relationship between the two party and republicans. we will have a look at how many of regulation may affect consumers. our guest is ed mierzwinski. "washington journal hopp" is ne. . .

several current and former members are expected to be there. president obama is a financial plan today for a town hall meeting. there is a lot on the economy, including this story below the fold in "the washington times," "the white house is buying -- touting the success of the stimulus but the voters are not buying it. the administration says that work by creating millions of jobs and stay in of the depression, that it should be a crowning achievement as democrats prepare for the november democratic election, but voters have either rejected or ignored those claims with substantial majorities telling pollsters they do not think that the $862 billion package signed

into law at 18 months ago thisc. that is the question for you this morning. your thoughts on the stimulus bill and its connection to the the member election. what will be effective one be on the other family vote one way of the other based on the stimulus bill? we will get your calls in just a couple of minutes. in the meantime, we have jim warren on the phone. he is a columnist and we want to focus on this jury action yesterday in the trial of the former illinois governor, rod blagoevich. "the defiant blagojevich bows to appeal. explain what happened in the courtroom yesterday. >> the found out why they had spent two weeks deliberating,

mainly that they could not come to the unanimous decision on a single count. in some ways, the most ancillary of account, false statements. allegedly lying to fbi agent in 2005 as to whether or not he had a fire wall between his political contributions side of his professional life and the government side. that is the only one that went 12-0 on. in terms of selling the senate seat of barack obama after he was elected, they apparently came very close. there was one woman holding out, simply refusing to change her opinion. that is how close on some counts that he came to an

insured track to a federal prison. when headline talks about appealing, more important is the government quickly announced the attempt to try them again, so we will do this all over again. host: think to that, here is the headline, if you go to "the sun times," they talk more about the numbers in all of this. "some of the numbers were split, but the most explosive of these charges came to the holdout vote, and one woman felt she had just not gotten a clear-cut evidence that she needed to convict. -- convict." move this forward, what are we likely to see? caller: will likely to see this whole thing done over and the

federal government is going to push back in court in august, formally indicating their plan to retry, and knowing the federal government they will say that they are ready to go. there will be representation for both of the blagojevich costs, not just a former governor but also his brother were on trial. they have spent substantial sums of money and got a fair amount of free legal work from the lawyers i also think it is interesting that both sides will certainly be studying each and every comment from the jurors as to how they perceive the case. particularly how they received

the weaknesses in the government's case. some of the comments suggest that the jurors felt the case was confusing, which i think i might agree with. the timeline and chronology of the misdeeds became uncertain and you can bet that the government will stand back and say, ok, if there is committed the to this, we will come at it again next time. >>host: "yes, another trial woud be worth at," according to these e-mails this morning. what is the public's mood on all of this? caller: i have assumed that one of the factors that might play

into jury deliberations, as you know, as your audience on those, the general a very critical state of americans for the politicians these days, i certainly thought that that would not help blagojevich, who was clearly caught plotting and scheming potential quid pro quo. not just for allegedly trying to sell the senate seat, but there are other matters where he was caught in a conspiratorial fashion with aids, who i should parenthetically note to the audience, they are in prison, going to prison, or testify for the government as a result of the same evidence.

nevertheless, it is clear that it is possible with the jury went in and saw that it was as straight as possible. they were confused and a few folks were never convinced. there was not much poland in the chicago area. the former governor has been somewhat effective in portraying himself all over the country in various high-profile media forums. he has been somewhat effective in portraying himself as a victim, turning his back -- turning away from the one count that they got him on. there might be that of a backlash from folks sending my gosh -- saying -- my gosh, are we spending more money on a

trial for a man that was already in pete? no longer have this is resolved, his political career is in the dumps. host: following up on all of this yesterday, dick durbin seeking to distance the illinois democrat from blagojevich, " another trial could hurt the democratic fall campaign." what about that on the national level? caller: it is possible. there is a critical impact if they try to retain the governorship. remember, he was impeached and his successor is facing off against a very conservative downstate republicans named bill brady, guaranteed to be in the headlines for another few

months, amounting to political advertising for free for republicans in ill., insurer in the us a spectacle -- insuring of us expect to call -- a spectacle. i would even suggest that our good friend, brian lamb, should sign him up for some night q&a. he would be there in 10 minutes, even though ryan would have trouble getting in the wake that help and the democrats, certainly in illinois, but anywhere else is well. host: jim warren, a chicago columnist, thank you as always

for your time. to the first call on the stimulus bill in november election, will one affect the other? caller: i have a couple of requests. would you give a person that is very understanding of the american flag and have a program about how -- how is suppose to be displayed properly? the american flag is not being displayed properly. the next question, could you have someone come in to explain why corporations and businesses that are hiring illegal dockworkers are not been arrested and fined? that your question -- back to your question, is one of the

biggest hoaxes in america, but the news media is liberal. my point, he will not get the credit for anything that he does. i wish that the news media would get off of his daughters. i wish that they would leave him alone. overdoing their daughters, they would fees back off. host: good morning. caller: stimulus for the person on the ground has been a real boost. all of that money that went to wherever has been a ruse.

i have been trying to refinance for two years. not a single bank will discuss the issue because they are using old metrics with that one question, how much is your house worth? you know what? it is not worth a damn thing. host: back to your point about being on the ground, are there any signs of a stimulus plan projects? flexible plans were started a few years ago and a couple of them have picked up. but it is so weak it is disgusting. what everyone thought would happen was that that amount of money would be almost overnight,

people would be back to digging the holes in it is just not happening. 18 months later, 15 months later, it is so weak that it is time for the government to look at putin money into people. not the organization's. not the small businesses. we have heard enough about small businesses. hello about the people? until we solve the housing issue, none of this will work out. but the folks refinance into stable mortgages. host: we have got to move on. going to recovery.gov, you can see the breakdown, a state-by- state, in this website that the administration fourth as the stimulus bill came into law. we will read some of the

financial figures more in "the washington times." "inside the beltway, the stimulus with billions of dollars has become a part of whose money that both sides are you over. tripping up democrats who need to defend themselves to an angry electorate, as well as republicans. what is clear is that republicans in congress have lost their appetite for another big round of deficit spending." of dallas, linda, democrat, good morning. caller: thank you for taking my call. i agreed, and i appreciate the stimulus. it has allowed many school teachers, firefighters, and a policeman to be capped. if we get mad and angry because of the stimulus because our

streets are being kept safe, we are headed down the wrong path. the media that heats the president and everything that he does and says, they are succeeding. i think it is really bad, we need these things. in dallas i appreciate every firefighter that we have and i appreciate the policeman. as far as the november election is concerned, democrats do not need to stay home, they need to get out and vote. host: $14 billion went to the state of texas. california got more than $23 billion according to recovery.gov. california, independent line.

are you there? i think we lost him. tony, las vegas, republican, good morning. caller: thank you for having me on your show. let me turn down the television so that i can hear you clearly. here in las vegas, you know, first of all you know we are one of the worst economic we hit areas of the country. yet we have what is supposed to be one of the great leaders of the congress, supposedly, paying a lot of attention to it, but we do not see it. i do not see investment, i do not see a chance for business leadership to initiate any kind of new business.

i basically see a lot of people hiding money. there seems to be a huge investment in things that cannot happen. host: thank you. let's move on to harry in michigan. what are you seeing in michigan, if anything? what is the connection to this november? caller: my goodness, i cannot believe the things i am hearing on the air. people are calling in, complaining that they have two homes. they walk around with $5,000 in credit cards in the pocket just winding down crying. my daughter just came back to work in michigan. she is sinners. my son in college, another in iraq, fighting for the things america is supposed to stand

for. it is not american hero of this whining and crying. of course the stimulus is doing a job. we have an administration and president doing everything humanly possible to create jobs and do the right thing. programs have been initiated and paid for. programs that will help americans for the future. i am so sick and tired of the teabaggers and no-party republicans continuing to trash america. host: we will have to remind folks about the terminology regarding the tea party. we want to keep the program civil. dick armey will be on later to talk about the influence of the tea party a little bit more in the stimulus bill. more from the fees from "the

washington times," "the initial round of stimulus did not produce the results for noticeable improvements in the labour market to dominate the fall contest. in march 2009 that found the general support for the stimulus was 56% time thinking it was a good idea. by this summer only 35% said they thought they had kept on plorse. earlier this week the president spoke about washington spending in the economy overall. >> because of the steps that we took, we were able to fund and expand your operations, allowing bbb to retain and higher new

workers. this is leading to new business for your suppliers, including mgs plastics and other manufacturers in wisconsin. they're also looking to make another factory in southeastern wisconsin. host: republican candidates, open both counting on the expectations, showing that the stimulus package simply as that work. carly fiorina said that barbara boxer should be wary of showing up for bid and cutting state -- ceremonies for stimulus projects -- ribbon cutting ceremony for stimulus projects. caller: i know a lot of folks that are excited to get an opportunity to vote, one of the

reasons being the stimulus bill, the health care bill, that health care panel put in the bill, putting the other a panel to decide the health care that you can get, that is pretty sneaky. the finance bill with a from growing clause in it, and a health care bill with private army, it all relates to government growth and government control. we, the people of america would like to have an opportunity to have representation for our taxation, instead of having the government control every aspect of our life and basically not be responsible, fiscally, with their tax dollars. earlier you talked about the opportunity to of the government web site to see where the money was spent and i would ask you if you would be honest and say openly that they have discovered several mistakes that they have

posted on my website that have been lies about jobs that were never created. they even had zip codes that did not exist. saying that anything other than the truth, which is that it is a program for government growth, several bills have been voted on that they did not bother to read, it has been just for government growth, not stimulated the economy or helping the american people. i wish that the news media would be honest about it. in a republican in the vote for what one does a person, i always have. i encourage everyone to vote. host: thank you for pointing out your views. interesting that you made the point that was made in the hill today, "the stimulus web site is propaganda," according to

congressman beryl eisa. caller: good morning. host: for this stimulus bill, what will happen is the member? caller: the stimulus bill has been nothing but a political football. the reality is that when the economy was down fell dollar trillion in value disappeared from the planet. that money cannot be made up by $770 million in stimulus. the republicans have been that melting it as much as they could but every economist agrees we would have been a much higher rate of unemployment. the reality is that what he should have done in what we should be doing is spending much more money, not less, with that

money going to infrastructure 0 ibm united states. it is infrastructure that creates efficiency, productivity, making businesses grow. that is what the united states needs right now. if we expanded the infrastructure and a double the stimulus, we would be back to work stimulating the economy. host: jacksonville, florida, what you think of this? caller: via the stimulus at work, that money is gone. the taxpayers are going to have to pay it back. obama is going to have to raise our taxes to pay a fat. i am a former democrat, a teamster. it will make a difference when i

vote this november. everyone that i have spoken to is fired up. anybody but a democrat. anybody but a democrat. and let me say, before i go, the caller from michigan, he calls about everyday. how does he get through like that every day? host: we will keep an eye on it. we want folks to call in with 30 day intervals in between. thank you for having us on the shoulder about that. more on congressman fisa, "the stimulus web site is propaganda ." he released a media report that documented in the street agencies where the government promoted industry policy using

