then jess ford concerning international drug trafficking. and "the wall street journal" report concerning the new financial regulation rules signed into effect this month. "washington journal" is next. host: the debate over u.s. strategy in afghanistan is back on the front page this morning, following the leak of those wikileak documents -- one legislator says these documents call into question several things, and an investigation is likely to follow. meanwhile, slated to vote on $37

billion in emergency supplemental money for the war. the leak could complement that. we want your thoughts this morning on the leak. here are the lines. we will get to those phone calls in just a minute. on the house but, that $37 billion supplemental amount, senator dennis whose image is circulating a letter asking congressional members to vote against the supplemental funding. "the washington post" this morning says that official leaks will not alter views. they know that republicans have

been largely silent. perhaps because the bulk of documents concerned the war effort during the george w. bush administration. lawmakers said the trove of documents may harden opposition, but is unlikely to suddenly alter impressions of a war the administration had previously acknowledged is tough amid declining public support. it goes on to say that diplomatic consequences of the intelligence breach were tougher to judge. in islamabad the officials reacted angrily to delegations.

here is a quote from senator john mccain, quoted yesterday as saying "most of it is old news of." he said the emerging picture from this leak adds up to little more than we knew already, that the war in afghanistan was deteriorating and we were not winning." other papers this morning -- the front page here of "the washington post" -- anger, but no call for change.

atlanta, georgia, on the democratic line, eric. what do think? caller: i have to say this is an opportunity to see that our corporate media is not telling us anything. the bottom line is the corporate media, corporations -- you are corporate agent, lady. the american people have no idea what is going on in the world, or how to vote because the media does not inform us. the media is a corporation. the less consumers know, the more corporations can get from the american people.

[unintelligible] how do we know what will happen in the future? why don't you put people in there to inform us of both sides? host: we will be debating the issue in the days and weeks to follow. jim, republican line, north carolina. caller: the gentleman who just called needs to understand we're dealing with propaganda media, not corporate media. but as to our wikileaks, it is a lot of enlightening information which will give a black guy of only to the u.s. military, but also to our foreign policy, and wakes us up to the involvement of iran. this is probably also a strategy to accelerate our withdrawal from the theaters of war, but

they're voting on $37 billion of war supplemental today. we cannot, as was done in vietnam, leave our men and women in uniform hanging out in the wind on a dollar bill. they deserve better. i would support voting that supplemental to support men and women in uniform because they have done everything we have never passed from them to support our country. host: the wikileaks founder was asked yesterday about whether or not the release of these documents compromise security of u.s. and u.k. security. >> [inaudible] with groups we are attempting to expose, attempting to attack the messenger discharge from the power of the message. we do not see any difference in the white house's response to

this case to the other groups that we have exposed. we have tried hard to make sure that this material does not put in a sense at harm. -- innocence of harm. all the information is 7 months old, and so, it is of no operational significance, even though it is of significant consequence. host: what do you think? caller: first of all, i must agree with john mccain. pretty much all this information we already knew, anyway. certainly, we must termer -- remember why we went there in the first place. there were protecting osama bin laden and al qaeda. president bush went there and

drove them out to pakistan, where they are now. we could just be using those drones. no american soldiers need to die in afghanistan. as far as though wikileaks, those documents do not really mean anything. i hope that president obama is getting ready to start withdrawing troops because -- some people want to say that we won iraq, fine. we need to understand why we went to afghanistan in the first place. we just need to get out of there. if osama bin laden and al qaeda are in pakistan -- we could use those drums to attack.

the want to hear president obama make the case for staying in afghanistan for the next year? it seems like president obama was listening to colin powell. if it takes a year, as long as no american soldiers died there. host: this is jeff on the democratic line from north carolina. caller: hello, how are you? i'm a first-time caller. i want to acknowledge that about the wikileaks, none of that is really important. we should be focusing not just on americans, but as people, across the globe -- the ufo. we have been having the ufo's

all over our global -- for 20 or more years. and if we do not understand the ufo disclosure has to come. they are here to protect us, to monitor our government. if you go to "larry king live" -- you can find the cover-up, how they have been shooting down missiles, appointed in the wrong direction. all of this war has to stop. it is not about the wikileaks and war in afghanistan -- a matters, because we're losing precious lives, but we are all pointing fingers. we're all one universe, one people. we have to realize that. ufo disclosure is coming very soon. host: go to c-span.org to find all the events we have been covering. yesterday we should do a little

of the press conference with the founder of wikileaks and have that on our front page. you can link to all the documents there. the white house reaction is there along with a booklet the new york times" war logs. in about half an hour we will speak to the reporter about the decision to print these documents, as well as the stories they ran. a little about wikileaks -- here is "the wall street journal" -- on the legal question of releasing these, the legal experts say that the site could be investigated. it is clearly protected by the

first amendment. it says that this is the lesson of the pentagon papers from 1971 where the court ruled that the papers were allowed to publish classified study of the u.s. involvement in vietnam. los angeles, democratic aligned, go ahead. caller: i would like to comment that yesterday it is strange recalled all around to find out whether this would be on the calendar, so people could have time to phone their representative in light of the

leaks exposed yesterday, but no one in congress knew the date. watching congress work on these wars is like watching a group of first graders play soccer. everybody runs after one ball, they have no direction, they do not know where they're going. it is strange that on friday 47 republicans voted on the house bill brought to the committee as a whole that israel should have the right to attack iran. we're going after war, after war. host: the house will take up the $37 billion supplemental on the floor. the senate armed services committee are holding a confirmation hearing for the next u.s. central command. it is also likely to come up in

that hearing. we will have live coverage of both. c-span always covers the house of representatives'legislative floor action. we will cover the hearing at 3:00 p.m. richard, from san francisco. caller: good morning. i think the wikileaks have caused the death of a lot of american soldiers. when they release information that a troop of soldiers will be fallujah, there's only one rather goes there. these people are not stupid, but will sit there all week and set their ied's -- host: you have to turn down your television. let's move on to theodore, on the democratic line. caller: good morning. i am a retired soldier, 30 years

of military, and for 20 years i have a top-secret clearance. one of the things we've allowed as soldiers, and listed as well as officers, it is we take our oath to defend the constitution of the u.s., and the officers appointed over the bus -- i see where private manning was not been properly supervised because he was able to go in. i looked at the document. he said he had access to networks. the secret network used by the defense. he would take a cd in there, and have labeled was something likel lady gaga" and put

information in there, and erase the file. then he would send it to a buddy. it was one of his major concerns -- one of people to be held accountable, and to see does not happen again. host: here is a picture of a bradley manning, posted early this morning. investigators are checking his computers. he was charged with leaking classified information. thousands of documents published on sunday by wikileaks -- san the material relates entirely to the war in afghanistan while this fellow was stationed in iraq. orlando, fla., linda, on the republican line. caller: somebody called earlier and said that the issue with wikileaks was not important, but

i do think it is important. ultimately, the person who the information is culpable, but the man who owns wikileaks was on "larry king live" last night, and said the purpose of doing this was -- and this is a quotation from them -- to crush the people in power. well, that is not the job of the media. i could barely watch it because it disgusted me to see someone with so much hate for the united states. so, that really does disturb me. i don't think what he did was illegal, but it certainly was immoral and unethical, and my opinion, and not the role of the journalists. host: what you think about the clan that he is trying to expose possible war crimes? caller: i just don't think that

is his role. --he had ever mentioned, if he had information, he should have turned it over to the administration. we'll talk about top-secret information. he could have presented it secretly or confidentially to the administration. he did not have to do with the way he did. the reason why he did it -- city went to bring down the people in power -- he said he wanted to bring down the people in power. host: have you read some of the memos? caller: yes, they are extensive. host: what do you think about what you are reading? some are saying it reflects how war is, and that the american citizens paying for this should have access to the information of what it is like on the

ground. caller: um, i'm pretty loyal to our military. my son is a marine. i would leave that information of to the people in power. i think we need to have sunshine laws. we have a right to know certain things, but when it comes to our national security, i don't know -- it really disturbs me. the thing that disturbs me the most was his attitude and his goal. oft: let's listen to more what he had to say where he was pressed a little more about the alleged war crimes. >> however, it is up to court to decide, clearly, whether something is in the end of a crime. that is it, prana facie -- it does appear to be evidence of war crimes in this material --

the top example is a missile strike on a house which killed seven children. host: north carolina, you are on the air. caller: ultimately, i hope that the wikileaks revealed the real truth of what is going on in afghanistan -- and that is that the corporations, banks to republicans, are using our troops and taxpayer dollars to go into this country and pillage natural resources, run off with profits, hand us taxpayers the bill to pay for all of this, and use our sons and daughters to clear the way over there for them to pillage our resources. i wonder who the real terrorists are over there? i hope that wikileaks ultimately reveals all that. host: the editorials this

morning -- "the washington post" says the obama administration condemned the release of documents. "the wall street journal" -- it says the real story these documents reflect the official views of the afghan war. that afghanistan has shifted its direction and a more pro-american direction in the last 14 months.

that is the editorial in "the wall street journal" this morning. here "the new york times" says it has been only a few months since obama released his strategy for afghanistan. but americans are increasingly wary of this costly war. north carolina, abbott, on the democratic line. caller: i think the president should pull up the soldiers. if the soldiers want to die, let them -- let them die here to secure our borders.

if the come across, let them fight here. i think the president is getting a lot of false information, just as with colin powell. he got on national tv to make the point for bush. i think the president ought to make sure that he is getting straight information. i would give him a lie detector test. host: the republican line, todd, houston, texas. caller: let everyone remember that we are at war. i have two sons and the army. -- in the army. [unintelligible] host: in other news this morning, the campus newspapers are reporting on charlie rangel and possible ethics

investigation hearing, looking at alleged allegations of violations. he is not backing down is the politico have done. and "the hill" notes that on gop, rangel is holding his fire. there is slated to be a hearing on thursday and we will have coverage. go to c-span.org for more information. we go to rick on the independent line from michigan. what is the fallout from the wikileaks? caller: the fallout from this is great because people need to know what is going on. the main street media have fallen on their face because they are corporate-control. we do not get the right information. some of us have known from the beginning what is going on there.

