people should be driving safely on the road. but also, we need to address if there are conditions that are unsafe, how to work through those. they have to be individual decisions made by the individual drivers, their physicians, and families. and the state licensing agencies working together. there is no silver bullet to resolve this issue. it is going to be on a case by case basis and it will probably be very difficult in some situations, decisions that drivers have to make with their families and doctors. host: you have heard a number of callers make reference to the ntsb forum on older drivers. if your interested, you can find it at the c-span library at c- span.org. i want to say thank you to deborah hersman, the chairman of the ntsb. guest: happy to be here.

thanksgiving is a great time to talk about driving with your family. in the coming weeks i hope many listeners and watchers will do that. host: thanks for being with us. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> a look at the future of health care this afternoon. the alliance for health reform at the american enterprise

institute. like every -- live coverage starts up to about 15 eastern. >> in an ideal world, there are all these smart investors who think these things are going to crash and burn. you could not see that the way you can see it in the stock market. because of the way the instruments work you were not betting on a real mortgages, but you were betting on the casino version of a mortgage. > in 2003, bethany mclean

wrote about the mortgage crisis. >> george w. bush discusses the critical decisions of his administration and his personal life, live, sunday, 4:00 p.m. eastern on c-span2. president obama has our arrived in japan to attend an economic summit. it is his final tour -- stop on a tour of asia. at a news conference, the president says the federal reserve policy decisions to pump $600 billion into the economy was not designed to weaken the economy. his comments last 45 minutes. [applause]

>> good afternoon, everybody. before i discuss the g-20, i want to comment on the agreement in iraq that has taken place on a framework for a new government. there are still challenges to overcome, but all indications are that government will be representative, inclusive, and reflect the will of the iraqi people who cast their ballots in the last election. this agreement marks a milestone in the history of modern iraq. once again, iraqis are showing their determination to unify iraq and build its future and that those impulses are far stronger than those who want iraq to descend into war and terror. the last several months, the united states has worked closely with our partners to promote a broad-based government, one whose leaders share a commitment to consider all iraqis equal

citizens. now the leaders must finish the job of foreign their government so they can meet the challenges that the coalition will face. going forward we will support the people as the strength of their democracy, resolve disputes, resettle those displaced by war, and build ties with united states and the world. here in seoul, korea, we are grateful to our hosts and south korea for your extraordinary hospitality. we came here to continue the work that has taken us from london to pittsburgh to toronto. we work together to pull the global economy back from catastrophe. we committed ourselves to growth that is balanced and sustained, including financial reform and

fiscal responsibility. the actions we took were not always easy or popular but they were necessary. as a result, the global economy is growing again. some economies, especially emerging once, are experiencing strong economic growth. jobs are being created, as in united states, where we have created more than 1 million private-sector jobs alone. we succeeded in putting the global economy back on the path of recovery, but we also know the progress has not come nearly fast enough. nor have we had achieved a balanced global growth that we need. advanced economies are creeks -- are growing slowly and are not creating enough jobs.

others are creating large deficits. we risk going back to the situation that threatens global recovery. here in cory it -- here in south threat, the question is whether we can keep the global economy growing. the economy tends to focus on areas of disagreement. the 20 economists gathered here are in broad agreement on the way forward. this is an agreement that is based on a framework that was put forward by the and i did states. for the first time, which spell out the actions that are required. first, we agreed to keep focusing on growth. at home united states has been doing our part by making his starke investments in infrastructure and education, research, clean energy, and our economy is growing again, and we

must do more to make sure that this continues. we agreed that growth must be balanced. countries with large deficits must work to reduce them, as we are doing in united states, where we are on track to cut it in half by 2013 and are prepared to make tough decisions to make that goal. countries with large surpluses must shift away from highly dependent on exports. going forward no nations assumed their path to prosperity is paved with exports the united states. second, we agreed that the exchange rates must reflect economic realities, just as major economies needs to preserve stability. rg economies be to allow for currencies that are market- driven. this is of a raised yesterday with the president of china and

we will watch the appreciation of china's currency. we need to avoid actions that perpetrate imbalances and the country's an undue advantage over one another. third, we took further steps to implement financial regulatory reform. at home, we are implementing the toughest financial reforms since the great depression, and we are expecting the same sense of urgency rather than complacency among our g-20 partners. here in south korea, we agreed to new standards similar to those we passed in united states. we agree on an approach to ensure that taxpayers are not asked to pay for future bank failures. fourth, we agreed to focus on development as a key driver of economic growth. the work we did here today builds on a new development policy that i announced in

september and recognizes that the most effective means of this thing people out party is to create sustainable economic growth, growth that will create the markets for the future. we also agreed on the an action plan to combat corruption, which in some countries is the single greatest barrier to economic progress. finally, we reaffirmed the need to avoid protectionism that stifles growth and instead pursue trade and investment to open markets. that is why we will continue to work towards a u.s.-korea free trade agreement in the coming weeks. not just any agreement, but the best agreement to create jobs, both in america and korea. that is why i have spoken frankly to my partners today about prospects of the doha round. just as the emerging economies have gained a greater voice at financial institutions, so too

must embrace the responsibility to open markets to the trade and investment that creates jobs in all our countries. i want to thank our south korean hosts for a successful summit. i want to thank my fellow leaders for their partnership, and we have laid out the steps that we will take to realize the balance of sustained growth that we need now and in the days ahead. these are commitments we will have to be. with that, let me take a few questions and i will start off with a reporter from bloomberg. >> thank you, mr. president. a question on the south korea to free trade agreement. it concerns on automobiles and beef are not addressed over the next few weeks, at that point would be better to have no deal at all? >> i have always said that i am not interested in signing a trade agreement just for the sake of an announcement. i'm interested in trade

agreements that increase jobs and exports for the united states and hopefully also increase opportunities for our trading partners. i think that is achievable between united states and korea. the whole issue here from my perspective is do we have a deal that works for us? the president's obligation is to make sure it works for korea. we can get a win-win, but it was important to take the time so i am sure that it is a win american workers and companies, as well as for korean workers and companies, because i will have to go to congress and sell it. from my perspective, i am not interested in an announcement, but an agreement that does not produce for us. we have had a lot of those in the past.

a lot of announcements, but at the same time, we see american manufacturing deteriorate and as a consequence of a lot of concern back home. understandably, there is a lot of suspicion that some of these trade deals may not be good for america. i think this one can be, but i want to make sure that when i present that trade agreement to congress i am absolutely confident that we have got that kind of deal that is good for both countries. dan of cnn? >> thank you. after the midterm elections you said you were open to compromise on the bush tax cuts. i'm wondering if you are prepared to say that you are willing to accept a temporary extension for the wealthiest americans. unrelated cup question, you feel the election has weakened you on the global stage?

>> the answer to the second question is no. i think what we have seen over the last several days as we have traveled through asia is that people are eager to work with america, eager to engage with america on economic issues, security issues, on a whole range of mutual interests. that is especially true in asia, where we see such enormous potential. this is the fastest-growing part of the world. we have got to be here, and we have got to work, and i am confident that my administration over the next two years will continue to make progress in ensuring that the united states has a presence here, not just for the next couple of years, but for decades to come.

with respect to the bush tax cuts, what i have said is i am going to meet with both republican and democratic leaders late next week, and we will sit down and discuss how we move forward. my number one priority is making sure that we make the middle class tax cut permanent, that we give certain -- to the 98% americans that are affected by this tax breaks. i do not want to see their income taxes by up, not only because they need relief, after having gone through a horrendous recession, but because it would be bad for the economy. i continue to believe that extending permanently the upper income tax cuts would be a mistake and that we cannot afford it. and my hope is that somewhere in

between there we can find some sort of solution. but i am not going to negotiate here in seoul, south korea. my job is to negotiate here in washington with republican and democratic leaders. ben of ap. >> thank you, mr. president. you came here talking about the frustration that americans feel about the slow pace of recovery in the economy, and over your travels in the past 10 days you have talk about sustainable growth. the american people do not seem as interested in gradual growth as much as they want noticeable help right now. can you promise them that there will be in fact noticeable job growth during your four-year term, and d you think the unemployment rate will still be number of 9% when you run for reelection? >> i do not have a crystal ball, but i will say that we have grown the economy by 1 million

jobs over the last year. that is noticeable. those million people who have been hired notice those paychecks. monthss 10 consecutive t of private sector job growth. in order to speed up job growth we have put forward a range of proposals that i hope to discuss with democratic and republican leaders, because we cannot stand pat. i continue to believe that we need to invest in a creaky infrastructure back home, and as you travel around asia, you start seeing other countries investing in infrastructure. that is what the united states has done in the past, but we have been living off the investments we have made back in the 1930's up to the 1960's. it is time to make sure we have upgraded our roads, railways, airports.

