november elections. after that, a conversation on the federal deficit with matt welch. later, a look at banking regulations and oversight, bill swindell from "the national journal" is our guest. this is "washington journal." [captions copyright national cable satellite corp. 2010] [captions copyright national cable satellite corp. 2010] among likely voters republicans have a six point edge. front-page of "usa today" out with a new gallup poll shows a huge enthusiasm advantage for republicans.

go to c-span.org/politics to find out which candidates we are covering and wind. to an end to our prime time coverage of campaign -- two in 2 hour prime-time coverage of campaign 2010. a poll on education -- the percentage of families who plan to make little or no contribution to college tuition has increased during this economic downturn. we want to know from all of you -- is paying for college priority? we will divide the lines between parents and students. here is "the washington post" with that story. it says that gallup found the increase in those who plan to make little or no contribution to tuition increase, especially among hispanic families.

by the way, we will be covering that event. it starts this morning and goes into the afternoon and you can go to c-span.org for our coverage. so, are you paying for college or do you plan to pay for college? texas. a student. what do you think? caller: i am unique. just looking at the statistics you had. i am a returning student. i came in in the 2006, texas a&m, and i can definitely tell you my tuition has gone up.

in 2006, it was about $3,000 for the semester -- sorry, for the year. almost about $4,000 for the year. now it is about $6,000 for a semester. i don't know what the percentage of that is, but it is a $2,000 increase -- or a $4,000 increase. my parents helped me pay. but i am still waiting for my financially. but more than likely i will have to take all loans of my own and have my parents support on the side. host: do you think that your parents had to contribute less because of the economy? did they plan to give you more? caller: not necessarily more or less thing. as far as it goes, it was the same amount. what i am trying to say is that the inflation rate of what we

are plate -- paying has gone up. it may be more in the numerical value but actually the same amount. host: i think i missed that part. you say you are returning. why did you return? and how old are you? caller: i am 23 years old. i came here when i was 19. to be quite honest, i partied too much and got into too much trouble. i left. i matured through those years. lost my job, got evicted, and decided to go back to college because i need to get this done so i can have a better job in the future. i came back here. i was on academic probation but i am getting off on that thankfully this semester. i am proud of that.

host: what are you majoring in? caller: political science major and minor in philosophy and i plan on going to grad school to pursue a law degree at the university of texas'. host: appreciate a phone call. lexington, ky. jane on the line for parents. is paying for college tuition a priority for you? caller: yes, it is a priority. my problem is, i've got two daughters who are four years apart. one is a sophomore at university of kentucky and the other is a sophomore in high school. two years ago when this market meltdown happen, my daughter's college plans lost about 50%. i am having to shift money from the retirement account to pay for college. i assumed it would have all been paid for. host: what about student loans?

have you decided against that? caller: no, i haven't. but i see too many kids coming out of college with a lot of debt. when they get a job, their priority is paying on the student loan. it makes the life style for them very difficult. host: the article talks about that this is reverberating in washington, this issue. i wondering what you would like to see your elected representatives do on this issue when it comes to the cost of college tuition. caller: i would like to see them kind of keep a cap on it of some sort. the universities -- our public universities have been increasing about 5% a year. from four years ago, the increase in college tuition has skyrocketed really.

and the kids that are out there having to work and its total loans to pay for their college education because their parents can't afford to pay for college, it's terrible. host: why do you say that? you were talking to talk about -- starting to talk about that. how difficult it is when you graduate with a lot of student loans. caller: i have seen stories where people graduate from college and i have 40,000, 50,000, $70,000 of student loans. that is like having to pay a mortgage even before you start to pay for a place to live. and the job you get, certainly they will not come out of college making 100 grand a year. host: talking about whether paying for college is a priority. we divided the lines by parents and students.

trenton, new jersey. linda on our parents line. what are your comments on this issue? caller: i have one border that i wanted to send to college -- daughter. all my life it was my goal. but i ended up losing my job over a year ago. now the money that i have for her, i had to use it to provide my own expenses and living. i was just down to the unemployment office yesterday trying to get some assistance for going to school, and everything i wanted to do for school cost so much, i don't know what direction to go. i'm lost. host: you are trying to go to

school yourself? caller: yes. host: and you want to send your daughter to school. what school? caller: she wanted to be a pediatrician. she wanted to go to princeton. we talked about it. now she decided to go into the service so they can help pay for her school. host: hudson, new hampshire. good morning, grace, on the parents line. caller: yes, i have a student who is in college right now and i pay for his first two years and now i am making him pay for his second two years. even with him working full time six days a week during the summer he did not make enough money to pay for one semester of college. and he is going to the cheapest college here, which is $6,000 a semester. he buys his books on line. in order to pay for that he had them shipped to him from thailand and places like that in order to make it affordable.

i went to school in california, and even now -- i went to school in california, worked part time and i came out with no student to death. a he can't work full-time and pay for college. host: what about living expenses? caller: he lives at home. host: what do you want washington to do about it? caller: i want to look at what colleges are paying for. when i can only make a 10th of a percent on a savings account, and college tuition goes sky high. it his first year, -- his first year, when the economy went south, they charge me within two weeks, they said it would be an extra $800. if if the economy improves, we will give you a refund. sure. yeah, with less than a month before

school started. they sent a note out. host: when you walk around campus or drive around the campus, what do you see happening that you think they are spending money on? caller: not particularly this campus but another campus in new hampshire, within the last four years they made the building much nicer, they redid the library, did all these kinds of things it and just hiked the price up to the students. when i asked them why are you spending so much money on these capital improvements, the answer was, well, we have to attract better students and the way to do that is to make fancier cafeterias, fancier libraries and all these other things. host: we are talking about whether paying for college tuition is a priority during these economic times. it is a headline in "the washington post" this morning.

michigan. mark on our line for students. what is your situation? caller: i was a student before i refuse to take out any more loans. it is sad how we created a system that can prey on the poor

that just wants to get an education. it is very sad. we've got to look into this government system that we created to help these people get an education. they are making a whole lot of money. that is why i don't go to school anymore. host: how old were you when you dropped out, what year? caller: at 30 years old i finally was allowed to go to school. i was making a 4.0 grade point average. i asked for a scholarship, if there was any other way i could get help. the next day i got a letter and was kicked out of the university for bothering the teachers, they said. host: we will go to wisconsin. james online for parents. caller: good morning. some people have already stolen my thunder on this issue. i put a daughter through college and my wife and i, we saved our money, but that was in not

within the first two years. we are a middle-class family. when my daughter graduated, the job was an entry-level position. she wasn't making the money to pay back her loans. she had about $20,000 worth of loans. so, i am paying that for her. she is my daughter, i love her, and i will do that, but the system is screwed up. middle-class people can't afford to send their kids to college. host: was it a four-year college? caller: it was a four-year private institution, which was a little more expensive, granted. she did not go to the state university, which would have been a little cheaper, but not much cheaper. host: do you think it was worth it? caller: definitely. she got a great education. host: did she get a great job from that education? caller: she has a job she loves, put it that way, but her salary does not pay her enough to allow her to pay her loans back.

you know, middle-class people work hard. there should be a way where we can send our kids to school and be able to afford it in this country. host: what you think about two- year colleges, community colleges, did you consider that? caller: my son went to a two- year college, a technical college, and he is doing great. he is making more money than my daughter. he is a machinist/weld. -- welder. host: this is "usa today" this morning. it says on monday president obama announced an initiative in which companies, labor unions and two-year colleges will collaborate to improve job training and work force development. we are going to be covering that

event today, go to c-span.org. it says here -- among the companies that have already signed on, mcdonald's.

we will go to new york. on the line for students. good morning, dakota. you are on the air. is it a priority to pay for college? did your parents help you out? caller: i had to flip the bill completely myself. i came from a humble background. i had just completed four years at a private liberal arts institution and i am now continuing my degree at a seminary. i am going through it financially. i don't have insurance. and i love president obama but he does not seem to be helping folks my age. for me to get insurance, i have to go back on my parents'

insurance, and they don't have any. i would like to be a grown person. host: how old you -- are you? caller: i am 22 years old. host: joran, on the line for parents. caller: good morning. i would like to comment on a couple of things. my home country -- seven years ago, which i took my daughters. my one son i had to leave here. they both went to a university in another country, in great britain, which happens to be absolutely free. i come here just recently and i find out that my older son would like to go to college. so we went just last week. i was astonished at the cost involved that a child has to go through. and the parents, to put your

kids through school year. -- here. quite frankly, i would never bring my children back to this country to put them through the school and system because it is blatantly obvious that it was run like a business. back in britain, the experience was totally different. it was on an academic level. it was about the children, seeing if they were qualified to go through a schooling system and so on and so forth. host: fort wayne, indiana. mike on our parents line. what are your comments or thoughts on this? caller: certainly education is critical. it empowers families and individuals and i can't say enough about it. what i want to talk about is one method of funding in education is the new gi bill, called the chapter 33. it is an enormous benefit to correct military people.

but what i believe what to talk about is that benefit can be transferred -- but what i really want to talk about is that benefit can be transferred to their children. it provides entire tuition. $1,000 book stipend and a monthly living stipend of $1,500. host: it can be transferred -- does that just mean the white and the kids? caller: that is correct. it would go to the service member's dependent. it is a wonderful thing. let me explain a real disparity. you would have to be in service as of 9/11, the lawmakers are hellbent on that date to allow the new malls. someone who is permanently disabled or died in service, their children qualify for

another chapter, chapter 35. that amount that those children get it is like $950 a month. that is it. so, there is a disparity. let us say the uss cole, 70 sailors died on that in october of 2000. let's say the children of one of the sailors, that family is struggling. maybe one parent trying to raise the family. the va provides a provision -- they get $950 a month. host: what is your experience? caller: i am a permanent disabled veteran, a veteran advocate, so i am familiar with this thing. i am not able to work. service connected totally disabled veteran. but anyway, the disparity is it you could have a child whose

parents lived and they are getting significantly more money and they may be sitting across the table or a class from someone whose parents died in the military, providing service to our country, yet that job gets significantly less money. it is currently being looked at in congress. however, the provision for pre- 9/11 children are veterans is not even being considered. it is a tremendous disparity that i certainly hope our lawmakers look at and that society looks at as a whole. i think those to give their lives in service to their country should be put on the top billing. host: we will go to the student line from reno, nevada. caller: thank you for taking my call. i am 39 years old. i just started my first semester back in school. my main concern is with the

outcome of the midterm election. i am hearing talk about, the gop talks allot about cutting entitlements and all kinds of funding and spending and one of the things they are talking about is cutting the pell grants. i worked in a blue-collar job up until read about the time of the 2008 in action and was laid off -- right about the time of the 2008 election and i was laid off. nevada has the worst unemployment in the nation. it doesn't seem to be looking up. my only hope is to stay in school. so come i am concerned that this funding is going to be cut. maybe i would tell people to, maybe if they are concerned about continuing in their education, you might want to

consider the way they vote. and to let people know, maybe some of the parents who are calling, i got a full grant from fafsa.com. host: we will keep talking about this issue for the next 20 minutes or so on "washington john." but i want to give the political news. "the new york times" this morning talks about candidates taking the stage for a crucial debate season. many of the candidates in these hotly contested races will be squaring off in debates over the next month. we will be covering a lot of them on c-span. if you go to c-span.org /politics, you will see the upcoming event, on the web page, what the dates we will be covering them. we will be airing them at night. our prime time coverage kicks off this week. it will be around 8:00 p.m. eastern time, monday through friday. christine o'donnell, senate

candidate, tea party candidate, republican running in delaware for joe biden's seat has a new at this morning. >> i am not a witch. i am nothing you've heard. i am you. none of us are perfect, but none of us can be happy with what we see all round us. politicians who think spending, trading favors and back room deals are the ways to stay in office. i will go to washington and do what you'd do. i'm christine obama, and i approve this message. i'm you. host: this morning on "washington journal" we are talking about whether paying for college is a priority. alexandria, virginia. caller: how are you doing? i used a prepaid tuition program of the state of virginia. my daughter went through four years of college. average four -- $4,000 a year.