just look at the post-traumatic stress syndrome of those coming back, especially in iraq. we're killing a lot of civilians there. guess what? we're not the good guys of the there. i respect the military, and love our troops, but let's give them home. this is just crazy. there is no way that iraq was never a threat to was. we need to go back and investigate 9/11 because of those buildings were demolished before our eyes, and then they said airplanes did it with gas? host: we're talking about the release of these documents and the fallout from them. we will continue that conversation for the next 20 minutes. after that, we will have jane perlez from "the new york times"

join us. she will talk about -- i'm sorry, and about five minutes we will talk with sir to talk about the paper's decision to print these documents. -- we will talk with her and about five minutes. hello, on the republican line. caller: yes, we should give all our treasure to afghanistan and make the afghan people richer, stronger than us, and then we will become envious of what we did over there. we are going that way anyway. i think $37 billion -- give it to them, make them better than us. let's sacrifice ourselves for them. it is a great idea, great strategy. host: the house is expected to bring out that $37 billion in

emergency war money. on the senate side, and looks like there will go forward with a slimmed down energy bill. in other news, bp will name a new ceo -- robert dudley, the american chief executive. there is a picture of him. georgia, albert, on the democratic line. you are the last phone call on this before we go to our guest from "the new york times." caller: i'm calling in reference to the wikileaks information. i was listening to the founder during c-span early this morning. i'm retired military myself and work with sensitive material -- and i came to the conclusion that this specialist, the one they say did this alone -- i don't think he did act alone.

he was supervised by someone. to carry information in and out your subject to search, and there certain things you cannot carry in. by his working on the internet, he had to be involved with someone else while he was working on the internet. for general reference, my son who was in the marine corps who had a friend in the navy -- date e-mail the each other on a top- secret internet. there were called in on the carpet. this person did not act alone. host: thanks for the phone call. in just a few minutes, jane is the chief correspondent on pakistan for "the new york times." >> c-span is not available in

over 100 million homes, bringing you a direct link all as a public service, created by america's cable companies. with new york representative charles rangel in the news, is at the c-span library to follow the story and watch an oral history of him. "washington journal" continues. host: jane perlez is the chief pakistan correspondent for "the new york times." let's begin with how you first became involved with reporting this story. guest: i was in islamabad doing my usual reporting, and i got a call from an editor asking me to return to new york. i had some idea, but did not

know that scope or nature. host: what was the timeline? when did you come back? guest: two weeks ago. several colleagues had already spent about 10 days looking at them. host: what has been your involvement and what have you looked at in the past two weeks? guest: i have focused on mention of pakistan. we have a wonderful helper who has searched through the massive trove of documents according to subject and theme. i concentrated on those that dealt with pakistan. host: were you focusing on yesterday's headline in the paper that pakistan's spa unit was aiding insurgents? guest: yes, that was one of the

major themes. we found a number that described situations where isi officials appeared to be in meetings with -- were described to be in meetings with the afghan taliban, inside the pakistan's tribal areas, where they do have a safe haven. host: did you return to your sources in pakistan to double- check and reconfirm what you were seeing in the documents? guest: it is very difficult to go back to either it the afghan taliban or the i.s.i. which is a spy agency. i did make great efforts to call back to pakistan to verify certain names and places. the nature of how certain things were described. some of them are recognized instantly, but others i needed some clarification, and was able

to get that. host: what sort of information did you get from your sources? what was the reaction over there to the release of these? the official reaction after they were released on monday was a reaction from the isi saying this was more slander against the agency. that the isi would continue to work for pakistan with or without the help of the west. similarly, other officials had the same reaction. the major pakistani is papers did not report on the content of the documents.

the main emphasis inside pakistan yesterday was that the white house had decried the release of these. not much information inside pakistan after the release. host: these documents run from 2004 until 2010. there not documents related to the last year when the insurgency began. your experience in the pakistan -- how are things different compared to what you might read in these? guest: there are some documents from the middle of last year. i found a number of very short descriptions of afghan/taliban been assisted to go over the border from afghanistan into pakistan in the summer last year, the height of the fighting

season. the insurgency began a long time ago -- this current war began in to those among the get these go from 2004 until 2009. they give us a fresh on the bones, if you like, description of the generalities we have none. our reporters in afghanistan have reported a lot of the war, said these give us even more detail. the intelligence documents tell us what the american soldiers on the ground are hearing and seeing. as for pakistan, the documents do give more idea of how the afghan taliban work, the frequency of their organizing suicide bombers from tribal areas going into afghanistan. the source of those at very

well-known religious schools. the meetings of isi officers who were named the men generally with false names in the documents, how they meet with some of these networks. host: before we go to phone calls, tell our viewers, if you could, what your editor said to you about the decision to go forward with printing news. and if you personally had any professional hesitations about working on this? guest: i had no professional hesitation. these are low level, raw intelligence documents, not a secret. there classified, but in low- cost vacation. they're not battle plans. on top of that, we went to great lengths to redact names, places

, times of air flights. we redacted afghan names -- american names, so they're quite a few blanks. wikileaks said they would withhold 15 dozen documents while they went through them to make sure that -- while they redacted names. host: a pentagon spokesman said they will be investigating robustly into this bleak. what do you make of that? guest: that is the choice of the administration. if i were them, i might do the same. host: spring lake park, minn., andrea. caller: yes, i'm calling to ask ms. jane perlez to please use

these leaked documents as a conduit to help bring out more about what is really going on over there. there are war crimes being committed. we care about them all the time on the c-span channels. embedded reporters have been there. we should use the leak us the opportunity to take back the right to get protected by the ability to release information like this. it gets pretty odd that other

countries have to report on the evil things america it is doing -- our own press should be doing that. host: what about the state of reporting on the situation in afghanistan? is there enough reporting on the day-to-day operations in afghanistan and pakistan, compared to what we heard about during the iraq? or are americans not paying as close attention as they once did? guest: i am in pakistan most of the time, so it is hard for me to tell. but i do think americans are paying attention to the war in afghanistan. i think the documents are being released at a critical time. the chairman of the senate foreign relations committee john kerry made a statement soon after they went up on the websites, saying he thought they

shed light on the war. because of that, we should be taking a closer look at how the war was being prosecuted. i think it is quite telling. host: we move on to south carolina and larry. caller: 01 to comment that the person who got hold of those documents and release them after the american public -- the young man from wicked. there, i think they ought to be charged with some kind of war crime. that way we can stop the media. they can be stopped from announcing information like that without leaking at about the american government. host: alex, republican line. caller: hello.

my question is, how will this affect the future of possibly next wars? host: can you speak to the diplomatic fallout of this? guest: maybe the pakistani government and military are quite angry about this. it is a tenuous relationship, up and down, between pakistan and the u.s. however, the sides probably need each other. the u.s. does support the pakistani military with about $1 billion per year, and the pakistani economy is in terrible shape. the pakistanis who are fighting

taliban within the pakistan -- it is a different kind of taliban, but one that is fighting the pakistani state. the pakistani military is taking them on, and the u.s. is supporting them to be able to do that. this will create some tensions, but not anything that cannot be overcome. host: the democratic line:joanne from los angeles. caller: jane perlez, you spoke briefly about an analysis that [unintelligible] is there any systematic analysis of these documents being put it in certain categories? and an analysis of what was committed during the nuremberg crimes, and prosecuted? i think the american people are growing more and more impatient

with the fact that their money is being spent in foreign countries, it in foreign wars rather than on the economy. americans want to know how the money is being spent, and whether it is being spent in immoral, amoral, or moral means. this war is stealing from our economy, and from the education of children. host: let's take the first part of your comment question for our guest. can you repeat that? caller: is there any analysis of the war in general category from the wikileaks? is that being analyzed and put into categories? guest: we did not analyze.

we do not have the capacity to analyze all along the lines i think you are suggesting. one of my colleagues looked at the documents in terms of say, afghan taliban, inter-services intelligence, the name of the pakistani spy agency, official operations, or other categories. we were able to collate documents and certain categories, then able to read through documents in those. but we did not do any political analysis or ideological analysis. we were just able to break them down a little so it was a little faster than going through at 92,000 documents. host: we're talking about the wikileaks documents and "the new

york times" publishing of them. this is likely to come up during the house debate over the emergency war supplemental of $37 billion. the vote is expected sometime this week. the debate begins today. pompano, fla., dave, on the independent line. caller: the wikileaks incident is just to distract people. those things should be investigated deeply. to me it is just to distract the citizens. they know that people will see what is going on. host: jane perlez, let me change that into question and ask you

if the release of these documents would have, would exasperated tensions in pakistan with those who believe the u.s. will just leave? guest: maybe. many in pakistan believe the u.s. will leave anyway. i don't think the people in pakistan need much encouragement to think that way. i can't really speak to the situation in afghanistan, but i suspect it is smaller. in afghanistan the documents may add to the feeling that the u.s. state will be shorter rather than longer. host: what is the implication for the u.s. strategy in pakistan? guest: i think it will take more effort by the administration's diplomats and commanders to

persuade the pakistani people that the u.s. is serious in the relationship. i think the pakistani people are always suspicious of american intentions. 60-yearountry's history, we have a history of picking them up and then dropping them. this would accentuate that feeling. it is hard to tell how much of the storm it will create in the pakistan. host: hillary clinton was in pakistan last week, bringing $500 million, the first part of an aid package to the country. it is supposed to be about $1 billion over the next five years. is that correct? guest: the aid package as $7.5 billion over five years, which

is to go for civilian projects, separate and above the aid for the military. host: what is the impact of the money versus the situation this week with the documents? guest: the pakistani people are fairly unimpressed about the amount of money the u.s. gives them. anti-american cement in pakistan is extremely high. many people feel the americans have no business being there. -- anti-american sentiment is extremely high. they view the war as an occupation or, and many feel that once the americans leave, everything will be fun. this is probably a false idea, but a common perception in pakistan. the money that hillary clinton brought last week to try to