federal resources. he called upon the gao to determine if the the ministration violated federal law by using taxpayer dollars for federal purposes, specifically pointing to websites that contained false or misleading information, including conference calls in which artists and entertainers were encouraged to support the president's agenda." joe, long beach. caller: how transparent is this stimulus? how transparent is this timing? we need money now available need jobs now? they will not give it now, they will hold back killed just before the election and say look, things are picking up, even when they are not. but my main point is that i

wish you would start making the distinction between private sector jobs and public sector jobs. a person working for the government, they need a taxpayer, not that they do not a taxes, but a person working for the government needs a taxpayer to pay their salary. a private-sector job does not. they are making products. cars, steel, something. the government, if they say that they are creating or folding on to jobs, government jobs, those are not productive jobs in the sense of growing the economy. we have to pay their salaries to pay those debts. many private sector jobs and we need to create wealth in this country, but the irony is that the politicians that sent our jobs to china, india, the people

that sent them overseas, they came on television to tell us that they will give us jobs. we have to vote out these people, they are killing us. thank you. host: of leesburg, va., a republican line. caller: the last caller is correct. jobs are going overseas. i heard someone say just the other day that if there are 300 million people in india, if those 10% of people got a college education, there will be 30 million people working for the usa, taking our jobs. our students need to start to study. but back to the stimulus package, i would like to say i was able to refinance one house had a lower rate, able to purchase a brand new car at 60 months with no interest. i made money on the stock

market, i would suggest that people look at ford and beat the -- bp. did you know that they were keeping a body count of the people killed in afghanistan when bush was in office? now they have stopped that. obama has got more people killed there than bush ever did. my son was laid off for eight months and he just went back to work. did the stimulus money have anything to do with it? we have $13 trillion to pay back, so just wait for the cap and trade when the taxes taken in. host: thank you. one more point from "the washington times," "democrats are gambling that their rhetoric will love haunt them regarding good jobs being created in district for the sake of

partisan politics, including spending that they cannot speak to credibly. "fine with us, they will be seen as a cover for its and lacking in credibility, the president continues to campaign on the recovery act." on the republican side, the senate candidate, pat to me of pennsylvania, talk about this in the republican weekly radio address." here is a short piece from that. flex -- >> the stimulus bill, including $2 billion to study exotic dance and spring training baseball complexes, among some with the other ridiculous items. we were told that this spending bill would create jobs and keep unemployment down, but since then we have lost nearly 3

million more jobs in the unemployment rate hit 10%. from 14.5 million americans, they remain out of work. "the wall street journal closed both without this before breaking down the stimulus -- " the wall street journal" put out this report breaking down the stimulus, "most of the funds have been made available for smaller projects. one of the themes of is they talk about how much money was appropriated, 16.8 $1 billion has been spent." winter haven, florida, stimulus in november, what is the connection?

caller: what did you say about the member? caller: -- host: will the stimulus laws affect your vote? caller: i am perplexed at my friends calling in from florida, we are getting high-speed rail and the project is already started. they hadn't decided on which technology, but we're pretty sure it will be electric. the state has already put in for the money for the second phase of it. so, i do not know why my friends in florida have not read the newspaper to see that this huge project is about to start. i think they're getting ready to break ground. the reason they could jump on it so fast was because that a long time ago, the citizens of for a voted for the high-speed rail. it was designed and ready to go when jeb bush killed it.

we have that going into the stimulus. the other thing, here in polk county we got a lot of funds for educating students on how to whetheatherize buildings. the friends from for the need to eat -- read their newspapers. host: "the white house is under fire for the funds than stimulus cash -- and spent -- unspent stimulus cash. dave, what you make of this? caller: the short answer to your question, my friend, is the stimulus will affect my vote. i will likely vote independent from the major political parties.

i agree with the two earlier gentleman that agree that the stimulus so far seems to have primarily impact of long-term job security at the state and county levels, while the cities are hurting desperately. badly from florida mansion high- speed rail? there is a leg that is scheduled to go in just sell of california into vegas has a first leg. i have seen dancers upgrading the track quality already through the arizona and nevada border to bring the tracks up to standard nationally, running that through what we call the interstate 15 corridor through utah. i am looking forward to a v.p. of what has happened positively in terms of the use of public

money, like the san diego light rail for amtrak, within a 10 mile radius of any train station, the proliferation of private sector jobs are in national consequence of that. if the fed is keeping their money in public works, private sector jobs should happen quickly, which is a positive sign for long-term economy. host: republican line, baltimore, what are your thoughts? caller: i am a very small contractor, cleaning offices for the federal government in the fort meade area. i have been doing it for over 10 years. the people need to understand that it takes a while. contracts have to be written in administered.

the bigger the contract, sometimes it takes more to get the work started. the second point i would like to make, there are private contractors on all of these contracts. i know that in central maryland and baltimore in particular there are industry construction jobs that you cannot get because the prime contractors and subcontractors are only hiring mexicans. these are jobs that have requirements as far as training, wages, all of this stuff. host: jumping in, your thoughts on the election in november? caller: people need to be more educated, they need to stop being so a emotional. i am a republican but i do not trust anyone that says they want to tear something down and not

get a check out of it. eisa calls it a public service? do the right thing, make things better. host: coming up in 10 minutes we will talk to barry zigas, the former senior vice president for fannie mae. "government role in housing conference is debated. timothy geithner favors a hybrid homeowner system." we will talk about that more in a minute. other stories from the newspapers today, "the cia has videotapes of interrogation of an admitted 9/11 father, discovered in a box under a desk, a crucial how the foreign

governments helped the u.s. and it could help in prosecuting this man accused of facilitating the 9/11 attacks." "the white house is preparing measures to ban opportunities for americans to travel to cuba and sending money, making it easier to get licenses for cultural, and sports exchanges. , workers are becoming as cheaper to hire in the u.s. as they are in india according to the largest processors.

especially among the hispanic population. at the same time, the assertion sector in india, wages have risen this year. senior of tourist managers in the country maintain celeries -- senior outsourcing managers in the country maintain salaries above the world wide average." caller: i will tell you what, the stimulus package has worked. people calling in to say that it creates more government jobs, the stimulus package has provided seed money to a lot of private industries, especially in the green area, like windmills and motors, as well as the batteries for electric cars. of course, the infrastructure. of course it saved a lot of

jobs. it may have saved more than it has created, it definitely with people working and contributing to the economy, because their jobs have been saved. here's my point, do not cut me off, i concede that you are going out of your way to push this negative image. you are quoting things from eisa, who was on a witch hunt gridlock the administration. i find that appalling. host: the omission of the president -- caller: i understand, but in washington you have a natural proclivity to push the right wing agenda all the time. and i am not criticizing "washington journal," i am criticizing the from within, led by sculley, yourself, and greta.

host: started to cut you off, we want to make it clear to you that we are putting out and no support for whatever critique is out there, but we hope he will keep watching. bad news, louisiana. -- bad moon roof, louisiana. caller: i believe that you show both sides. this will affect my vote. i do not think that the stimulus is working. what i do not understand is we are giving $500 million for government motors and guess what is being built by a mexico? how is that going to help the

united states? host: a couple of more >> stories, an arms deal is poised for smooth passage in the u.s. -- host: a couple more stories, an arms deal as boys for smooth passage and u.s. "the deal would include black hawk and apache helicopters." one of the lead items in "usa today," "are the iraqi people ready"? "by the end of this month the administrator -- and administration will reduce troop levels." also in "usa today," "john kerry to clear the efforts to battle for russian crucial if they wanted to maintain the support of u.s. taxpayers at a time when

more troops were dying in the war." that is how they put it here. pittsburgh, pennsylvania, thank you for waiting. caller: in 20 months 3 million jobs were lost than in money. these people with vast world trains? this is all amtrak. we have supported them some fine to me to, all they do is lose money. every time i call a politician, i asked about the $30 billion to building nuclear plants. do you know how many jobs we create for young kids out of college them on that is a stimulus. i go through one -- west virginia once each year. route 19, they have been working

on it for three years. now they claim it is stimulus money? they're spending advertising and people are would -- losing their jobs. these people talking about how it is great, show me where. ? that is crazy. -- show me where. you spend $1 trillion? that is crazy. host: coming up, barry zigas will join us, now housing policy director at the consumer federation of america. he will be a lot -- he will be along in the want to remind you of our coverage of the funeral service for ted stevens. they both have this event at the anchorage baptist temple. joe biden will be speaking. several other current and former

senators will be there and we will be live there for you. we will be right back in a minute. ♪ ♪ >> after nixon lost the 1962 california governor's race, did they offer the former vice president the job as commissioner of baseball.

nixon was flattered, but declined, telling the owners "do not tell pat, she would kill me for turning you down." find all of the seized an american history television online at all times, washington norway. -- washington, watch what you want, when he won -- when he wanted -- when you want it. >> laura ingram and her thoughts on the administration, from "the obama diaries." "book tv close " and primetime all this week on c-span to. it is all available to you on

television, on-line, and social media networking sites. find the content and the time on the c-span video library, going on the road with a local content vehicle. washington, your way, no available in more than 100 million homes. provided as a public-service. >> "washington journal" continues. host: at the table is the former senior vice president for fannie mae, 1993 to 2006. the housing policy director for the consumer policy of america. you were asked about the housing finance meeting yesterday. what was your role? what was your take away?

guest: i was simply a participant to make sure that consumers continue to have access to affordable loan mortgage credit as a part of the many people that were in the audience. host: one of the headlines is timothy geithner making the case for the role of mortgages. what is your take on the future of fannie mae and freddie mac? guest: right now they are being operated under a conservatorship. there are still playing an extremely important role in the economy and one of the themes that emerged was an acknowledgement that both companies are still an important part of the housing economy, despite their troubles on balance sheets. going forward, another consensus

was the need for a federal role of some kind and beyond that there is a lot of stuff -- discussion about how it could be structured. public purposes and support for the mortgage market with access to consumers and lenders of all types, how can that be balanced against the need to bring in capital privately from the system? host: what is your opinion on how much of a role the government should have? guest: the government traditionally has a very large role. it is important to step back into the context under which fannie mae and freddie mac have always operated, getting tremendous support from the

depository house. freddie bay -- fannie mae and freddie mac have provided mortgage financing that is dedicated to the secondary market but going forward there clearly has to be a continuing role for providing the kind of service, and whether or not it is appropriate is at the heart of the debate. this began as a government agency in 1938 and only began to be moved into private hands starting in the 1950's. we have a lot of examples of how this can be done over time, this is just the most recent iteration and there is no doubt we will see a new one emerging. host: reminders about the government tax money that went to fannie mae and freddie mac. guest: 144 -- $145 billion in capital from the treasury to back up their position.

