host: let me mention those hearings. it will be live on c-span 3, on the exxon valdez court decision and the courtcaps. -- and the liability caps. that should be running for a couple of hours. jacksonville, florida. david, good morning. caller: a quick question. can your just give us more on her qualifications, and more importantly, republicans compare her to. my ears. can you talk about that? -- compare her to harriet myers. guest: she had a very short lived nomination because people

on both sides said that she was not qualified, republicans more so, and did not have much in the way of legal views or a judicial approach. there were some decisions that she was not familiar with that were considered to be dead wrong decisions, and did not seem to be up to the job. that is almost a universal view that was held up her. after elena kagan was nominated, some folks, mostly out of congress, compared her to harriet myers because of her lack of experience in the court. she is universally acknowledged as a legal scholar. she was a law professor at the

university of chicago. she clerked for two judges. she does not have a long bibliography of legal writing, but those who have worked with her, and her time as a listener general, has shown reduce solicitor general, has shown that she is -- solicitor general, has shown that she is very familiar with legal precedent. both were criticized for a lack of experience, but if you look at their resumes, even her critics have alleged she is qualified, if not appropriate for the bench. host: last phone call. herndon, virginia. chris. caller: i think that is crazy. a landing in is too extreme for america -- elena kagan is too

extreme for america. i am sure she is a nice person, it is fun to hang out with at the local bar, but this is an appointment to the supreme court. she prevented military recruiters from meeting with students at harvard. she encouraged the supreme court to strike down the solomon amendment. her thesis is about socialism. we are to expect she is moderate? host: 1 and the point. final comment on the release of these documents. what else is coming? guest: i think that we are going to hear more of her voice. documents written to her.

i think what we will see will run the gamut. it is unlikely that we are going to find anything that is a huge surprise. she worked for the clinton white house. it is clear what her politics work. no one would have expected president obama to nominate someone who does not share his agenda and his world view, but whether or not she is extremist is in the i of the beholder. there might be something in the next document that will tell us something about that. host: thank you for being here. a couple of program notes, 11:40 president obama's troubles

to maryland for a health care -- travels to maryland to speak to senior citizens on health care issue. they have a big sell job, trying to make things clear for folks who are not clear about those laws themselves. in the meantime, we are going to send you over to the headquarters of the department of homeland security where admiral thad allen will be briefing reporters. he has been doing this just about every day from various locations. today, he is in washington, d.c. he will give this media briefing, and we will briefing beenlive for you. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2008] .

>> one of the centers is located in the town of jean lafitte in southeast louisiana. we'll show you admiral thad allen when he comes out shortly.

>> i work in a processing plant in louisiana. we have been greatly affectedrag us money. we greatly appreciate that. we need people to know we're not just fishermen. fishermen don't catch and we don't work but we all have to go in together and help each other. we appreciate the help we are getting. i was asking for information and they were really nice and answered my questions. many times you don't know what is going on i came today to find out for me and the other girls

at the factory that work with me. >> did you file a claim to date? >> no, i just wanted to see how the second part would work. >> how much are you seeking? >> i received $2,000. >> that was for what? >> that is to cover my household expenses but i am not getting any salary. normally i would be. it does not cover everything but it is a big help. >> you'll also filed a claim? >> this was to pay my home rent. i just needed enough money to survive. >> did you file a claim? >> it was a climb of $2,000. >> what your expenses? >> my expenses are about $3,000 per month. >> [unintelligible]

>> they give people turns. there are some innate workers that they have to rotate them. -- there are so many workers that they have to rotate them. we make enough money from may to december to survive in the winter1!@0 months. >> what are you here to do today? >> i am here to say if they can give me another $500. i heard there was giving other people $2,500. some of them got 2000 and went back to get the $500 and they gave it to them. >> what is the process like? walk us through that. >> that is a slow process. the people i dealt with were

very nice. it was a little degrading. it is not our fault it happened. we would rather be working full time like we always do. we cannot. when they close the waters down on us and the fisherman can i catch. -- cannot catch. >> was a degrading because you have to ask? >> we have to ask for a handout and there were a lot of questions that witchy -- we should have to answer. we have proven that we work in the service industry. it is embarrassing. >> what kind of questions do you get asked? >> detrick kinds of questions, personal questions. >> can you share? >> if we show our pay stubs and tax papers, why are you asking if they are sure this is how we make our living? that is how we make our living.

it is like you are asking for a handout from somebody. it feels like you don't deserve it. you don't want to ask for handouts. you would rather be working. we make more money working. by the time the maker house payments and pay house insurance like with hurricane katrina, payments went up. we made it but now this -- how long will it take to recover from this? >> we don't know? >> we don't know. we might be working next year. we don't know. >> what have the owners of the factory told you? >> he doesn't know. he is trying to help us. he had another plan and had to close it down entirely. the people in dulac are out of work. >> if it comes back -- >> we will take you live back to

washington for admiral thad allen and a briefing on the gulf oil spill. >> we will be glad to take any questions you might have for us. in general, the weather may become a factor over the next couple of days. the wind has been out of the south-southeast at about 15 knots which moves the oil toward mississippi and alabama and the panhandle of florida. that will be slightly less and there is a current to the west that may hold it where it is. we are watching that very closely. we had two flights yesterday. there were no sightings of oil off the coast of florida. we have been reporting that there is an eddy of the loop current target we continue to watch that closely. regarding the containment operations and the containment cap -- from the last 24 hours we

were able to recover 14,842 barrels. this has declined steadily from the first day. we went from about 6,000 barrels to 15,000 barrels per o. we want to make sure we take as much oil from the stream as we can. one containment cap is closed and we continue to monitor that. a couple of key issues this week is that we have vessels of opportunity which is taking local waterman and putting them to work for it right now, we have over 2600 vessels throughout the gulf that are enrolled. in alabama, we had about 5000 vessels out. we are providing them booming equipment and other equipment. they are skimming and supporting other operations out there. later on this week, there will be meeting with bp and my staff. we will talk about individual

and business related claims. we will be meeting with british petroleum on that and i will be part of that meeting. we will make sure we are aligned with the claims process and understand what bp is doing to provide any oversight. other than that, no further updates and that will turn the podium over and be glad to take your questions. >> thank you. special thanks to you for the terrific job you have done in leading the federal team for a very aggressive and strategic response to this oil spill. the bp oil spill is a human tragedy and environmental disaster. the federal partners are deeply concerned about what the oil spill means for the help of the gulf of mexico and for the millions of people who depend on these waters for their livelihood and their enjoyment. from day one, noa and tracking

every aspect of this oil spill to inform the federal response and guide actions to aggressively protect wildlife and critical habitat. we have been tracking where the oil is going and where it is at the service as well as where it might be below the surface. we are looking at what the consequences of that oil will be to coastal communities and the help of the gulf. we deeply understand the public need for answers and have considered our responsibility to provide those answers. our commitment is to provide the right answers. with that in mind, we have deployed a wide range of tools, satellites in space, planes in the air, ships on the water, science on the ground, and information on line so that the american people can see what we are doing and understand the answers we are getting. we have always kc;c÷ that there is oil under the surface.

the question that noa and the academic artists are pursuing -- are pursuing is where it is and in what concentration and what impact is it having on the ecosystems. today we are announcing findings from noa analysis of water samples that were taken by our partners at the university of south florida aboard the weatherbird research vessel. we now have the result in hand from the water samples that were taken during those cruises. noa is confirming the presence of low concentrations of sub- surface oil at sampling debts ranging from the surface to be 300 feet applications 40 and 42 nautical miles north east of the oil well site and another sampling station at 142 nautical miles south east of the

oil well head. notably, our analysis of the presence of sub-surface oil determines that the concentration of oil are in the range of 0.5 parts per million. along with the analysis of the concentrations, we have also been fingerprinting the oil. you can't figure print it and determine whether it is from the mississippi side or some of the other oil that is in the gulf naturally. we have found that hydrocarbons in the surface sample taken 42 miles north east of the well head were consistent with the bp oil spill. hydrocarbons found in the samples 42 nautical miles northeast of the wellhead were in concentrations to love to do the actual fingerprinting.

finally, hydrocarbons found and the samples 142 nautical miles southeast of the well head at 330 feet and 1,000 feet were not consistent with the bp oil spill. this research from the university of south florida contributes to a larger three dimensional picture that we are in the process of constructing for the gulf. as admiral allen has suggested, each of these different research missions is essentially doing and mri through the water column, trying to characterize what is there and eventually we will have answers to what is there but what impact it is having. a number of other noa vessels are out on the water or just returning to complement the ships that were out there earlier. the noa, the thomas jefferson, is currently underway in a

mission in the vicinity of the bp deepwater authorize an oil spill. i was down in the gulf last week and was on board the thomas jefferson with a group of noa scientists and academics scientists as they are preparing to embark and do additional work. the noa ship, gordon gunter return to. we have results that have been sent for analysis and we are committed to real sharing those results as soon as they are back. the results that are in and can be seen at the noa.gov website and we are committed to transparency and sharing the information as soon as we have done the appropriate checks and balances to make sure the information is accurate. we are also flying some planes,

hurricane hunters. i was in one last week flying over the gulf to deploy what the surface low of the ocean is. all this scientific information helps us understand the oil, where it is, what impact it might be having. we remain concerned about the location of oil on the surface and under the sea. we and our academic partners will remain vigilant in our search for answers. as i mentioned at the beginning, we consider this to be a human tragedy and an environmental disaster. we are attacking it aggressively to mitigate the harm and understand the impact. we continue to stand shoulder to shoulder with gulf coast communities during these incredibly challenging times. the apple and i would be happy to answer any questions. >> -- the admiral and i would be

happy to answer any questions. >> [unintelligible] >> the term "plume" been used for a while. the definition is a source that is going for a while. and doyle cloud is probably a better term. -- and oil cloud is probably a better term. >> another useful analogy might be the volcanic ash emerging from a volcano. that is described as a plume from a single source and is being moved around by air currents. it is much in the same way that the oil coming out of this oil spill is being disbursed and both by subsurface currents. we will continue to do research and understand where is and in what concentrations and what impact it will have.

