of the oil spewing into the gulf for almost a month. but it could be too late to stop that oil from reaching a major ocean current that could carry it through the florida keys and up the east coast. after weeks of failed efforts b.p. crews yesterday hooked up a mile-long tube to funnel the crude from a blown well into the tanker ship. however, millions of gallons of crude are already in the gulf of mexico. asian stock markets have been tumbling as investor concerns that the europe debt crisis will worsen. at one point sending the euro to a four-year hoe. investors in asia are not convinced the $1 trillion bailout last week will keep the crisis from spreading from greece to other european countries. iran has agreed to a nuclear fuel swap brokered with the help of brazil and turkey. it could revive a u.n. backed

proposal for a easing the stand o off. finally, two astronauts are out space walking at the international space station. they will install a spare antenna on the space station, hook up the storage platform and losing the bolt on batteries. atlantis arrived yesterday on its last flight as the shuttle program winds down. those are some of the latest headlines on c-span radio. >> defending the united states against cyber attacks. tonight homeland security deputy und undersecretary phillip reitinger on the role of private networks in cyber security. the senate homeland security committee gets an update on the response to the gulf coast spill. they will hear from janet

napolitano and head of b.p. america thaft starts at 2:30 eastern on c-span. tomorrow it i is primary day in three states. coverage tonight starts on the 12th congressional district in pennsylvania. that is a special election for the seat of the late john murtha. first a get out the vote really with president clinton in johnsontown, pennsylvania and a campaign rally for the republican candidate tim burns, a rally over the weekend in washington, pennsylvania. that is tonight beginning at 8:00 eastern on c-span, c-span radio and c-span.org. supreme court nominee elena kagan is meeting with senators in advance of her confirmation hearing. learn more about the process in "the supreme court" pages of conversation wall the justices active and retired providing

unique insight about the court. available now in hard cover around as an e-book. >> "washington journal" continues. host: we have the executive vice president and chief operating officer with the u.s. chamber of commerce which today begins its annual small business summit. c-span cameras will be there covering the event. let's pick up with some comments in the last segment on housing. what is the correlation between housing growth and job growth? guest: well, housing construction and construction generally is one of the most expensive parts of the economy involving everything from real estate professionals to commodity providers, to service people, lawyers, designers, all the rest. a slowdown in construction hurts a lot more people than one would normally think.

it is a classically small business area. new home construction is still for the most part something that happens in individual kphaoup communities. so we will be talking about it. host: small pwebusiness job grh is kind of like motherhood and apple pie. it is hard to be against it. but what do you at the chamber of commerce see or would like the administration and congress to do that they are not doing now to spur growth? guest: we have something called the 20 million job challenge where we think we need this economy to create 20 million new jobs the next 10 years both to replace the jobs we have lost in the recession and also to employ the new people who will be coming into the economy the next 10 years. and who is going to do that? those jobs won't be government jobs. they will be private sector jobs, and primarily small business jobs. small business is the creator of

jobs in the economy. so we have to create the tax climate to allow them to grow, develop and hire. that is where the job growth has to come from. the primary responsibility of this government should be to create that environment. host: for the sake of our conversation, what is -- define a small business and how much of the economy is made up by small businesses? guest: there are a number of definitions of small business both by revenue and number of people they employ. we talk about businesses which revenues are under $100 million and you think that is a big business. but everything from the dry cleaner up to a company that has $100 million revenue is facing the same issues. where do i get credit? where do i get the people i need? where do i find customers? they are still out there

struggling. and, again, that is where the future of the economy rests and companies just like that. host: we are talking about small business job growth and the numbers coming up on the screen where you can call for democrats, republicans and independents. in an opinion piece in the "wall street journal" today meredith witness any writes about the small business credit crunch and part of the piece reads that if banks are not allowed to effectively price for risk they will not take the risk. right now we need banks and particularly community banks to step in and provide liquidity to small businesses, interest rate caps and fees that will more likely drive consumer credit out of the market and many community banks out of business. the business will take more

credit from the consumer. it is important to support any and all lending activities that would enable small businesses to begin hiring again. if the regulatory reform passes, with a rate cap and interchange regulation amendments, small businesses will be hurt. is this the most important piece of this financial regulation bill in terms of job growth, small job growth, that the chamber is likewise interested in? guest: when you talk to small businesses they are talking about right now the biggest issue is the credit crunch. the biggest driver behind that is the folks who give them credit, particularly regional and community banks, are caught in a vice. they have the politicians on one side beating them over the head to lend more, lend more. then they have the regulators on the other side saying reserve, reserve, reserve. and this is coming to a head in this regulatory reform package where, again, you have the political demands to lend more

and you have the layers of new regulation to attach down the regular -- tamp down the regulation. it is a key problem. host: the president has been talking a lot lately about small job growth. most recently in buffalo last week i want to play quickly what he had to say in terms of what the administration says it has done. >> last year we enacted seven tax cuts for america's small businesses. as well as what we call the making work pay tax credit that making work pay tax credit that goes to the vast majority of small business owners. so, so far the recovery act has supported over 63,000 loans to small businesses. that is more than $26 billion in new lending. more than 1,200 banks and credit unions that stopped issuing lines are lending again today.