the way that the offer values have declined, including risky bets, the company has run out of capital. the funding is basically standing behind them to make sure that mortgages get repaid. going forward, companies are paying a 10% dividend on that. one of the issues that results in this how to resolve that contribution. we do not know how big the final treasury backing is going to be, but both companies this quarter released earnings statements showing that they believe, by their numbers, that they have suffered the largest portion of losses, the have reserved and are now beginning to put a

healthy book of business in to their portfolio. host: at the same time, freddie mac has requested another $1.8 billion. should that be approved? guest: it has to be approved. especially if consumers want to continue to have access to these companies right now. this is the only way to get it. private investors remain very wary of directly investing in mortgages. interestingly enough, both companies have made no of the fact that a significant portion of the funding bill requesting is required for them to be able to repay. host: we will start taking questions for the guest. greensboro, n.c., go ahead. start over, if you can. i did not have a button crushed. caller: first of all, i think

that barack obama is doing a good job. people need to realize that we had 25 years of bad government between ronald reagan and the two bush's. like the other presidents did the realm of world, at least this one is trying. i think that he has put enough into the freddie mae and fannie mac -- fannie mae and freddie mac. host: upstate, n.y., christine, in the pan in color. caller: i have a comment about freddie mac and fannie mae. the government should back them up, we should invest in our own country. i did not mind if my tax payer money goes to help my neighbors.

national security -- homes our national security issues. my husband lost his job going overseas for a foam -- pharmaceutical country -- company. host: making in national security argument. guest: christina has a good point. following the financial crisis, created by unregulated wall street firms bundling toxic, unsafe mortgages into securities and selling them, in this crisis it is important for american homeowners to be able to refinance. the reason that fannie mae and freddie mac have become so important to that economy, the government backing of fannie mae and freddie mac to be seen as an investment in maintaining stability in the housing market

and allowing consumers to continue to have access to mortgage credit. mortgage rates right now are at their lowest point since people started keeping track of these records. very low interest rates. it is important to be able to make available mortgage credit on good terms. that is what this investment guarantees for them. host: speaking of credit, he did before the administration was going to tell fannie mae to avoid billions. guest, but that rumor to rest. there has been a lot of -- guest: let me put that rumor to rest. tiny of analysts have about this idea and i do not think that there is truth to it. the fact of the matter is that there are a series of programs designed to help people refinance their homes.

there are a series of well structured programs that are not getting a lot of traction, partly because it costs money to refinance. but for those that can and have higher mortgage rates that are available, it is an excellent opportunity. i have looked into this and i think that this is one of those rumors that got started in was blown out of proportion and there is nothing to it. host: john, republican line, co- head. caller: i am just curious, in the private sector if you do not run your business correctly, you lose your business. since the government has nothing invested, everyone says they're not doing a good job on managing everything.

since they live so well at our expense, what is going to happen to all of the property? what will happen if they decide to release those houses that were in foreclosure into the open market to be purchased by other investors? guest: it terrific question. with so many mortgages failing, the names of the heap of a guaranteed the mortgages have to take back the homes. fannie mae and freddie mac have record high numbers of homes they own because of foreclosures. what to do with them and how to get them back into the economy is one of the most vexing problems they're facing. the have tried to put a lot of resources on this, both companies, and i think that they will do better in the future because of the backlog. broadly speaking, the housing

economy will not recover until we get the backlog of foreclosed homes through the market. why not release them into the market? the consequence would further press down upon housing prices, bad news for existing homeowners taking payments currently without seeing the value of their investment decline because the market is flooded with homes. these homes have to get back into productive use in the hands of over occupants rather than investors who are simply investing on speculation. matching them up and moving forward. one of the obstacles is that when homes go into foreclosure, often it is after a long period of financial difficulty, sometimes by confusion in a lack of action, meaning that the homes need to be repaired. they may have been vacated or vandalized. some of these homes simply will

not be fit for use any time soon. all of these barriers have to be overcome and that is a localized problem. the administration has put out $6 billion to help and both fannie mae and freddie mac are throwing millions of the problem as well. you are right to point out that it is a critical problem that needs to be resolved. .

lobbied, legislated and put into practice all of these programs that failed, let me ask you this fundamental question, because in my community, i see the federal government, the fbi coming here and putting people who were in private investment, buying houses and putting them back on the tax rolls whether it be for rent or equity long-term or short-term to be put back on the market, but these people are going to prison and and it's outrage, because the paper here is printing all kinds of untruths, and the people here don't have the resources to

defend themselves like rod blagojevich. guest: there have been allegations into mortgage fraud. one of the underlying phenom of this housing crisis has been a widespread incidence of fraud at the mortgage brokerage level. there's no doubt in some instances people have tried to take advantage of the system, have tried to gain the system and use fraudulent means to obtain a home and transfer them to others. but broadly speaking, most of the people who are suffering through this mortgage crisis are regular people that bought a family hoping to be part of an investment and they are being hammered. sometimes led into a mortgage

they cannot afford now. and the president is putting in safe guards to try to learn from lessons of the past and put limb takes and stability in the mortgage market that will ensure we don't have the same type of crisis in the future. >> barry zigas has served as senior staff member of the u.s. conference of mayors, president of the national low income housing form makes and lou with the consumer federation of america housing policy. next call. canyon lake, texas, corey, thank you for waiting. you're an independent. caller: thank you for taking my call. 50eu6 got a quick comment and question. first of all, a little background. retired military. series 24 and series seven, license 65, license independent financial guy, live in texas. briefly, un, it's amazing to me

that people want to call in and blame the last administration. i became an independent in 2005 when i wasn't in greens with the bush era. nafta. nafta agreement and became independent back then. i don't really favor republicans or democrats. what amazes me is here in texas we have a surplus budge net our state. we're not a california or illinois. we're not a state that is constantly seeking to suck up to the federal government. and so independents like myself, not with the tea party. independents like myself are reliant and so my point for the profile and overall foundation with which texas operates i think should be looked at as a model. you look at california. they are so far behind this their politics and tax codes

that if they mirrored a little bit of what we're doing here, it's evident what we do here is working glfment host: let's hold that thought. dominick, republican, what are your thoughts this morning? caller: i think the biggest problem with phan phan and frederick bealefeld are the interest-only loans. >> i knew people who got involved and couldn't afford and got an interest-only loan and when it was up, the houses dropped $100,000 grand. my question to your guest is is this ever going to happen again? is phanny and fredy going to give these interest-only loans for five years? host: to what extent did you see all of this coming? guest: well, i think it's important to note that this mortgage crisis developed pretty rapidly in the early to mid thousands and did not start

in the conventional market that phanny may and fredy mack -- fannie mae and freddie mac operated. but private investors through wall street were buying loans that were exotic. no interest, no documentation. pay option arms where you decide how much the pay every month. negative liam ortizing loans where your balance grows every month instead of shrinking. they were brought to bear with as a means of creating affordable. and by definition, fannie mae and freddie mac did not flask these mortgages until 2005 when they began to take some portion of that mortgage business, because they had seen the share of the market they had shrink

dramatically because of other refers taking consumers out of the market with 23u8y-doumented and fully-written loans. that move by fannie mae and fred where i mack, which came late in the day is one of the reasons why they are in so much trouble today. they give clear direction to primary market lenders now about what kind of loans ought to be offered to consumers and requires lenders that borrowers have the ability to repay the mortgage one and of the features was lenders would put people in the mortgages they could afford at the initial terms but not at the terms they'd escalate to on an adjustable rate mortgage and the reason they used was the value of the property will

always go up and we know today that thearg goes up will have to come down, so those borrowers got stuck with mortgages they should have never gotten in the first place. on the terms it's going to escalate to, i think all those safe guards are important and we're going to see a very different mortgage market for here on. fan fannie mae and freddie mac are back to a more conservative set of standards than was the case when i was there and the performance of that book of business is actually very, very good. so there's no doubt that american consumers are prepared to take on responsible debt, pay their debts on time and build equity, and communities through homeownership. we just have to make sure consumers don't get ripped off by these so called innovations that are really designed to --

really aren't focused on the interest of consumers. realigning those interests between scurels and left-handers is one of the most important steps we have to take going forward and one of the features of the legislation and we have to get back to an era of a balanced policy. host: man welle, democrat, good morning. caller: yes. i wanted to touch on what i'm dealing with here. i'm disabled. the problem is you have the money coming in from obama and everything to hud and housing, but what we have going on here is the housing providers and the landlord. they are obligated to put the money in the units, and it's not happening, period. i'm dealing with what you call a crisis here, because i'm on a fixed income, and it's not only

disabled but seniors. host: what would you tell my mom? guest: i think he has made a very serious point. organizations like phan fan and freddie mac and the gap between them and those like man welle on fixed income or low-income needs. the renters and owners find themselves unable to meet the cost of the housing they up a with the reasonable amount of income they earn. so we have to find a way outside of the mortgage finance system to help those residents find and keep affordable housing. i don't know the specifics of man well's situation with his landlord but the government does put money into the housing situations but completely inadequate compared to the need. i think only 1/3 of those qualified for low income housing get to get it because

congress doesn't appropriate enough money to do that. how to make sure low or moderate-income people can find housing at a price they can afford. host: on from spring, texas. good morning. caller: am i wrong on this or is all this property artificially hyped up by these so called banks and so called mortgage companies. host: when you say hyped up, do you mean price? caller: yes. they are artificially high and got that way just so these banks could get a bigger bang for their buck and so the states could collect more revenue. guest: i think to separate the issues. the caller is right. house prices rose in many markets way beyond any sustainible or reasonable level, and in fact, when you look at where the largest drops

in house values are they tend to be concentrated in a handful of states. i was at a meeting over the weekend and one of the speakers said 70% of the forclosures are in 11 major markets and very highly concentrated. las vegas, south florida. parts of arizona. california. very high, very rapid increase in house prices that was driven by speculation, sometimes by investors, sometimes by home buyers. what role did mortgage lending play in that i think is a very important question, and the advent of the so called exotic mortgages designed to leverage people into homes with either very little down payment or very sketchy aassumptions about their ability to really pay back the debt they were taking on did increase the capital into a market where house

prices were and had not been if people were not able to qualify for the standard mortgages and not been able to buy the home. i don't subscribe to the belief that mortgage brokeers or banks were trying to drive up the cost of housing but there's no doubt when times were good, they were completely willing to take advantage of it. but you have to sustainible products. that's why we think maintaining the long-term fixed rate mortgage is such a critical part, because you've seen what happens when higher fees and more income but putting the consumer behind the 8-ball bearing all the risks, we've seen what that does. host: washington times headline consensus distant ads future of phanny and fredy are studied. -- fanny and freddy are studied.

