i think there is a huge queion to congress. what are you doing? why are you giving good jobs policy -- w a you giving the responsibility over to the fed again and again? the answer is obvious. they want to deduct responsibility out of congress. the fed should not be expanding now. the responsibility is on congress and the president to come up with a tax reform that will work with lower rates and a broader base for the tax system so businesses can create jobs and above all less spending at the federal level and less of these complicated regulatns that come out. by inserting itself rit after the election in the debate, the fed has exceeded its mandate or has been broadening and mandate

that actually it should be shrinking. hope we can have an open debate. the fed has to defend itself by saying we must not have been communicated very well our goals. that is not the problem. the policy itself is an expansionary policy that should be discontinued and wound down. it will not be problematic to do that the fed is borrowing from banks in order to buy vernment debt. debt can be wound down in january. i think that would help the dollar and help getapital flow back in the u.s. my ultimate goal is to have u.s. companies instead of investing all of their money in asia to borrowway from the u.s. dollar. if the fed stopped buying bonds,

he would have a positive dollar change. host: former fed vice chairman alan blinder wrote an op-ed in the wall street journal on november 15 in defense of ben bernanke. he writes -- tell us, what is deflation and why is it critical that we do not go into that area? guest: i've put into that letter, the letters that we did to bernanke, the idea that we as a group do not think it is a

good idea to increase the deflation rate. deflation is when prices fall. it is hmf because people may have borrowed money on the idea that they could retain the value. let's say you buy a piece of property with borrowed money, and the price falls. think how much worse it would be if there was a situation where cans of soup or falling in price. if you bght it, you would lose money as the price fell. you would be better off the playing your purchases under dflation. i don't think the u.s. is at risk of that. japan had situations where in a one-share basis, the generalized price level would be negative, like - 1%.

that caused ople to stop producing and stop purchasing because there was a shrinkage of the economy and the price level. the u.s. has not had that. prices in general are gng up. we all know, the prices of things that people buy every day such as food and medical costs are going up rapidly. bill prices are going up. gasoline prices are going up. i don't think the fed is right to worry about deflationary or the japan situation or the right to seek a higher inflation rate, and that is a part of the complaint that we have raised to the fed. host: david malpass has been a chief economist at bear stearns and is also between 1984 and january 1983 held economic

appointments during the reagan and bush administrations for developing nations and deputy assistant secretary of state. he has been a republican staff director of congress's joint economic committee and senior analyst for taxes and trade at the senate budget committee. he is our guest for the next 15 minutes. flint, mich., on our line for democrats. caller: and i would like to ask a question in regard to the quantitive easing. with the fed coming out at a time when obama [no audio] host: go ahead. caller: am i on? i want to ask a question about how the timing of the fed's quantitative easing decision right at t time when obama was going over to china about their

currency. with that, it made him look pretty bad. can y hear me? guest: yes, i can. caller: id undermined his credibility at a time when he was trying to make a stro effort [no audio] host: we will leave it there. guest: hi will raise another aspect of this. chairman bernanke first raised the issue of quantitative easing in august during his speech. some people are concerned about the political timing of that has leading into the november 2 election. it did have the affect -- the effect of some loosening

conditions as we approach the election. i am not into those timing conspiracy theories. i think the fed truly thinks is doing the right thing. that is where the dialogue should be. this policy is not going to help jobs. as far as the president's trip to china, i think it is a grave concern for americans that people from around the world look at the weakening dollar and they see a country that is in decline. i was born and raised in michigan. our caller was from flint, michigan. saw this gigantic decline for northern states across the u.s., where as the dollar weekend first against japan and now against china, the capital flows to the country's trade in the

1980's, the theory was we were going to weaken the dollar and it was going to help us be competitive. the money from the u.s. went to japan and built a better car there. so we lost our jobs in the united states because of the weak dollar, and now we are doing it again wh china. the president went on a trip to china, and the chinese look to the united states and think we should stop buying our own government debt britain should stop having our central bank and by our debt. that was a powerful message from the world central bankers back to the u.s. i think the burden is back on us to reconsider our policy, wind down the quantitative easing. i have a website where people can sign a petition, asking the fed to stop expanding. this is not the time for the fed to expand government.

caller: good morning, gentlemen. as a laid-off history teacher, i am so glad you are talking about the federal reserve because i thk this is the wizard behind the curtain when it comes to our onomic problems. studying history, i know a lot about the fed predicted to claim that they are a political, it is in st. predicted they control the value of the reserve currency of the world. there is a reason why the founders put article 1 section 8 the constitution because the congress is accountable to the people. ben bernanke is unaccountable. the fed is in politics anyway. that is a cop out. i do want to make a comment that

some other people have made, too. i think the american people need to understand th are a private bank. that is one of t reasons why we cannot open up their books. if they have our best interest in mind, what are they hiding? they have given money to other countries without our permission. and i am sure we are involved and we don't know about it. host: we will leave it there. guest: these ar all big issues and i am glad people are reading it wh history and with the constitution in mind. and i agree with the fundamental point that the caller is making, that there is a role for congress in thinking about how the economy is run and leaving most of those decisions to the people. that is what we have lost. the fed has become a huge,

powerful institution that is changing the interest rates and deciding on its own account to lower the interest rates on government bonds. that seems like an over strch of the power and an expansion of the appropriate role or an over expansion of the appropriate role for the fed. how do we best yet get back to a system that works for job creation at the small business level? my tught has been we have got to get the fed to stop buying bonds, and then have the fed pay more cognizance to the value of the dollar. i think the treasury department and the president should say they want a stable dollar over the decad. it would be a huge boon to job

eation in the u.s. they will not say that now. my thought has been let's take this in small steps. we will not be able to fundamentally change the whole working relationship between congress and the fed this year, so the best step is to take small bites of the apple to have them stop buying bonds, to have them stake their interests in the dollar, and that would be a huge step forward in terms of the constitutional role of the fed. host: in wall street journal this morning, their stories regarding the economic and financial situation in ireland, there had line is -- -- their heaine is --

-- is this a preview of what we might see in the united states? guest: i think it is a preview. we have done some of that. our banks were badly regulated in the 2000's. we ended up with a real crisis. the regulators had looked the other way, and that is what has gone on in ireland. now they are paying for it just like we are in terms of our high unemployment rate. another lesson tha could come from ireland to us -- i have written on this topic. the state debt in the u.s. is

very large, almost as large as ireland's debt. the peoplef the states will have a huge problem paying for that debt and paying the pensions that go along. one of the things that we gravely need right now is a backbone to stand up to the problem before it becomes a cris. but ireland's crisis is being made worse because they waited -- not so much of ireland, but the banking regulators waited and waited to tackle the problem. the better situation for the u.s. is for us to recognize california's spending as a state government is out of control, and the federal government should not be bailing them out, should not be facilitating the process of state spending. unfortunately, washington provides huge subsidies to state

and local governments around the country so tha encourages them to give excess pensions and spend more money than they have that. i think that is a lesson we should gather from the severity of this irish crisis. we do not want to get into that problem. i proposed a series of steps for the federal government to stop helping the states overspend. i think that would move us in the right direction. i want to mention my focus today is on getting the fed to stop ying bonds so we could actually see what the problems are. i have a website where people can sign a petition, asking the fed to stop buying bonds and stopped exnding its role. host: texas, thank you for holding.

caller: why are they talking about quantitative easing three already? guest: these are huge questions. goldman sachs in one report said it thought there should be $4 trillion of the fed of bond buying in order to stop the situation. i think there needs to be a new blood in the fed, new people working on some of these problems. i don't doubt the good intentions of the people involved, but it has become very narrow situation where many of the regional feds come up from inside their system. i do think this is a time where we should be bringing in new ideas and new blood into the fed and a broadening the base of

experience for the people regulating and controlling of the interest rates and so on. to go to the ladies. -- tim geithner who i have known for many yearss not a goldmasach person, that conspiracy theory has gotten more broad than it should. it is a tightly knit group of people at the fed and that treasury who are making these important decisions. we need more public input into whether we need -- into whether we have a strong and stable dollar. that is not in wall street's interest or the bank's interest because they like trading all these currencies. for the public at large, having a strong and stable dollar would be a big step forward.

we need an administration that cks up that policy. that would be a huge boon to our economy and to job creation. host: let's get some public input from bernie on our line for independents. caller: how are you, mr. malpass? may i call y mr. deputy secretary? guest: that is fine. i don't even remember those days. caller: i was born in 1941. there was a war and that time. -- there was a war at the time. during the great depression, the government spent a lot of money. we went back into the depression. it almost seems to me that when the war came,he country -- i

remember rationing. we were not able to get certain amounts of butter, sugar, and a gasoline. when the war came, we did massive spending. the the military came back and got jobs and started spending. earlier in the program, you said the government spends $3.80 trillion a year. doesn't it stand to reason that somehow -- i know this is an economic question. i took one course in college so i and ngerous. doesn't it stand treason that may be the stimulus was not as large as it needed to be? there is a number of economists who have said that. we have 15 million people misallocated in our labor force. i am almost of the opinion of

wpa, something else that puts money in the hands of people with a tendency to consume host: . host: david malpass. guest: that argument has been made. as the government spends more money, people look at their own budgets and cut back. you don't actually get the stimulus that the economists claim. i think we saw that in both -- bush startedhis idea of puttg money in consumers' pocks with rebate checks. it turned out that people knew if the government borrowed the money, it was on them. so they cut back. you did not get the consumption impact that economists had labeled. i want to focus on the production side of the economy.

the question is how do you get small businesses and new businesses to add that next worker. how'd you get every small ness in the country to add one worker? you are not going to that by having the government spend more money. that has the opposite impact. furthermore, the money flows away from the united states. big corporations are borrowing dollars and taking it abroad to create jobs there because those governments are not as out of control on the spending policies as our own government. you get that double-out of the spending. there was -- they raised taxes and there was a huge tax component and a mistake that caused that second depression of 1937. the book was written -- a book

was written and many articles corrected that perception that some how fdr's spending got us out of the depression. host: david malpass, >> some news you might already be aware of -- the ap reports that in one of the most dramatic confrontations on the korean peninsula, north korea shelled a south korean island. at least two south korean marines have been killed. the attack put civilians at risk, and set buildings on fire. there is no word of non-military deaths. white house secretary robert gibbs condemned the attack, and

says the president was awoken before dawn and appraised of the situation. coming up, we will have live coverage of president obama and vice president joe biden who will deliver remarks at a chrysler plant in kokomo, indiana. that is expected to start again 10 minutes. while we wait, your phone calls from this morning's "washington journal." "usa today" this morning. a 20% of those surveyed said obama should have the most influence on government policy, while 27% say tea party standard vendor -- standard bearer should.

27% of those polled say the tea party should have the most influence over government policy. a 23% say congressional leaders, 16% said democratic congressional leaders and 28% said it should be the president. we want to see what you have to say on who should have the most influence over u.s. government policies. our first call comes from new york on our line for republicans. adam, you are on "washington journal." caller: in any election cycle, i believe that the people should always dictate where this country should go and i think this is a really -- that obviously does not always occur. and i think this is a great example where the tea party influence has captured that. and therefore i believe that the tea party should and will influence the direction of legislation, where this country

should go. and specifically if you look at the contract from america where i believe there were 300 candidates signed on this contract from america where there were various ideals that they will be pushing for, one of them i believe was true fundamental tax reform, tax code replacement, the federal income tax code is sucking the life out of american and therefore we should see a lot of activity towards that and also the other items i am sure on this list. host: are using a lot of influence of the tea party of where you are? caller: i am one of them. host: pennsylvania, on the line for democrats. who should influence government part receive the most -- the president or the tea party? caller: i think as the

constitution says, all three branches fairly and equally. it looks as though when i saw the poll numbers that the majority of the people say republicans but out of the republicans, it looks like the tea party is stronger actually then what would be the establishment republicans. it looks to me the republican party is going to far to the right and i am hoping the american people will see what -- the tea party for what it is and i hope the american people understand -- have common sense and understand we need stability and we need to move together as a country to move forward. if we -- but 2012 will be devastating. i fear for my children's sake that people are not going to do what they need to do in washington, and therefore our country is going to go into an area of -- that will be stagnant

much longer than what i think people understand it is today. host: vance on our line for republicans. oklahoma. caller: what i think. i think coming up in about june of this coming year, there is going to be a big train wreck over raising the debt ceiling and the tea party is going to have a lot more influence as that date cos up. now, if the tea party remain strong and some of the media figures, maybe glenn beck and others, really rally the troops to get together and really march on washington and say no raise in the debt ceiling, i think then you will have a precipitous moment in the history of this country went -- when the

government credit card can really be cut in two and all of the powers that be will just be screaming bloody murder and over that. but i tell you what, that is what is going to have to happen. we are going to have to cut the government's credit card in two. yes, there will be a spike in interest rates. yes, the bond ratings will just go to nothing maybe, but that is exactly what has happened to put a permanent end to deficit spending because deficit spending is taxation without representation. host: more from the susan page article in "usa today" this morning. she writes --

lancaster, pennsylvania. caller: excuse my voice. the tea party is the equivalent of the know nothing is from 1843 until 1850. and the real thing that needs to get out of the swamp, we have to do campaign finance reform and get the money out of the other campaigns. otherwise we are headed dowthe toilet. host: and this particular instance with regard to campaign finance reform, who will have the most influence, the president or the tea party? caller: that's a tough call. i would say the president.