more than $7.5 billion in federal recovery act contracts are going to small businesses. right now, the series of additional tax incentives and other steps to promote hiring will take effect. because of a bill i signed into law a few weeks ago, businesses are eligible for tax cuts for hiring unemployed workers. companies are able to write off more investments in new equipment. as part of healthcare reform, four million small businesses recently received a postcard in their mailbox telling them they could be eligible for a health care tax cut this year. host: the president ticked off a number of things saying the administration has done. anything you can react to? guest: well, i mean a number of nice things in there. but when you are looking at job growth across an entire economy, when you are looking at millions of small businesses, not just a couple of programs that have

helped a few small businesses. what is the biggest impediment to job growth? it is uncertainty. if you are a owner what does the world look like in terms of your future tax experience and tax liability? what does the future look like in terms of healthcare liability? a lot of uncertainty. what does it look like in terms of credit availability? if you do get that big order in and you have the possibility of possibly hiring somebody else, do you wait because you are not certa certain? do you add overtime? do other things to get bay bi? or add the extra job not knowing what the experience would be next year? what i would like to hear going into 2010 and 2011 small business owners won't be subject to additional taxation. that would help job growth. so, nice programs but we have bigger issues with the economy and job growth at this time. host: let's hear from viewers.

springfield, vermont, mike on the independents line. caller: good morning. i have been laid off for 14 months and i find that i was a small growth company. the company became if you want to call it mid growth. became midsized. as it grows, the financial situation of the company changes and they can now go out and get better qualified personnel to sit in a chair. at that point you are screaming to say hey, why don't you retrain me. the cost of retraining somebody in a small business because usually the technology and/or the situation is they need you in your job but yet you are screaming to go forward and you are held back or it seems like

you are held back because they can now afford to hire a more qualified person. so, you go to school but you still don't have the certification you need to go forward. by then somebody else has already received the certification and goes in in front of you and the cycle keeps going over and over. so the longer you are out or the older you are shall the harder it is to get the certification to get back into the workforce. do you have any comments on this? guest: a couple of things. first, i'm very sorry about the situation. i wish to say that it was more uncommon but there are a lot of up employed people and we are working every day with our members to try to put policys in place that will help the economy and help with job growth. i have to tell you we we polled our members of all sizes across the country inevitably their number one issue is getting, keepi keeping, and training good

people. you have to have the good personnel. smart businesses will keep people who are good, retrain them, give them new skills. i'm afraid i don't know about the specific situation with your company, but frankly we we talk to our members they are all about expanding the training opportunities for their current workforce. all i can say is i do hope you get some retraining and good luck to you. host: robin, cockeysville, maryland. caller: i have a question/comment. in regard to new construction being the driver of our economy, here in maryland my husband and i make together like $125,000. we have not been able to afford a home because all new homes it seems like in maryland are mansions. the days where you had the neighborhoods where i grew up

with moderate sized homes are gone. i don't know who lives in these houses but they are huge and they all cost 750 or half of them starting at a million. what is wrong with building normal sized houses for regular p.j. on middle -- regular people on moderate income? guest: what you are essentially seeing is the market at work. there has been a huge focus on real estate expansion the last 10 years and developers were responding to where they thought the market was going in terms of what kinds of houses people want. i think what you will want is in the current climate when you start to see a ra rejuvenation the housing sector i think you will see more developers focusing on a more of a value segment of the market. i think it is just developers building houses they think people want and i think that

will change. host: to wyoming next, rollins, wyomi wyoming. caller: good morning, gentlemen. i find i'm in an interesting position in this state that i have known in all of my life. i moved here from las vegas and las vegas indeed is a disaster. when i left there several years ago, it was a disaster waiting to happen. i came here to this little town and it was busy. that was during the bush administrati administration. and, of course, mr. clean and mr. bush -- mr. cheney and mr. bush were drilling everything as fast as they could and that caused a boom to occur in places like there. and it has had a history of boom and bust. it has always been that way here. and it is a peculiar attitude

that people have when it booms. everybody goes out an spends all their money, they are rolling along, then it slows down. well, during this last few years i acquired a building lot for not much money and i cleared it and improved it and started building on it a few years ago. i now have the sheldon and it is coming -- shell is done but i hired a few people last fall and built it. with the super insulated shell foundation which is contrary to building new orleans around here. -- buildi norms. i am going to let it out. and i live in a nice older house. it doesn't belong to me, but i

have lived here and fairly comfortably and i own a small business. so i have my fingers in several of the hot issues now about building, about living in a place where you feel secure, about just the whole thing of real estate and i guess what i wonder about and the question i would like to ask your guest is this. i read a back back in 1992 known the limits to growth. are you familiar with it? guest: i'm not. caller: fair enough. it was published by a group of research people affiliated with an office called the club of growth -- host: why don't you ask the question so we get a response. caller: there is that nobody ever talks about growth is almost like a cure-all for everything and it is a cancerous

thing and have we reached the limits to growth? guest: i certainly hope not. i'm aware of the club of rome work which had dire warnings. most of which have not come true since that time. we are living in a world where people want and appropriately want to have safe, sound, prosperous existence. frankly, most of the people on this planet don't have that. they want -- if we don't have more economic growth we are condemning a lot of people around the world to difficult existences. we do need to have growth that we can sustain into the future. we get that. but economic-you don't have jobs, you don't have the capacity for technology development and living better