>> you mentioned yesterday that bp are moving additional vessels to the oil spill site. that seems to suggest [unintelligible] >> we have not reached the capacity of the ship about. we have enough capacity to respond to the entire flow. the reason those events have not been closed is bay prohibit the buildup of hydrates and shattered. it could dislodge the containment cap. >> if the additional vessel was on the scene already, would you be collecting oil? >> they are un choking it at a

sufficient rate. it has nothing to do with the overall capacity. this is how they are monitoring the flow and they do not want the cap to be dislodged. >> there were reports talking of a second oil spill. >> i haven't heard anything recently but we will make a release about that. >> some say that the federal response to hurricane katrina was better than this response. >> our response was to both of them and they are not comparable for many different reasons. there was not a lot of assets present at katrina. we were involved in this thing from the start. i can give you an exhaustive list of what is similar.

i don't believe they are compatible. >> -- comparable. >> of the vessels out there, only 135 are skimming vessels. >> let me differentiate vessels. we have a large skimming vessels operating offshore which are self-contained and can skim oil. there skimming --their skill ming and equipment of backing out of oil per their other skimming vessels that have equipment that drops a circle below the surface and soaks up oil. they can also bring up oil group net sprint -- through nets.

you are talking about the large skimmer's. >s. >> are you considering bringing in additional skimmer's? >> we are. when you hear about skimming vessels, those are the vessels that have been used offshore in large concentration. >> [unintelligible] >> there are several containment caps that are sitting on the bottom out there. depending on the circumstances, and it had to do with how fine a cut they could make. there was a tighter cap that they intended to put on because they had to go to the sheer cost, they went to the last perfect seal to contain the cap. there were several options depending how the riser cut would go. >> [unintelligible]

>> i am not sure i understand the question. we are looking to process larger concentrations of product varia. >> any estimates [unintelligible] >> our flow rate team has continued to work. i have asked them to go back and refined and question their assumptions on the two initial ranges. i asked them to take a look at the implications of their first estimate that when we cut the riser pipe that could have been a 20% increase on the flow rate. i ask them to look at the basic assumptions prior to cutting the riser pipe and see if we could get a final determination on what happened with the visuals we have. they could give us a revised

total flow rate. we need to understand the rate of flow in terms of taking out of production to establish the oil budget we are dealing with. >> there was high resolution video that was available. are you aware of any of videos that bp has that are not being given to the government? >> i question the couple of times about videos. there was a video that was owned by subcontractors to bp that we did not have access to. all the videos we have needed from bp we have gotten very early on, there were problems

with access to video but we don't have any problems right now. >> the what the admiral says is correct that there were problems early on. we have directed cbp to give everything they have and that has been forthcoming. >> [unintelligible] >> there were issues earlier on that after we provided guidance -- i had a personal conversation with tony a word about releasing the video about the top kill process. they thought they might -- that might put pressure on the operators. we had a frank conversation and everyone thought it would be better it had to be transparent to the american public. that is part of the pressure we have placed on bp. >> [unintelligible] >> i don't know the

subcontractors name but we will provide that. >> [unintelligible] >> the test results confirmed there is oil subsurface. we had suspected that but it is good to have confirmation. the early reports were looking and instruments of oil but look suspicious critical standard is the testing of water samples taken from the area. the analyses of those water samples which we now have in hand indicates there is definitely oil subsurface. it is in low concentrations. i mentioned at 0.5 parts per million. that is from the three sites that were sampled by the weatherbird ii. wendy gordon -- wendy gordon gunter --when the board and

gunter was out they took in samples. yes, there is oil in the water column. that is confirmed at the sites where we have done those analyses. it is in low concentrations. we will continue to release that data as soon as a bed is available. we will continue to do more mri slices to construct this three- dimensional puzzle so we can have a better sense of what is where and in what amounts and won the impact it is having. >> -- and what the impact it is having. >> [unintelligible] >> we look at the weather every day. the winds are coming out of the south right now which will push the edge of the oil spill up toward alabama. there is a counter current which

may balance that out. there may be some migration westward. >> let me jump in here and add to that. the national weather service is part of noa. they provide twice daily weather reports to inform all of the actions. the trajectories of where the surface oil will go and the shoreline impact maps where we think there are areas of the coast at risk are all provided as part of this unified response that noa is providing to inform the rest of the federal actions. >> we are not dealing with a monolithic spill. we are dealing with a 200-mile radius with hundreds of thousands of patches of smaller oil. they could be impacted by local currency.

ts. the oil close to the well head could be moving westward because of the currents and the oil toward the northern perimeter could be closing into mississippi and alabama and we are watching all that in aggregate. >> [unintelligible] >> we have not generally done subsurface response with one exception. when we had heavy oil that site to the bottom, we have had responses over the last 20 or 30 years where we have done oil recovery sitting on the bottom. i am not familiar with this in my own personal experience. we will do some research and get back to you. >> if we could go to the telephones, please. >> thank you for taking my call.

over the weekend, tony heyward said bp would pay every claim. why should the american people and the people of the gulf coast in particular be comfortable with the current situation which allows bp to manage the contractors during the majority of the cleanup as well as manage the claims process? is the oversight sufficient? are you personally comfortable? >> we are not comfortable with it. we are convening in metered this week with senior bp officials to look at the claims process. claims is not something that is part of bp, but it's and they

are relying on subcontractors and it is our responsibility to make sure that is done effectively in the interest of the american people. i have designated tracy waring and we will meet with bp and dispatch a team to go to every state and recognize the date set with claims so far. we will look at how they are processing individual claims and how they are processing business losses. i do that as a result of feedback we have received. we are reconciling any debits is on that this week and we will be reporting in future news conferences. next question? >> good morning. how many birds or other animals have been treated thus far? there are reports this morning [unintelligible] >> the number of birds and

wildlife that have been treated change significantly day to day. we will get to the exact numbers on that. in relation to the increased flow following a rise are cut, we estimated it would be 20 presents sign over the existing flow. that existing flow was modeled at up to 19,000 barrels per day. the geological survey will reconfigure the assumptions and give us their best estimate on the cut of the riser pipe. i would think we've hit aggregate them both together and revealed a new flow rate for the oil spill. >> next question? >> there is a report today of a second oil spill and the same area from a diamond offshore oil rig?

this was reported back in may and was never confirmed. do you have information on that? >> that question was asked earlier. we will make a statement later this afternoon. i have no personal knowledge of this but we will look into it and make a statement on this. >> my question has been covered, thank you. >> thank you for taking my question. how far away in days is the next vessel to help collect oil and natural gas? >> the next of vessel will be the q4 vasopressin i believe it will be there in the next two-

three days. that will add another 5-10,000 barrel capacity. we are in the process of directing british petroleum to give us a large -- long-term containment plan. after that we will have a better capacity -- a better idea of the capacity. they are moving large vessels from the north sea and they will set up a more permanent way to transfer the product to the surface. they will create an underwater morring. oring. they are looking at that in the next several weeks. that is a more permanent solution in heavier weather than what we have right now. next question. >> given the concentration of

oil you have recorded, about how much oil do you think is represented in the water column at this point to? >> as we construct more and more of these mri slices, we can put together a more comprehensive understanding of the entirety of the gulf and where the oil is and in what concentrations. at present, we only have the water samples returned from some initial research missions and they provide us with just a couple of slices. what that information tells us is that there is definite oil there in low concentration. that does not mean it does matter have significant impact. the impact it has remains to be understood and we are working

aggressively to do just that. a more complete picture will require additional information and we are in the process of getting that and will share that data when it is available. >> this gets back to the flow rate issue. one reason it is very important to establish the flow rate is to develop what i would call an overall oil budget. once we can establish a good model of a flow rate, we can then assess the aggregate amount that has been discharged. once we have that amount, we can go back and make an estimate we have had with impact on burning, skimming, the application of disbursements and how the oil is recovered a short. you take that aggregate amount and compare that to the discharge rate, what ever in between there that is not covered might give us some idea of what has not been accounted for this is a very imprecise way to deal with this.

to get the flow rate projection starts with measuring the production on a daily basis. >> everyone talks about how this is going so well, but you don't have enough ships to collect all the oil that could be collected. you don't even know how much oil is spilling into the gulf. >> i have neverhfboiu(r" this is going well. we are throwing everything we have at this. this is the largest oil spill in the history of the country. we knew this was catastrophic from the beginning when the oil rig exploded. i have said that nothing good happens when oil is on the water and we are making no illusions. it is a catastrophe and we are addressing it as such and will continue to do that.

>> when the q4000 gets there, you will process up to 40,000 barrels per day or is that as high as the capacity will go for the foreseeable future? >> there is a large as containment proposal from bp. we need to have the capacity. we also need redundancy. it is nice to be able to flow coming out of the well now but we would like to have two redundant system so if we had a failure, we could maintain production and sustain that through what could be increased weather conditions as we go through the hurricane season. the first thing is the flow that is being managed out of the containment cap right now has not met the production limits of

the vessels out there. we will have the q4000 coming on and will be supplanted with two larger vessels. we will create redundancy on production so if we lose one we can produce at the same rate and at the same time, we will be able to account for operations. >> good morning. is the larger containment proposal you mentioned, part of the bp hurricane-credit proposal? when they preparing for the hurricane-ready situation will they change the current cap to a bigger capped? yu+&? >> it is hard to get the production rate we want. they need to put in as much

survivability and sea-keepiong capabilities and the larger vessels will in fact do that. there is no guarantee we can sustain production. there will be times when we may be forced to suspend operations or more of the vessels for safety purposes. we could have oil discharging during that period of time. i don't like there is any way to do that. the well is not capped. it is only being contained. was their second part to the question? >> well they replace the current containment cap with a tighter sealed? >> there are several caps out there. some of them are stored on the bottom grid we have had no

recommendation they want to move from the current cap. that is something we want to do but we will make public what happens. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> uc pelican's being cleaned in venice, louisiana. -- you see pelicans being cleaned in venice, louisiana. [no audio]

[no audio] [no audio] [no audio]

>> the u.s. senate has gavelled in for the day. they are working on rebutting tax bres and social programs like jobless benefits. live coverage on c-span 2. the house meets at 2:00 p.m. eastern and will debate five bills dealing with hydroelectric power and federal lands. later this week, raising insurance premiums fha- guaranteed mortgages. live coverage here on c-span. >> president barack obama turns his attention today to the health-care bill. he is going to racing center in wheaton, maryland to answer questions about the new law. the town hall coincides with the

release later this week of the first batch of $250 checks to seniors who fall into the medicare prescription drug data known as the doughnut hole. we will have live coverage starting at 11:40 here on c- span. to is the busiest day of the year so far for congressional and gubernatorial elections with 12 states holding primaries or run off to bed. in california, the democratic senator barbara boxer will learn who her republican opponent is. there is a republican primary and the race to succeed arnold schwarzenegger. we will have live coverage starting tonight at 9:00 eastern on the cspan networks. >> no candidate in this race has given voters in new hampshire or america more opportunities to ask them questions and see what they are made up.