what many people think one of the best schools of the country. i was one of four children myself. for my parents, education was an important thing. all four children have gone through college. my parents could afford to pay only because they made it a priority. if you make it a priority and you instill in your children and entrepreneurial spirit, there is a way to have accomplished. right now the school a daughter went to is tend thousand dollars a year and i only paid $4,000 a year. i prepaid the whole amount when she was four years old just to get it taken care of and it turned out to be a phenomenal investment financially, but more phenomenal and education she received. , to share that that can work. you have to -- i just wanted to share that that can work, but have to instill that

entrepreneurial spirit. host: what is she doing now? caller: three-quarters of the way toward her master's degree in education. full-time teacher and a working on the side. she is paying for her master's degree. because i honestly believe that she will probably inherit millions of dollars of that is not going to be a question but i want her to do everything for herself now, because the more she can be independent, the better off. host: will she be a teacher? caller: she is a teacher of right now. she is teaching while picking up the master's degree also from the university of virginia. host: the thing she will continue to be a teacher? caller: i think she can do anything she wants to. she was the editor of for college paper, so she has a bright future as long as she keeps herself balanced. but that is what you try to do for your children, you try to keep them balanced and pass on an entrepreneurial spirit. i am not sure what she is going to do for the future.

she was -- it is teaching now and her mother was a 39-year teacher. host: good morning, tiffany. caller: thank you for having me on. host: how old are you? caller: i am 28. --on't think it is necessary necessarily pretty to pay for college out of your pocket. there are a lot of resources that are out there. people don't seem to know they are out there. there are plenty of websites -- scholarships.com. myself, i am pursuing several scholarships. i work part time. so far i have been able to pay my way through college. it is not necessarily a hard thing to do. you just have to work hard. host: the front page of "the washington times" this morning. it says many of the candidates

running for senate seats on the public and side are vowing not to have earmarks if they are elected. the front page of "the washington times." also in the papers this morning, it shows that those who are spending most of these midterm elections, which groups. the national republican congressional committee leads the pack, followed by american rovesroads, set up by karl and ed gillespie. you could see the list of who they are contributing to. it new york. peter, on the line for parents. caller: i do think it is very important to pay for college. but unfortunately, my care -- my parents, they came from italy many years ago. it was very difficult for them to pay for myself, so they went out for grants.

it would be great if there were other grants for them and that time. but they were struggling, paying bills. i am fortunate enough i was able to get paid for at that time. host: massachusetts. sandra, parents line. caller: in my case, my son went to college on grants. he worked his fanny off. today he is in the service, and master sergeant in charge of men and women. he is a teacher. in the fall, he will be teaching 500 men and women in pharmacy. i am very, very proud. he's got national honor society and presidential citations. the child that went well. thank you. we had nothing. he worked. thank you.

host: a little bit more about this event at the white house talking about two-year community colleges. it says the presiding over the summit is jill biden, wife of the vice-president. there'll be a competition to award $500 million to fund a community college and a career training initiative. oklahoma city. nancy on our line for parents. it is paying for college a priority? caller: this is a grandparent. and as one of the other callers said, we are trying to instill

an hour three grandchildren -- in our three grandchildren, a thirst for knowledge so they will be able to get into the college of their choice. we are putting aside as much as we are able to help them in the future. we also are lucky that we are part indian, being from oklahoma. and our indian tribe takes most of their income money and gives it towards students going to college. host: putin, texas. susan on the line for parents. caller: good morning. i wanted to caution all of the parents that are watching this morning to be careful in their voting for their candidates who are running. our son is a medical resident, and he was in medical school

during the six republican bush years. and the programs were so drastically cut back at my husband and i, even though he had been a good student in college, he had to -- we had to co-sign for all of the loans. most of the loans were predatory. limited loans during his medical experience. now our credit is damaged. to help but go to medical school, which we were happy to do. the candidates are important. host: we will be talking about that. in about 10 minutes, debbie wasserman schultz, a democrat from florida, will join us on the program. she is the vice-deputy whip in the house and has a leadership role at the democratic national committee as well. we will be talking about campaign 2010 coming up. but first, here is a tweet.

if you want to join our conversation, go to twitter.com /c-spanwj. caller: i was telling the died there at seek debt -- c-span that my daughter went to college at indiana state with a government grant for teaching. and my other daughter went to a junior university for nursing and they were both government grants. but in a way, our health care plan, them wanting to spend billions of dollars for health care, wouldn't it be kind of smart for people who have the 4.0 grade level to get grants and then work off what they are doing and use it as a pool for

universal health care in this state? whatever state they come from -- and the university gets paid, to where it stimulates that economy in that state. and then they can simply go out into the private sector or stay on their roster and be part of an emergency health care for people who are a little lower. it is all up to the politicians, what needs to be done. but i appreciate the help for my girls but as far as our health care plan, it would be better to spend the money and get it that and stimulate the money instead of losing it. host: ok. we will leave it there. talking about whether or not paying for college is a priority. in other news, this is "the new york times" this morning. excuse me, "the washington post ." u.s. transportation system is failing.

it says that in a report released monday -- new york on the line for parents. good morning. caller: i going to college on scholarships and grants. i would have never made it because my parents did not have any money at all. in fact, they came from a welfare background and i was able to go to college and now i

am self-sufficient and i am an advocate for college. host: i am going to cut off now because you need to turn the television down because otherwise there will be feedback. "the new york times" editorial is about the moratorium on drilling in the gulf coast. westhampton, new jersey. , on our line for parents -- tom on our line for parents. caller: i wanted to make a comment about student loans. sallie mae used to be an

affordable program to help finance colleges. now, sallie mae, for instance, with my daughter, she goes to the school where she got three- quarters of her school paid for with a scholarship because she is a good student. however, the $12,000 remaining went under sallie mae. the sallie mae, with interest at 13%, 14%, 15% of interest of the course of years she is in school means that the interest is more than a mortgage. so, the cost and up being the monthly interest just on the loan out well over $200 a month just in interest. i think there should be a better way. when i went to college, sallie mae was like at 4% or 6%, not at this 13%, 14% interest.

host: that was tom from westhampton, new jersey. "the new york times" yesterday writes about the supreme court's opening day. if you want to know what is on the docket, go to c-span.org and go to the video. -- video library and you can watch yesterdays segment. his headline this morning --

oak ridge, tennessee. on the line for parents. caller: i am a grandparent. thank you for taking my call. i think getting educated is an absolute priority. it is one of the most and pour in things you can do. if you are a member of the lower class, as my mother was, or a member of the middle class, as i am, it is what you have to do to lift yourself by your bootstraps. host: are you helping out your grandkids? caller: my grandkids are too long -- too young to go to college but i am saving for their education. i would like to make a public policy comment. i think what is happening to the cost of education is just part of the phenomenon of the growing divide between rich people and poor people and the pressure on the middle-class. the middle class is the engine of the economy and the engine of democracy.

the consequences of what we are doing in education and other parts of our life, the divide between rich and poor and the elimination of the middle- class, in the long term is a disaster. host: in political news, rahm emanuel was in chicago on a listening tour. "the new york times" has a piece about it. listening, it turns out, was not easy. new york.

john, on our line for students. caller: this is coming from a 47-year-old student. i agree with the last guy 1000 percent. i just returned to school for a master's degree in social policy. if you don't go to school, you are going to be stuck and you will never even make the middle class these days. there was a time when uneducated people can get a job and make it to middle-class because we had the jobs. but we don't have those kind of jobs. anything you have to sacrifice, the hard work, anything you have to do you have to get through school. if you don't go to school, there will be the have and have-nots. host: a few headlines before we wrap up this morning segment on

whether or not paying for college is a priority. here is "the new york times." that's part of an issue in bob woodward's new book "obama's wars." he will be our guest on "washington journal" this friday. he will be joining us on friday, 8:30 until 9:15. nato convoys besieged in pakistan.

and the front page of "the financial times" this morning, the headline is a call for a new global currency agreement. coordinated rebalancing approach. some have said there is a currency were going on. kentucky, on the line for parents. is paying for college a priority? caller: i have something to say. my social security pays for everything. i am very upset by a lot of things. you know, jobs, my social security, and all of the problems going on in washington. we are going the wrong way about everything. we need to get to the right path. we need to start helping israel out. start listening to people who are in the right.

our problems of washington, d.c., and i am one of the people that does not listen to anyone else talking about this and this and that. this has gone too far. and all of you people just want to keep running that now and need to shut up and sit down and drank some coffee and wait up. everything is going to tell. -- hell. caller: good morning, i'm calling from california and california has an excellent system where they have community colleges that are very inexpensive. anybody can get into a community college. and once they are in the community college and a graduate, they are guaranteed spots in the state university of or the state colleges. it is really a wonderful way for people to get an education that is not so expensive. host: what is your experience with community colleges? caller: let me tell you this. both of my children went to

community college. my son went on the culinary track and he is working as a chef, but is still wants a four- year degree because he wants a business degree so he can eventually owned a restaurant. my daughter, she will be graduating from the university of california in december. i feel it is a great bargain and they are getting a great education. secondly, my experience with community colleges -- i am from new york. i went to a community college in new york and then went to the university. in new york, community colleges are much more expensive than in california. my husband not long ago was unemployed and he went to get some extra skills. at the community college he took some courses in website design and things like that to refresh his skills. it really did help him. i am in agreement with president obama. the community colleges are a

great way to refresh your skills or to lead to another place. host: how much does it cost in california on average? caller: i do know. one credit at a community college is about $18. what is it, 12 credits, $200 for a student. books are usually much more expensive than actually a semester. at the community college level. host: that was peggy from sacramento, california. calling in on whether paying for college is a priority. when we come back, we will talk to debbie wasserman schultz, a democrat from florida and vice chair of dnc about campaign 2010.

[captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> the supreme court has started its new term. and you come learn more about the nation's highest court with c-span's latest book, "the supreme court." conversations with active and retired justices, reporters to cover the court and attorneys to argue cases there, revealing unique insights. available at hardcover -- in hard cover or view by a book and also e-book. >> we provide coverage of politics, public affairs, nonfiction books and american history. all available on television, radio, on line, and social media networking sites. find out content any time through c-span video library. and we take c-span on the road with our digital bus local content vehicle, bring in resources to your community. washington your way. now available in more than 100

million homes. created by cable and provided as a public service. "washington journal" continues. host: we welcome back to the table representative debbie wasserman schultz, democrat of florida. a few weeks before the midterm elections, it is getting busy. you are in town to do what? guest: doing some meetings and trying to pump some folks up for the election. it got a lot of polls out. gop retains edge -- host: gop retains edge as elections near. democrats cut the lead but it still shows republicans have a six-point lead on who they faber. guest: that is the generic ballot. which is what we all need to understand and remember is that

generic members of congress are not on the ballot. you have real human beings who have been serving their districts and working hard. i am confident democrats will hold the majority because this election is really a choice. a choice between the policies of the past, backsliding toward the bush era focusing once again on tax breaks for the wealthiest you as opposed to small businesses and middle-class folks or focusing on deficit reduction and making sure that we don't spend ourselves into oblivion and drive the economy over the cliff. they have repeatedly said that they want to return to the exact same agenda. so, our members are talking about that and have been serving the district's wealth. host: you predict the house will stay in democratic hands. as vice chair of the democratic national committee, you must have access to the numbers. what is your prediction? what is your prediction of how it looks? what do you see as your majority? guest: clearly, as any majority

party after the presidential election, faces an uphill climb. you later on that the fact that people are still struggling. that we are fighting our way through a recovery that is lower than people would like. definitely facing an uphill climb and i think democrats will definitely lose seats. the republicans need to win 39 seats, but probably need 45 or 46 seats because we have seats that we will take from them. i think we will shrink back closer to the 2006 majority. that was around 16 seats, giver take a few. i think we will probably be a round that point. host: in the gallup poll, from page of "usa today." gop voters are more fired up, they have a huge enthusiasm advantage, republicans do, heading into november. representative john boehner was on hand until last night and he said democrats and not going to show up because they feel betrayed.

guest: i think the leader is engaged in quite a bit wistful thinking. that is what he said leading up to our victory in pennsylvania 12 paired the same kind of polling predicted the press democrat enthusiasm. and republicans would supposedly take back the seat for the republicans. we beat them by eight points. even going into 8:00 that election night he was still predicting a victory for their candidate and it didn't happen. because we have a ground and field operation that is second to none. we know how to turn out voters. dnc just had a record month in september, $16 million. that will allow us to have resources to put into even more midterm races. talk is cheap. we will see what happens november 2. host: of the 16 million -- could you give us the 5 top races you will put the money toward?

guest: there are 43 front-line members, plus a variety of other members that are in difficult elections. it is hard to pin down the key five. because our members actually have sustained a really aggressive pace. if you look at this point in previous election cycles, depending on who was in the majority, yanking money and abandoning races and giving up on members that were supposedly lost, and we have not been in a position to do that yet because our members are on the climb, on the upswing. what the numbers are showing is that democrats are waking up, they are realizing what the stakes are, and quite frankly, independents are. host: whether or not democrats show of november, the vice- president recently said the democratic base, the liberals, need to stop whining and look at

what the white house and congress has passed. are you concerned at all that he is picking a fight with the base weeks before the election? guest: i have spent a lot of time around the country in support of my colleagues and spent time in our progressive states, as well as a swing districts. the base is really solid. they understand what is going on. a lot of people who are progressives -- i am progressive -- but a lot of folks are concerned that they want to change factors. -- faster. rome was not built in a day. we accomplished landmark health care reform, finally getting a handle on wall street and making sure the fox was not guarding the hen house, getting a handle on deficit reduction. we are trying to calm the base down and ask them to be a little more patient and about the stark choices on election day.

host: what will you be doing leading up to the election? guest: i will be running -- i am running for reelection myself. i spent the afternoon walking door-to-door in a precinct in my district. talking to seniors and young families. also spending time all throughout the country helping colleagues. it's going to get your thoughts on how expensive this midterm is. -- host: i wanted to get your thoughts on how expensive this midterm is. you yourself a raise $1.5 million. it you are running for reelection, but it looks like you are going to win handily and you have not had a strong competitor. why is it someone like you who runs in a democratic district needs to raise that much money? and are you turning around and doling it out to some of the more vulnerable colleagues? guest: i have been in office 18 years. i am running for the 10th time

for legislative office. i have a healthy respect for my constituents who can take out just as they put you in. you never take them for granted. if i am on the ballot, i am running a full-blown campaign and making sure my constituents know what i have been fighting hard to do on their behalf. that having been said, my constituents also care very deeply about this direction -- the direction this country is moving in. they are supportive of me moving of the country and making sure we can implement an agenda that they care about. so, remaining in the majority of something that concerns them as well and that allows me to be more effective. i have made plenty of contributions to colleagues across the country. host: the bush tax cuts, a big debate before congress left town. here is "the financial times." the stalemate threatens to stall the financial recovery. economists say not having any votes at all could be a real threat to what is happening to our economy.

it says obama's promise to end tax cuts for the rich unraveled, saying his plea last week was unheated -- unheeded. it deprives democrats of the clear election talking point about republicans holding middle-class tax cut hostages. republicans want to extend the tax cuts for all americans and democrats want to exclude the top 2 percent. this obvious conclusion is not -- is that pelosi did not believe she could get large enough majority of democrats to vote the way she wanted. guest: actually what it was is that the senate republicans in particular, with their republican colleagues in the house as well, they did hold up the middle class tax cuts hostage. making the middle-class tax cut permanent -- we knew that would not happen in the senate.

mitch but -- mitch mcconnell made it clear. he insisted on tax cuts for the wealthy. it would have been a contentious debate. we had a lot to accomplish with the remaining time we had in the house. and to spend time battling over whether we would extend a tax cut for the wealthiest few as well in the house, that is a lot of heavy breathing in "the financial times" to suggest the recovery will be delayed a few weeks until the land back, when we have an opportunity to take those tax cuts up. i think that is a bit of hyperbole. host: you are also a deputy whip for the house. what will be on the floor? guest: what will most likely be on the floor, in the house, that we permanently extend the tax

cuts for middle-class, working families, small businesses. we have already given 95% of americans a tax break, 97% of small businesses a tax break. we want to make those permanent. the tax breaks for some of these millionaires from the extension of those tax cuts is fiscally irresponsible. yet, republicans continue to talk from both sides of their mouth. they talk about spending and, suddenly, deficit reduction. for them to have suddenly found this on deficit spending is disingenuous. host: extending tax cuts for the

lower and middle class permanently also does a lot for the deficit. you cannot sustain it. guest: over all, it does add a huge amount to the deficit, but if you are going to take a fiscal hit a from those tax breaks, we should provide a break to those individuals who we know that will take a windfall from the tax break and put it back into the economy. remember, we are talking about income over $250,000. we are not suggesting that we take away completely tax breaks. just the income over $250,000. frankly, those individuals are not taking that windfall and putting it back into the economy. they are putting it into their already-fat investment portfolio. host: first phone call. gene, go ahead.

caller: first of all, it is the people's money. he mentioned it was a generic race. well, in california, there have been nothing but negative adds by boxer. you also said that you are going to do research on these candidates and avoid personal attacks. host: do you have a response? guest: not really. i think we're making sure our members are pointing out the contrast from the people who are asking for their vote, those who are suggesting, like barbara boxer, who are already fighting hard on behalf of her constituents in california -- we

need to compare the record. what a lot of people described as negative campaigning is really comparing and contrasting the candidates. barbara boxer has a fantastic record. i have debated her opponent, carly fiorina. we can always agree that she is running a equally, if not more so, negative campaign. host: next phone call. caller: i am a democrat, and i will be voting for the democrats in november. i am urging all the democrats to get out and vote. if people had voted for al gore, we would not have been in this situation because they would not have had george bush. anyway, i want to thank you for health care. i am one of those people who could not get coverage, because

i am a cancer survivor. keep up the good work. please defeat the republican tea partys. host: are you hearing from democratic candidates in your state about this bill, what are they saying? guest: i will be voting for tim conaway, because i have ron paul here who is out of his board. he wants to put a $2,000 copiague on medicare. he wants to fight the civil war all over again. -- co-pay on medicare. i am here from tim conaway, but they need to be more vocal on their agenda. they have done some good things. they corralled wall street. ms. wasserman, could you please

tell them to talk about what the republicans have voted no on? we tried to get a bill through on the outsourcing. host: i think she was referring to jack conway, running against rand paul. i have consistently heard our members talk about health care reform, the major record of accomplishments on tax breaks for the middle-class, small businesses, on wall street reform, the recovery act, the fact that before of president -- before president obama took office, we were bleeding 700,000 jobs, the month, now we are gaining. we have a long way to go, and

people want the pace of recovery to be quicker, but we have made some significant progress. i understand her annexed. there are some members who are partners in various issues, talking to their constituents. that is why it is important to highlight the real importance of what we can focus on. the generic ballot, that generally compares people's sentiments. making sure that we look at the race-by-race polling. even in races where a few months ago, the democrat was down, the numbers have now turned and the democrat is ahead again. host: clinton, missouri.

larry, good morning. caller: is not a wonderful morning. we have obamacare, capp and tax, and that will bring this country. i am not a republican or democrat, but believe me, this independent is going to vote republican. now, i would be willing to give the president a break, when he started, and you guys, the same way, but all i see is you want to bring our country down. several years ago, george soros said that he would support the democratic party. you can call me what ever you want. i am 72 years old. i have been around this country for a long time. i have never seen things as bad

as they are, could be. host: we have your point. have you voted for democrats in the past? did you vote for clinton? guest: i voted for harry truman who said the buck stops here. the deficit is just astronomical. host: we get your point. how do you attract an independent voter like that? guest: i am not sure that he was a true independent. sounds like he has not voted for a democrat since harry truman. the true independent voter is someone who cares about the deficit, economy. we are focusing talking to our constituents, focusing on the results that we have given. you look at this year, we have created about 83,000 private- sector jobs already this year.