of the tea party people are just tools of the big money folks. you saw it in the last election. at host: on missouri on our line for independents. ,aller: i am a cancer patient and i am just really concerned about the cuts that they made in medicare and medicaid. vital for americans like me. if i didn't have medicaid insurance program, i don't know what i would do. i already lost everything pretty much from the bills and everything. i am just concerned about tea party rhetoric that i hear, and the republicans, too, making deep cuts in these areas. host: more from the article. is susan page write s --

back to the part of the article that talks about the numbers. 28% of those surveyed said the president should have the most influence over government policy, while 27% say the tea party standard bearer should.

the gop congressional leaders should have 23% and democratic congressional leaders, 16%. according to this poll that is on the front page of "usa today" this morning. frederick, maryland, on the line for democrat. dn? caller: it is ian. caller: i am sorry. caller: i would like to say, but i am really upset about these little holes we have going on. it is like rupert murdoch owning 8% of the press. he owns fox news. there are a lot of us out here who voted for obama and when we hear stuff like this it sounds like subverting democracy. host: why does it sound like subverting democracy? caller: very powerful interests

have the microphone. if you guys doing blanket coverage of the tea party. nd koch brothers, big oil. they got us up on oil all these years so we are dependent. what did bush say? that we are addicted to oil. because they give us no alternative. jimmy carter -- ronald reagan toward the solar panels down from the white house and said take it to but garbage dump. ever since then, big oil have been telling us what we are going to do and that is not democracy. host: moving forward with regard to energy policy, do you think it will be the tea party or the president that has the most influence on how the government operates? caller: i hope it will be the president because we voted him in. i was complaining when bush was in all this and i was told i had to shut up and support my president because i was a

traitor and those are the ones who are really on obama. host: who should have more control over government policy, the president or the tea party? chase, turn your television down and you won't get the feedback and the process will move a lot smoother. caller: i actually think the influence should be shared. the tea party represents some portion of the country. and the president represents the electorate. a guy earlier talk about obama care. it does not necessarily need to be repealed, it needs to be redone. i am a health insurance agent, of dumping people into a broking system is not a way to fix it, fix the system. talk about energy. we have enough oil of our own as a result of the katrina spill --

bp disaster, smartly with correctly with proper safety measures, we have enough oil to power as into the next century. why are we dependent on foreign oil? host: let's move on. we got it is urgent message from the apa, -- ap. out of seoul, south korea. it two marines were killed and 16 other that injured after a bombardment on an island at the disputed western border. they returned fire unscrambled fired jets in response. instead, the new main attack on civilian areas violated the 1953 armistice halting the korean war. the skirmish came amid high tension over north korea's claim that it has a new uranium enrichment facility, and just six weeks after north korean leader kim jong il unveiled his youngest son kim jong known as his heir apparent.

other items regarding career. this item from "the wall street journal" with the headline -- north korea nuclear find raises fear on tehran. but washington is the deadline. no. 3 of's apparent upgrade is raising fear among lawmakers -- north korea's apparent upgrade it is raising fears among lawmakers about their role of supplying iran and others. also, in a related story and "the washington post" this morning, iran's nuclear program is said to be troubled. it it has experienced a series

problems, including and explain the fluctuations of the performance of thousands of centrifuges -- back to our phones and a discussion over influence over federal policy -- the president of the tea party, who shed the most -- who should have the most influence. carl on airline for democrats. missouri. caller: i am calling, the gentleman who talked about the polls before, he was bought on but i would like to add something. i would estimate about 40% of americans think obama is muslim and about 45% think he was not born in america and about 50% probably think he is a columnist and for one thing obama is not left. his policies if you look and analyze them, they are not left at all but about 50% think he is

to left. i am from missouri and they did a referendum and they are saying americans don't support health care because 70% were asked do you want to be forced to buy insurance and a question like this you are going to say, no, but if you say you want freedom distance covered most people would say yes. -- what preconditions' covered. the media is doing a horrible job of debunking but lying that are ruining the thing. host: mansfield, ohio, on the line for independent's. caller: i think that tea party is basically the bully section of the republican party. i think they do have a lot of power. but i think it is controlled by big money. thank you. host: in this op-ed piece in this morning's "baltimore sun" david wise writes under the headline, the audacity of hypocrisy.

republicans are attacking president obama for some of the very positions and policies their party recently embraced. he writes in his book, what it's a matter with kansas, thomas frank describes how conservatives use social issues to divert attention from other issues and drum up popular support for conservative causes.

back to the phones. our discussion on the influence over government policies. who should have more influence -- the president or the tea party? sterling, virginia, gary on our line for republicans. caller: thank you for taking my call. most definitely the president because he is the one who was elected. but what see happening in a lot of developing countries is a

veering towards pretentious consumerism and ideological militant industrialization, sort of the same path we took which has brought us all of this well that we are experiencing right now. neither of those things -- consumerism or industrialization has contributed to and the advancement of mankind. the three biggest problems i think we are facing as a world our population, energy, environmental degradation -- and one other thing. about homosexual rights, you know, it is just like they should have the same rights as everybody else. the stigmatizing the children of homosexuals, that does not american because, you know, children will brag on their parents, they will be on the playground or parking lot --

host: we will leave it there. florida. walt on our line for democrats. it caller: thank you for taking my call. it definitely the president, working with the legislative branch. the major problem we have right now, though lobbyists and the chamber of commerce as too much influence on the legislative branch. they need to do the work of the people. and also they should take into consideration that we are dealing with a global label -- we have to figure route how to figure into the global label job market. but the legislative branch needs to do their job for the country and leave these co-ops, the lombard -- lobbyist and chambers commerce.

host: in "the guardian" the headline across the top of the paper, i rise bailout and in turmoil. now europe fears crisis was prepared portugal -- portugal and spain may require eight. you can read that at guardian.co.uk. st. bidders were, florida, on the line for republicans -- st. petersburg, florida. caller: the people vote in the present. the president should most definitely be leading the political country. host: a lot of the house of representatives on the republican side were voted in by tea partiers. caller: i understand that. but the president had had his resistant with the population, and listen, just be quiet and

allow him to finish out what he started. i am almost certain that he will be more -- much better off. host: arcadia, florida, on the line for independents. caller: good morning. host: good morning. caller: definitely, we the people are going to have the most influence. at the last election was definitely a referendum for the country and president against the president and his policies. the people were trying to recapture their power. i referred to a couple of things. the poll that was taken prior to the election when inside the beltway people were asked one question, it is the country going the right direction. 60% said yes. outside the beltway, the rest of

the country said 80% now, no, it is not going theight direction. statement by the constitution -- governments are instituted -- derive their power from the consent of the people. host: this twitter message we got -- she writes that the day that would let the minority groups such as the tea party determine policy is when our democracy is dead. we elect presidents, not groups. what do you think about that? caller: well, we had clinton elected by a minority both times. he never got a majority of the boat. even though it was -- first time it was 42% of the vote, a plurality, and the second time, it was 49%. there has been a lot of fracturing of society and

divisions with this president's, however, the people will get it together, they will have a candidate and come back strong and we will get our country back. host: stories in the paper regarding travel in this thanksgiving week. the lead story in "the washington post," most support full bar these scanners. have coffers being interested. secretary napolitano defends airports remembers. also, no immediate changing in the tea s.a. screenings. this is a story and "usa today."

also in the papers this morning, t essay says few passengers -- and alabama, david on our line for democrats. who should have the most influence over government policies, the president or the tea party? caller: i think it should be the president and the one way he could do it is by being the commander in chief like senator kyl and arizona, he could transfer all of the military personnel in arizona to other states and shut down the economic military engines in it these republican states like mitch mcconnell in kentucky,

shut down the big ford by just transferring everybody out and sending them new orders to other ports around the country and let the republicans have a little bit of suffering going on. that is what i think. host: north carolina is what -- our next call. ralph on the line for independents. caller: it is a pleasure, for the first time. i think the president should be the leader, working in conjunction -- i am not sure about the tea party but members of the house. and if i can digress a little bit on these obamacare -- do you mind? host: well, we are trying to keep the conversation -- a conversation with regards to influence over government policy so we will move on to georgia on the line for republicans. ed, you are on "the washington journal." caller: i do know the voting

districts will be redrawn says the republicans won a sweeping victory across the united states, and the democrats can possibly take the house until the next 10 years because that is when they do -- the next census will be 10 years from now. the chances of the democrats taking back the house over the next 10 years is practically nil. the president has influenced up until january, and then after jan. he is going to have to start cutting the budget there is no influence by the -- of the tea party by big money. i am member of the tea party and i work every day until my hands are bloody and nobody gives me money. host: thank you for your call. ed in georgia. in "the new york times" this morning, the lead article -- taliban leader in secret talks was an imposter. unmanned reporting to be the insurgent #two got western

money. fort myers, florida, on our line for democrats. teaneck, you are on "washington journal." i believe the president should definitely be in charge. he should have more help from

both parties. democrats didn't exactly go along with him the past couple of years. and if the tea party people believed that they are not being manipulated by big money, then i guess -- therein lies the problem. most people hold -- who voted the people who are in, are totally oblivious that all of the big money through the chamber of commerce, just large, other organizations, by the same people who were in power prior to the past two years. host: of teaneck, we are going to leave it there. in the editorial section, the op-ed section of "the philadelphia inquirer."

democrats showing this still don't get it. in the house, they endorsed a discredited regime. back to the phones. texas, diagonal line for republicans. who should have more influence over government policies, the president or the tea party? caller: i think the president indeed should have the most

influence but on the same token i don't understand this antipathy toward the tea party. it is very difficult for most people who are not involved in the tea party movement to understand that it is not manipulated by some puppet master with bags of money in fusing it. it is definitely a grass-roots movement. it was the people who got together because they got tired of not being represented by lobbyists, unions, they did not have any voice. therefore, we banded together. and maybe others now want to attach themselves to the party, but it was definitely a grass- roots movement. host: are you in the tea party? caller: yes, i am, and i am a proud member. it is just individuals who care about the country, who care about the future and a path that the country is on.

host: how do you plan on exercising your influence in the coming year or two? caller: by voting. and i call our congressmen and express my opinion, as i always did. host: who represents -- a goal ralph hall. host: you think your influence with -- is what got him elected or reelected? caller: i should keep my powder dry on him, but he has been in there too long. i don't know if the tea party officially supported the man peak who was opposing him in the primary, but he didn't win. host: in "the philadelphia inquirer were" more news from texas. doa jurors began -- delay jurors

begin liberations. back to the phones. palm coast, chop on the line for independents. caller: thank you. thank you for c-span. i think the tea party should have more influence over policy because of what we have is an illegitimate federal government. the federal government has -- the set up is not constitutional. we are not represented by these

"leaders" leaders and self- appointed leaders. the u.s. senate is there to represent our state legislatures and governors. but congress, the house of representatives, is there to represent their constituency out there in the field. and when they go there and they say that they are the leaders, we don't need leaders. the people are the leaders. i think it is sort of a moot argument to say that somehow the president is in charge of -- anything. his job is to make sure the policies as our states decide are followed through on and to keep our country safe. he has a chief executive position. we have governors, with a 10th amendment. nothing should happen in our program and unless a majority of states through their state

legislatures have put forward a problem that needs a national solution. the national government has totally use allowed the states. and when we get our state back in charge of our federal government, then we can allow the tea party to be represented by the proper representation. we don't have proper representation. corporate america owns our government. host: in about 10 minutes we are going to be talking about the role of the federal reserve with david malpass, former deputy assistant treasury secretary and former deputy assistant secretary of state. that conversation is coming up in about 10 minutes. california on our line for democrats. jeff, go ahead. vista, sorry about that. caller: that's ok. when i heard somebody call and who said the tea party was not put together by large money

interest i practically fell off of my chair. i don't really think that the people who say that even a believed that. but here is how it goes. host: why not? they seem pretty sincere. caller: of course. everyone is sincere. i voted for obama. i am just a little guy. i am sincere. it is not these tea party people who are sincere and everybody else is not. i also, by the way, the whole disinformation campaign gets to me. i looked on my birth certificate. it doesn't say birth certificate. it said certificate of live births. does it mean i was born in kenya? host: what else does it say on your set to begin of live births? caller: the fact -- as my name but, it has -- but what i am saying is -- host: does it have the city and

state where yo >> we will leave "washington journal, to take your live to president obama and vice president biden at a chrysler plant in kokomo, indiana. the white house says 80 in 2008 allowed this and other plants to remain open. live coverage, here on c-span. [applause] >> good to see you, all. good to be back in an automobile plant, making things. thank you, very much. we are very delighted to be cared. -- to be here. look, when the president and i got collected, we knew we had a heavy load to carry. we stepped up, and with the help of the congressman and the senators here, we passed the

recovery act, just after taking office in the midst of the worst economic situation since the great depression. . .