lives. when we start limiting economic growth we are going to start having worse lives. host: next is jerry in talent, oregon. good morning. caller: good morning. i would like to make a comment and ask your guest a question. first of all, i was listening to a professor, richardwoman, from the university of massachusetts, an economic professor, and he has documented with statistics and graphs and charts how the greatest transfer of wealth possibly in the history of the world has taken place over the last 50 years in the united stat states. that transfer of wealth has been from the working class to the ruling class. i'm a 55-year-old man with grandchildren. i have looked around and i have seen that the chamber of

commerce has walked hand in happened with the ruling class to work against the working class. so first of all i would never have any respect for anything coming from the chamber of commerce. you people need to be exposed for what you are. i think all the local businesses here, if i have a choice i don't shop from people that support the right wing conservative chamber of commerce. the question i have for c-span or the request, is it possible for you folks to get amy goodman from democracy now on your program? host: she has been a guest on the program and we thank you for the input. guest: well, sure, i'm afraid i'm not familiar with this professor's work. here is what i know about business leaders. they are the entrepreneurs, they

are the people who create this economy, who create the jobs and employment that support all of us, including the government. i could list off the top of my head many, many folks who started with nothing and have built huge businesses that employ people all around the country. those are the people they should be celebrating. and that is part of what we are doing with the small business summit is celebrating the people who put themselves out there to not only try to have a better life for themselves but their communities. so you won't get any apologies from me about celebrating business leaders. we are happy to do it and frankly our economy and our country depend upon it. host: we are covering the event later and on the listing a number of c.e.o.'s and heads of small companies. what do you hope that they will get out of this conference? guest: well, it is two things.

we have a lot of rich content where we talk about common challenges they all face from credit to uncertain policies. but we also get them together and go to the hill and talk to elected representatives about those challenges. so, it is both talking about sort of common problems and acting upon them, going up to the hill to try to generate change. host: to damascus, virginia. good morning, earn est. caller: good morning to you. i want to talk to you about what runs this economy. than is energy. people working, making $9 an hour and taking half of their money to fill up their car to go 35 miles to and from work. people don't talk about energy. we have energy in this country that we don't make use of.

and there's got to an balance. there is too much regulation and there's not enough balance in this thing. these little people that are making $250 a week, they can't compete with people who are millionaires buying fuel and everything. and we have it here in this country and we don't use it. that is what got the economy starting to drag in the beginning of this thing. independent truckers have to park trucks. host: to broaden his question, how do we grow wages in this country? how do we make it so the cost of living is more affordable for workers of small businesses? guest: well, you need economic

growth. i'm getting back don't know earlier question, you need economic growth. productivity growth. you need the new companies that you have the dreamer and big idea. and what we need for that is we need a policy environment that allows that to happen and we need to focus on big issues that we haven't focused on, like energy, like the caller talked about. we have been suffering from the lack of sound environmental policies in the country for a long taoeuime. we have tremendous resources here that are unexploited. we have made this country less secure over time in terms of our energy supply. we need smart policies on ene y energy, infrastructure, a whole range of underlying government policies that determine whether you have economic growth or not. host: here is long beach, california, good morning to frank on our democratic line.

caller: good morning. i have a statement. we have had such a problem with illegal immigration and people who sound like racists call in and blame the individual worker. but it seems to be your members that hire these people and lure them over here. the great majority of illegal workers are working for your members in your jobs. and what are you going to do about it? your members are the people who exploit them and do more than the individual we attack. guest: well, this country needs comprehensive immigration reform. we have been talking about it for years and years. there are three parts to that. one, tougher border security. we need to have a secure border that people feel secure about. secondly, we need to address the

12 million illegal or undocumented immigrants here in this country and give them a path to regularize their lives and pull them into the regular economy. we are not going to put them on buses and push them out of here. we have to find a way to pull them in the regular economy. third, we need a system for getting workers into this country where they are needed, in agricultural or high tech or other areas. so, we need all three. we have been pushing for it a for a long time. there is not a lot of political courage in this town to deal with the issues and it is fundamental. host: we have a tweet on the issue of immigration focusing on arizona. guest: the boy cots are aimed

at the wrong people. when you boycott businesses in arizona, you punish those businesses, you punish their workers. take travel and tourism for example. our c.e.o. is giving a major speech on travel and tourism. when you boycott travel and tourism in a place who do you hurt? you hurt low income workers. so, the boycott may be well intended and may make you feel better. it doesn't have an effect and you punish the wrong people. host: next up is magna, utah. good morning. caller: good morning. i just want to ask a few questions about the deregulation of the technology and outsourcing of over six million jobs in this country. not why small business employ more people than big businesses because in the last 30 years you

have destroyed the industry in this country. in small pwebusiness people getl the tax breaks, the working people pay 86% of the taxes and 10% of the small business owners and very wealthy, the 1%, pay very little. maybe 15% at the most if they can't hide those. you people have fought tooth and nail against the employees free choice act and you have allowed these people to go in and do a card check and sign up and have a union. maybe you would have more of a tax base in this country because small businessmen don't pay taxes and they are not small businessmen. they are millionaires that own their own jets and everything else and employ probably over 120 people or over 500 people that you can consider a small business. so don't sit here and run this scam on us and talk small business. they are the great employers

because we broke up all the big business and good union jobs in this country the last 30 years. . as long as you sign a card you can push organization on employees. where a contract is imposed. if you think that will help