that will make us more productive and put people back to work right now. i believe that it is important for us to work with businesses to see if we can incentivize them to invest now rather than holding cash, waiting for the future. they have got cash to spend. we have put forward a series of tax proposals that historically republicans have supported. my expectation is there is no reason for them not to support it because i am supporting it. that is a conversation i hope to have next week. we have our recovery. it needs to be speeded up. government cannot hire back the 8 million people who lost their jobs. that is up to the private sector, but we can set the conditions whereby we see significant improvement during the course of the next year, the next two years, and we can chip away at the unemployment rate so

that we get back to the kinds of levels that reflect a growing middle class and increased opportunity for all people. jake tapper. >> thank you, mr. president. this communique has a commitment that all countries will refrain come -- from competitive devaluation of currencies. what do you think that means concrete lead when it comes to china's the heater and what you expect from them, and also, i am wondering when it comes to congress, what you think your democratic party would benefit from new blood, new leadership. >> i have been very clear and persistent since i came into office that we welcome china pot

rise. rise.nk-- china's they have lifted millions of people out of poverty and that is good for the world and america. it means that china has the opportunity to be a responsible partner. it means that china can be an enormous market for the united states, for korea, for countries throughout asia and around a world, and is good to beat -- to get people out poverty and give them opportunities. i have also said that precisely because of china's success is important it back in a response old-fashioned internationally. the issue of the rmb is one that is an irritant, not just the benighted states, but to a lot of trading partners and those

that are trading with partners -- with china around the world. it is undervalued. china spends enormous amounts of money intervening in the market to keep it undervalued. what we have said is it is important for china, in a gradual fashion, the transition to a market-based system. this is something that china has done in the past and china has acknowledged it needs to transition to a more balanced growth-strategy internally or they are focusing on their enormous domestic market and giving their people the opportunity to buy goods and services and consumer, all of which will promote their growth, but also will reduce some of the imbalances are on the world. what this committee k committed dates not just to china but to

all of us -- what this communique says is letting currencies reflect market fundamentals, allowing your currency to move up and down depending on the role that you are playing in the international trading system is the best way to assure that everybody benefits from trade rather than just some. the communique jimmy cates -- icates that principle. we hope to continue to see progress on that front. it means adjustments for china, so we understand that this is not solved overnight, but it

needs to be dealt with. i am confident that it can be. i think what we will naturally see is a whole bunch of talented people rise to the top as they promote good ideas that track the american people when it comes to jobs and investments and how to grow the economy and how to deal with our challenges. i think speaker pelosi has been an outstanding partner for me. harry reid has been a terrific partner in moving some very difficult legislation forward, and i am looking forward to working with the entire leadership team to continue to make progress on the issues that are important to the american

people. >> i am hoping to get you in a reflective mode. he spoke in your press conference in washington about your relationship with the american people. he said it had built slowly, it peaked, and then during the course of the last two years and had gone rockier and tougher. if you think the same -- i am wondering if you think the same could be of foreign leaders. >> that is not how i remember it. i remember our first g-20, you guys riding the execs storing -- exact same stories that you are right thing -- writing now. united states obviously has a special role to play on the

international stage. regardless of who is president. we are a very large, very wealthy, very powerful country. we have had outsized influence over world affairs for a century now. you are now seeing a situation in which a whole host of other countries are doing very well and coming into their own, and naturally they are gng to be more assertive in terms of their interests and ideas, and that is a healthy thing. that is why we have a g-20, because the old arrangements did not fully reflect these new realities. on thisst reflect somewhat. -- summit. the framework for a balanced and sustainable growth is one that we helped to originate.

the financial or forms and basel 3 are based on ideas that came out of our work and reflect many of the principles that are in the development document that was set forward. in terms of how we can encourage not canaid, but also -- not just aid, but self- sufficiency. sometimes i think naturally there is an instinct to focus on the disagreements because

otherwise these summits might not be very exciting, just world leaders sitting around intervening. there is a search for trauma. -- for drama. in each of these summits we have made progress, and sometimes charging that progress requires you to go back and looke at previous summits starting off with financial regulatory reform. in toronto we said here is what we need to do. let's have this ready by the time we get to south korea, and it was not real sexy in toronto, but it moved the ball forward in terms of a coordinated response to financial regulations. reform is something that the united states has said we need to get done.

in previous summits we have said we will find a way to get that done, and lo and behold we are here at this summit and we have achieved what is a huge shift in how the powers are assigned in these financial institutions. the work that we do here is not want to seem dramatic always. it is not always gone to be immediately world changing. but step by step, what we are doing is building stronger international mechanisms and institutions that will help stabilize the economy, ensure economic growth, and reduce tensions. the last point i will make on this -- part of the reason it seems that the united states is

attracting some dissent is because we are initiating ideas. we're putting them forward. e easiest thing for us to do is to take a passive role and let things just draft, which would not cause any conflict, but we thought it was important for us to put forward more structure to this idea of balanced and sustainable growth, and some countries pushed back. they were concerned about is this going to lock us into having to change our growth patterns or our trade policies or what have you. that resistance is natural. it arises out of the fact that united states is showing leadership and we are pushing to try to bring about changes. [unintelligible]

and i guess what i am saying is i actually think that my relationships have grown much stronger with the people i have worked with here. when i first came into office, people might have been interested in war photo ops -- in more photo ops because of the hoopla around my election. i now have a genuine friendship with the price minister of india, and i think he and i share a level of understanding and interest in working together that did not exist when i came on to the scene. the same is true for chancellor merkel. that does not mean there are not

going to be differences, but the same is true for my relationship with president hu. it was not any easier talking about currency when i had just been elected and my poll numbers or at 65% than it was now. this involves the interests of countries and not all of these are run to be the resolve -- are going to be resolved easily. it is not just a function of personal charm. ies's a function of countr interest. >> a quick follow-up. there was a comment back home that are compromised position is to take the bush tax cuts back

is a wrong interpretation. >> that is a wrong interpretation. here is the right interpretation. i want to make sure that taxes do not go up for middle-class families starting on january 1. that is my number one priority. for those families and the economy. i also believe that it would be fiscally irresponsible for us to permanently extend a high-income tax cuts. i think that would be a mistake, particularly when we have got our republican friends say that their number one priority is make sure we deal with our debt and our deficits. there may be a whole host of ways to compromise ground as issues. i am not going to negotiate here in south korea on those issues, but i have made very clear what my priorities are.

>> that was my quick follow-up. speaking of fiscal responsibility, given the fact that the bulk of the expanse of extending the tax cuts is the middle class, a trio of dollars, in the interest of telling the truth to the american people, can we afford that? >> well, the middle class in the and i the state's -- in the united states saw their real wages go down 5% over the period of 2001 to 2009. at the same time that all their costs were going up. giving them permanent relief is good for those families. i also believe strongly is good for our economy right now, at a time when we are still in

recovery. the costs are significant, and we are 1/2 to have a discussion -- we are going to have to have a discussion over the long term how to have our spending with our revenues, because they are out of balance. that is we -- that is why we have a deficit and a debt. it is our responsibility to the next generation to make sure that that it's solved -- that that gets solved. i do not start thinking on the revenue side, but on the spending side, where do we get the money. i am looking forward to get the official recommendations. i will study those carefully, consult widely, and see what we can do on the spending side that will have a and the impact.

-- an impact. and then we need to see what kind of a shortfall we will have, and then we will have a debate which will be a tough debate and it will have to be an honest debate with the american people about how we pay for those things that we think are really important for. i think it is important for us to that invest in research and vomit because that will be the key to our iovation. we need to figure out how to pay for that. it is important to figure out how to invest and our education system. how are we going to pay to make sure that young people can go to college. it is a port to make sure that social security and medical care generationor thais and the next. that will be a seri of tough conversations. what i know is if we are spending $700 billion, if we are

borrowing $700 billion to pay for tax breaks -- tax breaks for people like me who do not need them, and where i am least likely to spend that money and circulate it in the economy, that is probably not a great approach. chip? >> it is not your hat to comment on fed decisions, but that is reporting that there is unhappiness about -- among g-20, head -- among g-20 countries about that decision. could you share with us what some of them said, and what was

the number 1 complaint, concern, or piece of device that you got from leaders about the economy and restore chip of the economy? >> -- and stewardship of the economy? iments? about complement's there was not a lot of discussion about fed policy decisions. a couple times there were veiled references to monetary policy that may have an effect on other countries, but it was not central to any of the discussions that we had. on the margins, there was a lot of discussion and in the press there is a huge amount of discussion about it. that was not part of the discussion that we had inside the leaders' meetings.

most of the discussion had to do with how we translate the idea of rebalancing in two concrete steps. the communique reflects the consensus. it is puzzling to me that the reporting is all talking about conflict when the communique reflects a hard-won consensus that the 20 largest economies sign up for. that gives us some mechanisms to start monitoring, looking at indicators, seeing how countries are doing on this front. it does not provide an enforcement back of the -- enforcement mechanism, but thai gives the international community the ability to monitor and see exactly what countries are doing and see if the policies they are pursuing

our fair to their trading partners, and if not, it is a mechanism to apply at least some peer pressure on those countries to start doing something about it. i think when people call to me about the u.s. economy, their main concern is is it growing fast enough, because a lot of countries, including south korea, depend a lot on exports, and the u.s. is the world's largest market. they want to see us grow. they want the unemployment to go down. they are interested in what strategies that can be used to encourage takeoff in the u.s. economy, and i described to them some of the steps we are taken

and will continue to take in order to make that happen. the last point i would make about the fed decision. when i am asked about it, my simple point is to say from everything i can see this decision was not one designed to have an impact on the currency, on the dollar. it was designed to grow the economy. and there is some legitimate concern that we have had very low inflation, that a huge danger in the united states is deflation, and that we have to be mindful of those dangers going forward because that would not be good for the united states or for the rest of th world. beyond that, that is just an

observation about what i think the intent was. last question, scott? >> one of your top advisers said this morning that the challenges facing the g-20 now are much more manageable than they were at the height of the crisis. how does that affect the dynamic? is there some taking the bite off the ball among your fellow leaders? >> what it means is in the absence of crisis, people probably are willing to hunker down a little bit more on some of the negotiations. speed seems less of the essence, people think if it does not get

solved now, maybe we can put this off for another day. what is remarkable to me is despite some of those impulses we are still getting stuff done. as i emphasized before, which should not anticipate that every time countries come together that we are doing some revolutionary thing. instead of hitting home runs, sometimes we will hit singles. they are really important symbols. i just listed some of these. i am for reform. this is something that people have been talking about for a decade or more. it has gotten done. financial regulatory reform -- a huge lift. it is now coming to fruition. we have made enormous progress in a really short period of time.

basel 2 took a decade to do. we got this done basically in a year and a half. the development agenda that has been put forward will make a difference. it is rebalancing -- it is a work in progress, but everybody is on record saying surplus countries and deficit countries both have to be mindful of their policies and think about the adjustments that they need so we can sustain economic growth and keep our borders open to goods and services over the long term. those are all positives, and that is an indication of the seriousness with which people take these meetings, even if as i have said is not always going to be revolutionary progress, but sometimes evolutionary progress. i feel obliged to take one question from the korean press since you guys have been such

excellent hosts. anybody? this gentleman right here, the only guy who took me up on it. i will probably need a translation, if you are asking the question in korean. in fact, i will definitely need a translation. [laughter] >> i apologize to you, mr. president. i am chinese. >> in fairness, though, i did say i was going to let the korean press ask a question, so i think -- >> how about if the korean friends let me ask a question on their behalf? >> it depends on what the korean

friends say. this is getting more complicated than i expected. >> can you take a question from an asian, president obama? >> go-ahead -- >> you mentioned interpretation. part of a cold the being the american president is some of decisions you take, actions you make, will be interpreted in a way that are not what you thought they would be or what you meant they would be, for instance, some of the actions you have taken in were thought to be anti-business in the united states. some of the actions taken by the u.s. government that you represent as well, we interpreted as against other countries' interest. you find yourself constantly

being interpreted. how you address these interpretations? the mouth with wonderful press conferences like this that give me the opportunity to provide my own interpretation. you make a valid point. we live in a connected world. everything i say, everything my administration, anything one of my aides does, is interpreted in one fashion or another. in america we call this spin, and this is a cycle that goes on 24 hours a day, seven days a week, and in this media and varmint it is some ways more challenging to make sure -- media environment, it is in some ways more challenges to make sure that your message gets out consistently.