is one of the great otter towns of america. -- great auto towns in america. to bring kokomo back, to bring automotive industry back, we knew we had to change things. we could not keep doing things the way we did. we knew the industry had to get leaner, tougher, more competitive. we insisted that they did, and now you see results. an old industry adopting to a whole new era, and hiring again. hiring again. [applause] mr. president, i know you know this, but the last time we succeeded the lost 451,000 auto-related jobs. so far we are crated almost 75,000 new jobs and a lot more

to come. and the government did not do this, the government did what it was supposed to do with the leadership of a president and leadership from the president, we had investment from the private sector spot on board because the government was able to get back into the game. auto industry has poured back -- roared back. this thing i like most about this is that my dad would be happy for the first time in 24 years, j.d. buyer liked an american product more than a foreign product. that is a big deal. [applause] lo around here. look around here. cried one guy that works on a supply line doing exactly what you're doing here. it is a big process.

people work in places like here and delphi are a major part of this recovery. when you guys have jobs, guess what happens? the coffeeshops stays open. the barbershop stays open. the restaurant stays open. people open new businesses downtown. people sell shoes. people have jobs. this doesn't affect all the way through the economy, and that is what is happening here in kokomo. the lunch counter needs a few more witnesses to feed and serve them. the people that do not work here, we were just in town, and people would say thank you. they do not work here. they are saying thank you for this facility. we cannot just build a new economy by modernizing and revitalizing an old industry. we cannot stop degrading new

jobs, we need to create new industries as well. that is what the president did. a great example is over in tipton, the abound solar. there is no reason you cannot build the best automobile industries and b a leader in what the green industry will be. the president has done whatever great future -- president has done in the past, she looked to the future. -- he looked to the future. cox, some of our friends forget that is what all great presidents did. lincoln did it with a continental railroad. we're doing the same thing here again. every great president has a vision, and now we're doing it here. we're doing it here with a renewable energy investments that are being made outside of the city with the new industry

of the future. in a sense, there is a whole new automobile industry building whole new automobiles. my dad used to have a saying when he ran automobile dealerships, he said all they have to do is give me product. give me product. give me products, i can sell it. i said you are giving them the best product in the world again. we also believe we cannot have a strong economy without strong communities. that is why the recovery act helps heart-hit towns like kokomo. there are 13 fire starters better still on the job because of the recovery act and the safer act. teachers, law enforcement officers on the job. when i tell you an international recession hits, guess what? a town like kokomo and other towns all across america cannot do it on their own. that is why we helped with

infrastructure and road street improvements, to bring back main street and bring it back to life. kokomo is at the forefront of all. nowhere is it written that kokomo cannot be the hub of innovation in emerging industries in the 21st century like it was in the 20th century. [applause] nobody knows better than this man that our work is not done yet. we're just starting. but it is important we recognize success stories like kokomo as signs that we're definitely moving in the right direction. this town and these people are model for others looking to do the same thing over and over again in this country. you guys have in the embodiment of the limitless potential when we put the government and private sector altogether working towards the same end. in this community is built on grit and determination. -- this community is built on

grit and determination. we know it is a long road back, but we know we are on the road. the one most important thing we have to communicate to the nation and to everyone listening is we cannot stop now. we cannot turn around. we are heading in the right direction. kokomo is coming back, america is coming back, and it could not have happened without the vision of the man sitting behind me. ladies and gentlemen, the president of the united states, barack obama. [applause] >> thank you. thank you. thank you, everybody. thank you. thank you. have a seat. thank you so much. thank you joe. thank you kokomo.

joe is not only one of the best buys presidents in history, he is also one of the best and producers in history. i try to take him wherever i can hear ye. i want to thank your plant manager for the great tour and great work he is doing here. she is proud of the work that is being done at this plant. i want to thank your local uaw president. thank you for showing me around. a couple of other hot shots. evan bye is here. joe donnelly is in the house. congressman andre carson is here. congressman baron hills is here. and [applause]

by the way, congressman baron hill is in the indiana basketball hall of fame. that is pretty cool. being a congressman is cool, being in the basketball hall of fame in indiana as something. mayor a kokomo, craig and good nighgoodnight is here doing excellent work. the ceo is here. [applause] the president of the uaw, bob king, is in the house. [applause] we have some of the best workers in the united states of america right here at this plant. [applause] i had a chance to meet some of you as we were going around seeing these amazing

transmissions that your building, and i was very happy to hear that after a couple of tough years, at this plant is now running at full capacity. that is why i am here today. that is why i am here today. and [applause] now, we all know that one planned by itself -- one plant of by itself does not mean that there are still people here that are not hurting. i had lunch with the mayor and firefighters, and there is still long way to go. the mayor has all kinds of great plans and businesses that are looking to start expanding, but the fact is there are millions of people around the country who are still looking for work in the wake of the worst recession in our lifetimes. i do not have to tell you that spirit and many of you still have friends or neighbors a

husband or wife who is still struggling. i know that before this plant started rehiring, a lot of you were in the same position, so you remember that it is a tough thing when you are out of work, especially when you ever taken a lead time of pride in working and supporting a family and making great products. even as we continue to face serious challenges, what is happening here at this plant, the changes we're seeing throughout, loug kokomo are sig, positive signs of the future. you are living up to the spirit of optimism and determination, that correcgrit that has alwaysn at the heart of america. i remember coming to kokomo a

little over two years ago. what was happening here are protected what was happening all over the country, all over this region. for a decade or more, and families had felt a growing sense of economic insecurity. a lot of manufacturing had left that area. then every session started taking holds. and folks were seeing job losses and facing new hardships. that was before anyone knew how devastating the recession was going to be. by the time i took office just a few months later, the financial crisis had hit, the auto industry teetered on the brink, and we are losing millions of jobs. that let go and die with some tough choices. one was to help auto industry restructure. -- that left joe and i with

some tough choices. thawe knew that millions of jobs hung in the balance. we also knew the very survival of places like kokomo more on the line, and we knew that the collapse of the american auto industry would lead to an even deeper disaster for our economy. we also believed that america, which poparized the automobile, whose middle class was made on the basis of manufacturing, that we cannot give up, throw in the towel. that was not an option. those with -- there were those that were prepared to give up on

kokomo and the automobile industry. you remember the voices arguing for us to do nothing. they were pretty loud. suggesting we should just step back and watch an entire sector of our economy fall apart. we knew the auto industry was not built in this country was not built by doing the easy thing. it was not built by doing nothing. it was built by doing what was necessary, even when it was difficult. we made the decision to stand behind auto industry. if automakers and ceo are willing to do what is necessary to make themselves competitive in the 21st century and workers that would take pride in the product they made. we made the decision to stand with him because we have confidence in the american worker more than anything. today we know that was the right decision. [applause] we know that was the right

decision. today each of the big three auto makers has increase their market share. each of them. for the first time in over a decade, americans are buying larger shares of chrysler, gm, and ford cars and a smaller amount of their foreign counterparts. that is for the first time in a decade. and [applause] [applause] we're coming back. we are on the move. all three american companies are profitable and growing. some of you read last week, gm's stock offering exceeded expectations as investors expressed their confidence in the future that seemed so dim just 18 months ago, and the

treasury was able to sell half of its gm stock. here is the lesson, i do not bets against america. -- do not bet against america. do not bet against the american worker. do not bet against it. [applause] do not set against bet against . don't bet against it. this plan as a shining example of why you should not. -- this plant is a shining example of why you should not. two years ago production was plummeting. today the company is coming back. company has invested more than $300 million in this factory to retool. [applause]

it gets better. and the ceo just told me today chrysler is announcing an additional investment of more than $800 million in the kokomo facility. [applause] that is dongood. that is good news. that is real money, $800 million. [laughter] pretty happy about that. over the next few years, folks here expect to manufacture more transmissions than ever been for -- than ever before. hundreds of workers are back on

the job. we will be hiring more. [applause] this includes -- i will name a couple of people just to embarrass them. where is sharon? right here. [applause] sharon lost her job at 20 years at a paper mill. she was only able to find work that paid her car less than her other job until she was hired by chrysler. now she is doing a great job right here at chrysler. we are proud of you. [applause] jim ferod is here. jim is right next to her. [applause] jim worked for chrysler for a decade, right?

then he lost his job when the plant he worked at a new castle shut down. over the next few years he could only find in the men work on and off. it was not until after the restructuring that he was able to have a job he could count on. he is back for over a year now at doing an outstanding job making products for chrysler. [applause] at a plant down the road, worke are manufacturing parts for hybrid vehicles. that has already led to dozens of jobs and will lead to nearly 200 jobs over the next few years. a few miles outside of kokomo in tipton, a clean energy company will be able to hire 900 workers, taking over a plant that had to shut down a few years ago. a factory that was empty and markell come back to life. when people have a paycheck, the

conduct of the store, they are able to spend, that helps the economy grow. on main street and kokomo we're seeing a revival with new businesses opening downtown. for anybody that says our country's best days are behind us, anyone that would doubt our prospects for the future, anyone that does not believe in the midwest, anyone that does not believe in manufacturing, have them come to kokomo. [applause] come here. meet these workers. come back to the city that is fighting block by block, business by business, a job by job. this is a reminder of what we do as americans. what we can do as americans when we come together. we're not divided. we are not spending all of our

time bickering but instead of focusing on getting the job done. we did not give up, we do not turn back. we fight for our future. we're not out of the woods yet. it took a lot of years to get us into this mess, it will take longer than anyone would like to get us out. but i want everyone to be absolutely clear, we're moving in the right direction. [applause] we learned today that the economy is growing at a faster pace than we previously thought. that is welcome news. we will keep on making it grow faster. we will keep on creating more jobs. we need to do everything we can to make that happen. that is why in the coming days it is so important, coming months, it is so important that democrats and republicans work together to speed up our

recovery. we have to put aside our differences. the election is over. we have to find places where we can agree. we have to remember the most important contests we face is not between democrats and republicans, it is between america and our economic competitors. other nations are already making investments. [applause] other nations are making investments in education, energy, and infrastructure, technology, because they know that is how they will be able to attract new jobs of the future. throughout our history democrats and republicans have agreed on making these investments. we do not want to feed our economic leadership to countries like china. we have to make sure our workers have the skills and training to compete with any worker in the world. we should give our business is more incentives to invest, research, innovation that leads

to new jobs. we should make it easier, not harder, for middle-class families to get ahead. i will give you an example on taxes. next year taxes are set to go up for middle-class families unless congress acts. if we do not act by the end of the year, a typical middle-class family will wake up on january 1 to a tax increase of $3,000 per year. the next two weeks i am asking congress to take up this issue. the last thing we can afford to do is raise taxes on middle- class families. [applause] if we allow these taxes to go up, the results would be that a lot of people most likely would spend less. that means the economy would grow less. and we should resolve this issue

in the next few weeks. so that you have the assurance that your taxes will not go up when the clock strikes midnight. and this is an area where democrats and republicans agree. the only place we disagree is whether we can afford to also borrow $700 billion to pay for an extra tax cut for the wealthiest americans, millionaires and billionaires. i cannot think we can afford it right now. chris will require sacrifice from all americans, including those who can most afford it. i am eager to sit down with leaders from both parties next week and camera this out. but we need to hammer it out. -- i am eager to sit down with leaders from both parties next week and hammer it out.

before henry ford built the model t or walter chrysler took up the reins at a starter called buick, a man by the name of elwood hayes decided to do a an experiment right here in tokyo. he set up a 01-horsepower boat engine in his kitchen. the idea was that he might be able to rig the motor. he started it up and the engine work great. it works so well that it came loose from the bolt and destroyed the kitchen floor. after a brief, and what i imagine was a typical conversation with his wife, he decided to continue his test and his machine shop. when he was completed, he made

one of the earliest work in automobiles in america. he named a pioneer. kokomo has a story plays in our history. this is where people came to invent things and buildings here in america. to work hard in the hopes of producing something of value and that people could be proud of. that is the legacy of all of you. you are all ears to that tradition right here in this plant. -- you are all heirs to that tradition right here in this plant. congratulations, chrysler. congratulations, kokomo. and i am proud of you. [applause]

[captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] [music playing]

>> now to the national academy of social insurance. they will discuss strengthening social security for the long run. the and then, will include remarks of the the president of the institute. >> most people agree they expect to get something from the program.

most of said without the benefits they would have to help support their own aging families. finally, the largest group agreed, 87%, said they do not mind paying for the benefits because it provides security and stability to millions of retired americans, disabled, and children of disabled spouses. what is striking is it cuts across party lines as well as for the whole population. it was 87% of all americans. 93% of democrats, 85% of independence, 81% of republicans. in a similar question, we asked whether in the time of economic turmoil should we be thinking about shrinking government commitments, including to social security or should we be investing more in strengthening these programs?