economic growth, we have a disagreement. host: i have a suggest -- jean is next from long island. caller: not scare everyone, but obama and his taxes, trying to scare us into thinking that we will be paying more, you are scaring people. you have to cut it out. you'll need to learn how to tell the truth in stop your lying. guest: i have to disagree with you. we are not lying. there are many stresses in this economy. at the end of this year we are facing the expiration of a set of tax cuts which without any

action from the u.s. government would greatly increase the tax burden in this economy. most particularly on small business owners. host: the national federation of independent businesses is going to join the lawsuit started by the state's against the health care bill that was passed. what is the chamber of commerce is interest in this lawsuit as it goes -- chamber of commerce's interest as this lawsuit goes forward? guest: we opposed to the health care bill. we thought that it did not do the one thing that our members needed, which is controlling the cost curve for health care. we are taking the most expensive system and try fix it by making

it more expensive. that being said, it was passed. we will represent our members interest for the best outcome possible. host: what is the most common question you are hearing from small-business members guest: -- members of? guest: what does it mean for me? -- members? guest: what does it mean for me? what will it mean for my health care costs? host: christine, go ahead. caller: my husband has two jobs. he is a small independent contractor. he also has another full-time job. he just sold something that i cannot talk about. it is being tested. a new energy type of situation. i cannot really go into it. anyways, he makes $5,000 for building this piece for his company. we will be taxed for $1,500 of

that. it took him two weeks and many hours on his time off to finish this. they are very happy with that. i feel for the person who says that people do not pay taxes, we are middle-class people and that is a lot of money for us for one job. that is quite a bit of taxes. 30%. i feel that it is ridiculous. it seems that we need to innovate in this country. going back to when edison won the prize for coming up with the light bulb. i feel that we need to focus more on what we can do end stop name-calling -- and stop the name-calling. we need to pay our bills, which are going up. property income taxes are being

raised. as far as health care goes, why do they not take medical students who have not paid their student loans off and allow them to work in a free clinic, which would give them real life experience on how people get care. i have a 20-year-old daughter that does not have medical insurance and i worry about her all the time. guest: first, congratulations on a new idea. i hope that it works out for you. you are getting exactly what we are talking about. our future will rely on people like you and your husband coming up with these new s and watching new businesses grow based upon it. is there a legal, regulatory tax environment that makes you want to do that? that incentivizes you to do that?

i hope that it does not hold you back. i hope that you keep going. as we talk about this at the chamber there is a great picture of the microsoft corporation in 1984. about 10 people. very scruffy looking. bill gates looks like he is 12 years old. we do create new, powerful, amazing companies in this economy. it is because of people like your husband and yourself who have a big idea and they want to pursue the dream. please keep at it. host: chuck, republican line. rockville, maryland. caller: i have been a small businessman for 35 years. many people do not realize that if a small business makes $200,000 per year, as you were speaking of earlier, and it flows through your personal income within llc or such other

corporation, your living expenses come out of that. but you also have to generate cash flow. $120,000 of the money that i make each year is paid to equipment loans and other things. $130,000 per year, many people in that range, just keeping their business going. there's this big thing that you are rich if you make $250,000. in many respects small business people make less than government workers. last week i heard that the stimulus package for infrastructure, there was a wage out there of $79 per hour that had to be paid for businesses to qualify for stimulus money. that is ridiculous. as far as the union is concerned, these people that called about the union and 6

million jobs going overseas, everyone enjoys the cheap prices everyone enjoys the cheap prices that we pay for all the chinese goods and services that we get from other nations, but then they complain that the job is going over there and the union is bankrupting companies. look at what happened to gm and chrysler with all of their health concerns and the things that they negotiate the drive up the cost so high. host: what kind of business and do you own? guest: service station, gasoline and repairs. you know how volatile that is -- caller: service station, gasoline and repairs. you know how volatile that is. paying 6 cents per gallon on every credit card that you take, there is not much left over.

guest: what you are talking about with the tax treatment is a tremendous issue that very few leaders in this town understand. despite what we have done to try to make them understand. when we talk about people that make $250,000 per year or above often what you get are just would you describe. small businesses where revenues and expenses are passed through to the personal income statement. they are paying a lot of taxes in addition to the business. you are absolutely right. when they talk about limits like $250,000 per year they're mostly talking about small businesses with a lot of bills to pay. host: our guest is david chavern. boston, mary, in the pan and line.

-- independent line. caller: do you have any opinion on single payer systems? do you agree that business owners should pay for this? how is this requirement a benefit for small business owners? i do not understand why your organization does not try to relieve small business owners of this requirement? caller: business owners are going to pay no matter -- guest: business owners are going to pay no matter what. the trouble with single payer system is that it will crush innovation in a huge segment of our economy. by the way, if you look at the world for business owners they will still have to pay. the idea that they will get out of having to pay is not anything that anyone has suggested or put on the table. what it would do is take away

input or control over expenses. we do not think that single payer is a smart way to go. we think that there are a lot of innovations that we could have in the medical arena robot -- regarding individual choice and insurance market reform in other areas with improved health care and reduced costs. the administration did not agree. we will work from there. host: houston, texas. democratic line. go ahead. caller: with regards to the unions, does it actually trickled down? we have 20 work programs to make sure that the u.s. citizen does not make more than $15 per hour? they would rather have a slave or child labor doing it. as far as china goes, our congress and does not work for china. we pay them $200,000 per year to