>> i think all of the speakers acknowledge that you cannot have the current system sustained indefinitely. where federally-guaranteed mortgages make up all the mortgages being made today. number one. number two. a very clear set of consensus around the question if there's a guarantee or federal support, how is it manifested? >> because in the past fannie mae and freddie mac had with a could be called an implicit guarantee, which was not guaranteed by the united states government. but because of their unique position, many saw it as being

very related to the american housing agency and the government would step in. everybody agrees now that if there's a guarantee, it should be implicit and paid for. there remains a big difference as far as what the federal government should require and what parts of the market it should serve, but i don't think there's as much disagreement broadly, that the government needs to provide a level of support to make sure residents have ack access to housing and all levels of people that can afford mortgages, it's important for banks to have access to this system so we don't wind up with an even more legislatively- -- banking system. host: good morning. caller: good morning. would you please just let me speak my piece, and then i'll

get off. host: sure. caller: barry? guest: sure? caller: i think you're low on the $145 billion. i believe it's $148 billion loaned out from the taxpayers, that's one thing. it's $148 billion or more. number two. when did the democrats take over the senate and the house? was that 2006? and i seen on c-span in committee that the republicans asked for more regulation on fannie mae and freddie mac. but the democrats voted it down in committee, and it never did come to the floor. host: barry zigas? guest: well, there's been a long history of things around the charter and the terms and conditions of freddie mac and fannie mae, and i think there was a lot of back and forth and

it was democrats under barney frank who passed the first comprehensive rewrite of the comprehensive rules of fannie mae and freddie mac in 2007 then when it got to the senate, they couldn't reach agreement over there. i think fannie mae and freddie mac have been around a long time, and congress has a bipartisan commitment to homeownership and a national policy supporting it and phan fn and freddie mac were important parts of that. but in 2008 congress did act and it's the 2008 change that is made it possible for the treasury and the regulator to step in and put them under conservativeship and as unfortunate has the is, those tools have made it possible for american consumers to enjoy access to long-term fixed-rate financing as rates lower than ever soon before. so the numbers they are putting up has been an important

investment in ensuring home owners can continue to have access to that. host: dental, luke. hi there. caller: [inaudible] position to loan modification process -- because a lot of people that could be abe to keep the house, but the bank doesn't want to work out a loan modification. they would rather it go to forclosure and go ahead and auction the house to somebody else. but if they would agree to work the loan modification, with that homeowner, that homeowner would probably be able to keep his house. host: republican now, your thoughts? caller: good morning. i have statement to make and then a question, so please don't hang up on me. host: ok. caller: ok barry you said they

enjoyed the low rates. you know what they enjoyed too? each and every child and northern this country owes $340,000. you get 60% of the people taking more out than putting in and 47% that pay no federal tacks and 1% that pay 41% of the taxes, 10% pay 80. you have 80 million people on food stamps. you've got unions that have given money to politicians, now we're bailing them out. host: caller, how about your question this morning? caller: well, the question amounts to, first of all, general motors just bought a loan company. they are going to do the same thing to the car industry that fannie mae and freddie mac did to the housing industry. who are you going to find that will buy these houses? host: let's hear from our guest. guest: i think both callers have a similar point in that

there are a lot of homeowners in distress and a lot of property that is have gone into forclosure, and one of the question sincere what to do with that, the loan modification, i couldn't agree with him more. it's been a painful and difficult and not very successful effort as home owners have gotten into trouble, the administration has really been struggleing to catch up and find a way to help to help home owners pay their mortgage. things got off to a slow start and has been difficult to get right. having said that, i think it's also fair to say that the administration has helped over 1 million households and reduced their monthly mortgage payments by several hundred dollars. to basically forgive some portion of the debt, we think that is the most effective way to help modify mortgages and

the administration has been slow in stepping up to that. i hope as the new rule they have adopted we'll see more consumers benefitting from that. the other side in terms of selling the homes and finding new buyers for them, that's also been a difficult process, and it depends market-by-market on how the government is going and -- host: the comment about debt and taxes remind us of this story, the money section of "usa today," something that's been out there. want the ask you how serious this is, are housing tax breaks in jeopardy? that's a biggy for a lot of people. >> yes. and the mortgage interest deduction along with the property tax deduction is the single largest source of sub city in the -- sub as i did --

subsidy, but there's a tremendous mismatch in the housing system as far as where the subsidies go and where the needs are. the -- i hope there's going to be a conversation about how support is provided to those who need it on terms that are fair but does not undualy subsidize those who can carry their tpwhathe our economy. it's not a deliberate policy piece. it began because in 1986 all interest was deductible and allor interest was taken out of the equation and the home has become really the only way to deduct interest. this has led to another development in the mortgage industry, which is the proliferation of second mortgages, home equity lines of credit and so on which encourage consumers to use their home in order to take out

money to spend on consumer temperatures because the interest on that is deductible, the credit on your credit card is not. that's the other thing because it encourages people to eat away at the equity left on your home. >> good morning. i was researching mortgages in the middle of the decade when the housing bubble was pretty well formed by then and just about to go. and i attended some sem fars on that and about mortgages and the bank, and i did ask the lender, how many people have you turned down in the last two years? and he said i can't think of one. i got up and left and three years later that bank did fail. and we were encouraged by our own bank before and this was a bank that was there's one on every corner and it took a lot of tarp money and we were encouraged not to put a lot of

money down and one week later i walked in, asked a question and they said let's set up a home equity line of credit for you. but my one question is i lived in a european country for 26 years and all of our extended family over there have a home. the young people out of university, the baby boomers, mothers, fathers, everybody has a home but don't have an entity like phan fan and freddie mac and how do these countries get along without it? host: what's the difference between here and there? guest: that's a big topic. there are so many differences between the western european economies and the way they handle things and ours. the short story is the american housing economy has grown up around a stropping belief and private mortgage system and banking system that receives strong federal assistance through deposit and insurance and starting in 1934 when the government began ensuring

long-term fixed-rate mortgages, to provide those that they can repay early with no penalty, and those in other countries can buy homes. they cannot buy them with long-term fixed rate mortgages or lower down payments. and so access to homeownership can be much more difficult. on top of that, you have to remember that in many of those countries, there's a very strong social sector which ensures affordable rent which makes it easier to save for a down payment for a home and here in this country we took a different path. not to judge it. we said we want to t private sector to provide the bulk of this and need a way to provide funding to banks and other lenders as they make long-term

fixed-rate loans we need home the put it on the books. it's unique and provides benefits others don't have. >> dave, democrat, good morning. >> i was wondering how much did commercial real estate lead to this crisis? and how come we never hear anything about commercial real estate? >> that's terrific question. guest: first of all, the two are really only distantly related. right? so the funding for the commercial real estate is handled one way. fannie mae and freddie mac don't invest in that and what's interesting about this and what your question highlights is although there's no fannie mae and freddie mac, no housing goals or community reininvestment act, none of the things critics charge with the heart of the crisis incorrectly, i believe. the private sector is in terrible trouble because of

overleverage, speculation, loans written on shaky terms in order to keep encouraging the flow of credit. in that sector, it's having to suffer all those losses privately. and it is in many places, you're seeing a lot of vacancies and loans that can't be refinanced and those backed by commercial mortgage that is have to be rolled over and extended because nobody's sure how to bring more capital into that system. so we saw a lot of bubble sets. and the common threat on that is the commercial values would also rise, and you could keep lending against expectation of financing. and we've learned that's not a good way to do lending. >> good morning. >> good morning, gentlemen. i'd just like to make a comment, and then i have question. please don't cut me off.

host: mm-hmm. caller: first of all, i'd like to turn to an article in "the new york times" that was written by stephen a. holmes, one of their best financial reporters, and he wrote in "the new york times" in a move that could help improve homeownership rates among minorities and lower income people fannie mae is easing the requirement on loans that it will purchase from banks and other lenders. fannie mae is the nation's biggest underwriter of home mortgages has been under increasing pressure from the clinton administration to expand mortgage loans among low and moderate income people. then it goes on to say in moving even tentatively in this new area of lending, fannie mae is take on significantly more risks, which may not pose more difficulty between flush economic times but it may run into trouble in an economic

downturn prompting a government rescue similar to the savings and loans industry in the 1980's. host: caller, to your question. caller: this article was written in 1999. george bush wasn't anywhere near washington, d.c. that the time. the republicans had nothing to do with this bubble. the clinton administration decided that every minority should have a house whether they could afford it or not. host: no question there, but comment. we'll go to greenville first. earl, independent? then we'll go back to our guest. go ahead, earl. caller: yes. that caller is just talk. that's one of the problems trying to blame this on minorities and low-income people. the problem was these people who has a lot of money is trying to buy five, 10, 26 houses an then can't sell them

and that's where the problem came from the wealthy folks that messed the thing up. host: response to those two calls. guest: first to the first caller, it's important to remember that in the beginning of the clinton administration a lot of good work was done by the department of housing and urban development and as well as the federal reserve of boston and there were significant gaps in the minority of households to get access to homeownership when you took all the characteristics like income, age and so on that you would think might explain the difference, when you took out of the picture you couldn't explain it in any other way than than that there was a minority factor. so how can it be expanded responsibility and if you look

at the 90's or into the early 2000s, those efforts were successful. minority homeownership rates rose at a much faster rate than those of white families because they were given access to responsible mortgage credit. what happened in the latter part in the 2000's going forward was you started to see the increase in subprime lending sometimes victimizing these same families who had just become available for these and then went through and bullied them into equity loans and other things. because of the state of the economy and drop in housing is holding up multiples better than the lending that delove crisis which was irresponsible lending by wall street secure

tiesers who had based their entire business model on earning fees through the transactions of creating, selling and securetizing mortgages without taking a stake in the long-term success or getting on the side of the consumer to ensure their success would be the same as the lender's success and we've learned that you cannot separate these interests and one of the cardinal rules is going to ensure lending is done on a sustainible basis, that borrowers have the ability to repay and those who take the loans and make the loans have a common interest and safe and sound lending leads to safe and sound homeownership where people have a safe place to stay and can build equity in their homes. >> yes, democrat, hi? caller: yes, i would like to come in on the mortgage problem. i think a lot of it could be solved if they would take --

and put them into forclosured homes, renters. and maybe put more money into helping them have some respect for themselves. host: final thought? guest: that's a great point. we've got to find a better way to match the housing resources with the people who need homes. the problem is that while this is exactly the right idea, it really has to implement at the local level where circumstances and things can be different. state and local governments have been receiving aid to help them do this, as time goes by we're going to see state and local governments to bring more solutions but this inability to match up those who need homes with homes that are vacant is a problem we need to find way to

solve. host: barry zigas from the housing thank you. dick armey will be along to talk about the tea party this season but first this campaign 2010 update. >> house republicans campaign committee is setting aside $22 million in an ad tv blitz to go after 40 house democrats. joining me is alex isenstadt, you had the story yesterday. the headline was this is a blue print for the 2010 midterm. what are they trying to do here? >> well, absolutely. if you look at what this republican blue print is, is it's their initial plan to take over the house majority this fall. republicans are trying to go on offense. so the 40 seats that republicans are investing in, 39 of those seats are democratic contrasting strongly with the democratic plan, 54

seats the democrats plan to concentrate, they are all democratically held. >> but do they have more money than republicans? >> democrats absolutely have more money in the bank than republicans, precisely two times as much. the congressional campaign committee has $34 million in their bank account. republicans have $17 million. democrats are going to try to use their financial muscle to preserve their majority this fall. >> you note 22 million across 49 races, how far does $22 million go across 40 races when this could be one of the most expensive mid terms we've seen? >> there are two important things, republicans are going to try to invest in less expensive media markets in districts where they think they can win.