>> these are the faces you see every day. see some of their earlier television appearances at the cspan video library. it is a quarter-century that you can search your way. it is all available free online. >> now, former abc correspondent sam donaldson interviews federal reserve chairman ben bernanke. they talked about the current economic situation and what the fed chairman sees happening in the future. the woodrow wilson international center posted this 50-minute event.

>> david was president of the carnegie foundation. he is one of the great humanitarian ends in this country. there are several former colleagues that i want to introduce. andy ireland, congressman from florida and his wife nancy. [applause] i will test your knowledge of politics a little bit. we have a former vice presidential candidate. thank the right year was 1976. he was the vice president for ronald reagan when ronald reagan ran for the presidency, dick end clare schweitzer, would you

stand up? [applause] he was the senator from pennsylvania and also secretary of hhs a few years back. we are heavily loaded with pennsylvanians. tom ridge is here tonight. we are delighted to have a governor here. [applause] the former secretary of the department of homeland security. i want to introduce two people who are very important to us because they help us with the appropriations of the wilson center at the united states congress. they may be the most important people here so far as i am concerned. [laughter] jenny james and chris topeck are here. would you stand? [applause] they do a marvelous work on the staff of the appropriations committee. i am delighted that jim leach is here who is chairman of the national endowment of humanities

and he is a formal college of mine on the board. -- former the government on the board. sam donaldson's white is here. we are delighted to have you, jan. we have the president of siemen's usa. [applause] we have several ambassadors with us tonight. the ambassador from the republic of korea, would he stand please? over here. [applause] the ambassador from the embassy of sweden is with us. [applause] the ambassador from japan is here. [applause] the ambassador from mexico is here. delighted to have him.

[applause] i think the brazilian ambassador arrived but i did not see him personally. [applause] and we have the charges d- affaires from south africa. [applause] i hope i have hit everybody i am supposed to. this is a wonderful evening. i want to thank joe gildenhard for my tenures at the center. i came to the wilson center planning to be here about four or five years and i have stayed 11 or 12. one of the principal reasons i have stayed is because i have had the honor to work with joe. i will tell you how loyal joe is. he is so loyal that he is here tonight when his grandson or grand daughter is graduating

from high school. by golly, that is really something. we appreciate your leadership, joe. [applause] tonight, we welcome the chairman of the federal reserve, ben bernanke, to the center. he is an addict -- academic thinkers and policy maker in the tradition of woodrow wilson. he is a world-class scholar and like wilson, a princeton professor. dr. bernanke has become one of the country's most important and most respected policy makers. he happens to be greatly indebted to woodrow wilson. one of wells in's major legislative achievements, as many of you know, was the enactment of the federal reserve act of 1913. not to put too fine a spin on it, and skipping over an awful lot of history, i want to point

out that i don't think he would have a job today if it had not been for woodrow wilson. [laughter] over the past five years, he has faced tremendous challenges, adversity, and frustration. that is the lot of an avid washington nationals baseball fan. [laughter] which he certainly is. he and i and the sports fans all know that work -- with the first pick in tonight amateur draft and stephen strassberg's debut tomorrow, things are looking up for the nats. that is not my purpose to talk about the nationals. he is the 14th chairman of the national reserve, first nominated by george w. bush in 2006 and re nominated by barack

obama for a second term last august. his scholarly expertise is the great depression and its causes and that, of course, prepared him for the historic task of responding to the second greatest financial crisis in our country's history. he has been at the center of the extraordinary efforts of this country, indeed the world, to rescue us from the frightening near collapse of the national system in the fall of 2008 by making available trillions of dollars in official funds and helping us to understand better what happened and how to respond. for his work, we can only offer our appreciation, our support, and our fervent hope that he and his colleagues will succeed in enabling healthy and sustainable economic growth.

the other day, i saw a picture of him standing on the great wall of china. he was much more than an ordinary tourist. for some reason, my thoughts turned to one of his predecessors, william martin, who was chair of the federal reserve from 1951-1970. as i recollect, his travel schedule consisted of trips between washington and new york. that must seem like ancient history for a globetrotter like dr. bernanke. his responsibilities taken from the capitals of europe to the great wall of china, to jackson hole, wyoming, and many places. this illustrates the interconnectedness of the 21st century global economy. prior to his government service,

he was the howard harrison and gabriel snyder professor of economics in public affairs at princeton university, he served as chair of the economics department from 1996-2002. he began his academic career at stanford's business school before writing at princeton in 1985. he received a b.a. in economics in 1975, some a cloudy and a ph.d. in economics in 1979 from the massachusetts institute of technology. he and his wife and i have two children. born in georgia, he grew up in south carolina. the format tonight is not for a speech by dr. bernanke but he and our inimitable president of the council, the distinguished newsman sam donaldson, will provide the program.

sam will interview chairman bernanke and i would ask the two of them to come forward now. after the interview, we will have questions from the audience. [applause] >> [unintelligible] [inaudible] prone >> ♪ testing, hello? i am delighted that you have visited us. what do you think of the great wall of china? >> you can see it from the plane when you come down to beijing. it is very impressive. >> that matches richard nixon's statement. [laughter] let's get down to substantive matters. we seem to be in a recovery from

the great recession we have gone through, fragile but it may be. how convinced argued that that recovery will continue at a reasonable pace? do you see troubling signs that we may indeed slip back into a double dip recession? >> we have come to a number of stages. we had a tremendous contraption -- contraction. things stabilized in the middle of last year. than the natural business cycle process began to unwind itself, adding to a recovery. i think the recovery probably began sometime late last summer. we have been expanding and this is the fourth quarter of expansion that we have had. at first, the expansion was caused primarily by firms not accumulating their inventory as quickly after having built up a

large amount of inventory during the downturn and by the fiscal program. those are sort of artificial sources. the real question that we were facing was -- come the beginning of 2010, would the recovery get its own legs? would private sector demand take over for inventories and government spending and provide a sustainable recovery path? so far, it is pretty good. . .

>> they have very large outstanding debts in europe which are difficult for them to service. this is a problem because even though they have a single currency, they don't have a single fiscal authority. there is no easy way to move money, tax money from country a to country b in the way we can move money from state to state in the united states. providing help to greece has proved to be a difficult proposition. nevertheless, europeans are committed to avoiding default increase and in other countries on the so-called periphery because they fear that the default of agrees, even though

it is a small economy, might lead to defaults and other countries if investors got spooked by the first default that in turn could put pressure on the banking system which holds lots of securities from those countries and the banks and other businesses in those countries. it has been a relatively slow process. the europeans have put together a program, a special purpose vehicle with 500 billion bureaus in which is being partially match by the international monetary fund. >> is that enough? >> it is quite a bit. 500 billion here and there and you are talking real money sent. oon. [laughter] >> not what we have been spending. >> it is a lot of money and covers the obligations of portugal and spain and greece for a couple of years.

the imf is there and more european money might be necessary. there needs to be worked odone. . .

>> we have had some big deficits. >> do we need to raise revenue? >> let me finish the first part of your question. we cannot reduce the deficit this year or next year, but over the next three or five or six or seven years and beyond that as our society gets older and people become eligible for social security and medicare, we need to get control of the deficit. we need a medium-term plan, an exit strategy if you will that will allow us to bring our fiscal house in order over a longer period of time. >> to do we have one? >> no, not yet, i don't. what we have is a presidentially appointed deficit reduction commission which is made up of a distinguished group of congressmen. . .

>> and do we need to raise revenue as well as cut spending

in these entitlements? >> those are tough decisions. that is why this award to get the budget balanced so quickly. -- this is so hard to get the budget balanced so quickly. congress has two possibilities. i have often said in testimony that there is one law that i support, and that is the law of arithmetic. if you are going to reduce your spending -- reduce your deficit, you have got to cut spending or raise taxes, or both. that is why congress gets paid the big bucks to go out and figure out how to do that. i'm not going to try to make congress' decision for them. they would not pay attention to me anyway. but they have come together to try to find some ways to reduce spending and may be some necessary revenues to reduce the spending. it does not have to come to 0,

but just low enough that our economy can be sustained over time. >> the jiabao bills that the houses passed will have to be somehow emerged -- the two bills that the house passed will have to be somehow merge. i am informed that -- maybe even misinformed that you are not a particular fan of that rule. am i wrong? but this is one of those yes or no questions. -- >> this is one of those yes or no questions. >> can you answer it you like it or do not like it? >> the thing is this, there are many times in which a bank has to do something that looks like proprietary trading for good reason. if it has dot positioned loans than it may have to -- if it has

got positioned loans than it may have to buy various derivatives. there are lots of ways in which a bank may need to be exposed to a position in order to serve its customers. i think chairman volcker would agree that there are those circumstances, like hedging for example, where you do not want to prevent banks from buying the assets because that actually makes them more risky, not less. the senate bill, as i understand the way it would work, is that it has to -- it would create this separation maturing proprietary and not on proprietary trading. but it would ask the regulators at the federal reserve to figure of what that line means. -- figure out what that line

means. when is it gambling with the bank's capital, and ultimately the taxpayers? as long as there is a reasonable process for distinguishing between those two categories of assets, i think it will work. as one of the regulators, we will certainly work with our colleagues to try to make it operational. >> second specific question, derivatives. as the bill is written, most of them going to exchanges. but credit defiled swaps, certainly the most dangerous and lucrative, -- credit the fault swaps, certainly the most dangerous and lucrative, they might not. >> at credit default store -- credit defaults swaps come in different flavors. there are some that are

specific to an individual company like ford motor, and then there are some that are much broader, that cover an industry for example, or a mix of cds. these are important and valuable instruments because they can help you hedge against various kinds of risks. >> they would not have to be on exchanges the way the bill is written. >> the cds is an instrument that grew very quickly and it did not have a whole infrastructure that grew up quickly with it. this was one place that the federal reserve was ahead of the crisis because the new york fed, and in particular, timothy geithner as the treasury secretary had a big role in this. the fed was involved before the crisis trying to get better organization and control of these cds because at the time it was pretty chaotic.