that is more jobs created than in the entire bush presidency. there were no net new jobs created by that administration. host: what do you say when people talk about the unemployment rate above 8%? when he pushed the stimulus bill, he said that an employment would be below 8%. it is not. guest: no, it is not. it was probably not a good idea to tie a bill to a specific number in the drop of the unemployment rate, but there is no question we have made progress and we are on the upswing. the way to talk about it is simply through demonstrating the results, recognizing that people still have a lot of thanks to --

angst. we are talking about the efforts that we have made on their behalf and drawing a contrast between us and our opponents on election day. while we still face the potential for significant losses, i believe we will hold the majority. if you refer to to eric bolling, dammit -- a generic pooling, democrats were the ones that turned around jobs and focused on middle families. there is a lot more confidence to make those both a priority. that is what will bring the voters to the polls. host: next phone call. guest: your guest said -- caller: your guest said a little while ago the democrats have finally woken up. you should turn off your alarm clocks because you are going to

be beaten. host: why are democrats asleep? let's take a part of her question. guest: i think there was an undercurrent of angst from democrats who wanted us to pass everything in rapid fire, everything on the agenda. some of the more aggressive voters did have some angst that immigration reform was not passed, that we need to repeal don't ask, don't tell. some concern -- rightfully so -- that those things have not gotten done yet. the public option. a lot of voters were concerned about that. those are all still things -- immigration reform, don't ask, don't tell, changes that we need to make on the public option --

those are things that we need to focus on, but as we crystalize what is at stake here in november, our democratic voters are beginning to realize they do not want to elect candidates from afar, extreme right wing fringe of the party. they do not want to elect people who want to get rid of the 14th amendment, social security. host: henry, democratic line. caller: i am an 80-year-old african-american man. guest: nice to meet you. caller: i want to ask you one thing. why don't you go after boehner? you have a man in ohio running against him. he was saying that you'll do not

help him. guest: you are following the elections pretty closely. we have a lot of races in play. 43 members in our front line program, which i am responsible for. those members we need to make sure that we protect and help get reelected and maintain the democratic majority, so we can continue to turn the economy around and create jobs. we are asking them to prove themselves, that they have a certain amount of support that they generate on their own. i have not looked at his opponent, but we have so many people on the playing field right now, 22 protect the incumbents, then look at the open republican seats, incumbent republicans that we can try to recruit and elect a democrat.

that is what we have been trying to do. it spreads our resources thin. i have not been involved in any decisions on mr. boehner's race but i heard the president take it to him pretty good last week. getting into the personality thing is probably not a good idea, but challenging them on their wrong-headed things is the thing to do. host: next phone call. caller: first of all, every time i hear you talk about the failed bush policies, is it not true that the democrats have held a super majority for the last three years? when you talk about the failed pushed policies, is that not disingenuous? it is actually not a policy that came from washington.

you held a super majority. bush could not pass any thing. guest: we do not have a super majority. we have been in the majority since 2006, when president bush was still in the majority. obviously, when you have a divided government like that, neither the executive or legislative branch gets everything they want. certainly, we were not able to steamroll the president. in the past few years, we have had the majority, but because of the unfortunate way that the republicans have conducted themselves, filibusters, requiring every single bill to get 60 votes, they have brought legislation almost to a screeching halt. they have refused to be cooperative. the president has tried to reach across the aisle repeatedly, trying to get republicans to work with us, but they have been

more interested victory on election day and regaining power. host: governor's mansion in west virginia, running for robert f.'s open seat. -- byrd's open sea. t. "the wall street journal" says -- repeal of the healthcare bill, no matter who is in peril of it, does not make sense. any piece of legislation that we pass in washington, certainly is not stamped with protection.

there is always room for improvement. the two provisions that governor mansion is talking about, i certainly do not agree with the characterization, but he is entitled to his opinion. what majority of americans are pleased with is that we have finally taken the insurance industry out of the driver's seat when it comes to health care decisions. as a breast cancer survivor, i am thrilled that last thursday was -- we finally enacted a patient's bill of rights. patients can now be dropped from coverage. young adults, until 26, can remain on their parent's insurance. they got rid of annual caps. when a to make sure that we have real benefits here. i would love to have that debate, we welcome that debate on whether or not healthcare

reform should be repealed. once people -- as people have these benefits kicking in, and for seniors, the closing of the doughnut hole -- then we will see which way the debate goes. morning.llecaller: good i voted for president bush the first time around. when the war started, i started to get second thoughts. he doubled the deficit. the wars will cost over $3 trillion after everything is done, taking care of all of our young men and women. the other thing, i cannot understand -- i wish the

democrats would really pound the republicans on this. pardon me, i am nervous. they held up a vote for the military. demint held it from going to the floor. it was the last military vote that came up. host: defense authorization bill? caller: yes. mr. coburn is holding up our money that we have allotted for because somebody needs to be paid to put that money out. people need to know these things. these senators are acting like gods and holding the people of this country hostage.

guest: i could not agree more with the way the senate is. it is baffling to me and most americans, that one senator can put a stranglehold on a piece of legislation that the majority of senators support. that is the way the republicans have conducted themselves. instead of pursuing the position of majority rules, they have changed the procedure or rules, and now 60 votes is required to do anything. host: when democrats were in the minority, which they did the same thing. guest: we certainly did not. we did not set them up so that every single bill needed 60 votes. they have filibustered every single bill, every major piece of legislation. we did not even come close to that. the filibuster has its purpose. there are times when it makes sense, but when you are using it

to stop the president's the agenda at every step, that is irresponsible. again, something that we are talking about, leading up to election day. host: tom, republican line. good morning. caller: did is out of the question to continue telling mistruths that the bush administration did not create any jobs. they created about 3 million. it would be nice to go back to that unemployment rate. guest: i do not know where you get your numbers from. there were no net new jobs created. we ended up with a $1.30 trillion deficit. he inherited a $5.60 trillion

surplus. that was because the of ourpay- go rules. the republicans allow that to collapse. they passed trillions of dollars for tax cuts, mostly for the wealthiest few. that put us in a situation, combine with their other measures, that put us in an $11.50 trillion deficit, worked out over 10 years. we are trying to rein in that fiscal recklessness. with the reestablishment of pay- go rules, with limited exception, we would have to pay for everything that we pass, just like americans have to pay for all their bills. host: next phone call. from vermont.

democratic line. caller: let me tell you what i see in vermont. i see big corporations staying here and they are doing fairly well. but the small businesses are leaving in droves. a semiconductor oem, burton snowboards is leaving -- guest: are they leaving for other states? caller: what i see our siemens, other big corporations, and they are connected militarily. it seems the regulation that are happening are keeping big business alive, and small business does not have a chance

because of the tighter regulations. guest: i am not sure if he meant they are leaving for another state or another country, but one of the important distinction that folks need to be aware of, the republicans in congress have repeatedly voted to keep a tax loophole open that allows any business to ship jobs overseas. it incentivizes the previous law -- in the previous law, it incentivize them to ship jobs overseas. we want to focus on creating jobs in america. you talked about the burden of creating four new businesses. we have talked about tax relief for small businesses. this past week, we have legislation including 16 tax breaks for small businesses.

complete tax breaks on capital gains. making sure that they have a 100% deduction for those who are self-employed on the health insurance. a long list of those tax breaks. we want to provide relief for those small businesses because they are the engine that will drive our turnaround. host: an earlier caller mentioned george soros. he writes this week -- if the economy were to falter again, would you have to put more stimulus back on the table, aid to states, etc, would you have to do more? guest: ben bernanke has been keeping a close eye on the

economy. he does not believe the fed will get involved in making adjustments, unless he sees a significant downswing, which he has not seen. remember, a couple of weeks ago, folks were talking about a double-dip recession. we successfully avoided that because of our balance between spending and making sure that we can create enough jobs, responsible tax-cutting policy that gets and keeps cash in the hands of small business owners. we have to strike that balance with also a focus on deficit reduction so that we do not continue to send our deficit over the economy which was amassed in the bush in administration. host: so some spending would be on the table if the economy would falter again? guest: we need to see. we have not talked about another stimulus.

we just pass rules for banks that increased the amount of lending that they could give out to small businesses. there was a real problem with getting out to small businesses. we believe that is going to have a huge impact. host: back to phone calls. springfield, new jersey. david, go ahead. caller: i wanted to get your comment on what you feel about global governance, the abuse of wealth that is going on, how europe is looking to break down our -- bring down our style of living. i am curious if you feel responsible for how we are being trapped with obama, with his policies, to bring down our standard of living. i do not think you realize what

is going on. guest: we certainly cannot ignore the fact we are in a global economy. there are essentially no walls and economically now, particularly with this huge rise in technological capability. i think president obama has dramatically changed the perception of the nine it states. his diplomatic out reach -- the united states. his diplomatic outreach -- even with countries that we have had a terrible relationship -- he has reached out. in the bush and administration, when he used the go it alone strategy on the iraq war, the perception of america was pretty bad. we have recovered significantly, and now we are able to win agreement on sanctions from

russia and china against iran. president bush would never have won that because of the approach that he took interacting with other world leaders. host: old town, florida. dianne, republican line. caller: good morning. thank you for c-span. basically, i think the american people are naive. when president obama it first came into office, if he had been the blame on the bush administration and really got into the economics of what was left after he walked out the door, there would not be all this rage against obama because they would understand he had nothing to work with. like an ex-wife that walks out your door with your credit cards. guest: i think president obama

was wise to avoid the blame game. we have made sure that folks understand he inherited the most significant set of problems than anyone in history. right as he began, the economy was about to careen off a cliff. we had to rescue it from a second depression. we had to make sure that we did not lose two of the three major automobile companies in this country. he had to get to work. the american people certainly did not want to hear finger- pointing. they just wanted us to get the job done. now that we are approaching the election, the results that we got for the american people, we will be talking about where we were compared with how far we have come. that is an important point for people to focus in on when they are deciding which candidate to focus. -- to vote for. the republican candidate almost

exclusively wants to return as to the policies under the bush administration that put us in a deficit, that send our economy over a cliff, that made it almost impossible to regulate wall street, financial institutions. making sure that we draw that contrast and talk about our accomplishments and what we will be doing for the next 27 days. host: thank you for being here. coming up next, we will take a look at the deficit. "reason magazine" is looking to cut the deficit. first, we want to get this campaign 2010 update. in connecticut, the candidates for the senate, the open seat left by christopher dodd, who is retiring, squared off in a debate. jobs was issue #one.