in the remaining weeks to come, are republicans going to take out loans or find ways to raise their cash inflow so that they can invest more money into these races? republicans think it's a golden opportunity, one that doesn't come along very often and republicans can gain 35-40 seats according to the latest cook projection out yesterday. >> some of the specific races first of all john spratt. been around a long time, chairman of the house budget committee. why are they going after him? >> because he's poemly vulnerable, sits in a conservative seat and republicans think they have a strong challenger in senator mick mull veiny, but separate is not the only one they are going for. they are also going after chet edwards in texas. edwards has a very tough race against a wealthy business man. so republicans are up against long-serving powerful

appropriations committee members. >> and john spratt has been around 14 terms, chet edwards, 10 terms and going after first-term democrats. who are that i? >> there are clear and obvious targets for republicans among freshmen members, childers in mississippi, in maryland's eastern shore, i think you look at a number of different candidates including gabby gifford in her second term. someone like tom in virginia, glen niles from virginia, there are a lot of rich targets for republicans to go after. democrats and newcomer democrats and in a conservative-leaning district. >> and alan greyson who might be a familiar name to some of our viewers because of his floor speeches, why him? >> well, alan represent as conservative-leaning district in the orlando part of florida. and republicans think they can

drive money and drive attention to this race in a district that is potentially winible for them. it's going to be a tough race because grace season penley wealthy and put in millions of his own money and has raised a lot of money. but this is a race that can get a lot of attention in the coming months. >> why aren't republicans trying to protect their own competitive races? you put in your story they are not going to put money into the hawaii and louisiana race? >> there's a few races where the republicans have yet to reflect because republicans want to be on offense and focus their intentions on deaptly-held seats and a reflection of the fact that republicans just don't have that much noun spend. so poemly we could see republicans shift around some of their funds and defend some of these incumbents if they

believe they are in trouble. alex isenstadt from politico, thank you, very much. >> thank you. >> you can go to c-span.org if you want to read the entire list of republican candidates. >> well, here is a look at a tea party manifesto. haehnel titled give us liberty. up with of the authors is dick armey. chairman of freedomworks. he joins us from new york city. good morning, mr. armey. >> good morning. host: thank you for joining us. let's get right to part of the manifesto here. it says notice that we call for a hostile takeover. we didn't say join the republican party. we need to take it over. that's what you say. how come? how come a takeover? what's wrong with the g.o.p.? guest: well, obviously in the past few years in office the republicans have been disappointing to the small government conservatives across the country. just a few years ago they had a

plan to, as they believed, ensure their permanent majority to an ear mark strategy, which was big spending, so seriously offended the voters and in turn lost their majority. i had been saying for some time to the republicans within their party and now to the grass rootsal activists across the country is what we have to do is lea bill tate the republican party and cause this party to come back around to the small government principals that made it endearing to the nation for the reagan years and contract with america years. and we understand that either republicans or democrats are going to hold office. we just want the republican majority that can't emerge to be a bonefied reliable conservative majority. that is to say that we want to affect the policy decisions and behavior of the party and quite

frankly the tea party act across the country are not interested in politics but the policy that is govern the future for our grandchildren. host: what do they believe in, in a nut shell? >> well, the first thing we believe in is the constitution. it's the greatest act of entrepreneurial genius in the cause and liberty of the world and served this nation well and america's the greatest blessing to the world in the history of the world. certainly to ourselves with our prosperity and wonderful freedom and liberties. we want this protected and preserved and well-sebbed by those who take an oath of office to serve it. and secondly within our own organization, we say everybody is welcome here if you have a commitment to the real principals of freedom, liberty and small government responsibility. we want your activism and want you to pull your weight and have a courteous relationship among yourselves and with respect to others.

and so we have certain transactional rules of behavior that we ask of one another. for example, no one takes advantage or credit for someone else's work. do your share of the work and let your work speak for itself. so it's quite a grass roots entrepreneurial effort of decency, respect and communal respect to principals that have been endearing and enduring in this nation for 200 years. host: phone numbers on the the bottom of the screen the chairman of freedomworks and house majority leader and co-author of "give us liberty," a tea party manifesto. we'll get to your calls in a second. what's been the intact so far of the tea party? guest: our folks, i think have a better understanding of what's happening electorally in america, because we take our information on the ground, at the grass roots level from the

citizens who live in the district. so in the nine contests that actually have been concluded where our activists have chose an candidate in a primary process, our candidate is -- has won in all nine instances and clearly demonstrates that because we are the grass roots, we're more in touch with the community than are the oftentimes remote and removed and detached experts from afar. host: first call from our guest, byron on the line for democrats. you're on with dick armey in new york. caller: thank you for c-span. this man here doing all the talking. he's without there put out there by the u.s. chamber of commerce to sabotage anything that this administration that's in power does. he's been at it since they got in office and he'll be doing it

whenever they leave office. host: dick armey you an agent of the chamber? guest: i wrecken down in louisiana they are just not getting it well and i feel bad the guy's missed the point so much, because again, i work with real people, real activists from across the country who just simply believe in freedom, liberty and believe our government should have a responsible adult self-restraint on its own self-indulgences while it does things that must be done in the nation for the community effectively at a cost-effective basis. i don't know if we have any relationship to the chamber. once in a while we find ourselves on the same side of an issue. probably almost as often we find ourselves on different sides. so i don't know where this fellow gets his information, but i think he's been reading some comic books or something. host: tea party has a contract a set of actions should they take over.

so turn these principals, what the tea party folks believe into a legislative agenda. what would the top two or three things be going forward? >> skimpfied fair equitable tax system, a restraint on big government spending. the one thing i think is the most compelling is they believe this government can, with its horrible free-spending ways, put this nation into bankruptcy. so clearly restraint against big spending, respect for individual liberty. you know, here we have a government that has the audacity to mandate that esche buy a product they describe in the area of health concern to put them boo a government-run program that the government can't afford to run. they have already got a financial mess on their hands with medicare and now they want to expand it to the entire population. once you've biten off more than

you can chew, the idea is try to digest it the best you can, don't take another bite. caller: good morning. where to start? what we're seeing now is democrats on wild, and republicans gone wild in the past when they controlled the house. it happens. so perhaps there would be a more firget government if there were a balance of power and split between the house and senate and the party control. you know, i wanted to first of all the politics to try to define your opponent or yourself. and i'm a lifelong republican and sympathetic to the tea party movement to some extent but more so than since you started to express outrage to democrats gone wild. the spending is on the path of

economic ruin for the country. i think democrats have, they've been reminded of the mistakes of the past. i think we have most if not all of the values that the tea party is vowing. i think we've learned, you know, i have -- despite outrageous things harry reid says, republicans were not against slavery. one of my ancestors founded the republican party on the sole platform of anti-slavery. >> yes? host: dick armey? guest: politicians always act on their own behalf and some say insincere things but the idea that this whole movement only is a reaction to the democrat's current policies. the clear, stinging, most serious abhorrent policy

behavior in office as it offends these folks is the vote for the trouble asset releaf plan that was in fact, president bush's plan. and i mentioned the nine cases where we've in fact, seen our candidate win and oftentimes incumbent bebt candidate loses, it is that vofmente the fact is this is a question about policy not politics or certainly not about political parties. most tea party activists have a certain disappointment in both political parties and are drawn from both. a past historical affiliation with both parties. you see, when you walk among these activists at something like our september 12 march on washington. there are republicans and democrats that are marching in this group that want better policy from more responsible

office holders. it's not that great of a revolution narrow change, we just want those serving in office to act like responsible adults. >> host: how many members of the tea party, how many folks around the country are there now, and what are you doing to grow that number? >> it's amazing. guest: millions of folks. just a year ago we had a million people that left their homes and came from all over the country at their own expense to convene in washington on one single day. our own oh freedomworks is growing at about 3,000 new activists signing up every week. the fact is right now the chance for america to beat washington, reform this government, make it once again conformist behavior to the promise of the constitution has become such an exciting opportunity for so many american citizens that they are signing up in droves all over

the country. again, they are hoping -- the desire is not to be part of a club or group, but to be a part of a change in america that recaptures america, takes america back from professional politicians in washington that are acting on their own behalf instead of doing their duty for the country. host: tim you're on the independent line. caller: thank you, paul. good morning. good morning, dick. what is the most -- i don't know, what's the biggest turnout that your tea party has had in one gathering? guest: i'd say about 1 million people in washington, d.c. last september 12. these are folks that came from all over the country at their own expense. and clearly, it's the biggest single gathering the free market, small government conservatives to demonstrate their hopes and dreams and

their commitments on economic issues that anybody's ever seen. host: you wrote in the "wall street journal" op ed article that the tea party has boss med into a powerful social phenom because it's leaderless not directed by one mind. how is being leaderless good as opposed to a problem? guest: well that's a demonstration of the movement's authenticity. i've always said the idea is bigger than the man and bigger than the party and bigger than the moment. so here you have people transall over the country, people that have no prior affiliation with one another who because of their love of what our american constitution has allowed this great nation to accomplish when in fact, it's been responsibleably adhered to by people in public office saying these great ideas have served us well and we want

them to serve our grandchildren and let's come together in support of these ideas. so our leaders are the 58 people who wrote that beautiful cution. the leaders are the brave sowls who engaged in the war pursuant to the declaration of independence and dared to put their life, liberty and sacred honor on the line. so our leaders of today are just people from america who love america and fear our government just doesn't get it. we have a prayer for this country and our prayer is lord give us a government that has the ability to know the goodness of the american people and the decency to respect it. we don't ask for much from our government but just restrain yourself from being self-indulgent and overly aggressive in your spending and just don't bankrupt our grandchildren. they should have the same chance we had.

we're not asking much from the government just the same responsibility we'd ask from someone in the p.t.a. host: via twitter, it's asked is it true you are the founder of the tea party and freedomworks and they are not a grass roots effort. guest: i am the chairman of freedomworks. but i didn't found freedomworks. freedomworks is an organization founded in 1984. we've been around doing this kind of work for years. this is another one that again, everybody who fears the tea party is looking for somebody to be in charge with the notion being if we can kill that general, we'll stop that army. but the fact is there's just no generals to be found here. host: on the line for democrats, atlanta. good morning. caller: good morning. i just want to know what would the tea party solving the

unemployment and health care crisis in this country, what are their ideas to solve those issues specifically? guest: well, that's good. because first thing you have to understand is when the economy is in the doldrums is whath what is the problem? and the problem is our federal government today is so great, huge, large, inefficient and wasteful that it is such an ownerous burden on the private sector that it's depressing the economy. the solution is get this government under control. the first lady opposing obesity. everybody thinks she's being assertive. take the fattest children in the america and thin them down. make them happy. we're saying take the fattest government and thin it down and make us happy. you have to relieve the burden of an ownerous government so

the private sector can perform. we saw it happen before. it can happen again. but if in fact, this federal government continues to grow at the expense of the private sector, the private sect err -- sector won't grow. host: not everybody on the g.o.p. side has signed on, including leadership. what do you make of the leadership on the republican side of congress and their view of this? guest: well, this of course, becomes part of the problem. it's mixed commitments and obligations. when you are given the privilege by your neighbors to come to washington and serve in one of these marvelous offices of responsibility and privilege and duty, do you have then an obligation to your party or an obligation to your call cuss or to your speaker? or do you have an obligation to the people that sent you here?