again, the overwhelming majority said it is more important than ever to strengthen social security to make sure the retirees, disabled, and families can secure picked -- count on secure benefits for generations to come. the overwhelming majority was a strong level of support. finally, when asked is an important to preserve social security, even if we have to pay more? again, 70% said yes. a similar proportion agreed when the question focus only on upper income americans. other organizations have also

had similar results, including america speaks, which held a town hall meetings across the country this summer. in their final analysis, they found that their focus was on the deficit overall, but they did have a session on social security, but no benefit cuts provision had the support of the majority of their participants. 50% did support raising the social security tax rates, and 60% supported lifting the cap on earnings. they a r arp has done surveys ad found that most adults would rather pay more to preserve its future benefits than pay the same amount today and get less in the future. in so to recap, so security is a portable -- so to recap, social security is affordable.

i will turn it back to lisa. an>> we will bring kindle up now -- windal up now to get a reaction on the statements that were made. >> good afternoon. i am glad to be here in comments on this paper -- and comment on this paper. this comes at a time when we have had a deficit commission to issue a report of bauhaus social security solvency could be restored, primarily on the benefit side. this paper takes a different side, and i think all students should read it because it contains some very important insights. i will like to make four important points.

the first is the insight from the paper, and one's memory gets distorted by a history. the amendments that congress did to the greenspan commission more all on the benefits side. and one can make, as the deficit reports have suggested, the case for raising the retirement age or reducing benefits somewhat as longevity increases, the benefits become more generous because people are living longer. i think this chart, more than any other, it really did feats that argument. -- really defeats that argument. what does this chart show?

is shows between 2005 for someone retiring at the age of 65, after medicare part b premiums are taken into account, social security replaces 39%. that same benefit only replaces 32% 20 years later. that is an 18% decline. it goes from 39 to 35 at because we raise the normal retirement age from 65 to 67. we go from 35 to 32 because of medicare premiums are growing a lot faster than inflation. i would quibble with the start and won an important sense is that also as part of the amendments, more and more of the social security benefit is taxed. 25,000 for a single and 35,000 for a couple were not indexed

for inflation. they were held constant in nominal dollars. over time more social security benefits are being taxed. if you took that into account, that would take the 32% down to 29%. we have gone essentially from a replacement rate court average worker at 39%, and when you take into all accounts the 83 amendments to 29% over that time, a 26% decline. as we showed in an earlier charge, that is the reason social security benefits of a percent of gdp are really flat. it is the 26% said benefit decline that is offsetting almost completely the fact that there are more elderly in this country and the baby boom generation is about to retire. i wish they had taken it one step further, and looked at the

interaction between medicare and social security a little bit more. as probably most of the elderly know, they have not gone as assistant security benefit increase for -- they have not gotten us also security -- a social security increase for more than two years. however, because medicare part b premiums have not gone up any time there is a frozen cola, we will probably see at least a $20 increase in part b premiums come january 2012. therefore for a typical elderly person, it will go up and

completely taken away by the other hand of government by medicare part b premium increases. this is a problem, which could go on for a couple of years, depending upon inflation. when democrats a couple of years ago introduced a bill that tackle this problem. it basically would have a guaranteed to the elderly at least 75% or 80%. taking that same person who gives a 1% increase, you would protect at least $8 of that increase to take care of inflation in food, energy, red, and the likes. -- rent and the likes. that is an important phenomenon that the obama administration has to think about as we enter this time of very low inflation hopefully. the interaction between social security and medicare.

my second point is there was an important context and virginia alluded to it, but the point i want to stress is that social security was all that for 58 years before the great recession. now it is 54 years. we have no george run social security -- no short run social security problem, but we could use the deficit is to make it better. they should be done on social security terms, not budget terms. i think it was the right decision at the time. just prior to the 83 amendments, there had been quite and you increases. there was the will ober increas.

there was a lot of short-term increases in the payroll tax. there was nothing in the tax code to offset the payroll tax increases. we are in a different world today. there has been a 6.2 dedicated to zoll security -- dedicated to social security for the last three or four years. we know how the eec protecting workers with children. there's one other thing i want to illustrate going back that's one thing -- that on thing the 83 amendments did is we basically given a choice to all workers to retire at 62 or 70. if you retire at 62 you will

collect eight more years of benefits than someone who retires at age 70. it is actually really fair. --increasing the age lowers the benefits at all levels. if you just looked at 83 amendments, individuals got more of their retired at age 69 or retired at age 70 than they did under prior law. the 83 amendments really made it possible for the american workers to choose at any point in that age span from age 62 to age 70 when they wanted to retire, and it was essentially fair here ye. the thing to really stress is that put local leaders reject the thing to the stresses that

the political leaders, reagan and o'neal, were really correct. -- the thing to really stress is that the political leaders, reagan and o'neal, where really correct. every american has said is this issue knows exactly how solvents social security is because of the contents of the trust funds. my third point is that in another important sense, having said that the amendments were, it did not work, because what the politicians were doing in the rest of the budget. when president bush took office in january of 2000, cbo said there is a $5 billion surplus. he did not use any of that to make social security more soldan's. nor did he use it to pull down the national debt.

in-- he did not use any of that to make social security more solvent. we did not use the decade just before the baby boom generation retired to get ready for it. i would say that is really one of the greatest bill years of the bush administration, which has gone very little attention in the press. -- one of the greatest failures of the bush administration, which has gotten very little attention in the press. my third -- my foruturth point s that i think the paper could

have looked at other things. they saw the tax side unlike the other commissions and applaud them for putting the paper out for that purpose. i do think there are some other places. one could look at non-disabled child benefits. i do not understand why m tailhooa male for also a femalef you have children later in life you get a higher retirement that you. since most bosses now work, rising one could make the case for lowering been non-dependent spouse benefits. another place beside the benefits that they do increase, which i applaud them because they make a lot of sense, raising benefits for an 85-year- old, adding back in college

benefits for disabled beneficiaries and for children of parents to have died, the survivor benefits. there is very little survivor protection. if you take a male and female with identical earnings, one of them dies first, the benefits of that family are cut in half. expenses for that family just because one person died are not cut in half. i think the survivor benefits, particularly for a couple with identical earnings are nearly his -- or nearly identical could be improved. there is also a case that could be made to moving towards a more universal coverage. those are moe my basic points. it remember nothing else, it is we have already had a 26% decline in benefits.

we need to take into account the interaction between social security and medicare. politicians need to take a lesson from the 1983 amendments and rarely work together to solve our problems today. >> thank you very much. it is tough to put out a paper and then ask a qualified professor in this town to give us feedback on it. you have done that and very nicely. i think your message as well heard. i like that you did the calculation and give us the 26 percent decline and replacement rates just on what has already been scheduled. i think you have given us our work for the future to talk about the interaction of medicare and social security. i think that is a point well taken, and nice to hear that

things work in this town once in a while for all of you that come to work every day as staffers here. i think the briefing that we have tried to say today was really to take us back to the question of revenues and benefits adequacy. there is so much talk about the cuts that we tried to give you a picture today at the revenue side and tried to dispel the notion that we have had this balanced package in 1983. the facts are it was not balanced on the long haul. it was predominately cuts, and those cuts are still being phased in. it is the wrong time to ask about adequacy and certainly when we ask the american people about adequacy, they're quite interested in paying more for adequate benefits. i think that is a different story. we wanted to leave some time for questions today.

we have some great minds, so i will not open the floor. by job will to try to repeat the questions since we are being taped today. i will try to be a good listener. do you have any questions? kindle ed. -- go ahead. >> would you support the idea of amending the way it is calculated to take into account increases in the medicare part b premiums? right now you do not take the increases into account. >> that is a question about whether we will be serious about the interaction of medicare and social security, which you advised recalculating the way

the cost-of-living adjustments are calculated, in particular to take into account the cost of benefits marriage in -- in particular to take into account the cost to medicare part b. the party premiu>> the premiumst up almost all of the cola for a typical elderly person. i do not think that is what we intended for congress intended in 1972 when we installed the inflation index. there should be serious consideration on ways of doing the cola. they get quite technical. someone argue that the change -- some would argue the change

cpi is better. i think it should be seriously considered. >> any other questions or reactions to that? yes. >> [inaudible] >> why are we still unbalanced? why are we all on the revenue side? reactions? janice? >> yes, i think one of the things that we're trying to look at is over for the long-term, or is it we want to wind up and how will we get their?

when you look at what is happening with and a adequacy over the long-term, that does not speak well for more reductions in benefits. looking at what we actually did in the past, we were cutting benefits in 1983. and we knew it. we were not hiding it. it to go back and do it again, i think on the assumption that we're coming from a balanced package would be a mistake. if people decide they want to cut them again, we certainly can do that, but we should not come from the mistaken assumption that we're starting from a balanced place. we are not. >> anything to add to that? >> i would say that we are talking about something that is more balanced than other proposals for further benefit cuts because we have already had major benefit cuts and they're

not even fully phased in yet. we're seeing the benefits shrank. at the same time, the 1983 change really ask nothing more in the way of some contributors, from employees and employers beyond 1990. the tax rate we now have was scheduled in 1977 to take affect in 1990. enter -- under current law it will be that way in 2085 unless lawmakers intervene in schedule revenues that matched the remaining obligations of the program. people say they're willing to pay for it. let's allow them to do it. >> let me emphasize that lost in the shuffle is the fact that in the past we have had revenue increases in the long-term future. the 72 and then attacked a revenue increase that went in in 2010 or 2011.

-- the 1972 increase went into effect in 2010 or 2011. as we ran into trouble in the 1970's and 1980's of those increases were pulled back. in essence the tax rate we have today, 6.2%, which sets in 1977 and has not gone up. it is not like people have been hit over the head with a tax increase every year in the social security program. i think that gets lost in a lot of the discussions. >> let me add one other thing, and that is they were looking at the social security program in this paper. the other side of the cornyn is that medicare -- the other side of the coin is that medicare costs have gone up a lot over time. one could try to reduce the

increases we see in the medicare program. the affordable care act, which just got enacted, did reduce the growth rate in medicare by about 1.3 percentage points for he per beneficiary per year. what benefits were improved, the expenditure level souls were actually reduced. -- while benefits were improved, the expenditure level was actually reduced. it does point that perhaps social security should be strengthened and at the same time, we really work to reduce medicare expenditures while increasing the quality of benefits that the elderly receive from the medicare program. >> go ahead. yes. >> you are talking about increasing the retirement age

even further. [inaudible] the commission's have said that they are being harm-- [inaudibl] >> this is a good question. i am going to repeat it and would love it if you could answer it. the question was about disability benefits and many in the context of increasing the retirement age have talked about adding more people to the disability program. what is our reaction to that proposal? can we talk about what really happens? >> the disability program is there to provide benefits to

people who are unable to work. if they have a condition that expected to last a year in precludes them from working, but it is the most difficult part of the social security program to administer. the backlogs, i do not have the latest data, but the backlogs are huge. you may know better than i. likely we will select the disability program take care of those people or find some way to do that your disability assessment, a disability assessments are hard to do. i said that program in the past. the academy has studied the program in the past. there is no magic bullet to make the program easier to let the minister. from the beneficiaries perspective, they often get denied once, did denied twice, they get approved on appeal. -- get denied twice, they get

approval on appeal. it is a very arduous process. i have not seen an answer that fully deals with that. there might be one out there, but i have not seen it. >> it is also important to remember that the definition of disability under security is not like an occupational disability, it is a very strict definition of disability. we also have to take that into account. also, the longevity increases are not uniform. higher income people are living longer. the lower-income people have not enjoyed the same increase in their longevity. their longevity has gone up not even enough to cover the two years that the retirement age is already going up. the commission -- the various

reports that are out there now have the increases starting way out in the out years, but personally i have a concern that we really do not know what we did yet in 1983, the full impact. we know what wejh did, but we do not know the full impact of it. will people really wait a whole year? the whole two years? how many? how many will just live on less? the simpson commission also -- if i have the correct -- increases the age of early retirement, so the ability to retire at age 62 would simply go away. there is argument about that, because the age of 62 benefit would be so small, you may not want people taking it. it does not solve the problem of a nurse who was lifting a lot

of heavy weights every day or a janitor or somebody else that has a very hard dom and who probably is not getting the longevity boost. it is a difficult issue, and i think we have ahi lot to look t before we jump down that road. . . ?

not everybody can wait until 70, but to the point is that people who have a greater longevity and areter job prospects the ones that can wait until 70. if we really do a better job of helping people understand the advantages of awaiting if you can, under current law. >> not only have cuts already been made but incentives are there. >> incentives are there, and if people understood them better -- we already have people working at older ages, but that could be better if people understood the incentives better. >> in some ways, to the new

student of social security, it is a slightly odd concept that a cut in age is a cut in benefits. it sounds slightly awed. -- odd. i think what your table is trying to show, the difference between blue and red, are the cuts that have already been made because of the 1983 amendments. what are we seeing as the difference between 62 and 70 in what has already been made? >> essentially, this is comparing the benefits you would receive if the full benefit age were 65 versus 70. 65 is the red bars. 70 is the blue bars. so, people still have a choice of claiming benefits --