if i am consistent with my actions and my goals, then over time, hopefully people look at my overall trajectory and they can draw accurate conclusions about what we are trying to do with respect to business, example. we have had in the united states some battles between myself and some in the business community are on issues like financial regulation or health care. at the same time, i have said repeatedly and i have sat on this trip we cannot succeed unless american businesses succeed. i would do everything ian to promote their ability to grow and prosper and to sell their goods, both in united states and abroad. the fact that the economy is now growing and trade is expanding, the stock market is up, is an indication that i mean what i

say. by the end of my administration, hopefully businesses will and say that guy was good for business. now i'm stuck with this, but now i think i have to go fly a plane. [unintelligible] right. [unintelligible] first of all, beef was not the only issue that was of concern. in fact, a larger concern had to do with autos. concern is very simple.

we have forwarded thousand korean autos in the united states, and a few thousand american cars here in korea. people are concerned about whether the standards, the non- tariff barriers with respect to is something that is impeding us compete with those products. i think we can find a sweet spot that works both for korea and the united states. i repeat, i am not interested in trade agreements just for the sake of trade agreements. i want agreements that work for the other side, but my main job is to look out for the american people, american workers, and american businesses. and i want to make sure that this deal is balance. so will keep -- so we will keep working on it, and i am confident that we will get it

done. they do, everybody. i am late for my flight. [applause] thefter this deevent, president traveled to japan. the group of 21 economies is taking steps to create a pacific-wide trade zone. the president is expected back in washington on sunday. the future of health care, with the alliance for health reform. live coverage starts at 12:15

eastern. "book tv" this weekend. george w. bush on his memoir, " decision points." live sunday, 4:00 p.m., on c- span2. this weekend, c-span3 we will see how different american and british be shipped -- leadership worked on beating the nazis. live, saturday, november 20, a seminar from the national our kids -- from the national

archives. american history tv on c-span3. the united states senate will have 16 new members next year. richard blumenthal will be one of the new democrats joining the senate. he succeeds christopher dodd. he comes to capitol hill with state capital experience. he starts the new job in january. now the head of the federal reserve bank of dallas spoke about the economic recovery last week in san antonio. he said the decision to buy $600 billion in treasury bonds may be the wrong medicine for the economy.

his comments are about 45 minutes. >> i think we have a terrific program plan for youth of the next 24 hours, beginning with richard fisher, the president of the federal reserve bank of dallas. before i introduce richard, i want to dial back to 2002. one of the reasons i did that is because i fell at afp needed to take a greater step forward in terms of providing value to cfo's and treasurers. that was not something that we

were doing in 2002. in 2005 we had our first executive institute in san francisco. that was the beginning leading to where we are today, and this is our sixth deevent. we have had six treasurer's for rums. next year's is going to be in paris. we also -- many of the people here today, the society of canadian treasurers, so we have expanded the focus across the border. we hope the continued at further debt to provide diet to the people in the room today and to people in roles like you.

a lot of the work has been done by a fellow named craig martin, who has been running the institute since it began and is responsible for putting the next 24 hours together. if you enjoy it, you can thank him, and he did not, i will give you his room number in the hotel. [applause] without further ado, i would like to introduce richard fisher. he is president and chief executive officer of the federal reserve bank of dallas. he is a voting member of -- and has served both in the carter and clinton administrations in the treasury department and is deputy trade representative. we're very fortunate to have mr. fisher with us today to share some very timely remarks. latest and gentleman, richard fisher. -- ladies and gentlemen, richard

fisher. [applause] >> i am very excited that you are going to be holding your next meeting in paris, texas. a nice part of east texas. i understood you had condoleezza rice as a speaker last night. is a magnificent woman. she is a great concert pianist. the only instrument i can play is the radio. it has not escaped me that you invited me to speak in the gonzales convention center. congressman gonzales was wary of the federal reserve, and today in his memory i will operate on the presumption that a good congressman is holding a congressional hearing somewhere in the hereafter and as he did here on earth, called -- has

called a cop -- has called upon committee members to account for themselves. i can only account for and speak for my own actions, not that of anybody on the federal reserve board or in the federal system or any of the federal reserve banks. what i plan to do today is provide you with an analysis of the nation's economic predicament as i presented it to the open economic committee last week that summarizes the arguments i made during the course of monetary policy and provide a personal perspective on decisions made by the committee. afterwards i will do my very best to avoid answering any questions you might have. [laughter] after the staff is -- has briefed the committee on the projections and provided their own insights, ben bernanke calls

on all the participants in the fomc /is to present their sense of the economy. when i and call upon, i give a summary of the dallas fed staff. there are plenty of forecasting models available to all of us at the fed. the key to crafting monetary policy is placing the theoretical analysis done by our staff with a qualitative context of economic behaviors practiced by businesses and consumers operating in the field, like

you. the essence of what i recorded to my colleagues when we met last week is more things are moving in the right direction than in the wrong direction. there are green shoots beginning to emerge in the lancet pockmarked by ground -- by brown spots. the rest of a double that in the economy has lessened as has the risk of inflation. speculation in excess is beginning to raise its head. on the economic front, the debt from manufacturers indicate that activity has picked up on a year-over-year basis in october and was better than the pace in september. this might be expected. my contacts record price pressures from a range of

commodities, including corn, oil, metals used in manufacturing. this is nothing you would not have known from reading the daily press. i find it of interest that one of my contacts just came back from visiting with all 450 of his chinese suppliers and reports the chinese government was encouraging manufacturers to grant wage increases in large part to boost up domestic spending at request of the united states and others. this applied the particular company with everything from clothing to the lote end of entertainment devices.

alternative production sites in vietnam and india slightly underbid chinese counterparts. to be sure, these are opening negotiations. i know the process. but they are alarming. they might pretend to shift back to value-added goods, but in the immediate future, this is a squeeze on margins for those they are was chosen from china, india, vietnam, -- they are resources from china, india, vietnam, other parts of the world. none of them feel that they have the wherewithal to pass on the cost increases here at home of more than 2%, or roughly 2%. the one thing they are certain of is that the retail goods

inflation is highly unlikely to drift downward into a deflation. this is in keeping with what we see in examining the entrails of the trimmed means population done by the federal reserve of dallas -- the trend means of population, but i did federal reserve of dallas. -- trimmed means calculation of the federal reserve of dollars. to be sure, it is 1% annualized in september compared with an annualized rate of 1.3% in august. the number for these months, however, is above the rates we saw earlier in 2010, and the 12-month trim mean rate has been steady for the last six months,

clocking in precisely at 1% over the last three months. it is a better gauge of underlying trends, and we think it is at the dallas fed, then it is no surprise that the court right to be movement towards the steadier trim mean rate. the message the tremayne is sending is consistent with the price picture i have drawn from my colleagues in the past at several market committee meetings. the underlying trend appears at this time being to be holding steady, albeit at a rate we were accustomed to in the 1950's rather than the rate we have become accustomed to since then. without pricing power, and in the face of anemic demand, all my financial does this context, large and small, public and private, continue to work to

protect the margins. and to take advantage of ready access to cheap money, to and ce productivity, entice public companies to buy their stock, and warehousing those funds. a few, and this is the good news, are using cheap money to refinance their remaining pension obligations in light of unsustainable discount factors used for accounting purposes. to draw on the point, most all the businesses i talk to are investing -- expanding investment and productivity enhancements. 42 of the large companies are taught to report interest and -- far too few of the large companies i talked to report interest in hiring american workers. they believe the potential for the return on investment is

greater elsewhere. this reticence intensified during the final innings of the election season, which backs the question of whether this will now change with the new congress. i will circle back to that issue in my concluding remarks. non-financial and financial companies alike report that they are flushed with liquidity. bankers are aggressively courting the larger corporate credits -- microphone falls down. there it goes. several of my interlocutors report that in the last few weeks, the biggest banks approached them literally begging to have them borrow money at less than 3% over a 10- year time frame. as you know, corporate debt markets are rebuffed and smaller companies are not complaining about the lack of access to capital. as part of the last monthly texas manufacturing outlook

survey, conducted during october by the dallas fed, we ask our staff questions of the 240 companies surveyed about credit availability. only 60% responded that it was seeking credit for long-term expenditures, and of that 60%, only 18% reported they were having substantial or extreme difficulty obtaining financing. 44% of those companies reported they were seeking short-term credit, and of that -- excuse me, 54%, only 12% reported difficulty getting credit. this was central to my district, but given that the dallas said business activity index, which we published monthly, has the highest correlation of surveys to those reflected in the national pmi, our survey might have some credence.