the tea party caucus says i understand in the house of representatives. our people said you know, we understand these folks out here asking for respect for our constitutional miracle of meck. although let's get back to being as we have been in this country, so responsible, and we want to express our commitment to those same principals and ideas. i think some of the people who haven't d'wan so are people who are saying in effect that we have other commitments we hold to be more dear, and the final analysis at the ballot box, the voters will sort out which of these people with which of these commitments is going to have the privilege of serving in office. what these folks in washington have to understand is that's not their office. i get a big kick out of the priority attitude they have mr. congressman and mr. senator, you're really just a hired hand

and you can in fact, be fired if you don't get that what it is we require of you. host: you're on with dick armey. caller: yes. mr. armey, with all due respect. relative to what paul just mentioned about a few number of republicans in congress who have been willing to share support for the -- show support for the tea party, i have a really difficult time -- i'm not saying your voracity, but in some way if you could convince me, perhaps maybe say that no matter what happens in this election, we're going to have tea party candidates on the next ballot as tea party candidates, not republicans but as tea party candidates. are you willing to make that statement, sir? guest: no. of course, not. you have to understand what we are is a group of people who are committed to ideas.

we don't want to be a third political. why would we waste our time and effort doing such a foolish thing as that. we want to help the republican party see and democrat party see what we think made america great, too. right now what we see with the democrat party is a party that's so bought into the discipline progressive agenda and so intolerant of the members of their own party that might in fact, act out commitments other than the party's mandate that there's not much hope of for us to reach to democrats in office and get their support of our ideas we think there's some hope with the republicans, but we don't want to have a third party. we want a conservative majority -- spall government

conservativetism that was promised to us in this constitution that has sebbed the nation and indeed the world for so many years. just understand it. if you can't understand it, we'll buy you a dictionary. host: independent in houston, good morning. caller: good morning. one thing i noticed that you are screening your calls. i don't know why. i've never had that done before, but mr. armey seems to think that the government has no role in the united states. the free enterprise system has ruined this united states. they have been allowed to run amuck among the common people. they have no restrictions on what they can do. the housing industry has taken advantage of the people. by selling them junk.

and so far as loans sooned forth. host: caller says free enterprise is the problem. what do you think? guest: again, bless her heart. i feel so sorry for just simply not seeing it. first of all, we talk to the folks we work with in this movement. we understand that we must have a good, effective and responsible government. for example,, the government of the united states must protect contracts. can't have a system of private systems without contract law. right now the government of the united states is the first and largest organization that is breaking contracts and preempting contracts. we need to have a national defense. we need to have better roads and schools and would like the government stay focused more on those things they should be doing and doing well at the appropriate level and secondly, i'm going to put this out. make an observation, not an assertion but observation of fact.

there has been no outside of our religious benefits and those wonderful spiritual things we've gotten from the lord all mighty, for man there's been no greater source than the honest pursuit of profits by entrepreneurial people building and finding better profits. look at the good things you have in your life. the things you enjoy, the things you that bring you confident and ji. did you get them from government or private business? host: and detail via twitter what specifically is the tea party's plan once they take over? what are they going to cut? guest: yes. relieve yourselves from the unnecessary burdens. . .

guest: just leave me alone and leave me be free to take care of my own health. if you let these programs be voluntary, the costs can be enormously reduced. the careful in how you spend

money. established priorities, make trade-off decisions, lower and simplified taxes and make it a simplified tax system. there are so many things that the government can do it to be a blessing and service to the life of the american citizenry at large rather than a burden. 4 lord's 6, cannot take on sake,ssary, -- for lord's do not take on unnecessary burdens for things you did not need to do, that you do only to enhance your power at that moment. it is not about you, mr. senator, mr. congressman. make it about service of the lives of the citizens who entrust you and gave you this great privilege. host: dnc chairman tim kaine talking about the tea party.

>> republicans and tea party supporters can take a break and relax, because we have not distilled their agenda to eight blueprint of how -- we have to sell their agenda to a blueprint of how they would govern, the tea party contract with america but we've listened to what the leaders and candidates have been saying, people increasingly influenced by the tea party, and the contract would do 10 things. first, repeal health reform. second, privatize or end social security. third, end mcteer as we know it. fourth, extend president bush talks to tax breaks for wealthiest citizens and it will. -- president bush's tactics for will this citizens and dick oil. 7, 8, 9, abolish the departments of the education and energy and epa. finally, abolish the 17th

amendment, which provides for direct election of senators. guest: one of the things -- democrats are marvelous politicians. i always admired their skill. they understand that this is the largest movement in american politics that they will see in the lifetime. it is that enormous swing vote that is on the field today that is bigger than their party, bigger than the republican party. it is america at large taking on washington establishment. they are scared to death. they have conjured up their caricature of who we are too scared their bass back into -- the scare their base. if you don't laugh at politicians, they are going to make you cry, so let me laugh at them. i don't know what else to tell you. he is a funny guy. host: you are on with dick

armey. caller: it amazes me that you raising president reagan. his situation was that there were no poor people, just lazy people who did not want to work. that was just not true. on the private sector, the private sector has no incentive to help. they are making their money. on health care, you can still get your own health care if that is what you want. you have said that everything the democrats do are wrong and does not help this country, it is a bad thing. yet you have said nothing about the republican conservatives who got us in this mess in the first place. guest: let me remind you that our movement is a movement that is born out of by and large people who are disaffected with both political parties. certainly president bush's

public panic over the housing bubble that caused this enormous crash and the tarp program, $750 billion of the taxpayers' money, the irresponsible congress that put $750 billion of your money in the hands of one unelected federal bureaucrat, was a bitter disappointment to these folks. again, it is too easy for those of you who want to express a partisan loyalty to mischaracterized millions of people from across the country, many of whom have a voted illegally for democrats in the past or republicans and -- voted loyally for democrats and the past or republicans in the past. we understand that we have to affect what happens at a public policy ad that has to affect who hold political office, but the ambitions are not political

ambitions. they are policy ambitions. open your minds a little bit and look at what is going on. our recent caller, if he watches this carefully enough and loves america, might want to join us if he sees what is really going on out there. host: what do you make of the tenure of michael steele is head of the rnc? guest: again, he works with the republican party. politics sooner or later makes a horse's rear out of anybody. anybody who looks their beaver be governed by politically defined criteria it is put -- lets their behavior be governed by politically defined criteria is sooner or later going to have the stumbles. that is politics. politics is at best an amusement and at worst just

counterproductive distraction. i don't pay much attention to it. host: 10, republican from kansas city, for dick armey. -- dan, republican from kansas city, for dick armey. caller: new york has a party they are going to spin off like tea party and have a definite and it just for the tea party. if they do, that is going to split all the boats out there, and who will win? democrats. they ought to think twice before they start having a feisal abdul they ought to think twice before having na tea party candidate. i am sick and tired of the tax breaks for the abridged read i got a tax break -- i am sick and tired of the tax breaks for the rich. i get a tax break, and i it sure i'm not rich. host: let me add the voice of

ralph nader, wrote an op-ed in "the wall street journal" today. "a coalition of progressive and conservatives -- "convergence of liberal-progresses with conservative-libertarian centering on the autocratic, corporate-dominated nature of our government." how does that fit into the tea party? guest: the argument is about academic and i will have to sit down and wonder my way through it a little bit. one of the myths of political discourse today is that the republican party is the party of corporate america. the democrat party, quite frankly, has a greater symbiotic relationship with corporate america than the republican party. i think the empirical facts of

campaign contributions and largess and government programs that benefit corporate america is clearly documents that what we really want is for corporate america to quit turning to the government for pork barrel bailouts and giving us silly, as a nine notions like to big to fail -- silly, asinine notions like to big to fail, and to take it like a man. we say to the government, look, mind your own business. you have serious duties to do. it should be constructing roads, not bailing out banks. taxpayer money is a serious commodity. spend it wisely don't take care of your friends out there.

we don't need crony capitalism. there is a point where you see everybody -- what ralph nader is focusing on -- there is a growing number of people saying to be disciplined and dutiful in your limited tasks, understand your limitations, do them well, and they are saying to corporate america, get busy and tend to your own business and quit whining and crying to the government for bailouts. host: democrats, brenda. caller: good morning, and may i please have a moment to make a comment to dick armey? white, it is i don't understand why he and senate -- why, it is i don't understand why he and sarah palin said there and tell older people and people with low i.q. all this nonchalant stuff about things that are not true. i'm a veteran.

i served over 9.5 years in the u.s. marine corps. the stuff that you guys are doing and throwing at them is a total disgrace. to think that you actually were in congress -- we will never get anywhere like that. host: first time sarah palin's name has been thrown out there. speak to her and the comments. first of all, i want to thank the woman did my wife is from tennessee and she is a beautiful man, too. look, i have never met sarah palin. in here every now and then, once in awhile. -- i hear her every now and then, once in awhile. we have one thing in common, that we are free to express our ideas, and people are free to accept or reject the idea is. we are in no way able to

advocate anybody uses the power of the state to impose ideas on you. you may find this agreement with the ideas that i expressed here, disagreement with the ideas i express her, but rest assured this, i will never use the government make you comply with what i believe would be the better course of behavior on your part. i would be the first to say that the government should restrain themselves from meddling in your life and let you run your life and leave you free to choose how to live your life. the questions you have to ask is are those people who are privileged to represent you at office and have jurisdiction over the lives of your grandchildren, are they willing to let you be free to choose? are they willing to restrain using the power of the state to

tell you what to do it voluntarily in an unnecessary and repressive fashion? if you think they are representing you, cling to that government. if you think it is heavy and it fell listen to those who say there is a more freeway. listen to our apartment. -- listen to our argument. host: last call for dick armey. caller: the tea party has said that osama bin laden -- osama bin laden knocked down our buildings and our responses not one, but two wars. guest: the central policy focus that is compel these people to emerge from their homes and go on the streets and let their worry and discontent and fear known has been the economic issues and the wasteful spending, unnecessary spending

has been the central focus. that is why this movement stands so was met and the middle of american political -- why this movement stance so smack in the middle of the american political life today. if the economy fails and the nation collapses through financial insolvency, which is not a possible -- not impossible -- look at greece -- then these other issues fall behind it. but we do appreciate that it's going to war, the decision to send your young men and women in to battle has got to be the most previous -- grievous decision you could ever make. but we stay focused on other questions of how can we discipline this government to expand the minimal amount of