solve the very serious power situation -- i do not think it will be affected by this current situation with documents. host: boston, the republican line. caller: thanks for the opportunity to speak. the only way to stop the atrocities is a zero tolerance policy. the military has to set up a zero tolerance policy. if you kill an innocent person, you should be tried and put away. i have been watching documentaries and hearing veterans return, saying that they killed innocent people and were ordered to do this, that, and the other thing. it makes no sense to me. we're not supposed to be harming civilians. we are supposed to talk things

over, come to the table and compromise. host: let me show viewers a little from the news conference just a date with wikileaks founder julienan assange. >> i am often asked what is the most single, damning revelation -- the think easiest to capture, the single mass killing, the single personality -- that is not the true story of this material. the real story of this material is that is warm, and it is one damn thing after another. it is the continuous small events, the continuous deaths of children, insurgents, allied forces. search for the word amputation

or npt in this material, and there are dozens and dozens of references. this is the story of the war since 2004. like most of the accidents that occur on the road are the result of cars, not buses, most of the deaths in this war result from the everyday squalor of war, not the big incidents. host: your reaction to his comments? guest: well, "the new york times" is an entirely separate entity from wikileaks and julian assange. we published the documents separately from wikileaks because we thought they gave valuable context, texture, and

the real, ground-level view. and how american soldiers see the war valley by valley in afghanistan. it gives you an up close view, things that goitty on. it is hard to capture, even as reporter on the ground. there is no substitution for seeing what goes on inside the battlefield come inside the government, the places which provide the information for the decision makers. host: are there a lot of reporters and they pakistan who are imbedded? you talked about getting to that detail and how difficult it is. is there a lack of imbedded reporters? guest: pakistan is an entirely

different situation to afghanistan. there are no american troops in pakistan -- well, a few that do some trimming. we do sometimes go out with the pakistani army, and the military has been generous in giving us access, but always -- generally, after the fact, and after one or two-day trips, to see pakistan military fighting the pakistani taliban, those were threatening pakistan. these taliban are essentially different from the afghan taliban referred to in the documents. for us to see the afghan taliban is virtually impossible. they are in areas of pakistan known as trouble areas where it

is impossible for foreign reporters or even pakistani reporters to go without the army. if you went by yourself you would be kidnapped in five seconds and be in real trouble. host: besides the difference in the kitchen, how does the pakistani taliban compared to the afghan taliban differ? guest: the do have an illogical alignment, and common roots, and they're getting closer and closer. it is a big problem. you're getting one big festering pool -- but the pakistani taliban has in the past few years focused on trying to undermine the pakistani state, hitting at military installations, at installations

that cause great upset at the government. that is the pakistani taliban. the afghan taliban are granted sanctuaries by the pakistanis in trouble areas next door to afghanistan. these are the militants who go across the border into afghanistan to fight american and nato troops. the pakistani tbn for the most part do not fight our or nato soldiers. we call them the pakistani taliban because they're focused on trying to undermine the pakistani state. it is an ally of the u.s. host: the difference between the television and al qaeda in this region -- between the taliban and al qaeda? guest: they are very closely aligned, one and the same. one of the main groups in the

afghan taliban is known as the hakani network, host to the al qaeda operatives in the tribal areas since 2001. host: st. louis, missouri, tom. caller: i have been trying to get on since you have been on the air. i finally made it. there is very direct evidence of actual war crimes -- we're talking about deliberate killings by coalition forces, of innocent people. not accidental killings would drones. host: evidence of war crimes? guest: i do not see any, and it is not my job -- i am not a

prosecutor. i did not see any in the documents that i saw. host: did you go through all 90,000, or did your editors put them up into different categories? guest: i don't think anyone has gone through all 90,000 documents. we have gone through the whole 92,000 documents by computer, i suppose. i'm no expert on this. we went through with this computer-assisted method, and gone through them according to what we thought were the most relevant categories. host: can you estimate how much you have been able to read the last two weeks? guest: a lot, and i have learned a lot about military acronyms. host: what surprised you the most? guest: it was the mention of

several religious schools that i knew, one of which i have been too. they were mentioned as suppliers of young boys for suicide bombing attacks. what surprised me the most was actually reading about meetings among the afghan taliban, and what they plan to do. the specifics. an account of taking a young boy from x to y, and took them to market and such a ton, but a yellow corolla of such a date, with this license plate, and then plan that this car would go from such a place to kabul. the was a lot of granular detail that was very interesting. host: a couple more phone calls from our viewers.

buffalo, new york. caller: two questions. one big backs from a couple of calls back about the potential for war crimes. if it came out that there were actual war crimes, is it not true that we have nothing to worry about? because the u.s. has exempted itself from the world criminal court? we feel is appropriate for everyone else, but we say no, not for us? my second question is, is it also not true that the american people for the most part have been anaesthetized to war? we heard president obama condemned the release of this matter. because we have exempted men from the draft, is it not true -- we do not pay for the work, raise taxes --

host: do you care to respond to any of those two questions? guest: on the war crime a will not comment. on the question of people being too used to war, i think the documents, the release of the documents do provide a valuable service in the reminding people that this war is going on, and the caller is correct that there is no draft. it is quite remarkable that the publication of these documents can make a wide number of people in the u.s. have a better feel for how it is being conducted. host: "the wall street journal" weighs in today on the legality.

california, on the republican lineup -- you are the last phone call. caller: i have a question. does wikileaks have any affiliation with the communist party? host: hold on, because jane perlez go ahead. guest: wikileaks made the documents available to "and the new york times" and to another organization in germany. it had nothing to do what we chose to publish with them. we never spoke to them about what we were going to publish. we had nothing to do with them other than the fact than they called us and said how would you like to have a look at these?

host: will this impact your ability to report from afghanistan? guest: i will be able to report as usual. host: thank you. we appreciate your time coming up next, we turn our attention to stimulus money. the big debate is whether or not it is working. transportation secretary ray lahood will be with us.

>> here is a look at some of the other programming coming up on the c-span network. a hearing on the impact of the goal of oil spill on tourism. witnesses include kenneth feinberg and head of birth to run, travel, and tourism groups. also, the house ethics committee is planning a public trial in september for new york congressman charles rangel for financial wrongdoing. this week, a subcommittee holds a meeting to discuss the charges against congressman rangel. live coverage will be on thursday. c-span is now available in over 100,000 homes, renewed a direct link to politics, news, and history.

with new york representative charles rangel in the news housese of the recent attack ethics committee announcements, watch videos online at c- span.org. host: we are back with transportation secretary ray lahood. he is testifying today for the house transportation committee. before we get to your testimony, which will be on stimulus, we wanted to let the viewers know about some news on distressed driving. guest: we had a conference last year and since then it has conducted a lot of attention. we think we are saving lives and injuries.

the president signed an executive order banning texting and driving for government workers, particularly those issued government blackberries or driving government cars. today, we are announcing that we will be having another distracted driving summit here on september 1. our goal is to try to make sure states know that good laws are important. there is some activity in congress with senators and house members introducing bills, focusing on illegal distracted driving opportunities. this is an important safety

agenda at dot because we think we can save a lot of injuries and lives. host: the electronic firms have been concerned about this distracted driving, and they are looking at things like gps. how does this affect that? guest: using the nebraska device can cause accidents. -- any device can cause accidents. we consider all of these activities a distraction, but our focus has been on texting and driving, cell phone use and driving, persuading people that the use of these devices take your hands off the wheel in your

eyes off the road. and i have called it an epidemic because everyone has a cell phone. many people think they can text message and drive. if you are looking down for four seconds, you can go the length of a football field without looking at the roadway. we are going to continue our effort to persuade people that lines can be saved, injuries, by not texting and driving. host: we turn our attention to the "wall street times." you are testifying about the stimulus. critics say you cannot say the stimulus is working with the unemployment rate is 9.5%. guest: i have been all over the

country the last 18 months since i have had this job. everywhere i go and see the orange cones, people working. everyone tells me if it was not for the stimulus, they would not be working, and resurfacing room, building airports. transit systems have been able to purchase clean-burning buses. all of these things have created a lot of activity in america, to rebuild america's infrastructure. over 140,000 people are working on 14,000 projects as a result of the economic recovery.

host: those are the jobs. guest: that is correct, and 14,000 jobs are under way or completed within 30 days of the time the president was sworn in. host: do you count the jobs that have not started yet? guest: no, we count the jobs as somebody who has been working one year. our economic recovery program started when the president signed the bill in february of last year. all last summer, people were working. in the winter, some states suspended the program. in others, there were not to.

so we count a job where someone has worked one year. -- in the others, they were not. host: do you include those suspended jobs in the total? guest: we started from the beginning of the year, . host: there is some criticism about the signs all over the country -- this road was built with stimulus money. republicans claim that is an inappropriate use of taxpayer money, basically a campaign for the stimulus. guest: road signs have been a part of the interstate since it began 50 years ago. these signs are not new. we do not require them. half of the states are using

them, the other half are not. if a state decides to advertise the fact, they can do that. they do not have to. i am a republican. when i was in the house, we promoted the idea that small business benefits with government spending. these times are made by small businesses all over america. so the idea that this sign has not helped keep somebody -- helps somebody keep a job is not factual. these signs were made by small businesses that are putting people to work. that used to be a good republican principle. host: how much money is being spent on signs? guest: as i said, half of the

states are doing this. the amount varies, but it is a very small percentage of the money going of the door. host: wisconsin. kent on the republican line. caller: my concern is about the future expense of high-speed rail, the impact it will have on us. how are we supposed to continue with this deficit spending? host: are you talking about the fact that the stimulus had a billion dollars for our speed rail but many have put the figure in the hundreds of billions? guest: high speed rail can be implemented and connect the country in the next 25 years.