it concerns me that liquidity is on the present on bank and corporate balance sheets and yet is not being used to hire american workers. it also concerns me that the most recent amg market financial did it showed flows into all asset classes except money market mutual funds high risk to lowest bond vehicles -- to low risk on vehicles. margin debt remains shy of 2007 highs and is fast approaching levels that prevailed before the nasdaq explosion in 2001. margin account debit balances at percentage to market capitalization of the s&p 500 now exceed the level in 1987 and 2001. junk yields are at their lowest level since october 2007. the leveraged buyout market is back, 2006 levels of ebitda, and

the recent announcement of the carlyle group's purchase of holdings echoed the peak of the pre-crash price. buyout people do not typically by companies to expand the work force. instead, they acquire them to expand operations and provide an attractive payback, usually in a shorter time frame that under normal corporate horizons. the corporations i talked to eyeing possible acquisitions and ready access to cheap money and credit markets are not given to picking up strategic acquisitions as a way to expand payrolls. in sum, scanning the business landscape and the conditions of the financial markets, i have concluded as a part-time golfer that the greens are playing fast and must be approached with caution. at a minimum, i concluded that the committee should be very

careful in how we calibrate our next strokes, lest we overplay. i fully understand the theoretical impulse to drive longer term interest rates to lower levels in hope of stimulating demand and challenging the propensity economic actors to court rather than invest -- to hoard rather than invest. want effective engineering lower rates would be to devalue the dollar -- one effect of engineering at lower rates would be to devalue the dollar. i agree that we are indeed what economists refer to as a liquidity trap. yet i think it is worth noting that we already have low interest rates, and the press against risk-free instruments are historical novel to reduction in interest rates to what i refer to as lilliputian

levels have not done much so far to spark demand. the opportunity for capital credit markets to burn -- earn roi and other risk factors, and yet with the rates that are to prevail, businesses lack confidence that they can secure roi by expanding the domestic workforce. in comparison to what they might earn from alternative investments abroad, or by buying their own stocks, or cleaning up their balance sheets. for their part, consumers will borrow when they believe it makes sense to shift consumption for word. after the sobering experience of the last three years, consumers are restrained by a lack of confidence that their income streams will be sufficient to cover their payment obligations. on the supply side, we know that things are floating in a sea of liquidity. banks have pulled over a

trillion dollars of excess reserves on the balance sheets of the called federal reserve bank, like mine. -- 12 federal reserve banks, like mine. if we had a level of bank reserves for the could be in the marketplace that was binding, i could understand the impulse to believe that structure. for the quantitative easing for additional asset purchases will surely increase the level bank reserves at lower rates marginally and add more liquidity to the markets while weakening the dollar. the more germane question is whether this will work to the benefit of job creation, and whether it will wore off financial access. in a speech in jackson hole that was widely reported, chairman bernanke and ask all of us to consider the costs and benefits of further accommodation. my response was that i was skeptical about many of the presumed benefits of asset

purchases. i was certain, however, of some of its potential cost one is the risk of being perceived of embarking on the slippery slope that when a decision. once the central bank is perceived as targeting government debt yields at a time of budget deficits, concerns about that one of his asian quickly rises. i -- realized that concern -- about -- concerns about a debt when a decision quickly prices. the bank of england has announced the skull policy tight -- announced fiscal policy tightening. that is not the case here. if this were to change, i might advocate for monetary accommodation, but that is not happening yet. i worry that providing monetary accommodation will reduce the odds that fiscal discipline will be brought to bear.

i also worry about the risk of being perceived as using quantitative easing and buying copious amounts of financial assets above and beyond the ordinary bounds of what we know as the federal reserve system of the market account, as the "new normal" or implementing monetary policy. everything we know from monetary history tells us that when times are in crisis, which could open the floodgates. this has been the practice of central bankers since the 19th century, bagehot 101, after the great british patron saint of central banking. it worked. it worked to pull us out of financial panic and economic ruin. but he did not seem to me last week to be a time of panic or crisis. if we were to act by throwing more money in the economy in

these benign circumstances, the economy could experience turmoil. expectations of continued federal reserve purchases of treasury securities as normal operating procedure might grow and grow and be difficult to trim once it takes root in the mind of financial operators. i might understand the case for accommodation it serious deflation were a clear and present danger. it is not. i would add for the audience today here that this is thanks to ben bernanke's adroit leadership in engineering the liquidity measures implemented during the panic of 2008 and 2009, and by his students to avoid the policy errors of the 1930's -- his sturdiness to avoid the policy errors of the 1930's. neither m2 growth nor

inflation has fallen off the cliff will income is growing, however a criminal, and it is -- nominal income is growing, however incremental, and it is not shrinking. much of what we export from countries is in the form of higher value-added goods, services, and basic commodities like cotton and soybeans, which we produce with incredible efficiency. and not-insignificant portion of what we import is used to support lower income earners, the repeople suffering from employment or -- job or -- very people that are suffering from employment or job insecurity. wal-mart and costco and p

places where people buy necessities will likely employ fewer workers. i suggest that a consequence of that further easing was to weaken the dollar and this might undundermine our standing in the international forum, and it might undermine efforts to ward off protectionism. the proposition of higher prices of financial assets delivered to those most in need -- i wondered aloud if this were indeed true. we're seeing the beginnings of stiglitz of activity in stocks and buyouts -- beginning said speculative activity in stocks and buyouts. i have no problem with market operators making money. my previous life was as a financial money manager before i took the vow of financial custody at the federal reserve. -- financial chastity at the

federal reserve [laughter] senior citizens and others who played by the rules are earning nothing on their savings, while big debtors and too big to fail oligopoly banks benefited from their subsidy. no administration, republican or democrat, which tolerate, let alone advocate, that dynamic for very long. this could come back to bite the federal reserve and possibly threaten our independence. then there's the question of exit policy. the more we engage in a policy of asset purchases, the more we laid in our balance sheet with assets, the greater the likelihood of realizing losses on our holdings. one could conclude that the stream of securities we are holding will protect us from capitol losses under reasonable price reversal scenarios.

but if on a reasonable scenario to bail -- if on reasonable and there is prevail, i shudder at the prospect of the chairman of the fomc appearing before the tommittee as they did i 200 explain that there were billions of dollars of losses. we might be prescribing the wrong medicine for the ailment for which our economy is suffering. liquidity and appointed money -- abundant money are not be binding constraints on the economic activity we wish to see. the binding constraint on in, and future aggregate demand, the disincentives of regulatory policy, and the reluctance, given the disincentives, of those who have the power to create jobs to invest in undertakings that would indeed create those jobs. the remedy for what ails the economy, in my personal view, is in the hands of our fiscal and

regulatory authorities, not in the hands of the central bank of the united states. i could not stay with conviction that purchasing several hundreds of billions of dollars of treasuries on top of the amount we are already committed to buy to compensate for the runoff of $1.25 trillion of mortgage- backed securities on a balance sheet would lead to job creation and demand-spurring action, but i could envision such action would lead to a declining dollar, in coach for the speculation, commodity courting, accelerate the transfer of wealth, and possibly place at risk the stature and independence of the fed. well, now you know what i argued at the last meeting. [laughter] my perspective, and those of others at the fomc, because the internet is the most thoughtful and perceiving the chairman -- because ben bernanke is the most thoughtful and receiving of the

chairmen -- all of us are given a thoughtful and fair hearing at the table. after the liberation, the committee concluded that the better approach was to purchase $600 billion of treasuries between now and the and the second quarter of next year, on top of the not required to pay down -- the amount required to pay down the mortgage backed securities. the federal reserve will buy $110 billion, up in u.s. treasurys. it is an amount that is annualized for the federal deficit of the government next year it in the next eight months, the nation's central bank will be monetizing fiscal capital. it is risky business. we know that history is littered with economic carcasses of thisns that incorporated as a central bank practice spread out and the actions be justified? well, chairman bernanke

provided an answer in an editorial in "the washington post" the day after the meeting. "the approach ease the financial conditions in the past and look at it again. easier financial conditions will -- and look effective again. easier financial conditions will allow homeowners to refinance at the were corporate bond rates that will encourage investments and higher stock prices will induce small and great confidence, which spurs spending." for good measure, he added, "we have made all necessary preparations and are confident we have the tools to unwind these policies at the appropriate time." over the weekend, he added in a public speech that he did not think that the new level of asset purchases were what he referred to as super-ordinary inflation. having made by arguments to the contrary, i am a member of the

federal open market committee, chairman bernanke leads the committee, i respect the will of the committee, and i defer to the chairman as its sole spokesman. i would suggest that even if you share my perspective on this matter, you might be assuaged by looking into this initiative, which i consider to be a sort of a bridge to fiscal sanity to we have a new congress. from my perspective, there are two ways that the central banks can approach them. the way it is being done by the bank of england, which appears to me to be seeking to push the adjustment to a policy of fiscal abstinence by a new government after a prolonged history of the school debauchery -- fiscal temperatures, or to provide space necessary for our new progress to find a way to restore fiscal sobriety without cutting off economic recovery in the united states. the new leadership of the house

of representatives and the reelected leadership of the reconstituted senate, together with president obama, surely must understand that we are at the end of our line, and times of the essence. the fed is doing its level best to deliver on the dual mandate we were given by the congress of the united states. but monetary accommodation by itself is not the answer to our current woes. the fed, as i see it, has taken a leap of faith, and there are political leaders who will forge a budgetary and regulatory to invest in creating jobs for american workers while averting what is stanford historian described in one state's "new york times" as " looming fiscal apocalypse." as winston churchill said, we need action at this day.

otherwise, the effect of quantitative easing will come in my view, result in more financial speculation, further investment in financial instruments, and ultimately, super-ordinary inflation. the fomc has taken a calculated risk. if the congress and executive failed to deliver, i believe we will have to consider changing course. here is the message -- the fed is going out of its way to be a good citizen. it is time to the congress to do the same. thank you. [applause] >> questions? >> i am happy to take any questions anybody might have. since we are going to be reported on television and

covered by newswires, please state your name. [laughter] fire away. it is always an inhibiting introduction. [laughter] no questions? let me ask myself a question -- no, just kidding. you have more things on your -- you look like you are on a -- [unintelligible] [laughter] could you hold this for me? >> my question, then, is the fed has taken a risk, and what is good to you what the congress and president to take? -- what risk and do you what the congress and president to take? >> it is clear that they have to

organize themselves so that we have a tax and regulatory regime that encourages and incentivizes corporations, whether public or private, to take the kind of risk that expresses confidence in the future, ends up hiring more american workers. it is the congress of the united states, and that takes guts. we have huge the schools, unfunded liabilities -- huge fiscal holes, unfunded liabilities. medicare -- we did our own numbers, and it is that the $5 trillion, and in unfund commitments, and $90 trillion. we will have to treat them in a way -- their business, not my business -- a way that incentivize people to hire workers.