there was an effort to get it better documented, more transparent, etc. and i am assuming the fed is continuing to work on this process. the issue of exchanges, exchanges are good. they allow for price discovery, setting up margins and provided capital so that you do not have to worry about your counterparty when you make a traded derivatives. but exchanges are not always practical for very idiosyncratic, small, specialized types of derivatives. they exchange where you have a large quantities of homogenous product. that still does not mean they are not regulated. because in the new bill, and in the new regulatory rules, there would be substantial capital the

banks would have to have behind it. there would have to be transparency and considerable responsibility for regulators to oversee it. one of the big concerns, as you know, in the aig case was that they were selling credit insurance and when things went bad, they could not pay. that is why it aig was in such deep trouble. in that particular case, there was no one looking at aig. the officer of supervision was looking, but no agency really looking at what they were doing. under the proposal, any systemic company like aig or any large, complex, interconnected firm, there would be a broad supervisor, in many cases, at the fed. somebody would be looking at aig and ensure the they were

selling capitals of the things would not go bust if things went against them. >> richard bernstein, who is an investment analyst of some note, said it is immensely wealthy, not real reform. and richard fisher, the president of the bank in dallas, says it will do very little to rein in the banks in his view. what is your overall impression of the impact of this bill? >> overall, lots of pieces to it. overall, it is a sensible approach and the many pieces fit together. one thing that made everybody so mad, including the general public and everyone here in washington, was the bailout. i do not regret being involved in the because i know for a fact that if those companies

collapsed, we saw what happened when lehman collapsed. we know those firms had to be productive in the context of a panic when the economy was at risk, and the global economy was at risk. but is a situation we do not want to be in ever again. the acid test of reform will be, will it managed to big to fail? -- will lead manage the too big to fail? there is going to be a tougher set of regulations that will be used to make sure that largest firms have adequate capital, adequate liquidity. so that they do not fail so easily. second and most importantly --

and very importantly, there will be a resolution regime, which is if a large firm comes close to failure, like a lehman brothers tight situation, instead of allowing it to fail because we do not have the ability to prevent it, we have a set of rules whereby the fdic would be able to come in and close down that company in a way that was safe for the system. and a third idea would be that every company would have to have a living will that says if tomorrow morning i cannot make my payments and this company is on the border of bankruptcy, this is a detailed description of how this company will be disassembled and broken down and put into receivership in a way that will be quick and clean and not destroy the financial system.

too big to fail is the acid test. then we will have eliminated by far the most dangerous aspect. >> so you believe the bill overall will be more helpful than not. >> yes, i do. there are lots of different parts to it, and i would not deny that there are some things that i would change, but overall, i think it does address the too big to fail problem. part of this is the legislation, but there is also what the regulators are doing. the regulators are working right now to have liquidity that they have to hold. and the regulators can toughen up quite a bit, and i think that is what is happening. >> if i thought you were going to raise rates again, i would ask you. you will not tell us, will you?

>> in the future. [laughter] >> tell us precisely what we are looking at. to what will be assigned to you and your colleagues to raise the interest rates? >> the reason we do not tell people is not because we are perverse. it is because we do not know exactly when. how our statement has said -- you know, is laid out with what the conditions are. the conditions with what we are looking at is high unemployment and low capacity utilization the second is subdued inflation trends, low inflation and we have that right now. the third is the state of expectations. we're looking at the state of the economy, the real economy

and unemployment. and we're also looking at where it is going. we're also looking at financial markets and other things as well, but those are the broad, main areas. and that is what our mandate tells us we are supposed to look at. i should be clear that monetary policy takes a long time to work. we have right now very accommodative, very easy monitoring rates as opposed to close to zero. and we cannot wait until unemployment will be where we would like it to be. we are going to have to make a judgment about when is the appropriate time to begin moving and begin moving in a way that has normal policy.

it will be the case that when we start the process of tightening policy that the economy will not yet be back at full employment. one last thing is to say that we have made a lot of progress already in our exit, in some sense, because for example, many of the lending programs that we have put in place like the paper commercial program and money market future program have all been done away and that process is completed. by the way, without losing a penny and with good profits for the taxpayer. i view each step as just another step in the road towards a more normal policy. i am delighted to get there. >> six months ago,

[unintelligible] nowlin seems that it is at the end of the -- now it seems it is the end of the year and maybe into the beginning of next year. >> a favorite colleague of mine says he likes to read the newspaper to find out what he is thinking. [laughter] >> next question. what would happen -- except for the fact you would be out of a job -- what would happen if we abolished the federal financial system? >> we would be the only " -- country in the world without a bank. what would you suggest? >> we could increase the rate of taxation.

>> i do not know if i can test your patience, but for various reasons, my own research, for example was on the great depression. one of the great contributions that was made was trying all of the monetary policies to the gold standard was one of the reasons that the oppression became international. there are a lot of dangers and risks with the gold standard, not to mention a lot of practicality issues. i guess my question would be, the fed is not a perfect system, but compared to what? at this point, i mean, just the eminences of 180 countries in the world, there are a couple that share a central bank, but i do not know of any that do not

have a social rank and used someone else's currency. if someone is going to run the monetary policy, then someone has to deal with the policies that will be issued. i hope that in the united states it will be an independent and how to qualify the central bank that does it. >> i cannot see because of the lights. but who has a microphone? over there, sir. >> i am a banker and a real- estate man from illinois. we just opened a new branch in the washington area last week. we are a good bank. i would say wall street is

criticized so much for their unethical practices. but i'm on their real-estate -- on the release date and i see the subprime mortgage and these problems -- but i am on the real estate and i see the problem, the subprime mortgages and these problems and i see these greedy consumers. >> what is your question? >> to correct these basic ahman deep-seated roots, i think america needs a civic -- the basic, deep-seated route to my in america needs a civic lesson.

america has a totally indifferent consumers. >> you may be right, but we are limited with time. it would you like to give an answer to that? >> servin, the subprime problem was it -- certainly, the subprime problem was a contributor to the crisis. we have put together regulation on mortgage lending, but it came too late. but another aspect of it, certainly, was the understanding of our worsthe borrowers. certainly, understanding is important. now that we have seen the dangers of people not knowing what they are signing, i don't -- i hope there will be a much more committed effort in our school systems and colleges and for adults as well to help people understand how to navigate the financial market.

>> i am the director of the latin american program here at the wilson center. over the years, you have made a number of statements above rising income quality in the united states and the overall decline in wages. in light of the fact, even before the financial crisis, i was wondering what that -- if you could offer some thoughts about what that offers the free trade agreement. >> i did speak about inequality. rising inequality is a problem in the united states. there are a lot of reasons for it. they include more technological change, which includes more skilled workers over less skilled workers. there are many factors like the weakening of the union movement, and some trade unions favor less skilled workers over more skilled workers. there are a lot of reasons for

it. -one of the implications for the inequality might be protectionism. people might say, we ought to protect and close our borders. congress has broadly agreed that a very big source of growth and prosperity is trade. we do not want to have trade cut off, but we are also concerned with the inequality. fundamentally, if the problem is skills, then the real solution is getting skills. i'm going to go thursday to richmond to to talk at a conference to talk about workplace positions. give people skills, and they can get a decent wage.

one of the very disturbing aspects of our labour market situation is that about half of the unemployed have been unemployed for six months or more. that means that they are losing skills, losing contact with the job market, and as things go on if they just sit at home they will not find good work. even now, is more important than ever that we make available in every way that we can, not just k-12, but for working americans to get decent paying jobs. >> is it likely this country will ever have much leverage in negotiating with china? >> you just came back from china. >> i just came back from china. i attended what is now called

the strategic and economic dialogue, which is strategic -- i am perhaps the only american person on the american side to have been to all of them. this meeting was created by secretary paulson and the previous administration and has just continued into the current administration with some modifications. essentially, the entire cabinet of the united states, plus the fed chairman and others in china is that this media recognizes the wide differences when we talk about comments and concerns.

we do not just talk about the troubling part of our relationship, but about the ways that we can cooperate on energy, investment, trade, visas and other issues both on the economic and strategic side. the fact is that they need us and we need them. the chinese are the largest developing and largest developed economies in the world. we enjoyed working with each other. one of the benefits of these -- of this working together is having a relationship with people so that you can call and talk to them to get a frank answer. my answer is that we are talking to china and we need to keep talking to china because it is not just the same goal one or

two issues, but a range of issues in which the two countries after work together. >> but is china listening to us on issues of monetary policy? they control money. >> they have their own views and interests that we do not always agree with, certainly. but they are very interested in what the united states is doing and thinking. they understand that there is a sort of code dependency relationship. -- cota tendency -- code- dependency -- co-dependency in the relationship. all i'm saying is that there is a desire to engage, for me, and is a very important achievement to have those lines of communication be open. >> and someday they will revalue their currencies.

chairman bernanke, when you came to the post, you said you wanted to be more transparent. and we certainly believe you have been tonight. and we appreciate you coming. thank you. >> thank you very much. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> live now to a new discussion on the health care law with president obama and kathleen sebelius. we will hear about checks being sent out to seniors in the coming days to help with a prescription drug costs. this is taking place at the senior center in wieden, md., not far outside of washington. -- we 10, maryland, not far outside of washington. [applause] -- wheaton, md., not far

outside of washington. [applause] >> good afternoon. my name is fran garfinkel. >> please, have a seat. >> thank you. in november of 1997 i received the news that i had breast cancer. as you can probably guess, had chemotherapy, radiation therapy, surgery, and follow-up treatment. i have been on anti- cancer treatment for the last five years. last friday when i went to fill my prescription i was told i was in the doughnut hole and would have to pay the full amount for the supply. in addition, i have to pay for three other medications that i

have to pay for out of my own pocket while i'm in the doughnut hole. my husband and i cut any corners to buy the prescriptions that i needed, and this may i reached the doughnut hole again and the whole nightmare started again. the good news is that my men are so expensive that i will get out of the doughnut hole -- my medicines are so expensive that i will get out of the double by the end of the year. my husband and i are on a fixed income. it is pretty scary. we pay for medicare, medicare prescription plan, and dental, and now we are paying 100% of my drug costs because we are back in the doughnut hole. i understand our house just one serious medical setback can cause someone to lose their home and retirement fund. that is why i'm grateful for the

new law that will give me and seniors like me some relief. many seniors will receive a rebate check this year. in the years ahead, the doughnut hole will be completely closed. that means seniors like me will not have to hear the pharmacist tell them that they are in the gap and will be forced to scrimp to get the medicine is that they need. i want to thank the president and the congress for making that happen. and it gives me great pleasure to introduce the president of the united states. [applause] >> thank you, everybody. thank you so much. everybody, please have a seat. it is wonderful to see all of

you. i want to thank fran for that wonderful introduction. i want to make a few acknowledgements before i make some opening remarks. first, we have one of the best secretaries of health and human services we have ever had in kathleen sebelius. please give her a round of applause. [applause] i want to thank governor o'malley for joining us here today. and for his political efforts. i want to acknowledge our wonderful senior center for the great state of maryland. byron mikulski is here. [applause] ben cardin could not be here, but he is wonderful, too, so give him a round of applause. [laughter] [applause] and we have u.s. representative chris van hollen here, and u.s.