it took 50 years to build the interstate system at double that cost. our idea is some online it would be provided by our reverend. but there are companies from asia and europe that have been in the high-speed rail business for a long time, in america looking for opportunities, looking to invest their dollars to improve our infrastructure. host: under the stimulus, it is how foreign investment allowed? guest: yes, they have to come here and hires american workers. they also have to use american facilities. that is our goal. host: have you seen foreign

companies wanting to come in because of the stimulus? guest: absolutely. we put the money up to 13 regions in the country. many of these foreign countries are in these regions trying to partner with the different states as they get into high speed rail. we have no capacity in america today to build high-speed rail because we have not done it. amtrak has done some, but that is mostly in the northeast corridor. we are trying to use our expertise to build the capacity. host: detroit, democratic line. caller: you say you have been all over the country, you see all of these people going back to work.

we have 125,000 people out of a job in my city. i am 74 years old. i have watched politics destroyed this nation -- destroy this nation. but i am upset that we do not get the facts and figures of what is truly going on in our nation. you people that call yourself looking not for the american interest should start telling people what the truth is so that we can work our way out of this. guest: next monday i will be in detroit for the fourth time with a delegation to announce significant dollars beginning to implement a transit system that people have been working on. i think the people in detroit

made a good decision when they elected dave bing as their marriage. we want to be helpful to him in carrying out his transportation vision for the greater detroit area. i look forward to being there next money in our continued effort to be helpful on transportation issues. host: next phone call, but the truth. -- detroit. john on the independent line. caller: they are using the stimulus money to plug the budget calls, not for what the money was intended. how come we do not ask the post office to use electric vehicles? guest: i am not with the post

office, but we promoted the idea of electric vehicles. i do not know the specific answer on the post office, but with our money, the money we were given by congress for infrastructure in a transportation, that money is being spent directly in every state. as i said earlier, 14,000 projects are under way, 140,000 people are employed all over america. host: fairfax, virginia. ben on the republican line. caller: thank you for your service. it is a tough position to begin. my first question is what else can be done in my area.

i moved here in 1995. my commute is 20 miles. i wonder how you prioritize projects? are there any washington, d.c. projects to alleviate traffic? guest: we are really doing things with the governors, state department of transportation. in have a network of dot's every state. they work with state officials, governors. in the case of trenton, here in washington, we have the wamata group. the money for that comes from the two state and district region. in other cases, transit is

governed by transit districts around the country. we take our cues from the state dot's. when it comes to trenton, -- transit, state transit organizations. we have great people in place. the reason we have been able to get the money out the door over the last 18 months is because of these people. host: next phone call. independent line. caller: this is about the high speed rail between austin, dallas, houston. what do you think about that? host: this is a tweet from one

of our frequent viewers -- guest: infrastructure does have many spin-offs. that contractor has to then go out and buy steel, concrete. there are many different spin off four other different businesses. state to enter into contracts with contractors, and those contractors have to buy the material in order to complete the project. in many instances, those materials can add up to six different kinds of materials, so many different people benefit from that.

host: as a republican, have you always believe the private sector is better than government investment? guest: it is about a combination. when i first came to congress, and i served on the tradition committee for six years and worked closely with the chairman of the committee, in terms of making sure there was a good mix. the government had a severe control in this. host: now that the government has laid the foundation when it comes to the infrastructure spending, should conagra's go ahead with a second round of stimulus, or should the private sector be allowed to step in? some argue when there is government spending, it crawled to help government spending -- crowds out government spending. guest: we can get the expertise.

they have done it in europe, asia. as long as they hire americans and work with the americans, that is fine. the follow-on to the stimulus it should be a five-year, six-year program. host: with increased spending? guest: we are looking at opportunities to continue what we have been doing, but also to expand on that, like high-speed rail, other opportunities for transit, sustainable communities. we are born to work with congress. the idea that there ought to be another stimulus, i think -- the most important thing we should do is focus on the authorization bill.

host: the next round of stimulus will be done through the appropriation process. guest: the next round should be the transportation bill. we are going to work with congress. we are working with chairman oberstar and his committee. we are working with german boxer and her committee. we want to have a new transportation bill. -- chairman boxer and her committee. host: boston, independent line. caller: i was pretty amazed hearing the reason why it is ok to check for the highway with signs saying this construction is brought to you by the stimulus act. it is just not one of those reasons that holds weight.

i have been driving in massachusetts and new hampshire and i drove find them months ago and i said i cannot believe there is a sign for that to tell us what the construction was funded by. it is like a smack in the face. that money could be better spent going to jump. -- jobs. host: did you hear his argument that those signs were created by a small business? caller: i do not believe that at all. it is like saying this useless program is ok because it gives people jumped. that is fine, but those jobs could be more permanent, more sustained. we do not need signed on the road to do those sorts of things. it is sort of a band-aid solution.

that is what i see. political goals, but tons of wasted money. host: i think we have your point. guest: obviously, and jobs were created by these signs. it is a voluntary system that is not required. host: let me pick up on something he said, permanent jobs. the money would be better spent. of the 100 to 2000 jobs that were created -- 160,000 the jobs that were created through the stimulus, how many are permanent? guest: if we can get the funding, those people that are currently working, if there is a new program, and we hope that there is, those jobs can be

continued. host: good morning in baltimore caller. caller: i hear what you are talking about, but what about unemployment? it is high, i know is going down, but not fast enough. we are putting money from the stimulus into transportation, but people are losing their homes. all of these billions of dollars are being spent on transportation but nothing is being done to help homeowners. guest: and economic recovery plan was not just transportation. the department of energy, transportation, several other agencies received money.

there are the grants and allocations going to different states and different companies to put people back to work. if the honorable the rate is too high, there are too many people on of work. if it was not for the stimulus, the unemployment rate would be higher, but that is no excuse for someone trying to make a mortgage payment, putting food on the table, sending a child to school. if you look at the over all stimulus, it had money for other areas. we are determined to bring down the unemployment rate. it is just something that we are all committed to. we know that it is too high. the congress did pass laws for people who are going into foreclosure, assisting people to

readjust their loans. i would suggest who ever hold your mortgage, that you speak with them. there are programs that will adjust your mortgage while you are in tough times. host: next phone call. gary on the republican line. caller: i was curious, the high- speed contract, has it been awarded to china? guest: 9 of the infrastructure on high-speed has been awarded. we are working with the 13 regions where we will be allocating the money. buy americada

provision in the bill that makes sure companies participating in the program are buying american products, are buying supplies in america. host: are you concerned at all, if congress allows the tax cuts for those making more than $250,000 expire -- many have said that it would impact small businesses -- they would not be putting money back into the economy -- guest: that is a question i will leave to my colleagues in the congress, treasury. i know there is a debate about that. frankly, i have not really been involved in that. host: in your cabinet meetings,

is that part of the discussion? guest: every cabinet meeting there is a discussion on the economy. secretary geithner is a part of that, as well as the president, christina romer. the economy is always on everybody's mind. all of us believe the unemployment is way too high, and we are committed to getting people to work. president obama's team is committed to getting people back to work. host: appleton, wisconsin. terry on the republican line. caller: he is just doing the same thing that obama is doing. spend, spend, spend.

appleton is all ripped up from your jobs, but how long is it going to last? i have a small construction company. i have not worked for two months because i cannot find anything. where are the house jobs? guest: the idea behind the economic recovery is to help small businesses, getting people back to work. i know there are still pockets of the areas where people are not working, but we are not going to give up. we have to be vigilant about this. host: secretary lahood, thank you for speaking to us. we are going to take case -- a short break. when we come back, we will turn to mexico's drug mexico's drug

with jess ford. >> pentagon spokesperson geoff morrell says haber abbas investigation has been launched. the leak poses a substantial hazard to american fighting forces in afghanistan. meanwhile, kit bond, the ranking republican on the senate intelligence committee says he worries the leaks will not stop until we see someone "in an orange jumpsuit." members of the senate vote on a disclosure measure prompted by a supreme court ruling allowing corporations and unions to spend their own money on campaign ads. the measure needs the backing of one republican to clear the procedural hurdle. so far there is not one. south dakota republican senator john to will announce a proposal

to remake the congressional budget process by creating a joint house-senate panel to cut government spending, something the governor is using to run for in 2012. those are some of the latest headline to read -- headlines. >> this morning, a house energy subcommittee will hold a hearing on the impacts of the gulf of mexico oil spill on tourism. live coverage starts at 10:00 eastern on c-span 3. the house ethics committee is planning a public trial in a september 4 charles rangel for alleged that wrongdoing. this week, a subcommittee holds a meeting to discuss the charges against chairman riegle and

procedures for the pending trial. coverage is on thursday at 1:30 eastern. host: jess ford is the director of international affairs and trade at the government accountability office. part of a recent investigation into mexico in drug policy. reports that the u.s. is failing to assess whether drug aid to mexico is successful. what did you find out? guest: we were asked by congress to find out what it was taking so long for our assistance to get to mexico. the program was originally agreed to by president bush and mexican president calderon. there were concerns about where we stood, as of march, in delivering the equipment to

mexico. at the end of march, less than half of the aid had been obligated by the state department and other federal agencies. 10% had been spent. we also found the state department did not have a good set of measures to determine whether or not the aid would be effectively used. host: what kind of measures did they have? guest:they changed guest: --gu: they changed the rules. more of the focus is focused on the border and in the larger or origination spots. host: what kind of measures are you recommending? guest: the kinds of things we

would like to see relate to whether or not the level of other to is going down, for example, whether or not you see homicides declining. effective policing in mexico. whether we see the law enforcement activities and cooperation with u.s. authorities. those are the things i we think they need to consider. host: in yesterday's's "washington post" --

what has been the impact of not getting this assistance? guest: the sooner they can get the equipment in place, the sooner they can expand their operations in terms of fighting drug trafficking. some of this equipment takes years to acquire, build the equipment. it is not dead -- uncommon for big-ticket items for big items to be procured. in other cases, it is just waiting to be put into the pipe line. we fell and come at the end of march, some of those things had not been delivered. host: so are you recommending that the state department keep a closer eye on where the money is pritchard, how quickly it is spent?