that is a gets a thing to do when you have been practicing the equivalent of what i described with the british as fiscal debauchery for so long. to sober up and do the right thing takes guts. we will see if they have a bridge and must say, we are totally non-partisan at the federal reserve -- we will see if they have eight. i must say, with a totally non- partisan at the federal reserve could one of my all-time favorite public servants, in addition to paul volcker, is a man named george shultz. a republican public servant. i don't know if anybody in history has held as many cabinet jobs as him and did them so well. when he was president of omb under nixon, he was concerned that that administration was tempted to spend more money, and that congress was getting a little bit out of control.

the numbers were minuscule compared to now. he called onof his aides and said, " just between you and me, since you have been here since the founding of the office of management and budget, who enjoys spending more? is it worse under republicans or democrats?" the aide came back the next day and said, "there really is no difference between republicans and democrats in congress when it comes to spending money, with one exception -- democrats enjoy it more." [laughter] i don't believe that is any longer true. i don't think you can point the finger at one party or the other. together, and i mean this -- we cannot do this just the central bank did it leads to very bad behavior and has enormous risks. i think we have extended our salt significantly and we are well aware of that.

it does no good unless people taken the funds and put them to work. i should add that we live in a globalized environment and their options now -- there are options now. you are all business people, and you have advisers and fellow colleagues, investing with there is the best return on investment. thanks to winning the cold war, the death of mao and pol pot and others, we can do that anywhere in the world. they have to figure out how to be competitive on that front, because they are the congress of the united states and we are the central bank of the united states and the desire is to create more employment. >> hello.

in your opinion, did financial regulatory reform address too big to fail? >> you are talking about the recent bill passed by the congress? time will tell. i am a firm believer that too big to fail means you are too big, period. the 4 largest financial institutions -- which i understand are represented at these tables -- are larger than they were before the crisis. i do belie a former banker, if you get a certain size and scope you can follow the basic bankers rule, which is now know your customer. i would be in favor of breaking those institutions up. i certainly don't think it's fair for them to be subsidized by the kind of rates being paid

presently. now, back and sent a shiver up people's spine. -- the work that -- that can send a shiver up a people's spine but the work being done to make sure they abide capital rules and would at least restraint risk-taking behavior, including the " ru -- the volcker rule, which has been renewed for discussion by recently elected members of congress. paul is right that it encourages too much risky behavior. the answer is that it will really take time to figure out if this will be done. we have a new financial stability board that has only met once. it is just an affirmation. we at the fed have, i believe, at 254 rulings we have to pull together now.

going back to the churchville quotation, it -- the churchill quotation, that was the way the law was enacted and we are working on it. it is a destructive tendency, and we must treat it. i believe the intent is to treat it. the question is, will we find the cure? there is another question over here. >> how does the exit plan work? what is the conception model for $1.80 trillion? how to you on wine that successfully? the steps, the triggers, how the thinking works? >> in the old days, monetary policy was a very simple thing to bear with me for just a minute. i will give you an easy analogy

to wrap your mind around we basically spent our time controlling the fed funds rate. it is the rate that banks lend to each other. the fomc would meet and decide whether they wanted to tighten monetary policy or keep it the same or lose and a top. if you send it up, you know what the fed funds rate, if you wanted to raise it, you tighten the fed funds. we spend our time tightening that function. by the way, we made the assumption that the sprinkler system or. it did not. it became a group of goldberg device that got out of control, -- a rube goldberg device that got out of control, and we as regulators missed it. the intention was to tighten it just right so that the garden would grow, and if we put too much water on it, we would kill

it, if we did not want it enough, it would turn brown and -- water it enough, it would turn brown and die. we have a mortgage backed securities and treasurys, and when you buy them, you put that in the market, and you restructure them and take money out of the market. we also ought payments made on excess reserves -- we also have payments on excess reserves. we did not do that before. we can move that rate of around to affect the holdings of excess reserves, totaling over $1 trillion. it is 25 basis points, so the question is how much movement are you going to affect? we have protected our ability to conduct ourselves and try party market. we also bought the equivalent of

time deposits paid to the large financial institutions. there are quite a few tools in our tool kit. the real issue is how far in advance to identify what you need to do, the lag times are not clear and were never really clear, which is that simple rate we used for federal bond rates -- fund rates. we have a l to learn about the tools in our case, but we will use them if we feel if inflation is again rearing its ugly head. there is the answer to your question. ?es, sir, or ma'am depends on where the mic goes. this man deserves applause, by the way. [laughter] [applause]

my new accomplice in monetary policy. [laughter] >> good afternoon. most of the discussion and commentary has been among the cyclical factors driving unemployment, but i'm interested in your comments regarding the speculative forces driving certain jobs to never sort of come back to the u.s., and if you think it is the government's job to think about what america is going to be good at, what do you think about the strategic efforts made about the, and what more can be done? >> i am a central banker, not a legislator or member of congress, and i have no influence. [laughter] i say that because our job is to work to watch during of the garden -- the watering of the garden. it is clear to me, given my former occupations and just watching what is going on with

our economy, that other nations are obviously making enormous progress. i want to remind the room that we fought the cold war and we won. all the people we were worried about in china and russia and elsewhere are now competitors. milton friedman, who i interviewed for several television shows, said that they are partners, he called them our cooperators. obviously, when you have billions of people and you want to improve living standards, you bring them to work at the lowest value added and start to work upward. winston churchill, who i like to quote, often refer to the super-refund policies. he was a free trader, and that

is what america has done but we have done it successfully since the beginning of time. otherwise, we would be a a nation of farmers. we must continue to move up the for ourd letteatter people and prosperity. what does that come down to? education. that is for publicly-elected leaders to improve. to me, that is one of the most important issues of all. it is true from primary and the terreri -- and secondary school to the highest universities, and we must make sure we are training and work force to be able to compete. we know what the statistics are.

i think that is the key long- term issue that faces our nation. i just had one other comment -- we also are a nation of immigrants. my parents were immigrants. i don't see a single midamerican in this audience -- a single and native american in this audience. we are all children of immigrants who came here to better our lives. one of the all things when i speak the universities is looking at the audience and the change of complexion, particularly when you get high degrees. when you are talking at a convention where they get economic ph.d., you really have to work announced the names -- you really have to work to pronounced the names. imagine you spend an enormous amount of money and bring it up

to the service and send it away -- we tap into university endowments or state taxpayer money for our great state universities, will bring over the best minds of the world to be educated, and then don't let them stay. it makes 0 cents. -- makes zero sense. we know what has resulted, a silicon valley and everything else. everybody in this room came from nowhere. those are two things yet to get right to succeed -- we have to get right to succeed. one last question. well, i guess we are out. i was hoping somebody would sing the association's song.

[laughter] thank you very much. [applause] >> this afternoon, a look at the future of health care. the alliance for health reform hosts a discussion with norman shorenstein of the american enterprise institute, and i longtime capitol hill staffer. the live coverage starts at 12:15 eastern. >> in an ideal world, the fact that there were people shorting the mortgage market would have everybody saying, "there are all these smartnvestors who think this will crash and burn." but the market was opaque enough

that you could not see that the way you can see it in the stock market, and because of the way these instruments worked, they're not betting on a real mortgages but you were on the casino version of a mortgage. >> in 2003, bethany mclean wrote about and brought in "the room."t guys in here bthe sunday at 8:00 p.m. eastern on "q & a.">> argued in 1971, he ruled on in 1973, roe v. wade this considered one of the court's most controversy decisions. for the next two saturdays, listen to the arguments, 6:00 p.m. eastern on c-span radio,

nation wide on xm channel 132, an online at c-span.org. >> a new congress starts in january with republicans in control of the house. the votes are still being counted in several house races. ballots are still being counted in the alaska senate race. the associated press reports that republicans are leading in four of those seats and democrats in three. senator lisa kerlikowske's campaign has announced that she is headed for -- senator lisa kerlikowske's campaign has announced she is headed for reelection. a little over 9% of the bright- in ballots have been challenged by republican candidate joe miller's zeit.

the democratic candidate has conceded. coming up at 12:15, a discussion on the future of health care at the national press club. until then, it looked at the economy and a map of the financial stress of the united states. host: let me introduce you to two guests here in washington. one is joining me by phone in orlando. mike schneider is on the phone. good morning to you. guest: good morning. host: i want to start with showing you have lines and arou the country.

there is the hartford current which has an index of its own. there is some good news for people who live in hartford. you all have a statistical analysis that looks at the companies -- the country's the stress level. we invited you here in april. let's listen to what you had to say then. guest: you can only look at the real numbers and what the world had to say then. it peaked in october and has come down a little bit to 9.7%. in march, we created 160,000 payroll jobs. that was the best performance in three years. people are definitely encouraged. if you look at march 1 year ago, we were losing 107,000 jobs in

one -- in that month alone. i think things have stabilized, at least. the problem is when you have an unemployment rate of 9.7%, that is still a very high unemployment rates. martin host: crutsinger, we still hav a high unemployment rate -- host: martin crutsinger, we still have a high unemployment rate, in the 9.7 range, but what are your latest readings? guest: the latest readings show that the stress ramallah counties did drop to an eight- month low -- from all of the counties, did drop to an eight month low. but we are seeing signsf improvement. i used the word "stabilized" six months ago, and i think that is probably still where we are. the difficulty is that we are coming out of a recession, so we are bumping along the bottom.

host: mike schneider, i'm going to ask our colleagues, elise, to put the map on the screen. countys how we're doing by county across the nation. caller: this was developed -- guest: this was a love with about one dozen people with a peak -- with ap. those variables are the unemployment rate, the foreclosure rate in the bankruptcy rate and we chose those three variables because they work in different stages of a person's economic decline. we created an index score for every county and every state based on those variabl and the scores on a scale of 100 -- of one to 100 based on experience.