>> as the ceo of wwe, linda mcmahon has to be responsible of those choices that deprive the american workers of jobs. we need to assess each of the candidates here on how they treat the voters of connecticut from how they made the decisions, and they need to be accountable. >> i am proud of the fact that i created over 600 jobs -- 600,000 jobs in connecticut. we need more jobs in our state. i think it is a great record -- how many jobs have you created? host: joining us this morning is danielle, a political reporter with the "hartford current." here is the front page of your

newspaper, "finally a face-off." what were the big moments from last night? >> there were a couple of moments. jobs, the economy, her record at wwe. no huge gasps. the candidates are huge for both can -- the expectations are huge for both candidates. this was the first time that they were in the same room together for a debate. the stakes are pretty high. they both emerged fairly and skate. perhaps they got -- unscathed. perhaps they got more support from their own party, but there has not been much about those

that are undecided. host: there has been a critical tone for this election. linda mcmahon dropped a critical tone right before the debate. >> yes, vietnam. there was a new clip that was reported but there was no video , the attorney general talking about his record, implying that he served there. that was a bit of a bombshell, people were suspecting that she was tried to get him off of his game. he apologized for his misstatements in the past. the ad was shown, and he reacted to it, but other than that, it did not dominate the debate. host: spending, presidential visits, that will be a big part of the race. that will continue for the next

27 days. who will they be bringing into the state? >> linda mcmahon will be bringing in scott brown. of course, she did not need any fund-raising, like mr. blumenthal. talking about the senate candidates here, linda mcmahon dropping in her own money, how does blumenthal doing? >> he says his fund-raising is ok. clearly, he has also said that there is no way to match her. she may spend up to $50 million. she certainly has it, and has a willingness to spend it. i think he realizes there is no

way to compete with that. one thing that came out of the debate is, he is a man of significant wealth. she made a jab at him, saying that if you do not count my money, i promise not to mention that your family owns the empire state building. his family are major real-estate moguls in new york, but he is not pouring vast sums of his own money, at least up to this point. host: what do the polls show in the senate race? >> the polls show blumenthal up by a few points. here was another online paupoll that showed a much large relief for mr. blumenthal, 8 to 12 points, so it is anybody's guess. host: c-span will be covering a

debate for them tonight. why is this so competitive? >> yes, we have tom foley, a big republican in the state. former ambassador to ireland. we also have dan molloy, the former mayor of stanford as the democratic nominee. that is matching the senate race in terms of intensity and nastiness. host: thank you for your time. we will be covering that debate tonight. for more about the connecticut governor's race, go to our website, c-span.org. joining us at the table is matt welch with "reason magazine." their cover story -- in the story, you give the top

ways to go after the deficit. i want to put on the screen the ways that you recommend going after the deficit. these are the top toys that you recommend going after the deficit. -- ways that you recommend going after the deficit. i want to put the phone numbers on the screen so that you can get your phone calls in. i want to start with what is not on the list. you do not talk about medicare

or social security. guest: you cannot be serious ultimately about reducing the runaway growth of government, which has exploded in the last 10 years, without taking on that. the big three are defense, health care, social security. as mentioned in the intro to this package, that is what you have to do. with social security, certainly, you have to begin by raising the retirement age and move toward a system in which people have the ability to opt out if they do not want their money taken away. everywhere else we are able to individualize and direct our money where we see fit, except for these big areas in government, education, pension funds. so we can not get serious about it unless we attack that as well. host: something else that people

say that you need to look at is the deduction on your taxes, the different ways that people can save on taxes. according to the joint committee on taxation -- guest: no question the tax code is a total mess. special interest, targeted tax breaks, reductions is an attempt to do social engineering of the tax code. we need to move to a much more simple system. my emphasis is not really on taxes. i think this is a big fall of republicans for the last 10 years, they have had a tax cut and spend-type of approach.

the problem is spending, not taxes. we will always have something like 18% of gdp taken out by taxes. government tries to tweak it one way or another, but it is always near that. spending, however, is approaching 25%. the president said that the fiscal path we are on is untenable. we are in a situation where we are out of money. we cannot afford what is happening right now. nobody is talking about serious measures to do anything about this, certainly not the republican party, certainly not the pledge to america, which has nothing about this. you have republicans who are squawking when obama proposes to cut agricultural subsidies by $800 million. we want to begin the

conversation with some preliminary ideas, for people are serious about this issue. host: if americans are serious, why not ask them to pay more taxes -- to play devil's advocate -- allow the bush tax cuts to expire for everybody because that will add to the deficit over time? guest: it depends on what you think is the problem. if you think it is purely deficit, you can add taxes and hurt the economy in the process. we have not had any restraints on spending at all. under clinton, there were some restraints on clinton, but bush was the biggest government president since lyndon johnson. obama has only increased that amount. that is what is unsustainable. you cannot bridge that gap through taxes. i would like to see some -- even a symbolic amount -- to touch

this side of the scale. places like california and other places are asking what they can you to raise taxes, eliminate the deficit. we are talking about debt that has zoomed past the levels of countries like greece. raising taxes alone will not do that, especially if you weigh in what it will do to the economy. we need to reduce spending, too. host: matt welch is our guest from "reason magazine." long island, new york. marcello, democratic line. good morning. caller: i have a couple of questions on slashing the government. i heard an education show earlier paying for college and tuition. people get grants, scholarships, people paying for their students to get help with

their education, which is wonderful, but i have a comment on campaign contributions. why are they not taxed? people are hurting and they see these amount being spent on campaign ads, how much everyone is raising. why isn't that money taxed? i do not get it. guest: i have never heard that question raised before. maybe the idea is we do not need to tax every time money changes hands. i know some people on capitol hill are talking about a bout you added tax. -- value added tax. i think there is some good insights into, we should not be looking at every single transaction between consenting adults and looking at a way to tax. i do not think he would get the results you are looking for by

doing that. you also talked about higher education. there is evidence right now that we are entering into a higher education bubble because there has been heavy government involvement try to subsidize student loans and other things. you hear horror stories every day of people balking on their debt, waking up with $200,000 of debt, wondering where is my job? any time the government tries to reduce a happy result like this, home ownership, college education, you have a distortion in the markets that they are trying to affect. as a country, we are having to foot the bill when it all goes belly up. that is my worry. host: norman, republican line. caller: i wanted to look at two observations. milton friedman remarked the

amount of taxation that the government does is not the amount that it levees through taxation but really the amount that it spends. it is spending that is above that which it takes in from revenue is an alternative tax revenue that is ultimately deferred. another libertarian hero, emery roth part. he had a much better idea. the way that we can put a knife in the beast when it comes to runaway federal spending is to end payments on the interest on the debt. bond ratings would go out of this world. the government would not be able to issue bonds in the future. the credit of the fed would go out the window. the ability for the government to do deficit financing for the

future would be lost. guest: murray rothbar, a radical to his grave, he is right, and there would be some shock therapy, austerity that would be put on the economy. in general, a shudder would go through the financial system. some people may look on that with glee. i do not think that is where we are going. certainly, academically, more people are talking about that, but i think that is more of a phenomenon that we are getting into a place where this is unprecedented. we will have to come up with creative ways to address it. that is actually on the table more and more, and it should be a wake-up call that we cannot afford what we have right now. custer reason 14 to cut the federal budget includes cutting

the state budgets. a tweet -- guest: medicaid is a huge example of mandates. the thing to realize that people do not is that between 2002 and 2008, before things went belly up, states doubled their budgets, in nominal terms. i am a resident of california until two years ago. i did not feel like i was suddenly getting twice the services. what happens is when there are good times, people use the government like an atm machine. they make it to define benefits, contribution pensions for public employees, and all the spirit now we are seeing this great margin call. so we were paying for that?

there is a greater awareness now across the country, that pension obligations, purely for state and local employees, are unaffordable. they are underfunded by trillions of dollars. to even get state budgets growing only at the rate of population growth and inflation, you have to tackle pension. yes, the government has been giving all sorts of mandates on states, and states, in turn, have been putting mandates on cities and raiding their money. it is a mess all around. host: we are talking about cutting the government with matt welch from "reason magazine." a viewer tweets in -- guest: sure. reason.org, we have a

list of our 20 board members there who tend to be the biggest individual donors. most of our money -- i hesitate to give a figure. i would imagine 98% or more individuals. we published 11 times a year. we are a magazine, we do video journalism, including 3d videos, and we work with local think tanks on how to make their services more efficient. host: a libertarian magazine? guest: yes, it was founded by a college student in boston in 1960. whoever is in power things we are against them, and they are generally right. whoever is out of power seems to like us, until we become the

enemy again. host: another tweet -- woodbridge, virginia. good morning. caller: good morning. how are you? in your book, i do not see anything about social security. i know republicans want to ban that. i want your opinion on that. can you explain in your book, what you mean when you say, defined benefit pension? guest: sure, first of all, magazine, not book. defined benefit means -- let's say my brother is a teacher in san diego county. most likely, he has a defined

benefit pension. he knows what he will get at the end. i am not someone who works for the california public sector. i am in charge of my own pension and i have a contribution. i know how much i am putting in. i do not know how that money will do until the end. states all over the country, we have said to public employees, you are going to get this pot of gold at the end of the rainbow, and we guaranteed that, and they take their money and assumed it will make a% a year. it will never -- 8% a year. it will never make that amount of money. on social security, we mentioned it with introductory alamance here. republicans as much as democrats want to run against

republicans and dismantle social security. it is not on the table. their pledge to america says nothing about social security. they recognize it is a third rail. george bush tried modest steps in that direction and he was shot out of the water. it was one of the reasons the democrats got the house back in 2006. it is dead as a republican issue. for outsiders, you have to realize, that we cannot afford it as it currently stands. so what are we going to do about it? there were some ideas about raising the retirement age. ultimately, the only solution, given our demographics, is to allow an opt out system for people if they want to take their money and do with it what they want, instead of what the government wants. host: birmingham, alabama.

republican line. caller: i listen to a lot of politicians, a lot of democrats, republicans, but nobody addresses the fact that the federal bank is a privately owned bank. not only that, they create bust and booms in the economy, and they are privately owned. the biggest problem i have is our government borrows money from the federal reserve bank, and the government only borrowed the principle. the interest is not in society, but the government had to pay back principal plus interest, so that creates a debt that we can never get out of. it is impossible. guest: ron paul addresses that on a daily basis on capitol hill. his audit of the fed finally gained traction in the last session of congress.