work for america. not create jobs in mexico, india, or china. my kid is in afghanistan right now. we are killing people and sending this money for what? to give my job away? host: taking a look at the job chart growth of the u.s. population, they looked at the baby boomers but also that the millennials. fewer than half of them are currently adults. nearly all of them will be in the work force by the end of the decade. as they continue to advance to adulthood their unique characteristics will reshape american life. the size of that demographic group, 92 million people. where is the future of jobs, in particular for this age group? guest: particularly critical for

kids coming out of school, we need to get this economy going again. we are all dependent on it. we have loaded this generation with debts and obligations to take care of you and me in our old age. if they are not successful, we will not be successful. we need to get this economy moving and get this going in the workplace. also putting into place policies that will help them to be successful. it is in our interest to help them do that. host: ohio, republican line. caller: good morning. i want to congratulate you for defending your conservative positions here on c-span. i do not know that you do -- i know that you do not get many conservatives calling in on c- span. they have given up on it. what the democrats do not

understand is investment. people must invest to get a job. they will not invest for jobs that are putting square pegs in round holes and round pegs in square holes. the only way to get a job is to invest your money in the stock market ended bills into large businesses. -- and it builds into large businesses. union activity is a specter. legal in the legathe legal -- a. guest: what we have to stop doing in this town is demonizing business leaders.

they have put themselves out there to create wealth in the economy. the government does not create wealth. the private sector creates wealth. part of our job is to celebrate and tell that story. that is essentially what we will be doing this week. host: a couple of calls here. grand junction, colorado. chuck, go ahead. caller: i am a small businessman myself and i do not believe we will have anything correct until we stop of shoring -- off- shoring these jobs. we will be a third world country in less than 20 years. the brookings institution said that about five years ago. right after that, what do you know, los angeles is a third world country.

host: earlier we talked about the government programs that have yet to move small business lending. a report about the economic stimulus. are you having any trouble getting credit from your bank for additional job growth or expansion? caller: i am very small business. i use my credit card. you know, when they give you 0% for 12 months. host: is that common? guest: absolutely. by the way, a couple of callers have mentioned trade. we had a major speech given by our ceo last week. i tell you what, 95% of the people that we want to sell to live somewhere else. we are going to double exports in the next five years, but to do that we need to get moving on

the trade agenda. host: i think that our viewers can find that speech on our video library, c-span.org. one more call. tampa, florida. good morning, maxine. caller: i am calling in regards to a question that was asked a few calls back. what is the chamber doing regarding companies that are hiring these illegal immigrants? his answer was what the government is not doing. i think it is a two-way street. you never did answer that question. guest: sure. i mean, we do not condone anyone doing anything illegal. i do not think that too many of

our members are actually hiring the illegal aliens. what we have to knowledge is that there is a segment of the economy where there is work that needs to be done. the folks that are coming over here are working. they are not on the dole or otherwise taking from the economy. we have to acknowledge that and figure out how to make regulait regular and how to legally get to the people that you need to make the economy go. at the end of the day we do not condone anyone doing anything illegal, including employing illegal aliens. host: our guest has been david chavern, they're holding their small-business summit today. thank you for joining us. guest: i appreciate it.

host: next we will be looking at defense spending and your calls. first, a news update from c-span radio. >> at 9:20 in the headlines, good news from general motors this morning which said that strong sales of new models rose to the first quarter of profit in nearly three years. they earned $865 million from january through march. the federal government loan to gm $60 billion to stay in business and now owns 51% of the company. gm hopes to pay back the rest with a stock sale. bp says that it is siphoning oil from the gushing well in the gulf of mexico at a rate of a little more than 1,000 barrels per day. about one-fifth of the estimated 5,000 barrels that the well has been spewing. researchers say that the oil already in the gulf could have

reached a current that might carry it through the florida keys and up the east coast. we have live coverage of the senate homeland security community -- committee hearings starting here on c-span radio at 2:30. winning the war in afghanistan, expanding ties with russia, countering the threat imposed by iranian missiles, and ensuring the security of all members. that draft document is being released today, seeking to create -- seeking to repair a growing rift between the u.s. and european nations that want to maintain nutritional focuses on defense. heathrow airport is no longer in a no-fly zone because of the dense volcanic ash still drifting down from iceland. restrictions remain in place in

amsterdam, northern ireland, and smaller airports. finally nearly 2 million toy gun sets are being recalled after two choking deaths. sold nationwide at family dollar stores they were employed -- imported by henry gordy international in new jersey. they refused to recall them. you can get more information on the commission's website, ccsc.gov. those are some of the latest headlines on c-span radio. >> defending the united states against cyber attacks. r tonight, philipeitinger -- tonight, philip reitinger. on c-span 2, "road to the white

hous "the communicators." >> tomorrow is primary day in kentucky, arkansas, and pennsylvania. coverage tonight will focus on the 12th congressional district in pennsylvania. first tonight we will go to a get-out-the-vote rally for democrats with president clinton in johnstown, pennsylvania. then scott brown of hearing over the weekend in washington, pa. over the weekend. that is tonight beginning at 8:00 p.m. eastern on c-span, c- span radio, and c-span.org. >> supreme court nominee elena kagan is meeting with senators before her official nomination