representative don edwards. [applause] and i want you to know that they have fought hard on behalf of seniors and on behalf of this health care bill. and i could not be happier to be joined by them. i want to thank fran for joining her -- sharing her story with us. and i want to thank everyone who has joined us at the senior center. there are a lot of people listening and watching across america, so i appreciate you as well. i am looking forward to taking questions, but first, i want to say few brief words about the bill we pass a couple months back and what it means for senior citizens. it is hard to imagine today, but just two generations ago, millions of our seniors went without basic health care coverage. it was not right.

it is not reflective of our values and who we are. rather than allow that reality to continue, we made a promise to america's seniors that you can live out your golden years with some basic peace of mind and health coverage that you can count on. this new law recognizes that medicare is not just something that you are entitled to when you reach 65. it is something that you have worked a lifetime for. having a security and benefit of knowing that medicaid will be there when you need it. it is a sacred trust between you and your country. those of us in elected office have the commitment to uphold the trust, and as long as i am

president i will. that is why this law gives seniors and their families better savings, better benefits, and a higher level -- higher quality health care. that is why i want to ensure changes throughout the system, so that seniors have control. that is why it keeps medicare strong and solvent today and tomorrow. when fran was diagnosed with cancer, the cost of medication surpassed the coverage limits. but it did not reach the catastrophic coverage threshold. so, she found herself in this gap called the doughnut hole, where she was forced to pay the entire cost of this medicine to entire pocket. that forced her and her husband and many like them to cut back everywhere else. i have heard stories like that

all across this country. and i read about it when i read letters from so many of you at night. those stories, your stories are why we passed the slot in the first place. -- this lot in the first place. this debate cut pretty contentious at times last year. i think you remember. and just when you were looking for accurate information about what this reform would mean for you, there are a lot of proponents of health care reform generally that sought to deny you that information and they ran some pretty nasty rumors in hopes that it would scare folks. i know that is hard to imagine in politics, but that is what happened. [laughter] and we have seen it before in the 1930's when more than half of our seniors cannot support themselves and millionths of their savings vanish.

opponents argued that social security was going to be socialism. in 1965, plenty of folks warned that medicare was going to lead to a government take it -- takeover of the health care system. the same argument that was made this year and last year. we found out that those warnings had no anchor in -- no anchor in reality. what you need to know first and foremost is that the guaranteed medicare benefits that you have earned will not change. regardless of whether you have received them to medicare, or medicare advantage. your guaranteed benefits will not change. eligibility will not change. medicare will continue to cover the costs as it always has. if you like your doctor, you can keep your doctor.

in fact, we are taking steps to increase the number of primary care physicians so that seniors get to the care they need. we are working to reform this because right now, it does not make any sense. we have this patchwork system where medicare, each year they have to see if they are going to be reimbursed properly or not. i will keep fighting for dr. pay that is more cost-effective and efficient, and i urge congress to give us a short-term fix today and then one for the longer-term tomorrow. those are the facts. but what you will see through this new lovitlaw is an increasd focus on quality to be sure that

you get the care they need. case in point, beginning this week, tens of thousands of seniors who fall into the doughnut hole, like france, will receive a two wondered $50 rebate check -- $250 rebate check to help with costs of your prescriptions. that will happen immediately. [applause] and what will happen each month is as more seniors hit the doughnut hole, more checks will hit the nail, helping over 4 million seniors this year. by the beginning of next year, you will get a 50% discount on the brand name medicine that you need. [applause] and by 2020, it is being phased in, but by 2020 this law will close the gun of hole

completely. -- close the doughnut hole completely. it will be gone. [applause] and that is not all. beginning next year, preventive care, including annual wellness visits for medical beneficiaries, certain screening services like mammograms will be free because the best way to prevent a serious illness is to take care of ahead of time. and we will make sure that insurance companies do not have their profits. we have the authority to review and reject on reasonable -- unreasonable increases in medicare, and we will exercise that authority. finally, because seniors may be

targeted by scam artists, we will be sure that the new law will have a severe penalties for con artists. we will find you, prosecute you, and ultimately prevent those crimes from happening. [applause] part of the reason the this is so important is because we have been receiving outrageous reports from around the company -- country of people trying to scam seniors out of medicare. there will call asking for a number, social security number or a bank account, claiming that it is necessary to read in role in -- to be enrollere-enroll toe

benefits. we're going to put a stop to it. secretary sebelius and attorney general holder have expanded efforts across the country to vigorously cut down on those who would take advantage of seniors. we have established a joint health care fraud prevention and enforcement action team, also known as h.e.a.t. [laughter] this task force is already noted -- focusing on cities with high rates of questionable medicare expenses and has charged several individuals with fraudulent building. -- billing. there will be summit beginning next month and at these summits there will be health care officials and others that seniors rely on most to help raise awareness of expertise and

identifying fraud. this will protect your medicare and the american taxpayers' money. we are looking to eliminate waste anywhere we can. earlier this morning, my budget director, peter orszag, laid out a budget to cut spending in government, including asking all agencies to identify their worst performing programs as we put together a budget. some folks are against health reform in congress. they still think that none of this trip have happened. they do not think that we should be getting these -- none of this should have happened. they do not think that we shall be getting these rebates. in fact, they want to repeal. they want to roll back all of these reforms. they say they have their own plan, but over the last 14

months of debate they never seriously advanced it. when you look at it, you can see why. they would roll but the doughnut hole, -- rollback the doughnut hole, and also a roll back all of the insurance provisions that would make sure that insurance companies are not cheating folks on their premiums. they would put insurance companies back in charge. and some wood and medicare as we know it, giving every -- and some would end medicare as we know it, giving every senior a doctor. -- a voucher. we're not going to do that. we will move forward. [applause]

i told them the affordable care about is a law that promises security for our seniors, and it extends that promise to your children and your grandchildren and great-grandchildren. we have arrived of one of those loans were related to make to ride a longstanding wrong. millions of willingham -- make the righright in longstanding w. and we will stand up to make sure that everybody gets a fair shot. and what a better nation for it. taxpayers will not have to pay higher premiums for trips to the are -- to the e.r. by uninsured

americans. small businesses are already learning they are eligible for tax credits to cover their workers this year. the worst practices of the insurance companies will end, so they cannot deny you coverage because you have a pre-existing condition or somehow you perhaps get sick. this law works for future generations are bringing more to bring -- doing more to bring down the deficit than just about everything we can do. this gives all of our seniors, not just some of them, but all of them, a chance to reach their dreams. i am proud to say that the answer to each of those questions was yes. and as long as i am president and i have great allies like the members of congress that are here, then this will be a promise that america continues

to keep. thank you very much, everybody. and now i want to take some of your questions. [applause] >> let me make sure my microphone is working. what's secretary sebelius is going to run the show here. >> but i cannot give away cars. [laughter] we have lots of people run the country who are listening and a number of people in your who want to ask questions. we will take the first question -- in here who want to ask questions. we will take the first question. yes, ma'am. >> good morning, mr. president. >> could you tell us your name? >> yes, i could do that. mary kay krangle and i live in arlington, virginia. i just became eligible for

medicare a few weeks ago. my question is about the doughnut hole. i think all of us appreciate the to under $50 -- $250, and i think it will help a lot of folks, but my concern is why is it taking so long? why 10 years to close bowl completely? >> essentially, we will be facing this down. it is just a matter of money. it is very expensive to close the double -- the doughnut hole. frankly, we should not have a double in the first place. but once that doughnut hole was created, each year, though budget was assuming it was there.

for us to close that right away is to blow a hole through the budget. so we said, how do we provide some immediate assistance to those who are falling in the doughnut hole, and how do we rushed it a home -- and how we reach it at home. immediately, you will receive the to wondered $50 check. next year, the we then phase in the prescription drugs and part of what we still have to do is work with the drug companies to reduce the cost of prescription drugs generally. this is something that secretary sebelius takes very seriously. are there ways, for example, to get generic drugs on the market

faster? are there ways to make sure that we are not preventing do -- new products from getting to the market? are there ways of negotiating for better prices? there is a host of things that we will be doing. that is not like we will be standing still on this. but this law shows that in a decade from now it will be completely eliminated. >> my understanding is that we have folks standing by run the country, so the next question will come from the audience. operator? >> your first call is from barbara franklin from illinois. >> i am president of the illinois alliance for retired americans. my question is, will the

reduction in subsidies to medicare a bandage plans, because these companies to reduce coverage in the plants? courts that is a great question. -- >> that is a great question. this has been an area where probably there has been the most in misinformation and concerns, after the death penalty. remember those? -- the death panels. remember those? . .

insurance companies were getting paid $1,000 more -- 1,000 more than the cost of regular medicare. ok. now, by law these insurance companies were supposed to be providing additional benefits and better services for this $1,000, but a lot of it ended up going to their profits and c.e.o. bonuses and their bottom lines. you, if you weren't signed up for medicare advantage, were

still paying higher premiums for somebody else's medicare advantage. if you are in regular medicare, which is about 77%, so three out of four of you who are in medicare are signed up for regular medicare and one out of four of you are signed up for medicare advantage. those of you who weren't in medicare advantage, you're actually paying a higher premium for that extra $1,000 going to the insurance companies. well, that's not a deal. that doesn't seem fair. so here's what we said under the law. what we said is you can maintain medicare advantage, but we are going to say to the insurance companies that you can't use this just to peg your profits or pay higher c.e.o. bonuses. 85% of what you spend has to actually be for health services. we're going to review the rates that are applied.