it struck lot of people as an almost impossible, chaotic the venture. certainly, -- a key otic adventure. certainly, we are looking for the smoke signals coming out of the chimney, but i think we have succeeded our system to technocrats. we are relying on a face that we will have a maestro that can save the day. this boom-bust cycle that you rightly point to, which was goosed by the fed, especially after september 11, the .com bubble bursting, get a lot more attention, and it can only lead to better outcomes if we know who made the shots. host: bob from wisconsin. independent line. caller: good morning.

everybody talks about social security. if the government would quit taking money from social security and use it for everything else, i think social security would be all right. they bury money that they steal from social security in a bill. we need that money but everybody jumps on that bandwagon and signs that bill. guest: i do not know the exact numbers. you are right, they have been rating from the trust fund for years. they did not put on al gore cost lockbox, like they said. if you remove the idea that we are reading this trust fund, look at basic solvency, demographics, -- it is moving

towards insolvency. you can adjust the retirement age. that is basically the easiest mechanism. you can means test people receiving it. that will begin to address it. but the baby boomer generation is retiring. it is difficult to deal with, regardless of trust fund issues. host: one reason to cut the government includes bringing the troops home from afghanistan and iraq. i want to read some figures that you have. it says barack obama promised to wind down in iraq to troop levels below 50,000 in 2011, none by 2012. there are signs that the timetable could be pushed back.

you go on to say -- the costs are felt decades out, why? guest: i think the peak of cost for a war is something like 40 years afterwards. there is literature about how we are paying for civil war pensions will into 20th-century. we look at the tea party, the current trends in politics. recently, there was an op-ed written by william kristol,

others have at the brookings institution, american heritage, but we love with you are doing, tea party, but exceptional some all the way. this shows me that establishment republican ideas are still overseen by republican leaders. it is more then we have in the magazine, but at the same time, if you look at the literature coming from the tea party movement as opposed to the republican party, it is all about spending. . .

>> parties in power love to do favors for rich people whether

in hollywood or a baseball team. if we started to address that and this sort of targeted and very inefficient maneuvering of the tax code we would be much better governed and better run economy. host: now to lynnville, tennessee. caller: good morning. mrs. schultz said president clinton left a surplus for preside president bush. but many misunderstand that and think that we paid off the national debt. and from my understanding our national debt was only paid under andrew jackson in the 1830's. so would you please clear up the surplus that president bush got in 2001 as opposed to what the democrats continually say was a surplus that he got? guest: that is a great point and it also, i think, ties into

something which is that a lot of people try to talk around government spending and talk about this year's deficit. what can we do to close the h e hole. if you look at long-term debt, even by closing the hole you will make that situation possibly worse in addition to hurting the economy with it. i look back at the clinton years with great fondness and regret we have gone so far from this and the democrats in power, even though obama ran on a net spending cut, he saeid i'm goin to enact a net spending cut and go through government line by line getting rid much inefficient programs. i believed him, stupidly. democrats have gone away from those economics that they had in clinton, in the clinton era, where they looked for ways to balance the budget and live

within our means. republicaning led the way. -- republicans led the way and with the financial crisis and other things obama hit the accelerator and we can't afford it. we are out of money. host: we have the editor and chief of reason magazine. we saw you the piece with the title "how to slash government before in slashes you." guest: the blurring is intentional. host: part of the plan includes several things like overhaul medicaid, bring troops home. slash state budgets and end defined benefit pensions. i want to ask about erasing federal education spending you say it has increased by close to 80% in real terms since 2001 but test scores in reading and math among 17-year-olds have been flat since 1971.

>> we should pay on the local and state level. government has a role. there are plenty of readers of my magazine who might disagree. i start from the standpoint of we will have public schools. my daughters hopefully will go to them. what can we do to make them better? i don't think the federal government has made things better. generally speaking, if you look at all funding since 1970 we have doubled per student funding for public education on national and local levels. host: how could it be better with state and local governments with the fiscal crisis they are in? they have had to borrow money from this pot and put it in another pot. they had to get money from the federal government to pay for programs as well. how could it get better? guest: they start to clean up their house which they haven't. the stimulus package advertised as a way to create or save 3.5 million jobs 90% in the private sector has been a way to help

states avoid suffering from their own bad decisions. there's been a teacher retention program, something like two-thirds of the jobs affected in any way by the stimulus package has gone to make sure states and local governments don't fire teachers. that has been one of the most inefficient parts of governance for a very long time. as we see with the popularity of the new film "waiting for super man" and in d.c. with education politics we are spending twice as much and getting no better results. what do you do to get better results? i don't think you get them from the federal level. you get them at the local level but as part of that you need to tackle the power of teachers unions in blocking legitimate avenues for reform out there which center around having students being able to opt out of their own school local neighborhood. host: roseanne democratic line

in franklin, tennessee. caller: i have a few things i had like to address because your speaker is just very -- it is amazing what he is saying. first i would remove the 501-c-3 status which rich use to hide in foundations and they fund lobbyist an websites like his to achieve their interests. then i would revise the tax structure with incredibilitial taxes up the ladder as eisenhower did. i don't see why the uber wealthy should pay 39% when they used to pay 91% and the the money that would have gonna the communal pot to pay for education and transportation are set aside and wonderful accounts so they do not have to pay and fund what we need for our nation. three, only a barbaric society refuses to care for the disabled

with healthcare, elderly with social security and medicare and the young with education. i know the g.o.p. would like to dismantle our democratic society because it would make more money for them and they could keep more money but we have a dealt society that says justice for all. host: she was on the democratic line. she mentioned rich conservatives contributing to organizations contributing to the campaign. a tweet from american hero says nothing could be clearer when george soros wrote no comment but god forbid coke -- koch should say something. >> the 501-c-3 thing we have the idea everything that is called a corporation in this country is rich. even rich pants who is trying to find a permission slip to pollute rivers.

sierra magazine is a 501-c-3. mother jones, a late lefty investigative outfit out of san francisco is a 501-c-3. you have newspapers looking for ways to be nonprofit in a misguided attempt to stay in business. we are not a rich or a well, deep pocketed company. they are ways for people to do nonprofit things. you start to imperil your status when you tether yourself to a political party or candidate, which we don't do. host: like george soros or david koch? are you influenced by the money you receive from them? guest: david koch is one of our 0 board -- 20 board members and the only one who i haven't met or talked to or communicated

with in any meaningful sense. inevitably you will have influence if someone gives you money, of course. portrayed by the way he is in new yorker he is an unpresentlied self-interested person who issing for ways to deny that global warming exists so he can get on with polluting, in a nutshell. if that is the case, the money he has given to us has been a terrible waste of time. we have a science correspondent among our small staff who within the world of free market journalism is considered something of a her particular because he thinks global warming is man made, and we should do something about it. that is a little bit odd. the portrayal of them and him as a big republican operation is strange when you think about their most visible thing that they helped create was the cato

institute a libertarian organizati organization. libertarians and republicans are not the same. they don't mix and play well together especially after what we saw to george bush. and to get to education, republicans -- and i'm not an apologist for them -- don't want to abolish education for the youngest nor do libertarians. we say ike, we spent twice -- we said we spent twice as much using your system. let's talk about how to spend in more efficiently to deliver better outcomes. we want the same outcomes as you. the outcomes that, say, your party or tribe has been favoring and supporting have not worked. so, we are out of money. that hasn't worked. maybe talk to some of these people you find to be barbaric. >> republican lane, john.

caller: i had a question. i read recently opec is moving away from the u.s. dollar around to the euro. i see right now that the dollar has gone down and opposite moves, gold moves opposite of the dollar and gold has gone up. i was wondering if there is a correlation? guest: i think there is a question, and i'm no expert but in times of financial trouble there will be a flight to quality. that could be gold and usually is. it could also be treasuries, u.s. treasuries. and it could be even the dollar compared to the euro seeming ok. but if you continue to debase the currency and create situations where the only way you can continue to have the public policy pay for it is continuing to borrow money and to print more of it, that the value of the dollar has to go down. it is basic physics.

host: matt welch editor and chief of reason magazine. up next we turn to housing policy. what happens on the issue in the lame duck session. first a news update. >> it is 9:16 a.m. federal reserve chairman ben bernanke in remarks to college students says the economy could be helped by another round of asset purchases. the fed is considering launching a new program to buy government debt. it is aimed at driving down rates on mortgages and other debt. economists think the new program could be announced at the next meeting november 2 and 3. turning to the war in afghanistan, reports this morning of three explosions in kandahar. they happened minutes apart killing as many as four afghan police officers while four nato service members died in separate attacks. that increases the coalition death toll to 11 in the first week of october. the pentagon holds a briefing

this morning from that country. it will be on c-span radio. solar panels will be installed in the white house by spring of next year to heat water for the first family and supply some electricity. it is not the first time the mansion has used solar energy. former president carter spent $30,000 on a water heating system in the 1970's and former president bush had solar systems powering some buildings and heated water for the pool. those are some of the latest headlines on c-span radio. >> every weekend on c-span 3 specious american history tv. 48 hours of people and events telling the american story. hear historic speeches andy witness accounts of speeches. visit museums, historical sites and college campuses as top professors and historians delve

into america's past. that is all weekend every weekend on c-span 3. host: we will now talk about housing policy. he writes for the national journal magazine. let's talk about a potential lame duck situation and what happens with fanny and freddie when they come back. guest: house financial services chairman barney frank is washing on a draft to try to overhaul the housing finance system and it has kind of been in crisis ever since the government about two years ago took over fannie mae and freddie mac and everyone is trying to figure out the next step. the obama administration has decided to basically come up with a new platform that they are going to release in january. congressman frank decided maybe to try to get out front and come up with an idea which he hasn't

so far and basically put it out this as a marker to get the debate started so when congress comes back next year it can go full throttle. host: he hasn't put out a detailed plan but he has had testimony before his committee about different options that are out there to either abolish freddie mac or fannie mae or revamp them. what are some options? guest: frank has said basically fannie mae and freddie mac can't exist. they were government sponsored enterprises which bakley means that they were private corporationless but had a mandate to promote housing affordability. in this public-private hybrid, it didn't work with the financial crisis. so they were taken over by a federal conservatorship and the government has put in $150 billion to keep tell afloat because they are securitizing the whole mortgage market. there are a lot of ideas from

nationalizing them to spinning them off privately to maybe breaking them up to eight to 12 pieces and having the government not guarantee that but maybe these entities could pay a fee to the government to back, to guarantee the bonds along the lines of a jinny me. stkpwr what is the -- host: what is the industry saying? guest: they are saying do no harm. realtors, home builders. mortgage bankers who notice there is a very, very fragile housing economy and they are very wary of doing massive we will sale changes to something where the g.d.p. of housing is about up to 15% and ramifications across the economy and business model. so they have approached it as a very cautious way and almost all of them want some form of government support in the next model.