guest: yes, we are working on developing a more comprehensive delivery schedule so that they can close the gap on expected delivery date. we would like the state department to develop a more comprehensive schedule that would of line when things would be delivered so that they could then be used as a part of operational planning. host: how much does all of this cost, how much has been spent? guest: the total program is about $1.6 billion. about $250 million is going to central america, the rest is going to mexico. 46% has been obligated as of march. so we are not quite halfway there in terms of obligations. the expenditure rate is currently 10%. host: where is the money then?

castro is yet to be -- guest: it is yet to be spent. we have to sign agreements with the government of mexico before we can obligate the money. some of the agreements take months to negotiate. this is part of the reason why the pace of delivery has not been instep, as many would like. host: did you report on what else the state department can do with this aid promised to mexico? in this piece, there is this discussion on to buy a think tank in the motion came, where mexico's ambassador pointed out the vast majority of guns and money come from the united states. 80% of the guns seized by the calderon government over three

years came from the united states. guest: there are a number of other efforts, primarily along the border, to expand a anti- smuggling activities, not only for guns, but for bulk cash, other weapons going over the border. those programs were not part of our investigation but we did issue a report to a year ago where we talked about the efforts to stop the gun smuggling along the border. we made some recommendations back then for law enforcement to more effectively address the problem. host: dog on the republican line. florida. caller: you said they changed the policy is in march. why did they change those policies, what affect will it

have on the new policies? what are the new ones so much better? -- why are the new one so much better? guest: first of all, some of the goals of the new program are similar to the old one. primarily to fight drug- trafficking organizations in mexico. the current program has more of an emphasis on community development and dealing with issues with judicial reform. a lot of the money and training going in there will be for what i call rule of law, building capacity in order to fight the drug trafficking activities. the fundamental objective is to fight drug-trafficking organizations in mexico and try

to reduce the level of violence, as most people know, has been horrible the last couple of years. host: next phone call. democratic line. caller: recent public opinion polls in mexico show that the citizens of mexico are becoming increasingly discouraged because of the killings by the drug cartels. support for president calderon is falling rapidly. do you think there is a chance this will defeat him and the mexican president -- people will choose a president who promises he will stop letting the cartels?

guest: first of all, the administration has acknowledged that demand for drugs in the country is a driving a car for the problem in mexico, in terms of the drug-trafficking organizations feeding the u.s. market. with regard to the political situation, unfortunately, we have not studied that in detail, so we do not know how this would influence in incoming government. host: what do you think the impact would be if there was a switch in government, and getting this aid money into mexico? guest: at this point, we are already talking about 2011

before much of the dissent. what might happen after that, that depends on how the administration wants to deal with any new incoming administration. weather is a continuation party or not. host: binghamton, new york. frank on the independent line. caller: this is like opening you will not get a toothache. everything moves so slow. although you seem like a professional, you also seem like a typical politician, like our government, it is stonewalling everything. meanwhile, hundreds of thousands of people are dying. they practically have a sanctuary in tucson, arizona, but what happened? we make excuses.

we do not have any desire. that is what is wrong with this administration and the last administration. it is tough to listen to this pr. come on. host: explain what the government accountability office is. guest: basically, we are an investigative arm. we look into various federal programs. we are not really the people who established policy or created this program. our job is to report whether or not the program is being carried out as intended. our report shows, at this point, we are getting there, but progress is slow. host: tucson, arizona.

peter on the republican line. caller: most of the weapons they are using our automatic weapons. you cannot get them as an ordinary citizen. grenades.also have you cannot get that around here. how come they are saying that all of the weapons are coming from here? host: i do not know if you looked at that issue. guest: we looked at it last summer, so my information might

be of little old, but we did look at what types of weapons were being found. the atf reported, based on tracing information, the large amount of the ground for coming from the united states. with regards to some of the other weapons, much of the came from arsenals in central america, some left over from the conflict in the 1980's. our government is trying to get a better understanding on where the weaponry is coming from. many rustled levels are found at crime scenes and it is something that the government is trying to address. host: the mexican government has

pleaded to reinstate the ban on assault weapons and to stop the sale to mexicans. in the story says -- san diego. there were cut, democratic line. -- sandra, democratic line. caller: i think drugs need to be legalized. we are wasting money in the prisons. guest: we do not have a position on the legalization of drugs. that is something for congress to decide. we did not cover that, so i do not have a comment. host: mount airy, maryland. caller: basically, people in

washington are not listening to the american people. if you closed down the border, it would show that we are the problem. the drug traffic would stop because the border would be closed. that would address a lot of issues. it is not a matter of democrat, republican. we are pretty much in the same vote. host: jess ford is the director of international affairs and trade at the gao. have you looked at the issue of the fence along the border? guest: we have another part of the gao looking at that part of the program, looking at border initiatives. we have not yet completed the

work, so i cannot comment on our findings. host: arkansas. caller: i just have a simple question. why is this administration, and the past administration, why the you keep trying to build a nationations? this is our nation. we are not doing this for the people of mexico. we have people dying, we have had state parks that are closing down, but you refuse to recognize that. i do not understand. a lot of american people do not understand. why do you keep doing this? host: san diego.

joanne on the republican line. caller: last week they rounded up about five drug kingpins. i do not understand why this is not in the military, taking up of the state department. this is a war. 23,000 mexican people have died in the last three years. this is serious. we should be using all of our resources. i know we have some history with mexico, but we should be doing everything to stop this terrible war. unspeakable violence in the newspapers every day. today we are going to give another $39 billion? $300 billion in afghanistan? this is our border. we need to put more money into the military and then did this

conflict -- end this conflict. host: we read a little bit about what sort of equipment mexico is missing. are you supportive of providing them with money and equipment? caller: absolutely. some of their government is corrupt. we should be using major resources to assist mexico. host: the peace we are looking at is in the monday edition of "the washington post" -- pittsburgh, pennsylvania. jim on the democratic line. caller: 75% to 85% of foreign

aid should be made through goods and services from the u.s. it would give our people the tax dollars back into the economy. more importantly, the people who receive the foreign aid would realize these are physical items coming from the united states. i realize there are certain areas where we would have to give actual money, but this basic principle would our country, and in general, foreign aid. guest: as far as we know, the vast majority of the equipment is made in the united states. the helicopters are manufactured here. the other airplane to be here giving them are primarily-u.s.- made.

other scanners and equipment are also made in the u.s. host: that is a contract between these companies in the government to produce this equipment? guest: yes, and that is part of the reason that there is some delays, getting these contracts through. host: is it the government for these companies that are delaying getting this equipment to mexico? guest: it needs to be certain that these contractors are complying with government rules. that takes some time. with regards to some of these helicopters, it can take up to a year and a half to build the helicopter. host: tampa. tag on the independent line.

caller: let us talk about the transamerica highway. high-speed rail. i can answer the question why people say they cannot understand why drugs are not legalized, why we cannot put more money into our infrastructure. about the fact that bankers took over the country in 1970 and are looking to take over all borders. host: a tweet -- guest: the equipment will be provided to various federal agencies in mexico. the federal police in mexico will be getting a large portion. the mexican navy is getting some aircraft. mexican army is getting some

armored vehicles. the rest will go primarily to law enforcement entities. host: auburn, alabama. tyler, you are next. caller: it is pretty obvious here marijuana growing is virtually nonexistent. helicopters can fly over and spot a leaf of marijuana. we have almost squashed it, even in the rural areas. business is probably booming in mexico. people do not understand, yes, it is very profitable right now to bring drugs from mexico. host: can you speak to the profits? guest: government estimates are

that the amount of illicit trafficking is in the billions of dollars. i have seen as much as $16 billion to $30 billion. that is part of the reason that you see all of the violence down there. they are fighting for turf to get access to the u.s. market. our market is the largest in the world, when it comes to demand for illegal drugs. host: did gao look at this equipment, look at whether or not it is effective to curb the drug trade? guest: i think it is premature to conclude about how affective the equipment would be. we have not seen much of it. some of the helicopters have

been delivered. some of the people in the area have been trained. some of the equipment has been used, but in terms of the bottom-line effect, we have not seen that yet, because we are not far enough down the line. host: next phone call to caller:. -- phone call. caller: i am appreciative of what c-span does. they provide true accountability. i want to ask mr. ford, and during the nixon era, we had the cia and fbi doing their job and they brought mr. nixon in to accountability. now we have a situation where all three branches of the government, cia, fbi, and

national security, all supposed to be protecting the country. here we have a problem at the border. we could call in the national guard at any time. we do not a lot when there are riots in california but we cannot provide what is basically for our children and grandchildren over the next generations. it takes me back to an old testament scripture. the babylonians had the entire nation of israel in their hands -- host: anything to comment on? guest: the issue is the threat

on the border, the government has stepped up in terms of law enforcement on the border. i think there is an understanding that there is a threat coming across and we are trying to deal with it but the results are not as apparent as we would like to see because they do not have a good basis for measuring progress. host: next phone call. caller: i read in the newspaper the other day that people are being left of of prison, they are given guns, they commit mass murder, and then they go back to prison. you expect us to give them more weapons? guest: i know the article you were talking about. that article points to one difficult part of this. institutions in mexico are a major problem. in order for them to establish

rule of law, they have to find ways to fight the level of corruption. these drug-trafficking organizations are able to infiltrate come in this case, prison systems. host: next phone call. alexandria, virginia. brian. caller: a lot of your comments, figures, statistics, have been refuted by the nra and host: can you let our viewers know what you have read? caller: a lot of statistics, like the murder rate going up, is not true.