we're going to set a rate that is fair and appropriate. so that medicare advantage isn't costing people who aren't in medicare advantage. so those are the changes that we've made. now, that is, by the way, where we are obtaining a number of the saves in medicare. it's about eliminating some of these insurance subsidies that were unnecessary for the program. but we have not eliminated medicare advantage, and insurance companies can still make money operating a well-managed medicare advantage program. that, you know, helps to manage and coordinate the prescription drugs and the dental and all that stuff. so for administrative convenience, medicare advantage may still end up being a useful program for some people. we just want to make sure that that money isn't just a big giveaway to the insurance companies. and this was costing medicare

overall i think around $17 billion to $18 billion every year. that's billion with a b. it is to say we are going to take some of that money from the insurance companies. and they'll still be able to make money. and so seniors who are under a medicare advantage plan that is doing a good job have nothing to worry about. if you're signed up for a medicare advantage program that is wasting money, then we're going to be telling those insurance companies to stop wasting the money. and, you know, that, i think, is something that everybody expects us to do. overseeing a program that lasts over the long term. anything you want to add there? >> i think the president did a great job answering that question. let's take the next one from the audience. sir, in the back. >> i'm 69 years old and i have heart disease, high blood pressure and incurrable prostrate cancer.

i have a couple of other chronic conditions. a transgender perssn. i am allergic to some of the drugs that would be used to treat my conditions. i am actually doing the wise things for myself and still productive in several ways. one of the main reasons for my sustained good health is my primary care physician. in addition to being a good doctor, she's be a outstanding advocate and coordinating for my sometimes complex care. i believe significantly more money can be saved in medicare by directing more resources to primary physicians for coordination and patient advocacy and less to the complex organizational programs that has the same purpose. instead of buying extensive -- what we need is more archers. >> well, let me -- i am not going to comment on football.

because -- are most people around here ravens fans or redskins fans? i -- i am -- i just want to make sure, you know. i don't know. see, this is why i didn't want to talk about football. this issue of primary care physicians is absolutely critical. and it has the promise of making such a big difference in the overall health of everybody. from children to seniors. you know, it used to be that most of us had a family doctor, you would consult with that family doctor, think knew your history, they knew your children. they helped deliver babies. they -- and as a consequence

what happened was that everybody got regular checkups and could anticipate a lot of the problems that are out there. now in these big medical systems so often what happens is you're shoveled around from specialist to specialist, oftentimes people don't have a primary care physician that they're comfortable with so they don't get regular checkups, they don't get regular consultations, preventable diseases and maintenance and you don't have the kind of coordination that's necessary between all these different specialists, right, so you go to one doctor, they take a test. then, you go to the hospital and they have you take the same test. a lot of errors occur because there's not communication between these various specialists and it adds a lot of cost because each time that test is being taken they're charging.

they're charging medicare if you're on medicare. and if you're not on medicare they're charging the insurance company and that's part of what's adding to all these costs. this was a major focus of the health reform bill is, how do we get more primary care physicians, number one? and, number two, how do we give them more power so they are the hub around which a patient-centered -- the medical system exists, correct? and, first, getting more primary care physicians. sadly, young medical students would love to go into primary care but they don't get paid as well as specialists. so they say to themselves, you know what, i don't want to -- i got all these medical school bills that i got to pay. i got to become a plastic surgeon or something. so part of the bill was to -- through loan forgiveness

programs and other mechanisms make it more enticing for young medical students to go into primary care, build up the pool of primary care physicians. number two is increasing the reimbursements for primary care. you know, right now you got a situation where if a primary care physician says to a patient, you know what, you need to lose some weight because you're at risk for diabetes, and i got a good exercise program that makes sense and here is the dietitian that you can use. sometimes medicare won't reimburse the consultation but they'll reimburse the foot amputation because after somebody gets the disease. so that doesn't make sense. so changing our reimbursement system to encourage preventive care and encourage what primary care physicians do is probably

going to be the single most important thing that we can do to assure that you and those of you who have good primary care physicians continue to get that kind of care. last point i'll make, and i just want to go back to this point i made during my remarks. about a decade ago i guess -- and barbara, correct me if i'm getting the timing wrong -- but about a decade ago congress -- not our congress, but the previous congress -- [laughter] >> made the decision that the way we were going to actually cut medicare -- or cut the rising cost of medicare was to say to doctors and providers, we're going to cap you at a certain level. and if you don't, tough luck. and in theory it sounded good but it wasn't very well thought

through. so what happened was each year costs for doctors went up, and the reimbursements -- and it eventually got so bad that congress started saying, this isn't realistic, so each year they kind of do a patchwork fix on this thing. and the formula for reimbursing medicare doctors would be a -- adjusted but only for a year but it won't get adjusted permanently. so what happened over time is that it built up so each year you have this emergency so unless congress passes a bill right away suddenly medicare doctors are going to get a 21% cut in their reimbursements because all that health care inflation had built up over time. we are now in this situation again, and we got to fix this

permanently. now, in the meantime, temporarily, we have to make sure that your doctor is getting reimbursed so they can stay in business and keep their doors opened. and my administration has worked very closely with doctors to try to see if we can get this fixed short term but ultimately we are going to have to get it fixed long term. what we want is a system where doctors are reimbursed for the right things. we want them reimbursed tore quality and how good care you are giving patients. we don't want doctors just to be reimbursed for how many tests they do or how many procedures they do because sometimes that may mean they're not getting the best care. so there are adjustments we need to make over the long term how we reimburse doctors. but what we shouldn't do is have this, you know, guillotine hanging over their heads every

year where they're ficking out, am i going to get reimbursed or will my pay get cut 21%? i don't want to be a doctor because it will make my income unstable. that's something we got to fix, ok. >> thank you, mr. president. before we take the next question from the audience, i want to add one thing to that great answer which is to tell you that the president has been focused from the beginning of the discussion about health reform on the work force. understanding that it's great to say everybody should get great medical care, we'll have more access. you said over and over again, what about the docs, what about the nurses, what about the nurse practitioners? what if we don't have enough people, how are we going to deal with it? starting in the recovery act, the piece of legislation that was signed thanks to members of

congress and the president, there was the beginning of more scholarships, more incentives for a whole range of health care practitioners that really got increased in the affordable care act of that just signed. it's in the budget in the future. it's going to continue. i want to thank you, mr. president, because as the discussion went on in congress, it often didn't get enough attention but i will tell you because i had the privilege of seeing the president on a very regular basis during this discussion that that was constantly a focus of his. we have to make sure we have not only the doctors and nurses and nurse practitioners but the primary care, the folkssthat are going to take care of the entire population. and that's ben a focus and i think it will continue to be a focus. operator, if you are still there, it's hard because we can't see you but i assume you are still there. is there another question from the audience listening in?

>> barbara from ken very, colorado. barbara, please ask your question. -- barbara from denver, colorado. barbara, please ask your answer. >> mr. president, i am barbara. >> how are you? >> i would like to have you answer a question. >> i'm all ready. >> ok. for health care reform, i am concerned about how any health care changes will impact seniors and choices around alternatives to having to go to live in a nursing home. my friends and i want to live independently. >> well, it is a great

question. and let me just say, you sound like a woman that after my grandmother's heart because she -- some of you know my grandmother passed away a couple years ago. she helped raise me so i was very close to her and she lived in hawaii. after my grandfather passed away she had the same little apartment she had had when i was growing up over there. we kept on trying to say, you know, listen, why don't you move to chicago? and she said, what am i, an idiot? i am going to trade 80 degrees and trade winds for chicago winter? but she was always very proud and insistent. until the end of sher life she insisted on making sure -- until the end of her life she

insisted on making sure she live in her apartment. there are given options for different people. the key is we want to give choice to seniors, what's best for them. some people love living in a retirement facility. some people want to stay in their own house. some people want a mix of options. so if they can get help that comes in, you know, that may be the best option. what we tried to do, not just in this law but what we're trying to do generally, and i want secretary sebelius to fill in on the specifics on this, is to increase the number of options that are available for people. and make sure that we are reimbursing through medicare, not just for the traditional choices of, you know, if you're in a nursing home then you're going to do it one way or another, but, you know, are there other ways that people can get maybe a nurse that

comes in or maybe somebody who's cleaning an apartment for once a week? that's what my grandmother did, for example. that made all the difference because maybe she couldn't reach -- barbara is nodding. she can relate to that. you know, so those are the kinds of innovations and flexibility that we want to introduce into the system. some of it will be facilitated by the new law. some of it will be facilitated by the ongoing improvements that we want to institute over the next several years so it's not going to happen all at once. go ahead. >> thank you, mr. president. i think there are a couple of -- let me mention a couple of specific things that are part of the new law. one is there is a provision

called the class act which is going to allow workers in the current work force to begin to voluntarily decide to have a payroll checkup and put aside some money that they can draw on later to provide the kind of residential care that i think is going talked about. if somebody needs to come to the house and help with lawn -- with the lawn, go to the grocery store, so you can have your own savings account so you can draw on that and that will be mappingd as part of the law. i -- managed as part of the law. i think have people have more choices. yesterday or the day before under the department of aging we released grants to the community which are going to help governors like governor o'mali and his senior volunteer program get the word out to families about what their options are. for a lot of people, particularly if somebody happens quickly, somebody suddenly gets sicker than they were and needs help, a lot of families don't know what their

options are, don't know if there's anything other than a nursing home available. so part of choice is knowing what are -- what is here in maryland, what's around the country, what are those options. so these will be counselors who will meet with families, meet with family members. there are a series of medical strategies in the bill that provide for wrap-around care once a patient leaves the hospital. so a home health team where somebody needs some -- if they don't need to be in a full-time residential care but they need somebody to follow-up. did you take your medicine? are you having any problems? are you experiencing any trouble? so the bill has a whole lot of features that i think will have choices. and the overall president and

vice president's move forward that will provide for benefits for family members that are helping to provide for care services. because sometimes in this tough budget time it's tough. people are running out of money. and they think, you know, i want to help my loved ones stay at home. i want to provide the care, but i'm trying to raise kids and take care of an aging parent or aunt and uncle, i don't have the resources or any -- i need a day off or help going to the grocery store. so there will be caregiver money. 80% of long-term care services are provided in communities by loved ones and they need a little help. so the system is going to get stronger to give those choices across the board. i think all of that is god news for americans. >> good. >> yes, sir. and, again, if you would say your name that would be great. >> i'm ed.