>> 67. >> yes, 67. people still have a choice of claiming benefits of any age between 62 and 70, but when we get to the blue bar stage, for people born in 1960 or later, at any age they claim benefits, it is going to be roughly 12%-14% less than it otherwise would have been without this change in the law. >> ok, we have time for another question. anymore? all right, we have achieved something rare in washington, a perfect one hour and grieving. i want to thank the panelists -- briefing. i want to thank the panelists. thank you very much. [applause]

>> and we will stick around if anyone has any questions they would like to ask. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> here are some programs c-span is airing thursday, starting at

10:00 a.m. eastern. academy award winner jeff bridges talks about his work to reduce hunger, jane goodall talks about her love of animals, the chief justice talks about the role of the supreme court, and later, retired justice john paul stevens. former president bill clinton awards a medal to tony blair. that is on thanksgiving day on c-span. >> experience american history tv, starting saturday at 8:00 a.m. eastern. 48 hours of people and events telling the american story. here historic speeches by national leaders and i witnessed the events of accounts that shaped our nation. this is an historical museums, historical sites and college campuses. american history tv, all weekend every weekend on c-span-3. >> the c-span network to provide coverage of politics, public

affairs, nonfiction books and american history. it is all available to you on television, radio, online, and on social media networking site. find our content online at any time at the c-span library. and we take c-span on the road with a local content vehicle. the c-span networks are now available in more than 100 million homes. created by cable, provided as a public service. >> the irish prime minister faced leaders of the opposition party in the irish parliament today to answer questions about a financial assistance package from the european union and imf. yesterday, irish political leaders called for the prime minister's resignation and a new election. he is under enormous pressure to reduce the budget, a condition of the rescue package. the irish data set is 32% of gdp

this year -- irish and deficits -- irish deficit this year is 32% of gdp, the highest in europe. when a warning, some portions of this program are in gaelic. >> we move on now to leaders questions. >> in the past week, we have seen the authority and the trust of this government elaborate. having been told only last week that there was no need for outside intervention, outside

help, about a financial bailout, we have now seen the people leave that point of view as the imf and the ec be arrived in dublin. in recent days, it has been announced that we will accept a bailout. we would like to withdraw our support from government on the basis that we have been betrayed and there were not proper communications within the cabinet. yet, it seems that following the press conference yesterday, after an ongoing attempt to cling to power at all costs, at

this time in crisis, what our country needs is confidence and stability. it has neither at the moment. that is why people who have money in banks are concerned as to whether they should leave it there. it is very important to reiterate to those people that their money is saved. i want to assure you, this party will act constructively in the interest of ireland, in the interest of stability and conscience that is needed both here and internationally. that is why we have a motion this evening to send out a signal internationally of the importance of the cooperation tax rate, such a fundamental cornerstone. >> i wish to interrupt you.

>> that is why i accept your invitation to release the delegation that is here from vague imf and the european commission -- from the imf and the european commission. i do make one specific request to you, and it is best. there are things that you have it within your grasp that can restore certainty and a sense of confidence. the first of these is to deal with the budget. you have made a point of the importance of the budget being passed. tomorrow, the plan will be presented. it is in effect the budget for 2011. in the interest of being constructive, in the interest of certainty, stability and continuity, will you tell us now

that you bring forward the budgets until next week and a slimmed down version of the finance bill can be put through with the key ingredients of that budget? i will facilitate the house sitting from monday to friday until all of that has been completed by christmas. this will bring some measure of certainty to a government that is out of control. >> hear, hear. >> i made clear yesterday that there is no question of my motivation. my sole motivation is to ensure that a four-year plan is published and that a budget is passed by the house. the minister of finance has agreed to a time line for that

with the commissioner. the commissioner has made it clear today again that he does not want to see [unintelligible] until the new year. it is very important in terms of fiscal targets that we proceed with the budget on the day which we have set out. we want to do that properly and appropriately. that timeline was agreed to by the commissioner when he came here to talk to the minister of finance. we very much agree that the best thing for this country is to pass that budget. i think it is very important that it happen. i do not wish to go over again some of the "issues that have --

some of the issues that have been raised. i want to make it clear that i have answered the reports that have been put to me that were untrue at the time. there were people who felt that ireland should do that immediately, but i was very anxious to ensure that i represented the taxpayer and the people of this country. in relation to the technical discussions that were taking place in preparation for that meeting on tuesday night, we wanted to make sure the whatever concerns were expressed we were being made aware of and that our minister could deal with those issues. the political decision that was made on tuesday night ought to have a discussion here in dublin, and that matter has moved along quickly, as you

know. i just wanted to make that point. we must always confirm for each other, there is no intention of any government at anyime but to represent the people of our country it to the greatest possible extent we possibly can. i was simply responding truthfully to the specific reports which were untrue at the time. in fact, as you know, on sunday we made a formal application, having had the opportunity to set the parameters for these discussions, including, as you say, the importance of the 12.5% in cooperation as a cornerstone of our democracy. so, the second point i was making is that it was unusual in this situation for the government to consider applying for this facility as we decided

to do on sunday, but it is clear that the abnormality in the market situation and the perception and opinions that i heard a, the view of the g- seven, of our partners and others, that we would consider this matter on that basis. we were prepared to do so, because we are anxious to meet our international obligations, but we must also protect our own interests in the very best possible way we can. that is what i wanted to say in relation to that. there is no action, no motivation by me or anyone else. "we were simply trying to do was to make sure -- what we were it simply trying to do was make sure the we were not bound to a situation, that we look to the situation, listen to concerns,

and made sure that the parameters of the decision we were about to take were consistent with what was best for the country under the circumstances. in relation to the other matter that the deputy raises, i made a statement yesterday evening of what the government intention is. we believe that a statement of conscience will be passed with the budget. we will publish our four year plan as we said we would and submitted to the european commission. and we will bring forward a whatever legislative enactments, and i do not anticipate what those are, but we will deal with those issues as broadly as it is possible to do in order to bring certification -- as promptly as it is possible to do in order to bring certainty to the country. i believe that in the new year it will be making that point i

made yesterday and reiterated today that there will be an opportunity for us to go to the country and have the country make the decision as to who should have a mandate to continue with the challenge of what will face this country in the years ahead. the immediate priority is that if we delay that situation, we need to pass this budget as we said we would. we set out a time line and we need to proceed with it. that is the context and the basis on which important discussions are ongoing and better conditions that will be for a spirit -- will be for us. >> deputy. >> you have used two words that are important. first, you referred to the immediate priority.

second, you referred to certainty. these are not normal times. this is not business as usual. frankly, i have no interest in attempting to play political games as the situation is. the fact that you're absent, erstwhile friends from cabinet are not here, that is for you to decide. if you want to bring certainty to this matter, in respect to the budget, you cannot do so next week. it is very easy for the government to bring in a bid overnight. to take a bit away from the pensioners overnight. what is at stake here is certainty, is stability, is the confidence of our people.

maybe you do not appreciate the level of exasperation and uncertainty out there. one thing you can do is bring forward your budget next week. i will facilitate you by having the house said monday through friday so that the legislative process can be completed by government. that is constructive and that is in the interest of certain date, stability, -- the interest of certainty, the interest of stability, the interest of restoring confidence at home and abroad. what i do not want to see is what i heard from the minister of transport today. [boos and hisses]

what the minister of transport was talking about was having an election of april or may. do have any concept of the reaction of uncertainty that that creates? i am telling you from my own experience here, it is perfectly in order for the government to bring in a budget next week, to bring in a slimmed down version of the key essentials of your finance bill and have them put through the legislative process that you regularly referred to, and have that out of the way by christmas. that restores some sense of stability. that restores some sense of confidence. that restores some sense of relief internationally that at long last, ireland is beginning to move the way that it should. i offer you that in a spirit of being constructive. if you are serious about what you say, the immediate priority and the restoration of

certainty, i support that. so i would offer you the opportunity to bring forward your budget, bring forward a key, essential bill in finance, and to deal with that before the house leaves for christmas. you can then name your date for the general election toward the back end of january. >> i do not anticipate whatever the timeline you are suggesting would be involved in completing the enactments that are necessary to complete the budgetary and other matters that have to be complied with when the budget is enacted. so let me make that clear. the second point want to make is that as you know, as you know collapse november is very -- as you know, as you know, november is very important in terms of taxes. it is critically important that those are right in the next

financial year in order to make sure that our budgetary assessment is correct and our figures are up today. we are talking about, therefore, having the budget within a week of those figures being brought through. that is why we always have our budget then. the point i am making is that the commission and the people with whom we are dealing accepted that the issuing of the four-year plan this week and a voting on the budget of the seventh of december, with the abrasion that will make sure the quantitative -- with the informational will make sure the quantitative nature of the budget is correct, that we do it that way. the government has to do this correctly.

it has to get to the november figures as part of it. about, withinng the next two weeks, having a budget to put before this house, and having a four-year plan published tomorrow. >> i want to pursue this a bit further because the situation that we are now in is one of very considerable instability and lack a certain date -- lack of certainty, and that's been largely brought about by the government itself. you contributed to it yourself by denying that the recession is taking place within the eu or the imf. we were told thursday on radio what you should have told us earlier in the week. we ended up with the imf being

brought then, with an application being made to the stabilization fund on monday, which was something that you had been denying i'll weekend we did all weekend. -- denying all weekend. use a web needs to be done is that the budget needs to be passed -- you say what needs to be done is that the budget needs to be passed. let's be clear about this. there is a process that happens, as you know. the budget is brought in. there are a series of resolutions, many of which deal with excise matters. very often, they're not very controversial at all in terms of the house passing them, but it is then followed by two pieces

of legislation which are required to give effect to the budgetary measures. last year, the first was passed prior to christmas. the other is a finance bill. last year, that did not creep its way through the house until the 26th of march. two questions for you. first of all, what is the time when you're talking about? can you set out for us here the steps? if you are saying, responding to the suggestion that has been put to which is that you are moving forward the date for the budget, which is a proposition of with which i would agree, but you are rejecting it now and sticking with the seventh of december. what is your time line after the seventh of december? when did you envisage a the finance bill in particular being presented, i voted on, and being

enacted? and secondly, can i ask you this, since we are in circumstances that one of the parties in government have already taxed themselves of of government. wait -- we have heard from deputies to have supported your government who suggest that their loyalty is at least in doubt. do you consider that the government has the majority that is sufficient to put through the financial resolutions of the budget on budget night itself? >> i have given the reason to the deputy ngo about -- to the deputy and you about the reasons for waiting for the november tax

returns. that timeline is known to be the one in which we are dealing, so we proceed on that basis. i make the point that it is in order to do that as opposed to postponing the election. we all know that people approval will take a lot longer than a seventh of december, which is the appointed date for the budget. the action setup and undertaken with the european union -- actions that have been undertaken with the european union is based on end in the

context of the publication of a four-year plan this week in the ratifying of a budget on the seventh of december. that is an integral part of the process that we are in gauged in. the third point is that while i do not anticipate a legislative change, a finance bill has to be passed. there is a need for the appropriations bill to assure that payments can be made, and the other legislative enactments that arise out of the budget announcement will also have to be passed. what i am saying, deputy, is that on the basis of the filling all of those requirements and

giving certainty to the decisions that are taken, the deputy then asked me, but that timeline is -- what did that timeline is. i can say that it will all be done with do urgency and proper procedures, as quickly as we can do that. i am not in the business of using this particular situation for any personal regard for myself or any personal consideration. the third point i want to make is that regarding the whole question of the passage of the budget, i believe it has been said both in terms of external conflict in the country and internal conflict in the country, the greatest statement of confidence we could make is

to adopt the budget with the corrections the weir's the keynote -- corrections that we are speaking of. of course, a recognize the differences between us on many issues. i do not question the motivation of people who look to the national issue. this is a madeleine -- this is a matter of national interest for assault. i say that openly. we have to discharge our duty. we will do that. i hope that there are sufficient people in the house to see that we are acting in national interest. >> first of all, can i say that it is important that we have clarity and that we have

stability, both in relation to budgetary matters and in relation to the political life of the country, but to be honest, i think you have brought anything but clarity to this matter. let me start with this. i do not think that is in this country's interest that the budgetary process is prolonged to the end of march. i do not think it is in our interest that we have a three- four month period of instability, of doubt, a lack of clarity whether or not the budget is going through. the budgetary process is not completed, as you well know, until the finance bill is enacted, and last year that was the end of march. now i ask you very clearly, what was your intention regarding the

other pieces of legislation. i am asking you particularly in relation to the finance bill, what is your intention with regard to that? it is unacceptable and not in anybody's interest that that process is not completed, and is strung out for a three-four month time period. that is not in the country's interest. i invite you again to tell us clearly when we are going to see, when you see the end of the process come up when you envisage the pipeline being completed? you analogous situation, and you have said this before year too -- you are now in a situation,

and you have said this before hear it too, that you are in the responsibility of bringing forth a budget. given the response of the green party and the statements made by some independence, do you consider that you have a majority on your side of the house to put through the budget and legislation you submit? >> i say again that the reason why i cannot, the reason why the budget is being brought forth on the seventh of december is because of the valid reasons i have given. i am not trying to be difficult. there are valid reasons for that. the second point to make is in relation to the time stamp for the completion of all of the action needed based on

budgetary announcements i cannot anticipate or relate to you at this point. i would expect that certainly by the month of february we should have everything completed. that would be my hope. you are asking me to give you an indication. april, may, i do not anticipate that. i am simply trying to be frank. i am not here playing games. i am giving you my opinion. that is my opinion. i am giving it to you. that is what i think as a realistic timescale for legislative announcements to be made. if, as i say, we continue to work through these issues as property, -- we will continue to work through these issues in the proper way.

i believe there will be support for this budget. i believe there will be support for this budget. i believe that this house knows and understands, and i have indicated the timetable for the leaders in the spirit in which it was received, the question of additional official confirmation of the situation and the seriousness of the present situation we find ourselves in. i would ask everyone to reflect on that. >> that complete leaders questions for today.

could i call in new to announce the order of business for today? >> statements on the finance ministers' meeting.

the proceedings shall be brought to a conclusion at 7:00 p.m. tonight and the following arrangement shall apply. the leaders of the labor party shall be called upon until not exceed 16 minutes each. the statements of other members called upon shall not exceed 10 minutes. members may share time. there will be questioned starting at 6:35 p.m. for a time not exceeding 20 minutes. following statements to not exceed five minutes. >> one proposal has been brought to the house today. statements on the finance ministers' meeting.