unnecessary tax dollars on the highest priorities and legitimate of -- minimal amount of necessary tax dollars on the highest priorities and legitimate duties? it is not that much to ask. host: dick armey is up in new york city, a former house majority leader, chairman of freedomworks and co-author of "gift of liberty." thank you for your time this morning. guest: thank you for having me, and thanks to all the callers. i really enjoy them. host: 40 minutes left on "washington journal." we will continue our focus on financial regulation, and what it means for consumers. plenty of chances for you to ask questions of our next guest in the meantime, news from c-span or radio. >> nato says that afghan and coalition troops killed two insurgents and detained several

others last night while pursuing a bomb-making expert working for the taliban. the shootings resulted in hundreds of demonstrators blocking the main highway between kabul and kill all i did the protesters killed were innocent civilians, but nader said that the forces killed two insurgents. workers at -- nato says that the forces killed two insurgents. representatives from various countries are meeting with russian president dmitry medvedev. in business news, general motors and its chinese partner have announced plans to jointly develop fuel-efficient small engines and transmissions. the company's joint engineering and design centers in sang hanghai but the work will be done in detroit. the family of former senator ted stevens has released the list of attendees at today's funeral,

and those scheduled to speak include vice-president joe biden, senate majority leader mitch mcconnell. ted stevens, the longest serving senator in alaska, died last week in a plane crash. those are some the headlines from c-span radio. >> after nixon lost the 1962 california governor's race, he was offered the job as commissioner of baseball. nixon was flattered, but declined, telling, "don't te -- telling the owners, "don't tell pat. she would tell me if i turn you down." fight american history - -- >> find american history on line

at the c-span video library. watch what you want, when you want. >> "washington journal" continues. host: we continue with our summer series on the financial regulation law, which will take two years to fully implemented monday we focus on financial regulation and government power. tuesday we focus on the banks. at tomorrow, investors, friday preventing the financial crisis. today we focus on the consumer. our guest is ed mierzwinski, a representative for u.s. public interest research group. one of the biggest provisions, the one that has drawn the most discussion and debate, is the idea of created a new consumer financial protection bureau within the federal reserve. explain how this would work.

guest: the consumer financial protection bureau is an incredible idea. we think it is the biggest consumer protection since deposit insurance after the great crash of 1929. the consumer protection of functions that have been going on in government had been divided among seven agencies, and the consumer is not always protected equally by the different agencies. for the first time, like we have the fda for drugs and food, the consumer products safety commission for dangerous toys and toasters, for the first time we will have a one-stop shopping agency for consumer protection in the financial marketplace. it is a very powerful idea and makes a great deal of sense. no matter where you get a consumer product, a bank or pay a lender, you will be covered by the cfp an article is

about elizabeth ward in "the washington post." -- elizabeth warren in "the washington post." there is a lot of debate about whether she should have the agency. guest: my group has not taken a position, but many believe that she has all the qualities to lead the agency. she speaks for american consumers. she has a track record of studying bankruptcy and why people get in trouble with financial institutions. she is a professor of contract law. she understands how to communicate what the agency will do. she has done tremendous things. she came up with the idea in 2007. host: another aspect of the bill is that it would allow states to impose stricter consumer laws on bank. this is compared to the federal standards. the state attorney general would have the power to enforce certain rules of the consumer bureau.

guest: bank regulators were asleep at the switch in enforcing their own laws. second, federal bank regulators took away the rights of the state regulators and legislators to pass stronger laws treadwell mortgage program and mortgage companies owned by national bank -- to pass stronger laws. mortgage programs and mortgage companies for on by national banks and there are tough advocates to protect consumers. host: the bill would permanently increase the level of deposit insurance for banks and thrifts and credit unions to $250,000, retroactive to january 2008. guest: people are concerned that banks might fail and this bill makes the guarantee a little bit bigger. host: lenders must ensure that homeowners can repay the loan.

pretty simple, right? guest: they must ensure that the borrower can repay the loan. brokers cannot get kickbacks and more for putting you in a more expensive alone, and brokers can be penalized if they put you in a loan that is unfair. host: before we get to calls for our guest, what is taking place so far? what is an effect we can see? guest: the treasury department is working hard to take pieces of the other agencies and move them over to the new bureau, which will start up sometime between january and july of next year. as of the start date of the law, july 21, we have a new protections for merchants against unfair credit card practices. most of the need a little too takes effect when the bureau -- smost of the new law takes effect when whitby road starts up.

-- when the the new bureau starts up. host: first call. caller: i'm calling about the new agency that has been created. is into this the expansion of the government of the -- is into this the expansion of a government that's the tea partiers are complaining about now? i understand that a lot of the issues are disingenuous when they say that the human this government infrastructure -- humongous government infrastructure -- government influences and in some cases, financial industry, subsidizes some programs that the private- sector offers. guest: i would disagree with that, because the consumer financial protection bureau is better government, not bigger government. most of the employees will come from existing agencies, part of the system that failed to protect us.

they will work only for consumers coul. in their old jobs they worked primarily for banks and protecting consumers was not their responsibility. this is a major step in better government. host: who reports to whom i know that? gu -- under that? guest: loans and mortgages would be regulated by this bureau, and all financial institutions big and small would essentially be under the bureau's rules. host: and the fed oversees -- guest: that is an important point. , a number of us wanted an independent regulator. what we ended up with was a reguluator in the fed but not of the fed. there is an anti-meddling law. it reports to the president. host: carl, republican line. caller: i'm going to reiterate a

little bit of the gentleman from across the's question. not all of the employees are coming from all seven entities. why not? why not just employees a leader or a ceo of -- why not just employ a leader or a ceo and just take all the jobs you need instead of hiring new ones? guest: i did not make myself clear. all the consumer protection employees of those regulators are moving over. we all look at this as bigger government at all --. we don't look at this as bigger government at all. host: independent, hi. caller: i wanted to make a comment, because i have heard all this about regulation and how to make consumers happier, i guess, would be the word.

but all i see is that greed runs this country, and that is plain and simple. on the back of money to say "in on the back of money it should say "in greed we trust." host: robert from new york. caller: thank you, c-span, for doing such a good job. on at restricting banks from automatic overdraft protection, was it legal for? i was charged $600 in overdraft fees and paying for parking because the website of my bank told me i had more than enough money. guest: that is a perfect example of the need for the new law. the regulators recently issued limits on overdraft charges. banks used to earn money the

old-fashioned way, they used to earn it. then they started promoting free checking, but there was attacked at the back-end, calls -- overdraftthere was a catch at the back-end, costly overdraft loans. the bank claimed that it was a privilege, a protection. as of sunday, you can belong to be charged the overdraft fee -- on your dad you can no longer be charged to overdraft fee -- you can no longer be charged under overdraft fee -- it's the biggest check clears first, lots of little ones will bounce. was it legal for? it may have been an unfair policy. it may have been something not enforced by the bank regulators. they aided and abetted the unfair practices. host: staying with consumers, the topic for this part of the

series, debit cards are practical stuff for people. what other items are in this bill the they will see and feel and deal with on a daily basis? guest: there is a tremendous amount in desperate special offices would be established a -- in the nit -- there is a in this.us amount special offices would be established for those at the mercy of unfair practices. new protections for low-income people new office of financial literacy. there will be one telephone number where you can call with your consumer complaints, whether they are about 80 lenders are banks or anyone else. -- whether they are about payday lenders or banks or anyone else. normally they just tell you to deal with the bank. you will have a regulator with one job, to protect you.

host: miami beach, republican. year-r: i'm a 40-something- old male, and i've seen these banks fail for my life. and every time they fail you make new regulations, this and that, and will not happen again. can you promise with this that there will never be another bubble? it seems like every 10 years -- i just heard you say that in the last 10 years -- i remember a few banking crises since i've been young. host: is the idea of another bubble connected to this topic? guest: the consumer protection act is our response to the failure and collapse of the banking system -- is a response to the collapse and failure of the banking system, brought on by a housing bubble of the federal reserve failed to address with monetary policy or regulation. the securities and exchange commission had a voluntary program on risk for its biggest- regulated wall street banks.

there was a mess in washington, and we are doing all we can, congress and the president are doing all they can, through this legislation. i cannot personally guaranteed that there will be no bubble, but congress still has a job to do. you cannot just set up regulators and wait for them to do the job. congress failed for many years in oversight, and the public needs to elect people to congress who are going to demand oversight and who are going to represent the public, not corporations. host: sticking of congress, moving forward, the senate needs to confirm the head of the new consumer agency. what is your sense, getting deeper into the debate, over that? guest: it is washington in august and there is not a lot going on. one of the big stories is will professor warren be nominated? some people think she cannot get

the votes in the senate, others think she will. there is tremendous support in the public for her. i think banks are scared of her, but i don't think they should be, because she is not a radical. she cares about the public and he cares about transparency in the marketplace -- she cares about transparency in the marketplace, and banks will be able to work with our. host: how long would this person serve? guest: it is a to buckle appointment of five years. that mean -- it is a typical appointment of five years. that means you are protected from political machinations. gary, ind. all right leaders have a term between a -- five at a very common -- very common. all regulators have a turn between five and seven years. it is the same way other

regulators are funded. they are not funded through congress. it is a fairly powerful position and will require oversight by the congress. host: democratic caller from mobile, alabama. caller: thanks for taking my call. one of the most powerful pieces of legislation in the regulation of truth in lending -- why is that particular thing not actually done for the consumer as a should be, and why is it not protected the weight it should be? why are you going all the way to january 2011 to give a mortgager the relief they need from wall street and these corporate banks lenders the cause of the bubble in the beginning? guest: it is a very good question.

the regulations have not been in force adequately, the once the deal with your mortgage and -- the ones that deal with your mortgage and loans that you have. but now we have an agency that will have the power to protect you. congress never passes laws -- a very rarely -- that take effect immediately. they have to write the rules to make it work. some of these things are better done by regulators. we're urging the president to move quickly to establish the agency. it could start in january. under some circumstances, it could not start until july. we would like to start as quickly as possible. it will then look at your credit card contract, your deposit account contract, your mortgage contract. it will say that this is too complicated. make it simpler, make it fairer.