host: and consumers, groups that represent consumers? guest: they are very -- they are taking a very cautious approach, too, because they don't want the government bailouts, but they want a stable functioning and vibrant housing market. and how you achieve that is kind of the question that policy makers will grapple with. host: what will the republicans say? guest: the house republicans put out a proposal and it is -- it was not filled in with details but they want to priv e privatize fanny and freddie and put it out to the private market. they are kind of silent on if there should be a government guarantee but they have been pushing a line that says the government, federal government needs to get out of the business of housing finance or very, very reduced role. host: what happens if republicans take control of the house with the health financial

services committee, which member takes control as chairman and what does that mean for what we are talking about? guest: spencer baucus of alabama appears to be the next chairman of the house financial services committee. on his shoulders would rest the republican platform to try to move it out. even within his caucus one thing of interest is you have a lot of people who are free market conservatives who say the federal government -- we in the federal government need to be off this but a lot of republicans are cautious who side with the realtors and home builders and say we need some sort of government backstop or support because of the fragile condition that we are seeing and whether you represent riverside or orange county, housing markets have gotten hit pretty bad on this issue so you may see a schism between members of the republican party that want a

purely free market approach versus those that want some government backstop. host: it sounds like the divide is not along ideology but region. you talked about california and the california lawmakers are worried about what would happen to the ability of their constituents to be able to get jumbo loans because jumbo loans in california might be a loan for a mill class person in that -- middle class person because of the price of housing there. guest: that is an excellent point because there are some ideological breakdowns but in is parochial because in nebraska the housing market is vastly different than if you represent southern california. the median home price there and gary miller from orange county i think one of his cities that he represents the median home price was around $580,000. he needs the judge bow market as

opposed to a lawmaker from nebraska who the homes would be much less. that is where you see a split from a lot of these lawmakers. host: we are talking to bill swindell. the g.o.p. pledge, one of the provisions or proposals they would do if they get control of house or senate is end government control of fannie mae and freddie mac. we are talking about u.s. housing policy for the rest of today a today's "washington journal." start dialling now. what is the political reality of any of this happening? guest: i would say it is pretty great because treasury secretary geithner says they will put forth the plan. house republics will use this as if they were to take control showing that they are going to reduce government, they are

going to move forward on a way to reduce fannie mae and freddie mac and spin it off. host: raymond is calling from cecilia, kentucky, democratic line. caller: good morning and thank you and how is the baby? i wanted to say that bill, i believe is his name there, i think he's putting it on like it is and these fox people just sit back and just listen to these republicans to fox and do whatever fox says and they would give anything to have a station like this but they can't be like this and thank you. host: we will go on to yolanda on the republican line in nashville, tennessee. caller: good morning. i'm not in agreement with what he is saying, the housing market is nationwide and i believe what

he is saying that republicans and all the realtors and builders and all of these are seeking relief and they are the cause of the problems we have today. they supper inflated the -- they super inflated the prices and take the money out of the country. billers, what at the -- builders and developers are lucking out. host: any legislation after what she is talking about, the developers, real estate agents, those that she blames for the price of housing and situation of housing? guest: well, a lot of the issues especially to do with predatory lending was addressed in the financial regulatory overhaul passed by congress this summer. there were some requirements like when a bank sells a loan off they are going to have to

retain 5% of the risk so they are not able to flip a loan into the secondary market and forget about it. there are some standards that go into underwriting that were contained in the bill. so, congress has taken some steps as well as the federal reserve to address some of these predatory lending issues that have happened. also, there hasn't been a private secondary mortgage market since the crash and that basically fannie mae and freddie mac have been holding the fold for all of this. but looking at what happened with the housing market there is a lot of blame to go through a lot of different entities. host: how much did fanny and freddie receive from the federal government and did they pay it back? guest: they have received about $150 billion in equity. there is talk it could go up to $400 billion although the regulator doesn't believe it will. we don't know how long until it

comes back and how you spin them off, which will be a big question on it, too. also, this is where house financial services chairman tank makes the point they did include it within the overhaul because they are filling a void. they have eliminated the bad practices. they are making loans that are very strict, well-regulated loans and providing necessary liquidity that no one else is providing. so, he believes basically you can use that for now and you don't have to address that. it was not a pressing condition, then come back and take a crack at it next congress. tkpw host: if they do that, will part of that be to forgive what the federal government, what taxpayers are given to fannie mae and freddie mac and say they are not going to have to give back the $150 billion? guest: that will be a big question because they don't

know. and you are basically in a bailout mentality. there is an equity stake so if you spin it out, it could possibly -- the federal government could recoup money? yes. but how do you do that. because with tarp there is talk you may make money on a.i.g. so that is to be determined. but it plays into the whole bailout politics on the hill whether you are a republican or democrat and anything with the word bailout you run for the exits. that be a major subtext on this and how lawmakers handle that is yet to be determined. host: a tweet from a viewer who asks about the headlines we have seen on foreclosures. guest: the regulators haven't taken a step although they are examining it. a lot of action has been taken on the private market with gmac corporation, bank of america,

jpmorgan chase holding up the foreclosure processes because of allegations that it has become like a paper mill and they have not done the due diligence. this is playing out and how it may affect everything remains to be determined. one thing is it will slow down foreclosures which may help stabilize the housing market temporarily. host: stella joins us from new jersey, independent line. caller: good morning. i just think that people have to begin recognizing that our congress and our government has become a notorious criminal enterpri enterprise, and that is how we need to start looking at our congress and our elected officials. and it is nothing proves that more clearly than our u.s. housing policy and the recent financial collapse.

congress has become -- it is supposed to legislate lows and the executive is supposed to enforce them. we have seen the failure of enforcement of laws through our financial meltdown. we have a perfect examine now in terms of foreclosure, and we need to understand that we are no longer a nation of laws and that our government has produced a climate of lawlessness in which law breakers are rewarded, including the members of congress. host: we saw stories in the financial crisis that members of congress were pushing fanny and freddie to make riskier loans. what has happened with regard to this?

is there any provision as to what kind of loans fannie mae and freddie mac can make? guest: they got in trouble because they got into the subprime market, not as much as maybe the more notorious lenders such as countrywide but there was a push by policy makers, democrats and republicans, to increase home ownership. this was carried out through bill clinton and george bush because every american if they could afford a home should have one. but unfortunately a lot of americans who couldn't afford a home got one and we are deal with the repercussions of that. that came to a head during the financial crisis in that freddie mac and fannie mae have restabilized their business model and they are not accepting that pocket that they did from 2005 to 2007 where loans on their books got them into trouble.

host: next ann on the republican line from florida. caller: good morning. the lady stella kind of took some of my thunder. i think that because we do not have any regulatory teeth opening up freddie and fanny and seeing what the audit would produce before we decide to do something in january tells me a lot -- or tells me too little. the bankruptcy law between housing and that thing going on i believe this week at the supreme court level, i wonderedif that was going to -- i wondered if that was going to play a part in what would be decided about these issues in backdoor rooms or whatever for the january release -- host: do you know what she is talking about? john: i'm not familiar with it. host: can you explain the

supreme court case? caller: as far as i understand it, it is going to take up discussions or hearings or decision making regarding the housing market and foreclosures. the reason i know this is because i'm a c-span watcher and there was a gentleman on this week who is extremely intelligent who covers i believe it is for the "wall street journa journal". host: did you watch yesterday? caller: yes. host: yes, adam joined us from the "new york times." caller: he will be watching this closely, he said. and being in florida, we have one out of -- i think it is now three out of five holes in foreclosure and it affecting people who have been paying on time, doing things the regular way, continue to pay, no

principal or interest has been raked back for us. this is all affecting our economy very, very heavily here where i live. guest: i think one thing to look on the foreclosure front is when congress may return from the lame duck and into next year and how it plays out with lenners suspending foreclosure -- lenders suspending foreclosure proceedings and the pressure lawmakers put on regulators and businesses to try to come to the bottom of the answer of this. one thing about the foreclosure process is interesting. a couple last year congress tried to -- a lot of democrats tried to put a proposal that was basically nicknamed cram down that would allow homeowners to go into a bankruptcy court and be able to get the principal drawn down on the home mortgage. they were able to get through the house but not the senate.

on the financial regulatory bill it got dropped as part of the negotiations. a lot of people, advocates for a lot of people in foreclosure said if you use that process to reduce the principal through the bankruptcy process you really could have stabilized the mortgage market and have a better recovery and keep people in their homes. this was opposed by a lot of the banking interests who contend that it would set the mortgage market out of whack and would have required higher interest rates as a result of this. in the end it was not included on this. but now that this foreclosure process has developed a lot of problems you will see a lot of lawmakers, especially from florida that has a market that has been under a lot of stress, nevada where senate majority leader reid is in a tight race and he's been very syrup

anesthetic to the -- sympathetic to the pleas of the home builders and markets there. it will respond a lot and how that may play out in november as well as next year will be one thing to watch. host: a tweet from a viewer here. guest: there were some amendments that were proposed to really tighten up the underwriting standards. the overall one did do a lot of things that strengthen ed, advocates would say, in terms of what a person applying for the loan, a lot of predatory lending, you know, problems that we saw, low teaser rates and a pers person, if they pay back the loan early there are prepayment penalties and most consumer groups applauded the provisions

of the housing language that was in the overhaul. host: next phone call st. paul, minnesota, chris, independent line. caller: good morning. i hear a lot of complaints about government intervention in this country. but we fail to realize because of excessive deregulation in the past that is what brought freddie mac and fannie mae into this. so whether republican, independent or democrat, there is a need government to intervene in how the companies run businesses because the failure of such business companies has an effect on the whole economy. so, i don't agree with people who say government shouldn't intervene. it is necessary for government to step in. . that is one problem with freddie mac and fannie mae. they had this culture where they

were a company that issued stock but had government man dates. that -- mandates. that got them into problems. one thing also is interesting about the united states of america is involvement that we have in home ownership through government programs, whether it is fannie mae and freddie mac, ginny me or f.h.a. you don't see that in other countries and western europe or australia the amount of government support. as policy makers go through and examine that they will look at other countries. no one had a fannie mae and freddie mac like we did. very few countries had even a ginny me which is a government owned corporation. they are saying if these countries do it and they have home ownership rates comparable and sometimes better than the united states is there something we can borrow from their system and incorporate into ours.