basically, it showed the probability of walking down some street and rning into someone who was either unemployed, bases for closure, or has filed for bankruptcy. for instance, the state of nevada, which is the worst off in the country, had the score of about 21. if he were to walk down any street in nevada, the chances of running into someone who was unemployed, facing foreclosure, or bankrupt would be one of five. host: darkest areas on the map indicating what? -- indicate what? guest: those indicate the most distressed areas. as you can see, it is concentrated on lot in nevada, california, michigan, and parts of florida. host: we would like our viewers to join in the discussion. we will help you understand what you see happening in your state, but we would like to hear from you what you think is happening

in your state. are you starting to hear that things are leveling out, or starting to experience optimism? or are things getting worse. tell us why. here is how you reach us. the numbers are on the screen. ipod we also have the twitter address and e-mail account -- but we als have the ttchell address and e-mail account. places that are -- we have the twitter address and e-mail account. places that are doing poorly, in relationship to realistic, what are you finding that might be -- to real estate, what are you finding that might be a turnaround? guest: real-estate hasad a bumpy year. it got a boost from the home buyer tax credit, but that expired at the end of april. what we saw was kind of a lot of

sales were pushed forward as people tried to get a close before they lost the tax credit. then we saw a slump. that filter into thehole economy. we had a slowdown for the whole overall economy. part of that was from the home buyer tax credit going away. part of it was what was going on in europe with the debt crisis in greece and what that did to the financial markets are on the world. we really had a slowdown in the economy that almost went into a stall speed over the summer. it seems we have been picking up in the last uple of months some better figures, but again, these have to the contras against a very deep recessn. -- contrast against a very deep recession. host: mike, have you ever had

ies?push back from the county' guest: no, i think the knowledge theyre facing very difficult times. in seeing live around the country, just to have on to what marty was saying, there are places that are doing large numbers of information technology, professional jobs -- those coties are doing the best from the country. whereas counties with large numbers of workers in a real- estate or reta are tending to the worst abomination. host: our first comme is by twitter, and this is a person who thinks we are being spun. here is what they write.

guest: i do not think we are spending huge. -- spinning you. based on what was reported, we d 151,000 jobs created in october. our stress matt was in september. -- our stress matt was in september. but if you look at october, the job increase was the best in five months. if we have had as -- we have had 874,000 jobs created this year on net. how does that compare? we had 8.4 million jobs lost over the two years from december 2007 through december 2009. while we have gained jobs, we still have not gained back anywhere near the number of jobs we lost during the recession. things are still bad out there. i think the election results showed that.

voters were voting their anger at the polls. host: the highest stressed spots are nevada, california, florida, michigan and arizona. the lowest stressed places are north dakota, south dakota, nebraska, vt., and wyoming. what factors contribute to the low stress scores in those states, mike? guest: a lot of those states have industries and jobs that are based on recession-proof industries, such as farming and mining. that is a big reason. also, these areas did not go through the housing boom that some of the worst hit are did. ey did not have the resulting foreclosure crisis. host: are also some of the

lowest populated places in the country. guest: that is true. it is remarkable, the unemployment rate for a state like north dakota. it is under 3.5%. if you look at what is going on in a state where i am in florida, it is about 12%. mr. host: crutsinger, how can people find -- host: mr. crutsinger are, how can people find this map? guest: the good places togo to your local newspaper side. a lot of newspapers linked to this map,, have it on their web sites. mike, is there another way tdo it? just host: google "economic stress map" and it will pop up. host: and a good number of statistics will pop up to show you how the press analyze the

numbers to get them to their overall stress levels. how did this partnership come between the two of you? . . he helps compile the figures with other ap reporters and i add in the national perspective. guest: a dozen people at the ap, from the reporters to the multimedia designers. it has been a real team effort. host: how did the ideas come about? guest: we wanted to just take out the recession was affecting people at a local. we chose the county level because we could get monthly updates and monthly data at the

county level on foreclosure and unemployment rates. that is why we chose to look at the county level. guest: you know, it is one of the leaders for the foreclosure crisis, and that is going to take probably a year or more to have those troubled housing

markets improve, and, you know, it's still had a very high unemployment rate. i don't have any advice for jerry brown, but california is one of the worst states, to stress score of over 16, unemployment rate over 12%. indicators we use to measure are at the more stressful end of the spek trum. host: are there any pockets of good news in california. guest: there are. technology and professional jobs are a bigrea for growth

>> california has a highly educated labor force. i imagine there is more. host: a call from ohio. guest: ohio is probably among the states over the past three years that saw onef the biggest declines. a lot was from the manufacturing base over the past year, it has showed some slight improvement. it is down to 12.5%.

it suffered a lot and is making some bit of improvement. are you there? >> we lost her. going next to florida. greg on the republican line. caller: saratoga is reporting that currently 50% of the mortgages here are under the water. and what you all thought of this.

guest: he mentioned fannie and freddie. the frank-dodd overhaul bill requires the administration to report by january on a plan of what to do with fannie and freddie. they are now in government receivership. that is a plan in progress at the moment. corporations that make that plan. >> mike, are you there? >> you are back now. thanks for waiting. >> have you looked into why all the jobs are lost and why the unemployment rate are so high.

but the people in ohio is decimated because they are closing plants and moving people away. i would like you tout a map on the screen that shows the number of ceos and how much money they are making at the expense of how

many people they are putting out of work. thank you. >> president obama has wrapped up the g-20 summit where he tried to make jobs the center of his tour. he tried to emphasize the u.s. exporters and jobs and renegotiate the trade deal with south korea. they had announced he would try

to get this agreement done. they say they are going to keep talking about it. china was at the table for this meeting. the administration has toughened the line the currency with advantages. the chinese have pushed back in that area. what the federal reserve is doing now with increasing of the 600 billion more to boost the economy hearsaying this is just a backdoor way to weaken the doll dollar. when you have a global recession, you have a lieutenant of trade coming out.

host: we'll look back at what happened with that trip. new jersey's stress level, i think is it's on a steady decline. unemployment has declined over the past month.

. the foreclosure rate has declined slight ly >> and this message comes by twitter. in nebraska, we help each other with emergencies. most save and don'tover spend. nebraska was on the list of states with low stress scores. back to phone calls. this is a cal from kansas on the independent line. good morning. caller: good morning i don't want tget into debt but i want to talk about the president. people are upset and that's why they voted like they voted here

we will let it go there and we'll add the dimension about the state of the economy. guest: economist generally favor migration across the spectrum, it increases the outcome and is a benefit to the economic growth.

pooling to increase the output both parties will expire at the end of this month the republicans have been arguing that to extend this, they need to find cuts elsewhere that whil this session will have the same make up, the change won't happen until january we'll listen to a caller from high rock north carolina i want to

know how many federal workers they are go to cut from their staff if they are a congressman or senator ab the nexthing, local economy. local. local. you got the right word. we have to start picking ourselves up by the boot straps local locally we have to think outside of the box.

we need to start thinking about shoes and corn from nebraska. quit looking to the federal government thinking they are going to cure everything. we have to cure things ourselves. that's it. host: thank you north carolina. the stathas been the capital of the financial community. a lot of big banks there. the wtern part of the state has traditionally been the home of furniture manufacturing, a lot of which has been shipped overseas. guest: north carolina also has a pretty diversified economy with research education it's doing

better than its neighbor to the south. south carolina. let's go on to heights bill, maryland. this is a call from david, democrat line. caller: how are you all this morning? here in the state of maryland, you can see the economy is on a steady rise. it is not where it should be, but we have not been hit as hard as other states. you can see there has been a

steady climb in the economy. you can see it at construction sites and stuff. you can see factories and stuff putting people back to work. it has been a steady, positive reaction here. the thing i wanted to say, like the caller said before, you cannot depend on government. you cannot depend on president obama to cure all your sales, especially -- ails, especially only being in office for two years. the caller from nebraska, i do not think it is right to just sit there and blame the government. you have to take care of your own problems. that is all i have to say. guest: you are right, maryland

is doing better than the rest of the nation, did not experience the recession as such, but part of that is, there is a pretty decent sized part of the work force that works for the government. despite what he said about not having to rely on the government, i would hazard to guess that maryland is in as good shape as it is because of the number of people who work for the federal government. the engine for those folks looking at the state's, the lighter the caller, the less the stress. the darker, that means stress levels, they are higher at those darker colors. martin, i do not know if you have looked at the public

sector, private sector numbers for the country and how they are changing for us, as a nation. guest: overall, we were losing members because of temporary census workers. the net was 151,000 jobs created this october which was the best in five months. host: were those private-sector jobs? guest: yes, they were private sector jobs. the public sector lost 8000 jobs. you mentioned california. a lot of states are having to lay off workers because they have balanced budget requirements. with this recession, they have been hit particularly hard and are finding ways to balance their state budget. host: next phone call from pennsylvania. mark.

are you from pittsburg? sorry about that, go ahead. caller: i was looking at your map. we still have the biggest steel mills, coal mines in the area. they are gone now. host: mike schneider? >> if you take a city like pittsburgh, it has undergone a transformation in the past decade. it is no longer rely on steel. it is heavy in research, health care, universities, and medicine. it is true, those steel and manufacturing jobs may not be as

many as there were two decades ago, but it has been replaced by jobs that require higher educated workers who have transformed the economy. host: another skeptic on twitter -- objective, mike schneider? >> no, we get our data from the bureau of labor statistics. we get our housing data from realty track. we get our bankruptcy data from bankruptcy courts. those are our data sources. host: upstate new york, this is sue on the democrat's line. where exactly upstate? caller: near rochester.

i do not have the tv on, so i do not have a visual of the map, but talking about all of these jobs going overseas and companies hiring, i wonder if your map has information on what industries, what corporations, companies are operating in those counties, as far as who is hiring, who have led jobs go? >> we would love to do that. unfortunately, it might be a little bit too complex to do that for every county in the nation. i agree, if we could do something like that, it would be a fantastic tool. host: she used the phrase "all the jobs have gone overseas." what is the real story about job exportation? guest: we have lost

manufacturing jobs. actually, this year manufacturing has grown again. that is partly because u.s. companies are benefiting by a rebound in the global economy, so their exports are up as well. globalization cuts both ways but we have lost a number of jobs. part of that is foreign competition. part of it is higher productivity in this country. u.s. companies are learning to make more with fewer cost -- workers. people do feel stress, however, because they see plants, factories in their home community shutting down, and going to china, mexico, other countries. >> we are leaving "washington journal" to go to the national press club for a discussion on

how it takeover of the house by republicans may change health care policy. speakers include an official with aarp, ala with a former top health care adviser. event is held by the alliance for health reform. >> my name is ed howard of the alliance for health reform. on behalf of senator rockefeller, collins, our board of dectors, i want to welcome you to this session about how last week's election may affect the new health care reform law and other health-care issues. i also want to acknowledge the co-sponsor ship of the robert wood johnson foundation. unless you are a brand new to health care, you know rwj is the

largest philanthropy in america devoted to helping healthcare the way that they believe. they were going to be with us today, but i believe that they would be happy to steer you toward that the direction of the program that they have in health care. if you do not know him, i want to point out bill irwin, the communications director of the alliance. he would be happy to help you identify sources, track down contact information, suggest story ideas. he is the go-to guy. i should tell you the briefing is being broadcast by c-span, so please when you are asking a question, if you would wait for

a microphone to arrive and identify yourself. try to keep the question as brief as you can so we can get to as many as possible. we will have a transcript of this briefing available in a few days on our website at allhealth.org. that is all of the overhead you need to get us into this discussion. we have a high-powered panel here to respond to your questions. i am going to introduce them briefly. there is more extensive information in your packets. i will give them an initial question to two on and then the show belongs to you. on my immediate right is norm ornstein, a resident scholar at the american enterprise institute. he knows more about members of congress than they do themselves. that is not saying much. [laughter] >> low bar.