>> this is probably the most momentous decision in the history of the state in this procedure. this is the effect of the decision by the government to request assistance from the european central bank, the european commission, and the international monetary fund. the proposal that this would merit a mere 19 minutes of debate is unbecoming to the irish constitution and to the people of ireland. the prime minister himself needs to come into this house and explain in detail to the people of ireland what his cabinet signed off to by way of a virtual meeting and video conferencing of finance ministers. as it stands in this particular discussion, the labor party will have a 15 minute slot.

but only the minister of finance will speak for the government. i think it is extraordinarily inappropriate and assaulting -- insulting to the people at home not to have this decision explained in our part to the people of our country. we are being told from every newspaper in the world what the irish people need to do it. everybody in this house is conscious of our international responsibility, but under the irish constitution we have a responsibility primarily to the citizens of our own country. >> what you are doing is disorderly and inappropriate. >> i wish to record opposing the

order of business as presented by the prime minister. i would say that i think it is absolutely it inappropriate that he should even move an order of business here today when what he should have done, last evening at the very latest, if not a long time before as we have called for, is to go to the parliament and allow the people the opportunity to give a mandate to the government in order to ensure that there is confidence restored and measures introduced. >> that is out of order. there is no provision in the order for explanations such as this. [crosstalk and shouting] the fact of the matter is that we should not be having a in

this order of business here today. this leader has not got the support of even his own party. >> this is not a motion on the order of business. >> it is the only example in history -- >> this is out of order. [shouting] >> we need to move on. [bell ringing] >> it is absolutely unacceptable. [bell ringing] >> unacceptable.

[bell ringing] >> this issue relates to statements of the euro-group meeting. there will be other opportunities to hear on that the matter. >> [speaking gaelic] >> a look at the u.s. capitol here where both the house and the senate are out now for the thanksgiving break. some political news for you, the

representative of new york's 20 that district has just conceded to the republican. w h a m television said it that the race was too close to call on election day. the republican had a 567 vote advantage over the incumbent. the incumbent said his only regret was losing the election. it is january -- in january, we will see the start of the 112th congress, with many new faces, including senator chris k coons. another new face, marco rubio. the tea party favorites won the race against democrat kendrick

meek and independent charlie crist. >> on thursday, jeff bridges walks about his work to reduce hunger. jane goodall talks about animals. lawyers discussed the impact of john paul stevens. former president bill clinton presents the liberty award metal to tony blair. that is on thanksgiving on c- span. >> british prime minister david cameron answered questions about his government's domestic and foreign policy agenda for the first time, a tradition that began with tony blair. he defended his proposed spending cuts and the timetable for withdrawing troops from afghanistan by 2015. the liaison committee is made up of the 33 chairman of the house of commons select committees.

their questions are not provided in advance. this event is to and a half hours. -- 2.5 hours. >> order, order. the purpose of these sessions is quite different from whence they pose a question time. >> a that is a relief. >> they are designed to explore at greater depth and the role that you play in the determination of government policy.

we scrutinize our individual departments in our own committees. now it is your turn. we are going to start with a major section that has already been questioned in detail by the treasury committee. how often were you involved simply in order to broker agreement or rectify arguments within the treasury department? >> i was involved from the start in setting the strategy for the comprehensive review. the budget gave a fiscal mandate to the government. when it came to the comprehensive review itself, i was involved in both the setting strategy, which departments we

were going to protect, what areas we were going to try to invest in, what was the thinking behind where to make cuts and how to make them, and then i was involved in two other ways. one was through what became known as the quadrilateral meeting with the chancellor and the chief secretary that met nine times. we used those to go through the difficult areas to try to work out what the right policies were and what the right approach was. there was a strategy that i think was very successful in making the correct decisions. abizaid shares of cabinet had about nine discussions on the spending review. i was involved -- obviously, shares of cabinet had

about nine discussion -- chairs of cabinet had about nine discussions on the spending review. i was involved in making sure the process was more collegiate and collective than it was in the past. >> where did you have the greatest interest in steering the policy in a particular direction? >> it was not so much that. there were disputes between treasury and the individual departments. i did not get involved in all of those. i would get involved if they were not being resolved, if there were one or two areas where they were being resolved and i could helps further resolve them. the process actually worked very well i think partly because the

treasury debt a good job of meeting early on with cabinet colleagues. we went through difficult areas like how are we going to protect education and early years, are we going to protect housing, what about welfare? we had early meetings to talk through these issues. another reason i think it went in a relatively smooth the way is that we took a big decision at the beginning to try to reduce public spending and get deficits under control, to look a very big areas like pensions and welfare, because if you do not do that you will make unacceptable cuts in schools, hospitals and policing. we did make some big decisions on welfare, $18 billion in

spending reductions altogether. we of frozen public-sector pay for two years. we have also increased individual contributions. that made the rest of the areas less difficult. >> for things more difficult in some areas? >> if we had not dealt with welfare, we would have to be cutting far more in education and other areas. i thought that was unacceptable, and if you want to get the budget deficit under control, you have to look at the big areas of public spending and have cut across the board. we took a strategic view that we wanted to protect the various departments, health services, overseas aid and the school budget. we wanted to protect capital

spending because we want to invest in the recovery and we protected capital spending. we wanted to make sure that while we made spending reductions there was a strong element of fairness and social mobility. we wanted to increase and nursery education foreign two- year old, 3-year-old and four- year-old. we want to help create a more fair society. that went right through our spending decision. we took the decision early on that that was our game, rather than just trying to make the numbers add up. this was decided at a court meetings, so the deputy prime minister and myself and other prime ministers as well decided

the strategy for, as i say, which departments to protect, the state of fairness that we wanted, and the way to support the recovery by not seeking further reductions in capital spending. this is spending review is described as comprehensive, but it was not, really. >> in a constructive manifesto, we wanted to protect the and a chess. -- protected the nhs. i know that is a contentious decision that some people do not agree with. the cost of health services are

huge, drugs, aging population, new treatments coming along. it will be difficult enough to budget that is just increasing with population. if you're trying to get to a position with balanced books, you have to take the country with you. we need the health services to be there for as if we get sick. if we are asking the country to come together to get through a difficult time, we must protect the one thing we all care about very deeply. >> so you would agree that it is a semi comprehensive review at best. you wanted to as you could get, let's take the country with you by excluding a number of key

areas. -- you wanted to, as you put it, and take the country with you by excluding a number of key areas. ireland is very high in the news at the moment. do peewit you want now to quash quash the want now to kosp widespread reports that there was a contingency basis too vague national bailout? it would be think epoc wise to speculate about a country that is a good neighbor and a good friend. ireland is one of our biggest export markets.

we export more into ireland than we do to brazil, russia, india combined. perhaps that is not a good reflection of our exports. but we have an interest in ireland being a success. as i say, i do not agree should be speculating. >> so the special conditions, the special relationship you have with ireland might lead one to believe there is more than a european mechanism at play. >> the last government before the new government came to office agreed in the european union that the european financial mechanism which is basically there to help countries that get in trouble

is established under qualified majority voting. it was supported by the last government. that is a mechanism that is there and can pay out money to support countries that are in trouble. that exists and we are part of that whether we like it or not. >> one general question. have you, in your planning, and i presume there is planning, ignored the fact that a bilateral bailout will come out of the bottom line and therefore alter the numbers, unlike a contingency that is created by a european bailout? >> i will give a technical answer. the ploy to make it absolutely right. -- the point you make is

absolutely right. the europeans use their head room to make a contingent loan. a bilateral loan it is money you have to raise in order to lend. >> and you have to come to the house for approval. >> in any event, if these things were to happen -- >> one could take it from your answers that you are heavily engaged in these debates. >> i have tried to answer the question as best i can. >> given that article 3 of the mechanism you referred to can only be activated by ireland

itself and not buying majority votes -- and not by majority vote, is there a chance of the coalition government joining up with germany and the other states toarticipate in this before it is activated? and why are the european banks and the commission in government before the regulation is activated? doesn't this go against the views expressed by their prime minister that they can manage for the time being? why doing this a mechanism and not a bilateral arrangement? >> we're certainly not trying to cors ireland to do anything -- coerced ireland to do anything. that is not a part of our plan. the technical position is right.

i think the position as you and i understand it is that this mechanism exists. britain is a part of it according to the action of the last government. there is some debate because of the way it is set up. that is the situation we inherited. >> but once you got into the system, it has to be activated by ireland. >> i cannot answer for the irish government. neither might be pursued. that is to say, the european mechanism and the bilateral agreement. >> i think you would be right in saying that, but i think going any further would be speculating and i do not think we should do that. >> i want to get us back to the brett of the conference --

breadth of the conference. you have said that we should do all we can to protect from line services. my committee undertook a study. . .

aedepartment were often faced by rising baselines and were told to go ahead and spend more money to states more money if you can. and we are in a different situation because departments really conceive that in some cases there baselines are being produced -- reduced. they are being helped by a government that is freezing public sector pay, reducing welfare payments and dealing with the issue of public sector sect. we're not planning for failure in finding the savings, but the savings we have set out need to be achieved, and we want to achieve it them peruke the source of the efficiencies that

you talk about. i think it is working. >> and if you don't? that was really the question. and i can see the great endeavour, are radically to centralize control to ensure that things are secured, but i have to say that i am skeptical as to whether you would achieve what you set out to do. it really what i am interested in is it that were to happen, would you then come back to further cuts or would you reconsider your 81 billion pounds -- >> the baseline is set out. >> so your said on that? >> departments have to deliver the reductions. -- so you're set on that? we're doing the things to help them, but the department's top to deliver the reductions.

let me talk about the example yesterday in the chamber. policing hmic. how'd you make up the gap between that and the reduction in home of the spending that we're talking about? well, obviously we are adding in a two-year pay freeze -- kansas using this as an example. we're making changes to police pay and conditions, and we're changing paper work, which will go in addition to what hmic is saying. the fact is if we were not doing this, and if we took the plans we inherited, at the end of the parliament we would still have a structural deficit of from 3%, and we would still be

added toward debt-gdp ratio. in simple terms, it would still be getting worse. so after all the pain of cuts, the situation would still be getting worse. that would be a sensible way to go about it. >> i hear that. i am skeptical as to whether departments will find it, but i hear your intent. might give you three examples -- may i give you three examples where there is an unintended consequence of the decision. hmic is facing a cut in staff. they have 18 million accounts going back to between 2004 and 2005 and 2007 and 2008 unreconciled as to whether people have paid too much or too

little and tax. they told us last friday are writing off three of those last four years in terms of money owed to governments, which is writing off 650 million pounds. with their lack of staff, they are unlikely to be able to tackle 2007-20078 properly. york and attended consequence is cutting staff. -- with their lack of staff, they're unlikely to be able to tackle 2007-2008 properly. your unintended consequences is cutting staff. >> i will look into that issue

specifically. >> can i stop you there? that is the point i made. it is separate. >> they will still lose the staff. >> we could not exempted departments from trying to be more proficient, but there was a separate decision made to try to recover 7 billion pounds of revenue. i can confirm that figure if you would like. >> let me give you another example of the late right now. o-- of the late triton. we're going to have to spend an extra billion on an extra order for a submarine to keep the barrower -- and shipbuilding capacity going. is that sensible?