procedures. read more about this process and the supreme court in our new book, available in hardcover and as an e-book. >> "washington journal" continues. host: george wilson, the defense correspondent for national correspondents daily, here to talk about the recommendations coming from secretary gates in terms of cutting defense spending. why is it so difficult to have this conversation with congress on cutting defense programs or personnel? guest: my life has been 50 years of looking at the military industrial complex. congress has gone from being very skeptical about weapons -- bill crosse had lamented the fact that there was a $1 million cost overrun in a program, now

it is a public package. it is very hard to close down a weapon, even when we do not need it. host: you made this comment, "the majority members of congress now regard purchasing weapons as legitimate public works programs because of the jobs that they provide back home." if that is the case, at what point does someone like secretary gates have success in the things he wants to get done? for example, in the 2011 budget proposal there are things that the president and secretary gates wanted out that the congress put back in. guest: it is an uphill fight. they just thumbed their nose at secretary gates by increasing pay and health benefits for the military, which he said earlier

he would not allow. there has got to be an education program that $1 in domestic spending gives you more. and i think that obama has to lead the fight. coming from the president and the secretary of defense, they can make the point. host: george wilson is with us to take your calls on defense spending. for democrats, 202-737-0002. for republicans, 202-737-0001. for independents, 202-628-0205. we want to take a look at your top five big-ticket items. things that secretary gates has pointed out as things he would like to cut or eliminate. the bradley next generation fighting vehicle. the new ballistic submarine. the one that gets a lot of attention as the presidential

helicopter. marine-1 is up for replacement. finally, the joint strike fighter. any chance in eliminating or reducing any of these programs? guest: congress is generally against it and the voters are rebelling. their usual pattern is to switch them out, not cancelled out right. i do not see congress having the guts to cancel any one of those programs. they might do as they did with the army combat system, stretching it out and turning it around. i do not see politicians in this economy being willing to cancel a weapon. host: how big is the 2010 pentagon budget? historically how does that compare? guest: roughly $700 billion. it does not count everything else that they can contribute to a common defense.

i worked it out to $1 trillion per year. the money that goes from the energy department nuclear weapons, as well as veterans care and homeland security. roughly from $700 billion to $1 trillion quite quickly. we are spending over $1 million per minute on national defense. host: looking at the overall 2011 budget, what was it? guest: they like to say $600 billion plus, but that does not count homeland security. which is a legitimate national defense effort. it also does not count the nuclear weapons provided by the energy department. i got it up to $1 trillion for

everything, including veterans care. there is also a tidal wave of veterans care bills piling up that i do not think the country is prepared for. so many brain injuries and invisible wounds from the weapon of choice in iraq and afghanistan, which is the improvised explosive devices. i have seen estimates that we will be overwhelmed, both the private and public medical facilities. because these veterans will need care for the rest of their lives. host: harbor m, maine. go ahead. caller: i have spent a lot of time in the infantry. for the most part i have noticed that the bradley is the one thing that needs to go.

to me, veteran care will be in a long term the thing that they need to spend the most on. if you do not have the people on the ground fighting in top condition, worrying about what they will do when they get home, you will not have a prepared soldier during the battle. some of the technology coming out, we do not need much in a way of submarines in the desert. seems like most of the fighting that we are doing now is leaning towards -- even in training be pretty much go to the middle east. we have no other places to really trained for right now. i believe that the people that are out there fighting a war is what we need to put money in. not just technology that is proven. host: -- guest: i agree with you on that. submarines, according to robert

gates, are now $7 billion to $8 billion. host: 41 submarine? guest: 41 submarine. -- host: for one submarine? guest: for one submarine. so, i agree with you. infantry training, body armor, they would seem to be the top priority items. host: battle rouge, good morning. this is mark. caller: i have perhaps a crazy question. i do not mean to get foolish on you. everyone knows that weapons are very overpriced. have you ever done a study to see what percentage you think you are being overcharged ?

guest: the government accounting office has done just such a study. they found that the amount of money in the agreed upon was $296 billion. just in cost overruns for major weapons. the pentagon admitted that it did not know where all of its dollars are spent. we are going to the poorhouse on the back of a bad lax in my view. -- battle ax in my view. host: for example, an aging tanker in the military, they are nowhere near choosing a new contractor. how much will this drive up the cost for that eventual replacement aircraft? guest: amongst other things the defense secretary has declared war on overhead.

including an inordinate amount of private contractors. in other words we are short on contract and officers. we have subcontractors in the private sector that have not worked out well. host: contract and officers are not employees of the pentagon? guest: gates was trying to write that imbalance. -- right that imbalance. that is part of the cost overrun the you mentioned. host: wayne, florida. independent line. caller: good morning, bill. the federal budget, somewhere around 20% -- maybe 24% -- maybe 16% of what runs the military, president obama authorized

angela merkel of germany to push this big bailout of the of euro and greece. our part of that would be somewhere around $170 billion that would go to this foreign country and a faceless organization that will fail anyways. host: a little bit of topic. we are talking about defense spending with george wilson of "congress of daily." this is your peace from today -- "congress daily." this is your peace from today. "gates' swan song." guest: he wants to kill the c-17 in the sense he wants to purchase no more of them. a modern transport that has turned out to be a good airplane, but as far as he is

concerned, but enough is enough. if you are a politician, you will resist that. people say that gates cancel the f-22, but he did not do that -- canceled the f-22, but he did not do that. he just canceled making any more of them. he wants to reform the purchasing process. he has asked good questions, like why we need 11 aircraft carriers with 20 billion air wing -- 20 million air wing. if congress keeps regarding the pentagon program as a jobs program, he made this their and leave the pentagon by the end of the year -- he made this their