>> he writes a weekly column for "roll call." he is an election analyst for cbs news. he is a student of an expert on how government works. at the far end is dean rosen. he is a partner in the public affairs firm of -- he was the policy adviser to senate majority leader bill frist, at a time when he was the vice chairman of the alliance for health care reform. next to him is john rother, the executive vice president of policy, strategy, and international affairs for aarp. he has also spent a number of years on the hill.

in the interest of full disclosure, i should say that john is a recently elected member of the alliance board of directors, so he is sort of my boss. so what ever you say, i agree with. let me begin with an initial question. as soon as we get some responses from our panelists, we will open it up to you. and it is pretty general. we have had a lot of successful republican and house and senate candidates saying in the campaign they wanted to repeal or replace the new health reform laws. some said that would not be possible, pointing to the democratically-held senate, the possibility of an obama veto. depending on who you listen to, they focuse on defund and delay, among their other

alliterative suggestions, to slow down the implementation of the law. what is your best guess about how the congress will deal with this new reform? will they strike it, start it, something else? -- starve it, something else? >> in a sluggish economy, it is a boom time for us that write jokes about politics and politicians. we have had three waves of elections in a row expressing enormous public dissatisfaction with the status quo, the actors in washington. brace yourselves for a wave sometime, probably in two years. who gets caught in the under wash remains to be seen. that continues a difficult environment for those of you in

the political environment. that means for the remaining two years, one of the greatest challenges for president obama is a challenge from his own left. i was particularly struck when russ feingold, one of the losers, in his speech, said it is on to the next battle in 2012. that could mean a couple of things, but that would obviously mean a challenge from the left or president. so every issue that comes up, the most recent being how to handle bush tax cuts, is watched with close scrutiny by his base. he has to be careful on that front. at the same time, as we talk about health care issues, an interesting set of dynamics to watch within republican ranks. john boehner had basically called the health care reform

package an abomination. he has called for repeal and replace, as he spoke at my institution. he spoke mostly in cautious and prudent terms of what he how he wanted to change the dynamic an atmosphere of the house. the second question was about health reform and he got very animated. he said we are going to cut it off at the knees, we are going to cut funding as much as we can. the first thing we are going to look at is eliminating the medicare cuts that are part of the legislation. at the time, i first laugh at myself because i remember the great debate in the reagan years when republicans went ballistic every time democrats talked about cuts. they said these are not cuts, they are slowdowns in the rate of increase. also, because it put republicans in a way, in a funny position,

defending every dollar in perpetuity. at the same time, the initial top of repeal was replaced by repeal and replace, but there is a real dilemma here. when you start to parse out the individual provisions, most of them are popular. the one that is not is the individual mandate. but if you take out the individual mandate and do, as most republican candidates, and leaders have said -- and of course you are going to keep the ban on pre-existing conditions -- you are left with an impossible situation. it was striking, the head of the american health insurance plans, she made her first overture on that issue. she said insurers would prefer

for a guaranteed issue. but it would require universal coverage. how we get around that dilemma is an interesting one. it will leave some people disappointed. you can now defund the program. in order to do so, you would have to get appropriations bills that still pass, cutting out funding for the administration since most of it does not take effect for a while, and get those bills approved and signed by the president. that will not happen. you can retard the progress, you can have a showdown over the hhs bill, but of course, if you shut down hhs, then that means you shut down all of hhs, which means cms, nih, a lot of things

people will not find comforting. republican leaders who remember the last disaster may not want that to happen but they may not be able to control it, or the new members coming in who want to take an ax to these programs. of course, they will try to slow down the implementation of the plan. they will call kathleen cinereous -- sebelius, other members of hhs, to testify. a said he-- darrell isssa wants to have two hearings of a day. let me mention one final thing. one of the first act we will see in the first congress is they will stop extending unemployment benefits. that will have real implications and repercussions for help outside of states.

will probably increase the number of people going to emergency rooms, states which are already strapped for funds will come to washington saying, if you are going to do this, you have to help us out. that includes a wave of new republican governors. and they are not going to find much help from their compatriots on the hill who are more concerned about cutting the federal budget than they are about providing money for their friends. >> a pretty good calendar of things to attack and look for. now we turn to dean rosen, who would tell us what all of this can be worked out. >> thank you very much. thank you for inviting me. i do not know if i can tell you how it will be worked out, but i am just happy i do not have to jokes.any of norm's let me say something about how health care played out in the

public. i will try to respond to your question -- to how i think republicans will grapple with the repeal replace debate right now. leadership election will be next week, so all of this should be taken with a grain of salt. if you look at the election, this is how the new leadership in the house, returning republican leadership in the senate will look at this. you can look at the polls and take different lessons from them. for me, i think the clear message of this election was about jobs and the economy. but i do not completely buy the white house explanation that it was not for the poor economy, unemployment, we would not be in this situation. there was a strong message about voter concern, government overreach, and the size and scope of government, deficit spending. if you look at some of the

polls, the outcomes were more significant than in any other time, even 1992. if you look at the percentage of the deficit in relation to gdp, you can see why people are concerned about it. but in terms of health care, depending on how you ask the question, you get an even split when you ask voters do they want to repeal the law or something else? but when you ask them if they want to send a message about health care pros and cons, and you look at the tremendous vote among independents and others, those concerned about it, -- in general, i think republicans will look at those folks who sent them to washington as a repudiation of the law, at least significant concern. yes, there are some who want to grow it, at a public option, but

an overwhelming number of independent voters want to scale back if not completely repeal. but in context, where does that fit in? for me, health care reform -- and the election results translate into how people will interpret those and how we govern. i think they were symbolic of this overall message of a government that has grown too fast that is spending too much, that is trying to do too much. while people or not voting over the particulars of health care reform -- and i am sure john will talk about this -- i am sure some seniors were concerned about cuts in spending, what everyone to call it, but for most of them, it framed the narrative. this is a trillion dollar bill. even if it is offset by tax increases or spending cuts, it's still grows government and that is what framed the narrative.

secondly, as i talked to real people outside of washington, it became a symbol of an administration and congress that was not paying attention to what the american people felt was job #1, which was jobs. the president, for however particulate he was in the campaign, never seemed to hit on a message that connected health care in a meaningful way to the american people as addressing their concerns about the economy and jobs. so to a lot of people, it looked like overreach, you took your eye off the ball. when you look at it, you look at this new congress coming in, you see a significant majority. there are some commentators -- norm, it will be interesting to hear your comments on this. when you looked at the senate a year ago, you would have said

that the republicans had a real uphill battle. if we would have had this candidate here, maybe they would have picked up another seat or two. i think that is probably true. on the other hand, as a republican, if you were to tell me a year and a half ago we would be able to defend our seats, including in places where we have lost in the past, and win six of our 12 competitive races, i would have taken that bargain. that is what happened. in the house, it looks like there are 62 new members with a couple of races undecided. what i think folks focus on, should focus on, because of retirement and other things, there are more than 80 new members of the republican caucus. of those people, by my count, about 35 of them that have never

held any kind of elective office before. not congressman, not dogcatcher. they come to washington not with an attitude of let's get along, but they are here to make real change. what they mostly campaigned upon in terms of health care was repealing the law and replacing it with what they call more comprehensive reform. i look at the pledge for america, i look at the outcome, and i am one of those people who believe that when you campaign on you actually have to do. and to answer your question, my sense is republicans in the house will have to have some kind of a vote. whether it is in the first week or first month, they have to have a vote that essentially repeals the law. they may have separate votes or bills that they point to to show what they are for -- and i would remind all the reporters to write about this, there are a

number of republican legislative proposal that have insurance reform and other things in there that wwill point to. and i think they will have a vote in the senate. there are a number of members in the senate, unlike this last election -- there are now 23 democrats. a majority of them are democrats defending. a lot of them come from states in the middle of the country that voted for john mccain and george bush. there may be three, four, five of those folks that may vote to repeal, if it came down to it. senate amendments generally do not have to be attached to germain legislation, so it could come up on an energy bill, tax bill. so there will be an attempt. clearly, the president will veto that. so then the question is what do

they do next? i put it into three categories. brad than either or, they will do all three. they will investigate, they will legislate in a different way, and they will appropriate. in reverse order -- in terms of appropriations, there are things that you can do, i think, short of shutting down the government. you can attach risers to things and say that a treasury fund should not be spent to enforce an individual mandate that is not enforceable until 2014. i also agree they have to be careful in how they couch this because there are a lot of popular programs in there. i do not personally view the appropriations route as the most effective, but it is one that people will look at. in terms of investigations, there will be a lot more oversight hearings. as you know, there was a lot of frustration that secretary

sebelius did not testify before the house or senate, except in one limited circumstance on another matter. i think that will change. obviously, there will be a hearing next week in the senate. even max baucus of the finance committee said that he thought it was not a good use of the president's power to appoint him in a recess appointment. so there will be more investigation. other than the people, they will focus on a range of issues. what are employers doing with their retirement coverage in retirement -- response to the law? the third thing in the legislative arena, the way i would look at that, rather than a strike and replace, after they have their effort, i think we will see a series of surgical strikes. maybe going after things -- norm mention one of them, the

individual mandate. we could talk about the substantive implications. that is not popular. more than that, there are potential lawsuits when they could go after the independent payment advisory's. they may look at some of the industry these and taxes, which you can argue would offset the cost of the bill, but will likely drive up premiums if you tax the underlying cost of care. i think they will look at some other programs, some of which will save money, others that will harm the bill. whether they are successful against a president who still wields a veto pen -- obviously, that is an uphill battle. if anything, the next couple of years, taking republicans legitimately for what they will do, trying to attack a lot, also will attempt to try to keep

alive in the minds of voters, those things about the bill that they do not like. the next few years for me will sort of become about 2012. in part, 2013. there could be a new president in the white house and seats in the senate that are in republican hands. reminding all of us that many of the provisions, while under way, insurance reforms, the new subsidy cannot take effect until 2014. i think that becomes a focus, keeping this alive, even if they cannot make changes this year because the president is trying to be in a position to make some of the substantive changes in 2013. i will stop there. >> john, how does this strike you, from the institutional or political point of view, or any other? >> thank you for the opportunity.