>> i do not agree with you about the second part. in the hunter-killer submarine was part of the defense program. you're shaking your head, but it was and we think it should be, part of the program. i would separate that decision, which i think is the right decision, and we took in the strategic defense review, from the division we have taken over trident. can we see how much is necessary to spend now and in the future? now we have all of the experience of the current vanguard of submarines operating, we make a better estimate of how long it is? who could put off some of the spending from this parliament, and that overall it would not add to the cost.

it was the right decision to take. so this was part of a very -- i know we will come to the strategic defense review. it was a very important piece of work. >> we do not know yet and what it means of additional costs to trident. we do know the cost of extending the vanguard submarine. and looks to us with a short- term fix for a long-term spending and not for the government. to go i am sure that -- >> i am sure that a defense minister could go through in detail. we were doing through the defense review. i think it's of course we look at the cost of the trident in the review. we're still spending significantly on that the

replacement during this time. i was assured we could do this, bringing in having no caps or capability petrina the existing submarines and new submarines, and i was told it was possible to do this without spending continuously. it seems there to me we save money. >> i would like to bring james up at this point. >> a thank you. -- thank you. >> prime minister, what role did you play in this? >> again, a german general i would say. i chaired the leading cabinet committee that we have established, with judging works extremely well. it has met about 18 times since the government has formed. i chaired at those meetings. in order to first set the strategy, we wanted to follow as

a country what are the biggest threats and opportunities to us, and flowing from the strategy, what is the defense posture we should take? and what are the decisions we should take about submarines, destroyers, and frigates and all the rest of it? in addition to that german general, obviously the service chiefs have a direct line to the prime minister, and they like to come and make their views known, which they did. we had a very good conversation. i had a number of bilateral meetings with the defense secretary and the chancellor, and i played quite a role at the end. there was a gap between the treasury and the minister of defense, which was quite widely reported on great confidences and i hope to bring together both parties at the end to get what i and was a good, sensible outcome. it was mostly a strategic, chairman-like role, with a bit

of an interference at the end. >> so what is the most difficult area of the hold of this comprehensive spending review? >> it was one of the most over some departments. it was a bit of a train crash when we took over in terms of 30 billion in excess and commitments and overspend. 38 billion overspend. plus, it was part defense as part of an overall strategic security defense review that included other areas as well, which made it particularly complicated. within its, there were one or two areas, such as the decision over the aircraft carriers, which was a fantastically difficult question to try to get answer to. i profoundly believe that we got the right answers, but it took a lot of time and work, but it was tough.

>> at the -- you said you particularly got involved right at the end. at that stage, we had a letter from the secretary of state of defense to you. what affected that letter have on the entire process? >> i do not think had a huge impact. minister stand up for their departments and make the case for their department. -- ministers to stand up for their departments and make the case for their department. and i think there is a problem. that department does have a bit of a problem with leaks, which is a problem when they are responsible for security. i do not think it made a huge difference. the fact is i think it was a good outcome in terms of here we are as a country with this fast deficit. we have to deal with it. defense made a modest contribution with an 8% real terms reduction over four-year period, and that does not touch

at all what we're doing in afghanistan, because that is mounted out of reserves. a set of good and long-term decisions were made over things like carriers, are in numbers, and future requirements for the air force, which i'd think are right. >> sticking with that letter is for just a moment, it would not have been so influential if the debt just been between him and you? if that had not been leaked, it would not have as much affect? >> the point is because it was the most difficult area to deal with, there were always going to be more discussions about defense and a trickier process of getting it right and perhaps with other departments. leaks of letters do not tell. i am trying -- i am not trying to be evasive. -- leaked letters do not help.

it adds to the pressure, but i do not think it would change what was a generally collective discussion, and i do not want to underestimate this, b we talked about the defense use of the united kingdom for the first time in a long time. there was that business department, that chancellor of the exchequer, secretary of state, prime minister, having a discussion about what -- what is the right -- put what is the right defense posture. i have tried to make this more collective, more collegiate, more of the government coming together and discussing these things as a government rather than by lead to early -- bilaterally. we have tried to have more of a collective discussion about those things.

>> i will come on to that precise process and just a moment. there's one question that concerns me, which is that the uplift for the defense budget from 2015 onwards. you said on the day of the strategic defense and security review, my own strong view is that the structure will require a year on year-old real-terms growth in the defense budget in the years beyond 2015. that is your own strong view. rather oddly, it seems not to be government policy. what you intend to do to turn your own strong view into government policy? >> the short answer is put it in a manifesto and win an election. >> about will not work, with? if that view is not government policy, the ministry of defense

will have to start making really severe cuts with the effect from 2012 onwards. >> i do not accept that. i think the point is the ministry of defense now has what has had for a long time. it has its budget numbers out until 2015, and it knows that one party has absolutely committed to real-terms increases. i have a specified between how much -- i have not specified how much between 2015 and 20120. it is obviously for other parties to make their views clear. the mod drea years ago was massively overspend. we did not have a clue what was coined to happen next. i think they have a much better position now with the departmental budget that is basically a aflac 34 billion, give or take a bit, through five

years. we have to make sure we have good people in the ministry of defence making sure we get value for money. there is a new permanent secretary, chief of defence staff, we need to get a new defense of material and good people in the department to make sure it delivers for the taxpayer monies that are going into it. >> ok, but in the defense review you also announced a 10-year rowling budget for the ministry of defence. presumably, you will be building into a comprehensive spending review before the next election, the sort of uplift that you are saying it is your strong view should be in place. >> that is a very good question, and there are two answers to that. one is i think we should have a defense review every four or five years.

we are in a coalition, and i think we have come from a very good outcome, on the defense review. we have shown that two parties that have a slightly different track records and defense policies on this matter can come together and make sense of a really difficult set of questions, and i am sure we can co on doing that. and to go it is widely -- >> peake it is widely understood that the decision to withdraw the carrier and sartorial -- the harrier and harark royal under e sdr was a last-minute decision made over the weekend before the review. and did no. 10 have a our role in suggesting or promoting the idea of that letter and increasing them to try to close down the debate?

>> i have read both letters. i am delighted that the chiefs of staff wrote such a powerful lot -- powerful letter in defense of the decision we made. >> did no. 10 have any role in it? >> i simply do not know. i would not be surprised at all. but i do not know. who writes what letter is frankly less important. the reason the decision was made relatively states was that this was the most difficult question at the heart of the defense review, which we debated and discussed as a national security council over and over again. i will tell you how my own view changed to give you a sense of how deeply the matter was discussed. coming at it as an amateur, it seemed to me at first cut at obvious answer was to keep the existing carriers, keep tehe

harrier and use that as a bridge when they came in. that is the simple amateurs great for review. do not have a gate in capability and therefore you retired a tornado instead of the harrier. i was convinced by the end of the process that wall that was the easier thing to explain in parliament and to the media and to the public, it was actually the wrong decision. i was convinced it was the wrong decision and i am profoundly convinced we have made the right decision to keep canadiatornadod retire harrier. tornado is a more capable aircraft. harrier has of fantastic record. the fact is today the tornado is a more effective aircraft.

it is operating now in afghanistan. the big question for us right now is, how can we best support our troops and effort in afghanistan? and that is by keeping the tornado. that is why i think we kidcomedd come to the right view. and in no way to prove this was a discussion and debate process, rather than what is convenient. it would've been much easier to keep harriers. it was the wrong answer, and that is why i feel so strongly about that. >> many of us will find it unacceptable if it turns out that number to 10 did prompt chiefs of staff to enter political controversy and that way. that is why it is very important

it to the bottom th of that, and we await your reply. when lord turnbull gave evidence to the treasury committee, he said that liam fox's letter was written to be leaked. i am sure you did not see it that way, prime minister. no, it was a letter written to put the secretary of state's view about the importance of not making a cecily deep cuts in defense. and when you look at the effect of that money, you can see that we will have the fourth biggest defense budget in the world. we can overdo the gloom about this. we're going to have the best hun-killer submarine anyone has. we have our brand new aircraft carrier. >> i do not want to get carried away.

on the carrier decision, health care related to personally explore the scope for renegotiation of that contract? to go fairly thoroughly. -- >> fairly clearly. this was a question i asked repeatedly, can we go back to bae? can we look at the contracts? but the answer was pretty clear. i think maybe this is something that a select committee might want to look into. these contracts were pretty tightly drawn, and we were in a situation where if we get even canceled the second of the two carriers we would have cost a huge sum of money. >> in order to look into the matter, a select committee will need the contract. i recognize that some aspects will be confidential, but would you agree to provide the contract to my select committee

to enable us to examine the extent? >> i will be happy to provide the maximum of what we can under the rules. >> well, you make the rules, prime minister. >> i wish it was as simple as that. you find out in the song that you don't make quite as many rules as you like, but i will certainly look into that and we will do what we can. >> you and your party have said that you're committed to widen participation in higher education. a recent study by the institute of fiscal studies reported that educational made allowances has significantly raised state-on rates for post-fees from lower- income backgrounds and indeed,

the educational success arising actual pays for itself. if the government were committed to this in their run-ups to the general election, why is it now been removed and what steps are being taken to replace it? >> we have had to look at every area of spending very closely because of the catastrophic state of the public finances that we inherited. we look at the educational maintenance allowance specifically, and while there is a piece of research that you ", there is another piece of quite well-brougthought research that shows that 90 percent of the money is effectively dead-weight costs, paid to people who would stay on anyway. does it really makes sense to pay people at the same time there is paying on tuesday?

we're actually going to be in the ads in the amount of money and resources that colleges and schools have to target the money to people who need it the most. that is a better approach than the one we inherited. fiat i except there will be a spending reduction in this area. -- but i expect there will be a spending reduction in this area. we're looking at this up at the moment. there will be announcement forthcoming. i do not have the exact date for when this will be introduced. >> there is a considerable gap between the implementation of the cuts and the implementation of these proposals, which seeks to address the issues. what will happen in the meantime? >> i do not think there will be a gap. there will be a phasing out of thei ema's.

and then the introduction of the discretionary lerner fundarner . again, we have to make big decisions on how to focus the money in education. the big decision we made is to put the money into the school's budget. that is why the spending per pupil is being frozen in cash terms across the parliament, and we are introducing a 2.5 billion people premium over and above that so the peoples from the pores are crowns have more money following them to whatever school they choose to go to. at the same time, we're getting rid of a lot of specific grants, trusting the head teachers with a maximum of the monmoney to dee how to best spend it. that is a different approach from that of the last government. we think is right to trust's head teachers more.

>> you have a mechanism for funding -- will you hav ve a mechanism for funding fe college's? >> yes, we will. they have complained about the massive amount the bodies they have to go to for spending. it would like a simpler program. they will have a program much more simple than amiri had bodies we have inherited. >> can i go into the complications of the rise in tuition fees because of as a result of these proposals, somebody going through university could potentially accumulate up to 40,000 of debt on tuition and accommodation?

given that it is much harder to sell the benefits of a university education to students from low-income and low- desperation families, it will be a huge challenge to keep the level of applications up. indeed, the latest statistics showed that after rise in 2008, it has been dropping in comparison with the private sector. that puts additional responsibilities on organizations like aim higher. are you going to keep its, and if not, what are you want to replace it with? >> i cannot give you specifics on aim higher, but i think the most important thing is the new system we are introducing is more progressive and because students won't pay anything up front and no one will start paying back until they earn 21,000 compared with 15,000 now.

it comes out of the browne review. it does give a boost to the maintenance arrangements. on that combination of better maintenance arrangements, nobody pays anything of a threat to and you do not pay anything back until you earn 21,000. it makes it much more progressive system. we still have a challenge to get out to schools in deprived areas and apply for -- in the anchorage people to apply for school. when you looked at the policies we are as adopti adopting as a l of those things can help us as a government and as a country encouraging people from low- income backgrounds to apply it to the university. >> i want to move on to the science budget as a whole.

i am on record as praising the work of david willetts in maintaining cash for the research council budget. but you said in an earlier response is that you tried to have a collective discussions. i have been probing an area that i cannot get a straight answer on. perhaps you will give it to me. there is an interaction between the browne report, a science settlement, departmental science budgets, the emigration tap and the closure of the rdas on the effects on the power overall capacity for science in the uk. what advice were you given on a interaction of those things? >> if willets cannot into that

question, i do not know what hope there is for me but let me try. there is an interaction between what is happening at the university and as you say, the immigration rules as well. i would argue they're all heading in a pro-science direction. the university changes because we're giving focusing support on science degrees. i think that the system of graduate contributions is going to focus the mind of the undergraduate much more on what is a good course? what is a good university? will give me a good start in life? i think all of that is actually pro-science. -- what will give me a good start in life? to 1000 net immigration each year is -- 200,000 net

immigration each year is too high and needs to come down. there are people coming in under so-called tier 1 rules and doing unskilled jobs. to go prime minister, and never feel it is necessary to repeat what you said in the house yesterday. >> sorry, you're quite right. when do you expect the criteria to be known? >> i would hope next week we might be able to make an announcement. >> all of your answers were predicated on "i think." so am i correct in saying that you did not receive any advise on the collective impact of all those issues, one upon another? we have not got a strategy that engages us on issues like whether we're going to attract

the next people coming in to be are successful nobel prize winners? how many university departments are going to close as a result of this policy? you do not know the answer to that, do you? >> i specifically asked to see the chief scientific adviser when i became prime minister and had a proper meeting with him about the big items on his agenda to make sure that this was a pro-science government. david willetts is one of the brightest talents in the house of commons. of course, lots of different policies will have an impact on science, and i think, as i hope to demonstrate, that they will have a good effect. >> finally, it is therefore a great pity that the chief scientific up adviser said to the boards that he was disappointed at the billiard to be consulted on changes in his own department.

there was a headline that said "stupid, ignorant, coolidfoolis" david willetts has assured me today that my concerns in the concerns of the scientific community will be met. is it time that we have more transparency, proper engagement, with the scientific community to stop these mistakes being made? >> perhaps i should take away what you say and have a greater think about it. what i am finding is that the system of having a chief scientific adviser, and indeed scientific advisers in each department, is a way of helping make government policy science- friendly. i think that is a good start. >> may i turn to transport and to elouise ellman?