-- he may despair and leave by the end of the year. host: florida, good morning. caller: donald rumsfeld had announced the there was money missing from the defense budget. joseph kinds was the comptroller of the budget at the time. turns out that there was $3 billion missing. where did that money go? i know that there were hearings on it. three-fourths -- $3.40 trillion is a lot to disappear. when the pentagon was hit the next day, it hit the accounting department. host: where did this money disappear from? guest: from the pentagon's budget. -- caller: from the pentagon's budget. donald rumsfeld announced that there was money missing, they

were trying to find out where the money went. guest: the bottom line is that the pentagon has admitted before several congressional committees that they do not know where all of their taxpayer dollars are going. they have been promising reform since i was a little boy and did not -- has not happened. now, i do not think that it is a -- that they are black hearted, evil maen. i think it is terribly complex, but still out rages when you are a taxpayer. host: republican line, good morning. caller: as i understand it we have over 60 military bases. if we were to close them around the world, with that not solve the problem?

over in great britain they had an inquiry a while back on how did they expand -- can be the same thing against bush, rumsfeld, dick cheney? like the previous caller said, can we bring indictments to find out how this happened? trying to close some of the bases. guest: i do not think they are talking about indictments. we know that they were over extended. 150 countries in the world where we have an active-duty military presence. it strains the force of a strong

military. of what are we doing with -- " we are doing, i would start with -- what we are doing, i would start with pulling out the military from overseas. host: even a casual observer to the whole base closing and realignment would see that that seems to be a painful and slow process as far as agreeing of what to close and then closing it. guest: i am not a great fan, but that is one thing that robertson

got done. convincing congress to put a set -- put the sale of of money into the surplus -- put the same amount of money into the surplus, yielding more jobs. surplus, yielding more jobs. host: pa., the morning. caller: i agree with the callers. you kind of blew off wayne because he was talking about the euro. like it or not, we have these bases. we are ruling the world and any change that we make affects the world and i do not think we are taking our responsibility seriously when we build walls as if we are in the country. we do not own the land.

the land is the resource. people should be allowed to go where they want to go. people should not be discriminated against, you know? we have taken over the world, so let's take our worldly responsibility. cut down the military. stop making weapons. we are the killers here. thank you. guest: i think that that is a more complicated issue than she is portraying. host: you spoke earlier about your anticipated cost for the wars in iraq and afghanistan. there is a story this morning in "the new york times" about stress after battle. in the story they pointed out that reservists were more likely than regular troops to report symptoms, partly explaining the discrepancy.

they make up 30% of the forces but only 10% of british forces. what kind of broader cost is they're going to be in having the reserves to fight wars in afghanistan and iraq? guest: they have been over-used, in my view. they have been called up three or four times. the government is not happy about it. what will happen if there is a terrorist attack in the states and the guard is not there? the exposure to explosions call -- causes all kinds of brain complications that we are just discovering every minute. i do not think if you can say that a combat reservist that has been exposed to explosions, or active-duty infantry, have many different problems. i think they are the same. especially since they have been over-deployed in both the

regular army and reservists. host: daytona beach, john, independent line. caller: i have a couple of comments to make. my first concern for america's imperialism and colonialism in the world. we spend $1 trillion each year. they used a rubber stamp to kill civilians overseas. as far as feeling bad for the guys with pstd, they press buttons and use drone missiles to kill civilians oversees every day. that is cowardly. not bravery. host: is that the future of warfare as well belmont guest:

the problem with using creditor drones in a place like pakistan -- host: is that the future of warfare as well? guest: the problem with using predator droens in places like pakistan -- drones in places like pakistan, for example if we killed osama bin laden tomorrow morning is that not in danger of the president of the united states? is that a good trade-off? i think that we get into dangerous areas when we start unmanned warfare. it looks like we are setting the stage for retaliation. host: to lead editorial today --

host: the lead editorial today in "the new york times" today, "exploding personnel costs will increasingly crowd out financing for new weapons." guest: that is very true. the military has a wonderful medical care system. they get raises every year. it seems to me that the secretary is right when he says that we have to start cutting these human costs. host: they conclude with this, "mr. gates is an old hand in washington. but if there's any doubt about what he is up against, the house

subcommittee reminded him last week. they added $400 million to the $9,000,000,000.2010 request for missile defenses -- they added $400 million to the $9 billion request for missiles for the 2011 budget. -- budget." barry, good morning. caller: i thought of the supplementals for the defense budget were no longer in the strategy of the administration. did -- i thought that the supplementals for the defense budget were no longer in the strategy of the administration. the other thing, i would appreciate it if you would let us know -- every year we hear about the billions of dollars that go into the district's.