i'm a senior citizen who lives in maryland, silver spring, maryland. >> nice to see you, again. it's lovely to have you here. >> i want to thank secretary sbeelias and the president letting me ask this question. i am asking this on behalf of my children who are in their 60's and late 60's and my grandchildren and great grandchildren. i heard from some of my friends who spread the myths who are against the health care bill no matter what it says. of course, they told me about the death panel. of course, which is now dead. but the -- one of the things that they bring up -- and i heard the same argument in 1965 that providing medicare at this point we may not be concerned with this at our ages, but our children may be that we will soon with the president the way it is that medicare and social security will soon run out of

money. now, as i say, that concern is not so much for me at my age but for my children and their children. >> well, it is a wonderful question. so let me talk just about the finances of the health care bill, medicare and i'll throw in social security. we have a genuine long-term problem, and i can describe it very simply. we have a population that's getting older so you're going to see a bulge in the number of people who are using medicare and medicaid. more recipients fuel workers to support those programs. we got more money going out and less money coming in. and that's going to worsen over time. now, that has nothing to do with the health care bill.

that has to due with the fact that we have an aging population and health care inflation, the cost of the additional cost of health care each year are going up -- is going up much faster than overall inflation and how fast wages and taxes,est, are growing. -- etc., are growing. so you have this gap of how much is needed versus how much is actually coming in to the programs. that has to be fixed. now, one way to fix it would be to just say, we're just going to cut benefits. if there is going to be a gap between how much medicare is going to cost and how much we actually have, we say, each of you, we have to eliminate some benefits. you get fewer prescription drugs, you have to pay higher

co-pays, certain procedures won't be covered or some people won't be covered orwell' raise the eligibility when you qualify for medicare. there are a bunch of adjustments that could be made that -- or we'll raise the eligibility when you qualify for medicare. there are a bunch of adjustments that could be made. the way we think is the smarter way is to say, where are we getting good value for our money? where are we not getting good value for our money? how can we design medicare so that we're reducing the costs that are skyrocketing but people are actually getting better care? are there ways we can do that? for example, can we have one test instead of five tests, have that one test emailed to everybody so that medicare is not paying for five tests? can we arrange so that because

we have a good primary care physician you make one visit to the doctor's office and all the specialists come to that one office as opposed to you having make five different visits? are there ways in which use best practices for certain diseases so that we're catching them sooner, it's cheaper to care for than when you really got? how can we make the health care system as a whole smarter, more efficient for everybody including young people, not just for seniors, because obviously health starts -- the healthy you are when you're younger, the healthier you are going to be when you're older. are there ways we can better -- have better efficiency, make

the health care system better? if we do that that will start controlling the costs of medicare and won't go bankrupt as quick? a lot of the chakes is what we introduced in our health care bill. now, in addition, the health care bill overall because of eliminating some of those subsidies i mentioned are actually going to save $1 billion -- $1 trillion out of our deficit over the long term. a trillion, that's with a t. that's a lot of money. so when you hear arguments out there that, well, you know what, we couldn't afford this health care bill. folks that are saying that, they didn't read the bill, because according to the congressional budget office, this will actually reduce the deficit, reduce costs by making the system smarter, making it more efficient. that in turn means that

medicare will be there longer. now, the one thing i want to say about medicare and medicaid, though, this health care bill alone doesn't solve all our problems. and i don't want to overadvertise. the truth of the matter is it's very hard to change a health care system that involves millions of patients, tens of thousands of doctors, hospitals, all those systems, all across the country, you know, trying to manage that all from the top is just too hard. what we try to do is create new incentives, find who's doing the best job treating what, advertise those best practices so that other people start adapting them and over time that trickles throughout the system so that the system overall gets more efficient. that's what we're trying to do and that's going to take some time. it's not going to happen overnight. it will happen over the course of the decade. maybe two decades in some cases before we're actually going to

be able to solve this problem overall. but what i want you to tell those friends of yours is that the long-term fiscal implications of medicare, the only way to fix those are to what's called bend the cost curve, make health care more efficient. the other alternative, which is often the one that is presented by our republican colleagues, is to essentially bounce it out of the system. that's the main proposal that they got that was presented during this debate in terms of saving medicare. what that basically means is, we're going to give you a set amount. just hypothetically, we'll give you $5,000. you go buy your own health insurance in the private market instead of getting medicare, but think about it. what happens? you get $5,000 and the cost is $10,000. that comes out of your pocket.

and the next year the costs are $12,000 and maybe they gave you an inflation adjustment adjustment. now you get $5,500 but the costs for the same quality care you're getting under medicare is $12,000. there's an easy way to make it look like you're solving the problem. you just dump it on other people. and what we're trying to do is actually solve the problem by making the health care system more efficient. that's going to be harder, but it's fairer, it's more just, it's going to keep the commitment and the promise of medicare for years to come. >> thank you, mr. president. operator, we have time for one more from the world out there. >> your next question comes from dennis from las vegas, nevada. dennis, please go ahead and ask your question. >> mr. president. >> hi, dennis. >> how are you, sir? >> good. >> i am a retiree who's a member of the international union of painters and allied

trade. i'm currently drawing my health insurance from cobra since the federal subsidy from my employer is a major being discontinued and i have confirmed my former employer will not offer cobra. what am i supposed to do and how does the new health care law help me now get health care especially since my wife is getting -- dealing with health care issues. >> you don't get qualified for medicare. you're getting cobra because your employer is not -- you're not on the job right now, is that what's going on? >> correct. >> well, here's what happens is because of this terrible recession that we had, we knew that a lot of folks were going to be losing their jobs. when i took office 750,000 people per month were losing their jobs.

we're now because of the recovery act, the great work that congress did, we're now gaining jobs again every month. we have that eight million job hole that was created because of the recession and that's going to take some time to fill. you have a lot of people like dennis out there, people in construction, people in the trade, a lot of folks who were laid off who not only are truggling to pay their bills but they were in danger of losing their health care because they lost their job. cobra, the idea is by law you're allowed to keep your health insurance even if you lose your job just by buying the premiums. here's the catch. if the premiums are there are 1,000 a month, you -- $1,000 a month, now you lost your job so you have less money. a lot of people can't afford

cobra. one of the important things we did in the recovery act, and a lot of people don't know this, but this was hugely important to so many americans, including dennis, as you just heard, was through the recovery act we said that we are going to subsidize 65% of the cost of what your premiums were so you can keep your health insurance even as you're looking for a job to try to get back on your feet. so if your premium for your family was $1,000 a month, now it only costs you $350 a month. we have sustained that for a year and a half now, and we think it's important to sustain it for at least another six months because there's still a lot of folks who are out of work. the economy's improving, but the unemployment rate is still high. this is being debated in congress right now. and so, dennis, the answer is

what we need is to make sure that congress follows through on its commitment to go ahead and maintain cobra until people are working at a higher rate again. now, that's not a long-term solution to dennis' question, though. the problem is that for a lot of folks like dennis once cobra ran out before this crisis, before the recovery act, they were just out of luck. if you didn't have a job, you didn't have health insurance because buying health insurance in the private marketplace as an individual is prohibitably expensive. if you're not part of a big pool that can negotiate with the insurance companies, they jack up your rate. you're paying 20% more or 30% more than you would be paying if you were working for a big company. in some cases if you have a pre-existing condition you can't get health insurance at all. some of you have been through this. some of you if you haven't yet

qualified for medicare are going through it right now. there are early retirees who aren't yet qualified for medicare but they lost their job, they have enough savings to support themselves but they don't have enough savings to be paying these huge medical bills. the whole idea around the health reform bill is let's put new a pool so you get the same leverage that somebody else does. let's, even if you're on your own or you're a small business owner, let's give you the same negotiating power that somebody who works at google has. for example, you're a federal worker, you're part of a pool, you get a great deal. the way the health care structure is, somebody like dennis, even after cobra is -- has -- he's no longer eligible

for cobra, somebody like dennis could sign up to be part of a pool where they got the best lowest rates possible, kathleen sebelius, the secretary of health and human services, will be overseeing what these policies were that were offered, you have a choice of plans. it wouldn't be, you know, one size fits all, if dennis had a bigger family and had -- he mentioned his wife, so you wanted to have a certain kind of better insurance, you know, he could pay a little bit more. if he was young and single and feeling healthy, you could have a cheaper version. the benefit is would get the benefit of being part of this big pool. if you still couldn't afford it, and there are some people if they're making minimum wage, they are not making a lot of money, they still couldn't afford the premium even though

it's a much better deal, then we're going to provide tax credits, provide subsidies to help people pay for their insurance. now, all of this doesn't go into effect until 2013. and i'll anticipate the question earlier, how come it's taking so long? in this case it's just not a question of money. it's a question of setting it up right. we are talking about 30 million people getting insurance. you have to set it up in a way that, you know, is efficient, isn't subject to fraud. so we had to phase that in to do it right over a certain number of years. but the key is by 2014, which is right around the corner, what you're going to see is a situation where somebody like dennis, even if his cobra eligibility has lapsed, he's going to know, have the confidence, have the security that he can look after himself

and his wife when it comes to their health care needs. and that is something that's existed in every other industrialized country in the world except the united states. up until this year. think about that. we're the wealthiest nation on earth. every other country had that basic security except us. and what we did was we didn't do anything radical. we didn't -- this wasn't socialized medicine. we built off the private system that we already have but we said, you know what, we are going to fill these gaps so that everyone has some security, so you have no parent out there who's thinking, i'm not sure i can afford to take my child to the doctor even though she's not feeling well. there's nobody out there who they lose their job at 55 and certainly are thinking, you

know what, for 10 years i have to go without health insurance. there's nobody out there who because they had a pre-existing condition, somebody like fran who had been stricken with breast cancer who right now if fran was working rather than retired and tried to get shushes right now she might be prohibited, she might not be able to get health insurance. -- insurance right now she might be prohibited, she might not be able to get health insurance. that's not reflective of the values of our country. that's why we changed it and that's why we're going to fight any effort to go back to a system that doesn't work for the american people and doesn't work for our seniors. thank you so much, everybody. [applause] >> thank you, mr. president.