the claims about the guns coming from the u.s. are not true. the next headline will be that they are using them to deliver the drugs, these black c hawks. host: what did you find? guest: we reported on it about one year ago. on the guns they have been able to trace, it was slightly under 90% better coming from the u.s. that was based on data from one year ago. host: what you make of that, brian? caller: hunting rifles have been the targets from the beginning. the gentleman earlier said it these guys are using military- grade, fully automatic weapons. this stuff about getting the a assault weapon ban going -- if

only targets people who have a right to have guns in this country. guest: we have not done anything related to whether or not americans have a right to have a gun. we just reported information available at the time about the nature of gun smuggling from one year ago. our government working with mexicans has shown many guns are coming from the u.s., but how many we do not know. host: mr. ford is with the gao. we need to take you to the house of representatives who are beginning two days'of legislative business. if it is short, we will come back to the conversation. for five minutes. mr. connolly: thank you, mr. speaker. there's been considerable finger-pointing misdirected, i might add, by our colleagues on the other side of the aisle with respect to who is responsible with the mountain

of debt weighing on our administration. i want to highlight some of the acts we have taken to reduce our deficit and restore fiscal responsibility. when this congress took office in january of 2009 we inherited the worst recession since the great depression and $1.2 trillion of annual deficit with red i -- was red inked far into the future. the question was whether the united states bond market could survive in the event the entire national debt was retired at the time? we had three straight budget surpluses totaling more than $559 billion with a projected $5.6 trillion surplus well into the decade. unfortunately, we now know what happened next. the bush administration and republican-controlled congresses cast aside fiscal discipline and made reckless,

long-term budget surpluses into record deficits. they enacted two long-term tax cuts and entitlement programs which was none paid for and all of it added to the debt. these actions alone added $6.6 trillion to the national debt and let the federal budget virtually unbalanced for the foreseeable futu. agically, the $5.6 trillion projected surpluses became more than $6 trillion in national debt. but, mr. speaker, while we inherited these budget deficits we also inherited the responsibility to do something about them. the american people don't want to see more of the same bankrupt fiscal policies of the past. they want a return to fiscal responsibility and this congress is taking a number of steps to do just that. earlier in this congress we adopted one of the most significant deficit reduction tools, reinstituting statutory

pay-go or statutory pay-as-you-go legislation. it is a simple concept. if you have an idea you have to pay for it, and we know it works. in 1990 in the face of then record deficits, congress enacted statutory pay-go which helped lead to three straight years of surpluses. unfortunately, in 2002, president bush and a republican-controlled congress failed to re-enact pay-go. the results were disastrous and predictable and a immedie return to record deficits. our restoration of pay-go this year is a critical step in controlling spending and reducing deficits. mr. speaker, the house of representatives has made deficit reduction a priority with the passage of a number of important pieces of legislation. one of the largest drivers of the deficit has been the rising cost of health insurance premiums and health care costs. according to the congressional budget office, the health insurance reform law will finally bend the cost curve and reduce the deficit by $124 billion over the next 10 years

and $1.2 trillion in the 10 years thereafter. through passage of the student aid and responsibility act we reformed the college loan program, producing new efficiencies, expanding opportunity for millions of young people and we reduced the deficit by $19 billion. we responded swiftly to a government accountability office report highlighting billions of dollars of cost overruns and wasteful pentagon spending for weapon services. the acquisition reform act passed by this congress will crack down on re than $300 billion in wasteful spending, further recing the deficit, and will ensure that the it serves our men and women in uniform. the security act set new standards of energy efficiency and would reduce the deficit by $9 billion over the next decade. the recently passed wall street reform and consumer protection

act will enforce greater accountability of risky bank practices and reduce the deficit by $3.2 billion over the next 10 years. the actions president obama has proposed a three-year spending freeze will reduce the deficit by another $250 billion over the next decade. the recently adopted house budget for fiscal year 2011 reduces the president's request by additional billions of dollars. i support the president's bipartisan national commission on fiscal responsibility and reform and its efforts to identify even further opportunities for additional deficireduction. mr. speaker, despite inheriting record deficits, we've taken a number of steps that will restore fiscal responsibility and reduce the deficit. already our actions coupled with the improving economy have resulted in more than $250 billion in reduction of the debt in the current year alobe. the united states went almost 30 years between budget surpluses from 1969 to 1998. the actions of this congress

has set us on the path to ensuret doesn't take another generation. thank you so much and i yield back. the speaker pro tempore: the gentleman yields back. the chair now recognizes the gentleman from texas, mr. hinojosa, for five minutes. mr. hinojosa: perm five -- i request permission to address the house for five minutes. the speaker pro tempore: so granted. mr. hinojosa: mr. speaker, i rise today for two reasons. the first is to thank my colleagues here in the house of representatives and, secondly, to ask for their continued assistance. as many of you may know, hurricane alex hit south texas the first week of july. it was followedby a subsequent tropical storm that dropped more than a foot of rain on my

region, which is covered and -- whicis represented by congressman ortiz, cuellar and myself. even more rain, 30 inches fell in the mountains of monterrey, mexico. and over the next two weeks, the rio grande river swelled to record levels causing flooding along the u.s.-mexico border in texas. the texas border from laredo to brownsville is home for over two million people. the internationabridges in this region carry thbulk of u.s. land trade between the united states and mexico. the border region is primarily protected by a feral levy -- levee operated by the international boundary and water commission, better known as ipwc. although it's responsible for

over 500 miles of levees just on the u.s. side and seven dams, for decades it received approximately $5 million a year for maintenance of those levees. as a result, the corps of engineers' assessment in 2005 showed that hundreds of miles of the levee system were inadequate, too low or too weak to be certified. several of the dams were also of great concern. when theeport was published by border colleagues and i, and i knew we had to work hard and fast to protect the millions of people we represent, we fwan working with the ibwc, the corps of engineers and local officials to get the information we needed to make our case to congress. we thought outside the box. hidalgo county with 750,000 people, one of t fastest growing counties in the nation, worked with ibwc and the department of homeland security to develop an ingenuous plan to

combine the federal effort to fix the levees with the effort to build a new border fence. the resulting border wall concept met the h.s.s. criteria for defense and enforced the ibwc levees. the county believed so much in this project that it raised bond money and gave $82 million to ibwc to expedite the repairs, even though this was a total federal responsibility. hidalgo county is one of the poorest in the nation and should not have had to spend their scarce resources on a federal project. they deserve to be reimbursed. in washington, we met with appropriators from both sides of the aisle to make our case. i want to particularly thank congressman frank wolf, congressman david price, congressman john lewis, congresswoman leeta lowy, and congressman david obey for understanding the need and providing us with $400 million

over the last four years to make the badly need repairs. as a result, the river counties were repaired, dams were repaired, although not before we suffered flooding that cost the lives of u.s. and mexican heads of thentnational boundary and water commission, who died in a helicopter crash while surveying the damage. all along the u.s.-mexico border, pairs have been made. i have a few pictures that demonstrate what this meant during the hurricane alex. here's a map showing what we would have experienced in hidalgo county if the levees had not been repaired. everything in blue would have been a hew money gus lake -- humongous lake. it would have looked like new orleans did under hurricane rita and hurricane katrina.

this blue area of water would have covered most of the major population area, endangering hundreds of ousands of people and costing billions and billions of dollars worth of damage. despite historic river levels of 20 and 30 feet over flood stage, which makes the rio grande cresting at 59 feet, the cars on the new bridge, if i can show the next picture, will show the daily traffic coming north from mexico. you can see all along this bridge shows that the war all around us is holding up very well because of the wall and the strengthening of the levee system. look at this. unfortunately, despite our progress and historic funding,

ibwc internal floodways north of the river still have not been repaired. levees in this area did not hold, and communities have been flooded. this picture now shows a section of the river, the rio grande river with no levees and the resulting flooding that occurred. mr. speaker, i ask permission to have just one more minute to finish my presentation. the speaker pro tempore: the chair cannot entertain that request. mr. hinojosa: i close then by saying i want to thank all the members of this body who responded to our pleas and i urge them to help us finish the job and complete the system prevention. it's much less expensive than cleaning up after a natural disaster. thank you and i yield back the baffle my time. the speaker pro tempore: yield back the balance of my time. pursuant to clause 12-a of rule 1, the chair declares the house in recess until 10:00 a.m. host: we're back with the

washington journal as the house leaves the morning session. we will turn our attention to the financial regulation bill just signed into law by president obama. here is what he had to say at the bill signing on the new agency. >> all told, these reforms represent the strongest consumer financial protections in history. [applause] and these protections will be enforced by a new consumer watchdog with just one job -- looking out for people, not big banks, lenders, investment houses -- looking out for people i as they interact with the financial system. it is not just good for consumers, but good for the economy. host: our guest is here to talk

about this consumer protection agency. we want to do a 101 on this -- how will it work? guest: it does many things, one of them is to create a new bureau of consumer financial protection within the federal reserve, funded by the federal reserve at about $500 million per year. it will be charged with writing rules, for credit cards, mortgages, pay their loans, student college loans -- the people in charge of looking at these practices and loans and deciding what is fair and not come and then writing the rules. for big banks like j.p. morgan they will have examiners' go out and look to the practices, and potentially issue fines, or slap fees on those companies they believe are violating the rules. host: can anyone, congress, the federal reserve, la white house

overruled? guest: there is very limited veto power. it was one of the big fights in congress as to whether other bank regulators would have the power to tell the agency to back off. it can only overrule the consumer agency if they find some role will potentially pose a systemic risk and threaten the banking system. that is a very high threshold to overcome. host: is it written in there have to approve systemic risk? guest: it essentially would take a two-thirds vote, and would have to be such an extreme finding. host: potentially how many rules could come from this new agency? guest: the new director will have discretion as to how many to write. definitely doesn't, and potentially more than a hundred. the treasury department has already begun having meetings --

zones, and doa potentially thousands. they have to nominate step. the agency will consolidate power from about seven different federal agencies. they will have an existing federal employes come into work for this one. they can over right a role for a product they think needs more regulation. host: it will take one year before we see any new rules coming from this agency? guest: likely so. we will hear a lot of noise sending that there will begin debating in proposing new policies. but it will likely take one year for this new agency to have a real impact. host: why is the treasury department beginning to form this new agency if it will be under the federal reserve? guest: it is a good question, and put it into law because they knew would take time. because the treasury already has

staff -- is sort of an odd set up. the fed has no discretion or ability to overrule any of its decisions. the fed chairman cannot tell the director of this agency that does not like the role and the director cannot do it. host: it is part of the federal reserve. will be located there? guest: they're looking at office space. the fed has a pretty full building. host: what are you hearing about turf wars over the new agency, and who is in charge, or who has the authority, or money? the money for this new agency is supposed to come from the federal reserve's overall budget.