host: what are some examples of what they are doing? guest: there are a lot of countries that could do, for instance, there is cover bonds. one congressman of new jersey, a republican, has proposed this. in germany they do this where a lender would take a loan and package it as a bundle and sell it. the difference between that and securitizati securitization, the united states model, is the lender still carries the default risk. if something goes wrong it goes to the lender. it was not sold it the secondary market and they can forget it. congressman garrett believes there is not model for this that works in the u.s. and he wants to get legislation to set up a cover bond program in the united states. one thing that germany, every country is different but their loan to value rate is like 60%. so that probably would knock out a lot of homeowners that could

avail themselves of a loan that would be through a covered bond. that would be one way. you have other countries that do interest-only loans that may reset or fixed loans for shorter terms that you can maybe renegotiate with the lender after a while. these are some of the proposals that are being kicked around. whether that goes anywhere is a big question that lawmakers are going to grapple with. host: our guest writes for national journal magazine. it is nationaljournal.com. we are talking about u.s. housing policy. house financial services chairman barney frank is thinking of bringing up legislation to khaeupchange fane and freddie mac in the lame duck session. here is a story in in the "wall street journal" this morning about his own battle for congress. it says the national mood is hostile and mr. frank is now spending more time on his re-election instead of pumping

money this the campaigns of vulnerable democratic lawmakers. the traditional role of a party leader. his focus on his own district will have reverberations in races across the country. denver, colorado, vick on the republican line. caller: i wanted to ask the question what is a homeowner and being a homeowner for 16 years, what exactly do i own? every 15 years they strip our equi equity. guest: you actually own the mortgage to the home. it goes to maybe a bigger debate with maybe the caller was addressing. should every american own a home. this is going to be a question part of the debate, whether or not -- and congressman frank, who you referenced -- whether or not everyone should own a home and what is wrong with renting and building up the multifamily housing policy in this country? there is a lot to be said that

during this crisis a lot of people got homes that they really shouldn't have had because they couldn't afford them. and there isn't any, you know, the policy for every american to be a homeowner maybe was misguided. congressman frank argues there has to be more focus on mult multifamily housing to make it more affordable and suit the needs for a lot of peel whether young -- a lot of people, whether they want to move around and maybe it fits their needs or maybe they can't afford it. and one prescription that he will be pushing is the thing called the affordable housing trust fund which was included in a law about two years ago that congress passed and it was supposed to be funded up to a billion dollars but through new business with fannie mae and freddie mac. the problem is fannie mae and freddie mac got taken over by a federal conservatorship and the money hasn't been allocated. so one thing frank will do is try to find funding within the

overhaul to a.m. indicate some resources to multifamily housing through the affordable housing trust fund. host: chicago, wanda, democratic line. caller: i would just like to verify with mr. swindell he said they talk about privatizing fannie mae and freddie mac but he said they were looking for backstop from the federal government. is that more of the privatizing process and socializing debt? guest: they put out -- house republicans put out a proposal that is to spin fannie mae and freddie mac out to the private market. they have been more vague on what that market should be in, whether you spin them out to private companies, how many private companies there are and how would they operate. would there be any sort of government backstop? that is one of the big debates. what will the government role

be? last week congressman baucus, in line to take over the chairmanship of the house financial services committee, said he didn't think government should play a role in the overhaul especially with a backstop. now, that will come in conflict with maybe other republicans who want, as well as industry, who want to see a backstop especially the secondary market where lenders want to go to this market to sell them off and get more liquidity. how you can devise a scheme like that will be a major debate. host: boone, north carolina, rob on the republican line. caller: good morning. i would like to respond to the first two callers. the first gentleman who basically criticized fox news. he doesn't have to watch fox news if he doesn't want to. if he would, he might realize that early on in this decade the republicans did try to reform

fannie mae and freddie mac only to have the democrats roadblock th that. also, the second lady who was blaming republicans and realtors and investors and whatever, last time i looked barney frank and chris dodd were democrats and they were the people who got us in this mess. the biggest problem is people who not -- he reiterated this -- people that couldn't afford the houses shouldn't be given the loans. it is a big practice of the democratic party to give, give, give for the votes. it is kind of like an underhanded way of buying your votes and i don't think that is right. thank you. host: we will go to tkhad lincoln park, michigan, on the independent line. stpwhro good morning. when i was in my 20's, in the 1970's, growing up, you know, when we bought a house we had to

have 10% or 20% down. now, to me, when we started giving these zero down loans and everything and putting people in houses that didn't belong because they couldn't afford it, we had like 30% paid on a house out of our gross pay. now, that didn't overstepped of money we paid for everything else. out what they have to put in the house, spending $100 on cell phones and that how can they pay for that when they can walk away? guest: that is a question that i think a lot of people are aski asking. responsibility of walking away from a house.

that goes to a lot of, you know, whether or not the lender was responsible and whether or not the borrower was responsible. that will be something that will be carried out. the other previous caller raised the question about were there warning signs shared out this. and there were some lawmakers who had criticisms of fannie mae and freddie mac. but fannie mae and freddie mac, if you go back, you know, five or six years and especially the early part of this decade, they had a tremendous sway on the hill. democrats as well as some republicans. they had an incredible lobbying operation. they could really get what they wanted through congress and they were able to stymie a lot of the overhaul of fannie mae and freddie mac for a lot of years. what you will see a lot of republicans -- had is one issue that resonates, there are some

republicans that had been critics of richard baker of louisiana, ed royce of california, who really said -- and richard shelby of alabama -- who really said fanny and freddie were using their strength to play unfair in the private market and were lobbying scrugger naught that was not -- juggernaut that was not healthy for the american economy. they were some of the few voices that were there. as fanny and freddie went through accounting schedules the leverage and political muscle slowly weaned. then congressman frank came around to get a bargain with former congressman mike oxley of ohio and they were about to get something but they were stymied by the bush administration in trying to move something forward. and this issue was not addressed until the summer of 2008 when a lot of the problems we saw in

the banking sector came to a head and they knew they had to do a provision to address some of the issues. host: we've a tweet. guest: they were created to help spear home lending. fanny was before freddie. i think freddie came in the 1960's. they were set up to help give homeowners a shot at the american dream and stabilize the fixed rate 30-year home loans that we were accustomed to because they could provide the liquidity for banks to buy the loans. they would hold them some and securitize them off to the secondary market where investors would buy them. the one thing about fannie mae and freddie mac they had this hybrid structure and a lot of people believed there was implicit guarantee if something

were to go wrong the government would come in and allow fannie mae and freddie mac to borrow at lower cost which made them more profitable. regulators said there is no explicit guarantee, you know. they are not going to step in. but what happened in 2008 when the crisis occurred government accepted in. -- stepped in and one consensus is the hybrid structure will not exist in the future. what may exist from that who knows. i think that the national association of realtors have called to make them nonprofits. you have the national association of home builders asking for some government backstop. the financial services roundtable i believe has called for breaking up fannie mae and freddie mac to eight pieces and having those pay like a fee that would be guaranteed by the federal government for the bonds they issue. so there is a government guarantee but these companies would be paying a fee.

so, these are some of the ideas that are out there and will be kicked around. host: susan joins us from auburn, alabama, democratic line. caller: good morning. i understand that fanny and freddie are not currently considered to be on the government balance sheet and not only have they received government bailouts, they issue their own debt. is this a plan to put they will on the government balance sheet and honestly account for them in and how viable are cover bonds as an alternative? guest: good questions there. what you should watch is if the house republicans take over the house, one thing i'm sure they will probably do is try to put that on budget through -- they are not on budget now and the treasury has been fighting that because they said this is a temporary matter that they would look to come up with a solution in january. i imagine the house republicansrepublicans, will look to put it on budget. on covered bonds, that is an

interesting question whether or not could they succeed in the united states of america. and there are some people who say that they may be skeptical saying isn't that what the federal home lope bank is -- home loan bank is doing? some critics have noted they worked in other countries but other countries have different -- like germany with the 60% loan to value ratio that would not have a covered bond going on for someone who put down a minimal down payment. that remains to be seen. if republics were to -- if republicans take over this will be part of the conversation and how the structure at that time covered bonds could work in this country as opposed to other countries that have another system will be a major debate. host: michigan, betty on the republican line. caller: i would like to know why is it that the easing of the

housing loan regulations started with president carter and they were lowered even with -- am i on? host: yo, you are on. -- yes, you are on. caller: they were lowered. the regulations with clinton and his administration came to power and the banks were told if they did not loan to people that could not afford them, that is the truth and the media and you are not telling the whole truth how it came into this disarray and how -- host: we will get a response. one thing to consider is i think both republican an democratic administrations -- and democratic administrations have promoted ownership to bring more americans into owning a home.

that is now being seriously looked at whether or not people who are not able to own a home should you put them in a home and the basic answer by most policy makers is no, they should not be put in a home. i think what the caller may be referring to, which there is some on the right who say the community reinvestment act which requires banks to invest in more underserved and underprivileged neighborhoods, whether that was a contributor to the housing crisis, that banks were forced to make loans they should not have because of the c.r.a. requirements. the fed and fdic have said the c.r.a. was not a factor in the housing crisis. host: houston, texas, henry, independent line. caller: good morning. i'm going to try to put a little historical perspective on this. i would appreciate if your guest

would comment. in the post war period after world war ii a couple of things happened. one was suburban expansion. in the process of that the government started guaranteeing a lot of loans for the f.h. after the. later on -- f.h. after the then they created additional programs much in the process the economy on the average doubled. you used to have a 1,300 square foot house and that was big. now 2,600 square feet is considered average. on top of that people are spending at least twice as much if in the four times money on gas. so, basically our energy consumption is out of sight, our housing costs are really high and individual families are in a situation where the cost structure is almost unbearable. here is my question.

bill gross, who is a very astute man and head of pimco, came out about a month ago and said what the government needs to do is come in and guarantee all mortgages at 4%. that is pretty striking, i know. but i have asked myself many times why he said that. listen being to the program -- listening to the program aren't we in a more serious program than we are realizing? guest: he mentioned bill gross. it was a proposal he made at a conference hosted by treasury to kick out ideas of that. he made the pitch that if you could have the government come in and may a role in terms of refinancing people to get them down to 4% that will give a lot of whatever the conventional rate is, that would put more money into people's pockets that you would have an extra -- i don't know what the amount he

would say that people could spend and it would be the best stimulus that policy makers could enact and that wouldn't have to be done through legislative action, that could be done by treasury. treasury took a dim view and didn't go that route. they are looking at more of a comprehensive view because if refinance there would be a lot of logistical issues that would happen and you would have a lot of banks very wary of that as well. so you are dealing with a lot of different entities and a lot of strong powerful entities that are represented in washington. realtors, home builders feel bankers. and credit unions, independent community banks. they all have a voice, and to try to -- what treasury wants to try to do is hammer out a compro