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>> president obama meeting with folks in wheaton, maryland, just outside the nation's capital, talking about health care and about the doughnut hole, the medicare checks that are coming out. i'd like to get your reaction to the president's comments.

your thoughts on the implementation of the health care law. 202- 585-3885, the number to call if you're a republican. if you're a democrat the number's 202-585-3886. for independents and all others, that number 202-585-3887. make sure you mute your television when you call in. and if you have called and gotten on the air in the last 30 days, give others a chance to call in this afternoon. we'll take about 10 or 15 minutes of your phone calls. the president appearing at this event in maryland, the associated press writes, his timing coinciding of the first batch of $250 of people who fall in the prescription drug gap, the doughnut hole. it will be the first tangible benefit that many will be seeing from the law that president obama signed in march. some four million elderly and disabled people receiving it. the first 80 billion to go out

this week. we'll get your calls momentarily here. we'll give you a chance to see it later in our program schedule on the c-span networks. earlier today on another issue, the oil spill issue, which the white house is watching closely, thad allen briefed reporters and we'll show you it to you later in our schedule. charleston, south carolina. hello, you're on the air. what's your name? >> dei. >> go ahead, dei. >> i'm calling about the town hall that was held in maryland this morning. >> what do you think? >> what do i think? ok. another staged event as usual. the event was held in maryland in the most liberal pro-obama section of the state. chris van hollen was there. that's nancy pelosi's number one operative. and mull could you say key was there. every event this man stages is totally controlled.

there was no opposing view. it is absolutely totally manipulated. and it is obviously a desperate account of the backlash that's coming from the majority of americans who will sweep them out in 146 days come november 6. >> dee calling from our republican line. this is butch from jackson, wyoming. you're on the air, butch. go ahead. >> you know, 62% of the american people favor the public option. this health care we have now is a gift to the insurance companies. and health care should be actually privy to the american public -- [inaudible] that's the way it should be. >> earlier, our caller mentioned representative chris van hollen. he is there in the center of your screen. here is appleton, wisconsin.

terry is an independent. >> hi. >> hey there, terry. >> i am not sure about the health care plan, if it's so good, why doesn't congress have it it, why doesn't the president have the same thing? they're working for us and they're getting better benefits that we are and we're paying for it. >> maryland, congresswoman donna edwards there from the neighboring district outside of wheaton. that's the fourth district. here's charleston, south carolina, next up, charleston -- excuse me, fayetteville, north carolina. republican line, alex, go ahead. >> you said -- >> i said fayetteville, north carolina, is that you, alex. >> i thought you said republican. >> well, go ahead with your comment, alex. >> didn't state it. anyway, i was commenting on the effort done on the oil spill.

it's good but is it efficient enough and is it -- it is not capped yet or what's going on? >> well, it's a little bit offtopic. we're talking about the health care meeting with president obama. thad allen, you can watch that online in our video library at c-span.org. here's orlando, florida. magda. >> i'm magda from orlando, florida. i was watching the health care, and what i don't understand is the american people, they don't realize, we had a dumb president who killed my son in 2003 and 2004 and this health care, how can you be so smart and at the same time attack a president who is so decent, who

doesn't lie to the people? i believe in him. i went to the library. i went right through it for the health care, the doughnut hole. i went to my doctors and they say, do not believe what the republicans are telling you. they're just lying -- i had my own doctor. >> and that caller mentioning the doughnut hole. that gap that the president talked about, the first batch of those checks that are coming out this week beginning thursday to cover that coverage gap. he also, the president also announced today new measures to combat medicare fraud. including aiming to have waste, fraud and abuse in the program by the end of 2012. writes the associated press. this is sommersville, west virginia. john, go ahead on our independent line. caller: i have one very simple question. when they did a freeze on the price of what insurance is as of january 1 of this year, turn around and took a 25% deduction.

everybody else has to take a loss. why didn't the insurance company? that's the only question i have. >> thomas is with us from florida. looks like you're calling on our republican line. caller: hudson, florida. i keep seeing and reading in the paper and the internet that the president is going to cut trie care and medicare -- tricare and medicare payments by 2010. being a disabled veteran, that could probably cut down on the choices of disabled veterans to doctors. >> yes. caller: and how many tests are necessary when the doctor can't figure out what's wrong with you or you end up in the hospital? how many tests are necessary to figure out what exactly is going wrong with you? i mean, you say some tests are unnecessary, well, who decides what unnecessary those tests are? >> thanks for that call, thomas. and i'm reminded by our producer that one of the bill's

currently working its way through congress is to fix that, that gap in tricare and medicare. let's hear from cruxton, michigan, on our democrats' line. go ahead. what's your name? caller: melody in minnesota. >> my bads. go ahead, melanie. caller: i want to say being a disabled person coming up to retirement age, i want to know what happens to the people who are not at retirement age and they don't have the income to sustain themselves, let alone to have insurance? well, the state will eventually take our homes when we're gone and everybody we worked for? >> what's your health care situation, insurance situation right now, melanie? caller: right now i do have state insurance. >> a report this morning in "the new york times" talked about the cost of medicare. they reported this morning in their front page that medicaid,

rather, medicaid cuts put states' budgets in a bind. they'll have to close larger than anticipated shortfalls in the coming fiscal year unless congress passes a six-month extension of increased federal spending on medicaid. that's from this morning's "new york times." to scottsdale, arizona, steven. good afternoon. hi there. >> good day. >> you're on the air, steven. caller: i'm a doctor, and i like to say that this health care bill will absolutely destroy medicare, period. there is a 21% reduction in medicare fee schedule to doctors. in scottsdale, arizona, the mayo clinic, a very respected clinic, i'm sure you heard of it, has stopped accepting medicare patients because they lose the money on every

medicare patient that they treat. >> did you hear that one question asked to the president about increasing the -- the increasing money for primary care coordination and did you hear the president's response to that? caller: i didn't. i was flipping back and forth. but the point i'm trying to make here is that unless they put a doctor fix in there isn't a doctor in the united states that's going to be able to treat medicare patients because they'll lose money on every single medicare patient they treat. >> and that -- those payments to you started going down just a week or so ago, right? caller: medicare fees have been going down for a very long time. the real point here is if they do put a doctor fix in, then the president's promise to reduce the deficit with the health care bill goes out the window. so it's he manipulated the

figure and took out 21% to doctors in order to make the health care bill look like it would reduce the deficit. and if they put the -- so he has a conundrum here. >> that's for the input. we do want to get a few more views here. let's go to terry from new jersey on our republican line. san diego, california, next up. who's this calling? san diego, there you are. who's calling? caller: my name's george. >> go ahead. caller: yeah. i think all of us who supports health care reform realize what's passed is not the end. what it will become. >> yeah. caller: and that basically what it is is it established universal care that's a principle that's now established in this country and it also put the required regulations on the insurance companies, you know, things like the -- have prior

existing, you know, he restrictions and so forth. what happens is by the time it gets enacted for most of the public is that the congress will have to enact an expansion option which will be voluntary and optional for those who want to sign up. it will be an expansion of medicare. people understand medicare. there's no reason why they can't explain it to people. and have medicare that can compete with the private insurance. and they'll keep it simple that way. that's what it will be, i think, eventually. >> lynchburg, virginia. jack, go ahead. you get the last word here. caller: yes. i just wanted to say that i don't feel that the country's giving this country enough credit for the change he's making and giving it enough time. and if we don't make change then it will -- there won't be no insurance to anybody. i think if we give it a chance and give it time that things will work out. just wanted to say that.

thank you. >> thank you, jack. and thanks for all the calls. the moments here in wheaton, maryland, the event with president obama wrapped up and chris van hollen meeting with local officials. you have a chance to see this later in our schedule on the c-span networks. >> c-span, our public affairs content is available on television, radio, and online and you can also connect with us on twitter, facebook and ue tube and sign up for our -- youtube and sign up for our scheduled alerts. >> well, the house and senate back in session today. the senate gaveled in this morning. they continue working on that package of tax extension, tax and benefit extensions. a number of amendments to be considered. can you follow it live, senate coverage on c-span 2. they are in a break for their party caucus meetings. the house will gavel in shortly in about an hour or so, 2:00 p.m. eastern. about five bills on the agenda today .

including one that honors the late explorer, jacques cousteau. the house in at 2:00 p.m. eastern. coming up this afternoon at 3:00 on c-span3, senate foreign relations subcommittee will focus on the activities of hezbollah and the middle east and the officials testifying include the counterterrorism coordinator for the state department and as well as former bush administration ambassador ryan crocker. live coverage at 3:00 on c-span3. >> we have three new c-span books for you. "abraham lincoln," "the supreme court," and "who's buried in grant's tomb." to order go to

c-span.org/books. each one also a great gift idea for father's day. >> the republican voters here in las vegas are among those across nevada taking a nominee to challenge senate majority leader harry reid. republicans also have to decide whether to nominate the governor for a second term or choose a former federal judge who opposed the democrat, rory reid, the son of the u.s. senator. one of 12 states holds primaries and runoffs. we had a preview this morning on a number of the races on "washington journal." >> "washington journal" continues. host: at the table is bob benenson, senr analyst at "cq weekly." primaries, run off, a ver significant day that intel as a lot of stories about november. but let us get right to it.

the state that has lots and lots of people talking is arkansas. what is at stake here and what is this race between senator lincoln and the lieutenant governor and become so competive? guest: first of all, of today's primaries this has the most immediate impact. blanche lincoln is fighting for her political career, if she loses, she is done. blanche lincoln is a classic southern democratic centrist, which means she is a bit more moderate, conservative on some issues than the democratic mainstream. although there are some democratic activist, labor unions who really lobbied against her, who don't like that. in another election year, middle-of-the-road incumbents like blanche lincoln sometimes are regarded as a thoughtful and

the liberty. but for party activists they say, no, we want these members of congress to vote theay we want them to vote and when we don't, sometimes we face party rebellion. this has been a particularly difficult primary season for incumbents already. utah's senator bob and judy utah senator bob bennett, pennsylvania senator arlen specter going down to defeat. this will be an interesting test to see whether the party unity and ideological purity becomes an overriding issue for incumbents. host: neck and neck in arkansas. any late polls? guest: all the polls show it is very close. if you show the tenant governor bill halter with a small lead, but within the margin of error. but all you need is 50 percent plus one. host: what is he bnging? guest: something different. that is what much of the challenger candidates areoi