we have no debate. that is outrageous to me. guest: my comment is that you have to remember that this is an election year for members of congress. politicians have this tremendous fear of looking weak on defense. in your heart of hearts you may not want to vote for a weapon, but your opponent to declare you week on national defense. midterm elections happen every other year. there is just this tremendous fear of looking weak on defense. host: when john murtha died earlier this year, who else in

the senate is a rock-solid supporter and reluctant to cut anything from the pentagon's requests? guest: as you know, david o. beebie is going to retire and he told me that the system is broken as we are willy-nilly supporting weapons that we do not really need. norman dix is very big on supporting blowing in the state of washington. -- boeing in the state of washington. these people in the system are not really anti-military. host: there was word that the

congressmen have already shared the appropriations committee. -- had already chaired the appropriations committee. jim, good morning. caller: the military, every dollar that we spend their basically disappears. when we were fighting the cold war we literally out-spent to the soviet union. that cause them to have their economy collapsed. sometimes i worry that we are doing more of the same by using cheap means to get a lot of money to defeat them. however, their business cannot

function. this is a double-edged sword and i am not sure where we need to go. i think that the people should take a look at a map. iran as light -- red below turkey. -- is right below turkey. we have the highest literacy rate and the college graduates, hopefully we will never have to climb those mountains. guest: he raises a point about how our economy is strained because of military expenditures. to give you something to think about, we're basically running the united states government on borrowed money from the chinese.

what of they declare us a bad credit risk because our economic strength is not as good as our military strength? there are many complex issues in running the country had a deficit. -- at a deficit. it seems to me that for obama to declare his defense budget as off-limits, that affects the state of the national economy. most of the chinese, are they the biggest purchasers next to the u.s. -- host: the chinese, are they the biggest purchasers next to the u.s.? guest: the reason they're purchasing warships is to defeat -- protect their oil supply in the persian gulf. they do not have a single foreign deployment of troops everywhere. we have 150 countries.

i think it is an exaggeration to say that they're going into an aggressive navy. host: jeff, good morning. caller: mr. wilson, by have got a question. with all of the trouble of the legal immigration -- the trouble of illegal immigration, would be worth using the armed forces that way? getting their citizenship through that? maybe the american people with respect them more and be willing to let them live here? guest: that is a good idea and guest: that is a good idea and it has been tried in the past. many filipinos have gotten citizenship that way.

i would think that it deserves another new look. host: middletown, pa.. james. independent line. go ahead. caller: i find it hard to believe that congress would not cut defense spending considering how low their job approval is. i find it also hypocritical that many republicans constantly crying out to cut government spending but not the military. caller: i think that the mix of the martini is a bit reversed. anything for the military, not so much for the civilian economy. host: these supplemental spending bills that the administration has planned through the traditional appropriations process, when will we see another spending

bill for afghanistan? guest: i have to disagree in that sense. i think that obama is trying to be transparent by include supplementals in the request. -- including supplementals in the request. he has already announced that he will include war costs through a supplemental. i think that he is on the side of the angels in terms of making a transparent. -- making it transparent. host: david, florida. good morning. caller: i would like asked mr. wilson -- how much of the defense budget goes to foreign countries? foreign companies? like europe. we know that the president's helicopter was supposed to be made by italy.

i have a grandson in the service. host: i think we have a question. you are breaking up a bit. foreign manufacturers. guest: they will be competing for a new tanker. controversial, blah blah. the point of the story is that the aerospace industry is so international, it is hard to tell anyone that you will not purchase foreign products but if you want them to purchase our airplanes -- basically it is a double-edged sword and we should not have an isolationist take on that because they are expected to purchase our airplanes. why should we not purchase their products? guest: -- host: is there a security concern?

guest: maybe for some of the airplanes. israel has one of the 8-6 bomber and we have not been able to sell it to them. -- a-6 bomber and we have not been able to sell it to them. host: kentucky, edward. good morning. caller: by had a question relative to personnel -- i have a question relative to personnel costs. what percentage of military personnel qualify for food stamps based on their rates of pay? guest: i do not think that that is the story anymore. it used to be that the military pay was so low that they required food stamps. but i do not think that is the case as enacted by congress over the past few years.

host: where does the money for education in the gi bill come from? is that a pentagon expense? guest: that comes from the treasury department. i think that the pentagon and the sharp pencil guys get charged for it. i must confess i do not know the answer. host: clinton, north carolina. larry, democratic line. go ahead. it would help if i push the button. larry, go ahead. make sure that you meet your television or radio before you make your comments. -- mute your television before you make your comments. caller: can you hear me? host: we sure can. caller: we have a lot of waste in a high-tech war.

but we have got to take care of our veterans. we have got a lot of people back from older forestwars that needr health care. if something is not broken, i always learned not to mess with it. that was my comment. guest: i would say that the people that have looked into the coming health-care tidal wave, such as the chairman of the house federal affairs committee, have recoiled in horror. they think that the defense will overwhelm our system of care. both in our national system and private system. we have one more tidal wave of spending that will break over soon. host: this is not military spending, but there is a story from "the hill."

they expect a revised two country plan as the heads of state meet this week. "several members of congress have heard rumblings that president obama is inching closer to sending national guard troops to the u.s.-mexico border region." have you heard anything about that? guest: no, but i think that the government would resist that because they are so strained by filling vacancies in the contingencies in afghanistan and iraq. it might be a token amount of national guard. i do not see that we have the guardsmen to spare in terms of intensifying border security in a significant way. host: let's get one more call.