it is a pleasure to be here with norm and dean, both of whom i respect and agree with. now that everything has been said, i guess not everyone has said it, so i will try to put my own interpretation on this. i think it is easy to over interpret the election results for several reasons and to overdramatize its potential impact on health reform. first of all, the people who voted last week are not the same as the people who will vote next time. there are many fewer of them, many of the demographic groups were much less represented, as is typical in mid year. i think, to pick up where dean left off, the election that medals for health reform is not the one that we just had, but the one that we will have in 2012. it will be a different elector ate.

most voters today understand they are -- say, understandably, that they are confused about health care. there were many messages in the campaign. unfortunately, from my perspective, many were designed to scare people, especially seniors. so it is understandable that there is confusion. it is a big thing. the next two years will be an opportunity to help people understand more clearly how it might affect them. i do not think you can say there is a mandate out of this election for congress to spend a lot of energy on health care. i think there is a mandate to spend a lot of money on the economy. there is a poll in the papers this morning that shows a small minority want congress to focus on health reform, as opposed to the economy.

i think that will play itself out the more people try to focus on health care, but people at home will say, what about jobs? i also think there is no mandate at all for an alternative approach to help reform. you can see that to the polls -- in the polls. elements of alternatives are not particularly popular. many provisions of the affordable care act are popular. so you have an act that is very interdependent, in its design, and it would be difficult to start pulling it apart without either raising premiums or increasing the deficit substantially. i think as people start to confront that, we will see more caution about changes.

i also think, politically, provider groups are still quite supportive of that act. doctors, hospitals, insurers, drug companies. we are still supportive of that act. and i think good reason for all of them to be supportive. that will temper the debate. i do think the benefits of the act have not yet been appreciated, particularly for people who needed improvements in the most. the people who are chronically ill, those who are frail, children. there are some important advances in the legislation that would seriously improve the situation of people who are quite sympathetic to the public, and the more attention they get in terms of that improvement,

the more impact that will have on the tone of this debate, going forward. so i would conclude in much the same way as been did. the real battle here is done so much about legislation in the next couple of years, not really about appropriations. really, it is a battle for the hearts and minds of the american public. investigations will be a tool, but that can happen on both sides of the debate. the election that matters is 2012, when i think, we will know the answer after that as to the future of health reform. >> thank you, john. we are now at the point where we are actively soliciting your questions. let me also say, even before we knew there would be c-span coverage, we arranged a teleconference for reporters who are outside of washington, d.c.

we have given them contact information so that if they have a question that they would like to have asked, we will try to get it responded to. i remind you the e-mail address to send your question is questions@allhealth.org. so, make sure you have a microphone and please identify yourself. let's get the first question. >> my name is mark. i write for a medical publication called "medical device. ." the medical device tax pales in comparison to some of the other issues. i wonder if this will sort of disappear in the weeds?

some of the members of the senate from minnesota have some obvious orientations on this because of their constituency, but is this too small to corner any attention from government? -- garner any attention from government? >> republican will try to have individual investigations and every component of this will be attacked. some of it will be attacking tax increases. clearly, an attempt to lure some democrats over. we may get some, but my guess is they will be more symbolic than anything. either it will be in the context of bill that could be filibustered by democrats. you could get republicans joining a handful of democrats to support something and the core of democrats will not let that happen. in others, it will move into conference and tried to take

care of it there, which could mean yet again, potential gridlock, inability to come to an agreement. or it could come to a presidential veto. i would be monday surprised if that medical device tax -- mildly surprised if that medical device tax were repealed. >> i think that points out two important broader questions that becomes issues that republican leadership will have to grapple with. one of them is, how do any attempts to change the bill, how are they positioned? i think republicans and democrats who support modifying or revealing that will probably be less successful by portraying that as something that will help an individual by removing that burden.

as i sort of implied earlier, i think a number of those industry fees -- and this tax is one of the clear examples -- can be portrayed as those things that can increase the cost of the underlying products and translate into higher premiums, instead of lower, which is the goal in the bill. i think the other thing -- we do not completely know yet. norm and john may have a view of this, but for many republicans, pay-as-you-go budget rules did not apply. it will be interesting. when you look at the republican caucus in the house and senate, it is not clear if they will say we have to pay for tax cuts. if they do not, and they hold the traditional republican view

of a go -- pay go, if they do not have to offset those, it makes it easier to have a vote that pulls over some democrats to reduce the impact of those fees. what none of us talked about -- one of the overriding message is coming out of this election. we saw this earlier this week with the initial proposal from the entitlement -- deficit commission. this concern about spending. i think that will have to be balanced against all of these things that may need to be offset potentially. >> do you think the republican rule changes under consideration now will make it easier to do that? is that when you were alluding to? >> i have not been privy to that. >> they are talking about their

own adaptation of the you cut plan. taking advice from people all over the country. clearly, they will not have a pay go involving revenues. how you can reconcile that in your argument with deficit and debt remains on the table. it is a question that now has been brought into full relief, as have some of the issues over social security and medicare. there are a few committees that are creating a substantial role of discomfort in both parties. -- level of discomfort in both parties. >> editor of the "college of american pathologists." can you tell me how you see the new congress dealing with the new physician payment sgr issue?

>> i will take a crack at that since it is one of our top priorities to reassure seniors that they will have continued access to theiphysicians. we certainly hope the lame-duck session will tackle this. it is a an area, because it is new spending, will probably have to be offset somewhere. the only reason i am not more confident of the result is not because of the desire to extend the sgr, it is the uncertainty of what an offset would be, and how possible it would be to go forward. we are pushing congress to act quickly on this because they need to do something by the end of november in order to prevent disruption. >> the democrats in congress in

a lame duck are going to be tempted to kick this can often to january, precisely for the reason john mentioned. they cannot let it drop because it brings something close to catastrophe for positions and access in certain markets. i think they would rather leave the difficult choice -- because there will be a pay go decision on spending for what is a substantial sum of money -- to leap to the republicans in the house to deal with. >> "health reform week." one of the laws and health reform that could be seemingly vulnerable is health insurance exchanges. they do not start until 2014. what do you think are the chances of congress doing something either by funding or another means that would interfere or prevent exchanges from starting up in that year?

>> i will take first crack. again, so much of this bill is interlocking. the exchanges are clearly one of those mechanisms. are they absolutely essential? probably not. but they are clearly integrated things like the mandate for insurance reforms, subsidies. i start from the premise that almost any change, other than the thing that i would view on the margins and important, such as 1099 reporting, which the president will be resistant to and maybe tell if it gets through the senate -- i would say, given that, some kind of wholesale repeal of the exchanges is unlikely. what i would say is, as a governor's start to look at the

guidance that is coming from washington, and it is already underway, and republican governors picking up more seats at the state level, and controlling more legislatures at the state level -- this is another interesting area in terms of the role of the states. they have a huge role in terms of implementation of medicaid and othethings. you may see a bubbling up from states about the concerns of the regulatory requirements that could be dictated, to the extent that they have the flexibility to make changes. to the extent they feel they do not have the flexibility, if the issues get ripe enough, you could see these surgical strikes, targeted attempts to make changes to the exchanges. i remind folks, again, the leading republican house alternative, there was a form of the changes there. so it is not necessarily a

democratic idea, but the details are very different. >> there are two states today with exchanges, massachusetts and utah. they are very different. one is a more regulatory approach, one is more passive. that is the question, going forward. which model? since it is a state-by-state decision, i do not see this being related to the federal level. >> we will see some guidance based on press reports and other things in the coming weeks from the administration. to the extent that the governors feel the requirements are too strict, the alternative would be to not do anything. the rule that we are laboring under, which are coming down from regulation, are too

onerous, and we want it changed. >> some of the republican governors coming in campaign in a hostile well against health care and have talked about not using their money, discretion. it will be a challenge for many states to keep from disrupting your own citizens and making political points beyond just filing lawsuits and an amicus briefs. this is not a democratic idea. perhaps more of a republican idea. it is a way to bring more competition into the marketplace. the main republican alternative, however, is we do not need any of this, we just need people to shop across state lines. the real danger of that is it works the way that the credit card process works. you just for the state that has the least cumbersome regulatory law, the poorest plans.

the alternative to that is, if you got bipartisan take in this, return to the idea of a national exchange as an option. in a world where parties actually talk to one another, that could be on a ticket -- on the table. since they do not, it is probably not. >> we have a question here, and then i have a couple from around the country. >> gregory kauffman for the pink sheet. two questions. one similar to medical devices. what drug provisions do you see that are potential targets? second question relates to the patient-centered outcome research institute. how much r&d into that, potential changes that could be added to that body? >> let me just say to the panelists, we have had a request

from one of the reporters listening to identify the panelists as they speak. who would like to take a first crack? >> dean rosen. with respect to that, if you look at many members in the finance committee, there was agreement looking at research, but there were concerns about individual provisions. i would say that is probably on the list but i am not sure is at the top. if you look at the boards and commissions that are out there, i would put the independent in the advisory board -- payment advisory board as something that is more likely to be targeted. but we will see. new members will be coming to washington in a couple of weeks. they will have their views on how they want to