>> at the beginning of the meeting you told us that you have been involved in taking a strategic look at the cuts and that you had wanted to protect capital spending. and i am disappointed you did not mention transport in that. looking at the actual facts, rather than the rhetoric around the facts, capital spending in transport is actually being cut by 11% increase or a spending cut by 20%. that does not suggest that in reality to see transport assets an important engine for growth. >> i wrote them afraid i would dispute your figures. -- i am afraid i would dispute your figures. we're going to be spending more than 30 billion on transport infrastructure. those are the facts. overall we're spending 9 billion more on capital projects than the previous government planned.

i reason i did not get too involved in the transport budget is the negotiations went quite well. and the reason they went well is -- >> but prime minister, the figures i am using are figures from the review and figures from the treasury review. it might be true that it all could have been worse, but you cannot say that you projected capital spending and transport in the way you are alleging. >> i think we can. the point is the previous government announced a lot of cuts in capital spending. we inherited that situation and in some cases we added back in the money. that is why i am saying it is more than the lastovernment plans. that is a fact. that is important. the reason it was a relatively straightforward negotiation is because we decided strategically

to try to protect capital and where possible to enhance capital, so i did not get involved in that particular area. i did have conversations with the mayor of london about the importance of the to upgrade and the importance across reof cros both of which we manage to protect and are going ahead. yes, like every other departments there are reductions often temperamental spending, and in terms of capital spending, i would say it is a very good outcome. >> at the moment there are very successful regional structures that have permitted and local authorities, working with business, to decide strategic priorities for transport. those are being dismantled, and there is widespread agreement cut the proposed local enterprise partnerships will not

be able to replace those bod ies. what are you going to do to make sure that regional roles are determined and an accepted way? >> that is a very important points. i would come at it from a slightly different angle, because i think that the regional bodies were often quite bureaucratic, quite distant, and in some cases there were endless studies done but not much actual action. so i do not think it was a perfect system. >> in this instance i am talking specifically about transport and specifically about our regional allocations for transport board decided. all the evidence from around the country is that the existing structures, local authorities working with business, were very effective in that regard. there is no clear effective replacement.

we have heard from brian and secretary of state who said that some other structure will have to be put forward for transport. are yougoing to take a personal interest in this? >> i will. it is important we allocate money properly. when we look at these plans for capital projects, we ask very good questions about what is going to have the greatest impact on growth. those transport developments, for instance the a11 in norfolk, -- >> again, i do not think today is the day for that valuable catalog. otherwise i will start asking you about the a1. >> the danger is that without an effective regional structure of for making decisions on

regional, rather than local schemes either decisions will not be made effectively or they will become centralized. it secretary adopted nationally were applied absolutely we would have more and more investment and london and the south east, an overheating of the southeast and less investment in other regions. will you take a personal interest in assuring that and this change that you already decided on, regional perspective and regional prioritization will not be lost in the case of transport? >> absolutely. all i would say is that we can make a success of the local enterprise partnerships because it will go with a grain of what people want locally and regionally. if you look at the decisions we took in the spending round, there were major investments and even more that will be announced and to the regions. the government is extremely conscious of that. >> can i make a helpful suggestion that you might like

to write to as just to clarify the answer. >> who if we look back over 60 years, we surely cannot be concerned about the current state of the rail network. passengers are currently bracing themselves for another-and there's -- another hike in faires. doesn't make that we get the nature of franchising rights and such nature will suggest that longer franchises will encourage the successful bidder to invest more, actually in partnership netowrwork rail to bring about the kind of improvement that will ease bottlenecks, improve flow, and actually then add to the amount of money that is

being spent to improve the network. >> i.t. basically agree with that. -- i basically agree with that. i think where we need to go is -- term franchises with tough penalties if they do not live up to the things they promise to do. we also need to take a good look at why costs have gotten so out of control. roy mcnulty is doing this reviewed for us. when you have an extension in the case, picasso piggish are absolutely astronomical. we have to get to the bottom of what that is the case. >> i want to look at the way in which you have helped to try and join of government thinking in a number of respects. particularly looking at housing benefit changes. do you accept the fundamental problem here is the level of the

housing benefit bill has risen because the cost of housing has risen because there is a shortage of supply? why in the csr has the money for new affordable housing been cut by more than 50%? >> it is an extremely good question. we have to ask ourselves why we have been chasing ourselves around in a circuit of increased housing benefits and increase costs and not building very many houses. it seems to me that we have to do two things. one is the deficit problem. we have to look at the explosion of housing benefit, up by 50% over the last five years. we have to look at that, because we have to get on top of the deficit. we have to ask ourselves whether we can have a system that will encourage more house building,

which would ease the constraints of supply. although we a cut the capital money going into house building, i would argue that the system was not working. we have big capital allegations going into housing in the last decade, but it has not worked. we do not seem to a bill. many houses. what we're doing is getting on top of housing benefit, making some difficult decisions, but we are introducing real changes to how we support social housing and how we support house building and the courthouse building, which i believe will make a difference. for instance, the new homes bonus will mean that from now on when local authorities build houses in their areas or allow houses to be built, they will actually benefits. right now there's not much of the benefits to support house building. we need to change that fundamental regard in a more decentralized --

>> i am not sure it does, prime minister. the new way actually is to make new listings of existing houses or of how the new houses that are built, at 80% of market rates. >> we believe it will do, first of all how will it affect increase house building? the effect is that it be good to run-based -- if you go to a rent-based model, it gives house builders the confidence that if they build social housing, they know the sort of rent they will be able to get. >> can you point to one piece of evidence that shows that if you redistribute the planning grants, that is available for this purpose, among the number of houses that you need to build to be the previous government's

progress before the recession came, that would amount to about 1,300 pounds per property? is that really going to be a sufficient incentive to get you building more than 200,000 homes in this country? is there any evidence of that? >> if you ask a local authority leaders, the ones i have spoken to say it right now although there are a lot of targets, there is fairly much in it for us as a local authority if we build houses, because we do not get to keep the revenue. it is quite a big move we're trying to make. if you attract new business into your area, you keep the business rate. if you get more house is built, you keep the revenue for the extra houses. it is a change in the system, but given what we've just had it did not produce houses and

record number of people on the housing waiting list, i think it is time to try something new. >> given there is quite a lot of evidence that the housing benefit changes not just in london but outside will actually mean that areas are no longer are affordable for people on housing and a bit, include those in work on low incomes, is is still the government's policies to have mixed communities or is there no distinction between the policy of dwp and the policy of clg? >> of course we want to have mixed communities. >> many of whom are in work. many people on housing but that actually work. >> absolutely. but i think the general principle that i just enunciated --

>> so that actually does against the policy of mixed communities. and >> no, as i explained we support mixed communities. we have people in sheffield paying their taxes so that people can live in houses that they themselves could not dream of living in. and >> order. anne begg. >> thank you. picking up on what you've just said, prime minister, a lot of people accept the housing but the bill had to be brought under control, and you have given some examples. there are quite a lot of different aspects to the policy into the cuts and housing benefits, and i wanted to comment on one particular one, because i do not understand the rationale for it. this one is about who have been a year on job seekseeker's

allowance. why haven't looked through everything that i've received as tier of the select committee and from elsewhere, but i cannot see the rationale behind that particular decision to cut 10% from the housing benefit of those levin out of work a year. >> i think the rational is this, everybody knows that people on job-seekers' allowance and housing benefits. so the idea behind the 10% reduction is to sharpen the incentives to work. taking the example of london, in london there are 34,000 people who have been on jobseeker's allowance for longer than a year. they are all people who are supposed to be available for work in seeking a job, and in london there are 30,000

vacancies. 400,000 new vacancies in the year. that is the reason for that. 90% of people on js on toa , to find a job before the end of the year. i hope this policy will have as little effect as possible, but because the link between the benefits it is worth pursuing. >> let's hope that has quite a lot of affect. these are not small amounts of money. you are also looking to perhaps lessened the marginal tax for someone going into work, because when someone who is an out of work per year, they're going to lose 10% of their housing benefit. regardless of whether in that year the have moved houses.

we may have a position or someone who has done everything but the government has asked of them, they have signed up for work. they have goneo all the appointments, all the interviews, they have applied for hundreds of jobs, and they have not been able to find a job. that will be the first time in a welter history in this country where sanctions have been brought against someone who has done everything that the government has asked of them. -- that will be the first time in the welfare history in this country were sanctions have been brought against someone who is done everything that the government has asked of them. and they're going to have less money because they will have the money to pay for transport and all the other costs associated with work. >> i do not really except that

it will not increase the incentive to work, because as i said, there is a problem. let me make this point again -- >> some of these individuals, i have already moved to the cheapest house they can find. but after year there will still lose 10% of their housing benefit. to lose 10% of your benefit is a large portion of your income. that is what happens. what you say really does not add up. >> we're saying that we want to do much more than currently happens to help get people work in the first place. so yes there is a number scored in the red book, but obviously if we can get people into work faster than that in reduce that

number, we will get more tax revenue from the people who we get into work. i have to bring you back to the problem of housing benefit. here is the senate up 50% in the past five years. everyone accepts it is out of control. we have to take steps to deal with it. we have the housing benefit caps moving to the 30th percentile. in the number of other things, including the single-room great extension. none of them are easy. i completely accept none of these are easy. we have to try to find a package of changes to get housing benefits radically reduced. all we will be able to do is try to stem the increase and perhaps a modest reduction. >> my point is that this particular measure is actually

counter to everything else you are trying to do. so they only get the health of ones that have already been sanctioned. >> i think we have come to a straight points of disagreement. no doubt you will want to take miss begg's got away and reflect on them. >> this is just from the constituency point of view. he said that you support mixed communities, but it is

>> when i sent,q it you went ino my constituency and ask people earning 20,000 pounds whether they are happy to pay towards people whose rental bills are 30,000, 40,000 living in central london. i think that is more likely to lead to social unrest. >> i do not think you understand anchor in my constituency and the inability to access to affordable -- >> order. this is not wednesday afternoon. >> let's keep the house in order. >> yesterday the deputy leader

of the labor party and you had a robust exchange over police numbers. this morning i telephoned chief constable and confirm to me that if the cuts are implemented, she will lose a quarter of his work force in -- he will lose a quarter of his work force in four years. there is an independent study that has talked about 18,000. that is suddenly going to affect front-line services. do you agree? >> i do not necessarily agree, because it will depend on how well we manage our police forces. i did not use this " yesterday, so i am not of breaking this rule, but he said end result will be more resources put into front-line policing and more efficient and effective service for the people of greater manchester. he said while the situation is

clearly an unsettling, the end result will be more resources put into frontline policing. police staff, 4200. this is -- whoever is in government. if gordon brown was sitting here, we would both have to reduce the home office budget and make difficult decisions, and we would say to the police, you're going to have less money over the next four years. the question is can we try to get more for less. and when you look at manchester which with 4000 sap as opposed to 8000 officers, we have to do better. let's get behind him and tried to deliver that. >> sure.

yesterday you are very clear in your clear today that there are back-office staff who you kept mentioning yesterday in your reply. i have a list of 86 different kinds of a post that exist in a local police offices. the fact is that we're not expecting police officers to we want to see on the beat-visible policing, which is what our constituents want to do the jobs of, for example, a telephone in. >> we ended up with offices doing that job of h.r., i.t., and back-office functions. and what we have to try to focus on is a visible policing on our streets and try to minimize the back office that is there to support that. what are we doing to help this process?

well, we are freezing police pay well, we are freezing police pay for