guest: the funding issue played out on the hill and was pretty hot. the way democrats decided to protect the sentencing was through giving from reserve money and not having to have money abraded from congress. the feds are pretty confident that would be hard to tamper with their funding stream. the director issue is expected to be a big battle in coming months. there was a philosophical debate about how much power it should have, and how activist or pro-active the director should be. even before the bill was signed into law, liberal groups and many democrats began to argue preemptively for elizabeth warren to be nominated. the agency was heard idea -- her idea in 2007.

host: she is currently serving in what role? guest: she is the head of the congressional oversight panel to oversee the $700 billion bailout fund. she has had a lot of hearings, and her public visibility has grown. she has taken on the treasury department, big banks, and has a populist falling. the banking industry and many republicans think she would go overboard, and have called her a zealot. last week chris dodd said he does not know she is possible to confirm. the white house said that she is. we will have to see. host: what did the white house press secretary said yesterday? guest: that should be a very good director, and bill white house stands behind her. but is not going the extra step

to said it will nominate her. they have a small group they are still looking at. host: what was elizabeth's coast doing on the west coast over the weekend? guest: she gave a speech to liberal loggers and a bunch of democrats in las vegas. the question is whether her cult following will play out for more mainstream lawmakers and the public. host: we're talking about the new consumer protection agency. jim, independent line front of passover, texas. -- el paso, texas. caller: [unintelligible] i have a small business. there was the american recovery act that was supposed to help small businesses with bonds. i found out from my local banker that myself and 49 other

applicants got turned down for this almost-guaranteed loan. i think it is just rhetoric, public relations. when you look at implementation, it does not happen. i have seen regulations get nowhere. i see more and more where the government wants to protect the citizens. like we do not know what we're doing. we need protection. they think we don't know what we are sending. if we sign for a mortgage, we are victims because we don't know what we signed. host: will this new consumer protection agency have a say over whether or not, or how bank gives loans to small business? guest: that is a really good question, something i think is yet to be determined. the focus is definitely supposed to be on consumer products like

mortgages and credit cards. there was a big fight. some weighed in on the bill, saying if it is written too open-ended, it could affect ability to get credit. it will probably be up to the discretion of the new director. democrats would say it will stop the abusive practices from the banking industry more broadly, helping small businesses. republicans counter that if they have more regulations piled on to the lending industry, it will make it more expensive. host: what committee has oversight over this new agency? guest: the senate banking committee in the house financial services committee. host: marie, on the democratic line. caller: i would like to ask if he has heard anything.

i mailed the package last week to the united kingdom. when i did, i paid big money to have it shipped. the lady who got it at the other side had to pay $14 for international handling because it did not come from the united kingdom. she was also made to pay5.87 about $12, for value- added tax. host: are you asking if they would look at this type of practice? caller: yes. guest: my understanding they would look at banks and fees they charge, not at practices by the post office.

host: this says issuers increase and on this bill to service fees. a new study by pew finds that annual service fees have increased while penalty charges, subject to a new federal regulation, remain largely unchanged. credit cards are making different changes to the annual fees and service fees. do you expect this is one of the first rules the new agency will look at? guest: it is a really good question. one thing the agency is not likely to do is to ban the fees out right. the banking industry must make money to operate financial- services that it does. it will likely be an abusive fees, and abusive practices. because the banking industry are not allowed to charge as many fees for things like overdrafts, they're cutting fees to other things like free checking which might go away. they will look at many fees, but

i don't think we will see them banned by regulators. host: independent line. caller: it seems to be more lespower we give the governmento regulate business, and with the financial reform they have just passed, it seems to be more power for the government coming to the private sector, and pretty much takeover, basically. i don't see how anyone can explain how the government can come into private-sector and expect private companies to compete with them. the government is funded with an unlimited amount of money, and can basically make rules anyway they want. they can regulate you right out of business, where they tend to take over. host: and the studies that have impacted new rules from this consumer protection agency?

guest: the caller is raising a fair point, and something we have heard a lot in the past year. where was the government during the financial crisis? there were plenty of regulators and place. why didn't they stop what happened? maybe there was a flaw with the way of regulation was set up. it is the debate that will continue to play out. especially as we have a new consumer regulator with hands more into the daily financial products all american. host: we talked about elizabeth warren, but there are other potential candidates. who are they? guest: michael barr is the assistant treasury secretary, and played a major role in getting a financial overhaul bill into law. he was on the hill all the time, met with all sorts of different groups. many lawmakers know him. the other name we have heard is gene kimmelman of the justice

department, in washington along time, worked with many different consumer advocacy groups to get more consumer-friendly laws enacted. host: all three supported by progressives? guest: that is right. it is not like the banking industry has a best case scenario out of these three. there are three people the banking industry would not like to see nominated, frankly. the more the names are out there, the more we get to know them. elizabeth warren's this ability is bigger, but michael barr has played a big role in town, too. host: any talk of putting them into place during the august recess? guest: i have heard a lot, but no one from him there is authority to know.

the person will be in place for five years. at the appointed during recess, they may have the job for only through the end of next year. the could not really put a stamp on the agency like that. host: what type of fight are you hearing there will be on capitol hill? guest: many are comparing this to a supreme court nomination. the economy here is still fragile. many people are having trouble getting loans. they are worried that more regulation will make it harder for the economy to regain footing. there is a point at which republicans will try to hammer home, if we have someone in the job that does not look at the broader economy, it could be a dangerous post. there will be no way to stop the director. host: people on capitol hill are talking about days of hearings, potentially a filibuster on the floor? guest: depending on the nominee.

it could be a pretty explosive debate. people feel passionately about this position. many republicans voted against a financial overhaul bill, specifically because of the creation of this new agency. but there someone nominated they believe will make become worse, they will be outspoken. host: the next phone call is from michigan. caller: i'm surprised about where the opposition to elizabeth warren is coming from. if you said right now there is going to be opposition a matter who is appointed, why wouldn't the white house appoint someone with the prominence and support of elizabeth warren? because you had this topic on c- span before, and she was well- liked by conservatives as well as liberals and democrats. it seems like a no-printer to have her on. she is already the chair of this

panel -- so it seems like a no- brainer. host: you are referring to conservative su called in on this program? caller: it seemed like he did not give in opposing call, hardly, which is kind of unusual. guest: one thing about elizabeth warren -- i'm not saying should be easy to defeat. she loves a fight, is a really good speaker, really smart, and would be really difficult. it will be hard for republicans to have someone nominated who has made their career out of advocating for consumers, and have to articulate why they don't want someone who's a big consumer advocate in the job. she could very easily win confirmation. it would be a fight the white house would probably love to have. here is someone in america who look out for consumers, not the banking industry -- we dare

republicans to vote against her. she is so well-known. she does not mince words. she is very tough on the banking industry. many people think she would take the job and really use the post to push some of the policies she has said for years are necessary. host: 12 runs this would be able to put fines on banks and other companies. how much money? guest: it depends. -- whoever wins this post. guest: it was not clear. it was unclear if the federal or the state representatives were in charge. this regulator -- a buck would stop with this regulator.

theoretically, for every abuse of loan made, they would be able to levy a significant penalty. that could be a lot of money. host: what are you hearing from the industry, and their lobbyists, over the potential fight on capitol hill over the nomination? guest: i have talked to some banks who have publicly said they don't want a list of the one to have the job, but it is hard for bankers to say. if she is confirmed, then they are on the record saying they do not like her and are worried about her. she could go back after them. it is difficult to be on the record. host: minnesota, on the independent line. caller: how many pages is this bill? guest: it depends who you ask.

it is either 2300 or 800. it is 2300 in one format, but after bound into a book, 800 pages. caller: there has been a huge of cry for the federal reserve to be out of it. it has not happened. there will get $500 million per year to regulate. who is liable? can the federal reserve come after me as a business owner? guest: this agency was set up in a weird way. originally, the white house proposed creating an independent, standalone consumer protection agency with the idea it would be something like the epa, or another independent agency. that was very unpopular with many centrist democrats and republicans because they thought the agency would have no one to

answer to. they ended up putting it within the federal reserve as a bureau, although technically the federal reserve cannot tell it what to do, but it just gets its money from the federal reserve. it will be confusing for many people, but it is not really the federal reserve who will enforce the new rules. it will be the new bureau of the federal reserve. i do not know its acronym yet. yes, it will be writing rules and forcing them against private companies. host: the new budget would be around $500 million. how much is the budget for the federal reserve? guest: i do not know. it is not appropriated by congress. it comes from big holdings of the federal reserve, and

from a percentage of that. host: it is not taxpayer money? guest: may be indirectly it is. the federal reserve is a division of the government, but is not appropriate by congress every year. host: congress would not be able to appropriate money for a given purpose? guest: that is right. host: james, on the caller: republican line they seem to be protecting themselves. they make sales, and if the sales don't go through, and go through a credit card company, and if it was fraudulent, it seems like they're very confident that the credit card company will eat the bank said. the seldom made through a credit card. a credit-card company like citibank -- they will make the consumer eat a bad sale.

we are running very short on consumer activists in this country. it seems like a lot of things are forgotten. i would like to know what the government will do about it. keep covering up these ways these companies make profits. guest: the new agency will have discretion and supervision of the credit card industry. congress passed a new credit card regulation law last year. especially for large credit-card companies, they will actively look at their practices and interactions with consumers. one of the big issues with this agency, it will have a central point for the public to make call, log complaints. to have individual issues addressed. with so many different state and federal regulators, it has been hard for consumers to call. host: how will this consumer

protection agency worked with state-local agencies who do the same thing? guest: there will be in charge of having a coordinated, central, federal response. moreaw gives state ag's power to go after certain practices. this new agency will be the hub for consumer complaints. host: pa., donna. caller: i cannot believe some of the opposition to this financial reform bill. what difference does it make how many pages it is? that is just strange. i am all for it. many times -- purchasing a home, for example. i signed hundreds of pages. the print was so fine. he could not even see it.