host: george, independent caller. caller: good morning, thanks for taking my call. i think the federal reserve is unconstitutional. i believe giving it more power is the wrong move and that the establishment has taken us into world war iii. everybody should check out infowars.com. host: not the first time we've heard a comment about the fat in ed in that respect. guest: the consumer bureau is in the fed but not of the fed. we did fight very hard about the fed and there is a provision in the new law about how the fed uplights directors of its regional banks. you -- which we could have -- appointsfed poi

directors of its regional banks. host: we have a comment from twitter. talk about streamlining -- maybe that is the word to address this concern about below. -- his concern about bloat. guest: we have agencies that address different parts of the consumer's life. they do different jobs and they do not do some of these things well. some of the financial products you buy art barely regulated by any federal entity. the federal trade commission, a great agency in some respects, does not have the power to go after big credit bureaus that are responsible for creating credit score is that lenders decide how much to charge you for. the new consumer price mental -- the new consumer financial protection agency will be able to examine bureaus, mortgage

brokers, go after big payday lenders. that is why this is not bloat, this is better. host: 1 other tweet. guest: they would have to go to congress to pass a law to destroy the agency. my organization is non-partisan. there are many people who oppose this regulation, of both parties. we think this regulation is one the biggest consumer protections ever. if it gets going, if it pulls out of the box and start protecting the public, it will be difficult to roll it back. 80% of the public supports strong financial regulation. host: remind us what your group

is all about. when did it start, how is it funded? guest: we started in 1971 on college campuses. students hired their own staff help them with public interest projects. we have members in communities and college campuses across the country. uspirg.org was started in 1984. we look at hazardous waste issues, health care, you name it. host: the money comes in how? guest: we are funded by its citizens, we knocked on doors, we are funded by college students, and by non-profit corporations. host: our guest has been there since 1989, correct? guest: correct. i work on bank reform for 20 years in washington. in the last years we have really seen a change, because people

are telling washington that they don't like the way the system works. host: next caller, welcome to the program. caller: my comment is that there was regulation in place. the federal reserve was warned about the fraud going on and they chose to ignore it. more emphasis should have been put on enforcing the regulation and less on more regulation. my comment about the reform bill, one part in particular, and i would like you to respond to this, is if a company finds itself in trouble and is deemed to have economic crisis involved with it, the government can step in and wind it down. my problem with that is that when the government got involved with the car companies, they give priority to the union members and private investors -- their ship sank. it is going through the court

system, and this is what happens when the government gets involved. the reasons i believe the unions were given priority is that it is a fact that democrats lead with the unions because the unions give them money. that is why president obama is coming out with this wal-mart statement, they are not providing health care, because they are trying to turn unions -- it is so that they can get more funds. i would like to comment on that particular part. host: the union comment first. guest: the bush administration stepped in and asked the congress to bail out the big banks. the tarp program was established because there was a view that the big banks and the big car companies and other non- financial institutions, wall street investment houses, essentially, big insurance company called aig, all needed a bailout because they were

connected to everything else. unless they stopped the bleeding in the financial system, a financial problem would have grown worse and worse. i don't have an answer to you as to whether private investors or workers deserved more of a bailout or less of the bailout. but the government's role is essentially to protect the economy and they did that the best they could. there are a number of different cases and the courts addressing these issues and whether or not the ownership or executives of these big companies should pay. on the first matter, in 1994, the federal reserve was given authority by kind as to regulate predatory mortgage loans. -- given authority by congress to regulate predatory mortgage loans. at the peak of the collapse of the financial system, the federal reserve did not take action until 2008. that is why we need a new consumer protection bureau. host: texas, a democrat for ed

mierzwinski. caller: i am calling to thank you so much for advocating for 20 years -- oh, my gosh, i wish we had more people like you. i also have a question -- do you think the president obama would not appoint elizabeth warren after all of us have been signing petitions? i am sure hundreds of thousands of people. she has support right across the board of everyone. i am hoping that he appoints her sooner than later. she is obviously, obviously one of our greatest warriors in protecting us. thank you so much for everything. i am learning a lot this morning from you. host: the fact is, she does not

have support from everyone, as she pointed out. guest: i think the issue is that in the senate, 60 votes matter, unfortunately. people need to contact their if they support professor warren for the job. the banks hired lobbyists and spent billions of dollars to defeat this consumer bureau and other reforms in the agency. we had committed the and supports organizations that formed a coalition called americans -- community and civil rights organizations that form a coalition called americans for financial reform. host: if not ms. warren, who? guest: the names you hear most often are assistant secretary of the treasury michael barr, an

architect of the financial reform plan, eugene kimmelman, who has been with the department of justice for a couple of years. the president has not indicated which one he is for. host: raleigh, north carolina, independent, welcome. caller: i would like you to comment on two questions. first of all, you are talking about the credit bureau. i think the government should start everybodyand out fresh and pick up the economy. no. 2, you mentioned automobiles awhile ago. when north carolina used car salesman can charge and do what ever they want to come our government lets them do whatever they want to do. i would like you to comment on

that. guest: one of the things that was not in the consumer financial protection bureau's is caroductections dealers. but at the last minute congress gave the federal trade commission expanded authority to regulate car dealers. carl lenders will be under the new bureau, but on fair car dealer practices are the no. 1 consumer complaints to a lot of the state and federal agencies. we hope that the new ftc power will go after them. the pentagon has been a strong supporter of going after card dealers because they heard military families and that h -- they hurt military families and that hurts military preparedness. we all wanted the car dealers to be under the bureau, but we get them under the ftc. because the public supported

this bill, after all the delays and pernicious amendments were done away with on the senate floor, interestingly, the bill got stronger in the joint conference committee. that rarely happens. at the last minute be gained the power of the securities and exchange commission to give consumers and investors more protection against broker- dealers who mislead them. we gained the power to ban mandatory arbitration for the arbitration clauses in consumer contracts. credit scores will now be disclose to consumers whenever you get a denial or pay more for credit, you get a copy of the credit score that was actually used. that is a big win for consumers. merchants got a big win in the bill. everybody does not realize this, but when you use a credit or debit card, the banks collect two cents on average from every transaction.

small-car gasat stations and small convenience stores and even big stores, like big department stores. there is an opportunity for consumers to get discounts. host: back to the credit score issue, which pokes get explanations of why they were denied credit with -- what folks get explanations of why they were denied credit? guest: you already get the explanations of why you are denied credit, but you did not get a copy of of the score. for years we've been fighting to get you a copy of the exact report that the merchant looks out as well as the score. people are often encouraged by the bureaus and the advertising to buy credit monitoring services. the scores they give you with the overpriced services are not

the scores that the lenders use. host: linda, democrat, good morning. caller: in the house version of this bill, there was a paragraph that explicitly prevented the consumer protection agency from making any regulations at all regarding usury. i assume that made the final bill? guest: usury limits are not repealed by the new law, you are correct we had a situation where there is basically no federal usury ceilings and in most states with bank-friendly -- and it moves to states with bank friendly usury limits. caller: the consumer protection agency will not be able to do -- guest: they will be able to

regulate the payday lenders, trust me on that. they will be able to force them to provide products that are fair to consumers. host: how might they do that regulation? guest: we want to see what the best regulation is that comes up. but pay date lenders typically offer short-term loans for a week or two at an interest rate of over 1000% in some states, and they allow you to roll over those loans. there are tremendous problems. we can cap the way that payday lenders impose fees and use tools to go after them. host: one of the major things being talked about is the writing of these regulations over the period. guest: the first step was passing the law, the second is implementing the law, and the new bureau may take effect as early as january and maybe as

late as june. some regulations required by congress will take two years. my organization is actively involved in meetings at the treasury and we urge the regulators to get rid of misleading and unfair bank practices and let the banks tell consumers the choices and let the consumers pick the choices and let the banks make money out of your choices and not -- make money on a fair choices and not gotcha fees. host: with the state governments and the connection between the two -- guest: the new law reinstates the idea that we have a federalist system and that state attorneys general and state legislatures played a role in protecting the public and that the federal law serve as general as a floor of protection. -- serves a generally as a floor of protection for we wanted to make it stronger in the dynamic, but we did well pushing back

what has been happening over the last 10 years. the three things we look at is strong federal laws with a strong federal enforcement, state enforcement, a private rights of action. we accomplished things in this law that improves the rights of consumers to go to court and the rights of attorneys general and congress and the federal government to protect the public. host: syracuse, new york, joe, independent. caller: good morning, guys. what is your opinion of the conservatives and blaming the poor for the country's financial crisis? that is it possible that the bush administration's strong army -- is it possible that the bush administration's strong army of the bank's -- i think that is why they brought down eliot spitzer her, because he was about to expose them.

guest: there is a lot of trials that point to money and influence peddling -- trails that point to money and influence peddling. we had an unfortunate supreme court decision that increases the power of corporations to influence legislation, something called citizens united. you can look up at a spread the solution here is to have a stronger -- frederick regulation you can look -- >> that k -- you can look up that case. the solution here is a to have stronger regulation, to give consumers the opportunity to build assets. whether or not previous administrations demonize the poor, we have an agency that does the job of making sure that no matter how much money you have, federally insured and non- insured companies will have to offer you products at fair price.

there are tremendous benefits to the public no matter your income class in this bill. host: connecticut, good morning. caller: as i understand, there are seven existing agencies that will be incorporated into this new agency. each of these seven agencies as a hierarchy. the new agency does not need that many people. i would like to know how many people we can get off the public dole when this happens. guest: i don't have an answer to that question, we are only taking people from those agencies that regulated consumer laws. they were under the people who protected the banks. they will be in an agency that is only responsible for protecting the public. we'll be end up with a smaller government in the end -- will be end up with a smaller government

in the end? we will certainly end up with better government. host: next caller. caller: good morning, c-span, and thank you for taking my call. in reference to a previous caller who was hoping that ms. warren would be elected to the board by the president, i also hope so. but this is the moderator -- you made a comment clarifying the fact that not everyone wants to see this happen, and you are so bright. i wish -- this same thing -- and you are so right. i wish you would do the same thing when people call and say that everybody is against the president and his policies. you allow that to stand. president obama was elected bite mandate, a lion's share of the majority. -- by mandate, alliance share of

the majority. but you never clarified that everybody does not think that his policies are bad, everybody is not against him. you do not clear that up. they act like that. the only poor people who drove this country down and pis poor black people and hispanics, when there are poor white people in this country -- host: let's go to cleveland, where elaine is on the republican line. actually, let me make sure i've got them here. got you now. caller: you are talking about the payday loan companies and how they want to regulate them. can the government -- is it my understanding that the government can step in and tell the companies that they can

limit the amount and the year that you can get? likeat is true, isn't that big brother stepping in and telling me how many loans i can get per year? and most of the people in the agencies will be taken for the new agency, most of these people will be transferred to the new agency and you said that most these people did not do a good job in those other agencies. isn't that kind of stupid in the government to send people in these seven agencies to the new one, where they knew in past experience and history that they were not doing their job in the first place? guest: that is a fair question. i meant to say that the leaders of those agencies failed to instruct their employees to enforce the consumer laws, in fact instructed them not to.

we are confident that the ones who moved over all to a good job or they will not be at the new bureau -- the ones who moved over will to a good job or they will not be at the new bureau very long. i don't think it is big brother to point out a practice that is depleting to consumers. the pay date lenders are people .ike a gambler bets gets hooked by the time he paid $20, $20, at $20 again, you borrow $100 and paid $200. the government has a responsibility to regulate such unfair practices. host: baltimore, maryland, independent. thanks for waiting. caller: i have a couple of quick questions. i am concerned that this new

consumer agency will just basically be watered down and it may not enforce the law the office of comptroller currency and the federal trade commission stores complaints and the database -- stores complaints in the database, and i hope that this new agency will not do that. when someone has a complaint, someone will take the complaint and it will be fully investigated and the consumer laws will be enforced. host: maryland, we are down to our last minute here. guest: that is exactly an important question. we are asking the agency in our meetings with treasury to make sure that consumer complaints are investigated on behalf of individual consumers, that the da