it was for purchasing a home. host: let's talk about the impact of the agency on mortgages. guest: that is one thing in elizabeth warren has of the credit for. it will be to improve disclosures and simplify the process for credit cards and mortgages. everyone who has bought a house knows how much paper work is involved. the agency will be tasked with eliminating the fine print. making sure people know the fees there will be hit with. the mortgage area, because of what we just went through with the subprime lending crisis, will be a primary focus of the agency. host: people have also said the new agency could focus on palance. guest: it is a little awkward how they set it up. it can get big payday loan companies, but not smaller ones.

there has been a big push by the left to regulate these payday loans stores which they say charged astronomical rates for short-term loans. the pay the loan industry and many others say these are fees. it is not fair to say they charge 400% of a loan, and is access to credit for people who can get loans from banks. the new agency can go after the big payday loan companies and write rules that probably make it harder for them to hit people with big fees. many of these payday loans are mitigated -- people can keep rolling them over. host: do you know what the profit margin is for the payday loan industry? guest: i do not know. i think it depends on each state.

i imagine some states, the profit margin is not good, but probably much higher for others. host: the republican line, judy. caller: i have been trying for nearly three years to get on. i have two questions. i was concerned -- does this also cover companies like comcast? the situation with comcast is, if you are already signed up with them for the triple play, they have now come out with xfinity, but you cannot switch over to a cheaper rate because you are already with comcast. guest: there would be no discretion to get involved with that. it is something that possibly the ftc would do, but not this new agency. host: how difficult will it be for people to distinguish? anything involving a consumer, people would be compelled to

call. guest: i imagine it is something they will deal with for several years, to define the boundaries of the agency, and explain to americans with the agency does and does not do. the new director will have some discretion. the boundaries are not set in stone. they will have to make decisions about how far to cast their nets. but things like their cable bill, i don't think it will have any involvement with. caller: good morning. i have a question on credit cards. the build date. i have been going through my bills -- the bill date. i have been going through them for the last six months, since i retired. the bill date on a saturday or sunday, if your payment does not get there on the previous day, friday, they will give you a

late charge. when i called, most of the time, they will take it off. is there anything this agency can do to help solve that problem? guest: i imagine the agency will look at it. that has always been controversial, as to when the banks post your payments for credit cards. you can't get hit with a fee that can damage your credit. there was a law passed to address this, and i imagine it will be what this new agency looks at. for mortgages, credit cards, anything -- when the money gets in, when it is posted, and when your account discredited. host: here is a message by twitter. guest: i had not heard any names from the republican side.

the kind of person they want -- not speaking for all republicans, they want someone who will take into account the safety and soundness of the banking system, and you will way these rules against the ability of americans to get credit. once the nomination comes in, we will likely be hearing the background and philosophy of this person. host: good morning, jeff. caller: isn't there a recess coming up in congress and a few weeks? host: right, the august recess. caller: why doesn't he just recessed the appointment? host: we talked about that. guest: it is an option. i can't imagine it would be a popular move. i imagine many democrats would

say let's be proud of whoever we nominate, make republicans vote against the nominee. during a recess appointment there would only have about a year and half in office rather than the five years. it would look like they did not want a full hearing. especially for a new agency, it would make it a little harder to sell. host: does the law state when the president must nominate and when the congress must act on it? guest: i do not believe so. the treasury department has two months to make a statement about when the agency will be officially up and running. they have already said it will probably be next july. i am almost certain the administration wants someone confirmed by november. host: [unintelligible] guest: i imagine the white house

and democrats say it would be good to have before november. host: will go next to cleveland, dan, on the independent line. caller: it seems hard to believe that with barney frank and chris dodd writing this bill, writing in the middle of the housing bubble -- it seems hard to trust and fannie and freddie are not even touched in the bill. host: would have control over fannie and freddie? guest: no, or perhaps just indirectly. their government-run mortgage giants, and by mortgages on the secondary market. the agency would have an impact on the things fannie and freddie would buy. but fannie and freddie have their own regulator. it is so complicated.

the administration says they will propose a new government role in the mortgage financial system. that fannie and freddie could be a thing of the past. it will be a huge fight on capitol hill. host: when did the white house say they might weigh in with some proposal on have to do with fannie and freddie? guest: they have been hinting at it for months. it is likely to be a debate that comes up next year. host: on the democratic line, from houston, texas. caller: good morning. do they realize that a lot of these banks own these payday loan companies? it is a back door way. i feel the biggest problem is the credit bureau which is so

corrupt. it is the one that needs to be totally regulated. secondly, the republicans are so mean-spirited that they never, ever want anything that will help the smaller, lower class people. they only want to help big business. every time it comes up for minimum wage to be raised, they vote against it. anytime there is an ounce of money that will go out the door for doctors -- host: we got your point, but let's stick with the financial regulation, consumer protection agency. guest: we will have to watch how this person is influence. the way that the rule-writing process works, the agency will look at different things, confirmed, look at the role publicly.

then any other company can weigh in. usually there are between 30 and 60 days until comments come in, then they will review the proposal. it will be a big, public process for many of these new policies. every different credit card will have a different proposal, as will every type of mortgage. i imagine she is talking about your credit score. that is something that is really difficult. the government has tried to make it easier if you find a problem to get it fixed. anyone who has had to get a credit card or mortgage and stumbled upon a mistake in their credit score knows how difficult it is. host: the person in charge of this new agency, would they have

anything to do with whether or not a bank is rescued or failed, or the process of winding a bank down? guest: the new law gives the fdic much more power to play a bigger role. not just with banks, which they already have the power to one them down. but in 2008 they created a process where a non-bank, but big financial company could be taken over and liquidated in a way to insulate the public and the rest of the system. host: mich., cindy on the democrats' line. caller: first of all, i think elizabeth warren would be excellent because she is a people person, can help to educate the public about their rights. she can explain it.

i worked in community banking. where we kind of slip off the charts was when we went from being a service business to a sales business. i was encouraged to come on my own time, as sell product, and try to bring people into the bank. host: what type? guest: bounce protection. that was one thing. accounts of the went from being free checking accounts where there was no minimum balance, no charge for checks -- we were discouraging people from doing that. they wanted us to get them into the special clubs we would bring in a $200,000 bounce and get all these perks, free pet insurance,

all kinds of stuff. i was being paid a little above minimum wage to do the sales. host: did they charge for these clubs people were part of? it sounds like you had to have a higher threshold of money to be part of the club. caller: at the time you're getting maybe 1.5% interest on a regular account, so they would boost this to maybe 2%. but if you went below a certain balance, you had to dollars per check, a lot of these involved. host: and then what did the bank do with that money? if you were able to get a client to be part of a club and have a minimum of say, $200,000, what then would a bank do with that money? london out for subprime loans, or what? caller: my bank was a community bank. subprime loans were really

discouraged. it was not something we would do. we were more protective because we were more regulated. one of the last memos -- i had to quit my job to take care of my mother. one of the last memos we got was that our bank president what is to get with our congressional representatives so that we would be deregulated the same way the big banks were. there were trying to get us to lobby. i told my bank president, because we were a small bank and on more equal basis, and let him know i did not think we should be deregulated. i think that the big banks should be re-regular. host: what did the bank do with that money? caller: i think it went into fees and income. they may have been able to use it to generate bigger loans for commercial properties.

that is where this bank had problems. they put a lot of money of for commercial properties which were booming in our area, then everything sunk. host: did you know what they charged as an interest rate for that type of commercial loan? caller: no, those were done through executives. when we did regular mortgages, the loans were at the regular prime rate. our bank was quite conservative. we were one of the most conservative banks. that is why it was hard, and why we were pushed to sell to bring people in the. when you go from a service business to a sales business, it changes your whole personality with your customer. guest: one of the interesting things she said as how she noticed, but that elizabeth one would be good for the agency.

people all over the country know her. she has been on the front of "time" magazine, on "the daily show" -- and may play into the white house's decision. the fact that she has such a following all over the country is really interesting. host: richard from virginia, on the independent line. caller: of like to challenge your guest on a couple of points he made a bet the federal reserve. one being that the federal reserve has massive assets. they have no assets. the only ability have for access to assets is the pockets of uncle sam. the central-bank is their cash cow. the federal reserve is a division of the government -- it

is not. it is an independent, private organization originally set up by eight banks, four european, four american. they are still the class-a stock orders. the fed is not our savior. guest: there are many folks who feel very passionately about the federal reserve. apply dow during a financial overhaul discussion. paul has written a book about this and has a big following. they believe the federal reserve should be under more scrutiny. host: we have a few more minutes before the house comes back in four legislative business. the independent line, louisiana. bob, can you start over ducks are you there? -- bob, can you start over?

are you there? caller: the council will be made of 10 people in the several different committees, and one independent. there should be more people who work consumer-oriented. not just federal people. guest: that is a good understanding. there will be a council of regulators in charge of monitoring risks coming on the horizon with the idea that the next time there's a subprime lending crisis we will be able to see it, and not be overhauled. i think it will be chaired by the treasury secretary, head of the fdic, head of the sec. it will be a least one state regulator on the council.

looking at a lot of different issues coming. it will be on their radar, but not permanently. this consumer agency will be designed and run in a way that consumers will get a lot of focus. host: the last phone call is from the new york. caller: for a short time, four months, i took a job with one of the largest secondary lenders in the u.s. as a loan officer. i got in, and got out. the reason i got out is because i realized what kirk's they were. they would give people loans -- in most cases, second mortgages, and inevitably people who go to secondary lenders have a weak credit to begin with. they would fall behind weeks, months, and payments, and their payments would wind up coming in, and go solely to be paying in, and go solely to be paying